Molecular Partners AG is banking CHF55 million (US$60.9 million) up front and could get up to CHF1 billion more in development and commercial milestones, as well as research funding, in a multiproduct oncology discovery alliance with Roche Holding AG that marries its Darpin scaffold technology with Roche’s expertise in drug conjugates.

Further details, in terms of the targets, toxic payloads and indications involved, were not disclosed.

“The actual indications have yet to be finalized. We are still flexible at this point in time,” Christian Zahnd, CEO of Schlieren, Switzerland-based Molecular Partners, told BioWorld Today. The alliance will cover both solid and liquid tumors.

The specifics of the linker technology that will be deployed have not been fully worked out either. “This will come from both sides. We have some ideas about what works with Darpins, and they have some ideas about what works with toxins,” Chief Business Officer Patrick Amstutz told BioWorld Today. The two companies plan to explore the potential of adding a toxic payload to bispecific molecules, which would have highly specific tumor-targeting properties.

The deal takes the company’s Darpin technology, which has already attracted hefty deals in ophthalmology and immunology, into new territory. Although oncology is the core focus for Molecular Partners, it has not yet dipped its toes into the rapidly emerging market for antibody-drug conjugates (ADC) – or, in its case, Darpin-drug conjugates.

“We realized very early on that a combination of a toxin with a Darpin was a great opportunity for the platform,” Zahnd said. “We’re integrating forward with a partner in an area in which it would be very difficult to integrate independently.”

The two companies aim to obtain clinical proof of concept rapidly, but the timelines are unclear at this point.

“It’s an early discovery alliance. We cannot disclose or predict when the first molecule is going to enter clinical development,” Zahnd said.

Darpins – the term is derived from “designed ankyrin repeat protein” – are based on ankyrins, adaptor proteins involved in mediating the attachment of integral membrane proteins to the cytoskeleton. Like antibodies, they offer high affinities and specificities, but they are much smaller and easier to manufacture. Their small size also contributes to better tumor penetration. “It was one of the pieces of data that led to this deal,” Amstutz said.

Molecular Partners previously collaborated with Basel, Switzerland-based Roche on an exploratory basis, which did not progress into a product licensing deal. “You can only partner with Roche if you can differentiate your molecule against antibodies,” Amstutz said.

The new partnership continues its strong deal-making momentum of recent years. The company has probably added about $200 million nondilutive cash to its balance sheet in the last three years, between this deal, two in the field of ophthalmology with Irvine, Calif.-based Allergan, plus an undisclosed up-front payment attached to an immunology deal, potentially worth $800 million, with Johnson & Johnson, of New Brunswick, N.J.

It’s little wonder that the company has not had recourse to its investors of late. It took in CHF46 million in a Series B round in 2009, having raised CHF18.5 million in an A round in 2007. It has no immediate plans to seek further investment.

“Going public is an option that is open to us. We would only consider it if it made sense for the company,” Zahnd said. “With the balance sheet we have now, there is absolutely no need for that right now.”