Arvinas LLC, a Yale University spinout creating new drugs to degrade pathogenic proteins, has inked its first collaboration deal with Merck & Co. Inc. with the goal of creating new therapies for multiple diseases, most likely including cancer, the company's area of core expertise and the focus of its own initial development work.

The multiyear strategic partnership, the first of at least two Arvinas would like to form by the end of this year, includes an undisclosed up-front payment, funding to support Merck-related research and up to $434 million in milestone payments if the company succeeds in hitting all the R&D, regulatory and commercial goals for the targets Merck initially selects. Merck also would pay tiered royalties on any commercial products of the collaboration.

If all goes well, Merck has an option to expand the agreement to include additional disease targets, a decision that would trigger an additional one-time payment, plus potential milestones and royalties for Arvinas, an event that would be "a huge value driver" for the company, Arvinas president and CEO Manuel Litchman told BioWorld Today.

The deal is founded on the promise of the New Haven, Conn.-based company's proteolysis-targeting chimeras, or PROTACs, bifunctional small molecules that target proteins for degradation and removal from a cell. The molecules induce cells to bind to a particular protein and label it for degradation, in contrast to more traditional drug development approaches that inhibit proteins.

"As soon as the PROTAC binds to a protein, it causes the degradation or destruction of that protein by the cell's own natural machinery," said Litchman. "The PROTAC comes away from that little battle unscathed and is able to go on to the next pathogenic protein and destroy it."

The destruction appears to be long-lasting, too. Though it's not clear how long the effect might last in humans, during in vitro and in vivo assays, the target protein doesn't appear to bounce back or end up produced in higher quantities to overcome the PROTAC's impact. "We're very encouraged that that [target] protein might be, say, 90 percent degraded for a fairly long period of time, allowing, for example, weekly or twice-weekly dosing."

The company has been talking to potential partners since at least the beginning of 2014, said Litchman. During those conversations, it has been gathering feedback on its technology and assessing general interest in its degrader platform vs. classic protein inhibition while showcasing its work to date on internal programs.

Arvinas is advancing several discovery-stage cancer therapies of its own based on its degradation platform. Its lead androgen receptor program is focused on Kennedy's disease and prostate cancer and could move into clinical testing as early as mid-2016, said Litchman.

A number of other programs could follow, including the company's bromodomain-protein BRD-4 program, the most advanced among the possible options, which Litchman said has applicability in prostate cancer, and other solid tumors. It could also pursue a program targeting degradation of the estrogen receptor for breast cancer or epidermal growth factor receptor for solid tumors.

Founded in July 2013, Arvinas had raised $18.25 million to fund its work prior to the Merck deal. That funding has included a $15 million in series A financing co-led by Canaan Partners and 5AM Ventures along with Connecticut Innovations and Elm Street Ventures and $4.25 million in support from the Connecticut Department of Economic and Community Development and Connecticut Innovations, of which $1 million was equity. Taken together with its projected business development revenue, the company expects it can carry through 2016 and move its first candidate into the clinic, without raising additional funds until it undertakes studies to support an FDA investigational new drug application for a second internal program. (See BioWorld Today, Sept. 27, 2013.)

With a staff of 20 full-timers and 10 contracted employees, the company has grown significantly since the small crew that staffed it when Proteolix Inc. co-founder, Yale professor, and Arvinas' scientific founder Craig Crews built it with Canaan Partners venture partner Tim Shannon.

Litchman, a veteran of Novartis Pharmaceuticals Corp. who joined the company in January, cites a great culture and technology as having drawn him to Arvinas. "It's a team that has been able to solve problems repeatedly and get past really thorny issues time after time long before I joined," he said.