Arrakis Therapeutics Inc. signed a massive collaboration and license agreement with Roche Holding AG to discover RNA-targeted small-molecule (rSM) drugs against targets stretching across all of Roche’s R&D disease therapeutics areas.

Arrakis gets $190 million cash up front but said it could earn “multibillion-dollar future payments” for hitting preclinical, clinical, commercial and sales milestones for products the deal produces. The aggregate value of those payments could exceed “several billion dollars,” the company said, but it did not disclose more specific figures.

Arrakis will lead discovery and research for each target up to a defined point, at which time Roche has the option to exclusively continue preclinical and clinical development activities.

“We’ve now screened over two dozen human RNA targets and we’ve found hits for all of them. And we’re getting more expert at it all the time,” said Arrakis CEO Michael Gilman. “We are bringing more sophisticated tools to bear on target identification – in particular, spotting segments of RNA where structure meets function. Our library improves with every screen, as we eliminate confounding binders, of which there are many in conventional compound collections, and enrich with RNA-friendly scaffolds.”

COVID-19 played a role in the agreement’s inception and continues to impact its launch. The deal was being discussed as late as mid-March when the two companies decided to conclude negotiations by video. Arrakis’ labs and offices are shut down by the pandemic, but Gilman said work can continue even with dormant labs.

“Our Chinese CROs are back online and doing synthetic chemistry at a pre-pandemic pace,” he said. “We have transferred some cell assays to China, so that, ironically, some things are actually going faster now. Previously, compounds were shipped here, in at least two steps, for assay. Now they’re being tested in the same facility in which they’re made. Much of our work is computational and that, of course, continues at full speed.”

Gilman said the Roche deal means hiring and doing it quickly. He expects to double the company headcount in the coming year to accommodate the expansion. In the past few weeks, he said, Arrakis ventured into conducting video interviews, hired half a dozen new scientists and just completed its first virtual onboarding.

Arrakis, which specializes in aiming at small-molecule RNA targets, primarily cancers, brought in a $75 million series B in April 2019. Its platform allows Arrakis to predict and validate RNA target structure, find druggable pockets and identify drug-like hits. That funding was used to build a pipeline of rSMs the company hopes will lead to the clinic. That means going after the undruggable targets, ones in which current therapeutic approaches don't work.

The company name comes from the series of Dune books by Frank Herbert. Arrakis is the desert planet where the fictional drug called spice is harvested, and "we view our company's pursuit of RNA-targeted small molecules as a new cosmos for drug discovery," Gilman told BioWorld.

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