Novartis will partner with Dunad Therapeutics to develop oral covalent and protein degrading small molecule drugs for undisclosed diseases, through a collaboration that could generate more than $1.3 billion for the year-old developer of next-generation targeted protein degradation therapies—and revive a presence in the segment for the pharma giant.

Dunad, which emerged from stealth mode in March, has agreed to apply its fully tunable and selective platform to generate drugs focusing on up to four drug targets to be agreed upon with Novartis.

Dunad’s platform uses monovalent small molecules to induce selective degradation of disease-causing, often undruggable proteins through direct modification of the target. The company uses a mechanism of action that is target-class agnostic and, it says, differentiated from other targeted protein degradation technologies.

Through their strategic collaboration and license agreement, Dunad agreed to oversee program execution up to lead optimization. Novartis agreed to contribute its target and ligand expertise, allow Dunad access to unique assays and models, and fully fund the companies’ research collaboration.

In return, Novartis has an exclusive option to develop and commercialize products resulting from the companies’ research programs. Upon exercise of the option, Novartis has agreed to assume responsibility for future development, manufacturing, and global commercialization of the small molecule therapeutic products generated against the agreed targets​.

“This deal highlights the clear benefits our platform promises for the development of next-generation targeted protein degrader therapeutics,” Patrick T. Gunning, PhD, Dunad’s co-founder, acting CEO, and CSO, said in a statement. “We are confident that with our approach of inducing degradation via direct modulation of target proteins with mono-valent small molecules, we can significantly expand the boundaries of targeted protein degraders as a therapeutic modality.”

Protein degradation has drawn growing interest from biopharma giants in recent years. In August, Eli Lilly paid $35 million upfront toward an up-to-$1.6 billion collaboration with Lycia Therapeutics to use Lycia’s lysosomal targeting chimera (LYTAC) protein degradation technology for up to five targets in Lilly therapeutic areas that include immunology and pain.

A month earlier, Pfizer shelled out $650 million upfront and made a $350 million equity investment in Arvinas as part of an up-to-$2.4 billion collaboration. Arvinas inked an up-to-$110 million alliance with Bayer toward a joint venture aimed at developing targeted protein degraders for agricultural applications.

Trial terminated

For Novartis, the collaboration with Dunad jumpstarts a presence in protein degradation that recently ran aground when the pharma giant terminated a 199-participant, dose-escalation Phase I trial (NCT02734615) assessing Novartis’ oral selective estrogen receptor degrader (SERD) LSZ102 in advanced or metastatic ER+ breast cancer, both alone and with either of two Novartis drug candidates, LEE011 or BYL719 (alpelisib). Novartis disclosed the termination in its most recent update on October 11 on ClinicalTrials.gov.

A year earlier in Annals of Oncology, an international research team reported dose-escalation data from the trial which showed LSZ102 to have achieved an overall response rate of just 1.3% and a median progression-free survival rate of just 1.8 months.

In 2017, Novartis and the University of California, Berkeley, said they would explore targeted protein degradation as part of a collaboration to target “undruggable” proteins that included launching a Novartis-Berkeley Center for Proteomics and Chemistry Technologies.

Novartis agreed to pay Dunad $24 million in an upfront payment and equity investment combined, what Dunad called “significant” research funding, up to $1.3 billion in payments tied to achieving milestones, plus royalties.

Through its equity stake, the size of which was not disclosed, Novartis will join Dunad’s founding investor Epidarex Capital and BioGeneration Ventures (BGV), an Amsterdam-based early-stage venture capital firm, as investors in the British company.

“This collaboration is an important milestone for Dunad. It allows us to rapidly expand the impact of our platform technology to additional target classes and therapeutic areas, beyond Dunad’s own internal target pipeline,” stated Diana Kraskouskaya, PhD, Dunad’s co-founder and COO.

The company’s website does not disclose specific pipeline candidates, instead describing its pipeline as focusing on targets for which degradation is the optimal mechanism of action, and inhibition of the target’s activity alone is insufficient to elicit the maximum therapeutic effect.

“Our growing team is committed to advancing our internal pipeline and partnered programs directed against the most sought-after and previously intractable targets,” Kraskouskaya added.