Merck & Co. will use the proteolysis-targeting chimera (PROTAC) technology of Arvinas to create new therapeutics by degrading target proteins, under a collaboration that could generate up to $434 million in milestone payments for the private biotech.

The total value of the strategic R&D collaboration was not disclosed, though Arvinas said it will receive an upfront payment to support Merck-related research—as well as the payments, which are tied to research, development, regulatory, and commercial milestones for products against all targets initially selected by Merck. Arvinas also stands to gain tiered royalties on marketed products.

Merck can opt to expand the collaboration to include additional disease targets. An expansion would trigger an additional one-time payment to Arvinas, as well as payment of milestones and royalties on a product-by-product basis.

PROTACs are bi-functional small molecules that target proteins for removal from a cell by inducing a cell's own quality control machinery to bind to a particular protein and “tag” it for degradation. That contrasts with typical drug development, where protein activity is inhibited.

Only 25% of the body's 20,000 proteins can be drugged via traditional methods. Arvinas reasons that the large remainder can potentially be degraded using its approach, designed to radically expand the number of disease-causing proteins that can become targets for new drugs. Degradation is carried out by the same ubiquitin/proteasome system that oversees the normal turnover of most proteins within the cell.

“We look forward to working with Merck to create novel drugs to address difficult targets, and we believe this alliance will maximize the value of Arvinas' very exciting and innovative protein degradation technology,” Arvinas President and CEO Manuel Litchman, M.D., said in a statement.

Based in New Haven, CT, Arvinas is focused on developing new drugs for diseases that include cancer, pro-inflammatory, autoimmune, and rare diseases. The company was established in 2013 to commercialize research conducted by its founder and chief scientific advisor Craig Crews, Ph.D., at Yale University.