Merck and Proxygen partner in deal worth up to $2.5bn

Merck & Co –  known as MSD outside the US and Canada – and Proxygen have entered into a multi-year research collaboration and licensing agreement to jointly identify molecular glue degraders against multiple undisclosed therapeutic targets.

Under the terms of the agreement, the Austrian biotech will receive an upfront payment from Merck and will be eligible for future payments of up to $2.55bn plus royalties.

The announcement marks the third licensing deal Proxygen has signed with a major drugmaker since the end of 2020, when it partnered with Boehringer Ingelheim. Merck KGaA then teamed up with the company just over a year later in June 2022.

The deals are based on Proxygen’s platform technology and capabilities in identifying novel molecular glue degraders, which are designed to reprogramme the cell’s natural recycling machinery to selectively eliminate disease-causing proteins.

Due to the ability of molecular glue degraders to modulate protein classes not responsive to traditional drug discovery approaches, these molecules ‘hold the promise’ of unlocking disease targets that have been considered 'undruggable', Proxygen explained.

Robert Garbaccio, vice president and head of discovery chemistry at Merck, said: “Advances in our understanding of molecular glue degraders are opening exciting new avenues in the pursuit of novel therapeutic mechanisms.

“We look forward to working with the Proxygen team to advance this promising area of research and evaluate new opportunities to treat disease.”

Bernd Boidol, chief executive officer of Proxygen, said: “We are very excited to announce this collaboration with Merck and look forward to combining our innovative platform technology and unique expertise in identifying novel molecular glue degraders with Merck’s world class research and development capabilities.

“This partnership provides us with the framework and resources to further leverage our platform for the discovery of new drugs against challenging targets."

Merck also signed a worldwide licensing deal worth up to $922.5m last month with Opko Health’s ModeX Therapeutics unit for its experimental Epstein-Barr virus (EBV) vaccine.

The partnership will see both companies advance MDX-2201 to an Investigational New Drug application filing, after which Merck will be responsible for clinical and regulatory activities, as well as product commercialisation.