Novartis Forays into a Pact with Arvinas For USD 1.01 Billion

Swiss drugmaker Novartis AG has signed a licensing agreement with Arvinas worth up to $1.01 billion to acquire access to the U.S. biotech firm's experimental prostate cancer medication, Arvinas added.

The agreement strengthens Novartis' pursuit of cancer therapies, following the initiation of a tender bid to acquire German cancer company MorphoSys for 2.7 billion euros ($2.9 billion).

Novartis has been laying off employees and attempting to slash costs since splitting off its generic medicines firm Sandoz last year in order to focus on fewer therapeutic areas and geographic regions. Novartis has acquired global rights to develop and commercialize the medicine, ARV-766, from Arvinas in exchange for a $150 million upfront payment.

The partnership validates Arvinas' protein degradation platform and therapeutic candidates developed against a kind of prostate cancer. As part of the agreement, Novartis will also acquire AR-V7, a preclinical trial targeting prostate cancer, according to Truist Securities analyst Srikripa Devarakonda.

In addition, Arvinas is qualified to receive possible milestone payments of $1.01 billion in addition to tiered royalties for the medication. The purpose of ARV-766 is to specifically target and destroy androgen receptors, which attach to androgens, or male sex hormones. Arvinas is creating medicines that break down and eliminate disease-causing proteins by leveraging the body's built-in mechanism for getting rid of proteins.