Merck KgaA Offers $16M For Two C4 Degraders

Merck KGaA has been brought on board by the Massachusetts biotechnology company C4 Therapeutics as part of a biobucks agreement worth $740 million for two cancer-fighting degraders.

Merck KGaA is giving $740 million in biobucks in addition to the initial payment of $16 million for the two degraders that are directed at proteins responsible for the growth of cancer. The statement indicated that Merck will be accountable for further research and development and will pay for the discovery work that C4 is contributing. If any of the targets are developed into marketable medications, C4 stands to earn royalties in the range of the middle single digits to the low double digits. 

Through this collaboration, C4 Therapeutics and Merck KGaA will be able to draw on each other’s strengths in the areas of tailored protein degradation and clinical development/commercialization, respectively. The goal of this collaborative strategy is to speed up the process by which scientific findings are transformed into treatments with real therapeutic value.

According to Paul Lyne, who leads the cancer research division at Merck KGaA, the agreement provides the business with additional understanding of its investments in protein degradation.

A research agreement between Merck & Co. and C4 was signed less than three months ago. Merck & Co. paid C4 an upfront payment of $10 million and more than $600 million in biobucks in exchange for the smaller company’s contribution to the development of a unique degrader-antibody combination (DAC). If Merck, based in New Jersey, were to exercise the choice to license three more DACs, the total value of the transaction would increase to $2.5 billion. 

C4 has now made arrangements to collaborate with four of the world’s largest pharmaceutical companies, including Biogen and Roche, who are also involved in the company’s agreements.

However, despite the impetus created by the commercial expansion, C4 has experienced a rough few months. In January, the company made the announcement that it would be laying off 30% of the staff, which had an impact on around 45 individuals. This decision was made two months after C4 decided to bring an end to the development of CFT8634, a small chemical for which the degradation of the BRD9 protein did not appear to result in any significant improvement in the treatment of cancer patients. 

Instead, C4 is giving priority to two additional assets that are now in the clinical phase: CFT7455 and CFT1946. Individuals with multiple myeloma and non-Hodgkin lymphoma are being investigated with the former, which is an IKZF1/3 degrader. On the other hand, those with solid tumors that have BRAF V600 mutations are the target population for CFT1946.

According to the financial report for the firm’s fourth quarter, C4 spent almost exactly the same amount on research and development in 2023 as it did in 2022. The company cited significantly reduced preclinical expenditures but significantly higher clinical-stage costs.