By Colin Kellaher

Arvinas Inc. (ARVN) Tuesday said it formed a wide-ranging collaboration and licensing agreement with Bayer AG (BAYN.XE) to develop new human therapeutics and agricultural applications using Arvinas's Protac protein-degrader technology.

As part of the deal, the German chemical-and-pharmaceutical giant will provide more than $110 million in upfront funding to Arvinas, including the purchase of about 1.35 million shares of the New Haven, Conn., biopharmaceutical company at $24.14 apiece, or roughly $32.5 million.

The purchase represents a 20.4% premium to Arvinas's Monday closing price of $20.05.

Under the pharmaceutical collaboration, which will use the Protac technology to develop therapeutics aimed at patients with cardiovascular, oncological and gynecological diseases, Arvinas said it will also receive a $17.5 million upfront payment and up to $12 million in research funding.

Arvinas said it is eligible to receive more than $685 million in development and sales milestones, as well as royalties on product sales, while Bayer will own the rights to novel lead structures generated by the collaboration.

The companies also plan an agricultural joint venture using the Protac technology, which Arvinas said has the potential to address resistance mechanisms in plants to existing solutions to control weeds, insects and disease, in a bid to create sustainable agricultural products.

Arvinas said Bayer has committed more than $55 million in funding to the venture, which the companies will own equally.

With the closing of the transactions, Arvinas said it will have enough cash and investments to fund its planned operations into the second half of 2021.

Shares of Arvinas rose 9.8% in light premarket trading Tuesday.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

June 04, 2019 09:41 ET (13:41 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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