Ra Pharmaceuticals Clinches Merck Deal for Up to $200 Million

Xconomy Boston — 

Cambridge, MA-based Ra Pharmaceuticals has signed a collaboration deal with drug giant Merck (NYSE: MRK) that could provide the small company with as much as $200 million to support the development of its stable of novel drug candidates.

The five-year-old startup is creating a library of compounds designed to overcome frequent obstacles in drug development. The compounds, which Ra calls Cyclomimetics, can be as specific as antibodies in their actions on cells. Yet they resemble small molecule drugs in that they can be taken by mouth rather than by injection, the company says. Tweaks to their chemical structure allow them to penetrate the cell membrane, where they can influence the interactions among intracellular proteins.

Ra says it can generate trillions of potential drug candidates for a range of diseases through its Extreme Diversity platform. The resulting small, cyclic polymers are similar to peptides—a string of amino acids that is shorter than most proteins. But Ra’s Cyclomimetics compounds incorporate amino acids that are synthetically modified to enhance properties such as stability and potency. The company screens the library of compounds for their usefulness against multiple drug targets.

“Cyclomimetics have novel properties that enable the targeting of protein-protein interactions, a property sought after for a wide range of disease indications,” said Doug Treco, Ra’s co-founder and CEO, said in a statement. “The collaboration with Merck highlights the broad potential of our Extreme Diversity platform and provides us with the resources to strengthen and advance our core technology.”

Ra did not disclose the amount of an upfront payment and research support funds it will receive from Whitehouse Station, NJ-based Merck.

The Cambridge company, incorporated in 2008, will also be eligible for milestone payments from Merck if the collaboration achieves its goals in drug discovery, development, regulatory approval, and commercialization.

“This agreement with Ra Pharmaceuticals underscores our strategy of collaborating with scientists who have developed innovative new technologies with the potential to complement and enhance our original research and product portfolio,” Richard Tillyer, the head of drug discovery and preclinical sciences at Merck Research Laboratories, said in a statement.

In 2010, Ra raised $27 million in Series A funds from investor groups led by New Enterprise Associates. Morgenthaler Ventures, Novartis Venture Funds and Amgen Ventures participated in the financing.