Shares of C4 Therapeutics (NASDAQ: CCCC) more than doubled on Tuesday after the company announced an exclusive licensing and collaboration agreement with Merck (NYSE: MRK).

The new collaboration will work to develop degrader-antibody conjugates (DACs), which the company says is an emerging modality designed to selectively target and neutralize disease-causing proteins in cancer cells.

C4 Therapeutics will receive an initial upfront payment of $10 million and can earn additional milestone payments and graduated royalties based on potential future sales.  Should Merk exercise all options related to the new collaboration, C4 would be eligible to earn up to as much as $2.5 billion in potential payments.

Merck will also hold the option to expand the joint collaboration to encompass three additional targets that will remain exclusive to the partnership.

Commenting on the news, C4 president and chief executive officer Andrew Hirsch stated: “We are thrilled to collaborate with Merck to innovate within the growing field of antibody-drug conjugates and evaluate the potential for combining the catalytic efficiency, potency, target specificity, and durability of degraders with the specific binding and delivery capabilities of antibodies. We look forward to leveraging our powerful TORPEDO® platform in collaboration with Merck’s antibody-drug conjugation expertise to engineer novel medicines with the potential to transform patients’ lives.”

Within the partnership, C4 will be responsible for leveraging its exclusive TORPEDO® platform to formulate degrader payloads during the discovery phase.

Simultaneously, Merck will take charge of antibody conjugation to craft DACs in the discovery phase and be responsible for progressing DAC candidates through preclinical and clinical development, and potentially commercialization.

The company's TORPEDO® (Target Oriented Protein Degrader Optimizer) platform plays a crucial role in its cutting-edge approach to targeted protein degradation (TPD). Through the TORPEDO® platform, the company has the ability to craft molecular glues, termed MonoDAC™ degraders, and heterobifunctional degraders, known as BiDAC™ degraders.

TORPEDO® is a compilation of experimental methodologies and tools, giving the company the ability to conceptualize, evaluate, and anticipate degrader performance. Substantial investments have been made in developing both computational and experimental methods to augment the rational design of degraders. The incorporation of computer-based tools enables the company to meticulously design degraders at the molecular level, optimizing potency and selectivity.

Throughout C4’s pipeline and within each discovery project, the company employs cell-based assays to gauge the degradation of disease-causing targets, assessing the performance of individual degraders. These data undergo analysis using a proprietary and distinctive framework, yielding metrics of catalytic efficiency to address pivotal questions in the iterative design-make-test cycles.

Specifically, these questions revolve around how rapidly the degrader eliminates the target protein within the cell and the amount of target protein that persists after treatment.

This catalytic efficiency data proves crucial not only in designing new degraders for testing but also in forecasting the depth and duration of disease target removal in animal models of disease.

Shares of C4 jumped sharply higher during Tuesday’s market session on the back of the announcement, with more than 160 million shares traded, to close the session at $2.39 per share. Shares of C4 Therapeutics trade on the NASDAQ under the ticker symbol CCCC.  For more information visit www.c4therapeutics.com.