Arvinas Inc. (NASDAQ: ARVN) and Pfizer Inc. (NYSE: PFE) entered into a licensing agreement with Rigel Pharmaceuticals for exclusive global rights to VEPPANU, the first FDA-approved PROTAC protein degrader drug.

Under the agreement, Arvinas and Pfizer will receive $70 million upfront and an additional $15 million upon completion of development and manufacturing transition activities. The companies will split these payments evenly and are eligible for up to $320 million in future development, regulatory, and commercial milestone payments, plus tiered royalties on net sales ranging from the mid-teens to mid-20s percentage.

Rigel will handle VEPPANU's launch and commercialization in the United States and holds global rights with sublicensing capabilities for markets outside the U.S. Arvinas and Pfizer will receive a percentage of any sublicensing revenue generated internationally. Rigel will contribute up to $40 million toward ongoing development activities that Arvinas and Pfizer continue to manage.

VEPPANU is approved for treating adults with estrogen receptor-positive, HER2-negative, ESR1-mutated advanced or metastatic breast cancer following at least one line of endocrine therapy. The National Comprehensive Cancer Network added the drug to its clinical practice guidelines as a Category 2A treatment option on May 8.

The transaction requires regulatory approvals, including expiration of the Hart-Scott-Rodino Act waiting period. BofA Securities is serving as Arvinas' financial advisor for the deal.

VEPPANU represents the first commercialized drug from Arvinas' PROTAC platform, which uses the body's natural protein disposal system to degrade disease-causing proteins. The company continues developing multiple investigational drugs through clinical programs targeting various conditions including neurodegenerative disorders and cancers.