After finding a molecule that could attack an intractable cancer protein, Ternarx has turned its sights on a harder, and potentially more profitable, target.
For most of modern medicine, the basic job of a drug has been simple: find the protein causing the problem and block it.
But New Scientist declared in May that we’ll look back on 2026 as the year that all changed.
A new class of drugs, PROTACs, have come on the scene. They do something more drastic: they mark the offending protein for destruction and let the cell’s own molecular shredding machinery take care of the rest.
The first PROTAC drug – for breast cancer – was approved by the US FDA in May, validating the US$1 billion that drug giant Pfizer had put into a startup, Arvinas, five years earlier.
And while much of the early PROTAC research has been centred on cancer, Melbourne biotech Ternarx is betting it can have a greater impact by using PROTACs to go after the larger market in auto-immune diseases.
“They want to get it out of the labs into patients.”
Dr Bernhard Lechtenberg
Early this year, Ternarx secured investment from global venture firm Curie.Bio and WEHI Ventures to spin out its cancer research into a US-based company, Ternarx Bio, so that it could concentrate its Melbourne team on the debilitating autoimmune condition of Lupus.
To understand how a small Melbourne biotech came to believe it could tackle diseases that have resisted conventional drugs, you have to go back to the early days of PROTACs — and to a scientific problem being worked on at WEHI.
Out of the lab
PROTACs — short for proteolysis-targeting chimeras — were first conceived in 2001 by Yale researchers Craig Crews and Ray Deshaies, who showed that a molecule could be designed to hijack the cell’s natural waste-disposal machinery and destroy a specific protein. The idea built on the discovery of the ubiquitin-proteasome system, which won the 2004 Nobel Prize in Chemistry.
The Australian story begins with a then postdoctoral research fellow at Melbourne’s Walter and Eliza Hall Institute [WEHI], Rebecca Feltham, who was working on a scientific problem: how do you work out whether a promising drug target is worth pursuing before you’ve spent millions of dollars and thousands of hours on it.
Feltham and her team began experimenting with an emerging form of protein-degradation technology, PROTACs, using molecular tags to direct the cell’s own waste-disposal machinery towards particular proteins.
Traditional medicines involve molecules walking the streets of the human body looking for garbage. If a molecule finds a piece, it picks it up and carries it to the tip and its job is finished. PROTACs walk the streets with a spray can tagging multiple pieces of rubbish so the pre-existing garbage truck can find them and remove them.
“We had this ‘Wow!’ moment because the degrader technology was working better than we’d expected,” Dr Feltham tells Forbes Australia. “And so that really changed the trajectory of what we were thinking. It was no longer about finding and de-risking exciting drug targets. It was now, ‘How do we turn these into medicines?’”
“We looked at billions of compounds and we found one.”
Dr Joanne Boag
On the global scene, the first PROTAC human trials began in 2019 and, in 2021, Pfizer paid US$1 billion – US$650 million cash up front and US$350 million in equity – for a piece of biotech startup Arvinas’s action on its then early-stage breast cancer drug, vepdegestrant.
The federal Department of Health’s Medical Research Future Fund’s Frontier Health and Medical Research initiative dropped $15 million into establishing the Australian Centre for Targeted Therapeutics (ACTT) through WEHI, in 2023.
Ternarx was spun out of that in 2024 to commercialise its work.
“They want an outcome for Australian patients and Australian society,” says Dr Bernhard Lechtenberg, who joined the WEHI team in 2019. “They want to get it out of the labs into patients, and starting a company is one way to do that,” says Lechtenberg, a German researcher, who had done his postdoctoral work in the US.
A very productive destruction event
Where Feltham had looked at the PROTACS at the cellular level, Lechtenberg was doing it at the protein and atomic level.
They started on two cancer targets: neuroblastoma, a rare cancer that mainly affects children’s nerves; and prostate. Others had tried, and failed, to target proteins involved in these cancers using existing drug technologies. They were, therefore, seen as “undruggable”.
The Ternarx team also failed to find a molelcule for neuroblastoma.
That left prostate cancer. They had identified a protein that was thought to be a key driver behind the cancer that affects 1.5 million men each year, killing 400,000. If they could eliminate the protein, they could “potentially cure prostate cancer,” Lechtenberg says.
But this protein had no obvious nooks nor crannies into which standard drugs could be directed. That’s why it had remained “undruggable”.
“So we had to try and fit something into an area of it that hadn’t been touched before,” says Feltham. “That’s where PROTACs allow you to just gently touch the surface of it, you don’t have to fit deeply into the mouth, just gently touch the surface, and you can still have a very, very productive destruction event happen.”
But they still had to find their molecule. The search began with a technology known as DNA-encoded screening.
Companies can now build enormous libraries of potential drug molecules by systematically combining chemical building blocks. “They start with, let’s say, a thousand building blocks and combine them with another thousand building blocks,” Lechtenberg explains. Do that again with another thousand building blocks and the number of possible molecules quickly tops a billion. Each molecule carries its own DNA barcode, recording how it was made.
“You take this whole cocktail of billions of compounds, add it to the protein that you’re interested in, and then you wash everything away that doesn’t stick to your protein,” says Lechtenberg. What remains are the molecules that have bound to the target.
“You can read this DNA and then you know exactly which molecule was bound to your target protein.”
Taking on the world
No one in the world had found a chemical to attach to this protein before, says Ternarx CEO Dr Joanne Boag. “We looked at billions of compounds and we found one. It didn’t bind it very well, but it did bind. So we had to start a process of optimising that chemical to bind to that protein.
“That was what got the investor [Curie.Bio] interested – the fact that we, a small company in Australia, were able to do something that no one else had done.
“Bernhard’s group was able to show it in a crystal structure – so a picture of this compound bound to this protein,” says Boag. “We have developed multiple assays that were rigorously tested by them to convince them that we had actually done this, because no one else had been able to do it.”
Other tests in mice showed the compound appeared safe, says Feltham. “We could see really nice depletion of the target in different tissues and different organs, and the mice were fine. So that helped with that data package for the investors.”
They did a deal in February this year. Curie.Bio, with WEHI Ventures, now owns the prostate IP, but Ternarx has retained some equity and a role – with team members working on it in the US.
“Our lead asset’s gone off to live its best life in the US with its own funding,” says Boag. “But we still had over 12 months’ worth of funding. That enabled us to really think about where the field was going next.”
Ternarx decided to pivot away from cancer and into chronic disease.
The intractables
“Oncology is a very crowded space, and those larger companies like Arvinas in the US, they’ve got that all stitched up. There are also lots of assets coming out of China now that are very high quality.
“We wanted to go after things that are more difficult, but where we could really use the capabilities that we’ve built out of Becky and Bernard’s lab.
“So our first lead program is in Lupus or SLE [an autoimmune disease]. There’s a huge unmet need. It mainly affects women. They are mainly treated by corticosteroids and biologics that require monthly injections or infusions. We’re looking to develop one of the very few pills to manage the disease and, we think, manage it better.”
“You could use this technology on any disease.”
Dr Lee Booty
They are not revealing the name of the protein they’re targeting in Lupus. “We call it P3, which stands for Program 3 … It is a key driver of one of the mediators of lupus called interferon.”
Interferon is also a key driver of other conditions such as Sjögren’s Syndrome, Systemic Sclerosis, Myositis and Rheumatoid Arthritis. And others have failed to drug it in the past. “Importantly for fundraising purposes, this is a large market,” says Boag. “There were very specific things about this protein that meant that a degrader was really the only way to get at it.”
Lupus affects an estimated 30,000 Australians, 1.5 million Americans and about 5 million worldwide.
“Most people are diagnosed between the ages of 15 and 44,” says Boag. “There’s no cure. These people manage the disease for their lifetime and it can be fatal … I was shocked, when I started working in the area, how many people were impacted, and the fact there were no real disease modifying treatments out there.”
Ternarx has enough money to take it through to March 2027 and is trying to raise $30 million to take the lupus molecule through Phase 1 trials and start exploring other chronic ailments, including fibrotic conditions.
“We’re up against the clock,” says Boag. “We’ve got to produce some key pieces of data to convince investors to invest in us. We’re speaking to investors locally and also internationally, and getting a really great response. The capability that we’ve developed in terms of being able to drug these hard-to-drug proteins, being able to do it with PROTACs, is really resonating.
“It’s relatively rare for companies at our stage to be able to, in Australia, raise that amount of money. We’ve set the bar high, but we’ve got good traction and the science is progressing really well.”
And Ternarx won’t stop at auto-immune conditions, says chief scientific officer Lee Booty. “You could use this technology on any disease. This degrader technology allows you to tap into these core drivers of diseases … they’re what we like to call in the industry ‘intractable’ – we’re not able to get to them with traditional means.”
The Curie.Bio bio
Curie.Bio is a Boston-based venture capital and drug-development firm that has backed some 30 biotech start-ups, four of which have come out of Melbourne. Curie.Bio specialises in backing early-stage companies and providing them with an in-house team of drug hunters, scientists and operators. It has raised more than US$1.2 billion.
The small portion of that which has made its way to Victoria includes one biotech in stealth mode, but the other three are:
- Alkira Bio: A Melbourne-based spin-out from The Florey Institute focusing on therapeutic antibodies that target complex G protein-coupled receptors (GPCRs) using its LASEREDD platform.
- Phrenix Therapeutics: A spin-out from Monash University and The Florey Institute developing next-generation medicines for psychiatric and neurological disorders like psychosis and schizophrenia. Also backed by Brandon Capital.
- Ternarx Bio: A US company that was spun out of Ternarx to develop its prostate cancer IP.
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