UPDATE 2-Novartis taps Arvinas' cancer drug for up to $1 billion

(Adds shares in paragraph 2, analyst comment in paragraph 6, details in paragraph 7)

April 11 (Reuters) - Swiss drugmaker Novartis AG has entered into a licensing deal worth up to $1.01 billion with Arvinas to gain access to the U.S. biotech firm's experimental prostate cancer drug, Arvinas said on Thursday.

Shares of Connecticut-based Arvinas rose more than 6% to $39 in premarket trade.

The pact adds to Novartis' pursuit of cancer treatments after it launched a tender offer on Thursday to acquire German cancer drugmaker MorphoSys for an aggregate 2.7 billion euros ($2.9 billion).

Novartis has been cutting jobs and trying to rein in costs after spinning off its generic drugs business Sandoz last year, to focus on fewer therapeutic areas and geographic markets.

Under the agreement with Arvinas, Novartis has acquired global rights to develop and commercialize the drug, ARV-766, for an upfront payment of $150 million.

The partnership is a validation of Arvinas' protein degradation platform and the drug candidates being developed against a type of prostate cancer, Truist Securities analyst Srikripa Devarakonda wrote in a note.

Novartis will also buy another candidate in preclinical stage targeting prostate cancer, AR-V7, as part of the deal, Arvinas said.

Arvinas is also eligible to get tiered royalties for the drug and potential milestone payments adding up to $1.01 billion.

ARV-766 is designed to target and degrade androgen receptors, which bind to male sex hormones or androgens.

Arvinas is developing treatments that harness the body's own natural protein disposal system to degrade and remove disease-causing proteins. (Reporting by Mariam Sunny in Bengaluru; Editing by Shailesh Kuber)