A small Morrisville drug company co-founded by UNC Chapel Hill Chancellor Holden Thorp has signed a development deal that could bring in more than $200 million.

Viamet Pharmaceuticals this morning announced an agreement with the Novartis Option Fund to develop a treatment targeting a type of enzyme known as a metalloenzyme that contains a metal, typically zinc or iron. Viamet's technology is designed to shut down the activity of key metalloenzymes, and make safer and more effective medicines.

The deal includes an upfront fee and milestone payments that could be worth more than $200 million if the treatment proves successful down the road.

That's a significant amount of money for a Triangle company with eight employees.

A Morrisville drug company co-founded by UNC-Chapel Hill Chancellor Holden Thorp said Tuesday that it has raised $18 million in funding in spite of a slowdown in venture financing.

The company, Viamet Pharmaceuticals, plans to use the money to move its treatments into clinical trials. Viamet, which employs six, targets a specific class of enzymes called metalloenzymes that contain a metal, typically zinc or iron.

About 10 percent of drugs on the market today work because they shut down the activity of key metalloenzymes, said Robert Schotzinger, Viamet’s CEO. The technology Viamet is developing promises to improve existing drugs, making medicines safer and more effective, he said.

Viamet was founded in 2005 by Thorp and Thomas O’Halloran, a chemistry professor at Northwestern University. The company last raised money in June 2007 in $4 million Series A round.

The Series B funding announced Tuesday was led by the Novartis Option Fund and Lilly Ventures. Existing investors who also participated included Intersouth Partners and Hatteras Venture Partners, both of Durham.

Lilly Ventures, a subsidiary of Eli Lilly and Co., “invests in companies with promising technologies that have the potential to generate multiple, ‘best in class’ products,”  Managing Director Ed Torres wrote in a statement. “We believe that Viamet represents just such an opportunity.”