Swiss drugmaker Novartis (NOVN.S), opens new tab and drug developer Monte Rosa Therapeutics (GLUE.O), opens new tab agreed to an up to $5.7 billion licensing deal to develop treatments for immune-related diseases, the companies said on Monday, marking their second partnership in less than a year.
Under the agreement, Monte Rosa will receive $120 million upfront and could earn additional milestone payments and royalties.
Shares of the Boston based company jumped 50% in early morning trading after the announcement.
Immune-related diseases occur when the immune system mistakenly attacks healthy tissues, causing inflammation and damage. These hard-to-treat conditions can severely impact patients’ quality of life.
The deal grants Novartis exclusive rights to an undisclosed drug discovery target and options to license two additional programs from Monte Rosa’s early stage immunology portfolio.
The agreement represents “additional validation” of Monte Rosa’s molecular glue degrader discovery platform from an existing large pharma partner, Wedbush’s Robert Driscoll said.
Monte Rosa’s platform, QuEEN, uses artificial intelligence and machine learning to discover and develop new degraders – small molecules designed to break down disease-causing proteins – which Novartis will take into clinical development and commercialisation.
The deal allows Monte Rosa to leverage Novartis’ development capabilities to drive programs forward, and use the cash to achieve important milestones with its wholly-owned pipeline, Driscoll added.
Last year, the companies signed a similar $150 million upfront deal for MRT-6160, an early-stage autoimmune/inflammatory drug, with potential future payments up to $2.1 billion plus royalties on non-U.S. sales.
The agreement is Novartis’ second major deal this month, after an up to $5.2 billion tie up with China’s Argo Biopharmaceutical for experimental heart drugs.
Monte Rosa shares had fallen about 31% year-to-date till Friday close.
