Shares of PTC Therapeutics spiked by 16% on Monday after the pharmaceutical company disclosed a nearly $2 billion license and collaboration deal with Novartis. The deal empowers Novartis with the global progression, production, and marketing rights of the PTC518 Huntington's disease treatment, pending the conclusion of a Phase 2 study underway.
PTC Therapeutics will receive an upfront payment of $1.0 billion, with the potential to earn up to $1.9 billion in development, regulatory, and sales milestones. Additionally, the agreement entails a profit share system in the U.S, with double-digit tiered royalties on sales outside the U.S. The profit loss sharing ratio within U.S. will be 40% for PTC Therapeutics and 60% for Novartis.
PTC's CEO, Dr. Matthew Klein, revealed that the funds will be utilized to broaden the company's splicing platform and augment its commercial and development portfolio activities. The deal is anticipated to be finalized in the first quarter of 2025.
PTC Therapeutics shares reached their highest level since May 2023 following the announcement, while American depositary receipts (ADRs) of Novartis dropped by about 1%.