On Monday, PTC Therapeutics, Inc. (NASDAQ: NASDAQ:PTCT) saw its shares surge by 20% following the announcement of a landmark deal with Novartis (SIX:NOVN) Pharmaceuticals Corporation. The agreement focuses on the licensing and collaboration of PTC (NASDAQ:PTC)'s Huntington's disease program, particularly PTC518, and includes a substantial upfront payment as well as milestones and royalties.
PTC Therapeutics is set to receive $1.0 billion in cash upon the closing of the transaction. Additionally, the company is eligible for up to $1.9 billion in payments contingent on the achievement of certain development, regulatory, and sales milestones. The agreement also grants PTC a share of the profits in the U.S. market and tiered double-digit royalties on net sales outside the U.S.
Novartis has committed to take over global development, manufacturing, and commercial responsibilities for PTC518 after the completion of the placebo-controlled segment of the ongoing PIVOT-HD study. This transition is anticipated in the first half of 2025, with the companies sharing U.S. profits and losses on a 40/60 basis, favoring Novartis.
Matthew B. Klein, M.D., Chief Executive Officer of PTC Therapeutics, expressed optimism about the collaboration, highlighting the potential of PTC518 as a leading oral disease-modifying therapy for Huntington's disease. He stated that the financial aspects of the agreement reflect the treatment's promise and that the partnership with Novartis will leverage PTC's expertise in small molecule splicing therapies along with Novartis's global development and commercialization capabilities.
Vas Narasimhan, CEO of Novartis, underscored the strategic importance of the agreement to strengthen their neuroscience pipeline and their commitment to exploring new approaches for neurodegenerative diseases with significant unmet needs.
PTC518, which emerged from PTC's splicing platform, has shown promising results in the Phase 2 PIVOT-HD trial, with interim results in June 2024 indicating a reduction in mutant Huntingtin protein levels and potential clinical benefits.
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