:max_bytes(150000):strip_icc()/biotech_research_shutterstock_539866399-1815ece1983542b498a6b74bb3673015.jpg "This Biotech Stock Has Doubled Its Value Today—Here’s Why")
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Key Takeaways
- Monte Rosa Therapeutics signed a development and commercialization deal with Novartis that could pay the biotech up to $2.1 billion.
- The agreement is for Monte Rosa’s MRT-6160 drug and other potential treatments for immune system diseases.
- Shares of Monte Rosa more than doubled on the news.
Shares of Monte Rosa Therapeutics (GLUE) more than doubled Monday after the biotechnology company struck an exclusive development and commercialization license agreement with Novartis (NVS) for its treatments for immune system diseases that could be worth more than $2 billion.
The company said that Novartis will pay $150 million up front for exclusive worldwide rights to develop, manufacture, and commercialize its molecular glue degrader (MGD) drug, MRT-6160, currently in a Phase 1 trial, as well as other MGDs. Monte Rosa explained that it could then receive up to $2.1 billion in “development, regulatory, and sales milestones, beginning upon initiation of Phase 2 studies, as well as tiered royalties on ex-U.S. net sales.”
Novartis will be responsible for all clinical development and commercialization, starting with Phase 2 clinical studies. Monte Rosa will complete the Phase 1 trial, and co-fund the Phase 3 clinical development. It will share any profits and losses associated with the manufacturing and commercialization of MRT-6160 in the U.S.
CEO Says Deal ‘Expected To Extend Our Operational Runway’
Monte Rosa Chief Executive Officer (CEO) Dr. Markus Warmuth explained that the money raised from the deal is “expected to extend our operational runway, enable us to advance our pipeline to potential value-creating milestones and anticipated proof-of-concept readouts, and further leverage our QuEEN discovery engine.”
Monte Rosa Therapeutics recently were up 130% at $11.21, trading at their highest level in more than two years. American depositary receipts (ADRs) of Novartis were up about 1.5% at $115.47.