PTC Therapeutics stock soars after Novartis Licensing agreement

What you need to know

• PTC Therapeutics shares soared on Monday after the company announced a license agreement and a collaboration with Novartis worth nearly $2 billion.
• The deal gives Novartis global development, manufacturing, and commercial responsibility for PTC's experimental Huntington's Disease drug.
• PTC received $1.0 billion up front and stated that it will use the funds to increase its commercial portfolio and expand its splicing platforms.

PTC Therapeutics’ (PTCT), shares soared by 16% on Monday after the pharmaceutical company announced a license agreement and collaboration with Novartis.

PTC announced that Novartis will take on global responsibility for the development, manufacture, and marketing of PTC518, its drug used to treat Huntington’s Disease, following the completion of an ongoing Phase 2 clinical trial.

In exchange, PTC will receive a $1.0 billion upfront payment, with the opportunity to get a total of $1.9 billion "in development, regulatory and sales milestones, a profit share in the U.S., and double-digit tiered royalties on ex-U.S. sales." PTC and Novartis will split the U.S. losses and profits, each receiving 40 percent.

PTC’s Chief Executive Officer Dr. Matthew Klein said that proceeds would be used to increase the company’s fusion platform and its development and commercial activities.

This transaction should close by the end of first quarter 2025. 

PTC Therapeutics shares rose to the highest levels since May 2023. Novartis American Depositary Recipients (ADRs), however, dropped by around 1%.

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