(Reuters) - Swiss pharmaceutical giant Novartis will pay Monte Rosa Therapeutics $150 million upfront payment for a global license to develop, manufacture and sell some drug candidates, the U.S.-based biotech firm said on Monday.

The agreement covers a class of drugs called "molecular glue degraders," which target abnormal protein functions associated with some diseases that are hard to treat with existing medications.

Monte Rosa will also be eligible for future payments of up to $2.1 billion as well as royalties on net sales outside the U.S.

Shares of Monte Rosa surged 32% to $6.46 in premarket trade following the news.

CONTEXT

Novartis is bracing for the loss of U.S. patent protection next year for its bestseller Entresto and for Promacta to treat a lack of blood platelets.

WHY IT'S IMPORTANT

Among the candidates, Novartis will get access to MRT-6160, for which Monte Rosa is currently conducting an early-stage study for immune-mediated conditions. Novartis will take over the development of the candidate from mid-stage trials.

Like many major pharmaceutical companies, Novartis has been actively securing deals to strengthen its drug pipeline and mitigate the impact of losing exclusivity on key medications.

The Swiss company is also streamlining its operations by cutting jobs and costs and sharpening focus on fewer therapeutic areas and geographic markets.

KEY QUOTE

"Novartis has had a long-standing interest in molecular glue degraders, which offer the potential to tackle challenging biological targets," said Fiona Marshall, president of biomedical research at Novartis.

(Reporting by Leroy Leo in Bengaluru; Editing by Tasim Zahid)