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Shares of PTC Therapeutics PTCT rose nearly 19% on Monday after announcing that it has entered into an exclusive global licensing and collaboration agreement with pharma giant Novartis NVS for PTC518, its investigational oral therapy for Huntington's disease (HD).
Per the terms of the deal, Novartis will be responsible for developing and marketing PTC518 in HD indication after completion of the ongoing phase II PIVOT-HD study, expected in the first half of next year. PTC Therapeutics will receive an upfront cash payment of $1 billion. The company will also be eligible to receive up to $1.9 billion in milestone payments from Novartis.
While both companies will share profits and losses in the United States in the ratio of 40:60 (40% PTC and 60% Novartis), NVS will be responsible for ex-U.S. sales. PTCT will also be eligible to receive tiered double-digit royalties on ex-U.S. sales of the drug.
The deal is expected to be closed in first-quarter 2025, subject to the fulfillment of customary closing conditions, including regulatory approvals.
PTCT Stock’s Performance
Wall Street was impressed with the licensing deal. If the deal is successfully closed, management plans to use the proceeds to expand its drug development platform and strengthen its commercial activities.
Some investors also opined that the deal further validates PTC’s HD drug. In June, PTC reported interim data from the PIVOT-HD study, which showed that treatment with PTC518 resulted in a durable, dose-dependent reduction of huntingtin protein in the blood and the fluid surrounding the brain and spine.
Year to date, PTC Therapeutics’ shares have soared 88.9% against the industry’s 5.2% decline.
Image Source: Zacks Investment Research
Recent Developments in PTCT Stock
The Novartis deal is one of the few positive boosts to PTC Therapeutics stock this year. Last month, the FDA granted accelerated approval to the company’s gene therapy Kebilidi for treating AADC deficiency. This marks the approval for the first gene therapy in the United States that is directly administered to the brain.
In October, management resubmitted the regulatory filing seeking approval for Translarna in nonsense mutation Duchenne muscular dystrophy (nmDMD). Since a previous filing on the drug was issued a complete response letter (CRL) in 2016, the FDA is not obliged to provide a target action date, though it accepted the company’s resubmission.
In July, PTC filed a regulatory filing seeking approval with the FDA for sepiapterin to treat phenylketonuria (PKU) in pediatric and adult patients. A final decision is expected by July 29, 2025.