Swiss giant drug producer Novartis (NVS) has found a new destination for its recent partnership spree. On Monday, Monte Rosa Therapeutics (GLUE), a Massachusetts-based biotech company, disclosed its second deal with Novartis, with Monte’s shares exploding over 50% in early trading to more than $7.
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Under the new deal, Monte Rosa will use its platform, powered by artificial intelligence, to develop novel degraders, which are therapeutic molecules designed to selectively eliminate disease-causing proteins in cells. The end goal is to treat immune-mediated diseases such as rheumatoid arthritis that are caused by the immune system mistakenly attacking healthy cells.
Monte Rosa Secures Second Deal with Novartis
As part of the new arrangement, Novartis will be responsible for clinical development and commercialization of the drugs developed. The Swiss pharma heavyweight will also get exclusive rights to an undisclosed drug-discovery target. Novartis could also license two programs from Monte Rosa’s immunology portfolio.
In return, Monte Rosa is expected to receive an upfront payment of $120 million, plus ongoing payments to keep the licensing options active. The American biotech could also earn up to $5.7 billion as the drugs progress through development, approval, and sales milestones.
The new deal builds on Monte Rosa’s earlier partnership with Novartis. As agreed upon in the earlier arrangement, Monte Rosa is working on an experimental drug called MRT-6160 to treat immune-mediated diseases using a protein called VAV1.
Efforts are still ongoing to move the development of the drug towards mid-stage clinical trials, where the drug will be tested in patients, CEO Markus Warmuth noted in a statement.
Meanwhile, Novartis’ latest deal with Monte Rosa follows its planned acquisition of Tourmaline Bio (TRML), a $200 million drug development deal with Arrowhead (ARWR), and a $5.2 billion agreement with China’s Argo Biopharm.
Is GLUE a Good Stock to Buy?
Meanwhile, on Wall Street, Monte Rosa’s shares have a Strong Buy consensus rating based on three Buys over the past three months, as seen on TipRanks. The average GLUE price target is $20, which is an expansive 316% growth potential from its current level.
