Swiss pharmaceutical company Novartis AG (NYSE: NVS) and drug development firm Monte Rosa Therapeutics (NASDAQ: GLUE) announced on Monday a licensing agreement valued at up to $5.7 billion to jointly develop treatments for immune-mediated diseases.
Under the terms of the agreement, Monte Rosa Therapeutics will receive an upfront payment of $120 million. The company is also eligible to receive milestone payments and sales royalties that could total up to $5.7 billion if development targets are achieved and the resulting drugs reach commercial success.
This marks the second major partnership agreement Novartis has secured this month. The company previously entered into a deal worth up to $5.2 billion with Chinese biotechnology firm Argo Biopharmaceutical to co-develop experimental treatments for heart diseases.
Following the announcement, Monte Rosa Therapeutics' shares surged 50% in pre-market trading.