Novartis is paying $1 billion upfront for global rights to PTC Therapeutics’ midphase Huntington's disease program, helping the biotech bounce quickly back from disappointing data on another program.
PTC went into the Thanksgiving break reeling from the failure of an amyotrophic lateral sclerosis trial and its subsequent decision to stop further development of the candidate. Monday, PTC revealed a deal with Novartis for its Huntington's drug candidate PTC518, sending its share price up 17% to above $51 in premarket trading.
Novartis is paying $1 billion and committing up to $1.9 billion in development, regulatory and sales milestones for a global license to the asset. PTC has a 40% share of any profits or losses in the U.S. and will receive double-digit tiered royalties on overseas sales.
PTC developed PTC518 using the same splicing platform that spawned Roche’s Evrysdi. After crossing the blood-brain barrier, the molecule is designed to lower production of the HTT protein. Mutant HTT drives Huntington's, and animal data suggest lowering levels of the protein could improve outcomes in a rare disease that causes people to gradually lose the ability to walk, speak, swallow or care for themselves.
Multiple other companies are trying to treat Huntington's by targeting HTT, but PTC believes PTC518 is differentiated. The biotech has built its case for the oral candidate around evidence it reduces levels of the protein in the central nervous system and periphery and achieves uniform lowering in key regions of the brain.
PTC shared 12-month data from a phase 2 trial of the drug candidate in June. The biotech reported dose-dependent reductions in HTT in blood and cerebrospinal fluid. Scores on a motor scale worsened by 1.3 points in patients on the high dose of PTC518 compared to a 4.9-point deterioration on placebo.
Novartis once had its own HTT-lowering drug candidate, branaplam, but it stopped development about two years ago after seeing signs it may damage nerves outside of the brain and spinal cord. The action was part of a string of industrywide Huntington's setbacks that left PTC as a front-runner in the space. William Blair analysts discussed the status of PTC’s program in a note to investors last week.
“We believe investors are increasingly revisiting the company’s Huntington’s program, and positive regulatory discussions supporting a pathway to accelerated approval could provide significant upside to the stock given the high commercial potential of a small molecule compared to other modalities,” the analysts said.