Pharmaceutical giant Novartis signs potential $5.7 billion second partnership with Monte Rosa
In a significant development, biotech company Monte Rosa Therapeutics has announced a partnership with pharmaceutical giant Novartis. This collaboration, worth up to $5.7 billion, will see the two companies work together to develop additional molecular glue degraders (MGDs) for immune-mediated diseases.
The partnership is based on Monte Rosa's Quantitative and Engineered Elimination of Neosubstrates (QuEEN) discovery engine. QuEEN is designed to identify degradable protein targets and rationally design MGDs with unprecedented selectivity.
Novartis has agreed to pay Monte Rosa an upfront payment of $120 million, with potential milestone payments reaching up to $2.2 billion if regulatory approval is achieved for multiple indications in multiple territories. Tiered royalties on global net sales will be in the high single to low double-digit range.
The collaboration could generate more than $5.7 billion for Monte Rosa, according to the company's presentation to investors. This significant influx of funds has extended Monte Rosa's cash runway into 2028, as the company finished the second quarter with $295.5 million in cash, cash equivalents, restricted cash, and marketable securities as of June 30.
Novartis has also acquired an exclusive, royalty-bearing, sublicensable, and transferable license to an undisclosed discovery target from Monte Rosa. In addition, they have agreed to acquire options to license two programs from Monte Rosa's preclinical immunology portfolio.
Clinical development, regulatory, and sales milestones could result in payments of up to $5.4 billion for the first licensed program and two optioned immunology and inflammation (I&I) programs. The potential sales milestones could amount to up to $3.2 billion, to be allocated across licensed products.
Monte Rosa's CEO, Markus Warmuth, stated that the collaboration extends their relationship with Novartis beyond the previously announced VAV1 agreement. Novartis will work with Monte Rosa on developing degraders for immune-mediated diseases targeting "highly credentialed" and difficult-to-drug targets.
Clara Dong, PhD, equity analyst with Jefferies, sees the collaboration as a strong validation of Monte Rosa's molecular glue platform. Shares of Monte Rosa leaped to $7.39 soon after the start of trading Monday, representing a 44% surge from Friday's close of $4.81.
This partnership marks a significant step forward for Monte Rosa Therapeutics, bolstering their financial position and providing a strong foundation for future growth in the development of innovative treatments for immune-mediated diseases.
