Novartis NVS has entered into a global license and collaboration agreement with PTC Therapeutics PTCT for the latter’s Huntington's disease candidate to strengthen NVS’ neuroscience pipeline.

NVS also announced a collaboration with Olema Pharmaceuticals, Inc. OLMA for a breast cancer drug.

Year to date, shares of Novartis have risen 3.8% compared with the industry’s growth of 8.9%.

Image Source: Zacks Investment Research

NVS’ Licensing Deal With PTCT

Novartis will in-license PTC Therapeutics’ PTC518.  The candidate is an oral disease-modifying therapy in development for Huntington's disease.

NVS will assume responsibility for the development, manufacturing and commercialization of the candidate following the completion of the placebo-controlled portion of the ongoing phase II PIVOT-HD study.

Interim results, reported in June 2024, demonstrated that PTC518 treatment resulted in durable, dose-dependent reduction in blood and cerebrospinal fluid (CSF) mutant Huntingtin protein (HTT) levels as well as early signals of dose-dependent benefit on key clinical measurements at 12 months.

The study is expected to be completed in the first half of 2025.

Novartis will make an upfront payment of $1.0 billion to PTCT and the latter will also be eligible for up to $1.9 billion in development, regulatory and sales milestones. NVS will also share profits in the United States (40% PTC and 60% Novartis) and pay tiered royalties on ex-US sales.

The cash influx impressed PTCT’s investors and shares of the company gained on the announcement. PTCT expects to use the proceeds from this transaction to expand its splicing platform as well as support commercial and development portfolio activities.

The collaboration combines PTC's expertise in developing small molecule splicing therapies with Novartis' expertise in global development and commercialization of neuroscience therapies.

The agreement is expected to be closed in the first quarter of 2025.  The deal strengthens NVS’ neuroscience pipeline. NVS has approved drugs like Kesimpta and Zolgensma in its portfolio.

NVS’ Deal With OLMA

Novartis has entered into a clinical trial collaboration and supply agreement with Olema for a late-stage study.

Palazestrant is a novel, orally available small molecule with dual activity as a complete estrogen receptor (ER) antagonist and selective ER degrader. It is currently being investigated in patients with recurrent, locally advanced or metastatic ER-positive (ER+), human epidermal growth factor receptor 2-negative (HER2-) breast cancer.

Per the terms of the deal, Novartis will provide Olema with drug supply of Kisqali (ribociclib) for the planned phase III OPERA-02 trial of palazestrant in combination with ribociclib in ER+/HER2- frontline advanced or metastatic breast cancer.

This trial will be sponsored by Olema. While Olema maintains global commercial and marketing rights to palazestrant, all clinical data and inventions from the trial will be owned jointly.

Kisqali is one of the top drugs of Novartis. It is approved for metastatic and early breast cancer.

Novartis Looks to Strengthen Pipeline

NVS is a pure-play innovative medicine company with a focus on core therapeutic areas — cardiovascular, renal and metabolic, immunology, neuroscience and oncology.

NVS is now focused on strengthening its core pharmaceutical business with strategic acquisitions and deals. Earlier, Novartis acquired MorphoSys AG. The acquisition added pelabresib (late-stage BET inhibitor for myelofibrosis) and tulmimetostat (early-stage dual EZH2 and EZH1 inhibitor for solid tumors or lymphomas) to NVS’ pipeline.  The MorphoSys acquisition should further expand its oncology pipeline.

NVS’ Zacks Rank & Stock to Consider

Novartis currently carries a Zacks Rank #3 (Hold).

A better-ranked stock from the large-cap pharma industry is Pfizer PFE, which currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Over the past 60 days, Pfizer’s earnings estimates have risen from $2.62 to $2.91 per share for 2024, while that for 2025 has increased from $2.84 to $2.91. PFE’s shares have lost 10.5% year to date.

Pfizer’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 74.50%.




 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Novartis AG (NVS) : Free Stock Analysis Report

Pfizer Inc. (PFE) : Free Stock Analysis Report

PTC Therapeutics, Inc. (PTCT) : Free Stock Analysis Report

Olema Pharmaceuticals, Inc. (OLMA) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research