Shares of PTC Therapeutics PTCT rose nearly 19% on Monday after announcing that it has entered into an exclusive global licensing and collaboration agreement with pharma giant Novartis NVS for PTC518, its investigational oral therapy for Huntington's disease (HD).

Per the terms of the deal, Novartis will be responsible for developing and marketing PTC518 in HD indication after completion of the ongoing phase II PIVOT-HD study, expected in the first half of next year. PTC Therapeutics will receive an upfront cash payment of $1 billion. The company will also be eligible to receive up to $1.9 billion in milestone payments from Novartis.

While both companies will share profits and losses in the United States in the ratio of 40:60 (40% PTC and 60% Novartis), NVS will be responsible for ex-U.S. sales. PTCT will also be eligible to receive tiered double-digit royalties on ex-U.S. sales of the drug.

The deal is expected to be closed in first-quarter 2025, subject to the fulfillment of customary closing conditions, including regulatory approvals.

PTCT Stock’s Performance

Wall Street was impressed with the licensing deal. If the deal is successfully closed, management plans to use the proceeds to expand its drug development platform and strengthen its commercial activities.

Some investors also opined that the deal further validates PTC’s HD drug. In June, PTC reported interim data from the PIVOT-HD study, which showed that treatment with PTC518 resulted in a durable, dose-dependent reduction of huntingtin protein in the blood and the fluid surrounding the brain and spine.

Year to date, PTC Therapeutics’ shares have soared 88.9% against the industry’s 5.2% decline.

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Recent Developments in PTCT Stock

The Novartis deal is one of the few positive boosts to PTC Therapeutics stock this year. Last month, the FDA granted accelerated approval to the company’s gene therapy Kebilidi for treating AADC deficiency. This marks the approval for the first gene therapy in the United States that is directly administered to the brain.

In October, management resubmitted the regulatory filing seeking approval for Translarna in nonsense mutation Duchenne muscular dystrophy (nmDMD). Since a previous filing on the drug was issued a complete response letter (CRL) in 2016, the FDA is not obliged to provide a target action date, though it accepted the company’s resubmission.

In July, PTC filed a regulatory filing seeking approval with the FDA for sepiapterin to treat phenylketonuria (PKU) in pediatric and adult patients. A final decision is expected by July 29, 2025.

However, the company has also suffered some setbacks. Last week, management reported that a mid-stage study evaluating its investigational ALS drug utreloxastat did not meet the primary and secondary endpoints.

PTCT’s Zacks Rank

PTC Therapeutics currently carries a Zacks Rank #3 (Hold).

PTC Therapeutics, Inc. Price

PTC Therapeutics, Inc. price | PTC Therapeutics, Inc. Quote

Key Picks Among Biotech Stocks

A couple of better-ranked stocks from the sector are Castle Biosciences CSTL and Spero Therapeutics SPRO, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, estimates for Castle Biosciences’ 2024 loss per share have narrowed from 58 cents to 8 cents. During the same timeframe, loss per share estimates for 2025 have narrowed from $2.13 to $1.88. Year to date, shares of Castle Biosciences have surged 45.5%.

CSTL’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 172.72%.

In the past 60 days, estimates for Spero Therapeutics’ 2024 loss per share have narrowed from $1.59 to $1.13. Estimates for 2025 loss per share have narrowed from $1.54 to 54 cents. Year to date, shares of Spero Therapeutics have lost 23.1%.

Spero Therapeutics’ earnings beat estimates in two of the trailing four quarters and missed the mark in the other two, delivering an average surprise of 94.42%.

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