Molecular Partners' <MOLN.S> shares jumped as much as a third on Wednesday after Swiss drugs giant Novartis <NOVN.S> inked a deal to license two of the Zurich-based biotech company's antiviral drugs that it hopes to use to treat COVID-19 patients.
Molecular Partners will get an upfront payment of 60 million Swiss francs ($66.2 million), a potential milestone payment of 150 million francs, and a "significant royalty" on sales of the drugs called MP0420 and MP0423.
Molecular Partners' shares rose more than 32% before paring gains to about 20% at 0950 GMT, reducing their year-to-date drop, set into motion in large part by an eye drug that failed to win regulators' blessing, to 12%.
Novartis shares fell 1.7%, continuing their slide from Tuesday after third-quarter sales missed expectations.
First human studies for MP0420 are expected to start in November, Molecular Partners has said, with clinical studies for MP0423 due to begin in the first half of 2021.
Molecular Partners struck a deal with the Swiss government in August to reserve doses of MP0420.
"It has become increasingly clear that to tackle the pandemic at a global level the development of medicines that can prevent and treat the virus, in addition to the development of vaccines, will be crucial," Novartis said.
Novartis's efforts to combat COVID-19 have focused largely on repurposing older medicines, including its malaria drug hydroxychloroquine that won U.S. President Donald Trump's endorsement but flopped in trials.
Novartis does have its own COVID-19 drug-discovery programme, but with a pair of prospective medicines due to enter the clinic only next year, the Molecular Partners deal could help speed up entry into the field.
Molecular Partners is seeking to regain its lustre after its eye drug abicipar, in a partnership with U.S. drugmaker AbbVie, failed to win U.S. Food and Drug Administration approval.
($1 = 0.9070 Swiss francs)
(Reporting by John Miller; Editing by Michael Shields and Mark Potter)
