Genelabs Shares Rise on Hepatitis C Drug Development Agreement With Novartis

REDWOOD CITY, Calif. -- Shares of Genelabs Technologies Inc. jumped early Monday after the biotech drug maker said it entered a license and collaboration agreement with Swiss drug maker Novartis AG to develop Hepatitis C treatments.

Genelabs shares rose 35 cents, or 46 percent, to $1.11 in premarket activity on the INET electronic exchange. Shares have traded between 70 cents and $3.55 over the past 52 weeks.

Under the agreement, Genelabs will get an upfront payment of $12.5 million from Novartis, part of $20 million earmarked over the next two years to develop non-nucleoside drugs to treat Hepatitis C.

The company said the agreement could be worth more than $175 million with milestone payments. Genelabs also would receive royalties on developed products.

Genelabs will be responsible for drug discovery research and Novartis will handle development and commercialization. Novartis also gets an option to extend research funding for a third year.