Oct 28 (Reuters) - Swiss pharmaceutical giant Novartis

will pay Monte Rosa Therapeutics ( GLUE ) $150 million

upfront payment for a global license to develop, manufacture and

sell some drug candidates, the U.S.-based biotech firm said on

Monday.

The agreement covers a class of drugs called "molecular glue

degraders," which target abnormal protein functions associated

with some diseases that are hard to treat with existing

medications.

Monte Rosa will also be eligible for future payments of

up to $2.1 billion as well as royalties on net sales outside the

U.S.

Shares of Monte Rosa surged 32% to $6.46 in premarket trade

following the news.

CONTEXT

Novartis is bracing for the loss of U.S. patent protection

next year for its bestseller Entresto and for Promacta to treat

a lack of blood platelets.

WHY IT'S IMPORTANT

Among the candidates, Novartis will get access to MRT-6160,

for which Monte Rosa is currently conducting an early-stage

study for immune-mediated conditions. Novartis will take over

the development of the candidate from mid-stage trials.

Like many major pharmaceutical companies, Novartis has been

actively securing deals to strengthen its drug pipeline and

mitigate the impact of losing exclusivity on key medications.

The Swiss company is also streamlining its operations by

cutting jobs and costs and sharpening focus on fewer therapeutic

areas and geographic markets.

KEY QUOTE

"Novartis has had a long-standing interest in molecular glue

degraders, which offer the potential to tackle challenging

biological targets," said Fiona Marshall, president of

biomedical research at Novartis.