Swiss drugmaker Novartis will pay up to $2.9 billion for PTC Therapeutics' promising experimental drug for a neurological disorder called Huntington's disease, sending the U.S.-based biotech's shares up about 14% on Monday.

Novartis is paying $1 billion upfront in a licensing deal for an experimental Huntington’s disease treatment from PTC Therapeutics.

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.

Monday’s agreement comes days after PTC discontinued the development of another asset, utreloxastat, due to disappointing Phase II data in amyotrophic lateral sclerosis.

PTC Therapeutics has signed an up to $2.9 billion licensing deal with Novartis AG for the U.S. company's experimental drug for a rare neurological disorder, sending its shares up 20% in premarket trading on Monday.

Key Takeaways Shares of PTC Therapeutics soared Monday when the pharmaceutical firm announced it struck a nearly $2 billion license and collaboration deal with Novartis.The deal gives Novartis global development,