BioArctic Ends Novartis Collaboration, Keeps $30 Million Payment as Potential Option Is Canceled
Key Facts
BioArctic said on November 2, 2026, that Novartis Pharma AG had notified it of the termination of the option, collaboration and license agreement signed in August 2025. The Swedish company said the termination followed Novartis' decision to discontinue the program, without citing a strategic or commercial reason. The collaboration aimed to explore a potential treatment combining BioArctic's proprietary BrainTransporter technology with an undisclosed Novartis antibody. BioArctic said the decision "is not related to the BrainTransporter technology." The specific program is therefore ending, while BioArctic will keep the upfront payment it received under the agreement.
BioArctic will retain the $30 million upfront payment, the certain consideration stipulated when the agreement was signed. The company said it would recognize during 2026 the remaining portion of the payment not yet recorded as revenue as a result of the agreement's termination. The amount was part of a broader financial structure that tied subsequent consideration to Novartis exercising its license option, rather than merely signing the collaboration. The original agreement provided for potential additional payments of up to $772 million if Novartis exercised the option. It also included tiered royalties in the mid-single digits on future global sales if the product reached the market. With the agreement terminated, the opportunity for those program-related payments and royalties expires, while BioArctic keeps the $30 million upfront payment.
Under the agreement, BioArctic was responsible for generating a new drug candidate by combining its technology with a Novartis-owned antibody. After evaluating the candidate, Novartis could have chosen to license it and then assumed responsibility for its global development and commercialization. The license option was therefore a separate stage from the initial work to generate the candidate, and was also a condition for the additional payments of up to $772 million. The tiered royalties, meanwhile, were contingent on the product reaching the market and generating global sales. BioArctic's disclosure did not specify the program's stage when it was halted or provide details about the resulting candidate. The company confirmed that the decision to stop concerned the program, not the BrainTransporter technology, which is part of other collaboration arrangements.
BrainTransporter uses the transferrin receptor to facilitate the passage of drugs into the brain. BioArctic says the technology can be used across multiple therapeutic areas to deliver biologics and other drug modalities to the brain. As of November 2, 2026, the company had entered into five collaboration agreements with partners using the technology. Among them is an agreement BioArctic signed with Eli Lilly in June 2026 to develop a potential neurodegenerative disease treatment combining the technology with an undisclosed Lilly drug candidate. BioArctic's project list shows that development of candidate ND-BT8226 with Eli Lilly in neurodegeneration is continuing as a separate project from the program Novartis halted. This places the end of the Novartis collaboration within one program in the partnership portfolio, while other projects involving the technology remain in development.
Novartis' third-quarter 2026 results showed net sales of $14.522 billion, compared with $13.909 billion in the same period of 2025, an increase of 4% in both U.S. dollars and constant currencies. Net income, by contrast, fell to $1.196 billion from $3.930 billion a year earlier, a decline of 70%. Novartis attributed the decrease in reported results to exceptional items in its financial report. At BioArctic, research collaboration revenue in the second quarter of 2026 was about 60.4 million Swedish kronor, compared with 2.7 million in the same quarter of 2025; the company said the amount was mainly related to the Novartis collaboration. BioArctic's net revenue for that quarter was 247.5 million kronor, compared with 392.1 million in the corresponding period of 2025. BioArctic is scheduled to publish its third-quarter report on November 25, 2026, its next scheduled financial disclosure after announcing the agreement's termination.