By John Miller
ZURICH (Reuters) - Shares in biotechnology firm Molecular Partners <MOLN.S> closed 19% higher on Tuesday after the company announced a multi-million dollar deal with the Swiss government to reserve doses of an early-stage drug candidate against COVID-19.
Following the failure of its eye treatment abicipar in the United States, Molecular Partners is seeking to rebound with the experimental drug, called MP0420, against COVID-19.
The Swiss government is broadening efforts against the novel coronavirus, having last week struck an early-access deal for a potential vaccine from U.S.-based Moderna <MRNA.O>.
"The initial supply agreement secures the right to purchase 200,000 doses, with the potential to purchase up to an additional 3 million doses," Molecular Partners said on Tuesday.
The deal was worth close to 10 million Swiss francs (8.4 million pounds), the company said.
Clinical trials for its drug are slated for later this year. The company is designing the drug to block viral penetration of human cells, and to prevent the virus from escaping the immune system by mutating.
Swiss health officials said Molecular Partners' drug hopeful drew their interest in part because it could potentially be deployed as a therapy for people who are already sick, and as a prophylactic for others at high risk of infection.
Such medicines could play an important role, particularly if an effective vaccine does not emerge quickly, said Nora Kronig, head of the Swiss Federal Office of Public Health's International Division.
"We have here an approach that may occupy the 'middle ground' between the therapeutic agents that can be used in intensive care units, as well as a passive immunization," Kronig said in an interview.
Zurich-based Molecular Partners was hit by bad news in June, when abicipar, developed in a partnership with U.S. drugmaker AbbVie, failed to win U.S. Food and Drug Administration approval for blindness-causing macular degeneration.
The company promptly undertook a capital increase to shore up its finances.
(Reporting by John Miller; Editing by Jacqueline Wong, Michael Shields and Jan Harvey)