Novartis AG has agreed to buy U.S. biotech firm Regulus Therapeutics Inc. in a deal that could be valued at up to $1.7 billion.

The Swiss company will pay $7 a share in cash up-front through a subsidiary, equivalent to $800 million, according to a statement Wednesday.

Regulus Therapeutics shareholders will also receive a so-called contingent value right, which entitles them to a further $900 million if regulatory approval is secured for farabursen, which seeks to treat patients living with ADPKD, the most common genetic cause of renal failure.

Novartis is hunting for deals that could boost its sales beyond 2025, Chief Financial Officer Harry Kirsch said this week, and sees prices dropping in biotech.

Regulus Therapeutics works on therapies that target what’s called microRNA, a type of molecule that helps control the function of cells.

Novartis’ global development and commercial capabilities will help bring farabursen, its lead product, to market, according to Regulus Therapeutics Chief Executive Jay Hagan.

Shares in Regulus Therapeutics surged as much as 167% in pre-market trading in New York on Wednesday. The stock has since pared some of those gains to trade at about 131% higher. Novartis stock was largely flat in trading in Switzerland on Wednesday but is up nearly 6% in the last 12 months.

The proposed deal has been approved by both boards and should complete in the second half of 2025.

Hipwell and Kresge write for Bloomberg.

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This story originally appeared in Los Angeles Times.