Hopeful cancer drug
Novartis swallows Morphosys for 2.7 billion
February 6, 2024, 12:02 a.m
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The Swiss pharmaceutical company Novartis is offering 2.7 billion euros to take over the German biotech company Morphosys. The stock market acknowledges the plans with price jumps. This could also be good news for myelofibrosis patients.
The Swiss pharmaceutical giant Novartis wants to take over the German biotech company Morphosys for 2.7 billion euros. Novartis wants to pay 68 euros per Morphosys share, as both sides announced in the evening after the stock market closed. Insiders had previously indicated that Novartis was in advanced talks to take over Morphosys. This drove the biotech company’s shares to an annual high of 58.50 euros at the beginning of the week. According to two people familiar with the matter, Novartis prevailed against the drug manufacturer Incyte, which is a distribution partner of Morphosys and is also said to have courted the company.
With the acquisition, Novartis secures access to the company’s greatest hope, the drug pelabresib for the treatment of myelofibrosis – a rare malignant disease of the bone marrow. To complete the deal, the necessary antitrust approvals are still required as well as the achievement of a minimum acceptance rate of at least 65 percent of Morphosys shares. Novartis wants to complete the acquisition in the first half of the year and then take Morphosys off the stock exchange.
Hope for a new standard of care
Morphosys presented results of the crucial phase 3 study with pelabresib at the end of last year. These failed to convince investors, even though the product achieved the main goal of the study. However, there was no statistically significant benefit for an important secondary goal. Nevertheless, Morphosys plans to submit applications for approval for the drug in the USA and the European Union by the middle of the year. “Novartis has extensive resources that are not currently available to us as an independent biotech company to accelerate the development opportunities of pelabresib and to exploit the commercialization potential more quickly and on a larger scale,” said Morphosys CEO Jean-Paul Kress.
To date, Morphosys only has one of its own drugs on the market, the cancer drug Monjuvi, which the company sells under a cooperation and licensing agreement with Incyte. Incyte is now set to receive exclusive worldwide rights to the drug for $25 million. With pelabresib, Morphosys hopes to be able to set a new treatment standard. The company secured the drug in 2021 with the $1.7 billion takeover of the US cancer specialist Constellation Pharma.
Billions in sales possible
For years, Novartis’ drug Jakavi, approved in 2012, was the only drug in this indication area. But about half of myelofibrosis patients who benefit from Jakavi experience loss of response after two to five years. Morphosys therefore sees great potential in this market and has so far expected pelabresib to generate billions in sales. Novartis generated sales of $1.72 billion with Jakavi last year, an increase of ten percent.
According to insiders, the Swiss group was recently interested in taking over the biotech company Cytokinetics. The deal, which could have valued Cytokinetics at more than $10 billion, ultimately fell through, according to a person familiar with the matter. Novartis CEO Vasant Narasimhan said in mid-January that the company’s acquisition strategy was focused on smaller acquisitions worth less than $5 billion.
Morphosys was founded in Martinsried near Munich in 1992. The company went public in 1999 and grew in the early 2000s through partnerships with pharmaceutical companies such as Novartis, Janssen, Schering-Plough and Pfizer. Morphosys has also been listed on the US technology exchange Nasdaq since 2018.