shares in this article
Following the costly acquisition of US oncology specialist Constellation Pharmaceuticals, MorphoSys is separating itself from additional cost pools. To focus on anticancer drugs in the research pipeline, the Bavarian biotechnology company licensed two antibody preparations to the US company Human Immunology Biosciences (HIBio) and acquired a 15% stake in the company. In return, MorphoSys will receive an upfront payment of $ 15 million (approximately € 14.4 million). Additionally, there are potentially high interim payments and possible royalties. JPMorgan analyst James Gordon praised the prospect of additional revenue and also viewed the deal as a confirmation of the two licensed products.
The price of MorphoSys shares had already jumped the day before in view of a research cooperation with the US pharmaceutical giant Pfizer. However, MorphoSys is under heavy pressure on the stock market: on the one hand, sales of the leading drug Monjuvi have fallen short of market expectations. However, investors are also concerned that the company may have gotten bogged down with the Constellation acquisition and related far-reaching financing deal. Since the beginning of the year alone, the price has lost about half.
However, MorphoSys CEO Jean-Paul Kress is convinced of the future prospects of the cancer portfolio with the key compounds tafasitamab and pelabresib, on which the company is now focusing all its energy.
The licensing agreement gives HIBio, a specialist in autoimmune and inflammatory diseases, the exclusive right to develop and commercialize the antibody drugs MorphoSys felzartamab and MOR210 for all indications worldwide. The Greater China area and, in the case of MOR210, the South Korean market are excluded from this, he said. Here, in recent years MorphoSys had granted licenses to the company I-Mab Biopharma.
Felzartamab was recently investigated by MorphoSys as a possible drug for the treatment of two kidney diseases for which treatment options are reported to be limited. MOR210 is being researched as a cancer drug.
With the dry ink on the contract, MorphoSys has now freed itself of all costs for fund research: the running costs would be borne by HIBio. In addition to the upfront payment of $ 15 million, interim payments of up to $ 1 billion are due at certain stages from development to commercialization. And if the funds are actually approved, MorphoSys will receive a percentage of net sales in the form of tiered royalties in the low one to double digit range. Upon joining the San Francisco-based HIBio, SDAX will have a seat on its executive body, the Board of Directors.
Bavarians can use their income well, because research into the most important cancer drugs is expensive. Furthermore, following the acquisition of Constellation, MorphoSys will waive some royalties, which the Group will pass to its financial partner Royalty Pharma. As a result, MorphoSys slipped further into the red in the first quarter: the loss tripled from the previous year to nearly 123 million euros.
One of MorphoSys’ highest hopes is the active ingredient tafasitamab of the already approved blood cancer drug Monjuvi, which is being tested for further indications. Another pivotal study is underway for Constellation’s Pelabresib, which is being tested in the fight against rare bone marrow cancer myelofibrosis.
Investors were delighted with the news on the stock exchange: the stock, which is listed on the SDAX small cap index, was up 4.83% to EUR 18.46 during XETRA trading on Wednesday.
The leverage must be between 2 and 20
More news on MorphoSys
Image sources: MorphoSys