Medical Innovation Exchange

After Incyte's commercial buy, Novartis shells out €2.7B for cancer specialist MorphoSys

Rumblings of a potential bidding war over cancer specialist MorphoSys have subsided as quickly as they arose after Novartis descended on the German biotech Monday with billions of dollars in cash. The move comes less than 24 hours after rumors of the M&A imbroglio surfaced in Reuters.

Novartis is beefing up its oncology arm by laying out €2.7 billion ($2.9 billion) in cash to acquire MorphoSys, the companies announced after market close Monday.

As of Monday evening, the deal is now wholly centered on MorphoSys’ pipeline. Mere hours before Novartis telegraphed its buyout, MorphoSys revealed plans to sell its sole commercial asset—the lymphoma med Monjuvi—to longtime partner Incyte, which was also rumored to be jockeying for MorphoSys before Novartis swooped in.

With MorphySys’ marketed med out of the equation, Novartis is poised to pick up pelabrisib, a med being tested in combination with Incyte’s Jakafi (ruxolitinib) in patients with myelofibrosis. The Swiss pharma giant is also set to receive tulmimetostat—an early-stage dual inhibitor of enhancer of zeste homolog 1 and 2 proteins currently being pitted against solid tumors and lymphomas in the clinic.

Pelabresib plus Jakafi recently met the primary endpoint of spleen volume reduction in the phase 3 MANIFEST-2 study in myelofibrosis patients who’ve never tried a JAK inhibitor, Novartis and MorphoSys point out in their M&A release.

Still, the data, which uncloaked in late November, were far from perfect.

After the study’s 24-week mark, MorphoSys saw a significant improvement in the proportion of patients achieving at least a 35% reduction in spleen volume, causing the trial to hit its primary endpoint. But the drug failed on its second key measure: the study found 52% of patients taking pelabresib and ruxolitinib had at least a 50% reduction in total symptom score, compared to 46% of patients who took placebo with the JAK inhibitor.

Despite missing on some of the trial’s goals, MorphoSys’ CEO Jean-Paul Kress was quick to say he was “very pleased with this positive outcome” when reflecting on the trial results last fall.

Novartis expects the MorphoSys deal to close sometime during the first half of 2024.

The revelation of buyout rumors and the confirmation of a deal happened at breakneck speed Monday, following an early morning report from Reuters that Novartis was in advanced talks to acquire the German company. At the time, it was rumored that Incyte was also in the bidding war for MorphoSys.

Both companies have preexisting ties to the oncology specialist, with Novartis taking over a MorphoSys preclinical cancer program in 2022 and Incyte partnering on MorphoSys’ sole commercial product, the lymphoma med Monjuvi.

Monjuvi garnered $92 million in U.S. sales last year, and MorphoSys expects 2024 sales of between $80 million and $95 million.

With the latest news, MorphoSys shares skyrocketed by 56% to close at $17.27 on Monday.

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