Morphosys to Acquire Constellation Pharma in $ 1.7 Billion Deal, Health News, ET HealthWorld
To offset the financial burden of the takeover, the German biotech group sold rights, primarily future royalties on sales of Johnson & Johnson’s psoriasis drug Tremfya, to Royalty Pharma plc for an upfront payment of $ 1.425 billion. dollars and future contingent payments.
For Morphosys, the deal marks a bet on Constellation’s work in epigenetics, an area that explores how the genetic code is translated into proteins and characteristics of our bodies and the role this plays in cancer and other diseases.
Morphosys stock plunged 14% to 62.32 euros, its lowest for 3 1/2 years, while Constellation jumped 67% to 33.72 euros.
Constellation’s most advanced compound, pelabresib, is designed to treat a rare type of bone marrow cancer and is in the third and final stage of testing.
Morphosys chief executive Jean-Paul Kress said in a conference call with analysts that the company had also considered purchasing the rights to certain drug development projects, known as the grant. of licenses.
But it opted for the outright purchase of Constellation with its more than 150 employees, in part because of the short lead time for a potential launch of its lead compound.
“Nothing (licensed) is really cheap either and sometimes you end up with things a lot earlier,” Kress said. Morphosys will pay $ 34.00 per share in cash, which is about a 68% premium over Tuesday’s closing price. The transaction should be finalized in the third quarter, he said.
Under the agreement with Royalty Pharma to cash in some of its assets, Morphosys is also expected to receive additional payments of up to $ 150 million depending on certain development achievements, $ 350 million in development finance obligations and $ 100 million. dollars for Royalty’s investment in the capital increase.