MorphoSys AG Tanks 20% on Celgene Cancer Pact Breakup News
March 27, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Shares of German biotech MorphoSys AG plummeted more than 20 percent Friday, after the company said it would end its partnership with Celgene Corporation to develop a cancer drug only two years into the contract’s terms.
The Martinsried, Germany-based firm struck the $818 million multiple myeloma co-development pact with Celgene in 2013. Early market speculation is that Celgene decided to walk away after seeing lackluster Phase I data for the drug at the core of the deal, MOR202, but neither company would confirm that Friday.
The news also meant that Celgene’s $92 million upfront payment will come to naught, though its share price saw little effect in mid-morning trading Friday.
Both companies attempted to put a positive spin on the news Friday, saying the breakup was “mutual” and that MorphoSys will go ahead with a planned Phase I/IIa trial still underway. The potential for a multiple myeloma drug remains strong, as the target market remains a lucrative prize for just about any biopharma company willing to take the risks to bring a successful candidate along.
"Regaining rights to MOR202 opens up new possibilities for MorphoSys," said Simon Moroney, chief executive of MorphoSys. "MOR202 binds to CD38, a clinically validated target in multiple myeloma, and we know there is a lot of interest in the program. We thank Celgene for working with MorphoSys to advance the clinical development of MOR202. This program is a valuable component of our proprietary portfolio, and we are looking forward to presenting clinical data in the near future."
MorphoSys added that because of its now one-time breakup payment from Celgene, it has upped its earnings before interest and taxes of about 9 million to 16 million euros this year, a major gain from its previous forecast loss of 20 million euros to 30 million euros.
"We are committed to continuing the development of MOR202 as there is a high unmet medical need for new treatment options in multiple myeloma," added Arndt Schottelius, Chief Development Officer of MorphoSys AG. "Based on pre-clinical data, we see significant promise in combining MOR202 with Celgene's lenalidomide and pomalidomide in clinical trials which will commence soon."
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