Novartis Boosts Cancer Business with $2.9B MorphoSys Buy

Novartis

Pictured: Novartis' office in Germany/iStock, TBE

Novartis on Monday announced that it has inked a voluntary public takeover offer with German biotech MorphoSys for approximately $2.9 billion in a bid to expand its oncology portfolio.

Under the agreement, which has been unanimously approved by MorphoSys’ board of directors, Novartis will purchase all no-par value bearer shares of the biotech for over $73 apiece. The companies expect to close the deal in the first half of 2024, subject to customary closing conditions such as regulatory and anti-trust approvals as well as the acceptance of at least 65% of MorphoSys’ outstanding shareholders.

Novartis CMO Shreeram Aradhye said in a statement that the MorphoSys acquisition will help the Swiss pharma “strengthen our leading pipeline and portfolio in oncology, adding to our capabilities and expertise.”

At the center of the merger is pelabresib, an investigational small molecule inhibitor of the BET protein which suppresses the expression of abnormal genes involved in cancer development. According to Novartis’ announcement, pelabresib could be a “potentially practice changing treatment option” with an overall favorable tolerability and safety profile.

MorphoSys is currently running the Phase III MANIFEST-2 study, testing pelabresib in combination with Incyte’s Jakafi (ruxolitinib) in myelofibrosis patients who have not been previously treated with a JAK inhibitor.

In November 2023, the biotech posted mixed findings for the trial demonstrating that pelabresib plus Jakafi met one of the study’s primary endpoints, inducing a significant and clinically meaningful improvement in the proportion of patients with at least a 35% reduction in spleen volume after 24 weeks.

However, the combination regimen missed its second primary endpoint of total symptom score, unable to significantly differentiate itself from the placebo plus Jakafi arm. In its announcement on Monday, Novartis said that despite the mixed performance, a regulatory filing for pelabresib is set for the second half of 2024.

Besides pelabresib, the MorphoSys acquisition will also give Novartis the early-stage tulmimetostat, a dual-inhibitor of EZH1 and EZH2 that is being trialed for solid tumors or lymphomas.

However, Novartis will not gain access to MorphoSys’ FDA-approved therapy for diffuse large B-cell lymphoma Monjuvi (tafasitamab-cxix), the global development and commercialization rights to which was sold to Incyte just before Monday’s Novertis-MorphoSys deal was inked.

For Novartis, the MorphoSys acquisition continues its dealmaking spree, which last month included an AI partnership with Alphabet’s Isomorphic Labs, the acquisition of immune-focused Calypso Biotech as well as a pair of RNA interference R&D agreements with China-based Shanghai Argo Biopharmaceutical.

Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.

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