MorphoSys has acquired peptide therapeutic developer Lanthio Pharma for €20 million ($22.5 million), in a deal that adds to the buyer’s portfolio Lanthio’s pipeline of four preclinical drugs, led by a candidate for fibrotic diseases.

Lanthio’s lead candidate—called LP2 and soon to be renamed MOR107—is a lanthipeptide developed for fibrotic diseases as well as diabetic nephropathy. LP2/MOR107 is set to enter clinical trials next year after demonstrating potent angiotensin II type 2 (AT2) receptor-dependent activity in vivo, MorphoSys said.

“The acquisition of Lanthio Pharma adds a very attractive compound to our growing proprietary portfolio. The lead compound LP2 has the potential to be a first-in-class treatment for various fibrotic diseases and thus represents a commercially attractive opportunity,” MorphoSys CEO Simon E. Moroney, D.Phil, said in a statement issued yesterday.

Lanthio Pharma's approach is designed to identify peptides selected for specific disease targets, and stabilize their structural conformation for optimal receptor binding. The high specificity is intended to potentially provide drugs for indications not usually targeted with antibodies. In addition to intravenous administration, lanthipeptides can be delivered by oral, pulmonary or subcutaneous delivery and still achieve therapeutic plasma levels, MorphoSys said.

MorphoSys focuses on developing therapeutic antibodies through its HuCAL antibody library technology and other technologies. The company has built a pipeline of more than 90 human antibody drug candidates against diseases that include cancer, rheumatoid arthritis, and Alzheimer's disease.

MorphoSys—which held 19.98% of Lanthio shares before the deal—made its initial equity investment in the Dutch biotech in November 2012 as part of Lanthio’s €4.8 million ($6.2 million at the time and $5.4 million now) series A financing round.

Added MorphoSys CFO Jens Holstein: “Today's news marks another milestone for our Innovation Capital initiative that led to this acquisition. We will continue to look for opportunities to invest and collaborate with biopharmaceutical start-ups to strengthen our drug development capabilities and enrich our proprietary drug portfolio.”

Now, MorphoSys agreed to acquire all outstanding Lanthio shares from the company’s other investors, including the largest shareholder until now INKEF Capital, BioGeneration Ventures and Hanzepoort.

MorphoSys said the deal will not affect its guidance to investors for 2015. The company on Tuesday revised its guidance upward to project that it will finish this year with revenues of between €101 million to €106 million ($113.6 million to $119.2 million) and earnings before interest and taxes (EBIT) in the range of €9 million to €16 million ($10.1 million to nearly $18 million).

The company initially issued guidance of between €58 million to €63 million ($65.2 million to $70.9 million) in revenues and a loss before interest and taxes of €20 million to €30 million ($22.5 million to $33.7 million), before ending its collaboration with Celgene on cancer drug candidate MOR202, due to the full realization of deferred revenues from an upfront payment received from Celgene in 2013 together with a one-time termination payment.