MorphoSys plans to raise up to $150 million through an initial public offering (IPO) of its American depositary shares (ADSs), with the goals of developing and commercializing its lead product candidate, the blood cancer treatment MOR208, as well as advancing two other pipeline candidates and its tech platforms.

Headquartered in Planegg, Germany, MorphoSys is already a public company in Europe, where its shares trade on the Prime Standard Segment of the Börse Frankfurt (Frankfurt Stock Exchange). In the U.S., the company seeks to trade its ADSs on the NASDAQ Global Market under the ticker symbol “MOR.”

According to an F-1 registration statement filed yesterday with the U.S. Securities and Exchange Commission, MorphoSys is seeking the U.S. IPO to fund part of its $315 million projected cost of shepherding MOR208 through clinical development and into commercial production.

MorphoSys said in the filing that it anticipates spending approximately $225 million for continuation and further development of MOR208, and approximately $90 million to build out its commercial capabilities tied to an expected future approval for the treatment.

MOR208 is the furthest advanced of MorphoSys’ 28 candidates in clinical development—among a record-high 114 therapeutic product candidates in its entire development portfolio as of the end of 2017, being developed either alone or with partners.

MOR208 is a wholly owned anti-CD19 antibody currently being evaluated in relapsed/refractory diffuse large B-cell lymphoma (r/r DLBCL):

  • In combination with lenalidomide for patients ineligible for high-dose chemotherapy (HDCT) and autologous stem cell transplantation (ASCT),
  • In combination with bendamustine for patients ineligible for HDCT and ASCT, and
  • In chronic lymphocytic leukemia (CLL) in combination with either idelalisib or venetoclax in patients who have relapsed after prior therapy with a Bruton’s tyrosine kinase inhibitor. 

On March 13, MorphoSys released updated data from its ongoing L-MIND trial of MOR208 plus Celgene’s Revlimid® (lenalidomide) in r/r DLBCL patients ineligible for HDCT and ASCT. The company acknowledged that its preliminary median progression-free survival (PFS) endpoint had not been reached, with a preliminary PFS rate at 12 months of 50.4%, while also reporting an overall response rate (ORR) of 49% (33 of 68 patients), and complete remission in 31% of patients, though 29 of 33 responses were ongoing at the data cutoff date of December 12, 2017.

The data was promising enough, MorphoSys said at the time, for the company to discuss with the FDA the possibility of an expedited regulatory submission and approval for MOR208 based primarily on the L-MIND study. MOR208 has already received the agency’s Breakthrough Therapy designation.

Pipeline, Platform Plans

MorphoSys said in its filing that it anticipated spending approximately $20 million to finance the clinical development of MOR202, a human monoclonal antibody developed through the company’s Human Combinatorial Antibody Library (HuCAL) technology and directed against CD38. MOR202 is under study in Phase I/IIa trial in patients with relapsed or refractory multiple myeloma, both alone and in combination with Celgene’s Pomalyst® (pomalidomide) or Revlimid plus dexamethasone.

The company added that it also plans to begin clinical studies of MOR202 in non-small-cell lung cancer (NSCLC) in combination with Bristol-Myers Squibb’s Opdivo® (nivolumab) “or more oncology indications either alone or together with a partner.”

MorphoSys also anticipates spending approximately $30 million for the clinical development of MOR106, a human monoclonal antibody targeting IL-17C that was developed through the company’s Ylanthia® antibody platform.

MOR106 is now under clinical development for the treatment of atopic dermatitis through a collaboration with Galapagos launched in 2008. In September 2017, the companies reported positive Phase I results showing that at the highest dose level, 5 of 6 patients (83%) reached at least 50% an improvement in their atopic dermatitis symptoms (EASI-50) by week 4.

“We plan to initiate a Phase II study with our partner Galapagos in the first half of 2018,” MorphoSys added in the regulatory filing.

In addition, MorphoSys said it expects to spend approximately $45 million for its discovery programs and the development of its tech platforms.

Morphosys finished 2017 with a loss before interest and taxes of €67.6 million ($83.4 million), despite a 34% year-over-year jump in revenues to €66.8 million ($82.4 million).

A fraction of that revenue came from the €1.9 million ($2.3 million) generated in product-based royalties from the market launch of Janssen Biotech’s Tremfya® (guselkumab), a treatment for adults with moderate to severe plaque psoriasis developed through MorphoSys’s HuCAL technology and approved by the FDA in July 2017.

Goldman Sachs & Co., J.P. Morgan Securities, and Leerink Partners are acting as lead book-running managers, while Berenberg Capital Markets and JMP Securities are acting as co-managers for the proposed ADS offering.

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