Novartis has agreed to acquire MorphoSys for €2.7 billion ($2.9 billion), the companies said, in a deal designed to bolster the buyer’s oncology pipeline with a promising late-stage myelofibrosis candidate, as well as an early-stage candidate under study in patients with solid tumors or lymphomas.

Through the acquisition, Novartis will add to its pipeline pelabresib (CPI-0610), a drug administered in combination with ruxolitinib for patients with myelofibrosis. MorphoSys acquired pelabresib when it bought Constellation Pharmaceuticals for $1.7 billion cash in 2021. Novartis said a regulatory filing for pelabresib was planned for the second half of this year, following successful clinical study results.

“Novartis shares our steadfast commitment to develop and deliver transformative medicines that address the dire needs of cancer patients,” MorphoSys CEO Jean-Paul Kress, MD, said in a statement. “Pelabresib, the investigational therapy at the forefront of our promising oncology pipeline, has the potential to shift the treatment paradigm in myelofibrosis and further expand into other indications. Novartis will provide ample resources currently unavailable to MorphoSys as a standalone biotech company to help accelerate the development opportunities and maximize the commercialization potential of pelabresib at a greater speed and scale.”

Pelabresib is a small molecule designed to promote anti-tumor activity by selectively inhibiting the function of bromodomain and extra-terminal domain (BET) proteins to decrease the expression of abnormally expressed genes in cancer.

Ruxolitinib is co-marketed by MorphoSys and Incyte as Jakafi® for several indications including forms of myelofibrosis, polycythemia vera, and graft-versus-host disease—and as Opzelura®, a topical cream version of ruxolitinib, for forms of atopic dermatitis and nonsegmental vitiligo.

Back in November, the pelabresib-ruxolitinib combination met its primary endpoint of spleen volume reduction in the Phase III MANIFEST-2 trial (NCT04603495), assessing the drug in JAK inhibitor-naive MF patients.

The combination also met key secondary endpoints of absolute and 50% change in total symptom score (TSS) at week 24 compared to baseline. All four clinical hallmarks of disease in myelofibrosis—splenomegaly, disease-associated symptoms, anemia, and bone marrow fibrosis—were improved with pelabresib-ruxolitinib, MorphoSys said at the time.

“With the planned acquisition of MorphoSys, we aim to further strengthen our leading pipeline and portfolio in oncology, adding to our capabilities and expertise,” Shreeram Aradhye, MD, Novartis’ president, development and chief medical officer, said in a statement.

Earlier in the Phase II MANIFEST trial (NCT02158858), the third arm of the study with a patient population comparable to MANIFEST-2 showed durable improvements in both spleen volume and total symptom score up to week 60, MorphoSys said.

Pelabresib is also being studied in patients with essential thrombocythemia (ET), which is currently in Phase II in second-line treatment.

In addition to pelabresib, MorphoSys’ pipeline includes tulmimetostat (CPI-0209), an early-stage dual inhibitor of enhancer of zeste homolog 1 and 2 (EZH1 and EZH2) proteins. Tulmimetostat is being tested as a once-daily oral treatment in a Phase I/II trial (NCT04104776) in patients with advanced solid tumors or lymphomas, including ARID1A-mutated ovarian clear cell carcinoma and endometrial carcinoma, diffuse large B-cell lymphoma, peripheral T-cell lymphoma, BAP1-mutated mesothelioma, and castration-resistant prostate cancer.

Partnered with Novartis

Also in MorphoSys’ pipeline are two other candidates partnered with Novartis.

One is ianalumab (VAY736), which is under study across multiple immunological and hematology indications, including lupus nephritis (LN), Sjögren’s, systemic lupus erythematosus (SLE), immune thrombocytopenia (first- and second-line ITP), and warm autoimmune hemolytic anemia (wAIHA).

The other Novartis-partnered MorphoSys candidate is NOV-8 (CMK389), which is being investigated by Novartis for the treatment of pulmonary sarcoidosis (Phase II) and severe atopic dermatitis (also Phase II).

MorphoSys’ pipeline no longer includes Monjuvi® (tafasitamab-cxix), the cancer immunotherapy that MorphoSys co-markets with Incyte, through a more than $2 billion collaboration launched in 2020.

Hours before Novartis announced its planned acquisition, MorphoSys agreed to sell global development and commercialization rights to tafasitamab to Incyte for $25 million, effective immediately.

Under their asset purchase agreement for tafasitamab, Incyte will now recognize revenue and cost for all U.S. commercialization and clinical development and MorphoSys will no longer be eligible to receive future milestone, profit split, and royalty payments. Previously, the companies partnered in development and shared the costs of clinical development and commercialization of tafasitamab in the United States, with Incyte holding exclusive rights outside of the U.S.

“Given the proposed acquisition by Novartis and our long-standing partnership with Incyte, we know Incyte is best positioned to drive tafasitamab’s future growth opportunities forward successfully and more efficiently on its own at this time,” Kress added.

The transaction has been unanimously approved by the boards of both companies. Novartis plans to acquire MorphoSys for €68 ($73) per share subject to customary closing conditions, including acceptance of the takeover offer by owners of at least 65% of MorphoSys’s outstanding shares and receipt of regulatory approvals.

MorphoSys will continue to operate as a separate, independent company until the transaction closes.

The acquisition caps a two-decade collaboration between the companies that started in 2004, when Novartis and MorphoSys launched a strategic antibody alliance to jointly develop new antibody-based therapeutic substances against a variety of illnesses, and Novartis took a €9 million (about $9.7 million) equity stake in MorphoSys.

Three years later, the companies launched an up-to-$1 billion partnership allowing the Swiss pharma giant to use MorphoSys’ HuCAL technology to generate a large number of therapeutic antibody products.

“Building on our long-standing development partnership with MorphoSys, we look forward to continuing our work together to realize the full impact and value of their investigational medicines for patients with unmet needs,” Aradhye added.

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