Novartis to take over MorphoSys in EUR 2.7bn deal, shares jump

Shares in German oncology biopharmaceutical specialist MorphoSys were surging on Tuesday morning, after Swiss pharma giant Novartis announced a deal to acquire it overnight.

Novartis said the acquisition agreement, valued at €2.7bn in cash or €68 per share, included two key assets - pelabresib, a late-stage BET inhibitor for myelofibrosis (MF), and tulmimetostat, an early-stage investigational dual inhibitor of EZH2 and EZH1 for solid tumours or lymphomas.

It said pelabresib had shown promise as a potential first-line treatment option for MF patients when administered in combination with ruxolitinib.

In a phase three study, it successfully met its primary endpoint of spleen volume reduction and demonstrated positive trends in symptom improvement, all while maintaining a well-tolerated safety profile.

Regulatory filing with the US FDA for pelabresib in MF was planned for the second half of 2024.

Tulmimetostat was meanwhile described as a compound designed to inhibit the function of EZH2 and EZH1 proteins, which was being investigated for various solid tumours and lymphomas in a phase one and two trial.

The acquisition had received unanimous approval from both the Novartis and MorphoSys boards, and was now subject to customary closing conditions, including a minimum acceptance threshold of 65% of outstanding shares tendered in the takeover offer and regulatory approvals.

It was expected to conclude in the first half of this year.

“We are excited about the opportunity of bringing pelabresib, a potential next-generation treatment combined with ruxolitinib, to people living with myelofibrosis, a rare and debilitating form of blood cancer,” said Novartis president of development and chief medical officer Shreeram Aradhye.

“With the planned acquisition of MorphoSys, we aim to further strengthen our leading pipeline and portfolio in oncology, adding to our capabilities and expertise.

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

At 1055 CET (0955 GMT), shares in MorphoSys were up 13.94% in Frankfurt at €65.38, while Novartis was down 0.48% in Zurich at CHF 89.93.

Reporting by Josh White for Sharecast.com.