Morphosys to Bank Potential $818M in Celgene Deal for MOR202
By Cormac Sheridan
Shares in Morphosys AG surged by more than 17 percent during trading Thursday morning on news of a deal with Celgene Corp. for its anti-CD38 multiple myeloma antibody MOR202, worth an immediate €127 million (US$165.5 million) and which could be worth up to €628 million (US$818 million) in total.
The deal is the second Hamburg, Germany-based Morphosys has landed inside a month, following its potential $586 million pact in autoimmune disease with London-based Glaxosmithkline plc on MOR103, an antibody that blocks granulocyte-macrophage colony-stimulating factor (GM-CSF). (See BioWorld Today, Jun. 5, 2013.).
This time around, Morphosys will receive €70.8 million up front, while Summit, N.J.-based Celgene will acquire €46.2 million worth of newly issued Morphosys stock. The shares will be priced at a premium of at least 15 percent to the prevailing share price immediately before the agreement was signed. Morphosys is retaining co-promotion rights in Europe, where it will have a 50 percent share of the profits. It will receive tiered double-digit royalties on sales in other territories.
The deal pits the two companies directly against another recently formed alliance, which is also targeting CD38. Copenhagen, Denmark-based Genmab A/S and Johnson & Johnson, of New Brunswick, N.J., last year signed a potential $1.1 billion alliance – $135 million of which comprised an up-front payment and a stock purchase – on daratumumab. (See BioWorld Today, Aug. 31, 2012.).
A major point of difference between the two deals is how the development costs are being distributed. J&J is picking up the entire tab for daratumumab, whereas Morphosys will shoulder one third of MOR202's development costs, with Celgene picking up the rest.
"We want to retain more value with the co-promotion rights and the 50/50 split in Europe," Morphosys chief development officer Arndt Schottelius told BioWorld Today.
That option was not feasible in the GSK deal, given the scale of the clinical trials required for rheumatoid arthritis, MOR103's lead indication.
"Here is it much more fitting to our needs and capabilities. It's a very logical step," Schottelius said.
MOR202 is currently undergoing a Phase I/IIa clinical trial in patients with relapsed or refractory multiple myeloma. The Phase I dose-escalation portion of the study is ongoing – the Phase IIa leg will not commence until next year. However, some efficacy signals could emerge before then.
"We are getting into those cohorts where one could expect to see the first clinical data," Schottelius said.
The Race Is On
Morphosys and Celgene are some ways behind Genmab and J&J, however.
Daratumumab has already reported early efficacy data – the drug, administered as monotherapy, elicited a response in 31 percent of patients receiving a 2 mg/kg dose and in 67 percent of patients receiving a dose higher than 4 mg/kg.
"We are confident we can catch up here," Schottelius said. Celgene's experience in multiple myeloma was a big driver in closing the deal.
It now has three marketed products that are indicated for multiple myeloma, Thalomid (thalidomide), thalidomide analogue Revlimid (lenalidomide) and Pomalyst (pomalidomide), another thalidomide analogue that gained FDA approval in February.
The two companies will explore various drug combinations during the MOR202 development program.
"It's too early to give any specific details," Schottelius said. However, Morphosys has already reported preclinical research indicating a synergistic effect between MOR202 and Revlimid, due to a Revlimid-induced increase in CD38 expression in cultured multiple myeloma cells, which led to antibody-dependent cellular phagocytosis, and to Revlimid-associated activation of natural killer cells, which enhanced antibody-dependent cell-mediated cytotoxicity.
As yet, it is far too early to predict whether MOR202 or daratumumab will ultimately prevail in the looming contest. It is not clear either whether that contest will play out in the courtroom as well as in the clinic.
"I think every party is looking to secure their patent rights," Claudia Gutjahr-Löser, head of corporate communications at Morphosys, told BioWorld Today. "How this turns out in the future remains to be seen."
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