Citi, Stifel cut Morphosys after Alzheimer's drug fails to meet goal

Morphosys AG

15/11/2022 12:49

** Citi and Stifel cut German biotech group Morphosys
 MORG.DE  after its licensing partner Roche  ROG.S  said on
Monday its Alzheimer's drug candidate failed to meet goal in a
trial
    ** Citi cuts the stock to "sell" from "neutral" as it
removes the drug, gantenerumab, royalty contribution from its
model 
    ** "This has a profound impact on our valuation since we had
€11/share NPV (net present value) contribution from gantenerumab
royalty in our base case," it says
    ** Morphosys would have received tiered royalties of about
2% to 3% on future gantenerumab sales from its early role in
developing the drug
    ** Stifel cuts the stock to "hold" from "buy", saying that
while the drug was not core to the equity story it carried a
significant value
    ** It slashes target price by more than a half to EUR 16
    ** Both Citi and Stifel are also sceptical on the company's
immunotherapy drug Monjuvi, citing growing competition
    ** "Monjuvi's ramp continues to remain weak," Citi says
    ** Morphosys shares lost 57% in value year-to-date
 (Reporting by Philipp Krach and Anastasiia Kozlova)
 ((Philipp.Krach@thomsonreuters.com;
Anastasiia.Kozlova@thomsonreuters.com))