Novartis in the lead to acquire cancer drug developer MorphoSys-sources

Morphosys AG

05/02/2024 16:20

(Adds share reaction, prior Novartis CEO comments)
    By David  Carnevali
       Feb 5 (Reuters) - Drug maker Novartis AG  NOVN.S  is in
advanced talks to acquire MorphoSys AG  MORG.DE , a developer of
cancer treatments that has a market value of 1.6 billion euros
($1.7 billion), two people familiar with the matter said on
Monday.
    Novartis has so far prevailed over rival drug maker Incyte
Corp  INCY.O , which also made an offer for MorphoSys, the
sources said.
    The sources added that there is no certainty that the deal
negotiations will conclude successfully and requested anonymity
because the matter is confidential. They declined to give any
information about the acquisition price.
    Novartis, MorphoSys and Incyte did not immediately respond
to requests for comment.
    MorphoSys shares rose more than 40% on the news on Monday.
    Headquartered in Planegg, Germany, MorphoSys develops drugs
to fight deadly forms of cancers such as myelofibrosis, which is
a rare type of bone marrow cancer, and certain types of knotty
lymphomas.
    MorphoSys main revenue generator is a lymphoma drug called
Monjuvi, which it sells as part of a profit-sharing agreement
with Incyte. MorphoSys said last week that Monjuvi's U.S. net
product sales were $92 million in 2023, and that it expected
these sales to come in between $80 million and $95 million in
2024. The company has said it expects revenue to go up as
Monjuvi is approved for more indications. 
    One of MorphoSys' most promising drugs, known as Pelabresib,
is an inhibitor of proteins implicated in the development and
progression of myelofibrosis.
    MorphoSys stumbled in November when Pelabresib missed some
key goals in clinical trials, but said it was still planning to
apply in 2024 for approval to commercialize the drug in the U.S.
and Europe. 
    To slash costs, MorphoSys shut down some of its early-stage
research programs at the start of 2023, laying off about 17% of
its workforce. It now employs almost 550 people in its U.S. and
German offices, according to the company's website.
    Novartis has also been cutting jobs and costs, and spun off
its generic drugs business Sandoz last year, part of a focus on
fewer therapeutic areas and geographic markets. 
    Its revenue growth has been driven by its heart failure drug
Entresto, its medicine Kesimpta for multiple sclerosis, and
breast cancer drug Kisqali.
    Revenue gains for Pluvicto, a precision radiotherapy against
prostate cancer, eye drug Lucentis and gene therapy Zolgensma
against spinal muscular atrophy fell short of market
expectations in the fourth quarter of 2023.
    In an interview with CNBC last month, Novartis CEO Vasant
Narasimhan said the company's overall mergers and acquisitions
strategy was focused on deals involving assets valued below $5
billion.

 (Reporting by David Carnevali in New York; editing by Philippa
Fletcher and Chizu Nomiyama)
 ((David.Carnevali@thomsonreuters.com;))