MorphoSys AG, Planegg, signed an agreement tonight to be taken over by Novartis for an equity value of EUR 2.7 billion. Novartis will now make a voluntary public takeover offer for all shares of Morphosys at a price of EUR 68.00 per share in cash. This is an “attractive premium of 94 percent to the volume-weighted average price of the last month before January 25, 2024,” said Morphosys. However, this does not significantly exceed the price development of the last few days, as yesterday the price was already around 67 euros. The markup in market capitalization is also manageable. Just a few days ago, before the price increase, this was around 2 billion euros.
Novartis has the “necessary extensive resources to fully develop and expand the potential of pelabresib on a global level,” said the Executive Board and Supervisory Board of Morphosys, justifying the sale, which was unanimously approved. The other bidder, the company Incyte, does not go away completely empty-handed, but rather receives all rights to the antibody tafasitamab (Monjuvi), which is currently being marketed by both companies and is being developed for other indications. The retail price for this product is not yet known.
What’s next at the Planegg location near Munich? The agreement between Novartis and Morphosys contains “commitments to employees. Novartis views Morphosys’ employees as the foundation for the company’s current and future success,” it said in the current takeover announcement. Cluster manager Prof. Ralf Huss, BioM, also sees the developments positively: “The announced takeover is not the end of a journey, but rather an important sign for biotechnology in a difficult time. It still takes a long time for the innovation – here via the ‘detour’ of an established pharmaceutical company – to reach patents and the pharmaceutical market,” he said on |transcript-Demand.
The sale will still give traditionalists a sore eye. The biotech flagship, founded in 1992, once positioned itself in a league of its own when it came to antibody development and has leveraged this expertise millions of times over in numerous collaborations. Anyone who thinks that one of these collaborations, the one with Novartis with a volume of billions that was almost unimaginable at the time, and the current takeover closes a circle, so to speak, is overlooking the fact that the entire core antibody competence of the time was somewhat abruptly sidelined a few years ago. The then new board led by Jean-Paul Kress preferred to use the available resources to secure completely different active ingredients by taking over the US company Constellation Pharma. Another billion-dollar deal, which, however, weighed heavily on Morphosys’ share price in the following years. But it was other Constellation projects that persuaded Novartis to cooperate at the end of 2022 and probably laid the foundation for the current sale.
The bet on one of these US molecules did not clearly work out at the end of last year with very mixed results from the phase III study. Market observers seemed unsure whether this data would really be sufficient for approval by the FDA. Before there is another jitter over approval, the sale of a Morphosys 2.0 that has been greatly transformed by the founding myth brings an abrupt end to the biotech hopeful that was launched over 30 years ago. Only time will tell whether all of the employees in Planegg will really be of fundamental importance to the giant tanker Novartis. Goodbye Morphosys.