Novartis continues shopping spree with Morphosys acquisition

At pharmaceutical company Novartis, the hunger for additional acquisitions has not yet been satisfied, even after the numerous acquisitions in 2023. The Basel-based company is acquiring the German biotech company Morphosys for 2.7 billion euros.

This doesn’t come as a complete surprise. The first media had already speculated about this on Monday evening before the actual Novartis communiqué. According to reports, the Basel-based company managed to beat the American drug manufacturer Incyte.

As part of the agreed transaction, which was unanimously approved by the boards of directors of both companies, Novartis will launch a voluntary public takeover offer for all bearer shares in Morphosys AG at a price of EUR 68 per share.

The offer that has now been made puts an end to the takeover speculation that has repeatedly arisen in the past about the German biotech, which was founded in 1992 in Martinsried near Munich, Germany.

The pipeline has been reinforced

With the acquisition, Novartis strengthens its oncology pipeline, the company announced late Monday evening. The transaction gives Novartis access to pelabresib, an active ingredient for the treatment of myelofibrosis (MF), a life-threatening, chronic bone marrow disease.

As Novartis itself writes, the cause of MF is currently unknown. MF is thought to be caused by a change in the stem cells in the bone marrow.

In addition to pelabresib, the acquisition also gives Novartis access to tulmimetostat, an active ingredient that is still in early stages of testing and is currently being tested in patients with solid tumors or lymphomas. In addition, Morphosys’ pipeline includes a broad portfolio of drugs, some of which are being developed in collaboration with Novartis, including Iinalumab (VAY736), which is being investigated in several immunological diseases and in hematology.

But the most important thing is pelabresib. In a recent combination study, the active ingredient led to a reduction in spleen volume, thus achieving the stated goals. In the US, the application for approval to the American health authority FDA should, if possible, take place in the second half of 2024.

Strategically sensible acquisition

Novartis itself remains true to its M&A strategy with its plans. Just a week ago, CEO Vas Narasimhan confirmed in an interview with AWP-Video that the group remains focused on additional acquisitions with a volume of up to $3 billion.

Analysts consider the plans to make strategic sense, as evidenced by initial comments. For example, JPMorgan experts write that the current standard of care for myelofibrosis is Jakafi, for which Novartis has the rights outside the US. “Therefore, acquiring global rights for pelabresib is strategically important as it builds on Novartis’ existing presence in hematology,” the report said.

The transaction is subject to customary closing conditions, including the acceptance of the tender offer by at least 65 percent of the outstanding shares of Morphosys AG and the receipt of regulatory approvals, the information said. According to the information, the transaction is expected to close in the first half of 2024. Until the transaction is completed, the company will continue to operate as a separate, independent company. (rbu/sda/awp)