MorphoSys AG announced a Business Combination Agreement with Novartis, offering €68.00 per share in cash to acquire all outstanding shares. Novartis aims to gain global rights to develop and commercialize pelabresib and tulmimetostat. Additionally, MorphoSys will sell tafasitamab rights to Incyte for $25 million. The offer provides shareholders immediate cash value, enhances pelabresib’s potential, and secures tafasitamab’s future. MorphoSys boards intend to recommend the offer. Closing is expected in 2024’s first half.
MorphoSys AG (FSE:MOR)(NASDAQ:MOR) today announced the company entered into a Business Combination Agreement with Novartis data42 AG and Novartis AG (hereinafter collectively referred to as “Novartis”) based on Novartis’ intention to submit a voluntary public takeover offer for all outstanding MorphoSys no-par value bearer shares at an offer price of € 68.00 per share in cash. As part of the Business Combination Agreement with Novartis, Novartis seeks to obtain exclusive, worldwide rights to develop and commercialize pelabresib, an investigational BET inhibitor, and tulmimetostat, an investigational next-generation dual inhibitor of EZH2 and EZH1, across all indications. Separately, MorphoSys entered into a Purchase Agreement to sell and transfer all rights worldwide related to tafasitamab to Incyte Corporation (“Incyte”). Currently, MorphoSys partners with Incyte on the development and commercialization of tafasitamab. MorphoSys’ Management Board and Supervisory Board unanimously approved both agreements.
“Novartis shares our steadfast commitment to develop and deliver transformative medicines that address the dire needs of cancer patients. Pelabresib – the investigational therapy at the forefront of our promising oncology pipeline – has the potential to shift the treatment paradigm in myelofibrosis and further expand into other indications. Novartis will provide ample resources currently unavailable to MorphoSys as a standalone biotech company to help accelerate the development opportunities and maximize the commercialization potential of pelabresib at a greater speed and scale,” said Jean-Paul Kress, M.D., Chief Executive Officer of MorphoSys. “We are also pleased that Incyte will assume full responsibility of tafasitamab. Given the proposed acquisition by Novartis and our long-standing partnership with Incyte, we know Incyte is best positioned to drive tafasitamab’s future growth opportunities forward successfully and more efficiently on its own at this time. We believe these agreements are in the best interest of MorphoSys, our shareholders and cancer patients.”
Benefits of Novartis’ Public Takeover Offer
- Provides Attractive, Immediate and Certain Cash Value to MorphoSys’ Shareholders: The offer provides MorphoSys’ shareholders with an opportunity to realize significant value upfront and with certainty. Novartis intends to offer MorphoSys’ shareholders € 68.00 per share in cash, for a total equity value of € 2.7 billion. The offer price corresponds to a premium of 94% and 142% on the volume-weighted average price during the last month and three months, as of the unaffected January 25, 2024 close, respectively – the day before first rumors on a potential takeover surfaced. It also represents a premium of 89% to the unaffected January 25, 2024 closing share price.
- Maximizes Potential of Pelabresib: In the Phase 3 MANIFEST-2 study, all disease hallmarks of myelofibrosis were improved with the pelabresib and ruxolitinib combination versus placebo plus ruxolitinib, which is the standard of care in this disease. These findings point to pelabresib and ruxolitinib as a potential paradigm-shifting first-line myelofibrosis treatment. Beyond myelofibrosis, early data suggest pelabresib’s clinical benefit in additional indications, representing new opportunities with this investigational therapy. Novartis has the necessary financial resources, additional scientific expertise and global footprint to maximize the full scope of pelabresib’s potential, helping ensure patients worldwide could benefit.
- Creates New Opportunities for MorphoSys’ Colleagues: The agreement between Novartis and MorphoSys includes employee commitments. Novartis acknowledges that MorphoSys’ dedicated workforce is the foundation of the company’s current and future success.
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Subject to a careful review of the offer document, MorphoSys’ Management Board and Supervisory Board intend to recommend to shareholders the acceptance of the offer proposed by Novartis in their joint reasoned statement.
Details of Novartis’ Public Takeover Offer
The offer will contain customary closing conditions, in particular a minimum acceptance threshold of 65% of MorphoSys’ share capital and regulatory clearances. The closing is currently expected to take place in the first half of 2024. MorphoSys and Novartis agreed to take MorphoSys private promptly after the public takeover offer has been settled.
The offer document of the takeover offer will be published by Novartis at a later date in accordance with the provisions of the German Securities Acquisition and Takeover Act, after the German Federal Financial Supervisory Authority (“BaFin”) has approved the publication. Promptly after the offer document is published, MorphoSys’ Management Board and Supervisory Board will issue a joint reasoned statement in accordance with sec. 27 of the German Securities Acquisition and Takeover Act. In accordance with U.S. securities laws, Novartis data42 AG and Novartis AG will file the offer document and a Tender Offer Statement on Schedule TO and MorphoSys will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the U.S. Securities and Exchange Commission (the “SEC”).
The offer document (once available) and other information relating to the public takeover offer will be made public by Novartis, following approval by BaFin, on this website: www.novartis.com/investors/morphosys-acquisition. The Tender Offer Statement on Schedule TO and the Solicitation/Recommendation Statement on Schedule 14D-9 will be made available for free on the SEC’s website at www.sec.gov and under the “SEC Filings” section of MorphoSys’ website at www.morphosys.com/en/investors.
Details of the Sale of Tafasitamab to Incyte
Under the terms of MorphoSys’ Purchase Agreement with Incyte, Incyte will obtain exclusive rights worldwide, assume full responsibility and cover all costs going foward for the development and commercialization of tafasitamab for a purchase price of US$ 25 million. MorphoSys and Incyte have been collaborating on tafasitamab since 2020. Prior to this agreement, tafasitamab was co-marketed in the U.S. by MorphoSys and Incyte as Monjuvi® (tafasitamab-cxix) and outside the U.S. by Incyte as Minjuvi®.
Investor and Analyst Call Details
MorphoSys will host an investor and analyst call on February 6, 2024 at 02:00 pm CET (01:00 pm GMT; 08:00 am EST). Participants for the call may pre-register and will receive dedicated dial-in details to easily and quickly access the call:
Centerview Partners is acting as lead financial advisor and Skadden, Arps, Slate, Meagher & Flom as legal advisor to MorphoSys.
Source: Bio Space