) recently inked a deal with German company MorphoSys to
co-develop oncology candidate MOR202 on a global basis for
treating patients with multiple myeloma and certain cancer forms.
As per deal, the companies have also agreed to co-promote MOR202
in Europe for the above indications.
Celgene and MorphoSys will share the costs for developing the
candidate on a 1/3:2/3 basis. MOR202, a human monoclonal
antibody, is currently being evaluated in a phase I/IIa study for
treating patients suffering from relapsed/refractory myeloma. The
deal is worth up to $818 million, assuming all milestones are
As per the terms of the deal, Celgene will make an upfront
license payment of $92 million to the German company.
Furthermore, the US based biopharmaceutical company will invest
$60 million in order to subscribe the new shares of MorphoSys.
The new shares will be issued at the price determined once the
deal becomes effective. The companies said that the deal will
become effective as soon as it is cleared by the antitrust
authorities in the US under the Hart-Scott-Rodino Act. As per the
deal, the price will include at least a 15% premium to MorphoSys'
closing price (prior to the deal being inked). This will benefit
the shareholders of MorphoSys.
Moreover, MorphoSys is eligible to milestone payments from
Celgene apart from tiered double-digit royalties on net sales of
MOR202 (on approval) in markets outside Europe. The profits
emanating from sales in the markets, where the companies will
co-promote MOR202, will be shared equally.
We believe that the deal is also beneficial for Celgene which
already has a strong oncology pipeline/product portfolio.
Successful development and subsequent commercialization of MOR202
will further boost the company's oncology portfolio.
Celgene carries a Zacks Rank #3 (Hold). Companies such as
Biogen Idec Inc.
Jazz Pharmaceuticals Public Limited Company
Alnylam Pharmaceuticals, Inc.
) appear to be more attractive. While Alnylam Pharma carries a
Zacks Rank #2 (Buy), Biogen Idec and Jazz Pharma carry a Zacks
Rank #1 (Strong Buy).
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