Emergent BioSolutions, MorphoSys Start Cancer Drug Study - Analyst Blog

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Emergent BioSolutions Inc.EBS and its partner MorphoSys, a German biotech company, announced that they have initiated a phase I study on their prostrate cancer candidate, MOR209/ES414.

The phase I study will assess the safety, tolerability and clinical activity of MOR209/ES414 in patients with metastatic castration-resistant prostate cancer (mCRPC).

Initiation of the phase I study has triggered a milestone payment of $5 million from MorphoSys to Emergent BioSolutions.

We remind investors that Emergent BioSolutions had inked a deal with MorphoSys last year to co-develop and subsequently market MOR209/ES414. The candidate, an antibody to combat prostate cancer, was being developed by Emergent BioSolutions on the basis of its Adaptir platform.

As per the terms of the agreement, Emergent BioSolutions received an upfront payment worth $20 million and is eligible to receive further milestone payments from MorphoSys. In exchange, MorphoSys received commercialization rights to the candidate in markets apart from the U.S. and Canada. Emergent BioSolutions will be responsible for marketing MOR209/ES414 in these two markets.

Emergent BioSolutions is eligible to receive royalties (low single digit) from MorphoSys on sales of MOR209/ES414 in ex-U.S. and ex-Canadian markets following approval. The U.S.-based company will have to make royalty payments (from mid single-digit to up to 20%) to MorphoSys on sales in the U.S. and Canada.

Emergent BioSolutions carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Cytokinetics, Incorporated CYTK , Horizon Pharma plc HZNP and Affymetrix Inc. AFFX . All three stocks hold a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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