Novartis acquires German biotech MorphoSys for CHF2.5 billion
Even after its numerous acquisitions in 2023, the Swiss pharmaceutical company Novartis has not yet satisfied its appetite. The Basel-based company is acquiring the German biotech company MorphoSys for €2.7 billion (CHF2.5 billion).
This does not come as a complete surprise. News media had already speculated about this on Monday evening before the actual Novartis press release. According to the reports, Novartis was able to prevail in its bid for MorphoSys over the United States drug manufacturer Incyte.
As part of the agreed transaction, which was unanimously approved by the boards of directors of both companies, Novartis will make a voluntary public tender offer for all no-par value bearer shares of MorphoSys at a price of €68 per share.
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The offer that has now been made also puts an end to the takeover speculation about the German biotech, which was founded in 1992 in Martinsried near Munich.
Pipeline to be strengthened
With the takeover, Novartis is strengthening its oncology pipeline, the company announced late on Monday evening. The transaction gives Novartis access to pelabresib, an active ingredient for the treatment of myelofibrosis, a life-threatening, chronic disease of the bone marrow.
As Novartis itself writes, the cause of myelofibrosis is currently still unknown. It is assumed that myelofibrosis is caused by a change in the stem cells in the bone marrow.
In addition to pelabresib, the acquisition also gives Novartis access to tulmimetostat, a compound that is still at an early stage of testing and is currently being tested in patients with solid tumours or lymphomas. In addition, MorphoSys’s pipeline includes a broad portfolio of drugs, some of which are being developed in partnership with Novartis, including Ianalumab (VAY736), which is being investigated in various immunological diseases and haematology.
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Most important, however, is pelabresib. In a recent combination study, the active ingredient led to a reduction in spleen volume and thus achieved the targets set. In the US, the application for approval from the US Food and Drug Administration (US FDA) should be submitted in the second half of 2024 if possible.
Strategically sensible acquisition
Novartis itself remains true to its M&A strategy with these plans. Just a week ago, CEO Vas Narasimhan confirmed in an interview with AWP Video that the Group would continue to focus primarily on bolt-on acquisitions with a volume of up to $3 billion (CHF2.6 billion).
Analysts consider the plans to make strategic sense, as can be seen from the first early comments. The experts at JPMorgan, for example, write that the current standard of care for myelofibrosis is Jakafi, for which Novartis holds the rights outside the US. “Therefore, the acquisition of the global rights for pelabresib makes strong strategic sense as it builds on Novartis’s existing haematology presence,” the report states.
The transaction is subject to customary closing conditions, including acceptance of the tender offer by at least 65% of the outstanding shares of MorphoSys AG and receipt of regulatory approvals. The transaction is expected to close in the first half of 2024. Until completion of the transaction, the company will continue to operate as a separate, independent company.
Translated from German by DeepL/amva
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