Repeat: Pfizer Deal MorphoSys' Biggest Upfront Payment
Monday December 22, 5:46 am ET
FRANKFURT -(Dow Jones)- MorphoSys AG said Monday that a deal to generate therapeutic antibodies for U.S. pharmaceuticals giant Pfizer Co will mean the largest upfront payment from a drug development partner in the German biotechnology company's history.
Although the five-year research collaboration - worth a potential total $50 million to MorphoSys - isn't the company's largest partnership deal, the upfront payment is "significantly higher" than the $3 million it received upfront from U.S. biotech company Centocor Inc. in a partnership signed in December 2000, Chief Financial Officer Dave Lemus said in an interview with Dow Jones Newswires.
That upfront payment was the largest prior to the Pfizer deal, Lemus said.
Biotech partnerships typically involve an upfront payment, plus milestones for goals reached in the development of products as well as royalties on sales generated from those products that eventually make it to market.
Earlier Monday, MorphoSys announced it will generate therapeutic antibodies to be used on disease-related targets identified by Pfizer.
Pfizer will carry out the preclinical and clinical development and subsequent marketing of any commercial products resulting from the partnership, for which MorphoSys will receive an undisclosed upfront payment, milestone payments and royalties on any products approved for sale.
MorphoSys shares surged on the news, trading up 14.9%, or EUR1.36, at EUR10.50 by 1023 GMT.
Lemus said the payment "will have a substantial effect on our cash balance" and will boost revenues going forward, but he said he can't say whether the payment will be booked this year or early 2004.
"The impact on 2003 revenues will probably be minimal, but obviously it will help next year," he said.
"The impact is more toward future years," Lemus said.
Lemus declined to say how many targets are involved in the deal, but said pharmaceutical companies on average pay between $7.5 million and $12 million per antibody, including upfront and milestone payments.
"You can get a rough idea of the number of targets by taking a look at the size of the deal," he said, pointing to the potential $50 million MorphoSys stands to gain from the partnership, excluding royalties.
Lemus also said the targets provided by Pfizer aren't limited to any disease area.
Targets can be normally occurring constituents of the body such as enzymes, hormones and DNA; non-normal constituents such as tumors and antigens; or invading agents such as viruses.
Getting Pfizer on board is a significant boost for MorphoSys, he said.
"It tells me that Pfizer believes it can achieve something with our technology that it can't achieve with others'," he said.
Pfizer also has antibody cooperations with MorphoSys' major competitors, U.K.- based Cambridge Antibody Technology Group , and U.S.-based Medarex Inc. (NasdaqNM:MEDX - News) and Abgenix Inc. (NasdaqNM:ABGX - News) .
Unlike most antibody companies, which derive their antibodies from mice, MorphoSys develops human antibodies without using animals. Some analysts believe the human antibodies are tolerated better by patients than the mice-derived ones.
Company Web site: morphosys.com
-By Angela Cullen, Dow Jones Newswires; 49 69 2972 5500; angela.cullen@dowjones.com |
