MorphoSys and Novartis Forge New Strategic Alliance to Establish Innovative Therapeutic Antibody Pipeline - One of the Industry's Largest Pharma-Biote
* MorphoSys and Novartis enter into a comprehensive long term
alliance to accelerate discovery of therapeutic antibodies for use
against a wide range of diseases
* MorphoSys to become Novartis's main technology collaborator
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in the
area of antibody discovery and development
* Financial terms include committed payments in excess of US$600
million over the lifetime of the agreement, with further potential
for significant additional milestones, profit sharing and/or
royalty payments based on products emerging from the collaboration
* MorphoSys obtains certain co-development rights for selected
programs as well as rights to co-detail the resulting products in
specific territories through creation of its own sales force
* Financial strength provided by the agreement to enable MorphoSys to
increase the breadth and speed of its proprietary drug development
activities
MorphoSys AG (Frankfurt Stock Exchange: MOR; Prime Standard Segment)
announced today the formation of one of the most comprehensive
strategic alliances with Novartis in the discovery and development of
biopharmaceuticals. The deal is aimed at establishing a pipeline of
innovative drugs, and combines MorphoSys's and Novartis's research
and development capabilities. Novartis becomes MorphoSys's preferred
collaborator for HuCAL-based drug discovery, allowing MorphoSys to
progress to the next stage of its corporate development, which
involves a greater focus on drug discovery and development within the
Novartis alliance, and proprietary drug development, thereby
substantially reducing MorphoSys's reliance on new or extended
fee-for-service discovery deals. The expanded alliance also includes
rights to co-detail co-developed products in specific territories
through creation of MorphoSys's own sales force. In addition to
programs pursued jointly, Novartis has accelerated its plan to
internalize MorphoSys's leading human antibody technology, HuCAL, at
its research sites under the option agreed in the original contract.
The structure and the financial terms of the collaboration further
create a solid financial footing allowing MorphoSys to accelerate and
broaden its proprietary drug development efforts and participate in
development activities with Novartis.
Transaction Structure
Under the agreement, Novartis will make a major long-term commitment
to MorphoSys's HuCAL technology. The collaboration has a term of 10
years. Novartis has the option to prolong the collaboration for a
further two years or to conclude the alliance after 7 years in
certain limited circumstances. Over the lifetime of the agreement,
the parties will engage in approximately double the annual number of
therapeutic antibody discovery programs as compared to the previous
alliance, encompassing a wide range of diseases. MorphoSys also has
options to participate in certain development activities in various
programs, with part of the early stage costs being funded by
Novartis. Under the co-development options, MorphoSys may elect to
participate in these projects through cost and profit sharing with
financial participation reflecting its level of investment in the
respective programs.
Financial Terms
Based on a 10-year term, committed total annual payments sum to more
than US $600 million in technology access, internalization fees and
R&D funding, excluding reimbursement of R&D costs related to early
stage development activities.
Total payments under the agreement, including committed payments and
probability-weighted success-based milestones, contingent upon
successful clinical development and market approval of multiple
products, could potentially exceed US$1 billion, assuming the
collaboration successfully runs its maximum term. In addition to
these payments, MorphoSys would also be entitled to royalty payments
and/or profit sharing on any future product sales.
"This is a transforming deal for MorphoSys. This alliance heralds a
new chapter in our corporate development as it offers us the perfect
construct to increase significantly the value of our proprietary drug
development pipeline while simultaneously maximizing our financial
interest in partnered programs," commented Dr. Simon Moroney, Chief
Executive Officer of MorphoSys AG. "The first antibody from our
collaboration with Novartis entered the clinic three years after
signature. The proven success of our relationship and demonstrated
commitment of the collaborator was a key factor in our decision to
enter this substantially expanded new deal. This deal maximizes the
value of our partnered antibody pipeline and the additional
cash-flows within the strategic partnership with Novartis will become
a major value driver for MorphoSys."
"Over the past three years MorphoSys has been an instrumental
collaborator in the build up of Novartis internal biologics discovery
and development efforts," said Abbie Celniker, Global Head, Novartis
Biologics. "We look forward to continuing our collaboration with the
MorphoSys team under this expanded alliance."
The substantial committed and contingent funding that the new
alliance brings will transform MorphoSys's ability to build value by
expanding and accelerating its own drug development activities. In
addition, MorphoSys will further build its drug pipeline via the
co-development rights provided by the new agreement. MorphoSys
remains committed to its ongoing proprietary drug development
programs - MOR103 and MOR202 - and to the active therapeutic antibody
pipeline built with its other partners.
Therapeutic antibodies currently represent the most successful class
of biopharmaceutical drugs in the healthcare industry. MorphoSys and
Novartis started working together in 2004 in a collaboration that has
resulted to date in multiple active therapeutic antibody programs
across various diseases and the first IND-filing just three years
after initiation. The new agreement is built on the strong existing
relationship between the partners.
MorphoSys will hold a public conference call and live audio webcast
on December 3, 2007 at 10:00 CET to provide detailed information on
its new strategic alliance with Novartis.
Dial-in number for the Conference Call: +49 (0)69 9897 2623
(listen-only)
UK residents: +44 (0)20 7138 0844
Confirmation code: 8460477
Please dial in 10 minutes before the beginning of the conference.
MorphoSys AG offers participants the opportunity to follow the
presentation through a simultaneous slide presentation online at
morphosys.com
An audio replay and manuscripts of the conference will be available
following the live event on morphosys.com
For further information please contact: Dr. Claudia
Gutjahr-Löser, Head of Corporate Communications, Tel: +49 (0) 89 /
899 27-122, gutjahr-loeser@morphosys.com or Mario Brkulj, Manager
Public Relations, Tel: +49 (0) 89 / 899 27-454, brkulj@morphosys.com |
