Planegg/Munich, Germany, July 19, 2018
Ad hoc: MorphoSys and Galapagos Sign Global License Agreement for MOR106 with Novartis and MorphoSys Increases its Financial Guidance for 2018
MorphoSys AG (FSE: MOR; Prime Standard Segment; TecDAX; NASDAQ: MOR) announces today that MorphoSys and Galapagos NV have entered into a worldwide, exclusive agreement with Novartis Pharma AG covering the development and commercialization of their joint program MOR106. MorphoSys furthermore announces that, in consequence of this agreement with Galapagos and Novartis, it increases its financial guidance for the year 2018 pending clearance by the U.S. antitrust authorities under the Hart-Scott-Rodino Act. MOR106 is an investigational, fully human, IgG1 monoclonal antibody directed against the target IL-17C that was generated in a collaboration between MorphoSys and Galapagos.
Under the terms of the agreement, the parties will cooperate to broaden the existing development plan for MOR106 significantly. Novartis will be exclusively holding all rights for commercialization of any products resulting from the agreement signed today.
Upon the signing of the agreement, all future research, development, manufacturing and commercialization costs for MOR106 will be borne by Novartis. This includes the ongoing phase 2 IGUANA trial in atopic dermatitis (AtD) patients as well as a planned phase 1 study to evaluate the safety and efficacy of a subcutaneous formulation of MOR106 in healthy volunteers and AtD patients. MorphoSys and Galapagos will conduct additional trials to support development of MOR106 in AtD. Under the terms of the agreement, Novartis will explore the potential of MOR106 in additional indications other than AtD.
In addition to the funding of the current and future MOR106 program by Novartis, MorphoSys and Galapagos will jointly receive an upfront payment of EUR 95 million (USD 111 million*). Pending achievement of certain developmental, regulatory, commercial and sales-based milestones, MorphoSys and Galapagos would jointly be eligible to receive significant milestone payments, potentially amounting to up to approximately EUR 850 million (USD 1 billion*), in addition to tiered royalties on net commercial sales in the range of up to low-teens to low-twenties. Under the terms of their agreement from 2008, Galapagos and MorphoSys will share all payments equally (50/50).
The agreement between MorphoSys, Galapagos, and Novartis is subject to clearance by the U.S. antitrust authorities under the Hart-Scott-Rodino Act, and will become effective as soon as this condition has been met.
In connection with the agreement and pending U.S. antitrust clearance, MorphoSys increases its financial guidance: For 2018, MorphoSys, subject to antitrust clearance, expects revenues in the range from EUR 67 to 72 million (up from previously EUR 20 to 25 million) and earnings before interest and taxes (EBIT) of EUR -55 to -65 million (up from previously EUR -110 to -120 million). R&D expenses for proprietary programs and technology development will be in the range from EUR 87 to 97 million (previously EUR 95 to 105 million).
*) Converted based on exchange rate: 1 EUR = 1.16945 USD (as of July 18, 2018, source: www.oanda.com)
END OF AD-HOC-RELEASE