GlaxoSmithKline (GSK) has agreed to pay up to €445m to acquire the rights to an investigational rheumatoid arthritis (RA) and multiple sclerosis (MS) candidate from MorphoSys.
Known as MOR103, the antibody is an anti-inflammatory drug that targets the protein granulocyte-macrophage colony-stimulating factor (GM-CSF), which can lead to the activation and proliferation of immune cells, causing inflammation.
It is currently in phase I/II clinical trials to treat patients with mild to moderate rheumatoid arthritis and in phase Ib to treat patients with MS.
The terms of the deal are understandably cautious considering the early stage development of the drug, with GSK offering €22.5m as an upfront payment, and then potential milestones of €423m depending on how successful the drug proves itself to be in subsequent trials.
MorphoSys would also receive royalties if the product reaches the market.
The deal is still a major boost for MorphoSys, however, prompting the German biotech company to increases its financial guidance for 2013, raising its expectations from €48-52m to €68-72m.
It is also the biggest sign yet of big pharma’s confidence in MorphoSys’ antibody development HuCAL technology – the platform used to develop MOR103 – and follows smaller, ongoing, partnership agreements with both Novartis and Astellas.
Dr Simon Moroney, CEO of MorphoSys, described the deal as a “major milestone” for the company.
“Our goal was to secure an agreement with a company having the commitment and expertise to turn MOR103 into a successful drug, and in GSK we have clearly found such a partner,” he said.
“We hope this alliance will result in a significant return on investment for the MOR103 programme and to become a major value driver for MorphoSys.”
It is the second major deal GSK has agreed in a week following its acquisition of vaccine technology firm Okairos for €250m.