German biopharma company MorphoSys has announced that it will acquire Constellations Pharmaceuticals, a clinical-stage company with expertise in epigenetics, for a total of $1.7bn.
MorphoSys will pay $34 a share to acquire Constellation Pharma, which will see it gain two lead drugs, including BET inhibitor pelabresib and second-generation EZH2 inhibitor CPI-0209.
Both product candidates are in mid- to late-stage clinical trials, with ‘broad therapeutic potential’ across various haematological and solid tumours.
Pelabresib, a potentially first-in-class BET inhibitor, is currently being evaluated in phase 3 clinical trials for the bone marrow cancer myelofibrosis.
CP-0209 is currently being tested in phase 2 for the treatment of haematological and solid tumours. Constellation Pharma also has numerous additional preclinical compounds within its pipeline.
“We are proud that MorphoSys has recognised the strength of our team, our expertise in epigenetics, and our high-potential oncology development pipeline and discovery programmes,” said Jigar Raythatha, president and chief executive officer of Constellation Pharma.
“Becoming part of MorphoSys creates an industry leader with commercial capabilities, a deep R&D pipeline and complementary small molecule and biologics discovery and translational capabilities, as well as the financial strength to compete to win,” he added.
At the same time, MorphoSys has entered into a long-term strategic funding partnership with Royalty Pharma – a ‘leader in acquiring pharmaceutical royalties’.
As part of this deal, Royalty Pharma will make a $1.425bn upfront payment to MorphoSys to support its growth strategy.
The funds will be used to support MorphoSys’ acquisition of Constellation, as well as the development of the combined pipeline.
In addition, Royalty Pharma will provide MorphoSys with access to up to £350m in development funding bonds, as well as additional milestone payments of up to $150m.
In return, Royalty Pharma will gain the rights to receive 100% of MorphoSys’ royalties on net sales of its commercial drug Tremfya (guselkumab), as well as 80% of future royalties and 100% of future milestone payments on pipeline product otilimab, 60% of future royalties on gantenerumab, and 3% on future net sales of Constellation’s clinical stage assets (pelabresib and CPI-0209).
“We are thrilled to announce this partnership with Royalty Pharma, which is providing more than $2bn to fuel our proprietary drug development and commercialisation,” said Jean-Paul Kress, chief executive officer of MorphoSys.
“We are confident they will be a strong financial partner for years to come, enabling us to fund our growth and – with the addition of Constellation’s innovative pipeline – bring our attractive new candidates to patients,” he added.