MorphoSys and Novartis to develop therapeutic antibody pipeline

MorphoSys and Novartis are combining their research and development capabilities to establish a pipeline of innovative drugs.

This long-term alliance aims to accelerate the discovery of therapeutic antibodies for use against a wide range of diseases.

As part of the alliance, Novartis becomes MorphoSys's preferred collaborator for HuCAL-based drug discovery. This will allow 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.

The expanded alliance also includes rights to co-detail co-developed products in specific territories through creation of MorphoSys's own sales force.

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 seven 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 programmes as compared to the previous alliance, encompassing a wide range of diseases.

MorphoSys also has options to participate in certain development activities in various programmes, 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 programmes.

Based on a 10-year term, committed total annual payments sum to more than $600m (Euro 410m) in technology access, internalisation fees and R&D funding, excluding reimbursement of R&D costs related to early stage development activities.

"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 maximising our financial interest in partnered programmes," said Dr Simon Moroney, chief executive Officer of MorphoSys. "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 maximises 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."