Novartis Initiates Voluntary Public Takeover of MorphoSys AG

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Novartis officially published its voluntary public takeover offer through its subsidiary, Novartis BidCo AG, to acquire all outstanding shares of MorphoSys AG. This includes all shares of MorphoSys American Depositary Shares for $72 per share. According to the company, the offer reflects a significant 142% premium over the volume-weighted average price of the past three months as of January 25, 2024. Pending a minimum acceptance rate of 65% and other factors, the offer expires on May 13, 2024.¹

“The proposed acquisition by Novartis is in the best interest of MorphoSys, our shareholders and cancer patients – helping to accelerate commercial and development opportunities across our promising oncology pipeline,” said Jean-Paul Kress, MD, CEO, MorphoSys, in a press release. “The offer made by Novartis provides MorphoSys shareholders with an opportunity to realize significant value upfront and with certainty. After conducting a thorough assessment of the offer document, we unanimously conclude that the offer, including the offer price, is highly attractive and equitable. We recommend our shareholders accept this offer.”²

The public takeover was first announced in February, with Novartis expecting to claim ownership of pelabresib (CPI-0610), a novel treatment in combination with ruxolitinib under evaluation for patients with myelofibrosis (MF). Additionally, tulmimetostat (CPI-0209), a dual inhibitor targeting proteins involved in tumor growth, will be acquired as part of the takeover. MorphoSys’ pipeline also includes ianalumab (VAY736), a treatment being tested across immunological diseases and in hematology.³

“We are excited about the opportunity of bringing pelabresib, a potential next-generation treatment combined with ruxolitinib, to people living with myelofibrosis, a rare and debilitating form of blood cancer,” said Shreeram Aradhye, MD, president, development, chief medical officer, Novartis, in a press release. “With the planned acquisition of MorphoSys, we aim to further strengthen our leading pipeline and portfolio in oncology, adding to our capabilities and expertise. Building on our long-standing development partnership with MorphoSys, we look forward to continuing our work together to realize the full impact and value of their investigational medicines for patients with unmet needs.”

Upon takeover, both companies intend to remove MorphoSys shares in Germany and.the United States.2 Novartis and Morphosys AG first began collaborating in December 2007 with a goal of discovering and developing a pipeline of innovative drugs through their combined expertise. Initially a 10-year agreement for $600 million, the collaboration included access to technology internalization fees and R&D funding.⁴

“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,” said Simon Moroney, CEO, MorphoSys AG, in a 2007 press release. “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.”

References

1. Novartis tender offer for MorphoSys AG commences. Novartis. April 11, 2024. Accessed April 12, 2024. https://www.novartis.com/news/media-releases/novartis-tender-offer-morphosys-ag-commences

2. MorphoSys’ Management Board and Supervisory Board Recommend Shareholders Accept Public Takeover Offer by Novartis. Morphosys. April 11, 2024. Accessed April 12, 2024. https://www.morphosys.com/en/news/morphosys-management-board-and-supervisory-board-recommend-shareholders-accept-public-takeover

3. Novartis to strengthen oncology pipeline with agreement to acquire MorphoSys AG for EUR 68 per share or an aggregate of EUR 2.7bn in cash. Novartis. February 5, 2024. Accessed April 12, 2024. https://www.novartis.com/news/media-releases/novartis-strengthen-oncology-pipeline-agreement-acquire-morphosys-ag-eur-68-share-or-aggregate-eur-27bn-cash

4. MorphoSys and Novartis Forge New Strategic Alliance to Establish Innovative Therapeutic Antibody Pipeline - One of the Industry's Largest Pharma-Biotech R&D Collaborations. Morphosys. December 2007. Accessed April 12, 2024. https://www.morphosys.com/en/news/morphosys-and-novartis-forge-new-strategic-alliance-establish-innovative-therapeutic-antibody