Martinsried, June 2, (dpa-AFX/GNA) – German biotechnology company MorphoSys AG (MOR, MPSYY.PK) on Wednesday announced that it has entered into a definitive agreement to acquire Constellation Pharmaceuticals, Inc, (CNST) for 34.00 dollars per share in cash, which represents a total equity value of 1.7 billion dollars.
MorphoSys also announced that it has entered into a long-term strategic funding partnership with Royalty Pharma plc (RPRX).
In pre-market activity on Nasdaq, Constellation Pharma shares were gaining around 67 per cent to trade at 33.70 dollars, while MorphoSys shares were losing 11 per cent to 19.76 dollars. In Germany, MorphoSys shares were down 5 per cent.
The transaction has been unanimously approved by the management boardand the supervisory board of MorphoSys, as well as the board of directors of Constellation. The deal is expected to close in the third quarter of 2021.
The purchase price of 34.00 dollars per share in cash represents a premium of approximately 70 per cent to Constellation’s volume-weighted average price for the last five trading days.
Constellation is a clinical-stage biopharmaceutical company that develops novel therapeutics that address serious unmet medical needs in patients with various forms of cancer.
Constellation’s two lead product candidates, pelabresib (CPI-0610), a BET inhibitor, and CPI-0209, a second-generation EZH2 inhibitor, are in mid- to late-stage clinical trials.
In its deal with Royalty Pharma, MorphoSys noted that under certain conditions and upon closing of the transaction with Constellation, Royalty Pharma will make a 1.425-billion-dollar upfront payment to MorphoSys, supporting its growth strategy. The proceeds will be used to support the financing of the Constellation transaction and development of the combined pipeline.
Royalty Pharma will provide MorphoSys with access to up to 350 million dollars in development funding bonds with the flexibility to draw over a one-year period. It will also make additional payments of up to 150 million dollars to MorphoSys upon reaching clinical, regulatory and commercial milestones for otilimab, gantenerumab and pelabresib.
Further, Royalty Pharma will have the rights to receive 100 per cent of MorphoSys’ royalties on net sales of Tremfya, 80 per cent of future royalties and 100 per cent of future milestone payments on otilimab, 60 per cent of future royalties on gantenerumab, and three per cent on future net sales of Constellation’s clinical stage assets.
After completion of the transaction and subject to the required approvals of the MorphoSys boards, Royalty Pharma is expected to invest 100 million dollars in a cash capital increase of MorphoSys under an authorization to exclude subscription rights of existing shareholders.
The new MorphoSys shares will be listed on the Frankfurt Stock Exchange.
GNA