Incyte, MorphoSys in $2-Bn Licensing Deal for Cancer Drug
MorphoSys, a Martinsried, Germany-based biopharmaceutical company, and Incyte, a Wilmington, Delaware-based, global biopharmaceutical company, have entered into a collaboration and license agreement to further develop and commercialize MorphoSys’ tafasitamab, a proprietary treatment of B cell malignancies, in a deal worth up to $2 billion ($900 million upfront and $1.5 billion in milestones).
Tafasitamab is an Fc-engineered antibody against CD19 currently in clinical development for the treatment of B cell malignancies. MorphoSys and Incyte will co-commercialize tafasitamab in the US while Incyte has exclusive commercialization rights outside of the US.
Under the agreement, MorphoSys will receive an upfront payment of $750 million and Incyte will make an equity investment into MorphoSys of $150 million in new American Depositary Shares of MorphoSys at a premium to the share price at signing of the agreement. Depending on the achievement of certain developmental, regulatory, and commercial milestones, MorphoSys will be eligible to receive milestone payments amounting to up to $1.1 billion. MorphoSys will also receive tiered royalties on ex-US net sales of tafasitamab in a mid-teens to mid-twenties percentage range of net sales.
In the US, MorphoSys and Incyte will co-commercialize tafasitamab, with MorphoSys leading the commercialization strategy and booking all revenues from sales of tafasitamab. Incyte and MorphoSys will be jointly responsible for commercialization activities in the US and will share profits and losses on a 50:50 basis. Outside the US, Incyte will have exclusive commercialization rights and will lead the commercialization strategy and book all revenues from sales of tafasitamab, paying MorphoSys royalties on ex- US net sales.
Furthermore, the companies will share development costs associated with global and US-specific trials at a rate of 55% (Incyte) to 45% (MorphoSys); Incyte will cover 100% of the future development costs for trials that are specific to ex- US countries.
Both parties have agreed to co-develop tafasitamab broadly in relapsed/refractory diffuse large B cell lymphoma (r/r DLBCL), frontline DLBCL as well as additional indications beyond DLBCL, such as follicular lymphoma (FL), marginal zone lymphoma (MZL) and chronic lymphocytic leukemia (CLL). Incyte will be responsible for initiating a combination study of its investigational phosphoinositide-3 kinase (PI3K)-delta inhibitor parsaclisib and tafasitamab in r/r B cell malignancies. Further, Incyte will be responsible for leading any potential registration-enabling studies in CLL and a Phase III trial in r/r FL/MZL. MorphoSys will continue to be responsible for its currently ongoing clinical trials of tafasitamab in non-Hodgkin lymphoma, CLL, r/r DLBCL and frontline DLBCL. The parties will share responsibility in starting additional global trials, and Incyte intends to pursue development in additional territories including Japan and China.
MorphoSys recently submitted a biologics license application for tafasitamab, in combination with lenalidomide, to the US Food and Drug Administration for the treatment of r/r DLBCL; the FDA decision regarding a potential approval is expected by mid-2020. The submission of a marketing authorization application to the European Medicines Agency in r/r DLBCL is planned for mid-2020.
The agreement between MorphoSys and Incyte, including the equity investment, is subject to clearance by the US antitrust authorities under the Hart-Scott-Rodino Act as well as by the German and Austrian antitrust authorities, and will become effective as soon as these conditions have been met.