MorphoSys finds a nice, new billion-dollar home for unwanted assets in oncology pivot

MorphoSys has found a home for a couple of assets it doesn’t want anymore—a nice billion-dollar home, that is—as the German biotech shifts focus to oncology.

The company announced aftermarket Tuesday a new licensing and equity deal with HIBio, which will see that newly emerged biotech take over the rights to the anti-CD38 antibody felzartamab and the anti-C5aR1 antibody MOR210. MorphoSys will receive a 15% equity stake in HIBio and be eligible to receive up to $1 billion in milestone payments across the two programs, plus royalties on potential net sales.

In March, MorphoSys revealed a plan to ax its early pipeline and U.S.-based early research work that came along with the $1.7 billion purchase of Constellation Pharmaceuticals, a deal executed a year ago. The news on the pipeline change was slim on details at the time, with MorphoSys declining to specify which assets it would be saying goodbye to. The company shifted laboratory operations back to its home base in Planegg, Germany, although drug development work will still be conducted in the U.S., a spokesperson noted Wednesday. 

Now we know that Arch Venture Partners-backed HIBio has snagged worldwide rights, with a few exceptions, to kidney disease med felzartamab and MOR210, which is for autoimmune diseases and immuno-oncology. The deal gets complicated, but HIBio now has the rights to felzartamab worldwide except for greater China, and greater China and South Korea for MOR210. HIBio will take over all future development and commercialization of the two assets.

MorphoSys will also gain a board seat at HIBio and has collected a $15 million upfront fee specifically for MOR210.

Focusing on felzartamab, the monoclonal antibody has been tested in the kidney diseases anti-PLA2R antibody-positive membranous nephropathy (aMN) and immunoglobulin A nephropathy (IgAN), which both lack treatment options for patients. Two midstage studies in aMN are already underway with enrollment completed, called M-PLACE and NewPLACE, and another phase 2 called IGNAZ is in progress for IgAN. Early interim data from the M-PLACE study linked felzartamab with the reduction of a biomarker associated with aMN.

As for MOR210, an initial patient was dosed in a phase 1 study for advanced solid tumors in January 2021. The therapy is being developed with I-Mab, a deal signed in 2018 that garnered $3.5 million upfront for MorphoSys and $101.5 million in milestones. I-Mab was specifically granted rights to MOR210 in China, Hong Kong, Macau, Taiwan and South Korea, hence the geographical carve-out in the latest deal with HIBio.

HIBio, which stands for Human Immunology Biosciences, is a precision medicine biotech formed by Arch Venture Partners and Monograph Capital. It’s led by Travis Murdoch, M.D., a former partner at Monograph. According to Murdoch’s LinkedIn page, HIBio was founded in May 2021.

A spokesperson for HIBio confirmed the biotech is new to the scene, but not quite ready to reveal its full plans at this time. The MorphoSys deal is "a significant step setting HIBio up as the leading company in precision immunology." More details on the biotech's planned pipeline, besides the two new assets from MorphoSys, will be revealed in the fall. 

MorphoSys CEO Jean-Paul Kress, M.D., cited HIBio’s team of “experienced drug developers” and the venture capital firms behind the biotech that have “demonstrated track records of building successful companies.”

“Its management, coupled with deep scientific expertise in autoimmune diseases, makes HIBio exceptionally well positioned to successfully advance felzartamab and MOR210 into new medicines for patients in need of better treatment options,” Kress said.

With the two assets offloaded and a hefty pile of cash scheduled for down the road, MorphoSys will now turn resources to its late- and midstage oncology pipeline, the CEO added. That means the BET inhibitor pelabresib from Constellation and the approved CD19-targeting immunotherapy Monjuvi, both for blood cancers.

MorphoSys also has CPI-0209 listed in its pipeline, a second-generation EZH2 inhibitor gained from the Constellation buy that is in a phase 1 trial for advanced solid tumors and lymphomas.

Editor's Note: This story was updated at 8:42 a.m. ET on June 15, 2022, with additional detail from representatives of MorphoSys and HIBio.