MorphoSys supersizes IPO, bagging $208M for cancer R&D

MorphoSys CEO Simon Moroney. (MorphoSys)

MorphoSys has supersized its IPO, pulling in $208 million to develop its anti-CD19 antibody MOR208. The dialed-up IPO haul gives MorphoSys a $500 million-plus war chest to crash the CAR-T party with a drug it thinks provides safer, more durable efficacy without the cost or complexity of cell therapies. 

That idea has resonated with investors. MorphoSys penciled in $150 million as a forecast maximum IPO fundraising total when it filed to go public last month. The German biotech breezed past that goal, raising 39% more than initially anticipated even before a possible $31 million overallotment is factored in.

MorphoSys pulled off the upsized IPO without the help of existing investors. Groups including Baillie Gifford, Oppenheimer and Invesco possessed notable minority stakes in MorphoSys going into the IPO but opted against adding to their holdings. All 8.3 million American depositary shares sold in the listing went to new investors, setting MorphoSys apart from peers that have relied heavily on insiders to get IPOs away. 

The upshot is MorphoSys emerges from the IPO with a significant amount of money. MorphoSys closed out 2017 with around $380 million in cash and other readily-available assets. That means the Munich-based company is well equipped to spend $225 million on a multifront trial program for its wholly-owned lead program MOR208.

RELATED: MorphoSys eyes MOR208 approval after midphase DLBCL data impress

MorphoSys thinks it has a shot at winning FDA approval for MOR208 in relapsed or refractory diffuse large B cell lymphoma (DLBCL) on the strength of midphase data, setting it up to bring the antibody to market in the first half of 2020. The DLBCL trial program is testing MOR208 in combination with either Celgene’s Revlimid or Teva’s Treanda. Another study is assessing MOR208 plus Venclexta or Zydelig in chronic lymphocytic leukemia patients.

The most advanced data come from the Revlimid combination study. Almost one-third of the 81 evaluable patients experienced complete responses and progression-free survival (PFS) is still ticking up after following patients for 8.3 months, on average. MorphoSys sees the PFS data as one of its trump cards against Gilead’s Yescarta, which is already approved in DLBCL. Yescarta wowed with a complete response rate around 50% but the median PFS fell short of six months. 

MorphoSys needs more data to convincingly paint MOR208 as a CAR-T killer. But investors have already bought into its potential, setting the company up to show whether antibodies do a better job when targeting CD19 than cell therapies.