TBE/iStock Editorial via Getty Images
Update 2:03pm: Adds MorphoSys comment.
MorphoSys (NASDAQ:MOR) ADRs quickly fell 4.5% amid speculation that Novartis (NYSE:NVS) may eventually look to exit the EUR2.7 billion deal if regulators fail to approve an application for the drug pelabresib.
Mixed results from pelabresib’s Phase 3 study last year raised major concerns inside Novartis (NVS) that the drug isn’t approvable, according to a Stat News report from Adam Feuerstein on Tuesday, which cited two people familiar with the matter.
Support for MorphoSys (MOR) deal won inside Novartis (NVS), though for downside protection the transaction was structured so that Novartis could exit if the Food and Drug Administration doesn’t approve pelabresib, according to the report.
The breakup fee that Novartis (NVS) has to pay to MorphoSys (MOR) is lower than most biotech acquisitions, the report said.
A MorphoSys (MOR) and Novartis (NVS) spokesperson told Stat News that its report was incorrect and that deal is still expected to close in the first half of the year.
“This story is factually wrong,” a MorphoSys spokesperson said in an emailed statement to Bloomberg News.
Spokespeople for MorphoSys and Novartis didn’t immediately respond to Seeking Alpha email request for comment.
Novartis (NVS) appeared to win over a rival bid from Incyte (INCY), according to a Reuters report on Monday.
Incyte announced Monday it bought the global commercialization rights to the drug tafasitamab, also known as Monjuvi, from partner MorphoSys (MOR) for $25 million.