New York/ Munich — Morphosys, based in Munich, succeeded in achieving the largest IPO of a German biotech company on the Nasdaq in the USA to date and one of the largest share placements ever in the German biotech sector. The company’s shares were previously only listed in Germany.
With the fresh capital, Morphosys is preparing for the further expansion of its clinical research and the possible market launch of its first own product candidate in 2020.
The stock market proceeds will bring the company’s capital reserves to around 450 million euros, a lot of money for the ambitious projects.
The expensive drug research and development, which currently still leads to losses on the balance sheet, was the driving force behind the US IPO. For 2018, the company is projecting around 100 million euros in research costs and 110 to 120 million euros in operating losses. But such numbers are not unknown to U.S. investors, nor are they a deal-breaker if the technology and overall strategy are judged to be of value.
Morphosys’ strategic goal is to become a “fully integrated commercial biopharmaceutical” company with drugs developed in-house. In this respect, the Munich-based company is in global competition, especially with strong U.S. companies.
Morphosys’ current hope is an antibody compound called MOR208, which the company is testing in the final phase III trial against certain forms of blood cancer, so-called B‑cell lymphomas. It could — if the promising data so far are further confirmed — enter the first approval procedures next year and be launched on the market in 2020. The U.S. Food and Drug Administration has granted this drug candidate “breakthrough therapy” status, which comes with expedited consultation and review procedures, among other benefits. A further four proprietary MOR product candidates are in earlier stages of clinical development.
In addition, clinical trials with more than two dozen compounds based on Morphosys’ technology are currently underway with partners from the pharmaceutical industry. In the event of approval, the Munich-based company is entitled to royalties on these active ingredients. A first product from these partner programs, the psoriasis drug Tremfya developed by Johnson & Johnson, has been approved since 2017 — and is already generating initial revenues for the Munich-based company. Numerous other projects based on Morphosys’ substance libraries are in the earlier, preclinical phase of research: a total of around 100 antibody projects.
Thanks to this two-pronged strategy with the development of proprietary compounds and technology partnerships, Morphosys now has a relatively broad base and is in principle not dependent on individual projects, and can focus on its own developments.
The U.S. Nasdaq, at any rate, is delighted with the weighty new addition, and its President Nelson Griggs attests to the company from Planegg near Munich: “MorphoSys’ rich experience in antibody discovery and development, coupled with its proprietary technologies, makes it a leading company in the biopharmaceutical industry. We are pleased to welcome MorphoSys to the Nasdaq Stock Exchange and support the company’s continued success in improving the lives of patients with serious diseases.”
MorphoSys’s common shares are listed on the Frankfurt Stock Exchange under the symbol “MOR”. The ADSs are listed on the Nasdaq Global Market under the symbol “MOR.”
Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC and Leerink Partners LLC acted as lead book-running managers for the offering; Berenberg Capital Markets, LLC and JMP Securities LLC acted as co-managers for the ADS offering.
Photo: Nasdaq Inc.