$1.7bn deal will be funded by selling rights to royalties on existing drugs
German cancer and immunology firm Morphosys has agreed to buy US-based Constellation for $1.7 billion (£1.2 billion). The deal gives Morphosys access to Constellation’s pipeline of experimental drugs that aim to treat cancer by targeting epigenetic regulators to control gene expression.
The two most advanced are in phase 3 and phase 2 clinical trials, respectively, and both have ‘broad potential’ according to a statement from Morphosys chief executive Jean-Paul Kress. ‘We look forward to unlocking their full benefits for cancer patients,’ he added.
Morphosys is financing the deal by selling all or part of its rights to royalties from several existing and developmental drugs to Royalty Pharma, which specialises in acquiring pharmaceutical royalty packages. Royalty will pay $1.45 billion up front, plus an optional further $350 million in ‘development funding bonds’; up to £150 million in performance milestone payments for a suite of products, including Constellation’s lead candidate; and will invest $100 million in Morphosys shares.