MorphoSys, Novartis Expand Antibody Pact

MorphoSys AG expanded its therapeutic antibody collaboration with Novartis. The original collaboration agreement provided for a three-year term with an option for Novartis to extend. The collaboration will now go through May 2011.

In May 2004, the two companies forged a strategic alliance to jointly develop new antibody-based therapeutics against a range of illnesses. As part of the collaboration, Novartis invested approximately $11 million in MorphoSys. In August 2005, MorphoSys successfully concluded the first therapeutic antibody program with Novartis. Subsequently, several other antibody projects at MorphoSys were successfully completed, resulting in multiple milestone payments for MorphoSys.

Novartis committed to an increase in the number of new therapeutic antibody projects annually and will increase funding for R&D at MorphoSys. Novartis will also have the option to get access to the MorphoSys HuCAL Gold library and will have access to a certain HuCAL affinity optimization technology for optimization of non-therapeutic antibodies. The agreement also provides for increased annual license fees, with commercial license fees, R&D milestones, and royalties on marketed antibody products remaining unchanged.

The non-exclusive option on internalization of the entire MorphoSys HuCAL technology platform, offered to Novartis under the terms of the initial collaboration in 2004, will remain in place. Triggering of this option would result in an additional payment by Novartis to MorphoSys. Further financial details were not disclosed.

“We are very pleased to announce an expansion of our largest and our most productive collaboration to date,” said Dr. Simon Moroney, chief executive officer of MorphoSys. “Expanding our existing collaborations is a cornerstone of our strategy and we have been very successful in this regard. The extended agreement provides a higher number of therapeutic antibody programs to be pursued in the years to come.”