In a first, pre-development step, Novartis will fund the companies’ joint efforts until the program reaches formal preclinical development. MorphoSys will recognize its share of the funding as additional revenues.
In December 2007, MorphoSys and Novartis forged a drug discovery and development alliance. Financial terms include committed payments in excess of $600 million over the 10-year lifetime of the agreement.
Under the co-development options, MorphoSys may elect to participate in a selection of projects through cost and profit sharing with financial participation reflecting its level of investment in the respective programs. The pre-development agreement provides MorphoSys with the option to enter a formal co-development for the respective program with Novartis. Certain early stage costs in these programs are being funded by Novartis.
Simon Moroney, CEO of MorphoSys, said: “We see these pre-development options as an extremely valuable component of our deal with Novartis as they give us the opportunity to build our drug development capability in conjunction with one of the strongest and most experienced companies in the pharmaceutical industry.”