MorphoSys agrees to acquire Constellation Pharmaceuticals for $1.7bn

German company MorphoSys has signed a definitive agreement to acquire US-based Constellation Pharmaceuticals for approximately $1.7bn.

Under the terms of the agreement, MorphoSys’ wholly-owned subsidiary will begin a tender offer to acquire Constellation’s all outstanding shares at a price of $34.00 per share in cash.

Upon completion of the tender offer, the company will acquire all the remaining Constellation’s shares which are not tendered in the offer through a second step merger at the same price of the tender offer.

Constellation develops and discovers novel therapeutics using its expertise in epigenetics, for serious unmet medical requirements of patients with various forms of cancer.

The company’s two lead product candidates, pelabresib (CPI-0610), a BET inhibitor, and CPI-0209, a second-generation EZH2 inhibitor, are currently in the mid- to late-stage clinical trials.

They also have broad therapeutic potential to offer benefits to patients suffering with several hematological and solid tumours.

This acquisition accelerates MorphoSys’ growth strategy by adding these two lead product candidates.

The deal will use MorphoSys’ biologics expertise and Constellation’s epigenetics expertise and small molecule discovery platforms for the development of a broad range of oncology therapies to provide new treatments to patients.

MorphoSys CEO Jean-Paul Kress said: “This transformational acquisition represents a major step forward for MorphoSys as we bolster our position in hematology-oncology.

“Both pelabresib and CPI-0209 have broad potential and we look forward to unlocking their full benefits for cancer patients.

“Our existing clinical and commercial expertise is ideally suited to accelerate Constellation’s programmes, enabling us to maximise Constellation’s potential and bring these novel therapies to market.”

Upon completion of the deal, the company will remain headquartered in Munich and maintain a significant commercial and R&D presence in Boston, Massachusetts.

Additionally, MorphoSys has entered into a strategic funding partnership with Royalty Pharma.

Under the deal, the company will receive a $1.425bn upfront payment from Royalty Pharma that will be used to fund the Constellation transaction as well as the development of the combined pipeline.

Additionally, Royalty Pharma will give the company access to up to $350m in development funding bonds and will make $150m of additional payments after reaching certain milestones.