Royalty Pharma Reaches $2.025 Bln Strategic Funding Partnership With MorphoSys

Royalty Pharma plc (RPRX) said that it has reached a $2.025 billion strategic funding partnership with MorphoSys AG (MOR), as part of MorphoSys' $1.7 billion acquisition of Constellation Pharmaceuticals (CNST).

It is expected that the partnership will fuel the expansion of the combined company's capabilities to help enable the development and potential approvals of important cancer treatments.

The funding partnership is anchored by Royalty Pharma's acquisition of MorphoSys' rights to receive future royalties on Janssen's Tremfya (guselkumab).

Tremfya is an anti interleukin (IL)-23, approved for the treatment of adults living with moderate to severe plaque psoriasis, and for adults with active psoriatic arthritis and is also in clinical development for ulcerative colitis and Crohn's disease.

Royalty Pharma will also acquire the rights to receive royalties and certain milestone payments on four development-stage therapies.

Royalty Pharma will purchase the rights to receive 60% of MorphoSys' future royalties on gantenerumab. Gantenerumab, an anti-amyloid-beta monoclonal antibody, is in Phase 3 development for Alzheimer's disease by Roche.

Royalty Pharma will purchase the rights to receive 80% of MorphoSys' future royalties and 100% of its future milestones on otilimab. Otilimab, a fully human monoclonal antibody that inhibits granulocyte-macrophage colony-stimulating factor (GMCSF), is in Phase 3 development for rheumatoid arthritis by GlaxoSmithKline.

Royalty Pharma will buy the rights to receive 3% of future net sales of pelabresib. Pelabresib, a bromodomain and extra-terminal (BET) inhibitor for myelofibrosis, is in phase 3 development by Constellation.

Royalty Pharma will purchase the rights to receive 3% of future net sales of CPI-0209. CPI-0209, a second-generation enhancer of zeste homolog 2 (EZH2) inhibitor, is in phase 2 development for hematological malignancies and solid tumors by Constellation.

The transaction is contingent on the closing of MorphoSys' acquisition of Constellation, which is expected in the third quarter of 2021.

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