MorphoSys slides further into the loss zone - Novartis takeover in prospect

During a challenging business year, the active pharmaceutical ingredient developer MorphoSys once again recorded an increase in its losses. Marked by extensive research efforts and declining sales, the biotechnology company from Planegg incurred an annual loss of nearly 190 million euros. Compared to the previous year, when the deficit was already over 151 million euros, the negative trend thus continued. The company's decline in revenue is partly due to the missing, previously substantial license revenues from the pharmaceutical giant Novartis. The 2023 balance sheet showed a revenue of 238.3 million euros, a decrease of 14 percent. The operating loss also increased to 252.5 million euros – however, the SDax company surprised positively here by exceeding the average expectations of analysts. However, these financial results could soon become secondary, as the planned takeover by the Swiss pharmaceutical giant Novartis is imminent. After initial antitrust hurdles were cleared, MorphoSys CEO Jean-Paul Kress expects the transaction to be completed within the first half of the year – entirely within the planned timeframe. The takeover, which was publicly announced by Novartis at the beginning of February and is valued at 68 euros per share, comprising a total volume of 2.7 billion euros, has been declared a worthwhile venture by the biotech company MorphoSys. The reason for this is the prospect of accelerated progress through Novartis in the promising candidate Pelabresib – a hopeful drug against myelofibrosis, a rare form of cancer. According to reports, regulatory filings for Pelabresib in the USA and with the EMA are expected to be submitted within the current year. Although Novartis plans to take MorphoSys off the stock market upon successful completion of the business, an upgrade in the stock market index is imminent in the short term: The transition from the SDax to the MDax is scheduled following an index review by Deutsche Börse on March 18 – a return to the index of medium-sized companies after its departure in 2021. At that time, it was doubts that arose after the acquisition of Constellation Pharmaceuticals and the costly purchase of Pelabresib. The now increased takeover offer has revitalized the stock; for the time being, the share price closed slightly below the takeover bid at the stock exchange.