GlaxoSmithKline buys rights to MorphoSys RA drug candidate for up to $577 million

German biotech firm MorphoSys (FSE: MOR) yesterday (June 3) saw its shares leap as much as 6%, as it revealed a global agreement with UK pharma giant GlaxoSmithKline (LSE: GSK) to develop and commercialize MOR103, in a deal worth a potential 445 million euros ($577 million). MOR103 is MorphoSys' proprietary HuCAL-derived antibody against GM-CSF, which has concluded Phase I/II development in mild to moderate rheumatoid arthritis.

Under the terms of the agreement, GSK will assume responsibility for all subsequent development and commercialization of MOR103. As part of the agreement, MorphoSys receives an immediate upfront payment of 22.5 million euros. On achievement of certain developmental, regulatory, commercial and sales-based milestones, MorphoSys would be eligible to receive additional payments from GSK of up to 423 million euros, in addition to tiered, double-digit royalties on net sales.

"This transaction is a major milestone for MorphoSys. Our goal was to secure an agreement with a company having the commitment and expertise to turn MOR103 into a successful drug, and in GSK we have clearly found such a partner. We hope this alliance will result in a significant return on investment for the MOR103 program and to become a major value driver for MorphoSys," commented Simon Moroney, chief executive of MorphoSys.