when MorphoSys bought Cambridge, Massachusetts-based Constellation Pharmaceuticals for $1.7 billion last year Value represents the entire pipeline of cancer drug developers. MorphoSys has now decided to focus on Constellation’s most advanced assets, a move that will cut early-stage drug programs and work related to them.
MorphoSys said Thursday that Constellation’s discovery biology and drug discovery efforts have discontinued. Work related to clinical stage cancer drugs will be transferred to MorphoSys’ headquarters in Plainegg, Germany.
“As the early pipeline was part of the goodwill arising from the acquisition of Constellation, it was tested for impairment based on the latest cash flow forecast, which resulted in a goodwill impairment charge of 231 million euros (approximately $253.7 million),” the company said in a statement. stated in the announcement.
The write-down will be added to MorphoSys’ operating expenses, which the company said will report next week when it releases its fourth-quarter and full-year 2021 financial results.
Constellation’s drug research focuses on epigenetics, which involves turning genes on or off without changing the genetic code. The most advanced constellation drug is pelabresib, a late-stage development therapy candidate for myelofibrosis. Another Constellation candidate, CPI-0209, is in mid-stage testing as a potential treatment for advanced solid tumors and blood cancers. Last June, when the deal was announced, MorphoSys CEO Jean-Paul Kress said on a conference call that Constellation assets were complementary. The drugs strengthen MorphoSys’ presence in blood cancers and expand into solid tumors, he said.acquisition closure last July.
According to Constellation’s 2020 annual report, the biotech’s early-stage drugs include CPI-482, which is in preclinical development for blood cancers, and a discovery-stage compound in multiple solid tumors. The decision to cut back on these research programs was not entirely surprising. Following the deal, the focus will be on Constellation’s two clinical-stage compounds and two cancer drugs that MorphoSys has advanced into the clinic, MorphoSys Chief Financial Officer Sung Lee said on an investor call.
Shares of MorphoSys closed at $6.32 on Thursday, down nearly 2.5% from Wednesday’s close and more than 75% from a 52-week high.
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