MorphoSys, once a discovery powerhouse, exits preclinical R&D, lays off staff to focus cash on clinic

MorphoSys, once a discovery powerhouse, exits preclinical R&D, lays off staff to focus cash on clinic

MorphoSys’ preclinical team has paid the price for its commercial failures. The biotech, once an engine of innovation for Big Pharma, is stopping all preclinical work and laying off 17% of its headquarters staff to throw all its resources behind mid- to late-stage oncology programs.

Germany-based MorphoSys made its name as a discovery partner for Big Pharma, landing deals with a who’s who of drugmakers including Boehringer Ingelheim, GSK, Johnson & Johnson, Novartis, Pfizer and Roche. Now, MorphoSys is getting out of preclinical altogether.

Thursday, MorphoSys said it is stopping “work and operations on preclinical research programs.” The company called the data on the assets “promising” but, given the “need to make substantial investments to bring these programs into the clinic,” has decided its money is better spent elsewhere. Specifically, the cash will fund mid- to late-stage oncology programs. MorphoSys is exploring options for its preclinical assets.

The decision to exit preclinical will cost 17% of staff at MorphoSys’ German headquarters their jobs. MorphoSys’ workforce in Germany had an average of 431 active employees in 2021, a figure that was already well down on the average of 564 active employees for 2020.

MorphoSys’ contraction covers a period in which it launched Monjuvi, an anti-CD19 antibody that was tipped to provide CAR-T-like efficacy without the side effects and logistical challenges associated with cell therapies. Incyte bought into the idea, paying $750 million upfront for the drug in the months before it won FDA approval, but the product has crashed commercially.

Preliminary U.S. net sales came in at $89.4 million last year. With competition increasing, MorphoSys warned investors that sales could slip from that lowly position this year, setting its range for 2023 at $80 million to $95 million. The biotech is running three late-phase trials and has decided it can no longer invest in restocking its pipeline, despite ending September with more than $1 billion in the bank.

MorphoSys CEO Jean-Paul Kress, M.D., identified the phase 3 trial of BET inhibitor pelabresib in first-line myelofibrosis as the most important program. Top-line data from the pivotal trial are due early in 2024.

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