3:40 PM
Nov 06, 2018
 |  BC Extra  |  Company News

MorphoSys shares jump amid Tremfya guidance, MOR208 data

MorphoSys AG (Xetra:MOR; NASDAQ:MOR) shares rose Tuesday after the company said in its 3Q18 earnings that plaque psoriasis drug Tremfya guselkumab could generate 2018 royalties at the upper end of the biotech's previous guidance. MorphoSys also reported EPS that was well ahead of the consensus estimates.

MorphoSys gained $4.17 (17%) to $28.95 on NASDAQ and €7.55 to €102.50 in Germany.

MorphoSys CFO Jens Holstein told BioCentury that updated data from the Phase II L-MIND trial of MOR208 -- although released last week -- could have also played a role in the company's stock move.

Tremfya royalties may buoy revenues for the year; Holstein signaled during the earnings call Tuesday that the royalties should come at the upper end of its €12-€17 million ($13.7-$19.3 million) guidance. The Janssen Biotech Inc. unit of Johnson & Johnson (NYSE:JNJ) markets Tremfya.

For the quarter, MorphoSys reported EPS of €0.96, beating the Street's expectations of €0.65 and up 16% from 3Q17 EPS of €0.83. It posted 3Q18 revenues of €55 million ($62.6 million), in line with consensus of €55.4 million ($63.1 million) and more than triple the 3Q17 figure of €15 million. R&D expenses for the quarter fell 47% to €18 million ($20 million) from €33.7 million.

The revenue figure included a €47.5 million upfront payment made this quarter by Novartis AG (NYSE:NVS; SIX:NOVN) under a license deal for atopic dermatitis candidate MOR106. The biotech and partner Galapagos N.V. (Euronext:GLPG; NASDAQ:GLPG) granted Novartis exclusive, worldwide rights in July to the mAb against IL-17C. The deal went into effect in September (see "Novartis in Atopic Dermatitis Deal with MorphoSys, Galapagos").

In its earnings, MorphoSys flagged diffuse large B cell lymphoma (DLBCL) candidate MOR208 as its primary focus, reiterating plans to pursue expedited U.S. approval based primarily on L-MIND data. Speaking during the call, CEO Simon Moroney said MorphoSys remains on track to submit a rolling BLA submission before YE19. MorphoSys expects to launch the Fc-optimized human mAb against CD19 in the U.S. in mid-2020.

Updated L-MIND data, released in an abstract ahead of next month's American Society of Hematology meeting, showed MOR208 plus Revlimid lenalidomide led to a 58% overall response rate (ORR) among 81 evaluable patients with relapsed or refractory DLBCL. Holstein said Tuesday the data may have had limited investor visibility last week in the ASH abstracts news flow (see "MorphoSys Gains on Updated Response Data for MOR208 in DLBCL").

MOR208 has breakthrough therapy designation in the U.S. in combination with Revlimid to treat non-transplant eligible patients with relapsed or refractory DLBCL. MorphoSys gained exclusive worldwide rights to MOR208 from Xencor Inc. (NASDAQ:XNCR).

MorphoSys also mentioned plans by partner I-Mab Biopharma (Shanghai, China) to begin a pivotal Phase II trial of MOR202 in early 2019 for multiple myeloma. I-Mab has exclusive rights to the human HuCAL IgG1 mAb against CD38 in China, Taiwan, Hong Kong and Macau under a 2017 deal.

The company said it appointed James Hussey as acting president of the MorphoSys U.S. Inc. subsidiary to succeed Jennifer Herron, who resigned. Herron had joined the team in July as the subsidiary's president and EVP of global commercial. Hussey was EVP, global commercial operations at Athenex Inc. (NASDAQ:ATNX).

Consensus figures provided by FactSet.

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