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Morphosys says takeover by Novartis on course after report of drug safety concern

FILE PHOTO: Logo is seen at new factory of Novartis in Stein

BERLIN (Reuters) -Morphosys said its takeover by Novartis is still expected to close in the first half of this year, after a news report on a possible drug safety risk knocked the German biotechnology company's stock price on Monday.

Morphosys' statement came after a report by specialist website STAT News, citing two people familiar with the matter, of a safety issue with its experimental drug pelabresib, which is being developed to treat myelofibrosis, a rare type of blood cancer affecting the bone marrow.

"We generally do not discuss our interactions with regulatory authorities publicly. We remain confident in the benefit-risk profile of the combination of pelabresib and ruxolitinib," a Morphosys spokesperson said in an emailed response to Reuters, referring to Novartis' treatment for the same condition.

"The planned acquisition by Novartis is progressing steadily," they added.

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Novartis declined to comment on the STAT News report.

Pelabresib is seen as one of Morphosys's most promising drugs and a driver of Novartis's interest in the company.

The Swiss drug manufacturer struck a deal in February to take over Morphosys for 2.7 billion euros ($2.89 billion).

Shares in Morphosys were down 1.5% at 1026 GMT. Novartis shares were down 0.3%.

($1 = 0.9338 euros)

(Reporting by Patricia Weiss and Paul Arnold, Writing by Rachel More, Editing by Andrey Sychev, Kirsten Donovan)