DRUG maker Novartis is in advanced talks to acquire MorphoSys, a developer of cancer treatments that has a market value of 1.6 billion euros (S$2.3 billion), two people familiar with the matter said on Monday (Feb 5).

Novartis has so far prevailed over rival drug maker Incyte, which also made an offer for MorphoSys, the sources said.

The sources added that there is no certainty that the deal negotiations will conclude successfully and requested anonymity because the matter is confidential. They declined to give any information about the acquisition price.

Novartis, MorphoSys and Incyte did not immediately respond to requests for comment.

Headquartered in Planegg, Germany, MorphoSys develops drugs to fight deadly forms of cancers such as myelofibrosis, which is a rare type of bone marrow cancer, and certain types of knotty lymphomas.

MorphoSys main revenue generator is a lymphoma drug called Monjuvi, which it sells as part of a profit-sharing agreement with Incyte. MorphoSys said last week that Monjuvi’s US net product sales were US$92 million in 2023, and that it expected these sales to come in between US$80 million and US$95 million in 2024. The company has said it expects revenue to go up as Monjuvi is approved for more indications.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

One of MorphoSys’ most promising drugs, known as Pelabresib, is an inhibitor of proteins implicated in the development and progression of myelofibrosis.

MorphoSys stumbled in November when Pelabresib missed some key goals in clinical trials, but said it was still planning to apply in 2024 for approval to commercialise the drug in the US and Europe.

To slash costs, MorphoSys shut down some of its early-stage research programmes at the start of 2023, laying off about 17 per cent of its workforce. It now employs almost 550 people in its US and German offices, according to the company’s website.

Novartis has also been cutting jobs and costs, and spun off its generic drugs business Sandoz last year, part of a focus on fewer therapeutic areas and geographic markets.

Its revenue growth has been driven by its heart failure drug Entresto, its medicine Kesimpta for multiple sclerosis, and breast cancer drug Kisqali.

Revenue gains for Pluvicto, a precision radiotherapy against prostate cancer, eye drug Lucentis and gene therapy Zolgensma against spinal muscular atrophy fell short of market expectations in the fourth quarter of 2023. REUTERS