The Bavarians met their most important goal in a study relevant to approval and now want to apply for approval in the USA and Europe in the middle of next year. However, analysts found that the drug was unable to sufficiently improve the symptoms of the rare blood cancer myelofibrosis. Some experts doubt that approval will take place.
In the study, MorphoSys tested its hopeful pelabresib in patients with myelofibrosis. This is a rare blood cancer that originates in the bone marrow. In addition to the incorrect formation of white blood cells, the disease is accompanied by an enlargement of the spleen. Side effects of cancer include fever, extreme fatigue and weight loss.
In the Phase 3 MorphoSys study (Manifest-2), the combination therapy of pelabresib with the drug ruxolitinib resulted in a reduction in spleen volume by at least 35 percent in around two thirds of the patients, as the company announced late the evening before. According to MorphoSys, this is a statistically significant and significant improvement. When it comes to symptom reduction, however, the company only spoke of a “strong positive trend”.
Company boss Jean-Paul Kress commented optimistically on the data: “We are very satisfied with the positive results of the study,” he said, according to the statement. “Pelabresib in combination with ruxolitinib demonstrated large reductions in spleen volume and symptoms compared to ruxolitinib monotherapy – these are the most impressive improvements observed to date in clinical trials in patients with myelofibrosis.”
Kress had already indicated at an analyst conference last week that he expected a favorable response from the regulatory authorities, even with mixed data. He said regulators were keeping an eye on the severity of the disease myelofibrosis and the high, unmet medical need.
The US drug regulator FDA had already granted the combination therapy of pelabresib and ruxolitinib “fast track status” in 2018, which means it has the prospect of an accelerated approval process. The authority grants this status to serious or life-threatening illnesses in which there is an urgent need for new therapies.
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Successful approval is particularly important for MorphoSys, as the company is in the red due to high research costs for pelabresib, among other things. The company acquired the active ingredient with the costly takeover of the US cancer specialist Constellation Pharmaceuticals in 2021 for around $1.7 billion.
The new study data for the cancer drug Pelabresib caused MorphoSys’ share price to collapse on Tuesday morning. After strong fluctuations in pre-market trading, the bears finally prevailed in XETRA trading: the shares recently fell by 21.34 percent to 16.73 euros. At the lowest point, the loss was around a third. That was the lowest level since the beginning of April.
The share price has recently more than halved in just eight trading days. Analysts at the investment bank Van Lanschot Kempen wrote of “continued downside potential due to the uncertainty surrounding the approvalability” of the cancer drug. This was accompanied by financial risks; the company’s cash resources would be “relatively tight” with a view to 2025. The experts halved their price target from 20 to 10 euros, signaling further risks of losses.
Analyst Rajan Sharma from Goldman Sachs had already predicted a massive price weakness before the market. The cancer drug achieved the primary endpoint, but lacked statistical significance in an important secondary endpoint assessing symptom reduction, the expert wrote in his first reaction.
On the Lang & Schwarz trading platform, MorphoSys shares initially rose sharply the evening before to almost 30 euros compared to the XETRA close. However, they then went into the red there. The losses on the pre-market trading platform Tradegate then increased massively.
From a chart perspective, the picture has become much cloudier. On Thursday last week, the shares of the developer of antibodies against cancer had already fallen below the 200-day line, which is considered an indicator of the longer-term trend. At prices below 11.80 euros, the shares would fall to their lowest level since 2009.
Since the multi-year high of 146.30 euros in January 2020, the papers have only known one direction – downwards. At the beginning of 2020, MorphoSys was at times worth well over four billion euros on the stock exchange. It is now just over 550 million euros.
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PLANEGG (dpa-AFX)
Image source: MorphoSys, © MorphoSys AG