- Incyte will pay $750 million to add an experimental lymphoma treatment to its research pipeline, announcing Monday a licensing deal with MorphoSys that gives it partial U.S. and exclusive ex-U.S. rights to the German biotech's drug tafasitimab.
- Incyte will also invest $150 million in MorphoSys stock and agreed to extend another $1.1 billion in conditional payments should development of tafasitimab hit certain clinical, regulatory and sales milestones.
- The deal, announced as the J.P. Morgan Healthcare Conference opened in San Francisco, comes on the heels of a significant setback for Incyte's pipeline. Earlier this month, the Delaware-based biotech disclosed a surprising failure for a drug viewed as important to the company's future growth prospects.
Incyte is paying up for the privilege of securing a near-to-market cancer drug, agreeing to a deal that will use about half of the cash the biotech has on hand.
An approval for tafasitimab could come as soon as mid-2020, according to Morphosys, which submitted the drug to the Food and Drug Administration late last month. Should the FDA clear the drug for market, Incyte will have secured a needed boost to a pipeline that looks shakier following the failure of itacitinib in graft-versus-host disease.
While tafasitimab is initially aimed at treating relapsed or resistant forms of a lymphoma known as diffuse large B-cell, the companies will co-develop the drug in other types of the blood cancer and in leukemia. Incyte also plans to study tafasitimab, which targets a protein commonly found on the surface of B cells, with its experimental PI3K-delta inhibitor parsaclisib.
Morphosys' application in previously treated diffuse large B-cell lymphoma is supported by data from a single-arm, Phase 2 study dubbed L-MIND.
Results released last summer showed tafasitimab, when combined with Celgene's Revlimd (lenalidomide), led to responses in 60% of the 80 patients tested. Thirty-four patients achieved remission, and the median time to disease progression or death reached just over one year.
Treatment was most commonly associated with side effects that included low white blood cell and platelet counts, as well as infections.
If approved, tafasitimab would add another option for patients who can now be treated with CAR-T cancer therapies from Gilead and Novartis, as well as a recently approved antibody-drug conjugate from Roche.
Deal terms give Incyte rights to co-commercialize tafasitimab in the U.S. and to lead marketing outside the U.S., paying royalties back to Morphosys.
Wall Street analysts viewed the drug as a good fit with Incyte's sales teams, which sell Jakafi (ruxolitinib) for myelofibrosis and another rare blood cancer, as well as Iclusig (ponatinib) for leukemia in Europe. But Morphosys will lead marketing in the U.S. and Incyte has less experience in international markets, having given Jakafi rights to Novartis there.
Andrew Berens of SVB Leerink also acknowledged the deal might disappoint some investors who were hoping for a broader deal that could ease worries of slowing growth after patent protections to Jakafi run out. Shares in Incyte rose by 1% Monday morning following the announcement.
Incyte hopes to soon win approval for its own cancer drug pemigatinib in a rare type of liver cancer, while another of its medicines, licensed to Novartis, could also reach market this year.
But both drugs are expected to be relatively niche products, putting pressure on Incyte to find new opportunities that could lessen its reliance on Jakafi.