Ad hoc: MorphoSys AG Enters into Business Combination Agreement to be Acquired by Novartis for € 2.7 Billion Equity Value and into Purchase Agreement with Incyte for the Sale of Tafasitamab

MorphoSys AG / Key word(s): Mergers & Acquisitions/Disposal
Ad hoc: MorphoSys AG Enters into Business Combination Agreement to be Acquired by Novartis for € 2.7 Billion Equity Value and into Purchase Agreement with Incyte for the Sale of Tafasitamab

05-Feb-2024 / 22:45 CET/CEST
Disclosure of an inside information acc. to Article 17 MAR of the Regulation (EU) No 596/2014, transmitted by EQS News - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

Publication of an inside information according to Article 17 para. 1 of the Regulation (EU) No. 596/2014

Planegg/Munich, Germany, February 5, 2024

Ad hoc: MorphoSys AG Enters into Business Combination Agreement to be Acquired by Novartis for € 2.7 Billion Equity Value and into Purchase Agreement with Incyte for the Sale of Tafasitamab

MorphoSys AG (FSE: MOR; NASDAQ: MOR) announces today that it entered into a Business Combination Agreement with Novartis data42 AG and Novartis AG (hereinafter collectively referred to as "Novartis") based on Novartis' intention to submit a voluntary public takeover offer (the "Takeover Offer") for all of MorphoSys' outstanding common shares in exchange for payment of € 68.00 per share. As part of the Business Combination Agreement with Novartis, Novartis seeks to obtain exclusive, worldwide rights to develop and commercialize pelabresib, an investigational BET inhibitor, and tulmimetostat, an investigational next-generation dual inhibitor of EZH2 and EZH1, across all indications. Separately, MorphoSys entered into a Purchase Agreement with Incyte Corporation to sell and transfer all rights worldwide related to tafasitamab for $ 25.0 million. Currently, MorphoSys partners with Incyte on the development and commercialization of tafasitamab. MorphoSys' Management Board and Supervisory Board unanimously approved both agreements.

Public Takeover Offer from Novartis:

In the Business Combination Agreement, MorphoSys and Novartis agreed on the terms of the proposed Takeover Offer. Novartis will provide ample resources currently unavailable to MorphoSys as a standalone biotech company to help accelerate the development opportunities and maximize the commercialization potential of pelabresib, an investigational BET inhibitor, at a greater speed and scale.

Novartis intends to offer MorphoSys' shareholders € 68.00 per share in cash, for a total equity value of € 2.7 billion. The offer price corresponds to a premium of 94% and 142% on the volume-weighted average price during the last month and three months as of the unaffected January 25, 2024 close, respectively – the day before rumors about a transaction first surfaced. It also represents a premium of 89% percent to the closing share price of January 25, 2024. 

Subject to a careful review of the offer document to be published by Novartis data42 AG, MorphoSys' Management Board and Supervisory Board intend to recommend the acceptance of the Takeover Offer. The Takeover Offer will contain customary closing conditions, in particular a minimum acceptance threshold of 65% of MorphoSys' share capital and regulatory clearances. The closing is currently expected to take place in the first half of 2024. MorphoSys and Novartis agreed to take MorphoSys private promptly after the Takeover Offer has been settled.

The offer document of the Takeover Offer will be published by Novartis data42 AG at a later date in accordance with the provisions of the German Securities Acquisition and Takeover Act, after the German Federal Financial Supervisory Authority ("BaFin") has approved the publication. Promptly after the offer document is published, MorphoSys' Management Board and Supervisory Board will issue a joint reasoned statement in accordance with sec. 27 of the German Securities Acquisition and Takeover Act. In accordance with U.S. securities laws, Novartis data42 AG and Novartis AG will file the offer document and a Tender Offer Statement on Schedule TO and MorphoSys will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the U.S. Securities and Exchange Commission.

Sale of Tafasitamab to Incyte:
Under the terms of MorphoSys’ Purchase Agreement with Incyte, Incyte will obtain exclusive rights worldwide, assume full responsibility and cover all costs going forward for the development and commercialization of tafasitamab for a purchase price of US$ 25 million. MorphoSys and Incyte have been collaborating on tafasitamab since 2020. Prior to this agreement, tafasitamab was co-marketed in the U.S. by MorphoSys and Incyte as Monjuvi^® (tafasitamab-cxix) and outside the U.S. by Incyte as Minjuvi^®.

Financial Guidance:

As a consequence of the sale and transfer of tafasitamab to Incyte, MorphoSys' 2024 financial guidance published on January 30, 2024 cannot be maintained. MorphoSys will publish a new financial guidance in due course.

***

END OF AD HOC ANNOUNCEMENT

Additional Information and Where to Find It

Monjuvi® is a registered trademark of MorphoSys AG (the "Company").

The takeover offer described in this communication (the "Takeover Offer") has not yet commenced. This communication is neither an offer to purchase nor a solicitation of an offer to sell shares of the Company. The final terms and further provisions regarding the Takeover Offer will be in the offer document once the publication of the offer document by Novartis data42 AG (the "Bidder") has been approved by the German Federal Financial Supervisory Authority (the "BaFin"), after which the offer document will be filed with the U.S. Securities and Exchange Commission (the "SEC"). A solicitation and an offer to buy shares of the Company will be made only pursuant the offer document. In connection with the Takeover Offer, the Bidder and Novartis AG will file a Tender Offer Statement on Schedule TO with the SEC (together with the offer document, an Offer to Purchase including the means to tender and other related documents, the "Takeover Offer Documents"), the Company's management board and supervisory board will issue a joint reasoned statement in accordance with sec. 27 of the German Securities Acquisition and Takeover Act and the Company will file a Solicitation/Recommendation Statement on Schedule 14D-9 with the SEC (together with the joint reasoned statement, the "Recommendation Statements"). THE COMPANY'S STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO READ THE TAKEOVER OFFER DOCUMENTS AND THE RECOMMENDATION STATEMENTS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE TAKEOVER OFFER. The Takeover Offer Documents and the Recommendation Statements will be distributed to all stockholders of the Company in accordance with German and U.S. securities laws. The Tender Offer Statement on Schedule TO and the Solicitation/Recommendation Statement on Schedule 14D-9 will be made available for free at the SEC's website at www.sec.gov. Additional copies may be obtained for free by contacting the Bidder or the Company. Free copies of these materials and certain other offering documents will be made available on the Company's website in English at morphosys.com/en/investors/Novartis-TakeoverOffer and in German at morphosys.com/de/investoren/Novartis-TakeoverOffer, by mail to MorphoSys AG, Semmelweisstrasse 7, 82152 Planegg, Germany or by phone at +49 89 8992 7179.

In addition to the Offer to Purchase, including the means to tender and certain other Takeover Offer Documents, as well as the Solicitation/Recommendation Statement, the Company files other information with the SEC. The Company's filings with the SEC are also available for free to the public from commercial document-retrieval services and at the website maintained by the SEC at www.sec.gov and are also available free of charge under the "SEC Filings" section of the Company's website at www.morphosys.com/en/investors.

In order to reconcile certain areas where German law and U.S. law conflict, Novartis AG and the Bidder expect to request no-action and exemptive relief from the SEC to conduct the Takeover Offer in the manner described in the offer document.

Acceptance of the Takeover Offer by stockholders residing outside Germany and the United States of America may be subject to further legal requirements. With respect to the acceptance of the Takeover Offer outside Germany and the United States, no responsibility is assumed for the compliance with such legal requirements applicable in the respective jurisdiction.

Forward Looking Statements

This communication contains certain forward-looking statements concerning the Company, the Bidder and the Takeover Offer that involve substantial risks and uncertainties. Forward-looking statements include any statements containing the words "anticipate," "believe," "estimate," "expect," "intend," "goal," "may," "might," "plan," "predict," "project," "seek," "target," "potential," "will," "would," "could," "should," "continue" and similar expressions. In this communication, the Company's forward-looking statements include statements about the parties' ability to satisfy the conditions to the consummation of the Takeover Offer; statements about the expected timetable for the consummation of the Takeover Offer; the Company's plans, objectives, expectations and intentions; and the financial condition, results of operations and business of the Company and Novartis AG.

The forward-looking statements contained in this communication represent the judgment of the Company as of the date of this communication and involve known and unknown risks and uncertainties, which might cause the actual results, financial condition and liquidity, performance or achievements of the Company, or industry results, to be materially different from any historic or future results, financial conditions and liquidity, performance or achievements expressed or implied by such forward-looking statements. In addition, even if the Company's results, performance, financial condition and liquidity, and the development of the industry in which it operates are consistent with such forward-looking statements, they may not be predictive of results or developments in future periods. Those risks and uncertainties that could cause the actual results to differ from expectations contemplated by forward-looking statements include, among other things: uncertainties as to the timing of the Takeover Offer; uncertainties as to how many of the Company's stockholders will tender their stock in the Takeover Offer; the possibility that competing offers will be made; the possibility that various conditions for the Takeover Offer may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the Takeover Offer; the effects of the Takeover Offer on relationships with employees, other business partners or governmental entities; that the Bidder and Novartis AG may not realize the potential benefits of the Takeover Offer; transaction costs associated with the Takeover Offer; that the Company's expectations may be incorrect; the inherent uncertainties associated with competitive developments, clinical trial and product development activities and regulatory approval requirements; the Company's reliance on collaborations with third parties; estimating the commercial potential of the Company's development programs; and other risks indicated in the risk factors included in the Company's filings with the SEC, including the Company's Annual Report on Form 20-F, as well as the Solicitation/Recommendation Statement on Schedule 14D-9 to be filed by the Company and the Tender Offer Statement on Schedule TO and related Takeover Offer Documents to be filed by the Bidder and Novartis AG. Given these uncertainties, the reader is advised not to place any undue reliance on such forward-looking statements. These forward-looking statements speak only as of the date of publication of this communication. The Company and the Bidder expressly disclaim any obligation to update any such forward-looking statements in this communication to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements, unless specifically required by law or regulation.

About MorphoSys

At MorphoSys, we are driven by our mission: More life for people with cancer. As a global commercial-stage biopharmaceutical company, we develop and deliver innovative medicines, aspiring to redefine how cancer is treated. MorphoSys is headquartered in Planegg, Germany, and has its U.S. operations anchored in Boston, Massachusetts. To learn more, visit us at www.morphosys.com and follow us on Twitter at X and LinkedIn.

For more information, please contact:
 

MorphoSys AG

Dr. Julia Neugebauer

Vice President, Global Investor Relations

Tel: +49 (0)89 / 899 27 179

julia.neugebauer@morphosys.com

05-Feb-2024 CET/CEST The EQS Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases.
Archive at www.eqs-news.com