MorphoSys Inc. (NASDAQ: MOR) stock declined by 1.74% at last close while the MOR stock price plunged by 6.62% in the pre-market trading session. MorphoSys is a commercial-stage pharmaceutical business focused on the research, development, and commercialization of novel treatments for cancer and autoimmune disorders patients.
What is happening?
MorphoSys has completed its previously reported cash tender offer for all outstanding shares of Constellation Pharmaceuticals for $34.00 per share, net to the seller in cash, without interest, and pursuant to any statutory withholding of taxes. On July 14, 2021, one minute after 11:59 p.m. New York City Time, the tender offer ended.
In the tender offer, approximately 42,811,957 shares of Constellation were properly tendered and not lawfully withdrawn, representing roughly 89 percent of MOR’s outstanding shares at the time of the tender offer’s expiration. All legally tendered and not legitimately withdrawn shares have been accepted for payment in line with the provisions of the merger agreement between Constellation, MorphoSys, and MorphoSys Development Inc. MorphoSys will quickly complete its purchase of Constellation by merging MorphoSys Development Inc. with and into Constellation in a second stage, resulting in Constellation continuing to exist as an indirect fully owned subsidiary of MorphoSys.
The merger is anticipated to be completed today, before the opening of trading on the NASDAQ market in the United States, and Constellation shares will be delisted from the NASDAQ Global Select Market. The transaction’s overall stock value is estimated to be around $1.7 billion.
MorphoSys has entered into a long-term strategic financial relationship with Royalty Pharma in conjunction with the completion of its acquisition of Constellation. Royalty Pharma has paid an upfront fee of $1.425 billion to MorphoSys, as previously disclosed, to assist the financing of the acquisition with Constellation and the creation of the combined portfolio. MorphoSys will also have full rights to up to $350 million in Development Funding Bonds from Royalty Pharma, with the ability to draw over a one-year period, and Royalty Pharma will make additional payments to MorphoSys of up to $150 million if clinical, regulatory, and commercial benchmarks for otilimab, gantenerumab, and pelabresib are met.
Royalty Pharma will be entitled to 100% of MorphoSys’ royalties on Tremfya net sales, as well as 80% of future royalties and 100% of future milestone payments on otilimab, 60% of future royalties on gantenerumab, and 3% on future net sales of Constellation’s clinical stage assets (pelabresib and CPI-0209). Following the conclusion of MorphoSys’ purchase of Constellation, Royalty Pharma will invest $100 million in a MorphoSys cash capital raise under an authorization to exclude current shareholders’ subscription rights. MorphoSys will list its new shares on the Frankfurt Stock Exchange.