Novartis’ 2.7 billion euro ($2.9 billion) gamble on MorphoSys has hit turbulence. Months after buying the biotech, Novartis has revealed a safety signal that could set back plans to seek approval for the jewel of the acquisition by a couple of years.
The Swiss drugmaker acquired MorphoSys earlier this year, making its move in the wake of the biotech’s phase 3 readout on the myelofibrosis drug candidate pelabresib. MorphoSys linked the BET inhibitor to a reduction in spleen volume but failed to show a significant effect on symptoms, causing one hit and one miss on key endpoints.
MorphoSys planned to file for approval in the U.S. and Europe around the middle of 2024 when it posted the data late last year. By July, Novartis CEO Vas Narasimhan, M.D., was telling investors the company needed to see 48-week data and get “a stronger sense of the overall profile of pelabresib” to finalize its filing plans.
Novartis now has the 48-week data and has pushed back its plans to seek approval. The drugmaker used its third-quarter results to disclose the setback, revealing that a “longer follow-up time is needed to determine, in consultation with health authorities, the regulatory path for pelabresib in myelofibrosis.” Novartis said it will keep tracking patients and assess the need for additional studies to support approval.
Narasimhan shared more details on a call with the media Tuesday. A safety signal has emerged over the course of this year, the CEO said, and Novartis continues to see an imbalance in the rate of malignant transformations. Myelofibrosis can transform into acute myeloid leukemia, a more dangerous, aggressive cancer. Such transformations are rare and are happening more frequently in recipients of pelabresib.
“We plan to follow these patients longer, look at the data over the course of the next year, also evaluate what additional studies we would need to do to mitigate both the safety risk but also create a stronger data package,” Narasimhan said. “We do think it would be a couple more years before we would have a data package which would enable us to file from this.”
The setback prompted Novartis to reassess the value of MorphoSys, leading it to record an $800 million impairment in its third-quarter results. Novartis recorded the impairment before completing the buyout of minority shareholders and gaining 100% control of MorphoSys.
Novartis disclosed the setback to pelabresib alongside other pipeline updates. Development has been halted on blood pressure and heart failure prospect XXB750, with the company explaining that it has dropped the NPR1 agonist in response to a “scientific assessment and review of available data of early investigational studies.”
The pharma also reported the discontinuation of phase 3 food allergy candidate ligelizumab and ended work on ianalumab in autoimmune hepatitis after seeing phase 2 data. Novartis has studied ligelizumab in a range of indications without finding a path to market.
Development of ianalumab, meanwhile, is continuing in multiple other indications. Novartis is running a slate of phase 3 trials in indications including Sjögren’s syndrome and lupus.