NVS Novartis AG

   By Donato Paolo Mancini 
 

Shares in Novartis AG (NOVN.EB), MorphoSys AG (MOR.XE) and Galapagos NV (GLPG.AE) rose on Thursday after the companies said they have reached an agreement worth as much as $1 billion to market an innovative drug.

The agreement is for monoclonal antibody MOR106, which is used mainly for the skin condition atopic dermatitis. The deal is exclusive and covers the commercialization of the compound, which was jointly developed by MorphoSys and Galapagos.

Germany's MorphoSys and Belgium-based Galapagos will receive an upfront payment of 95 million euros ($111 million), which could rise to EUR850 million ($1 billion) depending on the fulfilment of certain conditions and sales-based targets, the biotechnology companies said.

Novartis will hold the rights to market any products resulting from the agreement signed Thursday, and will bear all future research, development, manufacturing and commercialization costs for the antibody, MorphoSys and Galapagos said.

Novartis, which had sales of $49 billion in 2017, is upping the ante on its transition to a more focused-medicines company with Chief Executive Vas Narasimhan at its helm.

Last month the Swiss pharmaceutical said it will shed its Alcon eyecare unit--which analysts value at about $20 billion--and joined a number of other big-pharma players in exiting antibiotic and antiviral research earlier this month.

The company released a second-quarter earnings statement on Wednesday in which it maintained its outlook for the year.

"[The agreement] looks like a very nice complement to the dermatology franchise being built around Cosentyx, [which buoyed sales in the second quarter]" said an analyst note from Bryan Garnier.

Shares in Galapagos were last up 2.7% at EUR90.32, MorhpoSys trades 3.5% higher at EUR117.20, and Novartis rises 0.6% at CHF81.18.

Write to Donato Paolo Mancini at donatopaolo.mancini@dowjones.com

(END) Dow Jones Newswires

July 19, 2018 08:36 ET (12:36 GMT)

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