Antibodies are one of the fastest growing segments within healthcare. They offer solutions that work with the pre-existing immune system of the body. As such, they tend to take less time to develop and have less safety issues. It is also a sector that has undergone a lot of consolidation. Astra Zeneca bought Cambridge Antibody Technology, Amgen bought Abgenix and Bristol Myers Squibb bought Medarex. The three acquired companies were all antibody discoverers.
Similarly, Morphosys signed a huge deal with Novartis in 2007, principally to access their antibody screening platform HuCal. This technology a ‘fully human’ antibody development program which end to have less efficacy and compatibility issues than ‘humanised’ or mouse. The Novartis deal is the cornerstone of their partnered development program.
Morphosys Profit Drivers
Morphosys has three profit drivers.
The first is the partnered program of which they have four programs in phase II and 66 in development in total. They recently announced that Roche has begun Gantenerumab –targeting amyloid beta for Alzheimer's-in phase II.
You can access their partnered program here
The second profit driver is through their own proprietary program. It is this which eats up their R & D budget, but I think they have some interesting things in clinical development. They announced that
“Disclosure of multiple sclerosis as the second indication for the Company's lead development program MOR103, a fully human HuCAL antibody targeting GM-CSF. The decision is based on a compelling scientific rationale and promising pre-clinical data. MorphoSys expects to start a phase 1b trial in multiple sclerosis with MOR103 in H2 2011.”
This is very interesting because it suggests that things are going well with their ongoing trial with MOR103 in Phase 1a/2b for Rheumatoid Arthritis. Morphosys hold a strong IP position here, having bought the rights to access GM-CSF technology against inflammatory diseases in the
The last of the divisions is AbD Serotec which provides the research and diagnostics industry with antibodies developed out of HuCal. This division is profitable and provides support to their R & D program.
They also gave a presentation on ArYla which is a novel antibody optimization platform, that they feel will increase the probability of success of getting antibodies through pre-clinical in to early stage trials.
Although Morphosys are unlikely to have any compound in the market until 2015, they represent a good way to make a speculative investment in the biotech industry.
Morphosys RNS release http://www.investegate.co.uk/Article.aspx?id=20101125063000H5353
Morphosys Website http://www.morphosys.com/