Drug research company Morphosys, situated in Planegg near Munich, Germany, secures around 102.7 million euros through a capital increase. This investment will bolster the company's market introduction of cancer drug Pelabresib and bolster its pharmaceutical research endeavors. The aim is to meet a liquidity requirement of approximately 250 million euros in 2024, with additional cost-cutting measures planned.
Bypassing shareholders' subscription rights, these new shares will remain eligible for dividends throughout the current year. The offering price represents a discount of 2.8% from the volume-weighted five-day average share price on the Xetra platform.
Morphosys leverages strategic partnerships, such as their alliance with Royalty Pharma, to bolster its financial resources. Royalty Pharma has monetized Morphosys's Development Funding Bonds, securing $511 million in January 2025 to fund acquisitions, including royalties on Tremfya and development-stage assets.
The proceeds from these bond monetizations are allocated to share repurchases and new royalty acquisitions as part of Royalty Pharma's updated capital allocation strategy. Royalty Pharma hopes to repurchase $2 billion of shares in 2025 and invest in cutting-edge royalty acquisitions, dependent on market conditions.
Furthermore, the influx of capital enhances Royalty Pharma's liquidity, allowing for more effective execution of royalty deals and investment in groundbreaking research and development initiatives. Royalty Pharma has entered into a pact with Biogen, agreeing to provide research and development funding of up to $250 million for litifilimab, a promising Phase 3 drug candidate with proven proof-of-concept in systemic lupus erythematosus and cutaneous lupus erythematosus.
In conclusion, Morphosys raises capital through strategic partnerships, such as its work with Royalty Pharma, to meet its financial goals and fuel its drug research and development ambitions. Through the monetization of Development Funding Bonds, funds are being allocated towards share repurchases, new royalty acquisitions, and groundbreaking research efforts, enhancing the overall liquidity of investors and bolstering the pharmaceutical sector.
