Investors were dismayed, following the termination of a partnership between Celgene Corporation (NASDAQ:CELG) and MorphoSys AG.
In 2014, the multimillion dollar deal was broken due to investor fall-out. This was after it was alleged that the company had analyzed the data from stage one of MOR202 trials. Celgene then decided that the trial drug was not doing as well as the rival CD8 drug. This led to termination of the MOR202 contract which had been funded with $18.8 million.
Simon Moroney, who is the current CEO of MorphoSys claims that the death sentence on the trial drug was too immature. He claimed that things not working out with Celgene were just like any normal business risk. In their case, the pulling out of Celgene was an unprecedented risk.
Moroney also announced the nature of the project as being a continuous one. He expressed the company’s will and decision to continue trials with phase 2 trials or the MOR202 drug already being planned. The CEO does not plan the company’s work to be halted without his consent and consideration of future possibilities.
MorphoSys intends to market its drug together with CD38 antibody. This will only be possible once the drug trials prove to be successful for its intended purpose. The company maintains their will and belief that they still have a chance to make the best and most effective drug in its category.
The announcement of Celgene’s termination of the contract with Morphosis scared away the investors. This led to a decrease in the share value. Morphosis CEO still maintains that they can turn this around. He claims that the company has had it worse in the past. He further goes on to explain that investors will always react differently to information and speculation follows.
Most assumptions are usually wrong and just because a minor derailment has occurred doesn’t mean that the whole thing will not be a success.Morphosis’ plans on continuing research and will reveal the drug if the subsequent trials are successful.