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MorphoSys Sells Drug to Glaxo for $577 Million Plus Royalties

June 3 (Bloomberg) -- MorphoSys AG said it sold rights to its experimental MOR103 treatment to GlaxoSmithKline Plc for as much as 445 million euros ($577 million) as well as royalties on potential sales. The company raised its revenue forecast.

Shares of the Martinsried, Germany-based company jumped as much as 6.6 percent after the announcement, and traded 1.3 percent higher at 37.80 euros as of 3:43 p.m. in Frankfurt today. The stock has gained almost 29 percent this year.

The deal comes with an upfront payment of 22.5 million euros, prompting the company to forecast full-year revenue of 68 million euros to 72 million euros, compared with a previous outlook for 48 million euros to 52 million euros. MorphoSys will also receive success-based payments of as much as 423 million euros, and a double-digit cut of future sales. MOR103 is currently in mid-stage clinical trials in rheumatoid arthritis and in early stage trials in multiple sclerosis.

“This transaction is a major milestone for MorphoSys,” Chief Executive Officer Simon Moroney said in the statement.“We hope this alliance will result in a significant return on investment for the MOR103 program and to become a major value driver for MorphoSys.”

MorphoSys gave a new forecast for earnings before interest and tax with a range from a loss of 2 million euros to earnings of 2 million euros at that level.

This is the first proprietary drug for MorphoSys, which develops biological drugs for partners such as Roche Holding AG and Novartis AG.

To contact the reporter on this story: Eva von Schaper in Munich at evonschaper@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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