The stock of Pharmaceutical Constellation (NASDAQ: CNST) absolutely crushed it this week, up 70.6% as the market closed on Thursday. The catalyst for this impressive performance was the announcement on Wednesday that the German drug maker MorphoSys (NASDAQ: MOR) plans to acquire Constellation for $ 1.7 billion.
MorphoSys’ cash offer of $ 34 per share on Constellation represented a premium of nearly 72% over the biotech share’s closing price at the end of last week. Why was MorphoSys willing to pay so much? He really wanted the Constellation pipeline programs. Jean-Paul Kress, CEO of MorphoSys, said: “This transformational acquisition represents a major step forward for MorphoSys as we strengthen our position in hematology-oncology.
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Constellation is currently evaluating its lead pipeline candidate, pelabresib, in advanced clinical studies targeting myelofibrosis, a type of bone marrow cancer. The investigational drug inhibits bromodomain and extra-terminal proteins, which certain types of cancer cells use to promote growth.
The company is also evaluating CPI-0209 in a Phase 2 clinical study targeting hematologic and solid tumors. CPI-0209 inhibits EZH2, an enzyme that can promote the growth of certain cancer cells as well as suppress anti-tumor responses.
The acquisition of Constellation by MorphoSys is expected to be finalized in the third quarter of this year. In the meantime, Constellation plans to provide clinical updates on its advanced study of pelabresib this summer. An update of the monotherapy cohorts of the phase 2 study of CPI-0209 is expected by the end of the year.
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