What happened
Shares of Constellation Pharmaceuticals (CNST +0.00%) had skyrocketed 66.7% as of 12:01 p.m. EDT on Wednesday. The huge gain came after MorphoSys (MOR +0.00%) announced that it will acquire Constellation for $1.7 billion.
So what
MorphoSys was attracted to Constellation for its two lead pipeline candidates, pelabresib and CPI-0209. Constellation is currently evaluating pelabresib in late-stage clinical studies targeting myelofibrosis. It's testing CPI-0209 in phase 2 clinical studies for treating blood cancer and solid tumors.
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"Both pelabresib and CPI-0209 have broad potential, and we look forward to unlocking their full benefits for cancer patients," said MorphoSys CEO Jean-Paul Kress. He referred to the deal as a "transformational acquisition" for MorphoSys as it increases its focus on hematology-oncology.
Two products are already on the market that use MorphoSys' antibody technology. Johnson & Johnson won U.S. approval for Tremfya in 2017 for treating plaque psoriasis. Last year, MorphoSys won accelerated approval for Monjuvi in combination with Revlimid for treating diffuse large B-cell lymphoma.
Now what
Constellation's share price is nearly at the $34 offered by MorphoSys, so the small biotech stock won't move much higher. The acquisition is expected to close in the third quarter of this year.
