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Why Constellation Pharmaceuticals Stock Is Skyrocketing Today

By Keith Speights - Jun 2, 2021 at 12:16PM

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The company is being acquired by MorphoSys.

What happened

Shares of Constellation Pharmaceuticals (CNST) had skyrocketed 66.7% as of 12:01 p.m. EDT on Wednesday. The huge gain came after MorphoSys (MOR -4.50%) 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.

Two jigsaw puzzle pieces held close to each other with the sun shining in the background.

Image source: Getty Images.

"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.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Constellation Pharmaceuticals, Inc. Stock Quote
Constellation Pharmaceuticals, Inc.
Johnson & Johnson Stock Quote
Johnson & Johnson
$169.31 (1.52%) $2.54
MorphoSys AG Stock Quote
MorphoSys AG
$5.09 (-4.50%) $0.24

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