What happened
The stock of Constellation Pharmaceuticals (CNST +0.00%) was absolutely crushing it this week, up 70.6% as of the market close on Thursday. The catalyst behind this impressive performance was the announcement on Wednesday that German drugmaker MorphoSys (MOR +0.00%) plans to acquire Constellation for $1.7 billion.
So what
MorphoSys' cash offer of $34 per share for Constellation represented a premium of nearly 72% over the closing price for the biotech stock at the end of last week. Why was MorphoSys willing to pay up so much? It really wanted Constellation's pipeline programs. MorphoSys CEO Jean-Paul Kress stated, "This transformational acquisition represents a major step forward for MorphoSys as we bolster our position in hematology-oncology."
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Constellation is currently evaluating its leading pipeline candidate, pelabresib, in late-stage clinical studies targeting myelofibrosis, a type of bone marrow cancer. The experimental drug inhibits bromodomain and extra-terminal proteins, which some types of cancer cells use to promote growth.
The company also is evaluating CPI-0209 in a phase 2 clinical study targeting hematological 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.
Now what
MorphoSys' acquisition of Constellation is expected to close in the third quarter of this year. In the meantime, Constellation anticipates providing clinical updates from its late-stage study of pelabresib this summer. An update on the monotherapy cohorts from the phase 2 study of CPI-0209 is expected by the end of the year.
