Analyst: Morphosys Is Well-Positioned To Continue Success With Antibody Discovery Platforms

Morphosys AG/S ADR MOR is a German biotech company that specializes in antibodies research. With the expiry of the IPO quiet period, analysts began coverage on U.S.-listed shares.

The Analyst

JMP Securities analyst Konstantinos Aprilakis initiated coverage of Morphosys with a Market Outperform rating and $38 price target.

The Thesis

Morphosys has a "broad pipeline," and two distinct businesses, namely proprietary development and partnered discovery, wherein it works with partners on targets identified by the latter, Aprilakis said in a note. The company's proprietary unit focuses on oncology and inflammation.

Aprilakis noted the company is developing MOR208, its most advanced proprietary asset, which has been tested in combination of lenalidomide for treating relapsed or refractory diffuse large B cell lymphoma. The candidate has received breakthrough designation status from the FDA due to it targeting an unmet medical need.

The analyst expects a commercial launch for MOR208 in 2020, and estimates peak U.S. sales of $1 billion in 2026.

Tremfya, developed by Johnson & Johnson JNJ's Janssen unit and generated by Morphosys' technology platform, was approved to treat moderate-to-severe plaque psoriasis in both the U.S. and EU in 2017. The analyst said Morphosys stands to gain about 4.5 percent in royalties on potential U.S. sales of $3.2 billion in 2026.

"In possession of one of the most prolific antibody platforms in all of biotech, Morphosys boasts an expansive and robust pipeline," JMP said.

The Price Action

After ending with a gain of 5.07 percent on their debut on April 19, shares of Morphosys have added 4.1 percent.

The stock traded around $27 at time of publication, down 1.4 percent on the day.

Editor's note: A previous version of this article incorrectly stated the analyst started coverage with a Market Perform rating.

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