Under the terms of the agreement, signed on 20 January, MorphoSys purchased 100 per cent ownership of Biogenesis Ltd and Biogenesis Inc for £5.25 million (€7.5 million) less net debt of approximately £700 000. The two Biogenesis companies will become wholly owned subsidiaries of MorphoSys.
MorphoSys is a company that develops and applies innovative technologies in order to discover disease related targets and new drugs. The company's technologies use fully human antibodies in both research and therapeutic applications.
The acquisition of the Biogenesis group provides MorphoSys with an array of marketing options for the HuCAL antibody technology it has acquired in the deal.
The antibody-generating HuCAL technology allows specific recombinant antibodies to be produced faster than existing animal based methods. The technology allows high-level expression of protein fragments for screening against the HuCAL Gold library using bioinformatic algorithms to select antigen sequences for expression and screening.
The technology also allows the generation of antibodies against expressed protein fragments reducing screening efforts in comparison to peptide antigens. In addition the resulting antibodies are more likely to bind the parental protein than antibodies against peptide fragments.
Humanisation of antibodies has increased the potential of antibody therapy as in vitro technologies specifically phage display systems. They have provided avenues to generate efficiently large panels of human antibodies with relative ease. This has resulted in the antibody market accounting for global sales in excess of $800 million in 2004.
In addition, human genome sequencing and related data-mining information are facilitating a generation of increasing numbers of drug targets (that are being leveraged by the antibody generation companies) for drug discovery and target validation, as well as for generating antibody therapeutic and diagnostic products.
The acquired Biogenesis companies will be integrated with MorphoSys' existing research antibody business unit, Antibodies by Design. The new unit will run alongside the existing therapeutic antibodies unit, which comprises the largest part of the MorphoSys business.
"Today's transaction will help MorphoSys build the market for its HuCAL technology outside our core therapeutic antibody segment," commented Dr Simon Moroney, chief executive officer of MorphoSys.
"The acquisition of Biogenesis brings us immediate access to well-established sales channels plus substantial know-how in the research and diagnostics markets," he added.
The addition of Biogenesis is an important strategic step for Morphosys, in establishing its HuCAL technology in new antibody market segments. The latest acquisition follows the establishment of the Antibodies by Design unit in late 2003 to serve the research and diagnostics markets with custom monoclonal antibodies.
While the therapeutic antibodies unit remains the key driver of the MorphoSys business, the expanded research antibodies unit becomes a more significant second pillar in the company's overall strategy.
According to Datamonitor Healthcare the recombinant antibody market is a $32 billion industry with the prospect of future growth very significant. Future growth of the rDNA market will remain the chief contributor to the industry's global economic prosperity, followed by the sectors of therapeutic antibodies, vaccines, DNA-RNA synthetics, small molecules, gene and cell therapies.
Figures from Frost & Sullivan suggest the monoclonal antibody (MAb) therapeutics global market will increase to $16.7 billion in 2008.
Although growth will rely on the rise of humanised and human antibodies, monoclonals, led by infliximab and rituximab (Rituxan; Genentech), will dominate with a 49 per cent market share in 2008. Humanised antibodies will follow, with sales forecast to reach $5.2 billion, or a 31 per cent market share by 2008. In addition, fully human antibodies with 2008 sales of $1.9 billion will capture 11 per cent of the market in 2008.