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MorphoSys (MOR) Down 22% on Mixed Data From Myelofibrosis Study

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Shares of MorphoSys (MOR - Free Report) lost 22.3% on Nov 21 after management announced top-line results from the phase III MANIFEST-2 study evaluating pelabresib plus Jakafi (ruxolitinib) in JAK inhibitor-naïve patients with myelofibrosis.

The MANIFEST-2 study met its primary endpoint of at least a 35% or greater reduction in spleen volume (“SVR35”) following 24 weeks of treatment with pelabresib/Jakafi combination. Data from the study showed that 66% of patients who were administered the combination achieved the SVR35 compared with 35% of those participants who received a placebo plus Jakafi. Reduction in spleen size is an important clinical endpoint in myelofibrosis because spleen enlargement reflects disease activity and can cause significant pain and discomfort.

However, the study did not meet its key secondary endpoints assessing symptom improvement — at least a 50% reduction in total symptom score (TSS50) and absolute change in total symptom score (TSS) at week 24. Though the results showed a strong positive trend favoring the pelabresib/Jakafi combination, the results were in close proximity to those treated in the placebo group.

Data from the study showed that 52% of patients who received pelabresib/Jakafi combination achieved the TSS50 endpoint compared with 46% of study participants who received placebo plus Jakafi.

This close proximity of pelabresib/Jakafi combination results with placebo, did not sit well with the investors, likely leading to the fall in share price. Year to date, shares of MorphoSys have risen 27.1% against the industry’s 23.7% decline.

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Despite the mixed results, MorphoSys will discuss the results with the FDA and EMA. Management believes that combining a JAK inhibitor like Jakafi and a BET inhibitor like pelabresib suggests synergistic benefits. It intends to submit regulatory applications in the United States and Europe for the pelabresib/Jakafi combination in myelofibrosis by mid-2024.

Myelofibrosis is a form of blood cancer that has limited treatment options. Currently, treatments with JAK inhibitors are the standard of care for treating symptoms of myelofibrosis rather than acting as a cure.

Jakafi is marketed by Incyte (INCY - Free Report) , which is approved by the FDA to treat patients with polycythemia vera (“PV”) who have had an inadequate response to or are intolerant to hydroxyurea.

MorphoSys has only one marketed drug in its pipeline, Monjuvi (Tafasitamab), which is marketed in partnership with Incyte. The drug was approved by the FDA in 2020 in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) who are not eligible for autologous stem cell transplant. While Incyte and MorphoSys co-commercialize Monjuvi in the United States, Incyte is solely responsible for marketing the drug outside the country under the brand name Minjuvi.


Zacks Rank & Other Stock to Consider

MorphoSys currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks in the overall healthcare sector include Acadia Pharmaceuticals (ACAD - Free Report) and AnaptysBio (ANAB - Free Report) , all carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Acadia Pharmaceuticals’ loss estimates for 2023 have narrowed from 41 cents to 34 cents per share in the past 60 days. During the same period, the estimates for 2024 earnings per share have risen from 52 cents to 90 cents. Year to date, Acadia Pharmaceuticals’ shares have gained 41.0%.

Acadia Pharmaceuticals beat earnings estimates in two of the last four quarters while missing the mark on the other two occasions, witnessing an earnings surprise of 20.69% on average. In the last reported quarter, ACAD reported an earnings surprise of 6.98%.

AnaptysBio’s loss estimate has narrowed from $6.57 to $6.08 per share in the past 60 days. During the same period, the loss estimates per share for 2024 have narrowed from $6.93 to $6.38. Shares of ANAB have lost 54.3% in the year-to-date period.

The earnings of AnaptysBio beat estimates in two of the last four quarters while missing the mark on the other two occasions, posting a negative average earnings surprise of 6.48%. AnaptysBio’s earnings beat estimates by 18.02%.

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