Johnson & Johnson’s Janssen subsidiary has terminated its research collaboration and option agreement with Morphic Therapeutic, the company announced in a filing with the Securities and Exchange Commission Friday.
The agreement, signed in February 2019 and updated in December 2020, focused on research to “develop antibody activators for an undisclosed integrin target.” Janssen exercised its right to terminate the agreement for “convenience,” Morphic said in its filing.
Janssen previously notified Morphic that it did not intend to exercise its options on the first two integrin targets due to a “lack of target validation in the specific disease” of the company’s interest.
The termination of the agreement was acknowledged last week and will be effective within 60 days of January 13, according to the filing.
In light of the news, Morphic’s stock was down more than 1% during the late morning trading session Monday.
The Morphic separation is the latest business move by J&J, which recently stopped a late-stage global trial on an HIV vaccine after it was found to be ineffective at preventing infections and slashed production of its COVID-19 vaccine. The pharma giant will also unveil its Q4 2022 earnings on Tuesday morning.
Janssen’s decision also comes nearly one year after AbbVie halted its work on oral integrin therapeutics for fibrosis-related indications with Morphic.
In October 2018, AbbVie entered into an R&D collaboration with Morphic, paying $100 million up front followed by a $20 million license fee for an exclusive license option for each compound related to the agreement.
In August 2020, AbbVie exercised its option to exclusively license and control the further development and commercialization of an αvβ6–specific integrin program to treat fibrotic diseases including Idiopathic pulmonary fibrosis (IPF) and additional fibrosis-related indications.
However, AbbVie informed Morphic in February 2022 that it did not intend to advance of its selective oral αvβ6-specific integrin inhibitors due to “a suspected on-target/ αvβ6-mediated safety signal that has been observed in pre-clinical testing.”
Morphic is still seemingly in a strong financial position, according to its most recent financials, which indicated that the company has nearly $372 million in cash, cash equivalents and marketable securities, an amount sufficient to fund operations into the second half of 2025.