Pipeline Expansion and Solid Top-line Growth
Press conference call (in German) today at 10:00 am CET
Conference call and webcast of the analyst meeting and press conference (in English)
today at 02:00 pm CET (01:00 pm GMT; 08:00 am EST)
MorphoSys AG (FSE: MOR; Prime Standard Segment; TecDAX) today announced its financial results according to International Financial Reporting Standards (IFRS) for the three-months' period and financial year ending December 31, 2009. The Company increased full-year Group revenues by 13 % to EUR 81.0 million (2008: EUR 71.6 million). Operating profit amounted to EUR 11.4 million (2008: EUR 16.4 million). The year-on-year decrease was a direct result of the planned increased investment in proprietary development in the amount of EUR 19.3 million in 2009 (up from EUR 8.9 million in 2008). Group net profit after taxes decreased to EUR 9.0 million (2008: EUR 13.2 million) due to the higher level of R&D investment. At the end of the year 2009, MorphoSys's cash position amounted to EUR 135.1 million (2008: EUR 137.9 million).
Highlights of the Year 2009
· Proprietary Development Progress: Established a team with strong preclinical and clinical expertise; Added three new proprietary programs to supplement lead compounds MOR103 and MOR202.
· First Proprietary Program in Phase 1b/2a: Advanced lead program MOR103 into first patient trial in rheumatoid arthritis (RA); Decision on second indication successfully concluded based on sound pre-clinical data.
· Strong Growth of Partnered Drug Pipeline: Partnered pipeline increased to three programs in Phase 2, with a further four programs in Phase 1; Expansion of partnered pipeline to 65 active therapeutic antibody projects by end of 2009 (up from 55 at the end of 2008).
· New Growth Opportunities in Infectious Diseases: First HuCAL PLATINUM-based alliance in infectious disease space with Daiichi Sankyo.
· AbD Serotec: Solid top-line growth and profit margin; Further penetrating the diagnostics industry.
· Technology: New antibody library HuCAL PLATINUM firmly established in R&D processes; Progress on new antibody technologies to continue in 2010.
'MorphoSys enters 2010 as a well-positioned and mature company with a promising product portfolio, a sustainable partnered business and a prospering AbD segment providing strong financial results. This is an excellent basis for our future,' stated Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. 'Increasingly, the Company's clinical pipeline is taking centre stage. At the end of 2009, four HuCAL-based programs were in Phase 2 clinical trials with another four compounds in Phase 1. Clinical proof-of-concept with HuCAL antibodies is rapidly approaching. During 2009, we looked closely at potential acquisitions as a means of adding to our portfolio of proprietary product candidates, but nothing that we found justified the investment that would have been required. We are therefore no longer actively pursuing acquisition as a means of adding to our pipeline. We are, however, interested in supplementing our existing technology platform and accelerating the growth of the AbD Serotec segment in the diagnostics field.'
'In 2009, the partnered discovery segment continued to show a very respectable performance, providing the MorphoSys Group with the financial wherewithal to channel substantial investment into proprietary R&D while allowing us to report an operating profit according to our expectations. This is a unique profile in our industry,' commented Dave Lemus, Chief Financial Officer of MorphoSys AG, adding 'AbD Serotec reported a satisfying increase in profit margin, which included above-market top-line growth performance.'
Financial Review for the Fiscal Year 2009 (IFRS)
Group revenues for the full year 2009 amounted to EUR 81.0 million (2008: EUR 71.6 million), an increase of 13 % over the prior year. Segment revenues arising from the Partnered Discovery segment comprised 48.6 million in funded research and licensing fees (2008: 44.4 million) as well as 13.1 million in success-based payments (2008: 9.9 million). Segment revenues arising from the Proprietary Development segment included 1.0 million in funded research (2008: no revenues). The AbD Serotec research antibody segment generated 24 % or EUR 19.4 million of total revenues (2008: EUR 18.2 million). Assuming constant foreign exchange rates at the average rate of 2008, revenues in the AbD Serotec segment would have amounted to 19.7 million, an increase of 8.2 % over 2008.
Total operating expenses for the full year 2009 increased by 26 % to EUR 69.6 million (2008: EUR 55.2 million). The strong increase of 14.4 million was mainly caused by higher proprietary research and development (R&D) expenses and partially as a result of increased sales, general and administrative (S, G&A) expenses. Cost of goods sold (COGS) decreased by 6 % to EUR 6.7 million (2008: EUR 7.1 million). Research and development expenses rose by EUR 11.4 million or 41 % to EUR 39.0 million in 2009 (2008: EUR 27.6 million). The increase in R&D expenses mainly resulted from a higher level of investment in proprietary product development (including segment allocations) amounting to EUR 19.3 million (2008: EUR 8.9 million). Sales, general and administrative expenses increased by EUR 3.4 million to EUR 23.9 million (2008: EUR 20.5 million), mainly caused by increased costs for consulting services and personnel costs. Non-cash charges related to stock-based compensation are embedded in COGS, S,G&A and R&D expenses and amounted to EUR 1.7 million (2008: EUR 1.0 million).
Total Group operating profit decreased to EUR 11.4 million (2008: EUR 16.4 million). Partnered Discovery showed a segment operating profit of 39.6 million (2008: 34.4 million) while 19.3 million were invested into proprietary development (2008: investment of 8.9 million). In the AbD Serotec segment, operating profit significantly increased to 1.0 million (2008: 0.4 million), an operating margin of 5 %.
Non-operating income and expenses, including taxes, amounted in 2009 to EUR (2.5) million (2008: non-operating expenses of EUR 3.2 million). For the full year 2009, MorphoSys realized a net profit of EUR 9.0 million compared to a net profit of EUR 13.2 million in the previous year. The resulting diluted earnings per share for the year 2009 amounted to EUR 0.40 (2008: EUR 0.59).
On December 31, 2009, the Company had EUR 135.1 million in cash, cash equivalents, and marketable securities, compared to EUR 137.9 million as of December 31, 2008. Net cash outflow from operations in 2009 amounted to EUR 1.0 million (2008: net cash inflow EUR 28.6 million). The main reasons for the cash outflow were reduced profits, an increase in accounts receivable, and changes in the composition of deferred revenue. The number of issued shares at December 31, 2009 was 22,660,557, compared to 22,478,787 shares at December 31, 2008.
Fourth Quarter of 2009 (IFRS)
In the fourth quarter of 2009, the Company generated revenues of EUR 23.4 million, compared to EUR 18.4 million in the same quarter of 2008, an increase of 28 %. Total operating expenses amounted to EUR 21.4 million, compared to EUR 17.1 million in the same quarter of 2008. The increase of operating expenses was mainly due to increased costs for consulting services and personnel costs. The resulting operating profit amounted to EUR 2.1 million (Q4 2008: EUR 1.3 million). Net profit for the fourth quarter 2009 was EUR 1.3 million, compared to EUR 1.4 million in the fourth quarter of 2008.
Outlook for 2010
For 2010, MorphoSys anticipates total Group revenues of between EUR 89 million and EUR 93 million and anticipates an operating profit in the range of EUR 5 million to EUR 9 million. Backed by its sound financial position, MorphoSys will continue to increase its investment in proprietary R&D to between EUR 26 million and EUR 29 million during 2010. In addition, the Company continues to invest in technology development. For 2010, MorphoSys expects to make major progress in advancing its product pipeline and by the end of the year the Company projects its partnered and proprietary pipeline to comprise up to 14 programs in clinical trials, thereof at least 4 antibodies in Phase 2. MorphoSys's management team will provide a more detailed outlook in today's press conference and conference call.
MorphoSys will hold its analyst meeting and press conference today in Frankfurt to present the Annual Financial Results 2009 and the Outlook 2010.
Dial-in number for the press conference call (in German) at 10:00 am CET:
Germany: +49 (0) 89 2444 329 75
Dial-in number for the analyst meeting and press conference at 02:00 pm CET; 01:00 pm GMT; 08:00 am EST (listen-only):
Germany: +49 (0) 89 2444 329 75
For UK residents: +44 (0) 20 3003 2666
For US residents: +1 212 999 6659
Please dial in 10 minutes before the beginning of the conference.
In addition, MorphoSys offers participants the opportunity to follow the presentation through a simultaneous slide presentation online at http://www.morphosys.com.
A live webcast, slides, webcast replay and transcript will be made available at http://www.morphosys.com.
Approximately two hours after the press conference, a slide-synchronized audio replay of the conference will be available on http://www.morphosys.com.
About MorphoSys:
MorphoSys is an independent biotechnology company that develops novel antibodies for therapeutic, diagnostic and research applications. The Company's HuCAL technology is one of the most powerful methods available for generating fully human antibodies. By successfully applying this and other proprietary technologies, MorphoSys has become a leader in the field of therapeutic antibodies, one of the fastest-growing drug classes in human health-care. Through its alliances with some of the world's leading pharmaceutical companies, MorphoSys has created a pipeline of more than 60 drug candidates. The Company is expanding its drug pipeline by adding new partnered programs, and by building a portfolio of fully-owned therapeutic antibodies. For its proprietary portfolio, the Company is focused on the areas of oncology and inflammation. Its most advanced program MOR103, a first-in-class, fully human antibody against GM-CSF, is currently tested in a Phase Ib/IIa trial in rheumatoid arthritis patients. Via its business unit AbD Serotec, MorphoSys is expanding the reach of its technologies in the diagnostics and research markets. MorphoSys is headquartered in Munich, Germany and listed on the Frankfurt Stock Exchange under the symbol 'MOR'. For further information, visit http://www.morphosys.com/
HuCAL®, HuCAL GOLD®, HuCAL PLATINUM®, CysDisplay® and RapMAT® are registered trademarks of MorphoSys AG.