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Pipeline Expansion Continues as Planned - Financial Guidance Confirmed
 
MorphoSys AG (FSE: MOR; Prime Standard Segment; TecDAX) today announced its financial results for the first six months ended June 30, 2009 according to International Financial Reporting Standards (IFRS).  Group revenues increased by 14 % to EUR 37.9 million (H1 2008: EUR 33.3 million) and operating profit amounted to EUR 6.6 million (H1 2008: EUR 8.0 million).  Net profit decreased to EUR 5.0 million (H1 2008: EUR 6.3 million).  The main reason for the decline in profits was, as previously announced, increased investment in proprietary drug development.  At June 30, 2009 MorphoSys's cash position was EUR 144.1 million (December 31, 2008: EUR 137.9 million).
 
Highlights of the Second Quarter of 2009:
  • MorphoSys reported a positive outcome to the phase 1 study of its lead compound MOR103 and submitted an application for the authorization of a phase 1b/2a clinical study in patients with rheumatoid arthritis (RA).
  • MorphoSys and the University of Melbourne signed an agreement to cooperate on investigating new therapeutic applications for the MOR103 program. As part of the expanded relationship, new patent applications have been filed, which are intended to broaden the scope of protection of the anti-GM-CSF approach.
  • MorphoSys's proprietary pipeline increased to five compounds in total.  During the second quarter, work on MOR205 started as planned, and a disease-related target molecule for a new inflammation program, MOR104, was selected. Pre-clinical development of MOR202 and lead identification for MOR203 continued as planned.
  • Novartis committed to the full ten-year term of the strategic alliance originally signed in December 2007. The decision was based on the successful achievement by MorphoSys of certain predefined improvements in its proprietary technologies.
  • MorphoSys's partnered pipeline increased to 62 therapeutic antibody programs in total (compared to 55 at the beginning of the year), of which six are currently in clinical development, 31 are in preclinical development and 25 are in the discovery phase.
  • Two partners, namely Centocor Ortho Biotech Inc. and Novartis, commenced Phase 1 clinical trials using HuCAL-derived, fully human antibodies.
  • Daiichi Sankyo initiated a further two oncology-focused therapeutic antibody programs within its collaboration with MorphoSys.
  • Schering-Plough triggered its option to extend the current collaboration between the two companies for another year.
  • MorphoSys's AbD Serotec unit and Spinreact S.A. signed a supply agreement. Spinreact will incorporate antibodies from AbD Serotec in a series of clinical diagnostic kits.
  • The Japanese Patent Office has granted a new patent covering MorphoSys's CysDisplay technology.
  • The Company introduced more detailed financial reporting, by moving from two operating segments to three - the existing Therapeutic Antibodies segment was sub-divided into Partnered Discovery and Proprietary Development.
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    'The expansion of our proprietary antibody pipeline continues as planned with our lead compound on track to enter a phase 1b/2a study in patients in the second half of the year,' commented Dave Lemus, Chief Financial Officer of MorphoSys AG.  'Moreover, our partnered discovery business continues to deliver dependable cash flow, while AbD Serotec continues its upswing into sustained profitability.  These two pillars of our business will allow our continued investment in proprietary antibody therapeutics, whilst maintaining overall Company profitability.'
     
    Financial Review for the First Six Months of 2009 (IFRS)
    Group revenues for the first six months of 2009 amounted to EUR 37.9 million (H1 2008: EUR 33.3 million), an increase of 14 % over the prior year.  Revenues arising from the Partnered Discovery segment accounted for 74 % or EUR 28.1 million of the total (H1 2008: EUR 24.3 million) and included success-based payments in the amount of EUR 5.4 million, while the AbD Serotec segment, focused on research and diagnostic antibodies generated 26 % or EUR 9.7 million of total revenues (H1 2008: EUR 9.0 million).  The Proprietary Development segment, comprising the Company's own and joint drug development activities contributed EUR 0.5 million to total revenues.  These revenues arise from Novartis' funding of a joint pre-development program.  Measured at constant foreign exchange rates, revenues in the Partnered Discovery and Proprietary Development segments would have amounted to EUR 27.8 million and revenues in the AbD Serotec would have amounted to EUR 9.8 million.  MorphoSys's overall revenue growth was driven primarily by higher levels of funded research, licensing fees and success-based revenues in the Partnered Discovery and Proprietary Development segments as well as increased sales across the AbD Serotec segment.
     
    Total operating expenses for the first six months of 2009 increased by 24 % to EUR 31.3 million (H1 2008: EUR 25.3 million).  The change in operating expenses was mainly due to higher investment in research and development which rose by 56 % to EUR 18.0 million (H1 2008: EUR 11.5 million).  Partnered Discovery operating expenses were EUR 10.1 million, Proprietary Development operating expense amounted to EUR 8.5 million.  Within the Proprietary Development segment, costs in the amount of EUR 7.8 million (H1 2008: EUR 2.0 million) were incurred for the development of the Company's proprietary products.  Sales, general and administrative expenses amounted to EUR 10.0 million (H1 2008: EUR 10.2 million).  Cost of goods sold decreased to EUR 3.3 million (H1 2008: EUR 3.5 million).  A non-cash, stock-based compensation charge is embedded in COGS, S,G&A and R&D expenses and amounted to EUR 0.8 million (H1 2008: EUR 0.6 million).
     
    Total operating profit for the first six months of 2009 amounted to EUR 6.6 million (H1 2008: EUR 8.0 million).  The result for the Partnered Discovery segment amounted to EUR 18.0 million (H1 2008: EUR 14.6 million), while the Proprietary Development segment showed a segment loss of EUR 8.0 million (H1 2008: segment loss of EUR 2.5 million).  The AbD Serotec Research and Diagnostic Antibodies segment result amounted to EUR 1.1 million (H1 2008: EUR 0.2 million).  Unallocated corporate costs in the first half of 2009 amounted to EUR 4.4 million (H1 2008: EUR 4.2 million).
     
    For the first six months of 2009, non-operating income (excluding tax expenses) amounted to EUR 1.1 million (H1 2008: EUR 1.1 million).  Profit before taxes amounted to EUR 7.7 million (H1 2008: EUR 9.1 million).  The Company reported income tax expenses for the first six months of 2009 in the amount of EUR 2.7 million (H1 2008: EUR 2.8 million).
     
    Net profit for the first six months of 2009 amounted to EUR 5.0 million compared to a net profit of EUR 6.3 million in the same period of the previous year.  The resulting diluted earnings per share for the first six months of 2009 amounted to EUR 0.22 (H1 2008: Diluted earnings per share of EUR 0.28).
     
    As of June 30, 2009, the Company held EUR 144.1 million in cash, cash equivalents and marketable financial assets, compared to a balance of EUR 137.9 million on December 31, 2008.  Cash inflow from operations in the first six months of 2009 amounted to EUR 6.6 million (H1 2008: cash inflow of EUR 18.0 million).  The number of issued shares at June 30, 2009 was 22,492,287, compared to 22,478,787 shares as of December 31, 2008.
     
    Financial Outlook for 2009:
    MorphoSys re-confirmed its financial guidance for 2009 as previously communicated in February 2009.  The Company anticipates total group revenues between EUR 80 million and EUR 85 million, and an operating profit of EUR 8 million to EUR 11 million.  In line with its plans to expand the Company's proprietary pipeline, MorphoSys anticipates making investments in technology and product development of between EUR 18 million and EUR 20 million, compared to EUR 7.7 million in the previous year.
     
    MorphoSys will hold a public conference call today at 02:00pm CET (1:00pm GMT, 8:00am EDT) to present the Six Months Results 2009 and report on current developments.
     
    Dial-in number for the Conference Call (listen-only):
    Germany:      +49 (0) 69 710 49 1462
    For U.K. residents:   +44 (0) 1212 604 860
    For U.S. residents:   +1 (1) 866 347 1957
     
    Please dial in 10 minutes before the beginning of the conference.
     
    Approximately two hours after the press conference, an audio replay of the conference will be available on http://www.morphosys.com.
     
    For further information please contact: Dr. Claudia Gutjahr-Löser, Head of Corporate Communications & Investor Relations, Tel: +49 (0) 89 / 899 27-122, gutjahr-loeser@morphosys.com or Mario Brkulj, Senior Manager Corporate Communications & Investor Relations, Tel: +49 (0) 89 / 899 27-454, brkulj@morphosys.com