MorphoSys Reports First Quarter 2007 Results

MorphoSys AG (Frankfurt: MOR; Prime Standard Segment, TecDAX) today reported financial results according to IFRS for its first quarter ended March 31, 2007.  The MorphoSys Group achieved revenues of EUR 14.1 million (Q1 2006: EUR 14.8 million), a profit from operations of EUR 1.3 million (Q1 2006: EUR 4.7 million), and a net profit of EUR 0.6 million (Q1 2006: 4.9 million).  MorphoSys's cash position amounted to EUR 72.0 million at the end of the first quarter of 2007 (December 31, 2006: EUR 66.0 million).
 
Highlights of the First Quarter 2007:
  • Formation of an antibody partnership with Astellas, MorphoSys's third alliance with a Japanese pharmaceutical company. Under the terms of the agreement, MorphoSys grants Astellas access to its HuCAL GOLD antibody library for use in its internal pharmaceutical drug discovery programs.
  • Existing partnered therapeutic antibody pipeline currently comprises 43 programs in total, of which currently two are in phase 1 clinical development, 16 in pre-clinical development, and 25 in research.
  • Significant expansion of AbD Serotec's license agreement with the U.K. Medical Research Council (MRC). The agreement, which provides AbD Serotec with access to a broad range of hybridoma cell lines as a source of research antibodies, is extended for a further five years, and includes additional products which will be implemented in AbD Serotec's offering.
  • Formation of a research alliance involving MorphoSys's Tokyo-based partner GeneFrontier Corporation together with a renowned Japanese research organization. The expanded collaboration now also covers the generation of HuCAL-derived fully human antibodies for proteome research and target validation as well as commercialization of resulting antibody products.
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    'MorphoSys continues to increase its market presence in both operating segments, as evidenced by the addition of yet another top 20 pharmaceutical company and a leading research institute in Asia, to our partner roster' commented Dave Lemus, Chief Financial Officer of MorphoSys AG. 'Moreover, we expect to remain on track to hit this year's operational and financial targets.'
     
    Financial Review of the First Quarter 2007 (IFRS):
    Revenues in the first three months of 2007 slightly decreased in comparison to the same period of the former year by 5% to EUR 14.1 million (Q1 2006: EUR 14.8 million).  Reasons for the decrease were in large part attributable to unusually high levels of success-based payments received in the first quarter of 2006.  Revenues arising from the Therapeutic Antibodies segment amounted to EUR 8.8 million or 62% of total revenues, which included success-based payments in the amount of EUR 1.6 million.  The AbD segment contributed EUR 5.3 million or 38% to total revenues.
     
    Total operating expenses for the first three months of 2007 amounted to EUR 12.8 million, compared to EUR 10.2 million in the same period of 2006.  Cost of goods sold amounted to EUR 2.7 million (Q1 2006: EUR 2.1 million), representing cost of sales for goods sold by the AbD segment.  Research and development costs increased to EUR 4.9 million from EUR 3.8 million; sales, general & administrative expenses amounted to EUR 5.2 million compared to EUR 4.2 million in the previous year.  Stock-based compensation, reported as components within COGS, R&D and S,G&A expenses, amounted to EUR 0.4 million (Q1 2006: EUR 0.3 million).  Operating profit for the first three months of 2007 reached EUR 1.3 million (Q1 2006: EUR 4.7 million).  Non-operating expenses, including taxes, amounted in the first three months of 2007 to EUR 0.7 million (Q1 2006: non-operating income of EUR 0.2 million).  Earnings before interest and taxes (EBIT) amounted to EUR 1.5 million, compared to an EBIT of EUR 4.9 million in the same period of the previous year.
     
    In the first quarter of 2007, MorphoSys achieved a net income of EUR 0.6 million, compared to a net income of EUR 4.9 million in the same period of the previous year.  Diluted net income per share for the first three months of 2007 amounted to EUR 0.09 (Q1 2006: EUR 0.78).
     
    On March 31, 2007, MorphoSys had cash, cash equivalents and available-for-sale financial assets of EUR 72.0 million, compared to EUR 66.0 million at the end of 2006.
     
    The number of shares outstanding at March 31, 2007 was 6,697,678, compared 6,686,160 at December 31, 2006.
     
    Financial Outlook
    MorphoSys left its financial outlook for 2007 unchanged.  The Company projects total revenues of EUR 60 to 65 million, and profit from operations of EUR 7 to 10 million for fiscal year 2007.