MorphoSys Updates Strategy for Proprietary Product Development

Company will take new lead compound MOR103 into Clinical Development

Martinsried/Munich, February 24, 2006

MorphoSys AG (Frankfurt Stock Exchange: MOR; Prime Standard Segment; TecDAX) today presented its updated strategy for the further development of its proprietary therapeutic antibody programs. As a result of the strategic review process initiated in 2005, MorphoSys will focus the majority of its efforts on its anti-inflammatory compound MOR103 as new lead compound in the indication of Rheumatoid Arthritis. The Company intends to evaluate clinical efficacy of the compound. MorphoSys will discontinue further development of its anti-ICAM program, which presently consists of the MOR101/MOR102 therapeutic antibody projects. In regard of MorphoSys's cancer-related antibody program MOR202, the Company intends to generate additional preclinical data around this project, which will determine further steps.

MOR103 is a fully human HuCAL® antibody against a not disclosed target, developed in the area of inflammatory diseases. MorphoSys will start immediately with pre-clinical development of the compound. After completion of pre-clinical testing, MorphoSys will provide all necessary information to regulatory authorities and ethics committees (which correspond to an IND filing) within the second half of 2007 to start human trials. Rheumatoid arthritis is a chronic disease, mainly characterized by inflammation of the lining of the joints. It can lead to long-term joint damage, resulting in chronic pain, loss of function and disability. The disease affects approximately 4-6 million people worldwide.

“Proprietary products represent the highest value-added application of our HuCAL® technology and we are excited about our ability to explore this potential growth driver,” said Dr. Simon Moroney, Chief Executive Officer of MorphoSys. “Although this adaptation of our product strategy is a new direction for us, these efforts remain comparable with our present business model, which are predicated on a cash generative business in order to remain independent of the capital markets.“

“The strategic review of our proprietary product portfolio revealed that in fact our latest compound MOR103 is the most promising of MorphoSys drug candidates and thus we decided to focus our development activities in favor of this program,” stated Dr. Marlies Sproll, Chief Scientific Officer of MorphoSys. “MOR103 targets inflammatory diseases such as psoriasis, multiples sclerosis, inflammatory bowels disease, asthma, and especially rheumatoid arthritis, where we see a huge potential for additional innovative therapies.”