Conference call and webcast of the analyst meeting and press conference today at 02:00 pm CET (01:00 pm GMT; 08:00 am EST)
'Our solid financial position and operational profitability uniquely position us in today's difficult capital market environment,' commented Dave Lemus, Chief Financial Officer of MorphoSys AG. 'Moreover, based on committed revenue streams from our broad portfolio of long-term partnerships allied with our strong balance sheet, the company is ideally positioned to increase its proprietary R&D activities, and to build long-term shareholder value.'
Group revenues for the full year 2008 amounted to EUR 71.6 million (2007: EUR 62.0 million), an increase of 16 % over the prior year. Measured in constant currency terms, total revenues would have amounted to EUR 73.1 million. Revenues arising from the Therapeutic Antibodies segment accounted for 75 % or EUR 53.4 million of total revenues. The AbD research antibody segment generated 25 % or EUR 18.2 million of total revenues. MorphoSys's overall revenue growth was primarily driven by higher levels of funded research and licensing fees.
Total operating expenses for the full year 2008 were EUR 55.2 million (2007: EUR 54.9 million), representing a slight increase over the prior year. Cost of goods sold (COGS), amounted to EUR 7.1 million (2007: EUR 7.9 million). Research and development expenses rose by EUR 5.4 million to EUR 27.6 million in 2008 (2007: EUR 22.2 million). The increase in R&D expenses mainly resulted from higher expenses for product and technology development amounting to EUR 7.7 million (2007: EUR 6.1 million). Sales, general and administrative expenses decreased by EUR 4.3 million to EUR 20.5 million (2007: EUR 24.8 million). This change was mainly caused by lower costs for external services. Non-cash charges related to stock-based compensation are embedded in COGS, S,G&A and R&D expenses and amounted to EUR 1.0 million (2007: EUR 1.4 million).
Total operating profit more than doubled to EUR 16.4 million (2007: EUR 7.0 million). AbD achieved an operating result of EUR 0.4 million, its first annual profit. The targeted profit margin of 5 % for the unit was not achieved, primarily due to a non-cash impairment charge relating to the former Biogenesis UK facility in Poole, UK of EUR 0.5 million. The operating result for the Therapeutic Antibodies segment amounted to EUR 25.6 million (2007: EUR 15.2 million). Unallocated corporate costs in 2008 amounted to EUR 9.5 million (2007: unallocated costs of EUR 7.6 million).
Non-operating expenses, including taxes, amounted in 2008 to EUR 3.2 million (2007: Non-operating income of EUR 4.5 million). For the full year 2008 MorphoSys realized a net profit of EUR 13.2 million compared to a net profit of EUR 11.5 million in the previous year.
On December 23, 2008, MorphoSys implemented a 3-for-1 stock split, as resolved in the 2008 AGM, and the number of shares issued at December 31, 2008 was therefore 22,478,787 shares, compared to a pro-forma figure of 22,160,259 at December 31, 2007. The resulting diluted earnings per share for the year 2008 amounted to EUR 0.59, compared to a pro-forma diluted earnings per share of EUR 0.53 in 2007.
On December 31, 2008, the Company had EUR 137.9 million in cash, cash equivalents, and marketable securities, compared to the EUR 106.9 million as of December 31, 2007. Funds are held in three German financial institutions, predominantly in short-term maturity money funds and short-term deposit accounts.
In the fourth quarter of 2008, the Company generated revenues of EUR 18.3 million, compared to EUR 17.9 million in the same quarter of 2007, an increase of 2 %. Total operating expenses amounted to EUR 17.1 million, compared to EUR 17.7 million in the same quarter of 2007. The decrease of operating expenses was mainly due to lower consulting fees in connection with the Novartis deal in 2007. This effect was partly offset by higher product and technology development costs. The resulting operating profit amounted to EUR 1.3 million (2007: EUR 0.1 million). Net profit for the fourth quarter 2008 was EUR 1.4 million, compared to EUR 6.6 million in the fourth quarter of 2007, which included deferred tax income in the amount of EUR 4.1 million mainly relating to capitalization of tax loss carry-forwards.
For 2009, MorphoSys anticipates total revenues of EUR 80 million to EUR 85 million, major progress in advancing its product pipeline, and profitability. Backed by its sound financial position and its strong positive cash flows, MorphoSys plans to more than double its investments in technology and product development to between EUR 18 million and EUR 20 million. Proprietary activities are expected to represent approximately half of the total R&D spending of the Group. If fully and timely executed this strong investment in proprietary R&D would leave the Company in 2009 with a comfortable operating profit in the range of EUR 8 million to EUR 11 million. By the end of 2009 the Company expects its partnered and proprietary pipeline to comprise up to 8 compounds in clinical trials, thereof at least 3 antibodies in phase 2. MorphoSys's management team will provide more detailed outlook in today's press conference and conference call.
Germany: +49 (0)69 710491462
Germany: +49 (0)69 710491462
For UK residents: +44 (0)1212 604860
For US residents: +1 (1) 866 347 1957
MorphoSys is a publicly traded biotechnology company focused on the generation of fully human antibodies as a means to discover and develop innovative antibody-based drugs against life-threatening diseases. MorphoSys's goal is to establish HuCAL as the technology of choice for antibody generation in research, diagnostics and therapeutic applications. The Company currently has therapeutic and research alliances with the majority of the world largest pharmaceutical companies including Boehringer Ingelheim, Centocor/Johnson & Johnson, Merck & Co., Novartis, Pfizer and Roche. Within these partnerships, more than 50 therapeutic antibody programs are ongoing in which MorphoSys participates through exclusive license and milestones payments as well as royalties on any end products. Additionally, MorphoSys is active in the antibody research market through its AbD Serotec business unit. The business unit has operations in Germany (Munich), the U.S. (Raleigh, NC) and U.K. (Oxford). For further information please visit http://www.morphosys.com/