MorphoSys AG Reports Results for the First Quarter of 2012

MARTINSRIED, GERMANY and MUNICH, GERMANY--(Marketwire - May 04, 2012) - MorphoSys AG / MorphoSys AG Reports Results for the First Quarter of 2012.

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MorphoSys AG (FRANKFURT: MOR) (Prime Standard Segment; TecDAX) today announced its financial results for the three months ending March 31, 2012 according to International Financial Reporting Standards (IFRS). Group revenues decreased to EUR 16.1 million (Q1 2011: EUR 48.6 million). As previously disclosed, the unfavorable comparison was due to a one-off technology milestone payment from Novartis in Q1 2011 in connection with the installation of MorphoSys’s HuCAL antibody platform at Novartis’s premises in Basel. In the first quarter of 2012, MorphoSys recorded an EBIT of EUR (0.8 million) (Q1 2011: EBIT of EUR 27.5 million) and a net loss of EUR 0.5 million (Q1 2011: net profit of EUR 18.8 million). MorphoSys’s investment in proprietary research and development amounted to EUR 6.4 million (Q1 2011: EUR 7.3 million). MorphoSys’s cash, securities and interest-bearing assignable loans on March 31, 2012 amounted to EUR 137.4 million (December 31, 2011: EUR 134.4 million). The Company re-confirmed its full year guidance for 2012.

| In EURO million | Q1 2012 | Q1 2011 | +-------------------------------+---------+---------+ | | | | +-------------------------------+---------+---------+ | | | | | | | | | Group Revenues | 16.1 | 48.6 | +-------------------------------+---------+---------+ | hereof success-based payments | 0.4 | 30.4 | +-------------------------------+---------+---------+ | hereof AbD Serotec | 4.5 | 4.4 | +-------------------------------+---------+---------+ | Total Operating Expenses | 17.0 | 19.9 | +-------------------------------+---------+---------+ | EBIT | (0.8) | 27.5 | +-------------------------------+---------+---------+ | Net Profit/(Loss) | (0.5) | 18.8 | +-------------------------------+---------+---------+ | EPS, diluted, in EURO | (0.02) | 0.81 | +-------------------------------+---------+---------+ | | | | +-------------------------------+---------+---------+ 

Highlights of the First Quarter

* MOR103 in RA: MorphoSys completes patient enrollment in its phase 1b/2a clinical trial evaluating MOR103 in patients with active rheumatoid arthritis. Data from the trial will become available in Q3 2012.

* MOR103 in MS: MorphoSys doses first patient in phase 1b clinical trial for MOR103 in multiple sclerosis. The phase 1b dose-escalation study will determine the safety of three doses of MOR103 in patients. Data for this trial are expected to be available in 2013.

* Alliances: MorphoSys reaches the first clinical milestone in 2012 with Novartis; a HuCAL antibody advanced into a phase 1 trial in oncology. Additionally, Novartis advances another HuCAL antibody into a phase 2 clinical trial in ophthalmology. Janssen Research & Development, LLC has informed MorphoSys that the clinical development of the antibody program CNTO888 in cancer will be discontinued. As a result, MorphoSys no longer reflects the CNTO888 program as two clinical phase 2 programs in its pipeline, but as one clinical program in idiopathic pulmonary fibrosis (IPF).

* Pipeline Overview: At the end of the first quarter of 2012, MorphoSys’s partnered and proprietary pipeline comprises 71 programs, of which 20 are in clinical development.

* IP: An US patent is granted covering MorphoSys’s HuCAL antibody against CD38. The patent has a scheduled expiry date in 2028, not including any potential regulatory extensions.

* AbD Serotec: AbD Serotec expands the number of marketed HuCAL-based antibodies in diagnostic applications with a clinical diagnostic kit in the area of maternal health screening.

“Our solid business model enables us to continue to invest in long-term value drivers. We are on track to meet our goals for the full year,” commented Jens Holstein, Chief Financial Officer of MorphoSys AG. “We are pleased with our start in 2012 in view of the fact that this year does not include a large one-off payment as we have seen it in Q1 2011.”

“2012 is an important year for MorphoSys on a number of fronts, and we are delighted with our progress so far”, stated Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. “Our proprietary programs are advancing well and are on track to meet their respective development targets for this year and 2013. We’re also looking forward to major progress in our Partnered Discovery business during this year.”

Financial Review for First Quarter of 2012 According to IFRS

Group revenues for the first quarter of 2012 were EUR 16.1 million (Q1 2011: EUR 48.6 million), a decrease of 67 % over the same period of the previous year. The unfavorable comparison to the first quarter of 2011 reflects a large one-off payment for last year’s successful installation of our HuCAL technology at the Novartis Institutes for BioMedical Research in Basel, Switzerland. Revenues in the Partnered Discovery segment comprised EUR 10.7 million in funded research and licensing fees (Q1 2011: EUR 13.3 million) and EUR 0.4 million in success-based payments (Q1 2011: EUR 30.4 million). The Proprietary Development segment recorded funded research revenues of EUR 0.5 million (Q1 2011: EUR 0.6 million). Assuming constant foreign exchange rates at the average rate of Q1 2011, segment revenues in the Partnered Discovery and Proprietary Development segments would have totaled EUR 11.6 million. The AbD Serotec segment provided 28 % or EUR 4.5 million of total revenues (Q1 2011: EUR 4.4 million), an increase of 2 %. Assuming constant foreign exchange rates at the average rate of Q1 2011, revenues in the AbD Serotec segment would have amounted to EUR 4.4 million.

Total operating expenses for the first quarter of 2012 decreased by 15 % to EUR 17.0 million (Q1 2011: EUR 19.9 million). The decrease of EUR 2.9 million was mainly caused by reduced proprietary research and development (R&D) expenses in line with the Company’s plans. Cost of goods sold (COGS), a line item specific to AbD Serotec, decreased by 6 % to EUR 1.7 million (Q1 2011: EUR 1.8 million). Total research and development expenses for the Group decreased by EUR 2.3 million or 18 % to EUR 10.4 million (Q1 2011: EUR 12.7 million). The decrease in R&D expenses mainly resulted from a lower level of investment in proprietary product and technology development amounting to EUR 6.4 million (Q1 2011: EUR 7.3 million). Sales, general and administrative expenses decreased by 8 % to EUR 4.9 million (Q1 2011: EUR 5.3 million). Non-cash charges related to stock-based compensation are embedded in COGS, S,G&A and R&D expenses and amounted to EUR 0.3 million (Q1 2011: EUR 0.5 million).

For the first quarter of 2012, MorphoSys recorded earnings before interest and taxes (EBIT) of EUR (0.8 million) (Q1 2011: EBIT of EUR 27.5 million). Partnered Discovery showed a segment EBIT of EUR 6.2 million (Q1 2011: EBIT of EUR 37.6 million) while the continued investment in proprietary development led to segment EBIT of EUR (5.1 million) (Q1 2011: EBIT of EUR (6.2 million)). The AbD Serotec segment recorded a gross profit margin of 63 %, in comparison to 58 % in the first quarter of 2011. The EBIT for AbD Serotec improved to break-even (Q1 2011: EBIT of EUR (0.2 million)).

For the first quarter of 2012, MorphoSys recorded a net loss of EUR 0.5 million compared to a net profit of EUR 18.8 million in the same period of the previous year. The resulting diluted net loss per share for the first three months of 2012 was EUR 0.02 (Q1 2011: diluted net profit of EUR 0.81).

On March 31, 2012, the Company had EUR 127.4 million in cash, cash equivalents, and marketable securities compared to EUR 134.4 million as of December 31, 2011. Net cash inflow from operations in Q1 2012 amounted to EUR 2.3 million (Q1 2011: net cash inflow EUR 11.5 million). The number of issued shares at March 31, 2012 was 23,154,806, compared to 23,112,167 shares at December 31, 2011.

Outlook for 2012

MorphoSys re-confirmed its guidance for 2012. The Company anticipates total Group revenues of EUR 75-80 million and anticipates an EBIT in the range of EUR 1-5 million. This guidance does not, at this stage, include a successful out-licensing of any of the Company’s proprietary development programs. Investment in proprietary research and development in 2012 will be approximately EUR 20-25 million. For 2012, MorphoSys anticipates progress across its product pipeline including first patient data from its lead proprietary compound MOR103 in Q3 2012.

MorphoSys will hold a public conference call and webcast today at 02:00 p.m. CEST (08:00 a.m. EST, 01:00 p.m. BST) to present the First Quarter Results 2012 and report on current developments.

Dial-in number for the Conference Call (listen-only):

Germany: +49 89 2444 32975

For U.K. residents: +44 20 3003 2666

For U.S. residents: +1 202 204 1514

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.

The complete 1st Interim Report 2012 (January - March) is available on our website (HTML and PDF): http://www.morphosys.com/FinancialReports

About MorphoSys:

MorphoSys developed HuCAL, the most successful antibody library technology in the pharmaceutical industry. By successfully applying this and other patented technologies, MorphoSys has become a leader in the field of therapeutic antibodies, one of the fastest-growing drug classes in human healthcare. The company’s AbD Serotec unit uses HuCAL and other antibody technologies to generate superior monoclonal antibodies for research and diagnostic applications.

Together with its pharmaceutical partners, MorphoSys has built a therapeutic pipeline of more than 70 human antibody drug candidates for the treatment of cancer, rheumatoid arthritis, and Alzheimer’s disease, to name just a few. With its ongoing commitment to new antibody technology and drug development, MorphoSys is focused on making the healthcare products of tomorrow. MorphoSys is listed on the Frankfurt Stock Exchange under the symbol MOR. For regular updates about MorphoSys, visit http://www.morphosys.com

HuCAL®, HuCAL GOLD®, HuCAL PLATINUM®, Ylanthia®, CysDisplay®, RapMAT® and arYla® are registered trademarks of MorphoSys AG.

Slonomics® is a registered trademark of Sloning BioTechnology GmbH, a subsidiary of MorphoSys AG.

This communication contains certain forward-looking statements concerning the MorphoSys group of companies. The forward-looking statements contained herein represent the judgment of MorphoSys as of the date of this release and involve risks and uncertainties. Should actual conditions differ from the Company’s assumptions, actual results and actions may differ from those anticipated. MorphoSys does not intend to update any of these forward-looking statements as far as the wording of the relevant press release is concerned.

1st Interim Report 2012 (PDF): http://hugin.info/130295/R/1608700/510654.pdf

Media Release (PDF): http://hugin.info/130295/R/1608700/510650.pdf

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Source: MorphoSys AG via Thomson Reuters ONE [HUG#1608700]