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Q2 2003 Morphosys AG Earnings Conference Call - Final
30 July 2003

OPERATOR: Good morning, ladies and gentlemen. Welcome to today's MorphoSys AG conference call. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Mr Dave Lemus, CFO of MorphoSys AG. Please go ahead, sir.

DAVE LEMUS, CFO, MORPHOSYS AG: Good morning. Welcome. This is Dave Lemus, CFO of MorphoSys. With me today is Simon Moroney, our CEO. We're calling you today from our headquarter is Munich, Germany. First, we'd like to welcome you to this conference call and thank you for participating.

During the call, we would like to talk about the company's financial results for the first six months that ended June 30, 2003. Simon will begin by giving you an overview of the last quarter. Then I will review the financial results for the first six months. Afterward, we will open the call to your questions.

Before I start, I want to remind you that during this conference we will present and discuss certain forward-looking statements concerning the development of MorphoSys' core technologies, the progress of current research programs and the initiation of additional programs. Should actual conditions differ from the company's assumptions, actual results and actions may differ from those anticipated. You are, therefore, cautioned not to place undue reliance on such forward-looking statements, which speak only of the day hereof.

I would now like to hand over to Simon Moroney.

SIMON MORONEY, CEO, MORPHOSYS AG: Thank you, Dave. I would like to add my welcome to those of you joining the conference call today. I want to start my overview of the quarter by highlighting the financial results.

The numbers provide confirmation of what was apparent in Q1, namely that we are on-track to meet our objectives for the year. In Q2, we reduced our operating loss by more than two-thirds. We are very close to break-even on a cash basis. We have roughly the same level of cash as at year-end 2002. We have a three-year cash horizon. The business is financial sound, comprising a steady revenue stream and effective management of expenses.

The [indiscernible] should not obscure the fact that we continue to invest in the application of our technology to proprietary product programs. Our plans call for two new programs to be initiated per year, and this rate is being maintained.

In addition, our partner programs are making good progress. The present balance between partner programs, on which we earn money from day 1, and own programs, where we carry the costs alone, results in the low cash burn just referred to. This mix of partner and proprietary programs lies at the heart of our strategy of maximizing the value we derive from our HuCAL technology through therapeutic antibody development while minimizing our risk exposure.

More than three-fourths of the active therapeutic programs are partner-initiated. Confidentiality obligations prevent us from talking about the details of these programs, such as, for example, naming the targets. From time to time, we are able to announce progress, and this was the case last week regarding a research-stage program ongoing with Schering AG. Outside this [supply] our HuCAL Gold technology to generate an antibody which Schering scientists have now investigated in some detail. Already, the antibody has shown evidence of anti-cancer activity in in vitro essays. It also shows outstanding in vivo specificity, accumulating specifically in a tumor established in a mouse.

This is yet another example of an antibody whose generation was made possible by the unique features of our HuCAL technology. Strict specifications were defined at the outset of the project for the antibody, and our scientists optimized a HuCAL-derived lead candidate to these requirements. From the start of this project to achieving the efficacy and specificity data just mentioned, with the optimized antibody, took one year.

With regard to our proprietary programs, we're still on-track to complete animal experiments with MOR 101 and MOR 102 before the end of the summer. You will recall that MOR 101 is a Fab fragment being developed for the treatment of deep dermal burn, while MOR 102 is a [fore inner] globulant with potential in a number of inflammatory indications, our initial focus being psoriasis. The [indiscernible] experiments are being conducted with external collaborators to determine the most appropriate format of the antibody, for example, to [attach] levels of Fag fragments [with density] to the burn application. Our goal with these two programs is construct compelling packages, comprising targets, which is covered by an exclusive license from Boehringer Ingelheim, proprietary antibody and animal data. Such packages comprise substantial value and dramatically enhance our collaborating opportunities.

Today, we announced that we are winding down our program MOR 201. The reason for this is that we have now generated data in an alternative program that supports the decision to switch our efforts. The new program, which has the designation MOR 202, involves an anti-cancer antibody that we generated some time ago and on which we now have some promising in vitro data. We will not, as yet, reveal the target against which this antibody is directed. I can, however, say that the antibody may have applications in multiple multiple myeloma and other blood-borne cancers.

The rights to the antibody 201 have been returned to ProChon, who will assume responsibility for its further development along the lines of our original agreement with them. As a reminder, ProChon may develop up to four HuCAL antibodies. As usual, MorphoSys will earn milestones and royalties as antibodies move through development to market.

Looking forward, we anticipate a busy second half year. We're already engaging in discussions with parties interested in developing 101 and MOR 102. We will gear up our business development activities in respect of partnering these two compounds as soon as the animal data is available in approximately eight weeks' time. Meanwhile, we continue to discuss and negotiate with companies from the pharmaceutical and biotech sectors, with respect to potential collaborations around HuCAL. We do not want to predict when or if any of these discussions or negotiations may result in signed deals. However, we can say that interest in therapeutic antibodies continues to be high, and that the good news surrounding [Aviston] and XOMA, as well as other antibodies only helps in this regard.

Our focus continues to be on maximizing the number and quality of HuCAL-based programs being pursued by partners, while ensuring that the return we receive properly reflects the value inherent in our HuCAL technology.

That concludes my summary of the quarter. With that, I'd like to hand over to Dave, who will talk about the financial results.

DAVE LEMUS: Thank you, Simon. To begin our financial analysis, I'd like to start with operating revenues. In the first six months of 2003, company revenues amounted to E7.2m, compared to E8.7m in the same period of 2002, a decrease of 17%. Revenues arising from therapeutic antibody collaborations accounted for 85% of total revenues, while target research collaborations generated 15% of the total. No milestones revenues are recorded in the second quarter of 2003.

Moving on to operating expenses for the first six months of 2003, total operating expenses, including stock-based compensation, decreased E8.9m to E10.8m, resulting in an operating loss of E3.6m, a decrease of the loss of the same period in the prior year of 67%. In general terms, this reduction in expense resulted mainly from the company's restructuring implemented in Q4 2002, which resulted in lower personnel costs, as well as lower product development costs. The reduction in 2003 was strongly influenced by the patent licensing agreement and settlement entered into in 2002, more specifically the CAT and XOMA agreements.

Costs for R&D decreased by E3.1m to E5.7m. The decrease in R&D expenses resulted predominantly from lower licensing costs related to the XOMA agreement, as well as lower personnel costs and lower product development costs associated with the company's restructuring.

SG&A expenses amounted to E4.1m, compared to E8.7m in the same period of the previous year. The decrease in G&A expenses was mainly due to the decrease in patent litigation costs, which arose in part as a result of the settlement with CAT in December 2002.

Stock-based compensation in the amount of E1.1m in the six months 2003, compared to E2.3m during the first six months of 2002, was recorded as a non-cash charge for the expensing of stock options un US GAAP. The decrease in stock-based compensation is mainly due to a lesser number of employees and convertible bonds granted in 2003, compared to the same period in 2002. Stock-based compensation for new grants was also lowered to the reduced stock price of our [closing] shares, underlying the bonds at the time of grant.

For the first six months of 2003 and 2002, total investment in intangibles amounted E0.02m and E3.3m respectively. The higher amount in 2002 reflects in part the acquisition of the XOMA license.

Amortization, investments in property, plants and equipment, an depreciation, amounted to E0.6m and E0.2m and E0.4m for the first six months of the year respectively, and as such remain unchanged compared to the same period of the previous year.

For the first six months of 2003, the company posted a net loss of E4.9m, compared to E9.7m in the same period of the previous year, a reduction of approximately 50%. The resulting loss per share for the first six months 2003 amounted to E1.22 per share, compared to E2.50 per share for the first six months of 2002. On 30 June 2003, there were 4,253,410 shares outstanding.

Moving on to liquidity and current assets, on 30 June 2003 the company had E18.8m in cash and cash equivalents and marketable securities, compared to E19.1m balanced at 31 December 2002, a decrease of only E300,000. Cash used in operating activities for the first six months of 2003 amounted to E300,000, compared to E7.2m in the first six months of 2002, demonstrating our low cash burn for the first six months of the year.

Moving on to the outlook, the financial results we've presented today continue to reflect the positive benefits associated with the company's restructuring moves undertaken in November 2002. These benefits are in part mirrored by the significant reduction in operating loss, which fell by 68% compared to the previous year's numbers for the same period. Moreover, the cash position also remains robust, as evidenced by the level of cash and marketable securities, which are essentially at the same level as year-end 2002.

As you can see from the cash flow statement, the net cash used in operations for the first six months of 2002 was also very close to cash break-even. That being said, for the time being, we make no change from the guidance given earlier this year.

That concludes my financial analysis for the first half of 2003. I'd now like to open up the call to your questions.

OPERATOR: Thank you, sir. Today's Q&A session will be conducted electronically. If you'd like to ask a question, please press the * key, followed by the digit 1 on your telephone keypad. We will take questions in the order received, and will take as many as time permits. Once again, please press * 1 now on your telephone keypad to ask a question. We'll pause for a moment to assemble the roster. Our first question comes from Thomas Hoger with DZ Bank. Please go ahead, sir.

THOMAS HOGER, ANALYST, DZ BANK: Good morning. I have a question concerning the stop of program on FGFR-3. Could you elaborate a little bit on the reasons behind this termination of this project?

SIMON MORONEY: Hi Thomas. Because of the obligation of confidentiality we have with our partner, ProChon, we're not at liberty to speak openly about the results that were generated in the program or the reasons for stopping the program. Suffice it to say that, as we evaluate our pipeline and our proprietary programs that are ongoing in the year, we continue to evaluate the merits and data that we have on various antibodies. As such time as we deem is appropriate to switch our efforts and our focus from one program to another, we will do that. That is the case with this particular program. The program, MOR 202, we felt represented a better place to focus our efforts. Therefore, we chose to switch.

It also, I would say, reflects our philosophy, which is also inherent in the HuCAL technology, which is we are great believers in taking care to make a high-quality antibody and make sure that we have the right programs early on. This, if you like, is a reflection of that philosophy: we have taken an opportunity relatively early in the game, in this case, to switch our efforts from one to what we feel is a more promising program.

THOMAS HOGER: Thank you.

OPERATOR: Ladies and gentlemen, as a reminder, if you want to ask a question, please press * 1 on your telephone keypad now. Again, please press * 1 now on your telephone keypad if you want to ask a question. We now more to Mr Martin Possienke with Equinet. Please go ahead, sir.

MARTIN POSSIENKE, ANALYST, EQUINET INSTITUTIONAL SERVICES AG: Yes, good morning everybody. I missed the beginning of the call, so I'm sure if you explained it already, but I was a little bit surprised because of your financial results and the interest expense of E0.8m in the second quarter. Maybe you can explain it again.

DAVE LEMUS: Sure. No problem. At the beginning of this year, we gave guidance that our interest expense would be approximately E1.2m for the year. Now the E0.8m basically arises out of two postings. One posting relates to the agreement that we had with XOMA. This agreement we had with XOMA, we had an option of paying with cash or shares. And according to US GAAP accounting, when we actually raised the shares for XOMA, we would have to recognize what in essence is a king of interest expense related to this conversion, which in this case amounted to roughly E600,000 or so. And that's a non-cash charge on the income statement, which again relates only to the raising of shares to XOMA and will not reoccur. Again, I want to stress that it's non-cash.

The other piece of the E0.8m, approximately E0.2m relates to the agreement that we have with CAT. As you may recall, we had approximately E5m which was booked as part of the settlement agreement last year with CAT, that we have to pay them over the next five years at the rate of E1m per year. And how we booked that liability was that we booked it at a net present value, which means that every year we have to amortize, effectively, what is this loan to CAT on this outstanding liability. So, what you see in there is an interest-related charge on that liability, which is not in addition to the E1m, but is inside the E1m that we pay them every year.

MARTIN POSSIENKE: Okay. Thank you. And do we have to expect another E400,000 for the second half of the year?

DAVE LEMUS: No. Approximately another-- So, it was approximately E200,000 in the first half of the year. For the entire year, it will be about E400,000.

MARTIN POSSIENKE: Okay. Thanks a lot.

DAVE LEMUS: Going forth, of course, that amount will go down every year.

MARTIN POSSIENKE: Okay.

OPERATOR: Ladies and gentlemen, as a final reminder, if you'd like to ask a question in today's Q&A session, please press the * key, followed by the digit 1 on your telephone keypad. We now move to Mr Richard Parks with ING. Please go ahead, sir.

RICHARD PARKS, ANALYST, ING BARINGS LIMITED: Hello, gentlemen. I'd just like to apologize because I too missed part of the conference call. And I just wanted to check with the discontinuation of MOR 201. Have you given any potential timelines for when you'd expect to license your remaining proprietary antibody programs, and whether you'd be initiating any programs with a target?

SIMON MORONEY: Richard, what we said-- You may have missed this earlier on in the call, was are waiting animal data on both MOR 101 and MOR 102, which is expected late in the summer, on the back of which we will ramp up our business development as it's around there. We're really in the context of discussions with a number of companies who have expressed interest in those two programs. We will obviously pick up those discussions on the back of the animal data.

We don't want to give predictions about the timing of when we would sign one or more deals in respect of those compounds because, as you know, it's always very difficult to predict, but it's certainly one of our priorities to partner those two programs as soon as we possibly and reasonably can, given that we can secure the terms that we're looking for.

In respect of the other programs, as we've said, and I don't know whether you heard the answer or not, we've simply elected to switch from one program into what we feel is a more promising program, which is-- It's premature at this stage to say at what stage that program would be ready for partnering. But what we also have said consistently and repeated again today is that we're looking to initiate two new programs per year. We continue to maintain that rate. So, we're able to source targets that we think are sufficiently promising to support HuCAL discovery programs for our own account. That will continue, and that is planned and budgeted for the foreseeable future.

RICHARD PARKS: Okay. When will we know what these new targets are that you're working with?

SIMON MORONEY: We treat the publication of these targets, or the naming of these targets, on a case-by-case basis. The ICAM target that underlies MOR 101 and MOR 102, because it's subject to an exclusive license agreement with Boehringer Ingelheim, we were quite happy to name that target. In situations where we feel that naming the target would put us at a competitive disadvantage, with respect to other companies that may be interested in a program, we will not name the target. That is the case with this new program, MOR 202. We're not yet naming the target, other than to say that it's a cancer-relevant target. At such stage in the future as we feel that we have a sufficient reason to name the target, we will do so. But as I said, we are treating that very much on a case-by-case basis.

RICHARD PARKS: Okay. Thanks very much.

OPERATOR: We now have a follow-up question from Mr Thomas Hoger with DZ Bank. Please go ahead, sir.

PATRICK FOCKS, ANALYST, DZ BANK: Hello. This is Patrick Focks, a colleague of Thomas Hoger. I have a question concerning the average share number that you are calculating for the full year 2003. [indiscernible].

DAVE LEMUS: I assume you're talking about the weighted average number of shares outstanding. For the way that's calculated, as I'm sure you are aware, is under US GAAP they take a weighting of the number of shares which have actually been outstanding during the year. In the June number, we have one or two months' weighting worth of XOMA shares inside that number. And what we'll see is an increase in that number toward the end of the year, where we raised 588,000 shares which we are owing to CAT. And when that exactly will occur is not clear, but obviously it will happen before the end of the year. Our guess is sometime at the end of Q3, perhaps beginning of Q4, in which case, obviously when those shares are raised, they'll have an impact on the weighted average number of shares outstanding. So, can I give you an exact number today of what the expected weighted average number of shares will be at the end of the year? No. But if you take the June number and you assume that the shares from CAT, the 588,000 shares for CAT, will be raised at the end of September, that will probably give you a pretty good estimate of what the weighted average of shares should be at the end of the year.

PATRICK FOCKS: Okay. Thank you.

OPERATOR: If there are no further questions remaining in the queue, I would like to turn the call back over to Dr Moroney for closing remarks.

SIMON MORONEY: Thank you very much. Again, if there are no further questions, I would just like to remind you of the key messages to take away before we complete the call.

First, both proprietary and partner therapeutic antibody programs are progressing. The recent announcement from our collaboration with Schering exemplifies the progress that we're making in our active partner therapeutic antibody programs.

We continue to invest in proprietary programs and the expected rate, and have optimized our portfolio by switching our attention from MOR 201 to a different anti-cancer antibody, designated MOR 202. Meanwhile, MOR 101 and MOR 102 continue on-track.

Finally, and most importantly, this quarter's numbers confirm the business is on a solid course. Losses are significantly down on the previous year, revenue is stable, and our cash position has hardly changed over the last six months. We remain confident of meeting our goals for this year.

That concludes the call. Dave and I are in the office for the rest of the day, if any of you would like to follow up with us directly. Thank you again and goodbye.

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Q3 2003 Morphosys AG Earnings Conference Call - Final
29 October 2003

OPERATOR: Good day, everyone, and welcome to today's MorphoSys AG conference call. As a reminder, this call is being recorded. At this time, I would like to turn the call over to Mr. Dave Lemus, Chief Financial Officer. Please go ahead, Sir.

DAVE LEMUS, CFO, MORPHOSYS AG: Good morning and welcome. This is Dave Lemus, CFO, MorphoSys. With me, today, is Simon Moroney, our CEO. We're calling you today from out headquarters in Munich, Germany.

First, we'd like to welcome you to this conference call and thank you for participating. During the call, we'd like to talk about the company's financial results for the first nine months that ended September 30, 2003. Simon will begin by giving you an overview of the last quarter. Then, I will review the financial results for the first nine months. Afterwards, we will open the call to your questions.

Before I start, I want to remind you that during this conference we will present and discuss certain forward looking statements concerning the development of MorphoSys for technologies, the progress of its current research programs and the initiation of additional programs.

Should actual conditions differ from the Company's assumptions, actual results and actions may differ from those anticipated. You are, therefore, cautioned not to place undue reliance on such forward looking statements which speak only as of the date hereof.

I would now like to hand over to Simon Moroney.

SIMON MORONEY, CEO, MORPHOSYS AG: Thank you, Dave. I'd like to add my welcome to those of you joining the conference call today. I want to start my overview of the quarter by highlighting the financial results. The numbers for this illustrate again the effectiveness of the measures that we implemented at the end of last year to cut costs. [Creating] expenses for the first three quarters are down by almost half compared to last year and we have reduced our net loss by 59% over the same period. Combined with a stable revenue line which reduced expenditure has resulted in a minimal reduction of our cash position of just E1.3m year-to-date. The business is financially sound.

Q3 was highlighted by significant progress in both our in-house and [partnered] product programs. We released two interim progress announcements during the quarter. The first, from our collaboration with Schering, the second, with Centocor.

The Schering announcement concerns studies conducted with a HuCAL antibody that we had generated against a cancer related target. The result of in vitro efficacy and in vivo localization studies were both positive, which all goes well for the future development of this particular antibody.

The second announcement concerned a predefined milestone that had been hit in an information program ongoing at our collaboration with Centocor. In this case, the objective of the program was the development of an antibody fulfilling no fewer than eight criteria covering affinity, specificity and other properties.

In yet another demonstration of the power of HuCAL, we were able to deliver antibodies fulfilling all criteria. In this case, we received a milestone payment, as set out in the agreement covering our collaboration.

In early October, we announced the first animal data from our proprietary product programs. In these programs, we aim to develop two antibodies designated MOR101 and MOR102 for the treatment of second degree burn and chronic inflammatory disorders respectively. Both antibodies are directed against the same target molecule, ICAM1, and the programs are covered by an exclusive license that we secured from Boehringer Ingleheim earlier this year. Most importantly, Boehringer Ingleheim already observed evidence of efficacy in Phase 2 clinical trials with a mouse antibody called BIRR-1 against this target in secondary burn and with rheumatoid arthritis. Having completed the in vitro profiling of MOR101 and MOR102, both of which were generated from MorphoSys HuCAL GOLD antibody library, we have established that they have potency equivalent to the Boehringer Ingleheim [Muhring] antibody.

Our strategy on the burn indication is to develop a [FAB] fragment. The rationale is that in the acute inflammatory setting treatment with a FAB fragment, which will have a shorter half life than an IGG is sufficient.

Secondly, antibody fragments have significant advantages from the perspective of cost of goods, since they can be manufactured in bacteria. Our first objective has, therefore, been to compare the original Boehringer Ingleheim antibody with the corresponding chimeric FAB fragment in a rabbit model of burn. We used the established rabbit model because BIRR-1 has already been shown to be efficacious in this model.

The results that we announced on October, 9 at a conference in Japan, show that these two compounds behave equivalently in the rabbit model. This result clears the way to the continued development of the HuCAL GOLD derived FAB fragment MOR101.

In the case of MOR102, we announced positive data in a mouse model of psoriasis. This study compared MOR102 with [declamethosone] as a positive control in a skid mouse model of human psoriasis. The data showed that the antibody could improve the typical hallmarks of lesional psoriasis. For example, epidermal thickening a [acamphosis] was reduced by approximately 40%. We're now conducting additional studies in which we compare MOR102 with other biologics, either approved or pending approval, for the treatment of psoriasis.

We are engaged in discussions about [parboring] both of these antibody programs. It's important to point out that we see the indications we have looked as indicators of the activity of MOR101 and MOR102. As has been well established by other anti-inflammatories, such as those that act against TNF, there may well be additional clinical applications. We, therefore, do not rule out the possibility that we may partner these compounds in other indications. Our goal is to find a suitable for one or both of these programs by the middle of next year.

I'd like to finish by looking forward to year end. One of our stated goals for this year is to have clarity on which our partner programs would enter human clinical trials next year. GPC Biotech has recently communicated some of its pre-clinical data of a HuCAL antibody that MorphoSys generated in our collaboration with them and confirmed that that planned to commence clinical trials in 2004.

In addition, Bio has informed us that they hope to take the first antibody from our coloration into the clinic next year. We await information from other partners and hope to be able to add to this list in due course.

Finally, we continue to discuss with an array of potential partners agreements on new therapeutic antibody generation and/or technology collaborations. It is premature to predict the outcome of these discussions, but we are confident that we will have news on new deals in the near future.

That concludes my summary of the quarter. With that, I'd like to hand back to Dave Lemus, who will talk about the financial results.

DAVE LEMUS: Thank you, Simon. To begin the financial analysis, I'd like to start with operating revenues. In the first nine months of 2003, company revenues amounted to E10.9 compared to E12.4m in the same period of 2002. A decrease of 13%. Using constant exchange rates to convert our US dollar revenues, sales would have decreased by 9% in this period.

The vast majority of revenues recorded in 2003 relate to annual license fees received from partners. For the first nine months of 2003, total operating expenses, including stock based compensation expense, decreased to E16.3m resulting in an operating loss of E5.4m. A decrease of 69% comparing the same period of the prior year.

In general terms, the reduction [inaudible] of an expense resulted, in part, from the Company's restructuring implemented in Q4 2004, which resulted in lower personnel costs as well as lower product development costs.

The reduction in 2003 was also strongly influenced by the patent licensing agreements and settlements entered into in 2002. More specifically, the [inaudible] and XOMA agreements.

Costs for research and development decreased by E3.7m to E8.5m. The decrease in research and development expenses resulted predominantly from lower licensing costs related to the XOMA agreement as well as lower personnel costs and lower product development costs associated with the Company's restructuring.

Sales, general and administrative expenses amounted to E6.2m compared to E14.3m in the same period of the previous year. The decrease in general and administrative expenses was mainly due to the decrease in patent litigation costs, which arose in large part as a result of the settlement with Cambridge Antibody Technology in December 2002.

Stock base compensation in the amount of E1.6m was recorded for the first nine months of 2003, compared to E3.4m during the first nine months of 2002, and is a non-cash charge resulting from the expensing of options.

The decrease in stock based compensation is mainly due to declining expenses from options and convertible bonds granted in prior periods. Stock based compensation for new grants was also lowered to the reduced stock price of MorphoSys shares underlining the options in convertible bonds programs at the time of grant.

Moving on to capex, during the first nine months of 2003 and 2002, total investment in intangibles amounted to E6.1m and E3.5m respectively. The increase in 2003 was due to licenses for [CAT], which were capitalized upon share issuance in 2003.

For the first nine months of the year, amortization and depreciation amounted to E1.1m and E0.6m, and investment in the property, plant and equipment amounted to 0.5m respectively.

During the third quarter, 588,160 shares were issued to Cambridge Antibody Technology. With the issuance of the shares, MorphoSys has fulfilled its obligation under the two companies' settlement agreement from December 2002.

On a similar note, MorphoSys was able to help XOMA, recipient of the second MorphoSys capital issuance in 2003, to successfully clear its stake of 363,000 shares in MorphoSys, and this was planned.

For the first six months of 2003, the Company posted a net loss of E6.7m, compared to E16.5m in the same period of the previous year. A reduction of, approximately, 59%.

The resulting loss per share for the first nine months 2003 amounted to E1.6 compared to E4.23 for the first nine months of 2002.

On September 30, 2003, there were 4,841,578 ordinary shares outstanding.

On September 30, 2003, the Company had E17.8m in cash and cash equivalent and marketable securities, compared to E19.1m at December 31, 2002. A decrease of only E1.3m. Cash used in operating activities for the nine months 2003, amounted to E1.4m, compared to E7.8m in the first nine months of 2002, demonstrating again our low cash burn resulting from our successfully implemented restructuring.

The financial results we presented today continue to reflect the positive benefits associated with the Company's restructuring moves undertaken in November 2002.

For the time being, we make no change from the guidance given earlier in the year. That being said, we are looking at the possibility of lowering expenses guidance and making changes to the classification of operating versus non-operating items. But we are currently today not in a position to make those changes.

That concludes the financial analysis for the first nine months of 2003.

We'd now like to open the call up to your questions.

OPERATOR: Thank you. The question and answer session will be conducted electronically. If you would like to ask a question, please do so by pressing the star key followed by the digit one on your touchtone telephone. If you're using a speakerphone, please make sure the mute function is turned off to allow your signal to reach our equipment. We will proceed in the order that you signal us and we'll take as many questions as time permits. Thank you. We'll take our first question from Thomas Hoger with DZ. Please go ahead.

THOMAS HOGER, ANALYST, DZ BANK: Good morning. I have a question concerning a recent announcement on your web page that you're alluding to antibodies by design. Can you elaborate a little bit on this possibly new business unit?

SIMON MORONEY: Yes. This is-- good morning, Thomas.

THOMAS HOGER: Good morning.

SIMON MORONEY: This is an initiative that we have recently commenced to essentially explore the opportunities for our technology, the HuCAL technology in the antibody re-agent market. I think the key word here is explore. It's very much an exploratory unit that we've created within the company here, to simply investigate this area and to do initial-- some initial sales and marketing activities to see what kind of interest there is and applying our technology to generate antibody re-agents.

THOMAS HOGER: Okay. How many people are working on this project?

SIMON MORONEY: There's currently ten people in that unit.

THOMAS HOGER: Okay. Thank you very much.

OPERATOR: And as a reminder, please press star one on your touchtone telephone to ask a question.

THOMAS HEIKLER, ANALYST: Hello.

SIMON MORONEY: Yes. Hello.

THOMAS HEIKLER: Hello. This is Thomas [Heikler] speaking from Frankfurt.

SIMON MORONEY: Hello Thomas.

THOMAS HEIKLER: I would like to ask a question to Dave Lemus concerning the balance sheet. Could you remind us on the swing of other-- I don't [inaudible] that there is a really remarkable swing between the current data and the year end data on December 20 last year.

DAVE LEMUS: Yes. Okay. So, you're probably, I'm guessing, talking about the licensing amount of approximately E8.9m. No. The reason that's changed is because shortly afterward quarter end in Q2, we were able to rate the CAT shares related to the licensing agreement. Up to that point, we hadn't capitalized from an asset for the CAT licensing agreement. According to US GAAP, we can only do that once the shares were actually raised, and once we raised those shares you see the corresponding, I guess, approximately almost E6m asset there, which didn't existed year end, obviously. But that's related to the amount of license that we have received from CAT, which was capitalized once we raised the shares in July

THOMAS HEIKLER: Okay. Thank you.

OPERATOR: As another reminder, to ask a question, please press star one on your touchtone telephone. And we'll take a follow up question from Thomas Hoger. Please go ahead, Sir.

Thomas Hoger: Okay. Thanks. So, given-- given the reduced cash loan rate and assuming that the [state] of MorphoSys will, say, increase by 10% or 15% next year, will it be possible to reach breakeven next year?

DAVE LEMUS: We don't exclude the possibility that we could achieve breakeven next year. As we've done this, we prefer to give the guidance either later this year or at our annual press conference next year. We don't exclude it, but, at this point, it would be premature for us to give guidance for next year. There are still a number things which, obviously, we want to take a look at towards the end of the year to make statements like that.

Thomas Hoger: Sure. Does it mainly depend on the sales increase, or does it more or less depend on, say, hiring new people or increasing the expenses?

DAVE LEMUS: Again, I really don't want to give detail on-- what assumptions or what things need to happen by end of the year or by the time of annual press conference. I think, at this point, I think we'd like to just say that it is possible, we don't exclude it and we will, accordingly, give that guidance to the market once we're in a position to do so. Today, we're not in that position.

SIMON MORONEY: And, Thomas, maybe just to supplement that. As I mentioned in my presentation, we have information for GPC and Bio that they expect to take compounds into the clinic next year. Obviously, those decisions area associated with milestone payments, but they're also completely out of our control. Should either of those companies not do that, for whatever reason, either strategic or developmental or whatever, then obviously that would have an impact on the kind of revenues we could expect next year. So, that's simply a result of the nature of the business where increasingly milestone decisions are taken out of our hands.

Thomas Hoger: Okay. Thank you.

OPERATOR: Thank you, another reminder. To ask a question please press star one on your touchtone telephone. And we'll take the next question from Mr Dr. Martin Possienke with Equinet. Please go ahead.

MARTIN POSSIENKE, ANALYST, EQUINET INSTITUTIONAL SERVICES AG: Yes. Good morning, everybody. After some [inaudible] shares in Q3, maybe you are aware what CAT plans to do with its participation in MorphoSys and in this context, just for clarification, Schering's do owns its 358,000 shares in MorphoSys so, or maybe you can confirm that? And, so, I calculated a [inaudible] of around 80%? Maybe you can confirm this too? And then maybe you can comment on Schering aim to combine [Netigen] with a European biotech active in the antibody field?

DAVE LEMUS: Yeah. I'll take the share questions-- the share related question. So, as it relates to Schering, according to our information, they haven't sold, but, again, perhaps to get the latest information you may have to discuss that with Schering. but, according to what we know, they haven't sold.

As it related to XOMA, actually XOMA didn't sell all of it Q3. They had been selling throughout the year, but cleared their position in Q3.

As it relates to CAT, we know and we have communicated to the market, that they are subject to a lock-up agreement and, obviously, that's confidential to the Settlement Agreement which we signed last year. So, we can't tell you when that lock-up runs off and, I guess, to determine what exactly CAT wants to do with our shares, over what time, probably, CAT would be the best people to ask.

That being said, we know when we took-- when we made the capital increase to XOMA, we suspected, very strongly, based on what they communicated to us, that they would eventually clear the position. So, we were entirely aware that, at some point, they would clear their position and they hadn't taken a strategic interest in the company. As to whether or not that applies to CAT, again, perhaps CAT would be in a better position to answer.

MARTIN POSSIENKE: As a free float it's around 80% now.

DAVE LEMUS: Yes. Okay. Thank you.

SIMON MORONEY: I'll take the Schering question. I assume that you're referring to an announcement that appeared earlier this week by Herr [Spikercherter] referring to their intentions regarding Netigen.

MARTIN POSSIENKE: Yes, on Monday.

SIMON MORONEY: We also saw that announcement and our knowledge about that announcement is probably as much as your knowledge is about that announcement is, it's limited to what stood in the announcement itself.

MARTIN POSSIENKE: Okay. As a comment. Okay. Thank you.

OPERATOR: Thank you. As there are no further questions remaining in queue, I'd like to hand it over yourselves, Mr Moroney and Mr Lemus.

SIMON MORONEY: Thank you very much. If there are no further questions, I'd like to remind you of the key messages to take away before we complete the call.

Once again, the financial results for this quarter illustrate our effective costs control and our low cash burn. The progress that we announced in our collaborations with Schering and Centocor again exemplify our success in our applying our HuCAL technology in drug development.

Finally, the first pre-clinical data in respect of our MOR101 and MOR102 programs is very promising and will strengthen our efforts to find a strong development path for these compounds.

We're continuing our studies to bolster the data packages we've already assembled.

That concludes the call. Dave and I are in the office for the rest of day, if any of you would like to follow-up with us directly.

Thank you, again, and goodbye.

OPERATOR: That will now conclude today's conference call. Thanks for joining us.

[lupus2000]

Q4 2003 Morphosys AG Earnings Analyst Presentation & Conference Call - Final
26 February 2004

CLAUDIA GUTJAHR-LOSER, DIRECTOR OF CORPORATE COMMUNICATIONS, MORPHOSYS AG: It's my pleasure to welcome all of you to our annual conference. My name is Claudia Gutjahr-Loser; I am Director of Corporate Communications of MorphoSys. I would like to thank you for your interest and participation at our conference today. With me are my colleagues, Dr Simon Moroney, our Chief Executive Officer, and Dave Lemus, our Chief Financial Officer.

Today we will present the company's annual results for the year 2003. At the end of our presentation, we will take questions from the conference audience and those participants listening in on the phone may have. We have planned approximately one hour for the presentation. Afterwards, we will answer your questions. After the conference, snacks will be served outside and we would be happy to invite you. There will also be a chance for some more discussions.

Before we start, we want to remind you that during this conference, we will present and discuss certain forward-looking statements concerning the development of MorphoSys core technologies and progress of its current research programs and the initiation of additional programs. Actual conditions differ from the company's assumptions, actual results and actions may differ from those anticipated. You are therefore cautioned not to take [indiscernible] undue reliance on such forward-looking statements that speak only as of the date hereof.

I would now like to hand over to Dr Simon Moroney, our CEO who will discuss the highlights of 2003 and the outlook of the year 2004.

DR SIMON E. MORONEY, CEO, MORPHOSYS AG: Thank you Claudia. I would like to add my welcome to those of you joining us here in Frankfurt today and also to participants who are dialing in. Over the next hour, we will give you a comprehensive review of our year 2003, an outlook for the future, and a detailed presentation of all of the financial numbers.

We had a number of significant operational achievements in 2003. The therapeutic collaboration that we signed with Pfizer shortly before Christmas was certainly the highlight. We also made very good progress in our other existing partnerships. We generated promising pre-clinical data in our own proprietary product programs. We secured at the beginning of the year an exclusive worldwide license from Boehringer Ingelheim to antibodies against one of the central targets, ICAM-1, and we signed a manufacturing agreement with Lonza Biologics. This altogether points to successful execution of our business strategy.

On the financial side we had a very successful year. For the first time ever, MorphoSys was cash flow positive from operations. We significantly reduced our cash burn. We achieved an EBITDA positive result for the first time ever and the company's balance sheet was substantially strengthened. In other words, execution of this strategy is also bringing us short-term financial benefits.

2003 was a big year for antibodies in the biotech industry. Four new antibodies were approved for marketing and we saw a number of important deals in the sector. Indeed the respected US investment bank, Burrill & Co, quoted our deal with Pfizer as one of the three most significant antibody deals of the year and pointed to an increasing appetite amongst big pharma for large molecules and, particularly, antibodies. We see this as being also a significant trend for the future.

It is also a return to some of the cash rich deals that we have seen in the past but which dried up over the last couple of years. Our strategy, as you should well know by now, is based on our proprietary HuCAL technology and the commercial exploitation of that technology. We see that strategy very much as shown on this chart, namely that we have activities on the left hand side in the therapeutic field and on the right hand side, a new move for us in the non-therapeutic field. In the therapeutic field we have two types of activities - partner-initiated programs and MorphoSys-initiated programs.

On the right hand side in the non-therapeutic area we started a new initiative last year in the reagent area and we also in some of our collaborations have some diagnostic activity. What I want to do is spend some time on three of these areas - namely partner-initiated, MorphoSys-initiated and the reagent space and explain to you what we have achieved over the last 12 months in those areas.

I want to start by looking at the partner-initiated side of the strategy. The nine companies shown on the next slide are our therapeutic antibody partners. Of course a number of these partnerships have been running for several years. The most recent addition, as I mentioned, is Pfizer, since Christmas of last year. When you look at these partnerships, one of the striking features is the range of different diseases that we are working on. We have programs in cancer, infectious diseases, inflammation, in autoimmune disease and even in Alzheimer's disease. That speaks to one of the strengths or advantages of antibodies as therapeutics, namely that they can be applied in a range of different indications.

These deals are all different, but all have common elements as well. They all comprise an upfront payment of some form. In the case of Schering, up to E24m in an equity stake. They also all comprise of annual license fees in some form or other. The financials on a per program, and that means the per therapeutic antibody program basis, can be summarized as shown on this slide, namely that we receive research payment per program of between E0.5m and E1.5m. We expect to receive cumulative milestone payments per program of somewhere between E7m and E11m. When products come to market, we expect to receive royalties in the mid single-digit range.

I want to give you just one example out of the some 17 or 18 running programs with these therapeutic antibody partners and that example comes from our collaboration with Roche and is data that we published together with Roche in the autumn of last year. The Roche program is focused on making human antibodies to treat Alzheimer's disease. For the first time in publishing these results, we were able to disclose the identity of the target against which the program was directed, and that is Amyloid-ß Peptide, the key component of the plaque, the tangles of plaque, that form in Alzheimer patient's brains. When Roche originally came to us with this project, the challenge was not only to make an antibody directed against this target, but to have that antibody cross the blood-brain-barrier and somehow dissolve these tangles of plaque that occur in Alzheimer's brains.

This was an extremely interesting and challenging project for us and I should point out one that we would never have initiated without having such a collaboration with a company that has extensive experience in this disease. Our initial task was to make an antibody that bound to Amyloid-ß and that had sufficient affinity to lead to the dissolving of the plaque. The initial antibody that we generated had the right specificity, so it was able to bind to Amyloid-ß, but it had a rather moderate affinity. The number 200nM there is somewhat moderate in terms of affinity for target.

However, and this is the key advantage of HuCAL as an antibody technology, we were able to use the modular structure of HuCAL, which has been designed into the HuCAL technology, to improve that infinity, while maintaining the specificity. The affinity we improved over 30-fold in two steps, and then when we converted the antibody to an immunoglobulin, we achieved improvement overall of in excess of 1,400-fold - a very dramatic increase in the binding strength of the antibody for its target - while maintaining the specificity.

So step one of the project worked extremely well, and is a beautiful demonstration of the power of the HuCAL technology.

Step two, of course, was to see whether the antibody has the desired effects. I want to show you two pieces of data here, first in vitro data on the left hand side, in which Amyloid-ß Peptide, which is labeled, and which is allowed, in a test tube, to form plaques, is then challenged with antibody to see if the antibody can break up and dissolve these plaques.

Without going into the data in great detail, what you see here is, with increasing concentration of antibodies, moving to the right, the amount of aggregated Amyloid-ß is strongly reduced - the lines go down to the right. In other words, in vivo, it is possible to show that the Amyloid-ß plaques can be dissolved.

The next question, and this is perhaps the most challenging aspect, is would it be possible to administer the antibody to mice, in a mouse model of Alzheimer's, and have those antibodies cross the blood-brain-barrier into the brain and bind to plaque in the brain of these mice models of Alzheimer's disease. The figure on the right hand side shows that, indeed, this is possible. What was done here was the antibody was administered intravenously to mice, which were genetically modified in a way to represent human Alzheimer's disease. The mice were then sacrificed and sections of their brain was taken and then stained to see whether our antibody had reached its target.

What you see here are two colors - the red color is staining for the MorphoSys antibody, and the green color are those parts, which our antibody has not reached. So you can see that the majority of the plaque in this particular section has, indeed, been successfully labeled by the antibody. In other words, the antibody administered intravenously has crossed the blood-brain-barrier and has reached its target.

This was the data that we presented jointly with Roche in October, and which is the basis for ongoing work with this antibody at Roche. It is, in our view, a very nice demonstration that, not only can we make antibodies to precisely defined specifications, but that such antibodies can have in vivo effects.

That's just one example from the currently 17 ongoing partner programs, which are summarized on this slide. Six of those programs are currently at the pre-clinical stage, 11 are at the research stage, and what we indicate on this slide with the yellow diamonds are published milestones in each of those programs. If you were to go back and look through our press releases, you would see, for each of these diamonds, a reference to a successfully achieved milestone in one of those programs.

We are very proud of our success record in our collaborations and we think this speaks to the power of the HuCAL technology. We have a very good track record in achieving the objectives and the milestones that are set out at the beginning of the collaboration and again, this is not only a tribute to the people doing the work at MorphoSys, it's also a tribute to the strength of the technology.

I want to turn now to talk about our own proprietary programs, and summarize on page 12 the three programs that we are currently focusing on, namely MOR101 for burn, MOR102 for chronic inflammation, and MOR202 for cancer. Our strategy for our own programs is, as we have communicated some time ago, namely to take these programs to the point of proof of principle in vivo - in animal experiments - and then to seek a partner for subsequent development. In doing this we can minimize our risk and our expenditure while maintaining, through an option, the ability to join for co-development at some subsequent stage.

The first two programs, MOR101 and MOR102 are directed against the target ICAM-1. This was the subject of the exclusive license that we secured from Boehringer Ingelheim early in 2003. We chose this target, which we find particularly attractive, because it's a rare example of a clinically validated target. Boehringer Ingelheim worked with a mouse antibody called BIRR-1 and showed preliminary evidence of efficacy with this antibody in burn and in the treatment of rheumatoid arthritis.

However, they chose to stop development of that antibody because they encountered some toxic side effects that turn out to be related to the antibody and not to the target. We, with our technology, were convinced that we could use the validation that they had provided for the target, but by making a better antibody, we could avoid the problems that they encountered.

ICAM-1 is widely implicated, not only in the diseases which Boehringer looked at in the clinic, but in addition, in psoriasis, in Crohn's disease, and in diabetic retinopathy. What we have done is we have looked at the antibodies that we have generated using our HuCAL technology in burn and in psoriasis. What follows is a short summary of data that we published in the autumn of last year in those two diseases.

The first study that we did was with a Fab fragment derived from the original BIRR-1 antibody to test the hypothesis of whether the antibody fragment - the Fab fragment - could reproduce the properties of the full immunoglobulin in burn.

The way this work is done is to use an established, which happens to be a rabbit model of burn, in which the animal receives a brand - essentially a small burn on the skin - and it is then, after three hours, challenged with the agent under test. Typically what happens in these types of injuries is that following the burn, there is an immediate up regulation of ICAM-1 in the thelium just below the site of the burn, leucosytes rush to the area and finish up clogging the capillaries around the site of the burn and thereby reducing the blood flow.

A test for the efficacy of a compound is to measure the blood flow in the capillaries under the site of the burn. The data you see here shows how, immediately after burn, the blood flow reduces, up to the three hour point and then, on administration of the agent in red, the Fab fragment and of light blue the immunoglobulin, the blood flow is restored. That restoration of blood flow is statistically significant compared to the untreated group.

Importantly for us, what we've found is that the two, the light blue and the red lines, are coincident. In other words, that a Fab fragment is as good as an immunoglobulin in this setting.

The other thing you can do is, with histology, you can look at the tissue to see if there any differences between the treated and the control group. In the control group at the top, you can see, if you look at the capillaries, that they are indeed clogged with leucosytes, which have come to the site of inflammation and blocked the capillaries. Whereas, if you look in the treated group and you look at the same capillaries, they are indeed free. So you can see visually the effect that is measured on the left hand side of the slide.

So there you can look at the surface of the skin, and a typical consequence of burn on the surface of the skin is so-called epidermolysis - lysis of the epidermis, which, in the control group, is very marked here. The skin has been badly disrupted. Whereas, in the treated group, the skin, although burned, is in a much better, more stable shape. That is, again, an indicator that the treatment is having an effect in this model.

The second set of animal data that we generated and published in the autumn was in a psoriasis model. Again we used an established model together with an external collaborator, here in Frankfurt, and this is a SCID mouse model in which human psoriatic skin is transplanted onto an immune deficient mouse. Here, what's done is that the mouse bearing this human psoriatic skin is challenged with the agent, and one looks at the reduction in the thickness of the psoriatic skin.

What we did here is we took a control on the left side, we took our MOR102 substance in green, and we took a positive control known to be efficacious, namely Dexamethazone, an anti-inflammatory agent. What we found was a statistically significant reduction in the thickness of the skin, both with positive control and with MOR102.

What we also found is that the quality of that psoriatic skin, not only was significantly thinner on treatment, which you can see in this figure, but also that this inter-digitation, these fingers of tissues that characterize psoriatic skin, are much less pronounced on the treatment than they are in the control group here. This is the papillomatosis, which is substantially reduced in the treatment group.

This model is very predictive of effects in humans and what we're currently doing is we are comparing MOR102 with known anti-psoriatic agents, Enbrel and Amevive, to see how our compound compares to those known treatments in this model.

During the course of the course of the year we have become increasingly interested in the application of antibodies against ICAM-1 in eye disease, particularly in Diabetic Retinopathy. Diabetic Retinopathy is a common condition in diabetes patients, which is an inflammatory condition of the retina, which leads, in many cases, to loss of vision. It turns out that there is an increasing body of evidence implicating ICAM-1 in this condition. That evidence is based on a number of academic studies, for example, which show that mice that lack the ICAM-1 gene in which it is has been knocked out, also lack Diabetic Retinopathy symptoms.

You can see the same effect if you treat those mice with antibodies against ICAM-1. You can shut down Diabetic Retinopathy symptoms. What seems to be going on here is that, just as in other inflammatory indications, ICAM-1 is up regulated in the blood vessels of the retina, leading to recruitment of leucosytes and eventual destruction and damage to the capillaries themselves. This is an inflammatory condition that underlies Diabetic Retinopathy.

This is an interesting indication which is becoming more and more interesting to the pharmaceutical industry, the substantial market - $1b - and has come to the fore very much recently because of first, the deal that Eyetech did with Pfizer for ocular diseases, and secondly because of Eyetech's IPO which has been the most successful of the recent IPO's on NASDAQ.

So we feel here that we have a potential new indication in which antibodies against ICAM can be exploited, and that, therefore, the entire anti-ICAM program could be much lucrative than we previously suspected.

Very recently we have provided some data on our program MOR202, including announcing the target for that program. MOR202 is a cancer program, in which we are developing antibodies directed to the target CD38. CD38 is an antigen that is over-expressed on a number of human tumor cell lines. What we have done is generated antibodies using our HuCAL technology that are highly specific for human CD38.

What we have done is we have compared our HuCAL antibodies with an existing anti-CD38 antibody, which is currently in clinical development in the UK for the treatment of multiple myeloma. What you see here on the chart is that increasing concentrations of our antibody in blue kill cells bearing CD38 much more efficiently than does the reference antibody. The key thing to look for here is the difference between these two lines. You will see that the blue line has shifted some 10 to 100-fold towards the left, relative to the red line. That means that it works at a lower concentration, so it kills cells at a lower concentration. In fact, when we measured the improvement in effectiveness, it is some 5 to 100-fold more effective than the antibody which is in clinical development.

What is very interesting about this is that it seems to work by recognizing a unique epitope, a particular part of the CD38, which has not been known before, and we have submitted patent applications on that particular feature. What this means potentially is that we can patent not only the antibodies but the way they work by targeting this particular part of the CD38 target. We are currently initiating animal experiments with these antibodies and expect to have data in the summer.

I want to turn now away from the therapeutic side of our strategy and focus in on the reagents, which is a new initiative that we have announced early on this year and which has been running only for a few months now. That comprises a new business unit that we have set up in MorphoSys called Antibodies by Design. The objective of this business unit is to exploit the HuCAL technology in non-therapeutic applications, particularly in the reagent market.

For those of you who are not familiar, antibodies are widely-used research reagents in almost every life science laboratory worldwide. The total market for these reagents is about $800m and it's growing at some 15% to 20% annually. The fascinating aspect about this market is that it is completely dominated by old technologies, in other words, by mouse or rabbit monoclonal or polyclonal technologies. There has been as yet no impact at all of new library-based technologies in this market segment. We believe that the advantage of, for example, the HuCAL technology is a massive improvement in the speed and throughput at which antibodies can be generated for life science researchers.

What this means is that we can put antibody generation on the same high throughput footing as many other processes are currently done in life science research. We have hired two very experienced executives to the business unit. The first is Dieter Lingelbach, who came to us from Roche Diagnostics, where he was Senior VP with the responsibility for global sales and marketing of biochemicals. Secondly, Joanne Crowe, who came to us from Qiagen, where she had the responsibility of Head of International Marketing.

We got off to a very encouraging start here. Over 100 orders have been placed from life science research labs all around the world as you will see on this chart, even including South Africa. We have had some very encouraging feedback from some of our customers, including this very significant quote from Harvard Medical School, which is typical of what we hear, namely 'you have accomplished in the few months, what a year of rat immunizations has not'. We are very hopeful for this new business unit, and we believe that the HuCAL technology can have a big impact on this sector, which is currently served only by outdated technologies.

We haven't talked much recently about our internal capabilities, and in order to avoid them being taken for granted, I just wanted to talk to some of the improvements we have made and the increases we have made in our capabilities during the course of 2003. We have now a very comprehensive capability, not only for antibody generation and optimization, but also for early scale production and also clinical scale production.

Our HuCAL Gold technology is now extremely well established, and we believe it's a state-of-the-art, certainly for generation of human therapeutics. One of the aspects that we are often asked about is what is the difference between your library, which is a Fab library, and competing libraries, which are based on the single chain Fv format. A couple of years ago, it was hard to identify differences between those two formats. In the meantime, a lot of data has been generated, and one very significant point is that, when you convert a single-chain Fv to a whole immunoglobulin, in 25% of cases you lose affinity to the point where the immunoglobulin is not functional.

That is not the case with the Fab fragment. So therefore the evidence that is building up points to the fact that the Fab is a superior format for an antibody library than single-chain Fv. We are therefore delighted that we chose that format, and that HuCAL Gold is based on that format.

The other thing we are seeing more and more of, which plays the advantages of HuCAL, is that the therapeutic projects that people are pursuing have more and more demanding criteria. Typically we get five different criteria per project, or more, in terms of the properties that the antibodies should have, what specificity profile it should have, what signal it should turn on or turn off, what ligend it should compete with. We are getting very, very demanding projects. That plays to the advantages of HuCAL, because HuCAL, as I have said, is set up to allow you to make antibodies to precise specifications.

In the meantime, we have used the optimization facility of HuCAL many times. Our record so far is that we have improved the affinity of an antibody 28,000-fold and the best affinity we have reached is 1 pM. In layman's terms, extremely tight binding of the antibody to its target.

During the course of the year, we banded our deal with Bayer, during the course of which we secured access to a new human production cell line, called HKB11. I want to emphasize here HKB11 is a human cell line. That means that the antibodies that are produced in it will be in a glycosylation patent, as human as it is possible to make. It turns out to be a very successful cell line as well in terms of speed and yield of antibodies that it produces, and it is being used at Bayer for pre-clinical supply of HuCAL antibodies that have resulted from our collaboration.

Another very significant point is that the FDA has given approval for a drug and clinical development, which is being produced with the HKB11 cell line - very significant for pharmaceutical partners if this cell line has already been okayed by the FDA and that is the case.

The rights that we obtained from Bayer give us unlimited use of the cell line for research purposes, and an option to use it for commercial production. So a very important addition to our arsenal of capabilities.

I want to turn now to the future, and give you an outlook of what you can expect over the next 12 months or so. First, the situation in the pharmaceutical industry, productivity continues to be the major problem facing the pharmaceutical industry today. You have probably all seen this chart before, which shows the number of approved drugs - the blue bars - versus R&D investment - the red line. The red line continues to go up, and the blue bars don't continue to get much better. In fact if you look back 10 years, the number of drugs approved in 1994 was roughly the same as were approved last year and yet last year, two and a half times as much money was spent on R&D.

This is a major headache for the pharmaceutical industry and it is what is driving their need to collaborate with biotech. As I mentioned at the outset, we see a definite improvement in the climate for collaboration. Pharma seems to be returning to external investment. We think they definitely got their fingers burnt in the late 1990s and early 2000 in technologies that did not deliver and in genomics based on pro-genomics based technologies, where pharma spent a lot of money and didn't get a lot back.

Now they seem to have got over that disappointment and seem ready to invest again, but only where they see technologies or products that clearly lead to the market. As I said at the outset, there is an increasing interest in large molecules. Therapeutic antibodies continue to be a major growth area encouragingly. The approval of four new therapeutic antibodies last year only helps our case. We are therefore bullish about the number of partnering opportunities out there.

I want to just highlight that by looking at one segment of the industry, namely the top 20 pharma companies. This chart shows you those companies, with the ticked companies being those with which we have collaborations. We currently have collaborations with seven out of the top 20 pharma companies. The interesting point here is that many of those seven already had collaborations with other antibody companies. In fact if you look at Pfizer, Pfizer already had collaborations with Abgenix, Mederex, and Cambridge Antibody Technology - three of our competitors. We were nevertheless able to do a deal with Pfizer.

The significance of that is all of the companies on this list are potential partners for us, whether they have existing collaborations with other antibody companies or not. That, for us, is a very significant point when we look at our potential market for collaborations.

In conclusion, we believe we have a very compelling business model that is built around our state-of-the-art technology. Importantly for our partnering model, that technology can be a direct source of therapeutic products. Our Antibodies by Design initiative is taking us in a new direction and giving us the opportunity to exploit HuCAL in a new market where new technology has not had an impact at all to date. We believe the model is a balanced risk-reward model, combining near term revenues from our partnerships with the long-term growth that the therapeutic antibodies that we are developing with our partners will bring when they come to market.

Looking forward to the end of the year, how could our pipeline look? It could look as shown on page 31. The first HuCAL antibodies should go into the clinic this year, which will be a very significant highlight and milestone for us. We think that the further five antibodies currently in research will enter pre-clinic. We will start at least another five new therapeutic antibody programs with either existing or new partners, and of course we will generate the pre-clinical data on MOR202. So you can expect to see a significant strengthening in the quality and depth of our pipeline during the course of the year.

Finally, before handing over to Dave, a look at our objectives and our goals for the remainder of the year. As I have said, the first HuCAL antibodies should go into the clinic during the course of the year - that's the GPC antibodies. We project 20% revenue growth this year. That revenue growth will come from new deals, from milestones and existing partnerships and also from our Antibodies by Design initiative.

We aim to partner the ICAM-1 program during the course of the year. We will generate animal data in the MOR202 program. As I mentioned, we will initiate at least five new therapeutic antibody programs, either with new partners or with existing partners. We will be - and you will see details of this when Dave gives you our financial guidance for the year - we will be EBITDA profitable in 2004. In fact, in 2004 we expect a record year. Revenues higher than we have ever achieved before, based on the strength of our business model and the opportunities in the marketplace for partnering deals.

That concludes my part of the presentation. I would like to hand you over now to Dave for an analysis of the financials.

DAVE LEMUS, CFO, MORPHOSYS AG: Many thanks, Simon. In opening, I am happy to say that, financially speaking, 2003 was an especially strong year for MorphoSys. As Simon mentioned before, for the first time in our history, we achieved cash flow from operating activities in a positive way and this spread actually to an increase of our cash position at year-end. Another way to view our cash base performance is to take a look at EBITDA and using that measure we were also cash positive during the year.

There are a lot of reasons why the results are much better than last year, but probably the biggest involved the way we have brought down our cash burner. In the end, we managed to reduce expenses by 56%, which led to a bettering of the net result by more than 80%.

Let's move on to operating revenues. Revenues for the full-year 2003 decreased by 9% to E15.3m compared to E16.8m in 2002. However, if we had used constant exchange rates from 2002, our revenues would have been about E600,000 higher, giving a total of E15.9m. That comes pretty close to the guidance that we gave at the beginning of the year, of E16.0m. Other than foreign exchange developments, some deal and milestone delays also adversely affected revenues.

Looking at how our 2003 revenues are made up by segment, 82% of the revenues relate to therapeutic antibody collaborations, and 17% to target research collaborations. Less than 1% of sales arose from our new Antibody by Design initiative. On a percentage basis, the split between therapeutic antibody revenues and target research collaborations is similar to what it was last year. The percentage of revenues coming from Antibodies by Design, which is the newly created arm of MorphoSys designed to exploit non-therapeutic applications of HuCAL, was relatively small. Remember, the unit was created in 2003 and, looking ahead, we expect more from that unit.

Another way to view our revenues is to see what activities generated those revenues. The biggest part of revenues in 2003 arose from annual licensing fees from our existing partners. Milestones revenues amounted to 0.5m for the year or 3% of total revenues. That's less than 10% than they contributed in 2002. Grant revenues amounted to about E100,000 in 2003, and was basically unchanged from the prior year.

If we take a look at where sales geographically rose, 81% of MorphoSys's revenues came from the United States, and 19% from Europe. That's similar to last year's result of 76% and 24% respectively.

Moving on to the operating expenses for the year 2003, total operating expenses including R&D expense, SG&A expense and staff-based compensation expense decreased by 56% to E18.8m. That's a reduction of about 23.5m and the result is better than expected.

Costs for research and development fell by E10.6m compared to the prior year. The decrease resulted chiefly from lower licensing costs as a result of the licensing and settlement agreements with CAT and XOMA. Also impacting costs was the company's decision to refocus efforts in proprietary product development. As you know, the company now out-licenses the compounds at the pre-clinical stage instead of developing them in the clinic and hence costs are accordingly lower. Both external lab funding and personnel costs were lower as a result of this change in focus.

Sales, General and Administrative expenses amounted to E7.6m, which compares to E18.7m in 2002. The almost 60% decrease in SG&A expenses was due to the fact that there was no cap litigation in 2003. Also significantly contributing to savings was the closure of MorphoSys USA Inc. Closing our US sub resulted in cost savings for MorphoSys of about E1.8m per year.

Stock based compensation in the amount of E2.2m for the year was recorded as a non-cash charge. That amount is less than it was last year; the main reasons for the decline include fewer employees, more forfeitures, the exploration of amortization periods and a lower MorphoSys stock price.

On that note, I want to mention that MorphoSys is one of the very few companies that actually expensed their stock options under FAS123 in US GAAP and we have been doing that since the year 2000.

Let's take a look at the expenses by cost type. Personnel costs amounted to E7.5m or about 40% of total costs. As such, they are the largest cost block of costs that we have. Contrast that to last year, where intangible costs was the largest cost block. Intangibles cost includes patent litigation cost and patent and licensing amortization, and those amounted to 36% of our total costs in the year 2002. Fortunately for the agreements with CAT and XOMA, we have been able to significantly reduce those expenditures. You can see that actually in the percentage of total expenses that we have in 2003, where it only contributes 5% of our total expenses.

External services, which includes external lab funding and various outsourced administrative services, comprised about 20% in 2003, and was essentially unchanged from the prior year. The same goes for infrastructure costs, which were about 12% of total costs and remained largely unchanged.

Let's take a look at the savings that we had in 2003 compared to 2002. As you can see from the financials, a lot of the financial improvement came from savings in the operating area. Total operating expenses decreased by 56% - almost E21m. That chart there breaks down how those cost savings arose. As you can see, in order, the biggest cost savings arose out of intangibles costs, external services and personnel costs. As I mentioned in the previous slide, intangible costs were sharply lower in 2003, and contributed two-thirds of total savings. Costs for external services, which were primarily lower levels of cost related to external lab funding and M&A related expenses, contributed to about 20% of the total.

Finally, during the year MorphoSys personnel costs also fell from the leaner staff structures which we have when we implemented the company's restructuring plan. Personnel costs fell by 2.6m, of which MorphoSys US contributed E1.2m.

As has been mentioned earlier in this presentation, EBITDA is one way to take a look at operating cash flow. In our case, EBITDA, as defined by earnings before interest, tax, depreciation and amortization, excluding stock-based compensation, was positive in the amount of E1.2m for the year. As you can see on that slide this compares to a negative E18.8m number last year, reaching an EBITDA positive number of course for us, a MorphoSys first, and we are very happy to be able to announce that today.

Bearing the positive development of EBITDA at year-end 2003, the company had approximately E23m in cash at the end of the year. That compares to E19.1m at the end of 2002. That's an increase of more than 20%. That's another MorphoSys first - the first time we have ever increased our cash from operating activities as opposed to from financing activities.

Underscoring that point, you can also take a look at the cash provided by operating activities in the cash flow statement, which amounted to E5.8m positive, which strongly contrasts to the cash used in operations of E15.2m in 2002.

Let's move over to the balance sheet. During the year 2003 the company's current assets decreased by E3.3m to E26.2m, primarily as a result of lower receivables costs at year-end 2003. Total assets increased by 3.4m to 45.8m in 2003, the difference is mainly due to an increase in intangible assets, which we had one on the back of the acquisition and related capitalization of the CAT settlement.

On the liabilities side, during 2003 total current liabilities fell by 0.8m principally due to the settlement of licenses payable of E4.9m which was in large part settled to the equity issuances to CAT and XOMA. Deferred revenue increased by 2.3m to 10.4m, largely as a result of the collaborations entered into in the last quarter of 2003.

In 2003, MorphoSys issued equity twice. The first equity issuance was part of the MorphoSys XOMA licensing agreement signed in 2002, under which MorphoSys elected to issue about 363,000 shares to XOMA. The shares were issued to XOMA in the first-half of the year, and in coordination with MorphoSys, XOMA successfully cleared all of their position by Q3 of 2003.

The second issuance related to our settlement with CAT, and as part of the agreement MorphoSys issued 588,000 shares to CAT. Those shares were issued in August of 2003, and CAT still retains 100% of those shares. That being said, some of those shares are issued subject to a lock-up.

On that note, if you take a look at our shareholding, our biggest shareholder is currently Cambridge Antibody Technology, who owns about 12% of our shares, following by Schering, who owns 7%. The rest, the freefloat, which, according to the definition defined by Deutsche Borse, is about 80%, which includes about 3.5% of shares owned by the company's management and supervisory boards.

Let's take a look at the number of employees. At the end of the year 2003, MorphoSys employed 95 people, compared to 110 at the year-end 2002. Of the 95 employees at the end of 2003, 71 worked in research and 24 in SG&A, so roughly our historical average.

Before I start with guidance, I want to make a brief mention of international accounting standards. In fact, we intend to switch over our accounting principles over to IFRS from US GAAP sometime during the course of this year. As I am sure you are all aware, all European publicly traded companies need to switch their accounting over to international accounting standards by 2005. MorphoSys has been doing its accounts according to US GAAP since 1998. However, the time of change is upon us and sometime this year we intend to convert our accounts over to IFRS.

When we switch, of course we will be in a position to give you full reconciliations to US GAAP and explanations of the main reconciling items. A little later this year, we will give guidance exactly which reporting event we intend to switch over our accounts. That being said, for comparative purposes, we will continue throughout this year to give guidance and reconciliations to US GAAP.

Let's move on to guidance. I'd like to conclude the financial guidance, which I said is based on US GAAP for 2004. As I previously stated, and what you have heard from Simon today, is we expect double-digit revenue growth in 2004. We estimate year-end 2004 revenues at E19m. We estimate total operating expenses at roughly E23m. That amount includes E1m worth of stock-based compensation expense. Although this financial picture gives a financial loss for the year, we actually expect an EBITDA positive result for 2004. In terms of cash, we expect the cash position at the end of the year of at least E20m.

In closing, I would like to say we had, I think, a great year financially. I think what we have seen is that we have done a lot to reduce our burn rate in 2003 and as you can see from the projections we are back on track to achieving double-digit revenue growth.

Looking ahead, we expect strong revenue growth. We continue to exploit new initiatives such as the Antibodies by Design initiative and as well we are investing in our future by investing in proprietary products. All of these things I might add against the background of financial stability.

That concludes the financial analysis and the guidance for 2004 and I would now like to hand back to Claudia.

CLAUDIA GUTJAHR-LOSER: Thank you very much Dave. Thank you very much for your attention. I would like to open the floor now for questions. I would suggest that we start with questions coming from the conference call. May I ask the operator whether there are questions from the conference call?

OPERATOR: Thank you. The Question and Answer Session will be conducted electronically. If you would like to ask a question, please do so by pressing the star key followed by the digit one on your touchtone telephone. If you are using a phone with a mute function, please make sure your mute function is turned off to allow your signal to reach our equipment. We will proceed in the order that you signal us and we will take as many questions as time permits. Once again, please press star one on your touchtone telephone to ask a question. If you find that your question has been answered, you may remove yourself by pressing star, two. We will pause for just one moment to give everyone an opportunity to signal. Our first question comes from Nick Turner with Jefferies International Limited. Please go ahead.

NICK TURNER, ANALYST, JEFFERIES INTERNATIONAL LIMITED: Hello Dave. You talk about revenues next year growing at a double-digit rate, E19m. How much of that is already on the books? I am making the assumption that revenues from Pfizer don't appear in your 2003 numbers and therefore maybe a significant portion of the projected growth for 2004 is already on your books and therefore implicit in your guidance. How many new deals do you think you might need to strike to meet that target?

Secondly, from the point of view of antibodies in development, I mean you talked and showed some very nice data on your collaboration with Roche. However all of the milestones in that project have been met, certainly 12 months ago I guess now. Could you give me some indication if you can as to what is ongoing at Roche and what is perhaps holding Roche back from committing to clinical development of that particular antibody?

DAVE LEMUS: I'll take the first-half of that question. Nick, you are correct. The revenues that we saw in 2003 related to Pfizer were very small. We expect to see that revenue over the next couple of years being amortized over the lifetime of the agreement, which is five years. You asked the question, how much revenue do we have on the books that is currently secure. We estimate that amount to be slightly more than half, so slightly more than 50% today of those projections are already secured through committed contracts and committed revenues.

DR SIMON E. MORONEY: I'll take the second part of that question with respect to Roche. Unfortunately we are not at liberty to talk about Roche's plans for that compound, which we would like to be able to do, but subject to our agreement with Roche, we simply can't comment on the next step and subsequent developments.

NICK TURNER: Thanks.

CLAUDIA GUTJAHR-LOSER: Is there another question?

OPERATOR: Thank you. Once again, if you would like to ask a question please press star one now. It appears there are no further questions from the audio conference at this time. I would therefore like to turn the call back.

CLAUDIA GUTJAHR-LOSER: Okay. Well I think we'll start now with questions from the audience. Are there any questions here?

DR THOMAS HOGER, ANALYST, DZ BANK: Thomas Hoger, DZ Bank. Two questions concerning your pre-clinical programs. First of all when do you expect the comparable data with Amevive compared to your antibodies?

Secondly, you mentioned with the burn model that there is an increased flow of capillary blood. Could this be a surrogate market for clinical development?

DR SIMON E. MORONEY: To the first part of your question, when would we expect comparative data, that day should come in the summer. Again, just as a reminder that is a comparison of MOR102 versus Amevive versus Enbrel side by side in the SCID mouse model that I described. So mid-year we expect that data.

The second part of the question, whether the in vitro burn is a surrogate market for clinical development, we believe so, we believe so. Of course that doesn't obviate having to do the regular clinical development with that compound, but we chose to do that study because it happens to be a good and predictive model of what you can expect in vivo in humans.

ROGER BAKER, ANALYST, LIVE CYCON: Roger Baker, Live Cycon(ph) I have a question to your new business unit, Antibodies by Design. Is it correct to assume, you mention - if it is correct to assume that your major customer will be academic institutions, then the question arises whether the prices for new designed antibodies can compete with those produced by traditional methods? Can you comment on this?

DR SIMON E. MORONEY: Yes I can. I can tell you that of the over 100 orders that we have had so far, it represents a real mixture of users. So not only academic institutions as you would expect, but also companies of all sorts and shapes and sizes - pharma's, biotech, research companies and so on and so forth. In terms of the pricing, for competitive reasons, we don't talk in too much detail about the pricing. Suffice it to say that we feel comfortable about our ability to compete and to offer a product that is a very competitive product versus conventional custom monoclonal antibodies for example.

Remember that what we are offering customers here is a huge advantage in terms of speed. Typically, if you order an antibody from a custom-producer, you wait six, maybe nine, months and if you are unlucky you don't get anything. In our case what we are talking about is a turnaround in something like eight to ten weeks, and that for many researchers is a major advantage, which allows us to command a price that we feel is very competitive.

ROGER BAKER: Thank you. If I may I have a second question. Perhaps I missed it, I was a little bit late this morning. Concerning your antibody MOR202 which is targeted against CD38, you mentioned and that is new to me, that you not only are able to patent or have already patented this antibody, but also you patented or you are planning to patent the epitope or the interaction between the antibody and the epitope. Did I get this correctly?

DR SIMON E. MORONEY: Yes you did. What is surprising and novel here and therefore inventive is the fact that this antibody exerts its effect by binding to a particular part of the CD38 antigen. Because that is a novel and new discovery that is useful potentially, then that's something that you can protect. So the mechanism of action of this antibody through binding to that particular epitope.

ANALYST: [inaudible] in your balance sheet we see license rights of some E10m. They increased by a factor of 2 from last year. Could you describe what is behind that?

DAVE LEMUS: Sure. I think you are talking about the license fees which went to 10.8m from 2.3m. The difference is the CAT license. We capitalized license when we raised the shares in August and that difference is essentially that. When we did the settlement with CAT, there were basically several components to the contract. One component was paying for past use of certain of their technologies and another component of the contract was to take a license from CAT as it relates to certain activities that we do. That's why we raised the shares during the year, as we were paying for that license by raising the shares. We have a license from CAT to perform certain activities with certain of our technologies. That difference in licensing fee that you see there is exactly that.

DR SIMON E. MORONEY: Maybe this is a good point to just add a supplementary point to that. As Dave mentioned, there are various components to that settlement. One component is a license agreement for a certain part of our technologies. The most important component is the so-called covenant not to sue, and that covers our HuCAL Gold activities. What that means is we had complete freedom to apply HuCAL Gold to any target, even if that target has already been reserved by CAT or licensed to some partner by CAT. That's a key, key distinction between the license and the covenant not to sue.

The other consequence of that is that we don't pay any royalties on HuCAL Gold products to CAT, again because the activity is covered by the covenant and not by the license.

ANALYST: Coming back to the new business unit, do you plan to report on the new business unit separately? The second question is what is the estimate of the save of this new business unit to the guidance you gave for 2004?

DAVE LEMUS: Okay. In response to your first question, that will depend on how quickly we move over to IFRS. I believe under IFRS the guidelines for what you define as a segment are much more strict than they are under US GAAP and certainly IFRS we will immediately report them as a segment. That being said, by Q1 we will certainly report at least their sales separately, most likely their costs.

In answer to your question what do they compose of the total revenue projections we have made of the year? We estimate to be slightly under 10%

DR HANNS FROHNMEYER, ANALYST, LANDESBANK BADEN-WURTTEMBERG: LBW. In addition to the former question on this new section on Antibodies by Design, what is your plan to market and to bring this new field to the academics?

DR SIMON E. MORONEY: We see a number of segments, sub-segments of this research market and the way we consider them is there is a catalogue segment - these are companies that have a lot of antibodies that they sell via catalogue. There is a custom segment, where people want antibodies generated de novo, and we also think about the array segment, where people are increasingly interested in making antibodies on arrays for various research and diagnostic purposes.

At the moment the bulk of our activities are custom activities - academics, companies, you name it, researchers - who contact us, ship their antigen to us and we make the antibody against their antigen. The way we target that market is through conventional advertising in trade journals and trade magazines. We are going to conferences and trade fairs, through email shots to life science researchers. With time we will build a pool of antibodies ourselves which we will then be able to sell either ourselves, through a catalogue-type approach, or in collaboration with an existing catalogue supplier. So the custom segment is the one we are tackling first, then that will lead naturally into a catalogue opportunity and the ship opportunity we see as being interesting but really too early an stage at the moment.

DR HANNS FROHNMEYER: Maybe one follow-up? On slide 10, you found that GPC, your collaboration with GPC, is not yet in the pre-clinics, are there any other collaborations ongoing except the one which will be in clinic in summer?

DR SIMON E. MORONEY: Sorry I missed that, the --?

DR HANNS FROHNMEYER: Just in slide 10 that you have collaboration with GPC, which is in the research stage?

DR SIMON E. MORONEY: Sorry, you shouldn't interpret the arrows as belonging specifically to the companies on the left hand side. There's no attempt to line up the companies with the arrows there. Unfortunately, in many cases, we can't disclose how many programs are actually ongoing with particular partners. In the case of GPC, I can tell you that there is one active program, which is the antibody, which we expect to go in the clinic this year.

RACHEL GRAHAM, ANALYST, DOW JONES: Rachel Graham[ph] from Dow Jones. I have a couple of questions. On the new indication for ICAM-1 in eye disease, are there any other drugs on the market for that particular - for Diabetic Retinopathy, to save me researching that, if you can tell me that? With regard to partnering, the psoriasis projects and the burn projects, is that going to be the one partner or is it possible that that will be two partners, and any other information on that?

DR SIMON E. MORONEY: With respect to the first question, what's interesting here is the recognition that Diabetic Retinopathy is indeed an inflammatory disorder is a relatively new discovery or recognition if you like. There is actually old data from the 60s which show that diabetes patients with rheumatoid arthritis who are heavily, heavily treated with Aspirin, actually showed a very low level of Diabetic Retinopathy, which now, in retrospect, seems to underscore this point that it is an inflammatory disorder.

There are tests ongoing with other anti-inflammatories to see whether they also work, but this is essentially taking existing anti-inflammatory drugs and testing them in Diabetic Retinopathy. It is essentially a recognition of this new, if you like, discovery that Diabetic Retinopathy is indeed inflammation.

The second part of your question with regard to partnering of MOR101 and MOR102, potentially we see the opportunity to do three different deals here: a deal in the burn field around the Fab fragments; a deal in chronic inflammation which could be psoriasis, it could be rheumatoid, it could be Crohn's, it could be something else; and the third one would be a deal in eye disease because that's compartment, if you like, that you can nicely separate from the other applications.

It's almost impossible to imagine doing different deals in psoriasis and rheumatoid for example because of the close relationship between those diseases, but we could imagine doing three different deals. What it will actually transpire and look like in the end, we can't say yet, but it depends really on the requirements and the demands of the partner that we finally settle on. We certainly see that the eye disease is something that could be carved out into a separate deal compared to the other components.

ANALYST: [inaudible] combination question really. Simon in your part you mentioned that the pipeline, where you are expecting the pipeline to be at the end of 2004. On the slide there isn't any introduction of new programs from MorphoSys, although a year ago you mentioned that you were going to introduce about two and a half programs a year. In connection with that, your expenses are estimated to increase in 2004 by about 5m. Can you just give me an idea where this is going to come from? Where do you expect this hike in expenses to be coming from?

DR SIMON E. MORONEY: Yes, let me speak a little bit to the point about number of own programs. Of course we base our internal investment decisions on own programs on the quality of the data we generate and the potential for the programs that we are pursuing. It may turn out that, if we are particularly excited about a particular program, that we may choose to invest more in that at the expense of introducing a new and therefore early stage program. In the case of MOR202, we are very excited about the data there, but we want to be able to invest more in improving those antibodies and are looking at various ways of doing that.

Secondly, this eye disease opportunity in ICAM has now come up as being something relatively new. Therefore, of course we make a decision. Does it make more sense to invest perhaps more money in ICAM versus starting a completely new program? The information we gave regarding the number of new programs we would start each year, you should take very much as a rough guide and not as a definitive commitment to start that many programs per year. It depends on the quality of the data and our desire to invest in more promising and perhaps more advanced programs, rather than starting completely new programs.

ANALYST: [inaudible]

DR SIMON E. MORONEY: No, frankly. Targets we see coming from either in licensing deals like the ICAM-1 or public domain, CD38 is a public domain target where we believed, and we were proved right, that we could generate a better antibody that could have interesting effects, and maybe even the opportunity to create some intellectual property as we are doing with this new epitope. So we don't really see that access to targets as limiting. What we are looking to do is we are looking to channel our investment into those programs where it makes the most sense rather than to religiously commit to initiating a certain amount of new programs per year.

DR MARTIN POSSIENKE, ANALYST, EQUINET INSTITUTIONAL SERVICES: Martin Possienke, Equinet. I have got three questions. The first one regarding the Antibodies by Design and I guess it's a follow-up again. I just wonder, as it seems to be such a logical step to enter this market, why you have done it that late or why other library companies did not enter this market yet. Secondly in this context as well, if I got it correctly, you guide E2m for 2004? An EBIT margin guidance would be quite helpful in this context or maybe you can say if it is a profitable business unit even in 2004? Thirdly, a more strategic question. Maybe you can share with us your long-term view of the company or MorphoSys's future, where do you expect MorphoSys to be in five years time? Fourthly, a financial question, after the change to IFRS do you still have to expense for stock-based compensation?

DR SIMON E. MORONEY: I'll take parts one and three of that and Dave you'll take parts two and four. Part one, why did we only just start with Antibodies by Design now? Frankly the intellectual property cloud, if you like, was an issue that we didn't want to have to explain to several thousand potential academic or other research customers. Now that that cloud has cleared completely, it makes it much easier and much more direct to do business which involves selling on a weekly basis.

Why hasn't anyone else done it? Frankly we don't know, and I think one reason could be that people who have new technologies don't see this as being the most lucrative space to work in, and therefore have chosen, like Cambridge Antibody Technology for example, have chosen to focus on therapeutic antibodies because there is a perception that that is the most lucrative space. So that's our explanation of why no one has chosen to do it. As we have said, we see this as a golden opportunity to have our technology have a major impact on a new market that is currently unserved.

Part four was where do we expect to see the company in five year's time? As I said during the presentation, we think we have a very compelling business model. It is, we believe, the ideal mixture between partnering activities which are revenue-generating activities and own activities, where we will retain a greater share of the value of those programs. When you look at us, you should look at the breadth and the depth of our product pipeline, and if we are right in saying that our technology will result in a higher probability that therapeutic antibodies will come to market, then that very broad pipeline we have established will result in multiple products coming to market. That's the real true long-term value in MorphoSys - our participation in those multiple product programs.

Frankly where we are going, is we are aiming at becoming the preeminent source of therapeutic and research antibodies for consumers of those, which means pharmaceutical companies that are developing therapeutic drugs and researchers who are buying those for research purposes. We think we can do that based on the strength of the technology.

DR MARTIN POSSIENKE: Are you thinking about switching your business model again to clinical development, for example?

DR SIMON E. MORONEY: No, we have no plans to switch our business model. Of course should we want to, that's always an option. We can always decide should we want to at some stage in the future, that we have got such a promising compound, it looks so good pre-clinic, that we may decide to go further with it, but we have no plans to do it at the moment. The business strategy remains as communicated over the last couple of years now, which is pre-clinical development of compounds, out-licensing of those compounds, and partnering based on the existing model. Sorry there were parts one and three to your question which Dave will answer.

DAVE LEMUS: Regarding the break-even of the Antibodies by Design unit, the unit will be roughly break-even. It could be slightly positive, slightly negative by small amounts, but it should be roughly break-even. Regarding the question on stock-based compensation, one of the reasons we switched to stock-based compensation back in 2000 was we believed that both US GAAP and IFRS were headed in that direction. I still believe that is going to be the case and most likely we will continue to expense stock options under IFRS.

DR THOMAS HOGER: Thomas Hoger, DZ Bank again.Two questions - first of all what is the current status with regarding the patent litigation with Applied Molecular Evolution? Secondly, during the tenth anniversary of MorphoSys, your collaborator Bayer AG was rather bullish about the clinical development, or the start of clinical development, with one of the antibodies Morphosys produced with Bayer. Ever since, I have heard nothing about it. Could you give us an update?

DR SIMON E. MORONEY: First, with respect to AME, we have no new information. As a reminder, one year ago actually in January of last year, we got a ruling by the Magistrate in our favor, in summary judgment, that we did not infringe the AME estate, and the next step was supposed to be decision by the judge. We haven't heard. Unfortunately we have no means of knowing when the judge will rule. We simply have to wait and he will rule at his leisure. Of course what has happened is in the meantime AME has been acquired by Lilly, and that acquisition has been improved recently by the shareholders. We are none the wiser as to the plans of Lilly with respect to that process and that litigation.

The second question, Bayer and their plans for clinical development. Whatever statement Bayer makes is up to Bayer, and we are not at liberty from our side of this collaboration to comment on their plans. I'm afraid you will have to ask them with respect to those programs.

ANALYST: [Inaudible] Bank. I have got a question on your antibody MOR202 targeting CD38 cells. You mentioned that there is a clinical trial going on in the UK on multiple myeloma. Could you mention which company is carrying on these trials and what status they are in?

DR SIMON E. MORONEY: It is actually the Cancer Research Campaign. It's an academic driven trial sponsored by the Cancer Research Campaign that, to the best of our knowledge, is currently in Phase I for multiple myeloma, and more information than that, unfortunately we don't have.

CLAUDIA GUTJAHR-LOSER: Are there any further questions?

ANALYST: You mentioned the lock-up period for CAT shares. Can you tell us when that ends?

DAVE LEMUS: I'd love to, but due to the confidentiality between us and CAT, I think it was agreed not to disclose that.

ANALYST: Thank you.

[lupus2000]

Q1 2004 - n/a

[lupus2000]

Q2 2004 - n/a

[lupus2000]

Q3 2004 Morphosys AG Earnings Conference Call - Final
28 October 2004

OPERATOR: Good morning ladies and gentlemen and welcome today's Morphosys AG third quarter presentation conference call. For your information today's call is being recorded. At this time for opening I would like to hand the call over to Mr. Dave Lemus, please go-ahead sir.

DAVE LEMUS, CFO, MORPHOSYS AG: Good morning and welcome. This is Dave Lemus CFO of Morphosys. With me today is Simon Moroney, our CEO. We are calling today from our head quarters in Munich, Germany. First we like to welcome you to this conference call and thank you for participating. During the call we would like to talk about the companies results for the first 3 quarters of 2004. Simon will begin by giving an over view of the last quarter, and I will give a review of the financial results for the first nine month and discuss the outlook for the next year. Afterwards we will open up the call up to your questions.

Before I start I want to remind you that during the conference call we will present and discuss certain forward-looking statements concerning the development of Morphosys core technologies the progress of the current term research program and the initiation of additional programs, should actual conditions differ from the company's assumption actual results and action may differ from those anticipated. We are therefore caution not to place undue reliance on such forward-looking statements we speak only as of the date here of. I would now like to hand over to Dr. Simon Moroney.

SIMON MORONEY, CEO, MORPHOSYS AG: Thank you Dave and also from me, welcome to every one participating in this call. I would like to start my review of the quarter by highlighting the strong operational performance of the company this year as reflected in the financial results, nine months revenues are up 42% over last year, Q3 revenues are up and even more impressive 86% over last year both of the quarter and year to date the company has recorded a profit. This out standing performance is directly attributable to our portfolios of successful commercial alliances within which we are working with some of the world's leading companies to develop innovative antibody base medicines. Most significantly of all we now have enough visibility on next year that we have communicated today that we will be profitable on a net basis in 2005. This is the confirmation of something of something that has been evident now for several months mainly that more process has reached and inflection point in its development please take the trances profitability to mark the start of an exciting year for the company in which the great story continue. As I mentioned our financial performance is currently being driven by our alliances, R&D funding as well as technology and target-related license fees from these partnerships provide the lion's share of our revenues, milestone payments also contribute, although these have been a relatively minor part of total income so far. However, we expect this situation to change over the coming month as HuCAL antibodies start to move into the clinic.

During forward a clinical milestones are hit, the corresponding payments should make up a larger proportion of our revenues. The key part of our strategy is therefore to maximize the number of therapeutic antibody programs based on our HuCAL technology. We are being very successful in executing this part of our strategy. There are currently some 28 active programs ongoing within our 10 therapeutic antibody based partnerships of these programs, nine have reached the stage of pre-clinical development, the remainder being in the research phase.

During the Q3 we added the new program with in our club relation with Beringer Ingleheim . In addition during Q3 center core extended an exclusive license covering lots of programs on going in our collaboration, in this case for a therapeutic antibody in the area of inflammation.

Currently the most advanced HuCAL antibody program is that ongoing SGPC biotech, they have announced the HuCAL derive antibody 1DO9 V3 for the treatment of lymphoma as expected to enter the clinic within the next few months. With respect to other advanced program we have received information from partners that they serve as 2Q tell antibodies should enter the clinic during 2005. While partner programs from the bulk of our HuCAL-based product pipeline, our own program comprise of very important components. During Q3, we were happy to report positive animal data from our more 202 program at the annual Human Antibodies and Hybridomas conference in Dublin. The most (inaudible) program comprises fully human HuCAL antibodies against CD38, which is implicated in a number of cancers. We are looking initially at multiple myeloma a blood born cancer in which CD38 is significantly over expressed. In vitro data showed that several of our antibodies efficiently kill CD38 during cell by antibody dependent cellulitis toxicity or ADCC as well as complement dependent cider toxicity or CDC we therefore conducted a study in which CD38 bearing tumors were established in (inaudible). The antibodies were tested in two different settings, in the first study, we started treatment 14 days after an injection of cancer cells before any tumor was visible. Antibodies were then administered every other day until day 36. And the second study we started treatment with two different antibody concentrations at a time point where the tumor was clearly visible. Antibodies were administered every other day from three and five weeks respectively and the tumor developments was compared to a controlled group with no antibody treatment until the end of the study of day 80, in both settings treatment with more 202 lead to a significant retardation of tumor growth and for subgroups of animals no tumor to be detected at all at the end of the observation period. On the basis of these very promising results we are now entering discussions with potential partners, with regard to more 102, you will recall that we are conducting a comparison study in which this antibody is compared with (inaudible) and a mouth model of psoriasis. We have not counted some delays due to difficulties in sourcing satisfactory human psoriatic skin samples required for the mouth model, and this is slow to steady down somewhat. The expect results from the comparative study by the end of Q1 2005, obviously, the outcome of the study would be a key determinant of our ability to find a development promise for this program. And thinking about the opportunities for a new fire pharmaceutical from its laboratory condition, it is worth noting the recent warning issued by the FDA of increased risks of lymphoma associated with the MPGMF therapies.

We are somewhat less optimistic about the chances for commercializing more 101, the burn program as a stand alone program, discussion with potential partners have showed that the initial indication of deep journals burn is unlikely to be persuade in isolation from other in inflammatory condition. Our goal therefore is to partner more 101 and more 102 together which in turn concern is dependent on the annual basis for psoriasis, to un-pin both our partners in our own therapeutic anti-body development programs, we placed a high priority on maintaining our technology leadership, accordingly in September we took a license from Crusel (ph) to use their first T-6 selenoid for production for the immunoglobulin. This cell line is becoming widely adopted has it has two advantages, first it is the human cell line meaning the proteins produced using it contains human blood calculation patterns and therefore is likely to be immunogenic in human patient's.

Second it's a high yielding cell line important for the production of the expenses bio-pharmaceuticals, we are now working on establishing the routine production of HuCAL anti-bodies using thirsty-six(ph).

In July we entered the collaboration with Novo Plant a private company based in Berlin who was taking application of HuCAL technology into a completely new direction. Novo Plant is focused on the use of anti-bodies in veterinary applications. They are now using our HuCAL gold library to source anti-bodies against the viruses and bacteria that commonly infect the gastrointestinal tract with poultry, pig and cattle, the anti-bodies will then be added to feed stock to these animals there by obviating the use of anti-biotics. The Morphosys benefits by annual user fees but more importantly by milestones and royalties is and when products are developed and reach the market.

Morphosys retains all rights in therapeutic and diagnostic anti-bodies for applications in human health care, this collaboration exemplifies the breath of opportunities offered by HuCAL taking the technology in new directions that we would not peruse on our own.

Our earned applications for the technology outside the therapeutic area continued, here, our first agency business unit, anti-bodies by design which is active in the custom anti-body market providing HuCAL anti-bodies to life science researches world wide. One of the more interesting geographical markets here is Japan where the government has made a major commitment to industrialize G9 and proteon based research. For this reason we started the marketing relationship with the Japanese organization to help establish more (inaudible) and the HuCAL technology in the potentially very lucrative market. We were delighted therefore to be able to enter in September a marketing partnership with Gene Frontier Corperation. Gene Frontiers is mandate is to help us find customers for anti-bodies by design and also to built relationships to Japanese pharmaceutical companies, several of whom we believe are potential partners for our core therapeutics business.

On the intellectual property front, we very recently received feedback from the judge in Boston who is presiding over our dispute from the (inaudible)case. We learned that the judge was unable to rule with regard of the motion to summary judgment for which we had a recommendation for a positive ruling from the responsible magistrate.

Specifically the judge reported that he would not fulfill his obligation to avoid resulting disputed questions of fact if he is opted to summary judgment motion. He therefore decided first to undertake plain construction, well we had hopes that he would have confirmed the opinion of the magistrate without the need for further process this was not to be, however it is important to stress that this new communication is neither a setback nor a victory for more process that merely prolongs the case. It may still be that summary judgment will be made in our favor or it may in case the judge does not decided in our favor in summary judgment, but the case continues.

We remain confident of the strength of that case, and of the arguments that convince the magistrate to recommend summary judgment in our favor. As usual will keep you posted on any material development in this case.

Finally in early September we announced the departure of Thomas von Rueden our Chief Scientific Officer, to receive several questions in this regard mostly along the lines of whether the step represent will present the change of our strategy. I like to take this opportunity to stress that there is no change in our strategy and no other change in company results ownership of material all rise for any other circumstances relating to this position by the board. As mentioned at the time we thank Thomas for its contribution over the past 6 years and wish him well for the future. That concludes my summary of the quarter and now I would like to hand back to Dave for his review of the numbers.

DAVE LEMUS: Thank you Simon, to began the financial analyses, I would like to start with revenues, company revenues grew by 42% in the first 9 months of 2004 with 16.5 million Euro compared to 10.9 million in the same period of the last year. Reasons for the increase include recently signs collaborations with Novartis and Pfizer additionally we achieve various milestones in our existing partnerships.

Revenues from our therapeutic anti-body and target research collaborations generated 97% of revenues for the anti-body by design unit generated 3% of total revenues. So in the expenses for the first 9 months of 2004 cost total operating expenses decrease by 9% to 14.9 million Euros, cost releases in development increased to 8.9 million compared to 8.5 million Euros in the same period of the previous year.

The increase of 400,000 Euros resulted mainly from higher personnel costs corresponding to increased operational activities from new deals as well as higher amortization expense resulting from the cath license acquisition in 2003. Sales general and administrative expenses decrease by 900,000 Euros to 5.3 million. The decrease in the first three quarters of 2004 resulted mainly from reduced legal and advisory fees stemming from capital increases executed with Cath-Enzoma (ph) during the prior year.

Stock base compensation in the amount of 800,000 Euros is recorded for the first 9 months of 2004 as a non-cash charge, the decrease in stock base compensation was namely due to declining amortization expenses from options in comfortable bonds branded in prior periods as well as slower numbers of options in comfortable bonds granted in 2004, investment in property and equipment amounted to 1.3 million Euros for the first 9 months period ended December 30th 2004 comparative 500,000 for the same period of the previous year, its increase in CapEx resulted mainly from the automation needs of the anti-body by design units as well as replacement and maintenance of equipment use in other areas of the accompanied business.

Accordingly depreciation increase for the first two quarters of 2004 and account to 700,000 Euro compared to 600,000 Euro in the same period of last year. Non-operating income amounted to 700,000 Euro compared to a non-operating loss of 1.3 million Euros on September 30th 2003. a better performance in the current year stems from the absent of extraordinary interest charges in 2003 relating to the beneficial conversion of almost share issue and transaction as well as gains on further sale of marketable securities in the first 9 months of 2004.

Higher interest income as a result of higher cash balances also served to improve the result in the first 9 months of 2004. Following the positive trend establish in 2003, the company achieved net profitability for the first 9 months of 2004 in the amount of 1.3 million Euro compared to a net loss of 6.7 million Euro in the first 9 months of 2003. This represents the second quarter this year that Morphosys was bottom line profitable, taking that that analyses one step further is one created a fiscal year which included the last four quarters starting in Q4 2003 for those has been bottom line profitable on a cumulative basis for the last 12 months, with almost a 90% bottom line income return on sales, coming back to Q3 2004 positive EBITA that is EBITA not including stock base compensation amounted to 4.3 million Euro compared to a negative 2.6 million Euro loss in the same period 2003.

The resulting earnings per share for the 9 months ended in 2004 amount of $0.24 per share compared to a loss per share of 1.6 Euro in the same period of the previous year. Moving on to the balance sheet of September 30th 2004, the total number of shares issued was 5.4 million compared to 4.9 million on December 31 2003. The increase arose from conversion of the convertible bond issued to Novartis in connection with the collaboration agreement signed in May of this year. Conversion took place in June into 490,000 shares of Morphosys. On September 30th 2004, the company held 31.8 million Euro in cash, cash equipment's and marketable securities compared to 23.2 million in December 31st 2003. Before going to the guidance session I would like to again repeat today what we mentioned throughout the which is that we are publishing our year end audit results for this year according to IFRS or international accounting standards, naturally, we will also publish a reconciliation in US GAAP for consistency and comparative purposes and not least because our guidance for the year is also set in US GAAP. That being said the differences between the two sets of accounting standards is not large. To give you a flavor of what our results look light in Q3 under IFRS, we reconciled our Q3 numbers into IFRS and they look and follows.

Revenues for the first nine months of 2004 under IFRS would have been 15.7 million euro, expenses would have been 14.6 million euro, non-operating items will been a 100,000 euro loss leaving a total income of 1 million euro which is roughly 300,000 less than the result of the US GAAP looking ahead between the North East large differences between higher forays and US GAAP results as it relates to our numbers.

Now its typical during our conference call, I would treat the opportunity to confirmed financial guidance. During our last conference call we increased the revenue guidance from an original 19 million euro revenue to 21 million euro, which I would like to re-confirm again today. We still feel comfortable with 21 million euro.

Expense guidance we expect to remain constant at 23 million as estimated at the beginning of the year. Looking ahead into 2005, we believe that for fiscal year 2005, on the basis of continued operational success get more policies should be able to achieve bottom line profitability for the year. We expect revenues in line with expectations for lifetime based growth company to increase by at least 15% year-on-year. All other details are waiting to our P&L and balance sheet for 2005 would like to differ until next year as we do each year at our annual press conference when we took guidance for the year.

The last item I would like to mention today is our inclusion to tech dash index, which we are very peaceful now in September. It represents the first time we have been included in this index since it was found in last year. That concludes the financial analysis for the first nine months of 2004. We would now like to open to call up your questions.

OPERATOR: Thank you very much sir). [Operator Instructions]. Our first question will be coming from Hans Frohnmyer (ph) of LBBW, please go-ahead sir.

HANS FROHNMYER, ANALYST, LLBW: Good morning congratulations to yourself. I have two questions, one is could you give us an update on your patent conflict with AME and the second is could you give this more ideas about the more 101, 102 and 202 program it seems to be now the results seems to be finished in 2005 only.

UNIDENTIFIED SPEAKER: Thank you.

SIMON MORONEY: Again hello Frohnmyer, first of all regarding AME, the situation is as was stated during the presentation and is not much detail I can add to that as we indicated we received feedback from the judge, its ruling on the basis of recommendations from the magistrate and whereas the magistrate has recommended a ruling in our favor in summary judgment the judge is not able-- to feel able to confirm that, because there was still disputed facts and therefore has requested additional information. So as I said the during the presentation this simply represents a prolongation of the case when can not be certain by negative or positive for us which simply means a further delay before final conclusion is reached.

The information that we gave during the presentation is really as complete as can be and there is really not further information that we can provide at this point. With respect to the proprietary programs as I said more 101 based on the basis we have embraced on the discussions we have had, we feel is only going to be commercializable in a package with more 102 together you will recall that, those are two different formats against the same target, so perhaps it is not terribly surprising that a company would look to commercialized both together and would not be interested in one isolation. With regards to more 102, also as I said during the presentation the delay is due to difficulty in sourcing appropriate skin samples to imagine how this work one has to find psoriatic patients who have plaque which can be taken off the skin and transplanted on these mites of the appropriate size and thickness and so on what you tend to find in summer is that the incidents of such patients goes down since ultraviolet light is beneficial for this condition, so it is not surprising that it is some more hard to find patient's during the summer month than it is during the winter and hence the delay.

However as of indicated we do expect to have sufficient samples to be able to conduct the study over the coming months and therefore to have a conclusion in the first quarter of next year. And finally with respect to the 202. it is again as we indicated in the presentation that we have now what we feel a very good and very compelling mouth pager on the basis of which we are no having discussions with potential partners.

HANS FROHNMYER: OK, thank you.

OPERATOR: Thank you Mr. Frohnmyer. [Operator Instructions]. Our next question will be coming from Mr. Helmar Plats (ph) from Kleinberg (ph), please go-ahead sir

HELMAR PLATS, ANALYST: Thanks congratulations for the result excellent, some questions regarding the quarterly development if we calculate for example shift for 2003 there must have been significant high number for R&D expenses can we expected the development for Q4 2004.

DAVE LEMUS: Yes good morning and thank you for the comments. I think if you took a linear expert miscalculation of our expenses going forward, yes it would fall somewhat short of the 23 million that we have projected for the year, there are events both on the R&D side and the SG&A side which we believe could take place prior to the end of the year, essentially like to like to keep guidance as it is of course I am not at liberty at th9is point to discuss exactly what those events are, but we still standby our expense guidance for 2003 and obviously to make that expense guidance both R&D and GNA expenses we would have to increase in Q4 we review the current quarter.

HELMAR PLATS: OK fine, I had one question regarding the antibodies (inaudible)could you give us a little bit of labour regarding the contracts you could get and how you estimate the development

SIMON MORONEY: Yes its developing largely as we expected so in the number of way to this business works is that the custom service in which researchers basically send in their targets their antigens and the antibodies by designed unit generate antibodies against them and then essentially shift them to the customer within a two-month period.

So for the revenue recognition what's crucial here is the speed at which the customer can deliver the antigen and this was found to be somewhat unpredictable often when people are working with new team, new molecules it takes them longer to make the molecule should do to and then we have to submissively (ph) expect to this. There is a potential source of delay and in some cases we would actually seen than. From our point of view obviously in order to book the revenue we need to be able to invoice the customer which means that we need to shift the antibody in a seasonal period of time and it found that we are now pretty good of shipping well within that two months target that we initially set up though indeed we have a target of reducing that time even further so later some of the key parameters in that business deal. Obviously sourcing the customers the customer's ability to deliver their antigen and our ability consistently to make antibodies and ship it within the expected time frames.

HELMAR PLATS: OK . Am I right, if I assume that it is an e-commerce based basis.

SIMON MORONEY: Its not e-commerce, no because remember that you know we have to get physical materials in our hands that we have to get the targets physically sent to us and we can make antibody and physically send it back to the customer. So although we use the channels in order to market this service. You wouldn't really call it an e-commerce business.

HELMAR PLATS: OK, Thanks very much.

SIMON MORONEY: Welcome.

OPERATOR: Thank you very much Mr. Plats. Our next question will be coming from Mr. Thomas Urga (ph) of (inaudible) Bank. Please go ahead sir.

SIMON MORONEY: We are not hearing you Thomas.

THOMAS URGA, ANALYST: Do you hear me now.

SIMON MORONEY: Now we do, yes.

THOMAS URGA: OK, my question was actually already asked by Helmar Plats (ph) so I have to withdraw my question, but also a concern of the Q4 expenses.

SIMON MORONEY: OK.

THOMAS URGA: Sorry thank you.

OPERATOR: [Operator Instructions] Dr. Moroney I would like to turn the conference back over to you for any additional or closure remarks.

SIMON MORONEY: Thank you very much, if there are indeed any further questions I would like to close by reminding you that the key message to take away from this call first the company's outstanding financial performance is based on our excellent operational performance, strong partnerships and a record number of on going therapeutic antibody program make a very good financial performance today and even more importantly very well the future growth an incretion of value. Our technology works it is being applied in high quality partnerships and we are convinced that it will lead to important new medicines for the treatment of intractable diseases in which will face will have a significant participation, second clues from operations Q3 2004 conference call should any of you have any additional questions Dave and I are both in the office for the reminder of the day and would be happy to talk to you one on one, thank you again to your participation and good bye.

OPERATOR: That will conclude this conference, we thank you for your participation and wish you good day.

[lupus2000]

Q4 2004 Morphosys AG Conference Call - Final
25 February 2005

CLAUDIA GUTJAHR-LOSER, DIRECTOR CORPORATE COMMUNICATIONS, MORPHOSYS AG: It's a pleasure to welcome all of you to our yearly press conference. My name is Claudia Gutjahr-Loser, I'm responsible for Corporate Communications at MorphoSys. With me are my colleagues, Dr. Simon Moroney, our CEO, and Dave Lemus, our CFO. Today we will present the Company's annual results for the year 2004, and an outlook for 2005. At the end of our presentation, we will take questions with this conference audience and also participants listening by conference call may have.

For all people listening in by conference call, you can find the slides of our presentation on our corporate website under Events and Conference Calls. We have planned approximately 1 hour for the presentations, afterwards we will answer your questions from the conference call and also from the audience. After the conference we will invite you to a lunch outside, and would be happy if you would stay a little bit longer. There will be also possibility for some more discussions.

Before we start - can you please put the next slide, please Bev. We want to remind you that during this conference, we will present and discuss certain forward-looking statements concerning the development of MorphoSys core technologies, the progress of its current research programs, and the initiation of additional programs. Should actual conditions differ from the Company's assumptions, actual results and actions may differ from those anticipated.

You are therefore cautioned not to place undue reliance on such forward-looking statements which speak only as of the date hereof. I would like now to hand over to Dr. Simon Moroney.

SIMON MORONEY, CEO, MORPHOSYS AG: Thank you Claudia, and also from me welcome to the 2005 MorphoSys results conference. First of all I'd like to express my thanks for the forgiveness of our German friends here in Frankfurt, that we do this conference as usual in English. The reason we do that is so that we can have an international conference in parallel, and so that everyone hears the same message at exactly the same time. So thank you to the Germans here in Frankfurt.

2004 was an outstanding year for MorphoSys. For the first time, and faster than we expected it, we reached profitability. We entered a major, strategic partnership with Novartis which I'll come on to and describe in some detail. We substantially strengthened our product pipeline.

Prior to the end of 2004, the first HuCAL antibody was approved for administration to man, and that antibody entered the clinic on February 1 of this year. We also obtained and published very promising pre-clinical data on our own cancer program, MOR202. And in addition, and equally importantly, we significantly increased the number of programs ongoing with our partners.

Just after the end of the year, in January of this year, we completed the acquisition of Biogenesis, which is intended to substantially strengthen our antibody -- our research antibody program and business. MorphoSys is therefore well-positioned for further growth going forward.

The Company has 2 areas of strategic focus, both of which are based on our priority technology, HuCAL. On the left hand side of this chart is our main area of focus, namely therapeutic antibodies. On the right hand side is something that grew out of our initiative called Antibodies by Design, and that is the exploration of the HuCAL technology in the research antibodies field. I intend over the next 30 minutes or so, to give you a review of 2004 in respect of each of these areas in turn.

First of all, looking at the therapeutic antibodies side of the business. We've made excellent progress in the therapeutic antibody field during 2004. We further consolidated our position as a technological leader in this space. The partnerships we have speak for themselves.

Companies of the quality of Pfizer, Novartis, Centocor, Schering, Bayer and so on, don't likely choose a technology platform for their future drug development. And the fact that those companies have all chosen HuCAL is a massive vote of confidence in the technology. We now have collaborations with 5 of the world's leading 10 pharmaceutical companies.

As I mentioned, the pipeline of partnered, ongoing projects has grown substantially during 2004. We started the year with 17 active programs, we finished the year with 24 active programs. What that means, of course, is not only research funding today for MorphoSys, but it also means milestones in the near-term and, when products come to market, royalties.

Now this is a point that is always worth emphasizing, that for every single program that's based on a HuCAL antibody, we will gain milestones and royalties as those products come to market. So that, of course, represents significant future upside for the Company, and is the basis for our goal to maximize the number of HuCAL-based therapeutic programs ongoing.

We therefore continue to look for new partners. We continue to encourage our existing partners to start new programs with us. We're looking to build as broad a pipeline of HuCAL-based therapeutic antibodies as we can, and in 2004 we made a great step forwards in that direction.

The partnerships themselves - some of the companies I've mentioned are long-term partnerships, and this chart gives you a sense of how those deals look in terms of their duration. The original deal of this magnitude goes back to 1999 with Bayer, and almost on an annual basis thereafter, we're able to enter additional major, long-term commitments with other leading pharmaceutical companies.

And you can see from this chart the Novartis deal which we signed during 2004, but also the extensions that we entered into with Schering and Centocor.

Want to spend a minute or two talking about Novartis. We cannot underestimate the importance of this deal for MorphoSys. For Novartis this was a major, strategic move to build a therapeutic antibody pipeline of the future. For us it was our largest partnership to date by far. We were very happy to welcome Novartis as a shareholder to MorphoSys. Novartis took a 10% stake in the Company, which really underlines the strategic nature of this collaboration for them.

When the deal was announced, Mark Fishman, the Head of Research at Novartis, made very clear the reason why Novartis had chosen MorphoSys, and I think it's worth reminding ourselves of that quote of his. He talked about our highly differentiated technology. We're often asked what is it about MorphoSys and HuCAL that is so different from other technologies in this space. And I think this external validation, that we have a really unique and differentiated technology, is of utmost importance for us.

To some details of the alliance. The scope is that this should be the basis of Novartis' future therapeutic efforts. The term is initially for 3 years - Novartis has an option to extend it for a further 2 years, making 5 years altogether. Equity - I mentioned that Novartis took an equity stake, they paid E9m for that. In addition to that, there are a number of payments, not all of which we've been able to talk about openly due to the confidentiality of certain terms of the agreement.

What we can tell you is that there is a commitment from Novartis to pay at least $30m, for research support and license payments over the first 3 years of the collaboration. On a per program, that is per therapeutic antibody target that Novartis brings to us, they pay additional fees. License fees, for example, to access the HuCAL technology in respect of that particular target.

For the first time, we granted a partner an option to internalize the technology fully and permanently. So that means that Novartis can come to us at any time over the next 3 years and say, 'Now we would like to have the entire HuCAL technology installed at Novartis permanently'. This is something we have not done in the past because we have felt that we wouldn't be able to extract sufficient value from it.

In this case we could, and although we can't mention precisely the payment that would arise in such a case, it is a significant double digit million payment that we would receive. Importantly, and again to emphasize this, on every HuCAL product that would come to market - either from the initial phase or in the future, if Novartis should use HuCAL in-house to devise antibody products - we would get milestones and royalties on all products.

In addition very late in the year, around Christmas, kind of as usual, we signed additional partnerships - 2 in this case. And these were, in the case of Centocor, a -- an early extension of our existing deal. We were able to agree with Centocor to extend the deal through the end of 2007, and we got a commitment from Centocor to commence at least a further 2 therapeutic antibody programs during the course of 2005.

At the same time Centocor, and I think this is a reflection of their happiness with the collaboration so far, increased the level of R&D funding. So we have a bigger team working on their behalf at MorphoSys now than we did in the past.

Schering had been due to expire at the end of last year. That was initially a 3-year deal which was scheduled to expire at the end of '04, and we were happily able to negotiate an extension to that deal for a further 2 years, to the end of 2006, with again an option for Schering to extend it for a further year. So we could get a further 3-year extension from that deal.

We have granted additional, exclusive licenses to Schering in respect of a number projects that have been ongoing, and Schering have sought and received from us options on exclusive licenses for in vivo diagnostics. You may be aware that in vivo diagnostics for Schering is an important field, and this is something that they specially requested and which we were happy to provide them with.

I mentioned that the first HuCAL antibody has now entered clinical trials. That is, of course, the antibody that we made for GPC Biotech, and that antibody entered a European Phase 1 trial which could be somewhere between 28 and 43 patients. That trial started on February 1 of this year. The trial is in relapsed or refractory B cell lymphoma and, of course, we eagerly await the outcome of that Phase 1 trial.

There is some now very interesting animal data that's been obtained with this antibody, and here we show just 1 example of that. This is a study that a friend of GPC Biotech conducted in combination with Rituxan, the anti-CD20 antibody on the market for lymphoma. And if you look at this data here, you'll see a considerable effect of these 2 antibodies in combination. Basically this is administration of antibody to a mouse model in which a tumor has been established.

So the orange colored line there is the control, and as you can see, after about 25 days all of the animals in that control group were either paralyzed or dead. So the tumor was fatal in 100% of the cases after 25 days. In the treatment group, the blue line here, you'll see that about a quarter of the animals survived even out to 3.5 months -- sorry, 2.5 months.

So, in other words, we're seeing a significant delay, the blue line has moved to the right compared to the orange line, and we're even seeing a significant improvement in overall survival in this animal study. So these are promising, animal data which give us confidence that the compound should also work in man, and, therefore, we eagerly await the results of this trial.

Altogether, the MorphoSys partnered program pipeline looks something like this. As I mentioned, there are some 24 programs currently ongoing. The GPC antibody 1DO9C3 is the first to enter the clinic, but we now have information from our other partners in respect of a further 3 programs that, by this time next year, could also be in the clinic.

Obviously we can't be 100% sure of that but this is based on feedback from other partners, that an additional 3 of our HuCAL antibodies could be in clinical trials within a year from now, and we're obviously very hopeful that that will be the case. So you can see in total the pipeline is very broad and is now advancing nicely towards clinical development.

Turning now to our own efforts. Everything I've talked about so far have been programs that are ongoing with partners. As you will recall, we have an internal program where we have initiated our own therapeutic antibody development against selected targets. The 2 programs you've heard most about so far, MOR101 and 102 for inflammatory conditions, are both pre-clinical development.

MOR102 - we published some interesting data, a mouse model of cirrhosis, and what we're currently doing is doing a comparative study of MOR102 against the marketed, biological drugs Amevive and Raptiva, also in a cirrhosis model. The data for that study we expect on schedule at the end of this quarter, and we will, of course, report the outcome of that study as soon as that -- those data are available, and we've had a chance to analyze them.

Talking to potential partners about these compounds, we're seeing increasing interest. Of course, people are all awaiting the outcome of this comparative study, but we're hearing more and more the concerns of the anti-TNF approaches. I think there are long-term concerns that mechanisms that rely on inhibition of TNF, may have long-term safety issues. And, therefore, particularly for non-life threatening such as cirrhosis, alternative approaches, alternative modes of action are definitely of interest.

So we arrive -- await the outcome of this comparative study with interest. MOR202 - as I mentioned we published animal data in the third quarter of last year, and I'll come on to that. Being a cancer antibody, it's rather easy to raise interest from potential partners for this compound. Many, many pharma and biotech companies are looking for new cancer compounds with new mechanisms of action, and therefore we're getting good traction in talking to potential partners about this program.

For the first time, I can mention today that we have initiated a fourth program which we call MOR103. This is a program in the area of inflammation. I'm not yet prepared to name the target that we're working on here, suffice to say that we have generated interesting antibodies, and that this is currently in the research phase.

Looking now at just 1 example of the data that we generated for MOR203. We're looking at this compound initially in multiple myeloma, but it definitely has potential in addition in the chronic and acute leukaemias. This study was conducted in a mouse model, established mouse model of multiple myeloma. Essentially what you do, is you administer tumor cells to the mouse. You wait until the tumor has formed to a size that you can detect, and we then administered antibodies.

And what this chart shows you is, it shows you the growth in the volume of the tumor over time. We started treatment after about 30 days, which was the time taken for a tumor to establish and to be detectable. And you see here the blue line which is the control, the tumor continued to grow rapidly thereafter.

The red line is the group of mice treated with MOR202, 1 of the MOR202 series of compounds, and you can see there a significant reduction in the volume of the tumor in that group of animals. Although you don't see the data here, what we have shown is that reduction in tumor volume is dose dependent. Which is good because it says that the compound is working as you predicted. And in this case, 4 out of 9 - it's almost half of the animals - were actually tumor-free when the study was completed.

So not only did we reduce tumor growth but we were actually able to eliminate tumor in this case. These are very promising data and this is -- this set of data and other data are the basis for the discussions that we're having at the moment with potential partners. And the basis for quite some excitement about this compound.

I want to turn now to the second side of our business, namely research antibody. Here again, we made good progress during 2004. The revenues from our Antibodies by Design initiative reached E0.8m during the year. But perhaps more importantly still, we now have 115 active customers ordering HuCAL antibodies through the Antibodies by Design unit in some 17 countries. So we really have spread our marketing reach very successfully in year 1.

One of the things we've had to overcome is, if you like, a lack of knowledge about the technology in this field. In the therapeutic space we're very well-known, and people who develop therapeutic antibodies understand what technological options are available. They understand the importance of human antibodies, they understand the power of our technology.

In this reagent space it's a different challenge for us in educating people what's important. So we've had to really invest in taking our time to explain to people why HuCAL is actually a good technology in the reagent space as well. But we're getting there. We have definitely increasing acceptance amongst customers, that this technology can replace what they're used to, namely the mouse-based antibodies, for research applications.

It also took us somewhat longer than we thought to convince catalog companies, to make new products based on the technology. But towards the end of the year we signed a deal with EMD Biosciences, under which they introduced the first HuCAL-based antibody as a catalog product.

Perhaps the most significant development of all in this space, was our acquisition of Biogenesis, and I'll come on to this and talk about it in a little more detail. But it was an important step for us, towards our goal of establishing HuCAL as the industry standard for research antibodies, as we're well on the way to doing in the therapeutic antibody space.

Looking at the Antibodies by Design business - the unit showed good growth throughout the year. This is a cumulative chart, I'd like to point out, but we saw steady and continuing growth throughout the course of the year. Our expectations for the year, which we communicated during the course of last year, were around E1m of new revenue for the Antibodies by Design unit.

Of course, when you commence a completely new business in virgin territory, it's often difficult to predict how the business is going to develop. And therefore, the fact that we came in about E200,000 short of that goal I don't regard as a major setback, but we learned a lot during this year. For example, if you look at the left hand bar on this chart, you'll see that we expected to do some business with catalog companies. That is EMD Biosciences type companies who would access HuCAL antibodies and sell them through their catalogs.

But we also expected to do company -- business with array companies. We've had many, many discussions with companies making antibody chips for diagnostic and research applications. What turned out, in fact, was that the core business which is the custom business - that is, customers coming to us and ordering HuCAL antibodies that we make in-house - the custom business exceeded our expectations. But actually the catalog and the array businesses were non-existent.

So, as I say, we -- overall we weren't disappointed because the business got off to a start, but we learned a lot about where we would be able to do business in this space.

If you look at what customers need in the research antibody field and you look at, for example, surveys which ask people what's important for you in this space. Here on this chart you'll see some of the issues that customers rate as important. So, for example, if you look at the criteria that people call essential or very important, speed is most important of all for those people.

Other important factors are support, price obviously, and value. Is the antibody in stock? That means can I get it tomorrow or the next day, and what is the variety of antibodies that the supplier can offer? For us, what we can definitely compete on is speed and this is really a key advantage of the HuCAL technology. We're now at the stage where we can routinely turn around orders in 8 weeks. So that means from getting the partners' target to shipping the antibody takes 8 weeks, and we think we can reduce that.

And if you compare that to the 4 to 6 or 9 months that it takes for a conventional mouse antibody, we have a significant advantage in terms of speed. If we just go back for 1 second. Clearly where we are lacking is, do we have the antibodies in stock, and this is what the catalog companies have and which we lack. Although we have the antibodies in the HuCAL collection, we have to fish them out and that takes 8 weeks.

Catalog companies have an advantage that we lack, which is they have a collection of antibodies already in stock, it can be shipped immediately. So that was clearly where we were lacking, and that was 1 of the arguments for us behind the Biogenesis acquisition.

So what is the strategic rationale for our acquisition of Biogenesis? As I mentioned, the uptake of HuCAL by potential catalog partners was slower than we expected, and that it's clear that having a catalog capability is important for potential customers in this field. So therefore we said to ourselves, although we're technologically strong in the market place, in terms of sales and marketing, we're weak. And, therefore, we said what we need is not just a collaboration with a catalog company, we need to acquire a catalog company.

What we've gained through acquiring Biogenesis is access to sales channels. Biogenesis has tens of thousands of contacts, there's thousands of active customers. There's a worldwide network of distributors. It has good established contacts and contracts with diagnostics companies.

In addition, they have an existing product portfolio of well over 4,000 antibodies in a catalog, which means they've got customers who are calling on a daily basis looking for new reagents. They also bring to us valuable expertise. They understand this research antibody market. They can provide input on what are the next hot products, and in which direction should we go in developing HuCAL-based reagents.

In addition, we see their know-how in the diagnostics as being invaluable. Diagnostics is, until now, something that we haven't tackled in a major way but we see the potential now, at least to do that with Biogenesis. Biogenesis has bought us a presence in 2 very important markets, through their sites in the UK and in New Hampshire in the US. We now have a presence in 2 of the most important life science markets, and in the US the most important life science market.

So we're delighted to be back in the US, and to have a presence and a sales and marketing force actually on the ground there. They've broadened our customer base. The current Antibodies by Design customer base, as I mentioned, 117 or so customers, spread across between North America, Europe, Asia, the Asia Pacific and Australasia region, and even South Africa. So there we have established contacts already.

But together with Biogenesis, we're much stronger. In Europe, particularly in the UK, in North America, and they also have activities in the Asia and Australasia regions.

Turning to other progress we made during 2004. New markets continue to be important for us, and during the course of the year we entered a collaboration with GeneFrontier Corporation. GeneFrontier is a Japanese company, which is helping us in business development and in marketing of the research antibody capability in Japan.

Japan is a very interesting life science market. The Japanese government recognizes that it missed the boat on the human genenome project, and it's determined not to do that when it comes to proteomics research. And, therefore, research on proteins, research that needs antibodies, is a particular importance and a particular priority Japan. And therefore, we have targeted that as a market that we want to pursue more aggressively, and our colleagues at GeneFrontier are helping us with that.

In addition, we took application of HuCAL into new directions. During the course of 2004 we signed a deal with Novoplant that is a Berlin company, which is developing antibodies for animal feed applications. This is something that we would not have done on our own, but simply highlights the fact that the HuCAL platform can go in various directions. And we're very happy to be able to co-operate with Novoplant in this area.

Importantly for us, MorphoSys retains rights to any diagnostic or therapeutic antibodies that should result from that collaboration. Thirdly, technology - we're not ignoring technological development. We recognize that we're leading in this field through having invested in the technology over the past years. We continue to do so, it's a priority for us.

During the course of 2004 we secured access to 2 human cell lines for the production of therapeutic antibodies. Namely PerC6 which license from Crucell, and HKB11 which is a human cell line that we access through our collaboration with Bayer. These 2 cell lines give us the ability to produce antibodies more efficiently, and also to produce antibodies that are human in their glycosylation patterns, and therefore should be completed indistinguishable from normal human antibodies.

Finally, the last point I'd like to make in reviewing 2004, before I hand over to Dave Lemus for the financial results. On the intellectual property side, we further strengthened our HuCAL estate, through granted patents in the US. And also our core screening technology, CysDisplay, was further protected through the allowance of a patent in the US.

The AME case you recall, which is in litigation, continues. We heard from the judge that the initial, favorable ruling from the magistrate needed further analysis from his perspective. And accordingly there will be a Markman hearing in April of this year on that case. Let me say here that we continue to be confident of our position, vis-a-vis AME in that case.

Finally, a look at the goals that we set ourselves at the beginning of last year, and how well we did against those goals. We set ourselves the goal of reaching profitability on an EBITDA basis. As you've seen, we've exceeded that dramatically by becoming profitable on a net basis. We projected revenue growth of some 20%, we massively exceeded that with revenue growth of over 40%.

We wanted to start at least 5 new partnered programs. As you've seen, we've started 7 new partnered programs. We wanted the first HuCAL antibody to enter the clinic, that we achieved. We wanted to obtain good animal data for our MOR202 program, that we achieved. The only goal that we were unable to achieve during the course of last year, and I think this has a lot to do with delays in the animal studies that we were conducting, was to partner the ICAM-1 program.

As I mentioned, we continue to be excited about that program, and I continue to believe that either that or potentially MOR202 will be partnered during the course of this year.

That concludes my overview of 2004, and with that I'd like to hand over to Dave who will talk you through the financial results.

DAVE LEMUS, CFO, MORPHOSYS AG: Many thanks Simon. In opening, I'm very happy to say that financially speaking 2004 was a bell weather year for MorphoSys. The financial success that we had was driven in large part due to operational successes. On the basis of newly signed deals, extension of existing deals, and the achievement of milestones, MorphoSys was able to increase revenues by about 44%, and our cash position increased by over 60% to E37m at year-end.

We had again like last year, a positive EBITDA result and a positive cash flow from operations. New for this, as of course you know, we were profitable on a bottom line basis. These factors ultimately led the Company's entry into the TecDAX in September of 2004. This type of financial performance is not built overnight. If you look at our revenues for the last 6 years we have grown organically, at a rate of a compound annual growth rate of 32%.

Looking ahead, it's an important goal for us to increase revenues and continue down a strong path of growth. As we've said in the past, what we try to achieve is at least 15%, which is what we think is a growth rate consistent with other life science growth companies. As you can see from the graph, however, we have more than doubled that performance over the last 6 years on average.

Also what contributed to this year's excellent financial result was the restructuring efforts that we initiated back in 2002. As you can see, we have significantly reduced our expense base since that time but, nonetheless, been able to stabilize and then grow our top line This against the backdrop of investing in own proprietary product programs.

Also, as mentioned throughout the year 2004, we have switched our accounting standards from US GAAP to IFRS standards for the year-end accounts only. We gave guidance at the beginning of the year in US GAAP, and reported our first 3 quarters according to US GAAP accounting. For the year-end accounts, we prepared our formal accounts in IFRS, but have also provided today a comparison with US GAAP.

As you can see from the table, the differences between US GAAP and IFRS are relatively small. Operating revenues for 2004 were above our latest up guided -- updated guidance given summer of 2004, of E21m. Full year revenue under IFRS and US GAAP was E22m, and as you can see there's no big difference between IFRS and US GAAP, as it relates to revenue accounting.

Operating expenses were somewhat lower than expected at year-end, and amounted to E21.7m under US GAAP, compared to E21.3m under IFRS. The main difference here is that certain of our intangible expenses under US GAAP were capitalized for a longer period than under IFRS, and hence the amortization expense is somewhat higher.

Although I haven't presented a balance sheet here, comparing IFRS versus US GAAP, you would see that this would be the one big item that is different in US GAAP than IFRS. Namely, our intangibles assets are E3.2m less under IFRS than US GAAP. In terms of non-operating items, we had a E600,000 higher result under US GAAP than IFRS.

The result comes -- The gain comes as a result of gains on marketable securities, which are marked up in value under IFRS but not under US GAAP. Under US GAAP they're booked at the lower of cost or market, hence the difference. Claudia?

I'd now like to move on to our full IFRS results for 2004. As I said before, revenues for the full year 2004 increased by 44% to E22m, compared to E15.3m in the prior year. The reasons for the increase relate to new co-operations, extension of existing deals, and the achievement of milestones. So our operating expenses increased by 16% to 22 -- E21.3m, an increase of E2.9m. The increase in expense was driven mainly by higher personnel costs, higher intangibles cost resulting from licenses taken last year.

Comparing this to guidance, as I said, they're somewhat under-guidance due to the fact that certain acquisitions costs, involved with the acquisition of Biogenesis, were capitalized under IFRS and not expensed. Hence, we came in somewhat lower than our analyst guidance that we gave at the beginning of the year. Non-operating loss increased by E0.3m to E0.4m, and was mainly due to higher losses arising from foreign currency transactions, which were only partially offset by the Company's foreign hedging policy.

In 2004, MorphoSys achieved a net income of E0.3m under IFRS. The resulting net income per share for the year amounted to E0.05 per share, compared to a E0.72 loss per share in the prior year.

Looking ahead, now that we report under IFRS, the reporting guidelines for segment reporting are somewhat more stringent than under US GAAP. Therefore, for 2005 and beyond the Company intends to provide financial segment reporting, for what we presently have identified as 2 segments.

The first segment we call the therapeutic antibody segment, and this segment comprises all activities of MorphoSys where we are involved in creating a drug. In this unit we include the collaborations with all of our 13 active partners. Also in this segment we include our own therapeutic antibody drug programs because it involves making drugs and currently, as you've heard today, that program consists of 10 -- MOR101, 102, 202 and 103.

Going back to the chart again, we do have a second segment and that includes MorphoSys's activities in the non-therapeutic applications of HuCAL, mainly the research antibody field presently. This segment we call the MorphoSys research antibody segment, and includes our current business which we do under the brand of Antibodies by Design. And looking ahead into 2005, it will from now also include the results of the Biogenesis acquisition.

Looking at these segments financially for 2004 under IFRS, you can see that the majority of our revenues was generated in therapeutic antibody segment. Revenues from the antibody research segment amounted to 4% of the total, or about E800,000. As we said before, revenues for the research segment were somewhat at the low end of our expectations. Some of that had to do with shipping delays, a longer than expected anogen expression by our customers.

However, we feel that that business is very interesting. We continue to expect to invest into it, due to the excellent growth potential that we see for that business in the coming years.

Another way to look at our revenues is to see how they're split by geography and by source. The biggest part of revenues in 2004 obviously came from our annual licensing fees with partners such as Novartis, Bayer, Centocor, and so forth. However, milestones revenues gained in importance, not only in relative terms but also in absolute terms compared to the prior year.

For 2004 revenues amounted to E1.4m for the year, or about 6% of total revenues, compared to roughly half that amount in 2003. If you take a look at where sales geographically arose, 55% of MorphoSys's commercial revenues were generated in North America, and 45% in Europe. Revenues in Europe massively increased in relative terms, compared to the prior year - in no small part due to the fact that Novartis, which is a Swiss-based collaboration, had a significant impact on our financial results in 2004.

Let's move on to the operating expenses. For 2004 costs for R&D rose by E3.4m to E12.4m. Higher personnel costs and material costs resulting from the increased co-operations work were the main reason. A revaluation of the CAT license from the prior year in 2003, also made the R&D expense increase appear somewhat higher than it otherwise would have been.

SG&A expenses amounted to E7.5m compared to E7.2m, despite the fact that no headcount in SG&A was increased, although in R&D we significantly increased headcount. Staff-based compensation of E1.1m was recorded as a non-cash charge, as it has been in prior years, and decreased by about E800,000. Lower number of new grants, lower stock price, forfeitures, and declining expenses related to grants of previous years, all contributed to the decrease.

Moving on to the cash. For the last few -- several years in a row MorphoSys has been able to increase its cash position, year-by-year at year-end. This has been mainly the result of improving operational activities, which have been cash positive for the last couple of years. In 2004, we increased the cash position by more than 60%. In addition to cash generated by operating activities, the convertible bonds sold to Novartis just netted the Company almost E9m.

This, combined with strong cash flow, allowed us to finance the Biogenesis acquisition out of cash reserves. Moving on to the rest of the balance sheet. You can see that the Company's current assets increased by E14.2m to E40.4m, mainly the result of the increased cash position. There are no other significant items on the balance sheet that I'd really like to remark on today, so I'd like to move on to the next slide, the liabilities.

During the year, total current liabilities increased by E2.4m. The increase was mainly due to higher accruals for licenses payable, as well as for employee-related benefits. Furthermore, provisions amounting to E600,000 have been made for pending litigation costs. The long-term portion of liabilities amounted to E900,000 and decreased by about E800,000, due in large part to a E1m payment to Cambridge Antibody Technology as part of our settlement agreement that we signed back in 2002.

Moving on to changes in equity. Looking at changes in the share capital over the year, MorphoSys issued a convertible bond in Novartis in 2004. There were 7 mandatory or convertible debentures, which were converted into approximately 490,000 shares of MorphoSys in June 2004. Additionally, roughly 47,000 shares were converted by employees, out of our convertible bonds and stock options program throughout the year. At year-end the total number of shares issued was roughly 5.4m shares.

Since we're on the topic of equity, taking a look at our shareholder structure and how that changed during the year. Presently our biggest shareholder still remains Cambridge Antibody Technology, who owns about 10% of our shares. Now new with Novartis who follows with 9%, and with Schering with just under 7%. The free float according to definition of Deutsche Borse, amounts to roughly 40-- sorry, 74%, and includes roughly 3% of shareholdings by management and the Supervisory Board.

Taking a look at the total number of employees for the year. At the end of the year we employed 132 employees, all of whom were in Munich, compared to 95 which was the number that we had at the beginning of the year. The increase of approximately 40% was all due to increases in R&D headcount. There are no new heads in G&A. Of the 132, 108 worked in R&D and 24 in SG&A.

Looking ahead, with the acquisition of the Biogenesis Group located in the UK and the US, means that the MorphoSys Group presently employs staff of around 160 employees - our highest number ever.

Okay, with that last slide, I'd like to wrap up the prior year results and now move towards some forward-looking numbers. As previously stated, we expect to achieve double digit revenue growth for the next years. We therefore estimate full year revenues for 2005 at E30m, which represents a 36% increase over the prior year. The main part of revenues will come out of the partnered target research segment, with E25m revenues.

Revenues out of the MorphoSys research antibodies unit will amount to roughly E5m, which includes the Biogenesis group in the UK and the US. We estimate total operating expenses for the Company as a whole, at approximately E29m, which means that we expect a net profit at the end of this year of roughly E1m, or roughly a tripling of the profit that we had compared to the prior year.

In closing, I'd like to say that we had an excellent year financially speaking, and as well operationally speaking. Looking ahead, MorphoSys expects to sustain profitability on the basis of strong revenue growth. We believe the Company will continue to grow and exploit different markets, in order to establish its technology as the industry standard. And this, against the backdrop of continuing to invest in own proprietary programs. All-in-all, I think it's a very attractive business proposition and investment case.

That concludes my financial analysis for the year 2004 and the guidance for 2005, and with that I'd like to now hand back to Simon.

SIMON MORONEY: Thank you Dave. I'd to turn now over the next few minutes to an outlook for the future for MorphoSys. And again, in doing this I'd like to concentrate separately on our 2 areas of activity, namely therapeutic antibodies and research antibodies. These continue to be lucrative markets.

On the therapeutic antibodies side, the market is currently some $6b. We're seeing very rapid growth continuing of in excess of 30% per annum, and in terms of products, we've seen some amazing breakthroughs. Most recently we've seen Tysabri come to market, an antibody for the treatment of multiple sclerosis. We've seen, of course, last year of Avastin from Genotech for the treatment of cancer, and Xolair from Novartis for the treatment of asthma.

These 3 products exemplify what diverse to these areas antibodies can be applied in. In addition, of course, we have the blockbusters - Remicade and Rituxan - both well over $1b drugs. All these facts together are driving the interest from the pharmaceutical and biotech industries in this class of drugs, and mean for us continued interest and continued demand in the technology.

On the research antibodies side, we have an $800m market. We're seeing good growth here - some 15% to 20% annually, and the customer base here is worldwide, life science researchers. People in labs who need antibodies for particular applications. However, this is a space and a segment that is ripe for technological change.

It's a segment that has relied on animal-based technologies for ever, and which in our view could benefit enormously through faster access to antibodies, higher throughput, and higher quality antibodies. And that's our goal with HuCAL to really change the way people use antibodies in the research segment.

In terms of our growth strategy at MorphoSys, again we think in terms of those 2 areas - the therapeutic area and the research antibody area. In therapeutics what we have done is, over the first several years having established the HuCAL technology, is we have entered technology-driven partnerships. The deals that we have entered in the late 1990s and early 2000s with companies such as Bayer and Centocor, and Schering and so on, have really been technology-driven partnerships.

We're now today entering a new phase in the Company's growth, and that is as the pipeline develops and matures, we can expect to see an increasing news flow in terms of clinical events, and of course, the related milestone payments that come along with those events.

In the future we will, of course, see compounds coming to market. And as those compounds come to market, as I emphasized, we will gain royalties, and those royalties will depend on how heavily we were involved in the programs. The partnered programs - the royalties are at a mid single digit level, and that is 1 of the main reasons why we're interested in pursuing our own programs. Where, when they are finally partnered and finally come to market, will generate a much higher level of royalty income.

So we see 3 distinct phases in the development of the Company on the therapeutic antibodies side, and we clearly now, with the entry of the GPC antibody into the clinic, have progressed to the second phase.

For reagents, the research business, our initial goal here was to establish a beachhead for HuCAL in the marketplace. As I mentioned before, there's been an education challenge for us convincing people that this technology also works for them on the research side of the business. I think we've done that most effectively. The second phase for us is to expand our market reach by acquisitions, and the Biogenesis deal was the first of these.

This clearly brings us the potential to grow at a much faster rate than we would be able to without such an acquisition. Our goal ultimately is to establish HuCAL as the industry standard by which research antibodies are made, which we believe can drive growth even further.

In terms of the revenue characteristics, and in adopting this 2-leggged strategy, this was very important for us. In looking at the types of revenue we could expect from each side, and they're quite different. The therapeutic business - the deals with the Pfizers, the Novartis and so on, is immediately profitable for us. We get a team of researchers paid by the partner. We get license fees for indirect or direct access to the technology and, of course, we then get the milestones and the royalties which are very profitable for us.

The upside is very large because we're talking about potential blockbuster drugs coming to market in the future, but it's some way off admittedly. The other feature about it is that we're dependent on partners, of course. We're dependent on being able to go out and find new pharma deals, or biotech deals, with new partners. We're dependent on those partners continuing to be convinced that antibodies are an attractive class of drugs, and we're not always able precisely to predict when such deals will come along.

We're very dependent on the willingness of those partners to adopt an antibody -- a therapeutic antibody strategy. As I've mentioned, currently and for the foreseeable future, that looks extremely attractive but we are dependent on partners. So that's been 1 of the reasons why we have looked to diversify by moving into the research business.

Yes, it's a smaller market size but the margins are very attractive in that space. And most importantly by having our own products, our own research products, our own catalog products, we have the business completely under our control. We're not dependent on the strategic decisions of large partners.

So together the 2 types of business activity complement each other, and we believe because they are based on a common technology platform, are very attractive to have running alongside each other. And what that will contribute to as we go forward, is a diversification of our revenue base.

Today, as we've seen, our revenues are dominated by the payments we receive from our therapeutic partners, in the dark blue on the left of this chart. And a rather smaller amount comes from milestones, from those therapeutic programs, and an even smaller part from the reagents, the research business.

Looking into the future, that mix will change substantially. So there will be new contributors that come to that, mainly proprietary products and royalties, and those will start to reduce the relative importance of partner revenue and the milestone revenue. So what we're doing here is we're derisking and reducing our reliance on 1 particular source of revenue, and therefore putting the Company on a more stable footing for future growth.

Turning to our precise objectives for this year on the therapeutics side. As I've mentioned already, we aim and intend to secure a partner for 1 or other of our therapeutic antibody programs - MOR101, 102 and 202. And it's important to mention here that we aim to secure a co-development option. That is, we want to have the possibility to work together, jointly with the partner. Share the cost going forward and share the upside more equally than we would do if we simply out-license the compound for a royalty.

As I also mentioned, we've had information from a couple of our partners that additional antibodies could enter the clinic. We hope to see at least a further 1 antibody enter the clinic this year. We intend to enter new programs with new partners. We're often asked with whom, how many, when? We can't precisely predict that but we -- based on ongoing discussions and negotiations, we're confident that we'll be able to add new names to our roster and new programs to our pipeline.

We also expect to reach milestones in the ongoing 24 programs. Of course, the more programs that are ongoing, the more likelihood it is that milestones will be reached and that the corresponding payments will be triggered. Again, I don't want to quantify that precisely but we're very confident that that will be achieved.

And finally on the therapeutic side, we want to uphold our leading technology position. We got to where we are today by being technologically leading, we don't intend to surrender that advantage. We continue to invest in technology development.

In terms of the research antibodies side of the business, which is being shaped very much by the acquisition of Biogenesis, clearly during the course of this year we intend to complete the integration of the 2 organizations. We clearly intend to keep both sites. The presence in the UK and the US are important strategic aspects of this transaction for us.

We intend to leverage what we've gained in sales channels, in market presence, in distribution network, to increase our access to customers for the HuCAL customer service. We also are now planning a wave of HuCAL products which can be marketed through the Biogenesis sales and marketing apparatus, and we're looking for cross-selling synergies. Having the established Biogenesis people selling HuCAL services, and having our sales and marketing people increase the reach of the Biogenesis offering.

As I mentioned, Biogenesis brings us some interesting business in the diagnostic space and we hope to benefit from that, and look to sell the HuCAL concept to potential diagnostics customers. Altogether, as we mentioned when we announced the deal back on January 21, please don't expect fireworks in terms of bottom line performance from the research side of the business in this year.

It's a consolidation year, it's an integration year, and it's a year to create a platform from which we can grow attractively in the future. And I'm sure that if we do the planning and do the integration properly and correctly in this year, we can look forward to very exciting growth rates going forward.

Summarizing all that in Company goals for the year, on the therapeutics side - partner for the own program; additional HuCAL antibody in the clinic; new partnered programs. On the research business side - integrate the 2 organizations A-by-D and Biogenesis; reaching that important target of E5m on the revenue side; and perhaps more importantly, establish a platform for solid growth from 2006 and beyond.

Company-wide, as you've seen in the guidance, we're aiming for double digit revenue growth and, again, profit on a net basis in this year.

Finally, to conclude, I'd like to close by saying 2004 is without question the most successful year in the Company's history. MorphoSys finished the year in a stronger position than we've ever been before, but even more important we have taken steps, achieved operational objectives, and positioned MorphoSys for continuing further attractive growth in the future. And we look forward to continuing to report to you on that growth. Thank you very much.

CLAUDIA GUTJAHR-LOSER: Thank you Simon. Thanks for your patience. I would like to open the floor now for questions, and since we are also conducting a conference call, I would like to start with asking those participants listening by conference call. And I would like to ask the operator if there are any questions?

OPERATOR: [OPERATOR INSTRUCTIONS]. Our first question comes from Daniel Wendorff with WestLB AG. Please go ahead.

DANIEL WENDORFF, ANALYST, WESTLB: Yes, good morning. Thanks for taking my question. I actually have 3 questions, 2 relating to the Antibodies by Design unit. You said that you think you can achieve attractive margins in that business. Can you give a bit further spice to that, if that's possible? And also, if I'm right and you have segment reporting in that division, you have to report like cost of sales. Can you give us an indication what the gross margin might be?

And my third question would be, you said that you expect a second HuCAL generated antibody in the clinic. Is that 1 of the 3 potential projects which you mentioned at the beginning, could enter the clinic by Q1 2006? Thank you.

DAVE LEMUS: Okay. I think I'll handle the first 2 questions, because I believe they're the same question of what are the margins, or what is the cost of sales that we imagine for the business which we do in the antibodies research segment? Here I'd said that we expect margins somewhere between 60% and 75%, and hence the cost of sales of around 25%.

DANIEL WENDORFF: Okay, and on the operating side?

DAVE LEMUS: Bottom line operating, you mean?

DANIEL WENDORFF: Yes, operating profit line.

DAVE LEMUS: Okay. Bottom line operating from the Biogenesis unit, what we've seen historically is a rate of around 10%, sometimes a little bit lower, sometimes a bit higher. So that we think we can improve over time, obviously with the synergies that are possible with doing business with MorphoSys AG. In terms of the segment itself for next -- for 2005, we expect roughly a breakeven. And I think 1 of the reasons why we don't expect, as Simon said, financial fireworks as it relates to that particular segment in 2005, is that it is an integration year.

There will be some streamlining activities, and there will be integration costs which we can't exactly quantify today. Hence we conservatively give ourselves a target of breakeven in that entire research unit for this year.

SIMON MORONEY: Okay. With respect to the HuCAL antibody which we think will enter the clinic, yes. As I said, we've had information from our partners that 3 -- a further 3 antibodies could enter the clinic before the end of Q1 next year, and 1 of those 3 should make it in this calendar year.

DANIEL WENDORFF: Okay, thank you.

OPERATOR: [OPERATOR INSTRUCTIONS]. We have no further questions at this time.

CLAUDIA GUTJAHR-LOSER: Thanks a lot, and we are moving on to questions here from the floor. I would like to ask you to use the microphone, that the people listening in the conference call can also follow your questions. I think there's the first question over there.

THOMAS HOGER, ANALYST, DZ BANK: Thomas Hoger, DZ Bank. Given the very successful year 2004, I was a little bit surprised if I look at the compensation for the management board, which was lower in 2004 when compared to 2003. Why is this, and could you give some more details about the objectives by which your performance is measured?

SIMON MORONEY: Yes, sure. So compensation in 2004 contains a component which is a bonus in respect of performance in 2003, and obviously that bonus is determined by the executive's performance in 2003. Which the Board, the [indiscernible] deemed -- obviously because 2003 was not a very successful year as 2004 was - so accordingly adjusted downwards.

The way Vorstandt(ph) compensation works is rather simple. We receive a salary and we receive a performance-related bonus, which is a combination of individual performance and overall Company performance, and those 2 elements together comprise the Vorstandt compensation.

THOMAS HOGER: Sorry, but the Company performance, this is measured by some margins or by the stock performance?

SIMON MORONEY: The Company performance is based on the Company goals, and the Company goals for 2005, the ones I just showed for example, and for each year we have such a set of Company goals which is agreed with the Board of Directors at the beginning of the year. And the Board of Directors at the end of the year then assesses how we've performed against those goals. So those goals are in the public domain and we can be measured against those goals.

THOMAS RICHTER, ANALYST, EQUITY: Thomas Richter from Equity. I would like to have some more flavor on your aims concerning the diagnostic business you would like to aim on. Is it more opportunistic to enter this year of clients, or is it strategic move of -- as a quantum leap? Thank you.

SIMON MORONEY: The answer is at this stage we are not making a concerted move into that area. You'll recall that we do have some ongoing diagnostic projects with, for example, Schering, for whom in vivo diagnostics is important. So, it's not as if we have not done anything in the diagnostics sector at all.

Biogenesis has -- quite a significant chunk of its income comes from supplying particular antibodies to diagnostic companies. So that it is companies that prepare -- that manufacture and sell diagnostic kits. And, therefore, since that is an important part of the Biogenesis business, we see the opportunity to use their contacts and their established business, as a platform on which to seek to increase the reach of HuCAL into that diagnostic space.

It's something -- As Dave and I have mentioned, we see this as very much a consolidation year, and it's something that we in turn intend to learn about during the course of this year. But it's not something that we intend to make a major thrust of the business, at least not certainly this year.

HILMAR PLATZ, ANALYST, KAYENBURG AG: Hilmar Platz, Kayenburg AG. A couple of questions regarding Biogenesis. Could you give us a bit impression regarding what kind of integration steps have to be done this year with Biogenesis? What differences are regarding the IT platform, of the kind and the way Biogenesis managed its business in the past? And can we expect a further increase in personnel to achieve the E5m sales revenue? Thanks.

SIMON MORONEY: Okay, let me -- We'll split that. I'll take some of that and Dave will take some of that. There's actually not a huge amount of integration to be done. The 2 organizations are pretty complementary. Biogenesis is a very tightly run organization. There is not a lot of overhead or infrastructure and so, for example, on the administrative side there's very little overlap, in fact. And certainly, in terms of their operating activities, it's really complementary to what we're doing.

They have a business based on, as I said, a catalog antibody business. They use a technology, namely animal-based technologies, to source their antibodies and that's -- those products are something that in time we see being replaced by HuCAL antibodies. Obviously, that's not going to happen overnight but our goal is, in the long-term, that more and more -- a higher and higher percentage of their products are HuCAL-based antibodies.

So, you won't see essentially any change in headcount. We don't anticipate having to hire new people, and we don't see much reduction in headcount if at all. And therefore, at least from an operating point of view, we thought - and it's been confirmed for us now - that the integration is actually less problematic than it could be with some other organizations.

It's a rather small organization, a rather tightly held and tightly run organization, and therefore relatively easy for us to integrate. In terms of thinks like IT platforms and so on, perhaps Dave can talk to that point.

DAVE LEMUS: Yes, I think as Simon said, it's a relatively small company. I think the 1 distinguishing feature in the business is that they are a brand-based business. Biogenesis has a brand, it's a catalog company, it's a catalog antibody company. And hence, the web, the website that they have plays a much more important role in prosecuting their business as it does compared to our business.

The 1 area in the IT area where we could imagine to invest would be, actually, a combined or better integrated website between the 2 companies. But in terms of the other IT infrastructure that will depend, of course, on how we decide to invest further; which site we decide to invest further in; where our production will take place for the 2 units, and so forth. So it's a bit early to talk about what exactly what we're going to do beyond the website at this point.

THOMAS HOGER: Thomas Hoger again. 2 questions. What of -- What is the reason for the net loss in Q4 2004? And second question is, that now that AME, the litigation is ongoing, do we expect here also higher cost on this side?

DAVE LEMUS: Okay. In terms of the AME cost we have built in certain costs in our budget this year, when we expect the cost to increase for AME-related litigation as compared to the prior year. As to the loss in the fourth quarter, an answer doesn't come to mind immediately but it you give me 2 minutes, I'll come back to you and answer that.

CLAUDIA GUTJAHR-LOSER: Are there more questions?

THOMAS RICHTER: Thomas Richter once again. A question for the number crunchers. On page 44 in the Geschesbild(ph), the segment report. Dave, could you please shed a little bit more light on the allocation of costs and revenues? There is, unfortunately, a huge amount of cost non-allocated so, yes, give us a little bit more light on that please? Thank you.

DAVE LEMUS: Sure. I guess you -- It's probably pretty clear from the chart on what the direct costs associated with these segments, so I won't go into that further. We do have a certain amount of unallocated costs, and as you rightly pointed out they are not small. And part of that has to do with the fact that it's not terribly simply, at least at this point, to make an extremely accurate split of those costs.

A lot of those costs are the cost of renting the entire building; the cost of a stock market listing; the stock -- the cost of an IRTR department. So a lot of general costs where we don't have an obvious allocation key to split between the part of our target research business, and the reagent business.

Now we've talked it over with our auditors and they feel that, in the absence of having such a key, that it is acceptable, at least as a first step, to keep that relatively large, unallocated amount in there. That being said, we could imagine that the bulk of those costs would be associated with the bulk of the revenue, mainly the target -- the partnered target research segment.

THOMAS RICHTER: [inaudible - microphone inaccessible] share with us the unallocated the fact(ph) those [inaudible - microphone inaccessible] major role as well.

DAVE LEMUS: It may do. Obviously we'll look at ways to find good allocation keys which are reasonable, so that we can make that split. But if we're not forced to do it we won't but, obviously for the sake of financial transparency, we will try to do that going forward. But our auditors felt comfortable with the way that we've presented here.

THOMAS RICHTER: Okay, thanks. And a question to Simon if I may. Would you like to use the foothold of Biogenesis in the US to emphasize your strengths in the US market of your original business as well?

SIMON MORONEY: We don't need to. We're -- on the therapeutic side of the business, we're sufficiently well-known in the US and everywhere actually. So we don't see that Biogenesis presence in the US is helping on the therapeutic side of the business. But we do see it as an important foothold for building our research antibodies business in the US.

Therapeutics we know, and we know everyone who's active and they know us. So it's really to -- as a foothold and a means of strengthening our research antibodies presence in the US that's attractive.

CLAUDIA GUTJAHR-LOSER: I've just heard there's another question from the conference call, so I would like to ask the operator for the question.

OPERATOR: Thank you. Our next question comes from Nick Turner with Jefferies International Limited. Please go ahead.

NICK TURNER, ANALYST, JEFFERIES INTERNATIONAL: Hello Simon, Dave. I just wondered if you could give me some ideas to what Biogenesis sales were in 2004? And also what you anticipate the price differential to be between catalog antibodies form -- sourced from animals, and those sourced from HuCAL? I assume, as you said, that you would hope to see at least some of this switched to HuCAL in the future, and I just wondered what that might result in terms of sales growth and margin development there?

And then a question really on MOR101. Have you finished all of the pre-clinical studies with that particular agent? I seem to remember that there was a burn study with an animal model planned for that drug and I -- in 2004, and I just wondered if that study's been done, and if you can tell us what the results were?

DAVE LEMUS: Okay. Maybe just to handle the financial question real quickly. Although the full year accounts have not yet been audited, and in fact we've started the process of doing an audit of the full year results. The Biogenesis financial calendar is on an April to April cycle as opposed to a calendar year. So the number I give here is not audited but we suspect that the number for 2004 was slightly under E3m for the Biogenesis Group.

And maybe to answer -- sorry, if I could just use the opportunity to answer Thomas Hoger's question previously. I think there was no 1 huge reason associated with it but, if I have to point 1 reason, it would probably be in stock-based compensation. You see that half of the year is stock-based compensation expense under US GAAP was actually incurred in the fourth quarter, which is probably the reason why we went into slight loss in that quarter.

SIMON MORONEY: Okay, coming back to the other questions, Nick. MO

[lupus2000]

Q1 2005 Morphosys AG Earnings Conference Call - Final
28 April 2005

OPERATOR: Good day ladies and gentlemen and welcome to the Morphosys AG first quarter 2005 results conference call. [OPERATOR INSTRUCTIONS] At this time I would like to turn the call over to your host today, the Chief Financial Officer Mr.Dave Lemus. Please go ahead Sir.

DAVE LEMUS, CFO, MORPHOSYS AG: Good morning and welcome. This is Dave Lemus CFO of Morphosys. With me today is Simon Moroney our CEO. The call comes today from our headquarters in Munich, Germany. First we'd like to welcome you to this conference call and thank you for participating. During the call we would like to talk about the Company's financial results for the first quarter of 2005. Simon will begin by giving you an overview of the last quarter and provide you with an update about the psoriasis comparison study within MOR102. Then I'll open the call to reviewing the financial results for the first three months. Afterwards we open the call to your questions.

Before I start I want to remind you that this conference -- that during this conference we will present and discuss certain forward-looking statements concerning the development of Morphosys' core technologies, the progress of its current research programs and the initiation of additional programs. Should actual conditions differ from the Company's assumptions, actual results and actions may differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements which speak only as at the date hereof. I'd now like to hand over to Simon Moroney.

SIMON MORONEY, CEO, MORPHOSYS AG: Thank you Dave and also from me welcome to everyone participating in this call. It has been an extremely busy quarter for us. While taking important steps at the corporate level to help us drive our research antibody business forward, we also reached a significant milestone on the core therapeutic side of the business and as well, entered into new deals for two existing partners, Bristol-Myers Squibb and Boehringer Ingelheim. Intense corporate activity has not been at the expense of operations. As the numbers show the business is performing absolutely in line with the guidance we issued at our annual results conference.

The highlight of the quarter was our acquisition of Biogenesis. This transaction is intended to help us build our research antibody business, giving us recurring revenues from a portfolio of existing products and even more importantly, established marketing channels for new HuCAL derived products.

Since the announcement of the acquisition of January 20, we have focused on linking the business activities of our 3 research antibody sites in Munich, Poole in England and New Hampshire in the United States. We are already seeing the first signs of the positive synergies we expect as customer contacts we've developed out of our HuCAL business for the Biogenesis products and, as we establish new contacts for potential HuCAL business from pre-existing Biogenesis customers.

Approximately 6 weeks after the acquisition we successfully completed a pipe financing raising just over E17m. As a result we are able to report a particularly strong cash position at quarter's end of over E50m. This financing was done with future expansion in mind and will give us much great flexibility to enter and conduct future discussions and negotiations.

On the therapeutic side of the business a landmark event in the Company's history was the entry of the first HuCAL antibody into clinical trials. On February 1, our partners GPC Biotech announced that 1DO-923, a HuCAL antibody against MHC2 had commenced a clinical trial in Switzerland for lymphoma. We will of course follow the -- we will follow the course of this and subsequent trials with great interest.

Other developments on the therapeutic side of the business were deals with Bristol-Myers Squibb and Boehringer Ingelheim. The BMS deal involved switching their existing HuCAL's description from a previous version of the library to the new Gold version. BMS will use HuCAL Gold within their pharmaceutical discovery programs for target characterization and validation as well as for therapeutic and diagnostic antibody product development.

The deal with Boehringer Ingelheim builds on our established relationship, dating from February 2003, under which we are developing 2 therapeutic antibody candidates. The new deal covers installation of the HuCAL Gold technology at a number of BI sites. For example in Vienna, to enable BI to integrate the technology into their research and development activities, we expect additional therapeutic programs to result from this increase in HuCAL based activity at Boehringer Ingelheim.

Both the BMS and BI deal further exemplify our strategy of increasing the penetration of the HuCAL technology into pharmaceutical drug discovery programs. This strategy has a simple premise. Increased utilization of our proprietary technology raises our revenues today but more importantly, increases the number of products based on the technology that will reach the market tomorrow. More products means more milestone and royalty payments to Morphosys and therefore greater value.

The new deals add to the 24 ongoing pilot projects in our pipeline. Although it came after the conclusion of the first quarter, I would like to pick up on our second press release of today regarding our ongoing pre-clinical work with MOR102.

As we announced, there was also our most recent study, which was intended to compare the efficacy of MOR102 with the approved biologics for Raptiva and Aloveve were inconclusive. The reason for this is that the established model which we had used successfully in earlier work to establish the efficacy of MOR102, behaved less well than expected in this study. In particular we observed such a high level of spontaneous remissions in the contract arm that we were unable to draw any conclusions regarding the performance of MOR102 relative to the 2 approved treatments. Notwithstanding this inconclusive outcome, we remain optimistic for the future development of MOR102 for 2 reasons. First, the compounds did show clear evidence of efficacy in the earlier study, the result of which will shortly be published in a [indiscernible] scientific journal. And second, dermatologists continue to look for new treatment alternatives since the existing medications currently approved for the syndication do not work in all cases.

Regarding both this and our cancer program MOR202, discussions with potential partners are ongoing and we remain committed to our announced objective, of finding a development partner for one or both compounds before year end.

Finally, a brief review of the remainder of the year. We are upbeat regarding both our core therapeutics business and the new research antibody activities of antibodies by design and Biogenesis.

We continue to see good demand for our technology. The deals that we announced in Q1 with Bristol-Myers Squibb and Boehringer Ingelheim, we expect to be the first of several important alliances that we will report during the course of this year.

Our pipeline continues to develop. We are on track to meet all of our objectives for this year. That concludes my summary of the quarter and I would now like to hand back to Dave, for us his review of the numbers.

DAVE LEMUS: Thank you Simon. We prepared our financial results for the first quarter 2005 according to IFRS standards. Most of you recall that we switched our accounts over to IFRS already in Q4 last year. Therefore, I won't go into the differences between US GAAP and IFRS in our report this morning. And by the way, the numbers are consolidated numbers which means they include the newly acquire Biogenesis group of companies.

To begin the financial analysis I'd like to start with revenues. Company revenues grew by 72% in the first three months of 2005, to E7.4m compared to E4.3m in the same period of last year. Reasons for the increase include new corroborations signed last year, the addition of Biogenesis revenues in our consolidated numbers and the I and B milestone from GPC which happened in January of this year.

To give you a clear look for the impact of Biogenesis on our numbers, the Biogenesis group of companies contributed E0.5m for the first quarter turnover. Stripping out the effect of Biogenesis, Morphosys grew organically by more than 60% in the first quarter of 2005.

Revenues from our therapeutic antibody and target research collaborations generated 89% of total revenues, while the research antibody segment, which includes Morphosys antibodies by design unit and really acquired Biogenesis group of companies in the USA and the UK, generated 11% of the total.

The antibody design -- the antibody by design unit contributed 39% of the total research antibody segment revenues while 61% of segment revenues are just from the Biogenesis group companies.

If you look at our income statement you will see a new line representing cost of goods sold. Cost of goods sold is made up of the research antibody segment, cost of goods sold during the first quarter for both the antibody by design unit as well as for the Biogenesis group of companies. Costs rose significantly in 2005, compared to 2004, rising from E0.2m to E0.5m. The main reason for the increase was the inclusion of the Biogenesis group of companies cost of goods sold into group accounts in the current year, which represented E0.2m of the total cost amount.

And for the first three months of 2005, total operating expenses increased by 54% to E6.3m. Costs for research and development increased to E3.6m compared to E2.4m in the same period of the previous year. The increase of E1.2m resulted mainly from higher personnel related costs and higher material expense as a result of new co-operations signed during 2004, as well as increased license fees interim milestone payment achieved in 2005.

So general and administrative expenses increased by E1m to E2.4m. This is mainly from higher personnel costs extending from the contribution of the Biogenesis group as well as increased advisory fees.

The total operating expenses for the Biogenesis group, the total operating -- to the consolidated operating expense was E0.3m.

Moving on to capital expenditure. Morphosys investment in plant, property and equipment was modest during the first quarter and amounted to E0.1m for the first three months of 2005 compared to E0.5m for the same period of the prior year. Substantially all investments were accomplished in Germany.

Depreciation for the first three months of 2005 came to E0.2m and remained unchanged compared to Q1 2004.

Following the positive trend established in 2004, the Company is presenting an operating profit for the first three months of 2005 in the amount of E0.6m compared to a break even zero in the same period of the previous year. A net income of E0.5m resulted for the first quarter in 2005, compared to a net loss of E0.1m in March 2004.

The resulting profit per share for the first three months in 2005 remains at E0.08 per share compared to a net loss per share of E0.01 per share in the same quarter of the previous year.

At March 31st, 2005 the total number of shares increased to approximately 5.95m compared to 5.3m shares at December 31st, 2004, mainly reflecting the Company's private placement successfully executed during the first quarter of 2005.

At March 31st, 2005, which is post-private placement, the Company held 51.1m in cash, cash equivalents in marketable securities, compared to a E37.2m balance at the end of last year.

As is typical during our conference call we'd like to take the opportunity to confirm financial guidance.

In summary, we have no changes to guidance to report this morning. Therefore, we reiterate our original guidance.

We expect revenues in total of E30m, whereof E25m from the therapeutic antibody segment and E5m from the research antibody segment.

Expenses are expected to increase in line with revenues and we expect for the full year expenses of E29m.

On the basis of these estimates Morphosys expects to achieve a net profit of E1m for the full year 2005.

That concludes the financial analysis for the first quarter of 2005. We would now like to open the call up to your questions.

OPERATOR: Thank you Sir. The question and answer session will be conducted electronically. [OPERATOR INSTRUCTIONS] The first question is from Thomas Hoger, DZ Bank. Please go ahead Sir. Mr.Hoger, if you would like to re-signal? Please go ahead Mr.Hoger.

THOMAS HOGER, ANALYST, DZ BANK: Okay, good.

OPERATOR: Mr.Hoger? Once again, if you could please re-signal. Mr.Hoger? If you could please re-signal? Mr.Hoger please go ahead, your line is open.

THOMAS HOGER: Okay good finally, third try. Can you hear me now?

DAVE LEMUS: Yes.

THOMAS HOGER: Okay fine good. So I have a question concerning all the pre-clinical antibodies by Morphosys. When do you expect the first pharma of macrobiotic deals to be closed concerning the further advance to these antibodies?

SIMON MORONEY: Thomas hi, this is Simon. Just to confirm again what we said during the call and also what we said at the beginning of this year, that our goal is to partner at least one of these compounds during the course of this year. Precisely when that would be I obviously can't say but that's certainly a stated and maintained goal for 2005.

THOMAS HOGER: Okay, so this is after the date of -- after today more likely the cancer antibody, I assume?

SIMON MORONEY: No, I really wouldn't want to predict which one of those two it will be. Discussions around both programs continue. In an ideal world we would indeed partner both compounds however our stated goal is that we will partner at least one of them and I wouldn't frankly want to say today which one it will be see. We see chances to partner either of them.

THOMAS HOGER: Okay, fair enough and all the best from [indiscernible].

SIMON MORONEY: Thank you.

OPERATOR: We will take our next question from Dr. Markus Metzger of the Bank Vontobel. Please go ahead Sir.

MARKUS METZGER, ANALYST, BANK VONTOBEL: Hi everybody, Markus Metzger from Bank Vontobel. I have a question on the new collaborations you suggested to close during 2005. Are those already reflected in your financial guidance or is actually the whole batch is covered by existing partnerships?

And then secondly, can you tell us anything about the timing of clinical studies for let's say partner antibodies in-house development you have been involved?

And then maybe you can give us some more flavor on how, let's say the discussion is going about the CD38 project, to see how the interest from potential partners is on that side?

And also maybe share some news about other pre-clinical projects than the CD38 and the MOR102? Thanks very much.

DAVE LEMUS: [indiscernible] good morning. I'll start with the financial question. There are some new deals and vision for this year and they are included in our budget and our prognosis for this year of the E30m turnover. Also included in that prognosis obviously is the antibodies by design and Biogenesis group revenues. Should those deals be had at this point we are not willing to say that that would increase the total amount of revenues that we would achieve for the year under the current circumstances we believe that should those deals be had, we would still come in at E30m.

To give you a flavor for the level of firmness of those revenues, more than two-thirds of those revenues are already wrapped up in terms of -- or committed in terms of existing partnerships.

SIMON MORONEY: Markus hi. I'll talk to the other questions you had. First of all with respect to the clinical milestones, the GPC program, we know probably as much as you do, which is that the information that GPC has put in the public domain, that they expect data from their phase 1 study of 1DO-923 in the second half of this year. More than that we don't know.

We have no reason to deviate from information that we communicated earlier this year that we have good reason to believe that a further three compounds from partners could enter the clinic by the end of Q1 next year. One of those could make it in this calendar year, but as I said, our current information is still that there could be an additional 3 over and above 1DO-923 in the clinic by the end of Q1 in 2006.

With respect to the CD38 program that you mentioned, that is of course MOR202. All I would say at this stage is that discussions with potential partners are ongoing and as I said in respect to Thomas Hoger's question, we expect and aim to partner either that or MOR102, the anti-ICAM program or in an ideal world both, prior to the end of this year.

You also asked about any other pre-clinical programs, as we announced today at our year-end results conference, we have a new program ongoing called MOR103, which is an inflammation program against a target that we haven't yet disclosed. That program is somewhat early still in the research phase and therefore it's really premature to say anything meaningful or anything of any value about that program and we'd prefer to withhold any substantive comments about that until we generate data that we feel is really meaningful from a commercial perspective.

MARKUS METZGER: Thanks very much.

OPERATOR: We will take out next question from Dr. Hans Frohnmyer. Please go ahead Sir.

HANS FROHNMYER, ANALYST, LLBW: Good morning. There are 3 questions. One is, what are your expectations for the tax rate in the full year?

And the second is, your cost of goods sold, can we expect a similar rise than in Q1 for the full year?

And the third one is, for your Biogenesis business, from the Q1 results it seems to be that you got 0.5m since end of January, does this sit through your full year expectations in the antibody by design business? Thank you.

DAVE LEMUS: Okay, I'll take that. Good morning. The first question regarding the tax rate, we actually have the potential of paying tax in 3 various jurisdictions. One in the US through Biogenesis US, one from Biogenesis in the UK and there we expect to pay the statutory tax rates which are in effect in both the US and the UK.

With regard to Morphosys AG in Germany, we have given a projection of E1m profit under IFRS. That will look slightly different to our tax books. We could imagine that for example that the tax books would show somewhat less of a profit and hence since we have tax loss carry-forwards, we don't intend -- or we don't expect at this point to pay any taxes in Germany.

The second question was the COGS, we expect to see -- or what you saw you in Q1 was the effect of adding not only the Biogenesis group sales but also the Biogenesis group COGS and what we saw was that the COGS -- the gross profit margins of Biogenesis were slightly in excess of 50% during the first quarter. We expect that to rise. We felt that the gross margin on the antibodies by design business was slightly under-performing in Q1. We expect that also to rise. So we expect COGS as a percentage of sales for the reagent antibodies until to reduce. That is, the gross margins should improve throughout the year as sales pick up.

And the last question -- I'm sorry could you remind me again what that was?

HANS FROHNMYER: Yes, just the development of your Biogenesis business. Since end of January, you obviously made E0.5m in revenues, so do you stick to your full year guidance, I think that was E3m for the full year, for the Biogenesis business?

DAVE LEMUS: Yes, we expect that roughly it would be roughly E3m. Now I think I would like to move away from giving individual targets to each unit and just say for the unit as a whole, the research antibody unit, which includes Munich Antibodies by Design plus Biogenesis UK and Biogenesis US, we expect for the entire until revenues of roughly E5m.

HANS FROHNMYER: Okay.

DAVE LEMUS: And we still have no reason to believe that that shouldn't happen by the end of this year. That is, we expect a pick up of sales.

HANS FROHNMYER: Thank you.

OPERATOR: [OPERATOR INSTRUCTIONS] We will take our next question from Mr. Nick Turner of Jeffries International. Please go ahead Sir.

NICK TURNER, ANALYST, JEFFERIES INTERNATIONAL: Hello. Thanks for taking the question. Could you perhaps tell me whether or not there's been any progress with MOR101 in burn? Whether there are discussions on this partnering ongoing and whether there's been any interest or whether effectively it's a program that's very much on the back burner?

In addition, with MOR102 in psoriasis, could you tell me how you intend to move this program forward and as to whether or not the inconclusive study that you reported today, in fact was a study that was contracted out. And if so, does this give you a feeling that perhaps you ought to be expanding in-house or indeed to be able to do such studies yourself?

And maybe on -- a final point would be, perhaps you could discuss briefly the approach that Morphosys has to the development of in-house partnering candidates and whether the approach that you have is purely opportunistic or whether or not you're building up an R&D business driven by novel proprietary targets?

SIMON MORONEY: Nick hi. I'll take that. I don't know whether the pun was intended, to say that MOR101 was being put on the back burner but

NICK TURNER: Not really, I'm sorry, it was a bad choice of word.

SIMON MORONEY: The answer to that is, in the discussions that we're having around MOR102, burn is always part of the discussion and we kind of see those programs together and you will recall that the original data that Boehringer Ingelheim generated that burn was indeed with the IgG, the full IgG, and the only difference between MOR101 and 102 is [indiscernible] versus IgG. So it could indeed be that the deal we do may be primarily around the IgG, but could be a focus on psoriasis as well as burn. So in a sense, it's -- that's a little bit misleading to see those as really separate programs. They are really related since they are essentially the same molecule in two different formats. They're essentially related and they're all kind of rolled into one discussion. So I guess we don't see really any chance of partnering them separately but they would be part of a single deal.

With respect to psoriasis study, in answer to your question, yes indeed that was an externally conducted study. We used a group here in Germany to do the work and the fact that the study was inconclusive, I don't want in any way to reflect on them. What we've learnt is that these types of studies, where we use [Skip Morris] on to which psoriac skin from donors is grafted, are rather unpredictable and that's one of the reasons why the partners that we're talking to, who are knowledgeable about this stuff, are actually somewhat relaxed that the study was indeed inconclusive.

We haven't yet decided precisely what additional work we will do in this area. That's something that we are currently looking at, but we are currently considering some organizational steps that we think will strengthen our ability in this area and it would be premature for me to say anything about those yet, but in the coming weeks we hope to be able to talk about that in more detail.

With respect to the partner programs, we see that really as the rolls-royce part of our business if you like. We really have an extremely good reputation in the pharmaceutical industry for our partnering activities. You talk to any of our current partners about how we perform in those partnerships and I'm sure that the feedback will be uniformly positive and as I said during the presentation, we continue to see excellent demand out there for our technology and for our work. And so, we don't really see that as an opportunistic business, the way you said. There is genuine demand from potential partners out there and we continue to try and fulfill that demand.

With respect to whether we would initiate our own programs in order to look to out-license those then, that will continue as we've said in the past, to be ad hoc, in the sense that as and when we identify interesting targets where we think we can generate added value with the HuCAL base program, we will do that. That doesn't mean that we are committing to a certain number at a certain time, but we will continue as resources allow to initiate own programs and to seek to partner those programs.

NICK TURNER: Okay, thanks very much. And from the opportunistic point of view I was referring primarily to your in-house programs as to have you -- what the approach is within Morphosys's R&D let's call, for research in terms of the choice of potential target and what to move forward with and I think that you answered that.

SIMON MORONEY: Yes, the MOR103 is a good example there. That was an opportunity that was identified by one of our scientists where we saw a good opportunity to add value with -- and optimize HuCAL antibody and therefore we have chosen to pursue it.

NICK TURNER: Thanks.

OPERATOR: [OPERATOR INSTRUCTIONS] Gentlemen it appears we have no further questions and I would like to turn the call back over to you for any closing remarks. Please go ahead.

SIMON MORONEY: Thank you. Before we conclude I'd like to remind you all of the key messages to take away from this call. First the acquisition of Biogenesis and the subsequent E17m pipe gives us much greater flexibility as we focus on growing our business. Second, the core therapeutics business continues to perform well as illustrated by the deals with Bristol-Myers Squibb and Boehringer Ingelheim. And finally, the commencement by GPC of clinical trials with the HuCAL antibody 1do-923 signals we hope, the first of a series of antibodies derived from our proprietary technology, which will reach the clinic in the months and years to come and is therefore a landmark event for Morphosys.

That concludes the Morphosys Q1 2005 conference call. Should any of you have any additional questions, Dave and I are both in the office for the rest of the day and would be happy to talk to you one on one. Thank you again for your participation and good bye.

OPERATOR: Ladies and gentlemen that will conclude today's conference. Thank you for your participation and have a good day.

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Q2 2005 Morphosys AG Earnings Conference Call - Final
28 July 2005

OPERATOR: Good day ladies and gentleman and welcome to the Morphosys AG Second Quarter 2005 Results Conference Call. [OPERATOR INSTRUCTIONS] At this time I would like to turn the call over to your host today, Mr. Dave Lemus, CFO. Please go ahead, sir.

DAVE LEMUS, CFO, MORPHOSYS AG: Good morning and welcome. This is Dave Lemus, CFO, MorphoSys, calling from the U.S. this morning. With me on the call this morning is Simon Moroney, our CEO, who is sitting in our headquarters in Munich.

First we'd like to welcome you to this conference call and thank you for participating. During the call we would like to talk about the Company's financial results for the first six months of 2005.

Simon will begin by giving you an overview of the last quarter, then I will review the financial results for the half of 2005. Afterwards we will open the call to your questions.

Before I start I want to remind you that during this conference we will present and discuss certain forward-looking statements concerning the development of MorphoSys core technologies, the progress of its current research programs and the initiation of additional programs. Should actual conditions differ from the Company's assumptions, actual results and actions may differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements which speak only as of the date hereof. I would now like to hand over to Simon Moroney.

SIMON MORONEY, CEO, MORPHOSYS AG: Thank you Dave, and also from me, welcome to everyone participating in this call. The second quarter has again been one of solid performance for MorphoSys. The financial results bear this out at E15m. Revenues are absolutely in line with our revenue target of E30m for the full year. Expenses are well under control and the net result once again highlights the fact that the business is performing strongly.

The Therapeutic side of the business has performed particularly well. The most visible aspect was the extension of our collaboration with ImmunoGen Inc. After 4 successful years ImmunoGen chose to extend their license to the HuCAL technology for a further year and took the opportunity to upgrade to the latest HuCAL Gold version of the library. For us this means additional license revenue and potentially new product programs based on the application of our technology.

What is less visible in the Therapeutics unit is the excellent progress being made in our ongoing partnerships. This is the case because much of the time our partners are not prepared to release any information about the status of ongoing projects. While we understand this position, it does limit what we can say about the programs and certain payments we receive under the collaboration.

What we can say is that our strategy of maximizing the number of partnered programs, based on our technology, is paying off. In Q2 2005 we started another new program with one of our major pharmaceutical partners, which wasn't disclosed separately. There are currently some 25 active partnered programs and as these move forward the frequency and size of milestone payments is increasing. This has a positive impact on our revenues, for example milestone payments made a significant contribution to our revenues in this quarter. Even more importantly, with every milestone that is hit the probability of that antibody becoming a marketed drug goes up.

Partnered programs based on our technology in which we participate through milestone and royalty payments have always been at the heart of the MorphoSys strategy and it is very gratifying to see the positive effects of this strategy reflected in our financial results as well as the burgeoning pipeline of Therapeutic products based on our technology.

Regarding our proprietary drug programs we continue to carry out discussions with potential partners on their further development.

On the Research Antibody side of the business, in the second quarter we completed the integration of the 2 Biogenesis businesses that we acquired in Q1. Revenues for the unit came in a little below our target, to some extent because our attention was focused mostly on integration during the quarter, but demand is robust and we expect to meet our objectives for the full year.

During the quarter we announced the collaboration with ProQinase, a division of KTB Tumorforschungs GmbH, and the Natural and Medical Sciences Institute of the University of Tuebingen to make antibodies against 250 Protein Qinases. This project is being supported by a E2m grant from the German Federal Ministry of Research. Qinases comprise an important class of enzyme, many of which are implicated in diseases. This is an excellent example of the application of our automated HuCAL technology enabling a high throughput approach to the characterization of an important class of proteins.

We made 2 important appointments during the quarter. Dr. Robert Friesen joined us as Director of Pre-Clinical Development. He will help us with the planning and execution of the next steps with our proprietary product candidates and with subsequent molecules that we may choose to pursue. Robert came to us from AM Farmer in Holland where he was VP of Research and Pre-Clinical Development.

The second appointment was of Dr. Bernhard Erning who becomes are Director of Treasury & Corporate Development. Bernhard has many years experience in international investment banking behind him, including positions as Head of Equity Capital Markets for West LB and as Executive Director of Corporate Finance for UBS in London and Frankfurt.

These 2 senior appointments impact areas that are of great importance to the Company and on which we place a high priority.

Finally in my review of the quarter we are very proud to have won ergo Kommunikations Award for Corporate Governance, Best TecDAX Company and Best Biotech Company overall for the second year in a row. We attach great importance to this aspect of Company management and this award is a pleasing recognition of that fact.

That concludes my review of the quarter. I would now like to hand back to Dave for his review of the financials.

DAVE LEMUS: Thank you Simon. To begin the financial analysis, I'll start with revenues. Company revenues grew by 73% in the first 6 months of 2005 to E15.4m compared to E8.9m in the same period of last year. Reasons for the increase include significant new collaborations which were signed in 2004, the addition of Biogenesis revenues in our consolidated numbers and success based payments from existing collaborations achieved in the first 6 months of this year.

The MorphoSys Research Antibody segment contributed 1.8m revenues to the consolidated turnover for the first half year. Revenues from our Therapeutic Antibody and Target Research collaborations generated 88% of total revenues while the Research Antibody segment generated 12% of the total.

COGS rose significantly in 2005 compared 2004, rising from E0.4m to E1.1m. The main reason for the increase was inclusion of the Biogenesis Companies costs of goods sold in the group accounts in the current year, which amounted to E0.6m of the total COGS amount.

For the first 6 months in 2005 total other operating expenses increased by 31% to E12.2m. In line with the increase, costs for Research and Development increased to E6.8m compared to E5.2m in the same period the previous year. The increase of E1.6m resulted mainly from higher personnel costs and higher material expense, as a result of new collaborations signed in 2004 as well as increased license fees due to a milestone payment achieved in 2005.

SG&A expenses increased by E1.4m to E4.9m. This resulted mainly from higher personnel costs stemming from the contribution of the Biogenesis Group as well as increased third party advisory fees. In particular marketing expenses.

Stock-based compensation, in the amount of E0.6m for the first 6 months of 2005 was essentially unchanged compared to the previous year.

MorphoSys investment in plant, property and equipment or CapEx amounted to E0.3m for the first 6 months of 2005 compared to E0.7m for the same period last year. Last years CapEx was heavily impacted by investment in the Antibodies by Design Automation facilities which are now largely finished, therefore the reduction in CapEx.

Depreciation for the first 6 months accounted for E0.4m compared to E0.3m in the same period of the previous year.

Non-operating expenses amounted to E0.2m compared to a non-operating loss of E0.5m in the same period of the previous year and arise mainly from foreign exchange losses and interest expense. The amount you see as an income tax benefit in the amount of E0.1m stems from the Biogenesis purchase price allocation, or PPA, which we did in Q2 this year. More specifically it's the amortization of deferred tax liabilities associated with a step up of assets. We will talk a little bit more about the PPA in just a minute.

For the first 6 months of 2005 the Company presented an operating profit in the amount of E2.0m compared to last year's loss of E0.7m. An income of E1.8m resulted for the first half of 2005 compared to a net loss of E1.2m in the first half of 2004.

At June 30 the total number of shares issued were 5.9m compared to 5.4m at December 2004, which reflects the successful capital increase which we conducted in the first quarter of this year. At June 30, 2005 the Company held 49.4m in cash and available for sale - financial assets compared to 37.2m balance at December 31, 2004. The higher cash amount again reflects our cash positive business as well as the capital increase conducted in Q1 of this year.

The only item I'd like to discuss on the balance sheet today are the step up and net assets relating to our purchase price allocation in conjunction with the Biogenesis acquisition. In the financial report we issued today, you'll see our preliminary PPA and summary form and see the total step up and asset values equalled roughly to 0 - to E2.2m. This puts our goodwill as a percentage of the purchase price at roughly 56%.

That concludes the financial analysis.

As is typical in these conference calls, we'd like to take the opportunity to confirm financial guidance. In summary we have no changes to guidance to report this morning. To reiterate the original guidance. We expect revenues in total of E30m thereof E25m from the Therapeutic Antibody segment and E5m from the Research Antibody segment.

Expenses are anticipated to increase in line with revenues and we expect for the full year 2005 E29m of expense. On the basis of these estimates MorphoSys expects to achieve a net profit of E1m for the full year. Although we currently show a net profit of E1.8m, there is a ramp up of expenditure expected in the second half of this year. Additionally the first half was impacted by success-based payment revenues, happened earlier in the year than expected, resulting therefore in somewhat higher profit margins for the first half of the year.

Hence it would be premature to conclude our level of profitability will continue for the year and therefore we stick with our original guidance of E1m profit for the full year.

That concludes the financial analysis for the first half of 2005. We'd now like to open up the call to your questions.

OPERATOR: Thank you Sir. [OPERATOR INSTRUCTIONS] We will now take our first question from Thomas [Visler] of Equities GmbH. Please go ahead.

THOMAS VISLER, ANALYST, EQUITIES GMBH: Hello, this is Thomas [Visler] from Equities in Frankfurt speaking. Thank you for taking my question. My first question is concerning the very good result of the first half of the year. You mentioned it right now that there is better than expected revenue stream in the first half and the second half should be an increase in expenditures. Could you please be a little bit more specific on that? Also concerning a more expenses to be seen in the second half, that is the one question.

The other question is on the PPA procedure. Did I understand you correctly that the allocation on assets is fixed right now so that we will not see any changes in goodwill amortization and so on and so forth in the second half of the year? Thank you.

SIMON MORONEY: Thomas, hi and welcome to the call. Simon here. We mentioned at the outset that we're sitting in different cities on sides of the Atlantic so we'll try and coordinate the answers to the questions as well as possible. I think on these two points I would ask Dave, regarding expenses in the second half of the year and the PPA, to comment.

DAVE LEMUS: Okay, I'll start with the PPA. As we all understand under IFRS, under the international accounting standards, the PPA is preliminary in it's' nature, meaning that we have 12 months from the date of acquisition to make changes. That being said, we have now booked the preliminary PPA and we do not expect any significant changes within the next 12 months. That being said we do leave it open that there may be minor adjustments to the PPA in the coming quarters but we don't expect anything significant.

As it relates to your first question on profitability, as I mentioned in the call our profitability was impacted, for example, by one of the milestones which we achieved during the quarter. As we've said for many years when milestones start to flow that will significantly positively increase our result. In the second half of the year we don't expect milestones to flow in the same level that they did in the first half, hence profitability will lower somewhat. Additionally as I said in the call our expenses will ramp. Some of those expenses will ramp, for example, in the pre-clinical development area. Beyond that I think I can't exactly comment where the expenses will be or define it to a particular block, I think the biggest block we can say is the development of pre-clinical compounds in the second half of the year.

THOMAS VISLER: May I take an additional question on that?

DAVE LEMUS: Yes.

THOMAS VISLER: You indicated in the management report concerning the R&D expenses that you are moving out of the - that you are using the cost of external lab funding. Is this a trend and is this meaning that you will do more lab work internally in the future than in the past? Thank you.

DAVE LEMUS: Sure, no. No, I think that would be a wrong conclusion to draw. I think the reduced cost relating to external lab funding have more to do with timing of these expenditures rather than a shift from external to internal.

THOMAS VISLER: Okay. Thank you.

OPERATOR: [OPERATOR INSTRUCTIONS] We will now take our next question from Martin Possienke of Equinet. Please go ahead Sir.

MARTIN POSSIENKE, ANALYST, EQUINET: A very good morning. It's Martin Possienke from Equinet. Firstly, with regard to Research Antibodies, I think I thought correctly you had a loss of E1.4m in the first 6 months and you spoke before about break even for the full year. Is this reachable?

And then secondly with regard to your tax loss carried forward I assume you must have something like E20m or so. Will there be a certain point in time where you have to capitalize these tax loss carried forward?

And then thirdly maybe you can briefly remind me of the terms of the Novatis collaboration, maybe in particular with regard to options of Novatis to obtain full access to MorphoSys technology?

SIMON MORONEY: Okay Martin I'll take part of that. And with respect to the Research Antibodies Unit I will comment on the qualitative development of that business, Dave may want to add something with respect to the financial result there. As I said during the presentation, we certainly spent some time focusing on integration during the first 6 months, but the underlying demand and the underlying growth is strong and for example, on the customs side of the business where this would be the original antibodies by design business where we make custom antibodies for people on demand, we are continuing to see really rapid growth there, so, at a rate of 80 to 90% year on year. So that fundamental underlying growth is what's driving the business and that's why we're able to reiterate what we said at the outset which is that we still expect to reach the target of 5m revenues and 5m expenses for the year as a whole for that unit.

While I'm at it, I'll also pick up on your question with respect to Novatis and then hand over to Dave for the tax loss carried forward question. Recall that the agreement with Novatis is intended to run for 5 years although it may only last 3 years. We don't know yet whether that option to extend for the additional 2 years will be exercised. Novatis has committed some approximately 30m over the first 3 years and for the first time we've granted an option for Novatis in this case to internalize the entire technology platform. Novatis may exercise that option any time within the first 3 years, exercise will trigger a payment, a significant payment from Novatis which we've not publicized and are not able to publicize. No decision on there part has been made yet whether they will or will not exercise that option.

MARTIN POSSIENKE: It was in the first 3 years?

SIMON MORONEY: Yes.

MARTIN POSSIENKE: Okay, thank you.

SIMON MORONEY: So then I would propose to hand over to Dave for the tax loss carried forward question.

DAVE LEMUS: Okay. Regarding the tax loss carried forward, the amount that we have in terms of tax loss carried forward, which we think are applicable for use going forward, the amount is slightly in excess of E25m and yes, we will start to think as we become more and more profitable how we will think about turning some of those tax loss carried forward into tax benefit assets. But yes that is an issue, perhaps less for this year but certainly perhaps, for example, if we're going to be profitable next year, one for next year.

Related to your question on the Research Antibody segment. Operating results, if one looks at the operating results the Biogenesis Group was actually slightly cash positive and profitable and hence the bulk of the loss occurred on the Antibodies by Design side, which led the entire unit into loss for the first 6 months. Some of that has to do with the fact that we have allocated now more of the infrastructure and administrative costs to the Antibodies by Design unit in Munich.

Previously if you had looked at these allocations, not as much administrative costs or infrastructure costs had been allocated to that unit. In terms of the prognosis for the full year, we still are trying to achieve break-even for that unit at the [indiscernible] Committee [indiscernible] or above. That being said that could be impacted by how we ultimately allocate expenses from the headquarter from the Therapeutic Antibody Unit into the Research Antibody Unit so that it could be also slightly minus, but we are targeting break-even still.

MARTIN POSSIENKE: But at least we can assume that, let's say, starting Q3 the Research Antibody Unit will be profitable on a quarterly basis?

DAVE LEMUS: That is the target.

MARTIN POSSIENKE: Okay, thank you.

OPERATOR: [OPERATOR INSTRUCTIONS] We now have a follow-up question from Thomas Visler of Equities GmbH. Please go ahead.

THOMAS VISLER: Thank you for taking the question. Thomas Visler once again. [indiscernible] concerning the more 102 procedure. Is there any new action in site concerning some new tests and so on and so forth to proceed in this the project? Thank you.

SIMON MORONEY: There's no new news at this state Thomas. As I mentioned during the presentation we've hired Robert Friesen to help us plan and execute the further development of those compounds. At such time as we have new information we will bring it to your attention. At this stage we have nothing new to say about that. I want to emphasize something though that we said on the last call on the back of the inconclusive animal study we did. We remain committed to our own proprietary product programs and that's one of those programs, so don't interpret our silence on this matter to mean that we're losing interest, that's certainly not the case.

THOMAS VISLER: Until today you don't have any new signs from your partners concerning entering their project into clinical phase 1?

SIMON MORONEY: Again, earlier this year I believe at the Year End Results Conference Call, we said that we had information from partners that an additional 3 compounds were expected to enter the clinic until the end of Q1 next year.

THOMAS VISLER: Indeed.

SIMON MORONEY: And we have no information that would lead us to alter that projection at this stage. In other words we're still expecting a further 3 compounds to be in the clinic, making a total of 4 of course including the 1D09C3 being developed by GPC, that would make a total of 4 by the end of Q1 next year.

THOMAS VISLER: Okay, thank you.

OPERATOR: It appears that there are no further questions at this time. Dr. Simon Moroney, I would like to turn the conference back over to you for any additional or closing remarks.

SIMON MORONEY: Thank you. Before closing the call I would like to remind you all of the main points to take away.

First, the Therapeutics part of our business is performing particularly well. Excellent progress in ongoing partner projects has made a significant contribution to the strong financial results for the quarter.

Second, the integration of Biogenesis is complete. Overall we're on track to reach all of our goals for this year.

That concludes the call. Should any of you wish to follow up with us directly, then I at least am available in the office here in Munich for the rest of the day. Thank you again for participating and goodbye.

OPERATOR: Ladies and gentlemen, this will conclude today's telephone conference. Thank you for your participation, you may now disconnect.

[lupus2000]

Q3 2005 Morphosys AG Earnings Conference Call - Final
27 October 2005

OPERATOR: Good day ladies and gentlemen and welcome to the MorphoSys AG third quarter 2005 results conference call. For your information this conference is being recorded. At this time I would like to turn the call over to your host today, Mr. Dave Lemus, CFO. Please go ahead.

DAVE LEMUS, CFO, MORPHOSYS AG: Good morning and welcome. This is Dave Lemus, CFO MorphoSys. With me today is Simon Moroney, our CEO. We are calling you from our headquarters in Munich, Germany. First we'd like to welcome you to this conference call and thank you for participating. During the call we would like to talk about the Company's financial results for the first nine months of 2005.

Simon will begin by giving you an overview of the last quarter. Then I will review the financial results for the first nine months of 2005, and provide a short summary of the current status of the Biogenesis integration. Afterwards we will open the call up to your questions.

Before I start I will remind you at this conference that we will present and discuss certain forward-looking statements concerning the development of MorphoSys core technologies, the progress of its current research programs and the initiation of additional programs. Should actual conditions differ from the Company's assumptions, actual results and actions may differ from those anticipated. We would therefore caution not to place undue reliance on such forward-looking statements which speak only as the date hereof. I would now like to hand over to Simon Moroney.

SIMON MORONEY, CEO, MORPHOSYS AG: Thank you Dave. Also from me, welcome to everyone participating in this call. Once again we are delighted to be able to report on a very strong quarter for the Company. The financial results, especially the improved full-year profit guidance, speak for themselves. Indeed for the year as a whole, progress in our core Therapeutic Antibody segment has been especially strong as evidenced by the growing proportion of milestone revenue in our top line.

This is evidence of the depth of our partner's therapeutic pipeline, which is itself a validation of our strategy of entering multiple high quality antibody partnerships. In addition to this strong operational performance we have made considerable progress in the areas that are of strategic importance for the Company, as I will describe.

The highlight of the quarter was our deal with Eli Lilly. This deal came together with full and final settlement of an ongoing dispute with AME, a fully owned subsidiary of Lilly. Under the terms of the deal we have granted Lilly a license to our HuCAL GOLD technology for their in-house R&D activities. This license also comprises options for Lilly to develop a number of HuCAL antibodies as therapeutics, and obviously we hope that this will result in growth in our partnered pipeline.

In addition we have established fixed terms under which Lilly may gain access to research antibodies from our Antibodies by Design unit. In return, we and our partners have freedom to operate under the [Kaufman patent]. We are delighted to have achieved an outcome, which not only provides additional business opportunities for us, and our two main business areas, namely Therapeutic and Research Antibodies, but simultaneously brings to an end the only ongoing litigation that we had.

Our core business based around partnered therapeutic projects continues to perform strongly. Altogether some 28 partnered therapeutic antibody projects are currently ongoing. This is to be compared with the 24 that were active at the start of this year. The expansion of this partnered pipeline is at the heart of our strategy. By delivering optimized fully human antibodies against a range of targets to quality partners, we maximize the probability that product based on our proprietary technology will come to market, and thereby maximize the value we extract from the technology.

Progress was announced from our two biggest partnerships, namely Centocor and Novartis. With Centocor we initiated a new program against an inflammatory target, under the December 2004 extension of our deal. With Novartis we hit the first of what we hope and expect to be many milestones, when we delivered an optimized HuCAL antibody against the cancer-related target molecule.

The deal that we announced with Shionogi marked our first [high double] deal in the Japanese market. Here we are delighted to highlight the contribution of our marketing partner, [Jin Frontier] Corporation, who played a key role in supporting our Business Development team and making the deal a reality. The Shionogi announcement came less than a year after we signed up with Jin Frontier. We hope and believe that this will be the first of a number of business deals in an important Japanese market.

As already announced during the Q2 conference call we appointed Robert Friesen to the position of Director of Pre-Clinical Development. Robert came to us from [break in audio] program and drive the execution of those plans. In this regard we expect in the near future to finalize the plan for the future of the three main programs, MOR102 and MOR103, which are HuCAL antibodies for inflammatory diseases, and MOR202, a HuCAL antibody for cancer.

Our overall strategy with respect to these programs has not changed. Mainly to secure value through the further development with a qualified partner. In this regard discussions are ongoing and I do not want to comment further on these discussions at this stage. We hope to be able to communicate -- to provide a comprehensive update of the proprietary portfolio as a whole, no later than our year-end results conference in February of next year.

The excellent performance in the Therapeutics area compensates for some lag in our other main area, namely the Research Antibodies unit comprising Antibodies by Design plus the acquired Biogenesis companies. While we continue to see good uptake in our services and products, the growth on that uptake has not been at the rate that we anticipated when we acquired Biogenesis. As Dave will describe shortly, the result for this unit in isolation has come in somewhat short of where we expected. The state of the difference is not enough to make an impact on the Company as a whole.

Most importantly we are encouraged by the increasing awareness of HuCAL in the research and antibodies market, and remain convinced by the logic behind this business unit, and its potential to help maximize the use of our proprietary technology in the life science community.

Before handing over to Dave I am delighted to pick up on a second announcement that we made today, namely the appointment of a new Chief Scientific Officer. Effective November 1, of this year, Dr. Marlies Sproll will join the Vorstand in this position. Marlies has been with us for five years having come from positions at Boehringer Ingelheim and [E] Merck.

In searching for this position we have conducted a comprehensive survey of potential candidates. The survey convinced us that in Marlies we have someone who combines, in an ideal way, a deep understanding of therapeutic antibodies, much of which comes from her time at BI and Merck, conversance with the HuCAL platform and an enormous level of trust and respect both within the Company and from our strategic partners. On behalf of Dave I look forward to Marlies joining the Vorstand of MorphoSys and to working with her in the years ahead.

That concludes my review of the quarter. I'd now like to hand back to Dave for his review of the financials.

DAVE LEMUS: Thank you Simon. To begin the financial analysis I'll start with revenues. Revenues grew by 52% in the first nine months of 2005, to E23.8m compared to E15.7m in the same period of last year. Reasons for the increase included new deals signed in 2004, success based payments from existing collaborations in 2005 and the effects of consolidating Biogenesis into our accounts in 2005.

Revenues arising from the Therapeutic Antibody segment accounted for 87% or E20.7m of total revenues for the first nine months of 2005. That compares to E16.4 - sorry that total comprises E16.4m funded research and paid license fees, and E4.3m or 21% of success and/or milestone fees.

The Research Antibody segment comprising MorphoSys's Antibodies by Design unit, and the Biogenesis Group companies in the U.S. and the U.K., generated 13% or E3.1m of total revenues. The Biogenesis Group contributed E2.2m in revenues or 71% of total segment revenues. Antibodies by Design contributed the remaining third or E0.9m of total Research Antibody segment revenues.

We move on to costs of goods sold. COGS only arise in the Research Antibody segment. COGS rose significantly in 2005 compared to 2004, rising from E0.7m to E1.9m. The main reason for the increase was the inclusion of the Biogenesis Group companies profit consoled in the Group accounts in the current year which amounted to E1.1m of the total.

For the first nine months of 2005 total other operating expenses, including stock-based compensation, increased by 30% to E18.1m. The total increase in operating expense of E4.2m was mainly due to higher personnel-related and material costs, in conjunction with new collaboration as well as increased intangibles expenses. The acquisition of the Biogenesis Group companies had the effect of increasing other operating expenses by E1.2m.

In line with this increase costs for Research and Development increased to E9.9m compared to E8.2m in the same period of the previous year. The increase of E1.7m resulted mainly from higher success-based license fees, as well as the effects of payments due under the Eli Lilly cross-licensing agreements signed in the third quarter of 2005.

Higher personnel costs and materials expenses resulted from new co-operations signed. Sales, general and administrative expenses increased by E2.4m to E7.4m. This resulted mainly from higher personnel costs, due to the contribution of Biogenesis, as well as increased costs for external marketing and legal services. Biogenesis total contribution to sales, general and administrative expenses amounted to E1m for the first nine months of 2005.

Stock-based compensation, in the amount of E0.9m for the first nine months of 2005, remained almost unchanged compared to the previous year. MorphoSys' investment in plant, property and equipment, or CapEx, amounted to E0.4m for the first nine months of 2005 compared to E1.2m for the same period of the prior year. Last year's CapEx was heavily impacted by investment into the Antibodies by Design automation facilities, which are now largely finished. Hence the reduction of CapEx in 2005.

Depreciation for the first nine months of 2005 accounted for E0.6m compared to E0.5m in the same period of the previous year. Non-operating expenses summed to zero compared to a non-operating loss of E0.2m in the same period of the previous year.

The interim short-term investments in the amount of E0.5m and tax benefits in the amount of E0.2m were offset by losses from foreign exchange in the amount of E0.5m and interest expenses from the category in the amount of E0.2m.

For the first nine months of 2005 the Company presented an operating profit in the amount of E3.8m compared to an operating profit of E1.2m for the first nine months of 2004. A net income of E3.9m resulted for the first nine months of 2005, compared to E1.0m in the same period of the previous year. The resulting diluted net profit per share for the entire MorphoSys Group for the first nine months ended September 30, 2005, amounted to E0.67 per share, compared to E0.18 per share in the same period of the previous year.

At September 30, 2005 the total amount of shares issued was approximately 6 million shares compared to 5.4 million at December 31, 2004 but [inaudible] the capital increases in the first quarter of this year, approximately 68,000 shares created as a result of exercises out of equity incentive schemes.

In terms of liquidity at September 30, 2005, the Company held E50m in cash and cash equivalents, compared to E37.2m at December 31, 2004. That concludes the financial analysis.

Now before I move on to the financial outlook for the remaining year, I would like to spend just one minute talking about the integration of the Biogenesis Group, acquired in January of this year.

We are happy to announce that by the end of the third quarter 2005, substantially all integration related to the acquisition of Biogenesis has now been accomplished. A few examples. Biogenesis' Antibodies by Design have now merged all marketing and commercial activities into each other. Importantly the combined companies have now been included -- have now been organized along three market segments. These three segments include the Custom Monoclonal Antibody market, Custom Monoclonal antibodies are generated in Munich by Antibodies by Design, using HuCAL, the global clients of both companies. In the second segment Biogenesis provide a comprehensive catalogue of antibody products. This serves as a potential portal for other segments of the business, not to mention as a business in its own right.

The factor in the last months the combined companies have started in-house catalogue projects against novel targets. For example in the area of bone metabolism. A first set of HuCAL derived antibodies were very recently added to the Biogenesis catalogue, and are presently being tested with industrial customers.

Last, but certainly not least, is a contract manufacturing business, where antibodies are produced and scaled from 10mg to 10g on behalf of customers.

The bottom line about any integration is financial impact. On this note, to date, the merger has allowed Biogenesis to secure more than E200,000 of business revenue-related synergies using HuCAL already in 2005, and added numerous new customers to the MorphoSys research antibody customer roster, which have the potential to provide future revenue growth for the combined businesses. In upcoming calls we hope to update you regarding further developments about how the combined unit is progressing.

Now to the outlook. As is typical during our conference calls, we like to take the opportunity to update our financial guidance. At the beginning of this year we estimated that revenues would come in at roughly E30m. This number remains our best estimate of annual revenues for this year. That being said, we see potential upside to the numbers if certain milestones take place before the year end. However, as these milestone events are not in our control, and past experience has shown that these -- timing around these milestones is very difficult to estimate, we choose to remain with our E30m target revenue for the year until we have more clear visibility on these events.

Relating to segment revenues, we expect to see a slight out-performance of sales on the Therapeutic Antibody segment, but more specifically we see approximately E26m versus the original E25m as likely.

This over-performance is balanced however by the slight underperformance of expectations on the Research Antibody segment side of the business, which we now expect to come in at roughly between E4 and E4.5m below the originally planned E5m which we set as a target for the segment at the year's beginning.

On this note, we had originally hoped, shortly after the acquisition at the beginning of the year, that the entire unit would break even for the year prior to corporate allocations. On the back of the unit's performance to date, and the inclusion of amortization related to the purchase price allocation performed in the summer, we have to scale this ambitious target back to an operating loss of approximately E1.25m for the full year.

Total operating expenses prepared to the beginning for the MorphoSys Group are E29m. Assuming a revenue level of E30m, we believe that there is scope for reducing our total operating expense estimate today down by E1m, so that a total operating expense at E28m for the year will result.

Reasons for the decrease in expense are various, and include among other reasons 2004 legal provisions being higher than the 2005 actuals. Lower stock-based compensation expense estimates due to forfeitures of stock options and lower product development expenses. The impact of this change is that we would estimate year-end profitability to rise by E1m to E2m. Although we show profit of over E3m in the first nine-month figure, we allow ourselves room in Q4 for expense provisions related to further proprietary product development expenses as well as possible M&A expenses.

Additionally, as I mentioned before, the Q4 numbers have a high proportion of success-based payments from partners compared to other quarters. Should these activities I just mentioned not materialize as we plan on the expense side, and revenues attain the level we expect for the quarter, then there may be further scope for expense reductions beyond that which we have announced today.

That concludes our financial analysis for the first nine months of 2005. We would now like to open the call up to your questions.

OPERATOR: Thank you. Ladies and gentlemen the question and answer session will be conducted electronically. [OPERATOR INSTRUCTIONS]. Our first question comes from Thomas Schiessle with Equities GmbH, please go ahead.

THOMAS SCHIESSLE, ANALYST, EQUITIES GMBH: Yes, this is Thomas Schiessle from Equities GmbH, hi gentlemen.

SIMON MORONEY: Good morning. Hi Thomas.

THOMAS SCHIESSLE: Ah wonderful, so the line is open. Good morning Dave, good morning Simon. One question on the Antibody by Design, what has been the reason for this lack in dynamism in the overall business with this Antibody business? Is the question of integration the main issue? Or is it the overall market? Thank you.

SIMON MORONEY: Okay, when you talk about lack of dynamism, it's important to bear in mind that this is all relative. Especially if you look at the core customs Antibodies by Design segment itself, that business is currently growing at 80%. So for any business that is growing that fast, it's not that easy to be precise in making projections about how fast it's going to grow in a particular time period.

Our original estimates have turned out to be somewhat higher than reality, and that's the reason for the discrepancy. However, we still see very strong growth, very rapid growth, and as I've mentioned importantly, increasing awareness in the market place for this new technology which is only just getting a foothold remember. This is a completely new technology in a well established marketplace. So the issue is really nothing to do with integration of Biogenesis, which we feel has been successfully accomplished, but much more to do with, a little bit the unpredictability of forecasting a very rapidly growing business segment.

THOMAS SCHIESSLE: Yes -- my record work is correct. Antibody by Design has the run rate of approximately 300,000 per quarter, will there be an uptake in activity with this business unit in the future? Or is this the run rate we should put into our spreadsheets for the quarters to come?

SIMON MORONEY: We expect it to grow. If you look at this year it will, we believe, come in at about 1.3 for the year as a whole. Remember it was at about 800,000 last year. We are seeing rapid growth here and we are seeing no reason why that growth should diminish in the years ahead. The challenge for us always is to estimate as precisely as we can how fast that growth will be, but we still see it as being a very attractive and a very rapidly growing segment of the business.

DAVE LEMUS: Maybe if I could just add to that, I would fully support Simon's comments that for the year ahead and the years ahead that it will grow dynamically, but Thomas your question may have been for the next quarter, if I understood your question correctly, should you expect a similar run rate, and the answer there is yes. At the next quarter we would predict a similar run rate to what we've seen in previous quarters.

THOMAS SCHIESSLE: The automation activity is within this business unit are completed right now, so there is the room for more business to come?

SIMON MORONEY: Sorry, was that automation did you say?

THOMAS SCHIESSLE: Yes, automation.

SIMON MORONEY: Yes, we have the capacity to grow that business now that the automation is in place. Of the orders that we get, not all of them can be handled on the automation, most of them can, something like 80% of them can be handled on the automation facilities we have. There is always a proportion, roughly 20% currently that can't, but we certainly, now that the automation is in place, have the scope to increase the number of routine projects, shall we say, that we run there.

THOMAS SCHIESSLE: Okay, thank you [for the call].

OPERATOR: We will now take questions from Martin Possienke from Equinet.

MARTIN POSSIENKE, ANALYST, EQUINET INSTITUTIONAL SERVICES: Good morning. Okay I have got a couple of questions I would say. The first one maybe to the Therapeutic Antibody field. If I understood you correctly, the figure was 28 antibodies in development, then maybe you can give me the figure how many of these 28 antibodies can reach the clinic within the next 12 months I would say. I think you gave guidance a couple of quarters ago that three antibodies will reach the clinic in Q1 '06, is this still correct?

And secondly maybe coming to the Research Antibody unit, can you quantify the integration costs of the first three quarters of this year? And then if it looks like you need approximately E6m in the revenues in order to break even. Can we be confident that you can reach a figure of this kind on '06? Okay and now I'm with the guidance somehow.

And thirdly regarding your guidance for 2005, in comparing your guidance with the figure of E3.9m reached after nine months, what could be the reason or what explanation can I give to my clients for net loss of more than a E1m in Q4?

And, okay it is a question I should not ask because you will not answer, but regarding the outlook '06, is there any reason to believe that you will be less profitable than in '05?

SIMON MORONEY: Okay, let me start Martin on the Therapeutic Antibody program. We have said indeed that we expect an additional three antibodies to go to the clinic in the foreseeable future, beyond the one that's already in the clinic, that's the GPC antibody. And very recently we have received advice from one of the partners that we think will be responsible for two of those additional three, that they foresee a delay. This is not because of any lack of interest in the program or any fundamental problems, but simply the kind of technical issues that can arise during pre-clinical and manufacturing development of any compound.

So the current situation, our best estimate, and remember that these are things that are not under out control, they are purely under the control of our partners. But our best current estimate is that yes, indeed there will -- we do have visibility on those three additional antibodies entering the clinic.

One of them we still believe will be before the end of Q1 next year, but another two will be delayed beyond that. And that delay could be of the order of 12 months, or possibly as much as 18 months.

MARTIN POSSIENKE: Okay. So actually it will be one antibody to move into the clinic in '06?

SIMON MORONEY: I want to emphasize again, this is based on information we have from our partners and our best current estimate, we believe there could be one within the first quarter of 2006. We believe that there could be another two within 12 months from now, so that would still fall next year, but that that could be up to 18 months which, in the worst case, would take it into 2007 of course.

MARTIN POSSIENKE: Okay. Just to clarify. It's a delay -- it's not a delay of 12 months but the period is 12 months starting today?

SIMON MORONEY: Correct, 12 to 18 months from today. We're talking roughly about the end of next year to the early part of 2007 for those two. The one still seems to be on track for Q1 of next year.

MARTIN POSSIENKE: Okay.

DAVE LEMUS: Okay there was a pair of questions relating to 2006 guidance which unfortunately I won't comment on.

MARTIN POSSIENKE: I thought so.

DAVE LEMUS: What I can however say is, and I think it's important to stress this so that expectations are in line with what we project for next year. MorphoSys is a profitable company currently, has been profitable since last year. That being said, we do not run this company on an EPS cent per basis. We think that profit is important it's important to remain independent of capital markets and that's the reason we run it profitably, however we are not currently running the company as a growth company. We'll run it so that it has a few extra cents per share EPS. So I think that's important to stress so that we all have expectations that people are not calculating a certain rise in EPS. It may be higher, it may be lower, but again the point is, that we don't run it on an EPS basis.

In terms of a question related to the Q4 of 2005. There was the remark that for us to come in E2m we would have to make a loss in the final quarter of slightly over E1m. In my speech I feel I addressed that point, which is we have budgeted in the fourth quarter a certain amount of product development expenses related to our proprietary product development portfolio, and as well potentially M&A expenses.

As I mentioned if those things happen as budgeted, then we believe that expenses would land in as we project them. However, if they don't occur then there may be some room for additional scope of lowering estimates at the end of the year on the expense side. But again I can't say that at this point.

There was one final question related to MRA integration costs, and there we can say that the integration costs have been absolutely minimal. The costs which we can directly identify are certainly less than E150,000 in terms of the integration costs.

MARTIN POSSIENKE: So my calculation is correct that you need approximately E6m in revenues in order to break even?

DAVE LEMUS: Not necessarily. It depends on how you define break even. What you see in the financial reports are amounts for the segments after corporate allocations. We mentioned today that the loss for antibodies for design prior to allocations would be E1.3m. So I think it would therefore be a mistake to add the E1.8m which you see in Q3, and add that to the E4.2m revenue guidance which we gave to give a E6m. I think the unit could break even prior to corporate allocations at a lower amount of revenues than that. And we are of course, on the back of the results that we see today, taking action to reduce our cost base in the RBU sector to improve profitability there.

MARTIN POSSIENKE: Okay. So it could be a target to be profitable in '06 for this unit?

DAVE LEMUS: Certainly could be.

MARTIN POSSIENKE: Okay. Thank you.

OPERATOR: Ladies and gentlemen, we will now take a question from Thomas Hoger with DZ Bank.

THOMAS HOGER, ANALYST, DZ BANK: Good morning. I have two questions right now. First of all, the payments to Lilly and also the payments to the pharmacy [indiscernible] have they been booked under R&D or SG&A? And will there be additional payments to Lilly?

And secondly, do you also plan to license CD38 antibody this year to a pharma partner?

DAVE LEMUS: I'll take the first part of the question. The payments for [Dr. Van Ruden] have been booked under SG&A, the payments for Lilly have been booked under R&D.

SIMON MORONEY: With respect to the MOR202 program Thomas that you mentioned which is the CD38 program. As I mentioned in the talk, we don't want to comment on ongoing discussions for obvious reasons. It falls into the category of negotiations, and for that reason we don't want to talk about it at that stage. I think our objective and our goal for this program was made clear earlier in the year, that we intend to find a good partner for it, and we're continuing to work towards that end. More than that I can't say at this stage.

THOMAS HOGER: Okay. Thanks. One little question concerning Lilly. Am I right in assuming that there will be no additional payments in Q4 to Lilly?

DAVE LEMUS: I think what we can say, we're not allowed to comment on the details of the financials, but I think we can definitively say that the size and scope of payments in Q3 versus Q4, the Q3 payment will be significantly larger than anything that will paid under the agreement in Q4.

THOMAS HOGER: Thank you.

OPERATOR: We will now take a question from Daniel Wendorff with West LB.

DANIEL WENDORFF, ANALYST, WEST LB: Good morning everybody. And my questions have all been answered, so I have no additional question at this time.

OPERATOR: We will move to the next question from Markus Metzger from Bank Vontobel.

MARKUS METZGER, ANALYST, BANK VONTOBEL: Hi everybody. I just wonder whether you remain committed to bring your own antibodies through quickly to development? And if not, would we have to expect a much lower R&D cost line by next year? Thanks.

SIMON MORONEY: The answer's yes, we do remain committed, that's one of the reasons we just hired a director of pre-clinical development, and I don't want to say anything that relates to guidance for next year, but we fully intend to budget an amount of money that enables us to fulfill that commitment to our own proprietory antibodies.

MARKUS METZGER: Okay. Thanks.

OPERATOR: [OPERATOR INSTRUCTIONS]. Our next question comes from [Lennin Gi] with Viscardi.

LENNIN GI, ANALYST, VISCARDI: Hi Simon, hi Dave. Just a quick question concerning the success base for licensing fees. [Just mentioning] Q3 especially the first nine months were a higher success base than licensing fees. What does that mean? Does that mean the higher revenue will be [inaudible] proportional to the actual revenue because actually there was an increase in proportion to the actual revenue?

SIMON MORONEY: Okay, we've just got to make sure we understand your question. Was your question that the percentage of success-based revenues in Q4 will be higher than the previous three quarters? Did we misunderstand that?

LENNIN GI: Essentially it is higher in Q3 compared to previous quarters the success fees that [inaudible] highest proportion?

DAVE LEMUS: I believe so yes.

LENNIN GI: Okay.

OPERATOR: Our next question comes from Hanns Frohnmeyer with LBW.

HANNS FROHNMEYER, ANALYST, LBW: Good morning. As I understood it right a reason for your very conservative guidance for the full year, is that you might get some additional M&A expenses. Could you elaborate a bit about M&A activities you plan in the near future?

SIMON MORONEY: I think the only comment we can make around M&A is comments that we've made previously to the public, which are that in regard to M&A or potential M&A targets we continue to look at acquisitions on the research antibody segment side. Beyond that, I think it is our policy not to comment on whether or not we are in discussions with anybody at this particular point. If we're shown that we are usually throughout the year in discussions with somebody or the other, but obviously at this point we're not at liberty to discuss where we are with that and who we are in discussions with. Does that answer your question?

HANNS FROHNMEYER: No.

OPERATOR: As there are no further questions at this time, I would like to hand the call over to you today for any additional or closing remarks.

SIMON MORONEY: Before closing the call I'd like to remind you of the main points to take away. Overall business is performing particularly well, especially on the therapeutic side excellent progress and ongoing partner project have made a significant contribution to the strong financial results for the quarter. The strong performance has contributed to us being able to raise bottom line guidance for the year as a whole.

That concludes the call, should any of you wish to follow up with us directly, Dave and I are both available in the office here in Munich for the rest of the day. Thank you again for participating and goodbye.

OPERATOR: Ladies and gentlemen. That will conclude today's conference call. Thank you for your participation, you may now disconnect.

[lupus2000]

Morphosys AG Conference Call Regarding Acquisition of Serotec Group - Final
12 January 2006

OPERATOR: Please stand by, this is Premier Global Services, we are about to begin. Good day ladies and gentlemen and welcome to the MorphoSys Acquires Serotec Group Conference Call. [OPERATOR INSTRUCTIONS]. At this time I would like to turn the call over to your hosts today, Dr. Simon Moroney, CEO, and Mr. Dave Lemus, CFO. Gentlemen, please go ahead.

DAVE LEMUS, CFO, MORPHOSYS AG: Good morning and welcome to the MorphoSys conference call. This is Dave Lemus, CFO of MorphoSys. I am here with my colleague, our CEO, Simon Moroney. We have convened this conference call this morning to talk about this morning's announcement of our acquisition of the Serotec Group. Simon and I will provide you with some more detail about the transaction. And we will then open the call to your questions.

Before we start I want to remind you that during this conference call we will present and discuss certain forward-looking statements concerning the development of MorphoSys' core technologies, the progress of its current research program and the initiation of additional programs. Should actual conditions differ from the Company's assumptions actual results and actions may differ from those anticipated. You are, therefore, cautioned not to place undue reliance on such forward-looking statements, which speak only as of the day hereof. I would now like to hand over to Simon to speak about the overall rationale of today's announcement relating to the acquisition of Serotec Group. Simon.

SIMON MORONEY, CEO, MORPHOSYS AG: Thank you Dave. Good morning everyone. And also from me, welcome. The acquisition of Serotec further strengthens the research antibody division of our business, currently the focus of our Antibodies by Design and Biogenesis units. In the research antibody business, size is an important matter. Customer base, product portfolio and access to distribution channels all represent key assets and means to further increase market share.

According to our estimates Serotec is one of the top three antibody suppliers in Europe. Post acquisition, MorphoSys will, we believe, become the leading dedicated supplier of research antibodies and antibody research technologies in Europe, and also a rising global player, being in the top 20 worldwide. Serotec brings to MorphoSys a comprehensive catalogue comprising more than 4,600 research antibodies and products, well-established sales channels, and a large existing customer base in the academic and industrial communities.

Regarding management, there will be no change in the Executive Board, or Vorstand, of MorphoSys AG. The enlarged research antibody unit will be headed, as before, by Dieter Lingelbach. The Serotec founders and current management will remain with the organization and will have expanded roles in the combined unit. Our long-term goal in this area remains unchanged. We believe that in vitro methods, such as our proprietary HuCal technology, will replace animal-based approaches as the means of making antibodies for all applications. MorphoSys is leading this technological transition.

Combining the market presence of Serotec, a well-established antibody supplier, with our HuCal technology for generating custom with competent antibodies, creates a unique business active in multiple segments. We aim to maximize the penetration of HuCal antibodies in the research market. And we see strengthened sales and marketing as a key capability, complementing our existing technological expertise. This was our main motivation in acquiring Biogenesis in 2005 and is also the basis for today's deal. It is also behind the worldwide licensing agreement we announced with Chemicon earlier this week. The acquisition of Serotec is, therefore, a further step in the execution of our strategy.

The enlarged position will unite the existing Antibodies by Design and Biogenesis businesses, together with the Serotec Group, under a single new brand called Antibodies Direct, or AbD for short. AbD will provide a unique offering to life science researchers, a wide selection of antibodies from the combined catalogues of Biogenesis and Serotec, plus access to modern recombinant antibody technology services from Antibodies by Design. In addition we intend to expand the catalogue offering by adding new HuCal-derived reagents as we are already doing with Biogenesis.

Finally I want to emphasis that therapeutics will continue to represent the largest part of our business. From a revenue perspective the existing therapeutics division and the new AbD unit will be closer in size than was the case in the past, but therapeutics remains the larger of the two.

Strategically strengthening our research business achieves three things. First, it offers the prospect of new growth via increased penetration of HuCal in the life science community. Second, it balances the companies risk/reward proposition. We retain the huge upside potential that is provided by the many ongoing drug programs in our therapeutic business, and we diversify our revenue base by growing sales in the research segment.

And third, strengthening our research antibody business is also good for our core therapeutics division. For example we've seen at least one user in the pharmaceutical industry switch from being an Antibodies by Design customer, to a full therapeutic partner based on satisfaction with the technology. HuCal lends itself ideally to this transition since it provides a seamless path from a research reagent to a fully human optimized drug candidate.

With that I'd now like to hand back to Dave for the financial aspect of today's transaction.

DAVE LEMUS: Thank you Simon. You can see from the key figures of today's deal this acquisition is somewhat larger than the Biogenesis [big] deal we did at the beginning of 2005. In contrast to the Biogenesis deal, we decided this time to use a mix of both cash and MorphoSys stock as consideration for the deal. The total purchase price is approximately £19.9m broken down as £14m cash and the issuance of approximately 208,000 new MorphoSys shares from a capital increase. Post transaction, we will have about E30m in our bank. We expect shareholder dilution in this transaction to be minimal at approximately 3.5%.

For Serotec's fiscal year 2005 we expect total revenue from Serotec to be about E11m. The Serotec Group is a profitable company and we expect the deal will be accretive from 2007 onwards. We will provide you with detailed financial guidance for 2006 at our annual results conference on February 24. We estimate that the contribution to our revenue this year will be very roughly about E11m. Viewed another way, the acquisition has the potential to more than triple the size of our research antibody sales in this segment.

Beyond this we will treat this transaction to diversify our revenue streams. Serotec is headquartered in Oxford, England, and has sales offices in the U.S., Germany, France and Scandinavia. Approximately 50% of Serotec's revenues come from the all-important U.S. market. The acquisition will, therefore, significantly increase our presence in these key markets. Serotec's staff of approximately 80 employees will join MorphoSys giving us a total headcount of approximately 240 employees post transaction.

With the transaction the expanded research antibodies unit will now become a more significant second pillar in the Company's overall strategy. Nonetheless, our therapeutic antibody programs, both for our own account and on behalf of partners, still represent a majority of our business. In summary we see this acquisition as another important step towards of goal of establishing HuCal as a technology standard in the research industry. That concludes our statement for this morning. I would now like to open up the call to your questions.

OPERATOR: Thank you gentlemen. [OPERATOR INSTRUCTIONS]. We will now take our first question from Martin Possienke from Equinet. Please go ahead.

MARTIN POSSIENKE, ANALYST, EQUINET INSTITUTIONAL SERVICES: Hi, good morning everybody. Just a couple of questions on financials, I am not sure that you will answer but I have to ask. Maybe you can give us some historic revenue figures for Serotec, maybe for last two years or so? Then are there any acquisition-related costs and which amount we have to assume there? Then you said Serotec is profitable, maybe in terms of an EBIT figure or an EBIT margin, am I right to assume that it's somewhere around 15% or so? And then lastly maybe, is it possible to use your tax loss carried forwards or the tax loss carried forwards of MorphoSys for Serotec earnings? Thank you.

DAVE LEMUS: Good morning. Okay, so in terms of historical sales numbers I think it's easiest to characterize Serotec's previous sales growth as ranging from 8 to approximately 15% in the past. So on average somewhere around 10% sales growth. In terms of their net income margins, that also has varied over the years, again that typically has ranged from somewhere around 10%, some years it's been a little bit more, some years slightly less.

MARTIN POSSIENKE: That was net income?

DAVE LEMUS: Yes. In terms of acquisition costs, we expect acquisition costs to come in at roughly about E900,000 for both the acquisition costs plus the capital increase related to that acquisition. In terms of tax loss carried forwards, yes we do have tax loss carried forwards which we think can be applied. That being said we have only a limited amount of those tax loss carried forwards which can be utilized, because in Germany we obviously have this minimum taxation law that was recently passed, so that only some of our tax loss carried forwards will be applied. But we do have tax loss carried forwards that can be used for several years forward.

MARTIN POSSIENKE: Okay. Thank you.

OPERATOR: We will now take our next question from Thomas Schiessle from Equities GmbH. Please go ahead.

THOMAS SCHIESSLE, ANALYST, MIDAS RESEARCH: Good morning gentlemen this is Thomas Schiessle, Frankfurt. A couple of questions, if I may, concerning the sales structure and the production structure of Serotec. Could you please give us some more detail on the regional structure here in so far as the 60% of total sales of the new company, the recently acquired company, are conducted in the U.S. Is there anything done in Asia? The other question is concerning the overlay between your running business and the newly acquired business, how will you manage to merge those two businesses? And the third question on sales, is there any huge product in the offering of Serotec? Is this a special catalogue business? Thank you.

SIMON MORONEY: Hi Thomas, this is Simon. First of all in terms of the sales split, what we mentioned was that approximately half of their sales come from the U.S., the number I believe is right around 45%. Otherwise the company is headquartered in the U.K. but also has sales offices in France, in Germany and in Scandinavia. And the second largest area for sales is in Europe. They operate in other geographies through a network of distributors and though that network of distributors have significant level of sales in Asia, which of course, is predominantly Japan. But that's the lesser of the three geographical areas in terms of sales.

In terms of your question about overlaying the two businesses, that's something that hasn't been completely and fully decided yet, exactly how we do that. Obviously we are looking at sites and we are looking at functions in those sites. And decisions on those issues will be made in the coming weeks and months.

You asked about whether they have a single large product. Serotec is a supplier of an important antibody for a kit for influenza B, that is an FDA-approved kit that is sold by a third party, and that is actually a very substantial product for them. However, the bulk of their sales, apart from that product, are basically catalogue-driven sales of research antibodies to the life science research community.

THOMAS SCHIESSLE: Thank you.

OPERATOR: [OPERATOR INSTRUCTIONS]. We will now move to Patrick Fuchs from DZ Bank.

PATRICK FUCHS, ANALYST, DZ BANK: Hello everybody. I have a question regarding the sales and earnings development of Serotec. You mentioned the average of the last years, but at least one acquisition that we saw on the market clearly showed a trend that the target which was very similar to Serotec that there was a stagnating -- a trend towards stagnating sales and to declining earnings, which could at some point, point to problems of the sector. Could you give us more details on that, where you see the trend at -- or where you saw the trend at Serotec the last years, the last two years or so?

SIMON MORONEY: Yes Patrick, good morning this is Simon.

PATRICK FUCHS: Hi Simon.

SIMON MORONEY: As mentioned historical growth has been in the 10 to 15% range. There is a lot of variability in this market. I think some companies have struggled there are other companies which are growing extremely rapidly. A recently example is AbCam, of course, which went public in London within the last few months, growing extremely rapidly.

We see ourselves, in our Antibodies by Design business, growth rates of well over 50%. So there is no question in my mind, that there is good attractive growth in this sector. And the trick is really to identify the products that sell well and that offer those growth opportunities. And if you are successful in doing that then the growth is there and the margins are there as well.

We've been very impressed with Serotec as a company, since getting to know them. I think they've demonstrated over the years how to make a success in this business. They've developed an extremely good reputation in the industry for quality and customer service. And we are looking to build on that going forward. And we believe, as I say, that there is sufficiently strong evidence of good growth in the market that it is not only an attractive market to be in per se but also, of course, and this is the main reason why we are here, that there is a golden opportunity to transition away from the traditional animal-based products to modern in vitro derived products, such as those that come out of the HuCal technology. And we are really playing the leading role in that transition, and we intend to continue doing that.

PATRICK FUCHS: A last question regarding on -- the business pillars of your company. Can the heavy expansion of the Antibodies by Design business by this acquisition be seen as a first sign that you might not heavily enlarge your internal [track] development programs? Or even cut them in order to get a focus on the biotech supply and the catalogue and custom antibody business, plus your pharma co-operations? Because building up inside development capabilities for sure binds money and [force]?

SIMON MORONEY: It's specifically for that reason that we emphasise during the statement that the therapeutic side of our business will continue to be the largest part.

PATRICK FUCHS: No, I mean not the therapeutic side, I mean in the internal track development program that you have with MOR101, MOR102, MOR103?

SIMON MORONEY: Yes and I was just going on to say that we see those internal programs, the MOR programs, as an integral part of our therapeutic -- of the therapeutics division. We've said previously, on a previous call, that we will provide better information about the status of those programs at our year-end press conference on February 24. But you should not for a minute interpret that in growing the research antibody side of our business, that that's a sign that we intend to move away from proprietary products, that's not the case.

PATRICK FUCHS: Okay. Thank you.

OPERATOR: From LBW we will now take our next question from Hanns Frohnmeyer. Please go ahead.

HANNS FROHNMEYER, ANALYST, LANDESBANK BADEN-WURTTEMBERG: Hi good morning. I have a question on the potential synergies you have by changing the old antibodies in the catalogues and changing to your new HuCal system antibodies. So I am just curious how you want to manage that by 4,000 -- more than 4,000 antibodies to come to use more and more your HuCal technologies. How long you think will this transition phase pass? Or do you plan to keep most of the antibodies in their animal background?

SIMON MORONEY: Okay, of course, what we are certainly not going to do is we are not going to make 4,600 new HuCal antibodies to replace those existing antibodies. Many of those antibodies, of course, are small sellers and there would be no financial justification whatsoever for replacing them.

But the way to look at this is more that as we make new antibodies, increasingly those will be HuCal antibodies. So that over time the weight of -- or the split between HuCal-derived antibodies and animal-derived antibodies will move in favor of HuCal. And, of course, we'll start with those opportunities where we see the greatest opportunities for growth and margin, and focus on those first. So it will be a gradual process that will result over a perhaps three to five to seven year period, and the catalogue being switched entirely.

HANNS FROHNMEYER: So for example your -- what you mentioned this FDA-based kit, you can't switch directly?

SIMON MORONEY: Well, we are actually in discussion with the seller of that kit on specifically that point. We believe we can. And the attraction of doing that would be that we increase the margins significantly if we can produce a HuCal antibody that could be a component of that kit. In addition, of course, we are always looking for opportunities to make a superior antibody. And this is one of the main advantages of HuCal that you can actually think about an antibody of superior affinity, specificity and so on, which could make the end product, the end kit in this case, an even superior product.

HANNS FROHNMEYER: Thank you. Maybe one left, a follow-up. Could you give us a feeling about your possible development of the cogs now with this acquisition?

DAVE LEMUS: In terms of cogs, you might recall that the cogs line of the Group financial statements really represents the cost of goods associated only with the research antibody segment. What it means now with this acquisition, now that the acquisition of Serotec will now represent almost now third of total Group revenues. We would expect that the cogs line to increase. But that again it wouldn't affect, we think, the net income. We think that the effect on our net income will be accretive in 2007.

HANNS FROHNMEYER: Okay. Thank you.

OPERATOR: We will now take a follow-up question from Thomas Schiessle of Equities GmbH.

THOMAS SCHIESSLE: Thank you. A follow-up on the statement of profit contribution by Serotec. Why does the profit contribution runs in not before '07? Are there integration costs and, if so, how much will be the amount of the integration costs? Another question would be on strategic issues. Do you feel or is this acquisition the major step in reaching the critical mass of the catalogue business and the antibody business? Thank you.

DAVE LEMUS: Okay. In terms of why we are cash accretive from 2007 onwards, the answer is yes, we expect that there will be some costs associated with the integration of the two companies. As Simon alluded to previously in his speech that we expect synergies not only in the revenue side, but also on the cost side. You could imagine there could be some room for consolidation of sites, there is some overlap in the organizations. Again we are not in a position to exactly quantify what that might be. Today that review is still ongoing, however we expect that we should be able to quantify exactly what those costs should be around the time of our annual release which we do on February 24.

In terms of the question relating to critical mass, we think that achieving the number one spot in Europe is a good step. That being said we think that there is substantial scope for the business to continue to grow. That MorphoSys has a technology which can transform this sector. And we think that in line with that we'd like to be a global player. So in that vein we don't rule out further growth, of course, not only organically but also inorganically.

THOMAS SCHIESSLE: Follow-up on that, did you -- by acquiring Serotec did you gain some major customers, some major pharmaceutical groups into your offering?

SIMON MORONEY: Thomas, I referred to the influenza B product for which Serotec is a major supplier to a third party seller of that diagnostic kit. The bulk of the remainder of the sales, as is typical in this market, and of research antibodies are of course widely spread across the entire life science community. So their business is different from, for example, the MorphoSys [pharma] and therapeutic business, where we have, as you know, several major partnerships with leading pharmaceutical companies. This is inherently a different business and, therefore, they have a much, much larger customer base where, of course, the individual orders are rather smaller.

THOMAS SCHIESSLE: Is there any problem concerning integration of IT?

DAVE LEMUS: Based on the integration which we had with Biogenesis, I am responsible for IT in the organization, and I would actually say that that was one of the smoothest areas of integration that we had between the two companies. So based on the experience of Biogenesis and the review that we've done during the due diligence process, I would say no.

THOMAS SCHIESSLE: Wonderful. Thank you.

OPERATOR: [OPERATOR INSTRUCTIONS]. It appears that we have no further questions at this time. I would now like to turn the call back over to you for any additional or closing remarks.

SIMON MORONEY: Thank you. In closing I'd like to remind you all of the main message to take away from today's call. And that is that this announcement represents a major step forward in the execution of our strategy to establish the HuCal technology in the research antibody market. Together with Serotec, MorphoSys becomes Europe's leading dedicated supplier of research antibodies and research -- and antibody research technologies. We also become a very significant player on the world stage, with a unique offering.

That concludes the conference call. Thank you all for your participation. Should any of you like to follow up with us we'd be more than happy to talk to you individually. Since we are in London today, we would ask that you direct your calls through the MorphoSys switchboard in Munich. Thank you again and goodbye.

OPERATOR: Ladies and gentlemen, that will conclude today's MorphoSys Acquires Serotec Group Conference Call. Thank you for your participation. You may now disconnect.

[lupus2000]

Q4 2005 Morphosys AG Earnings Conference Call - Final
24 February 2006

CLAUDIA GUTJAHR-LOSER, DIRECTOR CORPORATE COMMUNICATIONS, MORPHOSYS AG: It's my pleasure to welcome all of you to our annual conference. My name is Claudia Gutjahr-Loser, I'm head of Corporate Communications at MorphoSys. I would like to thank you for your interest and your participation at our conference today. With me are my colleagues, Dr. Simon Moroney our CEO, Dave Lemus, our CFO and my colleague Mario Brkulj, PR Manager.

Before we start, I want to remind you that during this conference we will present and discuss certain forward-looking statements concerning the development of MorphoSys' core technologies, the progress of the current research programs and the initiation of additional programs. Should actual conditions differ from the Company's assumptions [inaudible] actions may differ from those anticipated. You are, therefore, cautioned not to place undue reliance on such forward-looking statements which speak only as of the date hereof.

Today we will present you the Company's annual results for the year 2005. We have planned approximately one hour for the presentation. I will start with a short introduction. That's followed [Simon] the revenue, the year 2005 and discuss our plans for 2006. Subsequently, Dave will give you an overview about the financial results of 2005 and discuss the financial guidance for 2006. At the end of our presentation we will have a Q&A session. For all people listening in the conference call, the presentation is available on our corporate website.

2005 was a really extraordinary year for MorphoSys. We [could] built up on our achievement for the year 2004 and expand our business internationally. With Shionogi, we signed our first year with a Japanese pharmaceutical company. Internationally, we could add a total three new names to our roster of partnerships which speaks of the quality of our technology and our reliability as a partner.

On the research side we added new customers to our list, and with the acquisition Serotec at the beginning of 2006 we gained additional sales [that offers us], not only in the U.S. and U.K., but also in Germany, Norway and France.

Last, but not least, we increased our IR activities. We will expand our [industrial base] in the U.S. To support these efforts we have started an ADR level one program at the beginning of 2006 and Dave will give you some more detailed information about this.

Our operational success led to a growth of over 50% in revenues. Both segments of our business have been very successful in signing new deals, attracting new customers and increasing our market share worldwide. In the Therapeutic area our partnering strategy is paying off, which is underlined by the financial result as well as by our ability to attract new partners and expand our existing partnerships.

In the Research area, the integration of Biogenesis was completed, and with the related acquisition of Serotec we have established ourselves as one of the leading suppliers for research antibodies worldwide. With the extended capabilities we plan to build on this growth during the coming year.

With this I would like to end my introduction and I would hand over now to Simon Moroney, our CEO.

DR. SIMON MORONEY, CEO, MORPHOSYS AG: Thank you Claudia and also from me a very warm welcome to all, both here in Frankfurt and on the call to our year end results conference. Claudia has already summarized some of the highlights of 2005. I intend to look at some of these advances in more detail, and then spend some time talking about our plans for the future. Of the three areas in succession namely, Partnered Therapeutic Antibodies, Research Antibodies and finally Proprietary Therapeutics.

As Claudia said, over the last 12 months we have made real progress in executing our strategy. That strategy is aimed at exploiting our proprietary technologies in two areas namely, Therapeutics and Research Antibodies. In the field of Therapeutics we aim to maximize the number and value of drug development programs based on our technologies. Maximizing the total number of programs requires collaboration with partners. Maximizing the total value requires pursuing programs for our own accounts. We're committed to both of these tracks.

Our partnerships with pharmaceutical and biotech companies comprise the largest part of our business. By collaborating with partners and the application of HuCAL and related technologies to the discovery of new antibody drugs, MorphoSys participates in near term revenues in the form of license fees and research funding but, most importantly, builds long term upside in the form of future milestone and royalty participation. Proprietary programs offer a larger future upside at such time as we choose to partner them.

In the field of Research products, we believe that in the years to come there will be a lucrative commercial opportunity as the generation of new antibodies transitions from the current animal sources to the in-vitro technologies of tomorrow. MorphoSys is at the forefront of this development and all of our efforts in this area are aimed at maximizing the uptake of research antibodies made with our technology.

The success of this dual strategy is visible in our financial results, but even more important in the short term success, are the seeds that we are sowing for future growth. I'll highlight some of these as we progress through the presentation.

I want to start with a look at developments in the Therapeutics market in which we are active. Total sales of Therapeutic Antibodies worldwide in 2005 reached approximately $12b. As a class of drugs, Therapeutic Antibodies comprised the fastest growing segment of the biotech industry. New data for Herceptin and the adjuvant setting released during 2005 showed a 52% decrease in disease recurrence in patients with early stage HER2 positive breast cancer being treated with Herceptin plus chemotherapy. Similarly, there was positive data for [Vastin] which, together with chemotherapy made its primary end point in patients with non-small cell lung carcinoma. These and other developments further underscored the great potential of antibodies in currently [intractable] diseases.

In February 2005 we saw the withdrawal from the market of Tysabri a humanized antibody marketed by Biogen Idec and Elan for the treatment of multiple sclerosis. Although this was a very significant event for the industry, experts understood this for what it was, namely, a drug specific issue that does not impact on antibodies as a class. Pharmas' long term appetite for antibodies as a class of drugs does not seem to have been affected and, indeed, it looks as though Tysabri will return during the course of this year.

Nevertheless, the Tysabri withdrawal did have a negative impact on the perception of biotech drugs amongst investors, as can be seen by the downturn in share prices generally in the spring of last year. The interests of big pharmas for antibodies was nowhere more clearly demonstrated that by some high profile acquisitions during the year. Roche Glykar, Pfzier [Biren] and Amgen Abgenics all illustrated the importance of specific antibodies and antibody technologies to big pharm. Interesting, while Amgen Abgenics was product driven, the other two deals were clearly motivated by access to proprietary enabling technology.

What impact have these developments had on MorphoSys? The main driver for pharma is clearly the success of existing market antibodies. An important consideration for them is the fact that antibody discovery and development is traditionally not one of the core competencies of big pharma, therefore, pharma companies looking to enter this space must do so through partnerships. As always, intellectual property is an important considering for pharma companies, who need assurance that they will have freedom to practice the technology and market products based on that technology. And last, but not least, we're seeing an increasing understanding of targets, and that in turn is driving demand for technology that enables antibody optimization.

For us, all of these demands are matched by our offering. First, HuCAL is genuinely becoming the technology of choice for therapeutic antibody generation. Second, our proven partnering model and our track record and in our favor. Third, in addition to a strong position around our own technology, we're now completely free of third party intellectual property disputes. And fourth, HuCAL was constructed with the antibody optimization in mind. Added together, all of these factors mean that we are well positioned in a market that continues to grow as new entrants seem to develop therapeutic antibodies, and our existing partners look to ramp up.

I mentioned clarity of intellectual property as an important factor. That clarity comes about in a large part due to our efforts over the last few years. Following our final and complete settlement with Cambridge Antibody Technology over three years ago now, in September of last year we reached a final settlement with Eli Lilly on the dispute over the patents in the AME estate.

While our HuCAL patent estate continues to grow, we now have seven grants of patents in key territories and a number of others pending. A proprietary cyst display technology is the subject of a granted patent in the U.S., and in 2005, we were granted a patent on the same technology in Australia. Other applications are pending.

Turning to the partnerships, in 2005, we signed deals with three new partners. Each of these new partnerships have a special significance for MorphoSys, over and above the purely financial aspects. First, the agreement with Shionogi is a breakthrough and a new geographical market for our HuCAL technology, mainly Japan. Shionogi is one of Japan's top ten pharmaceutical companies. The deal with Shionogi is a three year license agreement, under which they will use the HuCAL technology in-house. Shionogi will pay annual license fees to us for the use of the technology.

We laid the foundations for this deal in 2004 by entering a strategic marketing relationship with Tokyo based GeneFrontier Pharmaceutical Corporation. With their help we aim to further develop the Japanese market during the course of this year.

Second, as already mentioned, our agreement with the pharmaceutical group, Eli Lilly, in September 2005 brought to an end MorphoSys' last remaining patent dispute. Here we have again displayed our ability to resolve a complex intellectual property issue, and in this case, turn it to our advantage in the form of a cross license and co-operation.

Eli Lilly has internalized our HuCAL Gold library and would use the technology as its discovery programs. As always in such cases we've centered license fees whilst royalties on development programs. Third in December of last year we entered an important agreement with the U.S. pharmaceutical Merck & Co - our 10th deal with a top 20 pharmaceutical company. Merck is committed to applying the HuCAL technology and it's internal R&D for five years. We expect this deal to add significantly to the debt of the HuCAL derived therapeutic antibodies pipeline over the coming years.

In addition to securing new partners, we continually strive to expand our existing alliances. We were, therefore, delighted to enter new agreements with Boehringer Ingelheim, Bayer, Bristol-Myers Squibb and Imuinigin during the course of 2005.

I'd like to highlight just two of these deals. We've been working with Boehringer Ingelheim since 2003 when we initiated two therapeutic antibody programs. In March of last year, we added an additional partnership for five years, under which we installed the HuCAL technology at their Vienna site and Boehringer Ingelheim secured options for several therapeutic antibody programs.

Shortly before year end we extended our long standing alliance with Bayer. We were concerned a couple of years ago when Bayer discontinued its research activities in Berkley, California where our collaboration was originally focused, but we are delighted that the alliance has found a strong home elsewhere in the organization and that Bayer decided, not only to extend, but also to expand the collaboration. Bayer has commissioned to starting at least three new therapeutic antibody programs in 2006 and potentially many more as we go forward.

With the Merck and Lilly deals we brought to 10 the number of partnerships we have with the world's top 20 pharmaceutical companies. We have thereby achieved one of the goals we set ourselves several years ago, namely, to become the partner of choice for pharmaceutical companies developing antibody drugs. As can be seen on the next slide, chart 14, over the last year we at MorphoSys have entered more deals than any of our competitors. This is an attribute both to the power of our technology, our track record in delivering drug candidates and the excellence of our reputation in the market as a partner.

In addition our partnered pipeline has made real progress. There are currently two antibodies, either in, or about to enter phase 1 clinical trials. A further six are in pre-clinical development, and 21 are at the discovery stage.

The two most advanced programs are first 1DO9C3 a HuCAL antibody in MHC Class 2 which GPC Biotech took into Phase 1 trials for relapsed and remitting lymphoma. Most recently GPC has received Orphan Drug designation in the EU for Hodgkin's lymphoma and chronic lymphocidic leukemia. But a few weeks ago [Hoffman La] Roche announced the filing of an INV for a HuCAL antibody for the treatment of Alzheimer's Disease.

Alzheimer's Disease is one of the largest health care threats to our aging society. The number of sufferers if projected to grow from some 16m today, to 21m by 2010. The market for drugs to treat this disease will grow commensurately from today's level of over E5b. Very significantly there is a high un-met need for new treatment since none of the current treatments provide clear and sustainable benefits to patients.

The HuCAL antibody that we made for Roche is directed against B-amyloid, for which it has a very high affinity. It has been shown to break down aggregations of the peptide invitro, to bind specifically to plaque and brain tissue samples from human patients and to reach its target in an invivo mouse model of the disease. The antibody is intended to be administered intravenously, to show that prolonged persistence in circulation that's typical of human antibodies and from there target abnormal build ups of the protein in the brain's of Alzheimer's patients.

The INV filing triggered milestone payment from Roche that will be booked in our Q1 2006 results.

Looking forward, we continue to see strong demand for our technology and capabilities in the Therapeutic space. There are many companies with whom we have not yet formed partnerships, including those who have not committed to any antibody technology, as well as those who have chosen alternative technology but who remain potential partners for us.

In addition, the pool of potential disease targets is far from being exhausted. We, therefore, hope to start new programs in the years ahead, both with existing and also with new partners. And, of course, new therapeutic antibody programs means not only license and R&D payments today, but also the promise of future milestones and royalties tomorrow.

Regarding the pipeline we project an increase from current 29 to 36 partnered programs by the end of this year. Regarding additional compounds entering the clinic, although we do have visibility on several candidates, the decision is not under our control and we, therefore, can provide no information on timing of when this might occur. The delay in timelines that we had to communicate last year is an illustration of this point. Nevertheless, all programs which we have communicated would enter the clinic this year are ongoing and we expect that in time they will enter clinical trials. Based on the success of our discovery efforts, if all goes well, we project that as many as 10 to 12 partnered HuCAL could be in pre-clinic by the end of this year - up to double what we currently have in pre-clinic.

I want to turn now to the second pillar of our business, our Research Antibodies Division.

We have amalgamated our activities in this area under a single new brand -Antibodies Direct or AbD for short. Our aim on this side of the business is to maximize the penetration of HuCAL in this market. In order to achieve this, we're building our presence through selected deal doing first with our acquisition of Biogenesis in January of last year. We successfully completed the integration during 2005 and thereby gaining a physical presence in the U.K. and in the all important U.S. market. Biogenesis brought us an additional E3m of revenue but most important new sales channels in the market for research antibodies. Bolstered by new access to customers that Biogenesis brought, the custom HuCAL business continued to develop well in 2005, growing its revenues approximately 90% on the year.

I'll come to the Serotec acquisition, which dramatically increased our market presence in a moment. Allied to our existing Antibodies by Design activities, these acquisitions have accelerated our growth in this business and we are confident that we can continue on this growth path.

Just six weeks ago we announced the acquisition of Serotec. We paid just under E30m, about 2.6x their sales, comprising about E20m in cash and the remainder in newly minted MorphoSys shares. Serotec is a household name in the life science research world and the Company brings us more than 4,600 catalogue products, subsidiaries in the U.S.A., U.K., Germany, France and Scandinavia and a good level profitability on about E11m of revenues.

Through the acquisition of Serotec, as shown on chart 21, we have substantially increased our revenue in the Research Antibody segment. Revenues have increased from about E800,000 in 2004, to about E4.3m last year and we expect to hit about E18m this year.

Serotec fits ideally in our existing business but I'd like to just explain why. MorphoSys, through our experience in the therapeutic antibody, field has a deep understanding of state of the art technology, and is well known as a reliable partner. We've expanded out into custom monoclonal antibodies with Antibodies by Design, where we can leverage advantages around economies of scale. Serotec brings a strong catalogue business and brand, while Biogenesis has, in addition, production capabilities and links into the diagnostic industry. For both Biogenesis and Serotec the most important assets are presence in the market which we're aiming to establish HuCAL.

We foresee attractive opportunities for synergy. A key part of our integration planning with our new colleagues at Serotec, is how we will leverage their customer base, sales channels and understanding of the market to sell more HuCAL antibodies. Additionally, we see cost synergies through combined sales and marketing activities. We'll keep you updated on the integration process during the coming months.

The emphasis on maximizing our sales and distribution channels is also evident in our partnerships. To highlight just one, in January this year we signed a marketing deal with Chemicon. The logic behind this deal was the same as the acquisitions. Chemicon is within the world's top 20 supplier -- one of the world's top 10 -- 20 suppliers of research antibodies. They will supply HuCAL antibodies against -- sorry, we will supply HuCAL antibodies against targets identified by Chemicon, which they will market. We look forward to working with Chemicon to increase the penetration of HuCAL antibodies in the market and to increase in the awareness in the power of the technology. This deal brings to six the number of dedicated HuCAL based co-marketing, co-distribution and research partnerships we've entered. And these arrangements are in addition to the more than 100 agreements we have with distributors which we acquired with Biogenesis and Serotec.

Overall the market for research antibodies is growing at about 10% to 15%, but this should not detract from the fact that, with the right strategy, faster growth rates can be achieved. We see this if we look at Adcam, a newly listed company on the AIM stock exchange in the U.K., and we see it, of course, when we look at our own customer HuCAL Division, formerly Antibodies by Design. Our goals going forward are to outperform the market with three strategies, by increasing the proportion of HuCAL antibodies as replacements amongst newly generated products for our own catalogue, by making HuCAL antibodies as replacements for existing high end products where we see an opportunity to increase profit margins and third, by continuing to grow our custom antibody generation business. We expect this form of organic growth to enable us to outperform the market already in this year.

We also don't rule out further acquisitions as a means of promoting our growth in the segment. I now want to turn to our Proprietary Therapeutic activities.

Over the last several months we've carried out a detailed review of our programs MOR101/102, MOR202 and MOR103. This review concerned our commitment to this segment of our business, because of the lucrative potential upside. The main operational conclusion of this review can be summarized in two words - accelerate and focus. In short, our plans for the currently active programs are as follows.

MOR103 is our most promising candidate and will become the main focus of our efforts. We intend to advance this program as fast as possible to clinical trials for the treatment of rheumatoid arthritis.

For MOR202 we will invest in generating additional pre-clinical data before deciding on next steps and MOR101/102 are to be discontinued.

I now want to provide some more information on each program, starting with MOR101/102 and MOR202. At the beginning of 2005 we set ourselves a goal of partnering at least of our existing programs before year end. Our main efforts in this regard were on our inflammation programs, MOR101/102, directed against the target ICAM1, and the oncology program MOR202 against CD38. We purposely didn't include MOR103 in partnering discussions, as we wanted to generate additional data first.

In April of last year we received results of a second animal study, where we compared MOR102 with Raptiva and Amevive in psoriases. The data were impossible to interpret. Notwithstanding this, the original study, which showed clear efficacy in the same model was published in October of last year in the British Journal of Dermatology. During the year we carried out discussions with a range of potential partners for MOR101 and MOR102. In a handful of cases we entered advanced negotiations with the aim of reaching an agreement to cover the subsequent development of one or the other of these compounds. We went into these negotiations with clear expectations of what we wanted, regarding both financial terms, as well as our rights regarding potential co-development and/or co-marketing.

HuCAL is a premium technology, and a central part of our business strategy is to do premium deals based on the technology and products derived from it. Our adherence to this principle is a key reason why our business is performing so well today.

In the case of MOR101 and MOOR102, we were not able to secure a partnership on the terms that we sought. The problems encountered by Tysabri that I mentioned earlier, although they didn't impact on overall pharma sentiment towards antibodies, it did negatively affect our discussions on MOR101 and MOR102. The common feature is that both Tysabri and MOR101 and MOR102 are directed against cell adhesion molecules, which mediate extravasation, the process by which cells leave the circulation and enter surrounding tissue. This certainly made the discussions around the programs more difficult.

Regardless of the ultimate reasons, we believe our interests are best served by ending our investment in MOR101 and MOR102, in order to be able to focus our efforts elsewhere.

We also carried out numerous discussions and negotiations with potential partners for MOR202. We had some very promising [skid mouse data] for MOR202, and there is no doubt that the level of interest in this program is much higher than for MOR101 and MOR102. Nevertheless, as with MOR101 and MOR102, by year end we had not secured terms on which we would have been prepared to partner the program. In contrast to the conclusion with MOR101 and MOR102, however, we do believe that additional in MOR202 is merited. With a relatively low level of investment we will further strengthen the data package around our lead compound. Such stronger data may give us the opportunity to partner the MOR202 program. However, we make no predictions on this point and our future financial planning makes no assumptions regarding potential payments from such a partnership.

The antibody MOR103 will become the centerpiece of our Proprietary development activities. As already mentioned, we intend to develop MOR103 for the treatment of rheumatoid arthritis. We have a plan that goes as far as clinical efficacy in man. Over the next 18 months we will carry out full formal pre-clinical development, covering manufacturing of the antibody, pre-clinical proof of concept, and toxicity and safety studies. The program will be managed internally by Dr. Robert Friesen, who we appointed to the position of Director of Pre-Clinical Development last year. Robert leads a small team in-house and reports directly to our Chief Scientific Officer.

We do not plan to build a large infrastructure in development but instead will work externally using a panel of expert rheumatologists, in an advisory capacity, plus development consultants and CROs. In this way we can maximize the efficiency of our development efforts. Our plan calls for commencement of clinical trials in second half of next year.

Why have we reached this decision on MOR103? First, the market for rheumatoid arthritis drugs today is over E4b. Nevertheless, there is no question that this is an area of un-met clinical need. Today, despite a range of treatments, remissions are almost unheard of and curers are basically unknown. A number of agents are able to reduce inflammation, but disability usually increases anyway. The current standards of care amongst biologicals comprise the anti TNF therapies Embril, Humera and Rhemicaid. While these compounds have been enormously successful, there is a clear need for alternatives.

In addition to concerns about potential long term toxicity associated with the anti TNFs, the fact is that half of patients no longer respond to an anti TNF therapy after two years of treatment. New approaches such as [Arenthia] the CTLA4IG, which was launched last week in the U.S., [both] appear much more efficacious than the anti TNF. Safety is clearly a concern, for example, with the anti TNFs which are broadly immunosuppressive, there is evidence in some patients of increased rates of infections, particularly, tuberculosis, congestive heart failure, lupus-like conditions, [de-milanating] disease, not to mention a potentially greater long term risk of lymphoma.

Rheumatologists are constantly looking for new treatment options. The goals are to halt, or ideally reverse, the progression of the disease, to optimize the treatment of pain, to minimize the toxicity and overall to improve the quality of life for rheumatoid arthritis sufferers. Further, all of this needs to be done in an affordable way since rheumatoid arthritis is a chronic disease and the cure is currently not foreseeable we're looking at treatment almost certainly for life.

Second we're very excited about the target and the HuCAL antibodies that we have made against these. There's solid evidence that the target, which we're not disclosing at the moment, is implicated in the patho-physiology of rheumatoid arthritis. There is also a possibility that it may be implicated in other inflammatory conditions. We have several optimized HuCAL antibody candidates which are characterized by an extremely high affinity for the target. Although it is early in the development process, if this high affinity was to translate into a low dose regimen, then the aspect of affordability could be a key advantage of our program.

And third, our business is performing so well that we can now pursue a drug development program without compromising our commitment to maintaining profitability. In contrast to the past, we now have a cash flow positive business and can afford to invest into at least one proprietary program. We also feel that a greater focus than we've perhaps had in the past will allow us to progress faster.

We're convinced that if we're able to generate good proof of concept data in man we will be in a strong position to partner MOR103. The demand from pharma for new drugs continues to be strong. The attraction of doing deals later is evident from a survey on deal terms, as can be seen here on chart 31, deal value increases significantly from pre-clinic through Phases one and two.

I'd like to take this opportunity to make absolutely clear our position regarding internal discretionary investment, such as that aimed at Proprietary Therapeutics. Our business is performing strongly, as was seen by the fact that we're generating increasingly attractive cash flow. We've often stated our intention to re-invest as much of this cash flow as possible. We're convinced that MorphoSys has enormous potential for growth, and it is our intention to take advantage of this potential. We will not jeopardize our long term growth prospects by prioritizing short term financial results. Re-investment is in the best interest of our shareholders as it offers the best chance of capital growth. You should not look at MorphoSys as an earnings per share story, at least not yet. We're a growth Company and we're still growing.

In 2006 we will invest a part of this year's expected cash flow in proprietary HuCAL based development. This will, obviously, come at the expense of increasing profit line but, it's a decision we've taken for the reasons outlined above. The return on this investment will come in the future as MorphoSys commands an ever stronger financial interest, within partnerships of the type we've been already proving we can successfully do.

Finally, in my part of the presentation, I'd like to mention one more highlight of 2005. That was the appointment of Dr Marlies Sproll to the position of Chief Scientific Officer and member of the [Forstand]. We were delighted to be able to promote Marlies from her previous position of Senior Vice President for R&D to the position of Chief Scientific Officer. Marlies brings many years of experience in biologicals from positions with Boehringer Ingelheim and Merck KGaA. She's been with us for around five years and can claim much of the credit for the successes we have recorded, particularly with our partnerships. Her promotion was richly deserved.

That concludes my review of the year. I'd now like to hand over to Dave Lemus for the financial review.

DAVE LEMUS, CFO, MORPHOSYS AG: Thank you Simon. In opening, I'm happy to say that we had another good year in 2005, not only operationally but also financially speaking. Revenues for the MorphoSys Group increased by 52%, leading to a net profit of E4.7m. Our cash position increased to over E50m, in part through a successful private placement in March 2005 as well as positive cash flow from operations. As I will discuss in more detail in a minute, the percentage of success based payments significantly increased during the year, which is a sign that our partnered antibody pipeline is maturing. Additionally, we made first steps to expanding our U.S. institutional shareholder base, by establishing an ADR facility in the very important U.S. market. Last, but not least, we were again rewarded for Corporate Governance Excellence in 2005.

In opening the financial part, I'd like to start with some highlights of our guidance for the year. I think it's fair to say that our expectations at the beginning of 2005 were exceeded by year's end. As you know we had to raise guidance three times during the year for both revenues and net income.

Although we will go into the details of how we ended up where we did, I can already say at the outset that, clearly, the main driver of this out-performance was with revenues or, more specifically, success based milestone payments from our partners to us.

Success performance based payments ranged from MorphoSys receiving an option on an exclusive license all the way through receiving an IND milestone payment. And in 2005, clearly, it was these performance based success payments from partners which made us exceed both revenue and income targets for the year.

Let's start with revenues. The chart on the wall there illustrates where our revenue growth has come from. Revenues for the MorphoSys Group for the full year 2005 increased by 52% to E33.5m compared to E22m in 2004. Clearly, the main driver of revenue growth in 2005 was revenues from the Therapeutic Antibodies segment. Of the E11.5m increase over prior year's revenues, about E8m arose from higher Therapeutic Antibody revenues. As we had no acquisitions on the Therapeutic side of our business, the Therapeutic Antibody segment grew organically around 37%.

As I said previously, driving these Therapeutic Antibody revenues were performance based payments from partners in the amount of about E7m. The rest of the 37% increase came from new or expanded agreements.

While the Research Antibody segment contributed in 2004 only 4% to total Company revenues, in 2005 we saw the segment's contribution increase to 13%, or E4.4m, mainly as a result of the Biogenesis acquisition.

As we reported earlier, the Biogenesis business is now fully integrated with MorphoSys and the basis for further growth and stability has been laid. On top of this organic revenue growth of the segment, meaning removing the effect of Biogenesis from our 2005 sales, which was roughly E3m sales, resulted in organic growth of the AbD unit of close to 90% which contributed E1.4m sales in 2005.

In summary, organic revenue growth for the total Company was 40%. That growth is roughly in line with our average growth rate over the last five years of 36%.

Measuring the foreign exchange effects in 2005, you can also see on the chart total Company sales measured in constant currency. We were, in fact, helped by the U.S. dollar's sales on the top line by the gradual weakening of euro versus the U.S. dollar during the year. The positive impact to our top line was roughly E500,000.

Let's take a look at the geographic revenue split. If we take a look at where the sales geographically rose, 56% of MorphoSys' commercial revenues were generated with biotech and pharma companies located in Europe and Asia, compared with 45% last year. The picture is almost a mirror opposite of this in North America, with 42% sales for 2005 and 55% in 2004. Looking at the two segments' sales in isolations and how they geographically split, revenues geographically generally mirrors total Company numbers.

I've spoken now so far twice about performance based milestone payments but, given their significant contributions to top and bottom line in 2005, and looking ahead, it's worth highlighting a few more points. First, I want to point out that performance based payments are becoming an ever larger part of our revenue streams. For the case in point, in 2004, performance based payments made up around 6% or E1.4m of our total revenues. In 2005 that number jumped to 21%, or approximately E7m. That was roughly double or about E3m more than we originally expected for the year. What that indicates is that our business model is maturing and, because of that, we are seeing more upside related to performance based milestones and success payments. Remember, every milestone payment to us is almost pure profit.

There is, however, a dark side to this which is the ability to predict the timing and probability of these payments. Success based payments are very much harder to predict, both from their timing as well as their probability, and that's one of the reasons why we ended up raising guidance three times this year.

Although we were very bullish about our prospects looking ahead, everyone needs to understand that success based payments are a volatile element of our revenue stream, having potential to significantly affect revenues, not only quarter-to-quarter but also year-to-year.

Let's move to operating expenses. Total operating expenses increased by 28% to E27.3m - an increase of about E6m. This increase in operating expenses of E6m was mainly due to higher personnel related costs in conjunction with new collaborations and it's increased in tangible expenses. The incorporation of the Biogenesis Group companies into Group accounts had the effect of increasing operating expenses by around E3.9m.

Moving on to [costs] -- cost of goods sold only arise in the Research Antibody segment and it is composed of costs of goods sold for the Antibodies by Design and Biogenesis accounts. For the year 2005 total costs rose to E2.5m compared to E0.9m in the year 2004, which resulted largely from about E1.5m inclusion of Biogenesis costs in the consolidated Group accounts.

Costs for R&D fall mainly in the Therapeutic Antibody segment. R&D costs increased by 18% to E13.6m. This increase resulted mainly from higher intangibles costs. Costs for intangibles rose due to the Lilly patents settlement, impairment of intangible assets in relation to the Biogenesis and Serotec transactions and increased payments to third party licensors in conjunction with higher revenue levels.

Sales, general and administrative expenses amounted to E10.1m, an increase of 35% compared to the previous year. This effect resulted from increased costs from our external services, mainly marketing expenses for both the Therapeutic and Research units and higher personnel costs mainly associated with the acquired sites of Biogenesis. Biogenesis total contribution to group sales SG&A expenses amounted to E1.6m for the year 2005.

Stock based compensation in the amount of E1.1m for the year 2005 was recorded as a non cash charge. The decrease in stock base compensation was mainly due to declining expenses from options granted in prior periods. Please note that most likely in the financial reporting for 2006 and onwards, we will from now embed stock based compensation expense into R&D and SG&A expenses and no longer show it as a separate line.

Profit from operations increased to E6.2m and was 10 times higher than 2004, again, heavily influenced by higher performance based payments. Non-operating expenses increased by E1.2m to E1.5m in 2005. Much of this relates to an adjustment done in the fourth quarter 2005, for foreign exchange losses on a commercial contract which was re-classified in a non-operating expenses in the amount of E800,000, and revenues were correspondingly grossed.

These foreign exchange losses relate to a commercial contract, where foreign exchange gains and losses are shared with that respective partner. In previous years such shared gains and losses were netted into revenues.

Tax expenses - our first even paid as a profitable Company - amounted to roughly E400,000, largely explaining the rest of the difference for 2005.

MorphoSys achieved a net profit of E4.7m - the result of diluted net income per share for the full year 2005, amounted to 83 cents per share, compared to an EPS of 5 cents per share in the previous year.

Before moving to the balance sheet I'd like to quickly review results by segment. As we mentioned previously, revenues in the Therapeutic Antibody segment increased organically by 37% to E29.1m, heavily influenced, as we've said a couple of times now, by higher levels of performance based payments. The resulting net income was a very strong E12m which, of course, excludes costs which have not been allocated.

The result in the Research Antibody segment was, however, not quite as pleasing. As you can see there was a loss of approximately E3m for the unit. However, I think the reasons for the loss warrant some explanation.

The most important goal for the Research Antibody unit is to achieve a marginal positive cash flow. In order to get a proxy for cash flow for the this unit, in the next chart we removed the amortization and impairment relating to an acquired intangibles of approximately E700,000, corporate allocations of approximately E1.2m which exists whether or not the Research Antibody segment exists or not, and non-cash items such as depreciation of approximately E400,000 and then subtracted CapEx of about E100,000. The resulting number is a reasonably good proxy for cash usage of the unit. As you can see once you remove these non-cash items, cash usage of the unit was closer to E1m - still certainly not where we'd like it to be but a bit more manageable.

That being said there were some positive highlights for the unit in 2005. Aside from the very rapid organic growth in revenues which was experienced, gross margins for the Research Antibody segments were much better in 2005 compared to the previous year, going from a negative amount in 2004 to a positive 43% in 2005. More improvement in this area expected in 2006, particularly, as we utilize more capacity in the unit in Munich.

Let's moving quickly to the balance sheet. If you look at the balance sheet you can see that the Company's current assets increased by about E18m to E58.5m, mainly as a result of the capital increase successfully completed in March 2005. Looking at non-current assets you can see that these have gone up by approximately E6m, which is mainly the result of consolidating Biogenesis hard and soft assets into our balance sheet. As there were no significant other items on the assets side of the balance sheet was change, I'd like to move over quickly to liabilities.

During the year 2005 total liabilities decreased by E0.3m to approximately E16m. There were no significant changes in respect to liabilities. Stockholders' equity however grew mainly as a result of 2005 profits, the capital increase in March 2005 and stock options in bond exercises by employees.

Looking at changes in share capital during the year, MorphoSys successfully placed the private placement of approximately 10% of its share capital in March 2005 at E35.5 per share. Another 97,000 shares were issued as a result of an employee convertible bond and option exercises.

In January 2006, in connection with the acquisition of Serotec, MorphoSys issued new shares. As part of the purchase price MorphoSys will issue approximately 208,000 new MorphoSys shares. [The capital increase was, in fact,] registered in the commercial register in February of 2006 and, thereafter, the total number of shares issued will approximately be 6.2m shares.

Moving quickly to shareholding structure, [impressively] our biggest shareholder is Novartis, who owns about 8%, followed by Schering and CAT each with approximately 6%. It might be worth mentioning that CAT sold about one third of the shares that it held during 2005 using a broker we arranged to put them in contact with.

The Free Float according to the definition of Deutsche [Burse] amounted to approximately 80%, and includes roughly 3% shareholding by management and the supervisory boards.

At the end of the year 2005 the MorphoSys Group employed 172 employees, compared to 132 at the year end 2004. Of the 172 employees, 123 worked in research and development and 49 in SG&A. Of the total employees 27 worked in the Biogenesis Group of whom 10 were engaged in R&D and 17 in SG&A. With the acquisition of the Serotec Group companies located in the U.K., Germany, Norway, France and the U.S., in January of this year MorphoSys Group presently employs a total number of employees of approximately 240 people.

As you may have seen, we've recently started an ADR Level one program in the U.S. ADRs are negotiable in U.S. certificates, evidencing ownership of shares for a non-U.S. company, which enable U.S. investors to more easily acquire and trade non-U.S. securities denominated in U.S. dollars. The purpose of the ADR one level program was to encourage, in particular, U.S. investors in the MorphoSys stock, and allow investors who have mandates to trade only in U.S. dollars or U.S. securities easier access to the MorphoSys stock.

I'd also note that MorphoSys has, through this listing, minimal listing costs and minimal reporting requirements to the SEC. Importantly, the Company is not subject to Sarbanes-Oxley.

Okay, let's move to revenue guidance and overall guidance for 2006. Now before I start guidance, the first thing I want to stress is that our current business model is very much based on us being minimally break even, from a net income perspective. That being said, we don't feel currently that, at the current Company stage of development, that we should pursue profits for profit sake but rather use our financial flexibility to invest for the future.

So that is a backdrop. We estimate revenues for the full year 2005 at E50m, which represents a 50% increase over the prior year. Without the effect of Serotec in our numbers, we would have seen organic growth of the units at approximately 10% over the prior year. The main part of the revenues will come out of the Therapeutic Antibodies segment, which we estimate at roughly E32m. Of this amount, we expect performance based payments to make up approximately E7m, or about 22% of the segment's sales.

That level is similar to the actual level achieved in 2005, both in euro and percentage terms. Revenues of the Research Antibodies segment we estimate at roughly E18m, and this amount will include Antibodies by Design, Biogenesis and Serotec sales. Note that in 2006 and beyond we will no longer call the segment in our financial reporting the Research Antibody segment, but rather the AbD segment, in line with the re-branding that we do in 2006.

Moving to expenses, we expect -- we estimate total operating expenses for the Company as a whole at approximately E49m. I think it's important to highlight a number of assumptions which have been put into that expense line for 2005.

First and foremost, included in our assumptions is more than E4m worth of investment expense in proprietary products and technology development, which was outlined earlier today. Beyond this is included estimations of re-structuring charges of roughly E500,000, relating to the acquisition of Serotec, as well estimations of amortizations related to acquired intangibles of around E2m.

Note that the acquired intangibles estimate is only a best estimate at this point, and may change pending the final purchase price accounting exercise, which we do for Serotec later this year.

Looking at guidance by segment, in the Therapeutic segment, we expect the unit to be profitable as last year. As it relates to the AbD segment, we expect to have a net loss of less than our loss in 2005 which, again, was E3m. In terms of capital expenditures, we expect a CapEx spend of E4m to be spent this year. Of that, approximately E1m relates to one-off, re-structuring efforts related to the acquisition of Serotec. The rest mainly relates to technology development efforts on the Therapeutic side of our business.

The last point I'd like to make on guidance is the volatility of our quarterly numbers in 2006. As I said from the onset, higher levels of performance based payments will also involve higher levels of variability between quarters. Please, do not let the performance of any one quarter overly influence your thoughts relating to the full year.

In closing, I'd like to say we've had an excellent year, both financially and operationally speaking. Based on this performance, we intend to use our cash flow from operations to further invest in growth opportunities for the Company. We believe, by investing in the proprietary development of our own compounds, and maintaining our technological leadership, we can offer our shareholders an increased return on investment.

That concludes the financial analysis for 2005 and guidance for 2006. And I'd now like to hand back over to Simon [for the goals 2006].

DR. SIMON MORONEY: Thank you Dave. To bring the presentation to a close, I'll present our Company's goals for this year. These are, on the Therapeutic side of the business as Dave has stated, we aim to reach revenues of at least E32m. We anticipate additional deals so that we will increase our market share amongst leading pharma companies. We aim to increase the number of active partnered therapeutic antibody programs, by at least a quarter to 36 by year end.

Finally, on the Therapeutic side of the business, we intend to advance MOR103 according to our plan, so that it will be on track to reach clinical trials in the second half of next year.

On the Research Antibody side of the business, our main focus will be on consolidating the new division. The goals are, therefore, again as Dave has stated, revenues of at least E18m. We aim to complete the integration of Serotec into the unit and to establish our new brand in the market, AbD. Finally, across the Company as a whole we will remain profitable overall on revenues of E50m, as Dave has stated - almost 50% up on last year.

Before opening the Q&A session, I'd like to remind you of the main point to take away, and that is that MorphoSys had a very successful 2005, in which we strengthened our two main business units significantly. Our economic strength today enables us to invest in selected new areas, such as our proprietary product MOR103, to take advantage of growth opportunities in the future.

That concludes the presentation.

CLAUDIA GUTJAHR-LOSER: I would like to open now the floor for your questions. If you don't mind, we would start with questions from people listening in by conference call. May I ask the operator if there are any questions?

OPERATOR: Thank you. [OPERATOR INSTRUCTIONS]. We will pause for just a moment to allow everyone to signal for questions.

CLAUDIA GUTJAHR-LOSER: Okay, if there are so far no questions, I think we go back here to the audience, and I think there was a first question over here.

UNIDENTIFIED AUDIENCE MEMBER: At the beginning of the presentation you mentioned that your market share increased during the last year. What is your market is my question? You only look to antibody developing companies but, if you think about your market, you should look to all companies who have developed tools to develop new products. I think of [Evotech], [Basilea] and so on.

They are concentrated on some special segments but you mentioned Alzheimer, and [Evotech] also is looking to develop something. So the market is not really exactly defined, and the question is if you really increase your market share?

DR. SIMON MORONEY: Maybe I can take that one. Obviously, the market for methods and product candidates in the pharmaceutical industry is enormous, and highly segmented. You mentioned Alzheimer's disease. There are, obviously, a number of different approaches to tackling Alzheimer's disease. The most useful way for us to look at our market, and segment our market, is to look at the antibodies segment.

There we have a very clear picture of the market, of our competition, and of the customers for our products and technologies. And because that's the most meaningful way, because that's the area that we play in, that's how we do our analysis. And if you confine yourself to that segment, which is a significant segment, we have become over the last year, or during the last year, -- we did more deals than any of our competitors.

And on that basis, we can accurately state that our technology is becoming the method of choice amongst the pharma industry, for developers of therapeutic antibodies. Of course, that's not to say that there are not other approaches to Alzheimer's disease or, in fact, any disease.

UNIDENTIFIED AUDIENCE MEMBER: Can I maybe, first of all congratulations to the excellent result of the Therapeutic business unit, and I'm terribly sorry that I have to ask you some questions on the other business unit which is somewhat lagging behind. Maybe first of all you can give us the revenues of the Biogenesis entities, and maybe compare 2005 to 2004? And it would be quite helpful to have the, if it's still possible, the revenues of Biogenesis on a quarterly basis in 2005 so to see if a trend is there, if one?

Then maybe some more remarks on the EBIT of minus E3m in this business unit, which is pretty far away from the original guidance of a break even. What are the reasons behind that, and in this context, maybe even an explanation? I think the gross margin of the business unit was around 43%, and when we discussed this issue 12 months ago, I think a figure like 60% was mentioned. So what's the explanation for that pretty huge difference?

And then maybe lastly, on this business unit, or maybe on the guidance of this business unit. What I do not really understand is, I think when you acquired Biogenesis, it was a profitable entity and same is true for Serotec. So, in fact, you're combining somehow two profitable entities, and we end up with a guidance which calls for a loss of something like E2m this year. Maybe some more explanation there as well? But again, Therapeutics was wonderful.

DAVE LEMUS: Okay. There a number of financial elements to the question, so I'll address those first. Maybe the first point I'd like to address is margins. So we believe that the margins for Biogenesis are close to 60% as we said. What's dragged those margins down is the performance of the production unit, Antibodies by Design, in Munich.

And that business, as we've always said, is very much like a movie theater or a theater business and there needs to be a certain critical mass which runs through that unit, so that that unit is profitable. You noticed in 2004 the numbers that we'd showed, we had negative gross profitability for that unit which was the Antibodies by Design in Munich alone.

Now that negative result continued into 2005, which served to drag the entire unit's overall gross margin, including Biogenesis, down. So without the Antibodies by Design unit, the margins would have been at least in the mid to high 50s. So I think that explains the margin question.

You asked another question, what was the performance of AbD and Biogenesis in 2005? Unfortunately, when we purchased Biogenesis in 2005, the numbers that they had previously were neither IFRS nor inter-company clean. And we've never taken the opportunity to fully clean them out in an audited fashion, so anything I would say now is on un-audited numbers for 2004. But we can say roughly that the growth in the Biogenesis unit between 2004 and 2005 was about somewhere 10% to 12%.

The actual numbers for 2005 - Biogenesis brought in roughly E3.2m and AbD roughly brought in E1.3m. The AbD performance represents growth of 90%, -- or roughly 90% over the previous year. The numbers by quarter, I don't have them here with me or for Biogenesis. I think it's fair to say, however, I know that the first quarter of Biogenesis' numbers were quite weak. That had a lot today with the integration, the purchasing of the company, and in the second half of the year the performance was substantially better than the first half.

But we can provide that to you perhaps at a later point. It was definitely an upward trend. The second half of the year was no question better than the first half of the year, and a lot of that had to do with the fact that this was a small company. They had never been under any of the financial reporting requirements that a public company is. All the things related to the acquisition, the integration, that took time away from their efforts.

But, all-in-all, the growth was more or less where we expected it to be. The performance of Biogenesis was more or less where we expected it to be.

Now maybe going to back to your final point, which is why are we showing a loss in units which are, in fact, profitable? The Biogenesis unit, as we tried to show in chart 42, actually is more or less cash positive. There are, however, a number of things you have to consider when taking a look at comparing cash profitability versus financial profitability.

One of those things, for example, is amortization related to acquired intangibles, and the same thing with Serotec. Those are things that you have to subtract out to get the cash profitability versus financial profitability. We also had some impairment on the Biogenesis business, and that related to acquiring Serotec. Namely Serotec -- the acquisition of Serotec was a triggering effect for some impairment in Biogenesis, and the reason is that there is some overlap between the two businesses.

And because of that we've decided to concentrate more on the Serotec aspects of the business as opposed to the Biogenesis and, hence, there was some impairment on it. So I think that the year 2005 also included, roughly, E500,000 of special impairment. So I think 2005, again, was not a very pretty year but there are reasons to expect changes and improvement in 2006.

UNIDENTIFIED AUDIENCE MEMBER: [Inaudible].

DAVE LEMUS: I think the guidance that we gave this morning was simply that the loss, should there be one, will be less than what we had last year of E3m. We're somewhat reluctant to give an exact number at this point because, although we have estimates for things like re-structuring charges, and although we have estimates for amortization of acquired intangibles. Those won't become concrete until a little bit later in the year. It's too late, 30 or 45 days into the acquisition, to give you an exact number at this point.

But we can definitely - definitively say that we expect a loss of less than last year's loss of E3m for the unit.

DANIEL WENDORFF, ANALYST, WESTLB: Daniel Wendorff of WestLB. I have a question, well a group of questions regarding MOR103. And did it I got that right, that you plan to out-license this program after you have success -- will have probably successfully conducted Phase two trials? And when will that be actually be, and what level of investment would probably be needed to compare to your strategy before?

And there is also a question related to that which I have. If I look at your segment results, I would end up with an operating profit of around E9m and you reported E6.2m. So is the difference related to your Proprietary programs?

And one question also regarding your Research Antibodies Division. I think you said in the last conference call, that you wouldn't be sure whether you could use your own tax loss carried forwards, for the profits generated by the Serotec Group. Could you give us an update there? Thank you.

DR. SIMON MORONEY: Okay, Daniel. I'll speak to the question about the strategy for MOR103, and then Dave will handle the financial questions. Our strategy for MOR103 is to intend to take it to proof of concept in man, and that is, essentially, at least Phase one/two data where we see that the compound actually works in its proposed indication. At what stage we choose to part with the compound is not yet decided. We will -- As I said, we have a concrete plan to take it to that stage.

The costs, the expenses, for that doing are in our financial projections for the next three years, and we will take a view, as it moves forward, about when and if we'll partner it. And that decision will be based on our ability to continue financing the development, how promising the compound looks, whether we're getting traction and interest from potential partners for the compound. So at this stage no decision has been made on that.

But I think the clear message that we want to give you today, is that we're in a strong enough position to take this compound significantly further forward than we had planned to do in the past with any of our compounds. And in doing that, and this is well known in the industry, essentially, the further on you can take a compound, the more value you can generate in it. But the specific decisions about when to partner it, we've not yet taken.

UNIDENTIFIED AUDIENCE MEMBER: And the timing?

DR. SIMON MORONEY: As I said, our goal is to take it into the clinic in the second half of next year. We anticipate that we could have proof of concept data in man by the end of 2008, if all goes well.

DAVE LEMUS: And there were some questions regarding results. If you take a look at the segment reporting, you'll see the results by segment for costs which we can clearly and logically allocate to the segments. There are roughly E2.9m worth of costs in our infrastructure which have no logical allocation basis, for example, the amortization of the HuCAL patent or, for example, the cost of the public relation department. There are no logical bases for allocating those to the segments. So that's the difference that you're looking for in your result.

With regard to the question, tax NOLs. We do have in excess of E20m usable tax net operating losses which we can use. One of the reasons why we pay taxes this year is because of the minimum taxation law, whereby we pay a certain amount of tax beyond the threshold, the E1m.

To the question can, our subsidiaries profit from these NOLs from their tax position? And the answer is yes, but only in a very limited way. Namely, for their local profits they cannot set off our losses. However, there are certain transfer price arrangements in place and things like inter-company loans, which transfer some of the profit back to headquarters. And that profit, of course, is then set off versus the Munich or the MorphoSys AG tax loss, that carry forwards.

So in principle the subsidiaries don't use it, but through transfer price tax mechanisms, inter-company loans and expense and so forth, we transfer some of that profit back to us in Munich, where it is applied.

DANIEL WENDORFF: Have [you] the investment level needed from MOR103? Do you have any rough guidance you could probably give us?

DR. SIMON MORONEY: Is that -- Dave, is that a number that we are able to communicate at this point or choose to communicate?

DAVE LEMUS: I think we decided that we'd chosen not to communicate it but simply lump it into one number, which is product and technology development, equal to E4m this year. Perhaps during the year we might be able to give you a little bit more guidance, but for now we've decided to just leave that number open.

DANIEL WENDORFF: Okay, I had to ask any way. Thanks.

UNIDENTIFIED AUDIENCE MEMBER: I also have a question regarding MOR103 and the products that you basically gave up. First of all, you mentioned the term -- for 101 and 102 the terms of these did not meet your expectations. Isn't that a little bit optimistic, basically, now you're giving it up and maybe writing value off? That's the question to you, if you have any write-offs regarding 101 and 102?

And the second question is, if you compare -- you mentioned focus and accelerate and if you -- I don't want to have detailed figures but does this focus and accelerate mean, basically, that you maintain the costs that you have for internal track development, giving 101 and 102 up and focusing on 103 and 202? Does it mean an acceleration of the cost? So, basically, is it on a similar than compared to 2005?

DR. SIMON MORONEY: I think it's fair to say that the level of investment increases, certainly in this year and foreseeably in years to come, of course, as the compounds move forward. I think we've come to the conclusion, to speak to this term, accelerate and focus, that by pumping more money into a single, or perhaps two programs, will be more successful for us than spreading that investment over three or four programs, as we have in the past. I think that's clear.

And I think what's undisputed in this industry is that the more data you have and the better the quality of that data, then the more value you have. That's -- I think that's a given. And we feel after careful, very careful evaluation and consideration, that our best bet is to pump that investment into -- and to pump that focus into MOR103.

UNIDENTIFIED AUDIENCE MEMBER: Then I have a question on just if you -- the write-down.

DAVE LEMUS: No write-down because those expenses have been continually expensed as research and development costs over the last several years. So there's nothing. There

[lupus2000]

Q1 2006 Morphosys AG Earnings Conference Call - Final
28 April 2006

OPERATOR: Good morning, ladies and gentlemen, and welcome to today's MorphoSys presentation of Q1 results, 2006. For your information, this conference is being recorded. At this point, I would like to hand your call over to your host today, Mr. Dave Lemus, CFO.

Please go ahead, sir.

DAVE LEMUS, CFO, MORPHOSYS: Good morning and welcome. This is Dave Lemus, CFO of MorphoSys. With me today is Simon Moroney, our CEO. We're both calling you from our headquarters in Munich, Germany. First, we'd like to welcome you to the conference call and thank you for participating.

During the call, we would like to talk about the company's financial results for the first quarter of 2006. Simon will begin by giving you an overview of the first quarter. Then I will review the financial results for the first three months of 2006.

Afterwards, we'll open the call to your questions. Before I start, I want to remind you that during this conference we will present and discuss certain forward-looking statements concerning the development of MorphoSys core technologies, the progress of its current research programs and the initiation of additional programs. Should actual conditions differ from the company's assumptions, actual results and actions may differ from those anticipated.

You are therefore cautioned not to place undue reliance on such forward-looking statements, which only speak only as of the date hereof. I would now like to hand over to Simon Moroney.

SIMON MORONEY, CEO, MORPHOSYS: Thanks, Dave, and also from me a warm welcome to our Q1 2006 conference call. This has been an extremely productive quarter for us, and the numbers that we published today served to underline the achievements that we have made. On acquisitions, the capital increase, three new deals, the second HuCAL antibody IND, all this in the first three months of the year.

In addition, we took important decisions about our own product development efforts. I'll start my review of the quarter with our activities in the therapeutic antibody segment of the business.

In January, we announced that Hoffmann-La Roche had filed an IND application for a HuCAL antibody for the treatment of Alzheimer's disease. This event triggered a milestone payment, which is included in our Q1 results. We expect clinical trials with the antibody to commence shortly. We also announced a new agreement with Roche which takes us beyond the initial collaboration in the field of central nervous system diseases into the all-important oncology indication. The program has as its initial goal the development of HuCAL antibodies against two new targets to be supplied by Roche.

During the quarter, we received a milestone payment from Centocor for successfully delivering a set of antibodies meeting predefined success criteria against a target implicated in inflammatory and autoimmune diseases. The nature of our agreements with our partners usually prevents us from being able to publicize the magnitude and in some cases even the occurrence of these milestone payments.

Indeed, several other milestones were hit during the quarter, which we did not disclose separately. But at least as significant as the payments themselves is the fact that milestones point to positive progress in our therapeutic programs. The number of active, partnered therapeutic programs based on HuCAL has increased from 29 at the end of last year to 34 today.

Most importantly, there is a growing maturity in our partnered pipeline, as seen by the fact that the number of antibodies in phase I has increased from one to two, and the number in preclinical development has gone up from six to eight in the last three months. We are on track to reach our target of at least 36 active partnered therapeutic antibody programs by year end.

Our business developments in Japan continue to bear fruit. Following on from our first-ever Japanese pharmaceutical deal in September of last year with Shionogi, last month we entered into a wide-ranging deal with Daiichi Sankyo. Under the terms of the deal, Daiichi Sankyo receives a license to our HuCAL technology for their in-house R&D.

This license is for an initial two-year period and may be extended for a further three years. In addition, Daiichi Sankyo will support a group here at MorphoSys who will work on a therapeutic antibody project against one of their targets. An extension beyond the initial two-year term may bring additional collaborative therapeutic antibody projects.

With respect to our proprietary in-house programs, we continue to work, as announced in February of this year, on MOR 103 for rheumatoid arthritis and potentially other inflammatory diseases and on MOR 202 for cancer. Both of these programs are on track towards their respective next development stages.

For MOR 103, the filing of an IND in the second half of next year and for MOR 202 the completion of preclinical profiling by the end of this year. As a reminder, we will not communicate individual steps of the development process, but we will keep you updated regarding the overall progress of the programs against these timelines.

Turning to the research antibodies segment, the biggest transaction of the quarter was of course our acquisition of Serotec. This transaction is first and foremost intended to strengthen our ability to commercialize our HuCAL technology and antibodies derived from it in the research market. We have an ambitious objective for this side of the business, none other than to effect a technological transformation in the research market, replacing animal-based methods for antibody generation with a much more efficient in vitro HuCAL technology.

Serotec has brought us, in addition to the all-important established sales channels a profitable business with approximately EUR11 million of revenues. We've made good progress on integrating the Serotec Group into our research antibody unit, now operating under the name "Antibodies Direct," or AbD, for short.

Marketing activities are now merged. The Serotec sales force has been trained in the commercialization of HuCAL antibodies and we've successfully held our first joint trade fair presentations. With respect to the operation, we've decided to consolidate sites in the UK and U.S. In the UK, we plan to make Oxford the site of our UK headquarters.

Oxford offers good infrastructure and a high concentration of both academic and industrial research. Serotec has a long tradition and is well connected in this area. The site and [pool] on the south coast that was the Biogenesis UK facility will be closed no later than the end of this year.

The Biogenesis operations are currently being consolidated with Serotec UK and its subsidiary, Oxford Biotechnology, Limited, at a single site in the Oxford area. In the U.S., the former Serotec site in Raleigh, North Carolina, will be our new U.S. headquarters. But we will also retain a sales office in New England, taking advantage of the presence there of the former Biogenesis operation.

Here in Germany, we're retaining the Düsseldorf sales office of Serotec. Overall, headcount is being reduced by roughly 10 positions across the organization as a whole, mainly due to duplication of certain functions between Biogenesis and Serotec. During the integration, the greatest care has been taken to ensure continuity of business and to avoid any risk of disruption in product supply to customers.

We're particularly pleased that the progress on the integration has not been at the expense of the financial performance of the unit, which, for the first quarter, was right on target.

The transaction that went sent somewhat unnoticed light of the acquisition was our alliance with Chemicon, announced one day prior to the Serotec deal. The logic behind this deal was in many respects the same as the acquisition, to take advantage of existing sales channels to increase the uptake of HuCAL antibodies in the research market.

We believe that Chemicon, being one of the biggest players in the research antibody market is an ideal partner for this purpose.

That concludes my review of the quarter. I'd now like to hand back to Dave for his review of the financial results.

DAVE LEMUS: Thank you, Simon. To begin the financial analysis, I'll start with revenues. Group revenues grew by 100% in the first three months of 2006 to EUR14.8 million compared to EUR7.4 million in the same period of last year. The reasons for the increase were success-based payments from existing collaborations, which included clinical, as well as research milestones, and the inclusion of the Serotec Group revenues, contributing 22% of total revenues.

Total organic revenue growth amounted to 56%. The therapeutic segment experienced 56% organic growth and the AbD unit experienced 100% organic growth in the same period. Revenues arising from the therapeutic antibody segment accounted for 67%, or EUR9.9 million of total revenues. This total comprises EUR6 million from [research] and paid license fees and EUR3.9 million success and milestone fees.

You may recall that we predicted for the full year 2006 that performance-based payments in the amount of EUR7 million would occur. Those payments are nearly pure profit for us and in the first quarter we already achieved more than 50% of these planned payments for the year.

That's one of the reasons for the unusually strong net income result in Q1 on the therapeutic side of our business. The AbD segment, comprising MorphoSys Antibodies by Design unit, Biogenesis and Serotec generated EUR4.9 million, or about 33% of total revenues. The Serotec Group contributed 3.2 million in revenues, or 65% of total AbD revenues.

The remaining revenue for the entire segment amounted to EUR1.7 million and came from the brands Biogenesis and Antibodies by Design. For the quarter, the results on the top line for the AbD segment, in particular, for Biogenesis, was stronger than expected.

Let's move to expenses. For the first quarter of 2005, total operating expenses, which now include stock-based compensation, increased by 50% to EUR10.2 million. The total increase in operating expenses of EUR3.4 million was mainly due to the acquisition of the Serotec Group companies and had the effect of increasing operating expenses by EUR2.8 million.

Stock-based compensation expense is for the first time in 2006 now embedded in our [COGS], SG&A and R&D amounts. In previous years, the amounts were shown separately from these items on the face of the financial statements. Stock-based compensation for the first three months of 2006 amounted to EUR300,000, little change in total amount over the previous year.

In general terms, if you extrapolate total expenses for Q1 for the full year, the amounts are lower than guidance, which is due to several reasons. First of all, cost of owned product and technology development, which we predicted for the full year at 4 million was, as planned, very limited in the first quarter. I am, however, assured by our colleagues on the R&D side that this will pick up during the year.

Additionally, a number of items, such as the purchase price allocation, where we amortize intangibles identified from the acquisition, has not yet been done, and hence, none of the related amortization is booked in the first quarter of 2006. Furthermore, restructuring costs, so far minimal in Q1, are expected to increase during the year.

Therefore, there are a number of valid reasons why expenses appear presently under budget but are expected to increase during the year.

Moving on to cost of goods sold, cost of goods sold is composed of the AbD segment cost of goods sold. COGS rose significantly to EUR2.1 million in Q1 2006, compared to EUR500,000 in the same period of the prior year. The main reason for the increase was the inclusion of the Serotec Group company's COGS.

Compared to the same period last year, gross margins of the AbD segment improved significantly in Q1, raising from 39% in 2005 to 57% in the first three months of this year. The increase is attributable not only to the inclusion of Serotec, but also an improvement in margins in general of the non-Serotec AbD business.

The cost for research and development increased by 100,000 to EUR3.8 million and remained relatively unchanged compared to the same period in the prior year. Expenses for product and technology development amounted to only 300,000 and were included in research and development expenses, having started somewhat slowly in Q1. As I said before, we expect to pick up an expense on the R&D side in the next three quarters to come, as we mentioned during the guidance speech at the beginning of the year, the total EUR4 million for the full year.

SG&A expenses amounted to EUR4.2 million compared to EUR2.6 in the same period the previous year. This resulted mainly from higher personnel and other operating expenses, partly stemming from the contribution and integration of the Serotec Group of EUR1.5 million.

Looking ahead, also on the SG&A side, we expect a pickup of expenses in the next three quarters relating to restructuring and the other costs I mentioned earlier.

MorphoSys' investments in plant, property and equipment amounted to 200,000 for the first three months of 2006, compared to 100,000 for the same period of the prior year. Depreciation of plant, property and equipment for the first quarter of 2006 accounted for 300,000, compared to 200,000 the same period of the previous year.

Amortization of intangibles amounted to 500,000 and remained unchanged to the same period of the prior year. Nonoperating income summed to 200,000 income, compared to a nonoperating expense, or loss, of 200,000 in the same period of 2005. This was mainly caused by a gain on securities which were so far shown in he equity statement as unrealized gains and which were sold, and thereby realized, in the first quarter, in connection with raising financing for the acquisition of the Serotec Group.

For the first three months of 2006, the company presented an operating profit in the amount of EUR4.7 million, compared to an operating profit of 600,000 the first quarter of 2005. A net income of EUR4.9 million resulted for the first three months of 2006, compared to a net profit of 500,000 in the same period of the previous year.

The resulting diluted net profit per share for the entire MorphoSys group for the first three months, ended March 31st, 2006, amounted to $0.78 per share compared to $0.08 per share in 2005.

As mentioned before, the level of profits experienced in Q1 - sorry. The level of profits experienced in Q1 2006 is expected to substantially decrease during the year, as Q1 was characterized by strong revenues and lower levels of expenses, which I outlined previously.

At March 31st, 2006, the total number of shares issued was 6.2 million shares, compared to approximately 6 million shares at December 31st, 2005. The increase arose from the issuance of approximately 208,000 shares in connection with the capital increase as consideration for the Serotec acquisition.

An additional increase of approximately 33,000 shares resulted from the conversion of bonds issued to employees, as well as exercised options. The successful issuance of approximately 380,000 shares stemming from the capital increase in March 2006 was not presented on the balance sheet due to the accounting treatment of share capital unpaid under IFRS accounting rules.

However, on April 4th, 2006, the date of the cash settlement, the shares amounted to approximately 6.6 million shares.

On March 31st, 2006, MorphoSys' liquid funds comprised EUR43.5 million. Not included in this amount, as I just mentioned, were cash items due from the capital increase of EUR17.1 million successfully concluded in March, which was not included in the quarterly statement.

On December 31st, 2005, MorphoSys had cash, cash equivalents and available for sale financial assets of 53.6 million. That concludes the financial analysis.

As is typical during our conference calls, we'd like to take the opportunity to update our financial guidance. I would like to confirm our full-year guidance. Against the background of the strong financial results of the first quarter of 2006, we still expect a net profit of approximately EUR1 million. As I mentioned previously, there were a number of what appeared to be one-time effects, both on the revenue side and on the expense side, which resulted in a strong quarter, which we experienced in Q1.

This very much mirrors our comments, which we made at our year-end press conference several weeks ago, where we stated that the MorphoSys financial results can be volatile in any given quarter and that results in one quarter may not be indicative of the entire year's results. Taking this one step further, for us to achieve guidance this year implies that we will have a loss in at least one further quarter and we wanted in advance to alert you to this fact.

Having said that, we have an excellent quarter behind us. I also do not want to exclude the possibility of an out performance on net income should our financial expectations for the business be exceeded during the year.

That concludes the financial analysis for the first three months of 2006. We'd now like to open the call up to your questions.

OPERATOR: Thank you. [OPERATOR INSTRUCTIONS].

Our first comes from Mr. Patrick Fuchs with DZ Bank.

PATRICK FUCHS, ANALYST, DZ BANK: Hello, this is Patrick Fuchs, DZ Bank. I have a question regarding the Antibodies Direct business, which is 4.9 million. I would say disproportionately to what you would expect of 18 million throughout the year. I mean, are there seasonality effects, one-time effects that this quarter is quite nice, or could there an upside in the revenues, expectations, of 18 million that you have for the year.

The second question is you mentioned Roche IND filed, and mentioned that the clinical development then starts soon. Does this figure further milestones? And the last question on that is the unallocated costs, where 2.9 in the full year 2005, and now 1.4, and just if you can give what these unallocated costs are and rankly what you expect there in terms of the figure in 2005? Thanks.

SIMON MORONEY: Hello, Patrick.

PATRICK FUCHS: Hello.

SIMON MORONEY: So let me first answer the question about the Roche IND and then Dave will take the question about the AbD revenue in Q1 and the unallocated expenses. We'd love to be able to get a milestone payment for the filing of an IND and then a second one for the start of the phase I clinical trials.

Unfortunately, we haven't been able to achieve that as yet. And in this case, as in I believe all of the other cases that we have, the milestone is payable on filing of the IND application, so there won't be a second payment when the first treatment is administered to patients, which we expect I believe in the next couple of weeks.

DAVE LEMUS: Okay, there was a question regarding whether or not there was a seasonality factor relating to ...

PATRICK FUCHS: One-off, maybe a Chemicon return or revenue that you're ...

DAVE LEMUS: In principle, no, however, we do realize that there were certain customers that we had in the first quarter which had unusually strong quarters. And, hence, we think that the first quarter for AbD was very strong. It is possible that it continues, but our expectations for the full year is that that strength perhaps may not continue, and hence at this point we think it's just too early to raise guidance as it relates to the AbD business.

So, yes, we acknowledge that it was very strong, and that if you multiply the results out by four, it comes to 19.5 million as opposed to the 18 million, but it's too early to call that. And we do see certain items in Q1 that were perhaps one off.

They could continue. We don't exclude that they could continue, but we do recognize that they were unusually strong. Regarding the unallocated cost question, so, basically, the unallocated costs represent all the costs which can't be directly allocated to either of the two segments that we have.

This, for example, could involve everything from the cost of public relations, which has no obvious link to the segment's operating capacities to certain headquarters functions, which, again, have no link to the individual segments per se.

We haven't given guidance for the full year. Currently, 14.5% of total expenses were not allocated at MorphoSys. That compares very similarly to the experience that we had in 2004. In 2005, the amount was slightly lower. I haven't yet given guidance on it, but that being said we did take a look at how other companies are doing it and we noted that in Germany for example we saw one company with segments that had unallocated cost of 4%, another one that had close to 15, and when we look at comparable company in the U.S., for example, in [Vitrogen], they have close to 30% unallocated costs.

So the numbers are kind of all around the place, but my guess at this point is that unallocated costs for the year will come in around where it currently is at the quarter.

PATRICK FUCHS: Okay, thanks.

OPERATOR: Our next question comes from Martin Possienke with Equinet. Please go ahead, sir.

MARTIN POSSIENKE, ANALYST, EQUINET: Hello. Good morning, everybody. I guess maybe firstly congratulations to an outstanding quarter, and then a couple of questions, if I may. I assume that you do not want to discuss your financial guidance, so maybe another one.

If I remember correctly, you gave guidance for the partnered therapeutic antibodies by year end to be around 36 and now we are at 34. So maybe you can give an update there. And then, to these financials, or exactly to the financial result, I think it was minus 16,000 in the first quarter, and given the fact that in 2004 and 2005 you had negative financial results as well, despite a significant cash position, maybe you can give a brief explanation again there.

DAVE LEMUS: So, Martin, we didn't catch that question, the second question that you gave. We ...

MARTIN POSSIENKE: It's about your financial result. Actually, it has always been negative. It was negative in 2004, it was negative in 2005. It's negative in the first quarter, and despite a significant cash position, so maybe just a brief explanation again there. I know that you already explained it once, but I forgot it.

DAVE LEMUS: This is which category of expense?

MARTIN POSSIENKE: Financial result, interest expenses.

DAVE LEMUS: Interest expense, okay.

MARTIN POSSIENKE: And then thirdly, on the taxation of the first quarter, actually, there was no taxation, so maybe some words there and what we can expect for the full year as tax rate or taxation or whatever. And then, fourthly, a follow-up on Patrick's question.

Is it fair to assume that the first quarter was the first quarter without restructuring-related costs and amortization for AbD?

SIMON MORONEY: Let me start, Martin, with the number of programs that you asked about. Indeed, we've seen a nice increase in Q1 from 29 at the end of last year to 34 now and we're conscious that we projected a total of 36 by year end. We actually said at least 36. This is rather unpredictable. It's in the hands of our partners to decide when and on what targets they initiate new programs, so it's a little bit hard for us to predict. And we were a little bit surprised, quite honestly, with the number of new starts we had on the first quarter, and we expected those to be a little bit more spread out during the rest of the year.

We believe, and we have reason to believe, that there will be certainly another two, but beyond that it's a little bit hard to say, so I think it would be certainly premature at this stage to say that that number is going to be more than 36 by year end. But we're certainly very confident that we will hit that 36.

DAVE LEMUS: Okay, with regards to the financial questions, the interest expense that we show, you are correct. We don't have any long-term debt or bonds that we pay interest on. This results out of the transaction we did back in 2002 with CAT. As you may recall, part of the settlement with CAT back in 2002 was that we needed to - how do you say - to pay cash over five years, 1 million per year. And as the way you book that under IFRS is that you have to book a present value of that and attribute a certain amount of interest expense to that 1 million payment that we make each year.

Actually, I believe the last payment is coming up next year, so that interest expense line should fall off next year.

MARTIN POSSIENKE: Okay.

DAVE LEMUS: Regarding the taxation, the taxation is null for the first quarter, as you rightly pointed out. That very much has to do with the fact that, again, we do stick by our present expectations for the full year of EUR1 million profit. And if and when the profit does land at that level at the end of the year, we do of course have net operating less carry forwards, which would eliminate those gains, not having us to pay taxes.

So, for the time being, we do stick by guidance, and that's kind of backed up by the fact that we haven't built any deferred tax assets.

MARTIN POSSIENKE: Sorry to interrupt you there. But let's say for example for the United States, I assume that Serotec is profitable. Normally, you should pay taxes there and let's say the deferred tax assets, they should be in euros.

DAVE LEMUS: Okay, we - obviously, the creation of deferred tax assets and so forth in the U.S. is a very complex exercise, and we actually do it on a group level. So, at this point, we've just made payments for the end of the year. I think at this point the tax position such in the U.S. and in the UK was that, yes, we are in tax-paying positions, but the tax-paying positions are not that great that we need to currently build reserves for them, at least in the first quarter.

That might change in the second quarter and the third quarter, but for the time being, the profits in Q1 in both of those areas were not significant enough for us to warrant building tax expense reserves for them.

MARTIN POSSIENKE: Okay.

DAVE LEMUS: And the third question was relating to amortization and restructuring. You are correct. There are no amortizations from the PPA reflected in Q1 and the amount of restructuring costs related to the AbD segment are also very minimal in Q1. Again, those are expected to pick up when we do our PPA exercise later in the year and when the restructuring costs and the restructuring efforts come full bloom.

MARTIN POSSIENKE: Okay, thanks a lot.

OPERATOR: [OPERATOR INSTRUCTIONS].

We will now take a question from Daniel Wendorff with WestLB. Please go ahead, sir.

DANIEL WENDORFF, ANALYST, WESTLB PANMURE: Yes, good morning. Daniel Wendorff from WestLB. I have two questions, one also a follow-up regarding the Antibodies Direct business. If we would assume that the development goes forward over the next quarters as we saw that in Q1, do you think it's prudent to assume that even with higher amortizations and restructuring charges you could generate an operating profit there? So that just under the assumption that this continues as we saw it in the first quarter?

And, regarding the therapeutic antibodies business, let's say how many items of the revenue line you saw in Q1 were completely unexpected by you? If it's possible at all to say that, so it was not in your planning? Thank you.

DAVE LEMUS: Okay, first question regarding the inclusion of amortization relating to the PPA and whether or not - if we included that and we continued to have strong quarters, could we theoretically be profitable? So, at the year-end press conference, you might recall that we had included roughly an estimate of EUR2 million worth of PPA amortization, which would have given us an additional expense if you prorated it per quarter of 500,000 for the quarter.

I believe if you add that then to the result of the segment that we actually experienced, which was I think in the neighborhood of the odd 300,000 or so, we would have had a slight loss for the quarter. Yes, about 400,000. So we would have had a slight loss for the quarter. So I think that maybe answers your first question.

DANIEL WENDORFF: Okay.

DAVE LEMUS: Second question was related to the unexpected items. So, I think, again, when we gave guidance back in February, we know that Q1 was going to be strong and that there were going to be several milestones in our planning and that we also cautioned at that time not to draw too much conclusion from the results of one quarter, knowing that Q1 would be strong.

That being said, Q1 was slightly above our expectations, not only on the therapeutic side, but also on the AbD side. But, again, we do see some one-off items in the results, which, again, make us cautious to raise guidance this early in the year. If they continue, we may come back and revisit that, but that's I think just too early to do that at this point.

SIMON MORONEY: Daniel, this goes back to what I said before, which is the timing of some of these therapeutic events, the hitting of milestones and so on, which depend on events in the lab, are somewhat difficult to predict. And, certainly, when the decision lies in the hands of the partner at what time to start a new project or at what time to complete an experiment on a project, those are things that are really out of our hands completely and may fall in one quarter or may easily fall in the second quarter.

So, we were lucky to some extent that a number of those things happened in the first quarter, but it's very difficult to predict whether those will persist going forward.

DANIEL WENDORFF: Okay, and one question regarding the EUR400,000 you said on the Antibodies Direct business. So this is basically the [sigma] EBIT of the Antibodies Direct business, which was in Q1.

DAVE LEMUS: Not really. You'd have to add back the amortization related to the PPA of Biogenesis, plus depreciation of the segment, and that roughly is about 0.25 million.

So the EBITDA of the segment is actually higher to the tune of about EUR250,000.

DANIEL WENDORFF: Okay, thanks.

OPERATOR: We will now take a question from Mr. [Rudolf Bezoff] with [FG Securities]. Please go ahead, sir.

RUDOLF BEZOFF, ANALYST, SG SECURITIES: Yes, good morning. Two questions. First, on your deal with Schering, could you give us an update on that in the context of the acquisition of Schering AG buy a Bayer. But have you met already people at Bayer about that, or do you plan to meet them in the future?

The second question is on the - I know you don't want to give some detail about milestones, but at least could you give us an idea of a numerical number of milestones that were received in the first quarter. And the last question maybe on gross margin for AbD. It sounds like it was around 57% for the first quarter. Is it something which is sustainable, adjusted for exceptional items that we will see in the future quarters?

SIMON MORONEY: Okay, let me start with the Schering Bayer thing. Obviously, we're following very closely the developments in the Schering Bayer transaction. All I can say at this stage is both of those collaborations are running very well. You'll recall that we extended our Bayer collaboration at the end of last year and we extended our Schering collaboration in December of the prior year, and they're both running very well.

What I can't say at this stage is what impact the combination of those two companies, when it finally takes place, will have. And it's simply too early for us to speculate as to what impact that could potentially have on our collaborations with the two companies.

DAVE LEMUS: Okay, maybe I'll take the two financial questions. The first question was what was the amount of performance-based milestone payments which we received in the quarter? That was in total EUR3.9 million, which is actually slightly in excess of 50% of the entire projected milestones that we had planned for this year and which is included in our guidance, which is somewhere between 6 and EUR7 of performance-based or success-based payments. And this, again, is something that we mentioned at the beginning of this year when we gave guidance.

RUDOLF BEZOFF: Actually, my question was the numerical number of milestones that you received. So how many partners paid you some milestones during the quarter?

DAVE LEMUS: I think what we can say is it was less than five. Beyond that, I think we'd prefer not to comment at this point.

RUDOLF BEZOFF: Okay, thank you.

DAVE LEMUS: Regarding the sustainability of the profit. So, first of all, I assume you talked about the gross profit or the gross margin.

RUDOLF BEZOFF: Yes.

DAVE LEMUS: And there we think that those margins are sustainable and that we don't expect a significant decrease in those margins or a significant betterment. Of course, we are seeing that there is room for improvement on the margin. We hope that the margin continues to go upwards. The benchmark for us, I would say, in this segment is to push our margins to 60%.

RUDOLF BEZOFF: Thank you very much.

OPERATOR: We will now take a question from Mr. Thomas Schiessle from Equities.

Please go ahead, sir.

THOMAS SCHIESSLE, ANALYST, EQUITIES GMBH: Yes, thank you for taking my question. First of all, congratulations for the exceptional quarter. Two questions, if I may. One is on currency impact on the group level. You are receiving more and more revenues out of the Euro zone, so what is your guidance on this? And the second is if it comes to the Serotec integration, Simon, you mentioned that there is some first actions done already, consolidation of sites and is the decision made yet concerning the headquarters. What will be the next steps to take to put all the of the horsepowers on the street for the new entity.

Thank you [so far].

SIMON MORONEY: Okay, let me start with the second question, Thomas. We've made a good start on the integration. Maybe you misheard me during the talk. I didn't say that the consolidation of the sites had yet been completed. I said that we're decided on where those sites will be, and the predominant site will be just outside of Oxford in the UK, where the bulk of the employees will be. We'll also retain sales offices elsewhere. For example, in the U.S., although the main site in the U.S. will be the Raleigh, North Carolina site, and we'll retain a sales office in the New England area, and we'll maintain a sales office in Düsseldorf that came for the Serotec acquisition.

It's really in terms of, as you said, getting feet on the street, so to speak getting the sales effort running, that's really got off to a great start. And I think that's evidenced by the fact that the numbers for Q1, despite the fact that we're essentially integrating three operations, have been right on target.

So we've been really delighted with the way it's worked out so far, and we've been delighted by the way the Serotec folks have embraced the concept of HuCAL. And what we've heard from their salespeople, for example, is that they've been welcoming this kind of opportunity for a long time, because in the past Serotec hasn't offered antibody generation de novo, and they're now able to say to their customers, not only can we provide you with existing antibodies, but we can also make antibodies for you de novo.

So the entire sales force is really embracing HuCAL as something to offer and we're very happy with the way that our offering on that side of the business has become much stronger and much broader and given us a significant advantage, we believe, over certain of our competition in that space. So it's really now an ongoing effort of education and marketing to simply amplify that message and increasingly spread that message out to potential customers.

Did that answer your question?

THOMAS SCHIESSLE: Yes, thank you. Thank you.

DAVE LEMUS: Yes, Thomas, regarding the question on the FX, obviously, this is something we do monitor and look at every month, and I think probably the best thing to give you would be percentage of which revenues we believe are UK denominated, which are U.S. dollar denominated, and then give you assumptions as to what we budgeted those at. Unfortunately, I don't have those at my fingertips right now. However, we'll make sure that we have it for a future call.

THOMAS SCHIESSLE: Okay, so thank you [so far].

OPERATOR: [OPERATOR INSTRUCTIONS]. Our next question is a follow-up question from Mr. Patrick Fuchs with DZ Bank.

PATRICK FUCHS: Yes, Patrick Fuchs, DZ Bank. I have a question regarding the costs that you had for your internal track development program, internal antibody programs compared to Q1 '05 and '06, as I am aware that - or I remember that - in 2005 you had quite some costs regarding the implementation of the psoriasis model or something like that. Just roughly which amount, or which costs did you have for internal track development compared to this quarter's? Quarter one '05 and '06, if you can compare that)

DAVE LEMUS: I'm a little bit doing this by the hip. I know the numbers for there full year. I know the numbers for the full year in 2005 on product development, and technology development, was definitely minimal. This year, in comparison, we projected a full year of roughly 4 million. Less than 400,000 of that was spent in the first quarter. So I don't know what the quarter by quarter comparison is. I do know that the total spend in 2005 was actually minimal.

PATRICK FUCHS: Okay, but minimal, you have certain people working, that have been working on these antibody projects? At least you decided, for example, to give up the ICAM projects and, I mean, just telling minimal means for me nothing. Minimal means for me below 1 million for the year and that I really cannot believe, that for internal antibody development programs, regarding your therapeutic elements, the drug development efforts, just 500,000 throughout the year. That seems not plausible, I think.

SIMON MORONEY: You're now referring to last year, Patrick.

PATRICK FUCHS: Yes, exactly.

SIMON MORONEY: You'll recall that actually last year, the focus of our activities there was more on commercialization, so actually the biggest chunk of the effort last year was spent by our business development team, running around and talking to potential partners for the programs that we'd got. And it was on the back of the feedback that we got from them that was a large part of the decision that we would discontinue MOR 101 and 102 around the ICAM program.

As Dave says, the pure development spend last year, as opposed to the commercialization spend, was really - when you say less than 1 million, I think the answer is substantially less than a million, and therefore not to be compared at all with the number this year that we communicated at the year-end results conference in February, which, combined with technology development, will be on the order of 4 million.

PATRICK FUCHS: Okay, just to clearly state, if I got that right, for all your internal antibody programs, 101, 102, 201 and so on, substantially less than 1 million was spent on development efforts in 2005, yes?

SIMON MORONEY: Correct.

DAVE LEMUS: I can confirm that.

PATRICK FUCHS: Thank you.

OPERATOR: As there are no further questions remaining in the queue, that will conclude today's question and answer session.

Mr. Moroney, I would like to turn the call back over to you for any additional or closing remarks.

SIMON MORONEY: Thank you very much. Before ending the call, I'd just like to remind you of the main points to take away. First, the therapeutics division is performing particularly well, as seen by the excellent deal and milestone flow, which in turn has given us a strong first quarter in terms of financial performance.

Secondly, the acquisition of Serotec is a major step forward in our plan to build the research antibody side of our business, and integration here is progressing well.

That concludes the call. Should any of you wish to follow up with us directly, Dave and I are both available in the office here in Munich for the rest of the day. Thank you again for participating, and goodbye.

OPERATOR: Thank you for your participation. You may now disconnect.

[lupus2000]

Q2 2006 Morphosys AG Earnings Conference Call - Final
28 July 2006

OPERATOR: Good morning, ladies and gentlemen, and welcome to today's second quarter report 2006 conference call of MorphoSys AG. For your information, this conference is being recorded. At this time, I would like to hand the call over to your host today, Mr. Lemus. Go ahead, sir.

DAVE LEMUS, CFO, MORPHOSYS AG: Good morning, and welcome. This is Dave Lemus, CFO of MorphoSys. With me is Simon Moroney, our CEO. We're calling you today from our headquarters in Munich, Germany. First, we'd like to welcome you to this conference call and thank you for participating. During the call, we would like to begin to talk about the Company's financial results for the first half of 2006. Simon will begin by giving you an overview of the second quarter; then I will review the financial results for the first six months of 2006. Afterwards, we will open the call to your questions.

Before I start, I want to remind you that during this conference, we will present and discuss certain forward-looking statements concerning the development of MorphoSys' core technologies, the progress of its current research programs, and the initiation of additional programs. Should actual conditions differ from the Company's assumptions, actual results and actions may differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements, which speak only as of the day hereof.

Now, I would like to hand over to Simon Moroney.

SIMON MORONEY, CEO, MORPHOSYS AG: Also from me, a warm welcome to our Q2 2006 conference call. We've had a very good quarter. This good performance, together with great clarity on expenses, has enabled us to increase our financial guidance for the year as a whole. The headline figures were released yesterday, and Dave will speak to the details shortly. It goes without saying that this is excellent news which underscores how well the business is performing.

In the second quarter, we entered three new contracts with partners in the pharmaceutical and biotech industries. The most significant of these was the expansion and extension of our alliance with Novartis. We have already talked about the Novartis deal in a conference call on June 26, but I'll provide a reminder of the salient features now for completeness.

You'll recall that we originally entered an agreement with Novartis in May 2004. The deal was intended to run for three years, with Novartis having an option to extend for a further two years, making a maximum of five. We've now been working together for two years, and the collaboration has been so productive that Novartis requested that we increase the number of active programs that we jointly pursue. We were happy to acquiesce to this request under certain terms and conditions.

The key features are expansion, meaning more therapeutic antibody programs will be pursued, and extension. The agreement now runs for seven years in the first instance, with Novartis having an option on a further one year. More therapeutic antibody programs mean a larger team at MorphoSys, supported by Novartis. We are now recruiting for this purpose. More programs mean, of course, not only additional R&D funding for MorphoSys but also more license payments and the potential for more milestones and royalties on end product sales. We also insisted on higher annual technology access fees, which, effective immediately, are increased significantly over the original level. As usual in these cases, financial details were not disclosed, and we ask for your understanding that these must remain confidential.

During the quarter, we also entered an alliance with a completely new partner, namely Schering-Plough. This deal was our twelfth partnership with a top-20 pharmaceutical company. Under the terms of the deal, Schering-Plough may use our HuCAL GOLD library in its in-house research and development for up to five years. The technology will be used for discovery purposes, and Schering-Plough has options on up to ten therapeutic antibody licenses under predefined terms. As usual, MorphoSys got an up-front payment and will receive annual license payments. Under any therapeutic antibody programs that Schering-Plough may pursue, MorphoSys stands to receive target-related license fees, milestones and royalties, along the lines of our standard deal terms. In the meantime, a team of Schering-Plough scientists was here in Munich for training in the use of the HuCAL technology, and a copy of the library has been installed at Schering-Plough's premises. Again, as with Novartis, this deal is important not only for the near term revenue it brings us but for the potential of an expanded therapeutic antibody pipeline.

The third deal closed this quarter was with OncoMed, a much less well known name than the others but a company that is based on some fascinating science. OncoMed is a California-based company, a spinout of Genentech, with an approach to cancer therapy based on so-called cancer stem cells, which are believed to be uniquely responsible for the growth and proliferation of tumors. OncoMed has taken a license to use HuCAL GOLD for two years in its in-house R&D. MorphoSys received an up-front payment and will also be paid annual technology access fees. Again, as with Schering-Plough, OncoMed has options on several therapeutic antibody programs, and if one or more of these options is triggered, it will make target-related license payments to MorphoSys and potentially pay developmental milestones and royalties on end products.

All of these deals contribute to near term revenues but, more importantly, have the potential to significantly increase the breadth of our partnered therapeutic antibody pipeline. Without any of these three new deals yet contributing, the pilot pipeline has developed well during this quarter. As expected, following Roche's IND filing on our HuCAL antibodies for Alzheimer's disease in Q1, administration of drug to the first subject of the phase 1 trial commenced during Q2. We now count 2 compounds in clinical trials, 10 in preclinical development-- that's up from 8 at the end of Q1-- and 23 in research, for a total of 35 active programs. On the back of the Novartis deal, we communicated that the total number of active partnered programs would reach 38 by year end, and we're on track to reaching this target.

With respect to our proprietary, in-house therapeutic antibody programs, MOR103 and MOR202 both remain on track, MOR103 towards an IND in the second half of 2007 and MOR202 towards the selection of one fully profiled development candidate by the end of this year.

Turning to the research side of the business, integration of Serotec into our AbD unit continues to progress well. Sales are on target, and we have seen tangible signs of some of the synergies we have planned, such as securing new customers for our HuCAL custom antibody business from the efforts of the Serotec sales organization. In addition, as you will hear shortly from Dave, we now have a better understanding of all of the expenses associated with the acquisition and conclude that we remain on track to meet our financial expectations for the unit for this year, both top and bottom lines.

Before I hand back to Dave for his review of the financial results, I would like to mention a remarkable quarter in terms of pharmaceutical company acquisitions of biotech firms focusing on antibodies. In the order in which they were announced, we saw Pfizer buy Rinat, AstraZeneca bid for CAT, and Novartis buy NeuTec. This is yet more evidence, as if we need it, of the ever-increasing interest of pharmaceutical companies in antibodies as a class of drugs.

With that, I conclude my review of the quarter. I would now like to hand over to Dave for his presentation of the financial results.

DAVE LEMUS: To begin the financial analysis, I'll start with revenues. Group revenues grew by 72% in the first six months of 2006 to EUR26.5 million compared to EUR15.4 million in the same period of last year. Total Company organic growth amounted to 33% compared to the prior year in the Company. Revenues arising from the Therapeutic Antibody segment accounted for 66%, or EUR17.5 million total revenues, while the AbD segment generated 34%, or EUR9 million of the total.

On the Therapeutics side of our business, organic revenue growth amounted to 29% compared to the same period in 2005. The reasons for the increase were mainly due to success-based payments from existing collaborations, which represented EUR5 million revenues in the first half year, or roughly 29% of total segment revenues.

On the Research side of our business, the AbD segment achieved a very strong 67% organic growth over the prior year and represented the former brands Biogenesis in the UK and AbD in Munich. Inclusion of the Serotec Group revenues contributed EUR6 million of total revenues to the segment.

Moving to expenses for the first six months of 2006, total operating expenses increased by 58% to EUR21 million. The increase in operating expenses of EUR7.7 million was mainly due to higher personnel-related costs and other operating costs associated with the acquisition of Serotec, as well as increased personnel expenses at MorphoSys' headquarters in Munich. The acquisition of Serotec Ltd., including its affiliates, had the effect of increasing operating expenses by EUR5.6 million. Stock-based compensation expenses are presently embedded in COGS, SG&A and R&D expense amounts. Stock-based compensation for the first six months of 2006 amounted to EUR600,000 and changed little over the previous year, remaining as a non-cash charge. The purchase price allocation, or also known as PPA, was carried out for the Serotec acquisition in the second quarter. The resulting preliminary values were retroactively recognized to the purchase date, and amortization as well as half-year depreciation of assets identified were included in total operating expenses during the second quarter. The total PPA effects from the Serotec acquisition on operating profit amounted to EUR600,000 compared to Biogenesis' EUR300,000 in the same period of last year. Total PPA effects on operating expenses amounted to EUR800,000.

Moving on to cost of goods sold, COGS rose significantly to EUR4 million in second quarter of 2006 compared to EUR1.1 million in the same period of the prior year. The main reason for the increase was the inclusion of Serotec Group's company's COGS - amounted to EUR2.4 million in 2006. Also driving COGS higher were increased levels of revenues, stemming from Biogenesis in particular. Finally, COGS was affected by depreciation of the step up in inventories, identified under the Serotec and Biogenesis PPA exercises, in the amount of EUR400,000.

As a result of higher expenses for product and technology development in the amount of EUR900,000, costs for research and development increased to EUR7.9 million. Amortization of intangibles associated with the Serotec PPA amounted to EUR300,000 and were also accounted for as research and development expenses.

Sales, general and administrative expenses amounted to EUR9.1 million compared to EUR5.2 million in the same period of the previous year. This resulted mainly from higher personnel and other operating expenses arising out of the Serotec Group of EUR3.2 million, as well as increased personnel expenses at MorphoSys' headquarter on the SG&A side.

MorphoSys' investment in plant, property and equipment amounted to EUR200,000 for the first three months of 2006 compared to EUR100,000 for the same period the prior year. Depreciation of PP&E for the first quarter of 2006 accounted for EUR300,000 compared to EUR200,000 in the same period of the previous year. Amortization of intangibles amounted to EUR500,000 and remain unchanged compared to the same period the prior year.

Non-operating expenses increased by EUR800,000 to EUR1 million, mainly due to the recognition of tax accruals in order to reflect revised financial expectations for the year 2006. This effect was partly offset by gains in securities sold in the first quarter in connection with the financing of the Serotec Group and by the amortization of deferred tax liabilities recognized as a result of the Serotec purchase price allocation.

For the first six months of 2006, the Company presented an operating profit in the amount of EUR5.6 million compared to an operating profit of EUR2 million for the first half of 2005. For the first half year, profit before taxes amounted to EUR5.4 million compared to EUR1.7 million in the same period of the previous year. A net profit of EUR4.5 million was achieved in the first half of 2006 compared to a net profit of EUR1.8 million in the same period of 2005.

Looking at the second quarter in isolation, the net loss of EUR200,000 resulted for the second quarter of 2006 compared to a net profit of EUR1.3 million during the same period of 2005. The main reason for the loss is because of a cumulative catch up for the first year under the PPA exercise, as well as the recognition of tax accruals on higher than expected income for the full year.

The profit per share for the first half year more than doubled compared to the previous year and amounted to EUR0.71 per share in 2006. On June 30, 2006, the total number of shares issued amounted to 6.6 million shares.

On June 30, 2006, the Company held EUR64.9 million in cash, equivalents and securities compared to a year end 2005 balance of EUR53.6 million. Cash flow from operations amounted to a healthy EUR14.6 million in the first half year of 2006 and was driven by strong operating cash flows and increases in the levels of deferred revenues.

That concludes the financial analysis. As is typical during our conference calls, we'd like to take the opportunity to update our financial guidance. As you may have seen from the press release yesterday, we increased our financial guidance for the full year 2006. To reiterate, we expect for the full year 2006 revenues in the amount of EUR52 million. This increase arises from the Therapeutic Antibody segment, where we expect revenues of up to EUR34 million compared to EUR32 million guidance at the beginning of the year. The reason for the increase is the extension of the Novartis collaboration as well as the strong deal flow in the first half of 2006. Revenue guidance for the AbD segment remains unchanged at EUR18 million. In our revised guidance of today, we also lowered our expense guidance by up to EUR3 million from EUR49 million, potentially down to EUR46 million. An overall review of the budget, which was triggered by the signature of the Novartis extension, led us to believe that expenses could be lower than originally anticipated, and now also includes new estimates of total PPA expense, which are now lower than originally estimated. On the back of these changes, we expect an EBIT of up to EUR6 million for the full year 2006.

On that note, I want to make the point that as MorphoSys continues to be profitable, and increasingly so, we feel that EBIT represents the best way for us to gauge our operational performance. Non-operational items, including tax, amortization of deferred tax liabilities, foreign exchange gains and losses are very difficult to predict accurately, so we will in the future change our financial forecasts to reflect EBIT and not bottom line net income. That being said, our best estimate of the non-operating expenses for the full year in 2006 we estimate at EUR1 million, which includes income tax accruals on behalf of the Group Company, gains on sales of securities, foreign exchange losses, interest expense and amortization of deferred tax liabilities. For those who would like to calculate tax in your models, we have assumed a Group tax rate of approximately 20% in our calculations.

That concludes our financial analysis for the first six months of 2006. We'd now like to open the call up to your questions.

OPERATOR: Thank you, sir. [OPERATOR INSTRUCTIONS]. We'll take our first question from [Rudolf Bezoff] from Societe Generale. Please go ahead.

RUDOLF BEZOFF, ANALYST, SOCIETE GENERALE: The first question on the guidance increase. On the EUR2 million increase on top line, which part is associated to the expansion of the deal with Novartis? It's 50% of this EUR2 million? 75% or more? Also, on the increase in guidance in EBIT, could you elaborate a little bit on the reduction in operating costs that you expect for the year? So, one question on the agreement with ImmunoGen. I saw in your Q2 reports that it has been concluded. Can you elaborate a little bit on that? And, a third question on the EBIT for the Research Antibody division. When do you expect this division to be positive? In other words, do you think that the current structure would make possible a positive EBIT in the short or mid range? Thanks.

DAVE LEMUS: Okay. I'll take the first question, which related to what percentage of the guidance increase related to the Novartis deal. I'm afraid Novartis requested that we not disclose the financial details of this. I think it's fair to say that it represents a significant part of the increase; the exact percentage I don't want to give right now. I think there was also a question regarding EBIT guidance for the Research Antibody segment. We would like to see the EBIT be positive in 2007.

SIMON MORONEY: And, Rudolf, regarding ImmunoGen, that deal was scheduled to come to an end in June of this year, after a couple of expansions from the original deal, which was signed back in 2000. The deal simply concluded on schedule and was not extended further.

RUDOLF BEZOFF: So, what's going on now with that? I mean they continue with candidates?

SIMON MORONEY: There is-- If you recall, there was one therapeutic antibody program that we worked on, but the bulk of the deal was a research license to the HuCAL technology. So, they were using the HuCAL library in house for research purposes. The therapeutic antibody program is still in tact. But, as far as the research program is concerned, so using the library for research purposes, that is what has come to an end.

RUDOLF BEZOFF: Okay. Thank you.

OPERATOR: Thank you. Our next question is coming from Martin Possienke from Equinet. Please go ahead.

MARTIN POSSIENKE, ANALYST, EQUINET: A couple of financial questions, maybe firstly on the AbD segment. This minus EUR1 million in EBIT - are there any one-offs included? Maybe you can remind me there. Then, secondly, on the depreciation and amortization figure in Q2, can we take that as a run rate for the full year? And, then, thirdly, again my favorite question on tax assets, can you maybe quantify your loss of carry forward? And is there need to capitalize them in the course of the year? Have you discussed that with your auditors already?

DAVE LEMUS: Okay; I'll handle all those questions. Regarding the development in the AbD segment - why did it go from positive to negative in the quarter? Were there any one-off items? I think there's a combination of things going on here. In Q1, we had an extraordinary - a white-hot - quarter for the AbD segment. We had in the second quarter a good performance on the top line, not quite as good as in the first quarter. I think what pulled it into loss was in part a cumulative catch-up entry on the PP&A. We didn't reflect any PPA expenses in the first quarter, and we had to do a cumulative one in the second quarter. So, there is kind of a one-off effect in the second quarter.

MARTIN POSSIENKE: That summed up to EUR800,000?

DAVE LEMUS: The combination of lower sales plus the PPA effect accounts for the difference.

MARTIN POSSIENKE: I mean the PPA effect you booked in Q2 was EUR800,000? I think you mentioned a figure before.

DAVE LEMUS: In total, yes. In total for the Company, of which Serotec, I believe, was roughly EUR500,000.

MARTIN POSSIENKE: EUR500,000. So you could adjust for EUR250,000, if you want?

DAVE LEMUS: Yes. There was another question - did the PPA expenses in the first half represent--? In other words, can you extrapolate the expenses for the full year? Currently, yes; we believe that's the case. The question regarding tax loss carry forwards - we have approximately EUR21 million worth of tax loss carry forwards. We have discussed the idea of making those deferred tax assets. That will in part be determined during the year when we start to take a look at multiyear projections for future years and the likelihood-- and the strength of the profitability of the business going forward. So, at this point, yes, we have discussed it with our auditors. We are conscious of the topic. We don't feel the Company's at the stage where we can definitely do that, certainly today. Perhaps later in the year, that might change.

MARTIN POSSIENKE: Okay. Thank you.

OPERATOR: Thank you. [OPERATOR INSTRUCTIONS]. We'll take our next question from Thomas Schiessle from Equities. Please go ahead.

THOMAS SCHIESSLE, ANALYST, EQUITIES GMBH: A question on the AbD business, please, on the top line. Could you please elaborate a little bit on the top line development after a very good start in the first quarter of the year? Now we do see a little bit of reluctance [inaudible] in the top line. Is this a structural or a seasonal or a customer-wise reason behind this? And, what might be the run rate or the expansion rate for the quarters to come? This is one question. The other is concerning the Group accounting. Could you rule out another loss-making quarter in the second half of the year? And, the third one is-- The third question is on the Serotec cost base. You mentioned that there is approximately EUR2.5 million cost base on operating costs. Is this the run rate so far, or shall we take another--? Shall we increase it, let's say, for 10% or 15% in the quarters to come. Thank you so far.

SIMON MORONEY: Okay, Thomas; let me start with the first one about the Q2 top line for AbD, and then Dave will take the two subsequent questions. We've said repeatedly - don't look at individual quarters too closely. The AbD business comprises some catalog business, which is pretty reproducible; but there are also some lumpy features which relate to larger industrial supply contracts, for example. Therefore, it's really, I think, over analyzing things to look quarter by quarter and to look at tiny differences between the two quarters. I think this just leads to over interpretation of things that are actually not meaningful. The key thing is that revenues for the half year were EUR9 million and were absolutely bang on track to reach the target for the full year, which is EUR18 million. We do see some variation quarter to quarter, but it's really not relevant. Therefore, I would caution you from over interpreting that.

DAVE LEMUS: Okay. The other question - do we rule out losses in future quarters? Here, I would emphasize that, actually, on an operating level, so prior to income tax, MorphoSys was actually profitable to the tune of about EUR530,000. So, what swung us into loss was on a net income level-- was in fact the accrual for a full year's worth of income in that quarter. Do we rule out the possibility of having further loss-making quarters? You've heard the guidance that we may have an EBIT of potentially up to EUR6 million this year. That implies that some future quarters need to be positive, but it also could imply that the odd quarter could also be negative. I think as Simon pointed out, and I can only support what he says and what we've been saying now for several calls, is that these quarters are very volatile and that you can't always take one quarter and extrapolate the results for the full year.

There was a final question regarding Serotec - the run rate. On the expense side, we think that the run rate might increase a bit in the second half of the year. But we would expect that to be matched on the revenue side. So, from a gross profit perspective, we don't-- we see that kind of being constant for the full year.

THOMAS SCHIESSLE: Okay. An additional question on the AbD sales structure. Simon, you mentioned that there is, roughly speaking, a two-prong business - catalog-based business and industry business. Could you give us an idea; what is the impact of the catalog business? Is it already one-third of the overall business?

SIMON MORONEY: It's more than that. To explain it in completeness, there are actually three components. There's the catalog business, which is the bulk of what we got when we acquired Serotec and what we got when we acquired Biogenesis. Then there is an industrial supply business, where we supply larger quantities of antibodies to a few customers for specific applications in, for example, diagnostic kits or development into diagnostic kits. And then there's a custom business, which was the original Antibodies by Design unit that we started off here in Munich. I think in thinking about the way the revenues are split between these three units, you should think roughly in terms of kind of 60/20/20 as the split between those [two], in the order in which I mentioned them. So, catalog, industrial supply and A-by-D.

THOMAS SCHIESSLE: And this structure will hold on for the foreseeable future, or is there any--? Will one of these three [expanding] very rapidly, and the other one is going slowly or not that rapidly than the other two?

SIMON MORONEY: What we expect is that, in time, the structure or the distribution should start to reflect the Research Antibody market as a whole. If you look at that market, it's split roughly 80/20 between catalog antibodies, that is the preexisting antibodies, and custom antibodies. So, in other words, there should be a shift over time towards a higher preponderance of catalog antibodies.

THOMAS SCHIESSLE: Okay. An additional question on that. Do you feel quite comfortable in market share and in penetrating the market from the geographic perspective?

SIMON MORONEY: Of course we aspire to higher market penetration. I think we're pretty happy that our market share-- the sales are split roughly 50% in the U.S. and 50% in the rest of the world. That's already a good sign that we have such a high penetration in the U.S., which, in fact, represents 50% of the total market worldwide. But, of course, we're always striving for better market penetration and looking for continued growth. So, we're on a good track. I think the awareness of HuCAL, and this is really the key thing here-- the awareness of HuCAL as a future-generation technology in this industry is increasing all the time. That's something that we're very happy about around the Serotec acquisition. Our Serotec colleagues have embraced HuCAL and are really helping us promote it in this industry. That's something that I think is actually happening extremely effectively.

THOMAS SCHIESSLE: Okay; wonderful. Thank you.

OPERATOR: Thank you. [OPERATOR INSTRUCTIONS]. We'll take our next question from Patrick Fuchs from DZ Bank. Please go ahead.

PATRICK FUCHS, ANALYST, DZ BANK: I have some questions. The first question is-- you had an increase in the margin of the Therapeutic Antibody business. Is this or was this influenced positively by milestone, first question, or by, let's say, up-front payments or deal closes that you had in second quarter 2006 compared to 2005? This then comes to the next question. Your upped guidance - does this now, I assume, not include potential milestones that could arise from your partners' therapeutic antibody development projects running to the clinics? And the last question is, again, a little bit more detail on the EUR3 million that you saved in operating costs. If I'm right, you communicated that you would have EUR2.5 million restructure and PPA costs of the Serotec deal. Is there a new figure on that, and does this EUR3 million also maybe come from another source relating to your internal R&D projects? That's all. Thanks. I then I have another question, but, first, [inaudible].

SIMON MORONEY: Let me perhaps start, Patrick, with the guidance in terms of what is included and what is not included there. When we do this, we sit down, and we try and estimate as best we can what kind of milestones could be hit before the end of the year, which are, of course, booked in full - these milestones when they're hit. We saw the effect of that in Q1 when Roche filed the IND on the Alzheimer's antibody. At this stage, and we've said this in the recent past, what we're not doing is we're not trying to predict and announce when we think antibodies will go into the clinic because this only leads to disappointment when the partner says, well, for whatever reason, we've had a delay there. So, therefore, what I can't say is when we expect compounds to go into the clinic. But, what the guidance does include is our best estimate of what additional milestones can be hit until the end of the year. I'm afraid we have to be a little bit vague on that. But what we can't do is we can't communicate expectations of when compounds go into the clinic.

PATRICK FUCHS: Yes. So, in Q2, there were actually no milestones booked.

DAVE LEMUS: There were, actually, but at a lower rate than in Q1.

PATRICK FUCHS: Q1 was extraordinary good in that respect. I'm assuming a much lower rate.

DAVE LEMUS: Yes; it was. It was running at about one-third the rate that it was in the first quarter.

PATRICK FUCHS: And do you expect for the full year milestone payments higher than last year or at the same level, from your [plannings] right now?

DAVE LEMUS: Yes. And maybe I can also handle the other question that you had compared to the prior year at the same time. I think we-- In terms of percentage of sales for the Therapeutic unit, we roughly expect a similar level to what it was last year. I think this year we predicted a number of EUR7 million in total milestones, which would have represented on the old guidance roughly about 20% of milestones income. If you take a look at the first half of the year, in fact, we were running at a level of about 30%. So, I would say that we-- As a percentage, we are going to be running roughly at the same percentage what we did last year. In absolute terms, however, we're running at higher levels than we were last year. Given that in the first half of the year we've hit many of the EUR7 million milestones that we were supposed to hit for the full year-- we've already hit EUR5 million of them-- that answers your other question. Is, in fact, the profitability attributable-- the higher profitability attributable to milestones in 2006 versus 2005? The answer is yes. Again, if you take a look at the half-year numbers for 2006, we have a Therapeutic revenues milestones component of roughly about 30%. If you take a look at the same number last year, you're looking at something like 7%. So, the increase in profitability is largely attributable to the milestones.

PATRICK FUCHS: Okay. Then, again, maybe I didn't get it right with what is booked in income taxes. This was the deferred taxes that you booked in one quarter then?

DAVE LEMUS: Yes. I mean, as a result of-- Remember, at the beginning of the year, we had guidance of EUR1 million for the Group. We've now upgraded guidance to include higher profitability of up to EUR6 million. On the back of higher guidance, we therefore have to make a tax accrual for that higher income, which was then fully impacted in the second quarter, which is why the effect of income tax in the second quarter is probably not comparable as if you had booked it pro rata each quarter.

PATRICK FUCHS: Yes. And for the rest of the year-- for year-end guidance, it's 20% that you're assuming on tax rate?

DAVE LEMUS: For a Group level, yes.

PATRICK FUCHS: For a Group level. Okay. Then I have a question on Serotec. When I looked at the balance sheet, it was somehow-- I was somehow surprised about the low cash that they had-- cash [inaudible] that they had on January 11 of just some EUR300,000. This doesn't look terribly liquid. Was this one of the reasons why you could acquire MorphoSys-- sorry; Serotec-- at a quite fair face amount, or was it of no relevance?

DAVE LEMUS: I think that-- So, first of all, we haven't disclosed that information. But I'm assuming you picked it off of the company's house accounts in the UK. I think that if you take a look at the business of Serotec, it tends to be somewhat cyclical. I think it has a lot to do with the payment of bonuses in year end. At year end, the cash balances tend to be low compared to the rest of the year. But, I would not say that they were in a cash crisis, and hence we were able to acquire them cheaply.

PATRICK FUCHS: Not cheap, but at a fair price.

DAVE LEMUS: By no means; I think the cash position really didn't play a factor in it.

PATRICK FUCHS: Okay. So, this was it, then, from my side. Thank you.

OPERATOR: Thank you. There are no further questions at this time. I would like to turn the call back over to you, gentlemen, for any additional or closing remarks.

SIMON MORONEY: Thank you. If there are no further questions, I'd like to close by reminding you of the main message to take away from this conference call, and that is that a solid quarter of deal flow capped by the expansion of our Novartis deal is driving good financial performance, which in turn has enabled us to upgrade our estimates for revenue and profit for the year as a whole.

That concludes the call. Should any of you wish to follow up with us directly, Dave and I are both here in the office in Munich. Thanks again for participating, and good-bye.

OPERATOR: That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.

[lupus2000]

Q3 2006 Morphosys AG Earnings Conference Call - Final
27 October 2006

OPERATOR: Good morning ladies and gentlemen and welcome to today's Morphosys AG third quarter report conference call. For your information this conference is being recorded. At this time, I would like to hand the call over to your host today, Dr. Simon Moroney. Please go ahead sir.

DR. SIMON MORONEY, CEO, MORPHOSYS AG: Good morning this is Simon Moroney CEO of Morphosys. And I'd like to welcome you to Morphosys' Q3 results conference call. Dave Lemus, our CFO is with me on an external line and will participate in question and answers after the statement.

I'll start by giving you an overview of the third quarter and continue with a review of the financial results for the first nine months of 2006. Afterwards, I'll open the call up to your questions.

Before I start, I want to remind you that during this conference we'll present and discuss certain forward looking statements concerning the development of Morphosys' core technologies, the progress of its current research programs and the initiation of additional programs. Should actual conditions differ from the Company's assumptions, actual results and actions may differ from those anticipated. You are, therefore, cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.

We have a very strong quarter behind us. The financial results show that both sides of the business, Therapeutic Antibodies and Research Antibodies are performing very solidly. We fully expect to meet our financial targets for the year. Perhaps even more importantly, in the area that is the biggest driver of future value, mainly drug development programs, we are ahead of plan for the year.

We started the year with 29 active pilot therapeutic programs based on our HuCAL technology. Our goal for this year was a net gain of nine, meaning we aimed to reach 38 active programs by year end. The secondary goal reflecting the growing maturity of the pipeline was for at least 10 of these ongoing programs to be in pre-clinical development up from seven at the beginning of the year.

We're happy to announce today that we now have 40 active HuCAL based Therapeutic Antibodies programs ongoing in our partnerships. Of these, two are in Phase I clinical trials, namely the antibody we made for GPC Biotech for lymphoma and the antibody we made for Roche for Alzheimer's disease.

Out of the 40, 14 are now in pre-clinical development, twice the number at this stage of development at the start of the year. On both counts, total number of active programs and number of pre-clinical projects, we are, therefore, ahead of target for the year. The pre-clinical programs are particularly important because, of course, it is from this group that the next Phase I trials will come. We currently have 24 patent programs in discovery.

Looking forward, we expect further growth in the pipeline as our existing partners add new projects and as new yet unsigned partnerships are entered. Overall, interest in Therapeutic Antibodies as a class of drugs continues to be strong in the industry. We see no reason why the increase in the number of HuCAL based pilot programs cannot continue to be strong in the years ahead. This is essential to our strategy as the more HuCAL based drugs make it through development to market, the more Morphosys will benefit from lucrative milestone and royalty payments.

Turning to our proprietary drug programs, these continue on track. During the third quarter, we entered into a manufacturing agreement with Crucell and DSM, under which DSM will manufacture our MOR103 antibody for rheumatoid arthritis in Crucell's PER.C6 cell line.

We were delighted to enter this agreement since we believe PER.C6 offers attractive advantages based on yield, added to the fact that as a human cell line, it will endow our fully human antibody MOR103 with a fully human-like oscillation pattern. This we believe will be an advantage for a drug of this type for a chronic condition such as arthritis. Additionally, the cell line if safe and FDA approved, which were important decision criteria for us.

The second proprietary program, MOR202, for multiple myeloma also continues on track. The next milestone here will be the decision on a candidate for formal development, which we expect to make by year end. In respect of both of these programs, I'd like to take this opportunity to remind you not to anticipate announcements. As such time as we have significant news, we will let you know, as we did in the case of the agreement we signed with Crucell and DSM around the manufacture of clinical grade MOR103.

Turning to the research side of the business, integration of Serotec into our ABD unit will be complete by year end as planned. We fully expect to hit our financial targets on this side of the business, even though revenues through three-quarters are about 5% below the required run rate. The reason for this is that although revenues on this side of the business are much more predictable than those on the therapeutic side which, as you know, are often impacted by big milestone payments. Bigger industrial orders for research and or diagnostic antibodies can be a source of lumpiness in ABD.

Two bigger orders that may easily have flowed in Q3 will actually come in Q4. This means obviously, that Q3 revenue was a little lower than we originally expected, but will be compensated for in Q4 so that overall, we are on track for the year.

During Q3 we announced the sole-source contract from the USAMRIID, an organization of the U.S. Army Medical Research and Material Command and lead Medical Research Laboratory for the U.S. Biological Defense Program for the delivery of antibodies against potential bioterrorism agents. This deal highlighted the utility of HuCAL in an area that was new for us and potentially very important in the future. To highlight the speed with which we can generate antibodies, delivery has already been made within five weeks of receipt of the antigens.

With that I conclude my review of the quarter and I'll now continue with the review of the financial results beginning with revenues.

Group revenues grew by 64% in the first nine months of 2006 to EUR39m compared to EUR23.8m in the same period of last year. Total Company organic growth amounted to 26% compared to the prior year. Revenues are rising from the Therapeutic Antibodies segment amounted for 67%, or EUR26m, of total revenues, while the ABD segment generated 33%, or EUR13m, of the total.

On the Therapeutic side of our business, revenue growth amounted to 26% compared to the same period in 2005. Reasons for the increase were mainly due to the success-based payments from existing collaborations, which represented EUR6.3m in revenue for the first nine months, or roughly 24% of total segment revenues.

On the Research side of our business, the ABD segment achieved 26% organic growth of the prior year, inclusion of the Serotec group revenues contributed EUR9.1m to the total.

Turning to operating expenses for the first nine months of 2006, total operating expenses increased by 56% to EUR31.2m. The increase in operating expenses of EUR11.2m was manly due to two reasons. First, cost of goods sold increasing by EUR3.6m, which arose from the inclusion of the Serotec Group and consolidated accounts. And second, the increased personnel expenses at Morphosys AG.

The acquisition of Serotec Limited, including its affiliates, had the effect of increasing operating expenses by EUR8.5m.

Stock-based compensation expenses are presently embedded in COGS, SG&A and R&D expense amounts. Stock-based compensation for the first nine months of 2006 amounted to EUR1m and changed little over the previous year, remaining as a non-cash charge.

A purchase price allocation, or PPA, was carried out for the Serotec acquisition. The resulting preliminary values were retroactively recognized to the purchase date, an amortization as well as depreciation of assets identified, was included in total operating expenses during the quarter. Total PPA effects on operating profit, including the Serotec acquisition, amounted to EUR1.2m compared to EUR0.4m in the same period of the last year.

Cost of goods sold rose to EUR5.5m in Q3 2006 compared to EUR1.9m in the same period of the prior year. The main reason for the increase was the inclusion of Serotec Group company's cost of goods sold amounting to EUR3.4m in Q3 2006. Higher revenues stemming from existing customer HuCAL business also influenced COGS.

Finally, COGS was affected by depreciation stemming from inventories under the PPA exercises in the amount of EUR0.5m in the first nine months of the year.

As a result of higher expenses for products and technology development in the amount of EUR1.4m, costs for research and development increased to EUR11.7m. Amortization of intangibles associated with the Serotec PPA amounted to EUR0.6m and were accounted for as research and development expenses.

Sales, general and administrative expenses amounted to EUR14m compared to EUR7.9m in the same period of the previous year. This resulted mainly from higher personnel and other operating expenses arising out of the Serotec Group of EUR5.1m, as well as increased personnel expenses of Morphosys AG.

Morphosys' investment in property, plant and equipment amounted to EUR1.1m for the first nine months of 2006 compared to EUR0.4m for the same period of the prior year. Depreciation of property, plant and equipment for the first nine months of 2006 accounted for EUR1.4m of expense compared to EUR0.6m in the same period of the previous year. The single most significant contributor was a charge of EUR0.6m for depreciation of stock in connection with previous purchase price allocation exercises.

During the first nine months, the Company invested EUR0.3m in intangible assets. Amortization of intangibles amounted to EUR2m, an increase of EUR0.3m in comparison to the first nine months of 2005. This was mainly due to the amortization of intangible assets acquired in the Serotec deal. Non-operating expenses amounted to EUR0.5m, mainly due to increased foreign exchange effects and bank fees. This effect was partly offset by gains on securities sold in the first quarter in connection with financing the acquisition of Serotec Limited. For the first nine months of 2006, the Group presented an operating profit in the amount of EUR7.8m a near doubling over the same period of the prior year.

Earnings before interest and taxes, EBIT, amounted to EUR7.4m compared to an EBIT of EUR3.8m in the same period of the previous year. Net income after taxes, of EUR6.1m was achieved for the first three quarters of 2006, compared to a net income of EUR3.9m in the same period of 2005. The resulting diluted net profit per share for the nine months ended of September 30, 2006 amounted to EUR0.93 compared to EUR0.67 over the same period of the previous year.

On September 30, 2006 the Company held EUR 66.3m in cash, cash equivalents and available for sale financial assets compared to a year end 2005 balance, of EUR53.6m. Cash flow from operations amounted to a very strong EUR15.7m in the first nine months of 2006. That concludes the financial analysis.

As is typical during our conference calls, we would like to take the opportunity to update our financial guidance and hereby confirm the guidance given on the Q2 results conference call.

Under such guidance, we foresee an EBIT of up to EUR6m on up to EUR52m of revenues, and EUR46 to EUR49m of operating expenses. We don't exclude the possibility of out performance due to lower expenses, but as this is currently too uncertain to call, we would simply like to guide towards the lower end of the EUR46 to EUR49m expense range.

That concludes our financial analysis for the first nine months of 2006. We'd now like to open the call up to your questions.

OPERATOR: Thank you. [OPERATOR INSTRUCTIONS]. We will now pause for just a moment to give everyone an opportunity to signal for a question. We will now take our first question from Thomas Schiessle from Equities. Please go ahead.

THOMAS SCHIESSLE, ANALYST, EQUITIES: Yes, thank you for taking my question. Good morning everybody around the globe. Congratulations on this quite impressive operational performance in this period.

To my questions, actually the question is you have a very impressive cash flow on the operational level. What about the decision making process concerning your dividend -- paying a dividend in the future? This is the one question.

The other is concerning the depreciation you mentioned in your talk. There is a EUR1.4m ordinary depreciation in the nine month period, where -- and within this EUR1.4m there is an extraordinary depreciation, because of impairments of -- in the connection with Serotec. Is this impairment -- yes, the full impairment of those stocks within Serotec? Or is there something to come in the future? Now, this is the second question.

And the third one a totally different question, is there any news on the Schering Bayer theme concerning the collaboration between you and those two, or in the future the new Company Schering Bayer? Thank you so far.

DR. SIMON MORONEY: Thank you Thomas and good morning. I'll take your questions one and three. And Dave may want to add something in respect to question one. And I'm sure he'll answer question two for you.

First of all we have no plans to pay a dividend. We've consistently said that. And in saying that, we're making ourselves consistent with almost the entire biotech industry. As you know, it's widely regarded that the best strategy for biotech companies is just to reinvest as much as they can in future product and technology development. And that's what we intend to do. And, therefore, we have no plans to pay a dividend.

Regarding Schering Bayer, or Bayer Schering, we -- just as reminder, we have existing ongoing deals with each of the predecessor companies. And, of course, given that the two companies are coming together, some consolidation of those two contracts is to be expected.

Discussions are ongoing, but at this stage it's too early to say how they will resolve. But, of course, we proceed under the rather obvious assumption that there will be a necessary consolidation of those two contracts.

Dave, do you want to take the question regarding depreciation and the impairment for Serotec?

DAVE LEMUS, CFO, MORPHOSYS AG: Yes. And there may have been a -- how do you say misinterpretation of your part of the speech Simon. Then -- in fact, there was no impairment of Serotec assets. So, that may have been a misunderstanding. That was -- Serotec impacts on the COGS through PPA through normal depreciation of stock, which is bumped up to fair market value in conjunction with the PPA exercise. So, in fact, again I must stress there was no -- there is no impairment involved with the Serotec.

THOMAS SCHIESSLE: Okay. That's good news. Additional news -- additional question on that is the PPA already concluded? Or is there still, yes, decision making in process, so to speak?

DAVE LEMUS: Yes. We think that it's more or less final. Of course, as you know, Thomas, under IFRS we have the ability to change that until 12 months after the acquisition --

THOMAS SCHIESSLE: Indeed.

DAVE LEMUS: Which would be roughly middle of January next year but, at this point, we don't anticipate any changes to that.

THOMAS SCHIESSLE: Okay, wonderful. Thank you.

OPERATOR: We will now take our next question from Nick Turner of [Maribu] securities. Please go ahead.

NICK TURNER, ANALYST, MARIBU SECURITIES: Hello Simon, I wonder if you could perhaps update on what's happening as far an internal Therapeutic Antibody programs are concerned. You start to generate quite nice amounts of cash. And I just wonder whether or not you might be expanding the initiative in terms of own programs?

And then also, could you perhaps update on collaborative programs? How many of those are currently active in development? How many are in the clinic? And when do you think we might hear something on the Roche Alzheimer's disease trial?

DR. SIMON MORONEY: Yes, morning Nick. Yes, first of all, regarding the internal Therapeutic Antibody programs, we currently have two ongoing. Expenditure there will start to ramp, as I'm sure you know, as soon as you start making material for clinical trials and, indeed, entering the clinic, as we intend to do next year for MOR103, it starts to get more expensive. So, you should expect to see investment and spend in that area start to ramp in any case.

We're always looking at the possibility of starting additional new programs. However, philosophically, we are very cautious regarding target choice. And we need to be very confident in the quality of the target before we pursue a program around it. So, therefore, we're not jumping on new programs every day or even every month.

So, perhaps in summary, we're certainly interested in new programs and, as and when we feel that a new program is merited, we would consider starting a new program. But we fully intend to continue on with the two existing programs we have. As I said, the next key event in regard to MOR202 is the choice of a candidate by the end of this year.

Regarding the collaborative programs, as I mentioned during the talk, we currently really have 40 active collaborative programs spread between our Therapeutic Antibodies partnerships. Of those 40, two are currently in phase one clinical trials, 14 are now in pre-clinical development and 24 are in the discovery phase.

Regarding the Roche antibody for Alzheimer's disease, that phase one study started I believe in May of this year. And we currently have no information of when that study will be completed. And I'd just like to remind you and the other participants that we're not actually involved in running that study. The decision making process there is fully in the hands of Roche. And, therefore, should you need further, or be interested, in further information I would suggest that you contact Roche directly on that.

NICK TURNER: Thanks.

OPERATOR: [OPERATOR INSTRUCTIONS]. We will now take our next question from Hanns Frohnmeyer from LBBW Bank. Please go ahead.

HANNS FROHNMEYER, ANALYST, LBBW: Yes, good morning, Hanns Frohnmeyer from LBBW. I have two questions. One is related with your future costs. So, you mentioned that your production of MOR103 is starting now with your PER.C6 cell. Can we get a feeling how -- when the costs will arise in this -- with this respect? It's already in the fourth quarter or is it only in 2007?

And then I just found that you started an office in RTP for Serotec. What do you think are the costs there?

In addition, I found that your margins for the Therapeutic Antibody business increased from 46 to 54%. What are the reasons for this strong increase?

DR. SIMON MORONEY: Okay, let me start with a couple of those. First of all, regarding the costs for manufacture of the MOR103 material for clinical trials, those costs are actually spread over the period on -- in which the service is provided by the contract partner. And so, therefore, you shouldn't expect to see a lump sum hit the expenses in any particular quarter. Those costs are spread over that period which is, of course, a number of months.

And regarding the office in Research Triangle Park in Raleigh in North Carolina, we actually always had an office there, which we acquired through the acquisition of Serotec. And what we've done is simply relocate them to a more appropriate premises from the previous premises they were in, which were not really appropriate. So, therefore, we haven't actually made any significant increase in costs there. It's simply a move to a new premises.

HANNS FROHNMEYER: Okay, so you don't expect anything there?

DR. SIMON MORONEY: We don't expect anything unusual there. We expect costs to carry on as previously.

And Dave, do you want to say anything about the margins on the Therapeutic Antibodies side of the business?

DAVE LEMUS: Well, actually I just wanted to make another comment before I talked about the margins, which was a comment related the costs of MOR103.

As you may have read in our report, we had projected for the full year roughly EUR4m worth of product and technology development spend. A large part of that, of course, is involved with the production costs of MOR103. Of that EUR4m, we've spent roughly EUR1.4m to date. Meaning, we still have potential EUR2.6m to spend.

HANNS FROHNMEYER: Okay.

DAVE LEMUS: We think that there's a good chance that much of that monies will be spent in the fourth quarter. Of course, as Simon pointed out, the way we recognize some of those costs as we spread it over the time of performance. If the performance is done in the fourth quarter, then all the costs would land in there. If it exceeds that, then some of the costs would be pushed into the following year.

HANNS FROHNMEYER: Okay, I got it.

DAVE LEMUS: Okay, regarding margins were you referring to the quarterly margins? Or were you referring to the cumulative margins?

HANNS FROHNMEYER: I didn't -- sorry again?

DAVE LEMUS: Was your question regarding the margins?

HANNS FROHNMEYER: Operating margins, just from your segment report.

DAVE LEMUS: Yes?

HANNS FROHNMEYER: The operating results.

DAVE LEMUS: This is year to year or quarter to quarter?

HANNS FROHNMEYER: It's nine months report.

DAVE LEMUS: Nine months 2006 versus 2005?

HANNS FROHNMEYER: Yes, the Therapeutic Antibody business.

HANNS FROHNMEYER: Okay, well, the reason why you would see a pick up in the margins comparing one year to the next would be related to the fact that in 2006 we have the Serotec Group numbers included in our numbers, that be number one.

Number two, the gross margin involved with the Biogenesis business has really taken off. Last year it was close to 50%. This year it's well in excess of 60%. And that has a lot to do with the fact that a lot of the synergies we have expected along with that -- how do you say, that acquisition, have now come to fruition. And that business is performing extremely well.

So, I think the combination of those two things, the inclusion of the Serotec Group in 2006, whereas it was not included in 2005. And as well the Biogenesis Group performing really at top -- in top gear, in top form, has contributed to a higher gross margin performance.

HANNS FROHNMEYER: But in addition the Therapeutic Antibody business itself has also grown in the margins?

DAVE LEMUS: Yes.

HANNS FROHNMEYER: If you look at the segment result in comparison to the revenues. Therefore, I'm asking whether you get an increase in the Therapeutic Antibody business.

DAVE LEMUS: Okay, yes partially. The way we get compensated in the Therapeutic business is a combination of license fees, success based payments and funded FTEs being refunded to us through our partners.

I would say that in terms of total success payments, we're probably ahead in terms of a percentage compared to the previous year, which would, of course, lend the higher profitability on the Therapeutic side also.

HANNS FROHNMEYER: Thanks.

OPERATOR: We will now take our next question from Daniel Wendorff from WestLB. Please go ahead sir.

DANIEL WENDORFF, ANALYST, WESTLB EQUITY MARKETS: Yes good morning everybody. Unfortunately, a number of my questions are now already answered. I have one remaining left. I think I did not quite full understand the upcoming development plan of MOR103 and MOR202. Could you update me on that again please?

DR. SIMON MORONEY: Yes sure, hello Daniel.

DANIEL WENDORFF: Good morning.

DR. SIMON MORONEY: It's -- in respect to MOR103 -- in respect to both of these things nothing has changed. Both of them remain on track. In respect of MOR103, we've now entered the manufacturing agreement with Crucell and DSM. The next significant milestone that you should expect will be the filing of an IND application in the second half of next year.

DANIEL WENDORFF: Okay, got it.

DR. SIMON MORONEY: And in respect of MOR202, we're currently evaluating a couple of candidate molecules here, with the goal of identifying one formal development candidate by the end of this year. What we then decide to do with that particular candidate, we haven't yet communicated.

DANIEL WENDORFF: Okay.

DR. SIMON MORONEY: And may not communicate until the beginning of next year.

DANIEL WENDORFF: Okay perfect. I wasn't sure about that.

DR. SIMON MORONEY: Okay.

OPERATOR: [OPERATOR INSTRUCTIONS]. We now have a follow up question from Thomas Schiessle from Equities. Please go ahead.

THOMAS SCHIESSLE: Thank you. My follow up question is on the margins in the segment report. Dave, you give us the indication that if it comes to ABD business, Biogenesis is, yes, running on the top gear so to speak. And that's wonderful, nice to hear.

What about the Serotec business? Is this business going well or strong, or is there improvement possible? And overall -- in the overall picture, ABD is still in the -- not in the profits. So, you need some more top line. How would you like to generate the top line? This the one question.

The next question is concerning the -- your guidance. Simon, you said in your speech that there might be the possibility that the overall operating expenses will be on the lower end of your corridor, you indicated. That's fine. On the other hand, you said in your speech that you are ahead of plan, concerning the active collaborations you are pursuing right now.

So, on the one hand, there is the possibility of less expenses. That's good news. On the other hand you are ahead of plan if it comes to total revenues. That would be an additional positive news. So, is there, indeed, the possibility of exceeding your guidance revenues target? That is the second question. Thank you.

DR. SIMON MORONEY: Okay, maybe I can start with that one and then I can hand over to Dave to talk about the margin question, your first question.

We -- although you're right, we are working on more programs. Or let me put it that way, that there are more active programs ongoing in partnerships than we had planned for. That doesn't necessarily mean that all of those programs are ongoing here. One simple example, the Roche or the GPC programs, which are now in the clinic, we count as active programs. But, of course, we're not working on them here, which means we neither have expense nor revenue.

Until such time as milestones get hit, we don't book revenues unless those revenues are FTE related revenues. And that's the reason why at this stage, we see no reason to increase the revenue side of the guidance and prefer to leave it at the EUR52m.

THOMAS SCHIESSLE: So, to be more precise, there is no trigger out of the extra collaboration, so to speak?

DR. SIMON MORONEY: The --

THOMAS SCHIESSLE: The [nil] revenue trigger.

DR. SIMON MORONEY: The logical first revenue trigger beyond FTE funding is a success payment when an antibody gets handed over.

THOMAS SCHIESSLE: Indeed.

DR. SIMON MORONEY: But in respect of programs that have only just been started now, one can't expect that such success milestones would be payable in this year.

DAVE LEMUS: Yes, maybe if I could add to that Simon, real quickly. In terms of the revenue guidance, of course, there's always a possibility of out performance. Not only due to number of programs ongoing but, as you pointed out, Thomas, the hitting of milestones and so forth within a collaboration.

I think what Simon mentioned this morning was that we felt comfortable with the upper end of our revenue guidance, which was EUR52m at this point.

THOMAS SCHIESSLE: Okay.

DAVE LEMUS: In terms of expenses maybe since -- I just continue with that real quickly. I think we feel pretty comfortable with the lower end now, in terms of the EUR46m. And I think what was pointed out this morning, and what we also talked about on this call, was that there are a number of events, which could potentially impact that EUR46m to make it slightly lower. But, at this point, according to our planning, we think that we'll land pretty close to that EUR46m. So, at the same time, we can guide towards the lower end of the expense guidance.

THOMAS SCHIESSLE: Okay.

DR. SIMON MORONEY: Dave, do you want to pick up on that -- on Thomas' question about margins in the various areas?

DAVE LEMUS: Yes, I think Thomas' question if I remember correctly was the Serotec Group, how are things performing and are things meeting our expectations there? And if that was the question, then I would comment that things are going according to plan.

I think when we do an acquisition, and the history of Biogenesis was that it typically takes us about a year to integrate these units. Once these things are integrated, and I have to admit that there is some disruption during the integration and particularly in the case of Serotec, where we've now consolidated sites -- all of our sites into on U.K. platform and as well now into the U.S.

There is some disruption. It does take time to realize some of the synergies. But typically, as I said, with these integration projects you can start to see the fruits of these integration projects about one year afterwards. So, it was never planned that we would realize massive synergies as it related to Serotec. That being said, as I said before, we are now starting to see the fruits of the Biogenesis acquisition in terms of the synergies.

All in all, and Simon, you might want to comment on this, I would say that the Serotec unit is performing exactly where we expected to perform.

DR. SIMON MORONEY: Yes, I think overall that the fact that we're well on track to meet targets for the year for that unit as a whole. And I think really of the unit as a whole, because there are so many overlapping activities going on now that it's really misleading to talk about Biogenesis or Serotec as units, because we see the thing as a whole. Overall, the fact that the integration has gone so smoothly and the fact that we're absolutely on track to meet our goals for this year is a tribute to how well we've managed that integration process.

THOMAS SCHIESSLE: That would mean being frankly, in my [reckon] work, I had foreseen a little -- a quite better net margin in the ABD business, because you -- on the top line you improved your -- the run rate of revenues. You doubled, so to speak, the run rate of your revenues in the three month period of the third quarter. But, unfortunately, the segment profit, yes, increased -- or the segment loss increased, so --

DAVE LEMUS: Yes. And that again had a lot to do with the fact that one of the reports --

THOMAS SCHIESSLE: That's integration?

DAVE LEMUS: Q1 and Q2 we also reported that those were extraordinary quarters and that we didn't expect that to continue. As now history has now shown, that run rate didn't continue.

That being said, we currently have a gross margin of about -- just under 60%. And we've always said that the target margin for that unit is 60%. We actually think that over time we should be starting to do better than that.

And one of the reasons, for example, that we can expect to see better improvement in that result would be the fact that under these PPA exercises when you have a bump up in the fair market value inventory, these bump up in values are then charged to COGS over a very short period of time.

Now, a lot of those COGS amortizations, or rather depreciations, have been put into previous financials. And in terms of the Serotec Group, we expect amortization for one more year. So, once those extraordinary effects related to the PPA wear off, we should start to see margins improve also. Just from -- by virtue of the fact that that PPA depreciation is no longer in.

THOMAS SCHIESSLE: Okay. Thank you, Dave.

OPERATOR: As there are no further questions at this time, I would now like to turn the call back over to Dr. Moroney for any additional or closing remarks.

DR. SIMON MORONEY: Thank you. If there are no further questions, I would like to close by reminding you of the main message to take away from this conference call.

The significance in the near term, we're solidly on track to reach our financial targets for the year. Perhaps even more importantly, we've already surpassed our objectives for the year in terms of the number of active HuCAL based Therapeutic Antibody programs.

Strength in the pipeline today is an indicator of the value of tomorrow, and in this regard Morphosys is very well positioned.

That concludes the call. Should any of you wish to follow up with us directly, I'm in the office here in Munich. Thanks again for participating and good bye.

OPERATOR: Ladies and gentlemen that will conclude today's conference call. Thank you for your participation you may now disconnect.

[lupus2000]

MorphoSys AG Serotec-Übernahme – Mitschrift der Telefonkonferenz – Übersetzung

Dave Lemus, Finanzvorstand, MorphoSys AG
Guten Morgen und willkommen zur MorphoSys-Telefonkonferenz. Mein Name ist Dave
Lemus, Finanzvorstand von MorphoSys. Ich sitze hier heute mit meinem Kollegen Dr. Simon
Moroney, unserem Vorstandsvorsitzenden. Wir haben diese Telefonkonferenz einberufen,
um Sie näher über die heute Morgen bekannt gegebene Übernahme der Serotec-Gruppe zu
informieren. Dr. Simon Moroney und ich werden Ihnen zunächst nähere Informationen zu
dieser Übernahme geben. Im Anschluss daran haben Sie Gelegenheit, uns Fragen zu
stellen.
Bevor wir beginnen, möchte ich Sie daran erinnern, dass wir in dieser Telefonkonferenz
zukunftsgerichtete Aussagen über die Entwicklung der Kerntechnologien von MorphoSys,
das Fortschreiten seiner gegenwärtigen Forschungsprogramme und den Beginn weiterer
Programme machen und erörtern werden. Sollten sich die den Annahmen der Gesellschaft
zugrunde liegenden Verhältnisse ändern, so können die tatsächlichen Ergebnisse und
Maßnahmen von den erwarteten Ergebnissen und Maßnahmen abweichen. Sie werden
daher vorsorglich darauf hingewiesen, diesen zukunftsgerichteten Aussagen, die nur am Tag
ihrer Bekanntgabe Gültigkeit besitzen, keine unangemessene Bedeutung beizumessen.
Ich gebe das Wort nun an Dr. Simon Moroney, der Sie über die allgemeinen Hintergründe
der heutigen Ankündigung, d. h. die Akquisition der Serotec-Gruppe, informieren wird.
Simon Moroney, Vorstandsvorsitzender, MorphoSys AG
Guten Morgen und willkommen auch von meiner Seite.
Mit dem Kauf von Serotec gelingt uns eine weitere Stärkung unserer Sparte für
Forschungsantikörper, die derzeit den Schwerpunkt in unseren Tochterunternehmen
Antibodies by Design und Biogenesis bildet. Im Markt für Forschungsantikörper stellt Größe
einen entscheidenden Parameter dar: Die Größe des Kundenstamms, des Produktportfolios
und des Zugangs zu Vertriebskanälen sind entscheidende Schlüsselwerte und
Schlüsselfaktoren für die weitere Steigerung des Marktanteils. Laut unserer eigenen
Schätzung zählt Serotec zu den drei größten Anbietern von Antikörpern in Europa. Nach
erfolgter Übernahme von Serotec wird MorphoSys, davon sind wir überzeugt, zum führenden
spezialisierten Anbieter von Forschungsantikörpern und Antikörper-Forschungstechnologien
in Europa und steigt gleichzeitig zum Global Player in die Top 20 weltweit auf. Serotec bringt
ein umfassendes Portfolio aus mehr als 4.600 Forschungsantikörpern und Produkten, gut
etablierte Vertriebskanäle sowie einen großen bestehenden Kundenstamm aus dem
universitären und industriellen Bereich in MorphoSys ein.
Was die Geschäftsführung betrifft, wird es keine Änderungen im Vorstand der MorphoSys
AG geben, d. h. ich werde weiterhin als Vorstandsvorsitzender, Dave Lemus als
Finanzvorstand, und Marlies Sproll als Vorstand für Forschung & Entwicklung zur Verfügung
stehen. Die nun vergrößerte Sparte Forschungsantikörper wird, wie gehabt, der Leitung von
Dieter Lingelbach unterstehen. Die Gründer sowie die derzeitige Geschäftsführung von
Serotec werden im Unternehmen verbleiben und erweiterte Aufgaben in unserem
Firmenzusammenschluss übernehmen.
Auch unsere langfristigen Ziele im Geschäftsbereich bleiben unverändert. Wir sind
überzeugt, dass in-vitro-Verfahren wie unsere proprietäre HuCAL®-Technologie in Zukunft
tierbasierte Verfahren in der Herstellung von Antikörpern für sämtliche Anwendungszwecke
ablösen werden. Und MorphoSys steht an der Spitze dieses technologischen Wandels.
Durch Zusammenführung der Marktpräsenz von Serotec, einem gut etablierten Zulieferer
von Antikörpern, mit der MorphoSys eigenen HuCAL®-Technologie zur Herstellung
kundenspezifisch rekombinanter Antikörper gelingt uns die Bildung eines einzigartigen
Unternehmens, das in zahlreichen Segmenten aktiv ist. Unser Ziel lautet, die
Marktdurchdringung der HuCAL® Antikörper im Forschungsmarkt zu maximieren, und wir
sehen zu diesem Zweck im verstärkten Vertrieb & Marketing, ergänzend zu unserem
technologischen Know-how, eine entscheidende Schlüsselkompetenz. Dieses Ziel war
bereits der Hauptgrund für unsere Übernahme von Biogenesis im Jahr 2005 und zählt auch
zu den Hauptgründen für die jetzige Übernahme. Sie bildete auch unsere Motivation für die
weltweite Lizenzvereinbarung mit Chemicon, die wir Anfang dieser Woche bekannt gaben.
Die Übernahme von Serotec ist damit ein weiterer Schritt auf dem Weg der Umsetzung
unserer langfristigen Strategie.
Die vergrößerte Sparte wird die bestehenden Tochterunternehmen Antibodies by Design und
Biogenesis mit der neu zu uns stoßenden Serotec-Gruppe unter einer gemeinsamen neuen
Marke namens Antibodies Direct oder kurz AbD zusammenführen. AbD wird den in der Life
Science tätigen Forschern ein einzigartiges Angebotsspektrum bieten können: eine breite
Auswahl an Antikörpern aus dem vereinten Produktangebot von Biogenesis und Serotec,
plus moderne rekombinante Antikörpertechnologie-Dienste von Antibodies by Design.
Darüber hinaus beabsichtigen wir, das Katalogangebot um neue HuCAL®-basierte
Reagenzien zu erweitern, wie wir dies bereits bei Biogenesis getan haben.
Abschließend möchte ich hervorheben, dass der Bereich Therapeutika auch weiterhin die
wichtigste Sparte in unserem Geschäftsbereich darstellen wird. Was den Umsatz betrifft,
werden sich die bestehende Therapeutikasparte und das neue Tochterunternehmen AbD
aneinander stärker annähern, als dies bisher der Fall war. Der Bereich Therapeutika bleibt
jedoch unverändert unsere umsatzstärkste Sparte. Strategisch erreichen wir durch die
Stärkung unserer Forschungssparte drei Dinge: Zum einen die Aussicht auf mehr Wachstum
dank einer gesteigerten Marktdurchdringung von HuCAL® im Life Science-Markt; zum
zweiten die Ausgewogenheit im Risiko/Chancen-Verhältnis unseres Unternehmens, denn wir
behalten das enorme Gewinn-Potenzial aus der Vielzahl an laufenden
Wirkstoffforschungsprogrammen unserer Therapeutikasparte, und diversifizieren zugleich
unsere Umsatzbasis durch verstärkten Absatz im Forschungssegment. Zum dritten wirkt sich
die Stärkung unserer Forschungsantikörpersparte auch vorteilhaft auf unsere Kernsparte
Therapeutika aus. So wurde dank der Zufriedenheit mit unserer Technologie mindestens ein
Abnehmer aus der Pharmaindustrie vom vormaligen Antibodies by Design-Kunden zum
vollwertigen Partner unserer Therapeutikasparte. HuCAL® eignet sich ideal für diese
Umstellung, da es einen nahtlosen Übergang vom Forschungsreagenz zum vollständig
humanen optimierten Wirkstoffanwärter bietet.
Damit möchte ich das Wort zurückgeben an Dave Lemus, der Ihnen die finanziellen Aspekte
der heute bekannt gegebenen Übernahme erläutern wird.
Dave Lemus
Vielen Dank, Simon. Wie Sie aus den Eckdaten des heutigen Abschlusses ersehen können,
ist diese Übernahme etwas gewichtiger als die Übernahme von Biogenesis Anfang des
Jahres 2005. Anders als bei der Biogenesis-Übernahme haben wir diesmal beschlossen, die
Akquisition über eine Mischung aus Barmitteln und MorphoSys-Aktien zu finanzieren. Der
Gesamtkaufpreis beläuft sich auf rund 19,9 Millionen britische Pfund. Davon werden 14
Millionen Pfund, das entspricht rund 20,5 Millionen Euro, in Barmitteln beglichen, während
die Restsumme durch Ausgabe von rund 208.000 neuen MorphoSys-Aktien im Rahmen
einer Sachkapitalerhöhung beglichen werden. Nach erfolgter Transaktion werden wir über
ein Bankvermögen von 30 Millionen Euro verfügen. Die durch diese Transaktion zu
erwartende Verwässerung der Aktien wird mit rund 3,5% minimal sein.
Für das Serotec Geschäftsjahr 2005 gehen wir von einem Gesamtumsatz bei Serotec von
rund 11 Millionen Euro aus. Die Serotec-Gruppe arbeitet profitabel, und wir erwarten, dass
sich die Übernahme ab dem Jahr 2007 als gewinnbringend erweisen wird. Ausführlichere
Informationen über die Finanzsituation im Jahr 2006 werden wir Ihnen auf unserer
Jahresabschlusskonferenz am 24. Februar geben können. Wir gehen jedoch davon aus,
dass sich der Anteil von Serotec an unseren diesjährigen Umsatzzahlen auf rund 11
Millionen Euro belaufen wird. Diese Akquisition besitzt das Potential, den Umsatz unserer
Forschungsantikörpersparte mit Hinblick auf den Absatz mehr als zu verdreifachen.
Zusätzlich gelingt uns mit dieser Übernahme die Diversifizierung unserer Einnahmequellen.
Der Hauptsitz von Serotec befindet sich im englischen Oxford; das Unternehmen besitzt
zudem Vertriebsniederlassungen in den USA, Deutschland, Frankreich und Skandinavien. In
der Tat werden 50% der Umsätze von Serotec am alles dominierenden US-amerikanischen
Markt erzielt. Die Übernahme von Serotec sichert uns daher eine erhebliche Steigerung
unserer Präsenz in diesen Schlüsselmärkten. Die rund 80 Mitarbeiter von Serotec werden
von MorphoSys übernommen, wodurch sich unsere Mitarbeiterzahl nach erfolgter
Übernahme auf rund 240 Mitarbeiter erhöht.
Mit dieser Übernahme wird die erweiterte Forschungsantikörpersparte zu einem noch
wichtigeren zweiten Pfeiler in der Gesamtausrichtung unseres Unternehmens. Davon
unbeeinträchtigt bilden jedoch unsere Programme für therapeutische Antikörper, die wir
sowohl in eigener Regie wie auch im Namen unserer Partner führen, weiterhin den
wichtigsten Teil unseres Geschäfts.
Zusammenfassend möchten wir sagen, dass diese Übernahme einen weiteren bedeutenden
Schritt hin zu unserer Zielsetzung, HuCAL® als technologischen Standard in der
Forschungsindustrie zu etablieren, darstellt. Damit möchten wir unsere Stellungnahme für
heute abschließen. Sie können nun gerne Fragen stellen.
Fragen & Antworten
Operator: Unsere erste Frage kommt von Herrn Dr. Martin Possienke von Equinet.
Dr. Martin Possienke: Schönen Guten Morgen. Ich habe ein paar Fragen zum Thema
Finanzen. Vielleicht können Sie uns ein paar historische Umsatzzahlen der letzten zwei
Jahre oder so geben. Dann, fallen Akquisitionskosten an, und wenn das so ist, mit welcher
Summe rechnen wir da? Außerdem haben Sie gesagt, das Serotec profitabel ist, vielleicht in
Hinblick auf die EBIT-Zahlen oder EBIT-Marge. Liege ich richtig in meiner Annahme, dass
das ungefähr um die 15% liegt?
MorphoSys AG Serotec-Übernahme – Mitschrift der Telefonkonferenz – Übersetzung Seite 4 von 8
Meine letzte Frage ist, ob es möglich ist, die steuerlichen Verlustvorträge von Morphosys für
Serotec Erträge einzusetzen? Danke.
Dave Lemus: Guten Morgen. O.K. Zuerst die Umsatzzahlen der letzten Jahre. Ich glaube es
ist am einfachsten die Umsatzzahlen von Serotec so zu erklären. Der vergangene
Umsatzwachstum liegt zwischen circa 8% bis 15%, also um einen Durchschnittswert zu
nennen, 10% Umsatzwachstum. Wenn man das in Gewinn nach Steuern ausdrücken
möchte, hatten wir in den letzten Jahren auch hier variierende Zahlen. Die Unterschiede
liegen um den 10% Wert, in manchen Jahren war es ein bisschen mehr, in manchen ein
bisschen weniger.
Dr. Martin Possienke: Also Gewinn nach Steuern?
Dave Lemus: Ja. Kommen wir zu den Akquisitionskosten. Wir erwarten, dass sich die
Akquisitionskosten bei rund 900.000 Euros einpendeln, das wäre für die beiden
Akquisitionen, damit einhergehend eine Kapitalerhöhung.
Dann zu den steuerlichen Verlustvorträgen: Ja, wir haben steuerliche Verlustvorträge, von
denen wir denken, dass sie hier angewendet werden könnten. Aber leider können wir diese
steuerlichen Verlustvorträge nicht im vollständigen Umfang nutzen, da wir in Deutschland
natürlich eine Mindestversteuerung haben, was erst vor kurzem eingeführt wurde, so dass
wir wie gesagt nur einen Teil unserer steuerlichen Verlustvorträge hier anwenden können.
Aber wir haben steuerliche Verlustvorträge, die wir für einige Jahre nehmen können, ja.
Dr. Martin Possienke: O.K. Danke.
Operator: Unsere nächste Frage kommt von Thomas Schiessle von Equities GmbH.
Thomas Schiessle: Guten Morgen meine Herren, Thomas Schiessle. Ich habe ein paar
Fragen zur Umsatzstruktur und der Produktstruktur von Serotec. Könnten Sie vielleicht ein
bisschen mehr zur regionalen Struktur sagen? Sie haben betont, dass 60% des
Gesamtabsatzes des neu akquirierten Unternehmens aus den USA kommt. Gibt es auch
irgendwelche Pläne in Asien?
Meine zweite Frage dreht sich um die Überschneidungen ihres Unternehmens mit dem neu
akquirierten Unternehmen. Wie werden Sie die Zusammenführung der beiden Unternehmen
gestalten und managen?
Die dritte Frage dreht sich auch um Umsatz, gibt es ein großes Produkt im Angebot von
Serotec, ist es ein spezielles Katalogangebot? Danke.
Dr. Simon Moroney: Hallo Thomas, hier ist Simon. Erst einmal zur Umsatzaufteilung, was
wir ja schon erwähnt haben, ist, dass circa die Hälfte des Umsatzes aus den USA kommt,
um da mal eine Zahl zu nennen, ungefähr 45%. Andererseits hat das Unternehmen seinen
Firmensitz in England, aber durchaus auch Niederlassungen in Frankreich, Deutschland und
in Skandinavien, und die zweitgrößte Umsatzregion ist Europa. Sie operieren in anderen
Regionen durch ein Netzwerk von verschiedenen Vertriebsstellen, und durch dieses
Netzwerk von Vertriebsstellen haben sie einen bedeutenden Absatzlevel in Asien, natürlich
Japan an der Spitze, aber das ist der geringere Anteil in diesen drei Gebieten, was den
Umsatz angeht.
Zu Ihrer Frage der Überschneidungen zwischen den zwei Unternehmen. Hier haben wir bis
jetzt noch nicht vollständig entschieden, wie wir das genau machen. Natürlich schauen wir
uns gerade verschiedene Standorte an und wir kucken uns natürlich auch die Funktionen in
den möglichen Standorten an. Aber die finale Entscheidung fällen wir erst in den nächsten
Wochen und Monaten.
Sie haben gefragt, ob die Unternehmen ein einzelnes, großes Produkt haben. Serotec ist der
Lieferant eines wichtigen Antikörpers für einen Kit gegen Influenza B. Der von der FDA
geprüfte und zugelassene Kit wird von einem Drittanbieter vertrieben, und ist ein sehr
wichtiges Produkt. Nichts desto Trotz, neben diesem Produkt kommt der Großteil des
Absatzes aus dem aus Katalogen betriebenen Verkauf von Forschungsantikörpern für die
Forschungsgemeinschaft in den Life Sciences.
Thomas Schiessle: Danke
Operator: Unsere nächste Frage kommt von Dr. Patrick Fuchs von der DZ Bank.
Dr. Patrick Fuchs: Hallo zusammen. Ich habe eine Frage zum Absatz und zur
Ergebnisentwicklung von Serotec. Sie haben den Durchschnitt der letzten Jahre erwähnt.
Wenigstens eine Akquisition, die wir hier gesehen haben, zeigte einen Trend beim
Zielunternehmen, welches Serotec sehr ähnlich ist, zu stagnierendem Absatz und zum
Rückgang im Ergebnis. Diese Trends zeigen ja auf, dass an einem bestimmten Punkt
Probleme im Sektor auftreten könnten. Könnten Sie uns zu diesem Thema noch mehr
Informationen geben, wo Sie den Trend sehen und wo sie den Trend bei Serotec gesehen
haben in den letzten drei Jahren oder so?
Dr. Simon Moroney: Ja Patrick, Guten Morgen. Wie ich schon erwähnt hatte, das
Wachstum in der Vergangenheit lag zwischen 10 bis 15%. Wir haben eine große Bandbreite
im Markt. Ich glaube, viele Unternehmen haben gekämpft und andere wachsen sehr rapide.
Ein aktuelles Beispiel wäre natürlich Abcam, die ja kürzlich in London an die Börse
gegangen und in den letzten Monaten wirklich extrem schnell gewachsen sind. Wir sehen
uns im “Antibodies by Design” Geschäft, mit einer Wachstumsrate von gut über 50%. Also
das zeigt für mich ohne Frage, dass wir in diesem Sektor eine wirklich attraktive
Wachstumsrate zu verzeichnen haben. Der Trick ist einfach die Produkte zu identifizieren,
die sich gut verkaufen und die diese Wachstumsmöglichkeiten bieten, und wenn man das
erfolgreich macht, dann ist auf jeden Fall das Wachstum da und die Margen natürlich auch.
Wir sind von Serotec als Unternehmen sehr beeindruckt seit wir sie kennen gelernt haben.
Ich glaube, das Unternehmen hat im letzten Jahr gezeigt wie man einen Erfolg in diesem
Geschäftszweig auf die Beine stellt. Serotec steht in der Industrie für Qualität und gute
Kundenbetreuung und hat sich damit einen guten Ruf aufgebaut. Und wir sind gewillt diesen
guten Ruf noch weiter auszubauen. Außerdem glauben wir, wie ich bereits gesagt hatte,
dass wir ausreichend Beweise für eine gute Wachstumsrate in diesem Markt vorgewiesen
haben; in einem Markt, der nicht nur an sich attraktiv ist – und das ist der Hauptgrund warum
wir hier sind – sondern in dem es auch die einmalige Chance gibt, weg von den traditionellen
Tier-basierenden Produkten, hin zu modernen, aus in-vitro-Ansätzen wie der HuCAL
Technologie gewonnenen Produkten zu gehen. In diesem Markt spielen wir die Hauptrolle
bei dieser Transformation und wir haben auch vor, weiterhin diese Hauptrolle zu spielen.
Dr. Patrick Fuchs: Kann ich vielleicht noch eine letzte Frage zu Ihren Geschäftssäulen
stellen? Kann diese starke Expansion des “Antibodies by Design”-Geschäfts durch diese
Akquisition auch als eine Premiere angesehen werden, wo Sie erstmals Ihr internes
Entwicklungsprogramm nicht vergrößern, oder sogar herunterschrauben, um den Fokus auf
die Rolle des Zulieferers für die Biotech-Industrie, auf das Kataloggeschäft, und die
Antikörperentwicklung im Kundenauftrag zu richten, zusätzlich zu Ihren Pharma
Kooperationen. Die Aufwendungen für interne Wirkstoffentwicklung binden mit Sicherheit
viele Ressourcen und Kapital.
Dr. Simon Moroney: Genau aus diesem Grund haben wir während des Vortrages betont,
dass die therapeutische Seite weiterhin den größten Teil unseres Geschäfts ausmachen
wird.
Dr. Patrick Fuchs: Nein, nicht die therapeutische Säule. Ich meine das interne
Medikamenten-Entwicklungsprogramm welches Sie mit MOR101, 102 und 103 haben.
Dr. Simon Moroney: Ja, ich wollte gerade hinzufügen, dass wir diese internen Programme –
die Programme der MOR-Serie – als einen großen Bestandteil der therapeutischen Division
sehen.
Dr. Patrick Fuchs: O.K. Danke.
Operator: Unsere nächste Frage kommt von Herrn Dr. Hanns Frohnmeyer von der LBBW.
Dr. Hanns Frohnmeyer: Guten Morgen. Ich habe eine Frage zu den potentiellen Synergien,
die sich aus dem Wechsel von alten Antikörpern in den Katalogen zu Antikörpern aus ihrem
HuCAL-System ergeben. Ich bin nur neugierig wie sie es managen wollen bei mehr als 4.000
zusätzlichen Antikörpern, dass Sie da mehr und mehr HuCAL-Technologien benutzen
wollen. Wie lang, denken Sie, wird diese Übergangsphase dauern, oder planen Sie die
meisten Antikörper in Ihrem Tierhintergrund zu lassen?
Dr. Simon Moroney: Was wir definitiv nicht machen werden, sind 4.600 neue HuCALAntikörper,
um die alten existierenden Antikörper zu ersetzen. Viele dieser Antikörper sind
natürlich eher kleine Verkäufe und es wäre finanziell natürlich gar nicht tragbar, sie zu
ersetzen. Wie wir die Sache sehen, machen wir neue Antikörper, welche vermehrt dann
HuCAL-Antikörper sein werden, so dass im Laufe der Zeit die Gewichtung zwischen HuCALbasierten
Antikörpern und aus Tieren gewonnenen Antikörpern vermehrt zu Gunsten von
HuCAL verläuft. Natürlich werden wir mit denen starten, wo wir die größtmöglichen Chancen
für Wachstum und Verbesserung der Margen sehen und unseren Fokus zuerst auf diese
legen. Das wird also ein fortlaufender, langsamer Prozess sein, der sich über drei, fünf bis
sieben Jahre hinausziehen wird, um den Katalog völlig umzulegen.
Dr. Hanns Frohnmeyer: Also jetzt mal als Beispiel, der von Ihnen erwähnte FDA-geprüfte
Kit. Den können nicht direkt ersetzen, schätze ich mal?
Dr. Simon Moroney: Nun, wir sind tatsächlich in Verhandlungen mit dem eigentlichen
Verkäufer des Kits, in denen es um genau diesen Punkt geht. Wir denken, wir können es,
und es ist natürlich auch sehr attraktiv diesen Schritt zu gehen, da wir unsere Margen
signifikant vergrößern können indem wir einen HuCAL-Antikörper produzieren, der als eine
Komponente dieses Kits dient. Zusätzlich schauen wir natürlich immer nach Möglichkeiten
einen überlegenen Antikörper zu finden, und da haben wir mit HuCAL den entscheidenden
Vorteil, dass man nämlich tatsächlich an einen Antikörper mit überlegener Affinität und
Spezifität etc. denken kann, welches das Endprodukt dann verbessert. Der entstehende ist
in diesem Falle ein noch höherwertiges Produkt.
Dr. Hanns Frohnmeyer: Danke. Vielleicht noch eine Folgefrage: Könnten Sie uns vielleicht
ein Gefühl für die Entwicklung der Kosten für die Herstellung der Produkte im Segment
Forschungsantikörper (COGS) durch diese Akquisition geben?
Dave Lemus: Ja die Kosten, Sie können sich vielleicht erinnern, dass die COGS in den
Finanzberichten der Gruppe, nur die Kosten für die Herstellung der Produkte der
Forschungsantikörpersparte repräsentieren. Das heißt, jetzt, da durch die Akquisition
Serotecs ein Drittel des gesamten Gruppenumsatzes repräsentiert wird, würden wir
eigentlich erwarten, dass die COGS ansteigen, aber das, glauben wir, würde immer noch
keinen Einfluss auf den Konzerngewinn haben. Wir glauben, dass sich der Effekt auf den
Konzerngewinn erst in 2007 positiv auswirkt.
Dr. Hanns Frohnmeyer: Ok, danke Ihnen.
Operator: Wir eine Folgefrage von Herrn Thomas Schiessle von der Equities GmbH.
Thomas Schiessle: Danke. Ich habe eine Folgefrage zum Beitrag von Serotec zum Gewinn
– warum gibt es keinen Einfluss auf den Gewinn vor 2007? Gibt es da Integrationskosten,
und wenn das der Fall ist, von wie viel sprechen wir da?
Meine nächste Frage bezieht sich mehr auf ein spezifisches Thema: Glauben Sie, oder ist
diese Akquisition ein wichtiger Schritt, um eine kritische Masse im Kataloggeschäft oder im
Antikörpergeschäft zu erreichen? Danke.
Dave Lemus: Zur Frage, warum sich die Akquisition erst ab 2007 positiv auf den Gewinn
auswirkt? Die Antwort ist ja, wir erwarten, dass Kosten auf uns zukommen werden, die mit
der Integration der zwei Unternehmen verbunden sind. Simon hat ja schon in seiner Rede
durchklingen lassen, dass wir Synergien erwarten, nicht nur auf Seiten des Umsatzes aber
auch auf Seiten der Kosten. Sie können sich vorstellen, dass es Raum für eine
Zusammenlegung der Standorte geben könnte, es gibt ebenso gewisse Überschneidungen
in den Organisationen; hier sind wir auch wieder in der Situation, dass wir diese Kosten bis
jetzt nicht genau abschätzen können. Die Überprüfung ist zurzeit noch im Gange, aber wir
glauben, dass wir diese Kosten genauer bei unserer jährlichen Bilanzpressekonferenz am
24. Februar quantifizieren können.
Kommen wir jetzt zu Ihrer Frage zur kritischen Masse. Wir glauben, dass es ein guter Schritt
ist, die Pole Position auf dem europäischen Markt einzunehmen. Damit einhergehend
glauben wir natürlich, dass es für uns noch reichlich Spielraum gibt weiter zu wachsen, dass
Morphosys die Technologie hat diesen Sektor zu transformieren, und, bezogen auf das
Gesagte, das wir gerne ein “Global Player” werden möchten. Also in diesem Bereich
schließen wir weiteres Wachstum nicht aus, natürlich nicht nur organisches, sondern auch
inorganisches Wachstum.
Thomas Schiessle: Noch ein Folgefrage hierzu. Haben Sie durch die Akquisition von
Serotec, großen pharmazeutischen Gruppen als Kunden für Ihr Netzwerk hinzugewinnen
können?
Dr. Simon Moroney: Thomas, ich habe bereits die Influenza B-Produkte angesprochen, für
die Serotec ein wichtiger Zulieferer für die Drittanbieter des Kits ist. Der Großteil der
verbleibenden Umsätze ist – typisch für den Markt der Forschungsantikörper – natürlich breit
verteilt über die gesamte “Life Science”-Gemeinschaft. Also dieses Geschäft unterscheidet
sich dadurch sehr von dem, zum Beispiel, eher fokussierten pharmatherapeutischem
Geschäft von MorphoSys, in welchem man eher, wie Sie sicher wissen, wenige große
Partnerschaften mit führenden pharmazeutischen Unternehmen hat. Das ist natürlich etwas
ganz anderes, und deswegen haben diese Unternehmen auch viel mehr Kunden, aber die
individuellen Bestellungen fallen dafür natürlich eher klein aus.
Thomas Schiessle: Gibt es irgendein Problem mit der Integration der EDV?
Dave Lemus: Basierend auf der Integration von Biogenesis – bei der ich verantwortlich für
den EDV-Bereich im Unternehmen war – muss ich tatsächlich sagen, dass die EDV eines
der einfachsten Gebiete der Integration war. Also basierend auf den Erfahrungen mit
Biogenesis und dem Bericht den wir während des Prozesses der Unternehmensbewertung
angefertigt haben haben, eher nicht.
Thomas Schiessle: Wunderbar, Danke.
Operator: Es scheint, als hätten wir im Moment keine weiteren Fragen. Ich übergebe hiermit
die Konferenzschaltung für letzte Anmerkungen.
Dr. Simon Moroney - Verabschiedung
Abschließend möchte ich gerne die wichtigsten Aussagen dieser Telefonkonferenz nochmals
zusammenfassen, nämlich, dass die heute angekündigte Übernahme einen weiteren
bedeutenden Schritt auf dem Weg der Umsetzung unseres Ziels darstellt, unsere HuCALTechnologie
im Markt für Forschungsantikörper zu etablieren. MorphoSys steigt im
Zusammenschluss mit Serotec zum führenden spezialisierten Anbieter von
Forschungsantikörpern und Antikörper-Forschungstechnologien in Europa auf, und wird
darüber hinaus zu einem wichtigen Global Player mit einem einmaligen Angebot am
Weltmarkt.
Damit möchten wir diese Telefonkonferenz beenden. Ich danke Ihnen für Ihre Teilnahme.
Sollten Sie noch weitere Fragen an uns haben, stehen wir Ihnen gerne in einem
persönlichen Telefongespräch zur Verfügung. Da wir uns heute in London aufhalten, würden
wir Sie bitten, Ihre Anrufe über die MorphoSys-Zentrale in München an uns weiterleiten zu
lassen. Vielen Dank nochmals an Sie alle und auf Wiedersehen.

[lupus2000]

MorphoSys AG Q1 2006 – Mitschrift der Telefonkonferenz - Übersetzung

Dave Lemus, Finanzvorstand, MorphoSys AG
Guten Morgen und willkommen. Mein Name ist Dave Lemus, Finanzvorstand der
MorphoSys AG. Bei mir sitzt Simon Moroney, unser Vorstandsvorsitzender. Wir rufen Sie heute
von unserem Geschäftssitz in München, Deutschland an.
Zunächst möchten wir Sie zu dieser Telefonkonferenz begrüßen und Ihnen für Ihre Teilnahme
danken. Während des Gesprächs werden wir über die Finanzergebnisse der Gesellschaft für
das erste Quartal 2006 sprechen. Dr. Moroney wird mit einem Rückblick über das erste Quartal
beginnen. Im Anschluss daran werde ich die Finanzergebnisse für die ersten drei Monate des
Geschäftsjahres 2006 erläutern. Danach sind wir gerne bereit, auf Ihre Fragen einzugehen.
Bevor ich beginne, möchte ich Sie darauf aufmerksam machen, dass wir gewisse
vorausschauende Aussagen bezüglich der Entwicklung der Kerntechnologien von MorphoSys,
des im Rahmen der laufenden Forschungsprogramme der Gesellschaft erzielten Fortschritts
und der Einführung weiterer Programme vorstellen und erörtern werden. Sollte die tatsächliche
Situation von den Annahmen der Gesellschaft abweichen, können die letztendlichen
Ergebnisse und Maßnahmen anders ausfallen als ursprünglich geplant. Daher möchten wir Sie
darauf hinweisen, sich nicht allzu sehr auf diese vorausschauenden Aussagen zu verlassen, da
diese ausschließlich auf dem Stand bei heutigem Datum basieren.
Ich übergebe das Wort nun an Herr Dr. Simon Moroney.
Dr. Simon E. Moroney, Vorstansvorsitzender, MorphoSys AG
Vielen Dank, Dave, und auch meinerseits ein herzliches Willkommen zu unserem
Konferenzgespräch über das erste Quartal 2006.
Es war ein außerordentlich produktives Quartal für uns, und die heute von uns veröffentlichten
Zahlen unterstreichen unseren Erfolg. Eine Übernahme, eine Kapitalerhöhung, drei neue
Partnerschaften, der Start der klinischen Entwicklung für einen zweiten HuCAL-Antikörper – und
all dies in den ersten drei Monaten des Jahres. Des Weiteren trafen wir wichtige
Entscheidungen bezüglich unserer firmeneigenen Produktentwicklung.
Ich möchte meinen Quartalsbericht mit unseren Aktivitäten im therapeutischen
Antikörpersegment der Sparte beginnen. Im Januar gaben wir bekannt, dass Hoffmann-La
Roche einen IND-Antrag für einen HuCAL-Antikörper zur Behandlung von Alzheimer gestellt
hat. Dieses Ereignis brachte eine Meilesteinzahlung mit sich, welches im Ergebnis des ersten
Quartals berücksichtigt ist. Wir rechnen damit, dass die klinischen Tests mit dem Antikörper in
Kürze beginnen werden. Ferner kündigten wir einen neuen Vertrag mit Roche an, der über die
ursprüngliche Zusammenarbeit auf dem Gebiet der Erkrankungen des zentralen
Nervensystems hinaus sich auf die überaus wichtige Krebsindikation bezieht. Das anfängliche
Ziel des Programms, die Entwicklung von HuCAL-Antikörpern, wurde nun um zwei neue
Zielmoleküle erweitert, die von Roche verfolgt werden.
Im Quartalsverlauf haben wir eine Meilensteinzahlung von Centocor für die erfolgreiche
Lieferung einer Reihe von Antikörpern erhalten, welche alle vorab definierten Erfolgskriterien
erfüllen. Die Art der Verträge mit unseren Partnern verbietet es uns für gewöhnlich, die Höhe
und in manchen Fällen selbst den Erhalt solcher Zahlungen zu veröffentlichen. Tatsächlich
haben wir im Verlauf des Quartals diverse andere Meilensteinzahlungen erhalten, die wir nicht
separat ausgewiesen haben. Doch mindestens so wichtig wie die Zahlungen selbst ist der
Umstand, dass die Erfolgsprämien auf einen positiven Fortschritt bei unseren therapeutischen
Programmen hinweisen. Die Anzahl der therapeutischen Programme mit aktiven
Partnerschaften, die auf HuCAL basieren, ist von 29 Ende des vergangenen Jahres auf heute
34 gestiegen. Am wichtigsten ist hierbei, dass unsere zusammen mit Partnern aufgebaute
Pipeline zunehmend reift, was man daran erkennen kann, dass die Anzahl der Antikörper in
Phase 1 in den vergangenen drei Monaten von 1 auf 2 zugenommen hat und die Anzahl der
Antikörperprogramme in der präklinischen Entwicklungen von 6 auf 8 gestiegen ist. Wir sind auf
dem besten Weg, unser Ziel von mindestens 36 aktiven therapeutischen Antikörperprogrammen
unter Beteiligung von Partnern bis zum Jahresende zu erreichen.
Unsere Anstrengungen zur Geschäftsentwicklung in Japan tragen weiterhin Früchte. Im
Anschluss an unser erstes japanisches Pharmageschäft im September letzten Jahres mit
Shionogi unterzeichneten wir im vergangenen Monat eine breit angelegte Partnerschaft mit
Daiichi Sankyo unter Dach und Fach. Gemäß den Bedingungen des Geschäfts erhält Daiichi
Sankyo für ihr interne Forschung und Entwicklung eine Lizenz für unsere HuCAL-Technologie.
Diese Lizenz ist für einen anfänglichen Zeitraum von zwei Jahren gültig und kann um weitere
drei Jahre verlängert werden. Darüber hinaus wird Daiichi Sankyo ein Team hier bei MorphoSys
unterstützen, das an einem therapeutischen Antikörperprojekt zur Erfüllung eines ihrer Ziele
arbeiten wird. Eine Verlängerung über den anfänglichen Zeitraum von zwei Jahren hinaus kann
weitere Kooperationsprojekte auf dem Gebiet therapeutischer Antikörper zur Folge haben.
Im Hinblick auf unsere firmeneigenen hausinternen Programme arbeiten wir, wie im Februar
dieses Jahres angekündigt, weiter an MOR103 für rheumatoide Arthritis und möglicherweise
andere entzündliche Erkrankungen sowie an MOR202 zur Bekämpfung von Krebs. Beide
Programme sind im Plan – bei MOR103 die Einreichung eines IND-Antrags im zweiten Halbjahr
2007 und bei MOR202 der Abschluss der präklinischen Profilerstellung gegen Ende dieses
Jahres. Zur Erinnerung: Wir werden die einzelnen Schritte des Entwicklungsprozesses nicht
kommunizieren, Sie jedoch hinsichtlich des Gesamtfortschritts der Programme - gemessen an
den Fristen - auf dem Laufenden halten.
Um zum Antikörperforschungssegment zurückzukommen: Die größte Transaktion im Quartal
war zweifellos unsere Übernahme von Serotec. Diese Akquisition diente einzig und allein dem
Zweck, unsere Fähigkeit zur Kommerzialisierung unserer HuCAL-Technologie und der sich
daraus ableitenden Antikörper im Forschungsmarkt zu stärken. Für diesen Teil unseres
Geschäfts haben wir uns ein ehrgeiziges Ziel gesetzt – kein anderes als die Erreichung einer
technischen Transformation im Forschungsmarkt, indem wir auf Tierversuchen basierende
Methoden zur Gewinnung von Antikörpern durch die effizientere in-vitro-HuCAL-Technologie
ersetzen.
Serotec hat uns neben den äußerst wichtigen etablierten Vertriebskanälen zu einem rentablen
Geschäft mit einem Umsatz von rund EUR 11 Mio. verholfen. Wir haben bei der Integrierung
des Serotec-Konzerns in unsere Antikörperforschungssparte gute Fortschritte erzielt. Er wird
nun unter dem Namen Antibodies Direct bzw. abgekürzt AbD geführt. Die Marketingaktivitäten
sind inzwischen verschmolzen worden, das Verkaufspersonal wurde in der Kommerzialisierung
von HuCAL-Antikörpern geschult und wir haben unsere erste gemeinsame Messepräsentation
erfolgreich bestritten. Weiterhin haben wir beschlossen, die Standorte in Großbritannien und
den USA zu konsolidieren. Wir haben entschieden, Oxford zu unserem Firmensitz in
Großbritannien zu machen. Oxford verfügt über eine gute Infrastruktur und eine hohe
Konzentration der akademischen und industriellen Forschung. Serotec kann auf eine lange
Tradition zurückblicken und ist in dieser Region gut eingebunden. Der Standort in Poole an der
Südküste, bei der es sich um die Biogeneseeinrichtung in Großbritannien handelte, wird
spätestens bis Ende dieses Jahres geschlossen. Biogenesis wird zurzeit mit Serotec UK und
dessen Tochtergesellschaft Oxford Biotechnology Ltd. an einem einzigen Standort in der
Oxford-Region konsolidiert. In den Vereinigten Staaten wird der ehemalige Standort von
Serotec in Raleigh die Rolle unseres neuen Firmensitzes in den USA, wir werden jedoch auch
ein Verkaufsbüro in New England beibehalten und den Vorteil der Präsenz des ehemaligen
Biogenesis-Büros in dieser Gegend nutzen. Hier in Deutschland werden wir das Verkaufsbüro
von Serotec in Düsseldorf erhalten. Insgesamt wurde die Belegschaft der Gesamtorganisation
um rund 10 Stellen verringert, was in erster Linie auf die Doppelbesetzung gewisser Aufgaben
zwischen Biogenesis und Serotec zurückzuführen war. Während der Integration wird die größte
Sorgfalt darauf verwandt, die Fortführung des laufenden Geschäftsbetriebes sicherzustellen
und das Risiko von Unterbrechungen bei der Auslieferung von Produkten an Kunden zu
vermeiden.
Es erfüllt uns mit besonderem Stolz, dass der Integrationsfortschritt nicht auf Kosten der
finanziellen Entwicklung der Sparte ging, die im ersten Quartal dem gesetzten Ziel entsprochen
hat.
Eine Transaktion, die der Aufmerksamkeit der Öffentlichkeit angesichts der Akquisition fast
entgangen ist, war unsere Allianz mit Chemicon, die einen Tag vor der Serotec-Akquisition
bekannt gegeben wurde. Die Logik hinter dieser Maßnahme ist in vielerlei Hinsicht dieselbe wie
bei der Übernahme – nämlich die Nutzung bereits vorhandener Vertriebskanäle zur Einführung
der HuCAL-Antikörper auf dem Forschungsmarkt. Wir sind davon überzeugt, dass Chemicon –
ein Unternehmen, das zu den größten Marktteilnehmern im Antikörperforschungsmarkt zählt –
für diesen Zweck ein idealer Partner ist.
Damit schließe ich meinen Quartalsbericht und möchte nun wieder an Dave übergeben, der die
Finanzergebnisse kommentiert.
Mr. Dave Lemus, Finanzvorstand, MorphoSys AG
Vielen Dank, Simon.
Um mit der Finanzanalyse zu beginnen, möchte ich zunächst die Umsatzerlöse erläutern.
Umsatzerlöse
Der Konzernumsatz stieg in den ersten drei Monaten 2006 um 100% auf € 14,8 Mio. im
Vergleich zu € 7,4 Mio. im selben Zeitraum des Vorjahres. Gründe für diesen Anstieg waren
erfolgsabhängige Zahlungen aus bestehenden Kooperationen, zu denen sowohl klinische als
auch Forschungserfolgsmeilensteine zählten, sowie die Einbeziehung der Umsatzerlöse des
Serotec-Konzerns, die 22% zum Gesamtumsatz beitrugen. Das gesamte organische
Umsatzwachstum belief sich auf 56%; das therapeutische Segment verzeichnete ein
organisches Wachstum um 50%. Die Sparte AbD erreichte im selben Zeitraum ein organisches
Wachstum von 100%.
Die Umsatzerlöse aus dem therapeutischen Antikörpersegment machten 67% bzw. € 9,9 Mio.
des Gesamtumsatzes in den ersten drei Monaten 2006 aus. Dieser Gesamtumsatz setzt sich
aus € 6,0 Mio. finanzierter Forschungsarbeit und bezahlter Lizenzgebühren sowie aus € 3,9
Mio. erfolgsabhängigen Meilensteinzahlungen zusammen. Vielleicht erinnern Sie sich, dass wir
für das Gesamtjahr 2006 Meilenstein-Zahlungen in Höhe von rund € 7 Millionen prognostiziert
hatten. Diese Zahlungen stellen annähernd einen Reingewinn für uns dar, und im ersten
Quartal erreichten wir bereits mehr als 50% dieser für das Geschäftsjahr geplanten Zahlungen.
Dies ist einer der Gründe für den außergewöhnlich hohen Reingewinn des therapeutischen
Segments unseres Geschäfts im ersten Quartal.
Das AbD-Segment, zu dem die Geschäftsbereiche Antibodies by Design, Biogenesis und
Serotec gehören, erwirtschaftete 33% bzw. € 4,9 Mio. des Gesamtumsatzes. Der Serotec-
Konzern trug € 3,2 Mio. bzw. 65% zu den gesamten Umsatzerlösen von AbD bei. Der
verbleibende Umsatz für das gesamte Segment belief sich auf € 1,7 Mio. und stammte von den
Marken Biogenesis und Antibodies by Design. Für das Quartal fielen die Umsatzergebnisse des
AbD-Segments, insbesondere im Bereich der Biogenesis, stärker aus als erwartet.
Betriebliche Aufwendungen
Im ersten Quartal 2005 stiegen die gesamten betrieblichen Aufwendungen, die nun den
Aufwand aus Aktienoptionen beinhalten, um 50% auf € 10,2 Mio. Der Gesamtzuwachs bei den
betrieblichen Aufwendungen in Höhe von € 3,4 Mio. war in erster Linie auf die Übernahme des
Serotec-Konzerns zurückzuführen, durch die die betrieblichen Aufwendungen um € 2,8 Mio.
anstiegen.
Der Aufwand aus Aktienoptionen wird nun erstmals im Jahr 2006 in unsere Herstellkosten-,
SG&A- und F&E-Beträge einbezogen. In früheren Jahren wurden die Beträge in der gewinnund
Verlust-Rechnung separat von diesen Posten ausgewiesen. Der Aufwand aus
Aktienoptionen belief sich in den ersten drei Monaten 2006 auf € 0,3 Mio. und unterschied sich
damit kaum vom Gesamtbetrag des Vorjahres.
Im Allgemeinen liegen, wenn man den Gesamtaufwand für das erste Quartal auf das volle Jahr
hochrechnet, die Beträge unter der Prognose, was auf mehrere Gründe zurückzuführen ist.
Zunächst waren die Kosten für die Entwicklung firmeneigener Produkte und Technologie, die für
das Gesamtjahr auf € 4 Mio. geschätzt werden, im ersten Quartal wie geplant recht begrenzt.
Mir wurde jedoch von unseren Kollegen des Wissenschaftsbereichs versichert, dass diese im
Verlauf des Jahres steigen werden. Darüber hinaus wurden eine Reihe von Posten, darunter
die Kaufpreiszuweisung, bei denen wir immaterielle Vermögenswerte aus der Akquisition
abschreiben, noch nicht durchgeführt. Dadurch wurden auch noch keine dieser Abschreibungen
im ersten Quartal verbucht. Des Weiteren wird davon ausgegangen, dass die
Umstrukturierungskosten, die im ersten Quartal noch niedrig waren, während des Jahres
zunehmen. Es gibt also eine Reihe von sachlichen Gründen dafür, dass die Aufwendungen
gegenwärtig unter dem Budget liegen. Allerdings dürften sie im Jahresverlauf steigen.
Herstellungskosten
Bei den Umsatzkosten handelt es sich um die Umsatzkosten des AbD-Segments. Im ersten
Quartal 2006 stiegen sie erheblich auf € 2,1 Mio. im Vergleich zu € 0,5 Mio. im selben Zeitraum
des Vorjahres. Der Hauptgrund für den Anstieg war die Einbeziehung der Umsatzkosten der
Unternehmen des Serotec-Konzerns, die sich 2006 auf € 1,3 Mio. beliefen, in die
Konzernkonten im laufenden Jahr sowie die höheren Umsatzerlöse der Segmente Biogenesis
und Antibodies by Design.
Verglichen mit demselben Zeitraum des Vorjahres verbesserten sich die Bruttomargen des
AbD-Segments erheblich im ersten Quartal. Sie zogen von 39% im Jahr 2005 auf 57% in den
ersten drei Monaten dieses Jahres an. Der Anstieg lässt sich nicht nur der Einbeziehung von
Serotec zuschreiben, er ist auch eine Folge der Margenverbesserungen der Geschäfte ohne
Serotec im Allgemeinen.
Forschungs- und Entwicklungskosten
Die Kosten für Forschung und Entwicklung stiegen um € 0,1 Mio. auf € 3,8 Mio. und blieben im
Vergleich zum selben Zeitraum des Vorjahres relativ unverändert. Die Kosten für Produkt- und
Technologieentwicklung beliefen sich auf lediglich € 0,3 Mio. und wurden in die ForschungsMorphoSys
und Entwicklungskosten einbezogen, die im ersten Quartal etwas niedrig gewesen sind. Wir
rechnen mit einem Anziehen der Kosten im F&E-Bereich im Bereich der Technologie- und
Produktentwicklung in den folgenden drei Quartalen auf rund € 4 Mio. wie wir in unserer
Bilanzpressekonferenz zu Beginn des Jahres erwähnt hatten.
Aufwand für Verwaltung und Vertrieb
Der Aufwand für Vertrieb, Allgemeines und Verwaltung belief sich auf € 4,2 Mio. im Vergleich zu
€ 2,6 Mio. im selben Zeitraum des Vorjahres. Dies war in erster Linie eine Folge der höheren
Personal- und sonstigen Betriebskosten, die in Höhe von € 1,5 Mio auf die Einbeziehung des
Serotec-Konzerns zurück zu führen sind. Vorausschauend rechnen wir bei den SG&A mit einer
Zunahme der Kosten in den nächsten drei Quartalen auf Grund der Umstrukturierungs- und
sonstigen Kosten.
Investitionen und Abschreibungen
Die Investitionen von MorphoSys in Sachanlagen beliefen sich in den ersten drei Monaten 2006
auf € 0,2 Mio. im Vergleich zu € 0,1 Mio. im selben Zeitraum des Vorjahres. Die
Abschreibungen auf Sachanlagen betrugen im ersten Quartal 2006 € 0,3 Mio., verglichen mit
€ 0,2 Mio. im selben Zeitraum des Vorjahres. Die Abschreibungen auf immaterielle
Vermögenswerte beliefen sich auf € 0,5 Mio. und blieben damit im Vergleich zum selben
Zeitraum des Vorjahres unverändert.
Sonstige betriebliche Aufwendungen und Erträge
Die sonstigen Erträge schlugen mit € 0,2 Mio. zu Buche, während sich die sonstigen
betrieblichen Aufwendungen im selben Zeitraum des Vorjahres auf € 0,2 Mio. beliefen. Dies war
in erster Linie die Folge der Erträge aus dem Verkauf von Wertpapieren, der bislang in der
Eigenkapitalentwicklung als unrealisierter Gewinn ausgewiesen war. Die Wertpapiere sind nun
im Zusammenhang mit der Mittelbeschaffung für die Finanzierung der Akquisition des Serotec-
Konzerns verkauft worden, wodurch sich im ersten Quartal ein realisierter Gewinn ergab.
Quartalsüberschuss
In den ersten drei Monaten 2006 legte die Gesellschaft ein positives Ergebnis aus der
gewöhnlichen Geschäftstätigkeit in Höhe von € 4,7 Mio. vor, verglichen mit einem
Betriebsergebnis von € 0,6 Mio. im ersten Quartal 2005.
In den ersten drei Monaten 2006 ergab sich ein Überschuss in Höhe von € 4,9 Mio., während
im selben Zeitraum des Vorjahres ein Quartalsüberschuss von € 0,5 Mio. ausgewiesen wurde.
Der daraus resultierende Gewinn je Aktie einschließlich aller Umtauschrechte für den gesamten
MorphoSys-Konzern in den drei Monaten zum 31. März 2006 belief sich auf € 0,78 im Vergleich
zu einem Gewinn je Aktie in Höhe von € 0,08 im selben Zeitraum des Vorjahres.
Wie eingangs erwähnt, gehen wir davon aus, dass die im ersten Quartal 2006 erwirtschafteten
Gewinne im Verlauf des Jahres rückläufig sein werden, da das erste Quartal von einem starken
Umsatz und niedrigeren Kosten geprägt war.
Eigenkapital
Zum 31. März 2006 belief sich die Gesamtanzahl der ausgegebenen Aktien auf 6.268.063 im
Vergleich zu 6.025.863 zum 31. Dezember 2005. Der Anstieg ergab sich aus der Emission von
208.560 Aktien in Verbindung mit der Kapitalerhöhung im Zuge der Akquisition von Serotec. Die
weitere Zunahme um 33.640 Aktien resultierte aus der Umwandlung von Belegschaftsanleihen
sowie aus ausgeübten Bezugsrechten.
Die erfolgreiche Emission von 384.338 Aktien im Rahmen der Kapitalerhöhung im März 2006
wurde auf Grund der buchhalterischen Behandlung von nicht eingezahltem Aktienkapital nach
den IFRS nicht in der Bilanz ausgewiesen. Am 4. April 2006, dem Datum der der Einzahlung
der ausstehenden Einlagen, waren 6.652.401 Aktien im Umlauf.
Liquidität / Cashflow / Bilanz
Am 31. März 2006 beliefen sich die liquiden Mittel von MorphoSys auf € 43,5 Mio. Nicht in
diesem Betrag enthalten waren ausstehende Zahlungsmittel aus der erfolgreich durchgeführten
Kapitalerhöhung in Höhe von € 17,1 Mio., die nicht im Quartalsbericht ausgewiesen wurde. Das
nicht eingezahlte Aktienkapital wurde Anfang April beglichen, was zu diesem Zeitpunkt zu
liquiden Mitteln in Höhe von € 60,6 Mio. führte.
Damit schließe ich meinen Bericht für das Finanzergebnis des ersten Quartals 2006.
Ausblick
Wie es bei unseren Konferenzgesprächen üblich ist, möchten wir gerne die Gelegenheit nutzen,
Sie hinsichtlich unserer Finanzprognose auf den neuesten Stand zu bringen.
Ich möchte hiermit unsere Prognose für das Gesamtjahr bestätigen. Vor dem Hintergrund der
hervorragenden Finanzergebnisse des ersten Quartals 2006 erwarten wir einen Reingewinn in
Höhe von ca. € 1 Mio.
Wie ich bereits erwähnt habe, gab es eine Reihe einmaligen Ereignissen, sowohl bei den
Erträgen als auch bei den Aufwendungen, die zu dem guten Ergebnis im ersten Quartal führten.
Dies deckt sich größtenteils mit unseren Kommentaren, die wir auf unserer Pressekonferenz
zum Jahresende vor ein paar Wochen abgegeben haben. Darin haben wir erklärt, dass die
Finanzergebnisse von MorphoSys in jedem Quartal volatil sein können und die Ergebnisse
eines bestimmten Quartals möglicherweise keine Rückschlüsse auf die Ergebnisse des
Gesamtjahres zulassen. Führen wir dies noch einen Schritt weiter, bedeutet dies für uns, dass
wir mindestens in einem weiteren Quartal Verluste ausweisen werden, um unseren Vorgaben in
diesem Jahr entsprechen zu können, und wir möchten Sie bezüglich dieses Umstands
vorwarnen.
Wie bereits gesagt, haben wir ein herausragendes Quartal hinter uns. Ich möchte auch nicht die
Möglichkeit von positiven Überraschungen beim Gewinn ausschließen, sollten unsere
finanziellen Erwartungen für das Geschäft im Laufe des Jahres übertroffen werden.
Hiermit ist meine Finanzanalyse für die ersten drei Monate 2006 beendet. Wir möchten Sie nun
bitten, Ihre Fragen zu stellen.
Fragen & Antworten:
Operator: Unsere erste Frage kommt von Herrn Patrick Fuchs von der DZ Bank. Bitteschön
Dr. Patrick Fuchs, DZ Bank AG: Hallo, Patrick Fuchs, DZ Bank. Ich habe eine Frage zu dem
AbD-Segment; mir scheint dass die 4,9 Mio. eher unproportional zu den 18 Mio. stehen, die Sie
für das Gesamtjahr erwarten. Gibt es saisonale Effekte oder Einzeleffekte die sich in diesem
Quartal positiv auswirken könnten, oder könnte das die Jahresumsatzerwartung auf den Kopf
stellen? Meine nächste Frage bezieht sich auf Ihren Kommentar zu Roche IND. Sie hatten
erwähnt, dass die klinische Entwicklung bald beginnen wird, könnten das einen weiteren
Meilenstein bedeuten? Die letzte Frage hier bezieht sich auf die nicht zugeordneten Kosten im
Gesamtjahr 2005. Diese waren 2,9 Mio. und jetzt sind sie 1,4 Mio. Vielleicht könnten Sie uns
erklären was genau diese nicht zugeordneten Kosten sind und zweitens und wie Sie die Höhe
dieser Kosten in 2005 sehen? Danke.
Dr. Simon Moroney: Hallo Patrick. Lassen Sie mich zuerst Ihre Frage zu Roche IND
beantworten und dann wird Dave die andere Frage zu AbD-Umsatz im ersten Quartal und den
nicht zugeordneten Kosten übernehmen. Wir würden natürlich sehr gerne eine
Meilensteinzahlung für den IND und dann noch eine weitere für den Start von Phase 1
bekommen. Unglücklicherweise sind wir bis jetzt noch nicht dazu in der Lage gewesen dies so
zu verhandeln. In diesem Falle, wie auch in den meisten anderen Verträgen, wird der
Meilenstein bei der Beantragung der IND erreicht. Leider wird es keine zweite Zahlung geben,
wenn die ersten Patienten in den nächsten Wochen behandelt werden.
Dave Lemus: Es gab noch eine Frage ob es saisonale Faktoren gibt die Einfluss haben auf...
Dr. Patrick Fuchs: …Einfluss haben auf die Rendite oder die Umsatzerlöse.
Dave Lemus: Im Prinzip nicht, aber wir haben bemerkt, dass wir bei einigen unserer Kunden
ungewöhnlich gute erste Quartale hatten, deshalb war das erste Quartal bei AbD auch sehr
stark. Es kann natürlich sein, dass dieser Trend sich fortsetzt, aber unsere Erwartungen für den
Rest des Jahres ist, dass dies nicht anhalten wird. Es ist heute noch zu früh, unsere Prognose
für das Ergebnis von AbD zu erhöhen. Ja, das erste Quartal war sehr gut, und wenn man das
mal vier nimmt kommt man auf 19,5 Mio. und nicht auf 18 Mio, aber es ist einfach noch zu früh
für so eine Prognose und wir sehen einfach einige Ereignisse in Q1 die vielleicht nur hin und
wieder eintreten. Dies kann sich natürlich fortsetzen, das schließen wir nicht aus, aber wir
wissen auch dass diese Faktoren ungewöhnlich stark waren.
Kommen wir nun zu den nicht zugeordneten Kosten. Im Grunde genommen sind die nicht
zugeordneten Kosten die Kosten die man nicht eindeutig in eines unserer beiden Segmente
packen kann. Dazu gehören z.B. Kosten für Public Relations, bis hin zu zentralen Funktionen,
die natürlich auch wieder in keiner wirklichen Beziehung mit den individuellen Segmenten
stehen. Wir haben bis jetzt noch keine Prognose für das Gesamtjahr genannt, zurzeit sind das
14.5% von den Gesamtkosten, die wir nicht zuordnet haben. Das ist vergleichbar mit den
Erfahrungen die wir in 2004 gemacht haben. In 2005 war diese Summe ein wenig niedriger. Ich
habe noch keine Prognose darüber abgegeben, aber wir haben uns angesehen wie andere
Unternehmen damit umgehen. In Deutschland haben wir zum Beispiel ein Unternehmen mit
Segmenten gesehen welches 4% nicht zugeordnete Kosten hatte. Ein anderes hatte aber fast
15%. Und wenn wir uns ein vergleichbares Unternehmen in den USA anschauen, wie
Invitrogen, die haben fast 30% nicht zugeordnete Kosten, die Unterschiede sind also von
Unternehmen zu Unternehmen immens. Meine beste Einschätzung heute ist, dass die nicht
zugeordneten Kosten im Gesamtjahr sich ungefähr auf dem Level des ersten Quartals
einpendeln werden.
Dr. Patrick Fuchs: O.K., danke.
Operator: Unsere nächste Frage kommt von Martin Possienke von Equinet. Bitteschön.
Dr. Martin Possienke, Equinet: Guten Morgen. Erstmal Glückwunsch zu Ihrem tollen ersten
Quartal. Dann habe ich aber doch noch ein Paar Fragen, wenn ich darf. Ich nehme mal an das
Sie Ihre Finanzprognose hier nicht diskutieren wollen, also vielleicht doch eine andere Frage.
Wenn ich mich richtig erinnere, sagt Ihre Prognose für Antikörperprojekte zusammen mit
Partner läge bei 36 am Jahresende, jetzt sind wir bei 34, vielleicht können Sie uns da mal auf
den neuesten Stand bringen. Dann zu den Finanzen, oder um genau zu sein zum
Finanzergebnis, ich glaube es war minus 16.000 € im ersten Quartal, und es ist ja auch so,
dass Sie in den Jahren 2004 und 2005 ein negatives Finanzergebnis hatten, trotz signifikanten
Zahlungsmittelbestandes, vielleicht können Sie das nochmal kurz erläutern.
Dave Lemus: Entschuldige Martin, aber ich habe die zweite Frage nicht verstanden?
Dr. Martin Possienke: Es geht um Ihr Finanzergebnis. Das Ergebnis war immer negativ, es
war negativ im Jahr 2004, es war auch in 2005 negativ, jetzt ist es auch im ersten Quartal
wieder negativ trotz eines signifikanten Zahlungsmittelbestandes. Ich wollte da nur noch mal
eine kurze Erklärung für haben. Ich weiß, Sie haben das schon mal erklärt, aber ich habe es
vergessen.
Dave Lemus: Welche Kategorie von Kosten?
Dr. Martin Possienke: Zinsaufwand.
Dave Lemus: O.K.
Dr. Martin Possienke: Dann drittens zur Versteuerung des ersten Quartals, eigentlich gab es
da ja keine Versteuerung, also vielleicht ein paar Worte was wir da im ganzen Jahr erwarten
können, in Bezug auf die Steuerrate. Dann viertens noch eine Folgefrage zu Patricks Frage. Ist
es fair zu sagen, dass das erste Quartal ein Quartal ohne Restrukturierungskosten und ohne
Tilgungskosten für AbD war?
Dr. Simon Moroney: Martin, lass mich mit der Zahl von Programmen anfangen nach der Sie
gefragt haben. Tatsächlich konnten wir hier einen schönen Aufwärtstrend im ersten Quartal
verzeichnen, von 29 Programmen Ende letzten Jahres, auf jetzt 34. Natürlich sind wir uns
darüber im Klaren, dass wir für das Ende des Jahres 36 prognostiziert haben - wir habe sogar
gesagt, dass es mindestens 36 werden. Aber die ganze Sache ist wirklich eher unvorhersehbar.
Das ist in den Händen unserer Partner wann und mit welchen Zielen Sie neue Programme
initiieren, also ist es wie gesagt für uns sehr schwer eine Prognose aufzustellen. Wir sind ein
wenig überrascht wie viele Neustarts wir im ersten Quartal hatten. Wir denken, dass sich diese
ein bisschen besser auf den Rest des Jahres verteilen werden. Wir haben Grund zur Annahme
das auf jeden Fall noch zwei folgen werden, aber darüber hinaus ist es, wie gesagt, sehr
schwer und wahrscheinlich zu diesem Zeitpunkt auch verfrüht zu sagen, dass es mehr als 36
am Ende des Jahres sein werden. Aber wir sind sehr optimistisch dass wir diese 36 auf jeden
Fall erreichen werden.
Dave Lemus: Kommen wir jetzt zu den Finanzfragen. Zinsaufwand, Sie haben Recht, wir
haben zu diesem Zeitpunkt keine Schulden oder langfristigen Kredite auf die wir Zinsen zahlen
müssen. Der Zinsaufwand ist das Ergebnis der Transaktion die wir in 2002 mit CAT getätigt
haben. Wie Sie sich vielleicht erinnern, war Teil der Übereinkunft mit CAT in 2002, dass wir
CAT je 1 Mio. über einen Zeitraum von 5 Jahren zahlen mussten. Wie man das unter IFRS
verbucht ist folgendermaßen: man muss einen Barwert verbuchen und dann einen Betrag als
Zinsaufwand auf die 1 Mio. Zahlungen, welche wir jedes Jahr leisten müssen. Ich glaube
nächstes Jahr ist bereits die letzte Zahlung, also würde dieser Zinsaufwand dann auch
wegfallen.
Zur Versteuerung, die Versteuerung ist null für dieses erste Quartal, wie Sie das schon richtig
gesagt haben. Das hat schon wieder sehr viel damit zu tun, dass wir an unserer Prognose von
1 Mio Euro Gewinn für das Gesamtjahr festhalten. Wir haben natürlich Geschäftsvermögen
abzüglich Bilanzverlust, welches diese Gewinne eliminieren würde, so dass wir keine Steuern
zahlen müssen. Also zum jetzigen Zeitpunkt bleiben wir bei der konservativen Prognose, da wir
zudem noch keine Steuerabgrenzungsposten aufgebaut haben.
Dr. Martin Possienke: Entschuldigung das ich sie hier unterbreche, aber sagen wir zum
Beispiel für die USA. Ich nehme an, dass Serotec dort profitabel ist, also sollten Sie dort
Steuern bezahlen, und die Steuerabgrenzungen sollten in Europa sein.
Dave Lemus: Offensichtlich ist der Aufbau von Steuerabgrenzungen und ähnliches in den USA
eine sehr komplexe Aufgabe und wir machen das auf Gruppenbasis. Wir haben gerade die
Zahlungen für das Ende des Jahres getätigt. Zu diesem Zeitpunkt ist die Steuerposition in
England und in den USA so, dass, ja, wir in einer Position sind wo wir Steuern zahlen müssen.
Aber diese Steuerzahlungen sind derzeit noch nicht so hoch das wir jetzt dafür Rückstellungen
aufbauen müssten, wenigstens noch nicht im ersten Quartal. Das mag sich vielleicht im zweiten
Quartal ändern, aber zu diesem Zeitpunkt sind die Gewinne für beide Bereiche im ersten
Quartal noch nicht hoch genug, dass wir hier Rückstellungen rechtfertigen könnten.
Die dritte Frage war zu den Abschreibungen und Restrukturierungskosten. Sie haben recht, es
gibt keine Abschreibungen durch die PPA im ersten Quartal und die Summe von
Restrukturierungskosten durch das AbD Segment sind in Q1 auch minimal gewesen. Hier
erwarten wir abermals, dass diese sich erhöhen werden, wenn wir unsere PPA später im Jahr
starten, und wenn die Restrukturierungskosten und die Restrukturierungsleistungen sich voll
entwickeln.
Dr. Martin Possienke: O.K. Vielen Dank.
Operator: Unsere nächste Frage kommt von Daniel Wendorff von der WestLB. Bitteschön Herr
Wendorff.
Daniel Wendorff, WestLB: Ja Guten Morgen, Daniel Wendorff von der WestLB. Ich habe zwei
Fragen. Die eine ist auch eine Folgefrage zu dem Forschungssegment. Wenn ich mal
annehmen dürfte, dass die Entwicklung in den nächsten Quartalen so weiter geht wie wir sie in
Q1 gesehen haben, denken Sie es wäre falsch anzunehmen, dass Sie auch mit höheren
Abschreibungen und Restrukturierungsaufwendungen Sie einen operativen Gewinn erzielen
könnten? Natürlich unter der Annahme, dass sich das Geschäft so weiterentwickeln würde, wie
wir es im ersten Quartal gesehen haben? Zum therapeutischen Segment. Können Sie sagen
wie viele Programme auf der Umsatzlinie von Q1 total überraschend für Sie kamen, wenn das
überhaupt möglich ist zu sagen welche nicht von Ihnen geplant waren? Danke.
Dave Lemus: Zur ersten Frage, die Einbeziehung von Abschreibungen durch die PPA und ob
wir in Betracht gezogen haben, dass wir auch weiterhin gute Quartale haben könnten, also ob
wir theoretisch ins Plus gelangen könnten. Zur Bilanzpressekonferenz, wie Sie sich vielleicht
erinnern können, hatten wir ungefähr 2 Mio. an Abschreibungen eingerechnet, das hätte für uns
extra Kosten von circa 500.000 pro Quartal bedeutet. Ich glaube, dass wenn Sie das zum
wirklichen Ergebnis, was bei ungefähr 300.000 pro Segment liegt dazurechneten, dann hätten
wir hier einen Verlust gehabt von ungefähr 400.000. Wir hätten dann also einen geringen
Verlust pro Quartal gehabt. Ich denke das beantwortet Ihre erste Frage.
Ihre zweite Frage bezog sich auf die unvorhergesehenen Ereignisse. Als wir im Februar eine
Prognose aufgestellt haben, wussten wir das das erste Quartal sehr Gut sein wird. Wir haben
trotzdem die Euphorie gebremst haben und davor gewarnt haben zuviel in das Ergebnis eines
Quartals hineinzulesen, obwohl wir wussten das Q1 sehr erfolgreich verlaufen wird.
Nichtsdestotrotz lag Q1 leicht über unseren Erwartungen und das nicht nur auf der
therapeutischen Seite, sondern auch seitens AbD. Aber wie ich schon erwähnt habe, wir sehen
trotzdem einige einmalige Elemente im Ergebnis welche uns natürlich vorsichtiger in der
Anhebung der Prognosen werden lassen, besonders so früh im Jahr. Wenn es so weitergeht,
werden wir unsere Prognosen natürlich noch einmal anschauen, aber das wäre wie gesagt zu
früh.
Simon Moroney: Daniel, das geht zurück zum Timing der therapeutischen Ereignisse. Einen
Meilenstein zu erreichen hängt immer stark von Ereignissen im Labor ab, die sind damit sehr
schwer vorauszusehen. Und noch mal schwerer wenn die Entscheidung in den Händen der
Partner liegt, wann ein neues Projekt gestartet wird oder zu welchem Zeitpunkt andere
Experimente eines Projektes abgeschlossen sein müssen. Das sind Sachen die wirklich nicht in
unsere Macht liegen und die leicht von einem Quartal in ein anderes verschoben werden
können. Also sind wir wirklich glücklich, dass viele dieser Ereignisse in das erste Quartal
gefallen sind, aber es ist wie gesagt sehr schwierig zu sagen, ob dieser Trend sich weiter
fortsetzen wird.
Daniel Wendorff: O.K., und die eine Frage zu den 400.000 Euros im Bereich AbD, das ist doch
dann das EBIT-Ergebnis von AbD im ersten Quartal?
Dave Lemus: Nein, nicht wirklich. Sie müssen die Abschreibungen von Biogenesis, plus
Abschreibungen aus dem Segment, zusammen zählen, das kommt ungefähr auf 250.000, also
der EBITDA von dem Segment ist eigentlich höher als 250.000 Euro.
Daniel Wendorff: O.K. Danke.
Operator: Wir nehmen jetzt eine Frage von Herrn Rudolphe Besserve mit SG Securities.
Bitteschön Herr Besserve.
Rudolphe Besserve, SG Securities: Ja Guten Morgen. Zwei Fragen habe ich. Zuerst zur
Ihrem Vertrag mit Schering, könnten Sie uns vielleicht ein Update dazu geben, vor dem
Hintergrund der Akquisition von Schering durch Bayer? Haben Sie bereits Leute bei Bayer dazu
getroffen, oder planen Sie dieses in der Zukunft zu tun? Die zweite Frage: Ich weiß nicht, ob sie
uns nicht ein paar Details zu den Meilensteinen geben möchten, aber könnten Sie uns
wenigstens eine Idee der numerischen Anzahl an Meilensteinen geben die im ersten Quartal
erreicht wurden? Die letzte Frage zur Bruttomarge von AbD, es hört sich für mich so an als
wäre die um die 57% im ersten Quartal – ist diese stabil, auch wenn außergewöhnliche
Elemente in den zukünftigen Quartalen auftreten?
Dr. Simon Moroney: Lassen Sie mich mit der Schering/Bayer-Sache beginnen. Natürlich
verfolgen wir die Entwicklung bei Bayer/Schering sehr genau. Zu diesem Zeitpunkt kann ich nur
sagen, dass beide Kooperationen sehr gut laufen. Sie können sich sicherlich erinnern, dass wir
unsere Bayer-Kollaboration im Dezember letzten Jahres verlängert haben, genau wie unsere
Schering-Partnerschaft im Dezember des vorhergehenden Jahres und beide laufen sehr gut.
Wir können zu diesem Zeitpunkt noch nicht sagen welche Auswirkungen die Kombination der
beiden auf uns haben wird, wenn die Zusammenführung erst einmal stattgefunden hat. Wie
immer, ist es auch hier zu früh zu sagen welchen Einfluss das potentiell auf unsere
Kollaboration mit den beiden haben könnte.
Dave Lemus: Ich nehme dann vielleicht die beiden Fragen zu den Finanzen. Zuerst fragten sie
nach der Summe der „performance based“ Meilenstein Zahlungen, welche wir während des
Quartals erhalten. Insgesamt waren das 3,9 Mio. Euro, was leicht über 50% von dem war, was
wir eigentlich für die gesamten Meilensteine die wir über das Jahr geplant hatten gerechnet
haben. Das ist auch in unserer Prognose eingearbeitet, die liegt ja zwischen 6 und 7 Mio. Euro
für Meilensteinzahlungen. Aber das haben wir ja am Anfang des Jahres schon gesagt, als wir
unsere Prognose abgegeben haben.
Rudolphe Besserve: Meine Frage bezog sich aber auf eine numerische Zahl der Meilensteine,
also wie viele Partner haben im ersten Quartal Meilensteine bezahlt?
Dave Lemus: Also das waren weniger als 5. Mehr kann ich dazu im Moment nicht sagen. Die
Nachhaltigkeit des Gewinnes, wenn ich das richtig sehe, haben Sie von dem Bruttoergebnis
oder der Bruttomarge geredet, wir glauben fest daran das wir diese beibehalten können, und
vermuten dort keinen signifikanten Rückgang oder einen signifikanten Anstieg in den Margen.
Dennoch sehen wir natürlich den Raum für Verbesserung in diesen Margen, und hoffen, dass
die Margen noch weiter nach oben gehen werden. Der Richtwert der Margen liegt für uns da bei
60%.
Rudolphe Besserve: Vielen Dank.
Operator: Die nächste Frage kommt von Herrn Thomas Schiessle. Bitteschön.
Thomas Schiessle, EquiTS: Danke, dass Sie meine Frage genommen haben. Erstmal noch
Glückwünsche zu diesem tollen Quartal. Zwei Fragen, wenn ich darf. Wie schlagen sich
Währungseinflüsse auf das Konzernergebnis nieder. Sie erzielen mehr und mehr Umsätze
außerhalb der Euro-Zone – Wie ist da Ihre Prognose? Die zweite Frage bezieht sich auf die
Serotec Integration. Simon, Du hast erwähnt, dass da schon angefangen wurde zu handeln.
Zusammenlegung von Standorten und Entscheidungen die den Hauptsitz angehen. Was wird
denn da der nächste Schritt sein um alle Stärken der beiden Unternehmen zusammenzuziehen,
um eine neue Einheit zu erreichen. Danke.
Dr. Simon Moroney: Lass mich mit der zweiten Frage anfangen Thomas. Wir haben sicherlich
mit der Integration einen guten Start hingelegt. Vielleicht hast Du mich während der
Präsentation nicht verstanden, aber ich habe nicht gesagt dass die Zusammenlegung von
Standorten bereits abgeschlossen ist, ich habe gesagt das wir uns gerade entscheiden wo die
Standorte sein werden. Der wichtigste Standort wird direkt außerhalb Oxfords in England sein,
wo auch die meisten Mitarbeiter angesiedelt werden. Wir werden weitere Vertriebsstätten
beibehalten, wie zum Beispiel in den USA, auch wenn der Hauptsitz Raleigh, North Carolina
sein wird. Wir werden das Biogenesis-Vertriebsbüro in New England und eine Vertriebsstätte in
Düsseldorf beibehalten, die durch die Serotec Akquise dazugekommen ist.
Es geht wirklich darum die Füße auf den Boden zu kriegen, wie Du auch gesagt hast, durch die
Bemühungen im Vertrieb hatten hier einen tollen Start und ich denke die Zahlen aus dem ersten
Quartal gelten hierzu als Beweis. Obwohl wir praktisch drei Unternehmen auf einen
gemeinsamen Weg bringen müssen, lagen die Zahlen genau in unseren Zielvorstellungen. Wir
waren also wirklich glücklich, dass bis jetzt alles so gut geklappt hat, und wir waren auch sehr
glücklich darüber wie die Serotec-Mitarbeiter das HuCAL-Konzept angenommen und akzeptiert
haben. Ich höre von Seiten des Vertriebspersonals, das Sie diese Chance wirklich schätzen
und lange auf so eine Möglichkeit gewartet haben, da Serotec in der Vergangenheit keine
neuen Antikörper angeboten hat. Nun hat das Verkaufspersonal den Vorteil, dass Sie dem
Kunden sagen können, dass Sie nicht nur existierende Antikörper anbieten können, aber auch
Antikörper neu für den Kunden entwickeln können. Also wirklich das gesamte Vertriebspersonal
freut sich über HuCAL als ein gutes Angebot und wir sind wirklich glücklich, wie das Angebot
auf dieser Seite gestärkt und erweitert wurde, und uns damit einen signifikanten Vorteil
gegenüber mancher unsere Wettbewerber in diesem Markt gegeben hat. Also von hier ist es
wirklich eine Frage der kontinuierlichen Bemühungen in der Weiterbildung und des Marketings,
die Nachricht einfach weiterzugeben und weiter auszubreiten für potentielle Kunden.
Beantwortet das Ihre Frage?
Thomas Schiessle: Ja, Danke.
Dave Lemus: O.K. Thomas, kommen wir zur Fx-Frage, natürlich ist das eine Sache die wir
beobachten und das jeden Monat. Ich denke die beste Lösung wäre Dir eine Prozentzahl der
Umsatzerlöse zu geben, von den wir glauben das sie aus England kommen, oder aus dem US
Dollar und dir dann eine Idee vom Budget zu geben mit welchem wir es hier zu tun haben.
Leider habe ich diese zurzeit nicht zur Hand, aber ich werde sicherstellen, dass ich diese
Zahlen bei den nächsten Telefonkonferenz zur Hand habe.
Operator: Als nächstes haben wir eine Folgefrage von Herrn Patrick Fuchs von der DZ Bank.
Dr. Patrick Fuchs: Ich hätte eine Frage zu den Kosten für die internen Antikörper-Programme,
im Vergleich Q1 2005 und Q1 2006. Wenn ich mich da recht erinnere, hatten Sie 2005 einige
Kosten durch die Durchführung der Psoriasis-Studie oder so was. Nur mal so über den Daumen
gepeilt, welche Kosten sind durch das interne Medikamenten-Programm in Q1 2005 und 2006
entstanden, wenn Sie das vergleichen können?
Dave Lemus: Ich beantworte diese Frage spontan. Ich habe nur die Zahlen für das ganze Jahr
parat. Die Kosten im gesamten Produktentwicklungsbereich, für die Technolgie- und
Produktentwicklung waren definitiv minimal. Im Vergleich, dieses Jahr kommen wir auf ungefähr
4 Mio. €, weniger als 400.000 von dieser Zahl wurden im ersten Quartal dafür ausgegeben.
Also ich weiß nicht genau wie der Quartalsvergleich ist, aber in 2005 waren diese Ausgaben in
jedem Fall minimal.
Dr. Patrick Fuchs: O.K. minimal, aber sie hatten doch einige Leute die an dem
Antikörperprojekt gearbeitet haben, wenigstens hatten Sie entschlossen zum Beispiel das
Projekt ICAM aufzugeben. Minimal heißt für mich gar nichts, minimal heißt für mich, unter einer
Mio. für das ganze Jahr und das kann ich nun wirklich nicht glauben, dass man für die interne
Antikörper Entwicklung, also Ihre therapeutischen Antikörper Medikamentenentwicklung nur
500.000 ausgegeben wurden. Das scheint mir nun wirklich nicht plausibel.
Dr. Simon Moroney: Du jetzt vom letzen Jahr Patrick?
Dr. Patrick Fuchs: Genau
Dr. Simon Moroney: Du vergisst dass der Fokus im letzten Jahr auf der Auslizenzierung der
Programme lag, also der größte Anteil ging letztes Jahr an unser BD-Team, die sind
umhergereist und haben mit potentiellen Partnern für die Programme gesprochen, und durch
deren Feedback haben wir uns dazu entschlossen mit den ICAM-Programm nicht
weiterzumachen. Wie Dave gesagt hat, die reine Entwicklung stand letztes Jahr hinter der
Kommerzialisierung zurück. Also wenn Du sagst weniger als 1 Mio., ich denke die Antwort ist,
sehr viel geringer als 1 Mio. und deswegen wirklich nicht vergleichbar mit der Zahl von diesem
Jahr, die wir ja auf der Jahresergebniskonferenz im Februar bekannt gegeben haben. Diese
Zahl zusammen mit Technologieentwicklung kommt auf ungefähr 4 Mio.
Dr. Patrick Fuchs: Nur um noch mal sicher zu gehen, dass ich das jetzt richtig verstanden
habe, für alle Ihre internen Antikörper Programme: 101, 102, 201 etc. wurde sehr viel weniger
als 1 Mio. ausgegeben in 2005, ja?
Dave Lemus: Ja.
Operator: Da wir keine weiteren Fragen haben, würde ich die heutige Frage- und Antwortrunde
abschließen. Herr Moroney, ich übergebe das Wort an Sie.
Dr. Simon E. Moroney, CEO, MorphoSys AG
Bevor wir die Telefonkonferenz beenden, möchte ich gerne nochmals die wichtigsten Punkte
zusammenfassen:
Insbesondere die therapeutische Sparte entwickelt sich hervorragend, wie an den exzellenten
Geschäften und dem Erfolg zu sehen ist, was uns wiederum hinsichtlich der finanziellen
Entwicklung ein starkes erstes Quartal beschert hat. Zweitens: die Übernahme von Serotec ist
in Bezug auf unseren Plan, die Antikörperforschung unseres Geschäfts auszubauen, ein
wichtiger Schritt nach vorne. Mit der Integration geht es gut voran.
Hiermit möchten wir die Telefonkonferenz beenden. Sollte einer von Ihnen direkt mit uns an das
Gespräch anknüpfen wollen, stehen Dave und ich Ihnen hier im Münchner Büro den Rest des
Tages zur Verfügung. Nochmals vielen Dank für Ihre Teilnahme und auf Wiedersehen.

[lupus2000]

MorphoSys AG Novartis-Erweiterung – Mitschrift der Telefonkonferenz – Übersetzung

MorphoSys AG – Novartis-Erweiterung Telefonkonferenz
Dr. Dr. Simon Moroney, Vorstandsvorsitzender, MorphoSys AG
Guten Morgen und herzlich willkommen zur heutigen Telefonkonferenz von MorphoSys.
Mein Name ist Dr. Simon Moroney; ich bin Vorstandsvorsitzender der MorphoSys AG. Mir
am Telefon zugeschaltet ist unser Finanzvorstand Dave Lemus, der sich gegenwärtig in den
USA aufhält. Anlass der heutigen Telefonkonferenz ist die am vergangenen Freitag bekannt
gegebene Erweiterung der Kooperation mit Novartis. Ich werde die neue Vereinbarung
zunächst kurz erläutern; anschließend stehen wir Ihnen für Fragen zur Verfügung.
Bevor wir beginnen, möchte ich Sie daran erinnern, dass wir in dieser Telefonkonferenz
zukunftsgerichtete Aussagen über die Entwicklung der Kerntechnologien von MorphoSys,
das Fortschreiten seiner gegenwärtigen Forschungsprogramme und den Beginn weiterer
Programme machen und erörtern werden. Sollten sich die den Annahmen der Gesellschaft
zugrunde liegenden Verhältnisse ändern, so können die tatsächlichen Ergebnisse und
Maßnahmen von den erwarteten Ergebnissen und Maßnahmen abweichen. Sie werden
daher vorsorglich darauf hingewiesen, diesen zukunftsgerichteten Aussagen, die nur am Tag
ihrer Bekanntgabe Gültigkeit besitzen, keine unangemessene Bedeutung beizumessen.
Zu Beginn möchte ich Ihnen die Hauptpunkte unserer bestehenden Kooperation mit Novartis
ins Gedächtnis rufen. Es handelt sich um unsere größte Zusammenarbeit und dies wird
unterstrichen durch die Tatsache, dass Novartis unser größter Anteilseigner ist. Die
ursprüngliche Vereinbarung wurde im Mai 2004 unterzeichnet. Seither hat ein recht
umfangreiches Team von Wissenschaftlern hier bei MorphoSys eng mit den jeweiligen
Novartis-Kollegen bei der Herstellung von therapeutischen Antikörpern gegen von Novartis
benannte Ziele zusammen gearbeitet. Diese Zusammenarbeit war ausgesprochen
erfolgreich. Derzeit werden mehrere Projekte bearbeitet und eine Reihe von voll optimierten
und auf der Grundlage von HuCAL® entwickelten Arzneimittelkandidaten wurde an Novartis
geliefert.
Die ursprüngliche Vereinbarung war zunächst auf drei Jahre angelegt mit einer
Erweiterungsoption für Novartis auf fünf Jahre. In diesem Zusammenhang sind zwei Punkte
der neuen erweiterten Kooperation erwähnenswert: Zum einen wird die vereinbarte Laufzeit
auf sieben Jahre, d.h. bis Mitte 2011, verlängert mit einer Option auf ein weiteres Jahr. Zum
zweiten beinhaltet die Kooperation eine deutliche Erhöhung der Zahl der durchzuführenden
therapeutischen Antikörperprojekte. Letzteres bedeutet umfangreichere
Forschungszahlungen für MorphoSys, höhere Zielmolekül-spezifische Lizenzgebühren und
die Möglichkeit von mehr erfolgsabhängigen Zahlungen, da Antikörper hergestellt werden,
die vordefinierte Kriterien erfüllen. Vielleicht noch wichtiger als dieser kurzfristige Erfolg ist
jedoch die Tatsache, dass eine größere Anzahl aktiv verfolgter Programme die Erwartungen
erhöht, dass Produkte die Marktreife erlangen und die damit verbundenen
Meilensteinzahlungen im Verlauf der Entwicklung und Tantiemen auf Endprodukte fließen.
Novartis wird daneben höhere jährliche Technologie-Lizenzgebühren entrichten. Dies steht
im Zusammenhang mit einem neuen Aspekt der Kooperation, nämlich der
Technologieentwicklung. Wir haben hier bei MorphoSys eine Reihe von neuen
technologischen Entwicklungen identifiziert, die unsere Plattform noch leistungsfähiger
machen werden, so dass wir in der Lage sind, noch bessere therapeutische Antikörper
schneller als jemals zuvor zu entwickeln. Mit Hilfe der zusätzlichen Finanzierung durch
Novartis werden wir diese Neuentwicklungen nun implementieren. Daneben gewähren wir
Novartis beim Einsatz von HuCAL® in der Zielvalidierungsforschung weitere Unterstützung,
indem wir eine neue Optimierungstechnologie für deren Nutzung der HuCAL®-Bibliothek
installieren. Diese neue Technologie wird von Novartis nicht für die Entwicklung von
Arzneimitteln, sondern nur für die Antikörperoptimierung im Rahmen ihrer internen
Forschungsanwendungen eingesetzt.
Zusammengefasst verdeutlicht diese neue Vereinbarung den großen Erfolg der ersten
beiden Jahre unserer Kooperation und das Interesse von Novartis an unserer Technologie.
Für uns wird sie in diesem Jahr bereits unmittelbare Auswirkungen auf die Zahl der aktiven
therapeutischen Programme bei MorphoSys haben. Genauer gesagt heben wir unsere
Schätzung für die am Jahresende laufenden Programme auf 38 an. Daneben erwarten wir
von der Vereinbarung einen positiven Effekt auf unseren Konzernumsatz und unser
Ergebnis. Wir sind derzeit dabei, diese finanziellen Auswirkungen genau zu ermitteln und
werden spätestens bei der Veröffentlichung der Zahlen für das zweite Quartal am 28. Juli
eine aktualisierte Prognose bekannt geben.
Soweit meine einführenden Erläuterungen; ich bitte nun um Ihre Fragen.
Fragen & Antworten:
Operator: Unsere erste Frage kommt von Herrn Daniel Wendorff, West LB.
Daniel Wendorff: Guten Morgen. Daniel Wendorff von der West LB. Ich hätte zwei Fragen.
Die Erste: Sie haben in Ihrer Pressemitteilung noch mal gesagt, dass Novartis immer noch
HuCAL implementieren kann. Da wäre meine Frage, wie lange diese Option noch gilt?
Die zweite Frage: Sie sagten, dass die Anzahl an aktiven Kooperationen durch Novartis
ansteigen wird. Nur um mal ein Gefühl für die Dimensionen zu bekommen, heißt das eine
Verdoppelung, 30% Anstieg, eine Verdreifachung, einfach damit ich mal einen ungefähre
Idee bekomme, wie hoch der Anstieg dann wirklich sein wird. Danke.
Dr. Simon Moroney: Daniel, danke für den Beitrag. Um mal mit der Option der
Internalisierung anzufangen, ja die Möglichkeit existiert tatsächlich noch und läuft, wie
damals, parallel zur Kooperation.
Die Frage zur Anzahl an aktiven Programmen; Leider dürfen wir Ihnen an dieser Stelle nicht
viel sagen. Um das anders zu formulieren, wir haben heute nicht die Freiheit, Ihnen eine
solche Schätzung zu geben oder zu quantifizieren, wie viele Programmen heute laufend oder
wie viele in Zukunft gestartet werden. Aber wir hoffen, dass die Dimensionen der Ausweitung
dieser Kooperation etwas klarer werden bis zum Zeitpunkt der Q2-Telefonkonferenz. Also ich
entschuldige mich einfach schon mal im Voraus, dass wir leider keine weiteren Informationen
an dieser Stelle geben können – wir würden gerne, aber unglücklicherweise haben wir nicht
die Freiheit detaillierte Informationen zur Anzahl der fortlaufenden Programme oder der
Programme, die auch in Zukunft fortlaufen, an dieser Stelle zu veröffentlichen.
Daniel Wendorff: O.K. Verstehe ich. Danke.
Operator: Unsere nächste Frage kommt von Thomas Schiessle von Equities.
Thomas Schiessle: Guten Morgen. Hier ist Thomas Schiessle aus Frankfurt am Apparat.
Erstmal Glückwunsch zu diesem Abschluss, das ist wirklich beeindruckend. Ich würde gerne
noch einmal aufgreifen, was Daniel schon gefragt hat, und zwar ob wir vielleicht noch ein
paar weitere Informationen zu den Aktivitäten, die Sie mit Novartis teilen, bekommen
könnten. Können Sie uns vielleicht eine Idee geben, wie viele Programme sie in der
Vergangenheit mit Novartis durchgeführt haben und ob das ein Indikator für die Anzahl von
Programmen ist, die normalerweise in einem Jahr anfallen?
Dr. Simon Moroney: Thomas, danke für den Beitrag. Unglücklicherweise muss ich das
gleiche sagen, was ich auch schon vorher gesagt habe, nämlich, dass es uns im
ursprünglichen Übereinkommen nicht gestattet wurde über die Anzahl von fortlaufenden
Programmen zu sprechen, und das gleiche gilt auch jetzt. Wenn Sie sich die damalige
Pressemitteilung anschauen, von Mai 2004, da haben wir die Anzahl auch nicht bekannt
gegeben, und das können wir jetzt auch nicht.
Doch ich kann vielleicht einen Aspekt der Frage beantworten, und zwar: Im Durchschnitt
können wir sagen, dass wir circa 12 Monate brauchen, um ein Programm zu vollenden. Das
heißt also, dass jeder Neustart essentiell in 12 Monaten abgeschlossen wird, und wir dann
zu einem neuen Programm übergehen. Über diese Aussage hinausgehend, glaube ich, kann
ich nur auf meinen Kommentar in der Mitteilung verweisen, dass jeweils an mehreren
Programmen gleichzeitig gearbeitet wird.
Ich würde Ihnen wirklich gerne mehr helfen, mit einer präziseren Quantifizierung, aber
unglücklicherweise dürfen wir das nicht.
Thomas Schiessle: O.K. Verstehe...
Operator: Unsere nächste Frage kommt von Dr. Patrick Fuchs von der DZ Bank.
Dr. Patrick Fuchs: Hallo alle zusammen. Sie haben erwähnt, dass der Vertrag sich
signifikant vergrößert hat. Kann man hier erwarten, dass das größere Volumen für Sie
gleichzeitig geringere Margen bedeutet? Was können wir von den großvolumigen
Geschäften erwarten? Die zweite Frage ist: Können Sie uns sagen welche Motivation hinter
der Entscheidung von Novartis steht, den Vertrag schon so früh extensiv zu verlängern?
Die letzte Frage: Was mir sehr gefällt, ist der langfristige Abschluss, der weit über 2008
hinausgeht, was wir, in dieser Form, in den letzten Jahren nicht gesehen haben. Erwarten
Sie eine höhere Wahrscheinlichkeit für Abschlüsse, die über das Jahr 2010 hinausgehen,
oder wir darf ich das verstehen?
Dr. Simon Moroney: Da das Thema Margen eher in die Finanzen fällt, überlasse ich es
Dave, diese Frage beantworten. Aber bevor ich das Wort abgebe, möchte ich gerne Ihre
zweite und dritte Frage zur Motivation von Novartis gleich beantworten. Die Motivation, die
dahinter steht ist klar diese, dass unsere Technologie in den letzten beiden Jahren getestet
wurde. Ich glaube es wäre fair zu sagen, dass Novartis wirklich beeindruckt und glücklich
über die Entwicklung in diesen beiden Jahren gewesen ist. Es hat sich gezeigt, dass
therapeutische Antikörper wichtig für sie sind und sie sind nun so überzeugt von der
Technologie und der Kooperation, dass sie den Vertrag bis 2011 verlängert haben. Was das
für unsere anderen Kooperationen heißt, kann ich zu diesem Zeitpunkt nicht sagen. Wir
müssen abwarten, ob unsere anderen Partner eine ähnliche Verlängerung in Betracht
ziehen.
Eine Sache kann ich sagen, die Vergangenheit hat gezeigt, dass wir bisher oft erfolgreich
darin waren, existierende Verträge zu verlängern. Wir haben das bei Schering, bei Bayer, bei
Böhringer Ingelheim und anderen ja schon gezeigt, und ich glaube, das ist ein weiterer
Beweis dafür, wie extrem erfolgreich wir in diesen Kooperationen wirklich sind.
Dr. Patrick Fuchs: Meine Frage bezog sich aber eher auf die Konsolidierung der Märkte
Ihrer Wettbewerber wie beispielsweise CAT. Glauben Sie diese Faktoren werden auch
Entscheidungen beeinflussen, und auch andere Partner in der Zukunft beeinflussen?
Dr. Simon Moroney: Das glaube ich nicht. Ich glaube, dass jedes Pharma-Unternehmen
Kooperationen anders sieht. Für AstraZeneca war wahrscheinlich die Akquisition der beste
Weg, sich den Zugang zur Weiterentwicklung dieser Technologie zu sichern. Vielleicht hat
Novartis einen anderen Zugang zu dieser Technologie gewählt. Deswegen denke ich nicht,
dass Sie da von dem Verhalten eines Pharmakonzerns auf das eines anderen
Pharmakonzerns schließen können.
Dave, möchtest Du zu der Frage bzgl. der Margen Stellung nehmen?
Dave Lemus: Ja, ich kann kurz etwas dazu sagen. Ich glaube es wäre das Beste einfach
darüber zu reden, wo höhere Umsatzerlöse auftreten, wie Du ja gesagt hast Simon. Der
höhere Umsatz sollte durch die größere Anzahl an geförderter Forschung, durch die größere
Anzahl an FTEs, welche auch ein bisschen auf niedrigere Margen hinweisen, kommen. Aber
der extra Umsatz sollte außerdem durch höhere Lizenzbeiträge, als auch durch höhere
Zielmolekül-spezifische Lizenzbeitrage herbeigeführt werden, die purer Profit sind und
deswegen die Margen vergrößern.
Unsere beste Prognose für dieses Jahr ist, dass wenn mehrere Dinge über das Jahr verteilt
starten, dadurch die Margen gehalten werden. Danach hängt es natürlich sehr vom
Durchsatz und Erfolg ab, erst dann können wir die Frage nach „Wird das unsere Margen
anheben oder wird sich das margenneutral auswirken?“ beantworten.
Dr. Patrick Fuchs: O.K. Danke.
Operator: Unsere nächste Frage kommt von Dr. Hans Frohnmeyer von LBBW.
Dr. Hans Frohnmeyer: Guten Morgen. Ich habe zwei Fragen, eher allgemeiner Natur. Die
erste Frage: Könnten Sie uns ein bisschen mehr über die Struktur der Verträge sagen. Wenn
ich mich richtig erinnere, haben sie da letztes Mal eine Vorabzahlung bekommen, und
außerdem haben sie Aktien an Novartis ausgegeben. Haben sie ähnliche Elemente in
diesem Projekt, oder basiert dieses Projekt ausschließlich auf erfolgsbasierten Meilensteinen
zu einem späteren Zeitpunkt?
Die zweite Frage ist eher allgemeiner Natur. Fühlen sie sich weniger unter Druck gesetzt,
jetzt wo die Konkurrenz Abgenix und CAT aus dem Rennen ist, oder bleibt alles beim Alten?
Danke.
Dr. Simon Moroney: Danke. Kommen wir erstmal zu der Struktur des Vertrages. Im
Vergleich zur ersten Unterzeichnung, gibt es da keine Eigenkapital-Komponente in der
Expansion, und so sollte man das wirklich auch sehen, als Expansion. Wie das ganze
aufgebaut ist: Novartis hat angedeutet, wie viele Programme sie noch hinzufügen wollen,
und welche zusätzlichen Leistungen Sie von uns erwarten. Vor diesem Hintergrund, haben
wir dann kalkuliert: so viele zusätzliche Programme brauchen so und so viele FTEs, die an
den Programmen arbeiten müssen und dadurch können wir dann die Forschungszahlungen
definieren. Wir haben gesagt, so und soviel zusätzliche Kapazität oder Entwicklung bei
MorphoSys, brauchen so und soviel zusätzliche jährliche Förderung neben der FTEFörderung,
und das definiert dann wieder den Steigerungsbetrag auf die jährlichen
Lizenzbeiträge, welche von Novartis bezahlt werden.
Natürlich bedeuten die zusätzlichen Programme auch zusätzliche Lizenzbeiträge pro
Programm. Sie können sich sicherlich erinnern, dass wir Lizenzbeiträge auf Etappenbasis für
jedes Programm welches wir initiieren, berechnen. Wenn die Programme dann erfolgreich
sind, veranlasst das natürlich die Auszahlung von Erfolgsbeiträgen, wenn wir dann die
Antikörper dem Partner überreichen, der in diesem Falle Novartis ist. Und dann kommen
natürlich die normalen Meilensteine dazu, und dann kommen dazu noch die Tantiemen
sobald das Produkt auf den Markt kommt.
Also das sollte Ihnen einen guten Überblick über die Struktur geben, und ich entschuldige
mich hier nochmals, dass wir dieses Thema nicht weiter quantifizieren können.
Zum Thema Konkurrenz, wir merken sicherlich, dass es weniger Konkurrenz gibt. Wenn man
es mal mit der Situation vor einigen Jahren vergleicht, als nicht nur die Patent-Situation,
sondern auch die technologische Situation unklar war, die Vorzüge der
Antikörperbibliotheken gegenüber dem Tierantikörper-Ansatz...Im Gegensatz dazu haben wir
heute weniger Wettbewerber, weil Amgen, Abgenix übernommen hat und AstraZeneca, CAT
übernommen hat. Also gibt es heute weniger Mitkämpfer, und ich glaube es gibt einfach
mehr Klarheit in der Technologie. Ich denke das der Laborrattenansatz gerade an Popularität
verliert, gegenüber dem Bücherei Ansatz und das wir deswegen wirklich sehen, dass sich
das Umfeld von Wettbewerbern gelichtet hat und das gut für uns ist.
Dr. Hans Frohnmeyer: Vielleicht noch schnell eine Bemerkung direkt dazu. Warten sie auch
auf einen Abschluss in Japan? Könnten wir da etwas in den nächsten 12 Monaten erwarten?
Dr. Simon Moroney: Finden Sie, dass die zwei in den letzten 12 Monaten nicht genug
waren?
Dr. Hans Frohnmeyer: Die waren ja relativ klein.
Dr. Simon Moroney: Wir haben gesagt, das Japan ein wichtiger Markt für uns ist. Wir
werden natürlich weiter hart daran arbeiten in diesen Markt vorzudringen. Wir sammeln
gerade sehr viele Meilen, weil wir so oft dorthin reisen. Ich will hier keine Prognose abgeben,
da es immer sehr schwierig ist zu sagen, ob und wann diese Vertragsabschlüsse kommen.
Aber wir sehen natürlich, dass es ein Bereich mit vielen Möglichkeiten für uns darstellt und
wir weiterhin daran arbeiten. Ich will hier wirklich keine Prognose abgeben.
Dr. Hans Frohnmeyer: Sicher. Danke.
Operator: Unsere nächste Frage kommt von Dr. Martin Possienke von Equinet.
Dr. Martin Possienke: Guten Morgen alle zusammen. Vielleicht noch mal zu den Zahlen,
wenn ich mich richtig erinnere war es Ihnen erlaubt, über die FTE- und Lizenzbeiträge zu
sprechen in den originalen Kooperationen, welche sich insgesamt auf 30 Millionen US-Dollar
beliefen in den ersten drei Jahren. Vielleicht könnten Sie einfach nur schätzen, wie hoch
diese Zahl in den Jahren 4-7 ist? Zweitens habe ich eine eher offene Frage. Vielleicht
Simon, könnten Sie ein wenig Ihre Gefühle offen legen, dazu das Novartis sich entschieden
hat, die Kooperation zu verlängern und nicht die Option zur Internalisierung auszuführen?
Dr. Simon Moroney: Ok. Martin, danke. Ich muss mich noch mal entschuldigen wegen der
jährlichen Zahlungen. Wir hatten tatsächlich die Freiheit, die totalen kumulierten
Lizenzzahlungen und die FTE-Förderung von circa 30 Millionen über die ersten drei Jahre
bekannt zu geben und unglücklicherweise habe ich nicht die Freiheit zu sagen, wie viel da
noch dazukommt in der Weiterentwicklung.
Dr. Martin Possienke: Aber wird das mehr?
Dr. Simon Moroney: Ja das kann ich auf jeden Fall bestätigen. Es wird sich auf jeden Fall
erhöhen, aber ich kann nicht sagen um wie viel. Aber wir hoffen, dass dies klarer wird in der
Q2-telefonkonfernz und dass wir dann neue Prognosen geben können.
Ihre zweite Frage, warum Novartis lieber verlängert hat, anstelle die Technologie zu
internalisieren; müssten Sie Novartis stellen, aber ich könnte kurz darüber sprechen, was ich
über diese Kooperation weiß. Novartis ist sehr glücklich, geradezu enthusiastisch über die
Ergebnisse unserer Forscher in dieser Kooperation. Sie sind glaube ich so glücklich, dass
sie lieber weiter mit uns zusammenarbeiten wollen, weil die Kooperation so produktiv ist, als
eine Wette abzuschließen, ob sie das alles, intern alleine regeln können. Also ich glaube
diese Entscheidung ist wirklich ein Beweis dafür, was unsere Forscher erreicht haben und
ein Beweis der Produktivität dieser Kooperation, wie sie im Moment läuft.
Dr. Martin Possienke: Vielleicht noch eine Folgefrage, hätten Sie es vorgezogen die Option
durchzuführen anstelle der Verlängerung, oder ist das so, kann man sagen, das attraktivere
Szenario für MorphoSys?
Dr. Simon Moroney: Es gibt zwei Aspekte. Der eine ist der finanzielle Aspekt, auf welchen
Dave wahrscheinlich eingehen wird, aber von unserem Standpunkt aus, ein wichtiger Aspekt
den wir hier noch nicht erwähnt haben, ist wie viel wir eigentlich aus dieser Kooperation über
Medikamentenentwicklung lernen. Ich bin also mehr als glücklich, weiter mit den Novartis
Forschern zusammenzuarbeiten. Es ist eine sehr gute und produktive Kooperation und
dadurch bin ich geradezu glücklich, auch finanziell, dass wir diesen Weg gehen und dass wir
uns verpflichtet haben, diese Kooperation bis 2011 weiterzuführen. Dave, möchtest du noch
etwas zu diesen beiden Wahlmöglichkeiten hinzufügen?
Dave Lemus: Vielleicht kann ich dazu sagen, dass ich mit beiden Wegen zufrieden bin, also
entweder die Internalisierung oder die Kooperation weiter fortzusetzen. Vielleicht bin ich
sogar noch glücklicher, dass wir weitermachen, da es eine gewissen Portion an Umsatz für
mehrere Jahre garantiert, und außerdem repräsentiert es eine der längsten
Vertragslaufzeiten, die wir je hatten. Von diesem Standpunkt betrachtet bin ich noch mehr
davon überzeugt, dass dieser Weg besser war als eine Internalisierung.
Dr. Martin Possienke: O.K. Vielen Dank.
Operator: Unsere nächste Frage kommt von Daniel Wendorff von der West LB.
Daniel Wendorff: Sie haben gesagt, dass Sie definitiv mehr als 30 Millionen US Dollar
bekommen. Bedeutet dies mehr als 30 Mio. US Dollar in Summe bis 2011, oder heißt das,
dass sie höchstwahrscheinlich mehr als 10 Mio. US Dollar jedes Jahr bekommen?
Die zweite Frage: Hatte Ihre Unternehmung Antibodies Direct AbD irgendeinen Einfluss auf
die Verlängerung des Novartis-Vertrags? Danke.
Dr. Simon Moroney: Die jährlichen Zahlungen sollten Sie so betrachten: Von jetzt an gehen
die jährlichen Zahlungen einen Schritt nach oben. Also wird jetzt ein Schritt gemacht und
dann bleiben sie konstant für die nächsten 5 Jahre. Zu AbD: ja, wir sehen reale Synergie aus
diesem Bereich. Was wir bei AbD gesehen haben – und natürlich sprechen wir hier von
einem sehr anderen Markt, wo Kunden ein paar tausend Euro für einen Antikörper bezahlen
– ist, dass wir unseren Affinitätsoptimierung schneller und günstiger machen müssen. Als
Folge dieses Drucks, wenn Sie es so nennen wollen, haben wir diese ergänzende
Optimierungstechnologie entwickelt, welche wir Novartis für deren Antikörperforschung
anbieten. Also, das ist ein direkter Vorteil aus dem Lernprozess aus dem AbD
Forschungsantikörper-Markt, was sich jetzt bei ein paar unserer therapeutischen Geschäfte
auszahlt.
Daniel Wendorff: Danke.
Operator: Wir haben eine Folgefrage von Dr. Patrick Fuchs von der DZ Bank.
Dr. Patrick Fuchs: Nur eine Folgefrage zum Thema Verlängerungs- gegen
Internalisierungsentscheidung bei Novartis. Wenn ich das richtig verstanden habe, war das
weniger eine Kostenentscheidung als eine Frage des wissenschaftlichen Know-how, würden
Sie mir da zustimmen? Die zweite Frage: Sind die Vertragskonditionen dieselben während
der gesamten Laufzeit des Vertrages?
Sie haben schon erwähnt, dass die jährlichen Lizenzkosten gleich bleiben, sie werden also
bis zum Ende der Laufzeit flach verlaufen? Die letzte Frage, vielleicht können Sie uns dazu
ein bisschen was erzählen, Sie haben neue Entwicklungen in den Bereichen Schnelligkeit
und Spezifität erwähnt, ist das ein großer Wechsel in der Technologie oder ist das eine
schrittweise Veränderung welche es möglich macht, schneller zu sein?
Dr. Simon Moroney: Zu der Internalisierungsfrage, wenn ich Sie da richtig verstanden habe.
Novartis hat die Option auf Internalisierung bis zum Ende unserer Kooperationsarbeiten.
Meiner Meinung nach geht jeder, der das alleine macht, das Risiko ein, dass man das nicht
alleine zur Perfektion bringen könnte, und ich denke ein Weg dieses Risiko zu vermeiden ist,
einfach mit etwas weiter zu machen. Warum sollte man etwas ändern was funktioniert? So
ähnlich hat das Novartis wahrscheinlich gesehen. Die Kooperation läuft gut, warum nicht so
weiter machen?
Ihre zweite Frage zu den Konditionen des Vertrages. Die variable Komponente ist wie viele
Programme verfolgt werden. Wir haben gesagt, dass die Anzahl von effektiven Programmen
sofort hochgeht, aber es gibt da noch eine Möglichkeit für zusätzliche Programme die noch
dazukommen können, sogar darüber hinaus. Das ist etwas was wir nicht ausschließen, aber
ich denke aus Gründen der Vereinfachung sollten wir es so sehen, wie ich es auch gerade
Daniel beschrieben habe, dass wir eine schrittweise Veränderung haben werden, die jetzt
anfängt und welche auch die größer werdende Anzahl an Programmen und den
ansteigenden Level an jährlichen Technologiezahlungen reflektiert.
Zu Ihrer dritten Frage zu neuen Entwicklungen. Da gibt es prinzipiell eine Reihe von Dingen
die wir um unsere Kerntechnologie HuCAL herum entwickelt haben, also wir sprechen hier
nicht über eine fundamental neue Screening-Technologie oder irgendetwas in der Art.
Worüber wir sprechen sind Veränderungen, die wir hier im Haus selbstständig identifiziert
haben und von welchen wir glauben, dass sie die existierende Plattform sehr viel schneller
und produktiver machen wird.
Dr. Patrick Fuchs: O.K.
Operator: Wir haben eine Folgefrage von Thomas Schiessle von Equities.
Thomas Schiessle: Danke. Sprechen wir noch mal über das zusätzliche System, welches
Sie Novartis anbieten, in Hinblick auf die Affinität. Ist diese Affinitätstechnologie
ausschließlich für Novartis oder ist das auch für andere. Und wie viel ist die Technologie wert
in dem gesamten Vertrag? Das war meine erste Frage, die andere bezieht sich auf Ihre
Anspielung, dass Sie ihre Technologieentwicklung weiter ausbauen werden und, dass sie die
Effektivität der gesamten HuCAL-Technologie weiter verbessern wollen. Könnten Sie sich
vielleicht ein wenig klarer ausdrücken, wie viel Sie für dieses Vorhaben ausgeben wollen und
in welchem Zeitraum das passieren soll? Danke.
Dr. Simon Moroney: Erstmal zu dem Thema der zusätzlichen Optimierungstechnologie. Da
kann ich ganz deutlich antworten, dass es nicht exklusiv an Novartis lizenziert ist. Wie mit
allen unseren Technologien, müssen wir die Möglichkeit haben, diese in so viele
Partnerschaften wie möglich mit einzubringen, deswegen ist diese Lizenz nicht exklusiv für
einem Partner.
Zweitens zu den zusätzlichen Kosten in der Technologieentwicklung. Natürlich sind das
Kosten, die immer anfallen und inwieweit wir die neuen Ideen unserer Wissenschaftler
verfolgen ist festgesetzt durch ein Gesamtbudget für Technologie. Dave, Du möchtest
vielleicht noch etwas dazu sagen, aber ich habe gerade nicht zur Hand wie viel Wertzuwachs
wir durch dieses Investment erzielen, aber es ist durchaus etwas, wovon wir glauben, dass
für die nächsten Jahre ein Teil unseres Budgets bereit stehen sollte.
Dave, willst Du zu diesem Punkt noch etwas hinzufügen?
Dave Lemus: Ja, obwohl ich gerade in den USA bin und nicht alle Zahlen zur Hand habe,
kann ich mich trotzdem entsinnen, dass wir am Anfang des Jahres gesagt haben, dass sich
unser Budget für Produktentwicklung und Technologieentwicklung auf 4 Mio. Euro beläuft.
Die zusätzlichen Kosten, die durch Novartis drauf kommen, lassen uns diesen Wert wohl
überschreiten.
Thomas Schiessle: Könnten Sie uns eine Idee geben wie dieses Budget in den nächsten
Jahren aussehen wird?
Dave Lemus: Ja, was wir ja normalerweise am Anfang und am Ende jedes Jahres machen,
ist Prognosen für das ganze Jahr abzugeben. Unglücklicherweise kann Ich Ihnen heute noch
nicht sagen was die Technologie- und die Produktkosten sein werden.
Thomas Schiessle: Da gibt es also keine direkte Verbindung zwischen dem derzeitigen
Umsatz aus den Hauptkooperationen und den Ausgaben des Geldes welches Sie
verdienen?
Dave Lemus: Also ich würde sagen, es ist nicht eins-zu-eins. Im Falle Novartis gibt es da
einen Zusammenhang, aber keinen wo wir sagen, wir müssen jetzt unser Budget für das
Jahr verändern.
Thomas Schiessle: Danke.
Operator: Unsere nächste Frage kommt von Nick Turner von Mirabaud Securities.
Nick Turner: Ich habe mich gefragt, ob Sie zu diesem Zeitpunkt schon sagen können,
vielleicht auch nicht, was die zusätzliche Erhöhung in FTEs sein wird in den ersten zwei oder
drei Jahren der Kooperation, und was die Erweiterung im Umfang des Vertrags für eine
Auswirkung auf die Kostenbasis haben wird?
Dr. Simon Moroney: Hier geht es wieder um verschiedene Parameter, anhand von welchen
wir den Umfang der Erweiterung beurteilen können. Wir können den Umfang anhand der
Anzahl der Programme und an der Anzahl der FTEs beurteilen, was auch eine direkte
lineare Korrelation hier ist, weil wir normalerweise pro Programm intern ungefähr drei bis vier
FTEs einsetzen. Aus diesem Grund habe ich hier wieder nicht die Erlaubnis, Auskunft zu
geben, weil anhand dieser Zahl ganz einfach die Anzahl an Programmen errechnen werden
kann, an welchen wir zurzeit arbeiten.
Vielleicht sollte ich hier noch mal auf etwas anderes zurückkommen – und bitte glauben Sie
mir, ich möchte Ihnen allen helfen, Ihre Prognosen zu erstellen und ich hoffe das Sie unsere
Situation respektieren, dass wir nun mal nicht viel sagen dürfen – lassen Sie mich auf ein
Statement aus dem Text zurückkommen welches ich zu Anfang dieser Konferenzschaltung
abgegeben habe. Erinnern Sie sich daran, dass wir Ihnen in Q1 gesagt haben, dass wir 34
fortlaufende aktive Programme haben, und während ich dieses Statements vorgelesen habe,
habe ich Ihnen gesagt, dass unsere Erwartungen für das Ende des Jahres bei 38 aktiven
Programmen liegt. Das sollte Ihnen schon mal einen kleinen Hinweis darauf geben, wie viele
neue Programme oder wenigstens eine Grenze an neuen Programmen, wir in Angriff
nehmen von diesem Zeitpunkt bis zum Ende des Jahres, aber Sie sollten auch nicht zuviel
da hineinlesen.
Nick Turner: O.K. Die Frage könnte vielleicht ein wenig keck wirken, aber könnten Sie uns
vielleicht einen ungefähren Richtwert geben, wie viel, proportional gesehen, von Ihren
derzeitigen R&D Kosten in die Novartis Kooperation geflossen sind, vor der Erweiterung?
Dr. Simon Moroney: Dave, ich glaube das könntest Du parat haben.
Dave Lemus: Ich glaube es ist ok zu sagen...Am Anfang der Konferenzschaltung gab es
eine Frage oder ein Statement von einem der Teilnehmer, dass Sie annehmen, das
Zahlungen von Novartis, eingenommen der Lizenzbeiträge, plus FTEs für drei Jahre,
ungefähr 30 Mio. Dollar betragen, und das durch drei sind 10 Mio. Das wäre auch die beste
Antwort die ich Ihnen heute geben kann. Die Kombination von Lizenzbeiträgen und FTEs
war ungefähr 10 Mio. US Dollar in den letzten paar Jahren seit wir Novartis gezeichnet
haben, wie wir ja auch gesagt haben, diese 30 Mio. US Dollar müssen grob über die drei
Jahre geteilt werden, oder das ist wenigstens so wie wir das buchen.
Operator: Unsere nächste Frage kommt von Rodolphe Besserve mit Societe General.
Rodolphe Besserve: Ja Guten Morgen. Es ist mir noch nicht ganz klar, ob sich diese
Erweiterung auch auf neue Zielmoleküle konzentriert, oder ob es neue Projekte sein werden,
die sich um existierende Zielmoleküle, an denen Sie bereits mit Novartis arbeiten, drehen.
Meine zweite Frage: Ich hätte gerne gewusst, wie sie zu der Übernahme von NeuTec
Pharma durch Novartis stehen. Wie sehen sie das, in der Phase der Kooperation in der Sie
sich jetzt mit Novartis befinden, und diesen internen Kapazitäten. Danke.
Dr. Simon Moroney: Ein Programm ist durch ein Zielmolekül definiert, also wird Novartis ein
Ziel auswählen, und wir entwickeln ein Programm, welches normalerweise, wie ich bereits
erwähnte, 3 bis 4 FTEs mit sich zieht, die auf diesem Zielmoleküle arbeiten. Diese neue
Kooperation beinhaltet eine zusätzliche Anzahl an neuen Zielmoleküle und damit auch
neuen Programmen. Beantwortet das Ihre Frage?
Rodolphe Besserve: Ja, Danke.
Dr. Simon Moroney: Zum Thema NeuTec: hier glaube ich nicht, dass wir noch irgendetwas
sagen können, außer dem was bereits in der Presse zu lesen war. Ich bin mir sicher, Sie
sind sich alle darüber im klaren, dass Novartis die Firma NeuTec übernommen hat, um
fortgeschrittene Programme im Bereich der infektiösen Erkrankungen in Phase 2 und 3 der
klinischen Entwicklung zu übernehmen, welche zufälligerweise, wie ich glaube, Substanzen
sind, die auf Antikörpern basieren. Ich würde also darüber hinaus nicht zuviel hinein
interpretieren.
Dave Lemus: Außer der Tatsache, dass Antikörper eine sehr interessante Klasse von
Molekülen ist, und zwar für die gesamte Pharmaindustrie.
Operator: Wir haben jetzt keine weiteren Fragen mehr meine Herren. Dr. Moroney, ich
würde dann die Konferenzschaltung gerne an Sie abgeben für letzte Anmerkungen und die
Verabschiedung.
Dr. Simon Moroney: Vielen Dank. Wenn es keine weiteren Fragen gibt, möchte ich mich bei
Ihnen allen für Ihre Teilnahme an der Telefonkonferenz bedanken. Wenn jemand von Ihnen
im Nachgang direkt mit mir sprechen möchte, stehe ich für den Rest des Tages in meinem
Büro hier in München zur Verfügung. Nochmals vielen Dank und auf Wiederhören.

[lupus2000]

MorphoSys AG Q2 2006 – Manuskript der Telefonkonferenz - Übersetzung

Herr Dave Lemus, Finanzvorstand, MorphoSys AG
Guten Morgen und herzlich willkommen. Mein Name ist Dave Lemus, ich bin Finanzvorstand
der MorphoSys AG. Neben mir sitzt unser Vorstandsvorsitzender Dr. Simon Moroney. Wir
führen diese Telefonkonferenz von unserer Firmenzentrale in München aus.
Zunächst möchten wir Sie zur heutigen Telefonkonferenz begrüßen und uns für Ihre Teilnahme
bedanken. Im Verlauf der Telefonkonferenz werden wir über die Ergebnisentwicklung der
Gesellschaft im ersten Halbjahr 2006 berichten. Herr Dr. Moroney wird mit einem Überblick über
das zweite Quartal beginnen. Danach werde ich die Ergebnisentwicklung des ersten Halbjahres
2006 erläutern. Anschließend stehen wir Ihnen dann für Fragen zur Verfügung.
Bevor ich beginne, möchte ich Sie daran erinnern, dass wir in dieser Telefonkonferenz
zukunftsgerichtete Aussagen über die Entwicklung der Kerntechnologien von MorphoSys, das
Fortschreiten seiner gegenwärtigen Forschungsprogramme und den Beginn weiterer
Programme machen und erörtern werden. Sollten sich die den Annahmen der Gesellschaft
zugrunde liegenden Verhältnisse ändern, so können die tatsächlichen Ergebnisse und
Maßnahmen von den erwarteten Ergebnissen und Maßnahmen abweichen. Sie werden daher
vorsorglich darauf hingewiesen, diesen zukunftsgerichteten Aussagen, die nur am Tag ihrer
Bekanntgabe Gültigkeit besitzen, keine unangemessene Bedeutung beizumessen.
Ich darf nun an Herrn Dr. Moroney weitergeben.
Dr. Simon E. Moroney, Vorstandsvorsitzender, MorphoSys AG
Danke Dave, auch von mir ein herzliches Willkommen zu unserer Telefonkonferenz anlässlich
des Zwischenberichts zum zweiten Quartal 2006.
Wir blicken auf ein sehr gutes Quartal zurück. Die gute Ergebnisentwicklung und eine größere
Klarheit bezüglich unserer Aufwendungen haben uns in die Lage versetzt, unsere
Finanzprognose für das Gesamtjahr anzuheben. Die wichtigsten Kennzahlen haben wir gestern
veröffentlicht und Herr Lemus wird hierzu gleich ins Detail gehen. Das sind natürlich
hervorragende Nachrichten, die den guten Geschäftsverlauf unterstreichen.
Im zweiten Quartal haben wir drei neue Verträge mit Partnern aus der Pharma- und
Biotechnologiebranche geschlossen. Der wichtigste von ihnen betrifft die Ausweitung und
Verlängerung unserer Allianz mit Novartis. Obwohl der Novartis-Vertrag bereits Gegenstand
unserer Telefonkonferenz am 26. Juni war, möchte ich der Vollständigkeit halber die
Hauptpunkte noch einmal ins Gedächtnis rufen. Sie erinnern sich, dass wir im Mai 2004 die
ursprüngliche Vereinbarung mit Novartis geschlossen hatten. Dieser Vertrag hatte zunächst
eine Laufzeit von drei Jahren und räumte Novartis eine Option auf zwei weitere Jahre ein, so
dass sich eine Laufzeit von maximal fünf Jahren ergab. Wir arbeiten nun seit zwei Jahren
zusammen und die Zusammenarbeit war so ergiebig, dass Novartis um eine Erhöhung der
Anzahl der gemeinsam bearbeiteten Projekte gebeten hat. Wir sind dieser Bitte unter
bestimmten Voraussetzungen natürlich sehr gern nachgekommen.
Die beiden Kernpunkte sind die Ausweitung – sie bedeutet die Verfolgung von mehr
therapeutischen Antikörperprogrammen, und die Verlängerung – die Vereinbarung gilt nun für
sieben Jahre mit einer Option für Novartis auf ein weiteres Jahr. Eine größere Zahl
therapeutischer Antikörperprogramme bedeutet ein größeres Team bei MorphoSys, das von
Novartis unterstützt wird; zu diesem Zweck stellen wir derzeit neue Mitarbeiter ein. Mehr
Programme bedeuten natürlich nicht nur zusätzliche finanzielle Mittel für Forschung und
Entwicklung bei MorphoSys, sondern selbstverständlich auch mehr Lizenzzahlungen und die
Aussicht auf weitere Meilensteine und auf Tantiemen aus Verkäufen von Endprodukten. Wir
haben auch auf höheren jährlichen Technologiezugangsgebühren bestanden, die, ab sofort,
das ursprünglich geplante Niveau deutlich übertreffen. Wie in solchen Fällen üblich, wurde über
die finanziellen Einzelheiten Stillschweigen vereinbart und wir bitten Sie um Verständnis, dass
wir die Details vertraulich behandeln müssen.
Im Verlauf des Quartals sind wir auch eine Allianz mit einem völlig neuen Partner eingegangen,
nämlich Schering-Plough. Diese Vereinbarung ist unsere zwölfte Partnerschaft mit einem zu
den Top 20 gehörenden Pharmaunternehmen. Der Vertrag räumt Schering-Plough das Recht
ein, unsere HuCAL GOLD-Bibliothek in seiner internen Forschung und Entwicklung für bis zu
fünf Jahre einzusetzen. Die Technologie wird für Zwecke der Medikamentenforschung
eingesetzt und Schering-Plough wurden unter vorab definierten Bedingungen Optionen für bis
zu zehn therapeutische Antikörperlizenzen eingeräumt. Wie üblich erhielt MorphoSys eine
Vorauszahlung und wird jährliche Lizenzgebühren erhalten. Für jedes von Schering-Plough
verfolgte therapeutische Antikörperprogramm hat MorphoSys im Rahmen unserer üblichen
Vertragskonditionen Anspruch auf Zielmolekül-bezogene Lizenzgebühren, Meilensteine und
Tantiemen. Mittlerweile war ein Team von Wissenschaftlern von Schering-Plough hier in
München und wurde zwei Wochen lang in der Anwendung der HuCAL-Technologie geschult.
Die Bibliothek wurde bereits bei Schering-Plough installiert und wir freuen uns bereits darauf,
Schering-Plough bei der Nutzung von HuCAL unterstützen zu können. Wie auch bei Novartis ist
dieses Abkommen nicht nur wegen der kurzfristig erzielbaren Umsatzerlöse von großer
Bedeutung, sondern wegen des Potenzials für eine Erweiterung unserer therapeutischen
Antikörper-Pipeline.
Der dritte Vertrag in diesem Quartal wurde mit Oncomed geschlossen, einer im Vergleich zu
den beiden anderen weit weniger bekannten Adresse, jedoch ein Unternehmen, das sich mit
einigen faszinierenden naturwissenschaftlichen Aufgabenstellungen befasst. Bei Oncomed
handelt es sich um ein Unternehmen mit Sitz in Kalifornien und um ein Spinoff von Genentech
mit einem wissenschaftlichen Ansatz in der Krebstherapie, der auf so genannten
Krebsstammzellen beruht, von denen man annimmt, dass ausschließlich sie verantwortlich sind
für das Wachstum und die Ausbreitung von Tumoren. Oncomed hat eine Lizenz für die
zweijährige Nutzung von HuCAL GOLD in seiner internen Forschung und Entwicklung
erworben. MorphoSys erhielt eine Vorauszahlung und wird auch jährliche
Technologiezugangsgebühren erhalten. Wie auch Schering-Plough verfügt Oncomed über
Optionen für mehrere therapeutische Antikörperprogramme; für den Fall, dass eine oder
mehrere dieser Optionen ausgeübt werden, wird Oncomed an MorphoSys zielbezogene
Lizenzzahlungen sowie möglicherweise Entwicklungs-Meilensteine und Tantiemen auf
Endprodukte leisten.
Alle diese Vereinbarungen werden in nächster Zeit zu unseren Umsatzerlösen beitragen. Was
aber wichtiger ist: Sie bergen das Potenzial für eine deutliche Verbreiterung unserer mit
Partnern betriebenen therapeutischen Antikörper-Pipeline. Ohne dass eine dieser drei neuen
Vereinbarungen schon einen Beitrag leistet, hat sich die mit Partnern betriebene Pipeline in
diesem Quartal gut entwickelt. Wie erwartet hat Roche - nach der Einreichung der IND
(Investigational New Drug) für unseren HuCAL-Antikörper für die Behandlung von Alzheimer im
ersten Quartal – im zweiten Quartal mit der Phase 1 begonnen. Wir verfügen nun über zwei
Wirkstoffe in der klinischen Erprobung, zehn in der präklinischen Entwicklung – nach acht am
Ende des ersten Quartals – und 23 in der Forschung; das ergibt insgesamt 35 aktive
Programme. Nach dem Novartis-Vertrag hatten wir mitgeteilt, dass sich am Jahresende die
Gesamtzahl der aktiven Programme auf 38 belaufen wird. Wir sind auf dem besten Weg, dieses
Ziel zu erreichen.
In Bezug auf unsere firmeneigenen Antikörperprogramme MOR103 und MOR202: Beide
Programme befinden sich auf Kurs – MOR103 in Richtung auf ein IND in der zweiten
Jahreshälfte 2007 und MOR202 in Richtung auf die Auswahl eines voll profilierten
Entwicklungskandidaten gegen Ende dieses Jahres.
Wenden wir uns nun der Forschungsseite unseres Geschäfts zu: Die Integration von Serotec in
unser Segment AbD schreitet weiter gut voran. Die Umsätze sind im Plan und wir sehen
verlässliche Anzeichen für einige der geplanten Synergien, wie beispielsweise das Gewinnen
neuer Kunden für unser HuCAL-Geschäft mit maßgeschneiderten Antikörpern durch die
Anstrengungen der Verkaufsorganisation von Serotec. Daneben können wir nun, wie Dave
gleich ausführen wird, alle mit dem Erwerb im Zusammenhang stehenden Kosten und
Aufwendungen besser einschätzen und schlussfolgern daraus, dass wir weiterhin auf dem
richtigen Weg sind, in diesem Segment unsere finanziellen Erwartungen in Bezug auf
Jahresumsatz und -ergebnis zu erreichen.
Bevor ich an Dave für seine Ausführungen zur Ergebnisentwicklung weitergebe, möchte ich
darauf hinweisen, dass dieses Quartal in Bezug auf den Erwerb von auf Antikörper
spezialisierten Biotechnologieunternehmen durch Pharmaunternehmen bemerkenswert war. In
der Reihenfolge ihrer Bekanntgabe kam es zum Erwerb von Rinat durch Pfizer, zu einem
Angebot seitens AstraZeneca für CAT und zum Erwerb von Neutec durch Novartis. Dies ist
noch mehr Beweis – wenn es dessen überhaupt bedurft hätte – für das ständig zunehmende
Interesse von Pharmaunternehmen an Antikörpern als eigenständige Medikamentenklasse.
Damit will ich meinen Rückblick auf das Quartal beenden und gebe weiter an Dave für seine
Erläuterungen zur Ergebnisentwicklung.
Herr Dave Lemus, Finanzvorstand, MorphoSys AG
Vielen Dank Simon.
Lassen Sie mich meine Finanzanalyse mit den Umsatzerlösen beginnen.
Umsatzerlöse
Der Konzernumsatz stieg in den ersten sechs Monaten 2006 um 72 % auf 26,5 Millionen Euro
verglichen mit 15,4 Millionen Euro im gleichen Zeitraum des Vorjahres. Das organische
Wachstum des Konzerns betrug im Vergleich zum Vorjahr 33 %.
Die Umsatzerlöse des Segments Therapeutische Antikörper trugen 66 % oder 17,5 Millionen
Euro zum Konzernumsatz bei, während das Segment AbD 34 % oder 9,0 Millionen €
beisteuerte.
Auf der therapeutischen Seite unseres Geschäfts lag das organische Wachstum verglichen mit
der Vorjahresperiode bei 29 %. Hauptgrund des Anstiegs waren erfolgsabhängige Zahlungen
aus bestehenden Partnerschaften, die in der ersten Jahreshälfte 5 Millionen € oder rund 29 %
des Segmentumsatzes betrugen.
Auf der Forschungsseite unseres Geschäfts hat das Segment AbD mit seinen bisherigen
Marken Biogenesis in Großbritannien und Antibodies by Design in München gegenüber dem
Vorjahr ein ausgesprochen starkes organisches Wachstum von 67 % erzielt. Die Einbeziehung
der Umsatzerlöse der Serotec-Gruppe trug 6,0 Millionen € zum Segmentumsatz bei.
Betriebliche Aufwendungen
In den ersten sechs Monaten 2006 erhöhten sich die betrieblichen Aufwendungen um 58 % auf
21,0 Millionen €. Der Anstieg der betrieblichen Aufwendungen um 7,7 Millionen € hatte seine
wesentlichen Ursachen in höheren Personalkosten und sonstigen betrieblichen Kosten im
Zusammenhang mit dem Serotec-Erwerb sowie in einer Zunahme der Personalkosten in der
MorphoSys-Firmenzentrale in München. Der Erwerb der Serotec Ltd. einschließlich ihrer
Beteiligungen wirkte sich um 5,6 Millionen € erhöhend auf die betrieblichen Aufwendungen aus.
Der Personalaufwand aus Aktienoptionen ist derzeit in den Herstellungskosten, den
Aufwendungen für Vertrieb, Allgemeines und Verwaltung sowie in den Aufwendungen für
Forschung und Entwicklung enthalten. Der Personalaufwand der ersten sechs Monate 2006
belief sich nahezu unverändert zum Vorjahr auf 0,6 Millionen € und wird weiterhin als nicht
zahlungswirksam behandelt.
Im zweiten Quartal wurde für den Serotec-Erwerb eine Kaufpreiszuordnung (purchase price
allocation – PPA) vorgenommen. Die sich ergebenden vorläufigen Werte wurden rückwirkend
auf den Erwerbszeitpunkt angewandt und die Abschreibungen auf immaterielle
Vermögenswerte sowie die Halbjahresabschreibungen auf identifizierte Vermögenswerte im
zweiten Quartal in den betrieblichen Aufwendungen erfasst. Die Auswirkungen der
Kaufpreiszuordnung des Serotec-Erwerbs beliefen sich insgesamt auf 0,6 Millionen € nach 0,3
Millionen € für den Biogenesis-Erwerb im Vergleichszeitraum des Vorjahres. Die
Gesamtauswirkungen der Kaufpreiszuordnung auf die betrieblichen Aufwendungen belief sich
auf 0,8 Millionen €.
Herstellungskosten
Die Herstellungskosten stiegen deutlich von 1,1 Millionen € in der Vergleichsperiode des
Vorjahres auf 4,0 Millionen €. Hauptgrund dieses Anstiegs war die Einbeziehung der
Herstellungskosten der Gesellschaften der Serotec-Gruppe in Höhe von 2,4 Millionen €. Zur
Steigerung der Herstellungskosten ebenfalls beigetragen haben die höheren Umsatzerlöse
insbesondere von Biogenesis. Schließlich wurden die Herstellungskosten durch
Abschreibungen in Höhe von 0,4 Millionen € für den ‚Step-up’ der Vorräte im Rahmen der
Kaufpreiszuordnung beeinflusst.
Aufwendungen für Forschung und Entwicklung
Durch Aufwendungen für die Produkt- und Technologieentwicklung von 0,9 Millionen € erhöhten
sich die Aufwendungen für Forschung und Entwicklung auf 7,9 Millionen €. Abschreibungen auf
immaterielle Vermögenswerte im Zusammenhang mit der Seroctec-Kaufpreiszuordnung
betrugen 0,3 Millionen € und wurden als Forschungs- und Entwicklungsaufwand behandelt.
Aufwendungen für Vertrieb, Allgemeines und Verwaltung
Die Aufwendungen für Vertrieb, Allgemeines und Verwaltung beliefen sich auf 9,1 Millionen €,
verglichen mit 5,2 Millionen € im gleichen Zeitraum des Vorjahres. Dies war vor allem auf
höhere Personalkosten und sonstige betriebliche Aufwendungen aus der Serotec-Gruppe in
Höhe von 3,2 Millionen € sowie auf den Personalkostenanstieg in der Firmenzentrale der
MorphoSys AG zurückzuführen.
Investitionen und Abschreibungen
Im ersten Halbjahr 2006 hat MorphoSys wie im Vergleichszeitraum des Vorjahres 0,2
Millionen € in Sachanlagen investiert. Abschreibungen auf Sachanlagen beliefen sich im ersten
Halbjahr 2006 auf 0,9 Millionen € gegenüber 0,4 Millionen € im Vergleichszeitraum des
Vorjahres. Die Abschreibungen auf immaterielle Vermögenswerte beliefen sich auf 1,3
Millionen € und erhöhten sich um 0,2 Millionen € im Vergleich zum ersten Halbjahr 2006.
Sonstige betriebliche Aufwendungen und Erträge
Die sonstigen betrieblichen Aufwendungen und Erträge erhöhten sich um 0,8 Millionen € auf 1,0
Millionen € hauptsächlich durch die Bildung von Steuerrückstellungen vor dem Hintergrund der
revidierten Finanzprognose für das Gesamtjahr 2006. Diesem Effekt standen teilweise Erträge
aus dem Verkauf von Wertpapieren im ersten Quartal 2006 im Zusammenhang mit der
Finanzierung des Erwerbs der Serotec Ltd. und die Auflösung von im Rahmen der Serotec-
Kaufpreiszuordnung gebildeten latenten Steuerverbindlichkeiten gegenüber.
Ergebnis der gewöhnlichen Geschäftstätigkeit / Periodenüberschuss
Die Gesellschaft weist für die ersten sechs Monate 2006 ein Ergebnis der gewöhnlichen
Geschäftstätigkeit in Höhe von 5,6 Millionen € aus, verglichen mit 2,0 Millionen € im ersten
Halbjahr 2005. Im Halbjahr belief sich das Ergebnis vor Steuern auf 5,4 Millionen € nach 1,7
Millionen € im Vergleichszeitraum des Vorjahres. Im ersten Halbjahr 2006 wurde ein
Periodenüberschuss von 4,5 Millionen € erwirtschaftet, im Vergleich zu 1,8 Millionen € in der
gleichen Periode 2005.
Bei isolierter Betrachtung des zweiten Quartals 2006 ergibt sich ein Periodenfehlbetrag von 0,4
Millionen €, verglichen mit einem Periodenüberschuss von 1,3 Millionen € im
Vorjahresvergleichszeitraum. Hauptgründe für den Fehlbetrag waren der kumulierten
Verbuchungen für das erste Halbjahr der Kaufpreiszuordnung und die Bildung von
Steuerrückstellungen für das erwartete höhere Ergebnis des Gesamtjahres.
Der Periodenüberschuss je Aktie des Halbjahres hat sich im Vergleich zum Vorjahr mehr als
verdoppelt und belief sich auf 0,71 € nach 0,32 € in 2005. Am 30. Juni 2006 betrug die
Gesamtzahl der ausgegebenen Aktien 6.654.179.
Liquidität/Cashflow/Bilanz
Am 30. Juni 2006 verfügte die Gesellschaft über 64,9 Millionen € an liquiden Mitteln und zur
Veräußerung verfügbaren Finanzanlagen verglichen mit einer Liquiditätsposition von 53,6
Millionen € am Jahresende 2005. Der Zahlungsmittelzufluss aus der gewöhnlichen
Geschäftstätigkeit belief sich in den ersten sechs Monaten 2006 auf solide 14,6 Millionen € und
war beeinflusst vom starken operativen Cashflow und von höheren Umsatzabgrenzungen.
Damit sind wir am Ende der Finanzanalyse.
Ausblick
Wie immer in unseren Telefonkonferenzen nutzen wir die Gelegenheit zur Aktualisierung
unserer Finanzprognose.
Wie Sie der gestrigen Pressemitteilung entnehmen konnten, haben wir unsere Finanzprognose
für das Gesamtjahr 2006 angehoben.
Ich darf es noch einmal wiederholen: Wir rechnen für das Gesamtjahr 2006 mit Umsatzerlösen
in Höhe von bis zu 52 Millionen €. Dieser Anstieg rührt aus dem Segment Therapeutische
Antikörper, in dem wir nun Umsatzerlöse in Höhe von bis zu 34 Millionen € nach den am
Jahresanfang prognostizierten 32 Millionen € erwarten. Die Gründe für den Umsatzanstieg
liegen in der Ausweitung der Zusammenarbeit mit Novartis, den guten Vertragsabschlüssen in
den ersten sechs Monaten 2006.
Die Umsatzprognose für das Segment AbD blieb unverändert bei 18 Millionen €.
In unserer revidierten Prognose von gestern haben wir auch unsere Aufwandsprognose um bis
zu 3 Millionen € gesenkt, von 49 Millionen € auf bis zu 46 Millionen €. Die Gründe hierfür sind
ein Überarbeitung des Budgets, welches nach der Verlängerung mit Novartis durchgeführt
worden war, welches uns zu dem Schluss kommen lies, dass die Aufwendungen niedriger sein
können als ursprünglich angenommen. Weiterhin enthält die neue Prognose auch die neuen
Schätzungen für die Aufwendungen aus der Kaufpreiszuordnung aus der Serotec-Akquisition,
die niedriger als erwartet ausgefallen sind.
Vor dem Hintergrund dieser Veränderungen erwarten wir ein EBIT von bis zu 6 Millionen €.
An dieser Stelle möchte ich darauf hinweisen, dass wir im Zuge der zunehmend profitablen
Entwicklung von MorphoSys der Ansicht sind, dass das Ergebnis vor Zinsen und Steuern, also
das EBIT, die beste Messgröße für unsere operative Entwicklung darstellt. Die sonstigen
betrieblichen Aufwendungen wie Steuern, Abschreibungen auf latente Steuerverbindlichkeiten
sowie Fremdwährungskursgewinne und -verluste sind nur sehr schwer genau vorherzusagen;
daher werden wir künftig unsere Finanzprognose auf das EBIT abstellen und nicht mehr auf
den Jahresüberschuss.
Unsere beste Schätzung der sonstigen betrieblichen Aufwendungen für das Gesamtjahr in
Höhe von 1,0 Millionen € schließt Ertragsteuerrückstellungen für die Gesellschaften des
Konzerns, Erträge aus dem Verkauf von Wertpapieren, Fremdwährungskursverluste,
Zinsaufwendungen und die Abschreibung einer latenten Steuerverbindlichkeit ein. Wie haben
unseren Berechnungen eine Konzernsteuerquote von knapp unter 20 % zugrunde gelegt.
Damit sind wir am Ende unserer Finanzanalyse der ersten sechs Monate des Jahres 2006. Wir
stehen Ihnen nun gern für Ihre Fragen zur Verfügung.
Fragen & Antworten:
Operator: Die erste Frage kommt von Rudolphe Besserve von SG Securities.
Rudolphe Besserve, SG Securities: Guten Morgen. Meine erste Frage betrifft die Erhöhung
der Prognose: Welcher Anteil – aus der Erhöhung um zwei Millionen – stammt aus der
Erweiterung des Vertrages mit Novartis? Sind das 50% dieser zwei Millionen, 75% oder mehr?
Es gab auch eine Erhöhung der Prognose für den EBIT – könnten Sie vielleicht noch ein wenig
mehr zu der Reduzierung der Betriebskosten sagen, die Sie in diesem Jahr erwarten?
Dann habe ich noch eine Frage zu der Zusammenarbeit mit ImmunoGen: Ich habe in Ihrem Q2-
Bericht gelesen, dass diese beendet ist. Können Sie auch hierzu noch ein wenig mehr sagen?
Die dritte Frage dreht sich um den EBIT für den Bereich Forschungsantikörper: Wann, schätzen
Sie, wird dieser Bereich positiv sein, oder, anders formuliert, glauben Sie, dass die derzeitige
Struktur einen positiven EBIT kurz- oder mittelfristig möglich macht? Danke.
Dave Lemus: Ich beziehe mich auf die erste Frage, wie viel Prozent der Prognosenerhöhung
aus dem Novartis-Geschäft resultieren. Leider hat uns Novartis nicht gestattet, finanzielle
Details zu diesem Thema bekannt zu geben. Ich kann jedoch sagen kann, dass es einen
signifikanten Teil der Erhöhung ausmacht – aber ich kann Ihnen hier keine genaue Prozentzahl
geben.
Dann gab es, glaube ich, noch die Frage nach der Prognose für den EBIT bezogen auf den
Bereich Forschungsantikörper. Wir streben für 2007 einen positiven EBIT an.
Dr. Simon Moroney: Rudolphe, zum Thema „ImmunoGen“: Die Beeidigung des Vertrages war
auf Juni diesen Jahres angesetzt – und das, nachdem der ursprüngliche Vertrag, der ja schon
in 2000 unterzeichnet wurde, schon ein paar Erweiterungen wurden. Die Zusammenarbeit
endete also planungsgemäß und wurde einfach nicht weiter verlängert.
Rudolphe Besserve: Und was passiert jetzt? Verfolgt ImmunoGen therapeutische
Antikörperkandidaten jetzt weiter?
Dr. Simon Moroney: Es gab ein therapeutisches Antikörper-Programm, an welchem gearbeitet
wurde, aber der Großteil des Vertrages war eine Forschungslizenz für die HuCAL-Technologie.
ImmunoGen hat die HuCAL-Bibliothek für interne Forschungszwecke genutzt. Das
therapeutische Antikörper-Programm läuft immer noch, aber das Forschungsprogramm – also
die Nutzung der Bibliothek für Forschungszwecke – wurde eingestellt.
Rudolphe Besserve: OK, danke.
Operator: Danke. Unsere nächste Frage kommt von Martin Possienke von Equinet.
Dr. Martin Possienke, Equinet: Guten Morgen, alle zusammen. Ich habe noch ein paar Fragen
zu den Finanzen, vielleicht erst einmal zum AbD-Bereich. Der Verlust von einer Million € im
EBIT: Sind da irgendwelche Einmaleffekte enthalten? Vielleicht können Sie mir da weiterhelfen.
Dann habe ich eine Frage zu den Abschreibungen in Q2: Können wir diesen Betrag auf das
Gesamtjahr hochrechnen?
Dann drittens meine Lieblingsfrage zu den aktiven latenten Steuern: Könnten Sie vielleicht die
Höhe der vorhandenen Verlustvorträge quantifizieren und mir sagen, ob es notwendig sein wird,
darauf im Laufe des Jahres aktive latente Steuern anzusetzen? Wurde dieses Thema bereits
mit den Wirtschaftsprüfern besprochen?
Dave Lemus: OK, ich beantworte alle Ihre Fragen. Zu Ihrer Frage nach der Entwicklung im
AbD-Segment, warum es im letzten Quartal vom einem Plus ins Minus gerutscht ist, und ob es
dort einmalige Posten gab. Ich glaube, es ist eine Kombination einiger Dinge, die passiert sind:
Zunächst einmal hatten wir ein außergewöhnlich erfolgreiches erstes Quartal im AbD-Segment.
Im zweiten Quartal haben wir auch eine gute Leistung gezeigt, aber einfach nicht ganz so gut
wie im ersten. Der Verlust war zum Teil durch die kumulierte Verbuchung der
Kaufpreiszuordnung zurückzuführen. Im ersten Quartal haben wir keinerlei Aufwand aus der
Kaufpreiszuordnung verbucht. Das ist im zweiten Quartal kumuliert geschehen und führt zu
einer Art Einmaleffekt im zweiten Quartal.
Dr. Martin Possienke: Und dieser Effekt beträgt 800.000 Euro?
Dave Lemus: Die Kombination von niedrigerem Umsatz zuzüglich der Auswirkungen aus der
Kaufpreiszuordnung macht die Differenz aus.
Dr. Martin Possienke: Nein, ich meinte, ob der Effekt der Kaufpreiszuordnung, den Sie im
zweiten Quartal gebucht haben, 800.000 Euro ausmachte? Ich dachte, Sie hätten das vorhin
erwähnt.
Dave Lemus: Zusammengefasst für den Konzern, wovon Serotec ungefähr 500.000 Euro
beitrug.
Dr. Martin Possienke: 500.000 Euro, das bedeutet, man kann es auf 250.000 Euro anpassen,
wenn man will.
Dave Lemus: Ja. Da gab es noch eine weitere Frage, ob man die Kosten für die
Kaufpreiszuordnung des ersten Halbjahres für das ganze Jahr hochrechnen kann. Ja – wir
glauben, dass dies der Fall sein wird. Und zuletzt die Frage zu den Verlustvorträgen: Wir haben
geschätzte 21 Millionen Euro an Verlustvorträgen. Wir haben die Möglichkeit bereits
besprochen, darauf aktive latente Steuern zu bilden. Das wird sich teilweise im Laufe diesen
Jahres herausstellen, wenn wir uns die Prognosen für die nächsten Jahre ansehen und damit
die Wahrscheinlichkeit und die Stärke und die Profitabilität des Geschäfts in den kommenden
Jahren. Dies wurde bereits diskutiert, und wir sind uns des Themas bewusst. Wir glauben nicht,
dass das Unternehmen heute schon an dem Punkt ist, dass wir so etwas in Betracht ziehen
sollten. Vielleicht ändert sich das aber noch zum Jahresende hin.
Dr. Martin Possienke: Vielen Dank.
Operator: Danke. Die nächste Frage kommt von Thomas Schiessle von Equits.
Thomas Schiessle, Equits: Danke und guten Morgen nach München. Eine Frage zum AbDGeschäft.
Könnten sie ganz generell noch ein wenig mehr zur Umsatz-Entwicklung sagen – der
sehr gute Start im ersten Quartal, besonders weil man ja jetzt eine etwas langsamere Gangart
beobachten konnte. Hat das strukturelle Gründe, oder eher saisonale oder kundenabhängige
Gründe? Und was wäre dann die Verlaufsrate oder Expansionsrate für die folgenden Quartale?
Das wäre die eine Frage – die andere ist zum Thema Konzern-Bilanzierung. Können Sie ein
weiteres Verlustquartal im zweiten Halbjahr ausschließen? Und die dritte Frage dreht sich um
Serotec’s Kostenbasis. Sie hatten erwähnt, dass circa 2,5 Millionen davon Betriebskosten sind.
Ist das da der Richtwert, oder sollen wir noch mal 10 bis 15 % für die kommenden Quartale
dazurechnen? Danke.
Dr. Simon Moroney: Thomas, lassen Sie mich mit der Frage zur AbD-Umsatzentwicklung im
zweiten Quartal beginnen, und Dave übernimmt dann Ihre beiden anderen Fragen. Ich glaube,
wir haben das bereits öfters gesagt: Man soll sich die einzelnen Quartale nicht zu genau
ansehen. Das AbD-Geschäft beinhaltet ein Kataloggeschäft, das relativ reproduzierbar ist, aber
da gibt es auch beispielsweise ein paar volatile Komponenten, die mit größeren
Industrielieferverträgen einhergehen. Deswegen glaube ich, dass man einfach überanalysiert,
wenn man sich Quartal für Quartal einzeln anschaut und kleine Differenzen zwischen zwei
Quartalen analysiert. Ich glaube, man interpretiert dadurch zu viel in Sachen hinein, die
eigentlich überhaupt nicht ausschlaggebend sind. Die Kernaussage ist, dass der Umsatz im
ersten halben Jahr bei 9 Millionen lag, und dass wir damit absolut auf dem richtigen Weg sind,
das vorgegebene Ziel von 18 Millionen Euro für das Gesamtjahr zu erreichen. Natürlich sehen
wir Schwankungen von Quartal zu Quartal, aber diese Unterschiede sind wirklich nicht relevant
und deswegen würde ich Ihnen davon abraten, diese überzuinterpretieren.
Dave Lemus: OK – ich komme dann zu Ihrer anderen Frage, ob wir Verluste in den zukünftigen
Quartalen ausschließen können. Ich möchte hier betonen, dass MorphoSys vor der
Einkommenssteuer – mit circa 530.000 Euro – auf Betriebskostenlevel eigentlich profitabel war -
aber was uns beim Bilanzgewinn ins Minus getrieben hat, waren tatsächlich die Rückstellungen
in diesem Quartal im Wert eines ganzen Jahres. Können wir ausschließen, dass weitere
Verlustquartale folgen werden? Sie haben die Prognose gehört, dass wir einen EBIT von 6
Millionen Euro in diesem Jahr erzielen könnten. Daraus folgt, dass eines der zukünftigen
Quartale positiv sein muss, aber das könnte auch bedeuten, dass da durchaus auch noch ein
negatives Quartal dabei sein könnte. Ich glaube, Simon hat es schon gesagt – und ich kann ihm
da nur beipflichten: Wie wir schon in mehreren Telefonkonferenzen immer wieder betont haben,
sind Quartale sehr volatil, und man kann nicht immer ein Quartal nehmen und dieses auf das
Ergebnis des Gesamtjahres hochrechnen.
Da gab es noch eine letzte Frage zu Serotec’s Entwicklung. Auf der Kostenseite denken wir,
dass die Rate sich im zweiten Teil des Jahres noch ein wenig erhöhen könnte – aber wir
erwarten, dies durch die Gewinnseite wieder auszugleichen. Also sehen wir einen konstanten
Rohertrag für das ganze Jahr.
Thomas Schiessle: Ich habe zusätzlich noch eine Frage zur Verkaufsstruktur von AbD. Simon,
Sie haben gesagt, dass es da - allgemein gesprochen – ein zweigeteiltes Geschäft gibt: ein
Basisgeschäft und ein Industriegeschäft. Können Sie uns erklären, welchen Anteil das
Kataloggeschäft hat? Ist das jetzt schon ein Drittel des gesamten Umsatzes?
Dr. Simon Moroney: Es ist mehr als das. Um es näher zu erklären – es gibt tatsächlich drei
Komponenten: Das Kataloggeschäft, das wir größtenteils aus der Übernahme von Serotec und
Biogenesis gewonnen haben; dann ist da das Industriegeschäft, bei dem wir große Mengen an
Antikörpern an einzelne Kunden für spezielle Anwendungen liefern. Also zum Beispiel
Diagnostik-Kits oder Entwicklung für Diagnostik-Kits. Dann gibt es aber auch noch das Geschäft
mit den kundenspezifischen Antikörpern, welches die ursprüngliche „Antibodies by Design“-
Einheit darstellt, die wir hier in München gestartet haben. Wenn Sie sich vorstellen möchten,
wie der Konzerngewinn auf diese drei Einheiten aufgeteilt werden kann, dann sollten Sie eine
60/20/20-Aufteilung anwenden – in der Reihenfolge, wie ich sie gerade genannt habe, also:
Katalog, Auftragsproduktion und Antibodies by Design (kundenspezifische Antikörper).
Thomas Schiessle: Und die Struktur wird auch in absehbarer Zukunft so bestehen bleiben,
oder entwickelt sich ein Bereich eher schneller, während eine andere Einheit langsamer wächst
als die anderen beiden?
Dr. Simon Moroney: Wir erwarten, dass sich die Verteilung am gesamten Antikörper-
Forschungsmarkt orientieren wird und sich dann auch dahingehend entwickelt. Im Gesamtmarkt
ist das Verhältnis von Katalog-Antikörpern – also der schon existierenden Antikörper – zu den
spezifisch angefertigten Antikörpern ungefähr 80/20. Also mit anderen Worten: Da sollte es – im
Laufe der Zeit – eine Bewegung in Richtung einer höheren Gewichtung an Katalog-Antikörpern
geben.
Thomas Schiessle: Nur noch eine Frage dazu: Fühlen sie sich relativ wohl mit Ihrem
Marktanteil und mit der Entscheidung, an den Markt von einer geographischen Sicht
heranzugehen?
Dr. Simon Moroney: Natürlich möchten wir noch eine höhere Marktpenetration erzielen. Wir
sind sehr glücklich, dass unser Marktanteil beim Umsatz ungefähr 50/50 ist, also 50 % in den
USA und 50 % im Rest der Welt. Es ist ja schon mal ein gutes Zeichen, dass wir so eine hohe
Reichweite in den USA haben – schließlich macht der amerikanische Markt ja 50 % des totalen
Marktes weltweit aus. Aber natürlich sind wir immer darum bemüht, noch tiefer in den Markt
vorzudringen und kontinuierlich zu wachsen. Also wir sind auf jeden Fall auf einem guten Weg.
Ich glaube das Wissen über HuCAL – und das ist das Wichtigste hier – und das Bewusstsein in
der Branche, dass HuCAL die Technologie der Zukunft ist, verbreitet sich unaufhaltbar. Wir sind
rundum zufrieden mit der Serotec-Akquisition. Unsere Serotec-Kollegen haben HuCAL so
reibungslos angenommen und helfen uns wirklich, das Produkt in der Industrie voranzubringen,
und ich finde, sie sind dabei extrem effektiv.
Thomas Schiessle: Sehr gut - danke.
Operator: Wir nehmen unsere nächste Frage von Patrick Fuchs von der DZ Bank.
Dr. Patrick Fuchs, DZ Bank: Hallo zusammen, ich habe einige Fragen. Die erste: Sie
verzeichnen einen Anstieg in den Margen des therapeutischen Antikörper-Geschäfts. War das
positiv von Meilensteinen oder von vorgezogenen Zahlungen beeinflusst oder von Verträgen,
die im zweiten Quartal 2006 abgeschlossen wurden, verglichen mit 2005? Die nächste Frage:
Ihre erhöhte Prognose enthält doch keine – wie ich annehme – potentiellen Meilensteine, die
aus den therapeutischen Antikörperentwicklungs-Projekten, welche durch die Kliniken gehen,
hervorgehen? Und die letzte Frage: Ich hätte gerne noch ein paar detaillierte Informationen zu
den 3 Millionen Euro, die Sie an betrieblichen Aufwendungen einsparen. Wenn ich richtig liege,
haben Sie kommuniziert, dass Sie 2,5 Millionen Euro für Restrukturierung und Kosten für die
Kaufpreiszuordnung durch die Serotec-Akquisition eingeplant haben. Gibt es da eine neue Zahl
bzw. kommen diese 3 Millionen Euro vielleicht auch aus anderen Bereichen, die mit Ihren
internen R&D-Projekten zu tun haben?
Dr. Simon Moroney: Patrick, lassen Sie mich damit anfangen, was in der Prognose beinhaltet
ist und was nicht. Wenn wir uns zusammensetzen und eine Prognose machen, dann tun wir
unser Bestes, um abzuschätzen, welche Meilensteine wir vor Ende des Jahres noch realisieren
können und ob wir diese natürlich auch voll verbuchen können, wenn sie dann erreicht werden.
Wir haben den Effekt im ersten Quartal gesehen, als Roche den IND für den Alzheimer-
Antikörper beantragt hat. In diesem Stadium – und das haben wir in der Vergangenheit auch
gesagt – tun wir eines nicht: Wir versuchen nicht vorauszusagen, wann Antikörper in die Klinik
gehen, weil es nur zu Enttäuschungen führt, wenn es nachher aus irgendeinem Grund eine
Verzögerung gibt. Deshalb kann ich also nicht sagen, wann wir erwarten, dass die nächsten
Antikörper in die klinischen Prüfungen gehen werden, aber die Prognose beinhaltet unsere
Einschätzung, welche zusätzlichen Meilensteine bis zum Ende des Jahres erreicht werden
können. Ich befürchte, wir müssen hier ein bisschen ungenau bleiben, aber wir können und
möchten eben nicht Erwartungen kommunizieren.
Dr. Patrick Fuchs: Also wurden in Q2 tatsächlich keine Meilensteine verbucht?
Dave Lemus: Doch, es wurden, aber eine geringere Anzahl als in Q1.
Dr. Patrick Fuchs: In Q1 gab es da ja bei den Meilensteinen ein außerordentlich großes
Wachstum – erwarten Sie also eine sehr viel niedrigere Rate?
Dave Lemus: Ja, das war außerordentlich. Im zweiten Quartal belief sich der Anteil auf ein
Drittel des ersten Quartals.
Dr. Patrick Fuchs: Und erwarten Sie für das ganze Jahr höhere Meilensteinzahlungen als
letztes Jahr oder eher auf dem gleichen Level, wenn Sie von den derzeitigen Plänen
ausgehen?
Dave Lemus: Ja, und vielleicht kann ich dann auch gleich Ihre anderen Fragen beantworten.
Prozentual erwarten wir bei den Umsatzerlösen im therapeutischen Segment ungefähr den
gleichen Anteil wie im letzten Jahr. Ich glaube, dieses Jahr haben wir insgesamt 7 Millionen
Euro für erfolgsabhängige Zahlungen prognostiziert, was nach der alten Prognose ungefähr
einen Anteil von 20 % bedeutet. Wenn man das erste Halbjahr 2006 analysiert – da sind wir
zurzeit bei einem Anteil von 30 %, wir werden also prozentual ungefähr gleich auf mit dem
letzten Jahr liegen. Auf der anderen Seite liegen wir in absoluten Zahlen höher als letztes Jahr,
wir haben in der ersten Hälfte des Jahres schon die meisten Meilensteine erreicht und dadurch
schon 5 Mio. € von den prognostizierten 7 Mio. € erzielt, und das sollte Ihre Frage beantworten.
Ist die gestiegene Profitabilität auf Meilensteinzahlungen zurück zu führen? Die Antwort ist also
„Ja“. Wenn Sie sich nochmals die Zahlen des ersten Halbjahres anschauen, haben wir Erlöse
aus Meilensteinzahlungen in Höhe von ungefähr 30 %, und wenn Sie sich die gleichen Zahlen
im letzten Jahr anschauen, dann waren wir bei 17 %. Der Anstieg in der Profitabilität ist
größtenteils den Meilensteinen zuzuschreiben.
Dr. Patrick Fuchs: OK. Vielleicht habe ich das nicht richtig verstanden mit den Buchungen der
Ertragssteuern, das waren also die latenten Steuern, die Sie in dem einen Quartal verbucht
haben?
Dave Lemus: Am Anfang des Jahres haben wir eine Prognose von 1 Mio. € für den Konzern
genannt. Mit der erhöhten Prognose, die eine höhere Profitabilität von bis zu 6 Mio. €
einbezieht, mussten wir eine Steuerrückstellung für das höher als zunächst prognostizierte
Einkommen buchen, was einen großen Einfluss auf das Ergebnis des zweiten Quartals hatte.
Deswegen kann man den Effekt auf die Ertragssteuer im zweiten Quartal auch nicht
vergleichen mit einer pro rate Verbuchung auf jedes Quartal.
Dr. Patrick Fuchs: Und für den Rest des Jahres oder das Ende des Jahres sehen Sie 20%
Steuerquote.
Dave Lemus: Auf Gruppenebene, ja.
Dr. Patrick Fuchs: Dann habe ich noch eine Frage zu Serotec. Als ich mir die Bilanz
angeschaut habe, war ich irgendwie überrascht durch die niedrige Liquidität, die Serotec am 11.
Januar hatte, das waren nur 300.000 Euro. Das sieht für mich nicht gerade liquide aus. War das
einer der Gründe, warum Sie Serotec zu einem günstigen Kaufpreis akquirieren konnten, oder
war das nicht relevant?
Dave Lemus: Erst einmal haben wir diese Informationen noch gar nicht veröffentlicht, aber ich
denke, Sie haben die Information von „Companies House“ in England. Wenn Sie sich das
Geschäft bei Serotec anschauen, es neigt dazu eher zyklisch zu sein und ich denke, dass das
sehr mit der Auszahlung von Bonuszahlungen zusammenhängt, die am Ende des Jahres
anfallen. Also am Ende des Jahres ist der Barmittelbestand eher niedrig verglichen zum Rest
des Jahres. Aber ich würde nicht sagen, dass Serotec in einer Liquiditätskrise war, und wir
deshalb in der Lage waren, Serotec sehr günstig zu übernehmen. Auf keinen Fall denke ich,
dass die Cash Position irgendetwas damit zu tun hatte.
Dr. Patrick Fuchs: OK, das war's von meiner Seite, danke.
Dr. Simon E. Moroney, Vorstandsvorsitzender, MorphoSys AG
Wenn es keine weiteren Fragen mehr gibt, möchte ich zum Schluss kommen, indem ich noch
einmal die Kernaussage dieser Telefonkonferenz betone. Sie lautet: Ein starkes Quartal mit
guten Vertragsabschlüssen, allen voran die Erweiterung der Zusammenarbeit mit Novartis, ist
der Motor einer guten Ergebnisentwicklung, die uns wiederum in die Lage versetzt hat, unsere
Umsatz- und Ergebnisprognose für das Gesamtjahr anzuheben.
Hiermit ist die Telefonkonferenz beendet. Sollte jemand von Ihnen im Nachgang direkt mit Herrn
Lemus oder mir sprechen wollen: Wir stehen beide hier in unseren Münchener Büros zur
Verfügung. Nochmals vielen Dank für Ihre Teilnahme und auf Wiederhören.

[lupus2000]

MorphoSys AG Q3 2006 – Manuskript der Telefonkonferenz - Übersetzung aus dem Englischen – es gilt das gesprochene Wort

Dr. Simon E. Moroney, Vorstandsvorsitzender, MorphoSys AG
Guten Morgen. Mein Name ist Simon Moroney, ich bin Vorstandsvorsitzender der MorphoSys
AG und darf Sie zu unserer Telefonkonferenz zum Ergebnis des dritten Quartals und der ersten
neun Monate 2006 herzlich begrüßen. Unser Finanzvorstand Dave Lemus ist uns von außerhalb
zugeschaltet und wird Ihnen nach meinen Ausführungen ebenfalls für die Beantwortung
von Fragen zur Verfügung stehen. Ich möchte mit einem Überblick über das dritte Quartal beginnen
und anschließend einen Blick auf die Entwicklung im Neunmonatszeitraum 2006 werfen.
Im Anschluss daran werden wir Ihnen dann für Fragen zur Verfügung stehen.
Bevor ich beginne, möchte ich Sie daran erinnern, dass wir in dieser Telefonkonferenz zukunftsgerichtete
Aussagen über die Entwicklung der Kerntechnologien von MorphoSys, das
Fortschreiten seiner gegenwärtigen Forschungsprogramme und den Beginn weiterer Programme
machen und erörtern werden. Sollten sich die den Annahmen der Gesellschaft zugrunde
liegenden Verhältnisse ändern, so können die tatsächlichen Ergebnisse und Maßnahmen von
den erwarteten Ergebnissen und Maßnahmen abweichen. Sie werden daher vorsorglich darauf
hingewiesen, diesen zukunftsgerichteten Aussagen, die nur am Tag ihrer Bekanntgabe Gültigkeit
besitzen, keine unangemessene Bedeutung beizumessen.
Wir blicken auf ein sehr starkes Quartal zurück. Die Ergebnisentwicklung zeigt, dass sich beide
Bereiche unseres Geschäfts – das Segment Therapeutische Antikörper und das Segment Forschungsantikörper
– sehr solide entwickeln. Wir gehen davon aus, unsere für das Gesamtjahr
gegebenen Finanzprognosen in vollem Umfang zu erfüllen.
Was jedoch vielleicht noch wichtiger ist: In dem Bereich, der für das zukünftige Wachstum des
Unternehmenswerts am wichtigsten ist, nämlich bei den Medikamentenentwicklungsprogrammen,
sind wir unserem Plan für das Gesamtjahr voraus. Wir sind mit 29 aktiven und zusammen
mit Partnern betriebenen therapeutischen Programmen auf der Grundlage unserer HuCALTechnologie
in das Jahr gestartet. Ziel für dieses Jahr war ein Nettozugang von 9, so dass wir
am Jahresende 38 aktive Programme erreichen wollten. Ein zweites Ziel und damit Zeichen der
zunehmenden Reife unserer Pipeline war, dass sich mindestens 10 dieser bestehenden Programme
im präklinischen Stadium befinden sollten – nach 7 am Anfang des Jahres. Wir sind
heute in der glücklichen Lage mitteilen zu können, dass wir in unseren bestehenden Partnerschaften
gegenwärtig 40 aktive, HuCAL-basierte therapeutische Antikörperprogramme bearbeiten.
Davon befinden sich zwei Programme in der klinischen Erprobung der Phase 1, nämlich
der für GPC Biotech hergestellte Antikörper gegen Lymphome und der Antikörper von Roche
gegen Alzheimer. Von den 40 Programmen befinden sich 14 im präklinischen Entwicklungsstadium
und damit doppelt so viele wie am Jahresanfang. In beiden Kategorien - Gesamtzahl der
aktiven Programme und Zahl der präklinischen Projekte - sind wir also unserem Jahresplan
voraus. Die präklinischen Programme sind dabei besonders wichtig, da ja aus ihren Reihen die
nächsten Programme der klinischen Phase 1 kommen werden. Derzeit haben wir 24 mit Partnern
betriebene Programme in der Forschung. Für die Zukunft erwarten wir für unsere Pipeline
weiteres Wachstum, da unsere bestehenden Partner neue Projekte anstoßen und neue, derzeit
noch nicht vereinbarte Partnerschaften geschlossen werden könnten. Ingesamt gesehen ist das
Interesse der Branche an therapeutischen Antikörpern als Medikamentenklasse unverändert
groß. Wir sehen daher keinen Grund, wieso sich die Anzahl der HuCAL-basierten, mit Partnern
betriebenen Programme in den kommenden Jahren nicht weiter deutlich erhöhen sollte. Dies ist
für unsere Strategie von zentraler Bedeutung: Je mehr HuCAL-basierte Medikamente aus der
Entwicklung Marktreife erlangen, desto mehr attraktive Meilenstein- und Lizenzzahlungen werden
MorphoSys zufließen.
Wenden wir uns nun unseren firmeneigenen Medikamentenprogrammen zu, die sich alle auf
Kurs befinden. Im dritten Quartal haben wir mit Crucell und DSM eine Produktionsvereinbarung
geschlossen, nach der DSM unseren Antikörper MOR103 gegen rheumatoide Arthritis in Crucell’s
Zelllinie Per.C6® herstellen wird. Wir haben den Abschluss dieser Vereinbarung sehr begrüßt,
da wir der Überzeugung sind, dass Per.C6® von der Ausbeute her große Vorteile bietet
neben der Tatsache, dass Per.C6® als humane Zelllinie unserem vollständig menschlichen Antikörper
MOR103 ein vollständig humanes Glykolisierungsmuster verleiht. Wir sind der Ansicht,
dass dies für ein Medikament dieses Typs ein Vorteil bei chronischen Krankheiten wie der Arthritis
ist. Darüber hinaus gilt diese Zelllinie als sicher und ist von der FDA zugelassen, was für
uns ganz wichtige Entscheidungskriterien waren.
Das zweite firmeneigene Programm MOR202 gegen multiple Myelome entwickelt sich ebenfalls
weiterhin wie geplant. Hier wird der nächste Meilenstein die Entscheidung über einen Kandidaten
für die formale Entwicklung sein, die wir voraussichtlich bis Jahresende treffen werden.
Im Hinblick auf diese beiden Programme möchte ich Sie bei dieser Gelegenheit daran erinnern,
keine Ankündigungen zu erwarten. Wir werden Sie zu gegebener Zeit über wichtige Neuigkeiten
informieren, wie wir es im Fall der Produktionsvereinbarung mit Crucell und DSM für die
Herstellung des Antikörpers MOR103 in klinischer Qualität getan haben.
Wenden wir uns nun der Forschungsseite unseres Geschäfts zu. Die Integration von Serotec in
unsere Geschäftseinheit AbD wird wie geplant bis zum Jahresende abgeschlossen sein. Wir
gehen auch hier davon aus, unsere Finanzziele vollständig zu erreichen, wenngleich die Umsätze
der ersten drei Quartale um rund 5 % hinter dem Plan zurück blieben. Der Grund hierfür
ist folgender: Obwohl die Umsätze in diesem Geschäft sehr viel vorhersehbarer sind als im therapeutischen Geschäft, das, wie Sie wissen, oftmals von großen Meilensteinzahlungen beeinflusst
wird, können größere Branchenaufträge für Forschungs- und/oder diagnostische Antikörper
bei AbD zu Verschiebungen führen. Zwei größere Aufträge, die ohne weiteres im Q3 hätten
eingehen können, erwarten wir nun im vierten Quartal. Dies macht deutlich, wieso die Umsätze
des dritten Quartals leicht hinter unseren Erwartungen zurück geblieben sind; dies wird sich jedoch
in Q4 ausgleichen, so dass wir uns aufs Gesamtjahr gesehen im Plan befinden.
Im dritten Quartal haben wir wie bereits mitgeteilt vom USAMRIID, einer Abteilung des U.S. Army
Medical Research and Materiel Command und dem führenden medizinischen Forschungslabor
im US-Verteidigungsprogramm gegen Bioterrorismus, einen Exklusivauftrag für die Lieferung
von Antikörpern gegen potenzielle bioterroristische Substanzen erhalten. Dieser Auftrag
unterstreicht das Potenzial von HuCAL auf einem Gebiet, das bisher Neuland für uns war und in
Zukunft möglicherweise sehr wichtig werden könnte. Zur Verdeutlichung der Geschwindigkeit,
mit der wir Antikörper herstellen können: Unsere Lieferung erfolgte innerhalb von fünf Wochen
nach Erhalt der Antigene.
Damit möchte ich meinen Rückblick auf das Quartal beenden. Ich komme nun zum Finanzrückblick
und beginne mit den Umsatzerlösen.
Der Konzernumsatz stieg in den ersten neun Monaten 2006 um 64 % auf 39 Millionen Euro verglichen
mit 23,8 Millionen Euro im gleichen Zeitraum des Vorjahres. Das organische Wachstum
des Konzerns betrug im Vergleich zum Vorjahr insgesamt 26 %.
Die Umsatzerlöse des Segments Therapeutische Antikörper trugen 67 % oder 26,0 Millionen
Euro zum Konzernumsatz bei, während das Segment AbD 33 % oder 13,0 Millionen Euro beisteuerte.
Auf der therapeutischen Seite unseres Geschäfts lag das Wachstum verglichen mit der Vorjahresperiode
bei 26 %. Hauptgrund des Anstiegs waren erfolgsabhängige Zahlungen aus bestehenden
Partnerschaften, die sich in den ersten neun Monaten auf einen Umsatz von 6,3 Millionen
Euro beliefen und rund 24 % zum Segmentumsatz betrugen.
Auf der Forschungsseite unseres Geschäfts hat das Segment AbD gegenüber dem Vorjahr ein
organisches Wachstum von 26 % erzielt. Die Einbeziehung der Umsatzerlöse der Serotec-
Gruppe trug 9,1 Millionen Euro zum Segmentumsatz bei.
Kommen wir zu den betrieblichen Aufwendungen: In den ersten neun Monaten 2006 erhöhten
sie sich um 56 % auf 31,2 Millionen Euro. Der Anstieg der betrieblichen Aufwendungen um 11,2
Millionen Euro hatte im Wesentlichen zwei Ursachen – zum einen der Anstieg der Herstellungskosten
um 3,6 Millionen Euro durch die Einbeziehung der Serotec-Gruppe in den Konzernabschluss
und zum anderen die Zunahme der Personalkosten bei der MorphoSys AG. Der Erwerb
der Serotec Ltd. einschließlich ihrer Beteiligungsgesellschaften wirkte sich mit 8,5 Millionen Euro
erhöhend auf die betrieblichen Aufwendungen aus.
Der Personalaufwand aus Aktienoptionen ist derzeit in den Herstellungskosten, den Aufwendungen
für Vertrieb, Allgemeines und Verwaltung sowie in den Aufwendungen für Forschung
und Entwicklung enthalten. Der Personalaufwand aus Aktienoptionen der ersten neun Monate
2006 belief sich nahezu unverändert zum Vorjahr auf 1,0 Millionen Euro und wird weiterhin als
nicht zahlungswirksam behandelt.
Für den Serotec-Erwerb wurde eine Kaufpreiszuordnung (PPA – purchase price allocation) vorgenommen.
Die sich ergebenden vorläufigen Werte wurden rückwirkend auf den Erwerbszeitpunkt
angewandt und die Abschreibungen auf identifizierte Vermögenswerte im Quartal in den
betrieblichen Aufwendungen erfasst. Die Auswirkungen der Kaufpreiszuordnung des Serotec-
Erwerbs auf das Ergebnis der gewöhnlichen Geschäftstätigkeit beliefen sich insgesamt auf 1,2
Millionen Euro nach 0,4 Millionen Euro im Vergleichszeitraum des Vorjahres.
Die Herstellungskosten stiegen deutlich von 1,9 Millionen Euro in der Vergleichsperiode des
Vorjahres auf 5,5 Millionen Euro im dritten Quartal 2006. Hauptgrund dieses Anstiegs war die
Einbeziehung der Herstellungskosten der Gesellschaften der Serotec-Gruppe in Höhe von 3,4
Millionen Euro im Q3 2006. Ebenfalls zur Erhöhung der Herstellungskosten beigetragen haben
die gestiegenen Umsatzerlöse aus dem bestehenden kundenspezifischen HuCAL-Geschäft.
Schließlich waren die Herstellungskosten in den ersten neun Monaten des Jahres auch durch
Abschreibungen auf Vorräte in Höhe von 0,5 Millionen Euro im Rahmen der Kaufpreiszuordnung
beeinflusst.
Infolge des höheren Aufwands für Produkt- und Technologieentwicklung von 1,4 Millionen Euro
stiegen die Aufwendungen für Forschung und Entwicklung auf 11,7 Millionen Euro. Abschreibungen
auf immaterielle Vermögenswerte im Zusammenhang mit der Seroctec-
Kaufpreiszuordnung betrugen 0,6 Millionen Euro und wurden als Forschungs- und Entwicklungsaufwand
behandelt.
Die Aufwendungen für Vertrieb, Allgemeines und Verwaltung beliefen sich auf 14,0 Millionen
Euro, verglichen mit 7,9 Millionen Euro im gleichen Zeitraum des Vorjahres. Dies war vor allem
auf höhere Personal- und sonstige betriebliche Aufwendungen aus der Serotec-Gruppe in Höhe
von 5,1 Millionen Euro sowie auf den Personalkostenanstieg bei der MorphoSys AG zurückzuführen.
Im Neunmonatszeitraum 2006 hat MorphoSys 1,1 Millionen Euro in Sachanlagen investiert,
verglichen mit 0,4 Millionen Euro im Vergleichszeitraum des Vorjahres. Abschreibungen auf
Sachanlagen beliefen sich in den ersten neun Monaten 2006 auf 1,4 Millionen Euro gegenüber
0,6 Millionen Euro im gleichen Zeitraum 2005. Der bedeutsamste Einzelposten war eine Abschreibung
auf Vorräte von 0,6 Millionen Euro im Zusammenhang mit vorangegangenen Maßnahmen
im Rahmen der Kaufpreiszuordnung.
Im Verlauf der ersten neun Monate hat die Gesellschaft 0,3 Millionen Euro in immaterielle Vermögenswerte
investiert. Abschreibungen auf immaterielle Vermögenswerte beliefen sich auf 2,0
Millionen Euro - ein Anstieg um 0,3 Millionen Euro gegenüber dem Neunmonatszeitraum 2005.
Dies hatte seine wesentliche Ursache in der Abschreibung auf im Rahmen des Serotec-Erwerbs
erworbene immaterielle Vermögenswerte.
Die sonstigen betrieblichen Aufwendungen beliefen sich vor allem aufgrund gestiegener Wechselkurseffekte
und Bankgebühren auf 0,5 Millionen Euro. Dieser Effekt wurde durch Erträge aus
der Veräußerung von Wertpapieren im ersten Quartal im Rahmen der Finanzierung des Erwerbs
der Serotec Ltd. teilweise ausgeglichen.
Für die ersten neun Monate 2006 wies der Konzern mit 7,8 Millionen Euro ein gegenüber dem
Vergleichszeitraum des Vorjahres nahezu doppelt so hohes Ergebnis der gewöhnlichen Geschäftstätigkeit
aus.
Das Ergebnis vor Zinsen und Steuern (EBIT) betrug 7,4 Millionen Euro nach 3,8 Millionen Euro
in der gleichen Periode des Vorjahres.
In den ersten drei Quartalen 2006 wurde ein Periodenüberschuss von 6,1 Millionen Euro erwirtschaftet
verglichen mit 3,9 Millionen Euro im Vergleichszeitraum des Vorjahres.
Der sich für den Neunmonatszeitraum zum 30. September 2006 ergebende verwässerte Periodenüberschuss
je Aktie belief sich auf 0,93 Euro verglichen mit 0,67 Euro im gleichen Zeitraum
des Vorjahres.
Zum 30. September 2006 verfügte die Gesellschaft über 66,3 Millionen Euro liquide Mittel und
zur Veräußerung verfügbare Finanzanlagen verglichen mit einer Liquiditätsposition von 53,6
Millionen Euro am Jahresende 2005. Der Zahlungsmittelzufluss aus der gewöhnlichen Geschäftstätigkeit
belief sich in den ersten neun Monaten 2006 auf sehr starke 15,7 Millionen Euro.
Damit sind wir am Ende der Finanzanalyse.
Wie immer in unseren Telefonkonferenzen nutzen wir die Gelegenheit zur Aktualisierung unserer
Finanzprognose und möchten hiermit die in der Telefonkonferenz zum Q2 gegebene Prognose
bekräftigen. Im Rahmen dieser Prognose rechnen wir auf der Basis eines Umsatzes von
bis zu 52 Millionen Euro und betrieblicher Aufwendungen von 46 bis 49 Millionen Euro mit einem
EBIT von bis zu 6 Millionen Euro. Wir schließen eine bessere Entwicklung aufgrund niedrigerer
Aufwendungen nicht aus; da dies gegenwärtig jedoch noch zu unsicher ist, möchten wir
es in unserer Prognose bei einer Einschätzung am unteren Ende der Bandbreite von 46 bis 49
Millionen Euro belassen.
Damit sind wir am Ende unserer Finanzanalyse der ersten neun Monate des Jahres 2006. Wir
stehen Ihnen nun gern für Fragen zur Verfügung.
Fragen & Antworten:
Operator: Wir nehmen nun unsere erste Frage von Thomas Schiessle von EQUI.TS. Bitteschön.
Thomas Schiessle, EQUI.TS: Ja, vielen Dank, dass Sie meine Frage angenommen haben.
Guten Morgen an alle. Erst einmal Glückwünsche zu der durchaus beeindruckenden Leistung in
diesem Quartal. Nun zu meiner Frage: Sie haben einen sehr beeindruckenden Cashflow auf
operativer Ebene, aber wie sieht es denn auf der Ebene der Entscheidungsprozesse aus, oder
ganz konkret mit der Entscheidung in Zukunft Dividenden zu zahlen? Das war meine erste Frage,
die zweite bezieht sich auf die Abschreibungen die Sie in Ihrem Vortag erwähnt haben. Wir
haben in dieser Neun-Monats-Periode 1,4 Millionen Euro normale Abschreibung, und in diesen
1,4 Millionen Euro enthalten sind außerplanmäßige Abschreibungen auch im Zusammenhang
mit Serotec. Ist dieser Wertverfall alles was wir bei den Serotec Aktien zu erwarten haben, oder
kommt da noch etwas in der Zukunft? So das war die zweite Frage, die dritte Frage betrifft ein
ganz anderes Thema. Gibt es irgendwelche Neuigkeiten bezüglich Bayer und Schering, bezogen
auf die zukünftige Kollaboration zwischen Ihnen und den beiden Unternehmen? Danke, das
war es erstmal.
Dr. Simon Moroney: Vielen Dank Thomas, und ebenfalls guten Morgen. Ich nehme Fragen
eins und drei und Dave wird bestimmt zu Frage eins noch etwas ergänzen, und dann sicherlich
die zweite Frage auch noch beantworten. Erstens, wir haben keine Pläne eine Dividende zu
zahlen. Wir haben das immer wieder so gesagt, und damit sagen wir das gleiche wie fast der
ganze Rest der Biotech-Industrie. Wie Sie sicherlich wissen, ist die allgemein beste Strategie für
ein Biotech-Unternehmen, so viel wie möglich in zukünftige Produkte und Technologieentwicklung
zu reinvestieren, und genau das haben wir auch vor, und deswegen ist es keineswegs unser
Plan eine Dividende zu zahlen.
Zum Thema Schering and Bayer. Nur zur Erinnerung, wir haben ja existierende, fortlaufende
Verträge mit beiden Unternehmen und durch die bevorstehende Konsolidierung der beiden Unternehmen
wird auch in irgendeiner Form eine Konsolidierung in den beiden Verträgen zu erwarten
sein. Die Verhandlungen laufen bereits, aber an dieser Stelle wäre es zu früh zu sagen,
wie diese Situation gelöst wird. Bis auf weiteres bleiben wir bei der eigentlich offensichtlichen
Annahme, dass es Konsolidierungen in diesen beiden Verträgen geben wird. Dave möchtest Du
dann mit den Fragen zu der Abschreibung und Wertminderung für Serotec fortfahren?
Dave Lemus: Ja, es könnte sein, dass es eine Fehlinterpretation bei Deiner Rede gab, Simon.
Fakt ist, es gab keine außerplanmäßigen Abschreibungen auf Vermögenswerte bei Serotec. Es
handelte sich um die Auswirkungen der Kaufpreiszuordnung auf die Herstellungskosten in Form
von planmäßigen Abschreibungen auf Vorräte, die im Zuge der Kaufpreiszuordnung zum beizulegenden
Zeitwert bewertet wurden. Ich möchte an dieser Stelle nochmals betonen, dass es
gab keinerlei außerplanmäßigen Abschreibungen bei Serotec gab.
Thomas Schiessle: Ok, das sind natürlich gute Neuigkeiten. Vielleicht noch eine Zusatzfrage
dazu, ist die Kaufpreiszuordnung schon abgeschlossen, oder ist man da immer noch im Entscheidungsprozess?
Dave Lemus: Ja, wir glauben, dass die Entscheidung mehr oder weniger final ist. Natürlich haben
wir unter IFRS die Möglichkeit dies bis zu 12 Monate nach der Akquisition zu ändern, das
wäre dann ungefähr Mitte Januar nächsten Jahres, aber an dieser Stelle rechnen wir nicht mit
irgendwelchen Änderungen.
Thomas Schiessle: Ok, wunderbar. Danke.
Operator: Die nächste Frage kommt von von Nick Turner von Mirabaud Securities. Bitteschön.
Nick Turner, Mirabaud Securities: Hallo Simon. Könnte ich vielleicht ein Update haben was so
bei den eigenen therapeutischen Antikörperprogrammen passiert? Sie fangen ja an, wirklich
Cash zu generieren, und ich frage mich ob Sie vielleicht ihr Engagement im Bereich der eigenen
Programme expandieren wollen und weitere eigene Programme ansteuern? Dann hätte ich
auch gerne noch ein Update zu den Partner-Programmen. Wie viele von diesen sind zurzeit aktiv
in der Entwicklung, wie viele sind in der klinischen Phase, und wann glauben Sie, können wir
etwas den der Alzheimer-Studie von Roche hören?
Dr. Simon Moroney: Guten Morgen Nick. Erst einmal zu den eigenen Antikörperprogrammen;
wir haben zurzeit zwei eigene Programme laufen. Die Ausgaben dort werden sich natürlich erhöhen.
Wie Sie sicherlich wissen, sobald man damit anfängt die Materialien für die klinischen
Versuche zu produzieren und tatsächlich in die klinische Phase geht - wie wir das nächstes
Jahr für MOR103 vorhaben – steigen die Kosten. Sie sollten also ohnehin erwarten, dass die
Investition und die Kosten wirklich ansteigen. Zusätzlich schauen wir immer nach Möglichkeiten
neue, zusätzliche Programme zu starten. Nichtsdestotrotz ist es unsere Philosophie diese Wahl
sehr vorsichtig zu treffen und wir müssen wirklich von der Qualität unserer Wahl überzeugt sein,
bevor wir ein neues Programm starten. Deswegen ist es nicht so, dass wir täglich oder sogar
monatlich neue Programme hinzunehmen. Also um das nochmals zusammenzufassen: Ja wir
sind natürlich immer an neuen Programmen interessiert, und wenn wir denken aus einem Programm
einen Wert herausziehen zu können, dann überlegen wir uns natürlich es zu starten.
Aber unsere volle Absicht ist es die beiden existierenden Programme fortzuführen. Und wie ich
bereits angesprochen habe, wird die Wahl eines Kandidaten für MOR202, eines unserer
Schlüsselereignisse für das Ende des nächsten Jahres darstellen.
Zu den Partner-Programmen: Wie ich bereits während meiner Rede angesprochen hatte, haben
wir zurzeit 40 aktive Kollaborationsprogramme in unseren therapeutischen Antikörper-
Partnerschaften. Von diesen 40, sind zurzeit 2 in Phase 1 der klinischen Entwicklung, 14 sind
jetzt in der vorklinischen Entwicklung und 24 sind in der Entdeckungsphase.
Zu Roche's Antikörper für Alzheimer’s: die Phase 1 ist im Mai gestartet, und wir haben zurzeit
keine weiteren Informationen, wann diese Studie abgeschlossen sein wird. Ich würde Sie und
die anderen Zuhörer noch einmal gerne darauf aufmerksam machen, dass wir nicht in diese
Studie involviert sind. Die Entscheidungsprozesse liegen völlig in der Hand von Roche und
deshalb möchte ich Sie bitten, Roche direkt anzusprechen, wenn Sie an weiteren Informationen
interessiert sein sollten.
Nick Turner: Dankeschön.
Operator: Wir nehmen nun unsere nächste Frage von Hanns Frohnmeyer von der LBBW. Bitteschön.
Dr. Hanns Frohnmeyer: Guten Morgen, Hanns Frohnmeyer von der LBBW. Ich haben zwei
Fragen an Sie. Die erste bezieht sich auf Ihre zukünftigen Kosten. Sie haben erwähnt, dass die
Produktion für MOR103 nun beginnt. Könnten Sie uns vielleicht einen Anhaltspunkt geben
wann die Kosten denn nun wirklich kommen, sieht man die noch im vierten Quartal oder kommen
die erst in 2007? Dann habe ich gerade herausgefunden, dass Sie ein Büro in RTP [Research
Triangle Park] für Serotec eröffnet haben – was glauben Sie welche Kosten da auf Sie
zukommen? Außerdem habe ich gesehen, dass sich die Margen für das therapeutische Antikörper-
Segment erhöht haben von 46 % auf 54 % - was sind denn da die Gründe für diesen
starken Anstieg?
Dr. Simon Moroney: Ich beginne erstmal mit ein paar der Fragen. Zunächst zu den Produktionskosten
für das klinische Material von MOR103. Diese Kosten sind über die Periode verteilt in
welcher der Service von dem Vertragspartner in Anspruch genommen wird, und deswegen sollten
Sie nicht davon ausgehen eine kumulierte Summe in den Ausgaben in einem der Quartale
zu sehen. Diese Kosten sind über mehrere Monate verteilt. Und dann noch zu Ihrer Frage bzgl.
unseres Büros im „Research Triangle Park“ in Raleigh, North Carolina (USA). Wir hatten tatsächlich
schon immer ein Büro dort durch die Übernahme von Serotec. Wir sind lediglich umgezogen
und zwar in ein besser geeignetes Büro. Das Büro vorher war nämlich nicht ideal. Deshalb
erwarten wir keinen signifikanten Kostenanstieg, es ist lediglich ein Umzug.
Dr. Hans Frohnmeyer: OK. Also da erwarten Sie nichts?
Dr. Simon Moroney: Jedenfalls nichts Außergewöhnliches. Wir denken, dass die Kosten so
weiterlaufen werden wie bisher. Dave, möchtest Du etwas über die Margen der therapeutischen
Antikörper sagen?
Dave Lemus: Ich wollte noch einen Kommentar abgeben zu den Kosten für MOR103, bevor ich
zu den Margen komme. Wie Sie vielleicht in unserem Bericht gelesen haben, haben wir für das
gesamte Jahr ungefähr 4 Millionen Euro an Ausgaben für Produkt- und Technologieentwicklung
prognostiziert. Ein großer Teil davon geht natürlich in die Produktionskosten für MOR103. Von
diesen 4 Millionen Euro haben wir circa 1,4 Millionen Euro bisher investiert. Wir sehen gute
Chancen, dass die restlichen 2,6 Millionen Euro im verbleiben Quartal noch ausgegeben werden.
Wie Simon schon bemerkt hat, natürlich werden diese Kosten so verbucht, dass es über
die Zeit der eigentlichen Leistung verteilt ist. Falls die Leistung im vierten Quartal erbracht ist,
dann würden die Kosten natürlich dann gebündelt anfallen. Falls das nicht der Fall sein sollte,
dann würden natürlich einige dieser Kosten auf das nächste Jahr fallen. Dann zu den Margen,
meinten Sie die Quartalsmargen oder die kumulierten Margen?
Dr. Hanns Frohnmeyer: Die operativen Margen, aus Ihrem Segmentsbericht, die operativen
Ergebnisse.
Dave Lemus: Von Jahr zu Jahr oder von Quartal zu Quartal.
Dr. Hanns Frohnmeyer: Aus dem Neun-Monats-Bericht.
Dave Lemus: Neun Monate 2006 verglichen mit 2005?
Dr. Hanns Frohnmeyer: Genau, für das therapeutische Antikörper Geschäft.
Dave Lemus: OK, der Grund warum Sie höhere Margen hingegen des Vorjahres sehen, ist darin
begründet, dass wir in 2006 die Serotec-Zahlen mit hinzugenommen haben. Das war der eine
Grund. Der zweite Grund war die sehr positive Entwicklung bei Biogenesis. Letztes Jahr hatten
wir Margen von fast 50 %, dieses Jahr wird es sich der 60 %-Marke annähern. Das hat damit
zu tun, das viele Synergien, die wir durch die Akquisition erwartet haben, nun Früchte tragen
und das das Geschäft einfach toll läuft. Also ich glaube die Kombination dieser beiden Dinge,
also die Eingliederung der Serotec Gruppe in 2006 gegenüber 2005, und die Top Form der
Biogenesis Gruppe hat alles dazu beigetragen, das die Bruttomarge dieses Mal höher ist.
Dr. Hanns Frohnmeyer: Aber dazu hat ja das therapeutische Antikörpergeschäft auch die
Margen vergrößern können. Wenn man sich den Vergleich der Segmentergebnisse mit den
Umsatzerlösen anschaut, deswegen hatte ich ja auch gefragt, ob Sie einen Anstieg im therapeutischen
Antikörpergeschäft haben?
Dave Lemus: Ja, teilweise. Die Art und Weise wie wir im therapeutischen Geschäft bezahlt
werden ist durch eine Kombination von Lizenzgebühren, Zahlungen bei Erfolg und geförderten
FTE’s [full time equivalents – Vollzeit-Beschäftigte] die nun von unseren Partnern zurückerstattet
werden. Ich denke in Erfolgs-abhängigen Zahlungen sind wir prozentual wahrscheinlich stärker
als im vorherigen Jahr, was natürlich gleichzeitig auch eine höhere Profitabilität auf der therapeutischen
Seite bedeutet.
Operator: Wir nehmen unsere nächste Frage von Daniel Wendorff von WestLB. Bitteschön.
Daniel Wendorff, WestLB: Schönen guten Morgen alle zusammen. Unglücklicherweise sind
manche meiner Fragen nun bereits beantwortet. Ich habe aber trotzdem noch eine. Ich glaube,
ich habe noch nicht ganz den bald kommenden Entwicklungsplan für MOR103 und MOR202
verstanden. Können Sie mir das bitte noch mal erklären?
Dr. Simon Moroney: Klar, hallo Daniel. Für beide Sachen hat sich nichts verändert. Beide verlaufen
weiterhin nach Plan. Für MOR103 haben wir jetzt eine vertragliche Vereinbarung mit
Crucell und DSM. Der nächste signifikante Meilenstein, den Sie erwarten sollten, ist die EinreiMorphoSys
AG Q3 2006 – Manuskript der Telefonkonferenz Seite 10 von 12
chung der IND in der zweiten Hälfte des nächsten Jahres. Zum Thema MOR202 - wir sind zurzeit
dabei einige Antikörper-Kandidaten zu evaluieren, mit dem Ziel einen formalen Entwicklungskandidaten
am Ende des Jahres zu identifizieren. Was wir dann mit diesem ausgewählten
Kandidaten tun werden, haben wir bis jetzt noch nicht kommuniziert und werden dies wohl auch
nicht bis zum Beginn des nächsten Jahres tun.
Daniel Wendorff: Ok, perfekt. Ich war mir nicht mehr ganz sicher.
Operator: Wir haben nun eine weitere Frage von Thomas Schiessle von EQUI.TS. Bittschön.
Thomas Schiessle: Ja, meine Folgefrage bezieht sich auf die Margen des Segment-Berichtes.
Sie haben uns da einen Vorgeschmack gegeben, dass beim AbD-Geschäft Biogenesis sozusagen
auf Hochtouren läuft. Das ist wirklich wunderbar und gut zu hören. Was ist denn mit dem
Serotec-Geschäft? Läuft dieser Geschäftsbereich auch gut und stark oder gibt es da noch
Raum für Verbesserung? Und im Gesamtbild ist AbD immer noch nicht profitabel, also brauchen
Sie da mehr Umsatz. Was planen Sie um den Umsatz zu steigern? Das wäre die eine
Frage. Die nächste Frage bezieht sich auf Ihre Prognose. Simon, Sie hatten in Ihrer Rede gesagt,
dass es die Möglichkeit gibt, dass die gesamten betrieblichen Aufwendungen am unteren
Ende Ihres Prognosenkorridors liegen. Auf der anderen Seite sagten Sie aber auch, dass Sie
mit den aktiven Kollaboration dem eigentlichen Plan schon sehr weit voraus sind. Also auf der
einen Seite die Chance die Kosten niedriger zu halten, und das sind gute Neuigkeiten. Auf der
anderen Seite sind sie dem Plan voraus wenn es um Konzernumsatz geht, was natürlich auch
sehr gut ist. Gibt es da vielleicht die Möglichkeit dass das Umsatzziel übertroffen wird? Das war
die zweite Frage. Danke.
Dr. Simon Moroney: Ich werde die letzte Frage beantworten und dann gebe ich an Dave ab,
um die Frage zu den Margen, also Ihre erste Frage zu beantworten. Sie haben Recht, wir arbeiten
bereits an mehr Programmen, oder lassen Sie mich es so formulieren, es gibt mehr aktive
Partner-Programme, als wir ursprünglich geplant hatten. Das heißt aber nicht, dass alle die
Programme hier auch bearbeitet werden. Ein ganz simples Beispiel sind die Programme mit
Roche oder GPC, die ja derzeitig in der klinischen Phase 1 sind. Diese Programme rechnen wir
als aktiv, aber wir arbeiten an diesen Programmen nicht mehr. Wir haben also weder Kosten
noch Umsatz. Bis zu dem Zeitpunkt an dem Meilensteine erreicht werden, buchen wir keinen
Umsatz, es sei denn FTE-Umsätze. Das ist der Grund warum wir jetzt keine Notwendigkeit sehen
die Umsatzprognose zu erhöhen, ich bevorzuge diese bei 52 Millionen Euro zu belassen.
Thomas Schiessle: Um das nochmals zu präzisieren es gibt da keinen zusätzlichen Auslöser
aus den neuen Kooperationen? Keinen Auslöser für zusätzliche Umsätze?
Dr. Simon Moroney: Der logisch erste Auslöser über eine FTE-Förderung hinaus wäre eine
Erfolgszahlung sobald ein Antikörper übergeben wird, aber bei den Programmen die gerade
erst gestartet sind, kann keiner erwarten dass ein Meilenstein noch in diesem Jahr erreicht wird.
Dave Lemus: Vielleicht könnte ich da ganz kurz noch etwas anfügen, Simon. Wenn es um die
Umsatzprognose geht, gibt es ja immer die Möglichkeit diese zu überschreiten, einmal natürlich
durch die Anzahl von fortlaufenden Programmen aber auch, wie Sie es schon bemerkt haben
Thomas, durch das erreichen von Meilensteinen in einer Kollaboration. Ich glaube was Simon
heute Morgen angedeutet hat, ist das wir uns sehr wohl mit der oberen Grenze unserer Umsatzprognose
fühlen, welche bei 52 Millionen Euro liegt. Dann zu den Kosten, vielleicht kann ich
da noch schnell fortfahren: Ich denke da fühlen wir uns ein wenig komfortabler am unteren Ende
der Prognose bei 46 Millionen Euro und ich glaube das wurde heute Morgen schon gesagt.
Wir haben außerdem noch während dieser Konferenzschaltung gesagt, dass es da noch ein
paar Ereignisse geben könnte, die diese 46 Millionen Euro noch weiter reduzieren könnten.
Aber an diesem Punkt unserer Planung glauben wir, dass wir nahe dieser 46 Millionen Euro
rauskommen werden. Also zurzeit erwarten wir die operativen Kosten am unteren Ende unserer
Kostenprognose.
Dr. Simon Moroney: Dave, möchtest Du vielleicht noch auf Thomas Frage zu den Margen in
den verschiedenen Segmenten eingehen?
Dave Lemus: Ja, wenn ich mich richtig erinnere war Thomas Frage zur Serotec-Gruppe, wie
die Dinge so laufen und ob sie unsere Erwartungen erfüllen. Ich kann sagen, dass alles nach
Plan verläuft. Ich denke, wenn eine Akquisition vorgenommen wird, und wie wir das auch in der
Geschichte von Biogenesis sehen, dann dauert es ungefähr ein Jahr bis die neue Firma integriert
ist. Sobald die Integration abgeschlossen ist - und ich muss gestehen, dass es einige Stolpersteine
während der Integration gab, besonders im Fall Serotec, wo wir jetzt praktisch alle
unsere Standorte an einem Ort in Großbritannien konsolidiert haben, genauso wie in den USA,
da gab es auch eine paar Komplikationen. Es braucht einfach ein wenig Zeit bis man die Synergien
realisieren kann, aber typischerweise mit solchen Integrationsprojekten, kann man nach
ungefähr einem Jahr die Früchte dieser Integrationsprojekte sehen. Also es war nie geplant
massive Synergie bei Serotec zu realisieren. Im gleichen Zuge, wie ich bereits erwähnt habe,
sehen wir jetzt die Früchte der Synergien bei der Biogenesis-Akquisition. Zusammengefasst –
und Simon Du möchtest da vielleicht noch etwas hinzufügen – würde ich sagen, dass Serotec
genauso läuft wie wir das erwartet haben.
Dr. Simon Moroney: Alles in allem liegen wir genau da wo wir sein wollen um unsere Ziele am
Ende des Jahres zu erreichen. Und wenn ich sage alles zusammengefasst, dann meine ich
auch alle Bereiche des AbD-Segments. Es gibt so viele übergreifende Aktivitäten die vor sich
gehen, deswegen ist es auch etwas verwirrend hier von Biogenesis oder Serotec als unterschiedliche
Einheiten zu sprechen, weil wir alles als eine Einheit sehen. Zusammenfassend, die
Integration ist gut verlaufen und wir steuern in eine gute Richtung unsere Ziele für dieses Jahr
zu erreichen. Dies war nur durch einen erfolgreichen Integrationsprozess möglich.
Thomas Schiessle: Wenn ich ehrlich sein darf, hatte ich bessere Netto-Margen im AbDGeschäft
erwartet, weil Sie beim Umsatz eine Verbesserung der „run rate“ gezeigt haben, der
Umsatz wurde im dritten Quartal sogar verdoppelt, aber der Segmentverlust ist angestiegen.
Dave Lemus: Ja, das ist richtig, und das hat mit der Tatsache zu tun, dass Q1 und Q2 außerordentlich
gute Quartale waren, und dass wir nicht erwartet haben, dass es so weitergeht. Die
jüngste Entwicklung hat nun gezeigt, dass die „Run Rate“ nicht so fortgesetzt wurde. Das gesagt,
haben wir eine Bruttomarge von fast 60 %, und wir haben immer gesagt, dass 60 % unsere
Zielmarge für dieses Segment ist. Wir denken, dass wir mit der Zeit noch besser werden, und
ein Grund für unsere Annahme ist beispielsweise, dass die Auswirkungen der Kaufpreiszuordnung
auf die Herstellungskosten in Form von planmäßigen Abschreibungen auf die Vorräte, die
im Zuge der Kaufpreiszuordnung zum beizulegenden Zeitwert bewertet werden, nur einen relativ
kurzen Zeitraum betreffen. Ein Großteil dieser Abschreibungen war bereits in vorherigen Abschlüssen
enthalten, und wir erwarten für die Serotec-Gruppe Abschreibungen für ein weiteres
Jahr. Also sobald diese außergewöhnlichen Effekte durch die Kaufpreiszuordnung abgeschlossen
sind, sollten wir bessere Margen sehen, allein durch die Tatsache, dass diese Abschreibungen
aus der Kaufpreiszuordnung wegfallen.
Thomas Schiessle: Danke
Operator: Da wir zu diesem Zeitpunkt keine weiteren Fragen haben, möchte ich jetzt das Wort
and Herrn Dr. Moroney übergeben für seine Schlussworte.
Dr. Simon E. Moroney, Vorstandsvorsitzender, MorphoSys AG
Wenn es keine weiteren Fragen mehr gibt, möchte ich zum Schluss kommen, und noch einmal
die wichtigsten Punkte zusammenfassen. Für die nahe Zukunft ist wichtig zu wissen, dass wir
uns auf dem besten Weg befinden, unsere Finanzziele für das laufende Jahr zu erreichen. Vielleicht
aber noch wichtiger ist jedoch, dass wir unsere Jahresvorgaben in Bezug auf die Anzahl
der aktiven, HuCAL-basierten therapeutischen Antikörperprogramme bereits übertroffen haben.
Die Stärke einer Pipeline von heute ist ein Indikator für die Werte von morgen – und in dieser
Hinsicht ist MorphoSys sehr gut positioniert.
Hiermit sind wir am Ende der Telefonkonferenz. Sollte jemand von Ihnen im Nachgang direkt
mit uns sprechen wollen, stehe ich hier im Büro in München zur Verfügung. Nochmals vielen
Dank für Ihre Teilnahme und auf Wiederhören.
Operator: Meine Damen und Herren, dieses Telefonkonferenz ist damit beendet. Wir bedanken
uns für Ihre Teilnahme und wünschen noch einen schönen Tag. Sie können jetzt auflegen.

[gerdass]

Antwort auf Beitrag Nr.: 27.107.217 von lupus2000 am 22.01.07 11:53:19

[gerdass]

Antwort auf Beitrag Nr.: 27.107.118 von lupus2000 am 22.01.07 11:48:30

[lupus2000]

externesSkript:
Full Year 2006 Morphosys AG Earnings Conference Call - Final
28 Februar 2007

CLAUDIA GUTJAHR-LOSER, MANAGER CORPORATE COMMUNICATIONS, MORPHOSYS: It's my pleasure to welcome all of you to our annual conference. My name is Claudia Gutjahr-Loser, and I'm Head of Corporate Communications at MorphoSys. I would like to thank you for your interest and your participation in our conference today. With me are Dr. Simon Moroney, our CEO; and Dave Lemus, our CFO.

Before we start we want to remind you that during this conference we will present and discuss certain forward-looking statements concerning the development of MorphoSys' core technologies, the progress of its current research programs and the initiation of additional programs. Should actual conditions differ from the company's assumptions, actual results and actions may differ from those anticipated. We are therefore cautioned not to place undue reliance on such forward-looking statements which speak only as of the date hereof.

Today we will present you our annual results for the year 2006. We have planned approximately one hour for the presentation. Simon will start with the revenue of the year 2006. Subsequently, Dave will give you an overdue about the financial results of the fiscal year 2006 and present the guidance for 2007. Before we start with the question and answer session, Simon will speak about the outlook for 2007 and beyond. At the end of our presentations we will take questions that this conference audience and those participants listening in on the conference call may have. For the participants of the conference call you can view the slides of our presentation on our corporate website.

I would like now to hand over to Dr. Simon Moroney, CEO, who will start with the summary of the year 2006.

DR. SIMON MORONEY, CEO, MORPHOSYS: Thank you, Claudia. I'd like to add my welcome to all of you to this, our year end 2006 analyst and press conference. I want to start with an overview of Morphosys' achievements. We exceeded our financial targets for the year, increasing revenue by 58% over 2005 to EUR53 million. We strengthened our core partnered therapeutic antibody discovery business by adding three new partners and expanding three existing alliances.

Overall, our pipeline has advanced considerably. A second HuCAL antibody into clinical trials when Roche took our anti-amyloid beta antibody into the clinic for the treatment of Alzheimer's disease. GPC reported data from their ongoing Phase 1 trial of the HuCAL antibody 1DO9C3. Our partnered pipeline reached 43 compounds and we advanced our proprietary therapeutic antibody programs, MOR103 and MOR202, according to plan.

Regarding our technology, we reported a very important advance with the release of our new RapMAT technology for antibody optimization. And last, but not least, we transformed our research antibody segment from a fledgling business unit to a top 20 player worldwide via the acquisition of Serotec, and are leading the technological transformation of this market.

All in all we had an outstanding year and most importantly, the progress we made puts the company in a strong position to continue its successful development in the future. This was all achieved against the backdrop of some extraordinary developments in our industry. The demand for antibody technologies in the pharmaceutical industry is accelerating. The year 2006 could be remembered as the year the pharmaceutical industry became convinced of the importance of therapeutic antibodies as a class of drugs.

As shown on this slide 6, 2006 witnessed seven acquisitions of antibody based biotech companies by big pharma or big biotech. This is the proof, if it were needed, that the industry is convinced by antibodies as a class of drugs. Other highlights in the sector were the return to the market of Tysabri, Biogen Idec and Elan's innovative antibody based therapy for multiple sclerosis, and the enormously successful launch of Lucentis, Genentech's fab fragment for wet AMD. Together with the ongoing success of many of the existing marketed therapeutic antibodies, the new launches helped total turnover for the year to exceed $15 billion.

These events all underscore the fact that MorphoSys is active in a highly attractive segment of the pharmaceutical industry. Furthermore, we expect interest to continue to be high in the years to come as more and more pharmaceutical and biotech companies look to develop antibody based drugs.

The significance for MorphoSys for these industry developments comes on several levels. First, we find ourselves with less direct competition than several years ago due to the acquisition of key competitors such as Abgenix and Cambridge Antibody Technology.MorphoSys' position as the leading independent recombinant antibody company is now stronger than ever before. Second, the success of antibodies as drugs has catalyzed the development of a new segment of the biotech industry, namely the scaffold field in which antibody-like recombinant proteins of different types are being developed as drugs. This creates a new competitive challenge for us and highlights the need for ongoing technology development in order for us to maintain our current position as the partner of choice for companies seeking to develop protein based therapeutics. Third, interest in therapeutic antibodies in the pharmaceutical industry continues to be strong despite the tragic events associated with the Phase 1 clinical trial of TeGenero's anti-CD28 antibody in March of last year. This unfortunate occurrence did serve to highlight the care that is required during the pre-clinical development of antibodies, particularly those that work by activating components of the immune system.

Looking at our deal flow, 2006 was, once again, a banner year for MorphoSys. We were happy to be able to expand three of our most important partnerships. Our biggest relationship is with Novartis. In June we signed an early amendment which will take our collaboration out to 2011 and which significantly increases the number of programs being pursued. This is a very important alliance for us, but also for Novartis, as evidenced by the fact that one third of their pre-clinical biologics pipeline comprises HuCAL antibodies. We were also able to extend our collaboration with Pfizer. As with the Novartis deal, this agreement still had some time to run, but again, as with Novartis, Pfizer has been so pleased with the progress of the five therapeutic programs running under the original deal that they elected to extend early. This agreement will now run to the end of 2011.

As a result of the expansion the potential value for MorphoSys in research funding and potential development for milestone payments increased to more than $100 million not including royalties. It is worth noting that Pfizer had relationships with both Abgenix and Cambridge Antibody Technology and it is highly like that the fact that those two competitors were both acquired smoothed the way for our expansion with Pfizer.

Hoffman-La Roche added two new cancer programs to our relationship on the back of taking the antibody we made for them for Alzheimer's disease into the clinic. Another development involving two of our longstanding partners was the merger of Bayer and Schering during the year. At the time we announced that this would result in a consolidation of the two agreements. As a first step at the end of last year, Bayer exercised an option to terminate our agreement with them with the intention of proceeding under the ongoing Schering agreement, which was extended until the end of 2007. We continue to work with Bayer-Schering on how best to structure our collaboration going forward.

In addition, we signed up three new partners. Daiichi-Sankyo and Schering-Plough each secured up to five year licenses to apply the HuCAL technology internally and became respectively our 11th and 12th partnerships with top 20 pharma. We also added OncoMed to our roster of partners; OncoMed is a Genentech spinout pursuing target discovery with so-called tumor stem cells. OncoMed's approach is unique and is based on the concept that tumors derive from specialized precursor, or stem cells. OncoMed received a license to use the HuCAL technology in their discovery research for two years.

Partnered therapeutic antibody discover forms the core of our business, providing approximately two thirds of our revenue. But even more importantly it represents substantial future value for MorphoSys, since we will earn royalties on every HuCAL derived drug that comes to market. We therefore place particular emphasis on the progress of our partnered pipeline and 2006 was an outstanding year in this regard. As of today, the total number of active partnered therapeutic antibody programs is 43, an increase of almost 50% over the number at the beginning of last year. The maturity of the pipeline also advanced with currently two programs in the clinic, 14 in pre-clinical development and 27 in research. I'll come back to the importance of the partnered pipeline for our future at the end of the presentation.

There are now two HuCAL antibodies in clinical trials. In May of last year Roche initiated a Phase 1 clinical trial with the anti-amyloid beta antibody that we developed for them for the treatment of Alzheimer's disease. Roche is currently running two European Phase 1 studies, both trials are randomized, double-blinded studies in patients. The first trial is a multiple ascending dose study while the second is using a single dose. The trials are now progressing at centers in Denmark, Holland, Sweden and the United Kingdom. As these two trials are being conducted in patients, as opposed to healthy volunteers, it may be possible to observe signs of clinical efficacy.

Roche's Alzheimer's program became the second HuCAL antibody to enter human clinical trials after GPC's 1DO9C3 for cancer. During the year, GPC announced preliminary clinical data from the ongoing Phase 1 trial in relapsed and refractory B cell lymphoma involving three European sites. The antibody appears to be well tolerated and hints of anti-tumor activity were observed. GPC expects to complete the Phase 1 trial in the middle of this year and move into a Phase 2 trial thereafter. The drug has been granted orphan status by the European Commission in chronic lymphocytic leukemia, multiple myeloma and Hodgkin's lymphoma.

I'd like to turn now to our proprietary drug development programs, MOR103 and MOR202, which we advanced during 2006 according to schedule. Our future plans for both of our proprietary programs are being developed with one eye on deals being done in the industry. We've all witnessed the extraordinary sums being paid by big pharma and biotech for interesting drug candidates even in the early stages of development. The industry publication, Invivo, recently published an article entitled The $100 Million IND. The gist of this article was that recent deals prove that pharma is now prepared to pay this amount, $100 million, for compounds at this stage of development. These developments are, of course, to the advantage of the biotech industry and validate, or focus, the strategy of channeling investment into programs that we have initiated ourselves.

For the last 12 months, we've been fully focused on advancing the development of MOR103 and MOR202, according to plan, and have not engaged in any discussions with potential future partners. While we will continue to work on the programs, but once the data packages have advanced, we'll make them a subject of our regular meetings with pharma and biotech companies. In other words, we'll consider offers from partners for the further development of the two compounds. While we feel under no pressure to secure a partner for either program, we want to remain flexible. Our goal is to maximize our return on investment for each program.

Our most advanced program is MOR103, for the treatment of rheumatoid arthritis. There's still a high unmet medial need in rheumatoid arthritis treatment since fewer than 25% of patients are currently well treated. Non-responders and long-term safety concerns associated with the existing anti-TNF therapies provide strong incentives for new treatment options and especially for new mechanisms of action. During 2006, we have continued to investigate the lead antibody that we've made for this program and have become even more convinced that we have a potential drug. These studies have given us the confidence to embark on the critical manufacturing and process development part of the program.

In 2006, we signed a license and manufacturing agreement with Crucell and it's technology partner, DSM Biologics, for production of clinical grade material using the well-established and fully human PER.C6 cell line. This brings together our fully human antibody with production capabilities in a fully human host. Manufacturing human antibodies in such a manner offers several potential advantages over alternative production methods, especially when targeting chronic diseases such as rheumatoid arthritis. Production is proceeding according to schedule, as are our ongoing pre-clinical experiments. We remain on track to file an IND for this program in the second half of this year.

Our second proprietary program is MOR202, the anti-CD38 approach to the treatment of multiple myeloma. Here, we reached our objective of selecting a formal pre-clinical development candidate by year end 2006. The candidate we chose shows good efficacy in vitro and in vivo models, is well produced and behaved. In 2007, we will continue pre-clinical development of this compound.

I want to turn now to technology. The success of all our therapeutic antibody programs, both partnered and proprietary, hinges on the quality of the antibodies that can be made with the HuCAL technology. Key parameters for an antibody drug include not only the obvious ones such as target affinity and specificity, but also disease modifying activity, immunogenicity, solubility, stability, production characteristics and others. One of the great advantages of the HuCAL technology is its ability to deliver high quality antibodies quickly. Precisely these features are at a premium in our industry and we've long recognized the need to do even better here.

This is the logic behind RapMAT, a HuCAL based, or HuCAL related technology for making better antibodies even faster. RapMAT is a new process that exploits the modular design of the HuCAL library to optimize antibodies even faster than is currently possible. Based on our experience to date, the main advantages of this process are two-fold. First, substantial time savings can be made in the optimization of lead antibodies. RapMAT takes up to 30% off the time of the standard selection process that may normally last between six and 12 months. As you can see from the chart on slide 18, a typical improvement in affinity may be by a factor of ten to 40-fold.

Second, the process results in a greater diversity of lead candidates. This is especially important in drug development since the greater the diversity of the leads generated, the high probability that one having drug-like qualities will be obtained. RapMAT is now integrated in our drug discovery programs and we expect it to make our drug discovery even more efficient. We continue to invest in developing the HuCAL technology. The goal is very simple; to make effective and safe therapeutic antibody candidates faster than before. We'll update you on new developments as they come on line.

I'd like to turn now to the second pillar of our business, namely our research antibody segment, AbD Serotec. This unit combines our custom HuCAL antibody generation service with our two acquisitions in the research antibody space, Biogenesis and Serotec. This segment has come a long way in a short time. Having commenced operations less than four years ago, we're now one of the world's top 20 suppliers of research antibodies and we intend to improve this position still further.

The year was very much focused on consolidation and integration of the component pieces of this business. The majority of our staff in this unit is now located in a brand new facility in Kidlington, just north of Oxford in England. This consolidates the former Biogenesis operation from Poole on the south coast of England, with the former Serotec and Oxford Biotechnology operations outside Oxford. Altogether, we have about 80 staff on this site.

In addition to consolidation of the sites in England, we moved our Raleigh in North Carolina sales office to new premises during the year. Operations for the unit, including antibody generation and manufacturing, are in Oxford and at MorphoSys' headquarters in Munich, and we have sales staff at these sites as well as in Raleigh and New Hampshire in the US, Dusseldorf in Germany and Hamar in Norway.

We are delighted that despite the enormous upheaval associated with integrating these organizations, consolidating several teams and establishing two new premises, the AbD Serotec team was able to achieve the ambitious revenue target that we set for them at the beginning of the year. In addition, the unit developed a number of important relationships during 2006. Just to mention a few, we entered a marketing alliance with Chemicon, technology and marketing alliances with Thermo Fisher Group and Chimera Biotech, a discovery collaboration with the Kasuza DNA Research Institute in Japan and a sole source agreement with the US Army Medical Research Institute For Infectious Diseases, or USAMRIID for short.

Over the last couple of months, we've also entered research agreements with the Burnham Institute and with a leading Japanese research institute, both of which were sourced by the AbD Serotec unit. These are of particular significance for the company as a whole and I'll return to this topic in the outlook section of the presentation.

The loss that AbD Serotec recorded arose primarily because of one-off acquisition-related charges and we are confident that, in addition to solid top line growth, AbD Serotec will record a profit this year.

That concludes the review of the year. I now want to hand over to Dave for his presentation of the financial results.

DAVE LEMUS, CFO, MORPHOSYS AG: Thank you, Simon. In opening, I'm pleased to say that 2006 was another excellent year for MorphoSys, not only operationally, but financially speaking. On this first chart you can see some of the financial highlights of the year. Revenues for the MorphoSys Group increased by 58% to EUR53 million, leading to a net profit of EUR6 million. Removing Serotec from the picture, revenues grew organically by a solid 22%.

In January 2006, we acquired the Serotec Group to further strengthen the research antibodies and Serotec contributed EUR12.3 million of total Group revenues. Our cash position increased to EUR66 million, in part due to a successful private placement in March 2006 as well from very strong positive cash flow from operations of EUR16.3 million.

Last but not least, we were recognized in the annual STEP Award in the category finance, highlighting achievements in that area of our company during the year.

I'd now like to go into more detail of 2006 financial results. Let's start with revenues. The next chart shows where our revenue growth has arisen. Revenues for the MorphoSys Group for the full year 2006 increased by 58% to EUR53 million which slightly exceeded our guidance. Group revenues measured in constant currency would have been about EUR1 million lower than actual, mainly due to the weaker dollar. Revenues from the therapeutic antibody segment increased by EUR5.6 million to EUR34.7 million. As we had no acquisitions on the therapeutic side of our business, the therapeutic antibody segment grew organically by about 19%.

Performance based payments from partners increased to EUR7.5 million, providing 22% of the segment's revenues, an increase of 9% in comparison to the previous year. Payments in 2006 include the clinical Phase 1 milestone from our partner Roche.

While the research antibody segment contributed in 2005, 13% to total company revenues, in 2006 we saw the segment's contribution increase to 35% or EUR18.3 million, mainly as a result of the acquisition of the Serotec Group. As we reported earlier, the Serotec business is now fully integrated within the MorphoSys research antibody segment, named AbD. The organic revenue growth of the segment, that is if you remove the effect of Serotec from our 2006 revenues, would have resulted in organic growth of approximately 40%.

In summary, organic growth for both segments in total was 22% which is in line with our long-term goal to experience annual organic revenue growth in excess of 15% per year.

If we take a look on this next slide where sales arose geographically, 62% of MorphoSys' commercial revenues were generated in Europe and Asia, compared with 56% last year. This reflects the trends that we have seen over the last couple of years where our cooperation partners in Europe, and particularly in Asia, will continue to be very important to us. Looking at the two segment sales in isolation and how they geographically split, revenue geographically mirrors the total company numbers.

I think it's important to highlight the increasing amount of performance based payments. With a partnered pipeline of currently 43 antibody programs ongoing, this is another big picture trend. Namely, we will see that performance based payments will continue to be a larger part of our revenue streams. As you can see from the chart, they have increased in absolute terms over the last couple of years. We anticipate this trend to continue in 2007 also in percentage terms, which is good news to MorphoSys as these payments represent pure profit, an upside for the company.

For 2007 we expect one to three IND filings from our partners and 2008 is expected to generate even more IND filings, which again should help our financial result. Within the scope of MorphoSys' larger antibody partnerships, license payments and research funding still represent the majority of revenues.

The good news here is that many cooperations were extended in the last couple of years, making several of these revenue streams committed over the next several years. That in turn, allows us a higher planning certainty. Driving that point home, at the beginning of 2007 approximately two thirds of the revenues of the therapeutic antibodies segment was already committed and secured.

Let's move to operating expenses. Total operating expenses increased by 72% to EUR46.9 million. The total increase in operating expenses of EUR19.6 million was mainly due to the inclusion of the Serotec Group within the consolidated accounts with an impact of EUR13.8 million. Higher personnel cost in conjunction with new collaboration and increased expenses for proprietary product development also impact expenses. Comparing this against guidance, operating expenses were at the lower end of the range, identical to what we confirmed during our Q3, 2006 conference call.

COGS in our company only arises in the research antibody segment. For the year 2006, total cost rose to EUR8 million compared to EUR2.5 million in the year 2005, which mainly resulted from the inclusion of Serotec COGS in the consolidated Group accounts.

Cost for R&D arise mainly in the therapeutic antibody segment; R&D costs increased by 25% to EUR17.5 million. This increase was mainly the result of the expenses for product and technology development amounting to approximately EUR3 million.

SG&A expenses amounted to EUR21.4 million, an increase of 98% compared to the previous year. The increase is mainly derived from the inclusion of the Serotec Group in the amount of EUR8.3 million. Also driving SG&A cost higher were increased personnel cost at the Munich headquarters and one-off integration cost associated with the integration of acquired companies.

Stock-based compensation in the amount of EUR1.2 million for the year 2006 was recorded as a non-cash charge and this year is an embedded in COGS, SG&A and R&D expenses. Total stock-based compensation changed little in comparison to the previous year.

Let's look at the results by segment. On the therapeutic side, revenues amounted to EUR34.7 million compared to our guidance estimate of EUR34 million, which was influenced by higher levels of performance based payments and by new and expanded collaborations. Operating expenses of the therapeutic antibody segment increased 27% to EUR18.1 million, mainly driven by expenses for proprietary product development and technology development in the amount of EUR3 million. The resulting operating segment result was a very solid EUR16.6 million.

Moving to the research segment, total sales were EUR18.3 million and total expenses of EUR21.7 million, mainly impacted by strong organic growth and the Serotec acquisition, the result a loss of EUR3.4 million with a bid under our expectations and guidance, mainly due to higher and earlier than expected restructuring costs. Cash flow in the unit however, looks a bit better.

In order to get to the cash flow for the unit, in this next chart we removed amortization of approximately EUR1 million, depreciation of EUR900,000 and stock based compensation of EUR200,000 and then subtracted CapEx of EUR1.9 million. The result is a reasonably good proxy for cash flow of the unit. As you can see, once you remove these non-cash items and one-off restructuring cost of EUR1.7 million, the cash usage of the unit was closer to EUR1.5 million. All said and done, we expect and improvement looking ahead, and for 2007 we expect the segment to be both cash positive and have an operational income. More on that in the guidance section.

In our last slide we discuss restructuring costs. On that note, let me add some words to our corporate structure and the successful conclusion of the integration exercise. Shortly after the acquisition of the Serotec Group in 2006, we decided to consolidate some of our sites. Presently we have premises for this unit in Munich, Germany, in Oxford in the UK and in Raleigh in the US. We've also decided to keep a small sales office in Dusseldorf Germany and in New Hampshire in the US and in Norway.

In the UK, several former Biogenesis employees were moved to Oxford and we have decided to close down the site in Poole, which was completed at the end of 2006. We are presently renting the site over the next two years and have divested the equipment in that site to a buyer. At the end of this period, we hope to find another buyer for the building and the land.

Our US activities are now concentrated in the research triangle of North Carolina. We have a sales force sitting there of approximately 20 people which serve the US market. Additionally we keep a smaller satellite sales office in New Hampshire.

This next chart represents our corporate legal structure as per January 2007. It is the result of a streamlining exercise of the corporate structure, undertaken at the end of last year. On the left side, this is our former US subsidiary in Charlotte, MorphoSys USA Inc, which substantially ceased its operations a few years back. The Poole Real Estate Limited is the former Biogenesis Limited which possesses the real estate holdings of the ex-Biogenesis site and is the current landlord of that site. MorphoSys IP GmbH was founded a couple of years ago and holds a substantial portion of the IP rights of MorphoSys AG.MorphoSys UK Limited, formerly known as Serotec Limited, has been renamed recently. It has two affiliates, MorphoSys US Inc, which is the former Serotec Inc, and MorphoSys AbD GmbH, which is the former Serotec GmbH in Dusseldorf here in Germany. Oxford Biotechnology Limited and the Oxford Biomarketing Limited are currently in liquidation.

Moving back to the financial review, I'd like to continue with non-operating items. Profit from operations remained almost unchanged at EUR6.2 million compared to 2005 and is rather close to our guidance given, that we would be on the upper end of the EUR6 million. Earnings before interest, taxes, depreciation and amortization, or EBITDA, amounted to EUR10.3 million compared to EUR8.6 million in the previous year.

Beneath the non-operating section is income tax. We had a benefit from income taxes of EUR700,000. This has resulted from movements of our deferred tax liability in assets, but was also heavily impacted by the establishment of a deferred tax asset of approximately EUR1.2 million relating to our tax loss carry forwards in 2007.

MorphoSys achieved a net profit of EUR6 million under IFRS. The resulted diluted net income per share for the full year 2006 amounted to EUR0.93 per share compared to an EPS of EUR0.83 per share last year.

In 2006, MorphoSys' investment in plant, property and equipment, as well as in intangibles, amounted to EUR4 million resulting in an increase of EUR3.3 million compared to the same period of the prior year. Consolidating the UK's activities into our new corporate headquarters in Oxford contributed EUR1.2 million of the same. We believe the UK CapEx requirements, looking ahead, are substantially fulfilled by this investment. Depreciation of plant, property and equipment for 2006 accounted for EUR1.5 million compared to EUR900,000 in 2005. The increase was mainly due to the Serotec acquisition.

Let's move to the balance sheet. If you look at the balance sheet, you can see the company's current assets increased by about EUR18 million to EUR76.1 million, mainly as the result of the capital increase successfully completed in March 2006. The cash position increased to EUR66 million by the end of the year. Looking at non-current assets, you can see that these have more than doubled to EUR51.7 million, which is mainly the result of consolidating Serotec's hard and soft assets, especially goodwill in our balance sheet.

Let's move to the next slide, liabilities. During the year 2006, current liabilities increased by EUR7 million to EUR18.3 million. This change is mainly as a result of the inclusion of the Serotec entities into the consolidated Group financial statements. The growth in non-current liabilities was significantly impacted by the rise of non-deferred revenues of EUR2.5 million due to payments arising from new contracts signed in 2005 and 2006 and as well, a build up in deferred tax liabilities resulting from the Serotec purchase price accounting exercise.

Looking at changes in share capital during the year, two capital increases were carried out. As part of the Serotec acquisition in January 2006, one third of the purchase price was paid by means of a capital increase. The 208,560 new shares from the capital increase went to the former owners of the Serotec Group and are subject to a graded holding period. In March 2006, MorphoSys successfully placed 6.5 of its outstanding share capital in a private placement to international institutional investors resulting in gross proceeds for MorphoSys of approximately EUR17 million.

Beyond that, 97,000 shares were issued to employees as part of the convertible bonds and options exercises. At year end 2006, the total number of shares issued was approximately 6.7 million shares.

Looking at our shareholder structure, presently, our biggest shareholder is Novartis AG, who owns about 7%, followed by AstraZeneca, who owns approximately 6%. The free float amounted to approximately 87% and includes 3% of shareholdings by the management and supervisory boards. It may be worthwhile mentioning that in the course of 2006, that more than 200 investor meetings were held in ten countries and institutional shareholdings of MorphoSys roughly doubled during that -- during the year and we estimate these shareholdings to be currently at about 40% of share capital.

At the end of 2006, the MorphoSys Group employed 279 employees compared to 172 employees at year end 2005. Of the 279, 158 worked in the therapeutic antibody segment, and 121 in the research antibody segment. Of total employees, 183 worked in Germany, 78 in the UK, and 18 in the US.

That concludes my review for the year 2006. I'd like to briefly continue with the outlook for 2007.

We estimate the revenues for the full year 2007 to range between EUR60 and EUR65 million. We anticipate that approximately two thirds of revenues will be generated by the therapeutic antibody segment. Of that amount, we expect performance-based payments to make up approximately EUR10 million of the total. We expect that the research antibody segment will contribute approximately one third of total revenues.

There are a number of assumptions that have been put into the expense line for 2007. First and foremost, included in our assumptions is approximately EUR5 million worth of investment in proprietary products and roughly EUR1 million in proprietary technology development. Looking at the guidance by segment, in the therapeutic unit, we expect the unit to be profitable as last year as it relates to the AbD segment. We expect, in 2007, an operational profit of somewhere between 5% to 10% of sales.

That concludes the financial analysis of 2006 and the guidance for 2007. I'd now like to hand back to Simon.

DR. SIMON MORONEY: Thanks, Dave. To conclude the presentation, I'd like to talk about how we intend to use our current strength for future growth and then finish by presenting our goals for 2007.

Looking to our future, I want to make two key points about our pipeline and our strategy. The first point is that our partnered therapeutic discovery business has now hit critical mass. The six deals that we signed during 2006, together with the other running partnerships, will result in sufficient royalties from HuCAL drugs on the market to secure our long-term future. Our updated projection suggests that the currently active partnerships should result in at least nine HuCAL antibody drugs coming to the market. How do we reach this conclusion? It's based on the number of programs ongoing or pending within our current partnerships and the probability that these programs will result in marketed drugs. The next two slides take you through this calculation.

We currently have 43 active partnered programs. We project at least seven new program starts in 2007, meaning that the number should increase to a total of 50 by the end of this year. Within the scope of the existing ongoing collaborations, we believe a further 40 new programs will be started between 2008 and 2011. This makes a grand total of 90 partnered programs and our internal pipeline projections are based on this number. Note that this calculation relies only on partnerships that are already in place. Every additional partnership we may sign in the future will add to the number of HuCAL antibodies coming to market and I'd like to emphasize here that we do anticipate entering new partnerships, but solely for the purpose of this calculation, we have assumed no addition deals.

The next step of the estimate relies on our experience with generating HuCAL antibodies and industry data on developmental success rates. Our experience has shown that the probability that we can generate in antibody against a particular target, and meet the criteria required to enter formal pre-clinical development, is at least 80%. Our data on pre-clinical development suggests the probability that an antibody will successfully complete this phase is 37.5%.

The third aspect is clinical development and here we rely on the latest data from the Tuft Center for the study of drug development which is probably the most reliable source of statistics on the development of pharmaceutical products. These data show that the probability that a biotherapeutic drug will move from Phase 1 development to market is about 30%. So we can now apply these probabilities to our partnerships and estimate how many HuCAL antibodies will come to market from the existing partnerships and that number is nine. We should be careful, of course, not to over interpret this analysis; it's based on a number of assumptions and, of course, includes estimates of programs that haven't started yet. However, the estimate gives you a sense of the future potential of our partnered pipeline even assuming that no new deals are signed.

The second point I'd like to make is a strategic one and that is that our AbD Serotec unit is providing the synergy that we believe will be a major source of future value for our therapeutics business. The diagram on slide 46 captures pictorially an important synergy between the two parts of our business. Technology development within the therapeutic antibody segment makes HuCAL a more powerful research tool. This makes the technology more and more attractive for customers of our AbD Serotec unit, and this in turn helps our sales of research antibodies through the AbD Serotec unit. And furthermore it enables us to enter potentially valuable research collaborations which provide access to drug targets that in turn feed the therapeutic antibody segment.

A deal that we recently closed exemplifies this. I refer here to the alliance with the Burnham Institute, one of the leading medically orientated research institutes in the United States. The Burnham Institute is very well funded and ranks fifth among all private US research institutes in terms of NIH funding. It also consistently ranks among the top 20 organizations for the impact of its research publications measured through scientific citations received for publication by the Institute for Scientific Information. Burnham scientists have contributed to at least five approved therapies and several diagnostic tests that are currently in use and another nine innovative therapies are currently in clinical trials. The agreement we have with them gives scientists at the Burnham Institute rapid access to HuCAL antibodies for research purposes on preferred terms. In return, MorphoSys secures rights to develop any antibodies with therapeutic or diagnostic potential against targets investigated by Burham researchers.

The Burnham deal was the first example of such an arrangement. We recently into the second with a leading Japanese research institute in a three-way deal also involving our Japanese commercial partners GeneFrontier Corporation. We aim to forge similar agreements with other research institutes. We're convinced that multiple research based relationships with leading medically focused academic institutes will be a more productive way of accessing the targets of tomorrow than would building our own target discovery infrastructure in-house.

Access to innovative new drug targets will make our business model even more lucrative since it will enable us to offer not only a proprietary antibody technology, but also novel targets to a collaboration. Under this scenario MorphoSys would itself be the initiator of therapeutic antibody programs in contrast to our current model in which the 43 ongoing partner programs were all initiated by our collaboration partners. On a case by case basis we would decide how far to take individual programs before looking for partners for further development. This model offers considerable flexibility as we would be in control of each program.

Both of our business segments are performing extremely well and prospects for continued growth are very attractive. As I've mentioned our current partnerships and the state of developed pipeline mean that our therapeutic antibody segment has reached critical mass. On the research product side of the business attractive strategic synergies are now being realized. Operationally we expect the AbD Serotec segment to grow faster than the market and therefore to increase its market share.

The pharmaceutical industry is facing a severe challenge in filling its development pipeline. MorphoSys' success today is based on its ability to act as a source of antibody drugs. Looking to the future we believe that by continually improving our technology to enable a generation of even better antibody based substances even faster, by proving that HuCAL antibodies are not only effective in pre-clinical assays, but also in the clinic and by leveraging our proprietary technology in the research space to source novel targets that MorphoSys can become an indispensable partner to the pharmaceutical and research communities.

In closing, our goals our goals for this year are as follows. Revenues in 2007 will be in the range of EUR60 to EUR65 million, split roughly two to one therapeutics to research products. This is consistent with our longer-term objective to grow total Group revenues by at least 15% to 20% year-on-year until such a time as HuCAL drugs reach the market in five to six years' time when we would expect that growth to accelerate sharply. For 2007 we project an operating profit of about EUR7 to EUR10 million.

With regard to the development of our therapeutic pipeline we aim to file an IND on MOR103 before year end. Regarding MOR202 we'll continue with pre-clinical development working towards an IND. We anticipate between one and three new INDs from our partnered programs this year. This development reflects the growing maturity of our pipeline and we expect the number of INDs to be even higher next year. We project that the total number active partnered programs will hit 50 in 2007 and will increase steadily thereafter. Although this may sound like a modest increase from the 43 programs currently underway it includes assumed attrition in pre-clinical development.

The number of active programs is a more important parameter than the number of deals we sign with pharma companies. Based on the demand we continue to see in the industry and the number of discussions we are currently engaged in we anticipate an attractive level of deal flow in the years ahead. Predicting timing and scope of such deals is, however, very difficult and we can therefore give no precise guidance on this point.

In the research antibody segment our goal for the AbD Serotec unit is to increase revenues by 20% over last year and to reach profitability. A set of important strategic goals for the unit relate to the growing penetration of the HuCAL technology. To this end we aim to enter at least one new marketing alliance and also focus on increasing the uptake of HuCAL antibodies in the research community.

In closing we look forward to another successful year for the company and to updating you on a regular basis on our progress. Thank you all for your attention.

CLAUDIA GUTJAHR-LOSER: Thank you very much Simon, Dave. I would like to open now this room for your questions. I suggest that we start with questions coming from the conference call. I see there are no questions at the time, so may I have the first question here from the audience please?

HANS KUHLMANN, ANALYST, LBBW: Hello. I have two questions. Hans Kuhlmann from LBBW. One is how sure are you with your projected 40 new programs coming up in 2008 to 2011, what is the basis of those calculations?

And the second, if I look at your guidance for 2007 and the assumption that your AbD unit will be profitable with an EBIT margin about 5% to 10% and more milestones coming up from the therapeutic section, it seems to me that your EBIT estimates are rather conservative, could you comment on that please?

DR. SIMON MORONEY: I'll take the first part of that question and Dave will take the second part.

The estimate of 40 programs starting between '08 and 2011 we've taken out of the existing contracts, some of which run to 2011, some of which terminate earlier. In some of those contracts there are precise commitments about how many programs to start year-on-year, in other contracts there are options. And what we've done is we've combined the commitments that some of those partners have made with an estimate, a conservative estimate I might say, from the options and added those together to come to this number of 40. The total potential number of programs that could be started if you add the committed programs plus all of the options, there's actually a lot more than 40, but we have only taken a portion of the option to come up with this number reported. So we actually feel very, very comfortable with that number of 40.

DAVE LEMUS: And regarding the conservatism of the 2007 projections, I guess the first thing we have to realize is that we're dealing with ranges. When we talk about milestones of approximately ten, that could either be nine or it could more, same with the EBIT margin. And I think if you do the math and you realize also that we are doubling our investment in product and technology spend from this year's current EUR3 million to approximately EUR6 million next year. We think it's conservative, but not overly conservative.

DANIEL WENDORFF, ANALYST, WESTLB EQUITY MARKETS: Daniel Wendorff, WestLB. Three questions if I may? First question regarding the Bayer-Schering situation. You said the Schering deal for Bayer would slip into the Schering deal and that is going to expire at the end of 2007. How confident are you that that can be extended and if it's not going to be extended, what could be the financial impact in terms of a rough guidance?

And two financial questions regarding the CapEx, how do you see that going to develop into 2007? And the profitability in the ABD segment, do you mainly achieve this by increasing your gross margin or how do you see the EBIT margin of 5% to 10% develop?

DR. SIMON MORONEY: Yes, let me take the first question about Bayer-Schering and then Dave will speak to the financial questions. The agreement, the original agreement we had with Schering had a provision in it whereby it could be extended to the end of '07 and that's the agreement that the two, or now the combined Bayer-Schering is now operating under. We're in discussions with them at the moment about going beyond 2007, but at this stage I'm not able or not prepared to comment on the status of those discussions or the likelihood that we could extend that deal or if so, under what terms and conditions. It's an ongoing negotiation and our policy is simply not to comment on ongoing negotiations.

DANIEL WENDORFF: What's the potential financial impact if it's not going to be extended?

DR. SIMON MORONEY: I think what we would say to that point is we've seen in the past that if deals don't get extended, that we'd be in a position to replace them with alternative deals that essentially provide cover if you like, for the gap that's made by that missing deal. So let me just say that discussions are ongoing, what the terms could be for a potential extension, we don't know at this stage, but we -- it's not a source of concern for us. Let's put it that way.

DAVE LEMUS: As it relates to the question regarding CapEx; this year we had approximately EUR4 million worth of CapEx expenditure. We expect in 2007 that number to be reduced down to approximately EUR3 million. That's mainly the result of the fact that in 2006 we had capital expenditures in the amount of about EUR1.2 million as it relates to the restructuring of the UK Serotec Group.

As it relates to the question increasing the result of Serotec, making it more profitable, or the EBIT segment rather; I think it's a combination of things. Number one, we had restructuring costs of about EUR1.7 million last year. Those restructuring costs are now finished and we expect no further restructuring costs. That will be one effect, another effect of course will be we expect a slight increase in the gross profit and of course we also expect, through optimizing the product portfolio, that the business in total will become more profitable. So not one thing.

DANIEL WENDORFF: Thank you.

MARTIN POSSIENKE, ANALYST, EQUINET INSTITUTIONAL SERVICES: Martin Possienke, Equinet. Yes congratulations on therapeutics; I'm sorry that I have to ask again on the other business unit. Restructuring charges of EUR1.7 million, if I remember correctly it's pretty much in line with your guidance communicated last year. Nonetheless the operating result is significantly below your guidance so there must be something on the operating side as well. Maybe you can comment on that?

And then in terms of Serotec on a standalone basis, revenue growth is around 10%. Am I correct there and if I'm correct, why is it below industry growth and what is the trigger to bring it to 20% in 2007?

DR. SIMON MORONEY: Okay, maybe I can just start with some general comments about that and Dave will comment on the specific financial questions.

What you can't forget is that the year 2007 was one of massive upheaval for us in that area of the business so we consolidated several different operations, we established brand new premises, we had to relocate our manufacturing into those premises, we had to relocate people from two sites in the UK into those premises in the UK. That involved significant expense. We took the opportunity to upgrade their premises from something that was, we felt, well below current industry standard to something now that is really not only today's standard, but tomorrow's standard. We have a wonderful facility there and we took the opportunity in 2006 to make considerable expense in order to establish that facility and equip it for the future.

So it was really a year of establishing that unit in the best possible way that it could perform in the years ahead. And I think for that reason, what you should really focus in on is the projected performance for this year, which will be growth we project of above 20% which is significantly better than the market. If you look at some of the bigger players in the market, they're actually growing below 10%. Some of the bigger players such as Chemicon, now part of Milipor and some of the other antibody specialists, are growing below 10%. So if we can achieve that goal of growing at over 20%, we'll be growing at twice the rate of the market in this year. So I think those will be my general comments, that last year was a year of consolidation and we're now positioned to perform substantially better than the market in the years ahead, starting this year.

DAVE LEMUS: Yes maybe the comment on the restructuring charges; I think the guidance that we gave at the beginning of 2006 was that restructuring charges amount to approximately EUR1 million. They were almost double that in the form of about EUR1.7 million, so that had a big impact on the performance of the unit. Part of that was due to the fact that the expenses that we actually had in 2006 were higher than expected, part of it is also that some of these expenses were pulled forward into 2006 as a result of quicker than anticipated integration, moving into to the building which would then result in the write-offs which we had anticipated back in 2006, to occur in early in 2007.

MARTIN POSSIENKE: So from operating point of view everything went as you imagined it at the beginning of the year.

DAVE LEMUS: Other than the fact that the restructuring costs were substantially higher, and also that we, in conjunction with those restructuring costs, had -- because of that we had lower gross profit. But it think, as Simon mentioned, we're quite confident that this unit will become profitable this year and without doubt, cash positive.

MARTIN POSSIENKE: Just another question on this topic if I may regarding the guidance for 2007? I think we speak about some EUR22 million in terms of revenues for the AbD Serotec segment. So assuming that you keep your COGS and your operating costs stable, corrected for restructuring, we end up around EUR20 million. So all in all you have to keep your COGS and your operating costs stable in absolute terms in order to reach the upper end of your 5% to 10% EBIT guidance. Do you think it's possible to keep the cost level stable and operating costs maybe even declining a bit in absolute terms?

DAVE LEMUS: Yes, are we talking COGS as a percentage stable or COGS in absolute terms stable?

MARTIN POSSIENKE: To achieve the upper end of your guidance you have to keep it stable in absolute terms.

DAVE LEMUS: Okay, it's unlikely that we'll keep COGS stable in absolute terms. We expect, however, that the total cost of the operating unit, not least due to the fact that we've now restructured a number of the units. That chart that we saw there where we went from approximately ten subsidiaries to now the current seven, should also significantly reduce costs. We've substantially streamlined the structure of the Group which should result in substantial cost savings. So we expect the main cost -- we expect some improvement to happen on the gross margin, as I mentioned, and we also expect to see substantial improvement beneath gross margin.

MARTIN POSSIENKE: But operating costs will decline in absolute terms, most likely?

DAVE LEMUS: We would expect so, yes.

MARTIN POSSIENKE: Okay, thanks a lot.

HOLGER BLUM, ANALYST, DEUTSCHE BANK: Holger Blum, Deutsche Bank. One question on the SG&A number in the fourth quarter, it seems nearly twice the run rate of previous quarters. Was it due to restructuring and what should we expect there for the future?

The second question, on your guidance, could you maybe talk a little bit more of what is impacting the range, what makes you end up at the lower end versus upper end of the guidance, especially I think you mention that you target EUR10 million of milestone payments into 2007? Does that only imply one or three INDs?

And the third question then would be more longer term maybe on the proprietary pipeline or the fact that you haven't had any partnering talks yet. Might that become a topic over 2007 and maybe over longer term, would you have a maximum spending for that maybe for 2008, 2009?

DR. SIMON MORONEY: Maybe I'll start with that question about the [own] pipeline, and then Dave will answer the financial questions. We've deliberately not engaged in the last year and discussions on those programs because we wanted to focus on developing and bringing them forward and generating a strong data package. We feel now that in both cases we have two stories there, around MOR103 and MOR202, which are sufficiently strong and especially given the willingness, or let me say the desperation of pharma to pay big amount of money for interesting, even early stage drug candidates. We feel that it's now worth bringing those two stories into our meetings with pharma and biotech, when we go out and have those meetings.

That said, we don't need to partner either of those compounds during the course of this year. However, as I said during the talk, we want to remain flexible. If someone -- if we have a discussion with a great partner and they indicate that they would be very interested in working together with us to develop one or the other of those compounds, we will entertain that discussion. But our current intentions are to continue with both of those programs for the foreseeable future on our own.

DAVE LEMUS: Regarding the Q4 SG&A cost increase. Yes, you're correct that the increase is mainly attributable to the write-offs and the restructuring costs in association with the AbD unit in Q4. We also had a extra performance bonus based on the excellent year that we had -- that we paid in 2006.

There was a question regarding the impact of IND milestones on the approximately EUR10 million worth of projected milestones for the year. What I'm afraid I can't give you today is in that EUR10 million, to tell you whether or not in our planning one or three IND milestones are included, but obviously certainly at least one is, as it was this year, in 2006 we had the IND milestone included from Roche. One could perhaps assume that there is some upside in that guidance if we were to achieve the upper end of the three IND filings.

DR. SIMON MORONEY: Maybe I should just add a point to that. Predicting when milestones happen in this industry is enormously difficult. When it comes to clinical programs, filing INDs and so on, recall that we have no influence over this at all and we're simply in the hands of our partners there. So we have an idea, or a feeling or a sense that we have no control at all, and therefore, planning has to have an element of caution in it when we make estimates of when these events can occur.

HOLGER BLUM: But what is then causing the range, what are the flexible components in that guidance?

DAVE LEMUS: Partially it's the milestones and partially it's operational guidance. The other thing that has a very significant impact on our ability to call revenues mainly on the therapeutic side of the business is the impact of new revenues. That is very, very difficult to determine. And maybe one other point I should make. What we call as performance-based payments, includes, milestones, but is not the only thing that is included in that planning. We have a number, or a range of different types of payments which we consider performance-based payments that can vary. In total, for 2007 we expect them to be EUR10 million, they're certainly not all made of three IND payments. Did that answer you question?

HOLGER BLUM: Yes.

UNIDENTIFIED AUDIENCE MEMBER: [inaudible] Independent Analyst. You talked about 100% about your own company, but I would be interested about the market where you are moving and developing. Can you -- have you some imagination of your market where you are active, the antibody company market, or how could you define it? And do you -- have you some feeling for your market share in this market, how you developed and what is the measure? Is it sales, is it other measures which could give you some feeling that you are outperforming your competitors? Did you move up in your position from, let's say, place 50 to 20, and do you believe that this will go further in the coming years?

DR. SIMON MORONEY: When we think about these points, we have to think about the two units separately, the therapeutic antibody segment and the research antibody segment. On the research antibody side, a lot of our competitors are private companies and it's hard to get precise information about their turnover, for example. But as we said during the presentation, we believe, based on the best information we have, that we're in the top 20 worldwide in terms of our position, from point of view of turnover vis-à-vis our competitors. And remember, we started this segment in 2003, so we've gone from nowhere in 2003 to a position in the top 20 in 2006 and we, of course are aiming to move beyond there. And the fact that that segment is growing at faster than the market rate shows you that we're improving our market share in that segment.

On the therapeutic antibody segment, we know the competitive space extremely well. Two of our biggest competitors have been acquired in the last 18 months, that's Cambridge Antibody Technology and Abgenix. The way we measure our performance here is largely by the number of partnerships that we enter, compared with the number of partnerships our competitors enter. And here we know that we are in the top two, possibly three worldwide in that segment. And I think if you look at the top pharma companies, the top 20 pharma companies, we're number one in terms of the number of partnerships we have signed over the last three, four years.

So that's the basis of our claim, that we are the partner of choice for people who are prepared to pay serious money for access to a technology. MorphoSys is the partner of choice. That's a perfectly fair statement based on the deals that we've signed over the last couple of years. Does that answer the question?

UNIDENTIFIED AUDIENCE MEMBER: One additional question. The antibody technology is one of several technologies to develop new products. Do you feel that this technology will become even more important, or if you look to [inaudible], [CBCI] is not antibody, it's something different, so there are other methods and other technologies, biotechnologies. Do you think the antibody technology will become more important or could lose some importance?

DR. SIMON MORONEY: Good question. I'm convinced it will become more important, and the reason why is you just have to look at the level of interest in the pharmaceutical industry. Ten years ago, or 15 years ago, there were no antibody drugs, perhaps one, 15 years ago. Today there are 20. There are well over 100 in clinical trials today and that, of course -- those are the products of tomorrow. So the level of interest in the pharmaceutical industry for this class of drugs, for antibodies of the class, has exploded in the last five years. And based on the discussions and negotiations that we continue to have in the industry, we see that growth going on out into the future.

Whenever we talk to potential partners and of course, our existing partners, the Pfizers, the Novartis, the Roches, the Bayer-Schering, the Centocors, the Lilleys, the Schering-Ploughs, all of these people. We ask them a question that's of great importance for us which is, how much of the future do antibodies and antibody technologies have? Because we worry about that, of course it's important for us. And the answer we always get back from those people is, 15, 20 years and beyond.

This is not something that's going to come to an end tomorrow, this is something that the industry is committed to, that they're putting big investments into. And a proof of that point is the fact that as said in the presentation for Novartis, one third of their pre-clinical biologics pipeline comes out of our technology. That's a bit bet that Novartis is placing on their future portfolio of products which is directly based on our technology. We feel very, very comfortable and confident about the important of our technology and MorphoSys in the future of this industry.

UNIDENTIFIED AUDIENCE MEMBER: My name is [inaudible]. I just want to ask a question about what the conditions of your pharmaceutical collaborations are in the light of the huge interest of the big pharma companies in antibodies? How does it translate into the conditions of your deals you are doing, and do you see any shift in the mix between upfront payment, milestones and royalties?

DR. SIMON MORONEY: Yes, that's a good question, several years ago we had to face the criticism that all this stuff would become a commodity and would be worth nothing. And we've seen that in the case of, for example, combinatorial chemistry libraries, where in the late '90s they were something that you could charge milestones and royalties for and then a few years later, if you'd got a little bit of upfront cash you were very lucky. The criticism that people pointed at us five years ago that our technology would become a commodity has absolutely not panned out at all. And the fact of the matter is although terms and conditions haven't improved, they haven't decreased at all.

So in broad terms the royalties and the milestones that we can demand today are pretty much the same as they were five years ago, meaning that the technology has held its value. There are limits to what you can charge because if you think about royalties, for example, the pharma company does a calculation of how much they can afford to pay in terms of royalties and there is a limit on that number. But I think the fact that we've been able to hold those financial terms stable over that period is proof of the fact that the technology has retained its value and not become commoditized.

CLAUDIA GUTJAHR-LOSER: Are there any further questions?

UNIDENTIFIED AUDIENCE MEMBER: Maybe one follow-up question regarding your own antibody development programs. You mentioned that the Burnham Research Institute collaboration could present a sort of precedence for how you might even expand that further. How likely is it that you are going to expand that beyond the two programs within the next one to two years?

DR. SIMON MORONEY: Yes, it depends on the targets that we emerging. The reason we believe this that this a better way to source targets is that target discovery is enormously unpredictable. And we've even seen that at our pharma partners that some of them have moved out of target discovery in-house because you cannot predict, if you study 100 targets, how many of them will actually turn into real drug targets. So for us it's very difficult to say that Burnham will supply one or three or five or that any other institute will be a source of a certain number. However, we believe it's a numbers game. The more collaborations you have, the more interesting programs will emerge.

You shouldn't expect that we're suddenly going to be pursuing ten proprietary drug programs within the next year. That's not going to happen. The number will remain mo

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offizielles Transkript von MorphoSys in englisch:
http://www.morphosys.com/uploads/MOR_070228_YE2006_Speech-QA…
MorphoSys AG YE 2006 Conference Call Manuscript – Feb. 28, 2007
YE2006 – Press Conference and Analyst Meeting
The spoken word shall prevail

Speaker: Dr. Claudia Gutjahr-Löser, Head of Corporate Communication
It is my pleasure to welcome all of you to our annual conference. My name is Claudia Gutjahr-
Löser and I am the Head of Corporate Communications at MorphoSys. I would like to thank you
for your interest and participation at our conference today. With me are Dr. Simon Moroney, our
CEO, and Dave Lemus, our CFO.
Slide 2: Safe Harbour
Before we start, we want to remind you that during this conference we will present and discuss
certain forward-looking statements concerning the development of MorphoSys’ core
technologies, the progress of its current research programs and the initiation of additional
programs. Should actual conditions differ from the company’s assumptions actual results and
actions may differ from those anticipated. You are therefore cautioned not to place undue
reliance on such forward-looking statements, which speak only as of the date hereof.
Slide 3: Agenda
Today we will present the company’s annual results for 2006. We have planned approx. one
hour for the presentation. Simon will start with a review of 2006. Subsequently, Dave will give
you an overview about the financial results of 2006, and present the guidance for 2007. Before
we start with the questions and answers session, Simon will speak about the outlook for 2007
and beyond. At the end of our presentations, we will take questions that this conference
audience and those participants listening-in on the phone may have. For the participants of the
conference call, you can view the slides on our corporate website.
I would like now to hand over to Simon Moroney, our CEO, who will start with his summary of
the year 2006.

Speaker: Dr. Simon Moroney, CEO of MorphoSys AG
Thank you, Claudia. I’d like to add my welcome to this, our year-end 2006 press and analyst
conference.
Slide 4: Group Milestones 2006
I want to start with an overview of MorphoSys’s achievements. We exceeded our financial
targets for the year, increasing revenue by 58% over 2005 to € 53 million. We strengthened our
core partnered therapeutic antibody discovery business by adding three new partners and
expanding three existing alliances. Overall, our pipeline has advanced considerably: a second
HuCAL antibody entered clinical trials when Roche took our anti-amyloid-ß antibody into the
clinic for the treatment of Alzheimer’s disease. GPC reported data from their ongoing phase I
trial of the HuCAL antibody 1D09C3. Our partnered pipeline reached 43 compounds and we
advanced our proprietary therapeutic antibody programs MOR103 and MOR202 according to
plan. Regarding our technology, we reported a very important advance with the release of our
new RapMAT technology for antibody optimization. And last but not least, we transformed our
research antibodies segment from a fledgling business unit to a top 20 player worldwide via the
acquisition of Serotec, and are leading the technological transformation of this market.
All in all, we had an outstanding year. Most importantly, the progress we made puts the
company in a strong position to continue its successful development in the future.
Slide 5: Agenda
This was all achieved against the backdrop of some extraordinary developments in our industry.
The demand for antibody technologies in the pharmaceutical industry is accelerating. The year
2006 could be remembered as the year the pharmaceutical industry became convinced of the
importance of therapeutic antibodies as a class of drugs.
Slide 6: Therapeutic Antibodies: A Market Hotter Than Ever
As shown on this slide number 6, 2006 witnessed seven acquisitions of antibody-based biotech
companies by big pharma. This is the proof, if it were needed, that the industry is convinced by
antibodies as a class of drugs. Other highlights in the sector were the return to the market of
Tysabri, Biogen Idec and Elan’s innovative antibody-based therapy for multiple sclerosis, and
the enormously successful launch of Lucentis, Genentech’s Fab fragment for wet AMD.
Together with the ongoing success of many of the existing marketed therapeutic antibodies, the
new launches helped total turnover for the year to exceed US$ 15 billion.
These events all underscore the fact that MorphoSys is active in a highly attractive segment of
the pharmaceutical industry. Furthermore, we expect interest to continue to be high in the years
ahead as more and more pharmaceutical and biotech companies look to develop antibodybased
drugs.
The significance for MorphoSys of these industry developments comes on several levels. First,
we find ourselves with less direct competition than several years ago, due to the acquisition of
key competitors such as Abgenix and Cambridge Antibody Technology. MorphoSys’s position
as the leading independent recombinant antibody company is now stronger than ever before.
Second, the success of antibodies as drugs has catalyzed the development of a new segment
of the biotech industry, namely the scaffold field, in which antibody-like recombinant proteins of
different types are being developed as drugs. This creates a new competitive challenge for us,
and highlights the need for ongoing technology development in order for us to maintain our
current position as the partner of choice for companies seeking to develop protein based
therapeutics. Third, interest in therapeutic antibodies in the pharmaceutical industry continues to
be strong despite the tragic events associated with the phase 1 clinical study of TeGenero’s anti
CD28 antibody in March last year. This unfortunate occurrence did serve to highlight the care
that is required during the pre-clinical development of antibodies, particularly those that work by
activating components of the immune system.
Slide 7: Recent Deal Flow – Existing Partnerships
Looking at our deal flow, 2006 was, once again, a banner year for MorphoSys. We were happy
to be able to expand three of our most important relationships.
Our biggest partnership is with Novartis. In June we signed an early amendment which will take
our collaboration out to 2011, and which significantly increases the number of programs being
pursued. This is a very important alliance for us, but also for Novartis, as evidenced by the fact
that 1/3 of their preclinical biologics pipeline comprises HuCAL antibodies.
We were also able to extend our collaboration with Pfizer. As with the Novartis deal, this
agreement still had some time to run, but, again as with Novartis, Pfizer has been so pleased
with the progress of the 5 therapeutic programs running under the original deal that they elected
to extend early. This agreement will now run to the end of 2011. As a result of the expansion,
the potential value for MorphoSys in research funding and potential developmental milestone
payments increased to more than US$ 100 million, not including royalties. It is worth noting that
Pfizer had relationships with both Abgenix and CAT, and it is highly likely that the fact that those
two competitors were both acquired smoothed the way for our expansion with Pfizer.
Hoffmann-La Roche added two new cancer programs to our relationship, on the back of taking
the antibody we made for them for Alzheimer’s disease into the clinic.
Another development involving two of our long-standing partners was the merger of Bayer and
Schering during the year. At the time, we announced that this would result in a consolidation of
the two agreements. As a first step, at the end of last year Bayer exercised an option to
terminate our agreement, with the intention of proceeding under the ongoing Schering
agreement, which was extended until the end of 2007. We continue to work with Bayer-
Schering on how best to structure our collaboration going forward.
Slide 8: Deal Flow 2006 – Three New Partnerships
In addition, we signed up three new partners. Daiichi Sankyo and Schering-Plough each
secured up to 5-year licenses to apply the HuCAL technology internally, and became
respectively our 11th and 12th partnerships with top 20 pharma. We also added OncoMed to
our roster of partners. OncoMed is a Genentech spin-out pursuing target discovery with socalled
tumor stem cells. OncoMed’s approach is unique, and is based on the concept that
tumors derive from specialized precursor or “stem” cells. OncoMed received a license to use the
HuCAL technology in their discovery research for two years.
Partnered therapeutic antibody discovery forms the core of our business, providing
approximately 2/3 of our revenue. But even more importantly, it represents substantial future
value for MorphoSys, since we will earn royalties on every HuCAL-derived drug that comes to
market. We therefore place particular emphasis on the progress of our partnered pipeline and
2006 was an outstanding year in this regard.
Slide 9: Partnered HuCAL Therapeutic Antibody Pipeline – Growth and Maturing
As of today, the total number of active, partnered therapeutic antibody programs is 43, an
increase of almost 50% over the number at the beginning of last year. The maturity of the
pipeline also advanced, with currently 2 programs in the clinic, 14 in pre-clinical development,
and 27 in research. I’ll come back to the importance of the partnered pipeline for our future at
the end of the presentation.
Slide 10: Roche’s HuCAL-based Alzheimer Antibody
There are now two HuCAL antibodies in clinical trials. In May of last year, Roche initiated a
phase 1 clinical trial with the anti-amyloid-ß antibody that we developed for them for the
treatment of Alzheimer’s disease. Roche is currently running two European phase 1 studies.
Both trials are randomized, double-blinded studies in patients; the first trial is a multiple,
ascending dose study, while the second is using a single dose. The trials are now progressing
at centers in Denmark, Holland, Sweden and the United Kingdom. As these two trials are being
conducted in patients, as opposed to healthy volunteers, it may be possible to observe signs of
clinical efficacy.
Slide 11: First HuCAL Antibody in Man – GPC Biotech‘s 1D09C3
Roche’s Alzheimer’s program became the second HuCAL antibody to enter human clinical
trials, after GPC’s 1D09C3 for cancer. During the year, GPC announced preliminary clinical
data from the ongoing phase I trial in relapsed and refractory B-cell lymphomas involving 3
European sites. The antibody appears to be well-tolerated and hints of anti-tumor activity were
observed. GPC expects to complete the phase I trial in the middle of this year and move into a
phase 2 trial thereafter. The drug has been granted orphan status by the European Commission
in chronic lymphocytic leukaemia, multiple myeloma and Hodgkin’s lymphoma.
Slide 12: Agenda
I’d like to turn now to our proprietary drug development programs MOR103 and MOR202, which
we advanced during 2006 according to schedule.
Slide 13: ”The $100 Million IND” – Biotech’s Increased Leverage with Big Pharma
Our future plans for both of our proprietary programs are being developed with one eye on
deals being done in the industry. We have all witnessed the extraordinary sums being paid by
big pharma and biotech for interesting drug candidates, even in early stages of development.
The industry publication IN VIVO recently published an article entitled “The $100 Million IND”.
The gist of the article was that recent deals prove that pharma is now prepared to pay this
amount for compounds at this stage of development. These developments are of course to the
advantage of the biotech industry and validate MorphoSys’s strategy of channeling investment
into programs that we have initiated ourselves.
For the last 12 months, we have been fully focused on advancing the development of MOR103
and MOR202 according to plan, and have not engaged in any discussions with potential future
partners. While we will continue to work on both programs, once the data packages have
advanced, we will make these programs a subject of our regular meetings with pharma and
biotech companies. In other words, we will consider offers from partners for the further
development of the two compounds. While we feel under no pressure to secure a partner for
either program, we want to remain flexible – our goal is to maximize our return on investment for
each program.
Slide 14: MOR103 on Track to H2 2007 IND
Our most advanced program is MOR103 for the treatment of rheumatoid arthritis.
There is still a high unmet medical need in RA treatment, since fewer than 25% of patients are
currently adequately treated. Non-responders and long-term safety concerns associated with
the existing anti-TNF therapies provide strong incentives for new treatment options, especially
for new mechanisms of action.
During 2006, we have continued to investigate the lead antibody for this program, and have
become even more convinced that we have a potential drug. These studies have given us the
confidence to embark on the critical manufacturing and process development part of the
program.
In 2006, we signed a license and manufacturing agreement with Crucell and its technology
partner DSM Biologics for production of clinical grade material using the well established and
fully human PER.C6 cell line. This brings together our fully human antibody with production
capabilities in a fully human host. Manufacturing human antibodies in such a manner offers
several potential advantages over alternative production methods, especially when targeting
chronic diseases such as rheumatoid arthritis.
Production is proceeding according to schedule, as are our ongoing pre-clinical experiments.
We remain on track to file an IND for this program in the second half of this year.
Slide 15: Proprietary Cancer Program: MOR202
Our second proprietary program is MOR202, the anti-CD38 approach to the treatment of
multiple myeloma. Here, we reached our objective of selecting a formal pre-clinical development
candidate by year-end. The candidate we chose shows good efficacy in in vitro and in vivo
models, and is well produced and behaved. In 2007, we will continue pre-clinical development
of this compound.
Slide 16: Agenda
I want to turn now to technology. The success of all of our therapeutic antibody programs, both
partnered and proprietary, hinges on the quality of the antibodies that can be made with the
HuCAL technology.
Key parameters for an antibody drug include not only the obvious ones such as target affinity
and specificity but also disease-modifying activity, immunogenicity, solubility, stability,
production characteristics and others. One of the great advantages of the HuCAL technology is
its ability to deliver high quality antibodies quickly. Precisely these features are at a premium in
our industry, and we have long recognized the need to do even better here.
Slide 17: Technology Development: RapMAT Increases Affinity & Diversity
This is the logic behind RapMAT, a HuCAL-related technology for making better antibodies
even faster.
RapMAT is a new process that exploits the modular design of the HuCAL library to optimize
antibodies even faster than is currently possible. Based on our experience to date, the main
advantages of this process are two-fold. First, substantial time savings can be made in the
optimization of lead antibodies - RapMAT takes up to 30 % off the time of the standard selection
process, that may normally last 6-12 months.
Slide 18: Technology Development: RapMAT Increases Affinity & Diversity (II)
As you can see from the chart on slide 18, a typical improvement in affinity may be by a factor
of 10- to 40-fold. Second, the process results in a greater diversity of lead candidates. This is
especially important in drug development since the greater the diversity of the leads generated,
the higher the probability that one having drug-like qualities will be obtained.
RapMAT is now integrated in our drug discovery programs, and we expect it to make our drug
discovery even more efficient.
We continue to invest in developing the HuCAL technology. The goal is very simple: to make
effective and safe therapeutic antibody candidates faster than before. We will update you on
new developments as they come on line.
Slide 19: Agenda
I would like to turn now to the second pillar of our business, namely our research antibodies
segment AbD Serotec. This unit combines our custom HuCAL antibody generation service with
our two acquisitions in the research antibody space, Biogenesis and Serotec. This segment has
come a long way in a short time: having commenced operations less than 4 years ago, we are
now one of the world’s top 20 suppliers of research antibodies. We intend to improve this
position still further.
Slide 20: Global MorphoSys Group Sites
The year was very much focused on consolidation and integration of the component pieces of
this business. The majority of our staff in this unit is now located in a brand new facility in
Kidlington, just north of Oxford in England. This consolidates the former Biogenesis operation
from Poole on the south coast, with the former Serotec and Oxford Biotechnology operations
outside Oxford. Altogether we have about 80 staff on this site. In addition to consolidation of the
sites in England, we moved our Raleigh, North Carolina sales office to new premises during the
year. Operations for the unit, including antibody generation and manufacturing, are in Oxford
and at MorphoSys headquarters in Munich, and we have sales staff at these sites as well as in
Raleigh and New Hampshire in the US, Düsseldorf in Germany and Hamar in Norway.
Slide 21: AbD Serotec – Highlights 2006
We are delighted that despite the enormous upheaval associated with integrating three
organizations, consolidating several teams and establishing two new premises, the AbD
Serotec team was able to achieve the ambitious revenue target we set for them at the beginning
of the year.
In addition, the unit developed a number of important relationships during 2006. Just to mention
a few, we entered:
• A marketing alliance with Chemicon,
• Technology and marketing alliances with Thermo Fisher Group and Chimera Biotec,
• A discovery collaboration with the Kazusa DNA Research Institute in Japan,
• And a sole source agreement with the US Army Medical Research Institute for Infectious
Diseases – or USAMRIID for short,
Over the last couple of months we’ve also entered research agreements with The Burnham
Institute and with a leading Japanese research institute, both of which were sourced by the AbD
Serotec unit. These are of particular significance for the company as a whole, and I’ll return to
this topic in the outlook section of the presentation.
The loss that AbD Serotec recorded arose primarily because of one-off, acquisition-related
charges, and we are confident that, in addition to solid top-line growth, AbD Serotec will record
a profit this year.
Slide 22: Agenda
That concludes the review of the year. I now want to hand over to Dave Lemus for his
presentation of the financial results.

Speaker: Dave Lemus, CFO of MorphoSys AG
Slide 22: Agenda
Thanks, Simon. I’d now like to continue with the financial review for the fiscal year 2006. In
opening, I’m pleased to say, that 2006 was an excellent year - not only operationally, but also
financially speaking.
Slide 22: Financial Review: Highlights 2006
On this first chart, you can see some of the financial highlights of the year.
Revenues for the MorphoSys Group increased by 58 % to € 53 million, leading to a net profit of
€ 6.0 million. Removing Serotec from the picture, revenues grew organically by a solid 22 %.
In January 2006, we acquired the Serotec Group to further strengthen the Research Antibodies
segment. In 2006, Serotec contributed € 12.3 million or 23 % of total Group revenues.
Our cash position increased to € 66 million, in part through a successful private placement in
March 2006 as well as from a strong positive cash flow from operations of € 16.3 million.
Last but not least we were recognized in annual STEP Award in the category “Finance”,
highlighting achievements in that area of the company during the year.
I’d now like to go into more detail of our 2006 financial results.
Slide 23: Revenue Breakdown 2006
Let's start with revenues. The next chart shows where our revenue growth has arisen.
Revenues of the MorphoSys Group for the full year 2006 increased by 58 % to € 53 million,
which slightly exceeded our guidance. Group revenues, measured in constant currency, would
have been about € 1 million lower than actual, mainly due to the weaker dollar.
Revenues from the therapeutic antibody segment increased by € 5.6 million to € 34.7 million. As
we had no acquisitions on the therapeutic side of our business, the therapeutic antibodies
segment grew organically by around 19 %. Performance-based payments from partners
increased to € 7.5 million, providing 22 % of the segment revenues, an increase of 9 % in
comparison to 2005. The payments in 2006 include the clinical phase 1 milestone from our
partner Roche.
While the Research Antibody Segment contributed in 2005 13 % to total Company revenues, in
2006 we saw the segments contribution increase to 35 % or € 18.3 million – mainly as a result
of the acquisition of the Serotec Group. As we reported earlier, the Serotec business is now fully
integrated with MorphoSys’s Research Antibodies Segment, named AbD. The organic revenue
growth of the segment – that is, if you remove the effect of Serotec from our 2006 revenues –
would have resulted in organic growth of approximately 40%.
In summary, organic revenue growth for both segments in total was 22 %, which is in line with
our goal to experience annual organic growth in excess of 15% each year.
Slide 25: Revenues (Group): Geographic Split
If we take a look at where sales geographically arose, 62 % of MorphoSys’s commercial
revenues were generated with biotechnology and pharmaceutical companies as well as AbD
customers located in Europe and Asia, compared with 56 % last year. This reflects a trend we
have seen now for the last couple of years, where our cooperation partners in Europe and in
particular Asia will continue to be very important to us. Looking at the two segments sales in
isolation and how they geographically split, revenue geographically generally mirrors the total
Company numbers.
Slide 26: Revenues Therapeutic Antibodies Segment: Performance-Based Payments
I think it is important to highlight the increasing amounts of performance-based payments. With
a partnered pipeline of currently 43 antibody programs ongoing, this is another big picture trend
– namely we will see that performance-based payments will continue to be a larger part of our
revenue streams. As you can see from the chart, they have increased in absolute terms over
the last couple of years. We anticipate this trend to continue in 2007, also in percentage terms,
which is good news to MorphoSys, as these payments represent pure profit and upside for the
Company. For 2007, we expect 1 – 3 INDs, and 2008 is expected to generate even more IND
filings, which again should help our result.
Within the scope of MorphoSys’s larger antibody partnerships, license payments and research
funding still represent the majority of revenues. The good news here is that many cooperations
were extended in the last couple of years, making several of these revenue streams committed
over the next several years. That in turn allows us a higher planning certainty as it relates to our
thoughts ahead. Driving that point home, at the beginning of 2007, approximately two thirds of
the revenues of the Therapeutic Antibodies segment were already committed and secured.
Slide 27: Operating Expenses (Group)
Let’s move to operating expenses.
Total operating expenses increased by 72 % to € 46.9 million. The total increase in operating
expenses of € 19.6 million was mainly due to the inclusion of the Serotec Group in the
consolidated accounts with an impact of € 13.8 million. Higher personnel-related costs in
conjunction with new collaborations and increased expenses for proprietary product
development also impacted expenses.
Comparing this against guidance, operating expenses were at the lower end of the range,
identical to what we confirmed during our Q3 2006 conference call.
Moving on to Costs of Goods Sold, or COGS. As you all recall, COGS in our Company only
arise in the Research Antibodies segment. For the year 2006, total COGS rose to € 8.0 million
compared to € 2.5 million in the year 2005, which resulted mainly from the € 5.5 million inclusion
of Serotec COGS in the consolidated Group accounts.
Costs for research and development arise mainly in the therapeutic antibody unit. R&D costs
increased by 25 % to € 17.5 million. This increase was mainly the result of expenses for product
and technology development amounting to approximately € 3.0 million.
Sales, general and administrative expenses amounted to € 21.4 million, an increase of 98 %
compared to the previous year. The increase is mainly derived from the inclusion of the Serotec
Group in the amount of € 8.3 million. Also driving higher S, G&A costs were increased
personnel costs at the MorphoSys AG headquarter in Munich, and one-off integration costs
associated with acquired companies.
Stock-based compensation in the amount of € 1.2 million for the year 2006 was recorded as a
non-cash charge, and is embedded in cost of goods sold, S,G&A expenses as well as R&D
expenses. Stock-based compensation changed little in comparison to last year.
Slide 28: Results by Segment
Let’s look at the result by segment. On the therapeutic side, revenues amounted to € 34.7
million, compared our guidance estimate of € 34 million, influenced by higher levels of
performance-based payments and by new and expanded collaborations. Operating expenses of
the Therapeutic Antibodies segment increased by 27 % to € 18.1 million, mainly driven by
expenses for proprietary product and technology development in the amount of € 3 million. The
resulting operating segment result was a very strong € 16.6 million.
Moving to the Research segment, total sales were € 18.3 million, and total expenses of € 21.7
million, mainly impacted by strong organic growth and the Serotec acquisition. The result - a
loss of € 3.4 million - was a bit under our expectations and guidance, mainly due to higher and
earlier than expected restructuring costs. Cash flow in the unit however, looks a bit better.
Slide 29: AbD Segment: Cash Flow & Restructuring Cost
In order to get to cash flow for the unit, in this next chart, we removed amortization
approximately € 1.0 million, depreciation of € 0.9 million and stock-based compensation of € 0.2
million, and then subtracted Capex of € 1.9 million. The result is a reasonably good proxy for
cash usage or generation of the unit. As you can see, once you remove these non cash items,
cash usage of the unit was closer to € 3.2 million. One-off restructuring costs in the amount of
€ 1.7 million are also included in the operating result. All said and done, we expect now an
improvement looking ahead, and for 2007, we expect the segment to be both cash positive, and
have an operational income. More on that in the guidance section.
Slide 30: Sites Consolidation & Streamlining of Group Corporate Structure
In our last slide, we discussed restructuring costs. On that note, let me just add some words to
our corporate structure and the successful conclusion of the integration exercise. Shortly after
the acquisition of the Serotec Group in January 2006 we decided to consolidate some of our
sites. Presently we have our premises for this unit in Munich, Germany, in Oxford in the UK and
in Raleigh in the USA. We also decided to keep small sales offices in Dusseldorf, Germany, in
New Hampshire in the US, and in Norway.
In the UK, several former Biogenesis employees were moved to Oxford, and we have decided
to close down the site in Poole, which was completed by the end of 2006. We are presently
renting the site over the next two years, have divested the equipment to a buyer. At the end of
this period, we expect to find a buyer for the building and the land.
Our US activities are now concentrated in the Research Triangle in Raleigh, North Carolina. We
have a sales force sitting there, comprising approximately 20 people, which serve the US
market. Additionally, we keep a smaller satellite sales office in New Hampshire.
Slide 31: New Group Corporate Structure
This next chart represents our corporate legal structure as per January 2007. It is the result of a
streamlining of the corporate structure undertaken at the end of last year. On the left hand, this
is our former US subsidiary in Charlotte, MorphoSys USA Inc., which substantially ceased its
operations a few years back. The Poole Real Estate Ltd. is the former Biogenesis Ltd., which
possesses the real estate holdings of the ex-Biogenesis site, and is the current landlord of that
site. MorphoSys IP GmbH was founded a couple of years ago, and holds a substantial portion
of the IP rights of MorphoSys AG.
MorphoSys UK Ltd. was formerly known as Serotec Ltd., and has been renamed recently. It has
two affiliates, MorphoSys US Inc., which is the former Serotec Inc., and MorphoSys AbD GmbH,
which is the former Serotec GmbH in Dusseldorf here in Germany. Oxford Biotechnology Ltd.
and the Oxford Biomarketing Ltd. are currently in liquidation.
Slide 32: Non-operating Items and Taxes (Group)
Moving back to the financial review, I would like to continue with non-operating items. Profit
from Operations remained almost unchanged at € 6.2 million compared to 2005, and is very
close to our guidance given that we would be on the upper range of € 6 million.
Earnings before interest, taxes, depreciation and amortization – or EBITDA – amounted to
€ 10.3 million compared to € 8.6 million in the previous year.
Beneath the non-operating section is income tax; we had a benefit from income taxes of € 0.7
million. This has resulted from movements from our deferred tax liabilities and assets, but was
also heavily impacted by the establishment of a deferred tax asset of approximately € 1.2 million
relating to our tax loss carry-forwards for 2007.
MorphoSys achieved a net profit of € 6.0 million under IFRS. The resulting diluted net income
per share for the full year 2006 amounted to 93 Cent per share, compared to an EPS of 83 Cent
per share last year.
Slide 33: Capital Expenditure by Segments
In the fiscal year 2006, MorphoSys’s investment in property, plant and equipment as well as in
intangibles amounted to € 4.0 million resulting in an increase of € 3.3 million compared to the
same period of the prior year. Consolidating the Group’s UK activities into our new UK
headquarters in Oxford contributed € 1.2 million to the same. We believe the UK capex
requirements looking ahead, are substantially fulfilled by this investment.
Depreciation of property, plant and equipment for 2006 accounted for € 1.5 million, compared to
€ 0.9 million in 2005. The increase was mainly related to the Serotec acquisition.
Let’s now move to the Balance Sheet.
Slide 34: Consolidated Balance Sheet - Assets (Group)
If you look at the balance sheet, you can see that the Company's current assets increased by
about € 18 million to € 76.1 million, mainly as a result of the capital increase successfully
completed in March 2006. The cash position increased to € 66 million at the end of the year.
Looking at the non-current assets, you can see these have more than doubled to € 51.7 million,
which mainly is the result of consolidating Serotec´s hard and soft assets, especially goodwill,
into our balance sheet.
Let’s move to the next slide, liabilities.
Slide 35: Balance Sheet – Liabilities (Group)
During the year 2006, current liabilities increased by approximately € 7 million to € 18.3 million.
This change is primarily a result of the inclusion of the Serotec entities into the consolidated
financial statements. The growth in non-current liabilities was significantly impacted by the rise
of non-current deferred revenues by € 2.5 million due to payments arising from new contracts
signed in 2005 and 2006, and a buildup in deferred tax liabilities resulting from the Serotec
Purchase Price Accounting exercise.
Slide 36: Share Issuance 2006
Looking at changes in share capital during the year, two capital increases were carried out. As
part of the acquisition of the Serotec Group in January 2006, one-third of the purchase price
was paid by means of a capital increase against contribution in kind. The 208,560 new shares
from the capital increase or 3.5 % of the share capital went to the former owners of the Serotec
Group and are subject to a graded holding period.
In March 2006, MorphoSys successfully placed around 6.5 % of our outstanding share capital in
a private placement to international institutional investors, resulting in gross proceeds of
approximately 17.1 million € to the Company.
Beyond that, roughly 97,000 shares were issued as a result of employee convertible bond and
options exercises.
At year-end 2006, the total number of shares issued was roughly 6.7 million shares.
Slide 37: Shareholder Structure
Looking at our shareholder structure, presently our biggest shareholder is Novartis Pharma AG,
who owns about 7 %, followed by AstraZeneca with approximately 6 %. The free float,
according to the definition of Deutsche Börse, amounted to roughly 87 %, and includes approx.
3 % of shareholdings by the Management and Supervisory Boards.
It is may be worthwhile mentioning, that in the course of 2006, more than 200 investor meetings
were held in 10 countries and institutional shareholdings roughly doubled over the prior year,
and we currently estimate these shareholdings at around 40 % of total share capital.
Slide 38: Employees
At the end of the year 2006, the MorphoSys Group employed 279 employees, compared to 172
employees at year-end 2005. Of the 279 employees, 158 worked in the Therapeutic Antibodies
segment, and 121 in the AbD segment.
Of total employees, 183 worked in Germany, 78 in the UK, and 18 in the US.
Slide 39: Agenda
That concludes my review for the year 2006. I’d like to continue with the outlook for 2007.
Slide 40: Financial Outlook 2007
Let's move to the financial outlook for 2007. We estimate revenues for the full year 2007 to
range between € 60 and 65 million.
We anticipate that approx. 2/3 of the revenues will be generated by the Therapeutic Antibodies
Segment. Of this amount, we expect performance-based payments to make up a total of
approximately € 10 million.
We expect that the Research Antibodies segment will contribute approximately one third of total
revenues, including Serotec.
There are a number of assumptions which have been put into the expense line for 2007. First
and foremost, included in our assumptions is approximately € 5 million worth of investment
expense in the proprietary products and roughly € 1 million in proprietary technology
advancement.
Looking at guidance by segment, in the therapeutic unit, we expect the unit to be profitable as
last year. As it relates to the AbD segment, we expect in 2006 an operational profit somewhere
between 5-10% of sales.
Slide 41: Agenda
That concludes the financial analysis of 2006 and the guidance for 2007, and I would now like to
hand back now to Simon for the goals for 2007.
Thank you very much for your attention.

Speaker: Dr. Simon Moroney, CEO of MorphoSys AG
Thanks, Dave.
To conclude the presentation, I’d like to talk about how we intend to use our current strength for
future growth and finish by presenting our goals for 2007.
Looking to our future, I want to make two key points about our pipeline and our strategy.
Slide 42: Partnerships Hit Critical Mass
The first point is that our partnered therapeutic discovery business has now hit critical mass.
The six deals that we signed during 2006, together with the other running partnerships, will
result in sufficient royalties from HuCAL drugs on the market to secure our long-term future. Our
updated projections suggest that the currently active partnerships should result in at least 9
HuCAL antibody drugs coming to market.
How do we reach this conclusion? It is based on the number of programs ongoing or pending
within our current partnerships and the probability that these programs will result in marketed
drugs. The next two slides take you through this calculation.
Slide 43: Partnered Programs: Today & Tomorrow
We currently have 43 active programs. We project at least 7 new starts in 2007, meaning that
number should increase to 50 by the end of this year. Within the scope of the existing, ongoing
collaborations, we believe a further 40 new programs will be started between 2008 and 2011.
This makes a grand total of 90 partnered programs, and our internal pipeline projections are
based on this value.
Note that this calculation relies only on the partnerships that are already in place. Every
additional partnership we may sign in the future, will add to the number of HuCAL antibodies
coming to market. I’d like to emphasize here that we do anticipate entering new partnerships,
but solely for the purpose of this calculation, we have assumed no additional deals.
Slide 44: Developmental Success Probabilities
The next step of the estimate relies on our experience with generating HuCAL antibodies and
industry data on developmental success rates. Our experience has shown that the probability
that we can generate an antibody against a particular target, and meet the criteria required to
enter formal pre-clinical development, is at least 80 %. Our data on pre-clinical development
suggest the probability that an antibody will successfully complete this phase is 37.5 %. The
third aspect is clinical development, and here we rely on the latest data from the Tufts Centre
for the Study of Drug Development, which is probably the most reliable source of statistics on
the development of pharmaceutical products. These data show that the probability that a biotherapeutic
drug will move from phase 1 development to market is about 30%.
Slide 45: Partnered Programs: Expected Output
We can now apply these probabilities to our partnerships and estimate how many HuCAL
antibodies will come to market from existing partnerships, and that number is 9.
We should be careful not to over-interpret this analysis. It is based on a number of assumptions,
and of course includes estimates of programs that haven’t even started yet.
However the estimate gives you a sense of the future potential of our partnered pipeline, even if
no new deals are signed!
Slide 46: MorphoSys Core Technology HuCAL: How We’re Exploiting It
The second point I’d like to make is a strategic one, and that is that our AbD Serotec unit is
providing a synergy that we believe will be a major source of future value for our therapeutics
activities.
The diagram on slide 46 captures pictorially an important synergy between the two parts of our
business. Technology development within the therapeutic antibody segment makes HuCAL a
more powerful research tool. This makes the technology more and more attractive for
customers of our AbD Serotec unit. This in turn helps our sales of research antibodies through
the AbD Serotec unit. Furthermore, it enables us to enter potentially valuable research
collaborations which provide access to drug targets that in turn feed the therapeutic antibody
segment.
Slide 47: Strategic Research Alliance– The Burnham Institute
A deal that we recently closed exemplifies this. I refer to the alliance with the Burnham Institute,
one of the leading medically-oriented research institutes in the United States. It is well funded
and ranks 5th among all private U.S. research institutes in terms of NIH funding. It also
consistently ranks among the top 20 organizations for the impact of its research publications,
measured through scientific citations received per publication by the Institute for Scientific
Information (SCI). Burnham scientists have contributed to at least 5 approved therapies and
several diagnostic tests that are currently in use, plus another 9 innovative therapies currently in
clinical testing.
The agreement we have gives scientists at the Burnham Institute rapid access to HuCAL
antibodies for research purposes on preferred terms. In return, MorphoSys secures rights to
develop any antibodies with therapeutic or diagnostic potential against targets investigated by
Burnham researchers.
The Burnham deal was the first example of such an arrangement. We recently entered a
second, with a leading Japanese research institute in a three-way deal also involving our
Japanese commercial partners Gene Frontier Corporation.
We aim to forge similar agreements with other research institutes. We are convinced that
multiple research-based relationships with leading, medically-focused academic institutes will
be a more productive way of accessing the targets of tomorrow than building our own target
discovery infrastructure in house. Access to innovative new drug targets will make our business
model even more lucrative, since it will enable us to offer not only a proprietary antibody
technology, but also novel targets to a collaboration. Under this scenario, MorphoSys would
itself be the initiator of therapeutic antibody programs, in contrast to our current model in which
the 43 ongoing partnered programs were all initiated by our collaboration partners. On a caseby-
case basis, we would decide how far to take individual programs before looking for partners
for further development. This model offers considerable flexibility as we would control each
program.
Slide 48: Key Factors for Future Growth
Both of our business segments are performing well, and prospects for continued growth are
very attractive. As I have mentioned, our current partnerships and the status of our pipeline
mean that our therapeutic antibodies segment has reached critical mass. On the research
products side of the business, attractive strategic synergies are now being realized.
Operationally, we expect the AbD Serotec segment to grow faster than the market and
therefore, to increase its market share.
The pharmaceutical industry is facing a severe challenge in filling its development pipeline.
MorphoSys’s success today is based on its ability to act as a source of antibody drugs. Looking
to the future, we believe that by:
• Continually improving our technology to enable generation of even better antibodybased
substances even faster,
• Proving that HuCAL antibodies are not only effective in pre-clinical assays but also in the
clinic, and
• Leveraging our proprietary technology in the research space to source novel targets,
MorphoSys can become an indispensable partner to the pharmaceutical and research
communities.
In closing, our goals for this year are as follows:
Slide 50: Goals 2007
Revenues in 2007 will be in the range € 60 – 65 million, split roughly 2:1 therapeutics: research
products. This is consistent with our longer-term objective to grow total group revenues by at
least 15-20% year-on-year until such time as HuCAL drugs reach the market in 5-6 years time
when we would expect that growth to accelerate sharply. For 2007, we project an operating
profit of about € 7-10 million.
With regard to the development of our therapeutic pipeline, we aim to file an IND on MOR103
before year-end. Regarding MOR202, we will continue with pre-clinical development, working
towards an IND. We anticipate between 1 and 3 new INDs from our partnered programs this
year. This development reflects the growing maturity of our pipeline, and we expect the number
of INDs to be even higher next year. We project that the total number of active partnered
programs will hit 50 in 2007, and will increase steadily thereafter. Although this may sound like a
modest increase from the 43 programs currently under way, it includes assumed attrition in preclinical
development.
The number of active programs is a more important parameter than the number of deals we
sign with pharma companies. Based on the demand we continue to see in the industry, and the
number of discussions we are currently engaged in, we anticipate an attractive level of deal flow
in the years ahead. Predicting timing and scope of such deals is however very difficult and we
can therefore give no precise guidance on this point.
In the Research Antibody segment, our goal for the AbD Serotec unit is to increase revenues by
20% over last year and to reach profitability.
A set of important strategic goals for the unit relate to the growing penetration of the HuCAL
technology. To this end, we aim to enter at least one new marketing alliance, and also focus on
increasing the uptake of HuCAL antibodies in the research community.
In closing, we look forward to another successful year for the company, and to updating you on
a regular basis on our progress. Thank you all for your attention.
Speaker: Dr. Claudia Gutjahr-Löser, Head of Corporate Communications
Thank you very much, Dave and Simon. I would like to open the forum now for your questions. I
suggest that we start with the people listening by conference call. May I have your first question,
please?

Question & Answer Session:
Dr. Hanns Frohnmeyer, LBBW: I have two questions, Hanns Frohnmeyer from LBBW. One is,
how sure are you with your projected 40 new programs coming up in 2008-2011? What is the
basis of those calculations? The second, if I look at your guidance for 2007 under the
assumption that your AbD unit will be profitable with an EBIT margin of about 5-10% and more
milestones coming up from the therapeutics section, it seems to me that your EBIT estimates
are rather conservative. Could you comment on that please?
Dr. Simon Moroney: I’ll take the first part of that question and Dave will take the second part.
The estimate of 40 new programs starting between 2008 and 2011 we’ve taken out of the
existing contracts, some of which run to 2011, some of which terminate earlier. In some of those
contracts there are precise commitments about how many programs to start year on year. In
other contracts there are options. And what we’ve done is we’ve combined the commitments
that some of those partners have made with an estimate, a conservative estimate I might say,
from the options and added those together to come to this number of 40. The total potential
number of programs that could be started if you add the committed programs plus all of the
options is actually a lot more than 40, but we have only taken a portion of the options to come
up with this number of 40. So we actually feel very, very comfortable with that number of 40.
Dave Lemus: Regarding the conservatism of the 2007 projections, I guess the first thing we
have to realize is that we’re dealing with ranges when we talk about milestones of
approximately € 10 million, that could either be nine or it could be more, same with the EBIT
margin. I think if you do the math and you realize also that we are doubling our investment in
product and technology spend from this year’s current € 3 million to approximately € 6 million
next year we think it’s conservative but not overly conservative.
Daniel Wendorff, West LB: Three questions if I may, the first question regarding the Bayer-
Schering situation. You said the Schering deal for Bayer would slip into the Schering deal and
that is going to expire at the end of 2007. How confident are you that that can be extended, and
if it’s not going to be extended what could be the financial impact in terms of rough guidance?
Two financial questions regarding the Capex, how do you see that’s going to develop in 2007
and the profitability in the AbD segment, do you mainly achieve this by increasing your gross
margin or how do you see the EBIT margin of 5-10% develop?
Dr. Simon Moroney: Let me take the first question about Bayer-Schering and then Dave will
speak to the financial questions. The original agreement we had with Schering had a provision
in it whereby it could be extended until the end of ’07, and that’s the agreement that the
combined Bayer-Schering is now operating under. We’re in discussions with them at the
moment about going beyond 2007 but at this stage I’m not able or not prepared to comment on
the status of those discussions or the likelihood that we could extend that deal or if so under
what terms and conditions. It’s an ongoing negotiation and our policy is simply not to comment
on ongoing negotiations.
Daniel Wendorff: What’s the potential financial impact if it’s not going to be extended?
Dr. Simon Moroney: I think what we’d say to that point is we’ve seen in the past that if deals
don’t get extended that we’d be in a position to replace them with alternative deals that
essentially provide cover if you like for gap that’s made by that missing deal. So let me just say
that discussions are ongoing, what the terms could be for a potential extension we don’t know at
this stage but it’s not a source of concern for us, let us put it that way.
Dave Lemus: As it relates to the question regarding Capex, this year we had approximately
€ 4 million worth of CapEx expenditure, we expect in 2007 that number to be reduced down to
approximately € 3 million. That’s mainly the result of the fact that in 2006 we had capital
expenditures in the amount of about € 1.2 million as it relates to the restructuring of the UK
Serotec Group. As it relates to the question increasing the result of AbD Serotec, making it
more profitable or the AbD segment rather, I think that’s a combination of things. Number one
we have restructuring costs of about € 1.7 million last year – those restructuring costs are now
finished and we expect no further restructuring costs. That will be one effect, another effect of
course will be, we expect a slight increase in the gross profit and of course we also expect
through optimizing the product portfolio that the business in total will become more profitable.
So, not one thing.
Daniel Wendorff: Thank you.
Dr. Martin Possienke, Equinet: Congratulations on therapeutics, I’m sorry that I have to ask
again on the other business unit. Restructuring charges of € 1.7 million if I remember correctly
it’s pretty much in line with your guidance communicated last year. Nonetheless the operating
result is significantly below your guidance so there must be something on the operating side as
well, maybe you can comment on that? Then in terms of Serotec on a standalone basis,
revenue growth is around 10%, am I correct there? Then if I’m correct why is this below industry
growth and what is the trigger to bring it to 20% in 2007?
Dr. Simon Moroney: Ok, maybe I can just start with some general comments about that and
Dave will comment on the specific financial questions. What you can’t forget is that the year
2007 was one of massive upheaval for us in that area of the business, so we consolidated
several different operations, we established brand new premises, we had to relocate our
manufacturing into those premises, we had to relocate people from two sites in the UK into
those premises in the Oxford. That involved significant expense. We took the opportunity to
upgrade their premises from something that was, we felt, well below current industry standard to
something now that is really not only today’s standard but tomorrow’s standard. We have a
wonderful facility there and we took the opportunity in 2006 to make considerable expense in
order to establish that facility and equip it for the future, so it was really a year of establishing
that unit in the best possible way that it can perform in the years ahead. I think for that reason
what you should really focus in on is the projected performance for this year which will be
growth we project of above 20% which is significantly better than the market. If you look at
some of the bigger players in the market they’re actually growing below 10%, some of the
bigger players such as Chemicon, now part of Millipore, and some of the other antibody
specialists are growing below 10%. So if we can achieve that goal of growing over 20% we will
be growing at twice the rate of the market this year. So I think those will be my general
comments but last year was a year of consolidation and we’re now positioned to perform
substantially better than the market in the years ahead starting this year.
Dave Lemus: Maybe just to comment on the restructuring charges. I think the guidance that we
gave in the beginning of 2006 was that restructuring charges would amount to approximately
€ 1 million – they were almost double that in the form of about € 1.7 million, so that had a big
impact on the performance of the unit. Part of that was due to the fact that the expenses that we
actually had in 2006 were higher than expected. Part of it is also that some of these expenses
were pooled forward into 2006 as a result of quicker than anticipated integration moving into the
building which then resulted in write-offs which we had anticipated back in 2006 to occur early in
2007.
Dr. Martin Possienke: So from an operating point of view everything went as you imagined it at
the beginning of the year?
Dave Lemus: Other than the fact that the restructuring costs were substantially higher and also
because of that we had lower gross profits. But I think as Simon mentioned we’re quite
confident that this unit will become profitable this year and without doubt cash positive.
Dr. Martin Possienke: Just another question on this topic if I may. Regarding the guidance for
2007, I think we speak about some € 22 million in terms of revenues for the AbD Serotec
segment, so assuming you keep your COGS and your operating costs stable corrected for
restructuring, we end up around € 20 million, so all in all you have to keep your COGS and your
operating costs stable in absolute terms in order to reach the upper end of your 5-10% EBIT
guidance. Do you think it’s possible to keep the COGS level stable and operating costs maybe
even declining a bit in absolute terms?
Dave Lemus: Are we talking COGS as a percentage stable or COGS in absolute terms stable?
Dr. Martin Possienke: To achieve the upper end of your guidance, you have to keep it stable in
absolute terms.
Dave Lemus: It’s unlikely that we’ll keep COGS stable in absolute terms. We expect that the
total cost of the operating unit, not least due to the fact that we’ve now restructured a number of
the units – that chart that we saw there where we went from approximately 10 subsidiaries to
now the current 7 – should also significantly reduce costs. We’ve substantially streamlined the
structure of the group which should result in substantial cost savings. So we expect some
improvement to happen on the gross margin as I mentioned and we also expect to see
substantial improvement beneath gross margin.
Dr. Martin Possienke: But operating costs will decline in absolute terms most likely?
Dave Lemus: We would expect so, yes.
Dr. Martin Possienke: Ok, thanks a lot.
Holger Blum, Deutsche Bank: One question on the SG&A number in the fourth quarter, it
seems nearly twice the run rate of previous quarters. Was it due to the restructuring and what
should we therefore expect for the future? The second question on your guidance, could you
maybe talk a little bit more what is impacting the range? What makes you end up at the lower
end versus upper end of the guidance, especially I think you mentioned that you target
€ 10 million of milestone payments in 2007. Does that imply one or three INDs? The third
question would be more longer term maybe on the proprietary pipeline. You said that you
haven’t had any partnering talks yet. Might that become a topic over 2007 and maybe over the
longer term? Would you have a maximum spending for that maybe for 2008, 2009?
Dr. Simon Moroney: Maybe I’ll start with that question about the owned pipeline and then Dave
will answer the financial questions. We’ve deliberately not engaged in the last year in
discussions on those programs because we wanted to focus on developing and bringing them
forward and generating a strong data package. We feel now that in both cases we have two
stories there around MOR103 and MOR202 which are sufficiently strong and especially given
the willingness or let me say the desperation of pharma to pay big amounts of money for
interesting, even early stage drug candidates, we feel that it’s now worth bringing those two
stories into our meetings with pharma and biotech when we go out and have those meetings.
That said we don’t need to partner either of those compounds during the course of this year.
However as I said during the talk we want to remain flexible. If we have a discussion with a
great partner and they indicate that they would be very interested in working together with us to
develop one or the other of those compounds, we will entertain that discussion. But our current
intentions are to continue with both of those programs for the foreseeable future on our own.
Dave Lemus: Regarding the Q4 SG&A cost increase, yes, you’re correct that the increase is
mainly attributable to the write-offs and the restructuring costs in association with the AbD unit
in Q4. It also had an extra performance bonus based on the excellent year that we had that we
paid in 2006. There was a question regarding the impact of IND milestones on the
approximately € 10 million worth of projected milestones for the year. What I’m afraid I can’t
give you today is in that € 10 million to tell you whether or not in our planning one or three IND
milestones are included but obviously certainly at least one is as it was this year. In 2006, we
had the IND milestone included from Roche. One could perhaps assume that there is some
upside in that guidance if we were to achieve the upper end of the three IND filings.
Dr. Simon Moroney: Maybe I should just add a point to that. Predicting when milestones
happen in this industry is enormously difficult. When it comes to clinical programs, filing INDs
and so on, recall that we have no influence over this at all and we’re simply in the hands of our
partners there. So we have an idea or a feeling or a sense, but we have no control at all and
therefore planning has to have an element of caution in it when we make estimates of when
these are going to occur.
Holger Blum: But what is then causing the range, what are the flexible components in that
guidance?
Dave Lemus: Partially it’s the milestones and partially it’s operational performance. The other
thing that has a very significant impact on our ability to call revenues mainly on the therapeutic
side of the business is the impact of new revenues. That is very, very difficult to determine.
Maybe one other point I should make, what we call as performance based payments includes
milestones but is not the only thing that is included in that planning. We have a range of
different types of payments which we consider performance based payments that can vary. In
total for 2007 we expect them to be € 10 million, they’re certainly not all made of three IND
payments.
Harald Schmidlin, Independent Analyst: You talked 100% about your own company but I
would be interested about the markets where you are moving and developing. Have you some
imagination of your market where you are active, the antibody company market or how could
you define it? Have you some feeling for your market share in this market, how you developed
and what is the measure? It is sales, are there other measures which could give you some
feeling that you are outperforming your competitors? Did you move up in your position from let’s
say place 50 to 20 and do you believe that this will go forward in the coming years?
Dr. Simon Moroney: When we think about these points we have to think about the two units
separately, so the therapeutic antibody segment and the research antibody segment. On the
research antibody side a lot of our competitors are private companies and it’s hard to get
precise information about their turnover for example. But as we said during the presentation we
believe based on the best information we have that we’re in the top 20 worldwide in terms of our
position from the point of view of turnover vis-à-vis our competitors. Remember we started this
segment in 2003 so we’ve gone from nowhere in 2003 to a position in the top 20 in 2006, and
we of course are aiming to move beyond there. The fact that that segment is growing at faster
than the market rate shows you that we’re improving our market share in that segment. On the
therapeutic antibody segment we know the competitor space extremely well. Two of our biggest
competitors have been acquired in the last 18 months, that’s Cambridge Antibody Technology
and Abgenix. The way we measure our performance here is largely by the number of
partnerships that we enter compared with the number of partnerships that our competitors
enter. Here we know that we’re in the top two, possibly three worldwide in that segment. I think
if you look at the top 20 pharma companies, we’re number one in terms of the number of
partnerships we have signed over the last 3-4 years. So that’s the basis of our claim that we are
the partner of choice for people who are prepared to pay serious money for access to a
technology. MorphoSys is the partner of choice, that’s a perfectly fair statement based on the
deals that we’ve signed over the last couple of years.
Harald Schmidlin: Just one additional question. The antibody technology is one of several
technologies to develop new products. Do you feel that this technology will become even more
important or if you look to GPC’s Satraplatin, I think it’s not antibody, it’s something different so
there are other methods and other technologies, biotechnologies. Do you think the antibody
technology will become more important or could lose some importance?
Dr. Simon Moroney: That’s a good question. I’m convinced that it will become more important
and the reason why is you just have to look at the level of interest in the pharmaceutical
industry. Ten years ago or 15 years ago there were no antibody drugs, perhaps one 15 years
ago. Today there are 20. There are well over 100 in clinical trials today, and those of course are
the products of tomorrow. So the level of interest in the pharmaceutical industry for this class of
drugs, for antibodies as a class has exploded in the last five years and based on the
discussions and negotiations that we continue to have in the industry we see that growth going
on out into the future. Whenever we talk to potential partners and of course our existing partners
– the Pfizers, the Novartis, the Roches, the Bayer Scherings, the Centocors, the Lillys, the
Schering Ploughs, all these people – we ask them a question that’s of great importance for us
which is how much of a future do antibodies and antibody technologies have because we worry
about that, it’s importance for us. The answer we always get back from those people is 15, 20
years and beyond. This is not something that’s going to come to an end tomorrow. This is
something that the industry is committed to, that they’re putting big investments into and the
proof of that point is the fact that as we said in the presentation for Novartis, 1/3 of their preclinical
biologics pipeline comes out of our technology. That’s a big bet that Novartis is placing
on their future portfolio of products which is directly based on our technology. So we feel very,
very comfortable and confident about the importance of our technology and MorphoSys in the
future of this industry.
Siegfried Hofmann, Handelsblatt: I just want to ask a question about the conditions of your
pharmaceutical collaborations in light of the huge interest of the big pharma companies in
antibodies. How does it translate into the conditions of your deals you are doing and do you see
any shifts in the mix between up front payment milestones and royalties?
Dr. Simon Moroney: That’s a good question. Several years ago we had to face the criticism
that all this stuff would become a commodity and would be worth nothing, and we’ve seen that
in the case of for example combinatorial chemistry libraries where in the late 90s they were
something that you could charge milestones and royalties for, and then a few years later if you
got a little bit of up front cash you were very lucky. So the criticism that people pointed at us five
years ago that our technology would become a

[lupus2000]

offizielles Transkript von MorphoSys in deutsch:
http://www.morphosys.com/uploads/MOR_070228_YE2006_Speech-QA…

MorphoSys AG Jahresabschluss 2006 – Manuskript der Telefonkonferenz
Jahresabschluss 2006 – Pressekonferenz und Analystentreffen
Übersetzung aus dem Englischen – es gilt das gesprochene Wort

Sprecherin: Dr. Claudia Gutjahr-Löser, Leiterin der Unternehmenskommunikation
Es ist mir eine Freude, Sie zu unserer Jahreskonferenz begrüßen zu dürfen. Ich bin Claudia
Gutjahr-Löser, und ich leite die Unternehmenskommunikation bei MorphoSys. Ich bedanke
mich für Ihr zahlreiches Erscheinen und Ihr Interesse an unserer heutigen Veranstaltung.
Herr Dr. Moroney, Vorstandsvorsitzender, und Herr Lemus, Finanzvorstand, sind die
Sprecher der heutigen Veranstaltung.
Folie 2: Safe Harbour
Bevor wir beginnen, möchte ich Sie daran erinnern, dass wir in unserer Präsentation
zukunftsgerichtete Aussagen über die Entwicklung der Kerntechnologien von MorphoSys,
das Fortschreiten seiner gegenwärtigen Forschungsprogramme und den Beginn weiterer
Programme machen und erörtern werden. Sollten sich die den Annahmen der Gesellschaft
zugrunde liegenden Verhältnisse ändern, so können die tatsächlichen Ergebnisse und
Maßnahmen von den erwarteten Ergebnissen und Maßnahmen abweichen. Sie werden
daher vorsorglich darauf hingewiesen, diesen zukunftsgerichteten Aussagen, die nur am Tag
ihrer Bekanntgabe Gültigkeit besitzen, keine unangemessene Bedeutung beizumessen.
Folie 3: Agenda
Wir werden Ihnen heute die Ergebnisse des Geschäftsjahres 2006 vorstellen. Wir haben ca.
eine Stunde für die Präsentation eingeplant. Simon wird mit einem Rückblick über 2006
starten. Im Anschluss wird Dave das Finanzergebnis 2006 erläutern und die Finanzprognose
2007 vorstellen. Bevor wir Ihre Fragen beantworten, wird Simon noch über den Ausblick für
2007 und darüber hinaus sprechen. Am Ende der Präsentation werden die Ihre Fragen
beantworten. Für die Teilnehmer der Telefonkonferenz möchte ich darauf hinweisen, dass
die Präsentation der heutigen Veranstaltung auf unserer Webseite zur Verfügung steht.
Ich übergebe das Wort nun an Dr. Simon Moroney, Vorstandsvorsitzender der MorphoSys
AG, der mit einem Rückblick auf das Jahr 2006 starten wird.

Redner: Dr. Simon Moroney, Vorstandsvorsitzender der MorphoSys AG
Danke, Claudia. Ich möchte Sie ebenfalls zu unserer Presse- und Analystenkonferenz
anlässlich der Präsentation des Finanzergebnisses 2006 der MorphoSys AG herzlich
willkommen heißen.
Folie 4: Konzern-Meilensteine 2006
Ich möchte mit einem Überblick der durch MorphoSys in 2006 erreichten Erfolge beginnen.
Zunächst einmal übertrafen wir mit einem Umsatzwachstum von 58% gegenüber 2005 auf
53 Mio. €, die finanziellen Ziele, die wir uns zu Jahresanfang gesetzt hatten. Weiterhin haben
wir unser Kerngeschäft, der therapeutischen Antikörperentwicklung mit Partnern, durch die
Unterzeichnung drei neuer Partnerschaften und die Erweiterungen dreier bestehender
Allianzen deutlich gestärkt. Unsere Entwicklungspipeline zeigt insgesamt deutliche
Fortschritte: ein zweiter HuCAL-Antikörper, ein Antikörper gegen das Amyloid-beta Protein
für die Behandlung von Alzheimer aus unserer Kooperation mit Roche, ist in die klinische
Entwicklung eingetreten; GPC Biotech hat erste klinische Daten einer laufenden Phase-1-
Studie mit dem HuCAL-basierten Antikörper 1D09C3 veröffentlicht. Insgesamt ist die Anzahl
aller aktiven therapeutischen Programme mit Partnern auf 43 angestiegen und wir haben
unsere firmeneigenen Projekte MOR103 und MOR202 wie geplant vorangebracht. In
Hinblick auf unsere Technologie, haben wir mit der Präsentation unserer neuen RapMATTechnologie
wichtige Fortschritte verzeichnet. Von nicht minderer Bedeutung war die
Akquisition der Serotec-Gruppe, durch die unser Segment für Forschungsantikörper von
einer aufstrebenden Geschäftseinheit zu einem der weltweit 20 größten Anbieter in diesem
Bereich aufgestiegen ist. Gleichzeitig stehen wir an vorderster Front bei der technologischen
Transformation dieses Marktes.
Insgesamt betrachtet hatten wir ein herausragendes Jahr. Viel wichtiger noch ist, dass die
Fortschritte, die wir im diesem Jahr erreicht haben, uns in eine sehr gute Ausgangposition
versetzen, die erfolgreiche Entwicklung des Unternehmen ins Zukunft zu gestalten.
Folie 5: Agenda
All dies haben wir vor dem Hintergrund außerordentlicher Entwicklungen in unserer Industrie
erreicht. Antikörpertechnologien sind nach wie vor sehr hoch im Kurs bei der
Pharmaindustrie. Mehr noch; 2006 könnte sehr wahrscheinlich als das Jahr in die
Geschichtsbücher eingehen, in dem die pharmazeutische Industrie sich endgültig der
Bedeutung therapeutischer Antikörper als Medikamentklasse bewusst geworden ist.
Folie 6: Der Markt für therapeutische Antikörper: Aktiver als je zuvor
Wie auf der nächsten Folie 6 zu sehen ist, erfolgten im Jahr 2006 ganze sieben
Akquisitionen von Antikörper-basierten Biotechnologieunternehmen durch große
Pharmakonzerne. Dieses Vorgehen liefert den abschließenden Beweis, sollte er noch nötig
gewesen sein, dass die Pharmaindustrie von Antikörpern als Wirkstoffklasse überzeugt sind.
Andere wichtige Ereignisse im vergangenen Jahr waren die Rückkehr des Medikaments
Tysabri zum Markt, BiogenIdec’s und Elans innovative Antikörper-basierte Therapie gegen
Multiples Sklerose und der äußerst erfolgreiche Start von Lucentis, ein Antikörper-Fab-
Fragment zur Behandlung der feuchten Form der Altersbedingten Makuladegeneration der
Firma Genentech. Gemeinsam mit dem anhaltenden Erfolg der bereits zugelassenen
therapeutischen Antikörper übertraf der Markt für diese Medikamente durch die Neustarts die
Umsatz-Marke von 15 Milliarden US$.
All diese Fakten unterstreichen, dass MorphoSys in einem sehr attraktiven Segment der
pharmazeutischen Industrie aktiv ist. Wir erwarten, dass das Interesse an Antikörpern auch
in den kommenden Jahren nicht nachlassen wird, da mehr und mehr pharmazeutische und
biotechnologische Unternehmen die Entwicklung von Antikörper-basierten Therapien ins
Auge fassen.
Diese Branchenentwicklungen haben einige Auswirkungen auf MorphoSys. In erster Linie
treffen wir derzeit auf weniger direkte Konkurrenz als noch vor einigen Jahren, da unsere
direkten Wettbewerber Abgenix und Cambridge Antibody Technology in 2006 übernommen
wurden. MorphoSys Position als führender unabhängiger Hersteller rekombinanter
Antikörper ist deshalb starker als je zuvor. Zum zweiten hat der Erfolg von
Antikörpermedikamenten die Entwicklung anderer Felder der Biotechnologie stimuliert,
beispielsweise der so genannten Scaffold-Technologien, die Antikörper-ähnliche
rekombinante Proteine verschiedener Formen zur Medikamentenentwicklung einsetzen.
Dies bringt eine neue Herausforderung mit sich und unterstreicht die Bedeutung
fortlaufender Technologieverbesserung, um unsere heutige Führungsposition zu verteidigen
und weiterhin erste Wahl für Unternehmen zu bleiben, die Protein-basierte Therapeutika
entwickeln wollen. Drittens hat sich gezeigt, dass das Interesse der pharmazeutischen
Industrie an therapeutischen Antikörpern unverändert hoch bleibt, und dies trotz der
tragischen Ereignisse um die klinische Phase-1-Studie in Verbindung mit dem anti-CD28
Antikörper der deutschen Biotechfirma TeGenero vom März letzten Jahres. Dieser
unglückliche Vorfall hat jedoch bestätigt, dass besondere Sorgfalt in der präklinischen
Entwicklung bei solchen Antikörpern wichtig ist, die aktivierend in bestimmte Bereiche des
Immunsystems eingreifen.
Folie 7: Erweiterungen & Verlängerungen – Existierende Partnerschaften
Mit Blick auf unsere Vertragsabschlüsse in 2006 möchte ich feststellen, dass auch dieses
Jahr wieder ein überragendes Ergebnis für MorphoSys geliefert hat. So konnten wir drei
unserer wichtigsten Partnerschaften verlängern.
Darunter befindet sich auch unsere bislang größte Partnerschaft mit Novartis. Im Juni
unterzeichneten wir eine vorzeitige Erweiterung, die unsere Zusammenarbeit nicht nur bis
ins Jahr 2011 verlängert, sondern gleichzeitig die Anzahl an Programmen deutlich erhöht,
die wir gemeinsam verfolgen. Dies ist eine sehr bedeutende Allianz für uns, sowie auch für
Novartis, wie die Tatsache belegt, dass rund 1/3 ihrer biologischen Wirkstoffentwicklungen in
der Präklinik aus HuCAL-Antikörpern bestehen.
Es gelang uns außerdem, unsere Kooperation mit Pfizer zu verlängern. Ebenso wie bei
Novartis, wäre der bestehende Vertrag mit Pfizer noch eine Weile nicht ausgelaufen, aber
Pfizer war so zufrieden mit dem Fortschritt der 5 therapeutischen Programme, die wir unter
dem ursprünglichen Vertrag verfolgten, dass sie sich für eine vorzeitige Verlängerung
entschieden. Die erweitere Kooperation wird nun ebenfalls bis Ende 2011 laufen. Als
Resultat der Erweiterung erhöhte sich das potentielle Volumen des Vertrags für MorphoSys
in Form von Forschungszahlungen und Entwicklungs-abhängigen Meilensteinzahlungen auf
mehr als 100 Millionen US$, zuzüglich zu Tantiemen. Es ist erwähnenswert, dass Pfizer
sowohl mit unseren ehemaligen Konkurrenten Abgenix als auch CAT Verträge hatte und es
ist sehr wahrscheinlich, dass die Tatsache, dass diese beiden durch andere Konzerne
übernommen wurden, den Weg für eine Erweiterung unserer Geschäftsbeziehung zumindest
erleichtert hat.
Im Fall der dritten Erweiterung des Jahres entschied sich Hoffmann-La Roche, unsere
Zusammenarbeit auf die Indikation Krebs auszuweiten und zwei Programme in diesem
Bereich zu starten. Zeitgleich nahm der Schweizer Pharmakonzern einen Antikörper gegen
Alzheimer, den wir für sie generiert haben, in die klinische Entwicklung.
Eine weitere Entwicklung des Jahres betraf die Fusion unserer beiden langfristigen Partner
Bayer und Schering. Zu diesem Zeitpunkt haben wir erklärt, dass es zu einer Konsolidierung
der beiden bestehenden Vertragsverhältnisse kommen würde. Als ersten Schritt in diesem
Prozess hat Bayer am Ende des Jahres eine Option ausgeübt und die Vereinbarung mit dem
Ziel beigelegt, unter dem laufenden Schering Vertrag fortzufahren, der folglich bis Ende 2007
verlängert wurde. Wir arbeiten weiterhin mit Bayer-Schering daran, wie wir unsere zukünftige
Kooperation optimal gestalten.
Folie 8: Vertragsabschlüsse 2006 – Drei neue Partnerschaften
Zusätzlich zu den Erweiterungen unterzeichneten wir drei neue Partnerschaften in 2006.
Daiichi Sankyo und Schering-Plough verfügen seit diesem Jahr beide über eine bis zu 5-
Jahre gültige Lizenz für den Einsatz der HuCAL-Technologie, und wurden zu dem Zeitpunkt
zu unserem 11. und 12. Partner aus den Rängen der 20 größten Pharmakonzerne weltweit.
Ebenfalls neu in der MorphoSys-Partnerliste ist OncoMed. OncoMed, ein Spin-out von
Genentech, verfolgt die Medikamentenentwicklung gegen so genannte Krebsstammzellen.
OncoMeds Ansatz ist einzigartig in seiner Art und basiert auf dem Konzept, dass ein Tumor
aus spezialisierten Vorläufern oder Stammzellen hervorgeht. OncoMed hat eine Zwei-jährige
Lizenz, um die HuCAL-Technologie in ihrer Medikamentenforschung einzusetzen.
Therapeutische Antikörperentwicklung mit Partnern bildet den Kern unseres Geschäfts, und
trägt rund 2/3 unseres Gesamtumsatzes bei. Aber noch wichtiger als dies, repräsentiert das
Geschäft einen signifikanten zukünftigen Wert für MorphoSys, wenn wir am Umsatz von
HuCAL-basierten Medikamenten, die den Markt erreichen, in Form von Tantiemen
partizipieren. Wir legen deshalb einen besonderen Fokus auf die Weiterentwicklung unserer
Partner-Pipeline und 2006 war ein außerordentliches Jahr in dieser Hinsicht.
Folie 9: Therapeutische HuCAL-Antikörper mit Partnern – Pipelinewachstum und Reife
Am Jahresende beträgt die Zahl der aktiven therapeutischen Antikörperprojekte mit Partnern
43, eine annährend 50% Steigerung gegenüber dem Vorjahr. Gleichzeitig ist die Pipeline
weiter gereift mit derzeit zwei Programmen in der Klinik, weiteren 14 in der präklinischen
Entwicklung und 27 in der Forschungsphase. Ich werde die Bedeutung unserer Partner-
Pipeline für die Zukunft unserer Firma im Laufe meines Vortrags gegen Ende noch einmal
aufnehmen.
Folie 10: Roches HuCAL-basierter Antikörper zur Behandlung von Alzheimer
Es befinden sich jetzt zwei HuCAL-Antikörper in der klinischen Entwicklung. Im Mai des
vergangenen Jahres startete Roche eine klinische Phase-1-Studie zur Behandlung von
Alzheimer mit einem gegen das Protein Amyloid-beta gerichteten Antikörper, den wir auf
Basis unserer Technologie entwickelt haben. Roche führt derzeit zwei europäische Phase-1-
Studien an Klinikzentren in Dänemark, den Niederlanden, Schweden und Großbritannien
durch – beides randomisierte, doppelt verblindete Studien in Patienten. Die erste Studie ist
eine Dosis-Findungs-Studie, während der Antikörper in der zweiten in einer konstanten Dosis
angewandt wird. Da diese zwei Studien statt in gesunden Probanden in Patienten
durchgeführt werden, könnte es möglich sein, erste Anzeichen der klinischen Wirksamkeit
des Antikörpers zu beobachten.
Folie 11: Erster HuCAL Antikörper im Patienten – GPC Biotech’s 1D09C3
Das Projekt gegen Alzheimer war nach GPC Biotech’s Medikamentkandidat 1D09C3 gegen
Krebs der zweite HuCAL-Antikörper, der in die Klinik ging. Im vergangenen Jahr
veröffentlichte GPC erste klinische Daten aus der laufenden Phase-1-Studie an Patienten mit
resistentem B-Zell-Lymphom. Die Studie wird an drei europäischen Zentren durchgeführt.
Die Daten lassen darauf schließen, dass der Antikörper gut toleriert und erste Hinweise für
eine anti-Tumor-Aktivität beobachtet wurden. GPC erwartet die Phase-1-Studie in der
Jahresmitte abzuschließen und danach in die Phase 2 eintreten zu können. Dem
Medikamentkandidat wurde in der EU für die Behandlung von Hodgkin-Lymphom,
chronischer lymphatischer Leukämie und dem multiplen Myelom der Orphan-Drug-Status
zugesprochen.
Folie 12: Agenda
Ich möchte mich nun unseren firmeneigenen Programmen MOR103 und MOR202
zuwenden, die wir in 2006 gemäß Plan weiterentwickelt haben.
Folie 13: Der „100 Millionen $ IND“ - Verbesserte Verhandlungsposition für Biotech-
Firmen gegenüber Pharma
Bei den zukünftigen Plänen für diese beiden Projekte haben wir stets ein Auge auf Verträge,
die in unserer Industrie abgeschlossen werden. Wir haben alle die außergewöhnlichen
Summen beobachten können, die große Pharma- und Biotechnologie-Unternehmen bereit
sind, für aussichtsreiche Medikamentkandidaten zu bezahlen, selbst wenn sich diese noch in
recht frühen Phasen der Entwicklung befinden. Die Industriepublikation In Vivo hat das in
jüngerer Zeit verstärkte Aufkommen von mit 100 Millionen US-Dollar hoch dotierten INDVerträgen
thematisiert, und damit zusammengefasst, was die Pharmaindustrie investiert, um
Zugang zu Substanzen mit Klinikreife zu erhalten. Die Entwicklung ist verständlicherweise
von Vorteil für die Biotechnologieindustrie und unterstützt MorphoSys Entscheidung,
kontrolliert in die Programme zu investieren, die wir selbst gestartet haben.
Im Laufe der vergangenen 12 Monate haben wir uns gänzlich auf die geplante
Weiterentwicklung von MOR103 und MOR202 konzentriert und keine Diskussionen mit
potentiellen zukünftigen Partnern für diese Programme angestrebt. Wir werden die Arbeit an
beiden Programmen fortsetzen und sie, wenn die gewonnene Datenmenge rund um diese
Projekte zunimmt, zu einem Thema unserer regelmäßigen Treffen mit Pharma- und
Biotechnologiefirmen machen. In anderen Worten, werden wir Angebote von Partnern für die
weitere Entwicklung dieser Projekte in Betracht ziehen. Obgleich wir keinerlei Druck
verspüren, eine Partnerschaft für eines dieser Programme eingehen zu müssen, wollen wir
flexibel bleiben – unser Ziel ist es den Return of Investment für jedes dieser Programme zu
maximieren.
Folie 14: MOR103 gegen Rheumatoide Arthritis (RA) auf dem Weg in die Klinik in der
2. Jh. 2007
Unser fortgeschrittenstes internes Programm ist MOR103 für die Behandlung der
Rheumatoiden Arthritis.
Es besteht weiterhin ein hoher medizinischer Bedarf in der Behandlung der Rheumatoiden
Arthritis (RA), da weniger als 25% der Patienten derzeit ausreichend behandelt werden
können. Nicht-Ansprechen von Patienten auf die Behandlung und Sicherheitsrisiken beim
Lang-Zeit-Einsatz der existierenden anti-TNF-Therapien bieten starke Anreize für die Suche
nach neuen Behandlungsoptionen, insbesondere bei innovativen Wirkmechanismen.
Im Laufe des Jahres 2006 haben wir die Arbeit an unserem Leitkandidaten für dieses
Antikörperprogramm fortgesetzt und dabei wuchs unsere Überzeugung, dass wir ein
potentielles Medikament in unseren Händen haben. Diese Untersuchungen gaben uns so
viel Vertrauen in das Programm, dass wir als wichtigen Schritt das Herstellungs- und
Prozessetablierungsverfahren einleiteten.
In 2006 unterzeichnete MorphoSys einen Lizenz- und Herstellungsvertrag mit Crucell und
dessen Technologiepartner DSM Biologics. Der Vertrag ermöglicht MorphoSys den Einsatz
der etablierten menschlichen Zelllinie PER.C6 zur Produktion von klinischem
Antikörpermaterial im Rahmen des firmeneigenen Programms MOR103. Diese
Zusammenarbeit kombiniert einen vollständig menschlichen Antikörper zur Behandlung von
entzündlichen Erkrankungen mit einer ebenso vollständig menschlichen
Produktionsmethode. Die Herstellung von menschlichen Antikörpern auf diese Art verspricht
zahlreiche Vorteile gegenüber herkömmlichen Methoden, besonders für die Behandlung
einer chronischen Krankheit wie der Rheumatoiden Arthritis.
Die Produktion läuft nach Plan, ebenso wie unsere weiteren präklinischen Experimente. Wir
bleiben im Zeitplan, um alle nötigen Anträge für den Start klinischer Studien für dieses
Programm in der zweiten Jahreshälfte einreichen zu können.
Folie 15: Firmeneigenes Krebs-Programm: MOR202
Im Fall unseres Programms MOR202, ein anti-CD38 Antikörper zur Behandlung des
Multiplen Myeloms, haben wir unser Ziel erreicht, bis Jahresende 2006 einen Kandidaten für
die formelle präklinische Entwicklung zu identifizieren. Dieser Antikörper zeigt gute
Wirksamkeit in in vitro und in vivo-Analysen, kann gut produziert werden und zeigt viel
versprechende Eigenschaften. Im Jahr 2007 werden wir die formelle präklinische
Entwicklung dieses Wirkstoffs fortsetzen.
Folie 16: Agenda
Ich möchte mich nun dem Thema Technologieentwicklung zuwenden. Der Erfolg aller
unserer therapeutischen Programme, sowohl mit Partnern, als auch unsere internen
Projekte, hängt stark von der Qualität der Antikörper ab, die wir mit Hilfe der HuCALTechnologie
gewinnen können.
Die Hauptkriterien für Qualität umfassen die offensichtlichen Parameter wie Bindungsstärke
an das Zielmolekül oder Spezifität aber ebenso natürlich die sich abzeichnende Fähigkeit in
den Krankheitsverlauf einzugreifen, Immunogenität sowie physikalische und chemische
Charakteristiken wie Löslichkeit, Stabilität, Produktionseigenschaften und andere. Einer der
großen Vorteile der HuCAL-Technologie ist ihre Fähigkeit, Antikörper in hoher Qualität und
kurzer Zeit bereitstellen zu können. Exakt diese Fähigkeiten sind sehr gesucht in unserer
Industrie und wir sind stets bestrebt, hierbei noch besser zu werden.
Folie 17: Technologieentwicklung: RapMAT – Höhere Bindungsstärke & Diversität
Dies ist auch die Logik hinter RapMAT, einer mit HuCAL kompatiblen Technologie, um
Antikörper noch schneller zu gewinnen.
RapMAT ist ein neuer Prozess der sich den modularen Aufbau der HuCALAntikörperbibliothek
zu nutze macht, um früher im Prozess zu optimierten Antikörpern mit
höheren Affinitäten zu gelangen. Aufbauend auf unseren Erfahrungen bis heute, sind die
Hauptvorteile dieser Methode zum einen erhebliche Zeitersparnisse bei der Optimierung von
Leitkadidaten – RapMAT kann den Prozess, der normalerweise 6-12 Monate beansprucht,
um bis zu 30% verkürzen.
Folie 18: Technologieentwicklung: RapMAT – Höhere Bindungsstärke & Diversität (II)
Wie sie auf dieser Folie sehen, könnte eine typische Verbesserung der Affinität gegenüber
dem Standardprozess um den Faktor 10 bis 40 liegen. Zum anderen erhöht RapMAT die
Diversität der erzeugten Leitkandidaten. In der Wirkstoffentwicklung ist dies von besonderer
Bedeutung, den je höher die Vielfalt der Leitkandidaten desto wahrscheinlicher ist es,
Kandidaten mit Medikamentqualität zu erhalten.
RapMAT ist mittlerweile vollständig in unsere Wirkstoffidentifizierung integriert und wir
erwarten, dass die Technologie unsere Wirkstoffentdeckung noch effektiver macht.
Wir werden auch weiterhin in die Entwicklung der HuCAL-Technologie investieren. Das Ziel
dahinter ist sehr einfach formuliert: wirksame und sichere therapeutische
Antikörperkandidaten schneller entwickeln als zuvor. Über neue Entwicklungen in diesem
Bereich werden wir Sie informieren sobald sie einsatzbereit sind.
Folie 19: Agenda
Ich möchte mich nun der zweiten Säule unseres Geschäfts zuwenden, nämlich dem
Segment für Forschungsantikörper AbD Serotec. Diese Geschäftseinheit vereint die HuCALAntikörperentwicklung
im Kundenauftrag mit den zwei Akquisitionen im Forschungsantikörpermarkt,
Biogenesis und Serotec. Dieses Segment hat sich in kurzer Zeit sehr weit
entwickelt: seit dem Start vor weniger als 4 Jahren sind wir zu einem der 20 größten Anbieter
von Forschungswerkzeugen dieser Art weltweit herangewachsen und wollen weiterhin
Marktanteile im Sektor gewinnen.
Folie 20: Weltweite Niederlassungen der MorphoSys-Gruppe
Das vergangene Jahr stand sehr im Zeichen der Konsolidierung und Integration der
einzelnen Teilbereiche dieser Geschäftseinheit. Der Hauptanteil unserer Mitarbeiter in
diesem Segment hat nun seinen Sitz in einer jüngst eingeweihten Niederlassung in
Kidlington, im Norden Oxfords in England. Mit diesem Schritt haben wir die ehemalige
Niederlassung von Biogenesis in Poole an der Südküste Englands, mit den Serotec- und
Oxford Biotechnology-Firmen außerhalb von Oxford zusammengefasst. Alles in allem haben
wir rund 80 Mitarbeiter an diesem Standort. Neben der Zusammenführung der Standorte in
England, haben wir im Laufe des Jahres unser Vertriebsbüro in Raleigh, North Carolina, in
neue Einrichtungen umgezogen. Die Aktivitäten der Geschäftseinheit in Bezug auf
Antikörperentwicklung und Herstellung werden in Oxford und an unserem MorphoSys-
Hauptquartier in München durchgeführt. Zusätzlich haben wir Marketing & Vertriebskräfte an
diesen Standorten sowie in New Hampshire in den USA, Düsseldorf und bei Oslo in
Norwegen.
Folie 21: AbD Serotec – Highlights 2006
Zu unserer großen Zufriedenheit hat es das AbD Serotec Team, trotz der enormen
Anstrengung, den die Integration dreier Organisationen nebst Standortwechseln abverlangt,
geschafft, das ambitionierte Umsatzziel zu erreichen, das wir der Geschäftseinheit zu
Jahresanfang gestellt hatten.
In 2006 entwickelte die Geschäftseinheit eine Reihe wichtiger Zusammenarbeiten, so zum
Beispiel:
• Eine Marketing-Allianz mit Chemicon,
• Eine Marketing- und Technologie-Allianz mit der Thermo Fisher-Gruppe und Chimera
Biotec,
• Eine Forschungskooperation mit dem Kazusa DNA Research Institut in Japan,
• Sowie einen exklusiven Auftrag der U.S. Armee, genauer des Medical Research
Institutes for Infectious Diseases – oder kurz des USAMRIID.
In den letzen Monaten schlossen wir ferner weitere Forschungskooperation mit dem USamerikanischen
Burnham-Institut und einem weiteren japanischen Forschungsinstitut von
Weltrang. Diese Vertragsabschlüsse nahmen ihren Anfang bei AbD Serotec, haben aber
eine besondere Bedeutung für den Gesamtkonzern, zu der ich später im Laufe des Vortrags
noch einmal zurückkehre.
Der Verlust, den diese Geschäftseinheit in diesem Jahr verzeichneten, war in erster Linie
das Resultat einmalig-Anfallender Akquisitions-abhängiger Aufwendungen und wir sind
zuversichtlich, dass AbD Serotec in diesem Jahr zuzüglich zu solidem Umsatzwachstum
einen Nettogewinn erwirtschaften wird.
Folie 22: Agenda
Damit beende ich meinen Rückblick auf das vergangene Jahr. Ich möchte nun das Wort an
unseren Finanzvorstand Dave Lemus für seinen Rückblick des Finanzergebnisses
übergeben.

Sprecher: Dave Lemus, Finanzvorstand der MorphoSys AG
Danke, Simon. Ich wende mich nun dem Finanzergebnis des Geschäftsjahres 2006 zu. Ich
freue mich sehr, sagen zu können, dass 2006 ein hervorragendes Jahr für uns war, nicht nur
vom Geschäftsverlauf her, sondern auch finanziell gesehen.
Folie 23: Finanzrückblick: Highlights 2006
Auf dieser ersten Folie sind die finanziellen Erfolge des Jahres 2006 zusammengefasst.
Die Umsätze des MorphoSys-Konzerns stiegen um 58 % auf 53 Mio. €, der
Jahresüberschuss belief sich auf 6,0 Mio. €. Das organische Wachstum ohne Umsätze aus
der Serotec-Akquisition belief sich auf solide 22 %.
Im Januar 2006 erwarben wir die Serotec-Gruppe, um das Segment für
Forschungsantikörper weiter auszubauen. Im abgelaufenen Geschäftsjahr steuerte Serotec
12,3 Mio. € oder 23 % zum Konzernumsatz bei.
Der Bestand an liquiden Mitteln erhöhte sich auf 66 Mio. €, teilweise durch die erfolgreich
platzierte Kapitalerhöhung im März 2006, sowie durch einen starken operativen Mittelzufluss
in Höhe von 16,3 Mio. €.
Zum Schluss möchte ich noch kurz unsere Auszeichnung mit dem Step-Award nennen. Hier
wurden wir in der Kategorie „Finanzen“ ausgezeichnet, in Anerkennung der Erfolge des
Unternehmens während des Jahres 2006.
Nun werde ich mich im Detail unserem Finanzergebnis 2006 zuwenden.
Folie 24: Umsatzverteilung 2006
Ich beginne mit den Umsatzerlösen. Die folgende Folie zeigt, wo der Umsatzanstieg
entstanden ist.
Die Umsatzerlöse der MorphoSys-Gruppe stiegen im Gesamtjahr 2006 um 58 % auf
53 Mio. €. Damit haben wir unsere Jahresprognose leicht übertroffen. Unter der Annahme
von konstanten Wechselkursen wäre der Umsatz um eine Million geringer ausgefallen,
aufgrund der schwachen Entwicklung des US-Dollars.
Die Umsätze im Segment für Therapeutische Antikörper stiegen um 5,6 Mio. € auf
34,7 Mio. €. Das Segment wuchs rein organisch um 19 %, da hier keine Akquisitionen das
Ergebnis beeinflussen. Erfolgsabhängige Zahlungen von Partnern stiegen auf 7,5 Mio. €
oder 22 % des Segmentumsatzes, eine Steigerung gegenüber dem Vorjahr um 9 %. Diese
Summe enthält den Phase-1-Meilenstein von unserem Partner Roche.
Während das Segment für Forschungsantikörper im Jahr 2005 noch 13 % zum
Konzernumsatz beitrug, stieg dieser Anteil im Jahr 2006 auf 35 % oder 18,3 Mio. € – vor
allem durch die Akquisition der Serotec-Gruppe. Wie bereits früher berichtet ist die Serotec-
Gruppe nun vollständig in das Segment integriert. Das Segment trägt nun den Namen AbD.
Das organische Wachstum des Segments, also ohne die Umsätze von Serotec, betrug ca.
40 %.
Das organische Wachstum für beide Segmente betrug 22 %. Dies steht im Einklang mit
unserem Ziel, ein jährliches organisches Wachstum von mindestens 15 % zu erzielen.
Folie 25: Geografische Umsatzverteilung (Konzern)
62 % der kommerziellen Umsätze der MorphoSys-Gruppe wurden mit Pharma- und
Biotechnologie-Unternehmen sowie AbD Serotec-Kunden in Europa und Asien
erwirtschaftet, verglichen mit 56 % im Vorjahr. Dies spiegelt einen Trend wider, den wir nun
seit einigen Jahren beobachten, nämlich, dass unsere Kooperationen in Europa und vor
allem in Asien auch zukünftig sehr wichtig für uns sind. Betrachtet man die beiden Segmente
isoliert, und betrachtet die geografische Aufgliederung der Umsätze, so spiegelt die hier
dargestellte Aufteilung die Konzernumsätze wider.
Folie 26: Segment Therapeutische Antikörper - Erfolgsabhängige Zahlungen
Ich finde es ist sehr wichtig, die Summe der erfolgsabhängigen Zahlungen zu betonen. Mit
einer Partner-Pipeline von 43 Programmen ist dies ein weiterer genereller Trend, den wir
sehen. Die erfolgsabhängigen Zahlungen werden zunehmend einen größeren Anteil unserer
Umsatzerlöse ausmachen. Wie Sie in dieser Grafik erkennen können, hat die Summe in
absoluten Zahlen über die letzten Jahre zugenommen. Wir erwarten, dass sich dieser Trend
auch im Jahr 2007 fortsetzen wird. Dies ist sehr positiv für MorphoSys, da diese Zahlungen
reiner Gewinn und damit Potenzial nach oben sind. Für 2007 erwarten wir ein bis drei
weitere Klinikgänge, und die Anzahl wird im Jahr 2008 noch weiter steigen, was unserem
Ergebnis weiter helfen wird.
Im Zusammenhang mit unseren größeren Antikörperpartnerschaften sind Lizenzzahlungen
und finanzierte Forschungsleistungen immer noch der Löwenanteil der Umsätze. Es ist
positiv anzumerken, dass viele dieser Partnerschaften in den letzten Jahren verlängert
wurden, was uns zugesicherte Umsatzerlöse über die nächsten Jahre sichert. Dies
wiederum gibt uns eine größere Planungssicherheit für unsere zukünftige Planung. Dies
zeigt sich auch darin, dass am Anfang des Jahres 2007 bereits zwei Drittel der Umsätze im
therapeutischen Segment gesichert sind.
Folie 27: Betriebliche Aufwendungen (Konzern)
Ich komme nun zu den betrieblichen Aufwendungen.
Die gesamten betrieblichen Aufwendungen erhöhten sich um 72 % auf 46,9 Mio. €.
Der Anstieg der betrieblichen Aufwendungen um 19,6 Mio. € war im Wesentlichen auf die
Einbeziehung der Serotec-Gruppe in den Konzernabschluss zurückzuführen, was sich mit
13,8 Mio. € auswirkte, sowie auf höhere Personalkosten im Zusammenhang mit neuen
Kooperationen und auf gestiegene Aufwendungen für die firmeneigene Produktentwicklung.
Im Vergleich zur Prognose waren die Aufwendungen am unteren Ende des Korridors, wie wir
in der Telefonkonferenz anlässlich der Veröffentlichung der Neun-Monats-Zahlen
angekündigt hatten.
Kommen wir nun zu den Herstellungskosten. Herstellungskosten entstehen nur im Segment
für Forschungsantikörper. Im Jahr 2006 stiegen die Herstellungskosten auf 8 Mio. €,
verglichen mit 2,5 Mio. € im Vorjahr. Hauptgründe für den Anstieg waren die Einbeziehung
der Serotec-Herstellungskosten in Höhe von 5,5 Mio. € in den Konzernabschluss.
Die Aufwendungen für Forschung und Entwicklung haben ihren Ursprung im Segment für
therapeutische Antikörper und stiegen um 25 % auf 17,5 Mio. €. Dies hatte seine wesentliche
Ursache in den auf 3,0 Mio. € gestiegenen Aufwendungen für die Produkt- und
Technologieentwicklung.
Die Aufwendungen für Vertrieb, Allgemeines und Verwaltung betrugen 21,4 Mio. €, einem
Anstieg um 98 % gegenüber dem Vorjahr. Dieser Anstieg resultierte mit 8,3 Mio. €
hauptsächlich aus der erstmaligen Einbeziehung der Serotec-Gruppe sowie aus höherem
Personalaufwand der MorphoSys AG in München und den Integrationskosten für die
erworbenen Gesellschaften.
Der nicht zahlungswirksame Personalaufwand aus Aktienoptionen ist in den
Herstellungskosten, den Aufwendungen für Vertrieb, Allgemeines und Verwaltung sowie im
Forschungs- und Entwicklungsaufwand enthalten. Er belief sich gegenüber dem Vorjahr
nahezu unverändert auf 1,2 Mio. €.
Folie 28: Segmentberichterstattung
Wenden wir uns dem Segmentergebnis zu. Im Bereich der therapeutischen Antikörper
beliefen sich die Umsatzerlöse auf 34,7 Mio. €, vergliechen mit unserer Prognose von
34 Mio. €. Die Umsatzerlöse wurden positiv beeinflusst von höher als erwarteten
erfolgsabhängigen Zahlungen und neuen sowie erweiterten Partnerschaften. Die
betrieblichen Aufwendungen im therapeutischen Segment erhöhten sich um 27 % auf 18,1
Mio. €. Der Anstieg erklärt sich durch höhere Aufwendungen für die eigene Technologie- und
Produktentwicklung in Höhe von 3 Mio. €. Das sehr starke operative Segmentergebnis
beträgt 16,6 Mio. €.
Im Forschungsantikörpersegment stiegen die Umsatzerlöse auf 18,3 Mio. €, die operativen
Aufwendungen beliefen sich auf 21,7 Mio. €, vor allem beeinflusst durch die Serotec-
Akquisition. Das Segmentergebnis – ein Verlust von 3,4 Mio. € – war etwas unter unserer
Erwartung und unterhalb unserer Prognose, vor allem aufgrund höherer und früher als
erwartet angefallenen Restrukturierungskosten. Der Cashflow des Segments sieht allerdings
ein bisschen besser aus.
Folie 29: AbD Segment - Cashflow & Restrukturierungskosten
Auf der Folie 29 haben wir, um den Cashflow für das Segment darzustellen, die
Abschreibungen auf Sachanlagen in Höhe von ca. 1,0 Mio. €, sowie Abschreibungen auf
immaterielle Vermögenswerte in Höhe von 0,9 Mio. € und den Personalaufwand aus der
Ausgabe von Aktienoptionen in Höhe von 0,2 Mio. € abgezogen und die Investitionen in
Höhe von 1,9 Mio. € subtrahiert. Das Ergebnis ist ein guter Anhaltspunkt für den
Mittelverbrauch des Segments. Sie können sehen, dass nach dem Abzug dieser nichtzahlungswirksamen
Positionen der Mittelverbrauch der Einheit bei ca. 3,2 Mio. € lag.
Einmaleffekte aus der Restrukturierung in Höhe von 1,7 Mio. € belasteten das Ergebnis
zusätzlich. Alles zusammengenommen erwarten wir eine Verbesserung für die Zukunft, und
für das Jahr 2007 erwarten wir, dass das Segment sowohl Cash-positiv abschließen als auch
ein positives operatives Ergebnis zeigen wird. Mehr dazu aber beim Ausblick.
Folie 30: Konsolidierung der Tochtergesellschaften & Straffung der Konzernstruktur
In der letzten Folie habe ich über Restrukturierungskosten gesprochen. Bei dieser
Gelegenheit möchte ich noch ein paar Worte zur Konzernstruktur und zum erfolgreichen
Abschluss der Integration sagen. Kurz nach der Übernahme der Serotec-Gruppe im Januar
2006 haben wir beschlossen, einige unserer Niederlassungen zusammen zu legen. Heute
haben wir unseren Hauptsitz in München, und Niederlassungen in Oxford, Großbritannien,
und in Raleigh, in den USA. Außerdem haben wir kleine Vertriebsbüros in Düsseldorf, in
New Hampshire (USA) sowie in Norwegen und in Frankreich.
In Großbritannien sind einige frühere Biogenesis-Mitarbeiter nach Oxford gezogen, da wir
beschlossen hatten, die Niederlassung in Poole zu schließen. Dies wurde zum Jahresende
2006 umgesetzt. Wir vermieten aktuell das Gebäude für die nächsten beiden Jahre, und
haben die Ausstattung verkauft. Nach den zwei Jahren wollen wir das Land und Gebäude
verkaufen.
Unsere US-Aktivitäten haben wir im so genannten „Research Triangle“ in Raleigh in North
Carolina konzentriert. Dort sitzt eine Vertriebsmannschaft von ca. 20 Mitarbeitern, die den
US-Markt betreuen. Zusätzlich haben wir ein kleines Vertriebsbüro in New Hampshire
behalten.
Folie 31: Neue Konzernstruktur
Die nächste Folie zeigt unsere rechtliche Unternehmensstruktur zum Januar 2007. Sie ist
das Ergebnis einer Neuorganisation der Unternehmensstruktur, die wir im letzten Jahr
angestoßen haben. Links sehen Sie unsere frühere Tochtergesellschaft in Charlotte, die
MorphoSys USA Inc., die ihre Geschäftstätigkeit vor ein paar Jahren eingestellt hat. Die
Poole Real Estate Ltd. ist die frühere Biogenesis Ltd. und ist Besitzer des Grundeigentums
der früheren Biogenesis-Gesellschaft. Die MorphoSys IP GmbH wurde vor ein paar Jahren
gegründet und hält einen substantiellen Anteil der Patentrechte der MorphoSys AG.
Die MorphoSys UK Ltd. ist die frühere Serotec Ltd., und wurde kürzlich umbenannt. Sie hat
wiederum zwei Tochtergesellschaften, die MorphoSys US Inc. – die frühere Serotec Inc. –
und die MorphoSys AbD GmbH – die frühere Serotec GmbH – in Düsseldorf hier in
Deutschland. Die Oxford Biotechnology Ltd. und Oxford Biomarketing Ltd. befinden sich
gerade in der Auflösung.
Folie 32: Sonstige betriebliche Aufwendungen und Steuern (Konzern)
Lassen Sie mich zum Finanzrückblick zurückkehren. Ich komme nun zu den sonstigen
betrieblichen Aufwendungen. Das Ergebnis der gewöhnlichen Geschäftstätigkeit belief sich
im Vergleich zum Vorjahr fast unverändert auf 6,2 Mio. €. Dies ist sehr nah an unserer
Prognose am oberen Ende des Korridors von 6 Mio. €.
Der Gewinn vor Zinsen, Steuern und Abschreibungen – EBITDA – stieg auf 10,3 Mio. € im
Vergleich zu 8,6 Mio. € im Vorjahr.
Unterhalb der sonstigen betrieblichen Aufwendungen finden Sie die Ertragssteuern. Wir
haben einen Steuerertrag in Höhe von 0,7 Mio. € verbucht. Dieser Ertrag ist auf Effekte aus
latenten Steuern zurückzuführen, vor allem durch die Bildung von aktiven latenten Steuern
auf steuerliche Verlustvorträge, wodurch der Ertragssteueraufwand um 1,2 Mio. € reduziert
wurde.
MorphoSys erzielte unter IFRS einen Jahresüberschuss in Höhe von 6,0 Mio. €. Das sich
daraus ergebende verwässerte Ergebnis je Aktie belief sich auf 0,93 € je Aktie, verglichen
mit 0,83 € im Vorjahr.
Folie 33: Investitionen nach Segmenten
Im Geschäftsjahr 2006 investierte MorphoSys in Sachanlagen und immaterielle
Vermögenswerte insgesamt 4,0 Mio. €, ein Anstieg von 3,3 Mio. € gegenüber dem Vorjahr.
Hiervon entfielen 1,2 Mio. € auf Maßnahmen zur Zusammenführung der Konzernaktivitäten
in Großbritannien in der neuen UK-Zentrale in Oxford. Wir glauben, dass die notwendigen
Investitionen in Großbritannien damit weitestgehend erledigt sind.
Abschreibungen auf Sachanlagen in 2006 fielen in Höhe von 1,5 Mio. € an, verglichen mit
0,9 Mio. € im Vorjahr. Diese Zunahme hatte ihren Grund hauptsächlich in der Übernahme
der Serotec-Gruppe.
Lassen Sie uns nun einen Blick auf die Bilanz werfen.
Folie 34: Konzernbilanz - Aktiva
Das Umlaufvermögen erhöhte sich um ca. 18 Mio. € auf 76,1 Mio. €, vor allem durch die im
März 2006 erfolgreich durchgeführte Kapitalerhöhung. Die liquiden Mittel erhöhten sich zum
Jahresende auf 66 Mio. €. Das Anlagevermögen hat sich mehr als verdoppelt auf 51,7 Mio.
€, Hauptursache für den Anstieg war die Konsolidierung der Aktiva von Serotec in die
Konzernbilanz von MorphoSys. Insbesondere der Geschäfts- und Firmenwert (goodwill) ist
hier hervorzuheben.
Folie 35: Konzernbilanz - Verbindlichkeiten
Im Jahr 2006 erhöhten sich die kurzfristigen Verbindlichkeiten um ca. 7 Mio. € auf 18,3 Mio.
€. Diese Erhöhung hat ihre Ursache vor allem in der Einbeziehung der Serotec-Firmen in
den Konzernabschluss. Der Anstieg der langfristigen Verbindlichkeiten hatte seine
wesentlichen Ursachen in der Zunahme der langfristigen Umsatzabgrenzung um 2,5 Mio. €
aufgrund von in den Jahren 2005 und 2006 geschlossenen Neuverträgen sowie der
Zunahme der latenten Steuerverpflichtungen im Zusammenhang mit der Kaufpreiszuordnung
der Gesellschaft im Rahmen des Serotec-Erwerbs.
Folie 36: Kapitalerhöhungen 2006
Im Verlauf des Geschäftsjahres 2006 kam es zu zwei Kapitalerhöhungen. Im Rahmen des
Erwerbs der Serotec-Gruppe im Januar 2006 wurden ein Drittel des Kaufpreises durch eine
Sachkapitalerhöhung erbracht und die 208.560 neuen Aktien aus der Kapitalerhöhung
(3,5 % des Grundkapitals), die einer gestaffelten Haltefrist unterliegen, an die früheren
Eigentümer der Serotec-Gruppe ausgegeben.
Im März 2006 platzierte MorphoSys im Rahmen einer Privatplatzierung mit Erfolg 384.338
Aktien (6,5 % des Grundkapitals) zu einem Preis von 44,50 € je Aktie bei internationalen
institutionellen Investoren. Aus dieser Barkapitalerhöhung floss dem Unternehmen ein
Bruttoerlös von rund 17,1 Mio. € zu.
Die Wandlung von an Mitarbeiter gewährten Schuldverschreibungen und die Ausübung von
Aktienoptionen führten zu einem zusätzlichen Anstieg um ca. 97.000 Aktien.
Am Jahresende 2006 waren ca. 6,7 Mio. Aktien ausgegeben.
Folie 37: Aktionärsstruktur
Die Novartis Pharma AG ist mit ca. 7 % Aktienanteil aktuell MorphoSys’ größter
Einzelaktionär, gefolgt von AstraZeneca mit ca. 6 %. Der Streubesitz gemäß der Definition
der Deutschen Börse beläuft sich auf 87 %. Im Streubesitz enthalten sind ca. 3 %
Aktienbesitz von Vorstand und Aufsichtsrat.
Ich möchte an dieser Stelle anmerken, dass wir im Verlauf des Jahres mehr als 200
Investorentreffen in zehn Ländern absolviert haben. Der Anteil an institutionellen Aktionären
hat sich während des Jahres 2006 ungefähr auf 40 % verdoppelt.
Folie 38: Mitarbeiter
Am Ende des Jahres 2006 beschäftigte MorphoSys ca. 279 Mitarbeiter, verglichen mit 172
Mitarbeitern am Jahresende 2005. 155 Mitarbeiter waren im Segment Therapeutische
Antikörper beschäftigt, und 121 im Segment AbD.
183 Mitarbeiter waren in Deutschland beschäftigt, 78 in Großbritannien und 18 in den USA.
Folie 39: Agenda
Damit bin ich am Ende meines Rückblicks für das Jahr 2006 angekommen. Ich komme nun
zum Ausblick für 2007.
Folie 40: Finanzprognose 2007
Wir erwarten im Jahr 2007 Umsatzerlöse zwischen 60 Mio. € und 65 Mio. €.
Rund zwei Drittel der Umsatzerlöse werden vom Segment für therapeutische Antikörper
beigesteuert. In diesem Anteil werden ca. 10 Mio. € erfolgsabhängige Zahlungen enthalten
sein.
Das Segment AbD, inklusive Serotec, wird ca. ein Drittel zum Konzernumsatz beisteuern.
Es gibt eine Reihe von Annahmen, die in unseren Aufwendungen enthalten sind. Zunächst
planen wir ca. 5 Mio. € Investitionen für die eigene Produktentwicklung, und ca. 1 Mio. € für
die weitere Technologieentwicklung.
Das Segment Therapeutische Antikörper wird wie im Vorjahr profitabel sein, und für das
AbD-Segment erwarten wir ein positives Ergebnis aus der gewöhnlichen Geschäftstätigkeit,
mit einer Marge von ca. 5 -10 %.
Folie 41: Agenda
Damit möchte ich meinen Teil der Präsentation beenden und gebe das Wort zurück an
Simon für die Ziele für 2007.
Vielen Dank für Ihre Aufmerksamkeit.

Redner: Dr. Simon Moroney, Vorstandsvorsitzender der MorphoSys AG
Danke, Dave.
Zum Abschluss unserer Präsentation, möchte darüber sprechen, wie wir beabsichtigen,
unsere starke Position in zukünftiges Wachstum umzusetzen, und hierzu unsere Ziele für
2007 bekannt geben.
Mit Blick auf die Zukunft möchte ich zwei wichtige Anmerkungen zu unserer Pipeline und
Strategie machen.
Folie 42: Partnergeschäft erreicht kritische Masse
Den ersten Punkt, den ich hier ansprechen will, ist der Folgende: unser therapeutisches
Antikörpergeschäft mit Partnern hat nun eine kritische Masse erreicht.
Die sechs Verträge, die wir in 2006 unterzeichneten, und unsere anderen Partnerschaften
sollen zu ausreichenden Tantiemenzahlungen aus HuCAL-basierten Medikamenten führen
und unsere langfristige Zukunft sichern. Ein mögliches Zukunftsszenario zeigt, dass
mindestens 9 HuCAL-basierte Medikamente in Zukunft auf den Markt kommen könnten und
dies allein aus unseren heute existierenden Partnerschaften.
Wie kommen wir zu dieser Schlussfolgerung? Sie fußt auf der Anzahl der derzeit aktiv
verfolgten Programme mit Partnern und den innerhalb dieser Allianzen noch zu startenden
Projekten sowie den Berechnungen zur Wahrscheinlichkeit, dass es diese Programme bis
zur Marktreife und Vermarktung als Medikament schaffen. Die folgenden zwei Folien geben
diese Kalkulation wieder.
Folie 43: Partner-Programme: Heute & Morgen
Wir verfolgen derzeit 43 aktive Programme mit Partnern. Diese Zahl sollte auf 50 bis
Jahresende 2007 steigen. Im Rahmen der existierenden, laufenden Kooperationen glauben
wir, dass weitere 40 neue Programme in den Jahren zwischen 2008 bis 2011 gestartet
werden könnten. Unsere Vorhersagen für die Entwicklung unserer Pipeline basieren auf
diesen Annahmen. Grundlage dieser Rechnung sind hingegen nur unsere Partnerschaften,
die bereits heute aktiv sind. Jede weitere therapeutische Partnerschaft, die wir
möglicherweise in Zukunft unterzeichnen, sollte diese Zahlen weiter erhöhen. Ich möchte
betonen, dass wir weiterhin die Möglichkeit für neue Vertragsabschlüsse sehen. Aus rein
rechnerischen Gründen nehmen wir für diese Kalkulation keine zusätzlichen Kooperationen
in die Rechnung auf.
Folie 44: Erfolgswahrscheinlichkeiten der Medikamentenentwicklung
Der nächste Schritt unserer Pipeline-Projektion verlässt sich auf unsere Erfahrungswerte bei
der Generierung von HuCAL-Antikörpern sowie Industriedaten für Erfolgsraten in der
Medikamentenentwicklung. Unsere Erfahrung hat gezeigt, dass die Wahrscheinlichkeit mit
der wir einen Antikörper gegen ein bestimmtes Zielmolekül generieren können, der die
notwendigen Kriterien erfüllt, um die formelle präklinische Entwicklung beginnen zu können,
mindestens 80% beträgt. Unsere Erfahrungen für die präklinische Entwicklung wiederum
lassen erwarten, dass ein solcher Antikörper in rund 37,5% der Fälle die präklinische
Entwicklung auch erfolgreich abschließt. Der dritte Aspekt ist die klinische Entwicklung und
hier berufen wir uns auf jüngste Daten des Zentrums zur Studie der
Medikamentenentwicklung der Tufts Universität, die wahrscheinlich die verlässlichste Quelle
für Statistiken zur Entwicklung von Pharmazeutika darstellt. Jüngste Analysen der Tufts
Universität zeigen, dass die Wahrscheinlichkeit, mit der ein bio-therapeutischer Wirkstoff den
Weg von der Phase 1 der klinischen Entwicklung bis hin zum Markt erfolgreich hinter sich
bringt, rund 30% beträgt.
Folie 45: Partner-Programme: Erwarteter Output
Wenden wir nun diese Wahrscheinlichkeiten auf unsere heutigen Partnerschaften an und
schätzen wie viele HuCAL-Antikörper es zur Marktzulassung schaffen könnten, so ergibt
diese Berechnung die Zahl 9.
Diese Analyse sollte vorsichtig betrachtet und nicht überinterpretiert werden. Sie basiert auf
einer Vielzahl an Annahmen und Schätzungen zu Projekten, die zum Teil noch nicht
gestartet wurden.
Dennoch geben diese Schätzungen einen tieferen Einblick in die mögliche Zukunft von
MorphoSys und das Potenzial unserer Pipeline an Partner-Projekten und dies selbst unter
der Annahme, dass keine weiteren Partnerschaften unterzeichnet würden.
Folie 46: MorphoSys Kerntechnologie HuCAL: Wie wir Sie kommerzialisieren
Den zweiten Punkt, den ich hier ansprechen will, ist AbD Serotec. Diese Geschäftseinheit
bringt eine Synergie mit sich, die – wie wir glauben – eine wichtige Quelle für zukünftigen
Wertzuwachs und Wachstum für unsere therapeutischen Aktivitäten darstellen wird.
Diese Darstellung fasst die wichtigste Synergie zwischen den beiden Segmenten unseres
Geschäfts bildlich zusammen. Die kontinuierliche Technologieentwicklung im
therapeutischen Segment macht HuCAL zu einem effektiveren Werkzeug für die Forschung.
Dies macht die Technologie natürlich attraktiver für Kunden von AbD Serotec und unterstützt
unsere Umsatzzahlen in diesem Segment. Es hilft uns gleichzeitig, wertvolle
Forschungskooperationen einzugehen, die uns Zugang zu krankheitsrelevanten
Zielmolekülen ermöglicht und so wiederum das therapeutische Segment unterstützt.
Folie 47: Strategische Forschungs-Allianzen – Das Burnham Institut
Ein Vertrag, den wir jüngst unterzeichneten, verdeutlicht dies besonders, nämlich unsere
Allianz mit dem Burnham-Institut, einem der weltweit führenden medizinisch orientierten
Forschungsorganisationen in den Vereinigten Staaten. Finanziell gut ausgestattet – das
Burnham-Institut zählt zu den fünf durch die NIH am höchsten geförderten privaten
Forschungseinrichtungen in den USA – befindet es sich auch konstant unter den Top 20
Forschungsorganisationen in Hinblick auf den Einfluss ihrer Publikationen. Gemessen wird
dies durch das Institut für wissenschaftliche Informationen (SCI) anhand der Zitierungen ihrer
Veröffentlichungen durch andere Wissenschaftler. Die Wissenschaftler am Burnham-Institut
haben nach eigenen Angaben direkt oder indirekt zur Entwicklung mindestens 5
zugelassener Therapien, zahlreichen diagnostischen Tests und zusätzlich 9 innovativen
Therapieansätzen, die sich derzeit in der klinischen Phase der Entwicklung befinden,
beigetragen.
Die Vereinbarung zwischen uns und dem Burnham-Institut gibt den US-Wissenschaftlern
schnellen und direkten Zugang zu HuCAL-Antikörpern für ihre Forschungszwecke zu
Vorzugskonditionen. Im Gegenzug sichert sich MorphoSys die Rechte, alle Antikörper mit
therapeutischem oder diagnostischem Potenzial gegen Zielmoleküle, die von den
Wissenschaftlern am Burnham-Institut untersucht werden, weiterzuentwickeln. Zusätzlich
können alle Antikörper als pure Forschungsprodukte über den AbD Serotec Verkaufskatalog
vermarktet werden.
Der Vertrag mit dem Burnham-Institut war das erste Beispiel einer solchen Zusammenarbeit.
Wir sind jüngst ein zweites Vertragsverhältnis dieser Art mit einem führenden japanischen
Forschungsinstitut eingegangen, in einem drei-Parteien-Vertrag, der auch unseren
japanischen Partner Gene Frontier einbezieht.
Wir beabsichtigen ähnliche Kooperationsmöglichkeiten mit anderen führenden Instituten zu
suchen. Wir sind der festen Überzeugung, dass mehrere Forschungs-basierte
Kooperationen mit medizinisch-fokussierten akademischen Instituten der produktivere Weg
darstellt, um Zugang zu neuen Zielmolekülen zu erhalten, als eine eigene interne Target
Discovery-Infrastuktur aufzubauen. Wir glauben ferner, dass wir unser Geschäftsmodell
durch den Zugang zu Zielmolekülen noch lukrativer gestalten können, indem wir nicht nur
eine proprietäre Antikörpertechnologie, sondern auch neue Zielmoleküle in eine
Zusammenarbeit einbringen. Innerhalb dieses Szenarios träte MorphoSys selbst als Initiator
von therapeutischen Antikörperprojekten auf, im Gegensatz zu dem derzeitigen Modell, bei
dem die derzeit 43 aktiven Partnerprogramme alle durch unsere Kooperationspartner initiiert
wurden. Von Fall zu Fall würde MorphoSys dann entscheiden, wie weit individuelle
Programme selbst verfolgt würden, bevor Partner für die weitere Entwicklung gefunden
werden. Dieses Szenario bietet einen großen Spielraum und Flexibilität, da jedes dieser
Programme unter unserer Kontrolle stünde.
Folie 48: Schlüsselfaktoren für weiteres Wachstum
Beide Geschäftssegmente von MorphoSys zeigen eine gute Performance und die
Aussichten für zukünftiges Wachstum sind sehr attraktiv. Wie ich bereits vorhin erwähnt
habe, unsere hat unser therapeutisches Antikörpersegment durch die derzeitigen
Partnerschaften und den Status unserer Pipeline eine kritische Masse erreicht. Im
Forschungssegment haben wir begonnen, attraktive strategische Synergien zu realisieren.
Operativ erwarten wir, dass das Segment AbD Serotec schneller wächst als der Markt und
damit seinen Marktanteil erhöht.
Die pharmazeutische Industrie sieht sich mit einer ernsthaften Herausforderung konfrontiert
ihre Entwicklungspipeline zu füllen. MorphoSys’ Erfolg im Hier und Jetzt basiert auf der
Fähigkeit, als Quelle für mögliche Antikörpermedikamente zu dienen. Mit Blick auf die
Zukunft glauben wir deshalb durch…
• kontinuierliche Verbesserung unserer Technologie, um die Entwicklung noch
besserer Antikörper-basierter Wirkstoffe schneller zu ermöglichen,…
• den Beleg, dass HuCAL-Antikörper nicht nur in prä-klinischen Tests sondern auch in
der Klinik effektiv ihre Wirkung entfalten, und...
• den Einsatz unserer firmeneigenen Technologie im Forschungsbereich, um Zugang
zu neuen krankheits-relevanten Zielmolekülen zu erlangen,…
…MorphoSys zu einem noch attraktiveren, oder sogar unverzichtbaren Partner für die
Pharmaindustrie machen zu können.
Zum Abschluss möchte ich unsere Ziele für das kommende Jahr zusammenfassen:
Folie 49: Ziele 2007
Lassen Sie mich zuerst unsere Finanzziele rekapitulieren:
Unsere Umsätze in 2007 sollen auf sich in einer Spanne von 60 – 65 Millionen Euro
bewegen, grob aufgeteilt zwischen therapeutischem Geschäft und Forschungsprodukten im
Verhältnis 2:1. Dies stimmt überein mit unseren langfristigen Zielen, die Konzernumsätze um
mindestens 15-20% pro Jahr zu steigern bis zu einem Zeitpunkt, etwa 5-6 Jahre von jetzt an,
an dem HuCAL-basierte Medikamente auf den Markt kommen. Als Resultat hieraus würden
wir einen steilen Anstieg dieses Wachstums erwarten. Für 2007 erwarten wir einen
operativen Gewinn von 7-10 Millionen Euro.
In Hinblick auf die Entwicklung unserer therapeutischen Pipeline, beabsichtigen wir alle
Unterlagen für den Beginn klinischer Studien des Projekts MOR103 vor Jahresende
eingereicht zu haben. In Bezug auf MOR202 werden wir die formelle prä-klinische
Entwicklung fortsetzen und das Projekt weiter in Richtung Klinik entwickeln. Wir erwarten
zwischen 1 und 3 neuen Klinikstarts von Partner-Projekten in diesem Jahr. Diese
Entwicklung spiegelt den wachsenden Reifegrad unserer Pipeline wider und wir gehen
davon aus, dass die Zahl von Klinikstarts im kommenden Jahr 2008 noch höher ausfällt. Für
die Gesamtzahl an aktiven Partnerprogrammen wird bis Ende 2007 auf 50 ansteigen, und
danach weiter steigen. Obwohl dies ausgehend von den 43 derzeit verfolgten Projekten nur
nach einem moderaten Anstieg klingen mag, beinhaltet dieser Wert angenommene
Ausfallraten in der prä-klinischen Entwicklung.
Die Anzahl aktiver Programme ist ein wichtigerer Parameter als die Anzahl von Verträgen,
die wir mit Pharmafirmen unterzeichnen. Basierend auf der weiterhin hohen Nachfrage, die
wir in der Industrie sehen, und der Zahl der Gespräche in denen wir uns derzeit befinden,
sehen wir ein attraktives Maß an Vertragsmöglichkeiten in den kommenden Jahren. Eine
Vorhersage des Zeitpunkts oder der Umfangs solcher Verträge ist allerdings sehr schwierig
und wir können deshalb keine exakten Vorhersagen zu diesem Punkt treffen.
Im Forschungsantikörpersegment, ist das Ziel für unsere Geschäftseinheit AbD Serotec eine
Umsatzsteigerung von 20% im Vergleich zum Vorjahr und das Erreichen der
Gewinnschwelle.
Eine Reihe strategischer Ziele für die Geschäftseinheit sollen den wachsenden Einfluss und
Einsatz der HuCAL-Technologie in der Life-Science-Industrie fördern. Wir streben eine
weitere Marketing-Allianz hierzu an und wollen den Einsatz der HuCAL-Technologie in der
Forschungsgemeinschaft fördern.
Zum Schluss möchte ich sagen, dass wir uns auf ein weiteres erfolgreiches Jahr für unser
Unternehmen freuen und Sie in regelmäßigen Abständen über unsere Fortschritte zu
unterrichten. Vielen Dank für Ihre Aufmerksamkeit – wir freuen uns nun darauf, ihre Fragen
zu beantworten.

Folie 50: Fragen & Antworten
Redner: Dr. Claudia Gutjahr-Löser Leitering der Unternehmenskommunikation
Vielen Dank Dave and Simon. Wir sind nun bereit, Ihre Fragen entgegen zu nehmen. Ich
schlage vor, dass wir zuerst mit den Teilnehmern der Telefonkonferenz beginnen. Können
wir hier die erste Frage bitte haben?
Fragen & Antworten
Dr. Hanns Frohnmeyer, LBBW: Ich habe zwei Fragen: Wie sicher sind Sie, dass 40 neue
Programme in 2008-2011 an den Start gehen? Was ist die Basis für diese Kalkulationen?
Die zweite Frage: Wenn ich mir Ihre Prognose für 2007 ansehe mit der Vermutung, dass Ihre
AbD Einheit eine Gewinnmarge von mehr als 5-10% erreichen soll und weitere Meilensteine
vom therapeutischen Segment kommen, scheint es mir, dass Ihre EBIT-Schätzungen recht
konservativ sind. Könnten Sie das bitte kommentieren?
Dr. Simon Moroney: Ich werde den ersten Teil der Frage beantworten und Dave den
zweiten Teil. Die Prognose, dass 40 neue Programme zwischen 2008 und 2011 starten
werden, entnehmen wir den bestehenden Verträgen, von denen einige bis 2011 laufen und
einige früher enden. In manchen der Verträge ist präzise vereinbart, wie viele Programme
Jahr für Jahr starten. In anderen Verträgen sind Optionen vorgesehen. Wir haben die fest
vereinbarten Programme, zu denen sich einige dieser Partner verpflichtet haben, und eine
Schätzung – eine konservative Schätzung, möchte ich sagen – zu den optionalen
Programmen addiert und sind auf die Zahl 40 gekommen. Die potenzielle Gesamtzahl dieser
Programme, die gestartet werden können, wenn man die verbindlichen Programme plus alle
Optionen nimmt, ist tatsächlich weit höher als 40. Aber wir haben nur einen Teil der Optionen
genommen und kommen so auf die Zahl 40. So fühlen wir uns eigentlich sehr, sehr wohl mit
der Zahl 40.
Dave Lemus: In Bezug auf die Frage, wie konservativ die Prognose für 2007 ist, möchte ich
folgendes sagen: Das erste, was wir uns klar machen müssen ist, dass es sich um eine
Bandbreite handelt, wenn wir über Meilensteine in Höhe von ungefähr 10 Mio. € sprechen.
Das könnten entweder 9 Mio. € sein, oder auch mehr. Das Gleiche trifft auf die EBITGewinnspanne
zu. Ich glaube, wenn man rechnet und man realisiert, dass wir unsere
Investitionen in Produkt- und Technologieentwicklung im aktuellen Jahr von 3 Mio. € auf
ungefähr 6 Mio. € im nächsten Jahr verdoppeln werden, denken wir, dass die Prognose
konservativ ist, aber nicht übermäßig konservativ.
Daniel Wendorff, West LB: Drei Fragen, wenn ich darf: Die erste Frage bezieht sich auf die
Bayer-Schering Situation. Sie haben gesagt, der Bayer-Vertrag würde sich in den Schering-
Vertrag verlagern und Ende 2007 auslaufen. Wie zuversichtlich sind Sie, dass die
Vereinbarung verlängert werden kann, und wenn sie nicht verlängert wird, was könnten, in
groben Prognosen gesprochen, die finanziellen Auswirkungen sein? Und noch zwei Fragen
bezüglich der Investitionen. Wie sehen Sie die Entwicklung für 2007 und ferner die
Profitabilität im AbD-Segment? Erreichen Sie diese hauptsächlich durch das Vergrößern
Ihrer Bruttomarge oder wie wird die EBIT-Gewinnspanne von 5-10% erreicht?
Dr. Simon Moroney: Lassen Sie mich die erste Frage zu Bayer-Schering beantworten und
Dave wird etwas zu den finanziellen Fragen sagen. Die ursprüngliche Übereinkunft, die wir
mit Schering hatten, beinhaltete eine Klausel, nach der der Vertrag sich bis Ende 2007
verlängert, und dies ist die Übereinkunft, unter der die verbundene Bayer-Schering arbeitet.
Zurzeit sind wir mit Bayer-Schering in der Diskussion, ob es über 2007 hinausgeht. Aber in
dieser Phase können wir nicht bzw. sind nicht dazu bereit, den Status dieser Diskussionen
zu diskutieren bzw. über Wahrscheinlichkeiten zu sprechen, ob dieser Vertrag verlängert
wird und wenn, unter welchen Verhältnissen und Bedingungen. Es ist eine fortlaufende
Verhandlung und unsere Politik ist einfach, aktuelle Verhandlungen nicht zu kommentieren.
Daniel Wendorff: Was ist die mögliche finanzielle Auswirkung, wenn der Vertrag nicht
verlängert wird?
Dr. Simon Moroney: Ich glaube, dass wir in der Vergangenheit gezeigt haben, dass, wenn
Verträge nicht verlängert werden, wir in der Lage sind, diese durch alternative Verträge zu
ersetzen, oder die Lücke des beendeten Vertrags aufzufüllen. So lassen Sie mich nur sagen,
dass die Verhandlungen weiterlaufen. Welche Bedingungen für eine mögliche Verlängerung
bestehen, wissen wir zu diesem Zeitpunkt noch nicht, aber das ist auch kein Grund zur
Sorge für uns. Lassen Sie es uns so sagen.
Dave Lemus: In Hinblick auf die Frage zu den Investitionsausgaben: Dieses Jahr hatten wir
ungefähr 4 Mio. € an Investitionsausgaben. Wir erwarten für 2007, dass die Zahl auf
ungefähr 3 Mio. € reduziert wird. Das ist hauptsächlich das Ergebnis davon, dass wir in 2006
einen Kapitalverbrauch im Wert von 1,2 Mio. € hatten, der mit der Restrukturierung der
Serotec-Gruppe in Großbritannien verbunden war. Zu Ihrer Frage zur Verbesserung des
Ergebnisses von AbD Serotec, oder besser gesagt des AbD-Segments. Ich glaube, es ist
eine Kombination einiger Faktoren. Zum Ersten hatten wir Restrukturierungskosten von circa
1,7 Mio. € im letzten Jahr – die Restrukturierung ist beendet und wir erwarten keine weiteren
Restrukturierungskosten. Das ist der eine Effekt. Ein anderer Effekt wird natürlich sein, dass
wir ein leichtes Wachstum im Bruttoergebnis erwarten. Und natürlich erwarten wir auch, dass
durch die Verbesserung des Produktportfolios das Gesamtgeschäft profitabler werden wird.
Es ist also nicht nur ein Faktor.
Daniel Wendorff: Danke.
Dr. Martin Possienke, Equinet: Ich gratuliere zum therapeutischen Geschäft. Ich muss
noch mal etwas zur anderen Geschäftseinheiten fragen. Restrukturierungskosten von 1,7
Mio. €, wenn ich mich richtig erinnere, geht dies ziemlich konform mit der Prognose, die Sie
im letzten Jahr veröffentlicht haben. Nichtsdestoweniger liegt das Ergebnis des operativen
Geschäfts signifikant unter Ihrer Prognose. Demnach muss auch etwas auf der Seite des
operativen Geschäfts sein. Vielleicht könnten sie dazu etwas sagen? Und dann in Bezug auf
Serotec für sich gesehen, liegt das Einkommenswachstum bei 10 %, ist das richtig? Wenn
ich damit richtig liege, warum liegt dies unter dem Industriewachstum und was ist der
Auslöser, um das Wachstum auf 20 % in 2007 zu steigern?
Dr. Simon Moroney: Ok, vielleicht kann ich mit einem generellen Kommentar dazu
beginnen und Dave wird etwas zu den spezifischen finanziellen Fragen sagen. Was Sie nicht
vergessen dürfen, ist, dass das Jahr 2007 ein Jahr des massiven Umbruchs in diesem
Geschäftsgebiet für uns war. Wir haben mehrere verschiedene Betriebsaktivitäten
zusammengelegt, wir sind in neue Gebäude gezogen, wir mussten unsere
Herstellungskapazitäten in diese Gebäude verlegen und wir mussten die Angestellten aus
zwei Standorten in England in diese Gebäude in Oxford verlegen. Das bedeutet erheblichen
Aufwand. Wir nahmen die Möglichkeit wahr, die Gebäude aufzuwerten von etwas, von dem
wir dachten, dass es unter dem gegenwärtigen industriellem Standard liegt, zu etwas, das
nicht nur dem heutigen Standard entspricht, sondern dem von morgen. Wir haben jetzt eine
wundervolle Niederlassung in Oxford und wir nahmen die Möglichkeit in 2006 wahr,
erheblichen Aufwand zu betreiben, um dieses Werk zu errichten und es für die Zukunft
auszustatten. Demnach war es wirklich ein Jahr, in dem wir diesen Geschäftsbereich
bestmöglich ausgestattet haben, damit er in den folgenden Jahren etwas erreichen kann.
Aus diesem Grund sollten wir uns auf die geplante Geschäftsentwicklung von einem
Wachstum von mehr als 20 % in diesem Jahr konzentrieren, welches deutlich besser als das
Wachstum des Marktes ist. Wenn man sich einen der größeren Mitstreiter auf dem Markt
ansieht, wachsen diese unter einem Wert von 10 %. Manche der größeren Mitstreiter wie
zum Beispiel Chemicon, jetzt Teil von Millipore, und einige andere Antikörper-Spezialisten
liegen auch unter einer Wachstumsrate von 10 %. Wenn wir in der Lage sind, das
Wachstumsziel von 20 % zu erreichen, werden wir dieses Jahr doppelt so schnell wachsen
wie der Markt. So, dies waren meine allgemeinen Kommentare. Aber letztes Jahr war ein
Jahr der Konsolidierung und wir sind jetzt besser positioniert, um schon in diesem Jahr
beginnend substantiell mehr zu leisten als der Markt in den folgenden Jahren.
Dave Lemus: Vielleicht kurz zu den Restrukturierungskosten. Ich glaube, die Prognose, die
wir Anfang 2006 gemacht haben, war, dass Restrukturierungskosten bei annähernd 1 Mio. €
liegen würden – sie waren mit 1,7 Mio. € fast doppelt so hoch, was große Auswirkungen auf
das Ergebnis des Geschäftsbereichs hatte. Zu einem Teil lag das an der Tatsache, dass die
Aufwendungen, die wir in 2006 hatten, höher als erwartet waren. Zu einem anderen Teil
waren einige der Aufwendungen nach 2006 vorverlegt worden - als das Ergebnis der
schneller als angenommenen Eingliederung durch den Umzug in das neue Gebäude. Dies
führte dazu, dass Aufwendungen, die wir für 2007 erwartet hatten, bereits in 2006 auftraten.
Dr. Martin Possienke: Vom operativen Blickwinkel aus gesehen, ist also alles so gelaufen,
wie Sie sich das Anfang des Jahres vorgestellt haben?
Dave Lemus: Außer der Tatsache, dass die Restrukturierungskosten substantiell höher
waren, weswegen wir auch ein niedrigeres Bruttoergebnis haben. Aber ich denke, wie Simon
es auch schon gesagt hat, dass wir zuversichtlich sind, dass wir dieses Jahr profitabel sind
und ohne Zweifel operativ schwarze Zahlen schreiben.
Dr. Martin Possienke: Noch eine weitere Frage zu diesem Thema. Die Prognose für 2007
betrachtend, glaube ich, wir sprechen über 22 Mio. € Umsatz für den AbD Serotec
Unternehmensbereich. Angenommen, Sie behalten Ihre Herstellungskosten und Ihre
operativen Kosten stabil um das obere Ende Ihrer 5-10 % EBIT-Prognose zu erreichen.
Glauben Sie, es ist möglich die Herstellungskosten stabil zu halten und die operativen
Kosten im absoluten Verhältnis vielleicht sogar ein wenig zu senken?
Dave Lemus: Sprechen wir über Herstellungskosten in Prozent konstant oder
Herstellungskosten stabil im absoluten Verhältnis?
Dr. Martin Possienke: Um das obere Ende der Prognose zu erreichen, müssen sie es wohl
stabil im absoluten Verhältnis halten.
Dave Lemus: Es ist unwahrscheinlich, dass wir die Herstellungskosten im absoluten
Verhältnis stabil halten. Wir erwarten, dass die Gesamtkosten des operativen Bereichs, was
nicht zuletzt damit zusammenhängt, dass wir eine Vielzahl der Geschäftsbereiche
restrukturiert haben – die Tabelle, die wir gesehen haben, als wir von nahe 10
Tochtergesellschaften ausgegangen sind, und es jetzt gegenwärtig 7 sind – sollte demnach
bedeutsam die Kosten senken. Wir haben die Struktur der Gruppe wesentlich vereinfacht,
was sich in kräftigen Kosteneinsparungen umsetzen sollte. Wir erwarten also eine
Verbesserung der Bruttomarge, wie ich schon sagte, und eine wesentliche Verbesserung
unterhalb der Bruttomarge.
Dr. Martin Possienke: Aber die operativen Kosten werden im absoluten Verhältnis
wahrscheinlich sinken?
Dave Lemus: Das würden wir erwarten, ja.
Dr. Martin Possienke: Ok, vielen Dank.
Holger Blum, Deutsche Bank: Eine Frage zu der SG&A-Kosten im vierten Quartal: sie
scheinen fast doppelt so hoch wie die der vorangegangenen Quartale. Kommt dies auch
durch die Restrukturierung und was kann man aus diesem Grund für die Zukunft erwarten?
Die zweite Frage zu Ihrer Prognose: Könnten Sie ein wenig mehr dazu sagen, was
Auswirkungen auf die Größenordnung hat? Was bringt Sie dazu, am unteren Ende im
Gegensatz zum oberen Ende Ihrer Prognose zu enden, besonders, wenn Sie erwähnt
haben, dass sie Meilensteinzahlung um die 10 Mio. € in 2007 erzielen? Beinhaltet d

[eck64]

Antwort auf Beitrag Nr.: 28.166.267 von lupus2000 am 07.03.07 15:20:43

up damit der nicht historisch wird....