MorphoSys AG Reports Second Quarter 2019 Financial Results (news with additional features)
DGAP-News: MorphoSys AG / Key word(s): Quarterly / Interim Statement
Planegg/Munich, Germany, August 6, 2019
MorphoSys AG Reports Second Quarter 2019 Financial Results
Conference call and webcast (in English) to be held on August 7, 2019 at 2:00pm CEST (1:00pm BST/8:00am EDT)
MorphoSys AG (FSE: MOR; Prime Standard Segment; MDAX & TecDAX; NASDAQ: MOR) today reported its financial results for the second quarter of 2019.
"MorphoSys continued to make excellent progress on multiple fronts in the second quarter of 2019," said Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. "A major step was the appointment of my successor Dr. Jean-Paul Kress as the new CEO of MorphoSys, effective September 1, 2019. Jean-Paul brings a wealth of medical, commercial and leadership expertise and I have every confidence that he will enable MorphoSys to make great strides in the execution of its strategy, especially in the launch and commercialization of our lead program tafasitamab. Topline results from the primary analysis of our L-MIND trial, followed by the presentation of the complete data set at the recent ICML conference, confirmed the potential of this program. We remain on track to completing our BLA filing to FDA by the end of this year and today we also confirmed our intention to submit a Marketing Authorization Application based on L-MIND to the European Medicines Agency. For the B-MIND trial, we have disclosed the biomarker we have implemented as a low baseline peripheral blood natural killer cell count, which may help us to identify patients who could benefit from tafasitamab's potential efficient recruitment of these cells. Finally, our agreement with Vivoryon Therapeutics, which gives us access to a family of small molecule inhibitors in immuno-oncology, is a potentially invaluable addition to our proprietary portfolio. We are keen to assess the potential of these compounds in combination with our antibodies, first and foremost with tafasitamab", Dr. Moroney continued.
"The L-MIND data we have reported represent a key catalyst for the transformation of MorphoSys and our goal to develop into a fully integrated biopharmaceutical company. Our preparations to further broaden the development of tafasitamab are ongoing and the start of a first line trial in DLBCL is expected later this year. We are also broadening our development of MOR202, which we plan to test in a phase 1/2 clinical trial in a chronic inflammatory autoimmune disease of the kidneys later this year," commented Jens Holstein, Chief Financial Officer of MorphoSys AG. "Our balanced business model is based on the value of our Partnered Discovery segment that allows us to invest in the development and planned commercialization of our proprietary portfolio. The milestone payment of EUR22 million from GSK following the phase 3 start in rheumatoid arthritis with otilimab, formerly MOR103, led us to increase our financial guidance. An increasing royalty stream from Tremfya(R) further strengthens our cash position and we are confident that there will be other compounds that follow Tremfya's(R) market entry in the future."
Financial Review for the second quarter of 2019 (IFRS; all figures rounded)
In Q2 2019 MorphoSys continued to focus on the research and development of drug candidates both for its own account as well as with its partners. Group revenues increased to EUR34.7 million in Q2 2019 as compared to EUR8.1 million in the second quarter of the previous year. The increase was mainly driven by the milestone payment of EUR22 million from GSK due to the start of the clinical phase 3 program with otilimab (MOR103) in rheumatoid arthritis (RA). This payment was recognized in the second quarter due to the provisions of IFRS 15 on revenues from variable consideration.
Revenues also included an estimate of royalties on net sales of Tremfya(R) amounting to EUR 7.1 million (estimate only since royalties for Q2 2019 had not been reported by Janssen as of the balance date).
In the Proprietary Development segment, MorphoSys focuses on research into, and clinical development of, its own drug candidates in the fields of cancer and inflammation. In Q2 2019, this segment recorded revenues of EUR25.9 million (Q2 2018: EUR0.1 million). In the Partnered Discovery segment, MorphoSys applies its proprietary technology to discover new drug candidates for pharmaceutical companies, benefiting from its partners' development advancements through R&D funding, licensing fees, success-based milestone payments and royalties. In Q2 2019, revenues in this segment amounted to EUR8.7 million (Q2 2018: EUR8.1 million).
Total operating expenses were EUR40.3 million in the second quarter of 2019 (Q2 2018:
Earnings before interest and taxes (EBIT) in Q2 2019 was -EUR5.7 million (Q2 2018: -EUR24.1 million). The Proprietary Development segment reported an EBIT of -EUR7.0 million (Q2 2018:
At the end of Q2 2019, the Company had EUR409.2 million in cash, reported on the balance sheet under the line items "cash and cash equivalents"; "financial assets at fair value through profit or loss"; and current and non-current "other financial assets at amortized cost". On December 31, 2018, the Group's liquidity position amounted to EUR454.7 million.
The number of shares issued totaled 31,839,572 at the end of Q2 2019 (year-end 2018: 31,839,572).
Results for the first six months 2019
During the first six months of 2019, group revenues increased to EUR48.2 million (Q1-Q2 2018: EUR10.9 million). Revenues in the first half of 2019 comprised the milestone payment by GSK of EUR22.0 million due to the start of phase 3 clinical development of otilimab in RA. Expenditure for proprietary R&D, including technology development, amounted to EUR45.1 million in the first six months of 2019 (Q1-Q2 2018: EUR39.2 million). Consequently the EBIT in the first six months of 2019 amounted to -EUR29.3 million, compared to -EUR43.2 million in the first half of 2018.
Financial Guidance and Operational Outlook for 2019
Following a milestone payment of EUR22 million made by GSK on July 3, 2019 that was triggered by the start of phase 3 clinical development of otilimab (MOR103), MorphoSys increased its financial guidance. For the year 2019, MorphoSys expects revenues in the range EUR65 to 72 million (up from previously EUR43 to 50 million), and EBIT of -EUR105 to -115 million (from previously -EUR127 to -137 million). Expenses for proprietary development and technology development are expected to remain in a corridor of EUR95 to 105 million.
The guidance does not include revenues from potential future partnership or licensing agreements for tafasitamab or any other compound currently in MorphoSys's Proprietary Development segment. Effects from potential in-licensing or co-development deals for new development candidates are also not included.
In its Partnered Discovery segment, MorphoSys expects the following events until end of 2019:
According to information provided on clinicaltrials.gov, by the end of 2019 primary completion may be reached in up to eight clinical trials in phases 2 and 3 from partners evaluating antibodies made using MorphoSys's technology. These include:
Moreover, Janssen plans the start of a phase 1 trial of guselkumab in Chinese healthy volunteers, a phase 2 trial of guselkumab in pityriasis rubra pilaris, a phase 2/3 trial in ulcerative colitis and a phase 3 trial in palmoplantar-non-pustular psoriasis, according to clinicaltrials.gov.
Whether, when and to what extent news will be published following the primary completion of trials in the Partnered Discovery segment is at the full discretion of MorphoSys's partners.
MorphoSys will continue to support its proprietary development activities by evaluating potential in-licensing, co-development, and/or acquisition opportunities or the potential initiation of new proprietary development programs with the goal of maintaining and expanding the Company's position in its current therapeutic and technological fields of activities.
MorphoSys Group Key Figures (IFRS, June 30, 2019)
1) Including MOR107, which concluded a phase 1 study in 2017 and is currently in preclinical investigation with a focus on oncology indications. Tremfya(R) is still considered as a clinical program due to ongoing studies in various indications.
2) Including otilimab (MOR103/GSK3196165), which is fully out-licensed to GSK, and MOR106, for which MorphoSys and Galapagos have signed a global licensing agreement with Novartis.
PP - Percentage points
Dial-in number for the analyst conference call (in English) at 2:00pm CEST; 1:00pm BST; 8:00am EDT:
Germany: +49 69 201 744 220
Please dial in 10 minutes before the beginning of the conference.
A live webcast and slides will be made available at http://www.morphosys.com.
Approximately two hours after the call, a slide-synchronized audio replay of the conference and a transcript will be available at http://www.morphosys.com.
The Half-Year Report 2019 (IFRS) is available online at
HuCAL(R), HuCAL GOLD(R), HuCAL PLATINUM(R), CysDisplay(R), RapMAT(R), arYla(R), Ylanthia(R), 100 billion high potentials(R), Slonomics(R), Lanthio Pharma(R), LanthioPep(R) and ENFORCERTM are trademarks of the MorphoSys Group. Tremfya(R) is a trademark of Janssen Biotech, Inc.
MorphoSys forward-looking statements
Document title: Media Release
06.08.2019 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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