MorphoSys's key technologies

Technology Overview
Engineering
the Medicines
of Tomorrow

MorphoSys – July 2012

MorphoSys Key Technologies
1. HuCAL
MorphoSys’s HuCAL ®
(Human Combinatorial Antibody Library) technology is a
unique and innovative concept for the in vitro generation of highly specific and
fully human antibodies. The Human Combinatorial Antibody Library is a
collection of several billion distinct fully human antibodies that allows for the
rapid selection of antibodies with high affinity and specificity. The recombinant
antibody technology of HuCAL enables the generation of therapeutic and
diagnostic antibodies, including those binding to difficult antigens.
The HuCAL antibodies are produced in bacteria, and the technology enables in
vitro selection to isolate antibodies with the desired characteristics. HuCAL is
generated by de novo gene synthesis, and the large library is screened with a
technique called phage display to identify the antibody with a high affinity to
the investigated antigen.
The structural diversity of the human antibody repertoire is 95 percent
composed of seven heavy chain and seven light chain variable region genes. The
combination of these genes gives rise to 49 frameworks in the HuCAL master
library displaying several billion distinct fully human antibodies.
MorphoSys – July 2012
Technology Overview 3
HuCAL is an antibody phage display library. Antibody fragments can be displayed on the bacteriophage surface. The modular gene
structure of the antibodies allows a ‘plug-and-play’ approach to optimizing and engineering antibodies, which is restricted to the CDRs and
thus does not compromise the germline configuration of the frameworks.
Further fine-tuning of the antibodies is made possible with MorphoSys’s
proprietary TRIM technology that facilitates the targeted diversification of CDRs.
Pre-assembled trinucleotides are used in the chemical synthesis of the CDR
sequences, thereby ensuring complete control over amino acid composition
while avoiding stop codons. TRIM allows synthesizing any combination of
amino acids at each single position of the variable region in a ratio reflecting
exactly the one found in humans. As a result, these CDR libraries are of
substantially higher quality than those developed using more conventional
approaches.
The HuCAL ® (Human
Combinatorial Antibody
Library) technology is a
unique and innovative
concept for the in vitro
generation of highly
specific and fully human
antibodies.

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2. Ylanthia
Ylanthia ®
is MorphoSys’s next-generation antibody technology and was
presented in December 2011. Ylanthia, which is the industry’s largest antibody
Fab library to date, uses a unique and innovative concept for the in vitro
generation of highly specific and fully human antibodies. MorphoSys expects its
novel antibody library to set new standards for therapeutic antibody generation
in the pharmaceutical industry over the next decade and beyond.
YLANTHIA – MOVING BEYOND HUCAL
Ylanthia‘s genetic design captures the best of three worlds
DRUG CANDIDATES WITH SUPERIOR PROPERTIES AGAINST UNIQUE
TARGETS AND EPITOPES
Ylanthia takes antibody technology beyond current methods. There are two
major reasons why existing technologies limit the successful development of
therapeutic antibodies. First, many antibodies fail in development due to poor
biophysical properties, which render the molecule “not developable”. If the
antibody cannot be manufactured or its properties make it difficult to handle,
chances of successful commercialization are slim. Second, failure to generate
antibodies against all regions or “epitopes” of a target may lead to highly
promising disease targets being overlooked. Lack of diversity in antibody
generation means that putative targets often are not fully “interrogated” with
antibodies intended to probe their role in disease processes. The Ylanthia
technology was specifically conceived and designed to overcome these
limitations.
Ylanthia, which is the
industry’s largest
antibody Fab library to
date, uses a unique and
innovative concept for the
in vitro generation of
highly specific and fully
human antibodies.

Ylanthia − Quality in Design:
Payoff in Timelines and Success Rates
YLANTHIA AT A GLANCE
� Size and heavy/light chain pairing: Ylanthia is the industry’s
largest known antibody Fab library, comprising over 100 billion
distinct, fully human antibodies. Ylanthia uses 36 fixed, naturallyoccurring
heavy and light chain framework combinations, which
translates into unprecedented structural diversity. Great care was
invested into the antigen binding site design. The library’s
diversity is expected to result in antibodies against previously
inaccessible target molecules and unique epitope coverage.
� Biophysical properties: Antibody frameworks were pre-selected for
expression levels, stability and aggregation behavior. A shift
towards higher stability and stress tolerance will increase shelf life
and serum stability of resulting antibody-products, making them
more cost-effective to produce and administer. A higher solubility
in turn opens up the path for more convenient formulations for
patients, such as subcutaneous administration.
MorphoSys – July 2012
Technology Overview 5

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� Optimization: When needed, antibodies from the Ylanthia library
are optimized using MorphoSys’s proprietary Slonomics ®
technology, which MorphoSys obtained through its 2010
acquisition of Sloning BioTechnology. Ylanthia thereby
distinguishes itself in a central respect from HuCAL, which relies
on a modular gene design and pre-formed cassettes for antibody
optimization. Slonomics enables optimization of Ylanthia
antibodies with unprecedented speed and flexibility.

3. arYla − Antibodies Tailored to Match
Your Needs
arYla ®
is Slonomics applied to antibodies, a novel antibody optimization
platform providing high quality, ratio-controlled combinatorial libraries. arYla
offers an individualized maturation solution for antibodies. With the arYla
technology, MorphoSys combines more than 15 years of experience in design
and selection of therapeutic antibodies with the unique library synthesis
capabilities acquired with Sloning in October 2010.
FULL FLEXIBILITY IN ANTIBODY LIBRARY DESIGN
arYla brings significant advantages to antibody optimization especially in terms
of speed and flexibility. The new technology enables individualized antibody
libraries to be made with unprecedented speed and precision.
MorphoSys – July 2012
Technology Overview 7
arYla ® is Slonomics
applied to antibodies,
a novel antibody
optimization platform
providing high quality,
ratio-controlled
combinatorial libraries.

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CUSTOMIZED YLANTHIA ANTIBODY OPTIMIZATIONS
The arYla technology uses a unique DNA engineering platform (Slonomics ®
) to
precisely introduce the desired mutations through the production of high quality,
genetically diverse, customized variant libraries of the existing compound.
arYla can be used to make diverse, customized sub-libraries based on an
existing lead compound, incorporating many millions of pre-defined variations
at precisely determined sites within the antibody structure. In this way,
antibodies optimized for a multitude of properties including affinity, specificity,
immunogenicity, solubility, stability, production yield and others can rapidly be
identified.

4. SLONOMICS
In October 2010, Sloning BioTechnology GmbH joined the MorphoSys Group.
The transaction made MorphoSys the sole source of Sloning's state-of-the-art
Slonomics ®
technology.
Sloning’s superior combinatorial libraries are unbiased and enable researchers
to increase the success rate of their screening for new and optimized therapeutic
antibodies, proteins or industrial enzymes.
Key to Sloning’s success is the company’s core technology, Slonomics, a
proprietary, fully automated genetic engineering platform that utilizes sets of
double stranded DNA triplets in the controlled fabrication of highly diverse
combinatorial gene libraries.
SLONOMICS: TRIPLET-BASED SYNTHESIS OF DNA LIBRARIES
MorphoSys – July 2012
Technology Overview 9
Sloning’s superior
combinatorial libraries are
unbiased and enable
researchers to increase
the success rate of their
screening for new and
optimized therapeutic
antibodies, proteins or
industrial enzymes.

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5. First-Class Automation Using YScreen
YScreen is a system of laboratory robots and software that facilitates the highthroughput
screening of HuCAL antibody libraries resulting in the rapid
selection of a highly diverse pool of specifically binding antibody fragments.
FEATURES:
� High-throughput automated system
� Modular and expandable
� Reduced reaction volumes in 384 well microtiter plates lead to less
consumption of antigens and consumables
� Inline quality control by integrated controls
� Extremely low intra- and inter-assay variability
� Efficient data management
� Output: Specific monoclonal ELISA binders
In order to automate and increase the throughput in antibody generation, the
selection process of HuCAL antibodies was simplified, miniaturized and
parallelized. The automated system allows the generation of high-quality,
validated and sequenced antibodies in a high throughput fashion. The modular
system of specialized workstations enables parallel and interlaced handling of
work packages. An up-scale of capacity is easily attainable by “cloning” the
robotic system or individual components thereof.
AUTOSCREEN ®
SCREENING STEPS
� Automated picking of single bacterial colonies each harbouring a
HuCAL antibody gene and transfer into microtiter plates
� Primary screening of thousands of single clones in a robust 384 well
ELISA
� Automated transfer of a pre-defined selection of ELISA-positive clones
for further validation
� Test of cross-reactivity and quality control of ELISA-positive clones
� Sequence analysis of validated antibodies and database entry
YCLONE: POLYCLONAL IGG CONVERSION
� Polyclonal conversion of >100 Fabs into IgG format within 3 weeks
� 80% recovery of input sequences
� Heavy and light chain in one vector: pYMex
� Tremendous increase in number of IgG conversions
� Highly effective workflow compatible with different IgG expression
scales
� Functional screening of full length IgGs early on in the project

MorphoSys’s Product Pipeline (07/2012)
HuCAL ®
, HuCAL GOLD ®
, HuCAL PLATINUM ®
, CysDisplay ®
, RapMAT ®
, arYla ®
, Ylanthia ®
and 100 billion high potentials ®
are registered trademarks of MorphoSys AG.
Slonomics ®
is a registered trademark of Sloning BioTechnology GmbH, a subsidiary of MorphoSys AG.
MorphoSys – July 2012
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MorphoSys AG
Business Development
Lena-Christ-Str. 48
82152 Martinsried/Planegg
Germany
Phone: +49(0)89/89927-453
Fax: +49(0)89/89927-5453
Email: bd@morphosys.com
www.morphosys.com