Company Presentation - J.P. Morgan Healthcare ... - MorphoSys

Company p yUpdate p 

29th Annual J.P. Morgan Healthcare Conference – January 2011

Safe Harbour 

This presentation includes forward-looking forward looking statements. 

Actual results could differ materially from those included in the forward-looking statements 

due to various risk factors and uncertainties including changes in business, economic 

competitive conditions conditions, regulatory reforms, reforms foreign exchange rate fluctuations and the 

availability of financing. 

These and other risks and uncertainties are detailed in the Company’s Annual Report.

MorphoSys p y at a Glance 

� An independent antibody company 

Company �� Martinsried/Germany Martinsried/Germany, with sites in UK & US 

Business 

Technology 

Pipeline 

Financials 

Corporate 

� Frankfurt Stock Exchange – TecDAX 

� Th Therapeutic ti antibodies tib di 

� Research & diagnostic antibodies (AbD Serotec) 

� Leading, proprietary HuCAL platform 

� New technology from Sloning acquisition 

� Over 70 therapeutic antibody programs 

� Strong alliances with pharma companies 

� Sustainable profitability funds proprietary R&D 

� 10-year, $1bn strategic alliance with Novartis 

�� CCash h bbalance l iin excess of f $170 $170m 

Technology Pipeline AbD Serotec 

© MorphoSys AG 

Page 3

Strategy gy 

PROPRIETARY DEVELOPMENT 

� Own programs taken by MorphoSys to clinical proof-of-concept 

� Lucrative potential upside 

PARTNERED DISCOVERY AbD SEROTEC 

� Multiple p therapeutic p antibody y pproducts 

based on MorphoSys’s technology 

� Generate strong flow of 

milestones & royalties y 

� Growing g roster of diagnostic g ppartnerships p 

developing novel tests 

� Research antibody catalogue business 

INNOVATIVE, PROPRIETARY ANTIBODY TECHNOLOGY 

� Commitment to delivering superior antibodies 

� Next generation MAbs to be more efficacious, able to hit new targets and lower cost 

Corporate 


© MorphoSys AG Page 4

New Technology gy Enhances Power of Platform 

� October 2010: 

�MorphoSys �MorphoSys acquires Sloning BioTechnology for access to Slonomics 

Slonomics: 

� Enzymatic y a c ge gene e sy synthesis es s 

� Enables generation of protein libraries 

� With unprecedented speed 

� With complete l t control t l over composition iti 

� At low cost 

Powerful technology for protein discovery & optimization 

Slonomics 

Corporate 

MorphoSys 

Antibody 

Platform 


December 2010: 

Slonomics agreement 

with Pfizer provides p 

immediate payback of 

Sloning acquisition 

and foreshadows 

commercial potential 


A Unique q Platform for Generating gOptimized, p , 

Fully Human Antibodies 

HuCAL Platinum 

Lead antibody Optimized drug 

candidate 

Optimization using unique, 

modular design of HuCAL 

High performance, fully 

human antibody library 

NEW! Optimization using new 

45 billion antibodies arYla technology 

Corporate 


Superior 

optimized drug 

candidate did t 


– Higher g Probabilities of Success & 

Faster Development 

Today 

Discoveryy Preclinic Phase 1 Phase 2 Phase 3 Market 

With arYla 

35% 51% 73% 

Discovery Preclinic Phase 1 Phase 2 Phase 3 Market 

Expectations: 

50% 89% 51% 73% 

�� Shorten time to antibody drug candidate by 30% 

� Increase proportion of programs reaching clinic to 50% 

Corporate 


Source: MorphoSys experience 

Source: MorphoSys projections 


Broadest Antibody yPipeline p in the Industry: y 

77 Programs Ongoing 

Name Partner/MOR Target Indication Discovery Preclinic Phase 1 Phase 2 Phase 3 Market 

MOR103 MOR GM-CSF 

RA 

MS 

BHQ880 Novartis DKK-1 Cancer 

CNTO888 Centocor MCP-1 

CCancer 

IPF 

n.d. Novartis n.d. n.d. 

Gantenerumab Roche Amyloid-β AD 

MOR208 MOR CD19 CLL 

CNTO1959 Centocor n.d. Psoriasis 

BAY79-4620 Bayer Schering CA IX (MN) Cancer 

CNTO3157 Centocor n.d. Asthma 

n.d. Novartis n.d. Musculoskeletal 

n.d. Novartis n.d. Ophthalmology 

n.d. Centocor n.d. 

Inflammation/ 

Autoimmune 

3 Programs 3 Partners n.d. 

Inflammation/ 

Cancer 

MOR202 MOR CD38 Multiple Myeloma 

20 Programs Partnered Various Various* Various 

32 Programs Partnered Various Various* 

5 Programs MOR n.d. 

Inflammation/ 

Cancer 

2 Programs MOR/NOV n.d. Inflammation 

Corporate 



* Includes cancer, 

inflammatory, 

autoimmune, 

infectious, 

musculoskeletal & 

central nervous 

system diseases 

nd n.d. – not disclosed 

Page 8

MOR103 

A Novel Anti-Inflammatory Antibody 

The Target 

�� GM GM-CSF, CSF which plays a central role in activating granulocytes and 

macrophages 

� Extensive evidence implicating GM-CSF in the inflammatory cascade 

The Drug 

� A HuCAL IgG1 antibody that neutralizes human GM-CSF 

� High potency due to very high target affinity (KD = 0.4 pM) 

�� Subcutaneous PK study in healthy volunteers planned for 2011 

Intellectual Property 

� Exclusive license to a US patent covering antibodies against GM-CSF for 

the treatment of chronic inflammatory conditions 

�� Patent filings on antibody 

Corporate 



Page 9

MOR103 

Clinical Development 

In Rheumatoid Arthritis 

�� European phase 1b/2a trial ongoing to assess safety safety, signs of efficacy and 

immunogenicity of MOR103 in patients with active RA 

� 135 patients with active RA, randomized, double-blind, placebo controlled 

� Four ascending doses i.v. 0.3, 1.0 and 1.5 mg/kg or placebo with stable 

regimen of concomitant RA therapy 

�� Objectives: 

� Primary objectives: Adverse event rate and safety profile 

� Secondary objectives: DAS28, ACR & EULAR28, cytokines, MRI 

(synovitis & bone edema), PK, immunogenicity & patient-reported 

outcomes up to 16 wks 

� Final phase 1b/2a RA data expected in H1 2012 

In Multiple Sclerosis 

� Phase 1b safety study in MS patients being prepared 

Corporate 



Page 10

MOR208 

A Novel Anti-Cancer Antibody 

The Target 

�� CD19 CD19, a pan B-cell marker 

The Drug 

� Humanized, affinity optimized anti-CD19 antibody, comprising a proprietary 

modification that enhances effector cell recruitment 

�� EExclusive l i li license ffrom XXencor 

Selected Pre-clinical Observations 

� Enhanced affinity for Fc receptor leads to rapid and sustained B-cell 

depletion 

MOR208/X MOR208/XmAb5574 Ab5574 

%ADCC 

30 Namalwa 

20 

10 

0 

60 

40 

20 

0 

30 

20 

Wac3CD5 

SU-DHL-6 

� Higher ADCC than both Rituxan & Campath against 

10 

Anti-CD19 IgG1 (unmodified) 

all lymphoma & leukemia cell lines tested 

0 

XmAb (-) control 

(see selected data in figure) 

rituximab (CD20) 

0.01 0.1 0 10 100 

Corporate 


alemtuzumab (CD52) 

mAb (ng/mL) 

CLL 

Burkitt’ss 

Lymphoma 

B-NHHL 


MOR208 

Clinical Development 

Clinical Trial Design 

�� Multi-centre Multi-centre, open-label open-label, multi-dose multi-dose, single-arm phase 1, 1 dose-escalation 

study in USA 

� Patients with chronic lymphocytic leukemia, who have not responded to or 

hhave bbecome refractory f t tto previous i th therapies i 

� Objectives: 

� Primary objectives: Investigate maximum tolerated dose dose, safety and 

tolerability, pharmacokinetics and immunogenicity 

� Secondary objectives: Assess preliminary anti-tumor activity 

� Xencor funds phase 1 trial from $13 m up-front payment 

� Final data expected in 2012 

Corporate 



MOR202 

A Novel Antibody for Multiple Myeloma 

The Target 

�� CD38 CD38, a key target present on the vast majority of multiple myeloma cells 

The Drug 

� A high affinity, fully human HuCAL antibody 

Clinical Trial Design and Development Timeline 

� Multicentre, open-label, dose-escalation study (EU) 

�� Patients with relapsed/refractory multiple myeloma; failure of at least 2 prior 

therapies 

� Objectives: Investigate maximum tolerated dose, safety and tolerability, 

pharmacokinetics and immunogenicity; assessment of preliminary activity 

� Final data expected in 2012 

Corporate 



Partnered Programs g 

Phase 2 Clinical Development 

Partner & Program Disease Status 

Novartis 

BHQ880 

Osteolytic bone 

disease 

� HuCAL antibody targeting DKK-1 

� Clinical trials in multiple myeloma patients 

� Early data show stimulation of bone formation 

Novartis 

� June 2009: Start of phase 1/2 

n.d. 

nd n.d. �� Clinical proof of concept achieved 

Centocor Ortho Biotech Oncology & 

CNTO888 

immunology 

Roche 

Gantenerumab 

Corporate 

Alzheimer‘s 

disease 


� HuCAL antibody targeting MCP-1 

� MCP-1 MCP 1 regulates prostate cancer growth and 

metastasis 

� 2 oncology trials and 1 IPF trial ongoing 

�� HHuCAL CALantibody tib d ttargeting ti amyloid-β l id β 

� Amyloid-β implicated as causal factor in AD 

� Phase 2 study in patients with prodromal AD initiated 

iin Q4 2010 


Page 14

Partnered Programs g 

Phase 1 Clinical Development 

Partner & Program Disease Status 

Centocor Ortho Biotech 

CNTO1959 

Bayer Healthcare 

BAY79-4620 

Centocor Ortho Biotech 

CNTO3157 

Psoriasis 

Oncology 

Novartis 

Musculoskeletal 

n.d. 

diseases 

Novartis 

n.d. 

Various Various 

Corporate 

� June 2009: Start of phase 1 

� Study completed in Q4 2010 

� October 2009: Start of phase 1 trial 

� Antibody-drug conjugate targeting CA IX 

Asthma � June 2010: Start of phase 1 

� July 2010: Start of phase 1 

Ophthalmology �� August 2010: Start of phase 1 

� Four additional INDs/CTAs 


�� Anno Announced nced in December 2010 


Page 15

A Rapidly p y Growing gClinical Pipeline p 

Number of Partnered & Proprietary Programs in Clinical Trials at Year-end 

20 

15 

10 

5 

0 

Corporate 

1 

2 

Phase 1 Phase 2 

1 

4 

4 4 4 

6 

10 

2005 2006 2007 2008 2009 2010 2011E* 

Clinical Antibody Pipeline is aKeyValueDriver 

a Key Value Driver 


* assuming no attrition 


Current Pipeline p 

Projected HuCAL Drugs on the Market 

Discovery Preclinic Phase 1 Phase 2 Phase 3 Market 

39 

50% 70% 40% 65% 

Projection from today’s pipeline: 

22 

Success probability of 11% 

Source: MorphoSys internal statistics & Tufts Centre for the Study of Drug Development 

Corporate 

Success probability of 18% 

10 Success probability of 25% 

2 

6 Success probability of 33% 2 

Projected number of marketed HuCAL drugs from today’s pipeline: 12 


4 

4 


AbD Serotec Complements p Therapeutic p 

Segment of the Business 

� Antibodies for research and diagnostic markets 

� Cash-generative Cash generative since 2007 

Diagnostic Antibodies 

�� Using proprietary technologies to deliver superior 

antibodies for diagnostic uses 

� Future upside via royalties 

� PPotential t ti l synergies i with ith th therapeutic ti side id of f bbusiness i 

Research Antibodies 

� Catalogue comprising 15,000+ products 

�� Custom antibody generation using HuCAL 

� Stable and recurring cash flows 

Market 

$ 7bn 

$2bn 


Technology gy Offers Exciting g Growth Opportunities pp 

in Diagnostics 

AbD Serotec is working with over 20 diagnostics companies 

Application Technology Feature 

Poorly served targets � HuCAL provides antibodies where traditional approaches fail 

New biomarkers � HuCAL offers best possible selectivity & sensitivity 

CClinical monitoring � HuCAL C is very well-suited to making anti-idiotypic antibodies 

Thermal stability 

� In vitro method HuCAL offers key y advantages g compared p to in 

vivo antibody generation 

Diagnostic g standards � HuCAL offers precise p and indefinite reproducibility 

p y 

Corporate 



Page 19

Guidance 2010 

In million EUR 

Guidance 2010E 2009A 

Updated in 

Issued in 

December February 

Total Group Revenues 91 – 94 89 – 93 81.0 

Group Operating Profit 13 – 16 5 – 9 11.4 

AbD Serotec 

Revenue ~21 21 – 22 19.4 

Operating Profit Margin 5 – 8% 5 – 8% 5% 

2010 

� Increase of total proprietary R&D investment to € 27 – 29 

million (2009: € 19.3 million) 

2011 – 2012 

� Aiming for 10% – 20% annual revenue growth 

� Maintain profitability while strengthening pipeline 

Corporate 



Page 20

Shareholder Structure and Key y Financials 

Shareholder Structure (Dec. 2009) 

30% 

Corporate 

Novartis 

7% 

5% 

2% 

AstraZeneca 

MorphoSys (MOR GR) Key Financials 

In million EUR 9M 2010 9M 2009 

Management & 

Revenues 62.8 57.6 

17% Supervisory Board CCost t of f Goods G d Sold S ld 55 5.5 51 5.1 

No No. of Shares 

22,714,362 

7% 

10% 

7% 

4% 

4% 

7% 

R&D Expenses 32.5 27.5 

S,G&A Expenses 16.8 15.7 

Total Operating Expenses 54.8 48.3 

Operating Profit 8.0 9.3 

Net Profit 7.2 7.7 

EPS (diluted) in EUR 0.32 0.34 

USA 

UK 

Switzerland 

Germany 

France 

Other countries 

Cash, Cash Equivalents and Available-for-sale 

Financial Assets as of September 30, 2010: 

Retail Unidentified € 132.1 million 



Page 21

A Strategy gy for Substantial Value Creation 

Value 


Innovative, Proprietary Antibody Technology & Know-how 

Today Future 

Corporate 



Forthcoming g Events 

MOR103 

� Complete p enrollment in pphase 1b/2a RA study y 

� Commence phase 1b MS study 

MOR202 

�� Commence phase 1 study in multiple myeloma 

� Release pre-clinical data 

MOR208 

�� Progress report on open open-label label phase 1 study in CLL 

Partnerships 

� New INDs 

� Clinical data expected at major conferences (ASCO, ACR, ASH…) 

� New deals 

Diagnostics 

� Additional HuCAL-based diagnostic kits on market 

Corporate 



PARTNERED DISCOVERY 

AbD SEROTEC 


Thank You. 

www.morphosys.com 

Dr. Simon Moroney 

Chief Executive Officer 

Dr. Claudia Gutjahr-Löser 

Head of Corporate Communications & IR 

Phone +49 (0)89 ( ) / 899 27-311 Phone +49 (0)89 ( ) / 899 27-122 

Fax +49 (0)89 / 899 27-5311 

Fax +49 (0)89 / 899 27-5122 

Email investors@morphosys.com 

HuCAL ® , HuCAL GOLD ® , HuCAL PLATINUM ® , CysDisplay ® , RapMAT ® and AutoCAL ® are registered trademarks of MorphoSys AG, arYla is a trademark of 

MorphoSys AG

Company Presentation - J.P. Morgan Healthcare ... - MorphoSys

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