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MorphoSys AG Reports Nine Months 2012 Results


November 7, 2012 - Martinsried, Germany And Munich, Germany

MorphoSys AG /MorphoSys AG Reports Nine Months 2012 Results. Processed and transmitted by Thomson Reuters ONE.The issuer is solely responsible for the content of this announcement.

MorphoSys AG (FSE: MOR; Prime Standard Segment; TecDAX) todayannounced itsfinancial results according to International Financial ReportingStandards(IFRS) for the nine months ending September 30, 2012. The most importanteventduring the third quarter was the publication of excellent safety andefficacydata for MOR103 in rheumatoid arthritis (RA), the most advancedproprietaryprogram in MorphoSys's pipeline.

"During the first nine months of 2012, we made significant progresswith ourpipeline of new therapeutic products, which is the most important valuedriverfor the Company", stated Dr. Simon Moroney, Chief Executive Officer ofMorphoSysAG. "The positive outcome of the MOR103 study and the progress of ourpartneredpipeline underscore the strength of our business model. We lookforward tofurther progress in the months and years ahead."

Highlights of the Third Quarter

* MorphoSys delivered positive safety and efficacy results from a phase1b/2a study of MOR103 in rheumatoid arthritis patients.

* MorphoSys and the University of Melbourne published preclinical data onthe role of GM-CSF in inflammatory, arthritic and osteoarthritic pain.

* Roche highlighted progress in developing the HuCAL antibodygantenerumab in Alzheimer's disease at its Investor R&D Day.

* MorphoSys's partner OncoMed initiated a phase 1b/2 clinical trial withHuCAL antibody OMP-59R5 in advanced pancreatic cancer.

* MorphoSys's partner Bayer HealthCare received Orphan Drug Designationfor the HuCAL-based antibody conjugate BAY 94-9343 in the USA for thetreatment of mesothelioma.

* The product portfolio at MorphoSys matured further and remains one ofthe industry's broadest antibody pipelines: at the end of the quarter, MorphoSys's partnered and proprietary pipeline comprised 76 programs,of which 21 are in clinical development.


| |Nine Months |Nine Months | | |
| |Ended |Ended | | |
|In EURO million |Sep 30, 2012|Sep 30, 2011|Q3 2012|Q3 2011|
+-------------------------------+------------+------------+-------+-------+
| | | | | |
+-------------------------------+------------+------------+-------+-------+
| | | | | |
| | | | | |
|Group Revenues | 48.9| 83.7| 15.9| 17.1|
+-------------------------------+------------+------------+-------+-------+
|of which success-based payments| 1.9| 32.2| 0.0| 1.0|
+-------------------------------+------------+------------+-------+-------+
|of which AbD Serotec | 13.7| 14.1| 4.9| 4.7|
+-------------------------------+------------+------------+-------+-------+
|Total Operating Expenses | 51.3| 64.1| 16.3| 20.6|
+-------------------------------+------------+------------+-------+-------+
|EBIT | (2.3)| 18.0| (0.4)| (3.4)|
+-------------------------------+------------+------------+-------+-------+
|Net Profit/(Loss) | (1.2)| 13.0| (0.2)| (2.0)|
+-------------------------------+------------+------------+-------+-------+
|EPS, diluted, in EURO | (0.05)| 0.56| (0.01)| (0.09)|
+-------------------------------+------------+------------+-------+-------+
| | | | | |

"Our financial strength allows us to continue investing in proprietaryR&D, themain value driver of MorphoSys," commented Jens Holstein, ChiefFinancialOfficer of MorphoSys AG. "Our financial results are, however,increasinglydependent on milestone payments and the initiation of additionalcommercialagreements, leading to a higher volatility in revenues andearnings.Negotiations for additional commercial agreements took longer thanoriginallyanticipated and as a consequence are having a negative impact on ourfinancialresults for 2012."

Financial Review for First Nine Months of 2012 According to IFRS

Group revenues for the first nine months of 2012 were EUR 48.9 million(9-months2011: EUR 83.7 million), the difference to the previous year largelyreflectinga one-off payment received in Q1 2011 from Novartis for thesuccessfulinstallation of the HuCAL platform at the Novartis Institutes forBioMedicalResearch in Basel, Switzerland. Revenues in the Partnered Discoverysegmentcomprised EUR 32.1 million in funded research and licensing fees(9-months2011: EUR 35.7 million) and EUR 1.9 million in success-based payments(9-months2011: EUR 32.2 million). The Proprietary Development segment recordedfundedresearch revenues of EUR 1.2 million (9-months 2011: EUR 1.9 million).Assumingconstant foreign exchange rates at the average rate of the first ninemonths of2011, revenues in the Partnered Discovery and Proprietary Developmentsegmentswould have remained almost unchanged at EUR 35.1 million. The AbDSerotecsegment provided 28 % or EUR 13.7 million of total revenues (9-months2011: EUR14.1 million), a decrease of 3 %. Assuming constant foreign exchangerates atthe average rate of the first nine months of 2011, revenues in the AbDSerotecsegment would have amounted to EUR 12.9 million.

Total operating expenses for the first nine months of 2012 decreased by 20% toEUR 51.3 million (9-months 2011: EUR 64.1 million). The decrease of EUR12.8million was mainly caused by reduced proprietary research and development(R&D)expenses in line with the Company's plans. Cost of goods sold (COGS), alineitem specific to AbD Serotec, decreased by 13 % to EUR 4.8 million(9-months2011: EUR 5.5 million). Total research and development expenses for theGroupdecreased by EUR 11.6 million to EUR 30.3 million (9-months 2011: EUR41.9million). The decrease in R&D expenses mainly resulted from a lowerlevel ofinvestment in proprietary product and technology development amountingto EUR17.2 million (9-months 2011: EUR 26.1 million). Sales, generalandadministrative expenses decreased by 4 % to EUR 16.2 million (9-months2011: EUR16.8 million). Non-cash charges related to stock-based compensation areembeddedin COGS, S,G&A and R&D expenses and amounted to EUR 1.0 million (9-months2011:EUR 1.1 million).

For the first nine months of 2012, MorphoSys recorded earnings beforeinterestand taxes (EBIT) of minus EUR 2.3 million (9-months 2011: EBIT of EUR18.0million). Partnered Discovery showed a segment EBIT of EUR 17.9million(9-months 2011: EBIT of EUR 50.9 million) while the continuedinvestment inproprietary development led to segment EBIT of minus EUR 13.1 million(9-months 2011: EBIT of minus EUR 22.9 million). The AbD Serotec segmentrecorded a grossprofit margin of 65 %, in comparison to 61 % in the first nine months of2011.The EBIT for AbD Serotec amounted to minus EUR 0.04 million (9-months 2011:EBITof EUR 0.3 million).

For the first nine months of 2012, MorphoSys recorded a net loss aftertaxes ofEUR 1.2 million compared to a net profit of EUR 13.0 million in the sameperiodof the previous year, the difference again being predominantly due to theone-off payment received in Q1 2011. The resulting diluted net loss pershare forthe first nine months of 2012 was EUR 0.05 (9-months 2011: diluted netprofit ofEUR 0.56).

On September 30, 2012, MorphoSys's cash, securities andinterest-bearingassignable loans amounted to EUR 137.5 million (December 31, 2011: EUR134.4million). Net cash inflow from operations in the first nine months of2012amounted to EUR 2.4 million (2011: net cash inflow EUR 36.1 million). Thenumberof issued shares at September 30, 2012 was 23,308,622, compared to23,112,167shares at December 31, 2011.

Financial Review of the Third Quarter of 2012 (IFRS)

In the third quarter of 2012, revenues were EUR 15.9 million, comparedto EUR17.1 million in the same quarter of 2011. Earnings before interest andtaxesamounted to minus EUR 0.4 million, compared to an EBIT of minus EUR 3.4millionin the same period of 2011. A net loss of EUR 0.2 million was achievedin thethird quarter of 2012, compared to a net loss of EUR 2.0 million during thesameperiod in 2011.

Outlook for 2012

As stated in the past, revenues in 2012 are increasingly dependent onsuccess-based milestones in existing therapeutic antibody programs, newalliances or theexpansion of existing alliances involving new technology platformssuch asSlonomics and Ylanthia. In 2012, negotiations for additionalcommercialagreements took longer than originally anticipated. In addition,theuncertainties of government fiscal deficits led to a reduction offunding forthe research market, leading to lower sales in the AbD Serotec unit.

Therefore, MorphoSys updates its financial guidance for the Group for2012. Thecompany expects Group revenues to be in the range of EUR 70-75 million,thusbeing slightly below the original guidance of EUR 75-80 million. Interms ofEBIT for the Group, it is expected to be around the lower end of theoriginalguidance of EUR 1-5 million. At the time of the publication of the9-months2012 report, certain income-generating events are expected to materializebeforethe end of the year, the timely conclusion of which is important forreachingthe 2012 financial guidance.

This guidance currently does not include a successful out-licensing ofany ofthe Company's proprietary development programs. The scope and the timing ofsuchevents is difficult to predict and therefore not included in thefinancialprojections.

Investment in proprietary research and development in 2012 remainsunchanged andwill be approximately EUR 20-25 million.

MorphoSys will hold a public conference call and webcast today at 02:00p.m. CET(08:00 a.m. EST, 01:00 p.m. GMT) to present the Second Quarter Results2012 andreport on current developments.

Dial-in number for the Conference Call (listen-only):Germany: +49 89 2444 32975For U.K. residents: +44 20 3003 2666For U.S. residents: +1 202 204 1514

Please dial in 10 minutes before the beginning of the conference.

In addition, MorphoSys offers participants the opportunity tofollow thepresentation through a simultaneous slide presentation onlineathttp://www.morphosys.com.

A live webcast, slides, webcast replay and transcript will be madeavailable athttp://www.morphosys.com.

Approximately two hours after the press conference, a slide-synchronizedaudioreplay of the conference will be available on http://www.morphosys.com.

The complete 3(rd) Interim Report 2012 (January - September) is availableon ourwebsite (HTML and PDF): http://www.morphosys.com/FinancialReports

About MorphoSys:

MorphoSys developed HuCAL, the most successful antibody library technologyinthe pharmaceutical industry. By successfully applying this and otherpatentedtechnologies, MorphoSys has become a leader in the field of therapeuticantibodies, one of the fastest-growing drug classes in human healthcare.Thecompany's AbD Serotec unit uses HuCAL and other antibody technologies togenerate superior monoclonal antibodies for research and diagnosticapplications.Together with its pharmaceutical partners, MorphoSys has built atherapeuticpipeline of more than 70 human antibody drug candidates for the treatmentofcancer, rheumatoid arthritis, and Alzheimer's disease, to name just a few.Withits ongoing commitment to new antibody technology and drug development,MorphoSys is focused on making the healthcare products of tomorrow.MorphoSys islisted on the Frankfurt Stock Exchange under the symbol MOR. For regularupdatesabout MorphoSys, visit http://www.morphosys.com

HuCAL®, HuCAL GOLD®, HuCAL PLATINUM®, CysDisplay®,RapMAT®, arYla®and Ylanthia® and 100 billion high potentials® are registeredtrademarks ofMorphoSys AG

Slonomics® is a registered trademark of Sloning BioTechnologyGmbH, asubsidiary of MorphoSys AG.

This communication contains certain forward-looking statementsconcerning theMorphoSys group of companies. The forward-looking statements containedhereinrepresent the judgment of MorphoSys as of the date of this release andinvolverisks and uncertainties. Should actual conditions differ from theCompany'sassumptions, actual results and actions may differ from thoseanticipated.MorphoSys does not intend to update any of these forward-lookingstatements asfar as the wording of the relevant press release is concerned.

3rd Interim Report 2012 (PDF):http://hugin.info/130295/R/1655606/535015.pdf

Media Release (PDF):http://hugin.info/130295/R/1655606/535014.pdf

This announcement is distributed by Thomson Reuters on behalf ofThomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: MorphoSys AG via Thomson Reuters ONE

[HUG#1655606]

For more information, please contact:
MorphoSys AG
Dr. Claudia Gutjahr-Loser
Head of Corporate Communications & IR
Tel: +49 (0) 89 / 899 27-122

Mario Brkulj
Senior Manager Corporate Communications & IR
Tel: +49 (0) 89 / 899 27-454

Alexandra Goller
Specialist Corporate Communications & IR
Tel: +49 (0) 89 / 899 27-332

Email Contact

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