On July 27, 2015 MorphoSys AG (FSE: MOR; Prime Standard Segment; TecDAX, OTC: MPSYY) reported its financial results for the six months ending 30 June 2015. Group revenues were EUR 82.6 million (H1 2014: EUR 30.5 million) (Press release, MorphoSys, JUL 26, 2015, View Source [SID:1234506699]). The increase is attributable to revenue booked in connection with the ending of the collaboration with Celgene on MorphoSys’s proprietary drug candidate MOR202. This comprised the full realization of deferred revenues from an up-front payment received from Celgene in 2013 together with a one-time termination payment. Earnings before interest and taxes (EBIT) amounted to EUR 46.1 million (H1 2014: EUR 0.4 million). On 30 June 2015, MorphoSys held cash and cash equivalents, marketable securities, and financial assets classified as loans and receivables of EUR 324.9 million in comparison to EUR 352.8 million on 31 December 2014.

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Highlights of the Second Quarter 2015

At the end of the second quarter of 2015, MorphoSys’s product pipeline comprised a total of 102 therapeutic antibodies, including 24 clinical programs. Three partnered programs are currently in phase 3 trials.

MorphoSys presented its updated phase 2 clinical results for MOR208 in non-Hodgkin’s lymphoma (NHL) at the 2015 annual conference of the American Society of Oncology (ASCO) (Free ASCO Whitepaper). The clinical data showed that MOR208 is well tolerated with a low level of infusion reactions and demonstrated encouraging single-agent activity.

MorphoSys also presented preliminary clinical data on the safety, pharmacokinetics and efficacy of MOR202 in multiple myeloma at the 2015 ASCO (Free ASCO Whitepaper) conference. MOR202 proved to be safe and well tolerated and showed early signs of clinical activity and cases of long-lasting tumor control.

In May 2015, MorphoSys acquired all outstanding shares in the Dutch biopharmaceutical company Lanthio Pharma. The acquisition added new development candidates to MorphoSys’s proprietary portfolio, including a preclinical program for fibrotic diseases (MOR107).

In April 2015, MorphoSys announced that it had reached a clinical milestone with the initiation of a phase 2 study of the antibody guselkumab in psoriatic arthritis by its partner Janssen Biotech. The milestone payment was recognized in the first quarter of 2015.
Shortly after the end of the second quarter, MorphoSys announced that it had reached a clinical milestone associated with the IND filing of an antibody being developed to treat blood disorders by its partner Novartis, which was recognized in the second quarter of 2015.

At the Annual General Meeting on 8 May 2015, Ms. Wendy Johnson, Mr. Klaus Kühn and Dr. Frank Morich were newly elected to the Supervisory Board. Dr. Gerald Möller, Dr. Marc Cluzel and Ms. Karin Eastham were all re-elected to the Supervisory Board. Additionally, all resolutions proposed by the management were adopted.

MorphoSys repurchased 88,670 of its own shares in the second quarter of 2015. The shares will be used primarily for long-term incentive programs for the Management Board and Senior Management Group.

"The second quarter saw excellent progress with regard to our proprietary pipeline and the further expansion of our drug development capabilities in the biologics arena beyond antibodies. Clearly the highlight of the quarter from a pipeline perspective was the presentation of encouraging clinical data for our most advanced proprietary oncology programs MOR208 and MOR202," stated Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG.

"We are very pleased with the first half of 2015 and are on track to meet our goals for the full year. The addition of Lanthio’s portfolio of therapeutic peptides to our pipeline combined with new therapeutic antibody programs initiated by our partners have increased the number of therapeutic candidates in different stages of development for the first time beyond the 100 program mark," commented Jens Holstein, Chief Financial Officer of MorphoSys AG.

Financial Review for the First Half of 2015 (IFRS)

Group revenues for the first six months of 2015 amounted to EUR 82.6 million (H1 2014: EUR 30.5 million). Reasons for the increase were one-time effects in H1 2015 in connection with the full realization of deferred revenues from an up-front payment received from Celgene in 2013 together with a one-time termination fee. The Proprietary Development segment recorded revenues of EUR 59.6 million (H1 2014: EUR 7.7 million), all of which were recorded in connection with the co-development agreement with Celgene. Revenues in the Partnered Discovery segment comprised EUR 21.0 million in funded research and licensing fees (H1 2014: EUR 21.4 million) and EUR 2.0 million in success-based payments (H1 2014: EUR 1.4 million).

Total operating expenses for the first six months of 2015 amounted to EUR 40.9 million (H1 2014: EUR 30.1 million). Total research and development expenses were EUR 33.9 million (H1 2014: EUR 23.4 million). R&D expenses mainly consisted of costs for external lab services and personnel costs. Expenses for proprietary product and technology development amounted to EUR 25.3 million (H1 2014: EUR 14.9 million). General and administrative expenses increased to EUR 7.0 million (H1 2014: EUR 6.7 million) driven by higher expenses for personnel.

Earnings before interest and taxes (EBIT) amounted to EUR 46.1 million (H1 2014: EUR 0.4 million). The Proprietary Development segment reported a segment EBIT of EUR 40.2 million (H1 2014: EUR -5.9 million), while Partnered Discovery showed a segment EBIT of EUR 12.5 million (H1 2014: EUR 12.5 million).

For the first half of 2015, MorphoSys realized a net profit of EUR 36.5 million compared to EUR 0.6 million in the same period of the previous year. The resulting diluted earnings per share for the six months ending 30 June 2015 amounted to EUR 1.39 (H1 2014: EUR 0.02).

On 30 June 2015, the Company held liquid funds and marketable securities, as well as other financial assets (reported in the balance sheet under cash and cash equivalents, available for sale financial assets, bonds available for sale and financial assets classified as loans and receivables), in the amount of EUR 324.9 million, compared to EUR 352.8 million on 31 December 2014. The net cash inflow from operations in H1 2015 was EUR 1.1 million (H1 2014: net cash outflow of EUR 9.9 million). The number of shares issued at 30 June 2015 was 26,469,834, compared to 26,456,834 on 31 December 2014.

Second Quarter of 2015 (IFRS)

In the second quarter of 2015, the Company generated revenues in the amount of EUR 12.2 million, compared to EUR 14.7 million in the same quarter of 2014. Total operating expenses amounted to EUR 23.2 million in Q2 2015, compared to EUR 15.6 million in the same quarter of 2014. EBIT amounted to EUR -6.7 million (Q2 2014: EUR -1.0 million). Net loss for the second quarter 2015 was EUR 4.3 million, compared to a net loss of EUR 0.5 million in the second quarter of 2014.

Outlook for 2015

MorphoSys re-confirmed its guidance for 2015. MorphoSys anticipates total Group revenues of EUR 101 million to EUR 106 million and anticipates a positive EBIT in the range of EUR 9 to EUR 16 million in 2015. Expenses for proprietary product and technology development are expected to amount to EUR 56 million to EUR 63 million.