On January 30, 2024 MorphoSys AG (FSE: MOR; NASDAQ: MOR) reported preliminary Monjuvi (tafasitamab-cxix) U.S. net product sales and gross margin for Monjuvi U.S. net product sales for the full year of 2023 and provides its 2024 financial guidance (Press release, MorphoSys, JAN 30, 2024, View Source [SID1234639716]). In this context, MorphoSys reduces its financial liability from the collaboration with its partner Incyte and credits finance income accordingly.

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Preliminary Monjuvi U.S. net product sales are US$ 24.1 million (€ 22.4 million) for the fourth quarter and US$ 92.0 million (€ 85.0 million) for the full year of 2023. Fourth quarter and full year 2023 financial results will be published on March 13, 2024. For the full year of 2024, MorphoSys expects Monjuvi U.S. net product sales in the range of US$ 80 to 95 million, aligned with the company’s original 2023 guidance. MorphoSys anticipates Monjuvi’s potential growth to come from new indications. These new indications are currently being investigated in two Phase 3 studies, inMIND (relapsed or refractory follicular lymphoma and marginal zone lymphoma) and frontMIND (first-line diffuse large B-cell lymphoma). Further, preliminary 2023 gross margin for Monjuvi U.S. net product sales is 69%, which is impacted by the recognition of one-time write-offs for inventory.

"Patients with relapsed or refractory diffuse large B-cell lymphoma continued to benefit from Monjuvi in 2023, with sales reaching the higher end of our financial guidance. Beyond its approved indication, we believe Monjuvi’s potential growth will come from the new indications that are currently in Phase 3 studies, the first of which reads out later this year." said Jean-Paul Kress, M.D., Chief Executive Officer of MorphoSys. "To maintain our strong financial position, we will continue to be judicious with our finances in 2024 by prioritizing areas that create the most immediate impact and value. As such, pelabresib in first-line myelofibrosis remains our primary focus following the positive Phase 3 MANIFEST-2 results. We are diligently preparing regulatory filings to submit to the U.S. Food and Drug Administration and the European Medicines Agency in the middle of 2024."

As a result of the latest Monjuvi sales expectations, the balance sheet item "Financial Liabilities from Collaborations" is being reduced from € 226 million (balance as of September 30, 2023) to approximately € 114 million (balance as of December 31, 2023; unaudited). Finance income is credited with the difference between the two amounts. The balance in the "Financial Liabilities from Collaborations" item reflects an accounting view of expected future profits from the U.S. net product sales of Monjuvi in the relapsed or refractory diffuse large B-cell lymphoma indication owed to Incyte. This reduction in the "Financial Liabilities from Collaborations" item has no impact on cash or cash runway. Monjuvi’s potential new indications are not and will not be reflected in the line item "Financial Liabilities from Collaborations."

With all of MorphoSys’ Phase 3 clinical programs now fully enrolled and additional cost optimization measures planned, MorphoSys’ anticipated 2024 operating expenses are expected to be lower compared to 2023. As a result, the company expects an anticipated 2024 cash burn of approximately € 250 million (excluding debt and interest payments).

Full Year 2024 Financial Guidance:

2024 Financial Guidance 2024 Guidance Insights
Monjuvi U.S. Net Product Sales US$ 80m to 95m 100% of Monjuvi U.S. net product sales are recorded on MorphoSys’ income statement and related profit/loss is split 50/50 between MorphoSys and Incyte.
R&D Expenses € 210m to 225m R&D expenses anticipated to be lower in 2024 than 2023 due to full enrollment of Phase 3 studies as well as cost optimization measures.
SG&A Expenses € 140m to 155m 45% to 50% of mid-point of SG&A expenses represent Monjuvi U.S. selling costs of which 100% are recorded in MorphoSys’ income statement. Incyte reimburses MorphoSys for half of these selling expenses.
Additional information related to 2024 Financial Guidance:

Tremfya royalties will continue to be recorded as revenue without any cost of sales in MorphoSys’ income statement. These royalties, however, will not contribute any cash to MorphoSys, as 100% of the royalties will be passed on to Royalty Pharma.
MorphoSys anticipates receiving royalties for Minjuvi sales outside of the U.S.
MorphoSys does not anticipate any significant cash-accretive revenues from the achievement of milestones in 2024.
MorphoSys anticipates sales of commercial and clinical supply of tafasitamab outside of the U.S. to its partner Incyte. Revenue from this supply is recorded in the "Licenses, milestones and other" category in MorphoSys’ income statement. These sales result in a zero gross profit/margin. As such, MorphoSys does not provide guidance for these sales.