MorphoSys AG — Interim / Quarterly Report 2009

Jul 29, 2009

Contents

MorphoSys Group: 2nd Interim Report January – June 2009

• 3 Letter to the Shareholders
• 4 Interim Group Management Report
• 14 Consolidated Statement of Operations (IFRS) for the Periods Ended June 30, 2009 and 2008
• 15 Consolidated Statement of Comprehensive Income (IFRS) for the Periods Ended June 30, 2009 and 2008
• 16 Consolidated Balance Sheet (IFRS) as of June 30, 2009 and December 31, 2008
• 18 Consolidated Statement of Changes in Stockholders' Equity (IFRS) as of June 30, 2009 and 2008
• 20 Consolidated Statement of Cash Flows (IFRS) for the Periods Ended June 30, 2009 and 2008
• 22 Notes to the Interim Consolidated Financial Statements
• 29 Responsibility Statement
• 30 Review Report

HOLDERS REPORT

THE SHARE- MANAGEMENT

Dear Shareholders,

During the first six months of 2009, MorphoSys's business demonstrated progress on multiple fronts.

On the partnered side of MorphoSys's therapeutic business, two partners, namely Novartis and Centocor Ortho Biotech, advanced HuCAL-based antibody programs into clinical trials. Presently six of our partnered programs are in the clinic, and two more antibody programs could enter the clinic during the second half of the year.

Additionally, on the partnered side of our business, MorphoSys achieved an important milestone relating to technology development in July. As a result Novartis agreed to a full 10-year term of its collaboration with MorphoSys, thereby allowing MorphoSys to secure in excess of € 120 million committed revenues over the duration of the two companies' strategic partnership.

Progress on the partnered side of our business was matched by progress in our proprietary development activities. Having finalized and reported the data of the phase 1 clinical trial for our lead compound MOR103, we filed for a subsequent phase 1b/2a study in patients which is expected to start in the second half of the year.

Our third business segment, AbD Serotec, continued its solid performance from the first quarter. The segment continued to gain visibility in the diagnostic industry and foreign exchange rates thus far this year have developed in favor of the segment compared to the same period of the prior year.

Looking ahead, the Company will extend its segment reporting from two segments to three. In that vein, MorphoSys will as of the current quarter, report in three separate operating segments: Partnered Discovery, Proprietary Development and AbD Serotec. The first two of the aforementioned segments were previously combined as the "Therapeutic Antibodies segment". The split of these two segments mirrors our goal to stress the growing importance of MorphoSys's proprietary drug development activities as one of our Company's core competencies.

On a Group level, revenues for the first six months ended June 30, 2009 were broadly in line with the Company's expectations to meet full year guidance of € 80 million to € 85 million. Revenues for the first six months were € 37.9 million, a 14% increase over the same period in the previous year while operating profits came in at € 6.6 million.

Sincerely yours,

Dave Lemus Chief Financial Officer MorphoSys AG

Interim Group Management Report: January 1 – June 30, 2009

Industry Overview

In the second quarter of 2009, major antibody-related transactions included Celldex's proposed acquisition of cancer antibody company Curagen in a stock-for-stock transaction, which valued CuraGen at approximately US\$ 95 million. Additionally, Johnson & Johnson decided to acquire Elan's Alzheimer's Immunotherapy Program including the late-stage anti-Amyloid beta antibody Bapineuzumab via an equity investment in Elan equivalent to roughly US\$ 1 billion.

Significant licensing deals included an alliance in the area of infectious diseases between Merck & Co. and Medarex targeting Clostridium difficile infections, an agreement between Sanofi-Aventis and Kyowa Hakko Kirin covering an anti-inflammatory antibody against a member of the TNF-alpha pathway and Glaxo SmithKline's early-stage deal with Oxford Biotherapeutics covering a portfolio of cancer targets which can be addressed with antibodies.

Looking at product-related newsflow, the FDA approved the anti-TNF antibody Simponi® for rheumatoid arthritis while Avastin® was approved for glioblastoma, a very aggressive form of primary brain tumors, as an additional indication for the anti-VEGF antibody. Novartis received FDAapproval for Canakinumab (Ilaris® ), an antibody targeting interleukin-1 beta for the treatment of children and adults with cryopyrin-associated periodic syndrome. In Europe, the European Commission has approved Removab® , an antibody derivative developed by Fresenius Biotech and Munich-based Trion Pharma for treatment of ovarian cancer. With regard to late-stage development programs, Roche reported that Avastin® failed to meet its primary endpoint in a phase 3 trial for early-stage colon cancer. Medarex and the Mayo Clinic reported that the anti-CTLA-4 antibody Ipilimumab contributed to the full recovery of two patients with prostate cancer deemed inoperable.

Looking at the private biotechnology sector, Novimmune, a Swiss-based drug discovery and development company with a focus on therapeutic antibodies for inflammatory diseases and immunerelated disorders, secured Europe's largest venture capital financing round in 2009 with US\$ 54.8 million.

MorphoSys Share Price Performance

Driven by positive operational performance and news flow, the MorphoSys share price increased during the second quarter by 28%. The NASDAQ Biotechnology Index increased during the quarter by 12%, the TecDAX by 29%, and the DAXsubsector Biotechnology Performance Index increased by 12%. By comparison, a basket of international antibody companies (Source: BioCentury) increased by 22%. Year-to-date, MorphoSys's share price fell 9% at the end of the second quarter.

The MorphoSys Share (January 2, 2009 = 100%)

Financial Analysis

Revenues

Compared to the same period of the previous year, Group revenues increased by 14% to € 37.9 million in the first six months of 2009 (H1 2008: € 33.3 million). This increase is due to both higher levels of funded research, licensing fees and success-based revenues in the Partnered Discovery segment as well as stronger revenues in the AbD segment. Revenues arising from the Therapeutic Antibodies segments accounted for 76% or € 28.6 million (H1 2008: € 24.7 million) of total revenues while the AbD segment generated 24% (€ 9.7 million) of the total revenues (H1 2008: € 9.0 million).

Geographically, 22% or € 8.3 million, of MorphoSys's commercial revenues were generated with biotechnology and pharmaceutical companies or non-profit organizations located in North America and 78%, or € 29.6 million, with companies located mainly in Europe and Asia. This compares to 18% and 82%, respectively, in the same period of the prior year.

Partnered Discovery and Proprietary Development Segments

Revenues arising from the Partnered Discovery and Proprietary Development segments comprised € 22.7 million in funded research and licensing fees (H1 2008: € 21.6 million) as well as € 5.4 million success-based payments (H1 2008: € 2.7 million), representing 19% of total Partnered Discovery and Proprietary Development revenues. Approximately 85% of Partnered Discovery and Proprietary Development revenues and 63% of total revenues arose from the Company's three largest alliances with Novartis, Daiichi Sankyo and Pfizer (H1 2008: Novartis, Daiichi Sankyo and Merck, 86% and 62%, respectively).

Assuming constant foreign exchange rates at the average rate of 2008, revenues in the Partnered Discovery and Proprietary Development segments would have totaled € 27.8 million.

Revenue Development by Segment (in € million)

AbD Serotec Segment

Compared to the same period of the previous year, AbD Serotec segment's revenues increased by 8%, or € 0.7 million, to € 9.7 million in 2009 (H1 2008: € 9.0 million). Assuming constant foreign exchange rates at the average rate for 2008, revenues in the AbD segment would have amounted to € 9.8 million.

The largest part of revenues (approx. 81% or € 7.9 million) was generated with catalog and industrial customers (H1 2008: approx. 81% or € 7.3 million), while custom manufacture antibodies contributed 19% or € 1.8 million (H1 2008: 19% or € 1.7 million).

As of June 30, 2009, orders in the amount of € 1.9 million were classified as backorders in the segment (June 30, 2008: € 1.0 million).

Operating Expenses

Compared to the first six months of 2008, total operating expenses increased by approximately 24% to € 31.3 million in 2009 (H1 2008: € 25.3 million). The change in operating expenses of € 6.0 million was mainly impacted by research and development (R&D) expenses increasing by 56% or € 6.4 million which was partly offset by sales, general and administrative (S, G&A) expenses decreasing from € 10.2 million to € 10.0 million. Cost of goods sold (COGS) decreased from € 3.5 million to € 3.3 million. Total purchase price allocation (PPA) effects on operating profit amounted to € 0.3 million (H1 2008: € 0.4 million).

Stock-based compensation expenses are embedded in COGS, S, G&A and R&D expense amounts. Stock-based compensation for the first six months of 2009 amounted to € 0.8 million (H1 2008: € 0.6 million) and is a non-cash charge.

Cost of Goods Sold

COGS is composed of the AbD segment's cost of goods sold in the first six months of 2009 and – compared to the same period of the prior year – decreased from € 3.5 million to € 3.3 million.

Research and Development Expenses

In the first six months of 2009, expenses for research and development increased by € 6.5 million to € 18.0 million (H1 2008: € 11.5 million). This was mainly due to higher costs for external lab funding (H1 2009: € 4.7 million; H1 2008: € 0.9 million), as well as increased personnel costs in research and development both associated with proprietary drug development (H1 2009: € 7.1 million; H1 2008: € 5.1 million).

LETTER TO GROUP FINANCIAL STATEMENTS 7 THE SHARE- M A N A G E M E N T HOLDERS R E P O R T

In the first six months of 2009, the Company incurred costs for proprietary product development (excluding allocations for segment purposes) and technology development in the amount of € 7.8 million and € 0.2 million, respectively (H1 2008: € 2.0 million and € 0.3 million, respectively).

Sales, General and Administrative Expenses

Compared to the same period of the previous year, sales, general and administrative expenses decreased by € 0.2 million to € 10.0 million (H1 2008: € 10.2 million).

Development of Operating Expenses (in € million)

Cost by Expenditure Type

In the first six months of 2009, personnel costs (excluding stock-based compensation) amounted to € 12.3 million (H1 2008: € 10.4 million) or 39% of total operating expenses, thus representing the largest cost block within operating expenses.

Expenses for external services, representing the second-largest block by cost type, amounted to € 6.8 million (H1 2008: € 3.3 million) or 22% of total operating expenses and included external lab funding (H1 2009: € 4.7 million; H1 2008: € 0.9 million) and consulting fees (H1 2009: € 0.8 million; H1 2008: € 1.4 million).

Costs for intangibles accounted for € 4.1 million (H1 2008: € 4.1 million) or 13% of total operating expenses and mainly consisted of expenses for licenses (H1 2009: € 2.1 million; H1 2008: € 2.0 million) as well as amortization of licenses capitalized (H1 2009: € 1.2 million; H1 2008: € 1.2 million).

Non-operating Items

For the first six months of 2009, non-operating items included mainly finance income of € 1.1 million (H1 2008: € 1.3 million), other income of € 0.2 million (H1 2008: € 0.3 million) and other expenses of € 0.2 million (H1 2008: € 0.5 million). Finance income mainly comprised realized gains from marketable securities.

Taxes

For the first six months of 2009, the Company reported income tax expenses in the amount of € 2.7 million. This line item mainly included deferred tax expenses (€ 1.0 million) from the release of deferred tax assets capitalized in 2007 and current tax expenses (€ 1.6 million).

Operating Profit / Net Profit

Group operating profit for the first six months of 2009 amounted to € 6.6 million (H1 2008: € 8.0 million). Earnings before interest and taxes (EBIT) amounted to € 7.5 million, compared to an EBIT of € 8.4 million in the first six months of the previous year. The segments Partnered Discovery and Proprietary Development resulted in an operating profit of € 18.0 million (H1 2008: € 14.6 million) and an operating loss of € 8.0 million (H1 2008: operating loss of € 2.5 million), respectively, whereas the operating profit for the AbD Serotec segment amounted to € 1.1 million (H1 2008: € 0.2 million).

A net profit after taxes of € 5.0 million was achieved in the first six months of 2009, compared to a net profit after taxes of € 6.3 million in the same period of the prior year. The resulting basic net profit per share for the first six months of 2009 amounted to € 0.23 (H1 2008: € 0.28).

Liquidity / Cash Flows

Net cash inflow from operations in the first six months of 2009 amounted to € 6.6 million (H1 2008: cash inflow of € 18.0 million). Investing activities resulted in a cash outflow of € 3.1 million (H1 2008: cash outflow of € 16.7 million) whereas financing activities resulted in a minor cash outflow (H1 2008: cash inflow of € 0.6 million).

As of June 30, 2009, the Company held € 144.1 million in cash, cash equivalents and available-forsale financial assets, compared to a year end 2008 balance of € 137.9 million.

Assets

Total assets increased by € 5.7 million to € 209.0 million as of June 30, 2009, compared to € 203.3 million as of December 31, 2008. Current assets increased by € 7.8 million mainly as a result of an increase in both cash and cash equivalents (€ 6.2 million) and accounts receivable (€ 1.2 million).

Compared to December 31, 2008, non-current assets decreased by € 2.1 million mainly as a consequence of the release of deferred tax assets capitalized in 2007 (€ 1.1 million) as well as of the amortization of licenses (€ 1.0 million).

Liabilities

In the first six months of 2009, current liabilities increased from € 27.4 million as of December 31, 2008, to € 30.0 million as of June 30, 2009. This change primarily arose from an increase in current deferred revenue (€ 4.3 million) which was partly offset by a decrease in accounts payable (€ 2.0 million).

Non-current liabilities decreased by € 3.3 million to € 10.6 million in the first six months of 2009, which was mainly impacted by a decrease in non-current deferred revenue of € 3.3 million resulting from contracts signed in previous years.

Equity

Total stockholders' equity amounted to € 168.5 million as of June 30, 2009, compared to € 162.0 million as of December 31, 2008.

As of June 30, 2009, the total number of shares issued amounted to 22,492,287 of which 22,412,391 were outstanding, compared to 22,478,787 and 22,398,891 as of December 31, 2008, respectively.

The increase of shares outstanding by 13,500 shares arose from exercised options issued to employees.

Capital Expenditure

MorphoSys's investment in property, plant and equipment amounted to € 0.6 million for the sixmonth period ended June 30, 2009, compared to € 0.4 million in the same period of the prior year. Depreciation of property, plant and equipment for the first six months of 2009 accounted for € 0.7 million compared to € 0.7 million in the first half of 2008.

During the first six months of 2009, the Company invested € 0.4 million in intangible assets (H1 2008: € 0.3 million). Amortization of intangibles amounted to € 1.9 million and remained unchanged in comparison to the first half of 2008.

Human Resources

Number and Qualification of Employees

On June 30, 2009, the MorphoSys Group employed 375 people (December 31, 2008: 334). On average, the MorphoSys Group employed 353 people for the first six months of 2009 (H1 2008: 299).

Of the 375 employees, 123 people were employed in MorphoSys's subsidiaries on June 30, 2009, and on average, 115 were employed (H1 2008: 113 and 108 on average, respectively).

Of the 375 employees, 220 worked in research and development and 155 in sales, general and administration (December 31, 2008: 191 and 143, respectively).

On June 30, 2009, 102 of MorphoSys's employees had a Ph.D. degree (December 31, 2008: 91).

Of the 375 employees, 188 worked for the Partnered Discovery segment, 44 for the Proprietary Development segment and 143 for the AbD Serotec segment (December 31, 2008: Therapeutic Antibodies segments 201 and AbD segment 133, respectively).

On June 30, 2009, MorphoSys had 2 apprenticeship positions (December 31, 2008: 2).

Pipeline Update

Partnered Discovery

During the second quarter of 2009, MorphoSys's existing partnered therapeutic antibody pipeline increased to 62 active antibody development programs in total (up from 55 at the beginning of the year), of which currently six programs are in clinical development, 31 in preclinical development, and 25 in research (not including the co-development candidate with Novartis).

In the first six months, MorphoSys recorded seven new program starts with its partners. Two new cancer-related antibody programs were initiated within the partnership with Daiichi-Sankyo.

During the second quarter, two partner companies, namely Novartis and Centocor Ortho Biotech, advanced HuCAL-based antibody programs into phase 1 clinical trials. Both events triggered clinical milestone payments to MorphoSys. Although reported in the second quarter, the clinical milestone triggered within the Novartis collaboration was already included in the Company's Q1 results.

Proprietary Development

MOR103

In June 2009, MorphoSys reported positive results from the phase 1 clinical study for its lead drug MOR103, a fully human HuCAL-derived monoclonal antibody directed against Granulocyte Macrophage-Colony Stimulating Factor (GM-CSF), in healthy volunteers. The results of this study indicate that MOR103 is generally safe and well tolerated at all doses administered. The completed phase 1 trial was designed as a randomized, double-blind, placebo controlled, single ascending dose study to assess the safety, tolerability and pharmacokinetic parameters of MOR103 in healthy volunteers. In total, 63 volunteers received ascending doses of MOR103 up to a concentration of 3 mg/kg or placebo in seven dose cohorts via intravenous infusion. No maximum tolerated dose (MTD) was reached in the study. Analysis of the pharmacokinetic properties of MOR103 showed a serum halflife typical of a fully human antibody which could translate into a competitive dosing regimen. The overall safety, tolerability and pharmacokinetic properties of MOR103 provide a solid foundation for the Company's development plans, including the forthcoming phase 1b/2a study in patients.

In conjunction with the presentation of final phase 1 data MorphoSys announced that the Company has submitted an application for the authorization of a subsequent phase 1b/2a clinical study in patients with active rheumatoid arthritis. The trial, which will be conducted in multiple centers in several European countries, is expected to enroll 135 patients in total, beginning in the second half of 2009.

In July 2009, MorphoSys and the University of Melbourne initiated a research collaboration to investigate new therapeutic applications for MorphoSys's MOR103 program. The collaboration will focus on new therapeutic areas in which GM-CSF has recently been implicated in as yet unpublished work of researchers at the University of Melbourne. Under the terms of the agreement, MorphoSys will fund research activities at the University of Melbourne in multiple new indications. The University of Melbourne will receive an upfront payment and will be entitled to research funding, clinical milestone and royalty payments.

MOR202

The preclinical development and manufacturing of MOR202 continues as planned. Start of clinical development is expected in 2010.

LETTER TO GROUP FINANCIAL STATEMENTS 1 1 THE SHARE- M A N A G E M E N T HOLDERS R E P O R T

Early-stage pipeline

Work on MOR205, an early-stage cancer program, was initiated in the second quarter of 2009, and MOR203 continues as planned. Additionally, MorphoSys selected a new disease-related target molecule in inflammation, MOR104.

Business Development

Partnered Discovery

Novartis

MorphoSys announced in July that Novartis has committed to a ten-year term of the strategic alliance originally signed in December 2007. The decision was based on the successful achievement by MorphoSys of certain predefined improvements in its proprietary technologies. The collaboration will now run until 2017 and may be extended by Novartis for an additional two years beyond that time under the same financial terms and conditions. The option for Novartis to terminate the alliance after seven years is thereby removed. Based on the ten-year term, committed payments total more than € 400 million.

Schering-Plough

In June 2009, MorphoSys announced that Schering-Plough Corporation has triggered its preexisting option to extend the current collaboration for another year. The partnership may be extended by Schering-Plough annually until 2011. As a result, MorphoSys continues to have active collaborations with both Schering-Plough and Merck & Co, who announced plans to acquire Schering-Plough in March 2009.

The agreement grants Schering-Plough continued access to MorphoSys's proprietary antibody library HuCAL GOLD at its research site, Schering-Plough Biopharma, in Palo Alto, Calif., and contains options for therapeutic licenses. For therapeutic antibody projects undertaken by Schering-Plough, MorphoSys is eligible to receive license fees, milestone payments relating to the successful advancement of projects in clinical development, and royalties on HuCAL antibodies developed under the agreement.

AbD Serotec

AbD Serotec has tapped a new area of application, namely HuCAL-based antibodies used for clinical monitoring. In the second quarter, a first customer, an undisclosed US-based biopharmaceutical company, decided to use a HuCAL-based recombinant diagnostic antibody for in vitro clinical monitoring within a phase 1 clinical trial of a therapeutic cancer antibody program. AbD Serotec has granted a clinical monitoring license and will supply the customer with recombinant antibody material. Similar projects with different customers are currently ongoing.

Intellectual Property

In June 2009, MorphoSys announced that the Japanese Patent Office has granted a new patent covering its CysDisplay technology. CysDisplay is a proprietary screening technology, which is an important component of MorphoSys's proprietary HuCAL platform. The new patent (JP 4312403) describes a selection technology based on phage display for selecting high-affinity antibodies. The claims are not limited to the use of a HuCAL library with this selection technology.

As part of the research alliance initiated with the University of Melbourne in July 2009, new patent applications have been filed, which are intended to broaden the patent position of the anti-GM-CSF approach used in the MOR103 antibody program.

Risk and Opportunity Report

The risks and opportunities have not changed materially compared to the situation described in the Annual Report 2008.

Outlook

At the occasion of the reporting of the financial results of the first six months of 2009, MorphoSys reconfirmed full-year guidance. The Company estimates full-year 2009 Group revenues between € 80 million and € 85 million, and an operating profit of € 8 million to € 11 million, including investments in technology and product development in the amount of € 18 million to € 20 million (2008: € 7.7 million).

LETTER TO	GROUP	FINANCIAL STATEMENTS	1 3
THE SHARE-	M A N A G E M E N T
HOLDERS	R E P O R T

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Consolidated Statement of Operations (IFRS)

		Three Months	Three Months	Six Months	Six Months
		Ended	Ended	Ended	Ended
		06/30/2009	06/30/2008	06/30/2009	06/30/2008
	Note	€	€	€	€
Revenues	2	18,743,211	16,976,707	37,877,713	33,255,806
Operating Expenses	2
Cost of Goods Sold		1,656,394	1,846,936	3,319,892	3,526,634
Research and Development		9,471,378	6,212,855	17,954,978	11,529,656
Sales, General and Administrative		5,222,095	4,986,826	9,991,236	10,209,658
Total Operating Expenses		16,349,867	13,046,617	31,266,106	25,265,948
Profit from Operations		2,393,344	3,930,090	6,611,607	7,989,858
Finance Income		230,742	565,379	1,138,195	1,332,878
Finance Expense		3,358	1,617	4,588	3,234
Other Income		81,075	67,049	193,344	283,322
Other Expense		88,907	123,829	237,228	511,166
Profit before Taxes		2,612,896	4,437,072	7,701,330	9,091,658
Income Tax Expense		1,075,753	1,400,221	2,657,339	2,790,260
Net Profit		1,537,143	3,036,851	5,043,991	6,301,398
Basic Net Profit per Share		0.07	0.14	0.23	0.28
Diluted Net Profit per Share		0.07	0.14	0.22	0.28
Shares Used in Computing Basic Net Profit per Share		22,412,391	22,174,542	22,411,266	22,133,388
Shares Used in Computing Diluted Net Profit per Share		22,503,994	22,340,469	22,510,795	22,297,098

THE SHARE- MANAGEMENT Statement of Operations

LETTER TO GROUP F I N A N C I A L S T A T E M E N T S 1 5

• HOLDERS REPORT Statement of Comprehensive Income
• Balance Sheet Statement of Changes in Stockholders' Equity
  • Statement of Cash Flows
  • Notes to the Financial Statements

Consolidated Statement of Comprehensive Income (IFRS)

	Three Months Ended	Three Months Ended	Six Months Ended	Six Months Ended
	06/30/2009	06/30/2008	06/30/2009	06/30/2008
	€	€	€	€
Net Profit	1,537,143	3,036,851	5,043,991	6,301,398
Change in Unrealized Gains and Losses on Available-for-sale Securities	26,673	622,292	(505,584)	979,558
(Thereof Reclassifications of Unrealized Gains and Losses to Profit and Loss)	(160,500)	(207,302)	(924,378)	(563,404)
Deferred Taxes	(7,023)	(163,849)	133,120	(257,918)
Change in Unrealized Gains and Losses, Net of Deferred Tax	19,650	458,443	(372,464)	721,640
Effects from Equity-related Recognition of Deferred Taxes	(9,832)	2,075	(13,016)	10,480
Foreign Currency Gain/(Loss) from Consolidation	660,614	(184,670)	922,078	(703,516)
Comprehensive Income	2,207,575	3,312,699	5,580,589	6,330,002

Consolidated Balance Sheet (IFRS)

	June 30, 2009	Dec. 31, 2008
Note	€	€
ASSETS
Current Assets
Cash and Cash Equivalents	43,779,675	40,113,727
Available-for-sale Financial Assets	100,313,569	97,752,015
Accounts Receivable	5,404,918	4,211,258
Income Tax Receivables	304,792	1,122,495
Other Receivables	180,625	109,900
Inventories, Net	3,783,900	3,521,451
Prepaid Expenses and Other Current Assets	3,353,532	2,563,030
Assets Classified as Held for Sale	817,459	722,036
Total Current Assets	157,938,470	150,115,912
Non-current Assets
Property, Plant and Equipment, Net	3,927,675	3,967,405
Patents, Net	998,112	1,199,267
Licenses, Net	14,414,454	15,377,995
Software, Net	640,500	663,964
Know-how and Customer Lists, Net	2,483,590	2,492,537
Goodwill	26,783,703	26,672,397
Deferred Tax Asset	624,992	1,720,750
Prepaid Expenses and Other Assets,
Net of Current Portion	1,179,376	1,082,665
Total Non-current Assets	51,052,402	53,176,980
Total Assets	208,990,872	203,292,892

LETTER TO GROUP F I N A N C I A L S T A T E M E N T S 1 7 THE SHARE- MANAGEMENT Statement of Operations H O L D E R S R E P O R T Statement of Comprehensive Income

• Balance Sheet Statement of Changes in Stockholders' Equity
• Statement of Cash Flows
• Notes to the Financial Statements

		June 30, 2009	Dec. 31, 2008
	Note	€	€
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable		9,646,716	11,616,376
Licenses Payable		253,008	450,969
Provisions and Tax Liabilities		1,253,199	881,999
Current Portion of Deferred Revenue		18,803,704	14,453,680
Total Current Liabilities		29,956,627	27,403,024
Non-current Liabilities
Provisions, Net of Current Portion		117,839	117,839
Deferred Revenue, Net of Current Portion		7,903,412	11,193,421
Convertible Bonds Due to Related Parties		80,150	48,670
Deferred Tax Liability		2,454,722	2,542,750
Total Non-current Liabilities		10,556,123	13,902,680
Stockholders' Equity
Common Stock, € 1.00 Par Value;
Ordinary Shares Authorized (42,759,630 and 42,759,630 for 2009 and 2008, respectively)
Ordinary Shares Issued (22,492,287 and 22,478,787
for 2009 and 2008, respectively)
Ordinary Shares Outstanding (22,412,391 and 22,398,891 for 2009 and 2008, respectively)
Treasury Stock (79,896 and 79,896 shares for 2009 and 2008, respectively), at Cost	3	22,482,513	22,469,013
Additional Paid-in Capital	3	159,420,208	158,523,363
Reserves		2,226,309	1,689,711
Accumulated Deficit		(15,650,908)	(20,694,899)
Total Stockholders' Equity		168,478,122	161,987,188
Total Liabilities and Stockholders' Equity		208,990,872	203,292,892

Consolidated Statement of Changes in Stockholders' Equity (IFRS)

		Common Stock
	Shares	€
Balance as of January 1, 2008	22,160,259	22,160,259
Compensation Related to the Grant of Stock Options and Convertible Bonds	0	0
Exercise of Options and Convertible Bonds Issued, to Related Parties Net of Issuance Cost of € 15,500	120,195	120,195
Reserves:
Change in Unrealized Gain on Available-for-sale Securities, Net of Deferred Tax	0	0
Effects from Equity-related Recognition of Deferred Taxes	0	0
Foreign Currency Loss from Consolidation	0	0
Net Profit for the Period	0	0
Comprehensive Income	0	0
Balance as of June 30, 2008	22,280,454	22,280,454
Balance as of January 1, 2009	22,478,787	22,478,787
Compensation Related to the Grant of Stock Options and Convertible Bonds	0	0
Exercise of Options and Convertible Bonds Issued to Related Parties	13,500	13,500
Reserves:
Change in Unrealized Gain on Available-for-sale Securities, Net of Deferred Tax	0	0
Effects from Equity-related Recognition of Deferred Taxes	0	0
Foreign Currency Gain from Consolidation	0	0
Net Profit for the Period	0	0
Comprehensive Income	0	0
Balance as of June 30, 2009	22,492,287	22,492,287

• H O L D E R S R E P O R T Statement of Comprehensive Income
• Balance Sheet
• Statement of Changes in Stockholders' Equity
• Statement of Cash Flows
• Notes to the Financial Statements

	Treasury Stock	Additional	Revaluation	Translation	Accumulated	Total
		Paid-in Capital	Reserve	Reserve	Deficit	Stockholders'
						Equity
Shares	€	€	€	€	€	€
80,196	(9,811)	155,376,343	2,241,328	(382,418)	(33,848,252)	145,537,449
0	0	586,296	0	0	0	586,296
(300)	37	342,782	0	0	0	463,014
0	0	0	721,640	0	0	721,640
0	0	0	10,480	0	0	10,480
0	0	0	0	(703,516)	0	(703,516)
0	0	0	0	0	6,301,398	6,301,398
0	0	0	732,120	(703,516)	6,301,398	6,330,002
79,896	(9,774)	156,305,421	2,973,448	(1,085,934)	(27,546,854)	152,916,761
79,896	(9,774)	158,523,363	4,163,972	(2,474,261)	(20,694,899)	161,987,188
0	0	849,190	0	0	0	849,190
0	0	47,655	0	0	0	61,155
0	0	0	(372,464)	0	0	(372,464)
0	0	0	(13,016)	0	0	(13,016)
0	0	0	0	922,078	0	922,078
0	0	0	0	0	5,043,991	5,043,991
0	0	0	(385,480)	922,078	5,043,991	5,580,589
79,896	(9,774)	159,420,208	3,778,492	(1,552,183)	(15,650,908)	168,478,122

Consolidated Statement of Cash Flows (IFRS)

	2009	2008
For the Period Ended June 30, Note	€	€
Operating Activities
Net Profit	5,043,991	6,301,398
Adjustments to Reconcile Net Profit to Net Cash Provided by Operating Activities:
Non-cash Charges from PPA	0	66,937
Depreciation and Amortization of Tangible and Intangible Assets	2,599,511	2,614,930
Income Tax Benefit	(84,873)	(125,460)
Net Gain on Sales of Financial Assets	(934,087)	(618,460)
Unrealized Net Loss/ (Gain) on Derivative Financial Instruments	83,418	(122,107)
Loss on Sale of Property, Plant and Equipment	357	24,741
Recognition of Deferred Revenue	(15,621,543)	(16,223,416)
Stock-based Compensation	842,318	586,297
Changes in Operating Assets and Liabilities:
Accounts Receivable	(1,087,082)	4,822,785
Prepaid Expenses, Other Assets and Tax Receivables	991,255	(360,814)
Accounts Payable and Provisions	619,045	853,548
Licenses Payable	(197,960)	33,011
Other Liabilities	(1,976,385)	(4,369,563)
Deferred Revenue	16,681,557	24,210,332
Cash Generated from Operations	6,959,522	17,694,159
Interest Paid	(1,954)	0
Interest Received	204,151	714,779
Income Taxes Paid	(537,906)	(437,611)
Net Cash Provided by Operating Activities	6,623,813	17,971,327

LETTER TO GROUP F I N A N C I A L S T A T E M E N T S 2 1 THE SHARE- MANAGEMENT Statement of Operations H O L D E R S R E P O R T Statement of Comprehensive Income

Balance Sheet

• Statement of Cash Flows
• Notes to the Financial Statements

	2009	2008
For the Period Ended June 30, Note	€	€
Investing Activities:
Purchases of Financial Assets	(10,988,704)	(23,680,527)
Proceeds from Sales of Financial Assets	8,855,654	7,738,776
Purchases of Property, Plant and Equipment	(568,793)	(411,847)
Proceeds from Disposals of Property, Plant and Equipment	535	3,403
Additions to Intangibles	(359,160)	(317,085)
Net Cash Used in Investing Activities	(3,060,468)	(16,667,280)
Financing Activities:
Proceeds from the Exercise of Options and Convertible Bonds Granted to Related Parties	61,155	478,514
Net of Proceeds and Payments from the Issuance of Convertible Bonds Granted to Related Parties	31,480	1,120
Purchases of Derivative Financial Instruments	(173,304)	(75,000)
Proceeds from the Disposal of Derivative Financial Instruments	47,000	170,359
Net Cost of Share Issuance	0	(15,500)
Net Cash Used in/ Provided by Financing Activities	(33,669)	559,493
Effect of Exchange Rate Differences on Cash	136,272	108,282
Increase in Cash and Cash Equivalents	3,665,948	1,971,822
Cash and Cash Equivalents at the Beginning of the Period	40,113,727	48,407,064
Cash and Cash Equivalents at the End of the Period	43,779,675	50,378,886

Notes to the Interim Consolidated Financial Statements

The accompanying consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), IAS 34 "Interim Financial Reporting" adopted by the International Accounting Standards Board (IASB), London, in consideration of the interpretations of the Standing Interpretations Committee (SIC), the International Financial Reporting Interpretations Committee (IFRIC) and the IFRS adopted by the European Commission.

The consolidated financial statements for the period ended June 30, 2009, include MorphoSys AG, MorphoSys IP GmbH, MorphoSys USA, Inc., MorphoSys UK Ltd. (former Serotec Ltd.), MorphoSys US, Inc. (former Serotec, Inc.), MorphoSys AbD GmbH (former Serotec GmbH), Oxford Biotechnology Ltd. and Poole Real Estate Ltd. (former Biogenesis UK Ltd.), together referred to as the "Group".

1 Changes in Accounting Policies

The accounting policies applied for the financial statements as of December 31, 2008, have been used throughout the first six months of 2009.

The Group applies IFRS 8 "Operating Segments" (effective from January 1, 2009). IFRS 8 replaces IAS 14 and aligns segment reporting with the requirements of the US standard SFAS 131 "Disclosures about segments of an enterprise and related information". The new standard requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes. As of June 30, 2009, the Group implemented a third operating segment Therapeutic Antibodies – Proprietary Development.

2 Segment Reporting

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity's chief operating decision maker and for which discrete financial information is available.

Segment information is presented in respect of the Group's operating and geographical segments. The operating segments are based on the Group's management and internal reporting structure. Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Intersegment pricing is determined on an arm's length basis according to the Group transfer pricing policy.

THE SHARE- MANAGEMENT Statement of Operations H O L D E R S R E P O R T Statement of Comprehensive Income Balance Sheet Statement of Changes in Stockholders' Equity Statement of Cash Flows Notes to the Financial Statements

The Group consists of the following three main operating segments:

Partnered Discovery

MorphoSys possesses one of the leading technologies for the generation of human antibody therapeutics. The Company commercially exploits this technology via partnerships with multiple pharmaceutical and biotechnology companies. All activities related to these collaborations are reflected in this segment.

Proprietary Development

This segment involves all activities relating to proprietary therapeutic antibody development. Presently, this includes the Company's two lead compounds in its proprietary product portfolio, MOR103 and MOR202. Proprietary compounds, once developed to a stage where clinical proof of concept is achieved, can then be outlicensed to partners.

AbD Serotec

The AbD Serotec segment leverages MorphoSys's core technological capabilities in the design and manufacture of antibodies for research and diagnostic purposes. It commercializes the HuCAL technology, focusing on generation of bespoke research antibodies for its customers. The segment also generates sales from catalog antibodies and bulk/industrial production of antibodies.

GEOGRAPHICAL SEGMENTS

In presenting information on the basis of geographical segments, segment revenues are based on the geographical location of the customers and segment assets on the geographical location of the assets.

For the Six Months Period
Ended June 30,	Partnered Discovery		Proprietary Development
(in 000's €)	2009	2008	2009	2008
Revenues, total	28,103	24,704	506	-
External Revenues	28,103	24,704	506	-
Inter-segment Revenues	-	-		-
Total Operating Expenses	10,120	10,133	8,536	2,522
Cost of Goods Sold	-	-		-
Other Operating Expenses	9,658	9,701	8,536	2,522
Inter-segment Costs	462	432		-
Segment Result	17,983	14,571	(8,030)	(2,522)
Finance Income	-	-	-	-
Finance Expense	-	-	-	-
Other Income	-	-	-	-
Other Expense	-	-	-	-
Profit before Taxes	-	-	-	-
Income Tax Expense	-	-	-	-
Net Profit	-	-	-	-

For the Three Months Period

(in 000's €) 2009 2008 2009 2008 Revenues, total 13,869 12,541 253 - External Revenues 13,869 12,541 253 - Inter-segment Revenues - - - Total Operating Expenses 5,210 5,110 4,470 1,522 Cost of Goods Sold - - - Other Operating Expenses 4,979 4,879 4,470 1,522 Inter-segment Costs 231 231 - Segment Result 8,659 7,431 (4,217) (1,522) Finance Income - - - - Finance Expense - - - - Other Income - - - - Other Expense - - - - Profit before Taxes - - - - Income Tax Expense - - - - Net Profit - - - -	Ended June 30,	Partnered Discovery		Proprietary Development

LETTER TO	GROUP	F I N A N C I A L S T A T E M E N T S	2 5
THE SHARE-	MANAGEMENT	Statement of Operations
H O L D E R S	R E P O R T	Statement of Comprehensive Income

• Balance Sheet Statement of Changes in Stockholders' Equity

Statement of Cash Flows

Notes to the Financial Statements

AbD Serotec			Unallocated		Elimination	Group
2009	2008	2009	2008	2009	2008	2009	2008
9,731	8,984	-	-	(462)	(432)	37,878	33,256
9,269	8,552	-	-	-	-	37,878	33,256
462	432	-	-	(462)	(432)	-	-
8,658	8,807	4,414	4,236	(462)	(432)	31,266	25,266
3,320	3,527	-	-	-	-	3,320	3,527
5,338	5,280	4,414	4,236	-	-	27,946	21,739
-	-	-	-	(462)	(432)	-	-
1,073	177	(4,414)	(4,236)	-	-	6,612	7,990
-	-	-	-	-	-	1,138	1,332
-	-	-	-	-	-	5	3
-	-	-	-	-	-	193	283
-	-	-	-	-	-	237	511
-	-	-	-	-	-	7,701	9,091
-	-	-	-	-	-	2,657	2,790
-	-	-	-	-	-	5,044	6,301

AbD Serotec			Unallocated		Elimination		Group
2009	2008	2009	2008	2009	2008	2009	2008
4,852	4,667	-	-	(231)	(231)	18,743	16,977
4,621	4,436	-	-	-	-	18,743	16,977
231	231	-	-	(231)	(231)	-	-
4,403	4,529	2,498	2,117	(231)	(231)	16,350	13,047
1,657	1,847	-	-	-	-	1,657	1,847
2,746	2,682	2,498	2,117	-	-	14,693	11,200
-	-	-	-	(231)	(231)	-	-
449	138	(2,498)	(2,117)	-	-	2,393	3,930
-	-	-	-	-	-	231	565
-	-	-	-	-	-	3	1
-	-	-	-	-	-	81	67
-	-	-	-	-	-	89	124
-	-	-	-	-	-	2,613	4,437
-	-	-	-	-	-	1,076	1,400
-	-	-	-	-	-	1,537	3,037

For services performed by the AbD segment for the Partnered Discovery segment, a revenue sharing agreement was established in 2007. The compensatory fee to the AbD segment amounted to € 0.5 million for the first six months of 2009.

The following table shows the split of the Company's consolidated revenues by geographical market:

For the Period Ended June 30,
(in 000's €)	2009	2008
Germany	2,790	2,700
Other Europe and Asia	26,212	23,621
USA and Canada	8,281	6,076
Other	595	859
Total	37,878	33,256

3 Changes in Stockholders' Equity

Common Stock

On June 30, 2009, the common stock of the Company amounted to € 22,492,287 (December 31, 2008: € 22,478,787). Through the exercise of 13,500 options issued to management and employees, common stock increased by € 13,500 in the first six months of 2009. Treasury stock amounted to € 9,774 as of June 30, 2009 (December 31, 2008: € 9,774).

Additional Paid-in Capital

On June 30, 2009, additional paid-in capital amounted to € 159,420,208 (December 31, 2008: € 158,523,363). The total increase of € 896,845 is due to stock-based compensation in the amount of € 849,190. A further increase of € 47,655 arose from the exercise of issued stock options.

4 Changes in Convertible Bonds and Stock Options

On April 01, 2009, 422,200 stock options and 101,000 convertible bonds were granted to members of the Management Board and to employees under the 2002 Plan.

5 Directors' Dealings

The Group has related party transactions with its management and with members of the Supervisory Board. In addition to the cash remuneration, the Company has issued stock options and convertible bonds to the Management Board. The table below shows the shares, stock options and convertible bonds as well as the changes of ownership of the same which were held by members of the Management Board and the Supervisory Board during the first six months of 2009:

LETTER TO GROUP F I N A N C I A L S T A T E M E N T S 2 7 THE SHARE- MANAGEMENT Statement of Operations H O L D E R S R E P O R T Statement of Comprehensive Income

• Balance Sheet
• Statement of Changes in Stockholders' Equity
• Statement of Cash Flows
• Notes to the Financial Statements

Shares
	01/01/09	Additions	Forfeitures	Sales	30/06/09
Management Board
Dr. Simon E. Moroney	406,383	0	0	0	406,383
Dave Lemus	300	0	0	0	300
Dr. Arndt Schottelius	0	0	0	0	0
Dr. Marlies Sproll	105	0	0	0	105
Total	406,788	0	0	0	406,788
Supervisory Board
Dr. Gerald Möller	7,500	0	0	0	7,500
Prof. Dr. Jürgen Drews	7,290	0	0	0	7,290
Dr. Walter Blättler	2,019	0	0	0	2,019
Dr. Daniel Camus	0	0	0	0	0
Dr. Metin Colpan	0	0	0	0	0
Dr. Geoffrey N. Vernon	0	0	0	0	0
Total	16,809	0	0	0	16,809

Stock Options
	01/01/09	Additions	Forfeitures	Exercises	30/06/09
Management Board
Dr. Simon E. Moroney	293,445	81,000	0	0	374,445
Dave Lemus	147,267	36,600	0	0	183,867
Dr. Arndt Schottelius	0	90,000	0	0	90,000
Dr. Marlies Sproll	141,267	36,600	0	0	177,867
Total	581,979	244,200	0	0	826,179
Supervisory Board
Dr. Gerald Möller	0	0	0	0	0
Prof. Dr. Jürgen Drews	0	0	0	0	0
Dr. Walter Blättler	0	0	0	0	0
Dr. Daniel Camus	0	0	0	0	0
Dr. Metin Colpan	0	0	0	0	0
Dr. Geoffrey N. Vernon	0	0	0	0	0
Total	0	0	0	0	0

Convertible Bonds

	01/01/09	Additions	Forfeitures	Exercises	30/06/09
Management Board
Dr. Simon E. Moroney	16,647	30,000	0	0	46,647
Dave Lemus	13,872	30,000	0	0	43,872
Dr. Arndt Schottelius	0	0	0	0	0
Dr. Marlies Sproll	11,100	30,000	0	0	41,100
Total	41,619	90,000	0	0	131,619
Supervisory Board
Dr. Gerald Möller	0	0	0	0	0
Prof. Dr. Jürgen Drews	0	0	0	0	0
Dr. Walter Blättler	0	0	0	0	0
Dr. Daniel Camus	0	0	0	0	0
Dr. Metin Colpan	0	0	0	0	0
Dr. Geoffrey N. Vernon	0	0	0	0	0
Total	0	0	0	0	0

6 Transactions with Related Parties

Except for the transactions described in "Directors' Dealings", no other transactions with related parties have been entered into in the first six months of 2009.

7 Review

The interim consolidated financial statements and this interim report as of June 30, 2009, have been subject to a review by KPMG AG Wirtschaftsprüfungsgesellschaft, München.

LETTER TO GROUP F I N A N C I A L S T A T E M E N T S 2 9

• THE SHARE- MANAGEMENT Statement of Operations H O L D E R S R E P O R T Statement of Comprehensive Income
• Balance Sheet Statement of Changes in Stockholders' Equity
• Statement of Cash Flows
• Notes to the Financial Statements

Responsibility Statement

"To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the Interim Consolidated Financial Statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Interim Management Report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year."

Martinsried/Planegg, July 20, 2009

Dr. Simon E. Moroney Dave Lemus Chief Executive Officer Chief Financial Officer

Dr. Arndt Schottelius Dr. Marlies Sproll Chief Development Officer Chief Scientific Officer

Review Report

To MorphoSys Aktiengesellschaft, Martinsried/Planegg

We have reviewed the condensed interim consolidated financial statements - comprising the statement of operations, statement of comprehensive income, balance sheet, statement of changes in stockholders' equity, statement of cash flows and selected explanatory notes together with the interim group management report of the MorphoSys Aktiengesellschaft, Martinsried/Planegg, for the period from January 1 to June 30, 2009 that are part of the semi annual financial report according to § 37 w WpHG ["Wertpapierhandelsgesetz": "German Securities Trading Act"]. The preparation of the condensed interim consolidated financial statements in accordance with those IFRS applicable to interim financial reporting as adopted by the EU, and of the interim group management report in accordance with the requirements of the WpHG applicable to interim group management reports, is the responsibility of the Company's management. Our responsibility is to issue a report on the condensed interim consolidated financial statements and on the interim group management report based on our review.

We performed our review of the condensed interim consolidated financial statements and the interim group management report in accordance with the German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim consolidated financial statements have not been prepared, in material aspects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU, and that the interim group management report has not been prepared, in material aspects, in accordance with the requirements of the WpHG applicable to interim group management reports. A review is limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot issue an auditor's report.

Based on our review, no matters have come to our attention that cause us to presume that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU, or that the interim group management report has not been prepared, in material respects, in accordance with the requirements of the WpHG applicable to interim group management reports.

Munich, July 21, 2009

KPMG AG Wirtschaftsprüfungsgesellschaft

Pastor Rahn Wirtschaftsprüferin Wirtschaftsprüfer

[German Public Auditor] [German Public Auditor]

Imprint

Contact

Corporate Communications

Dr. Claudia Gutjahr-Löser Head of Corporate Communications & Investor Relations Phone: +49 89 899 27-122 Fax: +49 89 899 27-5122

Mario Brkulj Senior Manager Corporate Communications & Investor Relations Phone: +49 89 899 27-454 Fax: +49 89 899 27-5454

MorphoSys AG Lena-Christ-Str. 48 82152 Martinsried / Planegg Germany

E-mail: investors@morphosys.com Internet: www.morphosys.com

This interim report is also published in German and is available for download from our website.

HuCAL® , HuCAL GOLD® , HuCAL PLATINUM® , CysDisplay® and RapMAT® are registered trademarks of MorphoSys AG.