AI assistant
MorphoSys AG Investor Presentation 2007
291_ip_2007-03-15_4b1c8903-f3a7-431c-bb1c-f96db5e78eed.pdf
Investor Presentation
Open in viewerOpens in your device viewer
morphosis
Cowen and Company 27th Annual Health Care Conference
March 15, 2007
morphosys
Safe Harbour
This presentation includes 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, regulatory reforms, foreign exchange rate fluctuations and the availability of financing.
These and other risks and uncertainties are detailed in the Company's Prospectus.
HuCAL® and HuCAL GOLD® are registered trademarks of MorphoSys AG, RapMAT™, CysDisplay™ and AutoCAL™ are trademarks of MorphoSys AG
MorphoSys at a Glance
morphosys
- Leading provider of human therapeutic antibodies based on proprietary HuCAL technology
- Broad pipeline of therapeutic antibodies
- Top 20 research antibody supplier
- Successful partnering-driven strategy
- Profitable
- Royalties on all therapeutic products
- 280 Employees in Germany, UK, US, F, Scandinavia
- Listings
- Germany: Frankfurt Stock Exchange (TecDAX)
- USA: ADR Level 1 Program
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Strategy
morphosys
Therapeutic Antibodies
Maximize the number and value of HuCAL-based therapeutic antibodies
- Partnerships
- Multiple programs in many partnerships
- Target exclusivity for premium license fees, milestones & royalties
Research Products
Establish technology as the industry standard in the research antibody market
- Build sales channels and capabilities through acquisitions of catalogue companies
- “Feeder” of future diagnostics & therapeutic products
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
HuCAL
- World Leading Antibody Technology morphosys
- Antibodies can be... systematically optimized to match therapeutic application
- Antibodies are... fully human
- High throughput provides... economy of scale for research uses
- Proprietary to MorphoSys
HuCAL
(Human Combinatorial Antibody Library): A vast collection or „library“ of over 12 billion human antibodies in a system that enables systematic optimization of antibody properties
MorphoSys AG Company Presentation | March 2007 © MorphoSys AG
Engineering vs. Serendipity
morphosys
Increasing target understanding drives demands on antibody!
I
Fully human
II
Recognize antigen X...
III
...and Y...
IV
...but not Z!
V
High affinity!
VI
Block function! Stop X binding to substrate A...and Y to B!
VII
VIII
IX
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Undisputed Intellectual Property
morphosys
HuCAL patents on library methods and compositions
- USA (4)
- Europe (1)
- Australia (2)
- Japan (pending)
- Other (pending)
CysDisplay patents on screening technology
- USA (1)
- Australia (1)
- Other (pending)
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Corporate Structure Mirrors Strategy
morphosys
morphosys
Therapeutic Antibodies
Partnered 43/45 currently active programs
Own 2/45 currently active programs
Research Antibodies: AbD
comprises former units:
- Antibodies by Design
- Biogenesis
- Serotec
A Division of MorphoSys
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Therapeutic Antibodies: A Market Hotter Than Ever morphosus
Acquisitions prove importance of antibodies to big pharma
| 2005 | 2006 | |
|---|---|---|
| Roche/Glycart | ||
| Pfizer/Bioren | ||
| Amgen/Abgenix | ||
| Merck/GlycoFi, Abmaxis | ||
| Pfizer/Rinat | ||
| AstraZeneca/CAT | ||
| Novartis/NeuTec | ||
| Genentech/Tanox | ||
| GSK/Domantis |
- Tysabri returns to market for treatment of multiple sclerosis
- Lucentis makes successful debut – 20 marketed therapeutic antibodies
- Sales of therapeutic antibodies pass US$ 15 billion
MorphoSys AG Company Presentation | March 2007 © MorphoSys AG
Therapeutic Antibody Partnerships
morphosys
- Partner provides target, initiates program, brings disease-specific expertise
- Responsibilities
| MOR | Partner | |
|---|---|---|
| Lead generation | ■ | ■ |
| Optimization | ■ | |
| Development | ■ | |
| Marketing | ■ |
- Programs exclusive on „per target“ basis
- Partnerships typically multi-year, often multi-target
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Therapeutic Antibody Partnerships - Sample Deal Terms per Program
morphosys
- Each antibody project profitable from the beginning
- Milestones and royalties are pure profit
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Recent Deal Flow – Existing Partnerships
morphosys
NOVARTIS
- Increased number of therapeutic antibody projects
- Additional license fees & FTE support
- Committed to 2011
- 1/3 of Novartis pre-clinical biologics pipeline
Pfizer
- Early expansion until end of 2011
- Extension doubles potential deal volume
Roche
- IND for Alzheimer’s antibody
- March 2006: Two new programs in oncology
- Bayer-Schering collaboration was consolidated under the Schering contract
- Schering extended contract till end of 2007
- Discussions ongoing
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Morphosys
Deal Flow 2006 – Three New Partnerships
Daiichi-Sankyo
- Up to five year HuCAL GOLD license
- Second Top10 pharma partner in Japan
- Volume exceeds 2005 deal with Shionogi
Schering-Plough
- Up to five year license agreement
- Up to 10 therapeutic programs
OncoMed PHARMACEUTICALS
- Two year license agreement; option for therapeutic antibodies
- Unique approach in cancer therapy targeting cancer stem cells
MorphoSys AG Company Presentation | March 2007 © MorphoSys AG
morphosys
Partnered HuCAL Therapeutic Antibody Pipeline – Growth and Maturing
| Target | Drug discovery | Drug development | Market | |||
|---|---|---|---|---|---|---|
| Pre-clinical | Clinical development | |||||
| Phase 1 | Phase 2 | Phase 3 | ||||
| Blood Cancer (GPC Biotech) | ||||||
| Alzheimer's Disease (Roche) | ||||||
| 14 Compounds | ||||||
| 27 Compounds | ||||||
| - Currently 43 active, partnered therapeutic antibody programs |
- Year-end 2006 goal of 38 active, partnered programs out-performed! | | | | | | |
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Partnered Programs: Expected Output
morphosys
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
morphosys
Roche's HuCAL-based Alzheimer Antibody
- Trial I: Randomized, double-blind, multiple ascending dose study
- In patients
- Target sample size is <100 individuals
- Trial II: Randomized, double-blind, single dose study
- In patients
- Target sample size is <100 individuals
- Conducted in clinical centers in Denmark, Netherlands, Sweden and United Kingdom
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
First HuCAL Antibody in Man – GPC Biotech‘s 1D09C3
morphosys
- Ongoing Phase 1 trial at three European sites
- Preliminary clinical phase 1 data indicates
- 1D09C3 well tolerated within patients
- First hints of anti-tumor activity
- GPC expects final results in mid 2007
- GPC intends to move into Phase 2 testing thereafter
- Orphan Drug Status in CLL, MM, and Hodgkin’s lymphoma
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
MOR103 on Track to H2 2007 IND
morphosys
Rheumatologists now accept biological drugs for RA, but desperately need new alternatives:
- RA patients adequately treated: Under 25%
- Non-responders to anti-TNFs: 30%
- Non-responders after 2 years on anti-TNF: 50%
- Long-term safety issues with anti-TNFs
HuCAL antibody vs. undisclosed target for rheumatoid arthritis (RA)
- Very high affinity and expression: CoGS advantage
- Potential in other inflammatory indications
Milestones:
- H2 2006: Manufacturing agreement with Crucell/DSM ☑
- H2 2007: Filing for phase I clinical trial ☐
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Proprietary Cancer Program: MOR202
morphosys
HuCAL antibodies against CD38
- Initial indication multiple myeloma
- Potential in other blood-borne cancers
- Promising data from SCID mouse model
- Mechanism is ADCC plus effector cell independent
High unmet clinical need
Next MOR202 milestone
- End of 2006: Lead candidate selected ☑
- Continue pre-clinical development in 2007 ☐
- Define therapeutic window
- Define effective dose level
- Stability study
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Corporate Structure Mirrors Strategy
morphosys
morphosys
Therapeutic Antibodies
Partnered 43/45 currently active programs
Own 2/45 currently active programs
Research Antibodies: AbD
comprises former units:
- Antibodies by Design
- Biogenesis
- Serotec
A Division of MorphoSys
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Research Antibodies: The Opportunity morphosys
US$ 1 billion market
- Pre-existing catalogue antibodies (ca. 80%)
- Custom antibodies (ca. 20%)
Growing market
- Genomics revolution ▶ new genes ▶ new proteins ▶ new tools
- Life science researchers worldwide
Animal-based methods dominate
- Ripe for technological transformation to faster, higher throughput, more flexible in vitro methods
- MorphoSys is leading this transformation
MorphoSys AG Company Presentation | March 2007 © MorphoSys AG
Serotec Acquisition Triples Revenues
morphosys
A Division of MorphoSys
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Profit & Loss Statement (Group)
morphosys
| In EUR millions | 2006 | 2005 |
|---|---|---|
| Revenues | 53.0 | 33.5 |
| Cost of Goods Sold | 8.0 | 2.5 |
| R&D Expenses | 17.5 | 14.0 |
| S,G&A Expenses | 21.4 | 10.8 |
| Total Operating Expenses | 46.9 | 27.3 |
| Profit from Operations | 6.2* | 6.2 |
| Non-Operating Expenses | 0.9 | 1.0 |
| Profit Before Taxes | 5.3 | 5.1* |
| Income Tax Benefit/(Expense) | 0.7 | (0.4) |
| Net Profit | 6.0 | 4.7 |
| Earnings per Share (diluted) in EUR | 0.93 | 0.83 |
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Condensed Balance Sheets (Group)
morphosys
| In EUR millions | 12/31/2006 | 12/31/2005 |
|---|---|---|
| Assets | ||
| Cash, Cash Equivalents & Market. Securities | 66.0 | 53.6 |
| Other Current Assets | 10.1 | 4.9 |
| Total Non-Current Assets | 51.7 | 21.6 |
| Total Assets | 127.8 | 80.1 |
| Liabilities | ||
| Total Current Liabilities | 18.3 | 11.0 |
| Total Non-Current Liabilities | 9.5 | 5.1 |
| Total Shareholders' Equity | 100.1 | 64.0 |
| Total Liabilities | 127.8* | 80.1 |
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Shareholder Structure
Morphosys
- Institutional Shareholders
- Novartis
- AstraZeneca
- Management & Supervisory Boards
- Retail & Others
Number of Shares Issued at December 31, 2006 6,715,322
| Novartis | ~ 7 % |
|---|---|
| AstraZeneca | ~ 6 % |
| Free float | ~ 87 % |
| Institutional Shareholders (roughly doubled during 2006) | ~ 40 % |
| Retail & Others | ~ 44 % |
| Management & Supervisory Boards | ~ 3 % |
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Goals 2007
Morphosys
Group
- Revenue EUR 60 – 65 million, split 2/3 therapeutics: 1/3 research products
- Operating profit EUR 7 – 10 million
Therapeutic Segment
- MOR103 IND
- 1-3 partner INDs
- Partnered therapeutic programs reach 50
- New / expanded partnerships
AbD Serotec
- Over 20% revenue growth
- Profitable
- New marketing alliance
- Increase uptake of HuCAL in research community
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG
Investing in Future Growth
morphosys
Next generation antibody technology
- Enables “tailor-made” antibodies
Well positioned in expanding markets
- Therapeutic antibodies: proven execution of partnering strategy
- Research antibodies: One of the largest suppliers
Committed to growth & profitability
MorphoSys AG Company Presentation | March 2007
© MorphoSys AG Page 27