MorphoSys AG Reports Results for the First Three Months of 2015
MorphoSys AG has announced its financial results for the three months ending 31 March 2015. Group revenues increased to EUR 70.4 million (Q1 2014: EUR 15.9 million). 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 52.8 million (Q1 2014: EUR 1.4 million). On 31 March 2015, MorphoSys held cash and cash equivalents, marketable securities, and financial assets classified as loans and receivables of EUR 349.7 million in comparison to EUR 352.8 million on 31 December 2014.
Highlights of the First Quarter 2015
• MorphoSys and Emergent BioSolutions initiated a phase 1 clinical trial in prostate cancer patients with the bi-specific antibody MOR209/ES414. The open-label phase 1 clinical trial will be conducted in clinical centers in the US and Australia with planned enrollment of up to 130 patients.
• Upon publication of the 2014 annual financial results, MorphoSys provided an overview of the 2015 development plan for its proprietary portfolio. Among others, MorphoSys plans to initiate two phase 2 clinical trials in the second half of 2015 to evaluate MOR208 in combination with lenalidomide and bendamustine in diffuse large B-cell lymphoma.
• MorphoSys and Celgene mutually agreed to end their collaboration to co-develop and co-promote MOR202. MorphoSys will continue as planned with the clinical development of the compound, which is currently in a MorphoSys-sponsored phase 1/2a trial in relapsed or refractory multiple myeloma patients. The first clinical data will be presented at the Annual Meeting of the American Society of Clinical Oncology at the end of May/early June.
• With the end of the collaboration with Celgene on MOR202, MorphoSys updated its financial guidance for the current financial year and announced that it expects revenues for the 2015 financial year in the range of EUR 101 million to EUR 106 million (previous guidance: EUR 58 million to EUR 63 million) and earnings before interest and taxes (EBIT) in the range of EUR 9 million to EUR 16 million (previous guidance: a loss before interest and taxes of EUR 20 million to EUR 30 million).
• MorphoSys announced its nomination of three new Supervisory Board candidates, Ms. Wendy Johnson, Mr. Klaus Kühn, and Dr. Frank Morich, for election at the Annual General Meeting on 8 May 2015.
• Shortly after the end of the first quarter of 2015, MorphoSys announced the achievement of a clinical milestone with the initiation of a phase 2 study of the antibody guselkumab in psoriatic arthritis by its partner Janssen Biotech.
• At the end of the first quarter of 2015, MorphoSys's product pipeline comprised a total of 95 therapeutic antibodies, including 23 clinical programs. Three partnered programs are currently in phase 3 trials.
"We have a very clear roadmap for our proprietary product portfolio in 2015 focusing on how we will advance MOR209/ES414 together with our partner Emergent BioSolutions as well as MOR208 and MOR202 for our own account", commented Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. "With MOR209/ES414, the fourth candidate in our growing proprietary portfolio of compounds has entered clinical development, thereby bringing the total number of clinical programs in our pipeline to 23."
"The financial performance in the first quarter of 2015 was significantly influenced by the termination agreement with Celgene and the resulting one-off effects. This notwithstanding, MorphoSys has made a solid start to 2015 and the Company is well positioned to meet its increased financial goals for the full year," stated Jens Holstein, Chief Financial Officer of MorphoSys AG.
Financial Review for the First Three Months of 2015 (IFRS)
Group revenues for the first three months of 2015 amounted to EUR 70.4 million (Q1 2014: EUR 15.9 million). This rise was primarily the result of the termination of the cooperation with Celgene for the co-development and co-promotion of MOR202 and the subsequent recognition of the respective deferred revenues. The Proprietary Development segment recorded revenues of EUR 59.4 million (Q1 2014: EUR 4.1 million). These revenues originated mainly from the termination of the contract with Celgene. Revenues in the Partnered Discovery segment comprised EUR 10.5 million in funded research and licensing fees (Q1 2014: EUR 10.9 million) and EUR 0.5 million in success-based payments (Q1 2014: EUR 0.9 million).
Total operating expenses for the first three months of 2015 amounted to EUR 17.7 million (Q1 2014: EUR 14.5 million). Total research and development expenses were EUR 14.7 million (Q1 2014: EUR 11.2 million). R&D expenses consisted mainly of personnel expenses and expenses for external laboratory services. Investment in proprietary product and technology development amounted to EUR 10.4 million (Q1 2014: EUR 7.3 million). General and administrative expenses decreased to EUR 3.0 million (Q1 2014: EUR 3.3 million) driven by lower expenses for personnel and for external services.
Earnings before interest and taxes (EBIT) amounted to EUR 52.8 million (Q1 2014: EUR 1.4 million) resulting from the full realization of deferred revenues from an up-front payment received by Celgene. Proprietary Development showed a segment EBIT of EUR 49.7 million (Q1 2014: EUR -2.6 million) while the Partnered Discovery segment generated an EBIT of EUR 5.8 million (Q1 2014: EUR 6.9 million).
For the first three months of 2015, MorphoSys showed a consolidated net profit for the Group of EUR 40.9 million (Q1 2014: net profit of EUR 1.1 million). The resulting diluted net profit per share for the three months ending 31 March 2015 amounted to EUR 1.55 (Q1 2014: 0.04 EUR).
On 31 March 2015, the Company held cash and cash equivalents, marketable securities, and financial assets (classified in the balance sheet in the category "loans and receivables") of EUR 349.7 million in comparison to EUR 352.8 million on 31 December 2014. Net cash inflows from operating activities amounted to EUR 2.7 million in the first three months of 2015 (Q1 2014: outflow of EUR 7.7 million). The number of shares issued totaled 26,462,834 on 31 March 2015, of which 26,011,944 were outstanding (31 December 2014: 26,456,834 total shares and 26,005,944 shares outstanding).
Outlook for 2015
On 26 March 2015, MorphoSys updated its financial guidance for the fiscal year 2015 as a result of the termination of the co-development and co-promotion agreement for MOR202 with Celgene. The Company now expects revenues for the 2015 financial year in the amount of EUR 101 million to EUR 106 million (up from previously EUR 58 million to EUR 63 million). Based on management's current planning, proprietary R&D expenses are expected to increase to a range of EUR 56 million to EUR 63 million (previously EUR 48 million to EUR 58 million). The Company now expects earnings before interest and taxes (EBIT) of approximately EUR 9 million to EUR 16 million in 2015 (previously a loss of EUR 20 million to EUR 30 million).