Company Update
September 2014
© MorphoSys - September 2014
Safe Harbour
© MorphoSys - September 2014
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 Annual Report.
2
Introduction to MorphoSys
© MorphoSys - September 2014
Strong balance sheet and recurring cash-flows support investment in R&D
Exciting proprietary portfolio with 10 programs, including 3 clinical candidates
Broad partnered pipeline based on proprietary HuCAL/Ylanthia technologies
MorphoSys is committed to developing a valuable pipeline of truly differentiated therapeutic antibodies built using proprietary technologies.
3
The MorphoSys Pipeline20 Clinical Programs, 93 Total
© MorphoSys - September 2014 4
Program Partner Target Disease Area Discovery Preclinic Phase 1 Phase 2 Phase 3Bimagrumab (BYM338) Novartis ActRIIB MusculoskeletalGantenerumab Roche Amyloid-ß CNSMOR103 GSK GM-CSF InflammationMOR208 - CD19 CancerBHQ880 Novartis DKK-1 CancerCNTO3157 Janssen - InflammationCNTO6785 Janssen - InflammationGuselkumab (CNTO1959) Janssen IL23p19 InflammationLFG316 Novartis C5 OphthalmologyLJM716 Novartis HER3 CancerNOV–3 Novartis - not discl.Tarextumab (OMP-59R5) OncoMed Notch 2 CancerVAY736 Novartis BAFF-R InflammationMOR202 Celgene CD38 CancerBAY94-9343 Bayer Mesothelin (ADC) CancerBI–836845 BI IGF-1 CancerNOV–7 Novartis - OphthalmologyNOV–8 Novartis - InflammationPF-05082566 Pfizer 4-1BB CancerVantictumab (OMP-18R5) OncoMed Fzd 7 CancerMOR209/ES414 Emergent PSMA/CD3 Prostate CancerMOR106 Galapagos - Inflammation27 programs Various - VariousImmuno-oncology program Merck Serono - Cancer4 MOR programs Various - Various39 programs Various - Various
83 Partnered Programs10 MOR Programs
Most advanced development stage
Pipeline Programs: Business Structure
© MorphoSys - September 2014
Partner provides target
MorphoSys technology used to develop optimized antibody lead candidate
Partner responsible for development and commercialization
MorphoSys receives milestone & royalties
MorphoSys selects program at
target stage (discovery) or
later (in-licensing)
MorphoSys is fully responsible for pre-clinical and clinical development
Various partnering strategies
Partner Programs MOR Programs
Discovery Market Market
PartneringPartner
Discovery
5
INNOVATIVE PRODUCT PIPELINE
© MorphoSys - September 2014 6
The MorphoSys Proprietary Portfolio
© MorphoSys - September 2014
Program Partner Target Indication Discovery Preclinic Phase 1 Phase 2 Phase 3
Fully partnered (tiered, double-digit royalties)
MOR103 GSK GM-CSF Rheumatoid Arthritis
Multiple Sclerosis
Co-development & co-promotion
MOR202 Celgene CD38 Multiple Myeloma
MOR209/ES414 Emergent PSMA/CD3 Prostate Cancer
Unpartnered
MOR208 CD19 ALL
NHL
CLL (IST)
Early-stage programs
MOR106 Galapagos n.d. Inflammation
Immuno-oncologyprogram
Merck Serono n.d. Cancer
4 Programs n.d. Various
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Joint Development and Commercialization:Rights and Responsibilities
© MorphoSys - September 2014
… gets worldwide commercialization rights
excluding the U.S. and Canada tiered royalties up to 20% on sales in the
U.S. and Canada
… is responsible for joint development 64% of total development costs
… gets commercialization rights for the U.S. and
Canada upfront payment of US$ 20 million milestone payments, low single digit
royalties on product sales in MorphoSys’s territory
… is responsible for phase 1 clinical trial in prostate cancer
patients 36% of total development costs manufacturing and supply of the compound
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MOR209/ES414 - A Bi-specific Immunotherapeutic Against Prostate Cancer
© MorphoSys - September 2014 9
DRUG
Bi-specific anti-PSMA/anti-CD3 immunotherapeutic:
targeting PSMA on prostate cancer cells
targeting CD3 on cytotoxic T cells
DIFFERENTIATION
Redirects T cells to kill tumor cells expressing PSMA in vitro and in vivo
Reduced cytokine release upon T-cell activation compared to other formats
Prolonged serum half-life in mouse and NHP compared to antibody fragments
STATUS
IND filed; phase 1 clinical trial to be initiated in mCRPC in the U.S. and Australia
License agreement with Emergent to co-develop and commercialize MOR209/ES414
MOR209/ES414 Inhibits Tumor Growth andImproves Survival in Pre-clinical Model
© MorphoSys - September 2014 10
Subcutaneous Xenograft Model (MDA-PCa-2b) Design
MDA-PCa-2b is a PSMA-expressing human prostate cancer cell line
Complete inhibition of tumor growth in 3- and 30-µg groups
Delay of tumor growth in 0.3 µg ES414 treatment group
Increased overall survival
Tumor Volume
0
250
500
750
1000
1250
1500
Mea
nTu
mor
volu
me
(mm
3 )
Overall Survival
Perc
ents
u rv i
val
0
20
40
60
80
100
30 g ES414
0.3 g ES4143 g ES414
Vehicle
Data: Emergent BioSolutions
MOR202A Novel Antibody for Multiple Myeloma
© MorphoSys - September 2014 11
DRUG High affinity HuCAL antibody targeting CD38 Binds to a unique epitope
DIFFERENTIATION Ability to kill MM cells in vitro and across
multiple pre-clinical in vivo models (ADCC & ADCP) Strong synergy with IMiDs in pre-clinical models
(CD38 upregulation on MM cells and effector cell activation)
2 hour infusion
STATUS Phase 1/2a dose-escalation trial in relapsed or
refractory MM patients ongoing Combination trials with pomalidomide and
lenalidomide planned Additional cohorts with weekly dosing schedule,
with and without dexamethasone ongoing Global co-development and European
co-promotion agreement with Celgene
MOR202 Shows High ADCC and ADCP Activity as Single Agent
MOR208A Novel Antibody to Treat B-cell Malignancies
© MorphoSys - September 2014
DRUG
Fc-enhanced, humanized antibody targeting CD19
In-licensed from Xencor
DIFFERENTIATION
Fc modification leads to dramatically enhanced B-cell depletion
Convenient dosing schedule
Straightforward manufacturing
STATUS
Phase 2 NHL: Up to 30 R/R patients each in FL, MCL, DLBCL & other indolent NHL, presentation of data end of 2014
Phase 2 ALL: 30 R/R patients
Phase 2 CLL: Lenalidomide combo in R/R CLL and untreated CLL patients (IST – Investigator sponsored trial by OSU)
Best Responses (Phase 1 in CLL – presented@ASH2012)
Overall response Total
Phase 1 4 (15%) 27
Phase 2a 8 (30%) 27
0.3 mg/kg
1 mg/kg
3 mg/kg
6 mg/kg
9 mg/kg
12 mg/kg Total (%)
Responses by NCI96 criteria (physical exam)Complete Response 0Partial Response 2 1 3 12 18 (66.7)Stable Disease 1 1 1 1 0 4 8 (29.6)Progressive Disease 0Unknown 1 (3.7)Response by IWCLL 2008 criteria (CT scan)Complete Response 0Partial Response 1 2 1 4 (14.8)Stable Disease 1 1 2 1 1 14 20 (74)Progressive Disease 1 1 2 (7.4)Unknown 1 (3.7)
Preliminary Phase 2a Results (CLL)
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Program Partner Target Indication Phase 1 Phase 2 Phase 3Bimagrumab Novartis ActRIIB sIBM(BYM338) Cachexia (Cancer)
Cachexia (COPD)
Sarcopenia
Hip Fracture Surgery
BHQ880 Novartis DKK-1 MM (renal insufficiency)
Smoldering MM
LFG316 Novartis C5 Wet AMD
Geographic Atrophy
MCP
NOV-3 Novartis n.d. n.d.
VAY736 Novartis BAFF-R Pemphigus Vulgaris
Primary Sjögren's Syndrome
RRMS
LJM716 Novartis HER3 ESCC
HER2+ CancerHER2+ Cancer, combination with trastuzumabHER2+ Cancer, combination with BYL719 + trastuzumabSolid Tumors
NOV-7 Novartis n.d. Eye Disease
NOV-8 Novartis n.d. Inflammation
Partnered Clinical Pipeline (I)
© MorphoSys - September 2014 13
Program Partner Target Indication Phase 1 Phase 2 Phase 3Gantenerumab Roche Amyloid-ß Prodromal AD
Mild ADGenetically predisposedAD, Japanese patientsBiovailability
Guselkumab Janssen/J&J IL23p19 Psoriasis(CNTO1959) Rheumatoid Arthritis
Palmoplantar PustulosisCNTO3157 Janssen/J&J n.d. Asthma
Safety/PharmacokineticCNTO6785 Janssen/J&J n.d. COPD
Rheumatoid ArthritisTarextumab Oncomed/GSK Notch 2 Pancreatic Cancer(OMP-59R5) Small Cell Lung Cancer
Solid Tumors Vantictumab Oncomed/Bayer Fzd 7 Solid Tumors(OMP-18R5) Breast Cancer
Pancreatic CancerNSCLC
BAY94-9343 Bayer Mesothelin Solid TumorsBI-836845 BI IGF-1 Cancer
Breast CancerSolid TumorsEGFR mutant NSCLCCRPC + enzalutamideCancer, Japanese patients
PF-05082566 Pfizer 4-1BB Solid Tumors, NHL (+rituximab)Solid tumors, combination with PD-1 inhibitor MK-3475
Partnered Clinical Pipeline (II)
© MorphoSys - September 2014 14
Bimagrumab (BYM338)A Novartis Musculoskeletal Program
© MorphoSys - September 2014
DRUG
HuCAL antibody against ActRIIB
FDA breakthrough therapy designation for sporadic inclusion body myositis (sIBM)
Orphan drug designation in sIBM
DIFFERENTIATION
Novel mechanism of action
Phase 2 study showed that bimagrumab substantially benefited patients with sIBM
STATUS
Pivotal study in sIBM ongoing
Phase 2 studies ongoing in:
Cancer-related cachexia (completed) COPD-related cachexia Sarcopenia (completed) Hip Fracture Surgery
Listed by Novartis as “planned filing 2016”M. Schuelke at al, N Engl J Med 2004;350:2682-8
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GantenerumabA Roche Alzheimer’s Disease Program
© MorphoSys - September 2014
DRUG
HuCAL antibody against amyloid-ß
Binds N-terminus and middle of peptide
DIFFERENTIATION
Binds/disrupts amyloid plaque and oligomers; binds peptide only weakly
Gantenerumab reduces brain amyloid 3x faster than other amyloid-targeting substances in mild-to-moderate AD patients
STATUS
Phase 3 SCarlet RoAD trial with 770 prodromal patients (2 doses, 104 weeks on drug)
Data expected in 2016
Phase 3 Marguerite RoAD trial with 1,000 patients with mild AD
Estimated study completion date: 03/2019
Phase 3 DIAN network trial in genetically pre-disposed patients
Data from Phase 1Effect of gantenerumab on
amyloid load as indexed by PET SUVR at end of treatment
% Am
yloi
d ch
ange
from
bas
elin
eData: Courtesy of Roche
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Guselkumab (CNTO1959)A Janssen Anti-Inflammatory Program
© MorphoSys - September 2014
DRUG
HuCAL antibody against IL-23
DIFFERENTIATION
Guselkumab binds the p19 sub-unit of IL-23, while Stelara binds the p40 sub-unit of IL-23 and IL-12
Higher specificity through selected inhibition of IL-23 may provide better risk/benefit profile
STATUS
Phase 2 study in psoriasis successfully completed, J&J plans to start phase 3
Two additional Phase 2 studies ongoing:
Active rheumatoid arthritis Palmoplantar pustulosis
Listed under “planned filings 2013 – 2017” (J&J analyst day 2013)
Source: Jetten AM, Nucl Recept Signal, 2009
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Most Advanced Programs All HaveBlockbuster Potential
© MorphoSys - September 2014
Program Indication Forecast Peak Sales*
MOR103 Rheumatoid Arthritis $3.2bn
MOR202 Multiple Myeloma $2.1bn
MOR208NHLCLLALL
$790m$350m$250m
Bimagrumab
sIBMCancer CachexiaCOPD CachexiaSarcopeniaHip Fracture Surgery
$400m$1.3bn$1.0bn$1.6bntbd
Gantenerumab Alzheimer’s Disease $15bn
Guselkumab PsoriasisRheumatoid Arthritis
$950m$1.6bn
* Based on an external study by Defined Health using publicly available information
$1.4bn
$4.3bn
$2.6bn
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FINANCIALS
© MorphoSys - September 2014 19
Shareholdings
© MorphoSys - September 2014
67%
22%
5%3%
Institutional Investors - 67%
Retail Investors 22%
Novartis - 5%
Celgene - 3%
Treasury Stock - 1%
Management & Supervisory Boards - 2%
Stock Information
Prime Standard, TecDAX
FSE: MOR (ISIN: DE0006632003)
OTC: MPSYY
Ticker:
Bloomberg: MOR:GR Reuters: MORG.DE Thomson ONE: MOR-XE
Shares issued: 26,378,584 (August 31, 2014)
Shareholdings by Investor Type
20
Key Financials
© MorphoSys - September 2014
in EUR million Guidance 2014 Q2 2014
Group Revenues 58 to 63 30.5
Investment in Proprietary R&D 36 to 41 14.9
EBIT -11 to -16 0.4
Cash, cash equivalents & marketable securities as well as other financial assets as of June 30, 2014
374.0
21
Phas
e3
Phas
e1
Phas
e2
Clinical Trials Scheduled for Completion
© MorphoSys - September 2014
20152014
Potential data events based on clinical trial design & MorphoSys estimates
GantenerumabAD/Japan
CNTO3157Asthma
GantenerumabBioavailability
GuselkumabPsoriasis
BimagrumabCachexia (COPD)
GuselkumabRA (vs. Stelara)
GuselkumabPalmoplantar pustulosis
VantictumabBreast cancer
VantictumabNSCLC
CNTO6785COPD
BimagrumabsIBM
BI – 836845Cancer, Japan
LJM716Solid tumors/Mono
LJM716Solid tumors/Combo
CNTO3157Safety/PK
LFG316MCP
CNTO6785RA
VantictumabPancreatic cancer
BI – 836845Solid umors
MOR103Multiple sclerosis
MOR208NHL
BimagrumabCachexia (Cancer)
LJM716Solid tumors/Mono
Partnered ProgramsMOR Programs
TarextumabSolid tumors
BAY94-9343 (ADC)Solid tumors
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VantictumabPancreatic cancer
MOR202Multiple Myeloma
TarextumabSolid tumors
BI – 836845Cancer
Upcoming Milestones
© MorphoSys - September 2014 23
Proprietary Portfolio Clinical data for MOR103 phase 1b study in MS to be presented at ACTRIMS
ECTRIMS (September 2014)
First clinical data for MOR208 study in NHL (Q4)
Additional pre-clinical data for MOR202 (Q4)
Start of phase 1 in mCRPC for MOR209/ES414 (Q4 / Q1 2015)
Partnered Programs Start of phase 3 study for guselkumab in psoriasis expected (Q4)
Start of phase 2 study for BI–836845 expected (Q4)
APPENDIX
© MorphoSys - September 2014 24
Two Programs Partnered in Lucrative Deals with Celgene and GSK
© MorphoSys - September 2014
MOR103 Out-licensed on Phase 1b/2a data in RA
GSK
Responsible for development and commercialization of MOR103 in all indications
MorphoSys receives
EUR 22.5 million upfront payment
Up to EUR 423 million in success-based payments
Tiered, double-digit royalties on net sales
MOR202 Global co-development and European
co-promotion agreement
Costs: 1/3 MorphoSys, 2/3 Celgene
Upfront payment of EUR 70.8m
Equity investment of EUR 46.2m
Up to EUR 511m in development, regulatory and sales milestones
Co-promotion in Europe with 50:50 profit share
Exclusive Celgene in rest-of-world, tiered double digit royalties to MOR
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MOR103Novel Mode of Action in Rheumatoid Arthritis
© MorphoSys - September 2014
DRUG
HuCAL IgG1 targeting GM-CSF
GM-CSF is a key inflammatory mediator in RA and other inflammatory conditions
DIFFERENTIATION
Targets monocytes & macrophages
Ultra-high affinity
Fast onset of therapeutic effect
STATUS
Phase 1b/2a trial in RA patients showed excellent efficacy, durable response & clean safety profile
Phase 1b in MS completed, results to be presented at ACTRIMS-ECTRIMS meeting in September
Global license agreement with GSK
Results from Phase 1b/2a Trial in RA
- DAS28 Scores over 16 weeks -
Very fast onset of therapeutic effect
Durable response
Clean safety profile
Week
Mea
n ch
ange
fro
m b
asel
ine
Administration of MOR103
26
CD38 An Ideal Target for Hematologic Diseases
© MorphoSys - September 2014
* considered CD38-positive when 20 or 30% of cells exhibit CD38-expression (Meta analysis of several publications)
** PTLD = post-transplant lymphoproliferative disorders¥ >90% of MM cells are positive for CD38
sources: medscape.com, medlibes.com, trialx.com©hematologyatlas.com
$ Waldenstrom Macroglobulinemia
$
CD38 is expressed across multiple leukemia indications
27
Guselkumab Shows Significant Efficacy in Treat-ment of Moderate to Severe Plaque Psoriasis
© MorphoSys - September 2014
Results at week 16 presented at the 2014 AAD (phase 2b X-PLORE study) Up to 86% of psoriasis patients achieved a Physician's Global Assessment (PGA) score of cleared or
minimal at week 16 (primary endpoint) Significantly higher levels of efficacy at all doses studied compared to placebo group Safety
Two serious infections in patients receiving guselkumab One guselkumab-treated patient reported a malignancy Three cardiovascular [CV] events in guselkumab-treated patients: one fatal myocardial infarction
[MI], one nonfatal MI, one cerebrovascular accident, all patients had multiple pre-existing CV risk factors
@Week 16 Placebo 5 mg 50 mg 200 mg 15 mg 100 mg Humira
at week 0, 4, then every 12 weeks every 8 weeks
PGA score(cleared (0) orminimal (1) disease)
7% 34% 79% 83% 61% 86% 58%
PASI 75 5% 44% 81% 81% 76% 79% 70%
PASI 90 2% 34% 45% 57% 34% 62% 44%
AEs (SAEs) in % 50 (1) 50 (2) 56 (2)
28
Novartis Alliance: Landmark Deal
© MorphoSys - September 2014
Timeline May 2004: Initial deal, including equity stake November 2007: Major expansion November 2017: End, subject to 2-year extension option
Novartis pays… Approx. €20m p.a. technology license including HuCAL internalization fees
Approx. €20m p.a. in research funding Over €250m milestones (probability adjusted) Royalties on all resulting drugs
Novartis gets… Preferred access to HuCAL for use in over 100 discovery programs
Excluded Most infectious disease targets
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HuCAL: The Most Successful Antibody Library Technology in the Industry
© MorphoSys - September 2014
HuCALHuman Combinatorial
Antibody Library
Most successful antibody libraryHuCAL antibodies in clinic19
Transforming R&D productivitySuccess rate from target to IND40%
Modular gene structure enables systematic creation of drug quality antibodies
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NEW DEVELOPMENTS
NEW ANTIBODY PLATFORM
Next generation antibody platform
Higher quality antibodies, greater diversity
Patent protected until 2031
Ylanthia
New Technologies Intensify Focus on Making Truly Differentiated Drugs
© MorphoSys - September 2014
Alliance with Lanthio Pharmato develop lantipeptide librariesfor drug discovery
Preferred rights to exclusive license
Minority equity position
Most important target class
Challenging for antibodies
MorphoSys secures access tostabilized GPCRs from Heptares
Antibodies Against GPCRs Lantipeptides
31
Covering Analysts
© MorphoSys - September 2014
Institution Contact
Bank of America Merrill Lynch Ms. Sarah Potter
Close Brother Seydler Mr. Igor Kim
Commerzbank Mr. Daniel Wendorff
Deutsche Bank Mr. Gunnar Romer
Edison Dr. Mick Cooper
Goldman Sachs Mr. Steve Chesney
Helvea Dr. Olav Zilian
Independent Research GmbH Mr. Christoph Schöndube
J.P. Morgan Cazenove Ms. Diana Na
Kempen & Co. Mr. Sachin Soni / Mr. Mark Pospisilik
Landesbank Baden-Württemberg Mr. Timo Kürschner
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Forthcoming Events & Conferences
© MorphoSys - September 2014
Sep 8, 2014 Commerzbank Life Science DayFrankfurt, Germany
Sep 17-19, 2014 Bank of America Merrill Lynch Global Healthcare Conference 2014London, UK
Sep 22-24, 2014 Berenberg and Goldman Sachs Third Annual German Corporate ConferenceMunich, Germany
Sep 23-25, 2014 Baader Bank Germany Investment Conference Munich, Germany
Nov 7, 2014 Publication of 9-Months´ Report 2014
Nov 18, 2014 HSBC Healthcare Day 2014Frankfurt, Germany
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HuCAL®, HuCAL GOLD®, HuCAL PLATINUM®, CysDisplay®, RapMAT®, arYla® , Ylanthia® and 100 billion high potentials® are registered trademarks of MorphoSys AG.Slonomics® is a registered trademark of Sloning BioTechnology GmbH, a subsidiary of MorphoSys AG.
Dr. Claudia Gutjahr-LöserHead of Corporate Communications & IR
Phone +49 (0)89 / 899 27-122Fax +49 (0)89 / 899 27-5122Email [email protected]
Thank You
www.morphosys.com