MorphoSys AG Reports Results for Fiscal Year 2012

MUNCHEN, GERMANY--(Marketwire - March 05, 2013) -

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Therapeutic Antibody Pipeline Progress and Novel Technologies Are Key Value Drivers

Conference call and webcast (in English) today at 2:00pm CET (1:00pm GMT/8:00am EST)

MorphoSys AG (FSE: MOR; Prime Standard Segment; TecDAX) today announced financial results for the year ending December 31, 2012. Due to the sale of the AbD Serotec segment to Bio-Rad, which was completed on January 10, 2013, revenues and costs arising from this segment are classified as discontinued operations. Group revenues from continuing operations amounted to EUR 51.9 million and earnings before interest and taxes to EUR 2.5 million. Total group revenues including AbD Serotec would have summed to EUR 69.6 million, the respective EBIT to EUR 1.9 million. Profit for the year from continuing operations amounted to EUR 2.4 million, the consolidated net profit including AbD Serotec to EUR 1.9 million.

The year was marked by strong progress in the Company's pipeline of proprietary and partnered therapeutic antibody candidates, including MOR103 and MOR208, gantenerumab, CNTO1959 and BYM338. With the commercial launch of the Ylanthia antibody library, MorphoSys enhanced its position as an originator of the most advanced platforms for the development of therapeutic antibodies. By selling the research and diagnostic business unit AbD Serotec to Bio-Rad, MorphoSys further increased its focus on its therapeutic business segments and significantly strengthened its cash position.

Operational Highlights of 2012:

* Excellent safety and efficacy results in MOR103 rheumatoid arthritis phase 1b/2a study

* Promising phase 1 data for MOR208 in CLL

* Major milestone reached in collaboration with Roche as the clinical trial evaluating the HuCAL antibody gantenerumab to treat Alzheimer's disease was expanded to a pivotal phase 2/3 study

* Further maturation of one of the industry's broadest antibody pipelines: at year-end, MorphoSys's partnered and proprietary pipeline comprised 76 programs, of which 20 are in clinical development

* Divestment of research and diagnostic business unit AbD Serotec to Bio-Rad for a total consideration of approximately EUR 53 million

* Technology alliance with Lanthio Pharma for the development of lantipeptides, underpinned by equity investment - Launch of MorphoSys's "Innovation Capital" initiative

* Commercial launch of Ylanthia with expansion of Novartis collaboration

"The year 2012 was one of the most successful in the history of MorphoSys and our antibody pipeline and financial position have never been stronger," stated Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. "Major advances in our proprietary programs were the decisive events of the year. The positive reaction of the market illustrates the importance of these programs for the Company's value proposition. We are also excited about the significant progress with our partnered programs, which include numerous antibodies against attractive therapeutic targets. We are focused on advancing our proprietary and partnered antibody candidates and leveraging our technologies in collaborations to further advance our development pipeline. We will invest, as necessary, to generate the maximum possible value from our portfolio of drug candidates."

Financial Overview 2012

Due to the sale of the AbD Serotec segment to Bio-Rad, which was completed on January 10, 2013, revenues and costs arising from the AbD Serotec segment are classified as discontinued operations. Group revenues from continuing operations decreased by 37 % to EUR 51.9 million (2011: EUR 82.1 million) and earnings before interest and taxes decreased to EUR 2.5 million (2011: EUR 9.8 million). Total group revenues including AbD Serotec would have amounted to EUR 69.6 million (2011: EUR 100.8 million), the respective EBIT to EUR 1.9 million (2011: EUR 10.1 million). The difference to the previous year largely reflects a one-off payment received in Q1 2011 from Novartis for the successful installation of the HuCAL platform at the Novartis Institutes for BioMedical Research in Basel. The consolidated net profit including AbD Serotec amounted to EUR 1.9 million (2011: EUR 8.2 million). MorphoSys's cash, securities and interest-bearing assignable loans on December 31, 2012 amounted to EUR 135.7 million, including cash reserves of the AbD Serotec segment in the amount of EUR 5.3 million (December 31, 2011: EUR 134.4 million). This does not reflect the effects nor does it include the proceeds of the AbD Serotec transaction, which was closed on January 10, 2013. As a result, MorphoSys's cash, securities and interest-bearing assignable loans increased to EUR 180.8 million as of January 31, 2013.

|In EUR million                           |2012 |2011 |Q4 2012|Q4 2011|
+-----------------------------------------+-----+-----+-------+-------+
|                                         |     |     |       |       |
+-----------------------------------------+-----+-----+-------+-------+
|                                         |     |     |       |       |
|Continuing Operations:                   |     |     |       |       |
+-----------------------------------------+-----+-----+-------+-------+
|Group Revenues                           |51.9 |82.1 |16.5   |12.3   |
+-----------------------------------------+-----+-----+-------+-------+
|Total Operating Expenses                 |49.8 |70.8 |12.2   |20.4   |
+-----------------------------------------+-----+-----+-------+-------+
|Other Income/Expenses                    |0.3  |(1.5)|0.1    |0.1    |
+-----------------------------------------+-----+-----+-------+-------+
|Earnings Before Interest and Taxes (EBIT)|2.5  |9.8  |4.4    |(8.0)  |
+-----------------------------------------+-----+-----+-------+-------+
|Profit/Loss from Discontinued Operations |(0.4)|0.01 |(0.1)  |0.0    |
+-----------------------------------------+-----+-----+-------+-------+
|Consolidated Net Profit                  |1.9  |8.2  |3.2    |(4.8)  |
+-----------------------------------------+-----+-----+-------+-------+
|Total EPS (diluted) in EURO              |0.08 |0.36 |-      |-      |
+-----------------------------------------+-----+-----+-------+-------+

"Financial stability based on our strong cash position together with a profitable and cash-generating partner business, continues to be one of the greatest strengths of our company. Financial discipline will remain a key factor as we strive to maximize the value of our proprietary portfolio of antibody candidates. We are seeking to out-license MOR103 in 2013 and we will also consider further transactions such as in-licensing deals to access new drug candidates and technologies as well as equity participation in companies," commented Jens Holstein, Chief Financial Officer of MorphoSys AG.

Financial Review for the Fiscal Year 2012 (IFRS)

Results from Continuing Operations

Group revenues from continuing operations for the full year 2012 amounted to EUR 51.9 million (2011: EUR 82.1 million), a decrease of 37 % over the prior year. The decrease resulted predominantly from a one-time technology milestone payment from Novartis in 2011. Revenues in the Partnered Discovery segment comprised EUR 44.7 million in funded research and licensing fees (2011: EUR 79.3 million) and EUR 1.9 million in success-based payments (2011: EUR 32.7 million). The Proprietary Development segment recorded funded research revenues of EUR 7.0 million (2011: EUR 2.4 million). Assuming constant foreign exchange rates at the average rate of 2011, revenues in the Partnered Discovery and Proprietary Development segments would have amounted to EUR 51.3 million.

Total operating expenses from continuing operations for the full year 2012 decreased by 30 % to EUR 49.8 million (2011: EUR 70.8 million). The reduction in operating expenses of EUR 21.0 million was mainly caused by decreased proprietary research and development (R&D) expenses and lower S, G&A costs. Total research and development expenses fell by EUR 18.2 million or 33 % to EUR 37.7 million in 2012 (2011: EUR 55.9 million). The decrease in R&D expenses mainly resulted from a lower level of investment in proprietary product and technology development amounting to EUR 21.7 million (2011: EUR 36.8 million). Sales, general and administrative expenses fell by 19 % to EUR 12.1 million (2011: EUR 14.9 million). Non-cash charges related to stock-based compensation are embedded in COGS, S,G&A and R&D expenses and amounted to EUR 1.3 million (2011: EUR 1.5 million).

Earnings before interest and taxes (EBIT) from continuing operations amounted to EUR 2.5 million (2011: EUR 9.8 million). Partnered Discovery showed a segment EBIT of EUR 23.0 million (2011: EUR 55.7 million), while the Proprietary Discovery segment reported a segment EBIT of EUR -11.0 million (2011: EUR - 32.2 million) due to investments in proprietary development.

Other income and expenses, including taxes, resulted in an income of EUR 0.2 million (2011: expense of EUR 3.1 million). For the full year 2012, MorphoSys realized a net profit from continuing operations of EUR 2.4 million compared to a net profit of EUR 8.2 million in the previous year. The resulting diluted earnings per share from continuing operations for the year 2012 amounted to EUR 0.10 (2011: EUR 0.35).

Results from the AbD Serotec segment

Sales from the AbD Serotec segment amounted to EUR 18.0 million (2011: EUR 19.3 million). Assuming constant foreign exchange rates at the average rate of 2011, segment revenues in AbD Serotec would have amounted to EUR 17.0 million. EUR 17.7 million of the segment revenues are not included in the Group revenues from continuing operations and are presented as revenues from discontinuing operations.

Total operating costs for the AbD segment decreased by 4 % to EUR 17.6 million (2011: EUR 18.4 million), including cost of goods sold (COGS) in the amount of EUR 6.2 million (2011: EUR 7.0 million).

Earnings before interest and taxes (EBIT) from the AbD Serotec segment amounted to EUR 0.3 million (2011: EUR 0.9 million).

Results for the Group:

Group net profit amounted to EUR 1.9 million (2011: EUR 8.2 million). The resulting Group earnings per share amounted to EUR 0.08 (2011: EUR 0.36).

On December 31, 2012, the Company had EUR 135.7 million in cash, cash equivalents and marketable securities, including an interest-bearing assignable loan in the amount of EUR 10.0 million and including cash reserves of the AbD Serotec segment in the amount of EUR 5.3 million, compared to EUR 134.4 million as of December 31, 2011. Net cash inflow from operations in 2012 amounted to EUR 1.8 million (2011: EUR 27.1 million). The number of issued shares at December 31, 2012 was 23,358,228, compared to 23,112,167 shares at December 31, 2011.

Fourth Quarter of 2012 (IFRS)

Results from Continuing Operations

In the fourth quarter of 2012, the Company generated revenues from continuing operations in the amount of EUR 16.5 million, compared to EUR 12.3 million in the same quarter of 2011. Total operating expenses amounted to EUR 12.2 million in Q4, compared to EUR 20.4 million in the same quarter of 2011. The decrease of operating expenses was mainly due to decreased personnel expenses and costs for external services. The EBIT amounted to EUR 4.4 million (Q4 2011: EUR - 8.0 million). Net profit for the fourth quarter 2012 was EUR 3.2 million, compared to a net loss of EUR 4.8 million in the fourth quarter of 2011.

Results from Discontinued Operations (AbD Serotec)

The discontinued operations generated revenues of EUR 4.2 million in the fourth quarter of 2012, compared to EUR 4.8 million in the same quarter of 2011. Total operating expenses amounted to EUR 4.4 million in Q4, compared to EUR 4.6 million in the same quarter of 2011. The decrease of operating expenses was mainly due to decreased costs of goods sold. The resulting EBIT amounted to EUR -0.2 million (Q4 2011: EBIT of EUR 0.2 million). Net loss for the fourth quarter 2012 was EUR 0.1 million, compared to a slight net profit for the fourth quarter of 2011.

Outlook for 2013

MorphoSys's main goals for 2013 are the expansion and progress of its therapeutic antibody pipeline and the further development and exploitation of its technology platforms. Without taking into account a successful out-licensing of one of its proprietary compounds, MorphoSys anticipates total Group revenues of EUR 48 million to EUR 52 million and anticipates an EBIT in the range of EUR -18 to EUR -22 million in 2013. Total operating expenses will amount to EUR 70 million to EUR 74 million, of which EUR 32 million to EUR 37 million represent investments in proprietary products and technologies. From the sale of the AbD Serotec segment, MorphoSys expects an extraordinary income of EUR 4 million to EUR 6 million. Additional income from an out-licensing deal in 2013, which is not included in the current guidance, could lead to an out-performance of the guidance.

MorphoSys will hold its conference call and webcast today to present the Annual Financial Results 2012 and the Outlook 2013.

Dial-in number for the analyst conference call (in English) at 02:00 pm CET; 01:00 pm GMT; 08:00 am EST (listen-only):

Germany: +49 (0) 89 2444 32975

For UK residents: +44 (0) 20 3003 2666

For US residents: +1 202 204 1514

Please dial in 10 minutes before the beginning of the conference.

In addition, MorphoSys offers participants the opportunity to follow the presentation through a simultaneous slide presentation online at http://www.morphosys.com.

A live webcast, slides, webcast replay and transcript will be made available at http://www.morphosys.com.

Approximately two hours after the press conference, a slide-synchronized audio replay of the conference will be available on http://www.morphosys.com.

Consolidated Financial Statements 2012 (IFRS) are available on our website: http://www.morphosys.com/FinancialReports

About MorphoSys:

MorphoSys developed HuCAL, the most successful antibody library technology in the pharmaceutical industry. By successfully applying this and other patented technologies, MorphoSys has become a leader in the field of therapeutic antibodies, one of the fastest-growing drug classes in human healthcare. Together with its pharmaceutical partners, MorphoSys has built a therapeutic pipeline of more than 70 human antibody drug candidates for the treatment of cancer, rheumatoid arthritis, and Alzheimer's disease, to name just a few. With its ongoing commitment to new antibody technology and drug development, MorphoSys is focused on making the healthcare products of tomorrow. MorphoSys is listed on the Frankfurt Stock Exchange under the symbol MOR. For regular updates about MorphoSys, visit http://www.morphosys.com.

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.

This communication contains certain forward-looking statements concerning the MorphoSys group of companies. The forward-looking statements contained herein represent the judgment of MorphoSys as of the date of this release and involve risks and uncertainties. Should actual conditions differ from the Company's assumptions, actual results and actions may differ from those anticipated. MorphoSys does not intend to update any of these forward-looking statements as far as the wording of the relevant press release is concerned.

Consolidated Financial Statements (IFRS) 2012: http://hugin.info/130295/R/1682840/550611.pdf

Media Release (PDF): http://hugin.info/130295/R/1682840/550610.pdf

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Source: MorphoSys AG via Thomson Reuters ONE

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