MorphoSys AG Reports Results for the First Quarter of 2013

MARTINSRIED, GERMANY and MUNCHEN, GERMANY--(Marketwired - May 3, 2013) -

MorphoSys AG / MorphoSys AG Reports Results for the First Quarter of 2013

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First Quarter Positively Impacted by Sale of AbD Serotec

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 its financial results for the three months ending 31 March 2013. Group revenues from continuing operations increased by 44 % to EUR 16.9 million compared to the same period of the previous year. The reason for the increase was a fully paid-up license payment from Bio-Rad for a non-exclusive license for HuCAL in research and diagnostic applications in connection with the sale of the Company's AbD Serotec segment to Bio-Rad. Earnings before interest and taxes (EBIT) from continued operations amounted to EUR 2.5 million (Q1 2012: EUR -0.7 million). On 31 March 2013, MorphoSys's cash, securities and interest-bearing assignable loans amounted to EUR 177.4 million (31 December 2012: EUR 135.7 million).

| In EUR million*                           | Q1 2013 | Q1 2012 |
+-------------------------------------------+---------+---------+
|                                           |         |         |
+-------------------------------------------+---------+---------+
|                                           |         |         |
|                                           |         |         |
| Continuing Operations:                    |         |         |
+-------------------------------------------+---------+---------+
| Group Revenues                            | 16.9    | 11.7    |
+-------------------------------------------+---------+---------+
| Total Operating Expenses                  | 14.6    | 12.5    |
+-------------------------------------------+---------+---------+
| Other Income/Expenses                     | 0.2     | 0.1     |
+-------------------------------------------+---------+---------+
| Earnings Before Interest and Taxes (EBIT) | 2.5     | (0.7)   |
+-------------------------------------------+---------+---------+
| Profit/Loss from Continuing Operations    | 1.9     | (0.3)   |
+-------------------------------------------+---------+---------+
| Profit/Loss from Discontinued Operations  | 6.0     | (0.2)   |
+-------------------------------------------+---------+---------+
| Consolidated Net Profit                   | 7.9     | (0.5)   |
+-------------------------------------------+---------+---------+
| Total EPS (diluted) in EURO               | 0.33    | (0.02)  |
+-------------------------------------------+---------+---------+
|                                           |         |         |
|                                           |         |         |


* Differences due to rounding

Highlights of the First Quarter

* MorphoSys completes sale of AbD Serotec to Bio-Rad. With the divestment of AbD Serotec completed, MorphoSys can devote 100% of its attention to building value in its core therapeutics business.

* MorphoSys and Heptares sign alliance to develop antibody therapeutics targeting G protein-coupled receptors (GPCRs). The collaboration opens up new target space for therapeutic antibodies from the MorphoSys Ylanthia platform.

* MorphoSys receives first patent on novel antibody platform Ylanthia in the US.

* MorphoSys achieves first clinical milestone in a partnered program in 2013 as Novartis completes clinical trial application for a phase 1 study using a HuCAL antibody in ophthalmology.

* At the end of the first quarter of 2013, the MorphoSys partnered and proprietary pipeline comprises 21 clinical programs.

* Shortly after the end of the first quarter, MorphoSys initiates a share buy-back program, and plans to acquire up to 85,000 shares. The Company intends to use the shares primarily for its long-term incentive programs for its management.

"We expect 2013 to be a very exciting year for MorphoSys with our pipeline being once again the main newsflow and value driver," stated Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG. "With the sale of AbD Serotec successfully completed, we can now focus on advancing our proprietary and partnered development pipeline."

"The Q1 2013 results again highlight the attractive terms we were able to secure in the AbD Serotec divestment. With the sale of AbD Serotec we strengthened our financial resources, allowing us to increase our investments in proprietary research and development," commented Jens Holstein, Chief Financial Officer of MorphoSys AG.

Financial Review for the First Quarter of 2013 (IFRS)

On 10 January 2013, MorphoSys completed the sale of its research and diagnostic antibody segment AbD Serotec to Bio-Rad Laboratories, Inc. As a consequence, substantially all of the AbD Serotec segment was classified as discontinued operations. The operating segments Partnered Discovery and Proprietary Development as well as the part of AbD Serotec which remained with MorphoSys are presented as continuing operations.

Results from Continuing Operations

Group revenues from continuing operations for the first quarter of 2013 amounted to EUR 16.9 million (Q1 2012: EUR 11.7 million), an increase of 44 % over the prior year. The strong increase resulted predominantly from a license payment from Bio-Rad for a non-exclusive license for HuCAL in research and diagnostic applications in connection with their purchase of MorphoSys's research and diagnostic segment AbD Serotec. Revenues in the Partnered Discovery segment comprised EUR 16.5 million in funded research and licensing fees (Q1 2012: EUR 10.7 million) and EUR 0.4 million in success-based payments (Q1 2012: EUR 0.4 million). The Proprietary Development segment did not record revenues, as a result of the waiver of the existing co-development options with Novartis (Q1 2012: EUR 0.5 million).

Total operating expenses from continuing operations for the first quarter of 2013 increased by 17 % to EUR 14.6 million (Q1 2012: EUR 12.5 million). Total research and development expenses increased by 11 % to EUR 11.0 million (Q1 2012: EUR 9.9 million). The increase in R&D expenses mainly resulted from higher personnel and material costs. Investment in proprietary product and technology development amounted to EUR 7.0 million (Q1 2012: EUR 6.4 million). Sales, general and administrative expenses increased by 44 % to EUR 3.6 million (Q1 2012: EUR 2.5 million) driven by higher expenses for personnel and for external services. Non-cash charges related to share-based payments are embedded in S,G&A and R&D expenses and amounted to EUR 1.1 million (Q1 2012: EUR 0.3 million).

Earnings before interest and taxes (EBIT) from continuing operations amounted to EUR 2.5 million (Q1 2012: EUR -0.7 million). Partnered Discovery showed a segment EBIT of EUR 10.9 million (Q1 2012: EUR 6.2 million), while the Proprietary Development segment reported a segment EBIT of EUR -5.5 million (Q1 2012: EUR -5.1 million) due to investments in proprietary development.

For the first quarter of 2013, MorphoSys realized a net profit from continuing operations of EUR 1.9 million compared to a net loss of EUR 0.3 million in the same period of the previous year. The resulting diluted earnings per share from continuing operations for the first three months of 2013 amounted to EUR 0.08 (Q1 2012: EUR -0.01).

Results from the AbD Serotec segment (discontinued operations)

The sale of the research and diagnostic antibody segment AbD Serotec to Bio-Rad Laboratories, Inc. was completed on 10 January 2013. Results under discontinued operations reflect only the first 10 days of the quarter. Sales from discontinued operations decreased to EUR 0.6 million (Q1 2012: EUR 4.5 million). The revenues from discontinued operations are not included in the Group revenues from continuing operations.

Total operating costs for discontinued operations amounted to EUR 2.3 million (Q1 2012: EUR 4.6 million), including cost of goods sold (COGS) in the amount of EUR 0.1 million (Q1 2012: EUR 1.7 million) as well as transaction-related costs in the amount of EUR 1.8 million (Q1 2012: 0.02 million).

During the first three months of 2013, EBIT of discontinued operations after deduction of all attributable transaction costs amounted to EUR -1.7 million (Q1 2012: EUR -0.1 million). In connection with the deconsolidation, a disposal gain of EUR 8.0 million was accounted for, resulting in a profit before taxes of EUR 6.3 million (Q1 2012: EUR -0.1 million). The net profit of the discontinued operations amounted to EUR 6.0 million (Q1 2012: EUR -0.2 million).

Results for the Group

Group net profit amounted to EUR 7.9 million (Q1 2012: EUR -0.5 million). The resulting diluted Group earnings per share amounted to EUR 0.33 (Q1 2012: EUR -0.02).

On 31 March 2013, the Company had EUR 177.4 million in cash, cash equivalents and marketable securities, including an interest-bearing assignable loan in the amount of EUR 15.0 million, compared to EUR 135.7 million as of 31 December 2012. Net cash inflow from operations in Q1 2013 amounted to EUR 5.8 million (Q1 2012: EUR 2.3 million). The number of issued shares at 31 March 2013 was 23,358,228, unchanged from 31 December 2012.

Outlook for 2013

MorphoSys re-confirmed its guidance for 2013. 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. Additional income from an out-licensing deal in 2013, which is not included in the current guidance, could lead to out-performance of the guidance.

MorphoSys will hold a public conference call and webcast today at 02:00 p.m. CEST (08:00 a.m. EST, 01:00 p.m. BST) to present the First Quarter Results 2013 and report on current developments.

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.

The complete 1st Interim Report 2013 (January - March) is available on our website (HTML and PDF): 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.

Media Release (PDF): http://hugin.info/130295/R/1698905/560247.pdf

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