MorphoSys AG's (MOR) CEO Simon Moroney on Q4 2018 Results - Earnings Call Transcript

About: MorphoSys AG (MOR)
by: SA Transcripts
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Earning Call Audio

MorphoSys AG (NASDAQ:MOR) Q4 2018 Results Earnings Conference Call March 14, 2019 5:00 PM ET

Company Participants

Verena Kupas - Manager, Corporate Communications and Investor Relations

Simon Moroney - Chief Executive Officer

Jens Holstein - Chief Financial Officer

Malte Peters - Chief Development Officer

Markus Enzelberger - Chief Scientific Officer

Conference Call Participants

Brad Canino - SVB Leerink

Danielle Brill - Piper Jaffray

Anastasia Karpova - Kempen

Gunnar Romer - Deutsche Bank

Jason Butler - JMP Securities

Graig Suvannavejh - Goldman Sachs

Victoria English - Evernow Publishing

Gary Waanders - Bryan Garnier

Mick Cooper - Trinity Delta


Ladies and gentlemen, welcome to the MorphoSys Year End Results 2018 Conference Call. Please note that while the duration of the presentation, all participants will be in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Please note that we can only take your questions if you have registered by name. [Operator Instructions]

Now I would like to turn the conference over to Verena Kupas. Please go ahead.

Verena Kupas

Good afternoon. Good morning. And welcome to our full year results conference call and webcast. My name is Verena Kupas, Manager of Corporate Communications and Investor Relations at MorphoSys. With me on the call today are Simon Moroney, our CEO; Jens Holstein, our CFO; Malte Peters, our CDO; and Markus Enzelberger, our CSO.

Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning the development of MorphoSys’ core technologies, the progress of its current research and development programs and the initiation of additional programs.

Should actual conditions differ from the company’s assumptions, actual results and actions may differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.

Simon will start with a brief review of the highlights of 2018 and will then hand over to Malte who will present the progress we have made with MOR208, as well as the other proprietary programs during the reporting year. Simon will then comment on the progress in our Partnered Discovery segment. After Jens will review the financial results for 2018 and present the financial guidance for 2019 before handing back to Simon for the operational outlook for 2019. The presentation will last about 30 minutes. After the presentation, we will all be available for your questions. You will find a slide deck on our corporate website.

I would now like to hand over to Simon Moroney.

Simon Moroney

Thanks Verena. And also from me a warm welcome to our financial results call for 2018. It’s a real pleasure to wrap up what was an outstanding year for MorphoSys. The year 2018 was marked by a number of events that highlight our maturing product pipeline and progress towards our goal of becoming a fully integrated biopharmaceutical company.

In addition to the pipeline progress we made important advances in business development and our revenue, EBIT and cash all comfortably exceeded the financial guidance we have issued at the beginning of the year.

During the call we will recap the main highlights of 2018, focusing on the selection of our pipeline programs. The primary focus of our activities and investment is our proprietary drug portfolio, first and foremost, MOR208. Although, this program is our top priority, it shouldn’t overshadow some of the other programs in our propriety redevelopment segment that we are excited about.

And the potential in our Partnered Discovery segment was highlighted by the commercial success of Janssen’s drug Tremfya, which reached over US$0.5 billion in sale in its first full year on the market.

I will start with a quick overview of our Proprietary Development segment before handing over to Malte for more detail. Our highest priority is MOR208 and we have made great progress with this investigational program during 2018.

By year end, MOR208 had emerged as one of the most interesting new cancer drug candidates in our industry. Our initial goal is to bring MOR208 to market as fast as possible to offer a treatment alternative to patients suffering from a particularly aggressive form of blood cancer mainly diffuse large B-cell lymphoma or DLBCL.

With maturing clinical data, breakthrough therapy designation from the FDA and a clear view of the path to market, we are planning to commercialize MOR208 in the U.S. and the building organization there for this purpose.

The goal for the U.S. organization is very clear to ensure that the market launch of MOR208, subject of course to regulatory approval, will be a success. If all goes according to plan this could happen as early as mid 2020.

For our other programs from our Proprietary Development segment are also worthy of mentioning due to the progress made in 2018. In the middle of last year, together with our partner Galapagos we entered the lucrative partnership with Novartis on our investigation anti-IL-17C antibody MOR106. We believe that this deal gives us the best possible chance to maximize the opportunity that this promising program represents, not only in its lead indication atopic dermatitis but also in others.

Second, our investigational CD38 antibody MOR202 advanced in the hands of our partner I-Mab Biopharma to continue preparations for pivotal study in multiple myeloma in Greater China. We built on our successful relationship with I-Mab to partner a second compound with them, namely MOR210, our preclinical antibody targeting the C5a receptor, which we see as a potentially interesting immuno-oncology target.

Last, but not least, the investigational anti-GM-CSF antibody MOR103 also known as GSK3196165, delivered results for our partner GSK who subsequently committed to take it into a Phase 3 clinical study in rheumatoid arthritis.

With this introduction, I will hand over to Malte, who will provide you with some more details.

Malte Peters

Thank you, Simon, and also a warm welcome from my side. We are indeed excited about on what to aid program and this is where I would like to start. MOR208 is an investigational antibody directed against CD19 that we are currently exploring in three clinical trials.

The Phase 2 L-MIND and the Phase 3 B-MIND trials in relapsed/refractory DLBCL and the Phase 2 COSMOS trial in relapsed/refractory CLL and SLL. Our main focus is on relapsed/refractory DLBCL. We have made remarkable progress with MOR208 during 2018.

I will start with L-MIND, our most important and advanced trial in terms of market proximity. L-MIND is a Phase 2 open label single-arm trial evaluating MOR208 plus lenalidomide in patients with relapsed/refractory DLBCL, who are ineligible for high dose chemotherapy and autologous stem cell transplantations. Patients were eligible for enrollment if they had one to three prior lines of therapy with at least one prior line including an anti-CD20 targeting antibody such as rituximab.

In November 2018, the last of the 81 patients enrolled in the study reached the 12 months of follow-up. Database lock took place after and we are currently cleaning the data. In December 2018, we presented interim data from all 81 patients enrolled in this study at the American Society of Hematology Annual Meeting short ASH. These data presented on a June 2018 cut off well even better than the results that we have published from earlier data cut.

A total of 58% of patients showed an objective response to treatment, with 33% showing complete regression of the tumors. A significant proportion of patients, 46% were still on study treatment of data cut off.

The most significant metric observed is progression-free survival, median PFS was reported at 16.2 months, suggesting very durable responses under the treatment of MOR208 plus lenalidomide. Median duration of response was not reached and 70% of responding patients were without progression at 12 months.

Data observed to date show that no unexpected toxicities were observed for the treatment combination of MOR208 plus lenalidomide and no infusion related reactions were reported for MOR208.

Treatment related serious adverse events or SAEs only occurred in 20% of the patients, just over half of the patients required dose reduction of lenalidomide and 72% could stay on a daily dose of lenalidomide of 20 milligram or higher.

We believe that the data we have seen so far from L-MIND trial suggests that MOR208 plus lenalidomide could be a potential new treatment alternative for this area of unmet medical needs. If approved, the combination provides a new chemotherapy free regimen to patients who are in urgent need of more therapeutic options.

As a reminder, the trial is in patients with relapsed or refractory disease, who are ineligible to receive aggressive or toxic treatment such as high-dose chemotherapy and to tolerable the stem cell transplantation and who are therefore also unlikely to be eligible for more complicated and more toxic therapies. For these patients there are currently no approved treatments.

We have continued our dialog with the FDA under the current break so therapy designation and are planning to seek approval for MOR208 as fast as possible based on the L-MIND data. We are sending the data packages for BLA submission to the FDA that we plan to complete by year end.

In parallel, we have started discussions with some national European regulatory authorities to explore the possibility of using the L-MIND study as a basis for approval in Europe. We had envisaged seeking European approval based on our B-MIND study which are come to shortly, but given our L-MIND data and our interactions with the FDA, we decided to seek interactions also with European agencies regarding L-MIND.

We are very early in the process, but have been encouraged by our initial interactions. If the EMA were to agree to accept a potential marketing authorization application based on L-MIND submission of such an MAA could occur earlier than originally anticipated based on the B-MIND trial. We are seeking scientific advice from EMA and look forward to learning more about this potential alternative in the coming months.

This brings me to our other ongoing trial of MOR208 in relapsed/refractory DLBCL namely B-MINDs. This head to head Phase 3 study is investigating the efficacy of MOR208 plus bendamustine versus rituximab plus bendamustine in adults DLBCL patients worldwide. B-MIND is important for us as it may serve, in addition to being potentially pivotal on its own as a confirmatory study if conditional approval is granted based on L-MINDS.

For that end, we are very happy to announce last week that during the first quarter of 2019, we implemented an amendment of B-MIND, an agreement with the FDA. The scientific rationale for the amendment is based on published literature, as well as our own preclinical data, which indicated MOR208 maybe particularly active in DLBCL patients who can be characterized by the presence of a certain biomarker. Discussions with the FDA regarding the biomarker assay are currently being planned and are expected to take place in the middle of this year.

The pre-planned event driven interim analysis of B-MIND remains projected to take place in the second half of 2019. Depending on the outcome of the interim analysis, an increase from 330 to 450 patients may be required, in which case an event driven primary analysis of the study is expected in the first half of 2021.

Beyond DLBCL, we published results from our COSMOS trial of MOR208 in CLL at EHA in June and at ASH in December. COSMOS is a small trial of MOR208 plus idelalisib or venetoclax in patients with chronic lymphocytic leukemia or CLL and small lymphocytic lymphoma, SLL, after discontinuation of prior ibrutinib therapy.

In combination with idelalisib, an objective response rate was observed in nine of 11 patients, including one complete response. Two patients showed stable disease. One patient with a very good partial response, according to response criteria was taken off the study to receive stem cell transplantation.

In the combination with venetoclax, an objective response was shown in 10 out of 13 patients, including three complete responses. Three patients discontinued study participation in the first cycle without undergoing a response assessment, no patients have progressive disease, five patients showed minimal residual disease negativity, which means that no tumor cells were detected in that detectable in the peripheral blood.

The data highlighted the potential of MOR208 in additional B-cell malignancies beyond DLBCL and confirmed that MOR208 may be combined with other cancer drugs currently used in hematological malignancies including tyrosine kinase or BCL-2 inhibitor.

To sum up, we believe that MOR208 based therapies has the potential to become a treatment alternative in a variety of B-cell malignancies and our goal is to make these available as to as many patients as possible.

To that end, we announced plans at the end of last year to bring MOR208 into frontline DLBCL and preparations are ongoing for Phase 1b trial, which will start later this year. Pending analysis of the Phase 1b data, the next step maybe a pivotal Phase 2/3 trial with roughly 800 to 900 patients commencing in mid-2020.

In addition, we are currently evaluating further development options and are settings -- and setting to broaden the therapeutic scope of MOR208, which we will outline to the market in due course.

During 2018 we also made very good progress as well our Proprietary Development segment and I would now like to focus on the highlights of two of these programs, namely MOR206 -- MOR106 and MOR202.

A very interesting drug candidate from our Proprietary Development segment is MOR106, our potentially first-in-class anti-IL-17C antibody for atopic dermatitis discovered and co-developed together with Galapagos.

In early 2018, we presented data from a Phase 1 study at the American Association of Dermatology Conference. In the study, MOR106 showed first signs of activity and durable responses and was generally well-tolerated in atopic dermatitis patients.

We started two additional clinical studies in atopic dermatitis later in 2018, the Phase 2 IGUANA trial and a bridging study to evaluate a subcutaneous formulation of MOR106. In July, 2018 together with Galapagos we signed an exclusive global license agreement with Novartis for MOR106.

Financial terms of the deal were very favorable comprising an upfront payment of €95 million plus milestone potential of up to €850 million and double-digit royalties on product sales. Atopic dermatitis is a debilitating skin disease affecting over 80 million people across the world seven largest markets.

We are excited about the deal with Novartis as we believe this will enable us to advance MOR106 as quickly and broadly as possible while allowing us to allocate more resources elsewhere in particular to the development of MOR208.

I now move on to MOR202, our proprietary anti-CD38 antibodies for multiple myeloma and potentially other indications. We completed our Phase 1/2 study of MOR202 in multiple myeloma, either as a single agent or in combination with pomalidomide or lenalidomide and presented data based on the primary analysis in an oral presentation at ASH in December of last year.

Data were consistent with earlier cut offs from the trial showing long durations of response in the image combinations of up to 19 months. Only 6% of patients showed infusion related reactions, all of which were grades 1 and 2. Encouraged by the safety profile, we have shown that infusion time could be reduced from the initial 2 hours to just 30 minutes.

We are supporting our partner I-Mab Biopharma in its preparations for late-stage clinical development in multiple myeloma in the Chinese region. I-Mab submitted an IND application to the Chinese and Taiwanese authorities for MOR202 and we expect that they will start the first pivotal study of MOR202 soon. We also continue to evaluate our own development options for MOR202 in other indications and we expect to start the clinical trial in an autoimmune disease later this year.

That completes my review of the -- of our Proprietary Development segment, and with this, I will now hand back to Simon.

Simon Moroney

Thank you, Malte. Before I make -- before I review the highlights of our Partnered Discovery segment allow me to make one general remark. Our business model has evolved to one that is now very heavily focused on proprietary drug development.

Partnered Discovery segment, which was the company’s initial focus is no longer being actively pursued. Nevertheless, it is a substantial part of our value proposition and our financial participation in so many potential drugs will continue to serve more well long into the future.

The partnerships in the segment provides value on several fronts, we expect them to provide a growing revenue stream in the years ahead. They allow us to enter territories that it would be difficult for us to reach on our own. And they enable us to exploit the full potential of products discovered using our technology.

A great example is Janssen’s Tremfya, the first therapeutic agent based on our technology to reach the market. Now for approvals in the U.S., Canada and Europe in 2017 for the treatment of plaque psoriasis many other countries follow during 2018, including Japan, South Korea, Australia and Brazil.

In 2018, its first full year on the market, total sales were US$544 million giving us confidence the Tremfya is on its way to becoming a blockbuster. In its core indication of psoriasis, Janssen reported new clinical data in 2018 demonstrating superiority of the competitive Cosentyx and a hit-to-hit clinical study based on the primary endpoint of the ECLIPSE trial, namely PASI 90 at week 48.

Janssen is conducting more than 10 advanced stage clinical trials of Tremfya in a variety of settings and indications. These include psoriatic arthritis, pediatric psoriasis, Crohn’s disease, ulcerative colitis and hidradenitis suppurativa illustrating the advantage for us of working with the committed partner. We expect sales of Tremfya to continue to grow strongly in the years to come from which more patients will benefit through our royalty participation.

In June of 2018, we were able to announce good news for the anti-amyloid beta antibody, gantenerumab when our partner Roche initiated the new Phase 3 program in patients with early Alzheimer’s disease. The program consisting of two Phase 3 trials GRADUATE-1 and GRADUATE-2 will enroll approximately 1,520 patients in 31 countries worldwide. Patients will receive a significantly high dose of gantenerumab than in Roche’s previous trials as the subcutaneous injection with titration up to the target dose.

We are pleased to see Roche’s commitments and their sustained belief in the program. This was further cemented by Roche’s announcement a few weeks ago that they will continue gantenerumab development, despite having had to stop another beta amyloid antibody program in Alzheimer’s disease.

Overall, we have seen a number of advancements throughout the entire clinical pipeline last year, too many to mention here. Just two examples to make the point, in June 2018, our partner Bayer brought a novel compound into the clinic based on our technology, the thorium-227 radiolabel antibody conjugate BAY2287411.

Almost recently, Blackstone Life Science committed US$250 million to create a cardiovascular startup together with Novartis. The Biotech Anthos Therapeutics begins like with MAA868, a Factor XI antibody made by MorphoSys.

Slide 13 gives you an up-to-date snapshot of the clinical pipeline. As a reminder, the dark blue bars on the chart referred to our Partner Discovery segment, golden once refer to programs that originated in our Proprietary Development segment.

As you can see Tremfya is just the tip of the iceberg. One of our strengths as an organization is the breadth and depth of that pipeline. We see a number of programs that we believe have the potential to transform the treatment of the diseases they address. The entire R&D pipeline comprise the record by 116 programs at year end 2018, 29 of which were in clinical development with the first product launched, five of the 29 clinical programs, so around 17%, from our Proprietary Development segment.

That concludes the operational review, I will now hand over to Jen to his wrap-up of the financials.

Jens Holstein

Thank you, Simon. Ladies and gentlemen, also from my side a warm welcome to all of you and thanks for your interest in the company. 2018 was a very successful year for MorphoSys. Just to remind you, we introduced our guidance in March last year and increased our financial goals in September 2018 following antitrust clearance our MOR106 license agreement with Novartis.

Group revenues in 2018 amounted to €76.4 million and that’s above the updated guidance, which range from €67 million to €72 million. Our proprietary R&D expenses amounted to €98.3 million, which is slightly above our guidance from €87 million to €97 million. EBIT reached minus €59.1 million fully in line with our updated guidance of minus €55 million to minus €65 million.

Please move on with me now to slide 18 that illustrates our P&L statement. As stated before, Group revenues amounted to €76.4 million and that’s 14% above the previous year. The increase is mainly driven by the upfront payment of €47.5 million received from Novartis in conjunction with the license agreements for MOR106. Revenues include royalties on net sales of Tremfya amounting to €15.4 million in its first full commercial year 2018 after €1.9 million for 2017.

Due to a contractually trigger currency conversion the Tremfya royalty revenue was lower by €1.7 million. Total operating expenses increased slightly from €133.8 million in 2017 to €136.5 million in 2018, mainly due to higher selling and administrative expenses.

In 2018 research and development expenses decreased by 6% to €106.4 million, primarily due to the contractual ending of the Novartis collaboration in November of 2017. To reflect the buildup of commercial structures for more to aid in the U.S. initiated in July 2018, of course, it started presenting selling expense as a separate line item on January 1 2018.

In 2018 selling expenses amounted to €6.4 million to €4.8 million in 2017. Splitting out selling expenses would have reduced our research and development expenses, as well as our general and administrative expenses for 2017 by €3.5 million and €1.3 million, respectively.

General and administrative expenses increased by 39% from €15.7 million in 2017 to €21.9 million in 2018, mainly due to higher personnel expenses, as well as costs for external services, primarily related to the NASDAQ listing that took place in April 2018.

Earnings before interest and taxes amounted to minus €59.1 million, compared to an EBIT of minus €67.6 million in 2017. In 2018, the consolidated net loss amounted to €56.2 million after minus €69.8 million in the previous year. This translate into a loss per share of minus €1.79 in 2018, compared to minus €2.21 in 2017.

Let’s move to the segment reporting on slide 19 of the presentation. In our Proprietary Development segment, we focus on the research and clinical development of our own proprietary drug candidates.

In 2018, the segment recorded revenues of €53.6 million from €17.6 million in 2017, mainly due to the €47.5 million upfront payment from Novartis for MOR106 that has been fully recognized in our revenue figures.

Expenses for proprietary R&D including technology development increased by 2% from €96.3 million in 2017 to €98.3 million in 2018. The Proprietary Development segment reported an EBIT of minus €53.3 million after minus €81.3 million in 2017.

In the Partnered Discovery segment we apply our proprietary technology to the discovery of new drug candidates for pharmaceutical companies benefiting from our partners development advancements through R&D funding, licenses, success based milestone payments and royalties.

Revenue in the Partnered Discovery segment decreased from €49.2 million in 2017 to €22.8 million in 2018. The decrease was primarily driven by the contractually spending of excess collaboration with Novartis at the end of November, 2017.

The second revenue for 2018 included €3.5 million for funded research and license fees, compared to €41.9 million in 2017 and €19.3 million success based payments received primarily from Janssen, after €7.3 million in 2017. The EBIT in the Partnered Discovery segment was €18.3 million, compared to €30.3 million in the year before.

Let’s move on to the balance sheet on slide 20, as of December 31, 2018, we recorded total assets of soften €538.8 million, compared to €415.4 million at year end 2017. At year end 2018, we had €454.7 million in cash due to the adoption of IFRS 9 financial instruments, this position is now reported on the balance sheet under the line items, cash and cash equivalents, financial assets at fair value through profit and loss and the non-current other financial asset at amortized cost.

At the end of the previous year, this position amounted to €312.2 million and had comprised the line items, cash and cash equivalents available for sale financial assets and current financial assets classified as loans and receivables.

The number of shares issued totaled 31,839,572 at year end 2018 after 29,420,785 at year end 2017. The main reason for the increase was the capital increase performed by our NASDAQ listing completed in April of last year.

I am now coming to the financial guidance for 2019, before I will pass back to Simon for the strategic and operational outlook. For the financial year 2019, MorphoSys will continue to invest strongly in the development of its proprietary candidate, but primary goal of driving MOR208 market and also significantly into preparations for commercialization that asset -- for commercialization -- of commercializing that asset, sorry.

We are fortunate to be in a position to make these investments based on the strength of our balance sheet, and our expectation of revenues will grow significantly in the years ahead and the fact that our partners carry most of the development costs in our overall pipeline.

For 2019, we expect to generate Group revenues in the range of €43 million to €50 million. The reduction compared to 2018 is mainly due to the positive one-time payment of €47.5 million in 2018 in connection with the Novartis for MOR106, partly offset by increased royalties.

Revenues are expected to include royalty income from Tremfya ranging from €23 million to €30 million at constant exchange rate to the U.S. dollar. This means that Tremfya royalties in the second full year are expected to completely replace the annual fee cash flow of our former Novartis collaboration that ended in 2017.

Expenses for proprietary R&D anticipated in the corridor of €95 million to €105 million. We further expect earnings before interest and taxes and EBIT of minus €127 million to minus €137 million for 2019.

Please note expenses in 2019 will include R&D expenses for our Partnered business an increase in SG&A over 2018 in connection with the build-up of our commercial structures, as well as costs for the production of commercial materials MOR208 that wasn’t reflected in the cost of sales line.

It is important to mention that this guidance does not include the potential larger milestone payments for the start of a Phase 3 clinical trials for MOR103, GSK3196165 that could course in the course of 2019. This guidance also does not include revenues from potential future partnerships or licensing agreements for MOR208 or any other compound that is in our property development, effects from potential in licensing or co-development deals for new development candidates also not included in the guidance.

Ladies and gentlemen, MorphoSys is financially and operationally in the excellent shape and we are excited about the prospects of MorphoSys for 2019. Based on our solid financial position, which we successfully strengthened in 2018 through our NASDAQ IPO and attractive partnership with Novartis MOR106 and increase in royalty stream from Tremfya product sales we are well-positioned to continue the advancement of our pipeline products.

In particular, we aim to drive our lead program MOR208 towards the market and build our commercial capabilities in the United States in preparation for potential commercialization MOR208 subject to FDA approval.

With this, I would like to end my part and hand back to Simon.

Simon Moroney

Thank you, Jens. To conclude, we look forward with great confidence we believe MorphoSys is nearing an inflection point in this development as a company. We stand shortly before a very significant milestone for us, namely the transition to a commercial biopharmaceutical company. That transition hinges on a compound that we justified excited about MOR208, which should therefore come as no surprise that this will be our top priority in 2019.

Primary analysis of the data from all 81 patients enrolled in the online study is ongoing and we expect to present the final results at a scientific conference around mid-year. We plan to complete the BLA submission comprising preclinical clinical and CMC data to the FDA by year-end.

According to these plans, the filing will comprise data from the L-MIND study supplemented by real world data from patients comparable to those in the L-MIND study but who received lenalidomide single agent treatment.

We aim to publish the final data from the L-MIND study in mid-year and the real world lenalidomide only data compared with the L-MIND results at a medical conference towards the end of the year.

We will also continue our recently initiated talks with [Technical Difficulty] the European Medicines Agency which we accept potential marketing authorization application based on L-Mind, submission of such MAA could occur significant earlier than it was originally anticipated based on the B-MIND trial. We will seek EMA advice within the next several months.

We are proceeding with the buildup of commercial capabilities in the U.S. to prepare for the expected commercialization of MOR208 subject of course to FDA approval. We continue to work under the assumption that we will need to be ready to launch MOR208 by mid-2020. We currently expect the U.S. organization at launch to comprise around 80 to 100 people.

For B-MIND, as outlined by Malte, we are now proceeding with an amended version of the trial, which includes the biomarker as a co-primary endpoint. We are very pleased with this amendment as it will enable us to test the hypothesis that MOR208 shows enhanced activity in patients who can be identified using the biomarker, while in addition allowing us to test efficacy in the unselected patient population as originally planned. For 2019, we expect discussions with the FDA regarding the biomarker assay around mid-year. The pre-planned interim analysis is projected to take place in the second half of the year.

As Malte mentioned, for frontline DLBCL development, the first step will be a Phase 1b study, which will commence later this year. We will also continue our exploratory COSMOS trial of MOR208 plus idelalisib or venetoclax relapsed/refractory CLL, SLL and expect to present results later in 2019.

Finally for MOR208, we are working on plans to develop the antibody in indications beyond DLBCL and hope to be able to provide details around the middle of this year.

Turning to MOR202. As already outlined by Malte, we plan to start an exploratory clinical trial in an autoimmune indications in the third quarter of this year, at which time we will disclose the indication.

We also expect our partner I-Mab to initiate a pivotal development program with MOR202 in multiple myeloma in the Chinese region this year, possibly within the next few months. Further, I-Mab recently stated that they want to start clinical development in lupus in 2019 and we expect them to file for an IND later in the year.

For MOR106, our joined antibody program with Galapagos under global licensing agreement with Novartis, we will bring together with Galapagos our Phase 2 IGUANA study and the Phase 1 bridging study toward primary completion in the second half of this year. In addition, we plan to start for the clinical studies in atopic dermatitis together with Galapagos in the course of the year.

For MOR103, GSK3196165 based on announcements made by GSK earlier this year, we expect them to initiate Phase 3 development in rheumatoid arthritis in the second half of 2019. The dosing of the first patient in the pivotal study would trigger milestone payments from GSK, which would be material to our financial results, although as stated by Jens, it is not in our current guidance. For LMP peptide MOR107 will continue pre-clinical investigations with a focus on oncology.

Turning to our Partnered Discovery segment, by the end of 2019 primary completion maybe reached an up to 15 clinical trials in Phases 2 and 3 from COSMOS evaluating antibodies made using MorphoSys technology.

On particular note, our Phase 3 trials of Tremfya conducted by Janssen and psoriasis and psoriatic arthritis, potentially pivotal Phase 2b study by Mereo BioPharma in osteogenesis imperfecta or brittle bone syndrome of the HuCAL antibody setrusumab directed against sclerostin and several Phase 2, 3 studies of Novartis’s back receptor antibody VAY736 or Ianalumabm, an indications including idiopathic pulmonary fibrosis, severe primary Sjogren syndrome and autoimmune hepatitis that might breach primary analysis of the Phase 2 trials in 2019. As always, we have no control over what our partners communicate that there is obviously the potential for a lot of data relevant to our pipeline.

In conclusion, MorphoSys is at a pivotal position in its development. With the approval of Tremfya, we started the transformation of our income statement to that of a product company. The next key step anticipated to happen if MOR208 reaches the market will be the addition of our own product revenue on top of those royalties.

Transformation to a truly commercial company active on both sides of the Atlantic is a key goal for the company. As Jens has pointed out, we will continue to invest strongly to make this vision become a reality. But also looking at the depth of our pipeline in both our Proprietary and Partnered businesses, we see a number of programs with the potential to reach the market in the foreseeable future. We are very optimistic about the company’s prospects.

To conclude, a few words on my own behalf. On February 19th, the CEO, I, informed the Supervisory Board of MorphoSys that I will not renew my contract as a member of the company’s Management Board.

As a result of this decision, I will step down as CEO on expiry of my current contract on June 30, 2020 or when a successor is appointed whichever comes sooner. MorphoSys today is stronger than it’s ever been and I am immensely proud of everything we have achieved over the past 27 years since MorphoSys was founded.

There’s only one reason for my decision, after dedicating such a long time to MorphoSys, I am looking forward to having a bit more time for other interest and to exploring new opportunities. In the meantime, the business is usual and there’s plenty of stuff ahead of us here. We look forward to another exciting year.

Verena Kupas

Thank you, Simon. We’d now like to open the call for questions.

Question-and-Answer Session


[Operator Instructions] Okay. The first question we received is from Geoffrey Porges of SVB Leerink. Your line is now open. Please go ahead.

Brad Canino

Hi. This is Brad Canino on for Geoff. Congrats on the progress this year and thanks for taking our questions. You have provided a lot of information about the expected R&D plans in 2019. But we wanted to ask about when we should expect to hear about expanded plans for more to wait beyond the frontline DLBCL trial highlighted or if not, why those opportunities will not be initiated this year?

Malte Peters

I take the questions. Thank you for asking. We are in the process of defining the next activities that we were communicate probably during the early summer time. We were get out with our updated L-MIND data probably in the month of June also, and in the same time, we will update the external world on our additional activities.

We are getting a lot of incoming interest from many different sources, cooperative groups and investigators all over the world in Europe, US, Asia regarding possible investigator initiated trials and we are currently in the process of deciding which of these additional opportunities should be conducted as more sources sponsored trials and which of these activities maybe continue would on an investigator-initiated trial basis. So that takes a little bit more time, but we will be ready to speak about this in the early summer time.

Brad Canino

Great. And then to follow up on the regulatory comments in Europe, when you say that you will hear from the EMA in the coming months. Does that mean you will know definitively if L-MIND trial will be accepted as pivotal around mid-year or does this just mean discussions will continue to progress? Thanks.

Malte Peters

That’s a bit difficult to anticipate. So as I said in my statements, we had two encouraging discussions with National Europe Health Authority agencies earlier this year, we will follow up with a formal discussion at EMA in the summer time and we, of course, cannot predict what response maybe. It may be definitive. It may be a statement or recommendation by the agency to go either way that L-MIND maybe sufficient or not. It may be less definitive based on the EMA assessment. So that’s a bit difficult for me to anticipate. But, again, we were encouraged by the initial international feedback we received and are looking forward to receive now the formal EMA feedback in the middle of this year.

Brad Canino

Great. That’s helpful feedback. Thanks for the answers.

Malte Peters

Thank you.


The next question is from Danielle Brill of Piper Jaffray. Your line is now open. Please go ahead.

Danielle Brill

Hi, guys. Good morning. Thanks for the question. Simon, last quarter, I believe the interim analysis for B-MIND was expected to occur around May and then when I last saw, I think, you had said it wasn’t anticipated around this summer. I am just curious to know when the original analysis was expected, what’s driving the delays and are you impacting the timing to be pushed back further into the second half from the last update?

Simon Moroney

Yeah. Thanks, Danielle. I will hand that one over to Malte actually to answer.

Malte Peters

Yeah. Thank you, Danielle. So we have maybe one month or two months of the delay. We are seeing that patients stay on B-MIND for longer periods of time than we originally anticipated, which in our mind contributes mostly to the slight shift in our timelines. We are now anticipating to ready for the interim analysis probably in the third quarter and we generally saying it’s a good sign, and as you know, we spoke about this it’s an event driven analysis, so we can’t really influence this, because it’s driven by the time the events, which is progression or death are coming in. So being doctor, I am always happy that patients stay on our treatments for longer than we originally sought. But, of course, it’s may leads to a slight shift in our communicated timelines.

Danielle Brill

Okay. Great. And then, I am just curious how we should think about the importance of B-MIND in the U.S. You mentioned that it could potentially serve as a confirmatory trial, should we be thinking of it this way and could it be gating to full U.S. approval?

Malte Peters

Yeah. So currently in the United States, we do not think that we need a confirmatory study. We had, as you know, multiple interactions with FDA and the nature of a potential approval has not yet been discussed in great detail with the agency.

We have -- FDA is aware of the fact that we have both L-MIND and B-MIND. They know both protocols that we reviewed and commented on both protocols. So currently our assumption is that L-MIND in the United States maybe sufficient for an approval.

However, some of you may have realized in the latest ODAK for Karyopharm. Dr. [inaudible] clearly pointed out that it’s not unusual for FDA to consider trials with in different patient populations and with different combination partners as confirmatory study.

So, but I am coming back to my initial remark that so far we have no indication that the confirmatory study if needed, as of today that our current assumption. But if one is needed, B may -- B-MINDs may serve that perfect.

Danielle Brill

Okay. Thanks so much for the question.

Malte Peters



The next question is from Anastasia Karpova of Kempen. Your line is now open. Please go ahead.

Anastasia Karpova

Hi. Three questions if I may, but brief one. In regards to your synthetic control-arm, have you pre-specified the analysis and the way the data is going to be collected with the FDA?

Second, you previously never explicitly guided for MOR208 licensing in your guidance, whether excluded or not. I was wondering what has changed for you to reflect this possibility and is that, let’s say, reflection of increased process -- increased likelihood of such events occurring or just replied to markets questions?

And finally, can you provide a little bit more color on the biomarker that you plan to include in the B-MIND study and what percent of the DLBCL population generally have this biomarker? Thanks.

Simon Moroney

Thanks, Anastasia. Malte will start with the synthetic control-arm question.

Malte Peters

Maybe I will take the first and the third, and then I will give it back to you for the second. So for the -- we have a data control-arm and we had a very intense and accurate and detailed discussion with FDA on all of the statistic assumption and detail. So we have written a protocol, statistical analysis plan in basically collaboration with FDA and based on their assumption. So we are, I would say, in full agreement and alliances with FDA regarding that control-arm and we are very happy about having reached such a status.

Simon Moroney

Malte, you won’t comment on the pre-specified.

Malte Peters

It is pre-specified. All of the details that are in the protocol or in the statistical analysis plan, all these details are pre-specified. Yeah. Thank you, Simon for pointing it out.

For the biomarker, unfortunately we can’t disclose the nature of the biomarker due to IP issue. We will do so as soon as we can from an intellectual property perspective.

Simon Moroney

And then, Anastasia, regarding the MOR208 licensing, we simply wanted to be clear with you and to help you in your understanding of what’s in our guidance, just to be clear, what sort of things we include and what sort of things we excluded. So that was a general statement, not to be interpreted any particular belief or otherwise regarding MOR208 licensing.

Anastasia Karpova

Great. Thank you.


The next question is from Gunnar Romer of Deutsche Bank. Your line is now open. Please go ahead.

Gunnar Romer

Gunnar Romer, Deutsche Bank. Thanks for taking my questions. The first one would be on MOR208 again and I was wondering whether you can provide an update on your current thinking about partnering, be it for commercial purpose outside the U.S. or potential development partnerships globally?

Then the second question would be regarding your Tremfya royalty assumption, just curious whether you can give us any hint to the whether this is consistent with current market expectations in terms of Tremfya sales for 2019?

And then last question would be on the implied cost ramp especially on the SG&A line and I was wondering whether you can square that with the €90 million of commercial investments in the U.S. or maybe phrase it differently if you can help us on the cost of sales for 2019 maybe that explains the gap. So any comments in that regard would also be very helpful? Thank you.

Simon Moroney

Yeah. Thanks, Gunnar. Let me start with the MOR208 partnering question and then I will hand over to Jens for the other two. We have had a lot of inbound interest which doesn’t surprise us, given the strength of the data. We have made it clear that our goal that we working towards very actively is to commercialize MOR208 in the U.S. also and we are building to that end, as you know it.

We have indicated that we are add to and actually interested in partnering 208 in the rest of the world outside of the U.S. and we will entertain discussions with those goals in mind. It’s too early for us to say anything about what kind of deal we could entertain or enter and with whom, but I anticipate that those discussions will continue and will mature in the coming months. And obviously, as soon as we have something to say, we will keep you informed about it. But at this stage, we are looking to assume partnership along those lines, keeping the U.S. for ourselves and looking for the partner elsewhere.

Gunnar Romer

Maybe if I can just step in here, Simon. Would that mean also that you are committed to fully develop the front-line indication on your own in the U.S. or what partnering considerations include, for example, a share of cost on that front?

Simon Moroney

Yeah. I think one of the attractions of having a partner is to share the burden, so to speak, to share the cost of development and we would anticipate that any such deal would include some sort of shared costs against shared rights, as I said, preferably ex-U.S. But happy exactly how such a deal could be structured remains to be same.

Gunnar Romer

All right. Thanks.

Jens Holstein

Yeah. Gunnar, happy to take the next two questions. The first one on the royalties. You know that our hands over the bound in terms of what we can say about that contractual agreement with Janssen. We tried to be bit more precise with the messaging on the current implication that you have seen in our press release and the underlying net, so to say, royalties that we haven’t been able to book on the revenues. That gives you some sort of hint.

Unfortunately, we can’t be more precise on this. Going forward we are struggling a little bit with sort of the assumptions on how fast the ramp-up will be. We only can say we actually super happy work with what we have seen on Tremfya so far and we might be actually a bit conservative with the royalty range that we have given and but I think we feel comfortable overall with that sort of range without giving you a sort of clear guidance of what our underlying number is and that we have used for that range.

I think you should take into account when you look at these numbers, two aspects. There is very significant sort of currency indication for us and there is certainly in many of the contracts that we are having with partners, also staggered structures, so royalty development. So if you look beyond that guidance here for our ‘19, actually you should take that into account. That’s something like this will kick in in the years to come.

And on SG&A, yeah, indeed, I think, it’s -- you have seen relatively stable R&D spend for our proprietary activities versus 2019, but an increase in terms of the loss that we reported before interest and taxes and that is indeed partially, I have to say triggered by SG&A expenses, if you look at 2018 we talk about something like €28 million, €29 million that we had reported for both cost lines with the anticipated round about €90 million, €$100 million for the years ‘18 to ‘20 for the set up of the commercial organization, we actually with the planning for ‘19 fully in line with this.

The big difference comes between sort of -- and you are probably not totally off if you double that €28 million, €29 million for selling expenses in ‘19 versus ‘18 and you have to take into account in addition cost of sales that we have reported first time this year, but we will have a significant impact in 2019, as these cost line will reflect the first cost for commercial supply, the production of market supply of products that we have to produce and have to be checked by the FDA for preparation of the commercialization.

And this supply got it be booked as long as the product is not on the market, it’s not marketed products as cost basically. So normally you would book it as inventory. In our case, as this product was not on the market yet it’s cost and that’s increasing the cost position.

And then finally, we have certainly also still, and a couple of millions for partnered with our partner business there and if you then take all these products into account, you can follow where we are coming to that range of minus €127 to minus €137 million for EBIT.

Gunnar Romer

Many thanks, Jens. Just a quick follow-up for good order in terms of cash, would you provide any guidance, I guess, probably, stood north of €300 million based on your current planning for year end 2019 but...

Jens Holstein

Yeah. I think if you take the remains sort of standard practice if you look at the EBIT line that we have, in that sort of ballpark we also have the cash burn so we would estimate somewhere in the range of €320 million to €330 million of cash at year end 2019.

Gunnar Romer

All right. Makes perfect sense. Thank you.

Jens Holstein

You are welcome.


The next question is from Jason Butler, JMP Securities. Your line is now open. Please go head.

Jason Butler

Hi. Thanks for taking the questions. I had two, the first on MOR202, obviously, you are holding off on disclosing the indication. But can you give us any comments on the goals of the study? You mentioned this in exploratory study, are you focused on biomarkers or for example clinical endpoints or anything else that you can kind of speak to the insights into the size or timelines for the trial and then -- for the first drop? For gantenerumab, can you speak to any preclinical or clinical data that support potential for increased efficacy at the higher doses, for example, in terms of beta amyloid clearance? Thanks.

Malte Peters

So let me take the first question on and -- for the autoimmune study, let me make the following comments. There are couple of diseases in which there is a direct correlation between the presence of autoantibody and disease. And I will give you just one example, pemphigus vulgaris, for example, is a very significant and severe skin disorder, which is related to the presence of autoantibody. There are diseases and other indications, for example, in renal diseases, but neurological diseases are also other examples.

So we have picked one of these diseases to test the efficacy of MOR202 in reducing biomarker, all of this mark that be the autoantibody as a direct correlation to the -- out to the readouts regarding the disease. So that’s the goal. So the goals we need to see a treatment effect for the clinical disease and also an effect on the presence or absence of the autoantibody. And the study will start in the second half of this year, at which case we will disclose what the indication is.

Simon Moroney

And then Jason for your question about gantenerumab, our colleague Marcus will handle that.

Markus Enzelberger

Yeah. So, of course, it’s always difficult to exactly expanded the ratio of our partners in the clinical trial design. But for gantenerumab it was seen as aducanumab. So one of the antibody clinical trials and which has also a very similar profile of -- biochemical profile to our gantenerumab antibody or to us gantenerumab antibody, it was seen as aducanumab that at a higher dose relevant effect -- also effects were seen -- clinically effects were seen and this is also what we believe by twice wash to increase the dose one the original 105 milligrams to 225 milligrams gantenerumab in the [inaudible] trial to now to 1,200 milligrams per dose in the ongoing trial. So this increase dosage might show similar effects as we have seen this in aducanumab due to the very similar profile of the two antibodies.

Jason Butler

Great. Thanks for taking the questions.


The next question is from Graig Suvannavejh of Goldman Sachs. Your line is now open. Please go ahead.

Graig Suvannavejh

Yeah. Good afternoon, everyone. How are you today?

Simon Moroney

Good. Okay.

Malte Peters

Very good. Thank you.

Graig Suvannavejh

Congrats on the progress in 2018. I have got three quick questions please. My first is just around your 2019 financial guidance. So you are expecting GSK to start Phase 3 for the 103 product in the second half. But I am curious as to why you are not including a milestone associated with that? That’s my first question.

My second question just has to do with the L-MIND commercial opportunity as it relates to Europe, obviously, the original plan was to go after a more B-MIND oriented population. So, maybe Malte, so if you could help us frame if your plan is successful with European regulators to initially perhaps getting approval for 208 based on L-MIND what that looks like?

And my third question, maybe this is for Simon. Simon, certainly the loss for MorphoSys is to see you leave the company, and congrats on all the achievements you have had with the company in building it up. But as we think about the next CEO, what are the qualities that you are looking for or do you think the company will need if it goes through in your own words this pivotal position in the timing of the evolution of the company? Thank you.

Simon Moroney

And maybe I will take the first one, Graig. On the guidance for 2019, and yeah, indeed we have not included GSK. The milestone for GSK in our guidance, given that we are not exactly clear when it will take place, and there is always, although, maybe slim, but there is always a risk that this might for whatever sort of reason shift and as we do not control it and it is a significant milestone payment for us. If we would include this and then for whatever reason, GSK has a shift into 2020. We have to adapt our guidance and that is something we just wanted to avoid.

We wanted to make clear to everyone that of course there is a milestone payment of some significant at the horizon. But we don’t want to adapt our guidance because someone else is messing up to make it clear, yeah, so we took it when we have [inaudible].

Jens Holstein

Yeah. Graig, let me take the other two questions. First of all, regarding the opportunity for L-MIND and B-MIND in Europe. If you look at the patient population that we are addressing, it’s the same in both trials. So as relapse/refractory DLBCL patients who are ineligible for high-dose chemotherapy and autologous stem cell transplantation. So these tend to be older more frail patients.

And we look extremely closely at the U.S., because that’s our primary market of course where we estimate that there were somewhere in the order of 8,000 patients per year of that time and we estimate that the European size of the opportunity is similar, perhaps, touch smaller. But that applies to both L-MIND and B-MIND that’s essentially the addressable patient population in each market.

Simon Moroney

Yeah. Regarding the CEO my successor. I mean, the process has just started. I wanted to make sure that the company had enough time to run an orderly succession process. I am sure the company will be interested to find someone that has an understanding of R&D, as well as commercialization and we will see what kind of catalysts process turns up in the coming months.

But obviously, the objective is to find someone who is best qualified and experienced to take over and to lead the company on the trajectory that we see ahead for. I think, as we said the companies at a really good place at the moment and we are confident that the opportunity is attractive enough to be able to build a good pool of candidates to choose from.

Graig Suvannavejh

Okay. Great. Thank you. If I could just have one quick follow-up question, it’s actually on a different topic altogether. But so your partner in China, I-Mab Biopharma recently stated that they are planning to launch a phase or initial study in lupus in 2019, wondering if lupus is one of the indications you would consider on your own.

Simon Moroney

I think and Malte please comment, yeah, I mean, lupus falls into that bucket of autoimmune diseases, which we believe is our CD38 antibody could be active in. We are looking at something else actually, I can say but we are not looking at lupus, but we intrigue to see what I-Mab -- what data I-Mab produces in lupus, of course. But we are choosing to go at a slightly different direction. But I think in principle there’s no reason to think that [technical difficulty] included in the mix of indications that I referred to earlier.

Graig Suvannavejh

Okay. Thank you very much.


The next question is from Victoria English, Evernow Publishing. Your line is now open. Please go ahead.

Victoria English

Yes. Thank you very much for taking my two questions. First is about MOR208 in your approach to the EMA. Has -- is this change in strategy in any way related to a different view by the EMA towards single-arm trials, because I understand they seem less enthusiastic about these types of trials than the FDA has been?

The second question concerns MOR202 and whether the recent litigation -- patent litigation with Genmab in anyway affects the ongoing development of this product? Thanks.

Malte Peters

Thanks, Victoria. Let me take the first question with respect to the EMA, possible opinion here. I think you are correct in stating that EMA is traditionally considered to be more conservative with respect to accepting single-arm uncontrolled trial. However, as you know, and our recent examples of where EMA have made exceptions, right?

So they approved two CAR T-cell products based on single-arm uncontrolled studies. And I am seeing -- I would say some willingness at EMA to consider a modern style drug development and to consider a modern therapeutic options for patients in case the clinical data is really outstanding, right? I think that’s probably the prerequisite that has to be present in order to lead into the -- towards that type of thinking at EMA.

So I don’t think I am ready to say that the EMA has made a shift in their thinking. But I think it is a metal effect that there are recent examples where Europe has approved new innovative drugs based on single-arm trials and we hope that we may be able to have fruitful discussions with EMA regarding L-MIND, which in our mind from an efficacy perspective, it’s extremely attractive patients.

Victoria English


Malte Peters

And then I hand back to Simon.

Simon Moroney

Yes. Thanks, Victoria. So on 202 the litigation, just to remember that the litigation concerned three granted U.S. patents covering antibodies against CD38. We have separate patent protection for the MOR202 composition of matter that is unrelated to those three patents. So that -- those patents covering MOR202 composition of matter, for example, continue to be intact and unaffected by whatever went on in the litigation.

Victoria English

Okay. Good. Thank you.


The next question is from Gary Waanders of Bryan Garnier. Your line is now open. Please go ahead.

Gary Waanders

Hello, guys. Just a couple of questions if I may, firstly, could you remind me of the timeline for Tremfya royalties and when they might run out into? And what sort of extensions through indication, expansion might be available on that basis? And also just an idea around MOR208 will, obviously, you are focusing on oncology, but and as an antibody so reagents this or agent this might have opportunities for use outside of oncology and I wonder if you have looked at any of those possibilities? Thank you.

Simon Moroney

Yeah. Thanks, Gary. Regarding the royalty term for Tremfya, I think, we haven’t disclosed this precisely. I think it may be subject to the confidentiality provisions of the agreement. Let me just say that in general terms, how agreements provide for royalty payments for 10 years to 12 years from product launch, all the lifetime of the patent covering the product, whichever is the longer, okay, that’s the general way we treat that topic.

You mentioned expansion, I assume you mean into other indications. Is that right? Yeah. So whatever under indications would come to market would carry the same royalty burden and royalty payments to us of course.

Malte Peters

And with respect to your non-oncology indications, I can say that we are currently exploring these, as well as part of the process I outlined earlier. But we have not yet made any decisions as to whether we consider selected indications worth pursuing and we were included in our communication in the middle of this year.

Gary Waanders

Thanks very much.


And the next question is from Mick Cooper of Trinity Delta. Your line is now open. Please go ahead.

Mick Cooper

Hi. Just a quick question from me. Should we expect any new assets to come to the clinic this year and do you have a target looking further ahead for new antibodies to into the clinic.

Simon Moroney

Thanks, Mick. I assume, my question refers to anything at all within the pipeline, so proprietary and/or partnered programs?

Mick Cooper

More focused in the proprietary, but yes .

Simon Moroney

Yeah. We can -- I can confirm that we are not expecting any new proprietary programs going into the clinic this year, the next most advanced wanted to little bit further away than there. Regarding the Partnered Discovery programs those are always a little bit less under control, of course, so we could be surprised, but I think at this stage we are not assuming that anything is going to go into the clinic from our partners new assets.

Mick Cooper

Thank you very much.


We have no further questions coming through. So, I will now hand back over to Dr. Simon Moroney to wrap up today’s call.

Simon Moroney

Thanks very much. And to conclude the call, I’d just like to remind you the main points to take away. First, we are very bullish about our prospects headed by MOR208, based on the dialog with the FDA, we aim to bring MOR208 plus lenalidomide relapsed/refractory DLBCL to approval as fast as possible and doing everything to make an anticipated launch of MOR208 in the U.S. the success. We are targeting an area of major unmet need and hope to be able to offer patients new treatment option.

MOR106 based on the data observed so far and intensifying development program with Novartis. We look forward to speeding up and broadening development of this exciting and potentially first-in-class asset.

MOR202 will continue to partner -- support our partner I-Mab to bring this compound to pivotal development in multiple myeloma in China, while driving for development program the selected autoimmune indication.

Tremfya, based on Janssen’s tremendous success in development and commercialization of this antibody in plaque psoriasis, we are optimistic that there could become a very large and successful drug.

And finally, this is the tip of an iceberg of programs that could contribute significantly to value creation for MorphoSys in the future. We look forward to keeping you informed of progress.

Verena Kupas

That concludes the call. And then if you would like to follow up. We are in the office for the remainder of the day. Thank you for your participation during our call and good-bye.


Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Good-bye.