MorphoSys AG

Claudia Gutjahr-Löser - Head of Corporate Communications and Investor Relations Simon Moroney - Chief Executive Officer Jens Holstein - Chief Financial Officer Marlies Sproll - Chief Scientific Officer Arndt Schottelius - Chief Development Officer

Sarah Potter - Bank of America Merrill Lynch Igor Kim - Oddo Seydler Bank AG Gunnar Romer - Deutsche Bank Mick Cooper - Edison Investment Research Limited Olav Zillian - Helvea-Baader Bank Group Sachin Soni - Kempen & Co. Victoria English - Evernow Publishing Ltd.

Thomas Schießle - EQUI.TS

Good afternoon and also good morning and welcome to our 2014 Year-End Results Conference Call and Webcast. I’m Claudia Gutjahr-Löser, Head of Corporate Communications and Investor Relations of MorphoSys.

With me on the call today is our complete Management Board, Simon Moroney, our CEO; Jens Holstein, our CFO; Arndt Schottelius, our CDO; and Marlies Sproll, our CSO. Simon and Jens will present you overview of the year 2014 and provide an outlook for 2015.

After the presentation, we will all be available for your questions. We would like to thank you for participating.

For the participants of the conference call, you will find the slide deck of this presentation on our corporate website. Before we start, as shown on Slide 3, I want 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 speaks only as of the date hereof.

Let’s start by taking a look how the presentation will run. We have two parts; first we will review 2014, focusing on pipeline and financials, and second, we will provide an outlook for this year.

The presentation will last about 45 minutes. I would now like to hand over to Simon Moroney.

Thank you, Claudia, and also from me a warm welcome to our 2014 year-end results conference and webcast. The year just completed was one of very solid progress for MorphoSys.

We finished the year with a product pipeline that is larger and more mature than it is ever been. A few numbers make this point.

The total number of programs was 94 at year end, an increase of a 11 of year end 2013. Number of clinical stage programs was 22, an increase of three, three antibodies are in phase 3 development and 10 in phase 2 more than ever before.

Altogether, 16 new clinical trials were initiated during the year. And we may now be within two years of the first market entry of a drug made using our technology, as well execution of our strategy of using proprietary technologies to build a valuable drug pipeline is paying off.

Looking at Slide 6, I’ll commence with a review of the main operational highlights of the year, starting with our proprietary product portfolio. To summarize the current status, we now have two compounds in phase 2 development, two in are about to enter phase 1/2, one in preclinical development, and five in discovery.

The four clinical candidates that have been the subject of proprietary R&D investment ranked, by stage of development on MOR208, MOR103, MOR202 and MOR209. In 2014, we’ve made substantial progress with MOR208, complete phase 1/2a data in CLL and interim data from the ongoing NHL study have now been published.

In relapsed/refractory CLL, we observed an objective response rate of 38% of the recommended dose, despite a relatively short treatment schedule. To put these data into perspective, this is the best ORR seen for a CD19 or CD20 antibody in comparable studies in this indication.

Median progression free survival at recommended dose was 37 weeks and 60 weeks in the expansion cohort. This compares favorably to recent results shown with other recommended Single-Agent antibody therapies in this indication Rituximab and Ofatumumab, which in comparable mono-therapy setting showed median progression free survival of around 24 weeks to 34 weeks.

Interim NHL data was presented at the American Society of Hematology Conference in December. We observed clear and very encouraging efficacy signals in two relapsed or refractory NHL subtypes we looked at, mainly diffuse large B-cell lymphoma, DLBCL for short and follicular lymphoma.

Within the valuable patients in these two cohorts, we saw an ORR of 36% in DLBCL and 28% in follicular lymphoma. This promising clinical data from MOR208 was mirrored by very good progress on the regulatory front.

During the year, we received orphan drug status from MOR208 in both Europe and the U.S. for CLL and DLBCL.

We also received FDA fast track designation from MOR208 in DLBCL. I’ll turn now to the other MOR compound starting with the HuCAL antibody MOR103.

In September, we presented final data from the phase 1b trial of MOR103 in multiple sclerosis. This confirmed the safety profile we’ve seen in our earlier clinical studies and healthy volunteers and in rheumatoid arthritis patients, and also provided some hints of the efficacy.

With this, our work on MOR103 has been completed and all responsibility has been transferred to our licensee GSK. In 2014, we expanded the clinical development of MOR202 through the addition of a weekly dosing regimen comprising cohorts with and without dexamethasone.

Together with our partner Celgene, we also finalized plans for clinical studies combining MOR202 with lenalidomide and with pomalidomide. Preclinical data, which we published in connection with the ASH Conference, support the choice of these two combination partners.

The newest addition to our portfolio is MOR209, which is the subject to the co-development agreement with the Emergent BioSolutions. We in-licensed this program on the basis of a compelling preclinical data package that Emergent had assembled.

MOR209 is about to enter phase 1 clinical study in metastatic castration-resistant prostate cancer patients. The agreement we signed with Emergent is another step on our path to establishing a future commercial portfolio, as we secured sole rights to the program outside of North America.

These four clinical stage programs, MOR208, MOR103, MOR202, and MOR209 supplemented by growing earlier-stage portfolio. MOR106 is the next most advanced program, the first from our collaboration with Galapagos.

MOR106 is also the most advanced antibody derived from our Ylanthia platform and entered formal preclinical development during 2014. In the discovery stage, we expanded our portfolio from three programs at the beginning of 2014, to a total of five now.

This includes an exciting co-development program that we entered into in June with Merck Serono, which is focused on the use of our Ylanthia platform to generate antibodies against selected immune checkpoint targets. I’d now like to turn to our partnered pipeline, which continues to expand and mature.

At the end of 2014, this partnered pipeline comprised three programs in phase 3 clinical development, eight in phase 2, eight in phase 1, 25 in pre-clinic, and 40 in discovery. Over the year as a whole, this is a net increase of nine programs, there were 11 new program starts and two programs stopped.

In the interest of time, we will highlight just some of the progress of these programs. The most advanced program is Novartis’ HuCAL antibody bimagrumab.

In 2014, Novartis published data from the phase 2 trial of bimagrumab in Sporadic inclusion body myositis on the basis of which breakthrough therapy designation was awarded for the program by the FDA. The data showed an increase in muscle volume and lean body mass and an improvement in the six-minute walking distance endpoint.

Bimagrumab has also been shown to accelerate the recovery of muscle mass in young men, these muscles have atrophied as a result of wearing a cast. In 2014, a new phase 2 trial was started looking at the use of bimagrumab and recovery from hip fracture surgery, and Novartis also added a new larger phase 2 trial in older patients with Sarcopenia.

Nowhere was progress more visible in 2014 though than with Janssen’s HuCAL antibody guselkumab. Positive phase 2b data and mild-to-moderate plaque psoriasis was reported in March, in which guselkumab showed significantly higher efficacy than the competitor Humira.

By the end of the year, Janssen had initiated or registered five phase 3 trials and a further phase 2 trial of guselkumab, an indication of the scale of their commitments to the program. The third partnered antibody in phase 3 development is Russia’s Gantenerumab being developed for Alzheimer’s disease.

We were sorry to learn that phase 3 prodromal trial was stopped by Roche based on a pre-planned futility analysis. We are, however, encouraged that Roche remains committed to the program and is now focusing on the 1,000-patient trial in the mild Alzheimer’s disease, one of two late-stage studies that are being pursued with the antibody.

Elsewhere in the partnered pipeline Novartis’ LJM716 a HuCAL antibody against the cancer target HER3 is emerging as a very interesting phase 2 candidate. In 2014, Novartis published first clinical data on the compound and it’s highlighting the program in their pipeline presentations.

In the year-end results conference last month, Novartis presented LJM716 as a future - as a candidate for future filing. Pfizer’s program PF-05082566 a HuCAL antibody directed against the T-cell checkpoint target 4-1BB is another interesting partnered program, which is being explored in combination studies.

During the course of last year, Pfizer announced a combination trial with Merck’s PD-1 inhibitor pembrolizumab, an advanced solid tumors, and also signed a deal with Kyowa Hakko Kirin to conduct clinical studies in combination with their anti-CCR4 antibody mogamulizumab. Pfizer antibody is the most advanced of several immuno-oncology programs in our pipeline.

To complete the review of the year, I would like to highlight the progress we’ve made in new drug discovery, which comprises both technology development and target sourcing. During 2014, we completed our acquisition of the Lanthipeptide Library Technology platform from our partner Lanthio Pharma.

The decision to secure access to this technology was made following a feasibility study, which assist the generation and use of extremely diverse high quality lanthipeptide libraries. The technology is now being applied in selected discovery projects within MorphoSys.

This is a nice example of the use of our innovation capital initiative, as a means of expanding our access to novel drug discovery platforms. Our investment in developing the state-of-the-art Ylanthia antibody platform is paying off in two respects.

All of our in-house discovery programs are now being run with Ylanthia. Our experience with the technology has confirmed our view that this is the best technology for our future antibody generation requirements in terms of its power and the quality of the antibodies it gives us.

We see this in particular and our ability to make antibodies against target classes such GPCRs. Several target validation projects are ongoing, two of which have already advanced to tangible discovery programs.

Secondly, we recently established a novel bi-specific antibody technology, which in conjunction with Ylanthia, opens up new opportunities for us in oncology and beyond. Sourcing promising therapeutic targets is critical to our ability to generate new drug candidates in-house with antibodies bi-specifics lanthipeptides.

For this reason, the part of our strategy is to establish relationships with institutions involved in new target identification and validation. One such deal was signed in April with the Moulder Center of Temple University in the USA.

When exchange for access to our Ylanthia platform, which we installed at the Moulder Center, we have options on therapeutic antibody candidates that emerge from their work. With that, I’ll conclude the operational review of 2014.

I will now hand over to Jens for the financial report and guidance.

Thanks very much, Simon. Ladies and gentlemen also from my side a warm welcome to our conference call for the financial results of 2014.

As stated before, 2014 was operationally another very solid year for MorphoSys, made significant progress preparing the company for the future, especially with respect to the numbers of compounds and development and the maturity of our pipeline. In terms of our financial results, we ended the year in the range of our updated guidance from October of last year, significantly better than originally estimated in February resulting from A, higher revenues, and B, lower expenses.

Our solid financial foundation was €352.8 million in cash and other short and long-term financial assets at the end of 2014, allows us to push the company’s strategy of enlarging its proprietary compound base further in the years ahead. We will rate this approach of increasing the number of proprietary compounds as a value creating, as well as the risk reducing one.

Let me now turn to the financial highlights of the year 2014. Revenues came in above the guidance range of €58 million to €63 million at €64 million.

The main reason for the overperformance was success-based payments from three INDs and one phase 3 milestone during the year. EBIT amounted to minus €5.9 million after a positive EBIT of €9.9 million in 2015.

Comparing the year end EBIT with our guidance of minus €5 million to minus €8 million, we closed at the upper end of the loss range. Our financial position remains very strong for a company of our size.

We ended the year with a very healthy cash position of, as mentioned €352.8 million. Let me provide you with some more granularity on our figures.

On Slide 15, you can find the profit and loss statement for 2014 in comparison to 2013. Revenues decreased by 18% to €64 million.

This decline resulted primarily for non-recurring effect in relation to the out-licensing of MOR103 to GlaxoSmithKline and from a license fee from the sale of the AbD Serotec business unit to Bio-Rad in 2013. And as planned, total R&D expenses increased by 14% to €56 million.

R&D expenses on behalf of partners remained in the same ballpark as in previous years at around €20 million, our proprietary R&D expenses increased by 15% to €36.4 million. This number comprises €33.5 million invested in proprietary development, and €2.9 million expenses for further technology development.

General and administrative expenses decreased by 25% to €14.1 million, mainly as a result of lower personnel expenses and lower expenses for third-party services. Other operating income mainly consisted of currency gains and losses and the recovery of receivables impaired in previous years as a result of incoming payments.

With earnings before interest and taxes amounting to minus €5.9 million, we are fully in line with our guidance for the year. We reduced our original guidance loss range of minus €11 million to minus €16 million in October last year to reflect a better revenue development and reduced spending.

Finance income totaled €1.8 million, and mostly included interest income and gains from the sale of securities. Finance expenses were €0.2 million were mainly the result of bank fees.

For the year 2014, the group reported an income tax benefit of €1.3 million comprising a current tax expense of €0.3 million and a deferred tax income of €1.6 million. In 2014 a net result of minus €3 million was generated, resulting 2014 diluted net result to share amounted minus €0.12.

Turning to Page 16, revenues in the Proprietary Development segment decreased to €50 million, with €26.9 million in 2013. These revenues were mainly from co-development activities with Celgene.

The decline in comparison to the previous year was caused by the upfront payment recognized in 2013 in the connection with the out-licensing of MOR103 to GlaxoSmithKline. The operating expenses for Proprietary Development increased by 22% to €33.5 million.

The segment EBIT amounted to minus €18.4 million. Looking at our Partnered Discovery segment, revenues amount to €49 million, compared to €51 million in the previous year.

In 2014, milestone payments added up to €5.4 million, compared to €3 million in 2013. The decline in license fees was caused by a non-recurring effect in the first-half of 2013 resulting from the sale of the AbD Serotec business unit to Bio-Rad.

Operating expenses amounted to €23 million in comparison to €25.5 million in the previous year. The segment EBIT increased to €25.9 million.

The EBIT margin for the Partnered Discovery segment was therefore roughly 50%. Let’s now move to the balance sheet on Page 17.

Total assets amounted to €426.5 million, as of December 31, 2014. On December 31, 2014 the company held liquid funds in marketable securities, as well as other financial assets in the amount of €352.8 million, compared to €390.7 million on December 31, 2013.

This amount includes cash and cash equivalents of €32.2 million, marketable securities and bonds available for sale amounting to €113.5 million, short-term financial assets of €157.1 million, as well as long-term financial assets in the amount of €50 million. Please note that our cash balances shown in five different line items in the balance sheet.

The existing funds available for investment are therefore significantly higher than the pure cash and cash equivalents position indicates. Non-current assets amounted to €104.1 million, up from €41.1 million due to an investment in the fixed term financial asset.

In-licensed research program increased to €28.3 million due to the collaboration with the Emergent BioSolutions for the development of MOR209/ES414. Current liabilities remained more or less unchanged at €32.7 million.

Non-current liabilities decreased from €60.1 million to €45 million due to a decrease in deferred revenues. Please be reminded that MorphoSys received an upfront payment of €71 million from Celgene and a premium on top of the roughly 3% share participation in connection with the MOR202 deal.

Following IFRS accounting rules we need to spread the recognition of those amounts over the development time of the compound that contributes to our revenues, which in turn reduces the deferred revenue failure on the balance sheet. Total group equity amounted to €348.8 million compared to €352.1 million on December 31, 2013.

This brings me to the outlook section and the financial outlook for 2015. Before I start with the guidance, let me address the recent volatility and exchange rates versus the euro and how it affects MorphoSys.

At this point in time our FX exposure is limited to the U.S. dollar with studies running in the U.S.

and on the other hand some milestone payments that are paid in U.S. dollar.

We expect a limited exposure to the U.S. dollar in terms of our revenues of 2015.

In respect of costs, our exposure is currently estimated to be somewhere around US$10 million in 2015. In line with our policy, hedging of planned revenues and costs for 2015 has been initiated already in 2014, we expect that the net impact on our earnings after taxes to be not material in 2015, but certainly everybody doing business in the U.S.

in Europe is exposed these days at least to some extent. Coming now to the guidance, the company’s R&D budget for proprietary drug development will rise further in 2015 in comparison to previous years.

The majority of the investments will flow into clinical development of MorphoSys’ advanced drug candidates. Further investments are planned in the areas of target validation and antibody discovery, and development as well as in the area of technology development.

MorphoSys expect group revenues for the 2015 financial year in the amount of €58 million to €63 million for 2014. Based on management’s current planning R&D expenses for proprietary programs and the development of technology are expected to increase to a range of €48 million to €58 million in 2015.

MorphoSys plans to initiate more clinical trials in addition to continuing the trials currently underway for MOR208 and MOR202. The company expects earnings before interest and taxes of approximately minus €20 million to minus €30 million in 2015.

This guidance does not include additional in-licensing costs for further development candidates, the company might acquire co-develop; having said that, we would like reiterate again that we remain interested in expanding our existing technology and product portfolio, and by doing this also de-risking the proprietary portfolio further. We are actively pursuing ideas and opportunities for in-licensing acquisitions and in our innovation capital initiative.

With that, I would like to finish my presentation and hand back to Simon for the operational outlook.

Thanks, Jens. We’ll now turn to our operational outlook.

I’ll start with a reminder of our strategy within which our operational objectives are framed. Our strategy is to establish a valuable drug pipeline comprising programs made on behalf of partners and increasingly those developed for our own account.

Our main goal is to expand, enrich and diversify this pipeline. While we continue to support our biggest discovery partner Novartis, our internal R&D is focused increasingly on building a portfolio of differentiated proprietary drugs through a combination of de novo discovery supplemented by in-licensing of already existing programs.

Let me provide some more clarity on our plans for the current clinical programs starting with MOR208. Updated from the phase 2 study of MOR208 in NHL will be presented at one or more medical conferences during this year.

Meanwhile we’re finalizing plans for two combination trials of MOR208 in relapsed or refractory DLBCL, which is scheduled to start in the second-half of the year. The two combination studies will look at MOR208 in combination with lenalidomide and with bendamustine, combining MOR208 with bendamustine aims at challenging the current standard of care in this setting which is rituximab plus bendamustine.

For lenalidomide there is a strong preclinical rationale for combining an immunomodulatory agent which augments natural killer cell cytotoxicity with therapeutic antibodies which use this mechanism. We believe MOR208 is, thanks to its FC enhancement, ideally suited to take advantage of the NK cell effect of lenalidomide.

The lenalidomide combination trial we expect first data in 2017, whereas to the larger bendamustine trial first results will become available later. As I mentioned earlier, we have fast-track designation from the FDA for DLBCL, and we’re certainly seeing the benefit of this in our interactions with the regulatory authorities.

And part of the discussion concerns the best and fastest possible path to market for MOR208 and this has guided our choice of combination partners for the next trials in DLBCL. Meanwhile development of 208 in CLL continues within the investigated sponsored trial with our collaborator John Byrd.

We might see first data of the combination of MOR208 with the immunomodulator lenalidomide in CLL in late 2015. This study will lead into an additional combo-study relapsed/refractory CLL in early 2016, which will evaluate MOR208 in combination with another small molecule.

Regarding ALL, the ongoing phase 2 trial will be discontinued in order to refocus on a promising new approach in this indication. Despite some encouraging responses early in the trial, the overall response rate was not sufficient to justify continuing with mono-therapy.

MOR208, clearly has activity in ALL, but we believe that in this indication an altered approach is required, which will be subject of an investigator-sponsored trial set to start later this year. The plan here is to transfer NK cells from parental donor to children suffering from ALL.

CD19 is widely expressed in the B-cells of ALL patients and the NK cell infusion should give the immune system of the recipient a boost, which will in turn support the therapeutic effect of MOR208. We aim to realize this trial in collaboration with St.

Jude Children’s Research Hospital in the U.S. For MOR202, first clinical data from the phase 1/2a trial in relapsed/refractory multiple myeloma patients, we presented this year, possibly at ASCO, to which we have submitted abstract.

We expect to have data for approximately 30 to 40 patients focusing on safety, pharmacokinetics and preliminary efficacy. Before mid-year we plan to commence cohorts combining MOR208 with lenalidomide and with pomalidomide.

We also aim to show updated data at ASH in December. Given the competitive situation on this space, we believe that the results of these combination studies will be important for us to understand the true potential of MOR202.

MOR209 is about to enter a phase 1 trial in metastatic castration-resistant prostate cancer. This trial will recruit up to 130 patients across sites in the USA and Australia.

MOR209 will be administrated intravenously, once weekly for three months and bi-weekly thereafter until disease progression in the trial. First clinical data from the trial is expected in 2016.

MOR106 from our collaboration with Galapagos, it’s an antibody against an inflammation target that is currently being prepared for entry into clinical development next year. An important part of our strategy is about building our product portfolio beyond those existing programs.

The disease focuses on cancer although we’re prepared to be opportunistic when we see promising targets or compounds and other indications. In-licensing is one part of the strategy as exemplified by our deals with Xencor and Emergent for MOR208 and MOR209 respectively.

We expect a larger proportion of our proprietary portfolio to be build de novo, by applying our proprietary technologies and expertise against novel targets. This is why we continue to invest in technology development, having a proven and differentiated technology capability makes it easier to secure access to promising targets and to make differentiated drug candidates against those targets.

Our investment in Ylanthia illustrates this point. This state-of-the-art antibody technology is being leverage to secure access to novel targets as exemplified by the deal we signed last year with Temple University.

We’re looking for more deals of this type with academic institutions this year. Our deal with Merck Serono provides a related example.

Ylanthia was the key, which turned this into a true co-development deal with a pharmaceutical company in the checkpoint space. Again, we’re looking to do more of these.

The key is to ensure that we have the ability to make truly differentiated drug candidates against promising targets. Looking at the partnered pipeline, there is a lot of potential for news flow.

As always we can’t be sure what our partners would choose to say about clinical results. And most important is positive progress with or without an announcement.

The most candidates to deliver tangible progress - the most likely candidates to deliver tangible progress are the following. First, the bimagrumab, we expect the completion of the ongoing trial of this Novartis program and sporadic inclusion body myositis at the end of the year.

This program is listed by Novartis has been planned for filing in 2016. phase 2 trials will continue and other indications and Novartis has announced that approval in sarcopenia and recovery from hip fracture surgery could be expected in 2019.

Second, guselkumab, this program was repeatedly highlighted by Johnson & Johnson, as planned for filing in 2016 or 2017. We expect the increased dynamics in 2014 with this program to continue in 2015.

Clinical data from a HuCAL program, however, is meanwhile to be expected elsewhere in J&J’s autoimmune portfolio, mainly through the molecule CNTO6785. The HuCAL antibody against some aziad [ph] undisclosed target molecule is currently being evaluated in RA and COPD.

And two phase 2 trials are scheduled for completion this year. Another two potential phase 2 readouts could from Novartis’ eye disease program LFG316, more specifically from trials and multifocal choroiditis and panuveitis.

And a second trial in geographic atrophy associated with age-related macular degeneration. Looking earlier in the partnered pipeline eight phase 1 trials from partners will come to an end in 2015 and could deliver data.

With regards of clinical milestones in 2015, we expect up to six events this year, including five new clinical trial staffs and one program transitioning from phase 1 to phase 2. Overall, we expect approximately 10 new partnered discovery programs to be started in 2015.

To summarize our proprietary R&D investment, the €48 million to $58 million that Jens mentioned will be channeled into the following. Finishing the ongoing phase 2 trial for MOR208 and NHL, and initiating the bendamustine and lenalidomide combination trials in DLBCL; supporting our investigator-sponsored trials with MOR208 and CLL and ALL with clinical grade material; preparing an additional clinical trial in CLL, using MOR208 and combination with small molecule to start in early 2016; continuation of the phase 1/2a trial of MOR202 including the forthcoming combination studies of MOR202 with pomalidomide and lenalidomide; financing our share of the phase 1 trial of MOR209/ES414 in metastatic castration-resistant prostate cancer within our lines with Emergent; continuation of the co-development of MOR106 with Galapagos; continuation of our co-discovery alliance in the immune checkpoint space with Merck Serono; initiation and continuation of new programs in the area of antibody discovery and preclinical development; and further development of the lanthipeptide and biospecific platforms.

In conclusion, we look forward to another year of progress in our pipeline both with proprietary as well as partnered programs. The pipeline is maturing nicely, proving the power of our technologies, as well as our discovery and development capabilities.

MorphoSys is well positioned to continue its growth. Thank you for your attention.

I’ll now hand back to Claudia for the Q&A session.

Thank you, Simon. We are now opening the call for your questions.

Hi, there. It’s Sarah Potter from Bank of America.

Thank you for taking my questions, I’ve got two, please. I was interested in an update on your thinking around the partnering of MOR208.

Would you wait for the data from the new combination studies after 2017 or are you open to discussions at any time? And as a follow on from that, I know to sort of choosing to combine lot of your heads with Celgene, with Celgene products.

Is there the potential that Celgene would be interested in partnering this program and continuing the relationship you have following for MOR202? And then, my second question is on guselkumab.

There are a number of phase 3 studies ongoing for, but I noticed there were no head-to-head studies versus Stelara. Could you talk about how you see the positioning of this agent versus the Anti-L17 [ph] which is starting to come through, which have shown superiority over Stelara.

Thank you.

Thanks, Sarah. So, let me start with 208.

We don’t see any immediate need to partner 208. We have to wherewithal the means, the plans to take that - to continue to take that compound forward on our own.

And that don’t necessarily mean that we’ll go all the away on our own but we feel that we can continue to create value by generating additional data, as many settings as possible before considering a partnership. So that’s our immediate plan to continue to build value within the program.

And the second part of your question we have of course complete freedom to partner the program with whoever we wish. And as and when the time comes that we would seek a partner, we would engage with this many parties as possible, to identify the best possible party to take the program forward, whoever that may be.

So there is no decision and even early thoughts about who that might be, we’ll cross that bridge when we come to it. Regarding the guselkumab, Marlies will take that question.

Yes. Thanks, Sarah, for your question.

On guselkumab and its positioning, of course, this is a very interesting question, but for your understanding that we are not able to comment on the positioning strategy of our partnering here. So let’s see how it will go.

Thank you very much.

I’ve got a couple of questions. The first question is, could you provide us sort of a timeline for the R&D - for proprietary R&D expenses.

I believe the bulk of these expenses should be in the second-half of the year? And the second question is, could you specify that in terms of quarters, when do you expect the data from ALL mono-therapy and from CLL combo trial?

Thank you.

Igor, thanks very much for your questions. I’ll take the first one, and second will be an answer for Arndt.

On the timeline of the R&D expenses, yeah, indeed, I think it’s a fair assumption to assume that the second-half normally has a higher proportion of the cost in the first-half. But I mean, I can’t give you more granularity than this at this stage.

Okay. Thank you.

Hello, Igor, the question about ALL data and CLL data, for the ALL, as Simon said, we’re going to wrap that up, the expectation is that, we would share that probably by the end of the year for the next, I think, that was your question, the - I think you asked that CLL combo trial or also about the deal. So the CLL combo trial we said would start in early 2016, so that would probably, it’s a little bit too early maybe to comment, because we haven’t even specified what the design would look like most likely couple of years later possibly since it’s most likely going to be an open-label trial, the follow on years, so let’s say 17 probably preliminary with more robust data in 18.

And of course, the CLL also has the ongoing IST with John Byrd, Ohio State University combining with lenalidomide and there we might see first data - preliminary data by the end of this year.

Okay. Thanks a lot.

Sure.

Gunnar Romer, Deutsche Bank, thanks for taking my question. The first one would be with regard to MOR202, rather a bigger picture question here.

I can recall your attention was to catch up with competitive in the field, however, given the significant progress, especially DARA has made. What’s your thinking around a potential catch up here?

And then secondly, if you could remind us on MOR202, when the first potential milestone payment from Celgene would come? Is that anything that could already happen next year, or should we assume that this would happen at the earliest in 2016?

Then secondly, question for Jens, as always would be much appreciated if you could provide with us - with an idea of where you expect net cash by year end obviously, excluding any potential additional ideas? Thank you.

So, Gunnar, I will take the first question, your bigger picture question 202, and where we are kind of in the race with the on to our competitors. So I think we have - that technology DARA is ahead, they are very board, mostly likely will be first to market.

But with DARA there is no possibility to catch up. I think we know now with very encouraging data, a broad development, they will be possibly be launching in 2016.

Where we see ourselves, but with the molecule and we said we would share first data mostly safety PK, but also then at the conference possibly at ASCO, first efficacy data, and comparing to the saw [ph] molecule, we could potentially be second, of course, that as always depends on the data and the progress of the product studies.

And then, Gunnar, your second question, I’ll take that regarding the timing of a potential milestone in the 202 program. What we can tell you is that, we are not assuming anything for this year for that program, and beyond that, it would really be premature to speculate on that.

And as you know, we don’t give guidance beyond the current year, anyway. So I think all we can say at this moment is that, there was nothing currently assumed in our financial guidance for this year regarding MOR202.

Yes, and then on top of that, Gunnar, regarding the cash position, I think that sort of fair range you can assume for 2015 end of the year is €300 million to €310 million, that should be the net cash position.

All right, perfect. Thank you very much.

Maybe one follow-up, if I may, on your assumption regarding the top line. I think you talk about six potential transitions, five programs [indiscernible] if I could recall that correctly and one potential move into phase 2, is there any chance that you see one of your partner programs moving into phase 3, which could be then linked to a milestone payment for you?

In general it could be, but it’s, as you know, extremely difficult to predict. We have seen surprises as in last year, but we - in terms of being early and we have seen the other way around that the partners have been later than they originally estimated.

So as you know, we always assume some sort of mixture and that also drives the range you see in the top line, because we just can’t be sure when certain programs, which we assume should move in the next phase - and are scheduled to move in the next phase really will move in the next phase and then bring us some additional revenue milestones.

Okay. Thank you.

Yes, thanks for taking my follow-up. I have a question regarding the overall trends.

The number of partnered programs have significantly increased up to 84, I think, compared to the prior year. And at the same time the mix between in terms of employees between two segments, proprietary and partnered has also shifted programs - in proprietary programs.

So the question is, should we expect, it has a strong year in terms of new, in terms of partnered programs with 2015, or considering that you focus more on preventing their programs should be rather flat in terms of partnered program for the current year?

Yes, I’m happy to answer that question, Igor. Indeed, our stronger focus is on our proprietary activities with the existing setting of people involved in our partnered business, we are able to manage the programs, and after we have made the antibody for the partners, we handed over to the partner and from thereon, they take over the further development and also cover the costs.

And there is only limited sort of volatility and the number of people being involved in that segment, but with a stronger focus of MorphoSys on proprietary assets, and our intention to in-license additional assets, there will be a stronger higher number of people working on our proprietary activities.

Okay.

So partner will be rather stable, if there shouldn’t be some big additional corporations coming up, but the main focus is really to work on proprietary assets in the development arena to a great extent.

Okay. Thank you.

Good afternoon, everyone. A couple of questions, firstly with the Ylanthia products and also the bi-specifics, how far away from - these from entering the clinic potentially and also you’ve obviously got a very strong cash position.

But how much - can you give us an indication of how much is tied up and/or and how much is available to in-license and to develop another program or programs?

Yes, thanks, Mick, for your question. This is Marlies, happy to take your first question on the Ylanthia peptides and the bi-specifics.

So this is still early work where we developed the technology and make it ready to be used in a kind of industry setup. So I would say those programs are still very young programs and it’s not possible to predict exactly the point in time when they might reach the clinical development.

And in terms of your second question, Mick, indeed, we have a very solid financial basis, as also mentioned in my speech and despite the fact that the cash flow cost is in a range of €300 million to €310 million by year end, I mean, that certainly indicates that we have sufficient financial resources to in-license additional compound. So we don’t see a limitation in respect of the financial resources to do this at this point in time.

It’s rather a question of getting the right assets in-house, that’s a much more challenging job to do, to undertake, but the financial resources are there and for the foreseeable future they should be also there.

Okay. Thank you.

Hi, there. Thank you for taking my question.

It would be about an update on your collaboration you have with GSK on MOR103; and the related question to that on is, who is actually the manufacture of this antibody?

So, thanks, Olav, for the question. You know that we have the collaboration with GSK and are little hesitant kind of to really publically specifically comment on their plans.

We know they are working on the next 2b study to be started probably this year. I can’t really be more specific than that, because the arrangement is that the new partner really comments on that itself.

We see this very good commitment. All the resources go in there.

The plans are getting ready. And certainly the next study as well on its way.

Thank you. And then on the manufacturing, please.

I mean, I can take that question, Olav. This is Marlies again.

I mean just to remind you, of course, as it’s in the hand of our partner GSK, we won’t be able to comment and disclose the manufacture of the molecule.

Okay. Thank you.

Sure.

Thank you for taking my questions. Good afternoon.

I have three quick questions, I think, I hope. First one regards to MOR208 and CD19 target.

This is clearly a focus also on the CAR T cell programs in a number of other companies and academic institutions. So first question is how do you see MOR208 fitting into the spectrum of care for CD19, CD20 associated diseases?

Second question, with regard to your collaboration with Emergent and you’re moving into biospecific and other types of antibodies. Does that partnership exploring, moving further or beyond the 209 into other biospecifics?

As you mentioned you’re exploring new technology, EBS has from my understanding quite a position in those kinds of antibodies. And my last question, considering your progress and movement into a number of different programs your G&A expenses has diminished remarkably in the light this sort of expansion that you’ve had.

So could you describe a little bit how you manage to rein in some of your G&A expenses? Thank you.

George, this is Arndt, hi. Thanks for the first question.

Your question was about how does the CD19, 208 fits in the spectrum of the CD19, 20 is basically positioning there in the space. What we fell is we have a SC enhanced molecule that has shown very well behaved in all respects in terms of production, safety very much.

We’ve had very encouraging first efficacy signals, the final data CLL where it really compares favorably with the CD20s, actually all CD20s and CD19s in relapsed/refractory CLL, very promising the first data as to our preliminary in DLBCL follicular forms of the NHL space. So we think well-positioned with a really naked antibody that is very safe and shows efficacy, that when you think about cell therapy, just to say it more commonly which is quite demanding in terms of infrastructure needed at the different centers, we believe will be something that will be very much used in that space, so that should make it unique possible for positioning in the CD20, 19 space.

And George, let me take the second question, so just to be really clear about the relationship with Emergent that is confined just to the one program, the MOR209 program. And there is currently at least nothing going on beyond that within our collaboration with Emergent.

Having said, that we have our own and that’s where it comes from, our own activities in the biospecific field. As I mentioned we have some developments there that we like and we’ll continue to pursue, to give ourselves, independent of others, the ability to make biospecific antibodies against the targets that we’re interested in.

And then coming to the G&A expenses, I mean, in general it’s all our intention to really keep G&A as low as possible to invest the money instead of G&A people into the R&D arena. But we also have to fair that in 2013 we had some additional expenses that brought the numbers up in comparison to this year, driven by if you have a slim team in certain arenas you need some external support like lawyers for certain associations [ph] as we did in 2013 with Celgene, with the GSK, with the sale of AbD Serotec and so on.

So certainly there are also some costs that have to be associated to these jobs. But nonetheless, I mean, our intention definitely is to spend too much money on the G&A area but really focus on the R&D area.

Great, and thank you to Arndt, with regard to CD19 and MOR208. I see it sort of as prolonging treatments for patients with these diseases on antibodies before they need to go on to CAR T cells.

You see CAR T cell as many other people do as sort of a therapy of last resort. And Jens, regarding the G&A expenses, I suppose then 2013 was sort an outlier and not - and then on 2014 in terms of R&D.

You basically had more expenses in 2013 and 2014 is more in line with 2012 then. Is that a correct interpretation?

Yes, maybe I’ll start, because I said at the last, I think you have to expect for 2015 a slight increase versus the 2014 figures that and to some extent is really a lower figure than normally and 18 was in turn maybe an outlier in terms of the amount. So for the near future at least for this year, giving guidance I wouldn’t - I wouldn’t expect the number which lies between the two.

And maybe just to briefly address again, George. So I think we see it, it’s of course, very different than CAR T cells, I would see that independent.

Let me make one more comment since we disclosed, and as we said, we’re going to start these two phase 2 trials in DLBCL, where we saw a very promising results, lenalidomide and bendamustine. And here that the bendamustine, really the goal is to really replace the rituximab plus bendamustine regimen which is well-established in this second line, those patients that are non-eligible for stem cell transplant and hydros chemotherapy.

So here, and I think that was one of the original question, in that specific setting the goal would really be to replace a setting that is already established there. So we want to take that on and answer that important question early on.

I see, okay, thank you very much for the clarification. Thank you for taking my questions.

Good afternoon, everyone. My question is regarding your collaboration with Merck Serono and immuno-oncology in general.

Is the partnership with Merck Serono is totally in isolation as far as this collaboration is concerned or is it in combination with Pfizer or you’re talking to the same people. And what is the interaction there?

What is the strategy to develop what kind of candidates? That’s one.

And the other one is your own view to in-license new products. Simon, you mentioned you’re still focused on oncology, but oncology is too broad.

Is there a way you approach this process to pick up a new candidate? Can you share some light on this?

Thank you.

Sure, thanks, Sachin. So starting with Merck Serono, this is a collaboration that’s focused on specific checkpoint targets.

It’s unrelated to whatever else they may be doing elsewhere with others. There are certain checkpoint targets that they’re interested in and we’re interested in, and we’re using our Ylanthia technology to make antibodies against those particular targets.

What’s not disclosed is how many targets are involved there, what’s not disclosed is the identity of the targets as it is normal for this stage of a project, but it is a standalone project. Secondly, regarding in-licensing of new product, what we look for is we look at the landscape out there for antibodies or antibody like molecules that we think are differentiated.

Preferences for cancer, as you’ve seen, we are able to in-license compounds that are outside of our core focus of hematology or hemon [ph], when we brought in this molecular from Emergent in prostate cancer. The key point is really the differentiation and we’ve looked at a lot of compounds, not just in cancer but also outside cancer.

And really look at the data available and whether those molecules are sufficiently differentiated that now view they justify investment, of course, not only investment in getting our hands on them, but the investments that’s required then to develop them. And when we’re convinced, and when can negotiate a suitable agreement with the other side, as we’ve done with Xencor and now with Emergent, then we are prepared and able to act.

Maybe a quick follow-up on this one, how much your time is spent on this particular process or the full-year? Thank you.

You mean me personally or do you mean time of the company?

Time of the management, yes.

Yes. I can’t give you a precise number, but a significant chunk of time.

The way it works is, we have a little team here, part of our business development team, whose job it is to scour the landscape, and evaluate - so engage with people and evaluate the potential opportunities that are out there. That business development group report to me, so a significant chunk of my time is spent working with them, looking at these opportunities, considering them inevitably Marlies and Arndt are involved as well, as it was R&D relevant.

So it is a big part of what we do and an important part of our strategy, which is, as we’ve said, aimed at building as valuable the pipeline as we can. And we simply can’t do all of them totally on our own, which is why that in-licensing is such a priority for us.

That’s great. Thanks a lot.

Yes. You’re welcome.

Yes, Simon. Thank you for taking the question.

I was a bit curious about the pediatric trial, the investigator-sponsored pediatric trial, which will combine MOR208, with the transfer of NK cells from a parent to a child. Is there any precedent for this in the literature or otherwise?

Victoria, this is Arndt, I’ll be glad to take that question. So, yes there is actually, we’re going to do this with St.

Jude Hospital and they and others have actually before use these also called haplo-identicals of parental NK cell transfusions. There is good literature.

It’s safe to do that. They are of course purified, clean, there is really any safety events seen which this is being done.

And the full concept is, you have to imagine this ALL as a very, a very acute disease, usually the immune system is bettered with high dose chemotherapy that these children and young adults and adults get and specifically in children. So the idea is with an Fc-enhanced antibody that works through NK cells and of course would be weakened by a bettered immune system to restore that to really give the antibody the ability to act as it should be.

Okay. Thanks very much.

Sure.

Thank you for taking my questions. It’s a question on headcount.

What is your number you are heading for the current year, especially the background of your intense proprietary activities? And another question is around your presence in the U.S., is it time to be more present in the U.S.

right now? Thank you.

Yes, Thomas. Thanks very much for your questions.

Regarding the headcount we see an increase, a slight increase, yes, in the range of 5% to 10% for this year, with the focus as I mentioned earlier based on the question raised, on the proprietary - for the proprietary segment.

And regarding the U.S. presence, Thomas, we are already very present in the U.S., in terms of our investor relations activities where there are a lot doing road shows, doing conferences, talking to investors and so on.

As you know, we have collaborations with a number of U.S. academic and also U.S.

academic institutions and also companies over there. It’s an important place for us to be and without giving any details you should expect in general our visibility and our presence over there to increase with time.

But is there no actual need to be more closer to your partners in academics or in the industry world?

We are happy with the way we manage that, we have a lot of experience of managing relationships and interacting with companies really all over the world. So we know how to do that, but as I said you should without wanting to go into any details just now, because it’s quite premature, you should expect the U.S.

to become an even more important part of our activities in the future.

Okay. Thank you, Simon.

Thank you. And to conclude the call, I would like to remind you of the key take-away messages.

We’re excited about the prospects for progress this year, strengthening our own portfolio will be at the center stage of our efforts. We plan to advance the clinical development of MOR208, MOR202, and MOR209, while at the same time continuing to build a sustainable portfolio through our discovery activities.

You can expect that our partnered pipeline will continue to mature and grow. Within the next 18 to 24 months, we expect to see clinical data for various programs, including readouts from pivotal studies with bimagrumab and guselkumab, which will provide clarity on market introduction of the first of our antibodies.

We continue to execute our long-term plan to build the broadest and most valuable antibody pipeline in the biotechnology industry, including unique approaches that aim to help patients with serious conditions. That completes the presentation.

Thank you very much for your attention.

Should any of you wish to follow-up with us directly we’re in the office for the remainder of the day. Thank you for joining the call and good bye.