Q1 2020 Earnings Call
[music].
Ladies and gentlemen, welcome to muffled. This first quarter 2000 try to results conference call. Please note that for the duration of the presentation. All participants will be new listen only mode and the conference is being recorded.
Operator: Ladies and gentlemen, welcome to MorphoSys' first quarter 2020 results conference call. Please note that for the duration of the presentation, all participants will be in a 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. Should anyone need assistance during the conference call, they may signal this by pressing star and zero on their telephone. Now, I would like to turn the conference over to Dr. Julia Neugebauer. Please go ahead.
After the presentation, then we'd be an opportunity to ask questions.
Please note that we own can only take your questions. If you have for just the by name should anyone need assistance during the conference call. They may six now this by pressing star in the wrong on that tennis and now I would like to turn the conference over to Dr. Juliane like about just go ahead.
Good afternoon, good morning, and welcome to our Q1 Twentytwenty results conference call and webcast. My name is you've done I get on director corporate Communications and Investor Relations ethanol holder.
Julia Neugebauer: Good afternoon, good morning, and welcome to our Q1 2020 results conference call and webcast. My name is Julia Neugebauer, Director of Corporate Communications and Investor Relations at MorphoSys. With me on the call today are Jean-Paul Kress, our Chief Executive Officer, Jens Holstein, our Chief Financial Officer, and Marta Peters, our Chief Research and Development Officer. Please note that due to the COVID-19 pandemic, we're dialing in from different locations. So I would like to apologize for any disruptions this might cause. 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, our transition to a fully integrated commercial pharmaceutical company, and the initiation of additional programs. Should actual conditions differ from the company's assumptions, actual results and actions may differ from
With me on the cards or they are strong progress our chief Executive officer dense watched on our Chief Financial Officer, and my the Peterson, Our Chief Research and development Officer. Please.
Please note that due to the carpet 19 pandemic, we're dialing in from different locations. So I would like to apologize for any disruptions as my car.
Before we stopped I would like to remind you that during this conference call. We were presented and discussed certain forward looking statements concerning the development of more for this core technologies. The progress of its current research and development programs Elektron Division to fully integrated commercial pharmaceutical company and the initiation of additional program.
Should extra can discern differ from the company's assumptions actual results and actions may differ from those anticipated.
Julia Neugebauer: You are therefore cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date you write this message. You can find the agenda for today's call on slide three. Jean-Paul will start with his opening remarks, and we'll give you an overview of our Q1 2020 highlights. He will then hand over to Jens, who will review the financial results for the first quarter of 2020. Jean-Paul Demme will close with an outlook for the rest of the year. After the presentation, we will all be available for your questions. You will find the slide deck for this call on our corporate website. I would now like to hand the floor to Jean-Paul.
You are there for cautioned not to place undue reliance on such forward looking statements, which speak only as of today Carol.
You can find the agenda for today's call on slide slide three.
John Paul we start with his opening remarks, and we give you an overview on our Q1 Twentytwenty highlights. He will then hand over to begin with revenue the financial results for the first quarter of Twentytwenty. Some color them until this was an outlook for the rest of the year.
After the presentation, we will all be available for your questions. We'll find a slide deck for this call on our corporate website.
I would like to hand over to John Paul.
Thank you Julia and good morning, and good afternoon, everyone.
Jean-Paul Kress: Thank you, Julia, and good morning and good afternoon, everyone. First, I want to acknowledge that this has been an extraordinary quarter for all of us: a global pandemic, economic disruption like none of us has seen before, and, of course, financial volatility.
First one less knowledge that this has been an extraordinary quarter for Vodafone.
Grew about somebody make economic disruption like none of US has seen before and of course financial will lucky.
Jean-Paul Kress: I hope that all of you and your families are safe and healthy, and thank you for joining the call in these circumstances. The safety of our employees and patients is our top priority, as outlined in our press release last month. We activated our business continuity plans to minimize disruption and ensure the health and safety of our peers. With these measures in place, we have been able to move full speed ahead with getting ready for a successful launch of Tafasitamab if approved by the FDA. In a few minutes, I will share an update on the status of our launch preparation, but first, I will start with key highlights from the very precious first quarter.
I hope that all of you and your facilities are safe and healthy.
Thank you for joining the call in these circumstances.
The safety of our employees in patients top priorities.
As outlined in our press release last month.
We activate adult business continuity programs.
Minimize disruption and I'm sure to help consists of Paul cheese.
With these measures in place we have been able to move full speed ahead.
With getting ready for the six to two loans will suffer from up if approved by FDA.
In a few minutes.
Share an update on the such as will fall launch preparations.
First I was struck with key highlights on a very positive first quarter.
We got off to an extent on stock options with Gtwenty and I am happy to report because apologize we have made.
Jean-Paul Kress: We got off to an excellent start in 2020, and I am happy to report on the progress we have made. We signed a global licensing agreement with Insight for Peppercinema. We have been working closely together for two months now, and it is going very well. Insights Establish Global Hematology Oncology Presence, and their track record in commercializing important new medicines are highly complementary to our strengths, including our antibody and drug development expertise. Since the official closing of the deal, we have been aligning on launch activities and development plans together. We will maximize the full potential of Sympathies Unlocked.
Earlier this year.
We signed a global licensing agreement with insights.
To sum up.
We have been working closely together two months now and if you are going very well.
Insights established global hematology oncology prisons.
And we have trucks recall in commercializing impulse on new business James.
Highly complementary offerings, including all all puberty and drug development expertise.
Since the official closing of the deal.
We have been a lightning launch activities and development plans.
To get there.
We will maximize the scruples I'm sure will serve us through them up.
Jean-Paul Kress: We plan to share more details on this later this year. Also, during the first quarter, our BLA for catharsis and MAP was granted priority review by the FDA and given a PDUFA date of August 30th. The FDA has indicated that currently no advisory committee meeting is planned while awaiting the FDA decision on the BLA filing.
We plan to share more details of these later this year.
Also during disrupts Walker.
Nearly 4% to them up for granted priority review by the FDA and given given a pizza date of August 13th.
The FDA has indicated that currently no advisory Committee meeting these top.
While we're waiting for a decision on the BLE fighting.
Jean-Paul Kress: We also wanted to provide access to Theta Theta Map to patients who have no other treatment option. Therefore, we initiated an expanded access program in the U.S. in February. This EAP allows us to make tafacitamab available to eligible patients with relapsed or refractory diffused large B-cell lymphoma who are not eligible for available clinical trials and do not have other treatment options. One of my goals has been to strengthen the executive team.
We also wanted to provide access to capacity from up to patients who have no other treatment options.
Therefore, we initiated an expanded access program in the us in February.
This EAP so low this to make references amount the favorable.
Two eligible patients with relapsed or refractory diffuse large b cell lymphoma, who are not eligible fault available clinical trials.
And do not have although treatment options.
One of my goals has been to strengthen the exchange team.
And I'm very pleased to welcome Hello bundle there.
Jean-Paul Kress: And I am very pleased to welcome Roland Vandeler as our new Chief Commercial Officer. Roland brings a wealth of leadership experience, a clear focus on customer and patient needs, and a track record of exceptional execution both in the U.S. and internationally. Roland will lead our global commercial operations and will oversee our planned U.S. launch of Porta Fattita. Roland just started this week, and I look forward to introducing him to you during a future call.
As our new Chief commercial officer.
Well John brings a wealth of leadership experience.
The clear focus on customer and patient needs.
And the trucks recall of exceptional execution, both in the us and internationally.
Hello will lead our global commercial operations and will oversee all planned new was launched popped up front you talked about.
Hold on just after this week and I look forward to answer is in NIM to you during future calls.
Turning now to our development activities highlights.
Jean-Paul Kress: Turning now to our Development Activities Highlights. I have already mentioned the acceptance of the BLF Alpha Theta MAP. All ongoing Thetha Theta Map trials currently continue, and we have not experienced any major disruptions from COVID-19 in those trials. In general, we see positive signals from sites and investigators, and we see high interest in the ongoing trial. First line, our trial in frontline DLV-CL patients, is proceeding well and will be the basis for our pivotal trial that we plan to start next year. We are also finalizing our plans to develop Tassacita MAD in additional indications and with different combinations, for instance. We noticed encouraging clinical data in CLL for the combination of B-cell depleting antibodies with PI3 kinase inhibitors, and we plan to look into such combinations as well. As seen with many compounds in development in immunology and inflammation, the recruitment of patients was proactively planned for MORPH-202 in autoimmune indications, which is in phase 3 development for RA by GSK. However, for some countries, especially in Europe,
I already mentioned acceptance of the beautiful 50 them up.
All ongoing success with him up trials currency continue.
And we have not experienced any major disruption some coping 19 the in those trials.
In general.
We achieved positive signals some sites and investigators and we see high injury in the ongoing trials.
First mine.
I'll try out in front line de LBC as patients.
This is proceeding well and we will and will be the basis for all pivotal trials that we plan to south next year.
We are also for not ideal plans to develop tested them out.
Additional indications and with this film combination partners.
For instance, we noticed encouraging clinical data in C.L. Taylor for the combination of these says depleting antibodies with T. I treat kinase inhibitors, and we plan to look into such combinations as well.
I've seen with many compounds in development in immunology and summation.
The recruitment of patients with Fourk TV pose for multi two or two in autoimmune indications.
And for overseas market.
Which is in phase three development for our a by GSK.
However.
While some countries, especially in Europe.
Jean-Paul Kress: We see that the situation is improving, and some restrictions are being lifted. So we continue to watch the situation carefully and are fully prepared to restart our trial as soon as circumstances permit. We were very pleased to see that our partner, IMAB, did the first patient in mainland China in the ongoing phase three trial in multiple myeloma. IMAP is highly committed to bringing more to patients needing new treatment options. Back to Ocillimab.
We see that the situation is improving and some restrictions being lifted.
So we continue to watch the situation costly.
Our fully prepared to restock trial as soon as circumstances for me.
For the development of Nok, two or two in oncology.
We were very pleased to see developed partner Imap dosed. The first stations in mainland China in the ongoing phase III trial in multiple myeloma.
Hi, My name is highly committed to bringing about two to patients meeting new treatment options.
Back to the mouth.
GSK list yesterday.
Jean-Paul Kress: GSK listed yesterday the intention to investigate ophilimab in patients with severe pulmonary COVID-19 related disease on clinicaltrials.gov. According to the Registry.
The intention to investigate fulfillment in patients with severe preliminary coolfit 19 related disease on clinical trials the Gulf.
According to the history.
Jean-Paul Kress: The trial is planned to enroll about 800 patients and has a primary completion date of December 2020. We are obviously very pleased to see that GSK intends to test otilimabs in COVID-19 patients. [Inaudible] We have decided not to exercise our exclusive option to license Viborium's small molecule inhibitor of the CD47 SIRT-alpha interaction in the field of oncology.
The trial is planned to enroll about 800 patients and has the primary completion date of December Twentytwenty.
We obviously are very pleased to see that GSK intends to fiscal two remapping provision 19 patients.
Lastly.
We have decided to not exact size our exclusive option to license volumes small really truly inhibitor of the she focuses and serve as fast interaction seem to feel the from college.
The decision was based on historical analyzes of data from various pre clinical validation studies that we performed in Canada.
Jean-Paul Kress: The decision was based on a thorough analysis of data from various preclinical validation studies that we performed internally. However, we continue to actively evaluate potential licensing opportunities in order to diversify our pipeline and portfolio. Our strong financial situation brings us into a very good position for that, and we will share an update in June. Moving now to our Tata Sita Map U.S.
However, we continue to actively evaluate potential in licensing opportunities.
In order to diversify our pipeline in portfolio.
Our strong financial situation brings us into a very good position so that it will share an update in due course.
Moving now to our contracted amounts to us launch preparation.
Jean-Paul Kress: Launch Preparation. Our activities continue to ramp up as we prepare for the anticipated approval and launch of TASFA in the coming months. We've made significant progress, and we have adapted our approach successfully to the very special circumstances we are currently encountering with the pandemic, using a variety of virtual tools to onboard team members and to initiate, maintain, and even grow our connections with our key stakeholders. We are using multiple technologies. So, we can quickly and easily connect with our key customers upon approval.
Our activities continue to ramp up.
As we prepare for the alternative anticipated approval and launch of satisfying to coming month.
We've made significant progress and we have adapted our approach successfully to the very special circumstances. We are currently encountering with the comes into.
Well using a variety of future tools to on both she members and to initiate maintain and even grow a lot connections with our key stakeholders.
We are using multiple technology.
So because we can quickly and easily connect these artsy customers upon approval.
We are able to provide more choices and commercial 12 healthcare providers on the when and how they want to interact with us.
Jean-Paul Kress: We are able to provide more choices and controls to our health care providers on when and how they want to interact with us. We're also innovative with some of the best digital marketing practices. Our field sales organization is now fully staffed with some of the best oncology sales talent in the industry. They know the hematology oncology market and the key stakeholders very well. In addition, we are leveraging insights and existing relationships with respect to customer access, building on the network they have established with Jaka5. We are implementing industry best practices, and all our sales reps are working with remote capabilities for compliant virtual engagement. We have conducted comprehensive market research to better understand our key customer needs. [inaudible] We've developed a strong positioning and messaging based on the profile of the Kaffa-Len combination in RPR-DL-BCL. Our market access team has been engaging with the relevant players, and has a deep understanding of the landscape. Leveraging the Prejudice Experience
We also innovative with some of the best digital marketing practice.
Our field sales organization is now fully staffed.
We some of the best oncology says talents in the industry.
They know the hematology oncology market.
And the key stakeholders very well.
In addition, we are leveraging insights existing relationships with respect to customer access.
Building on the network, we have established Jackup high.
We are implementing industry best practices.
And all our sales reps.
Working with remote capabilities for compliance.
Through our engagement.
We have conducted comprehensive market research to better understand there are key customer needs.
And two segments our markets.
We've developed a strong positioning and messaging based on the profile of the castle in combination in all deals this year.
Our market access team has been engaging with the relevant figures.
And has a deep understanding of the landscape.
Leveraging their previous experience.
Jean-Paul Kress: We've also performed diligent pricing research, leading to a pricing strategy reflecting the value proposition of the Tar-Falen combination. We are establishing a compelling patient support program and market access strategy to ensure that all the appropriate patients will have access to Delta Theta Lambda. Our medical affairs team is continuously engaging with KOLs using virtual platforms and sponsoring CME programs. They are also participating in virtual symposia, lectures, and Clinical Trial Engaged. Our MSLs have achieved around 1,800 engagements with HCPs today. And we are well on track to meet and even exceed our target of 2,000 interactions by lunchtime. The robustness of our data for TAPACITA maps continues to generate a lot of interest from clinicians, and they will be very well represented at upcoming virtual scientific or medical conferences, like Ash on EAH. In addition to all of these activities, we are strengthening our partnership with Insight, and we have completed cross-training and deployment of our field medical. With insights, a strong presence, and expertise in the he-uncle field, we are significantly increasing our share of voice. And last but not least,
We've also pick from diligence pricing research, leading to a pricing strategy.
Reflecting the value proposition of the tougher in combination.
We are establishing a compelling patients you portfolio him and market access pathology.
To ensure that all the appropriate patients will have access to definitely summer.
Our medical affairs team is continuously engaging we scale is using virtual traps subs.
Bookings scientific exchanges.
And sponsoring Jimmy programs.
They are also participating in vitro symposia lectures and clinical trial engagements.
Oh, Hey, Msos combat ship around 1800 engagements with HCP is today.
And we're well on track to meats, and even exceeded our targets of 2000 interactions by launch.
The robustness of our data for capacity come out.
We continue to generate the log of injuries from conditions.
And.
And we'll be very well go through them, but coming via truck scientific or medical conferences.
Like National ph.
And that's cool.
In addition to all of these activities.
Strengthening our partnership with insights.
And have completed cross training and deployment of few medical teams.
His insights strong presence and expertise in DC encore field.
We are significantly increasing our share of voice.
And last but that please.
Jean-Paul Kress: Our supply chain is on track to ensure timely delivery of products upon FDA approval. We've made great progress towards our launch, despite the special circumstances. We have hired an amazing team with great experience in the, and we have outlined some of the actions we're taking to commercialize virtuality. Our organization has the business agility to adapt to new and changing circumstances to achieve our goals, and we have a very competitive share of boys together within. I will now turn over to James, who will provide you with an update on the 2020 Q1 results. James, please. Thank you, Jean-Paul.
While supply chain is on track to ensure timely delivery of product, but from a FDA approval.
We've made great progress towards all launch despite these fish such circumstances.
We have hired an amazing team with great experience in network.
I've outlined some of the actions we've taken to commercialize it surely.
Our organization has the business agility to adapt to new and changing circumstances to achieve our goals.
And we have a very competitive share of voice to get it will insights.
I will know hand over to Jim.
We'll provide you with an update on the Twentytwenty Q1 results.
Against please.
He was involved.
Let me start the financial revenue by reiterating that were indeed, very pleased with the company's development and financial performance in the first quartile for years.
Jens Holstein: Let me start the financial review by reiterating that we're indeed very pleased with the company's development and financial performance in the first quarter of the year. Q1 2020 was a record quarter. MorphoSys has never been financially stronger to pursue its goals. Revenues in the first quarter were at a record high of 251.2 million euros, and our cash position exceeded the 1 billion euro mark. Let's now take a closer look at the most important financial figures of MorphoSys for the first quarter of 2020, which have been significantly impacted by the successful closure of the company's collaboration licensing agreement with Intel. I would like to start with a summary of the agreement with INSEAD that we signed in January and finally closed.
Q1, Twentytwenty was a record quantify.
Before that has never been financially stronger to pursue its goals.
Revenues in the first quarter water, where record high of 251.2 million euros, and our cash position exceeded the 1 billion Euro Mark.
Let's now take a closer look at the most important financial figures of smartphones are so the first quarter twentytwenty that have been significantly impacted by the successful closure of the company's collaborations licensing agreement with insight.
I would like to start with a summary of between with insight that we signed in generating finally closed in March.
Jens Holstein: On January 13th, 2020, MorphoSys and Insight announced that both companies had signed a collaboration and licensing agreement for the future global development and commercialization of MorphoSys' proprietary anti-C19 antibody, Tafelzitamine. Under the terms of the agreement, MorphoSys received an upfront payment of 750 million U.S. dollars. In addition, Insight invested $150 million in new American depository shares of MorphoSys listed at NASA. MorphoSys increased its share capital by issuing new ordinary shares to facilitate Insight's purchase of approximately 3.6 million ADF. Each ADS represents one-fourth of one MorphoSys ordinary ship.
January 13th 2020, more photos and insight and now that both companies have signed the collaboration licensing agreement for the future Global development and commercialization of my focus is proprietary on T. cdnineteen antibody definitely come up.
Under the terms of the agreement not for the received an upfront payment of 750 million U.S. dollar.
In addition, inside invested 150 million U.S. dollar a new American depositary share of Moses listed at NASDAQ.
For this increased its share capital by issuing new ordinary shares to facilitate inside the purchase of approximately 3.6 million adss.
Each of U.S. represent one fourth of one morphosis ordinary shares.
Jens Holstein: Insight purchased the new ADSes at a price of US$41.32 per ADS, including a premium of 20% on the volume-weighted average ADS price 30 days prior to the signing of the collaboration and licensing agreement. The new ADSs represent 2.66, that is 2.76% of the registered share capital of MorphoSys following the cap links. Depending on the achievement of certain development, regulatory, and commercial milestones, MorphoSys is eligible to receive milestone payments up to 1.1 billion U.S. dollars. MorphoSys will also receive tiered royalties on ex-US net sales of Tafasita MOP at a mid-teens to mid-20s percentage rate. In the U.S., MorphoSys and Insight will co-commercialize Tafasita MAP with MorphoSys recording all revenues generated from Tafasita MAP sales. Insight and MorphoSys will equally share profits and losses, 50-50.
Inside purchase the new adss at a price of 41.32, U.S. dollar per idea, including a premium of 20% on the volume weighted average jds price 80 days prior to the signing of the collaboration in licensing agreement.
The new a assets represent 2.6 insect as 2.76% of the registers share capital of my photos following the capital increase.
Depending on the achievement of certain development regulatory and commercial milestones morphosis is eligible to receive milestone payments up to 1.1 billion U.S. dollar.
Before this will also receive receive tiered royalties on X U.S. net sales of tough I pick them up in the mid teens to mid Twentys percentage range.
In the U.S. locals and insight will co commercialize company come up with more hostess recording all revenues generated from top to pick them up sale.
Inside animal photos equally share profits and losses if anything.
Jens Holstein: MorphoSys and Insight will also share the development costs for worldwide and U.S.-specific clinical trials at a ratio of 55% covered by Insight to 45% covered by MorphoSys. Insight will also assume 100% of the future development costs for clinical trials in countries outside the U.S. Group revenues for the first quarter of 2020 rose to 251.2 million euros compared to 13.5 million euros in the first quarter of 2019. The increase was primarily driven by the upfront payment received under our agreement with Insight for the commercialization of Tafasitamab outside the U.S. As stated in our year-end call, a certain part of the upfront payment of US$750 million and of the premium of US$58 million was accounted for as revenue The remainder is represented on the balance sheet of the company. Revenues for the first quarter of 2020 include success-based payments of 10.3 million euros, primarily from Janssen. As in previous quarters, the contractual royalty reporting from Jensen for Trumphire has not been received yet.
Well those are then inside will also share the development cost for the worldwide and U.S. specific clinical trial for the ratio of 55% covered by inside to 45% covered by muscles.
Instead, we'll also see 100% of the future development cost for clinical trials in countries outside the U.S.
Let's now move to open health segment on Slide 10.
Group revenues for the first quarter of Twentytwenty rose to 251.2 million euros compared to 13.5 million euros in the first quarter of 2019.
The increase was primarily driven by the upfront payment received under our agreement with the inside for the commercialization of tough as you come up outside the U.S.
As stated in our year end call. It said part of the upfront payment of 750 million U.S. dollar and of the premium of $58 million was accounted for as revenues in Q1.
The remainder represented on the balance sheet of the company.
Revenues for the first quarter Twentytwenty include success based payments of 10.3 million euros, primarily from Janssen.
As in previous quarters. The contractual also reporting from just the Trump I have not been missing yet.
Jens Holstein: Jamphire Royalty's book for Q1 2020 was estimated based on a public announcement made by Jensen James. Looking at expenses, our total operating expenses increased to 47.7 million euros compared to 37.3 million euros in the first quarter of the previous year. The increase is mainly caused by the ramp-up of our launch preparation in the U.S. Cost of sales for the first three months of 2020 amounted to 3.3 million euros compared to 5 million euros in the first quarter of 2019. This item consists of manufacturing costs for the expected market supply of Kapazitama and expenses related to services provided to customers. The expenses for research and development amounted to €21.5 million compared to €24.7 million in the previous year. Expenses in the area were largely driven by expenses for external laboratory services and personnel.
Tinpot relative booked at Q1 2020 were estimated based on the public announcement made by Tencent JJ.
Looking at expenses, our total operating expenses increased 27.7 million euro compared to 3.3 million euros and third quarter over previous years.
The increase is mainly caused by the ramp up of our launch preparation anyway.
Cost of sales for the first three months of Twentytwenty amounted to 3.3 million euros compared to 5 million euros in the first quarter 2019.
This I can consist of manufacturing cost for the expected market supply a couple they come up and expenses related to services provided to customers.
<unk> expenses for research and development amounted to 21.5 million euros compared to 24.7 million euros Philippines.
Expenses in the area were largely driven by expenses for external laboratory services and personnel expenses.
Jens Holstein: Selling expenses increased to €12.8 million as compared to €1.7 million the year before. General and administrative expenses increased to €10.1 million versus €5.9 million in Q1 2019. Both increases are primarily the result of higher personnel expenses and expenses for external services and are again largely driven by our increased commercialization. In the first three months of 2020, other income amounted to €10.3 million, up from €0.2 million in the same period of the previous year. The increase mainly resulted from foreign exchange gains in connection with the inside calibration. Earnings before interest and taxes amounted to 213.6 million euros in comparison to minus 23.6 million euros in the first quarter of 2019. This is mainly driven by the collaboration licensing agreement within.
Selling expenses increased to 12.8 million euros as compared to 1.7 million euros via before.
General and administrative expenses increased to 10.1 million euros, there's a 5.9 million euros in Q1 2019.
Both increases are primarily is out there is out of higher personnel expenses and expenses for external services and again largely driven by all increased commercialization effort.
In the first three months of 2020 other income amounted to 10.3 million euros up from opened 2 million euros in the same period over the previous years.
The increase mainly resulted from foreign exchange gains in connection with the inside collaborations.
Earnings before interest in Texas amounted to 213.6 million euros in comparison to minus 23.6 million euros in the first quarter of 2019. This is mainly driven by the collaboration licensing agreement with insight.
Financing cone of 10.6 million euros, mainly included foreign exchange gains from the financial ability from collaborations and gains from changes in the fair value financial asset.
Jens Holstein: Finance income of 10.6 million euros mainly included foreign exchange gains from the financial liability from collaborations and gains from changes in the fair value of financial assets. Finance expenses of €9.3 million comprised mainly losses from financial derivatives and foreign exchange losses from the Financial Assets Fund. Our consolidated net profit after taxes amounted to €195.5 million in Q1 2020 compared to a net loss after taxes of €22.7 million in Q1 of the previous year. The diluted earnings per share for Q1 2020 reached €6.11 after minus €0.72 in Q1 of the previous year. On slide 11, you see a summary of our segment reporting for Q1.
Finance expense of about 3 million euros comprised mainly losses from financial derivatives and foreign exchange losses from the financial assets operation.
Our consolidated net profit off the Texas amounted to 195.5 million euros in Q1, twentytwenty compared to a net loss off the Texas of 22.7 million euros in Q1 of the previous year to diluted earnings per share for Q1, Twentytwenty reached six euros and 11 your sense of the minus 72 year assessment.
The one of the previous year.
On Slide 11, you see a summary of our segment reporting for Q1 Twentytwenty.
Jens Holstein: In our proprietary development segment, in which we focus on the research and clinical development of our own drug candidates, revenues of €240.4 million were recorded in the first quarter of 2020 as compared to €5.8 million in Q1. As mentioned earlier, this increase was driven by the agreement... Operating expenses amounted to €39 million as compared to €30.8 million in Q1. The main reason for this increase is our increasing investment in the development of our proprietary programs. The EBIT of our proprietary development segment was €210.8 million compared to €-25 million for the first quarter of the previous year in our partner discovery sector. We apply our proprietary technology to discover new antibodies for third parties, and they benefit from our party's development advancements through R&D funding licenses.
In our proprietary development segment in which we focus on the research and clinical development of our own drug candidate.
We recorded revenues of 240.4 million euros in the first quarter of Twentytwenty as compared to 5.8 million euros in Q1 of 2019 as mentioned earlier. This increase was driven by the claims within sight.
Operating expenses amounted to 39 million euros as compared to 50.8 million euros. In Q1 2019. The main reason for this increase it's all increasing investment for development of our proprietary programs. The EBIT of all party development segment was 210.8 million euros compared to minus 25 million euros.
For the first quarter of the previous year.
In our partner Discovery segment, we apply our proprietary technology to discover new antibodies for third parties and benefit from all parties development advancements for R&D funding licensees success based milestone payments royalty.
Jens Holstein: Success-Based Milestone Payments and Rolls. In the first quarter of 2020, revenues increased to €10.8 million as compared to €7.8 million in Q1 2009. The EBIT and our partner discovery segment amounted to 8.5 million euros as compared to 5.5 million euros in Q1 2009. Moving on to the balance sheet on slide 12, as of March 31st, 2020, we recorded total assets of 1.3 billion euros, up from 496.4 million euros. On March 31, 2020, our liquidity position amounted to 1.13 billion euros compared to 357.4 million euros as of December 31, 2019. On the balance sheet, this cash position is reported under the following items: cash and cash equivalents, financial assets at fair value through profit and loss, and current and non-current other financial assets at amortized.
In the first quarter of Twentytwenty revenues increased 10.8 million euros compared to 7.8 million euros in Q1 2019.
The EBIT in all parts of discovery segment amounted to 8.5 million euros compared to 5.5 million years in Q1 2019.
Moving onto the balance sheet on slide 12 as of March 31st Twentytwenty. We recorded total assets of 1.3 billion euros up from 496.4 million euros.
On March 31st 2020, our liquidity position amounted to 1.13 billion euros compared to 357.4 million euros as of December 31st 2019 on the balance sheet.
Its cash positions reported under the following items cash and cash equivalents financial assets at fair value through a profit and loss and churn and Noncurrent other financial assets at amortized cost.
The number of shares issue totaled 32.890 million or 46 at the end of Q1 2024 comparison at the end 2019. The number of shares was 31 million 957009 and [noise].
Jens Holstein: The number of shares issued totaled 32,890,046 at the end of Q1 2020. For comparison, at the year-end 2019, the number of shares was 31,957,958. Before I conclude this section, I would like to reaffirm our financial guidance for the full year 2020, which was first communicated in March in connection with the presentation of our 2019 annual report. We continue to expect group revenues in the range of 280 to 290 million euros. Total R&D expenses for 2020 are anticipated in the corridor of 130 to 140 million euros, and we expect an EBIT in the range of minus 15 to plus 5 million euros for 2020. This guidance is based on a constant currency exchange rate and does not include any contributions from Tefas Itamap revenues and any effects from potential in-licensing or co-development deals for new development candidates. The operational and financial guidance might potentially be impacted by the ongoing global COVID-19 crisis on MorphoSys' business operations, including but not limited to the company's supply chain clinical trial conduct, as well as timelines for regulatory and
Before I conclude my section I would like to reaffirm our financial guidance for the full year Twentytwenty, which was first communicated in March in connection with a presentation of our 2019 interim report.
We continue to expect coop revenues in the range of 280 to 290 million euros total R&D expenses for Twentytwenty anticipated in the coming up on a 3200 40 million euros.
We expect an EBIT in the range of minus 15 to plus 5 million euros for Twentytwenty.
This guidance is based on constant currency exchange rate indefinitely include any contributions from tough as they come up revenues in any effect from potentially in licensing or co development deals for new development candidates, the operational and financial guidance might potentially be impacted by the ongoing global cobot 19 crisis, almost a sufficient operations, including but.
Including but not limited to the company supply chain clinical trials on that as well as timelines for regulatory and commercial execution.
Jens Holstein: With that, I would like to end my part and would like to turn the call back to Jean-Paul for closing remarks. Thank you.
With this I would like to end my part and we'd like to turn the call back to jump off for closing remarks. Thank you.
Well, we close by reminding you of our key part.
Jean-Paul Kress: Let me close by reminding you of our key party. Our most important goal is the flawless U.S. launch of Tapasitama, assuming at the airport. As I discussed today, we are actively preparing and are confident that we are in excellent shape to launch, despite the current circumstances. We have successfully built our commercial organization and hired a strong and experienced team across all functions. We have established a strong partnership with Insight, and together, we will significantly increase our share of voice to make this launch a success. Beyond the U.S., we anticipate the submission of a European MAA meeting this year, with a potential launch in Europe in mid-2021. We are joining forces with Insight for a broad clinical development of Theta Theta Mad beyond RR-BLB-TL to explore the full potential of the product.
Our most important goal is the flow lets us launch of capacity time Oh.
Assuming FDA approval.
As I have discussed today, we are actively preparing enough confidence that we are in excellent shape to launch despite the current circumstances.
We have successfully built all commercial organization.
And higher is strong and experienced team across all functions.
We have established a ton partnership with inside.
And to get there.
We significantly increased our share of voice to make these launches success.
Beyond the U.S.
We anticipate the submission of a European and eight they meet this year with a potential launch in Europe in mid 2021.
We have joining forces with insightful abrol clinical development of separately time.
Beyond our appeal this year.
To explore the full potential of the products.
Operator: We are jointly working on optimizing the development plan, and we will provide you an update later this year. In addition to Tafsir Dammam, we'll continue to advance our other proprietary programs, and we are actively pursuing licensing opportunities to diversify our pipeline. [inaudible] We are in a very strong financial position to effectively and fully execute on our strategy plan. In conclusion, I'm very pleased with our accomplishments to date and excited about our future. I look forward to updating you on our progress.
We have joined people working on optimizing the development plan and we will provide you an update later this year.
In addition to deficit them up.
We'll continue to advance our other copyright programs.
And we are actively pursuing in licensing opportunities to diversify our pipeline.
Importantly.
We are in the very strong financial position.
60, black and fully execute on our strategic plans.
In conclusion.
I'm very pleased with a lot accomplished to date.
And excited about our future.
I look forward to updating you on them on our progress.
[laughter].
Thank you know Hong Kong, because I like to open the call to your question.
Operator: Thank you, Jean-Paul. We'd now like to open the call to your... Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press 0 and 1 on your telephone keypad now. You will be advised when to ask your question. If you change your mind and wish to withdraw your question, please press 0 and 2. Participants are requested to use only the handset while asking a question. And the first question is from Konstantinos Aprilakis, Deutsche Bank. Your line is now open.
Ladies and gentlemen, we will now begin the question in opposition.
What lunch Oscar question, Pete Press Zuma, one on your telephone keypad now you may be advised men to ask your question. If you change your mind and wish to withdraw. Your question. Please press is there going to.
Disciplines and requested to use only handset white asking the question.
[noise] and the first question if someone comes constantinos actually lackeys touch Bank. Your line is not one thing.
Hi, Good morning, good afternoon, and thank you for taking my questions I've got one on the impending episode and I've launch and then another on business development.
Manos Mastorakis: Good morning, good afternoon, and thank you for taking my questions. I've got one on the impending Tapacitimab launch and then another on business development. So you mentioned in your prepared remarks, you know, extensive interactions with key stakeholders in the DLBCL space ahead of Tapacitimab's potential launch. Can you tell us what you're hearing from KOLs and the like regarding the demand and utilization for CAR-T cell therapy for DLBCL given the ongoing COVID-19 pandemic and how you see this potentially reading through to Tapacitimab, assuming approval?
So you mentioned in your prepared remarks extensive interactions are key stakeholders in the deal Bcl space ahead of.
Sort of maps potential launch can you tell us what you're hearing from can't wells in the like regarding the demand and utilization for car T cell therapy for deal Bcl, given the ongoing colder 19 pandemic and how you see this potentially reading through two type of sort them out.
Demand assuming approval.
I can something else and thanks, all the question, Yes, we hear action that.
Jean-Paul Kress: Hi Constantinos. Thanks for the question. Yes, we hear, actually, that the cap is a bit of a challenge right now with the COVID context, for obvious reasons. So we knew that they were, you know, complicated, I would say, to say the least, to administer. And sometimes we get feedback on the high cost as well. But currently, there is a bit of a struggle with that. So yeah, I mean, in some ways, a
You know the copies are a bit of a challenge right now with the Cobiz context for obvious reasons. So we knew.
But there where you know complicated I would say two to disease and too I mean, there and sometimes we get the feedback often or the high cost as well, but currently.
Every bit of the struggle with with that so yeah, I mean in some ways.
Yeah, Matt a you know which is convenience to use an Easter makes it makes a lot of some thats, what we hearing from from the states right now.
Jean-Paul Kress: and Matt.
Jean-Paul Kress: Which is convenient to use and administer, makes a lot of sense. That's what we're hearing from the states right now.
Okay. Thanks, that's helpful. And then and then on the BD side, you know regarding your decision to not exercise the option to license of worry onto inhibitors. I was wondering if you could provide more detail on the rationale underpinning that decision, including you know what exactly you saw on a preclinical data that made you change course and is there anything we should conclude you know more broadly regarding the morphosis.
Manos Mastorakis: Okay, thanks, that's helpful. And then, on the BD side, you know, regarding your decision not to exercise the option to license the Valerian inhibitors, I was wondering if you could provide more detail on the rationale underpinning that decision, including, you know, what exactly you saw in the preclinical data that made you change course. And is there anything we should conclude, you know, more broadly regarding the MorphoSys BD strategy, especially with respect to early versus later stage additions to your portfolio?
BD strategy, especially with respect to.
Early versus later stage additions to your portfolio.
So I I don't surges, so compass, such a question that I, let them.
Jean-Paul Kress: So I'll answer the second part of your question and I'll let James comment on the decision. You know, I mean, this was an early stage deal, and obviously, we had all the caveats that could come with this kind of deal, and we conducted the... preliminary experiences, which led to the conclusion that in terms of our strategy, we think pretty broad, but we would be very disciplined. And for two reasons. The first one is that now we have boundaries, because the approaches we've done with the partnership were very.
Since come on some bids on the decision you know I mean this this wasn't nerdy stage dealer and obviously we.
We know we had those caveats that that could Ah that come with that was just kind of deals and then we can do to them.
Preliminary experiences, which which led to the computer in terms of our strategy.
Yeah, we think pretty broad, but we would be very disciplined and for two reasons. The first one is that now we have the boundaries.
Our for PD approaches, we we've done with the partnership which was very.
Jean-Paul Kress: I would say resource-consuming, and I think it took a lot of our energy and focus over the last couple of months. That's behind us, and obviously, with this partnership comes resources, and these resources now will allow us to have much more flexibility for potential moves. And we are right now looking at several possibilities, some of them beyond Tafasita Map, some of them complementing Tafasita Map. We get a lot of requests from the states for combination trials, considering that Tafasita Map is emerging more and more as a backbone for many, many new products. So there are actually more opportunities now than there were in the past. Yes, do you want to answer the first part of the question?
I would say, let's suppose consuming and I take two calarco coloring and that GE and focus over the last couple of maam.
That's behind US and obviously with this partnership comes you host source and these other sources now with Lois to have much more flexibility for potential moves and we are right now looking at civilized possibilities.
Some of them beyond.
It's actually tomorrow, but some of them complementing pathologies I'm not because a lot of liquids from distaste for combination trials and considering that the president Mike is emerging mall and Mark I backbone.
Many new products so its actually.
Oh possibilities now.
During the past.
Yeah. So you want to answer the first off of the question. Yeah. Thank you jump off I mean, we knew that this is a very rarely program. We still believe that the CD 47, a process actually an interesting one also in combination with tougher pick them up in general.
Jens Holstein: Yeah, thank you, Jean-Paul. I mean, we knew that this was a very early program. We still believe that the CD47 approach was actually an interesting one, also in combination with Tafasita MUP in general. But we looked at the preclinical data that we have collected over time, and we just felt that, you know, what we have seen doesn't support the exercise of the option. And that's why we decided not to execute it. Remember, we basically have invested in the company; we haven't paid anything for this option other than getting a participation, and that is remaining with us for the time being. I also want to make clear here that, you know, there is no direct intention now here to sell that off, because we have that question already.
But we look into.
Oh, the preclinical data that we that we have collected over time and we just felt that you know what we have seen doesn't support the exercise the option and that's why we decided to not not executed a you'll remember we basically half invested in the comp.
Any we haven't paid anything for this option other than getting a participation and that is remaining with us for the timing and also want to make clear here that you know it's there is no direct intention now here to sell that off because we got that question already. So I mean this is there's got to be seen in future at what we do with it.
Jens Holstein: So I mean, this has got to be seen in the future, what we do with it. So I think we have got to do some, and John Paul made that statement. I mean, we have done some deals of that kind in the past. And, of course, you should be prepared that we do similar sort of deals, early deals as well that run the risk that you have to make a call that is negative.
And so I.
I think we got to do some and jump all made that statement I mean, we we have done some deals all that kind of the past and of course, you should be prepared to what do similar sort of deals early and deals as well that that run the risk that you will have to make a call that is negative.
Manos Mastorakis: Got it. Thanks for that. The next question...
Got it thanks for that.
[laughter].
And next question is some Jason Butler JMP Securities. Your line you can see.
Operator: The next question is from Jason Butler, JMP Securities. Your line is now open. Mr. Butler, your line is now open. We can't hear you at the moment.
Yeah.
Mr. But like your line is now open comps here at the moment.
Hi can you guys can be now.
Operator: Hi, can you guys hear me now? Yes. Hi, okay. Thank you. It's Royan for Jason.
Yes.
Hi, Okay. Thanks, Roy in for Jason Thanks for taking my question I.
Royan: Thanks for taking our question. I guess the first one I'll follow up on the CD question a little bit. So for licensing targets, are you guys looking primarily in the oncology space, or broader? And then I had a question if you've been approached or thought about using your technology platforms to develop therapies for the novel coronavirus, and more broadly what you think about infectious diseases. Thank you.
I guess the first one I'll follow up on that on that question, a little bit so pretty unlikely target you guys looking primarily.
In the oncology space are you looking and came on curve or broader and that had a question if you Ben.
Approached or thought about using your technology platform to develop.
Therapies for the novel Krona virus and more broadly what you think about infectious disease. Thank you.
So this is John Paul it's its difficult to be specific as you know for all these things until we have something concrete to share with the states.
Jean-Paul Kress: So, Mr. Jean-Paul, it's difficult to be specific, as you know, about these things until we have something concrete to share with the state.
Jean-Paul Kress: We're being, I would say, concentric in the approach. I mean, we're trying really to leverage our... Ranked in position with Tapasitama Benavez. As I said, the game emerged as a great and very important backbone industry. So there are a lot of potentialities for combinations with future agents in impong, probably, but also in oncology.
We're we're being.
Say concentric India approach I mean, we trained really to leverage our.
Jean-Paul Kress: We are also considering possibilities to leverage our platforms and our technology, but there is a lot to do in New York. But we're being agnostic. I mean, if we see a good opportunity in solid tumors or even in inflammation, also immune, that's also a possibility. But we have a lot to do with that facet of that plus something.
Jean-Paul Kress: Okay, great. And then about the coronavirus, have you guys thought about approaching that? And I guess, more broadly, any thoughts about infectious diseases, have you ever considered that space? And I actually had one that has to do with VLA. Any recent interactions with the FDA, you can comment on those.
Marta Peters: Malte will address your question.
Marta Peters: Yeah, thank you. In terms of interacting, in terms of looking into opportunities to utilize our platform to potentially help patients with the coronavirus, we are collaborating with academic centers to investigate certain approaches, utilizing our platform to find possibilities that may lead to help in the future for patients suffering from this disease. Secondly, we are extremely pleased to read about your case and activities utilizing Otilimab in patients suffering with acute respiratory distress syndrome in these patients. So, I think these are the two areas that we should follow. To your second question regarding the FDA, I can only say that the interaction with FDA has been extremely positive and encouraging, and we are on track with respect to the PDUFA date of August 30th. And so far, we are extremely pleased with the progress we are making interacting with FDA.
Royan: Great, thank you.
Operator: The next question is from James Gordon, J.P. Morgan. Your line is now open.
James Daniel Gordon: Hello, thanks for taking the questions. James Gordon from J.P. Morgan.
James Daniel Gordon: A couple of questions, please. The first question was just about insight accounting. Can you just remind me for the US, if I'm saying correctly, there's going to be a 50% payaway to insight, and I believe that won't go through the P&L under the EPS report. So how are you thinking of disclosing that on a quarterly basis once TAPA launches? Will there be some sort of core EPS metric that better reflects what the cash generation is each quarter?
Can you just the money.
U.S. if I understand currently there's going to be a 50% pay a way to inside but I believe that one could actually the P.N.L. under like the the reports tdps. So how are you thinking is disclosed in and of course, we basis ones tougher launches movie some sort of cool E.D.S. metric that better reflects what the cash generation as each quarter say encompassing this pilot.
James Daniel Gordon: So encompassing this payaway would be the first question. Second question was just until a man for COVID-19. Can you talk about the mechanistic logic for GM-CSF for pulmonary symptoms? It sounds somewhat similar to an aisle 6 like Actemra. Is that the right way to think about it, and why might it be better potentially? And then the third and final question would be about the CD3, CD20 competition.
Maybe the first question second question, it's just a televised for quite a bit 19.
Can you talk about the mechanistic logic for the G.N.C.S.S. supposedly Simpsons.
Sounds somewhat similar to Oh six luck tamra.
<unk> way to think about why am I to be better potentially.
And then sat in front of question would be C.D. three cdtwenty competition. He lives not quite promising mechanism from some competitors is discarded for first line P.L.P.C.L.
James Daniel Gordon: So it looks like quite a promising mechanism from some competitors that are going for first-line DLBCL. So if that was successful in first line, and if Roche-Arles was successful with Pellegri's first line, what does that mean for Taffer ahead of Taffer getting into first line? Would it push Taffer back to third line? How are you thinking about sequencing of the different therapies that could be coming along for first-line DLBCL
So if that was successful in first law and then if if wash also successful talese first line.
What does that mean, it's a tough rather tough and getting into first why would it pushed talk about the so I'd like how are you thinking about sequencing of the different therapies that could be coming along for first on the L.B.C.L. Please.
James I saw the the questions you can sort of take the first one on accounting I <unk>.
Jens Holstein: James, thanks for the questions. And yes, we'll take the first one on accounting. I will take the second one on COVID.
It wouldn't take this Oklahoma go good and they didn't make the last one which is <unk>.
Jean-Paul Kress: Yeah, I think so.
Yeah, I think is on Paul let me start with the accounting treatment of that's well no. This is a real challenging activity that [noise].
Jens Holstein: and, as we all know, this is a
Jens Holstein: Real challenging
Jens Holstein: That will follow us for a while since this collaboration is a long-term project. Having said this, so as you've seen, we have accounted for the part, for the non-U.S. part, in the revenues, and that is, to also make that clear at this point in time, the number that you will see for this year; there is no further number coming. We have not included in our guidance TAFASITA MAP revenues and implications here, so nothing is included in our guidance in that respect, so certain implications that you are referring to, James, are, of course, not yet included. In terms of the accounting treatment and the implications on earnings per share going forward, we are in constant discussions with our auditors and assume to reflect really all the revenues, all the cost of sales, and all the commercial costs that both parties will account for, and that will reduce the impact that you're referring to by a significant amount.
That will fall off for for a while since discoloration is a long term collaboration having said this and so as you've seen we have we have accounted for the part for the non U.S. part is the revenues and that is two or something like that care. At this point in time is the the the number that he will see for this here there's no further.
About comics, we have not included in our guidance <unk> revenues and implications hair. So nothing is in our guys and thing so it it in that respect so certain implications that you're referring to James of course, not yet and included in terms of the.
<unk> treatment Andy implications on earnings per share going forward. Yeah. We are in constant discussions with a audiences and assume to to reflect really all the revenues all the costs of sales and all the commercial costs that both parties will account for and that would reduce the implication that you're referring to.
Too.
So a significant amount there is basically not much left in addition, you should be aware that going forward in each other for this you will see changes in the financial results because the financial feasibility that we have reported and part of the 70% of the upfront payment in the premiums that have.
Jens Holstein: There is basically not much left. In addition, you should be aware that going forward, in each of the quarters, you will see changes in the financial result because the financial liability that we have reported, part of the 70% of the upfront payment and the premium that haven't been revenues this quarter here, will change going forward, influenced by multiple implications such as interest rates and foreign exchange rates. So this will be an ongoing thing, and it's probably the most sensible thing going forward then in each quarter until everything is basically accounting-wise clear to explain that step-by-step. Yeah, that would be my.
Been revenue is this this quarter here they will change going forward influenced by multicast multiple implications being it interest rates and foreign exchange rate. So this will be.
Ongoing thing and it's probably the most sensible thing going forward then each quarter until everything is basically accounting was clear to explain that step by step.
Yeah that would be my answer to the first question jump all and they're not.
Jens Holstein: I'll take the second one on the...
I take the second one on the mechanism of action that potentially underlies the <unk> situation. So it's fairly well studies now James that in patients with a cute <unk> impatience with corporate 19.
Jean-Paul Kress: underlies the otillumab situation. So it's fairly well studied now, James, that in patients with acute respiratory distress syndrome, in patients with COVID-19 infection, CB4 Th1 cells, which express GMCSF and GMCSF levels as well, are increased. So that's the sort of epidemiological data that exists to justify whether inhibition of this pro-inflammatory cytokine could lead to an amelioration of the acute inflammatory condition. And you are right that it obviously follows a bit the same logic as for IL-6, which also is a pro-inflammatory cytokine. But I think it's always a good idea to try different branches of the pro-inflammatory chain.
Infection.
A C.D. for a G.H., one says, which express G.M.C.S.I.S.M.G.M.C.S.F. level of as where our increase.
So that's the sort of epidemiological data that exists to to justify if inhibition off this proinflammatory cytokine, we could lead to amelioration off the acute inflamatory condition and you're right that is.
Obviously follows that with the same logic as for I.O. six which also is important someone for it's harder kind, but I think.
It's always a good idea to try a difference branches also uproar inflammatory chain.
[noise] that's fun to then I think last question James was on the this should be three sheets when she.
Marta Peters: And I think the last question, James, was on the CD3, CD20. Competitive, a position, I would say. So here, you know, we're looking at the space, including the City3, City20, as
<unk>.
I, probably shouldn't I would say so here you know, we we're looking at the space, including the city three different T.I.'s. The same time competition, but also puts you both.
Jean-Paul Kress: at the same time, competition but also possible partners or complements to Tafasita Maps because again, Tafasita Maps might become the preferred backbone. It's pretty clear from the signals we get from other companies who, you know, almost need our product to complete phase two or phase three. In terms of comparison, I mean CD3, CD20 are emerging, I mean the data are still limited, it's intriguing, it's promising, but that facet I'm not comparing very well. We have, in terms of efficacy, in terms of duration of response, in terms of safety, obviously, you know, I mean, we still have a question mark for the slide specifics on the CRL and the current release syndrome. So I think that the name of the game will be to find and see how they improve their safety profile.
<unk> <unk> complements to touch if I'm not because again.
Might become backbone, it's pretty clear from the signal we get from other companies, who you know almost needlepoint complete face to face trees.
In terms of comparison.
The <unk> <unk>.
<unk>, it's intriguing it's for my thing, but that's what you're talking about compares very wet.
It's really fancy we have in terms of 50 K.C. in terms of Jewish not for his palms.
In terms of safety, obviously, you know we stood up a question Mark fault. The despite specifics on the C.I. rather than kind pretty syndrome. So I think that the name of the game will be to find.
To see what the Hell be improved safety profile. So we see that much I put themselves competition for those super from <unk>.
Jean-Paul Kress: So we see them as potential competitions, but also potential competitions that's a bit more subtle than that. And, and that's also true for some other future competitions. I think you also asked about sequencing versus CAR-T. That's also something we're looking at. The question about sequencing Staphylococcus versus CAR-T comes mostly from some KOLs. It's not the broad question we get from community oncologists because they are being pragmatic, and they don't really see the real value of our assets versus CAR-T. But obviously, we're exploring that as it is a question from the state, and we have a couple of studies going on.
So it's something that.
And and it's also true or false or some other <unk> I think you'll still have people <unk>. That's also something we're looking at the question on sequencing on stuff <unk>. Most do some some cable is it's not the whites squished and we get some do Camille.
Because being part about.
They don't they did she did we decided you apart sensors.
<unk>, but I'll, just see where x. three <unk>. He's a question from the states and we've we have a couple of studies going <unk>, who will help you know public knowledge on this topic.
Jean-Paul Kress: Who will help, you know, progress knowledge on this topic?
Next question. Please yes sure and next question some Jessica part U.S.D.V.D. <unk>.
Operator: Next question, please.
Operator: Yes, sure. The next question is from Jeffrey Potts, SBB, Lurin. Your line is now open. Thank you very much.
Thank you very much just a few questions apart all about top could you just tell us where it's.
Jeffrey Potts: Just a few questions, if I may, all about TAFA. First, could you just tell us where it's being made and confirm that the manufacturing site does not need inspection by the FDA? Secondly, could you talk or just give us some specificity about exactly the label you expect, what the base case is in terms of prior treatment history for patients? And then lastly, could you give us some color about the proportion of DLBCO patients in the U.S. that are treated outside transplant centers, because presumably that will be a sort of better segment of the market for you compared to the transplant centers where they're doing CAR-T. Sorry about all the questions.
Consolidate manufacturing sites is.
Inspection by the F.D.I. Secondly, could you talk just give us some specificity.
Exactly the label you expect what the base cases in terms of applause favorite history for patients and then lastly Ah.
Give us some color about the proportion of P.L.P.C.O. patients U.S., but a traitor outside transplant centers.
That that will be.
Data segment of democracy, you compare to into the time flat surface, whether doing talked to.
The question.
Hi, Jane.
Jean-Paul Kress: Hi Jeff. I'm glad to hear your voice, even if the line is pretty poor.
Voice, even use the lines pretty cool.
The and stuff like the last question proportional <unk> three to outside of the academic sensors, if I go up the Christian properly.
Jean-Paul Kress: I'll start with the last question. The proportion of TLBCL patients treated outside of the academic centers is actually higher than 80%, if I understand the question correctly. So our main, you know, I would say target resides with the oncologists, the community oncologists. And obviously, Tafasit Amab makes a lot of sense to all these patients treated in this community oncology center. Regarding the manufacturing question, we manufacture, and we have a partnership, a long-term partnership with Boeing on the line. It's in Germany, and they are close to our premises there. We know them extremely well, and it's going well. It's on track. The FCA inspections are ongoing in a creative way, I would say, so we are very confident that we will get the supply we need for our launch with Insight and Aya.
Higher than 80% so.
<unk> <unk>, you know I would sit targets to reside with the <unk> the community <unk> and.
Obviously <unk> makes a lot of sounds phone falls these patients treated in these and discomfort Jim color T.V. censored.
The beep.
Manufacturing question.
We manufacture we have about enough people long term Oh no. She we've <unk> in the line it's in Germany.
[laughter] aren't that close to our pretty since there you know them extremely well.
It's going when it's on track the F.T.A. fictions aren't aren't ongoing.
Well I would say.
So we are very confident that.
We get to supply we need phone.
Hour long screwed in sight.
And I absolutely.
Oh, yeah, sorry.
Jean-Paul Kress: Yeah, sorry.
Jean-Paul Kress: Just the label question.
Just the label question.
Labor.
Marta Peters: Yeah, so could you give us the base case for the indication that you expect in the label for TAP?
So could you give us the base.
Oh, the indication that you expect in the label.
Yeah. My so do you want yeah sure I mean, the based on the patient population that you always in all of those and mine study.
Marta Peters: Yeah.
Marta Peters: Sure, I mean, based on the patient population that we enrolled in our pivotal L-MIND study, our assumption, which is also the best case scenario, is that we get a second and third line label or higher than second line. Remember, half of our patients are second line patients, and half of the patients are third line and higher. That's a very good distribution, and that's what we anticipate or hope for at this moment.
Oh assumption whichever I'm off to the best case scenario. So that we got a second and coastline label higher than the second line remember we have half of our patients second line patients and half the patient <unk>. That's that's a very.
Good distribution and that's watch we that's what we pay it all hope for it this morning.
Jeffrey Potts: Great. Thanks very much.
Great. Thanks, very much Mmm <unk>.
Operator: Thank you. Next question, please.
The next question.
Operator: Yes, the next question is from the new vendor of Commerzbank. Your line is now open.
Yes, the next question <unk>.
unknown: Thanks for taking my questions and good afternoon, three if I may. The first one is, can you potentially say what the COVID-19 crisis impact will be on your originally planned SG&A and R&D cost lines in 2020? If any, I would assume that a virtual launch campaign might... have a different cost structure than a real-life launch campaign. My second question would be... Can you comment whether the Corona crisis is impacting the progress of your B-Mind study at all? Any comment there would be appreciated. And maybe lastly, a financial confirmatory question, I would say. Is there still a milestone payment due from inside pharmaceuticals in case Tafasitama gets FDA approval, or has this already been almost incorporated in the upfront payment? Thank you.
Thanks for taking my Christian Science, and put afternoon and three for me.
<unk>.
Kenya potentially same wants to see the cooking 19 equates impact on you I hear a chain planned at your name on coastlines and in 2000, and trendy and if any I would assume that.
<unk> launch campaign Mike.
Different cost structure, then then yeah uh-huh relax.
We won't complain my second question would be.
Mm.
Can you comment with I.B.M. corner crisis impacting the progress.
Study at all.
Any comments that would be appreciated and maybe <unk> I financial confirmatory question I would say.
And if they're still am I sort of payments you from inside pharmaceuticals in case topic I'm up gets the F.D.A. approval all has already been.
One of my so called friends from payment. Thank you.
I saw the question <unk>.
Jean-Paul Kress: Thanks for the questions. We're not commenting on the milestone contract, so we can't answer that question. On the financial impact of COVID-19 on the cost structure, Jens can answer part of the question. But I'll just say that, you know, I mean, shifting to virtual is actually a pretty, pretty big effort. We have hired our sales teams. Insight is hiring their sales team and reallocating people from Junkify. We need people behind the virtual interactions so it doesn't drastically change the SGMA picture. However, there might be some adjustment, obviously, due to maybe travel or some shifts. And so, my compliment on this one. I actually can't really, Jean-Paul. I think you made it.
<unk>, we not commenting number my students got contract should we kind of <unk>.
The financial impact so it could be nice.
Clustered <unk> <unk> kind of answer the question, but I, just say that that.
Shifting severe chill, he's actually a pretty pretty big assault.
We have parents hour that says teams.
Insight you just hiring that says team and the other kicking people from just kind of fight we we need people would be fine just get children directions. So it does a drastic to chance to his junior me teacher. However, it they might be some adjustment of D.C.H.U. two maybe travel are oh, some some some some.
And so it's like complete on just one and actually can really jump all I think you made it.
Jens Holstein: Okay, cool. Thank you.
Okay Cool [laughter].
Marta Peters: Yeah, sure. No, we are very pleased with the progress we're making in BEMIND. As of today, we are right on track with respect to our enrollment forecast. So that's a very, very positive situation for us, indicating that, of course, the lymphoma patients are very sick patients. They need urgent treatment, which we provide. And it also speaks to the determination that we see at the level of the sites and the doctors to provide good treatment to these patients. So we're very satisfied with the situation.
<unk> <unk> yeah.
Yeah sure no we have very pleased with the progress where I'm, making and you mind and also day, we are right on track with respect to <unk>.
Oh, that's a very very positive situation off off indicating that Oh of course, the formation is a very sick patients they need urgent treatments, which we provide adage. It also speaks to the determination that we see at the level upstairs tied to the doctor.
Tool provides what treatments out to these patients away that we're very satisfied with the situation.
Okay. Thank you very much mhm.
Marta Peters: Okay, thank you very much.
Operator: The next question is from Jamy Vax, Barclays. Your line is now open.
The next question <unk>.
Hi, good afternoon, that'd be one thing so it's like my question to me.
Jamy Vax: Hi, good afternoon, everyone. Thanks for taking my question. Jameel Fashion from Barclays.
The question.
Jamy Vax: For the first question... First question, just building on the previous one, for Pallavi, I'd just like to know what we could learn from TAPITISMAD, sorry, for TAPITISMAD, from the initial uptake that there has been for Pallavi. And then, second question, just on the cost side, I know you mentioned in your report that you further escalated the build-out of your US commercial organization. I was wondering if you could provide any further quantification for that. For example, how many people did you recruit in the quarter? How many people are there now? And is there any more incremental spend on infrastructure or capex than we should anticipate?
First question, but there's still some other papers <unk> I just like to know what we could in Tibet on topic, that's a lot sort of what's happened to them up from the initial I'll take that there's been a full philippi and second question just on the coffee side and then you'd mentioned in the report that you felt escalated to build out of your U.S. come out your organization.
As long as he gets about any by the qualification for that's how many people like did you recruiting the quota how many people are all that now and is that <unk> incremental spend on infrastructure will cut back then we should anticipate that thank you very much.
Jean-Paul Kress: Thank you very much.
Thanks for the question, which I know <unk>.
Jean-Paul Kress: Thanks for the question, Jamel. I'll start with the poll.
Sound bite the pull out we don't usually come home from competition, but I'll just be yeah. They are here on down there and as far as it to actually get very good benchmark to watch the behavior of the market for I would say <unk> <unk> <unk> very pleased with their published.
Jean-Paul Kress: We don't usually comment on competition, but obviously they are here and out there, and for us, it's actually a very good benchmark to watch the behavior of the market for a more modern launch compared to other older therapies. We're very pleased with the progress because, you know, this is a great lead indicator for a high end. I think there are almost 950 patients launched to date on Polar in the U.S. with a restricted label, and... You know, I mean, we're pretty confident that we can come up with a better profile. So this is extremely encouraging. And as Malte commented, our labels, which will also. If the discussions with the ADA go well, it will make even more sense. So actually, a very good sign for us on the U.S. stand. I'll let Jens answer that question.
Because you know this is great leading to here for Hi, <unk>.
Oh the most.
How did you see patients launched two they four lines you with.
With a restricted leave the boat and.
You know I mean, we're pretty confident that becomes a bit a profile.
Ah. So this is extremely encouraging and I just <unk> comments, good I'll labels for sure those so if if it.
Descriptions did did you.
<unk>.
You know make you've been most sense, so actually very good sign for us.
The U.S. and.
Let the against to answer the question.
Jens Holstein: Yeah, Jamil, thanks for the question. I mean, yeah, you have seen we have guided revenues for our standard business. We haven't guided any numbers for TAFA, and that's in agreement with our partner Insight. Similarly, we have agreed with Insight that we're not guiding on details in terms of the cost side for that exercise at this point in time. Of course, in the future, we'll get more clarity on this, but please bear with us at this point in time that we're not giving details on that to the public domain.
Yeah General thing for the question I mean, it yeah, Yeah I've seen we have guided revenues follow standard business, we haven't guided any any number for for tough and that's an agreement without a partner inside Similarly, we have a green went inside that we're not guiding on you know details on the times over cost side for the exercise at this point in time.
Of course in future work out more and more clarity on this but please bear with US at this point in time that we're not getting details on that to the public domain.
So okay. Thank you very much.
Jamy Vax: Sure, of course. Thank you very much. Thanks, everyone.
<unk>.
Operator: The next question is from Christian Ehmann, Frankfurt Main Research. Your line is now open.
The next question actually I'm Christian <unk>.
Christian Ehmann: Thank you, everyone, and thank you for taking my question.
[noise] Hello, everyone.
I have only two left.
Christian Ehmann: Thank you for asking my question. I only have two left.
Could you. Please reiterate on the on vacation space, you're looking for some up I notice that your previous presentation you.
Christian Ehmann: [inaudible]
Christian Ehmann: Could you please reiterate the indication space you're looking for, Tafasita Mabutu?
Christian Ehmann: I noticed that in your previous presentation you listed, for example,
For example.
Funny cut off <unk> also that's an indication no it's only a C.L.L.
Christian Ehmann: Thank you very much. And for the second question, could you give us an update or news or some feedback on the expanded access program you received for Staffa Dietemap in the
And for second question.
Pretty good update on U.S. or some feedback on the expended excellent program you receive for the hockey them up in the U.S.. Thank you very much.
Christian Ehmann: in the U.S.
Jean-Paul Kress: Hi Christian, I'll take the first one, and Malte will comment on the EAP. No, we're going for more indications on CLL. I quoted CLL as a possibility and, you know, showing that we're looking at the space and I was referring to data that were just released on some other products in the space, which inspires us, together with Insights, to make a move with a potential combination. But no, we are, as Malte said, going well with the first line, I would say, pre-pivotal study. We are working on a follicular lymphoma study together with Insights. And we'll have more news for you later this year, as I mentioned, as we are currently finalizing.
I was Christian that'll take the first one in Medicare would come up from the A.P. No. We we were going for a mall indication since I quoted.
Plus T.D.T. and you know showing that we're looking at the space and I was referring to date.
It's just released on that on some than other parts into space, which inspired us.
Decides to make it <unk>.
<unk> no we are as might have been said gleam, whether with the first line.
Pre people time that'd be we are working on that 40 to learn from Ah Ah study.
<unk>.
And then we'd have more news for you.
And later this year as we are currently finalizing though alignments insights to to port Charles from just one.
Jean-Paul Kress: are currently.
Jean-Paul Kress: [inaudible] Malte, you want to comment on the EAP? Yeah, for the EAP, we have received more than 10...
[noise] now so you want to come on Sunday, Yeah, Yeah, Yeah, I'm far they yeah P., we have received more than 10 request modifications from a physician's in the U.S. All of these requests are currently on a evaluation by by the F.T.A. because we have to operating.
Marta Peters: in the US. All of these requests are currently under evaluation by the FDA because we are still operating under the single IND situation. We have submitted our protocol, which will move the EAP into a second phase, which makes it easier for applying physicians to put a patient on an EAP. This is in close communication between MorphoSys and FDA, and we should be able to have this protocol in place probably fairly soon, in the next one or two weeks, so that patients can get access even easier to typhoid.
Another thing.
<unk> situation, we have submitted protocol, which will move to your p. into a second phase, which makes it more easier for applying physicians to put the patients on the on M.U.P. This is in close communication.
<unk> and F.D.A. and we should be able to have this protocol in place probably fairly soon in the next one or two weeks.
So that patients can get access easy tool.
Marta Peters: Thank you very much. Thank you.
Demo.
Very much.
Operator: This concludes today's Q&A session, so I will now hand back to Dr. Julia Neugebauer to wrap up today's call. That concludes today's call.
That's true.
It's computes today's can't <unk>.
<unk>.
Mm.
Contribute to take hard today.
Operator: If any of you would like to follow up, we're available for the remainder of today. We would like to thank you for your participation in the call and ongoing support. We look forward to an exciting rest of the year and updating you on our program. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining us and have a pleasant day. Goodbye.
If you would like to follow up wherever handy.
That's good day, we would we would like to thank you for your participation in the content online support.
Afford to an exciting recipe here and I'm, taking your on our program.
Mm.
[noise] Nike sentence, and then it conference it's not completely and you may disconnect you're kind of shape.
<unk> [laughter]. Thank you bye.
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[laughter].
[laughter].