Q3 2021 MorphoSys AG Earnings Call

[music].

Ladies and gentlemen, welcome to the market.

Operator: Ladies and gentlemen, welcome to the MorphoSys third quarter 2021 financial results conference call. Please note that for the duration of the presentation, all participants will be in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Please note that you can only ask questions if you have registered by name.

'twenty one financial results conference call. Please note that.

If duration of the presentation, all participants will be listen only mode and the conference is being recorded after the presentation give them an opportunity to ask questions.

Now let me take your question. If you have breeches funding should anyone need assistance during the conference. They may seek newness purposes stocking and zero on the telephone I would like to turn the conference over to Q&A I'd like to follow up.

Operator: Should anyone need assistance during the conference, they may signal us by pressing the star key and zero on their telephone. I would like to turn the conference over to Julia Neugebauer. Please do so. Ladies and gentlemen, good afternoon or good morning.

Go ahead.

Ladies and gentlemen, good afternoon, and good morning, My name is Julian.

Julia Neugebauer: My name is Julia Neugebauer, Senior Director of Investor Relations at MorphoSys, and it's my pleasure to welcome you to our third quarter 2021 financial results conference. Joining me on the call today are Jean-Paul Crest, Chief Executive Officer, Sam Bee, Chief Financial Officer, and Malte Peters, Chief Research and Development Officer. Joe Horvath, U.S. General Manager, will be available for Q&A. Before we begin, I'd like to remind you on slide two that some of the...

Director of Investor Relations.

My pleasure to welcome you to our third quarter 2021 financial guidance Conference call.

Joining me on the call today are John <unk>.

Chief Executive Officer, Sandy Chief Financial Officer, and Michael <unk>, Chief Research and development Officer.

U S General manager will be available for the Q&A session.

Before we begin I'd like to remind you on slide two some of the statements made during the call today are forward looking statements, including statements regarding our expectations for the commercialization of our products and our development plan impact of COVID-19 on our business and expectations for that component of our pipeline as well as the development plans of our collaboration partners.

Julia Neugebauer: All statements made during the call today are forward-looking statements, including statements regarding our expectations.

Julia Neugebauer: for the commercialization of our products and our development plan, the impact of COVID-19 on our business, and expectations for the compound in our pipeline, as well as the development plan of our collaboration project. These forward-looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in MorphoSys' 20-S and Annual Report, all for the year ended December 31, 2020, and from time to time in other SEC documents from MorphoSys. It is important to keep in mind that our...

These forward looking statements are subject to a number of risks and uncertainties that may cause our actual results could differ materially including those described in the 20th annual report for the year ended December 30, <unk> 2020, and sometimes the timing of the ICT documents muscle.

It is important to keep in mind that our statements on this webcast speak as of today.

Julia Neugebauer: Keep in mind that our statements on this webcast speak only as of today.

On slide three you will find the agenda for today's call.

Julia Neugebauer: On slide three, you will find the agenda for today's call. Jean-Paul will begin with an overview of the third quarter and will give an outlook. Malte will provide an update on our development pipeline before turning the call over to Jean.

So Paul will begin with an overview of the third accordingly, with even outlook, Mike will provide an update on our development pipeline before turning the call to Tom for summary of our third quarter 2021 financial results.

Operator: in a call to some for a summary of our third quarter 2021.

Julia Neugebauer: Following these prepared remarks, we will open the call for your questions. With that, I now hand the call over to you.

Following these prepared remarks, we will open the call for your questions with that I'll now hand, the call over to John Pollok.

Jean-Paul Crest: Thank you, Julia. Welcome, everyone, and thank you for joining us today. Before I start, I would like to welcome Joe Horvat to this call.

Thank you and.

Welcome everyone and thank you for joining us today.

Before I start I would like to welcome Joe Paul Foster this culture.

Jean-Paul Crest: Joe is our U.S. General Manager and has been instrumental in leading our commercialization efforts and building momentum since joining the company mid-year. I would also like to thank Roland Vandeler, whom we announced earlier this week, will be departing, for his efforts in strengthening the foundation of our commercial operation. Moving to slide five, with the ongoing launch of Monjovie, important confirming data for Pellabra, and the execution of multiple pivotal studies, we are making significant progress on our vision to become a leader in hematology oncology. On the Swipe Tips Now page.

Joe is all our U S General manager and has been instrumental in leading our commercialization efforts and building momentum since joining the company mid year.

I would also like to all our bundle there when we announced earlier this week will be the buffeting.

Is it focused in strengthening the foundation of all commercial operations.

Moving to slide five.

With the ongoing launch of longevity.

In Boston concerning data collaboratively.

And the execution of multiple pivotal studies, we are making significant progress on our vision to become a leader in hematology oncology.

On slide six now.

Jean-Paul Crest: Mon Jovi net sales of $22 million for the third quarter increased by 22% compared to the previous quarter. The growth was driven primarily by Tim Mabbutt. A greater proportion of circumcline patients are now treated with Mongioli, which will increasingly result in a longer duration of therapy. We also saw a broadening of the press-cargo base and high penetration in the community sector. Roughly 70% of orders are coming from the community setting, while still maintaining a consistent foothold in the academic setting. Looking more closely at demand, more than 850 accounts have ordered Monjubis installations. During the quarter, we received orders from 500 accounts.

Module B net sales of $22 million, while the first quarter increased by 22% compared to the previous cluster.

The growth was driven primarily by demand.

The greater proportion of second line patients are now treated with module fee.

Which all of our decline was increasingly result in a longer duration of therapy.

We also saw a broadening of the prescriber base and a high penetration in the community setting.

Roughly 70% of orders are coming from the community setting while still maintaining a consistent with holes in the academic setting.

Looking more closely at the demand.

850 accounts have all of the module gets installed.

During the quarter, we received orders from 500 accounts.

Jean-Paul Crest: Over 70% of these accounts were repeat orders, which is an increase from the previous quarter. Enthusiasm for Montjuvi by physicians continues to build. This is supported by our three-year data from our L-Vine trial, which demonstrated a median overall survival of 33.5 months, which means at four years, 42% of patients were still alive. Physician enthusiasm is also supported by Real World Evidence data for the Tafacitamab-Lenalidomide combination, showing comparable or even longer overall survival compared to other systemic therapies, which we look forward to sharing as a patch.

Over 70% of these accounts were repeat orders, which is an increase from the previous quarter.

And to get them for module B by physicians continue to do this.

This is supported by our three year data from our <unk> trial.

Which demonstrated a median overall survival of 33 five months.

Which means our full year's 42% of patients with <unk>.

Prescriber enthusiasm is also supported by real World evidence based up while the deficit amount with <unk> combination.

Showing comparable or even longer overall survival compared to other systemic therapies, which we look forward to sharing our ash.

As we approach the end of the first full year on the U S market.

Jean-Paul Crest: As we approach the end of the first full year on the US market, we are encouraged by the future growth potential of Monjovie as we gain more traction from second-line patients. Importantly, we remain confident that Monjuvi can become a backbone therapy and partner of choice in B-cell malignancies.

We are encouraged with the future growth potential of module B as we gained more traction from circumvent patients.

Importantly, we remain confident that <unk> can become a backbone therapy.

<unk> partner of choice in B cell malignancies.

We are also excited samons, you'll get to expand its geographic footprint and provide broader access for patients.

Jean-Paul Crest: We are also excited for Montjuvis to expand its geographic footprint and provide broader access for patients. Last quarter, we received conditional approvals in the EU and Canada with our partner Insight, and we are happy to have started to receive the first royalty payments from Ex-US Markets. Moving to slide seven.

Last quarter, we received conditional approval both in the EU and Canada with our partner insight and we're happy to have started to receive the first loyalty payments from ex U S markets.

Moving to slide seven.

Jean-Paul Crest: We are also making great progress advancing our clinical program. We are very excited about collaborating with, which is currently being studied in myelofibrosis in a pivotal study, Manifest 2, is approved. We believe this product has the potential to generate more than $1 billion in sales. We are excited for the upcoming ASH annual meeting, where we will share new data with additional patients from the Manifest Phase II trial. The data confirms earlier data cut-offs and increases our confidence in Pell Abrasive and its probability of success.

We are also making great progress advancing our clinical programs.

We are very excited about collaborating.

Which is currently being studied in myelofibrosis in the pivotal study manifest too.

If approved.

We believe this product has the potential to generate more than $1 billion in sales.

We are excited for the upcoming Ash annual meeting.

We will share new data with additional patients from the manifest phase II trial.

The data <unk> data cutoffs and increase our confidence in <unk>.

And the probability of success.

So first up from up.

Jean-Paul Crest: For Feldspar TAMAD, our anti-CD38 antibody, we recently announced encouraging early proof-of-concept data in autoimmune membranous nephropathy, and we dosed the first patient in a new phase 2 trial for feldartemab in IgA nephropathy. We believe our next generation EZ-H2 inhibitor

Our <unk>, we recently announced encouraging early proof of concept data in autoimmune membranous nephropathy.

And we dosed the first patients in a new phase II trial for <unk> in <unk>.

Nephropathy.

We believe our next generation easy hitched inhibitor CPI <unk> hundred nine has exciting potential and optionality in <unk> solid and Hematological oncology indications.

Jean-Paul Crest: CPI 0209 has exciting potential and optionality in sustained solid and hematologic oncology indications. In summary, we are focused on executing our strategic priorities, and we continue to make significant progress. With that, I will turn the call over to Malte for an R&D update. Thank you so far.

In summary, we are focused on executing our strategic priorities and we continue to make significant progress.

With that I.

I will turn the call over to Mazda falling R&D update.

Thank you Jos Mara.

Malte Peters: We have made great progress across our pipeline in recent months. Last week, we highlighted our presence at the ASH conference in December. We are proud to be able to share data from our two late-stage assets, Monjuby and PellagroSIP, in two oral presentations, as well as multiple postcards. For collaborative, we will share the latest data from the Manifest Phase II trial, including updated data for the primary endpoint spleen volume reduction 35 at week 24 for the combination arm 3 with ruxolitinib in frontline myelococcal growth.

We have made great progress across our pipeline in recent months not weeks, we highlighted our presence at the Ash conference in December.

We are proud to be able to share data from our two late stage assets when Julian to laparoscopy and two oral presentations as well as Mitraclip wholesales.

For <unk>, we will share the latest data from the manifest phase II trial, including updated data for the primary endpoint of spleen volume reduction 35 at week 24 for the combination arm, three which looks really engineered in frontline myelofibrosis.

Importantly, this data confirms the previous data presented at Ash 2020, given.

Malte Peters: Importantly, this data confirms the previous data presented at ASH 2020, giving us further confidence in the collaboration and, specifically, in the probability of success for our Phase 3 Manifest 2 study. We are also excited about some new and previously unpublished data on the disease modification potential of Pellabracip and specifically how Pellabracip differentiates from Ruxelita.

Giving us further confidence in penumbra system.

And specifically to the probability of success for our phase III <unk> study.

We are also excited.

About some new and previously unpublished data on the disease modification potential of collaborative and specifically how opened opposite differentiate from <unk>.

For example, sito mobile we will present data for the retrospective real World data study remind tool.

Malte Peters: For TASA ThetaMap, we will present data for the retrospective real-world data study ReMind2. Data presented at the Soho conference earlier this year showed that the tafacitamab and lenalidomide cohort was associated with longer overall survival versus the pooled data set of other systemic therapies. VR, and RJ Mox.

Data presented at <unk> earlier, this year showed that the tougher cedar lumber and Lenalidomide cohort was associated with longer overall survival versus a pure data set of other systemic therapies.

VR and RJ marks.

Our oral presentation at Ash will now show all comparator groups and includes fallout BR R Square and car T cell treatment and we look forward to sharing the data with you.

Malte Peters: Our oral presentation at ASH will now show all comparator groups and include PolarVR, R-Square, and CAR T-cell treatments, and we look forward to sharing the data. We are excited about Pilates for the treatment of patients with myelofibrosis, and we believe it has first-in-class and best-in-class potential.

Okay.

We are excited about the opposite for the treatment of patients with myelofibrosis.

And we believe and have first in class and best in class potential.

Malte Peters: Collaborative impacts the four major hallmarks of myelofibrosis, and we believe it has the potential to become the standard of care. Elabasib has shown a strong response rate in combination with rosinitinib, achieving a spleen volume reduction in 67% of first-line myelofibrosis patients. We intensified our personal interactions with key opinion leaders in the field and received very positive feedback on the data and the content.

Collaborative impacts the four major hallmarks of myelofibrosis, and we believe it has the potential to become the standard of care.

<unk> has shown a strong response rates in combination with <unk>, achieving a spleen volume reduction and 67% of first line myelofibrosis patients.

We intensified our personal interactions with key opinion leaders in the field and received very positive feedback on the data and to Commvault.

We are making great progress to ensure operational excellence for the execution of the ongoing phase III study and we are seeing the results of the measures we have implemented.

Malte Peters: We are making great progress to ensure operational excellence for the execution of the ongoing phase three study, and we are seeing the results of the measures we have implemented. We added additional CROs, improved the interaction with investigators, and expanded the number of countries and sites, with all activities in place. We expect to report top-line data from this study in the first half of 2020. Now moving to Monju.

We added additional <unk> improve the interaction with investigators.

And expanded the number of countries and sites.

With all activities in place.

We expect to report topline data from this study in the first half of 2024.

Now moving to Mon Julien.

We have two pivotal phase III studies ongoing expanding the clinical development for patients with frontline <unk> in patients with relapsed refractory indolent lymphoma.

Malte Peters: We have two Pivotal Phase III studies ongoing, expanding the clinical development to patients with frontline DLDCL and patients with relapsed refractory indolent lymphoma. For frontline DLDCL, we are doing very well in terms of enrollment. Investigators are excited about this study, and we are well underway adding additional sites in the United States to satisfy investigator and patient interests. In late August, MinJuby, the brand name of Tafasitamab outside of the U.S., was granted conditional marketing authorization by the European Commission for the treatment of adult patients with relapsed or refractory diffuse-like T-cell lymphoma who are not eligible for stem cell transplants Two days earlier, Minduvi received conditional approval in Canada.

For frontline <unk>, we are doing very well in terms of enrollment investigators are excited about this study and we are well underway, adding additional sites in the United States to satisfy investigator and patient interest.

In late August means you will be the brand name of <unk> outside of the U S was granted conditional marketing authorization by the European Commission for the treatment of adult patients with relapsed or refractory diffuse large b cell lymphoma, who are not eligible for stem cell transplant.

Two days earlier <unk> received conditional approval in Canada.

Malte Peters: In both jurisdictions, our partner Insight is responsible for the commercial base. We are very excited that the European Commission followed the FDA in approving Trafacetamab in combination with lanolidomide based on compelling data from the Elman study supported by our real-world data package. We have also made considerable progress with felzatemab in autoimmune membranous nephropathy, or AMN, a disease with significant unmet medical need. The M-PLACE study, evaluating felzartumab in patients with AMN, is fully enrolled, and the antibody has shown proof of concept for this indication.

In both jurisdictions our apartment inside his responsible for the commercialization.

We are very excited that the European Commission and followed the FDA and improving <unk> in combination with Lenalidomide based on compelling data from the <unk> study supported from our real World data package.

We also made considerable progress with Rosatom and autoimmune membranous nephropathy or <unk>.

The disease with significant unmet medical needs.

The <unk> study evaluating <unk> in patients with <unk> is fully enrolled and the antibody has shown proof of concept for this indication.

The data that we shared at kidney week recently demonstrated this shows akamai can rapidly and significantly reduced <unk>, our antibody titers in difficult to treat patients with <unk>, who are positive member interest in the property.

Malte Peters: The data that we shared at Kidney Week recently demonstrated that felzatomab can rapidly and significantly reduce anti-PLA2R antibody titers in difficult-to-treat patients with anti-PLA2R-positive membranous nephropathy. While it is still early to appreciate the full effect on proteinuria, we are encouraged to see the first patients with a drop in proteinuria already as early as six months after the initiation of Last month, we also dosed the first patient in the Phase 2 IGNAZ trial in patients with IgA nephropathy, another autoimmune disease affecting the kidneys.

While it is still early to appreciate the full effect on proteinuria. We are encouraged to see the first patients with a drop in proteinuria already as early as six months after the initiation of treatment.

Last month, we also dosed the first patient the first patient in the phase III <unk> trial in patients with Iga nephropathy, another autoimmune disease affecting the kidney.

Dosing of the first patients with Iga enterprises is an exciting milestone for more photos physicians and also patients as we are broadening our development program focus Ottawa.

Malte Peters: Dosing the first patients with IgA nephritis is an exciting milestone for MorphoSys physicians and also patients as we are broadening our development program for physicians. We believe Azatomoff could have great potential as a targeted therapy for patients with autoimmune renal diseases with limited treatment.

We believe as Akamai could have great potential as a targeted therapy for patients with autoimmune renal diseases with limited treatment options.

Yes.

Yes.

As you can see we expect to deliver a steady flow of late stage clinical data over the next several years, which have the potential to change treatment paradigms in several oncology and autoimmune indications.

Malte Peters: As you can see, we expect to deliver a steady flow of late-stage clinical data over the next several years, which has the potential to change treatment paradigms in several oncology and autoimmune diseases. We are very excited about this progress and the potential of our, With that, I now turn the call over to Stang for a review of the financials. Thank you, Malta.

We are very excited about this progress and potential of our pipeline.

With that I'll now turn the call over to sung for a review of the financials.

Thank you Walter we're pleased to share our financial results for the third quarter of 2021.

Sam Bee: We're pleased to share our financial results for the third quarter of 2021. Moving to slide 15. Monjuby sales in Q3 2021 were 18.6 million euros, reflecting 22% growth quarter over quarter excluding the impact of FF. As Jean-Paul mentioned earlier, we received additional regulatory approvals for Manjubi outside of the US and recorded €82,000 in royalty revenue from our partner Insight. With Menjubi Royalty Revenue becoming a regular item in our P&L going forward, it's important to note that MorphoSys provides the commercial and clinical supply for ex-U.S. utilization at an agreed-upon rate.

Moving to slide 15.

<unk> sales in Q3, 2021 were $18 6 million euros, reflecting 22% growth quarter over quarter, excluding the impact of FX.

As John Paul mentioned earlier, we received additional regulatory approvals of <unk> outside of the U S and recorded 82000 euros and royalty revenue from our partner insight.

With me and Jamie royalty revenue, becoming a regular item in our P&L going forward.

It's important to note that morphosis provides the commercial and clinical supply for ex U S utilization at an agreed upon rate.

Sam Bee: The revenue from this supply is recorded in the Licenses, Milestones, and Other category on our top line, and the exact same amount is subsequently recorded in Cost of Sales, yielding a zero gross margin on NJUBI supply sales. Moving to slide 16.

The revenue from the supply is recorded in the licenses milestones and other category in our topline and.

And the exact same amount of subsequently recorded in cost of sales, yielding a zero gross margin on <unk> supply sales.

Yes.

Moving to slide 16.

Sam Bee: Total revenues for the third quarter of 2021 were €41.2 million, compared to €22 million for the same period in 2020. Total cost of sales was 7.5 million euros in the third quarter of 2021, compared to 3.7 million euros for the third quarter of 2020. Cost of sales specific to Monjuby US product sales was 3.6 million euros in the third quarter of 2021.

Total revenues for the third quarter of 2021 were $41 2 million euros compared to 22 million euros for the same period in 2020.

Total cost of sales was $7 5 million euros in the third quarter of 2021 compared to $3 7 million euros for the third quarter of 2020.

Cost of sales specific to <unk> U S product sales was $3 6 million euros in the third quarter of 2021.

Sam Bee: Turning to operating expenses, R&D expenses in the third quarter were 64.4 million euros compared to 34.2 million euros in the same period of 2020. The growth primarily reflects the inclusion of R&D expenses from Constellation since July 15, 2021, and increased investment to support the advancement of our clinical stage program. Selling expenses were slightly down at 32.4 million euros in the third quarter, compared to 32.9 million euros in the third quarter of last year.

Turning to operating expenses R&D expenses in the third quarter were $64.

4 million euros compared to $34 2 million euros in the same period of 2020.

The growth primarily reflects the inclusion of R&D expenses from constellation Since July 15 2021.

And to increased investment to support the advancement of our clinical stage programs.

Selling expenses were slightly down at $32 4 million euros in the third quarter compared to $32 9 million euros in the third quarter of last year.

Sam Bee: G&A expenses in the third quarter were 19.4 million euros compared to 13.3 million euros for the third quarter of 2020. The increase was driven by the inclusion of Constellation's G&A expenses, as well as transaction-related costs. For the third quarter of 2021, we reported a consolidated net loss of 112.8 million euros, compared to a net loss of 65.3 million euros in the third quarter of 2020. Turning to the balance sheet, We ended the third quarter of 2021 with cash and investments of 1.13 billion euros, compared to 1.24 billion euros as of the end of 2020.

G&A expenses in the third quarter were $19 4 million euros compared to $13 3 million euros for the third quarter of 2020.

The increase was driven by the inclusion of constellation's G&A expenses as well as transaction related costs.

For the third quarter of 2021, and we reported a consolidated net loss of $112 8 million euros compared to a net loss of $65 3 million euros in the third quarter of 2020.

Turning to the balance sheet.

We ended the third quarter of 2021 with cash and investments of 113 billion euros compared to 124 billion euros as of the end of 2020.

In the third quarter of 2021, we recorded significant amounts in our balance sheet related to the constellation and royalty pharma transaction.

Sam Bee: In the third quarter of 2021, we recorded significant amounts in our balance sheet related to the Constellation and Royalty Pharma transactions. A high-level overview of the accounting for these transactions is provided on slide 18. Specific to the Royalty Pharma transaction, we recorded a financial liability in the amount of 1.2 billion euros for future royalty and milestone payments owed to Royalty Pharma. The measurement of the financial liability is initially at fair value and subsequently based on the effective interest method.

A high level overview of the accounting for these transactions is provided on slide 18.

Specific to the royalty pharma transaction, we recorded a financial liability in the amount of $1 2 billion euros for the future royalty and milestone payments owed to royalty pharma.

The measurement of the financial liability is initially at fair value and subsequently based on the effective interest method.

Sam Bee: Trinfaya Royalties and any potential royalties from Gantanarimov and Otillamov, Milestones for Otillamov, and future net sales of Collaborasys and CPI, 0209, will be recorded as revenue on the MorphoSys income statement. It's important to note that there will be no cost of sales amount recorded in the MorphoSys income statement for the revenue share that is As we completed some financially complex transactions with Royalty Pharma and Insight in the previous year, we have included slides 23 and 24 to help the investment community better understand the ongoing impact of these transactions on our income statement.

Shrimp via royalties and any potential royalties from <unk> and <unk> milestones for our Telemark and future net sales of collaborative and CPI <unk> hundred nine.

Will be recorded as revenue on the <unk> FERC <unk> income statement.

It's important to note that there are being no cost of sales amount recorded in the morphosis income statement for the revenue share that is tasked onto royalty pharma.

As we have completed some financially complex transactions with royalty pharma and inside in the previous year.

We have included slides 23, and 24 to help the investment community better understand the ongoing impact of these transactions to our income statement.

This view excludes the <unk> royalties since that is being passed on to royalty pharma.

Sam Bee: This view excludes the Trempaia royalties since that is being passed on to royalty pharma and excludes the effects of the 50-50 U.S. profit share with our partner Insight. The result is a P&L that connects net profit or loss more closely with cash generation or utilization.

And excludes the effects of the 50 50 U S profit share with our partner insight.

The result is a P&L that connects net profit or loss more closely with cash generation or utilization.

Sam Bee: Turning to our guidance for 2021 on slide 19, we are reiterating our guidance that was updated in July this year, following the close of the Consolation and Royalty Pharma transactions. We expect group revenues in the range of €155 million to €180 million.

Turning to our guidance for 2021 on slide 19.

We are reiterating our guidance that was updated in July this year following the close of the constellation and royalty pharma transactions.

We expect group revenues in the range of 155 million to 180 million euros.

As mentioned previously we will continue to record from via revenues and this is reflected in the guidance range.

Sam Bee: As mentioned previously, we will continue to record revenue from BioRevenues, and this is reflected in the guidance range. Moving to operating expenses, we expect 2021 operating expenses to be in the range of 435 million to 465 million euros, which includes expenses for Constellation as of July 15, 2021. The range also includes one-time transaction-related costs of 36 million euros.

Moving to operating expenses.

We expect 2021 operating expenses to be in the range of 435 million to 465 million euros, which.

Which include expenses for constellation as of July 15, 2021.

The range also includes one time transaction related costs of 36 million euros.

We anticipate R&D expenses to comprise between 52% to 57% of operating expenses, excluding the one time transaction related costs.

Operator: We anticipate R&D expenses to comprise between 52-57% of operating expenses, excluding the one-time transaction related costs. With that, we would like to open the call to questions. Operator?

With that we would like to open the call up for questions operator.

Ladies and gentlemen, we will now begin the question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad now.

Operator: Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press 01 on your telephone keypad now. We will be advised when to ask a question. If you change your mind and wish to withdraw your question, please press 0 or 2. Participants are rescued to all new fan sets when asking a question. The first question is coming from Josh Reports at SBB Daring Q9 now. Thank you very much for taking the question, and congratulations on the progress with the integration. One for Malta, one for Jean-Paul, and maybe one for Sam.

Igloo advice went to ask a question if you change your mind and wish to withdraw your question. Please press zero two dependent.

To answer your sense, that's why I'm asking a question.

The first question is coming from Jeffrey parts SBB Leerink. Your line is now open.

Thank you very much for taking my question.

Congratulations on the progress with the integration.

One for Malta, one for Sean Paul maybe you want to sign multiple first on manifest too.

Unknown Executive: Malta, first, on Manifest-2, do you plan to have an interim look at that study, and when might that occur? And then, Jean-Paul, now that you've vetted your combined company, could you give us a sense of what assets are potentially partnerable, and what assets or geographies are pretty much off-limits that you're committed to retaining? And then, lastly, do you expect consensus to track to what is, for the time being, called your ABC income statement or to IFRS?

Do you plan to have an interim look at that study and when might that occur and then Sean now you're better than your combined company could.

Could you give us a sense of what assets are potentially partner Bo and what assets or geographies are pretty much off limits, but Europe. We are committed to returning and then.

And lastly, do you expect consensus subtract two what are for the time being called ABC income statement.

<unk> two <unk>.

Unknown Executive: I'm just wondering how you see the various agencies and consolidators guiding, or at least setting things up in consensus. So, Jeff, let me start with the first question. What I would like to say is that we are seeing good progress with where we are with Mindful2 in terms of

I'm just wondering.

How you see the various sites and Susan Consolidators.

Guiding setting things up in consensus.

So Jeff let me start with with the first question.

What I would like to say is that we are seeing good progress with where we are with money for full in terms of enrollment I referred to the measures we are putting in place to accelerate operational excellence and improve on the operational excellence of the Tri Ed I would prefer not to make comments on it.

Unknown Executive: enrollment, I refer to the measures we are putting in place to

Unknown Executive: I would prefer not to make comments on specific issues.

Unknown Executive: Unknown Executive, Zain Ebrahim, Gabriela Hobbs, Charles Mabbutt, Philippa Pritchard

Specific statistical details as it Ken has the potential to impact the integrity of the trial and the FDA typically does not encourage sponsors to publicly comment on vessel.

Jean-Paul Crest: And Jeff, hi, thanks for the question, Jean-Paul, regarding the potential of partnering for our assets. It's pretty clear we've been...

Jean-Paul Crest: Very clear about our focus on our late-stage assets. Mont-Jouvier, we have to deal with inside, of collaborative. You might recall that we have the whole right, worldwide. So we have a lot of opportunity. Right now, we really believe we should retain all the geographies and all the rights.

Prefer not to give any details on what we're doing in terms of interim analysis.

And then Jeff Hi, Thanks for the question on both the GAAP and <unk>.

The first on shell.

Pop scenario, our assets, where it's pretty clear we've been.

Very.

Jean-Paul Crest: We're not contemplating partnership yet. We think we have enough, with the pivotal trials going on under the Manifest 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 40, 41, 42, 42, 43, 43, 44, 44, 45, 46, 47, 48, 48, 49, 50, 50, 51, 51, 52, 52, 53, 53, 54, 55, 56, 57, 57, 58, 59, 60, 60, 67, 67, 68, 69, 70, 70, 71, 71, 72, 71, 72, 72, 73, 74, 75, 75, 76, 77, 78, 78, 78, 79, 78, 79, 79, 78, 79, 78, 79, 79, 78, 79, 79, bring and raise and create value until we decide later.

Clear on our focus on our late stage assets module B, we have to deal with insightful.

Our collaboration with <unk>.

You might recall that we have to hold rights worldwide. So we have a lot of optionality right now.

I really believe we should retain all.

All the geographies and all the rights we are not contemplating partnership yet we think we have enough.

With the <unk>.

Trials going on in the manifest 123.

<unk> and res and create value until we decide later, but so far we are.

We're not working on any partnership pumping some softness.

Major asset for a major opportunity.

For the mid stage assets with service fixed index is up one level.

CPI <unk> hundred nine.

Sure.

I think that following the data and the progress we are making.

We could potentially partner those assets and make sure that that would help us to keep the focus on the later stage assets.

And that will also generate some.

Funding, which will obviously help us keep our balance sheets in great shape. So.

We're working on that both at the same time, we stay very determined on the progress on the data Moulton.

As I mentioned for those mid stage assets, where we have a lot of opportunity.

I should add by saying that there is interest.

Jean-Paul Crest: But so far, we are not working on any partnership for this major asset for us, a major opportunity. For the mid-stage assets, which are respectively Fersat and Mabbutt and CPIO209, we are. I think that following the data and the progress we are making... We could potentially partner with those assets and make sure that that would help us to keep the focus on the later stage and also of generic funding, which will obviously help us.

On those assets by so to put it simply keep you posted.

Great. Thank you and Jeff on your answer on your third question on the consensus.

It's my hope and desire that the sell side will model us.

As demonstrated in the Orange highlighted column, the a minus b minus C column, because this is more reflective of how morphosis.

We'll generate cash and utilize cash.

With respect to net income.

There are some complications that happened below the line and that is with two specific line items on the income statement the finance expense.

Jean-Paul Crest: Keep our balance sheet in great shape. So we're working on that, but at the same time, we stay very determined on the progress on the data, as Malte mentioned, for those mid-stage assets. But we have a lot of optionality.

Finance income and I think it would be very difficult for the sell side to try to predict.

How FX moves.

Movements impacted the liabilities on our balance sheet with regard to insight and royalty pharma.

Jean-Paul Crest: I should end by saying that there is interest in those aspects. Great, thank you. And Jeff, on your third question on the consensus, it's my hope and desire that the cell side will model, as demonstrated in the orange highlighted column, the A minus B minus C column, because this is more reflective of how MorphoSys.

Also there is.

Interest rate charges.

To those liabilities and then of course, there is items that are booked there as a result of a deviation from our <unk>. So that is something the sell side would not have any great visibility into so for all those reasons I.

Sam Bee: We'll generate cash and utilize cash with respect to net income. However, there are some complications that happen below the line. And that is with two specific line items on the income statement, that is, finance expense and finance income. And I think it would be very difficult for the sales side to try to predict. How FX movements impact the liabilities on our balance sheet with regard to Insight and Royalty Pharma. Also, there are interest rate charges on those liabilities, and then of course, there are items that are booked there as a result of a deviation from our LRP. So that is something the cell site would not have any great visibility in.

Hope people would start modeling to the Orange highlighted column.

Great. Thanks, Thanks, Scott.

Thanks, Jeff.

The next question is coming from Jason Butler with JMP Securities. Your line is now open.

Hi, Thanks for taking the questions.

First one on manifest.

<unk> can you just expand on your comments around improving.

Interactions with investigators and the operational excellence.

The trial conduct I guess now that you are running the trial are there aspects of the design that youre, considering amending or trial conduct in general.

Then.

Second question on.

So it's hard to map.

Clearly theres a lot of opportunities for the candidate.

Can you just walk through in addition to following the biology of how Youre thinking about prioritizing indications.

Sam Bee: So for all those reasons, I hope people will start modeling to the orange highlighted columns. Great. Thanks. Thanks, Frank. Thanks, Jeff. The next question is coming from Jason Butler at J&P Securities. Your line is now open. Hi, thanks for taking the questions. First one on Manifest-2.

Yes broadly.

Computing areas. Thank you.

Sure Jason Thanks.

Onto a question Mark for us.

For manifesto.

We have we have made significant changes aiming their conducted and the operational excellence of the try it and I think I spoke about this.

Operator: Morpho, can you just expand on your comments around improving the interactions between investigators and the operational excellence of the trial conduct? I guess now that you're running the trial, are there aspects of the design that you're considering amending or trial conduct in general? And then, second question on Feliz Audemars, clearly, there are a lot of opportunities for the candidate. Can you just walk through, in addition to following the biology, how you're thinking about prioritizing indications and, I guess broadly, therapeutic areas? Thank you.

Yes.

<unk> quarterly call.

As highlighted that.

Already during the due diligence that we performed.

For the constellation assets, we were aware of several areas.

With the benefit from our expertise at <unk>.

Secondly, improvements so we have really intensified our interaction with key opinion leaders. We have expanded the number of countries. We have significantly expanded the number of sites.

And we are already seeing turnaround in terms of how quickly enrollment function. We have also significantly improved our interaction and choice with.

Malte Peters: Sure, Jason. Thanks. I will answer question one first.

Clinical research organization C are all because there was clearly room for improvement and we have made some very I would say small changes that also.

Malte Peters: So for Manifest-2, we have made significant changes to the conduct and the operational excellence of the trial. And I think I spoke about this at the last quarterly call and highlighted that, already, during the due diligence that we performed for the consolation assets, we were aware of several...

Already show a benefit.

With respect to the design changes on client spoken last time about increasing the sample size to 400 that wasn't a measure of caution increasing the probability of success to get to a positive trial on both endpoints on the primary and the key secondary endpoint, but beyond that we do not plan to conduct.

Malte Peters: We have several areas that would benefit from our expertise at MorphoSys and certain improvements.

Malte Peters: We have really intensified our interaction with opinion leaders, we have expanded the number of countries, we have significantly expanded the number of sites, and we are already seeing results.

Any further changes with respect to the design of the trial.

Yes, and I would think that was a question on the <unk>.

As tough as you can.

As of the science.

For phase up until the because of the modern fraction of an LTC dislocating autoimmune diseases.

Malte Peters: turnaround in terms of how quickly enrollment functions.

Which is targeting the long leaving.

Malte Peters: We have also significantly improved our interaction and choice with clinical research organizations (CROs) because there was clearly room for improvement, and we have made some very, I would say, smart changes that have also already shown benefit. With respect to the design changes, I spoke last time about increasing the sample size to 400. That was a measure of caution, increasing the probability of success to get a positive trial on both endpoints, the primary and the key secondary endpoints. But beyond that, we do not plan to make any further changes with respect to the design of the trial. Yes, and I would. I think there was a question on Fez as well.

That says.

Which should until we give an advantage versus <unk> map, we stop which targets earlier.

Stages.

We have to put some shelves will address many autoimmune diseases with <unk>.

Our yes, our selection and that's what we applied for our current.

To investigate <unk> trial.

In lithology or a mix of unmet need.

Market sites.

And competitive stage. So if you think for instance, if you'd ask US why don't you do a study in myasthenia gravis, while we couldnt utility we think it would work.

This is a busy space at all.

<unk> agents being investigated but we don't exclude it so we started with our mythology indications.

Jean-Paul Crest: I'll start and you can add the science, Malte. For cells after Mab, in theory, because of the modification of an RPCD38 in autoimmune diseases, which is targeting the long-living plasma cells, which should, in theory, give an advantage versus Rituximab, which targets earlier pit cell stages. We have the potential to address many autoimmune diseases. The criteria for selection, and that's what we applied for our current two investigational trials in Nephrology, are a mix of unmet need and Competitive Stage. So if you take, for instance, if you ask us, why don't you do a study on Myosina Gravis? Well, we couldn't, in theory. We think it would work, but this is a busy space.

Few agents being explored this machine Amen.

And it's a very heightened many of these patients end up with.

In stage renal disease, and sometimes transplants.

Which which we think we can really help the unmet need here, but did you want to add anything no I think you summarized it very well may be one insights.

Additionally, on the AML indication assessment process, we really focused on in patients who have very limited treatment options.

And that means patients who have high until auto antibody titer or patients who have progressed on previous immune.

Jean-Paul Crest: There are already a couple of agents being investigated, but we don't exclude them. So we started with our nephrology indications because there are few agents being explored, especially in AMN. And it's a very high-end methoid.

Immuno suppressive treatment. So these patients on notoriously difficult to treat and we have seen as you have seen in the pulsar, maybe we are seeing very encouraging results. Both on the level of auto antibody Tiger as well as on proteinuria that with so we consider this very positive and encouraging data and we are super happy that we could.

Jean-Paul Crest: These patients end up with end-stage renal disease and sometimes transplants, which we think we can really help the method here. Arthur, do you want to add anything to that? No, I think you summarized it very well.

Started second dryer and hygiene in devices, and then jump on to summarize the <unk> module for the other options and other autoimmune diseases, where auto antibodies payroll, but I think we have focused really on <unk>.

Malte Peters: Maybe one slight addition on the AMN patients, as Jean-Paul said. We really focused on patients who have very limited treatment options. And that means patients who have high autoantibody titers or patients who have progressed on previous immunosuppressive treatments. So these patients are notoriously difficult to treat, and we are seeing, as you may have seen in the poster, very encouraging results both on the level of autoantibody titers as well as on proteinuria levels.

Towards the most pressing and burst proof of concept indications and I would maybe just thank you Mike I would add on the.

<unk>.

To remind you that.

We'd be on.

With the very important abstracts with three abstracts on bill out there.

Especially including one in the combination.

Number three.

Increasing our confidence for the phase III trial, which is very important so motto come pretty soon that fashion.

Malte Peters: So we consider this very positive and encouraging data, and we are super happy that we could start a second trial in IJNF fighters. And then Jean-Paul summarized it really well. There are multiple other options in other autoimmune diseases where autoantibodies play a role, but I think we have focused on two of the most pressing and best proof of concept indications.

Thank you.

Thanks.

The next question is coming from gross China Bauxite. Your line is now open.

Hi, Thank you very much.

Finding.

Im sorry.

Sorry, another follow up.

Got it.

Terry.

Thanks.

It's permanent.

I'm kind of I'm, sorry, I didn't see kind of what.

Jean-Paul Crest: And I would maybe just thank you, Matthew. I would add to the Pella comment to remind you that all eyes will be on us at ASH with the very important abstract. We have three abstracts on Pella there, especially one on the combination of arms, number three, increasing our confidence for the phase three trial, which is very important. So more to come pretty soon. Thank you. The next question is coming from Rosie Turner at Parkside. Your line is now open.

Yes.

And leaned across.

Primary and secondary endpoints and then Sac holdings.

Holdings.

Alright, Thank you for <unk>.

And <unk> already seen ethnic thanks, Kevin Thanks for trying to navigate the near mine and engineered currently.

So in your slides.

Okay presuming thats in Gainesville.

Operator: Hi, thank you very much for taking my questions, just two if I may. Firstly, sorry, another follow-up regarding Saroni and the data at ASH. It's probably just me, but I'm kind of slightly confused as to kind of what data we'll get that's going to kind of help with the read across to Manifest 2, just because I think the primary and secondary endpoints for Manifest 2, are 24-week data and we've obviously already seen admittedly very strong data from collaborative in the manifest original trial as you've shown your slide for 24 weeks so presumably this is going to be kind of duration of stream response data which is going to be kind of much longer term but maybe you can kind of help me understand that a bit better and then just secondly regarding selling expenses why were they down year-on-year and is this going to be a kind of sustained decrease or is this something that you expect to kind of come back in 2022? Thank you.

And at this.

Thanks.

Okay.

But maybe you can kind of help me understand that better and then just secondly.

Regarding selling expenses.

Why why were they down year on year and this disconnect.

Or is this something that you expect.

Come back.

Thank you.

Okay. So thanks rosy multi.

Mulder will take the first question and some of this decline.

So what we are.

Arent going to show at Ash is a new data cutoff, which comes precisely one year. After the NAS base. A couple so that means a couple of things first of all we have.

Roughly <unk> three year 'twenty for more patients included in our analysis.

For the primary endpoint spleen volume reduction every single patients off the HLA <unk> patients has reached the 24 week time point. So this is a fairly mature data fit which is likely not going to.

Malte Peters: Okay, so thanks, Rosie. Malte will take the first question in a second.

Malte Peters: Yeah, so Rosie, what we are going to show at ASH is a new data cutoff which comes precisely one year after the last data cutoff. So that means a couple of things. First of all, we have roughly 23 or 24 more patients included in our analysis. For the primary endpoint of spleen volume reduction, every single patient of the 80-something patients has reached the 24-week time point, so this is a fairly mature data set, which is likely not going to change much, so it can be considered a fairly final data set.

<unk> it can be considered a <unk>.

Sandy offending final dataset and that's why it's so important.

<unk> spoke about this.

What's more encouraging for US is that this data set confirms the earlier data cutoff, which was less mature so.

In summary, we really have gained more confidence and.

Malte Peters: And that's why it's so important, and we spoke about this, and what's so encouraging for us is that this data set confirms the earlier data cutoff, which was less mature. So in summary, we really have gained more confidence, and we are more confident in terms of how Manifest-2 would pan out in terms of probability of success. So you see more patients. All patients in ARM3 have reached the 24-week milestone, and you see

We are more confident in terms of how the <unk> tool.

<unk> in terms of probability of success, so youll see more patients.

All patients and obviously, having reached the 24 week.

Milestone and.

Youll see longer.

Duration of response data so that's going to be the best of the ash presentations.

Malte Peters: duration of response data. So that's going to be the best of the ASH. And Rosie, on your question about selling expenses year over year, they're just down slightly there. They're almost flat.

And Rosie on your question on the selling expenses year over year. They are just down slightly there almost flat, but we did go up sequentially and Thats just a phasing.

Sam Bee: But we did go up sequentially, and that's just a phasing phenomena that's happening. But I would say, outside of that, there's nothing extraordinary happening with the Q3 selling. Great, Patrick, thank you both very much.

Phenomenon, that's happening, but I would say outside of that there's nothing extraordinary happening with the Q3 selling expenses.

Great. Okay. Thank you. Thank you very much.

Thank you.

Operator: The next question comes from James Gordon at J.P. Morgan. Your line is now open.

The next question comes from James Gordon at Jpmorgan. Your line is now open.

Operator: Hello, James Gordon from JPMorgan. Thanks for taking the questions. A couple of questions, please. One was on 1Juby uptake, so encouraging comments on repeat orders and second-line patient use. Can you quantify at all?

James Gordon from JP Morgan, Thanks for taking the questions a couple of questions. Please.

One was on the uptake.

Encouraging comments on repeat orders and second line patient needs.

Can you quantify tool can you can you give us a split of what percentage of usage coming from second line and do you have any sense of what percentage of patients who started getting the therapy lastly, I'll still on therapy.

Joseph Horvat: Can you give us a split of what percentage of use is now coming from second-line? And do you have any sense of what percentage of patients who started getting the therapy commercially are still on therapy? The second question was about the 1Juby competition.

Pat.

Second question was on Wednesday, the competition. So the recent head slash abstracts come out and the <unk> is still looking pretty good.

Relapse refractory <unk> ACO negatively followed next year so.

Joseph Horvat: So we recently had some ASH abstracts come out, and the CD3, CD20s are still looking pretty good in relapsed refractory DLBCL, and they're going to be filed next year. So any thoughts about how the patient population, those who have been used in versus 1Juby, are they going to be competing currently, or is it different? Felza, the IGNAT study that you started was encouraging, but what's the path to market there?

Any thoughts about how the patient populations that would be used instead of just one JV are they going to be trying to compete thing or was it different.

Hello.

The ignite study that you started that was encouraging but what's the path to market that.

So when is the earliest that will actually get to come to market and would that be the same so a patient to see any different.

And then final one was really helpful data on the back of the presentation, if we call ADC reporting.

Malte Peters: So when is the earliest that might actually be able to come to market, and would that be the same sort of patients as CD38 or different? And then the final one was really helpful at the back of the presentation, if we call it ABC reporting, but are you now going to put that in the release every time when you report? So will we get that at the time you report, or will that only come out in the presentation going forward? Thank you, James. Four questions.

But you're not going to put that in the release every time when you report so we get that.

At the time, you recall that only come out in the presentation going forward.

Yes.

Thank you James for questions. So first things first I'll give that heightened.

Sure.

It will be conventional questions at the beginning and Joe will.

Alright.

First of all we.

We like the momentum we are building.

We continue to engage in a UK patient <unk> and our long term data as.

I mentioned in my prepared remarks.

There is growing enthusiasm on both data and we expect continuous growth.

In terms of the second line.

Jean-Paul Crest: So first things first, I'll give you a high note on your Monjuby commercial questions at the beginning, and Joe will elaborate. You know, first of all, we like the momentum we are building. We continue to engage and educate HCPs through our long-term data. As I mentioned in my prepared remark, there is growing enthusiasm for these data, and we expect continuous growth. In terms of the circumfine share here, we are actually leading the circumfine space, and we have increasing numbers of patients in Circumstance, which is so important that we have discussed several times for the duration of treatment. We have some patients actually over a year of treatment.

Sure.

We are actually leading the second line space and we have increasing numbers of patients.

In in second language is so important that we've discussed several times default duration of treatment that.

But we have some patients actually all very <unk> treatment.

And thats great to see that we are we are really hitting on them, but again, we are the only approved second line compound and we lead the space here.

And as I said several times there is a disconnect between realized and clinical trials, we have shown in our <unk> update.

Jean-Paul Crest: And that's great to see that we are really feeling the need. Again, we are the only approved second-line compound, and we leave space here. And, as I said several times, there is a disconnect between real life and clinical trials.

Beyond three years.

No.

But in real life without booking volume month, because its not that unique upfront. The good news here that we are working towards.

Engaging in indicating on those data and we see progress being made so we think that time will really play the role of the year.

Jean-Paul Crest: We have shown in our L-MIND trial that we have data beyond three years, four years. But in real life, we are talking more in months because it's not a clinical trial. The good news here is that we are working towards engaging and educating on this data, and we see progress. So we think that time will really play a big role here. But Joe has been spending a significant amount of time in the field, and he will have some comments.

But Joel has been spending a significant amount of time in the season.

We will add some comments here.

Yes James.

Thanks for the question.

As Roland mentioned perfect strategy, Paul mentioned, we have been.

Spending quite a bit of time in the field.

Whether it's large academic settings are smaller community settings large community counts right across the U S and.

Joseph Horvat: Yeah, James, thank you for that question. As John-Paul mentioned, I've been spending quite a bit of time in the field, whether it's large academic settings, smaller community settings, large community camps right across the U.S., and physicians continue to respond very favorably to that three-year data that was presented at AFCO and other conferences. And your question as it relates to repeat orders, as we reported on slide six of 3Q3, we've had more than 850 accounts that have ordered since launch. That continues to grow. For example, when we look at repeat orders... In Q3, we had greater than 500 accounts ordered, with approximately 70% of those accounts representing Repeat Orders.

And the physicians continue to respond very favorably.

To that three year data that was presented at <unk> and other conferences.

And your question as it relates to repeat orders as we reported on slide six.

<unk> Q3, we've had more than 850 accounts that have ordered since launch that continues to grow when we look at repeat orders in Q3, we had greater than 500 accounts ordered with approximately 70% of those accounts.

Representing repeat orders so we continue to make good progress.

And this is reflected by the enthusiasm.

Hcp's.

And the increasing accounts and reorders.

And as.

Paul mentioned as it relates to the percentage of second line as John Paul did allude to the fact that we do have leading share in second line as we continue to penetrate more.

Joseph Horvat: So we continue to make good progress, and this is reflected in the enthusiasm of the HCPs and the increasing number of accounts and reorders. John Paul mentioned, as it relates to the percentage of second line, as John Paul did allude to the fact that we do have a leading share in second line as we continue to penetrate more. And again, this is based on the robustness of the data and our ability to get out and, So the other question here was about Selzay, EGNAP, and the EGNAP trial. Malte, do you want to take this?

And again this is based on the robustness of the data.

And our ability to get out and see physicians.

Great.

Other question you asked a question about <unk> eaten up big trials.

But if you want to take that yes, I think.

I think it's submitted early too.

To speak about details on the path to market I think.

We are at this moment, we're super happy about where we are we are seeing good traction for both indications we want to take a moment really in the middle of the year to evaluate the data in both indications and then make a good decision of how we can.

Malte Peters: Yeah, I think it's a little early to speak about EGNAP on the path to market, but I think we are, at this moment, very happy about where we are. We are seeing good traction for both indications. We want to take a moment really in the middle of the year to evaluate the data for both indications and then make a good decision about how we can move forward in terms of registration activities.

Move forward in <unk>.

Lines of registration activities, we have some thoughts already but we want to really look at the entirety of the data in both indications and then make an informed decision that stays in place.

How we will get this approved so I think stay tuned a little bit we will update you of course as soon as we know more but at this point, we are really focusing on incorporating the proof of concept data and also executing on our Iga nephropathy Pedro.

Malte Peters: We have some thoughts already, but we want to really look at the entirety of the data in both indications and then make an informed decision that's data-driven about how we will get this approved. So I think you should stay tuned for a little bit.

Okay, and Jamie with regard to your question on the continuation of this.

Malte Peters: We will update you, of course, as soon as we know more. But at this point, we are really focusing on corroborating the proof-of-concept data and also executing on our IGN Friday. Okay, and James, with regard to your question on the continuation of this alternative income statement view, yes, the answer is we will absolutely continue to provide it going forward. I think it's essential to look at the business this way, given...

Alternative income statement view, yes. The answer is we will absolutely continue to provide us going forward I think it's essential.

To look at the business this way given the.

Two collaborations or arrangements, we have with insight and royalty pharma I think the yellow column would be much more meaningful.

To anyone looking at morphosis, yet in terms of timing of this.

Given it's the first time, we're sharing information like this I think thats still in discussion as to.

Sam Bee: The two collaborations or arrangements we have with Insight and Royalty Pharma, I think the yellow column would be much more meaningful to anyone looking at MorphoSys. In terms of timing of this, you know, given it's the first time we're sharing information like this, I think that's still in discussion as to the timing and other areas or disclosures this might appear in, but we thought initially... This was a good venue, putting it on the earnings fly deck, but let us get back to you in terms of timing and whether or not this would appear in other disclosures. Thank you.

The timing and.

Other areas of our disclosures this might appear and but we thought initially.

This was a good venue, putting in and the earnings slide deck, but let us get back to you in terms of.

Timing and whether this would have cured and other disclosures.

James I realize the one other question of module the future competition and I don't want to skip that.

We really as I said focusing on drilling the momentum on that on our.

On our compound and our regimen.

On the sugar land and again.

The only ones in second line.

Jean-Paul Crest: James, I realize you had a question about Montjuvi's future competition, and I don't want to skip that. You know, I mean, we really are, as I said, focusing on growing the momentum of our compound and our regimen. Manjouvi Len.

Of course, it's a competitive space, but in some ways also we could we.

We could leverage effect that will be more and more combinations based on modules in the future. We are as you know.

Jean-Paul Crest: And again, you know, we're the only ones in the second line. Of course, it's a competitive space. But in some ways also, we could, we could leverage the fact that there will be more and more combinations based on Manjouvi in the future. We are, as you know, [inaudible] you know, why not another bio-specific but another model is hit as well. And that's going to be very important because if we are at the core, as a backbone, that will mean in the future more prescriptions and more sales.

Exploration advice specific combinations and car, we're not excluding any other combinations as part of our backbone strategy. Some apparel market, we are talking to other companies for potential combinations with <unk>.

Mineral <unk>.

<unk> and other bispecific, although other entities as well.

And that's going to be very important because if we are on the car as the backbone that was meeting the future more prescription small cells.

Jean-Paul Crest: So we know it's a competitive space, but we know the strength of our regimen and our assets could be the basis for more competition in the future, for more backbone combinations in the future. As a reminder, if you have a question for our speakers, please press 0 now to enter the queue. The next question is coming from Vineet Agrawal at Citi. The line is now open. Yeah, hi, can you hear me?

So we look at the competitive space, but we know the strength of our regimen in our assets could be the base for more competitions industry hallmark.

Backbone.

Combinations into the future.

As a reminder, if you have a question Bose speakers. Please press star one now to enter the queue.

The next question is coming from <unk>.

Your line is now open.

Yes, Hi can you hear me.

Yes, yes, we can.

Operator: on Pellet Braces. The question is more from a reimbursement perspective. Now, given the proposed Medicare reforms, particularly regarding the redesigning of the Part D program, where manufacturers will be on the hook for 20% of the cost in the catastrophic coverage phase, and the plan sponsors now 60% versus 15% earlier, now, assuming this is implemented, can you comment on any potential impact on the combination of Pellet Braces plus Jack of Five?

Great.

Thanks for taking my question. So most of them have been answered, but just quickly first on celebrated.

The question is more from a reimbursement perspective now given the proposed Medicare reform, particularly regarding the design the designing of the part D program.

Manufacturers will be on the hook for 80% of the cost can be catastrophic coverage.

And the plan sponsors now 60, but lets say its 15% now.

Assuming this is implemented can you comment on any potential impact on the combination drug celebrated jakafi I know this is early stage, but.

Jean-Paul Crest: I know this is all early stage, but would love to know how you think about this. Ben, 1% of the 82,000 royalty revenue on Monjuvi, is that a gross number or a net number, and then I can follow up on the selling expenses. How should we think about this line going forward, at least until before you get ready for the Pellet Bracelet launch? And so I just wanted to clarify on your phasing comment, does that relate more to the general administration expenses or even the selling expenses?

But would love to know how do you think about this then.

One person.

If the 80 to 1000 royalty revenue on <unk>.

Is that a gross number net number is.

Is it after factoring your theory.

Thank God.

And then if I can follow up on defending expenses.

How should we think about this line going forward can you start before you get to that default celebrated launch and so I just wanted to clarify on your fees involvement.

Relate more to the general station expenses or are you waiting for the selling expenses.

Okay. Thanks.

Jean-Paul Crest: Okay, thanks Vineet, I'll stop by your collaborative question. First and foremost, the more we speak to K-webs, and we've been speaking to most, if not all, relevant K-webs in the years for mylofibrosis over the last couple of months.

<unk> topped by year PELA Brexit question.

Thursday.

First and foremost the mall, we speak to <unk> and we've been speaking to most if not all delivered on <unk> in myelofibrosis over the last couple of months.

Jean-Paul Crest: There is a very high unmet need in this dis- Remember that there is almost one standard of care out there, and only 50% of the patients are being addressed by the standard of care for several reasons, one being toxicity or high anemia, which compounds the anemic status of the patients to start. So there is a high inmate need, and when we presented our data, the Manifest-1 Phase 2 data that are going to be disclosed at ASH, to a group of corrections officers, they all were very, very impressed.

There is a very heightened unmet need in this disease.

Ah remembered that there at.

Almost one <unk> out there and only 50% of the patients are being upgraded by standard of care for several reasons, one being toxicity or high anatomy.

Which compound on the dynamics that use of the patients to start with so there is a high unmet need.

And.

When we presented level data.

Fist, one phase two data that are going to be.

Those of Ash to a group of Kols.

We're very very impressed so the feedback is very strong and date.

Jean-Paul Crest: So the feedback is very strong, and they are telling us that we are leaving the space in terms of a potential new standard of care in combination. I'm saying all that because that's going to determine the value proposition of the regimen and the compound in combination, potentially in monotherapy as well later.

Hitting us.

We are leading.

The space in terms of our put such a new standard of care and coordination I'm, saying, all Doug because does going to determine the value proposition.

Regimen and to compound in combination to potentially in monotherapy as well later.

Jean-Paul Crest: So, long story short, we have the basis, with the strength of our data, to establish a very strong proposition to have a new standard of care and, obviously, a value-based proposition, which is the basis for any reimbursement or pricing discussion. And we have time to do that. Remember that we have a couple of years to prepare for shaping the market and making sure that we address any concerns, potential concerns with the players.

So long story short, we have the basis with the strength of our data.

<unk> established a very strong proposition to towards the new standard of care and obviously value.

Based portfolio, which is the.

The base for any number of months of pricing discussion in the future.

And we have scientists.

We have a couple of years to prepare for shaping the market and making sure that we address any concerns.

In.

And put them to our concerns with the payers, but again the unmet need is so high that there is room for us to play in this market in a very competitively.

Jean-Paul Crest: But again, the height, the need is so high that there is room for us to play in this market in a very competitive way. And then someone will address your final question. Yes, you had a question on the royalty revenue from FTUS sales of Minjuvi. We put those in our top line at gross.

And then <unk> will address here finance questions yes.

Had a question on the royalty revenue from ex U S sales and then Judy.

We book those in our top line at gross.

Sam Bee: And then the amount that we have to pay to ZENCOR, our partner, is recorded in the cost of sales. I think you also had a question about phasing. When I was addressing Rosie's question, it was specific to selling expenses. And, Vineet, I don't know if you broke up in the middle of a question. No, that's fine. That's helpful. And I just wanted to follow up on the selling expenses. You know, how should we think about this line going forward? At least until you know, before you get ready for Bella Bressa Blanc.

And then the amount that we have to pay to <unk>. Our partner is recorded in cost of cost of sales.

I think you also had a question on phasing.

When I was addressing <unk> question.

It was specific to selling expenses.

And then I don't know if you broke up.

That's fine.

Yes.

Okay, No thats fine Thats helpful.

Wanted to just follow up on the selling expenses.

How should we think about this line going forward.

Before you get great equal available at launch.

Oh, yes, well you know we've spoken before there are some synergies here, we have a field team here.

Sam Bee: Oh, yes. Well, you know, we've spoken before; there are some synergies here. We have a field team here, and there could be an 80% overlap in terms of myelofibrosis and DLVCL. So, of course, we're going to realize synergies from our own, from our infrastructure today. Could something incremental be added in the future?

And there could be an 80% overlap.

In terms of myelofibrosis and <unk> so.

Of course, we are going to realize synergies from our from our infrastructure today.

Incremental will be added in the future we're going to keep all options open at this point.

Sam Bee: You know, we're going to keep all options open at this point. Thank you. If you would like to ask a question, please press 0 and 1 on your telephone keypad. We have no more further questions coming in, so I will then back over to Julia Neugebauer to wrap up today's call.

Thank you.

Hi, I'm reminder, issue I'd like to ask a question. Please press star zero on one on your telephone keypad.

We have no more further questions coming in.

<unk> wrap up today's call.

Julia Neugebauer: Ladies and gentlemen, this concludes today's conference call. If any of you would like to follow up, the Investor Relations Team...

Ladies and gentlemen, this concludes today's conference call.

If any of you would like to somewhat investor Nicky.

Julia Neugebauer: And if you would like to follow up, the Investor Relations team is available for the remainder of the day. Once again, thank you for joining our call. Have a good day, and goodbye.

For the remainder of the day.

Once again, thank you for joining our call have a good day and goodbye.

[music].