Full Year 2021 MorphoSys AG Earnings Call

Operator: Ladies and gentlemen, welcome to the end-year results 2021 conference call of MorphoSys. Please note that this conference is being recorded and during the presentation, will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. Please note that only if you are registered, you can ask a question.

Ladies and gentlemen, welcome to the MGM resorts 2021 conference call of muscles as please note that this.

Conference is being recorded and during the presentation.

You will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. Please note that only if you are registered you can ask a question should anyone need assistance. During this conference call that may signal, despite pressing star and zero on the telephone.

Operator: Should anyone need assistance during this conference call, they may signal this by pressing the star and zero on their telephone. Now I would like to turn the conference over to Julia Neugebauer. Please go ahead.

Now I would like to turn the conference over to Julia Neugebauer. Please go ahead.

Ladies and gentlemen, good afternoon, and good morning, My name is Julie and I hit on senior Director Investor Relations at my phone and it's my pleasure to watch in Utah fourth quarter and full year 2021 financial results Conference call.

Julia Neugebauer: My name is Julia Neugebauer, Senior Director, Investor Relations at MorphoSys, and it is my pleasure to welcome you to our fourth quarter in full year 2021 financial results conference call. Joining me on the call today are Jean-Paul Cress, Chief Executive Officer, Sung Lee, Chief Financial Officer, Multi-Peters, Chief Research and Development Officer, and would go forward US General Manager, who will be available for the Q&A session. Before we begin, I'd like to remind you on slide two that 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 plans, and expectations for the compounds in our pipeline as well as the development plans of our collaboration partners.

Joining me on the call today are John Paul Kress, Chief Executive Officer sung Lee Chief Financial Officer.

Peters Chief Research and development Officer.

Joe whoever at U S General manager, who will be available for the Q&A session.

Okay.

Julia Neugebauer: 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-F's annual report, all for the year ended December 31, 2021, and from time to time in other SEC documents of MorphoSys. It is important to keep in mind that our statements on this webcast speak as of today. On slide three, you will find the agenda for today's call. Jean-Paul will begin with an overview and will give an outlook.

Before we begin I'd like to remind you on slide two that some of the statements made during the call today are forward looking statements Julian statements regarding our expectations for the commercialization of our products and our development plans and expectations for the compounds in our pipeline as well as the development plans of our collaboration partner.

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 the 20-F and annual report for the year ended December 31, 2021, and from time to time and other SEC documents from a process.

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

On slide three you will find the agenda for today's call Sunpower will begin with an overview on where given outlook I will provide an update on our development pipeline, the French horn, but before turning the call to some for a summary of our fourth quarter and full year, 2020 one financial results.

Following their prepared remarks, we will open the call for your questions with that I'll hand, the call over to Sean power.

Julia Neugebauer: As it will provide an update on our development pipeline, before turning the call to some for summary on our fourth quote and full year 2021 financial results. Following these prepared remarks, we will open the call for your questions. With that, I'll hand now the call over to Jean-Paul. Thank you, Julia. Welcome, everyone.

Jean-Paul Cress: And thank you for joining us today. At MorphoSys, our ambition is to be a leader in hematology oncology with two commercial products by 2025. 2021 was a transformational year for us. It was marked by our first full year of the Montjuvis launch in the U.S., and approvals and launches outside of the U.S. with our partner Insight. We also took a bold step with the acquisition of Constellation Pharmaceuticals, which expanded our clinical pipeline in hematology oncology.

Thank you Julia welcome everyone and thank you for joining us today.

Our ambition is to be a leader in hematology oncology.

Two commercial products by 2025.

2021 was a transformational year for us it was marked by our first full year of the monitor we launched in the U S and approvals and launches outside of the U S with our partner insights.

We also took a bold step with the acquisition of constellation Pharmaceuticals, which expanded our clinical pipeline and hematology oncology.

Jean-Paul Cress: Our clinical pipeline has never been as robust as it is today. We currently have three pivotal studies and rolling, one of Pelabrasib in first line Milo, which we believe has the potential to change the standard of care for patients with myelofibrosis, and two from Montjuvis with one in first line DLDCL and a second in relapsed refractory follicular lymphoma and marginal zone lymphoma.

Our clinical pipeline has never been as robust as it is today.

We currently have three pivotal studies enrolling one pill abrasive in first line myelofibrosis.

Which we believe has the potential to change the standard of care for patients with myelofibrosis.

Two four months youll be with one in first line DLT scale and a second in relapsed or refractory follicular lymphoma, and marginal zone lymphoma.

Jean-Paul Cress: We are also progressing to phase two programs with CPIO209 and Fels-Artemab. In 2022, the major focus of us will be on rapidly enrolling our pivotal studies. Turning to our commercial results on slide 6. Montjuvi fourth quarter net sales were $23.6 million and $79.1 million for the full year. The fourth quarter grew 39% year-over-year and 7% sequentially. The fourth quarter growth was driven primarily by demand.

We are also progressing to phase II programs with CPI or to align and fills up come up.

In 2022, and a major focus of us will be on rapidly enrolling our pivotal studies.

Turning to our commercial results on slide six.

I'm on the jewelry fourth quarter and it says were $23 6 million and $79 1 million for the full year.

Fourth quarter grew 39% year, although year and 7% sequentially.

The first quarter growth was driven primarily by demand.

Jean-Paul Cress: And roughly 70% of orders from sites of care come from the community setting and the balance from the academic setting. Since launch and through the end of 2021, approximately 2,000 patients have been treated with Monjuvy. We view this as significant, considering the relatively short time Manjouvi has been available in the U.S. Close to 1,000 sites of care have ordered monjuvis since launch through the end of 2021, which is an increase from Q3, where we stood at 850. In the fourth quarter, More than 70% of our orders from sites of care were repeat orders, which is indicative of the regular use of Monjuvy at those sites of care.

And roughly 70% of orders from sites of care come from the community setting and the balance from the academic setting.

Since launch and through the end of 2021 a.

Approximately 2000 patients have been treated with monotherapy.

We view this as significant considering the relatively short time module has been available in the U S.

Close to thousands of sites of care have all their demand really since launch through the end of 2021.

Which is an increase from Q3, when we stood at 815.

In the fourth quarter.

More than 70% of all there is some sites of care, where repeat orders, which is indicated of the regular use of monitoring at those sites of care.

Jean-Paul Cress: We continue to have the leading market share of circumcline new patients now. And we are very pleased that Monjovie was recently designated as a preferred regimen by the NCCN guidelines for the second-line treatment for adult patients with relapsed or refractory diffuse large B-cell lymphoma. This will further facilitate the use of MonjuV in earlier line patients as doctors receive clear guidance on the treatment sequence in this disease. We continue our efforts to educate healthcare providers on the optimal duration of therapy and the benefits of keeping patients on our immunotherapy treatment longer. The traditional behavior for physicians in the RRDL-BCL setting, has been to treat for a few months. This is consistent with what we see with Manjubri.

We continue to have the leading market share of second line new patient starts and we are very pleased that <unk> was recently designated as a preferred regimen by the NCC and guidelines for the second line treatment for adult patients with relapsed or refractory diffuse large b cell lymphoma.

This will further facilitate the use of <unk> in earlier line patients as doctors receive clear guidance on the treatment sequence in this disease.

We continue our efforts to educate healthcare providers on the optimal duration of therapy and the benefits of keeping patients on our immunotherapy treatment longer.

The traditional behavior.

Physicians in the ordeal Bcl <unk>.

Has been to treat for a few months.

This is consistent with what we see with <unk>.

Jean-Paul Cress: While the actual time on treatment with monjuvie is as long or even slightly longer than other available options, It's definitely not where the optimal regimen should be with an immunotherapy. Given the profile of the Mangevi-Lenalidomide combination and the recent NCCN guideline, we are working to change this treatment behavior and to increase persistency over time. Moving to slide seven.

While the actual time on treatment with monitor the ease as long or even slightly longer than other available options.

It's definitely not where the optimal regimen should be with an immunotherapy.

Given the profile of the monitor the Lenalidomide combination.

And the recent N CCM guideline, we are working to change this treatment behavior and to increased persistency over time.

Moving to slide seven.

Jean-Paul Cress: Beyond the currently approved indication, we see the biggest opportunity for Montjuvis in first-line DLBCL. Our Pivotal Frontline trial is enrolling very well, with significant interest from the medical community. Recently published data from competitor trials have validated our approach to focus on high-risk patients with an IPI of 3 to 5. So another significant opportunity is Pell Abrasive, which we added to our portfolio through the acquisition of Constellation Pharma last year. We believe that Pellabracib has the potential to change the standard of care for patients with mylofibos.

Beyond the currently approved indication, we see the biggest opportunity for module B in first line <unk>.

Our pivotal <unk> trial is enrolling very well.

Significant interest from the medical community.

Recently published data from competitor trials have validated our approach to focus on high risk patients with an API of three to five.

So another significant opportunity is PELA Brexit.

Which we added to our portfolio through the acquisition of constellation pharma last year.

We believe that collaboration has the potential to chance to standard of care for patients with myelofibrosis.

Jean-Paul Cress: There remains a large and met need for these patients and this indication alone represents a significant commercial opportunity. We are especially excited about the opportunity in first line Milo Fibosis, where Pellabrasib is currently being studied in a pivotal study called Manifest-2 and the enrollment of this trial is progressing very well. We recently announced exciting data at the ASH annual meeting, where the ARM3 of the Manifest Phase 2 trial confirmed earlier data cutoffs and increased our confidence for the pivotal trial and its probability of success. As we look to catalysts for 2022.

There remains a large unmet need for these patients and this indication alone represents a significant commercial opportunity.

We are especially excited about the opportunity in first line myelofibrosis, where collaborate.

Is currently being studied in the pivotal study called manifest too.

And the enrollment of this trial is progressing very well.

We recently announced exciting data at the Ash annual meeting where the three of the manifest phase II trial confirmed earlier data cutoffs and increased our confidence for the pivotal trial and its probability of success.

As we look to catalyst for 2022.

Jean-Paul Cress: We are excited that Roche is planning to announce data from the two pivotal graduate studies with Gant and Erumab in Alzheimer's disease in the fourth quarter of this year. Roche also just initiated an additional phase 3 study with Gantane Ramab for the prevention of Alzheimer's, which is indicative of their confidence in this monoclonal antibody. We also expect G.S.K. to share pivotal data for O.T.L.I.M.AB in Remata, Eda Tritage. And for both programs, we retain a substantial share of the royalties.

We are excited that cost is planning to announce data from the two people graduate studies with <unk> in Alzheimer's disease in the fourth quarter of this year.

Ross also just initiated an additional phase III study, Wisconsin, a roadmap for the prevention of HUD timers, which is indicative of their confidence in this monoclonal antibody.

We also expect GSK to share pivotal data for OTT mob micro <unk>.

And for both programs, we retain a substantial share of their royalties.

Jean-Paul Cress: Now for our own mid-stage programs, the EZ-H2 inhibitor, CPI-0209, and TRES-Artemab in autoimmune diseases, we are expecting proof-of-concept data this year. In addition, from a financial standpoint, we have a strong balance sheet that takes us through collaborative pivotal data in 2024. We continue to stay focused on and invest in our largest potential value-creating opportunities and remain disciplined with our capital deployment. With that, I will now turn the call over to Malta for an R&D update. Malta.

Now for our own mid stage programs, the easy H, two inhibitor CPI or two nine and says I've come up in autoimmune diseases. We are expecting proof of concept data this year.

In addition from a financial standpoint, we have a strong balance sheet that takes us through pillar <unk> pivotal data in 2024.

We continue to stay focused on and invest in our largest potential value, creating opportunities and remain disciplined with our capital deployment.

With that I will now turn the call over to Malibu far in R&D update multiples.

Thank you Sean Park.

Malta Peters: Thank you, Jean-Paul. As John Paul mentioned, 2021 was a transformational year for MorphoSys, We significantly expanded our pipeline, supporting our ambition to become a leader in hematology and oncology [inaudible] Let's start with collaborative, our better inhibitor. Pelampazip is currently being developed as a potential treatment for myelofibrosis. Myelofibrosis is a bone marrow cancer for which only limited treatment options are available, affecting approximately 35,000 people in the United States and in Europe.

As John Paul mentioned, 'twenty, 'twenty, one and it was a transformational year for more forces we.

We significantly expanded our pipeline supporting our ambition to become a leader in hematology and oncology.

Let's start with collaborative our bet inhibitor.

Pillar <unk> is currently being developed as a potential treatment for myelofibrosis.

Hello fibrosis is a bone marrow cancer for which only limited treatment options are available.

<unk> approximately 35000 people in the United States and in Europe .

Malta Peters: The current standard of care for myelofibrosis is ruxolitinib, a JAK inhibitor, but only 50% of patients are being adequately treated. Based on recently published data, we believe that Pilarpracib has the potential to change the standard of care in the treatment of myelofibrosis, and we are receiving very positive feedback from key opinion leaders. We have two ongoing clinical trials. First, The Manifest Phase 2 study is evaluating palliableship in different settings. The key setting is ARM3, in which we are exploring pilabrasib in combination with ruxolitinib as first-line treatment for patients with myelofibrosis.

The current standard of care for Myelofibrosis is rock solid generic a JAK inhibitor, but only 50% of patients are being adequately treated.

Based on recently published data, we believe that Phallocracy. It has the potential to change the standard of care in the treatment of myelofibrosis and we are receiving very positive feedback from key opinion leaders.

We have two ongoing clinical trials.

First.

The manifests phase II study is evaluating <unk> in different settings.

The key is setting us on three in which we are exploring <unk> in combination with Sunitinib as first line treatment for patients with myelofibrosis.

Malta Peters: In December 2021 at Ash, we presented the latest data from the manifest study, both for the primary endpoint SVR35, which refers to a 35% spleen volume reduction at week 24. In December 2021 at Ash, we presented the latest data from the manifest study, both for the primary endpoint SVR35, which refers to a 35% spleen volume reduction at week 24, as well as the secondary endpoint, GSS-50, referring to a 50% reduction of total symptom score at week 24.

In December 2021 at Ash, we presented the latest data from the manifest study both for the primary endpoint SVR 35, which refers to a 35% spleen volume reduction at week 24.

As well as the secondary endpoint TSS 15, referring to a 50% reduction of total symptom score at week 24.

Malta Peters: The results demonstrated, an SVR35 score in 68% of patients, and a GSS50 score in 56%, which is numerically significantly higher to what was observed in Rooks-Legionnaires single-agent clinical trials. Additionally, analysis from an exploratory endpoint presented at ASH21 showed a reduction of megakaryocyte clustering in bone marrow and a correlation with spleen volume reduction. Megakaryocytes are the cells in the bone marrow responsible for making platelets and the clustering of these cells are one of the signs of myelofibrosis.

The results demonstrated.

And SCR 35 score in 68% of patients and a TSA 50 score and 56%, which is numerically significantly higher to what was observed in <unk> single agent clinical trials.

Additionally analysis from an exploratory endpoint presented at Ash 'twenty, one showed a reduction of mega carriers side clustering in bone marrow and correlation with with spleen volume reduction.

Mega carrier sites other cells in the bone marrow responsible for making placements and success drilling of these says one of the signs of myelofibrosis.

Malta Peters: This data suggests that Pilabrasib may have a potential in changing the cause of myelofibrosis. In summary, this latest data reaffirms our confidence in our second study, which is called Manifest 2, and is our ongoing phase 3 study that is comparing the combination of Ruxilitinib plus Pilabrasib versus Ruxilitinib alone as first line treatment for mylofabros. Let me provide some more details about this study. We have achieved a turnaround in the operational excellence for the execution of this study.

This data suggests that <unk> may have a potential and changing the course of myelofibrosis.

In summary, these latest data reaffirms our confidence in our second study, which is called manifest tool and is our ongoing phase III study that is comparing the combination of Sunitinib plus collaborative versus Farooq Sunitinib alone as first line treatment for myelofibrosis.

Let me provide some more details about this study.

We have achieved a turnaround in the operational excellence for the execution of this study.

Malta Peters: Our measures, such as the addition of additional CROs, improvement of the interaction with investigators, and the expansion of the number of countries and study sites, start to pay off. With all activities in place, enrollment is progressing well, and we expect to report top-line data from Manifest-2 in the first half of 2024. Now moving to Tafasitomo.

Our measures such as the addition of additional <unk> improvement of the interaction with investigators.

And the expansion of the number of countries and study sites start to pay off.

With all activities in place enrollment is progressing well and we expand we expect to report topline data from manifest tool in the first half of 2024.

Now moving to capital.

Malta Peters: We are also making progress with the clinical development of Tafacetamol. We have two pivotal Phase III studies ongoing, expanding the potential of this medicine into patients with first-line DLV-CL and patients with relapsed refractory indolent lymphoma. The first line deal BCL setting represents an area of significant unmet medical needs.

We are also making progress with the clinical development of tougher Sito mobile.

We have two pivotal phase III studies ongoing expanding the potential of this medicine into patients with first line <unk> and patients with relapsed refractory indolent lymphoma.

The first line <unk> setting represents an area of significant unmet medical needs.

Malta Peters: Our Pivotal Phase III study, FrontMind, is on track and enrolling at a good pace with significant interest from the medical community. Investigators are excited about this study and we have added 40 additional sites in the United States to satisfy investigator and patient interest, recently released data from competitor trials, have reinforced the potential to enhance the current standard of care and increased the confidence in our trial design that focuses on high-risk patients with an IPI score of 3 to 5.

Our pivotal phase III studies shrunk mind is on track and enrolling at a good pace.

With significant interest from the medical community.

Investigators are excited about this study and we have added 40 additional sites in the United States to satisfy investigator and patient interest.

Recently released data from competitor trials.

Have reinforced the potential to enhance the current standard of care the increased the confidence in our trial design that focuses on high risk patients with an ipi score of three to five.

Malta Peters: We also see great interest in the INMIND study, our ongoing pivotal study in relapsed refractory follicular lymphoma and marginal zone lymphoma, which is conducted by our partner Insight. Shortly, we will also treat the first patients in our MINDWAY trial, a study that is investigating an optimized treatment schedule with a reduced number of administrations for patients with non-Hodgkin lymphoma. Optimizing the treatment schedule is particularly important for patients with follicular lymphoma and three left refractory DLBCS.

We also see great interest in the in mind study our ongoing pivotal study in relapsed refractory Follicular lymphoma, and marginal zone lymphoma, which is conducted by our partner insight.

Shortly we will also treat the first patients in our minds way try at a study that is investigating an optimized treatment schedule with a reduced number of administrations for patients with non Hodgkin lymphoma.

Optimizing the treatment schedule is particularly important for patients with Follicular lymphoma, and relapsed refractory <unk>.

Okay.

Malta Peters: In 2022, we expect several data readouts from our mid-stage assets, CPI-2029 and Felzheimer. We are encouraged by the progress of our CPI-0209 clinical trial and by the preliminary data we are observing. And we plan to report data at a medical conference in the second half of this year. This easy H2 inhibitor, which we believe has best in class potential, is currently being assessed in a basket trial for several solid tumors as well as lymphoma.

In 2022, we expect several data readouts from our mid stage assets CPI, two zero to nine and chose Akamai.

We are encouraged by the progress of our CPI <unk> hundred nine anchor trial and by the preliminary data we are observing and we plan to report data at a medical conference in the second half of this year.

This easy H two inhibitor, which we believe has best in class potential is currently being assessed in a basket trial for several solid tumors as well as lymphoma.

Malta Peters: [inaudible] Ferzartemab, our anti-CD38 antibody, is being evaluated in two kidney autoimmune indications, namely autoimmune membranous nephropathy and IgA nephropathy, for which there are limited treatment and options available. In 2021, we presented early proof-of-concept data demonstrating that Felzatumab can rapidly and significantly reduce anti-PLA2R antibody titers in difficult-to-treat patients with anti-PLA2R antibody-positive membranous nephropathy.

So as I sum up our anti <unk> antibody is being evaluated in two kidney autoimmune indications, namely autoimmune membranous nephropathy, and Iga nephropathy for which there are limited treatment options available.

In 2021, we presented early proof of concept data demonstrating that <unk> can rapidly and significantly reduce on GPL eight to our antibody titers and difficult to treat patients with <unk> anti <unk> antibody positive membranous nephropathy.

Malta Peters: Our two ongoing trials, M-PLACE and NU-PLACE, are fully enrolled and we expect to share more mature data, including data on proteinuria, from this trial in the second half of this year. Also, our Phase II trial in IgA nephropathy, called IGNAT, is progressing well and we will share data later this year. As you can see on slide 13, we expect to deliver a steady flow of clinical data over the next several years, which we believe have the potential to change the treatment paradigms of several types of cancers and autoimmune diseases. We are very excited about our progress and the potential of our pipeline. With that, I now turn the call over to Sung for a review of the financials. Thank you, Malta.

Our two ongoing trials in place and new place are fully enrolled and we expect to share more mature data, including data on proteinuria from this pilot in the second half of this year.

Also our phase II trial in Iga nephropathy cause Eaton nuts is progressing well and we will share data later this year.

As you can see on slide 13, we expect to deliver a steady flow of clinical data over the next several years, which we believe have the potential to change the treatment paradigms of several types of Kansas and autoimmune diseases.

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

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

Sung Lee: We're pleased to share our financial results for the fourth quarter and full year of 2021. Moving to slide 15, Monjiby sales were $23.6 million in Q4 2021, reflecting a 39% year-over-year growth. For the full year 2021, Monjuby sales were $79.1 million.

Thank you Walter we're pleased to share our financial results for the fourth quarter and full year of 2021.

Moving to slide 15, <unk> sales were $23 $6 million in Q4, 2021, reflecting a 39% year over year growth.

For the full year 2021, <unk> sales were $79 $1 million.

Sung Lee: The four have benefited by approximately $2 million from inventory dynamics and clinical trial purchases, which will have an impact on the sequential change from Q4 to Q1. In the fourth quarter, we recorded €0.6 million in royalty revenue for Nanjivi outside of the U.S. from our partner Insight. For the full year 2021, we recorded 0.7 million euros in royalty revenues from Insight. With NINJUBI royalty revenue becoming a recurring and important 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.

<unk> benefited by approximately $2 million from inventory dynamics in clinical trial purchases, which will have an impact on the sequential change from Q4 to Q1.

In the fourth quarter, we recorded <unk> 6 million euros and royalty revenue for many JV outside of the U S from our partner insight.

For the full year 2021, we recorded <unk> 7 million euros and royalty revenues from insight.

With many <unk> royalty revenue, becoming a recurring and important item in our P&L going forward.

It's important to note that of our focus provides of a commercial and clinical supply for ex U S utilization at an agreed upon rate.

Sung Lee: The revenue from this supply is recorded in the licenses, milestones, and other category in our top line and the exact same amount is subsequently recorded in cost of sales, yielding a zero gross margin on Ninjuvi supply sales.

The revenue from the supply is recorded in the licenses milestones and other category in our top line and the exact same amount is subsequently recorded in cost of sales, yielding a zero gross margin on NIM juvie supply sales.

Sung Lee: Moving to slide 16, Total revenues in 2021 were €179.6 million, compared to €327.7 million in 2020. The year-over-year decline was driven by the upfront payment from Insight in 2020 for the outlicensing of Tapasitamab outside of the U.S. Total cost of sales was 32.2 million euros in 2021 compared to 9.2 million euros in 2020. The year-over-year increase was primarily driven by higher sales of Manjivi in the U.S.

Moving to slide 16.

Total revenues in 2021 were $179 6 million euros compared to $327 7 million euros in 2020.

The year over year decline was driven by the upfront payment from insight in 2020 for the out licensing of <unk> outside of the U S.

Total cost of sales was $32 2 million euros in 2021 compared to $9 2 million euros in 2020.

The year over year increase was primarily driven by higher sales of <unk> in the U S.

Sung Lee: Cost of sales specific to Monjuvi US product sales was 12.3 million euros in 2021. Turning to operating expenses [inaudible] R&D expenses in 2021 were 225.2 million euros compared to 139.4 million euros in 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 increased to $121.5 million in 2021 compared to $107.7 million in 2020.

Cost of sales specific to <unk> U S product sales was $12 3 million euros in 2021.

Sung Lee: The year-over-year increase was primarily driven by the first full year of commercialization activities for Manjuri compared to the wrap-up of activity than 2020. GNA expenses in 2021 were 78.3 million euros compared to 51.4 million euros in 2020. This increase was driven by the inclusion of consolations, GNA expenses, as well as transaction-related costs. In 2021, 37.3 million euros of transaction related expenses associated with the consolation and royalty pharma transactions were recorded in operating expenses with the vast majority being recorded in GA expenses. Separately, we recognize a non-cash expense of 230.7 million euros in the fourth quarter for an impairment charge on goodwill.

Turning to operating expenses.

R&D expenses in 2021 were $225 2 million euros compared to $139 4 million euros in 2020.

The growth primarily reflects the inclusion of R&D expenses from constellation since July 15th 2021, and increased investment to support the advancement of our clinical stage programs.

Selling expenses increased to $121 5 million euros in 2021 compared to $107 7 million euros in 2020.

The year over year increase was primarily driven by the first full year of commercialization activities for <unk> compared to the wrap up of activities in 2020.

G&A expenses in 2021 were $78 3 million euros compared to 51 4 million euros in 2020.

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

In 2021, $37 3 million euros of transaction related expenses associated with the constellation and royalty pharma transactions were recorded in operating expenses with the vast majority being recorded in G&A expenses.

Separately, we recognized a noncash expense of 237 million euros in the fourth quarter for an impairment charge on goodwill.

Sung Lee: This is the direct result of the decision the company took in the fourth quarter to stop all U.S.-based laboratory activities of the former Constellation Pharmaceuticals and to focus our research efforts on the most advanced programs being worked on at our research hub in Planig, Germany. For the full year of 2021, we reported a consolidated net loss of 514.1 million euros compared to a net profit of 97.9 million euros in 2020. Turning to our balance sheet, we end at 2021 with cash and investments of 976.9 million euros compared to 1.24 billion euros at the end of 2020.

This is a direct result of the decision the company took in the fourth quarter to stop all U S. Based laboratory activities of the former constellation Pharmaceuticals and to focus our research efforts on the most advanced programs being worked on at our research hub and planet Germany.

For the full year of 2021, we reported a consolidated net loss of $514 1 million euros compared to a net profit of $97 9 million euros in 2020.

Turning to our balance sheet we.

We ended 2021 with cash and investments of $976 9 million euros compared to 124 billion euros at the end of 2020.

Sung Lee: As Jean-Paul mentioned earlier, this amount is sufficient to take us through the collaborative pivotal data readout, which is anticipated in the first half of 2024. As a reminder, we also have available to us development funding bonds from Royalty Pharma in the range of $150 million to $350 million. We will communicate the exact amount that is drawn later this year. Nonetheless, the amount drawn will only serve to extend our cash runway.

As John Paul mentioned earlier this amount is sufficient to take us through the collaborative pivotal data readout, which is anticipated in the first half of 2024.

As a reminder, we also have available to us development funding bonds from royalty pharma in the range of 150 million to $350 million.

We will communicate the exact amount that has drawn later this year. Nonetheless, the amount drawn will only serve to extend our cash runway.

Sung Lee: Turning to our guidance for 2022 on slide 17. We are reiterating our guidance that was provided at the beginning of this year in January, all aspects of our guidance remain the same. Specific to Mungie v. U.S. Net Product Sales and the expected pace this year, we expect to see similar quarterly variations as we saw in 2021, and as such, we are anticipating a sequential decline in Q1, followed by a sequential increase in subsequent quarters. With that, we would like to open the call-up for questions. Operator?

Turning to our guidance for 2022 on slide 17.

We are reiterating our guidance that was provided at the beginning of this year in January .

Aspects of our guidance remains the same.

Specific to much of the U S net product sales and the expected pace this year.

We expect to see similar quarterly variations as we saw in 2021 and as such we are anticipating a sequential decline in Q1, followed by sequential increase in subsequent quarters.

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

Operator: 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 the telephone keypad now. You will be advised when to ask your questions. If you change your mind and wish to withdraw your question, please press 0 and 2. Participants are requested to use only handsets while offing a quest.

Ladies and gentlemen, we will now begin the question and answer session.

Would like to ask a question. Please press <unk> one on a telephone keypad now.

You will be at Whitestone to ask your question.

Do you change your mind and wish to withdraw your question. Please press star zero and two.

Participants are requested to use only handsets white asking a question.

Operator: [inaudible] We've received the first question. It's from James Quigley, Morgan Stanley. The line is no- Hey there, thanks for taking my questions. I've got a couple, Munjibu related, so you mentioned about the treatment duration being a matter of months and slightly ahead of what's used now and reactivate to the OBSC, the OBSCL.

We've received the first question is from James quickly Morgan Stanley . Your line is now open for Ya.

Hello, Thanks for taking my questions I've got a couple.

G B related so you mentioned about the treatment duration.

I'm not sure of months, it's funny.

Yeah.

She is now in.

Yes.

There'll be CEO .

James Quigley: But thinking specifically about the second line and the patients you've treated so far, why are physicians not considering the data when they're treating patients? It seems fairly clear in terms of the PFS benefit, but what are the pushbacks you're getting and where are the aspects of the data that you think you need to really highlight most to physicians? And then secondly, we saw some good data at Ash for the CAR-T therapies and second line, the OBCL, Munjuv is approved in the transplant, ineligible population, but to what extent could there be overlap between patients who can't receive a stem cell transplant and those who can receive CAR-T and how are you factoring that into your peak service functions for Munjuv? James, thank you for the questions. Joe will answer the first question, Andrew and Malte for the second one. Joe, please.

I'm thinking specifically about the second line and the patients who are treated so far.

While physicians nuts.

So considering the data when they.

When they're treating patients just curious what it seems fairly clear in terms of the PFS.

PFS benefit, but what are the pushback you're getting.

Where the aspects of the data that you think you need to really highlight most too cheap.

Physicians.

And then secondly, we saw some good data at.

At Ash for the car T therapies in second line.

It'll be shale.

<unk> is approved in the transplant.

And then a different population, but to what extent could they be overlap between patients should congress for stem cell transplant, and those who can receive car T and how are you factoring that into your peak set of assumptions for from one GB.

Okay. James Thank you for the questions.

Joe will answer the first question and two in multiple the second one.

Joe Please.

Jean-Paul Cress: When we look at the duration of treatment. Editions are used, short-term. Ration, Kimoff, As we introduce... Manjubi, which is an immunotherapist. And as they understand, How does an immunotherapy act?

When we look at the duration of treatment James.

Physicians are used to using short term.

Duration chemotherapies.

As we introduce.

Once you have which is an immunotherapy.

And as I understand.

HUD immunotherapy acts.

Jean-Paul Cress: Are you getting to see that? They can extend... Duration of Treatment, so... This is what we've seen in the solid tumor world, and now we're bringing those.., are oncologists in the LBGTQI community, as it relates to car- You know, the data as a move into the second line. Maunjuvi as the outpatient, Immunosarab, the CARTee is the inpatient. Butler, have to wait.

They are beginning to see that they can extend that.

Duration of treatments that the patients can get the benefits.

This is what we've seen in the solid tumor world and now we're bringing those learnings to the oncologists and <unk>.

Yeah.

As it relates to car T.

The data as it moves into the second line.

Yes.

We position <unk>.

Judy as the outpatient Immunotherapies, obviously the car T as the patients.

It'll be.

We'll have to wait to see.

Jean-Paul Cress: How the physicians will react as it relates to the transplant-eligible population. But I think we're well positioned in the second. Great, thank you. If I could just have a very quick follow-up in terms of the NCCN guideline impact. I mean, to what extent do you think this could accelerate monjuvie use?

How the physicians will react as it relates to the transplant eligible population.

But I think we're well positioned in the second line.

Great. Thank you if I could just have a very quick follow up in terms of the ANC Shan guideline impact I mean to what extent do you think this could.

Could accelerate when GV Houston.

Jean-Paul Cress: Was this included or was this impact potentially included in your peak sales guidance? And do you think this will help with the treatment duration point as well? Thank you. James.

What was this impact exchange concluded in your peak sales guidance.

Do you think this will help with the fiduciary duty.

Treatment duration point too as well thank you.

Joe.

Jean-Paul Cress: Yeah, we see this as a positive advance. You know, this is an additional endorsement and validation, recognizing Manjubi as the only preferred non-chemo based, The second line, as we continue to... Chris R. Penetration, Second Line, and create this behavior. [inaudible] Do you anticipate that the duration of the video will not be the same as the previous video? Got it.

Hi, James Yeah, we see this as a positive advancement.

This is additional endorsement and validation recognizing <unk> as the only preferred non chemo based immunotherapy for.

For second line.

Patients.

As we continue to increase our penetration second line and create this behavior change with physicians.

We do anticipate that the duration of treatment will continue to increase.

Got it thank you very much.

Operator: Thank you very much. The next question is by Jason Butler, JMP Securities. The line is now open. Hi, it's Roy on behalf of Jason.

The next question is by Jason Butler JMP Securities. Your line is now open for you.

Operator: Thanks for taking our question. Sorry, just to follow up on the last one about the NCCN guidelines. I guess any thoughts that maybe this might point us towards a higher end of guidance for revenues? for 2022, and then just a quick one. I thought you guys were gonna start the combination trial with Plymouth to Mab this quarter.

Hi, it's Roy on for Jason Thanks for taking our question. So just a follow up on the last one about the N C C in guidelines.

I guess any any thought that maybe this my point us towards the higher end of guidance for revenues.

For 2022, and then just a quick one I thought you guys were going to start that.

Combination trial with putting out to that.

This quarter is that still on track.

Operator: Is that still on track? Joe, please, for the first question. As it relates to the, and Guidelines.

Joe Please for the first question.

As it relates to the end CCN guidelines again, as we see it as a positive development.

Jean-Paul Cress: Again, as we see it as a positive development, [inaudible] And we continue to be positive, on the growth that we expect year-over-year growth, and to end up within our guidance. Yeah, with respect to the Plamotumab situation, we are expecting actually to enroll the first patient in this combination study any moment. We have almost finished the interaction and clarification with FDA on the protocol, and we are encouraged actually by our capability of combining Clafacetamab with additional agents such as Plamotumab, but also with BMS agents, and we are continuing to receive, Additional inbound requests for additional combination study of additional agents with the tapasitama. So we view it overall as a good sign confirming our confidence that tapasitama is a drug that can be very well combined with other agents.

Development.

And we continue to be positive.

On the growth that we expect year over year growth.

To end up within our guidance for this year.

Yes, yes, yes, I think <unk> question with respect to the <unk>.

Situation, we are expecting actually to enroll the first patient in this combination study any moments.

We have almost finished the interaction and clarification with FDA on the protocol and we are encouraged actually by.

Our capability of combining <unk> with additional agents such as.

<unk>, but also.

BMS agents and we are continuing we have continued to receive.

Additionally, inbound.

Request for.

Additional combination study of additional agents with setup of Tacoma. So we view this overall.

As a good sign.

Confirming our confidence that tougher hit them up it's a drug that can be combined.

Combined with other agents.

Thank you.

Mhm.

Operator: Thank you. The next question is by James Gordon, J.P. Morgan. The line is now open.

The next question is by James Gordon Jpmorgan. Your line is now open for you.

James Gordon: James Gordon, JP Morgan, thanks for taking the questions. First question was on the sequential decline mentioned in Q1 from 1juvy. Can you comment on the factors that are going to drive the decline in Q1 and then the increase in Q2? Is it just COVID or other factors recurring that we've seen that's caused some of the quarterly fluctuations in the previous year? And if we're looking at the January IQVIA data that shows a sequential decline, is that quite a good guide for what's actually going on in the market? Or should we be careful about interpreting that data?

James Gordon Jpmorgan, thanks for taking the questions.

So last question was on the sequential decline mentioned in Q1 <unk> can you comment on the factors that are going to drive the decline in Q1 and then the increase in Q2 is it just kind of at or other factors were kind of in that we've seen that's caused some of the quarterly fluctuations in the previous year and if we're looking at the January accuse me of data that shows that.

Sequential decline is that quite a good guide for what's actually going on in the market or should we be careful about attempt in that data.

James Gordon: Also just on US Monjuvi, since you issued the 22 guidance on January 7th, have you grown more or less bullish on Monjuvi 22 sales? Because you've had the NCCN but also.., the maybe there's COVID been a bit worse and the data we're seeing doesn't look quite as good so did you already anticipate the soft start to the year or have things been a little bit more challenging? Here's just the other question with the EZ-H2 inhibitor. Just confidence in the success of this phase 2 assay and which tumour types you're most excited about. Okay, let's start by the two Montjuvi questions, James.

Was it just on U S. One Judy since you issued the 'twenty two guidance on January seven.

If you can more or less bullish on longevity 'twenty two so because you've had to end CCN, but let's say.

Maybe there's clearly been a bit worst than that today too we are seeing doesn't look quite as good.

Did you already anticipate the soft start to the year.

Or have things been.

<unk> been a little bit more challenging.

Just the other question with the ease of it as two inhibitor.

Confidence in potentially they say to us that in which tumor types are you most excited about please.

Okay, let's start by the module to module B questions James Thanks pillar of that.

Operator: Thanks for that. Sang, maybe you can address the sequential, yeah, thank you. Yeah, thanks for your question, James. On your question about the sequential decline, I did mention in my prepared comments that we did benefit in Q4 about $2 million from inventory dynamics and also clinical trial purchases. So that's simply not gonna recur in Q1.

Maybe you can address.

Sequential yes, yes. Thanks for your question Jamie on your question about the sequential decline I Didnt mentioned in my prepared comments that we did benefit.

<unk> in Q4 about $2 million from inventory dynamics and also clinical trial purchases, so thats simply not going to recur.

Sung Lee: So that would be a reason for a sequential decline. In addition, obviously there was an Omicron event in the U.S. in the latter part of Q4, and certainly in Q1. And we're still trying to understand the total impact of that to our Q1. But I think it's fair to think that there is some impact, but the magnitude of which sometimes you really don't understand until this is well behind you.

In Q1, so that would be a reason for a sequential decline.

In addition, obviously there wasn't omicron <unk>.

Event in the U S. In the latter part of Q4 and certainly in Q1, and we're still trying to understand the total impact of that too.

Our Q1, but I think it's fair to think that there is some impact, but the magnitude of which sometimes you really don't understand until this is well behind you.

Sung Lee: As we get to see the growth in subsequent quarters, we can better measure what the real impact to Q1 would be. On your question about IQVIA data, I think you have to take all the hazards when you're looking at these market share or external data, because obviously there's more than that goes into just script data or demand into a quarterly number, such as inventory, clinical trial purchases, and other things that can impact the quarter. But I think directionally, when you look at this over time, it is a good barometer, but will it ever get you to the exact place within a quarter?

We get to see the growth in subsequent quarters, we can better measure.

The real impact to Q1 would be.

On your question about IQ via data.

I think you have to take all of the hazards when youre looking at these market share or external data because obviously there is more than that goes into just.

Script data or demand into a quarterly number.

Such as inventory clinical trial purchases and other things that can impact the quarter, but I think directionally. When you look at this over time.

It is a good barometer, but whatever gets you to the exact place within a quarter no, but I think directionally.

They serve as a good a good tool to forecast the future.

Sung Lee: No, but I think directionally they serve as a good tool to forecast the future. Thanks. And Malcolm, the EZ-H2?

Thanks, and I'll turn the page to the easiest to study James we are making very good progress as I'm as I said in my prepared remarks. The study consists of six different.

Malta Peters: Yeah. The EZ-H2 study, James, we are making very good progress, as I said in my prepared remarks. The study consists of six different arms. Three arms are tumors that all have a specific genetic mutation called ARID1A mutation.

Arms.

Three arms.

Two months Thats all have specific genetic mutation called average one <unk> mutation and these tumors ovarian cancer endometrial cancer and bladder cancer.

Malta Peters: And these tumors are ovarian cancer, endometrial cancer, and bladder cancer. Then we have an arm with various lymphoma types, including PTCL and also non-Hodgkin lymphoma. We have also a mesothelioma arm, which is almost fully enrolled. And we are excited about the prostate cancer arm. So it's really a plethora of different indications in solid tumors and hematological tumors.

Then we have an <unk>.

I'm with various lymphoma types, including PTC and also non Hodgkins lymphoma, we have also amira failure Omar.

Which is almost fully enrolled and we are excited about the prostate cancer. So its really a plethora of different indications in solid tumors.

Hematological tumors excitement is really I would say.

Malta Peters: And the demand is really, I would say, quite high for this trial, so that we are preparing ourselves to share the first preliminary data in the second half of this year, as I said earlier. Thanks, Malte. I realize we skipped the NCCN guideline question. Sam?

Quite high for this trial, so that we are preparing ourselves to share. The first preliminary data in the second half of this year as I said are there. Thanks, Matt I realize we keep D&C same guideline Christian.

Yes, so Jamie on your question about was the <unk> guideline change factored into our guidance, but we were certainly aware that this was a possibility and yes. We did factor in a range of scenarios that did include.

Sung Lee: Yeah. So, James, on your question about was the NCCN guideline change factored into our guidance, we were certainly aware that this was a possibility, and yes, we did factor in a range of scenarios that did include this event. The next question is by Susanne von Heutzutten-Kempten. The line is now open for you.

The C band.

The next question is by Zander from Sweden Kempton. Your line is now open for Ya.

Operator: Hi. Thank you very much for taking my time. I have a couple.

Hi.

Good afternoon, Thanks for taking my question.

I have a couple of let me start off by circling back to the treatment duration from Judy can you provide an update us like you see currently is average duration I understood. It was around three earlier in the year. So I'm, just wondering where it stands today.

Susanne von Heutzutten-Kempten: Let me start off by circling back to the treatment duration from Monjuvie. Can you provide an update as to what you see currently as average duration? I understood it was around three earlier in the year.

Susanne von Heutzutten-Kempten: So I'm just wondering where it stands today. And do you see a trend in that duration is increasing since? Then on peak sales guidance, do you still stand by the $500 to $750 million today, considering the context of the shorter than expected duration? Or do you expect you may need to adjust this at some point?

And do you see a trend in that duration is increasing.

And then on peak sales guidance do you still stand by the $500 million to $750 million today, considering the context of the shorted unexpected duration.

Or do you expect you may need to adjust it at some point and the last one is just to clarify on the financial guidance for the coming year.

Susanne von Heutzutten-Kempten: And the last one is just to clarify on the financial guidance for the coming year. You're not expecting significant milestones. Now, if I'm not mistaken, you have not yet received milestone payments yet from the Insight Collaboration on Monjuvie. Can you remind us of the amount that is outstanding?

Susanne von Heutzutten-Kempten: And given that the street has been wrong about this more than once, how should we be thinking of the timing of those milestones? Thank you. Thanks, Susana. Let's stop by Joe for the first question. Joe, please.

You are not expecting significant milestones now if im not mistaking you have not yet received milestone payments yet from the insights collaboration among jewelry.

Can you remind us of the amount that is outstanding and given that the street has been wrong on this more than once.

How should we be thinking of timing often milestones. Thank you.

Thanks, Susan.

By Joe Far first question Joe Please.

Joe: Hi, Susan. Yeah, as it relates to the duration of treatment, you're certainly in the ballpark. And we do see our duration. We are beginning to increase as we continue our penetration, second line. And as prescribers see the benefit of using an immunotherapy versus those traditional short term.

Hi, Susan Yeah as.

As it relates to the duration of treatment.

Certainly in the ballpark.

And we do see our duration beginning to increase as we continue our penetration in the second line and as prescribers see the benefit of using an immunotherapy versus those traditional short term cumulus that they've been using.

Great.

Sung Lee: And yes, Suzanne, on your question on milestones with regard to the insight collaboration and guidance. So in our guidance, we mentioned that there are no cash accretive milestones anticipated of significance this year. Now, we did recognize in the past, in Q4, a relatively small milestone related to the insight collaboration. So that's reflected in the licenses, milestones, and other line in the couple million euro range. But in terms of the, I guess you would say the larger milestones, I think those can reasonably be expected sometime near the end of 2023 onwards.

Yes, there is that on here.

On milestones with regard to the inside collaboration and guidance.

So in our guidance, we mentioned that there are no cash accretive milestones anticipated of significance. This year now we did recognize in the past in Q4.

Relatively small milestone related to the inside collaboration so that's reflected in the the licenses.

<unk> milestones and other line.

And the couple of million Euro range, but in terms of the I guess, you would say the larger milestones I think those can reasonably be expected sometime near the end of 2023 onwards could even be 2024, beginning and onwards, but.

Sung Lee: Could even be 2024 beginning and onwards. But as I mentioned in previous calls, because there's a lot of variables and what ifs that go into whether these milestones are realizable or not, I would call these out in the year that we're in, in terms of potential as part of our guidance. Got it.

As I mentioned in previous calls because.

There is a lot of variables and what is.

That go into whether these milestones are a realizable or not I would call. These out in the year that we're in in.

In terms of potential.

As part of our guidance.

Got it thank you and maybe on that.

Sure.

Sung Lee: Thank you. And maybe on the peak sales guidance. Yes, Suzanne, on peak sales with regard to Monjuby, certainly our goal is still the range that we put out there before the half billion to 750 million for second line DLBCO in the US. That is the goal that remains the goal. But obviously, with the start that we've had, especially last year with the COVID headwinds, we were a bit challenged.

Yes.

Susanne on peak sales with regard to <unk> certainly our goal is still the range that we put out there before the half going into $750 million for second line <unk> in the U S that is the goal that remains the goal, but obviously with the start that we've had especially last year with the COVID-19 headwinds we were a bit challenged.

And it's fair to think that the peak has been pushed out.

Sung Lee: And it's fair to think that the peak has been pushed out. Yeah, and Suzanne, I would, I mean, it's probably too early for numbers, but I would also start to think about what first line would would provide us the trial is going well. And as you know, with the recent results from competition, validates our approach, and it puts us probably in, yeah, the preferred option probably for the future. Got it.

And Susan I would.

200 default numbers, but I would also start to think about what.

First line would provide us that the trial is going well.

And as you know with the.

The recent results from competition.

Validates our approach and it puts us put lobbying.

Yes.

The push adoption probably for the future.

Got it thank you.

<unk>.

Sung Lee: Thank you. Thank you. As a reminder, if you want to ask a question, please press 0 and 1. Our next question is by Vineet Agrawal of... The line is now up. Oh hi there, it's Emily Hutchinson from Citi on for Vineet. Just one question please.

As a reminder, if you want to ask a question. Please press zero Antoine.

Our next question is by when it all.

Okay.

Citi. Your line is now open for you.

Oh, hi, Thanks, Jeff Hutchins intensity on for Sidney.

Just one question please.

Operator: I suppose by insight they're aware of the Taft-Bittermap R&D expense.., was down more than 40%. Unknown Executive, Charles Mabbutt, Philippa Pritchard, Charlotte Lohmann, MorphoSys AG, I'm not sure I understood the question correctly, but you're asking about the R&D expense, the collaboration with Insight, and what's driving the expenses. Well, recall that we have a co-development arrangement where MorphoSys pays 45% of the development and Insight, our partner, pays the balance, 55%. There are two major pivotal studies ongoing right now, frontline, which MorphoSys drives, that's in first-line DLVCL, and then in-line, which our partner Insight drives, and that's in follicular lymphoma and marginal zone lymphoma.

After todays by insight that has that confidence enough R&D expenses.

More than 40%.

And for Keith So could you, possibly let us know what could be driving that.

Given the key trials in frontline DLP, CFO and myself as a long time that's fine.

Trying to Mario Thank you.

I'm not sure I understood. The question correctly, but you are asking about the R&D expense to collaboration with insight and what's driving the expenses will recall that we have a.

Co development arrangement, where morphosis pays 45% of the development and inside our partner paid the balance 55%.

There are two major pivotal studies ongoing right now <unk>, which morphosis drives.

And first line <unk>, and then in mind, which our partner insight drives and Thats in Follicular lymphoma, and marginal zone lymphoma.

Operator: These studies were just ramping, or they were initiated, the first patients were dosed in the spring of 2021. So we haven't approached peak costs for both of these studies as we continue to enroll both. So it's fair to think that these two will continue to ramp, and hence, one of the major drivers of our year-over-year R&D expenses. You can see the guidance that we put out, for RD expenses between 300 to 325 million euros.

These studies were just ramping.

Or they were initiated the first patients were dosed in the spring of 2021. So we haven't approached peak costs for both of these studies that we continue to enroll both so it's fair to think that these two will continue to ramp and hence.

One of the major drivers of our year over year R&D expenses, you can see the guidance that we put out.

For R&D expenses between 300 to 325 million euros.

<unk>.

Unknown Executive: Normalized for Transaction Costs, some embedded in the 2021 Actuals, we're likely to see somewhere around 45% year-over-year increase in R&D expense, excluding Transaction Costs in 2021. And that's taking the midpoint of our 2022 R&D guidance. And the major drivers in addition to front-mind in-mind, it's the ongoing Manifest 2 Study for Claversons. I hope I've answered your question.

Normalized for transaction costs, some embedded in the 2021 actuals were likely to see somewhere around 45% year over year increase in R&D expense, excluding transaction costs in 2021, and that's taking the midpoint of our 2022 R&D guidance and the major drivers in addition.

<unk> to frontline in mind, it's the ongoing manifest II study for <unk>.

I hope I've answered your question.

Yes. Thank you.

Yeah.

Operator: Yes, thanks. The next question is by Rajan Sharma, Deutsche Bank. The line is now open for you.

The next question is by John <unk> Deutsche Bank. Your line is now open for Ya.

Rajan Sharma: Hi, thanks for the question. Just on Monjuvi, just to kind of push a little bit more on the 2022 guidance, could you potentially just talk to the various moving parts that get you to the higher end of that guidance range relative to the lower end? And then just on the peak sales guidance, could you just help us understand the ramp from where we are currently based on 2022 guidance and how we get to the 5 to 750 million at peak?

Hi, Thanks for the question just on <unk>, just to kind of push it out a bit more on the 2020 guidance could you potentially just talk to.

The various moving parts that get you to the higher end of that guidance range relative to the lower end.

And then just on the peak sales guidance could you just help us understand the ramp from where we are currently based on 'twenty two guidance and how we get to the $5 million to $750 million.

Rajan Sharma: And then finally, just a third one, if I can, just on the FrontMind trial, and obviously you've talked to increased confidence in that based on competitor data, and I'm assuming that that's based on the Polarix trial. So could you just talk again to kind of your confidence in that trial and how confident you are that our trial is the correct competitor on? Thanks, Rajan. Sun, can you handle the two first questions?

And then finally, just a third one if I can just.

On the frontline trial, and obviously you talked to increase confidence in that based on competitor data and I'm, assuming that that's based on the Florida, Florida trial, but could you just talk again to kind of your confidence in that trial and how confident you are that our shop is the cracks Empire schrom. Thanks.

Thanks, John sang can you handle the first question, yes, absolutely Roger Thanks for the question. So on your question about the <unk> 2022 guidance.

Sung Lee: Yes, absolutely, Rajan. Thanks for the question. So on your question about the Monjuvie 2022 guidance and what would get you to the upper end versus the bottom end, well, regardless of the range, I think it always comes down to three variables and how we think about it as patient persistence, patient starts, and then obviously competitive dynamics or market share. So I don't think it's any secret.

What would get you to the upper end versus the bottom end well regardless of the range I think it always comes down to three variables.

And how we think about it as patient persistence patient starts and then obviously competitive dynamics or market share. So yes.

I don't think its any secret the biggest opportunity that we have in front of us as elongate the persistence. So that's a variable that Joe and the commercialization team here and frankly all of our <unk>.

Sung Lee: The biggest opportunity that we have in front of us is elongating the persistence. So that's a variable that Joe and the commercialization team here and frankly all of MorphoSys is really keenly focused on because we really have an opportunity there to change the standard of care where right now we are, the duration of therapy is a few months, largely based on past practice. But as we work to change the behavior and educate the prescriber base out there, we really see an opportunity in the future to elongate that. It's not all going to happen in one year or a few quarters.

Our focus is really keenly focused on because we really have an opportunity there.

To change the standard of care, where right now we are the duration of therapy is a few months.

Actually based on past practice, but as we work to change the behavior and educate the prescriber base out there, we really see an opportunity to opportunity in the future to elongate that it's not all going to happen in one year or a few quarters. So this is going to be this is going to be ongoing work. So let's take one year at a time.

Sung Lee: So this is going to be ongoing work. So let's take one year at a time, and that relates to your second question about the ramp to the peak. Obviously, we don't expect the peak in the next couple of years.

And that relates to your second question about the ramp to the peak.

Obviously, we don't expect the peak in the next couple of years. There is a lot of work ahead of us in persistency still represents the biggest opportunity. So we'll take this one year at a time.

Sung Lee: There's a lot of work ahead of us, but then persistency still represents the biggest opportunity. So we'll take this one year at a time. I'll turn the first slide.

I'll turn the first one yeah. So.

Malta Peters: Yeah. So let me just quickly reiterate what Jean-Paul had already alluded to in terms of the front-line design. Jean-Paul correctly mentioned that we are quite happy that we have limited our patient population to IPI 3 to 5 patients for which the unmet medical need is extremely high. We know from other studies such as ROBUST and the ECOG 1412 study that lenalidomide is actually working in these high-risk patients. And we also know that lenalidomide and tafacitamab are highly synergistic components.

Let me just quickly reiterate what John Paul has already alluded to in terms of.

The.

Frontline design.

So Paul correctly mentioned that we are quite happy that we have limited our patient population to ipi five patients for which.

The unmet medical need is.

Extremely high we know from other studies.

Such is robust and the equal 14 twists study that the dilutive <unk> <unk> walking in these high risk patients and we also know Thats and then a little might enter facete them up are highly synergistic components. So we really feel that's.

Malta Peters: So we really feel that we have found maybe a very attractive treatment regimen in this population for which the medical need is extremely high. So I think this is in summary again of why we are confident about our study and the potential probability of success. To your second remark, related to the choice of ARCHOC in the Comperta arm.

We have found maybe a very attractive.

Treatment regimen in this patient population for which the.

The medical need is extremely high so I think this is an summarize in summary again of why we are confident about.

Our study.

Potential probability of success to your second remark.

Related to the choice of all Chuck in the comparator arm.

Malta Peters: We are enrolling really, really well, as Jean-Paul also alluded to. We are hopeful that we will be either done with our enrollment or close to be done at the time of the Polarix potential approval. And please also remember, currently the Polarix Frontline Regimen is not an approved agent. It's still under review by FDA. So it is currently not available for treatment in frontline DLBCL patients. And the last comment I want to make is that currently our Frontline Study is the only large randomized study in frontline DLBCL. So we have really a sweet spot here in terms of time of ensuring that we can maintain a high speed of enrollment.

We are enrolling really really well.

Paul also alluded to.

We're hopeful that we will be either done with our enrollment all close to be done at the time of the <unk> a potential approval and please also remember currently the Polaroid frontline regimen has not been approved.

Agents.

Under review by FDA.

So it is currently not available for treatment in frontline <unk> patients.

And the last comment I want to make is that currently.

Our frontline study is the only large randomized study in frontline <unk>. So we have really.

Our sweet spot in terms of time.

Of ensuring that we can maintain a high speed of enrollment.

Yeah.

Okay. Thank you.

Youre welcome.

Malta Peters: Okay, thank you. You're welcome. Ladies and gentlemen, this concludes today's conference call. If any of you would like to follow up, the Investor Relations team of MorphoSys is available for the remainder of the day. Once again, thank you for joining our call. Have a good day and goodbye. There are no further questions and so I hand back to you. We just completed the call of Eric Darceau. Thank you very much. Thanks for watching, and don't forget to like, share, and subscribe to our channel.

Ladies and gentlemen, this concludes today's conference call. If any of you would like to follow up the investor.

Nathan stimulus necrosis is available for the remainder of today. Once again, thank you for joining our call have a good day and goodbye.

Yes, no further questions and so I'll hand back to you.

We just completed the cold ovarian carcinoma. Thank you. Thank you very much.