Pipeline Update

Partnered Discovery

During the first quarter of 2010, MorphoSys’s existing partnered therapeutic antibody pipeline remained stable at 65 active antibody development programs in total, of which currently seven programs are in clinical development, 27 in preclinical development, and 31 in research (not including a co-development candidate with Novartis).

MorphoSys projects that during the remainder of 2010 between four and six partnered programs could enter clinical trials.

Proprietary Development

MOR103

In January 2010, MorphoSys enrolled the first patient in its phase 1b/2a clinical trial of its lead drug MOR103. The Company's lead development program, MOR103, is a fully human HuCAL antibody directed against GM-CSF (granulocyte macrophage-colony stimulating factor), being developed in the area of inflammatory diseases such as rheumatoid arthritis (RA), where current treatment options are inadequate.

In total, the randomized, double-blind, placebo-controlled, dose-escalation trial is expected to enroll 135 patients and will be conducted in multiple centers in several European countries. Patients with active RA despite previous therapy with NSAIDs, corticosteroids, DMARDs and/or anti-TNF-alpha therapies will each receive four infusions of either the HuCAL-derived antibody MOR103 or a placebo in three ascending dose cohorts. Enrollment is expected to be completed in the first half of 2011 with the final results expected in H1 2012.

The primary endpoint of the trial is to determine the safety and tolerability of multiple doses of up to 1.5 mg/kg of MOR103 in patients with active RA. Secondary outcome measures will evaluate pharmacokinetics, immunogenicity, and the drug's potential to improve clinical signs and symptoms of RA as measured by reduction of synovitis and bone edema as well as by ACR/ EULAR28 response criteria and patient-reported outcomes.

MOR202

Extended toxicological studies are being conducted on MOR202 during 2010 in preparation for human clinical trials. The Company expects to file a clinical trial application (CTA) in the fourth quarter of 2010 and commence a phase 1/2 trial in early 2011.

Early-stage pipeline

Work with MOR205 and MOR104, two early-stage programs in cancer and inflammation, continues as planned. The early-stage cancer program MOR203 was discontinued. MorphoSys has selected two new target molecules in cancer and inflammation for yet to be started internal programs, namely MOR105 and MOR206.

Target Discovery

As part of the antibody alliance in bone and joint diseases with Galapagos NV another antibody target was added to the alliance, thereby increasing the total number of programs from three to four. The alliance aims to discover and develop antibody therapeutics based on novel modes of action in bone and joint diseases, including rheumatoid arthritis, osteoporosis and osteoarthritis. Antibodies with high specificity towards the first target have been generated and are now being tested in disease-specific in vitro and in vivo experiments. The partners have prioritized the targets in order to maximize the value and intellectual property position of the respective therapeutic antibody programs.