Research and Development

As a specialist in innovative technologies and products in the field of drug development, MorphoSys’s sustainable economic success is largely based on successful R&D. MorphoSys’s technology platforms are continuously being improved and expanded with further modules. Additionally, MorphoSys carries out research – principally in the areas of cancer and inflammatory diseases – on proprietary drug candidates, which have to undergo thorough clinical trials often taking many years.

As a research-intensive company, MorphoSys is committed to protecting resources through optimized processes in laboratory work and therefore enabling sustainable economic activity. You can find detailed information on this in the Sustainability Report.

MorphoSys continually invests in the improvement of its laboratory equipment in order to preserve its competitiveness in the long-term. The largest investments in 2012 can be found in the following table:

TAB. 6 /// CAPITAL EXPENDITURE ON TANGIBLE ASSETS IN 2012
(SELECTION OF MAJOR INVESTMENTS)

in 000’s €   2012 
Protein Analysis System I (Lab Equipment) 215
Analytical Software 167
Electronic Document Management System (Lab Software) 151
Protein Analysis System II (Lab Equipment) 140
Flow Cytometer (Lab Equipment) 115
Gradient Pump (Lab Equipment) 55

RESEARCH AND DEVELOPMENT WITH PARTNERS

In this business segment, MorphoSys generates and characterizes high-quality antibody drug candidates for its partners, based on its technology platforms. The pipeline with drug candidates developed in collaboration with partners made great advances in 2012 and spanned 70 therapeutic antibody programs by the end of year. 16 of these are in clinical development, 20 in preclinical development and 34 in the research phase (see table 4 for changes on the previous year). In the 2012 business year ten programs were added and eight were terminated, leading to an increase by two programs. Altogether the project advances in 2012 fell within MorphoSys’s expectations.

Contractually determined research advances, such as the start of clinical trials for a drug, trigger milestone payments to MorphoSys. In March 2012, Novartis confirmed the start of a phase 1 clinical trial with a HuCAL-based antibody against cancer, which triggered a milestone payment.

A clinical milestone payment followed in May from the pharmaceutical group Roche, which extended a clinical trial of the Alz heimer compound gantenerumab in pivotal phase 2/3 trial. The trial is evaluating the effects of gantenerumab on cognitive abilities as well as the compound’s safety and pharmacokinetic properties in Alzheimer patients in the prodromal or early stage. At this stage of the disease patients only suffer mild cognitive impairment and have not yet been diagnosed with Alzheimer’s. A prognostic test can determine whether the patient is likely to progress to full-blown Alzheimer’s.

In addition to these two clinical milestone payments, MorphoSys also received milestone payments on various preclinical programs.

Other advances in 2012 brought projects closer to market, for instance the partnerships with Novartis, OncoMed and Janssen Biotech. In the course of the first quarter of 2012, Novartis advanced LFG316, a HuCAL  antibody in the field of ophthalmology, to a phase 2 clinical trial. In October 2012, OncoMed began a phase 1b/2 trial in the USA for OMP-59R5 for the primary treatment of patients with advanced pancreatic cancer. OMP-59R5 is the most advanced HuCAL antibody program to address a validated signaling pathway in the area of cancer stemcells.

MorphoSys’s partner Janssen Biotech began a new phase 2 trial for the HuCAL antibody CNTO1959. The goal of the new trial is to evaluate the safety and efficacy of CNTO1959 in direct comparison to ustekinumab (trade name: Stelara), with regard to the reduction of symptoms in active RA despite co-therapy with methotrexate. CNTO1959 is thus now being developed for the two significantly different indications psoriasis and RA. MorphoSys is taking this into account by counting CNTO1959 as two separate phase 2 programs.

The termination of programs is unavoidable in drug development, for example because research results no longer justify the continuation of a project or because partners opt to terminate projects on strategic grounds. In 2012, Janssen Biotech discontinued the development of the antibody CNTO888 in the areas of cancer and idiopathic lung fibrosis.

PROPRIETARY R&D  ACTIVITIES – PRODUCT DEVELOPMENT

In this business segment, MorphoSys evaluates and develops antibody compounds as proprietary products from the early research phase to partnering deals with a pharmaceutical company based on clinical results. The increased research effort in this segment provides the opportunity for significantly higher milestone payments and royalties on product sales for MorphoSys.

MorphoSys is currently pursuing four proprietary clinical programs, which are based on three compounds:

  • MOR103 – a fully human, monoclonal HuCAL antibody in the areas of rheumatoid arthritis and multiple sclerosis,
  • MOR202 – a fully human, monoclonal HuCAL antibody in the area of multiple myeloma,
  • MOR208 – a humanized, Fc-optimized, monoclonal antibody in the areas of lymphomas and leukemias.

In September 2012, MorphoSys released data on the clinical phase 1b/2a trial to evaluate its proprietary MOR103 HuCAL antibody in patients with RA. The results underscore the compound’s potential to become an important drug in a field with a high therapeutic need.

During the randomized, double-blind, placebo-controlled phase 1b/2a trial in 96 patients with mild to moderate pronounced rheumatoid arthritis, the patients were given MOR103 in four, once-weekly doses of 0.3 mg/kg, 1.0 mg/kg or 1.5 mg/kg. The trial was designed to investigate in particular how soon the therapeutic effect occurs, and was carried out at 26 clinical trial centers in Germany, the Netherlands, Poland, Bulgaria and Ukraine. The majority of trial participants were treated in parallel with disease-modifying anti-infl ammatories (DMARDs). The primary end-point of the trial was the evaluation of the safety and tolerability of MOR103 in multiple doses in patients with active RA. Secondary endpoint included the assessment of the compound’s pharmacokinetic properties and immunogenicity as well as its potential to improve clinical signs and symptoms in RA patients. Therapeutic success was measured by the DAS28, ACR20/50/70 and EULAR assessment criteria. Additionally, the development of synovitis and bone edema was captured by magnetic resonance imaging (MRI) and patient feedback was evaluated.

MOR103 was safe and well-tolerated at all doses administered. There were no drug-related serious adverse events. No obvious differences in the adverse event rate between the MOR103 and placebo groups were observed.

The best response was achieved in the 1.0 mg/kg dose cohort with an ACR20 score of 68 % at week 4, which was significantly higher than in the control arm. The ACR20 value is one of the highest ever seen in a biological RA compound after four weeks of treatment. Of particular importance was the fast onset of action observed: within 2 weeks, up to 40 % of patients achieved an ACR20 score. Improvement of DAS28 scores was rapid and significant over the treatment period of the study. MRI scans revealed a reduction of synovitis according to the RAMRIS system at week 4. The detailed trial results were presented in November at the annual meeting of the American College for Rheumatology (ACR), the most important symposium in rheumatology.

An additional phase 1 trial carried out in 2012 on the subcutaneous administration of MOR103 also produced positive results. The compound proved to be safe and well tolerated in this convenient method of administration and demonstrated an advantageous and competitive pharmacokinetic profile.

These clinical data were expanded by the publication of two research reports that underscore the significant therapeutic potential of the MOR103 program. The reports stem from a commercial agreement with a research department at the University of Melbourne and prove that GM-CSF, the underlying target molecule of the MOR103 program, is an important neurotransmitter for inflammatory, arthritic and osteoarthritic pain.

These clinical data were expanded by the publication of two research reports that underscore the significant therapeutic potential of the MOR103 program. The reports stem from a commercial agreement with a research department at the University of Melbourne and prove that GM-CSF, the underlying target molecule of the MOR103 program, is an important neurotransmitter for inflammatory, arthritic and osteoarthritic pain.

The current clinical phase 1/2a trial in patients with recurrent/ refractory MM as part of the MOR202 program was continued in 2012. The program’s preclinical database was also further strengthened in 2012. Once antibody-dependent cell-mediated cytotoxicity ( ADCC  ) had been identified as an effect mechanism for MOR202 in earlier trials, the compound’s ability to induce the elimination of MM cells in patients via antibody-dependent cellular phagocytosis ( ADCP  ) was also verified. Corresponding data were presented at the annual conference of the American Society of Hematology (ASH) in December 2012.

MOR208, an Fc-optimized anti-CD19 antibody successfully completed a phase 1/2a clinical trial. MOR208 demonstrated encouraging first signs of anti-tumor efficacy and an acceptable safety and tolerability profile in intensively treated high risk patients with chronic lymphocytic leukemia ( CLL  ) or small lymphatic lymphoma (SLL). The data support the compound’s further development. MorphoSys will now advance the program to phase 2 clinical development in non-Hodgkinʼs lymphoma ( NHL  ) and acute lymphoblastic leukemia ( ALL  ).

Furthermore, the possibility of combining MOR208 with other approved therapeutic drugs was investigated in preclinical trials. These investigations demonstrated that the small-molecules Bendamustine (Ribomustin®) and Fludarabine (Fludara®), as well as the anti-CD20 antibody Rituximab (Rituxan®) and Ofatumumab (Arzerra®), could increase the cytotoxicity of MOR208. The in vitro  and in vivo  activities of MOR208 were increased in an aggressive lymphoma model of all administered drugs, independent of their different mechanisms.

All research results generated in 2012 underpin the potential value of the Company’s proprietary compounds in the corresponding areas of disease.

PROPRIETARY R&D ACTIVITIES – TECHNOLOGY DEVELOPMENT

The R&D activities in the field of technology development are intended to secure the Company’s competitive position in its core business and open up new business opportunities. A dedicated research team works continuously on the further development of antibody technologies and on the evaluation of new technology platforms.

The beta version of the Ylanthia  antibody library – presented in December 2011 at a symposium – was completed in 2012 and put into commercial application. The goal of the Ylanthia development is to be able to develop antibodies with enhanced properties even faster. Ylanthia, the next-generation antibody platform, is intended to replace the HuCAL technology that has so far formed the basis of therapeutic antibody research and development at MorphoSys. MorphoSys integrated the technology into its research processes in 2012 and began the first therapeutic programs based on Ylanthia. Additionally, the extension of the strategic commercial agreement with Novartis sets the course for the Ylanthia platform to also facilitate drug development on behalf of partners.

In addition to its efforts in the antibody sector, MorphoSys started an initiative in 2012 to gain access to technologies from other companies that match its core competencies. MorphoSys announced a commercial agreement in November 2012 with the privately owned biopharmaceutical company Lanthio Pharma, a Dutch company specialized in the research and development of lantipeptides. Lantipeptides  are a new class of therapeutic agents. The LanthioPep technology from Lanthio Pharma is used in the identification of peptides for specific target molecules and stabilizes them in the conformation that is optimal for binding. Within the framework of the commercial agreement, MorphoSys and Lanthio Pharma began to jointly implement their technologies to produce high-quality and diverse lantipeptide libraries. MorphoSys receives preferred access to the exclusive in-licensing of the LanthioPep technology for compound research.

RESEARCH AND DEVELOPMENT IN THE ABD SEROTEC SEGMENT

The research activities at MorphoSys’s AbD Serotec business unit in the 2012 financial year were aimed at gaining access to new products in diagnostics as well as in selected research disciplines, such as veterinary research, innate immunity, neuroscience and stem cell antibodies. Among other things, these led to the expansion of the product catalogue in the area of research reagents  , in particular the introduction of a completely new product category for the analysis of existing antibody drugs. Several antibodies developed by AbD Serotec were used by partners in commercial contexts in 2012.

The sale of substantially all of the AbD Serotec segment, agreed at the end of 2012, had only minor effects on the research of MorphoSys as the research activities of the various business fields were already established as independent from each other prior to the sale of the division.