This is an independent study performed by students
from the Faculté des Sciences Pharmaceutiques of
Lille.
The opinions expressed are our own and not
necessarily those of Morphosys
Table of content
Part 1: Presentation
Part 2: Antibodies technology
Part 3: Business strategy
Part 4: Business revue
A biotechnology company focusing on fully
human antibodies
segments
Field of use
Proprietary
development
Partnered
discovery
Therapeutic antibodies Research &
Diagnostics
Location and subsidiaries
• MorphoSys was founded
by two chemists, Dr. Simon
Moroney and Dr. Andreas
Plückthun in Martinsried
near Munich in 1992.
• MorphoSys’s second largest
site is located in Oxford,
England.
Morphosys group 428 employees
Location and subsidiaries
• Research and diagnostic antibodies unit AbD Serotec expand
its sales organization in Düsseldorf.
• AbD Serotec is currently
represented in the most
important research antibody
market in Raleigh, North
Carolina (Research Triangle
Park).
Antibody structure
Fab
Recognition of the antigen
(bacteria or viruses)
Family protein of Ig (immunoglobulins) joined by disulfide bridges
Fc
Determines isotype and hence the
functional properties of the antibody
Monoclonal antibodies (mAb or moAb) are monospecific antibodies
made by identical immune cells that are all clones of a unique
parent cell.
Development of Antibodies Technologies
immunogenicity
Reduced immunogenicity
expected to:
Efficacy
Safety
Ease of use
Obtaining Mouse Antibodies
•Murine Antibody MOMAB
Hybridoma technology
Drawbacks:
-Requires considerable time
-Expensive
-Require an expertise specialized cell
culture, animal facilities
rejected by the human
immune system=>
unsuitable for use as
therapeutic agents.
Obtaining
Chimeric Ab XIMAB
Fusion of genes encoding variable
regions of murine antibody and
constant region of a human Ig
Humanize Ab ZUMAB
- Contain only the murine variable
part composed by highly regions
(CDR) in contact with the antigen.
- CDR grafted in the variable
region of a human Ig.
HuCAL library
More than 45 billion functional
human antibody (Fab format) .
selectable using in vitro methods,
such as phage display.
49 frameworks
CDRs= Complementary Determining Regions
7xVH 7xVL
Highly variable
genetic cassettes
(CDRs)
Phage display Technology
Phagemid
Gene III
P III
Antibody library
cloned into a
phagemid vector
simultaneous
periplasmic
expression of
phage coat
proteins and
antibody fragments
CysDisplay™ over monovalent phage display
•Ensuring that all specific binders are eluted from the
antigen
•Preventing elution of binders sticking non-specifically
•Elution of all binders independent of their affinity
HuCAL Concept
in vitro generation
of highly specific
and fully human
antibodies
Features:
-Rapid generation of fully human antibodies
-Proven success with difficult antigens (e.g. non-immunogenic or toxic
antigens)
-High affinity that can be further increased through targeted optimization
-High expression yields in E.coli
Benefits of HuCAL technology Parameter Conventional Monoclonals HuCAL
Selection Random Guided
Production Complicated Easy
Animal based Yes No
Guaranteed Supply No – source dies with
the cell line
Yes – clones can be
resynthesized
Flexible Formats No
Yes
Engineering and
Optimization
No Yes
Humanness No Yes
Throughput Mostly manual
Automated
Success Rate ~75%
98%
Speed of Delivery 4–9 months
8 weeks
Monoclonal Abs Market
One of the fastest-growing drug classes in
human healthcare
Monoclonal Antibody market 2009, Krishan Maggon, Knol Publishing Guild (KPG)
Company
founded in
Martinsried
1992 1997
First
commercial
partnership
with:
1999
IPO of
Morphosys AG
Start of an
extensive
partnership with:
2000
Presentation of the
HuCAL antibody library
First HuCAL patent
granted
2001
HuCAL GOLD
antibody library
Start of a strategic
partnership with:
2003
Start of a
partnership
with:
Start of a
partnership with:
New research
antibodies
division: AbD
Start of a
strategic
partnership with:
2004 2005
First HuCAL Ab
used in clinics
Acquisition of:
2006
Acquisition of:
Serotec
2007
One of the industry
largest pharma-
biotech R&D
collaborations with:
2008
First proprietary
therapeutic Ab
MOR103 enters
clinical trials
2010
Acquisition of:
Partnerships
In the majority of cases
standard terms of these
agreements are:
•upfront payments at signature,
•annual license payments in
exchange for access to
MorphoSys’s technologies,
•development-dependent
milestone payments,
•royalties on product sales.
Partnerships
The partnership with
• Started in 2004 and will run until 2017
•Total payments could potentially exceed € 1 billion
• Novartis pays : • Approx. €20m p.a. technology license including HuCAL
internalization fees
• Approx. €20m p.a. in research funding
• Over €250m milestones (probability adjusted)
• Royalties on all resulting drugs
•Novartis possess 7% of Morphosys
Partnered programs
• BHQ880:
• Osteolytic bone disease in multiple myeloma • Anti-DKK-1 neutralizing antibody
• First-in-class
• Fully human
• Phase 2
The partnership with:
Partnered programs
• Multiple myeloma
• Prevalence
• US : 45 000 people, 14 600 news cases/years (American Cancer
Society)
• France : 4000
• Osteolytic bone disease in multipe myeloma treatment
• Thalidomide + melphalan/prednisone
• Bortezomib + melphalan/prednisone
• Lenalidomide
• BHQ880 : DKK1 as an important therapeutic target in myeloma and
provide the rationale for clinical evaluation of BHQ880 to improve
bone disease and to inhibit MM growth.
• Possibility of provision in any other form of multiple myeloma
Proprietary development
• MOR 103
• Rheumatoid arthritis
• Target : GM-CSF, which plays a central role in activating
granulocytes and macrophages, essential in the
inflammatory cascade
• Clinical trial :Phase 1b/2a
• In several European country, with 135 patients
Proprietary development
• Rheumatoid arthritis:
• Prevalence : 4-6 million people worldwide
• Treatment
• Anti-TNFα
• Humira (Adalimumab)
• Enbrel (Etanercept)
• Remicade (Infliximab)
• Interest of MOR 103
• Non-responders to anti-TNFα : 30%
• Non-responders to anti-TNFα (after 2
years) : 50%
• Long-term safety issues with anti-TNFα
Proprietary development
• MOR 103
• Other inflammatory disease
indications
Asthma, Multiple Sclerosis, Chronic
Obstructive Pulmonary Disease
• Start Phase 1 Multiple Sclerosis
Focus on AbD Serotec
• >14,000 antibodies and immunological reagents:
custom monoclonal antibodies developed from the
MorphoSys HuCAL library,
large and small scale antibody production and
conjugation services.
• The AbD Serotec brand was created in
early 2006.
• 25% of Morphosys revenues
Antibodies by Design to provide custom antibody development services to the research and diagnostic markets using its proven HuCAL technology.
Biogenesis group (acquisition) >20 years experience in the Ab industry, a vehicle: • to bring HuCAL antibodies into the catalog antibody market • to bring a large and diverse range of catalog antibodies to the MorphoSys group.
2003 2005 2006
Serotec (acquisition) >20 years experience, strong position in the global market for research antibodies: distributors > 55 countries, and a large portfolio of Abs and custom services.
Oxford Biotechnology OBT (acquisition) internet-based Ab sales company, with customers all over the world. The OBT product portfolio is now also part of the AbD Serotec offering.
Sources of finance
• MorphoSys’ major sources of finance: public offerings,
revenues from its strategic pharma alliances,
profits from access fees for its proprietary technology.
• Grant revenues: 18% of revenues in 1997
<0.1% in 2009
MorphoSys finance and revenue recognition/expense, 1997-2009 € thousands
Groupe de Recherche en Economie Théorique et Appliquée –UMR CNRS 5113
http://www.innovation-equity.eu/file_upload/william-lazonick_mustafa-erdem-sakinc_presentation.pdf
R&D/
revenues
>50%
Future according to morphosys
Strategic alliance
with Novartis
Investments in proprietary
coumpounds
First clinical proof of
concept
Out licensing of own
coumpounds
First HuCAL-based drugs
on the market
Proprietary HuCAL-based
drugs on the market
SWOT
Strengths •Patents
•Supplementary segments: different
applications of the technology
•Participation in drug development with
multiple partners.
Weaknesses •70% of total revenues arose from the
Company’s three largest alliances
with Novartis, Daiichi Sankyo and
Pfizer.
•No HuCAL-based drug on the market
yet.
Opportunities •Due to strong competition among
generics companies, almost all
pharmaceutical companies are
increasing their commitment to
biologics such as human Abs.
•Monoclonal Abs: One of the fastest-
growing drug classes in human
healthcare.
Threats •No HuCAL-based drug on the market
yet.
•Competitors:
Microbial surface display: Dyax,
Medimmune, BioInvent.
Transgenic mice: Abgenix, Medarex,
Regeneron.
Competitors
Licensee PipelineDyax provides access to its phage display
libraries in various types of licenses and collaborations
under the Licensing and Funded Research Program
(LFRP). Under the LFRP, we maintain more than 70
licenses and collaborations with various research,
biotechnology and pharmaceutical companies. These
licensees have advanced into clinical development
numerous drug candidates identified using our phage
display libraries.Our licensee pipeline currently consists of
17 clinical-stage drug candidates.
Competitors
At MedImmune, antibody drugs are generated using three core technologies:
Phage display
Ribosome display
VelocImmune® (human monoclonal antibody-producing mice)*
Antibodies generated by these three techniques are currently produced from
a single clone of cells, and are therefore called monoclonal antibodies. The
majority of approved monoclonal antibodies marketed today are humanized
and chimeric monoclonal antibodies. However, human monoclonal antibodies
which are less likely to cause adverse immunological responses in patients
now form the largest group in research and development pipelines and are
expected to be the fastest growing segment of antibody therapeutics in the
future.
Competitors
BioInvent has created a highly functional and diverse library called n-
CoDeR®, which contains 2 x 1010 fully-human antibody genes. This
proprietary antibody library is the cornerstone of BioInvent's antibody
discovery platform, and is used in order to rapidly find therapeutic antibody
candidates with desired properties.
Partnerships: Bayer HealthCare, Daiichi Sankyo Company, Mitsubishi
Tanabe, XOMA.
Competitors
Kenta Biotech is focusing on the discovery and
development of innovative, fully human monoclonal
antibodies for the life-saving treatment of patients with
serious infectious diseases.
Evec specializes its business and technical positions
in developing human monoclonal antibodies, and
licensing pharmaceutical companies to use them.
Partnered product pipeline
• Indications of partnered programs
– Cancer, Alzheimer's disease, infectious
disease, cardiovascular dysfunction and
inflammation, etc.
Partnered product pipeline
• R 1450 : Gantenerumab
– Partner : Roche
– Indication : Alzheimer's disease
• Antibody attacks abnormal build-ups of
the amyloid beta protein in the cerebral
tissue that are characteristic of
Alzheimer's disease
– Phase 2 in a clinical trial
Monoclonal Abs Market
Generic NameTarget
Brand ®
FDA
Approval
Companies Indication Sales
$billion
2007 2008 2009
Infliximab c TNFα
Remicade 1998
J&J,
Merck KGA
CD, UC, AS
RA, Ps, PsA
5.04 6.5 6.91
Bevacizumab VEGF hz
Avastin 2004
Roche mBC, mCRC, NSCLC, mRCC, gliobastoma
3.93 4.7 5.92
Rituximab c CD20
Rituxan 1997
Roche Leukemia, Lymphoma, RA
5.01 5.6 5.8