MorphoSys AG (NASDAQ:MOR) Q4 2022 Earnings Call Transcript

Tim Demuth: Yeah. Thanks Rajan. This is Tim. So on the SVR expectation, I think we are in a very comfortable position. We have the MANIFEST study, particular Arm 3, that’s investigating pelabresib in combination with ruxolitinib in that naive patient population of myelofibrosis, where of course, we showed data at ASH last year with a very good screen response rates of 68% at week 24, which I guess is a quite competitive parameter if you compare that to some of the other drugs available in that space. On TSS also very good data from the same study with a 56%, 54% TSS improvements at week 24. So, I think we know what to expect. And as I mentioned in my prepared remarks when we took over the study from Constellation, we increase the sample size to further boost the confidence in hitting that TSS endpoint. And again, confidence is very high on making that.

Jean-Paul Kress: Joe, on the Monjuvi.

Joe Horvat: Yeah. Thank you for the question on the prescriber base. So, I think in the normal evolution of any launch, academics are quicker to adopt, but as we know, the sheer volume of patients are seen out in the community. We approximately have a 70/30 split right now. And as we continue to increase awareness and understanding and utility, the sites of care growth that we see a greater amount of is coming from the community. So, I think you continue to see a bit of a shift to more of a community. So, I think that’s the right way of looking at it.

Operator: We have the next question from Suzanne van Voorthuizen, VLK. Please go ahead.

Suzanne van Voorthuizen: Hi, there. Good afternoon. Thanks for taking my questions. Firstly, I would like to ask if you can elaborate a bit on the operating expenses for R&D. Can you indicate what proportion of the total, roughly 300 million relates to the major parts pelabresib versus tafasitamab and the rest? And then, circling back to your fine-tuned sales and marketing expenses and the decision to also know funds preclinical programs, was just wondering how are you looking to, or are you looking to further reduce expenses going forward? Can we expect further cost savings initiative during the coming year? Thanks.

Sung Lee: Suzanne, this is Sung. Appreciate the question. With regard to operating expenses and specifically R&D and how it’s broken out by the various clinical stage programs, I think the way to look at this is about two-thirds of our R&D expense is driven by the pivotal studies. So that’s substantial. And this year, you would expect the pelabresib pivotal study MANIFEST-2 to be peaking. The other studies that are related to tafasitamab or Monjuvi, frontMIND and inMIND, we are past the peak on those. So, hopefully that gives you a way to think about the direction of these different pivotal studies in terms of how they impact R&D expense. Now, with regard to your other question about other things the company could do in terms of cost structure optimization, look, there is no complacency here, and that’s reflected in the actions we’ve taken over the 18 months.

Since we’ve acquired Constellation in mid-2021, we’ve realized a lot of synergies. We’re way off of our peak headcount. As you remember, more than a year ago, we basically closed the research discovery operations at Constellation. We optimized our commercial expenses and we will continue to keep an eye on that based on developments of Monjuvi revenue and, of course, the recent action of — the difficult decision to close our operations on research and discovery efforts here in Germany. These are very important decisions to help us optimize our cost structure and the work will be ongoing. There’s no complacency as I mentioned before, and we’ll continue to monitor this as things develop.

Suzanne van Voorthuizen: Got it. And one follow up, if I may. Given the somewhat complicated accounting with the inside partnership and filed royalties and the one-offs from the last two years, can you help us understand what your current best cash burn rate is?