gesellschaft MorphoSys reports numbers of US subsidiary

Last Updated: 31. Januar 2024By

January is a rather quiet month on the stock market. The annual financial statements are not yet ready, but are still in preparation. Takeovers are more of an exception, because if companies are to be taken over in January, the consultants would have had to work in December – and even the highly paid investment bankers prefer to avoid that.

Quiet news time That’s why in these quiet news times, people are happy when a company publishes a truly meaningful ad-hoc announcement.

This happened this morning from MorphoSys AG.

But before I go into more detail about the press release, I would like to give you an overview of the company’s business model. I assume that this is only fully known to a few of you.

Business model overview MorphoSys is a biopharmaceutical company that specializes in the development of innovative drugs based on human antibodies. The company uses its own antibody library called HuCAL to research and develop both its own and partnered drug candidates.

MorphoSys can also generate revenue through license fees, milestone payments, and sales royalties from its partnerships with various international pharmaceutical companies.

US subsidiary reports figures for 2023 Now financial figures have been published. Not by MorphoSys itself, but by its US subsidiary Monjuvi.

According to preliminary figures, Monjuvi was able to generate a net product revenue of 24.1 million US dollars in the fourth quarter. In the full year, revenues amounted to 92.0 million US dollars.

Outlook for 2024 For the full year 2024, MorphoSys expects Monjuvi to generate net product revenues in the range of 80 to 95 million US dollars, which is actually in line with the company’s original forecast for 2023.

MorphoSys expects this potential growth to come from new indications. These new indications are currently being investigated in two phase 3 studies, the details of which (such as in the indications of relapsed or refractory follicular lymphoma and marginal zone lymphoma) I would rather spare you.

Changes in balance sheet What may not sound particularly positive at first glance – you read it right, the outlook for 2024 was actually supposed to be achieved last year – turns out to be a success at second glance: Due to the lower revenue expectations, MorphoSys is allowed to reduce the balance sheet position „Financial liabilities from collaborations“ from 226 to around 114 million euros.

This is because this accounting position reflects an estimate of the expected future profits from the net product sales of Monjuvi in the USA, which MorphoSys owes to the former owner of Monjuvi, the US company Incyte.

No cash effect If expectations decrease, so does this balance sheet item. Pretty tricky, but with positive consequences for MorphoSys on paper. On paper, because this is only a balance sheet item that improves. There is no cash flow associated with it, so the valuation effect is limited.

But that doesn’t really matter, because looking at the analysts‘ profit estimates, MorphoSys will not be profitable until at least 2027. Although risk appetite for loss-making biotechnology stocks seems to have increased again in recent months, I would only recommend the MorphoSys share to speculatively oriented investors with a long-term investment horizon.