Monday May 28, 5:20 am Eastern Time
Morphosys Q1 sales disappoint, shares fall
(UPDATE: Adds analyst comment, details)
By Sarah Knight
FRANKFURT, May 28 (Reuters) - Shares in German biotechnology company MorphoSys AG took a beating on Monday after the company's first-quarter sales came in well below analysts' expectations.
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The company said revenue in the quarter almost doubled to 2.76 million euros ($2.37 million), while three analysts polled by Reuters had forecast sales of between 4.05 million to 4.5 million euros.
The forecasts aimed high after MorphoSys, which develops and applies technologies for the production of antibodies, secured two new contracts and received two milestones payments in the first quarter.
``It's a young company, and the results are difficult to predict,'' said Thomas Schiessle, an analyst at Delbruck Asset Managment in Frankfurt, who has an ``accumulate'' rating on the share.
The market was less forgiving. Shares fell as much as 11 percent to 76.55 euros, while the Neuer Markt index fell 0.5 percent. The stock was trading down 7.97 percent at 0915 GMT.
Morphosys is under pressure to secure more deals and better financing, as it competes in the rapidly growing antibody market with companies such as Medarex Inc (NasdaqNM:MEDX - news), Abgenix Inc. (NasdaqNM:ABGX - news) and Cambridge Antibody Tehcnology plc (CAT) (quote from Yahoo! UK & Ireland: CAT.L).
While these companies have all started to create in-house antibody drug products, Morphosys is still using its technology to help partners develop products.
In addition, the company is facing a patent dispute with CAT, which has yet to be resolved. It said on Monday it had not taken provisions for possible losses from the legal case, as the outcome and the costs were difficult to gauge.
Giving a breakdown of first-quarter results, Morphosys said commercial partnerships with biotech and pharmaceutical firms in the United States generated 2.6 million euros, while milestone payments in the U.S. and Europe generated 1.4 million euros. There was an overlap in the figures.
The company said it generates the lion's share of revenue from its platform technologies, such as Hucal (human combinatorial antibody libraries), which can accelerate the identification of new disease associated genes or targets, and generate new theapeutic antibodies.
It makes 9.5 percent of its sales from research cooperations.
Net loss in the quarter narrowed to 2.03 million euros, from 4.56 million euros, as it booked a charge of 3.2 million euros in the quarter last year for adjustments to SAB101 regulations under U.S. GAAP accounting standards.
Research and development costs rose 0.4 million euros to 2.1 million in the quarter. Administration costs rose to 1.8 million euros from 1.1 million a year earlier, as it added new staff.
The company, which was founded 10 years ago but first commercialised its technology in 1997, said its cash flow rose to over 20 million euros at the end of March, from 18.1 million at the end of December. |
