MorphoSys Announces Extension of Antibody Collaboration with Bayer

Applied Clinical Trials

The collaboration is extended by five years, with a termination option after the first collaboration year.

Martinsried/Munich, December 8, 2005 – MorphoSys AG (Frankfurt Stock Exchange: MOR; Prime Standard Segment, TecDAX) announced today the extension of its collaboration with Bayer Pharmaceuticals Corporation. The collaboration is extended by five years, with a termination option after the first collaboration year. Under the terms of the extended agreement, MorphoSys grants Bayer access to its proprietary HuCAL GOLD(R) antibody library for use in Bayer's drug discovery programs at its research site in West Haven, CT, U.S.A. Additionally, the two parties undertake to commence up to 25 new therapeutic antibody programs should the collaboration run its full course. Under the terms of the agreement, a minimum of three new antibody development programs will be started in 2006. As consideration, MorphoSys will receive annual user fees and committed R&D funding during the duration of the agreement. Additionally, MorphoSys stands to receive license and milestone payments for each therapeutic antibody project as well as royalties on any end-products emerging from the collaboration. Further financial details were not disclosed.

The cooperation between MorphoSys and Bayer Pharmaceuticals Corporation, initiated in December 1999, focuses on the use of human antibodies for applications in the areas of therapy, diagnostics and target research. In January 2004, both companies entered into a cross licensing agreement in which Bayer changed its in-house research R&D programs to the HuCAL GOLD(R) antibody technology. In exchange, MorphoSys gained access to Bayer's human cell line HKB11 for production of HuCAL(R) based antibodies. Under the now extended agreement, MorphoSys receives expanded access to the HKB11 cell line, both for its own and its partners use in the research and commercial production of therapeutic and diagnostic antibody products.

"A central component of our strategy is the creation of long-lasting relationships with our drug development partners and today's news marks yet another successful multi-year extension of an existing collaboration," commented Dr. Simon Moroney, Chief Executive Officer of MorphoSys. "Most importantly, the extended agreement provides a substantial increase in the number of therapeutic antibody programs to be pursued with Bayer in the years to come."

About MorphoSys:

MorphoSys develops and applies innovative technologies for the production of synthetic antibodies which accelerate drug discovery and target characterization. Founded in 1992, the Company's proprietary Human Combinatorial Antibody Library (HuCAL(R)) technology is used by researchers worldwide for human antibody generation. The Company currently has licensing agreements and/or research collaborations with Bayer (Berkeley, California/USA), Boehringer Ingelheim (Ingelheim, Germany), Bristol-Myers Squibb (New Jersey/USA), Centocor Inc. (Malvern, Pennsylvania/USA), GPC Biotech AG (Munich/Germany), Hoffmann-La Roche AG (Basel/Switzerland), ImmunoGen Inc. (Cambridge, Massachusetts/USA), Novartis AG (Basel, Switzerland), Novoplant GmbH (Gatersleben, Germany), Pfizer Inc. (Delaware/USA), ProChon Biotech Ltd. (Rehovot/Israel), Schering AG (Berlin/Germany), Shionogi & Co., Ltd. (Osaka/Japan), Xoma Ltd. (Berkeley, California/USA) and others. Additionally, MorphoSys is active in the antibody research market through its Antibodies by Design business unit. Antibodies by Design was founded in 2003 for the purpose of exploiting the MorphoSys non-therapeutic antibody markets. MorphoSys' activities in the research antibody segment were significantly strengthened through the acquisition of the U.K. and U.S.-based Biogenesis Group in January 2005. For further information please visit the corporate website at: