MorphoSys Updates Strategy for Proprietary Product Development

Company will take new lead compound MOR103 into Clinical Development

Martinsried/Munich, February 24, 2006, MorphoSys AG (Frankfurt Stock Exchange: MOR; Prime Standard Segment; TecDAX) today presented its updated strategy for the further development of its proprietary therapeutic antibody programs. As a result of the strategic review process initiated in 2005, MorphoSys will focus the majority of its efforts on its anti-inflammatory compound MOR103 as new lead compound in the indication of Rheumatoid Arthritis. The Company intends to evaluate clinical efficacy of the compound. MorphoSys will discontinue further development of its anti-ICAM program, which presently consists of the MOR101/MOR102 therapeutic antibody projects. In regard of MorphoSys’s cancer-related antibody program MOR202, the Company intends to generate additional preclinical data around this project, which will determine further steps.

MOR103 is a fully human HuCAL® antibody against a not disclosed target, developed in the area of inflammatory diseases. MorphoSys will start immediately with pre-clinical development of the compound. After completion of pre-clinical testing, MorphoSys will provide all necessary information to regulatory authorities and ethics committees (which correspond to an IND filing) within the second half of 2007 to start human trials. Rheumatoid arthritis is a chronic disease, mainly characterized by inflammation of the lining of the joints. It can lead to long-term joint damage, resulting in chronic pain, loss of function and disability. The disease affects approximately 4-6 million people worldwide.

“Proprietary products represent the highest value-added application of our HuCAL® technology and we are excited about our ability to explore this potential growth driver,” said Dr. Simon Moroney, Chief Executive Officer of MorphoSys. “Although this adaptation of our product strategy is a new direction for us, these efforts remain comparable with our present business model, which are predicated on a cash generative business in order to remain independent of the capital markets.“

“The strategic review of our proprietary product portfolio revealed that in fact our latest compound MOR103 is the most promising of MorphoSys drug candidates and thus we decided to focus our development activities in favor of this program,” stated Dr. Marlies Sproll, Chief Scientific Officer of MorphoSys. “MOR103 targets inflammatory diseases such as psoriasis, multiples sclerosis, inflammatory bowels disease, asthma, and especially rheumatoid arthritis, where we see a huge potential for additional innovative therapies.”

MorphoSys will hold a public conference call today at 10:30 CET to present the Annual Financial Results 2005 and report on current developments.
Dial-in number for the Conference Call (listen-only): +49 69 2222 2246
Please dial in 10 minutes before the beginning of the conference.
In addition, MorphoSys offers participants the opportunity to follow the presentation through a simultaneous slide presentation online at http://www.morphosys.com.
Approximately two hours after the press conference, a slide-synchronized audio replay of the conference will be available on http://www.morphosys.com.

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_) technology is used by researchers worldwide for human antibody generation. The Company currently has licensing agreements and/or research collaborations with Bayer (USA), Boehringer Ingelheim (Germany), Bristol-Myers Squibb (USA), Centocor Inc. (USA), GPC Biotech AG (Germany), Hoffmann-La Roche AG (Switzerland), ImmunoGen Inc. (USA), Merck & Co., Inc. (USA), Novartis AG (Switzerland), Novoplant GmbH (Germany), Pfizer Inc. (USA), ProChon Biotech Ltd. (Israel), Schering AG (Germany), Shionogi & Co., Ltd. (Japan), Xoma Ltd. (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 and the Serotec Group in 2006. For further information please visit the corporate website at: http://www.morphosys.com/.


Statements included in this press release which are not historical in nature are intended to be, and are hereby identified as, “forward-looking statements” for purposes of the safe harbour provided by Section 21E of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words including “anticipates”, “believes”, “intends”, “estimates”, “expects” and similar expressions. The company cautions readers that forward-looking statements, including without limitation those relating to the company’s future operations and business prospects, are subject to certain risks and uncertainties that could cause actual results to differ materially from those indicated in the forward-looking statements. Factors that may affect future operations and business prospects include, but are not limited to, clinical and scientific results and developments concerning corporate collaborations and the company’s proprietary rights and other factors described in the prospectus relating to the company’s recent public offering.

Contact Information

Dr. Claudia Gutjahr-Löser

Director Corporate Communications

MorphoSys AG

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