MorphoSys and Japanese Pharmaceutical Group Daiichi Sankyo Form Broad Alliance to Develop Novel Antibody Therapies

Martinsried/Munich, Germany, March 16, 2006 , MorphoSys AG (Frankfurt: MOR; Prime Standard Segment, TecDAX) today announced that Sankyo Company, Limited, a wholly owned subsidiary of Daiichi Sankyo Company, Limited, and MorphoSys AG have entered into a license agreement and therapeutic antibody collaboration for an initial two-year term with the option of an extension of up to three more years. Under the terms of the agreement, Daiichi Sankyo commits to start one therapeutic antibody program with MorphoSys and receives an option for further programs.

During the initial two-year term of the agreement, Daiichi Sankyo will have access to the MorphoSys HuCAL GOLD® library at its research site in Tokyo. Additionally, MorphoSys will apply its proprietary HuCAL GOLD® technology to generate antibodies against a target provided by Daiichi Sankyo. Subsequently, Daiichi Sankyo will be responsible for pre-clinical and clinical development, as well as the ensuing marketing of resulting products. MorphoSys stands to receive an upfront payment and research funding, plus licensing and milestone payments, as well as royalties on end-product sales. If extended after the initial two-year period, the contract provides Daiichi Sankyo with access to additional MorphoSys capabilities, such as target validation, antibody optimization and pre-clinical development. Such an extension would trigger an additional upfront payment and result in increased research funding for MorphoSys. Further financial details were not disclosed.

“We look forward to working closely with Daiichi Sankyo to develop novel antibody drugs,” commented Dr. Simon Moroney, Chief Executive Officer of MorphoSys. “This new therapeutic partnership with one of the leading pharmaceutical groups in Japan once again shows the potential for innovative technology such as our HuCAL GOLD® antibody library in this market.”

HuCAL GOLD® is the latest and most powerful antibody library developed by MorphoSys. The technology utilizes a unique concept for the in vitro generation of highly specific and fully human antibodies. It is ideally suited for a broad range of purposes reaching from target validation to drug development.

About DAIICHI SANKYO COMPANY, LIMITED:
DAIICHI SANKYO COMPANY, LIMITED was established on September 28, 2005 as the joint holding company of two major Japanese pharmaceutical companies - Sankyo Company, Limited and Daiichi Pharmaceutical Co., Ltd. DAIICHI SANKYO is a global pharmaceutical innovator, continuously generating innovative drugs and services and maximizing its corporate value. Sankyo and Daiichi Pharmaceutical have a broad range of major drug products on the Japanese market, including the antihypertensive Benicar® (olmesartan medoxomil) and the synthetic antibacterial agent Cravit® (levofloxacin). Both companies have used their cumulative knowledge and expertise in the field of cardiovascular disease as a foundation for developing an abundant product lineup and R&D pipeline. For further details, please refer to the company web site at www.daiichisankyo.co.jp/eng.


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 (Berkeley, California/USA), Boehringer Ingelheim (Ingelheim, Germany), Bristol-Myers Squibb (New Jersey/USA), Centocor Inc. (Malvern, Pennsylvania/USA), Daiichi Sankyo & Co., Ltd. (Osaka/Japan), GPC Biotech AG (Munich/Germany), Hoffmann-La Roche AG (Basel/Switzerland), ImmunoGen Inc. (Cambridge, Massachusetts/USA), Merck & Co., Inc. (Whitehouse Station, New Jersey/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 and 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.

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Dr. Claudia Gutjahr-Löser

Director Corporate Communications

MorphoSys

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