Antibody therapeutics targeting GPCRs to be developed by alliance between MorphoSys and Heptares

MorphoSys AG (FSE: MOR; Prime Standard Segment, TecDAX) and UK-based Heptares Therapeutics, the leading GPCR drug discovery and development company, have signed an agreement to discover novel antibody therapeutics targeting G protein-coupled receptors (GPCRs), which are membrane proteins involved in a broad range of biological processes and diseases.

"GPCRs comprise the single largest class of targets for pharmaceuticals currently on the market. Technical challenges have meant that GPCRs have been largely intractable to therapeutic antibody development. We believe that by combining Heptares' unique StaR^® platform for generating stable GPCRs as antigens with our antibody discovery technology, we will be able to unlock the immense potential of therapeutic antibodies against GPCRs," commented Dr. Simon Moroney, Chief Executive Officer of MorphoSys AG.

"By creating StaRs, we believe we have overcome a major challenge facing small molecule and biologics discovery efforts focused on GPCRs. This has enabled us to create partnerships with leading pharma and biotech companies in both areas as well as to advance our own pipeline. We are therefore very excited to sign this new partnership with MorphoSys, one of the world's most advanced antibody therapeutic companies, to further leverage the power of our StaR^® technology into the antibody space," said Malcolm Weir, Chief Executive Officer of Heptares.

Under the terms of the agreement, Heptares will generate stabilized receptors (StaRs) for a set of GPCR disease targets proposed by MorphoSys. MorphoSys will then apply its Ylanthia antibody library to discover and develop antibody therapeutics against these StaRs. MorphoSys has the right to sublicense to third parties access to these targets in conjunction with therapeutic antibody candidates. Heptares will receive upfront and research funding payments, plus a share of future sublicensing revenues generated by MorphoSys. Heptares also chose Ylanthia to develop and commercialize one therapeutic antibody created by MorphoSys against a GPCR target selected by Heptares. In this case, MorphoSys is eligible to receive license fees, milestones and royalties on any Ylanthia antibody developed by Heptares.

Heptares' StaRs offer a breakthrough solution to the main challenge associated with making antibodies against GPCRs, namely producing purified and properly folded protein for use as an antigen against which antibodies are raised. StaRs enable antibody discovery by stabilizing the GPCR protein outside the cellular membrane in the correct conformation. StaRs preserve biologically relevant epitopes thereby enabling generation of a diverse panel of functional antibodies. This has previously proved very difficult for GPCRs, which lose their conformational and functional integrity when removed from their natural environment in cell membranes.

MorphoSys's Ylanthia antibody library comprises more than 100 billion distinct, fully human antibodies, which makes it the industry's largest known antibody Fab library. Ylanthia's genetic composition translates into unprecedented structural diversity of the antibodies and offers optimized developability features. The library's diversity is expected to result in antibodies against previously inaccessible target molecules and to provide unique epitope coverage.

The GPCR superfamily is the largest and single most important family of drug targets in the human body. It plays a central role in many biological processes and is linked to a wide range of disease areas. GPCRs are expressed in every type of cell in the body where their function is to transmit signals from outside the cell across the membrane to signaling pathways within the cell, between cells and between organ systems. There are over 375 non-chemosensory GPCRs encoded in the human genome, of which 225 have known ligands and 150 are orphan targets. GPCRs are the site of action of 25-30% of currently approved drugs. Six of the top ten and 60 of the top 200 best-selling drugs in the US in 2010 target GPCRs. Seven of 37 drugs approved in 2012 by the US Food & Drug Administration target GPCRs. By the end of 2012, 37 therapeutic antibodies had been approved and are being marketed in countries around the world. However, to date only one GPCR-targeting antibody has been approved.

About MorphoSys:

MorphoSys developed HuCAL, the most successful antibody library technology in the pharmaceutical industry. By successfully applying this and other patented technologies, MorphoSys has become a leader in the field of therapeutic antibodies, one of the fastest-growing drug classes in human healthcare.

Together with its pharmaceutical partners, MorphoSys has built a therapeutic pipeline of more than 70 human antibody drug candidates for the treatment of cancer, rheumatoid arthritis, and Alzheimer's disease, to name just a few. With its ongoing commitment to new antibody technology and drug development, MorphoSys is focused on making the healthcare products of tomorrow. MorphoSys is listed on the Frankfurt Stock Exchange under the symbol MOR. For regular updates about MorphoSys, visit http://www.morphosys.com.

About Heptares Therapeutics:

Heptares creates new medicines targeting clinically important, yet historically challenging, GPCRs (G protein-coupled receptors), a superfamily of drug receptors linked to a wide range of human diseases. Leveraging our advanced structure-based drug design technology platform, we have built an exciting discovery and development pipeline of novel drug candidates, which have the potential to transform the treatment of serious diseases, including Alzheimer's disease, Parkinson's disease, schizophrenia, migraine and diabetes. Our pharmaceutical partners include Shire, AstraZeneca, MedImmune, Takeda, Cubist and MorphoSys, and we are backed by MVM Life Science Partners, Clarus Ventures, Novartis Venture Fund and Takeda Ventures. To learn more about Heptares, please visit www.heptares.com.