MorphoSys AG
Q4 2020 Earnings Call Transcript

Published: 16 Mar 2021

[Operator:]

Ladies and gentlemen, welcome to the MorphoSys Year End 2020 Conference Call. Please note that for the duration of the presentation, all participants will be in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Now, I would like to turn the conference over to you, Dr. Julia Neugebauer. Please go ahead.

[Julia Neugebauer:]

Ladies and gentlemen, good afternoon and good morning. My name is Julia Neugebauer, Senior Director, Investor Relations at MorphoSys. And it's my pleasure to welcome you to our fourth quarter and full-year 2020 financial results conference call. Joining me on the call today are Jean-Paul Kress, Chief Executive Officer; Sung Lee, Chief Financial Officer; Roland Wandeler, Chief Operating Officer; and Malte Peters, Chief Research and Development Officer.

[Jean-Paul Kress:]

Thank you, Julia. Good morning and good afternoon, and thank you for joining us today. In 2020, we delivered one of the most successful years in the company's history. It was truly a transformational year, with the accelerated approval of Monjuvi, as the first and only second-line treatment for patients with relapsed/refractory diffuse large B cell lymphoma who are not eligible for stem cell transplant. We are incredibly proud of this achievement. As this is just the beginning and we are looking forward to building momentum over time. We believe tafasitamab has the potential to transform the standard of care in DLBCL, and will lead to a paradigm shift in how patients will B cell malignancies are treated. We are looking to rapidly expand the tafasitamab opportunity through label expansion and exploring tafasitamab in combination with other approved or emerging compounds. The execution in brining this important breakthrough therapy to the market for patients has created a strong foundation for MorphoSys as in integrated commercial biopharmaceutical company. Throughout the year, we continue to progress and expand our pipeline in the areas of hematology, oncology, and autoimmune diseases. We presented very encouraging preliminary Phase 1b data from our first-line study in first-line DLBCL that paves the way to initiate our pivotal front-line study in the coming months.

[Roland Wandeler:]

Thank you, Jean-Paul, and hello everyone. Moving to slide nine, 2020 was indeed an exciting year for us, and one of our defining moments was the accelerated approval of Monjuvi in late July. From FDA approval through the end of December, we delivered on a rapid speed to market, achieving major launch milestones within days of approval. In fact, the first Monjuvi order, shipment, patient dose, and inclusion in NCCN guidelines all happened within the first 30 days following approval. We ensured rapid and robust payer access, and coverage for Monjuvi through commercial and government channels is well-established. Now, taking a closer look at Q4, the first book order for Monjuvi in the marketplace; we reported $70 million in sales for the quarter and $22 million for the year. Q4 Monjuvi sales were primarily driven by demand and also benefited from a third-party clinical trial supply order and some select NGOs inventory buying at the close of the year. The latter two factors contributed about $1 million in Monjuvi sales in Q4. Moving to slide 10, we were very encouraged by the continued traction we saw in the number of accounts ordering Monjuvi. During our last call, we shared that more than 250 sites of care had ordered by the end of October with 80% reordering. By the end of December, we saw a significant increase with cumulative orders from more than 400 sites since launch. Key academic centers continue to be strongly interested in Monjuvi, and we are seeing increased momentum in community care indicating the broad accessibility of Monjuvi for patients in both academic and community settings. Given that we are already quite advanced in first quarter, we want to share some reflections on the start of the year. After strong momentum in 2020 and while uptake in second line continues to increase, we saw the first months of 2021 impacted by two factors.

[Malte Peters:]

Thank you, Roland. As Jean-Paul and Roland have mentioned, we are very proud of all our accomplishments in 2020, highlighted by the U.S. approval of Monjuvi. We have achieved FDA approval with an innovative approach in record time with a second-line labor, which is the foundation of making Monjuvi available for many patients suffering from relapsed/refractory DLBCL. I would now like to concentrate on the outlook for this year 2021. And let me start with tafasitamab. The key areas of focus for 2021 are rapidly extending the tafasitamab opportunity by label expansion and exploring tafasitamab in combination with other approved or emerging compounds.

[Sung Lee:]

Thank you, Malte. We're pleased to share our financial results for the fourth quarter and full-year 2020. 2020 was a transformative year where we began recording net product sales for the first time and significantly strengthened our balance sheet. Moving to slide 15, Group revenues for the fourth quarter were €36 million and €327.7 million for the full-year. The fourth quarter marked the first full quarter of Monjuvi sales, which came in at €14.1 million and €18.5 million for the full-year. Royalties from net sales of Tremfya in the fourth quarter were €12.1 million and €42.5 million for the full-year. Turning to expenses, cost of sales was €9.4 million in the fourth quarter and €9.2 million for the full-year. For the full-year, cost of sales benefited €9.9 million from the reversal of inventory impairments taken in the prior-year. R&D expenses in the fourth quarter were €54.8 million and €141.4 million for the full-year. Growth over 2019 reflects primarily the increased investment to support the advancement of our proprietary programs and impairment charges taken against legacy deals. SG&A expenses in the fourth quarter were €47 million and €159.1 million for the full-year. The full-year growth was anticipated and driven by the build out of the commercial infrastructure to prepare for and launch Monjuvi and investments to support the overall growth of the business. For 2020, we reported a consolidated net profit of €97.9 million compared to a net loss of €103 million in 2019. Profitability in 2020 was driven primarily by the recognition of €236.1 million as part of the upfront consideration from our partner Incyte. We ended the year with a liquidity position of more than €1.2 billion compared to €357.4 million at the end of 2019. With our strong balance sheet and cash position, we're well capitalized to execute on our growth strategy. Turning to our guidance for 2021 on slide 16, we anticipate group revenues to be in the range of €150 million to €200 million. This forecast includes the recently announced €16 million milestone payments from GSK. The range also captures the potential for variability from the first full-year of the Monjuvi product launch and the impact from the pandemic, which we believe will be greater in the first-half of this year. Operating expenses, inclusive of Incyte's share of Monjuvi selling costs, are anticipated to be in the range of €355 million to €385 million, with R&D expenses expected to comprise 45% to 50% of this range. R&D investments will be focused on the continued development of tafasitamab and felzartamab, early-stage development programs, and further development of our technologies. As our income statement evolves due to the growth and prominence of certain categories, we will adapt accordingly, and provide guidance on the measures we believe are helpful to the investment community. This could include net product sales in the future. Back to you, Jean-Paul.

[Jean-Paul Kress:]

Thank you, Sung. Before we go to the Q&A session, I wanted to take a moment to thank all of our colleagues and partners for their commitment and dedication during what has been unprecedented time during the COVID-19 pandemic over the past year. I am incredibly proud of what we were able to achieve, and the momentum we were able to build for the benefit of patients in the context. Thank you. We look forward to building upon the important milestones we accomplished in 2020, and executing on our strategic roadmap. We will now take your questions. Operator?

[Operator:]

Ladies and Gentlemen, we will now begin the question-and-answer session. The first question is by Geoffrey Porges.

[Geoffrey Porges:]

Thank you very much. Appreciate the questions and the clarity. So, a couple for Sung, if we could, on the guidance, so first, dumb question, but is your operating expense guidance including cost of goods. Secondly, is your gross margin profile for Q4 likely to be where you will be going forward? And then, just in terms of your SG&A, it implies that your SG&A is roughly going to be flat at the fourth quarter level, I believe. So I just want to clarify that. And then lastly, if you do secure approval in the EU for Monjuvi, would you expect there to be a milestone payment? Thank you.

[Sung Lee:]

Great. Geoff, thanks for all those questions. And please remind me if I have skipped one. But your first question, about COG, that is not part of our operating expense. So just to be clear, operating expense is R&D and SG&A expenses. In terms of gross margin percent, I think this will be relatively stable as we're exiting last year. We don't see that much variability this year. And I can even provide some additional color on that. For this year, you can expect it to be in the mid-to-high 70s, okay. And that's product gross margin. In terms of sales expenses or SG&A, you had mentioned that Q4 -- could we expect it to be basically the run rate of Q4. I think you're thinking about it the right way. And basically, as the increase in SG&A is largely driven by the full-year impact of the Monjuvi selling expenses. And these were not built at the same time in 2020. So, there's a staggering effect in 2020 and we just expect to see the full-year impact of that. And then in terms of milestones, for the potential approval of Monjuvi in the EU, I think is a very important question, and I'd like to make this very clear. That event, of potential approval of Monjuvi in the EU, does not trigger any milestone payments to MorphoSys. Further to that, the initiation of the front-line study for first-line DLBCL, that also would not trigger a milestone to MorphoSys. And just to wrap up the response, I think the last two points, the milestones. As I've come into my seat and taken a fresh look at the various estimates out there in the investor community, that seemed to be the biggest area of disconnect. So, hopefully by this communication today, it demystifies the milestone story for this year.

[Geoffrey Porges:]

Great. Thanks so much, Sung, and congratulations.

[Sung Lee:]

Great, thank you.

[Operator:]

The next question is by James Gordon from JPMorgan.

[James Gordon:]

Hello, James Gordon, JPMorgan. Thanks for taking the questions. The first one just on Monjuvi and the '21 implied U.S. revenue outlook. Since the guidance, if I understand it right, seems to imply that Monjuvi should do something like €65 million to €115 million for the year, and the bottom end of that seems to be only about 15% above annualizing what you already did in Q4. So, there are two questions. One is, heard the comments on Q1 headwind, do you actually think Q1 is going to see any growth on Q4 or could Q1 even be flat or down based on what you're seeing? I heard comments on COVID and winter storm. And for the full-year, what are you assuming about how long COVID headwinds persist for, do you think things are going to get a lot better in the second-half, or is the guidance assuming things as bad for COVID as is Q1 for the whole year? And more longer-term on Monjuvi, so I know there was a guidance before, that Monjuvi was going to hit a peak in the U.S. in refractory patients with $500 million to $750 million. I didn't see that side on the slide. So, is that being reiterated today or are you being a bit more cautious there for various reasons, including maybe competition from CD3, CD20s, or anything else? And then just the second question would be Polivy and the Polaris first-line data coming up from Roche. So, in the event that we do get positive data there over the next few months in front-line DLBCL, what do you think that means for Monjuvi? Does that reduce the opportunity in refractory patients at all? Any thoughts like what that could mean, please?

[Jean-Paul Kress:]

So, James, thanks for your question. This is Jean-Paul. I'll address two and three, and Roland will come back to the Monjuvi 2021 sales. Regarding peak sales, the $500 million to $750 million you're mentioning is still our assumption. And, of course, putting some caveats on potential market share and mark evolution, this is what we have in mind now. And also, bear in mind, this is for the current indication in the United States. So, if you count on potential other territories, we should be north of 1 billion for this indication. And obviously, this doesn't include potential line extensions, other indications, and potential combinations, because, as we stated a couple of times, really important to keep in mind that part of the great potential of Monjuvi, as we see it, is the backbone strategy when we will combine with other modalities, starting with obviously, but also with the Xencor bispecific, and potentially other modalities and compounds. In terms of your question on another event for first-line, we don't really comment on competition. That being said, obviously, we watch this space very closely. And we are extremely confident in our approach for first-line based on the strengths of our regimen; probably the efficacy durability combined with our safety and convenience make us very confident that we can be a key player in first-line regardless of other events. And again, this is good news for the patients, that there will be a couple of regimen in this indication. And last, but not least, it speaks to the size of the opportunity in first-line. Bear in mind that there is 30,000 new U.S. patients every year in first-line, so no wonder why there are a couple of companies trying to cut the cord here. But again, we remain very, very confident in our approach. And Malte could elaborate on why so in the future, but I'd like to address your first question on Monjuvi for the year, and Roland will address that.

[Roland Wandeler:]

Yes, thank you, James. Speaking about Q1, our quarter of course still ongoing and we look forward to sharing the results for Q1 shortly. We just thought that, given that we're quite forward into the quarter already, it was worth to give a heads-up regarding COVID impact and winter storm, and also to share the continued positive feedback that we're hearing from prescribers around the profile for Monjuvi, and especially those prescribers that have seen our long-term data, at ASH, for second-line patients, how intrigued they are with the duration of response. Looking at the rest of this year, and at COVID, with vaccinations hopefully gaining more traction as we move forward, our team is prepared to engage healthcare professionals increasingly in person from the middle of this year, which will be important, especially with the new data that we look forward to sharing at medical conferences, in summer. And as you think about the uptake of Monjuvi, as we said before, expect a gradual build. We spoke about the 10,000 patients in the U.S., therefore, 5,000 in second-line, where we're the only ones that are approved. We are looking at an increase uptake in those second-line patients. And also, as we continue to have traction in second-line, we expect that the average duration of response, which of course is shorter in late-line patients, will continue to build over time. So, all of this ladders up to what Jean-Paul just shared regarding our outlook and potential that we see for Monjuvi, and how we are looking at this year. Okay, next question, operator?

[Operator:]

The next question is by Graig Suvannavejh from Goldman Sachs. Your line is open now.

[Graig Suvannavejh:]

Thank you very much. Good afternoon and good morning. Thanks for taking my questions, I've got three. My first is on Monjuvi, I believe current consensus for 2021 is about €125 million for Monjuvi. I just wanted to know if you would comment on whether the company is comfortable with that current consensus number. So that's my first question. My second question just is on the OpEx guidance for the year, and I just want to make sure that I'm not missing anything. I believe that the fourth quarter OpEx was about €111 million in total OpEx, and -- but the guidance for the year is €355 million to €385 million, so just wondering if you could reconcile if you annualize fourth quarter over €400 million, and so I just wanted to maybe get some more clarity as to how we should be thinking about SG&A and R&D. So that's my second question. And then my third question just has to do with felzartamab and the data that we're expecting. Are you comfortable this time sharing like if you do get positive data, what the potential of that asset is in other autoimmune indications, whether you've got already, internally, a list of five or 10 indications that you think felzartamab would be potentially appropriate for? Thanks.

[Jean-Paul Kress:]

Thanks, Graig. This is Jean-Paul. Sung will take the two first questions, and I and Roland here will take the other.

[Roland Wandeler:]

Okay, great, thanks Jean-Paul. And appreciate the question. With regard to your question on the consensus Monjuvi estimates out there, obviously we come out with guidance. And obviously, there has been a reaction. And I've seen many follow-up or notes written with new ranges. I'll just simply refer you to slide 16, because I think we've laid out the revenue guidance there pretty well, where you can back into a reasonable range. For instance, the low end of our range, €150 million, the high end, €200 million; we have stated that this is inclusive of the $16 million milestone that was triggered for otilimab from GSK. We have also said that we expect moderate year-over-year growth for Tremfya. And, of course, lots here, the royalties here €42.5 million. So, we expect again, moderate growth. The range does not include any other significant milestones. And as I mentioned in my first response to Geoff's question, we are not expecting any outside milestone for EU approval or the initiation of the front-line study. Now, with all those components given, I think you can reasonably get to a range. And I would say, this range, we're very comfortable with. Given, in the backdrop of COVID, we have to make sure that we accounted for a situation that persists into the second-half. And also, you have the first year of launch of Monjuvi, which comes with its own variability. So, this is a range we're comfortable with. With regard to your question on OpEx and the reconciliation of the Q4 as a proxy, Q4 operating expense was just shy of €102 million. There are some one-timers in there. So, if you back those out, that's basically how you get to a lower operating expense, vis-à-vis a run rate from Q4. So, I hope that gives you some additional color.

[Graig Suvannavejh:]

Great, thank you.

[Jean-Paul Kress:]

Regarding your question on felzartamab, basically we have, as you know, we have started to pioneer on our mutual indication autoimmune response on membranous nephropathy and we're close to proof-of-concept here, we're actually ready to roll out pending proof-of-concept in this first indication to roll out other indications in a disciplined way based on developments visibility, unmet need, competitive intensity, and obviously commercial potential. Again, this modality in autoimmune diseases makes a lot of sense, because we act on the plasma cells which produce the pathogenic auto antibody, and we're very encouraged with what we've seen already in our proof-of-concept study. And we hope we can communicate on that in the next couple of months.

[Graig Suvannavejh:]

Okay, thank you.

[Operator:]

The next question is by James Quigley from Morgan Stanley.

[James Quigley:]

Hello, thank you for taking my questions. I've got three, please. So on the frontMIND, you mentioned the study starts in the next couple of months, but we've known the study design for quite a while since then, back into last year at your Monjuvi experts, when can we expect to start the drug start, if any delay purely down to COVID? And the Polarex trial you're going to be reading out in the next couple of months as well. So, are you potentially looking for, or waiting to look at what could happen there could be design of frontMIND change with the results of Polarex, that's number one. Number two, on the milestones for Monjuvi, could you give us an idea of what could you get the milestones, so it sounds like there's not a lot coming in 2021? Are the milestones, are the regulatory milestones, are they pretty much attached to approvals in front-line DLBCL, and other indications. And thirdly, on your backbone strategy for Monjuvi, since obviously the Incyte deal and the Xencor deal there hadn't been a lot of activity in terms of combinations, you mentioned carry. But is it going to be on you to start a trial sort of a basket trial of potential combinations with the other CD20 assets with the other ADCs to sort of kick start that process? Or could we be hearing something later on in the year with other combinations? Thank you.

[Jean-Paul Kress:]

Thank you, James. Malte will take question one on frontMIND and question three on the backbone and Sung will come back for your milestone question for Monjuvi.

[Malte Peters:]

Yes, thanks, Jean-Paul. Just reiterating, we're quite excited about the upcoming start of frontMIND, we're on track and we remember last time we spoke publicly, we highlighted that we would start frontMIND in the first-half of this year and we're fully on track to accomplish this. In terms of our excitement about frontMIND, we believe we have really found an optimal design of the study, combining ours with actually two targeted immunomodulatory agents tafasitamab and lenalidomide, we are very closely watching the time it requires to start treatments, we'll use good lenalidomide dose, we're concentrating on patients who are in most need of an approved treatments, namely the IPI 3 to 5 patients. And we're really encouraged by our preliminary data of firstMIND, which we have shot at ASH with an overall response rate of over 90%. And lastly, currently, we're the only meaningful Phase 3 study in front-line DLBCL. So we expect actually a very high degree of excitement regarding our frontMIND program. So with this, maybe I turn back to Jean-Paul for the second question.

[Jean-Paul Kress:]

Well, Malte the second question, the third question from James was on the backbone and I'll ask you.

[Malte Peters:]

Okay, good. So, let me take that as well. Again, we're really proud and also excited about the interactions, we have made with Xencor and also with other companies regarding new and exciting combination programs, including CD20CD3 assets. The reason we started actually with Xencor was that we know Xencor very well; we have a very good and long standing and trustworthy relationship. And we're now in the process of evaluating other potential combination partners. And we take this one step at a time, a basket trial would be probably difficult because the other agents that you have mentioned are not yet approved. That's why we will probably look at collaboration agreements with other companies if the opportunities arise.

[Sung Lee:]

Thanks, Malte. Okay, with regard to your question on milestones for Tafa, recall when we did this deal, it included a large upfront, along with the eligibility of $1.1 billion for regulatory and commercial milestones. And I just called out two that are not included of that $1.1 billion. To the extent that we enter a year and a milestone is significant for that year, we could talk about these because obviously, it would be material to our company in that year, but just wanting to respect the confidentiality of our agreement with our partner, I'm going to have to leave the details for the appropriate time. But I hope by clarifying the physician on the potential two catalysts this year, it kind of helps you with your modeling.

[James Quigley:]

That's great. Thank you.

[Jean-Paul Kress:]

Next question, please.

[Operator:]

The next question is by Vineet Agrawal from Citibank. Your line is open now sir.

[Vineet Agrawal:]

Yes, hi. Thanks for taking my questions. Three please. So first is the clarification on OpEx. So, I think on slide 16, we can see that the OpEx of $309.7 million for 2020 includes COGS of about $9 million, but you're saying that is excluded from 2021 guidance. So just wanted to confirm if you're changing the way you define OpEx and then second on R&D, Incyte has disclosed $88 million costs related to Monjuvi development for 2020. And obviously, that's the 55% share, but is it for full-year or it's from the date the deal got completed that is sometime in March. And the last question is on your last slide, you didn't include the Xencor royalty, if you could just clarify where it sits within the Monjuvi P&L?

[Sung Lee:]

Sure. So, this is Sung, yes, that's a very astute observation on OpEx. So the classical definition of that I'll just define OpEx with its R&D expense and SG&A expense. And I provided separate color on cost of goods sold, or gross margin I should say, with regard to Monjuvi. So it's separated. So, I can confirm that. OpEx again, does not include any elements of cost of goods sold or cost of sales. Okay, with regard to your question on the Tafa R&D, I think you were talking about reimbursement the 55

[Vineet Agrawal:]

All right, yes, I mean, so okay, yes, okay fair enough. That's it. Thanks.

[Operator:]

The next question is by Etzer Darout from Guggenheim Securities.

[Paul Jeng:]

Hi, this is Paul on for Etzer. Thanks for taking our questions. On Felzartamab, I wanted to ask about the rationale for the DOSING schedule as you're investigating in the new place trial, and sort of how you anticipate the results of this study and place altogether informing, thinking about next development steps and in the property. And also just a clarifying question will be M-PLACE data most likely be at a medical meeting or more of a company belief? Thanks.

[Jean-Paul Kress:]

Thanks, Paul. Malte will take your question.

[Malte Peters:]

Yes, the development strategy of conducting, scheduling, finding or defining studies in parallel to the sort of proof of concept study is actually quite normal in the autoimmune development worlds. So, we are on purpose doing this in parallel, so that we not only get confidence on the activity of this program in a significant autoimmune indication, but at the same time develop the best schedule going forward. And as its public information, you can see it in 10 for 5. So we're comparing two different schedules, differing by the amount of different doses over time and that help guide us to provide actually the best and most convenient treatment schedule for patients. With respect to your second question of when and how we were communicating the data, we haven't really made up our minds. I think it depends a bit on how fast we progress on looking at the data, cleaning them as you know, so we will do this as quickly as we can. We expect to have data on the first-half of this year, but again, then it depends a little bit on what the sequence and cadence is also meetings, but we will share this as soon as we can.

[Paul Jeng:]

Great, thanks a lot.

[Operator:]

The next question is from Zhiqiang Shu from Berenberg.

[Zhiqiang Shu:]

[,:]

[Jean-Paul Kress:]

Hi, this is Jean-Paul. I answered your question on salsa, and the potential partnership question on Monjuvi, and then certainly we close on the financial question. So, felzartamab, we have the opportunity now to really strengthen and build our own portfolio coming out of this loan years of licensing of partner business, and the intent is to obviously retain the economics we set up felzartamab, we have the whole economics all the asset, but we might establish a commercial partnership in the future, depending on the indications. Imagine we needed to tackle a legit target or universe with this first indication we might. We might decide to partner with either company with a presence in ecology. Nothing is decided, but we havethe optionality and we have the complete control on the asset. Roland, please and the question on second-line .

[Roland Wandeler:]

Yes. On Monjuvi, real-world usage as you would expect in any launch in hematology, there are physicians that are having an initial trial of the medicine for later line, the last line patients that have run out of options. We've seen this happening. Having said that, over these last months, we are very encouraged, pleased with the uptake that we see in second-line, where we are the only approved regimen for patients and especially in the community setting that offers a very attractive opportunity for patients and for healthcare professional. So, we're very pleased with what we're seeing in terms of the transition going into second-line, where we also expect treatment durations to be longer in line with the long-term data that we are sharing. As for the usage before and after I think that Malte perhaps give us a bit more color and share with more color there.

[Malte Peters:]

Yes, thanks, Roland. So, we actually see both. We actually see Monjuvi used before and after CAR-T treatment, which I think also make sense from a scientific and clinical data perspective. We have -- we are in the process of also sharing data regarding the CD19 expression. So that we can gain confidence inside and also outside that the CD19 target actually remains intact upon longer-term treatment with Monjuvi. So that's a very important information, but in the real words sketching as you asked, we are actually quite contend and also excited that's doctors use Monjuvi before and also after CAR-T treatment.

[Roland Wandeler:]

Okay. And I think you had a question on the recognition of milestones from Incyte, treatment. Generally these milestones are recognized when they're earned and they're paid in a lump sum generally speaking. So I don't see anything unique about these milestone, so hopefully that answers your question.

[Zhiqiang Shu:]

Thank you.

[Jean-Paul Kress:]

I think we are -- Okay. Next question, please.

[Operator:]

The next question is by Daniel .

[Unidentified Analyst:]

Yes. Hi, it's Daniel . Thanks for taking my question. One further clarification question on the guidance, and so, is with any Monjuvi revenue coming out of Europe also in form as a loyalty included in this guidance at all. And that would be my first question. And the second question is on Monjuvi market launch in U.S. Is it fair to assume that I interpret your comments with regards to the impact of the Corona as well as the winter storms in U.S. that, that March, April, maybe also May might also be more complicated quarters in terms of the launch. And that's my second question. And my last question on Tremfya royalties and then the moderate year-on-year growth you have included in your guidance for 2021. And the product was also approved in Europe for psoriatic arthritis. Is that now a more normal growth rate or the status of that product or why is that not stronger? Thank you.

[Jean-Paul Kress:]

Thank you, Daniel. I'll take question two on the Monjuvi launch. Look, as we said several times during the COVID at early days, and we launched in the middle of the pandemic. So we've focusing on execution on the launch, but I mean, bearing in mind that we are so focused also on and looking the long-term potential of Monjuvi. And you wanted a couple of examples this morning with . We have so many opportunities with the pipeline, Monjuvi as a backbone, Monjuvi as a product, felzartamab, earlier R&D and obviously potential external of proximity. So, I'll encourage you to stay tune and hang with us as we're navigating the context, but it doesn't affect the long-term perspective Monjuvi in our opinion. Now, I'll pass to Sung for the question on the guidance.

[Sung Lee:]

Right. So, I think your first question was, have we baked in any royalty revenue from potential EU sales of Monjuvi, and the answer is simply is no. Obviously when that event happens we'll have greater certainty. Your other question was with regard to Tremfya growth, and I just referring slide 16 where we've characterized it as we expect moderate growth. And I think your question is why not more. Well, simply I think definitions of moderate vary, but certainly this is not something we want to be aggressive on because we receive as much information as you do with regard to Tremfya sales up there. And obviously, in 2020 it did $1.3 billion, so it's blockbuster status. The year before, $1 billion, and it seems like with the amount of studies our partner is conducting and the footprint expansion for Tremfya, this continues to have a runway. But it's certainly is not something we have tremendous visibility into. And again, we do not receive any detailed forecast from our partner. And we are working with as much information that is available to the public. And this is not something that the company needs to be super aggressive on.

[Unidentified Analyst:]

All right. Thank you.

[Operator:]

The next question is by Jason Butler from JMP Securities.

[Jason Butler:]

Hi, thanks for taking the question. Just on the M-PLACE study in this first data readout we get, would we get Proteinuria data as well as immunological response? And if we do, can you help us benchmark the kind of response there we look for? Is there anything that's relevant from studies, for example, or steroids that you point us to as a benchmark for Proteinuria response? And then, follow-up, Jean-Paul, just at the beginning of our prepared comments, you talked about bispecific is important to the long-term strategy. Obviously you had partnership with Xencor, but you maybe just talk about your internal plans for bispecific development? Thanks.

[Jean-Paul Kress:]

Thank you, Jason. Actually, I will let Malte answer the two parts of the -- the two questions.

[Malte Peters:]

So, let me start with the first question on M-PLACE. Yes, we are of course monitoring the autoantibody titers in conjunction with Proteinuria data. And as you may know, the Proteinuria data come roughly six to nine months after you see the first drop in autoantibody titers, that's just by normal process of how kidney reacts to the disappearance of the pathogenic autoantibody. So that's why we hope to have as many data for Proteinuria as possible. But we certainly have immunological data and for proportion of patients for sure are supported by Proteinuria data. With respect to the comparison or benchmarking too, we took them up that's actually quite difficult to make sort of a cross product comparison because recall that in our trail -- in the M-PLACE trial, a significant focus is on patients who would have almost zero probability to respond to tafasitamab because they have such high autoantibody titer. So, that's a difficult situation to give a good benchmarking comparison. But I think with respect to the anecdotal information we receive from other anti-CD38 antibodies in similar diseases and with respect to what we have seen in our multiple myeloma studies regarding autoantibody production, antibody production, we are really confident and optimistic that we actually score extremely high and have a very competitive product.

[Jean-Paul Kress:]

And Jason, for your third question on bispecific, we have a series of -- I'll take that first. We have a series of candidates actually in our research pipeline, bispecific -- novel generation of bispecific, the Hemibody technology on and the CyCAT platform. So, yes, we are obviously looking at what makes sense here, trying to overcome the current challenges of bispecific, especially in terms of safety and tolerability.

[Operator:]

Thank you. We have no further questions coming through, so I will now hand back over to Dr. Julia Neugebauer to wrap up today's call.

[Julia Neugebauer:]

Ladies and gentlemen, this concludes today's conference all. If any of you would like to follow-up, the Investor Relations team of MorphoSys is available for the remainder of day. Once again, thank you for joining our call. Have a good day, and goodbye.

[Operator:]

Ladies and gentlemen, thank for you attendance. This call has been concluded. You may disconnect.