Report
Expert Corporate Governance Service (ECGS)
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MorphoSys – AGM 27 May 2020

General: The AGM is to be held in the form of a virtual AGM in accordance with the German Law to Mitigate the Consequences of the COVID-19 Pandemic. The physical presence of shareholders or their authorised proxies is not possible. The voting rights may therefore be exercised solely by postal vote or by granting authority to the proxies designated by the Company.

 

MorphoSys is a clinical-stage biopharmaceutical company dedicated to the discovery, development and commercialisation of innovative therapies for patients suffering from serious diseases. The focus is on cancer. Based on its leading expertise in antibody, protein and peptide technologies, the Company, together with its partners, has developed and contributed to the development of more than 100 product candidates, 28 of which are currently in clinical development. In 2017, Tremfya, marketed by Janssen for the treatment of plaque psoriasis, became the first drug based on MorphoSys' antibody technology to receive regulatory approval. The Company's most advanced proprietary product candidate, tafasitamab, is in late-stage clinical development for the treatment of patients with relapsed/refractory diffuse large B-cell lymphoma (r/r DLBCL).

 

The Company has issued 32,890,046 shares that amount to a share capital of EUR 32,890,046. As of 28 April 2020, BlackRock Inc. held between 5% and 10% and FMR LLC held between 3% and 5% of the Company's shares.

 

In financial year 2019, Group revenues decreased by 6.1% to EUR 71.8m and EBIT decreased by 82.6% to EUR -107.9m. For the financial year 2020, MorphoSys expects Group revenues in the range of EUR 280m to 290m. R&D expenses for proprietary drug development are expected to rise to EUR 130m to 140m. EBIT is expected in a range of between EUR -15m and -5m.

 

Item 4: PwC, Munich, is proposed as auditor for the current financial year. Ratio of non-audit/audit fees was 36.51% during the year under review and 76.67% over a three-year aggregate period which exceeds our guidelines. We therefore recommend opposing the proposal.

 

Item 8: The Company's Articles of Association shall be amended in order to allow for the participation of Supervisory Board members in the AGM by means of video and audio transmission in certain exceptional cases. ECGS considers the personal attendance of Supervisory Board members in the AGM as best practice. As the proposed cases for an attendance by means of video and audio transmission are deemed to be too extensive and unjustified, we recommend opposition.

 

Item 11: We recommend to oppose the Stock Option Plan 2020 as we do not consider its performance targets as challenging enough.

Underlying
MorphoSys AG

MorphoSys is engaged in development and commercialization of antibodies for therapeutic applications. Co. operates in two segments: Partnered Discovery, which operates therapeutic development programs for drug candidates in cooperation with biotechnology and pharmaceutical companies; and Proprietary Development, which is engaged in the development of therapeutic antibodies in the area of inflammatory disease and oncology on a proprietary basis. As of Dec 31 2013, Co.'s proprietary antibody compounds in clinical trials included MOR103 in the areas of rheumatoid arthritis and multiple sclerosis; MOR202 in the field of multiple myeloma; and MOR208 in the field of malignant B-cell diseases.

Provider
Proxinvest
Proxinvest

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Expert Corporate Governance Service (ECGS)

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