PLANEGG - (dpa-AFX) - Biotech company Morphosys surprisingly reduced its losses in the past quarter despite a decline in sales. Lower costs for sales, research and development provided relief, the SDax-listed company announced late Wednesday evening in Planegg near Munich. The board reaffirmed its full-year guidance and meanwhile reported growing interest in its main hopeful, pelabresib. The cancer drug is currently still undergoing tests.

Company CEO Jean-Paul Kress spoke in the release of "increasing enthusiasm" among physicians and patients regarding pelabresib. Data from a pivotal study are expected by the end of the year. The drug is currently being tested in myelofibrosis. According to the company, this is a form of blood cancer that is difficult to treat and leads, among other things, to bone marrow fibrosis. Analysts have also recently been increasingly positive about the prospects for the drug, which, as a potential first-line treatment for myelofibrosis, could become an important sales driver for Morphosys.

This is also necessary, because the profits from the blood cancer drug Monjuvi, which is the only drug Morphosys has marketed in the U.S. so far, are not enough to bring the company out of the red. In the second quarter, the drug brought in 23.6 million US dollars, the equivalent of 21.7 million euros, as in the previous year.

However, the company's total earnings fell by ten percent year-on-year to 53.2 million euros in the three months to June. This was due to a sharp drop in sales by Morphosys to its partner Incyte. The latter markets Monjuvi as Minjuvi outside the United States and, according to a spokesman, usually orders large quantities from the Bavarians, which it then sells off - so that Morphosys' revenues in this area fluctuate greatly from quarter to quarter.

Meanwhile, the board sees greater revenue potential for Monjuvi in the event of further approvals, particularly as a first-line treatment for so-called diffuse large B-cell lymphoma. Morphosys is therefore pushing ahead with research in this area, and patient enrollment for two advanced Phase 3 trials has now been fully completed, it said. In addition, Morphosys is fully focused on the expensive work on pelabresib.

In return, the group already cut 70 jobs at its headquarters this year to save costs. In the second quarter of the year, however, the associated severance payments still had an impact, and Morphosys had to shoulder higher administrative expenses, as the spokesman explained. Nevertheless, the operating loss shrank by eight percent to minus 50.5 million euros. Analysts had expected a significantly higher operating loss.

Lower expenses for external services in research and development had a positive effect on the operating result. Expenses in sales and marketing also fell, because Morphosys regularly readjusts the marketing of its products with a view to costs and takes a more focused approach.

Below the line, the net loss fell by almost 70 percent to minus 74 million euros. As at the beginning of the year, Morphosys benefited primarily from a valuation effect resulting from the reassessment of liabilities within collaborations. In addition, exchange rates had had a significant negative impact in the prior-year quarter./tav/jha/he