MorphoSys AG

XETRA:MOR

Earnings Call Transcript 2018-Q1

[Operator]

Ladies and gentlemen, welcome to the MorphoSys Quarterly Results Conference Call. [Operator Instructions]Now I would like to turn the conference over to Alexandra Goller. Please go ahead.

[Alexandra Goller, Associate Director Corporate Communications & IR]

Good afternoon, good morning, and welcome to our Q1 2018 conference call and webcast. My name is Alexandra Goller, Associate Director, Corporate Communications and Investor Relations at MorphoSys.With me on the call today are Simon Moroney, our CEO; and Jens Holstein, our CFO.Before we start, I would like to remind you that during this conference call, we will present and discuss certain forward-looking statements concerning the development of MorphoSys' core technologies, the progress of its current research and development programs and the initiation of additional programs. Should actual conditions differ from the company's assumptions, actual results and actions may differ from those anticipated. You are, therefore, cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof.Simon will start by giving you an operational review of the first quarter and main events after the end of the reporting period as well as an outlook for the rest of this year. After that, Jens will review the financial results for the first quarter. The presentation will last about 20 minutes. After the presentation, we will be available for your questions. You will find a slide deck on our corporate website.I would now like to hand over to Simon Moroney.

[Simon E. Moroney]

Thank you, Alex, and also from me, a warm welcome to the call.The first few months of the year have been extremely positive for MorphoSys. Progress in our pipeline was strong, led by important developments in our lead program MOR208. Our royalty participation in Janssen's Tremfya, guselkumab, is growing as new country approvals are added. And just after the quarter ended, we executed a very successful NASDAQ IPO, strengthening our balance sheet and broadening our U.S. shareholder base. Jens will talk about the NASDAQ listing later, but let me briefly comment on it here, as we know it came as a surprise to some of you.MOR208 have a lot to do with our decision to list in the U.S. Armed with breakthrough therapy designation from the FDA and now with a clear view of the path to market, we decided to focus on commercializing MOR208 in the U.S. and plan to build an organization there for this purpose. This was a clear message to investors and the NASDAQ IPO, which was well received and contributed to such as a smooth and successful offering.With that, I'll now move into the review of the quarter starting with MOR208. As a brief reminder, we are currently investigating MOR208 in 2 types of B-cell malignancies, relapsed or refractory DLBCL and BTK inhibitor refractory or intolerant CLL and SLL. Our current focus is on patients with relapsed or refractory DLBCL who are ineligible for high-dose chemotherapy and autologous stem cell transplantation.We see a particularly high unmet medical need for this patient group and are currently conducting 2 trials in this setting, namely L-MIND and B-MIND. In our year-end results call 2 months ago, we presented updated L-MIND data based on a new cutoff date of December 12, 2017. We also reported from our talks through the FDA under the current breakthrough therapy designation. Without going through those results again, we're very encouraged by the excellent response rates we saw and particularly by the duration of those responses. Recall that the median progression-free survival seen in these relapsed or refractory DLBCL patients receiving a combination of MOR208 and lenalidomide was not reached, but the PFS rate of 12 months was 50.4%.We're very pleased that these data, based on 68 patients available for efficacy assessment, are very much in line with those from an earlier cutoff at 44 patients, which were presented at ASH 2017.We've been encouraged by our interactions with the FDA and believe that when it's completed, L-MIND could form the basis for regulatory filing and approval in the U.S. This expectation is behind our current planning, which is as follows.The 81st and last patient into the trial was recruited in November of last year. With 12 months of follow-up, we'll have a database lock at the end of this year with full data expected in the first half of next year. For this reason, we may not submit data from L-MIND for release of ASH this year, but we'll keep you posted if this should change. As you can imagine, we're more focused on doing the right things to support the regulatory submission than we are on early publication. The rate-limiting step on the path to submission is currently manufacturing. This apparently often happens to companies receiving breakthrough therapy designation.We have a robust and well-established process running at a leading commercial contract manufacturer and are now producing at commercial scale, but the need to validate the process over multiple runs will take time. We hope to undertake a rolling submission to the FDA with the last part of the package being available late next year, which means an approval assuming, of course, a satisfactory data package could be expected in the first half of 2020.We're planning to start commercializing in the U.S. -- commercialization in the U.S. according to this time line. We've initiated the search for key senior positions and will set up the U.S. affiliate shortly. We also see potential for MOR208 and other lines of DLBCL treatment and in other B-cell malignancies. We're, therefore, evaluating additional trials with a goal of expanding a potential MOR208 franchise and making this promising agent available to as many patients as possible. We expect to be able to communicate our plans for further development of MOR208 in the second half of this year.Meanwhile, the B-MIND trial continues as per plan. Recall that this is a Phase III study evaluating MOR208 plus bendamustine versus rituximab plus bendamustine in relapsed or refractory DLBCL. We're currently anticipating completion of this trial late next year.The third MOR208 clinical trial is COSMOS, which is looking at MOR208 plus idelalisib or venetoclax in CLL or SLL. Here we have completed recruitment of the idelalisib cohort and hope to complete enrollment of the venetoclax cohort soon. We'll present data from this trial at one or more appropriate medical conferences later this year.Last week, we were notified that we have been accepted for poster presentation of data from the patient cohort treated with MOR208 plus idelalisib at the upcoming European Hematology Association Conference in June of this year.Let me now switch to MOR202, our proprietary anti-CD38 antibody in development for the treatment of multiple myeloma. We're currently in the final stage of our ongoing Phase I/IIa study of MOR208 with low-dose dexamethasone either alone or in combination with pomalidomide or lenalidomide in relapsed or refractory multiple myeloma. We completed patient enrollment in the middle of last year and we expect to report data at one or more medical conferences later this year. One of these will be the EHA conference in June. We were notified a few days ago that we will have an oral presentation of data from the trial at that meeting.We expect our Chinese partner I-Mab Biopharma will start the clinical development of MOR202 in multiple myeloma in China by the end of this year. Meanwhile, we continue to evaluate potential partnerships to develop MOR202 in multiple myeloma for other territories. We're also continuing our planning of the clinical trial of MOR202 in non-small cell lung cancer.The next compound from our Proprietary Development segment, where we have seen great progress, is MOR106. This potential first-in-class antibody targeting IL-17C is currently in co-development with Galapagos for the treatment of atopic dermatitis. In February of this year, we presented results of the AAD meeting in San Diego from our Phase I study of MOR106 in patients suffering from moderate-to-severe atopic dermatitis.In the study, MOR106 was shown to be generally well tolerated and we saw first signs of clinical activity. Although efficacy was just an exploratory endpoint of the trial and treatment duration of 4 weeks was relatively short, at the highest dose level, 5 out of 6 patients reached an improvement of at least 50% of their atopic dermatitis symptoms, the so-called EASI-50 score. We also observed a durable effect of the antibody lasting for more than 2 months after the last administration of the antibody. Based on these Phase I findings, we have decided together with Galapagos to move the program into Phase II and just 2 days ago, we reported the enrollment of the first patient. The so-called IGUANA trial will evaluate 3 different intravenous doses of MOR106 and 2 different dosing schemes in 180 patients with moderate-to-severe atopic dermatitis over a 12-week treatment period.This is an area of major unmet medical need in which we expect to be transformed by biologic therapies, in the way other inflammatory indications such as psoriasis have been transformed in the last 2 decades. We also see potential for MOR106 in other indications.I'll turn now to the highlights in our Partnered Discovery segment. Overall, this segment comprises more than 100 programs currently in R&D, 23 of which are in clinical development. In the interest of time, I'll only mention 2 programs here: Janssen's Tremfya and Roche’s gantenerumab.You'll recall the first approval of the Tremfya last year for the treatment of moderate-to-severe plaque psoriasis in the U.S., Europe and Canada. We were very pleased to report additional Tremfya approvals in April this year, mainly in Brazil, Australia and South Korea for plaque psoriasis and in Japan for the treatment of 3 forms of psoriasis and for psoriatic arthritis. Janssen is currently investigating Tremfya in further Phase III trials in psoriasis and in psoriatic arthritis and has announced plans for a development program in Crohn’s disease.Several Phase III trials in psoriasis are scheduled for primary completion in 2018, including a very interesting head-to-head study comparing Tremfya to Novartis' secukinumab, Cosentyx, in plaque psoriasis. We're delighted to see such a broad clinical development program and are optimistic that it could become a large and successful drug.For gantenerumab, Roche published data from open-label extension trials of gantenerumab in Alzheimer's patients at the Alzheimer's and Parkinson's conference, AAT, in March of this year in Turin.Gantenerumab showed greater and consistent amyloid-beta reduction in the brain after one year of treatment at higher doses in those studies in patients with prodromal to mild Alzheimer's disease compared to lower dosing. Based on these findings, Roche has announced plans to initiate 2 new pivotal Phase III trials namely GRADUATE-1 and GRADUATE-2 in patients with prodromal and mild Alzheimer's disease later this year.The start of these trials shows our partner's ongoing commitment to Alzheimer's disease and specifically to the amyloid hypothesis.To conclude, at the end of the first quarter, the MorphoSys pipeline comprised 115 programs in R&D. These include 1 program on the market and 28 programs in clinical development. Overall, clinical data and potential regulatory milestones from a number of programs could be published during the year.As always, we have no control over what our partners communicate, but there is obviously the potential for a lot of data to come. The number of these programs, for example, MOR103, just to name one, has the potential to be major value drivers for MorphoSys. We look forward to updating you on all of these programs in the future. That concludes my operational review.I'll now handover to Jens for his wrap-up of the financials.

[Jens H. Holstein]

Thank you, Simon. Ladies and gentlemen, also from my side, a warm welcome to all of you, and thanks for your interest in the company.Let me start the financial section with an overview of the most important financial figures for the first 3 months of 2018.Let's start with our P&L statement on Page 13. Group revenues totaled EUR 2.8 million compared to revenues of EUR 11.8 million in the first quarter of 2017. The decline has been expected and is driven by the completion of the active partnership with Novartis, which ended in accordance with the contract in November 2017.As the royalty reporting from Janssen for Q1 2018 has not been received yet, Tremfya royalties booked for Q1 2018 were estimated based on Tremfya sales in the previous months.Total operating expenses decreased by 90% to EUR 21.9 million.The expenses thereof for research and development were EUR 17.2 million as compared to EUR 22.9 million in the previous year.General and administrative expenses increased to EUR 3.9 million from EUR 3.4 million. Starting in the first quarter of 2018, we introduced a new line item in the profit and loss statement for selling expenses due to the expected rising importance of those expenses in connection with the planned preparations for the commercialization of MOR208.In the first 3 months of 2018, earnings before interest and taxes, the EBIT, came in at minus EUR 19 million in comparison to minus EUR 14.9 million in the first quarter of 2017.The operational losses reflect the expected revenue decrease as well as the ongoing spend for clinical development of the company's proprietary drug candidates.Our consolidated net loss after taxes in Q1 2018 amounted to EUR 19.5 million compared to a net loss after taxes of EUR 15 million in Q1 2017.The earnings per share for Q1 2018 were minus EUR 0.67 after minus EUR 0.52 in Q1 2017.Let's move to the segment reporting on Page 14 of the presentation. In our Proprietary Development segment, we focus on the research and clinical development of our own drug candidates, mainly in the fields of cancer and inflammation. In the first quarter of 2018, this segment recorded revenues in the same amount as in previous years Q1 of EUR 0.2 million. Expenses for Proprietary R&D, including technology development, declined to EUR 15.5 million as compared to EUR 19 million in Q1 2017. The year-on-year decline in Proprietary Development expenses is mainly due to the decreased development costs for MOR202 in connection with the licensing agreement with I-Mab from November 2017. Consequently, the segment EBIT of Proprietary Development came in at minus EUR 15.9 million compared to minus EUR 18.9 million in the previous year.In the Partnered Discovery segment, we apply our proprietary technology to discover new antibodies for third parties. We benefit from our partner's development, advancements through R&D funding, license fees, success-based milestone payments and royalties. In the first quarter of 2018, revenues were EUR 2.6 million compared to EUR 11.6 million in Q1 2017. As a consequence, EBIT in the Partnered Discovery segment was EUR 0.6 million as compared to EUR 7.3 million in Q1 2017.Let's move on to the balance sheet on Slide 15. As of March 31, 2018, we recorded total assets of EUR 318.1 million. This represents a reduction of EUR 22.6 million compared to year-end 2017. At the end of Q1, we had a cash position of EUR 286 million compared to EUR 312.2 million on December 31, 2017.Please be aware that the cash position is now for the first time reported on a different line item of the balance sheet than it has been for the full year results 2017.Since we have started to apply IFRS 9 on January 1, 2018, we now find the liquidity items on the balance sheet under the following line items: cash and cash equivalents, financial assets at fair value through profit and loss -- profit or loss and other financial assets at amortized cost. This cash position does not include net proceeds after deductions of all costs of approximately EUR 177 million from the capital increase with our successful NASDAQ listing.The number of shares issued remained unchanged compared to the end of 2017 and totaled 29,420,785 at the end of Q1 2018. This number does not include shares issued in connection with our NASDAQ listing.Speaking of the IPO on Slide 16, let me just briefly summarize the main points from the offering. In April 2018, we successfully priced and closed an initial public offering at NASDAQ. The transaction comprised the sale of 2,075,000 new ordinary shares in form of 8.3 million American Depositary Shares, ADSs, in the base offering as well as the exercising flow of the underwriters' options to purchase 311,250 additional new ordinary shares in the form of 1.245 million additional ADSs at a price of $25.04 per ADS.4 ADSs represent 1 ordinary share of MorphoSys. The new ordinary shares underlying the ADSs from the base offering and from the underwriters' option represent about 8.1% of the registered share capital of MorphoSys prior to the consummation of the offering.In summary, the IPO has enabled us to increase our exposure to new investors in the U.S., either could not invest or have not invested in MorphoSys based on our Frankfurt listing. We're very happy to have gained new investors and we look forward to working with and for all of the shareholders going forward on either side of the Atlantic.Before I conclude my section, I would like to reconfirm our financial guidance for 2018, which was first published in March in connection with the presentation of our 2017 annual report. For 2018, we anticipate total group revenues in the range of EUR 20 million to EUR 25 million and an EBIT in the range of minus EUR 110 million to minus EUR 120 million. Proprietary R&D expenses, including technology development in 2018, are anticipated in the corridor of EUR 95 million to EUR 105 million.Ladies and gentlemen, MorphoSys is at a truly exciting stage of its corporate development. Propelled by the updated interim data from the L-MIND study and constructive ongoing talks with the FDA, we'll now start building commercial capabilities in the U.S. in order to prepare for potential commercialization of MOR208 as our first proprietary product candidate.This is a key activity in our plan to transform MorphoSys into a fully integrated biopharmaceutical company. Through our recent successful NASDAQ IPO, we further raised our profile in the U.S. and strengthened our financial position. Based on our financial capabilities, we will continue to invest in the further development of MOR208 and in our other proprietary drug candidates as well as in our technology -- technological capabilities. And that concludes my review of the first 3 months of 2018.And I'll now hand back to Alexandra for the Q&A session. Thank you.

[Alexandra Goller, Associate Director Corporate Communications & IR]

Thank you, Jens. We will now open the call to your questions.

[Operator]

[Operator Instructions] We've received the first question from Franc Gregori.

[Francesco Gregori, Research Analyst]

It is Franc Gregori from Trinity Delta. I have to confess this is very impressive stuff. My question is, you've now got very good cash resources. Can I ask the obvious question? Assuming everything works out, how will you expand in the U.S. for commercialization? Will you build a sales force de novo with all the infrastructure? Or you're going to possibly buy a small strategic play?

[Simon E. Moroney]

Yes. Thanks, Franc, for the question. We're looking at this at the moment. As you suggest, there are were various ways one can go about this. We're looking at starting at the top, if you like, which is to hire key senior management for the U.S. organization. Whether the sales force would come from people that we've hired directly from the get-go or whether that would initially be contract sales force, for example, is something that we're thinking about. Whether we would consider acquisition of a pre-existing company with its own sales force is also a possibility. Those are options that are under evaluation at the moment and no decision has been taken yet about how we will proceed. The key objective, of course, is that we're in position in roughly 2 years from now to be able successfully to commercialize MOR208 that there may be different ways to get to that point.

[Operator]

The next question is from Mike King of JMP Securities.

[Michael George King, Managing Director and Senior Research Analyst]

It's nice to be on the first MorphoSys call asking questions, and welcome to the U.S. I had a couple of questions, if you don't mind. In no particular order maybe, Simon, just starting with MOR208, with the advent CAR T-cell therapies now with Kymriah gaining a DLBCL indication, is there any plan to examine MOR208 to post CAR-T relapse or any dialogue with the FDA about their curiosity about data in that patient population?

[Simon E. Moroney]

Yes. Thanks, Mike. And it's good for us also to have you on the call. Of course, we're paying close attention to what's going on in the CAR-T space and DLBCL, and we noted the approval of Cambria in this indication. This is -- currently, the patient population of our trials and the CAR-T trials are a little bit different. Our patients tend to be a bit older, a bit more frail, a bit more comorbidity, whereas, the CAR-T patients tend to be a little bit younger, a little bit more robust to be able to withstand the treatment itself. So the patient populations at this stage at least are a little bit different. As we mentioned during the talk, we see definite opportunities to take MOR208 into other lines of DLBCL. We're looking at frontline, for example, which is obviously a huge opportunity, but we're also looking at the CAR-T space. So in other words, moving into those somewhat younger patients that are currently the type of patients who've been in CAR-T trials. So we're not thinking really also strategically about MOR208 being used post CAR-T. If anything, we're thinking about MOR208 being used in front of CAR-T.

[Michael George King, Managing Director and Senior Research Analyst]

Yes, sure. No, I understand that. I just didn't know if there was any discussion about because of breakthrough therapy designation and prime designation for patients with unmet need if that represents an emerging population of patients with unmet need.

[Simon E. Moroney]

Yes. It's -- how these things fit together remains to be seen, of course, but specifically, that hasn't been a topic that we'll discuss with the FDA how MOR208 would fit in ahead of or potentially behind CAR-T, that's not been a subject of the discussion. As you can imagine, our key focus is on getting it approved in the patient population that it’s been developed in currently and not discussing with the FDA where else it could be positioned.

[Michael George King, Managing Director and Senior Research Analyst]

Sure. Okay. On MOR202, I just wanted to ask about, there was a small study I saw recently that I forgot what group it was, but suggesting that perhaps more rapid infusion times are possible. At the same time, J&J is developing the PEGPH20 with Halozyme for subcu formulation. So I just wonder how that impacts your thinking about the development time lines for 202? And what the competitive landscape is going to look like assuming approval of -- eventual approval of 202?

[Simon E. Moroney]

Yes. Just to explain that, we started out developing 202 with a 2-hour infusion. We now are confident that we can get that down to 30 minutes. So -- and from that perspective, at that duration, infusion time is really a nonissue. I think from a competitive positioning point of view, I think the way to think about this is that the CD38 space in multiple myeloma and potentially beyond multiple myeloma and solid tumors could be enormous. We've seen analysts' estimates well up in the billions for multiple myeloma alone and if we see efficacy in some solid tumor settings, then it could go well beyond that. So we're delighted to have an anti-CD38 antibody that looks competitive in the clinic and are optimistic that it'll have a place in what should be a very lucrative market for CD38 antibodies.

[Michael George King, Managing Director and Senior Research Analyst]

Yes. So I'd agree with that. In 106, can you talk about -- there's been a lot of competition that's recently emerged in atopic derm. So maybe talk a bit about kind of how you're benchmarking MOR106 performance? And then maybe some -- any other indications you might contemplate with 106?

[Simon E. Moroney]

Yes. I mean, I think at this stage, what we have is, we have a Phase I study with a limited number of patients, which shows that we have an active molecule. The level of that activity was encouraging and certainly justifies going into Phase II, which we've just started. But I think it's premature to say how our efficacy stacks up against any of the other molecules in this space. I think overall, we think that atopic dermatitis will develop as the psoriasis market did over the last, what 15 to 20 years when the TNS came online and then, of course, the IL-17s, now the IL-23s. So you now see a range of biologics available, which has totally transformed the treatment options available to psoriasis patients. And we see the same happening in atopic dermatitis over the next, what 10, 15, 20 years. So having something with a novel mechanism of action, which MOR106 is, targeting a unique target than IL-17C, we think is actually a very exciting space to be. So we'll see how the Phase II trial goes, but we're certainly encouraged by what we've seen so far.

[Michael George King, Managing Director and Senior Research Analyst]

Great. And then, just finally, I don't know if Jens wants to comment about any update on guidance on revenue from Tremfya given the recent significant performance of that molecule and J&J's continued enthusiasm about the peak sales for the molecule?

[Jens H. Holstein]

Sure, Mike. I mean, so far it has been a bit early to really be more precise on our expectations going forward. I mean, we have indicated to the capital market when we closed -- when we published our year-end figures for '17 that we would expect Tremfya royalties being in the range of EUR 12 million to EUR 17 million. We have confirmed that with today's announcement or yesterday's announcement on our guidance. We have so far for Q1 used an estimate for March because we haven't been able to receive report from Janssen yet on how the exact figures have been for Tremfya so far. But comparing what we know of Tremfya at this stage, we feel confident that we will end up this year in that sort of EUR 12 million to EUR 17 million. We have no other indication at this point in time that this is not achievable. So -- and as you pointed out, I mean, we have continuously every other week some news on an additional country that they put on. Today, I saw an announcement from NICE. So I mean, there is -- they -- I'm very thrilled I have to say that they got approval in psoriatic arthritis in Japan. So I think the way forward looks very promising. We got to see how things will develop, how the uptake in terms of Tremfya will be, but we have a very solid ground that we feel confident with.

[Operator]

We currently have no questions coming through. [Operator Instructions] There's another question of Gary Waanders with Bryan Garnier.

[Gary Anthony Waanders, Managing Director]

Just on 208 and the filing process, you mentioned you would look to do a rolling submission and it's understood why that might be the case. So we should expect the CMC to be the last part of that. Just explain why it might take so long? Because I guess, you've got 3 batches to produce and validate, but if you're expecting that to take you to the end of 2019, it seems like quite a long time for that.

[Simon E. Moroney]

Yes. Thanks, Gary. And it's a good question. It's actually several more runs than that, that we have to do. And it is not any question of actually doing the runs, but it's a question of harvesting the material obviously and doing all of the analytics that's required to document that the material is what we think it is. In other words, that the process itself is robust and fully reproducible in terms of the quality of the material it comes out. So our experts and I take their words for this, tell me that it's an extremely time-consuming and long process and we're going as fast as we possibly can. Obviously, we don't want to have anything slow this down. But it just takes its time and as it turns out, that will be the last part of the package and it'll be ready in Q4 of next year.

[Gary Anthony Waanders, Managing Director]

Okay. And, will there be any contribution of B-MIND data in the filing?

[Simon E. Moroney]

No, no, no. This is purely and simply L-MIND and nothing from B-MIND will be a part of this.

[Gary Anthony Waanders, Managing Director]

Okay. And the last question I had, excuse me for going on to something slightly off topic is MOR107. So this was in a Phase I study and you've kind of gone back to preclinical. What happened in the Phase I that now you want to return preclinical or maybe I'm getting something wrong there?

[Simon E. Moroney]

I think you're right. We did a Phase I study actually in healthy volunteers. So it was purely a safety study. And it was completed successfully, meaning that at the doses we investigated, the substance was generally safe and well tolerated. So we satisfied ourselves with that. As we were doing preclinical work with MOR107, we look to the number of different indications, the number of different settings and are still in the process of deciding which indication to go forward. That certainly has potential in a number of different areas and we as yet haven't taken the final decision of which indication we want to go forward with. We know we have a safe molecule based on the Phase I study in healthy volunteers. The decision now is about what indication to go forward in.

[Operator]

The following question is from Mick Cooper of Trinity Delta.

[Michael Thomas Dudley Cooper, Research Analyst]

Just got a quick follow-up question actually following on from Gary from MOR107. I was wondering how the lanthipeptide's platform was developing? And if there are any other products from that pipeline that could be entering the clinic sometime soon?

[Simon E. Moroney]

Yes. Thanks, Mick. We have other candidate molecules in the early stages of R&D. I wouldn't at this stage suggest that any of those are close to entering the clinic at this point. But we'll certainly keep you posted if there are developments on that front.

[Operator]

[Operator Instructions] Another question of Zoe Karamanoli of RBC.

[Zoe Karamanoli, Analyst]

I have 2 more questions following up on MOR106. And I'm wondering, in the IGUANA study, you are exploring dosage of 1, 3 and 10 milligram per kilogram. And I wonder perhaps if you can provide some background why you decided to go with the 3 milligrams rather than the 4 milligrams that was tested in the Phase I?

[Simon E. Moroney]

Yes. That's a very good question. You're right. The Phase I study looked at 1, 4 and 10 milligrams and indeed IGUANA is looking at 1, 3 and 10 milligrams. I have to admit, I can't help you on that. That's something that we'd have to check with our clinical experts if there's a good reason, which I see there is, why they've gone to 3 and not 4, but we're happy to check that and get back to you.

[Zoe Karamanoli, Analyst]

No problem. And on MOR106, if you could comment on the progress of the subcu formulation or when do you think that we can have an update on that?

[Simon E. Moroney]

Yes. That's progressing well. For an indication like this having a subcu formulation is basically a must. The molecules will behave in terms of the solubility and our ability to concentrate it for a subcu formulation, so that is on track. And we will, in the course of the clinical development plan, introduce a subcu formulation into clinical testing at some point in the future that's been integrated into the overall plan. And as and when we're ready to start that, we'll update you. But we don't see that as being a limiting factor in the overall development plan.

[Operator]

We have no further questions coming through. So I will now hand back over to Dr. Simon Moroney to wrap up today's call.

[Simon E. Moroney]

Many thanks. And to wrap up, we're really very excited with the position we're in right now. With MOR208, we could have a very valuable asset, a drug candidate, that may also help the patients suffering from DLBCL and perhaps also other B-cell malignancies. The company is focused on bringing this product to market as quickly as possible. Behind MOR208, we have several other promising proprietary programs in development that we look forward to advancing. Our highly successful NASDAQ listing gives us the firepower to be able to do this. Meanwhile, our partnered pipeline continues to develop well. The royalty stream from Tremfya is growing nicely and we expect news from other partner programs during the remainder of the year. We look forward to keeping you informed of progress.

[Alexandra Goller, Associate Director Corporate Communications & IR]

That concludes the call. If any of you would like to follow up, we are in the office for the remainder of the day. Thank you for your participation on the call, and goodbye.

[Operator]

Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.