Morphosys AG - BioTech fighting cancer

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Morphosys is a global biotech company that develops and commercializes therapeutic antibodies for patients suffering from cancer and autoimmune diseases. They have over 100 drugs in its wider pipeline, with many partnerships with other pharma and biotech companies.

The closing price today was at €71.04, the 52-week high was €125.20, and the 52-week low at €71.62, this means we are almost spot on the low - may be a good opportunity?

How has the development been in the last years...

The 1-year and 3-year are down with respective -26% and -18%, while the 5-year and 10-year development is up with +66% and +258%! ✅

What does the 10-year chart look like

Looks pretty good - I see a long upward trend which now almost is down and touches and the support level. A high peak at the end of 2019 at ~€125, not that long ago, and even the Corona crash is not that visible like in other companies

A view on the holders' list shows

that there is no majority holder (or strong owner), but we see several top-notch funds, e.g. T.Rowe Price, Fidelity, Vanguard ✅

The Assets on the Balance Sheet shows that it has increased a lot in the last year, an increase of €1.2 billion, 4 times as much as 5 years ago. Where does this come from, 2 positions, Sonstiges Umlaufvermögen of €1billion and €300m from Sonstige Vermögengegenstände. All the growth in assets comes from those positions. I had to check in the annual report to understand where it comes from, and they placed a convertible bond in the market to raise cash to further develop drugs in their pipeline. So it is not due to organic growth, but if they get high returns from their promising pipeline, I can understand it

The Shareholder Equity and Liability side should give us the missing piece

Here directly we see the increase of long-term debt ("Langfristige Finanzverbindlichkeiten") of €800m, but even with that debt on their books, the debt ratio is just slightly above 50%, which is healthy! The equity has increased by almost 50% in the last 5-years! The balance sheet looks good ✅

The Revenue, topline ("Umsatz"), has increased 360% the last year!!!, and it was as well during 2020 that the company turned positive on EBIT ("Operatives Ergebnis") and Net Income ("Jahresüberschuss"). The R&D ("Forschungs- und Entwicklungskosten") has as well increased by 40% during 2020, which is good, as they invest into the future earnings, if successful. ✅

Of course, no dividend title, as this was the first year they turned into black numbers, and that they invest heavily in the pipeline

The ROE was 15.76% and the EBIT margin 8,35%, in the first year, so I assume that this will further increase as new drugs will be licensed out to other companies or developed and shipped through their own processes. This could become a very nice profitable company in the coming years ...