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MorphoSys AG (NASDAQ:MOR)
Q3 2019 Earnings Call
Oct 30, 2019, 9:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, welcome to the MorphoSys Q3 Result 2019 Conference Call.[Operator Instructions] After the presentation there will be an opportunity to ask questions. Please note that we can only take your questions if you are registered by name. [Operator Instructions]

Now I would like to turn the conference call over to Sarah Fakih. Please go ahead.

Sarah Fakih -- Head of Corporate Communications and Investor Relations

Good afternoon. Good morning and welcome to our Q3 2019 conference call and webcast. My name is. Sarah Fakih and I'm the Head of Corporate Communications and Investor Relations at MorphoSys. 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 results differ from the Company's assumptions and ensuing actions may differ from those anticipated. You are therefore cautioned not to place undue reliance on such forward-looking statements, which speak only of the date hereof. With me on the call today are Jean-Paul Kress, our Chief Executive Officer, Jens Holstein, our Chief Financial Officer and Malte Peters, our Chief Development Officer.In the presentation. Jean-Paul will start by giving you an operational review of the third quarter as well as an outlook for the rest of this year after that. Jens will review the financial results of the third quarter and the first 9 months of 2019. After the presentation, we will all be available for your questions. You will find the slide deck for this presentation on our corporate website with this, I would now like to hand over to Jean-Paul Kress.

Jean-Paul Kress -- Chief Executive Officer

Thank you, Sarah. And also from me a warm welcome to our Q3 2019 earnings call. Yesterday was a very important day for the company, on which we made great progress on our main priorities. We published impressive results on our real world data approach, confirming our regulatory strategy around our L-MIND trial. With this data, we were able to deliver a critical component of the BLA filing package to the FDA.

The rolling submission to the FDA was initiated and we already submitted the first preclinical data package. Another top priority for us is the tafasitamab partnership, I have made clear that I am open to broad partnership settings including a US co-promotion. Our partnering approach follows the goal to maximize the value of tafasitamab and the pipeline in the product value proposition.

We are also finalizing buildup of our US commercial organization and we are executing on a flawless US pre-launch plan. In our proprietary clinical pipeline, we are accelerating the development of our anti-CD38 antibody, MOR202, for which the start of the clinical trial in membranous nephropathy is imminent.

Lastly, we were encouraged by the latest news from Biogen on aducanumab and what this may represent for patients, their families and for the scientific community, though it is premature to draw any conclusions about the investigations of Gantenerumab by our partner Roche as studies are ongoing. I would now like to walk you through the details of our progress and then Jens will provide a financial update.

Let me start with tafasitamab, our proprietary antibody against CD19 for applications in haematological malignancies and the key asset of our clinical pipeline. Tafasitamab is differentiated from other antibody-drug candidates, based on an Fc fragment selectively engineered to enable better recruitment of effector cells and potentially increased elimination of cancer cells.

Our most important trial is L-MIND, the Phase II study of tafasitamab in combination with lenalidomide or LEN in patients with relapsed or refractory diffuse large B-cell lymphoma, who are transplant ineligible and ineligible for high-dose chemotherapy.

The study reached its primary completion in May earlier this year. Yesterday we announced very compelling top-line results from Re-MIND the synthetic control arm for L-Mind. As L-MIND is a single-arm uncontrolled trial, Re-MIND was designed to compare the effectiveness of LEN monotherapy based on real world patient data, with the efficacy of the tafasitamab-LEN combination from L-MIND.

The study met its primary endpoint showing statistically significant superiority of the best objective response rates of the tafasitamab-LEN combination therapy compared to a therapy with LEN alone. Let me give you some insights on how this analysis was carried out. Re-MIND collected real world data from overall 419 non-transplant eligible relapsed refractory DLBCL patients who had received LEN monotherapy in the US and in Europe.

Qualification criteria for matching patients of both studies were discussed and agreed with the FDA. Eligible patients were identified from this pool and much one to one with patients from the L-MIND study based on important baseline characteristics. This resulted in 76 eligible Re-MIND patients that could be matched with 76 of the overall 80 L-MIND patients objective response rates were calculated on the basis of this subset of 76 patients in Re-MIND and L-MIND respectively.

Within this comparison the objective response rate of the tafasitamab-LEN combination was 67.1%, and significantly superior to the real world data based LEN mono objective response rate of 34.2%. Superiority of the tafasitamab-LEN combination was consistently observed across all secondary endpoints, including complete response, which was 39.5% for the tafasitamab-LEN combination, compared to LEN monotherapy, with 11.8%. There was also a significant difference of itself in overall survival, which was not reached in the tafasitamab-LEN combination, compared to 9.3 months with LEN monotherapy only. Most impressively, based on the hazard ratio, the probability to survive is twice as high in the tafasitamab-LEN combination, versus to LEN monotherapy. We believe this is an outstanding outcome and confirms our confidence in the path forward.

Importantly, since the real world LEN monotherapy data was collected from local sources, it was investigator assessed. To allow for a like-to-like comparison of the efficacy of both therapy approaches, the data of the 76 L-Mind patients were therefore also the investigator assessed data. The data we reported on the L-Mind primary analysis in July -- in June were centrally assessed data.

So the outcome of Re-MIND clearly supports the clinical superiority of the tafasitamab-LEN combination and significantly complements the compelling primary analysis of L-Mind data we reported earlier this year. Both studies, will from cost components of the BLA filing package. As I already highlighted we are now executing on our rolling submission to the FDA and this also demonstrates how confident we are that this package is very robust.

I am very confident that this is the right strategy to move ahead with the approval. We remain fully committed to finalize a submission to the FDA by the end of the year and we are planning for US launch by mid 2020. The other ongoing trials with tafasitamab are the Phase 3 B-MIND trial, also in relapsed or refractory DLBCL, and the COSMOS trial. The Phase 2 trial focusing on patients with chronic lymphocytic leukemia or small lymphocytic lymphoma.

For B-Mind we await the outcome of the interim analyses until year end. The interim analysis will be done by an independent data managing committee or IDMC, and as a result of this analysis, the IDMC will inform us about their recommendation on how to pursue the study. To clarify again, the L-Mind and Re-Mind data approach is robust and is a regulatory path we agreed with the FDA. We believe the outcome of B-MIND will have no effect on the US approvability of the tafasitamab-LEN combination. However, B-MIND has an upside potential for us, as it could serve as one of the possible options for a confirmatory trial in the case of a conditional approval.

Our plans to start the front line trial in DLBCL are also well on track and we expect to start it in the next few weeks. The trial will enroll about 60 patients and we will evaluate safety and first signs of efficacy of the combination of tafasitamab plus R-CHOP, versus tefacidomab plus LEN plus R-CHOP in previously untreated DLBCL patients. We are confident we have designed a trial with great chances of success and the depending on the outcome this study will be followed by a pivotal Phase 2/3 study with roughly 900 patients as soon as possible.

Lastly for our exploratory Phase 2 COSMOS trial in CLL, we plan to present updated data at ASH at the beginning of December. Obviously, our top priority remains to execute on a flawless BLA submission for tafasitamab to the US FDA by end of this year and given FDA approval, to be launch ready by mid next year.

Also, we reaffirm our plans to seek regulatory approval in Europe, based on L-MIND and intend to complete submission of a marketing authorization application to EMA by mid 2020. I would now like to update you on MOR202 our anti-CD38 antibody that we are pursuing in membranous nephropathy the chronic autoimmune kidney disease with high unmet need. The Phase 1/2 study will assess the safety and tolerability of MOR202 and also first signs of efficacy in this indication.

The first clinical sites have been activated and we expect dosing of the first patient to happen very shortly. As you know, MOR202 is also currently developed by our partner I-Mab in multiple myeloma in Greater China. With the original licensing agreement we signed with I-Mab in November 2017, I-Mab was granted exclusive rights for the development of MOR202 in the Greater China region, I-Mab is currently conducting two clinical trials with MO202 in multiple myeloma in Taiwan. The Phase 2 study with MOR202 in 3rd-line relapsed refractory multiple myeloma and the Phase 3 study in combination with LEN as a second-line treatment. In mid-October, I-Mab might also receive IND clearances granted by the Chinese National Medical Products Administration for both ongoing multiple myeloma trials. These clearances allow I-Mab to expand their ongoing trials, also to Mainland China and approve for I-Mab's successful fast-to-market strategy.

Let me continue with the updates on MOR106, the antibody directed against IL-17C which we jointly developed with Galapagos and fully out-licensed to Novartis in July 2018. You may have seen from our announcement on Monday that based on the joint decision of MorphoSys, Galapagos and Novartis, the clinical development of MOR106 in atopic dermatitis or AD was ended. The decision was based on an interim analysis for futility, which was performed in the Phase 2 Iguana trial and which resulted in a low probability of the study to meet its primary endpoint.

All of the currently four ongoing studies in AD will be ended and the decision was based on the lack of efficacy and not on any safety issues. All three parties will explore the future strategy with MOR106. Now, let me briefly turn to our partner discovery segment, the most advanced product of the partner discovery segment. The most advanced product of the partner discovery segment is Janssen's Tremfya. We are very pleased by Janssen's strong and continuous commitment to Tremfya as expressed in this broad spectrum of indications, in ongoing trial conducted by Janssen. Janssen also reported a strong quarter for Tremfya itself, which led us to adapt our expectations for the 2019 royalty income and Jens will cover that in a minute.

That concludes my part of the presentation. Before I hand over to Jens for the financial review, I would like to take the opportunity to thank our employees and our partners for their commitment and key contribution to the success of MorphoSys. I am very excited by the opportunities ahead of us. Jens, please?

Jens Holstein -- Chief Financial Officer

Thank you, Jean-Paul. Ladies and gentlemen, also from my side a warm welcome to all of you. And as we just heard, we look back on, operationally a very successful quarter for the company and I will now guide you through the most important financial figures of MorphoSys for the third quarter 2019. I would like to start with the consolidated statement of profit or loss on Slide 12. Group revenues in Q3 totalled EUR12.5 million compared to revenues of EUR55 million in the third quarter of 2018. Please remember that revenues in the third quarter of 2018 included the payment of Novartis of EUR47.5 million following the licensing agreement for MOR106.

Looking at expenses, our total operating expenses reached EUR40.3 million. The expenses for research and development amounted to EUR12.9 million compared to EUR18 million in Q3, 2018. Expenses for proprietary R&D and technology development amounted to EUR23.7 million, compared to EUR15.9 million in the previous year. Selling expenses rose to EUR4.4 million as compared to an expense of EUR1.3 million in the year before.

Looking at general and administrative expenses, those increased to EUR9 million with EUR5.1 million in Q3, 2018. Cost of sales for the third quarter of 2019 were EUR1 million after open EUR9 million in the previous year. This item consists of expenses related to services provided to partners such as Novartis or I-MAB, also manufacturing costs for the expected market supply of tafasitamab. Earnings before interest and taxes amounted to minus EUR27 million in Q3, 2019 and comparison to plus EUR30.1 million in the third quarter of 2018.

Our consolidated net loss after taxes amounted to EUR24.2 million in Q3 2019, compared to a net profit after taxes of EUR30.2 million in Q3 of the previous year. The earnings per share for Q3 2019 reached minus EUR0.76 and after nearly plus EUR0.96 in Q3 of the previous year.

I'm now on Slide 13, to give you an overview of our segment reporting for Q3 2019. In our proprietary development segment, in which we focus on the research and clinical development of our own drug candidates, we recorded revenues of EUR1.4 million in the third quarter of 2019, compared to EUR48.8 million in Q3, 2018. Operating expenses in this segment amounted to EUR32 million as compared to EUR18.6 million in Q3, 2018.

The main reason for this increase is our increasing investment for the development of our proprietary programs. Consequently, the EBITA of our proprietary development segment amounted to minus EUR30.5 million compared to EUR30.3 million for the previous year. In our partner discovery segment, we apply technology to discover new antibodies for third parties and benefit from our partner's development advancements through R&D funding, licensing fees, success based milestone payments, and royalties. In the third quarter of 2019 revenues amounted to EUR11 million as compared to EUR6.2 million in Q3, 2018. The revenues include an estimate of Tremfya revenues of EUR9.3 million.

as Janssen reported strong sales for Tremfya in Q3 of this year, we adjusted our royalty guidance for 2019. We now expect revenues between EUR30 million to EUR35 million, up from EUR23 million to EUR30 million at a constant US dollar exchange rate. The EBITA on our partner discovery segment increased and amounted to plus EUR8.8 million as compared to plus EUR3.8 million in Q3, 2018.

Moving onto the balance sheet on Slide 14 as of September 30 2019. We recorded total assets of EUR541.1 million, compared to EUR558.8 million by year-end 2018. At the end of Q3, we had a cash position of EUR412.4 million compared to EUR454.7 million as of December 312018. On the balance sheet this cash position is reported on the following items.

Cash and cash equivalents, financial assets at fair value for profit and loss, and current and non-current other financial assets at amortised costs. The number of shares issued totalled 31,927,958 at the end of Q3 2019, compared to 31,839,572 shares by year end, 2018. To briefly sum up the key figures for the first 9 months of 2019. Please turn to Slide 15.

Group revenues amounted to EUR60.7 million for the first 9 months of 2019. In the first 9 months of 2018, group revenues reached EUR66 million. Other revenues in the first 9 months of 2019 EUR53.4 million, were success-based payments, the majority of the sum was made up by the milestone payment received from GSK as well as Tremfya royalty income that amounted in total to EUR23 million.

R&D expenses amounted to EUR75.3 million in the first nine months, of which 68.8 million represent R&D expenses for proprietary drug development and technology development. Hence EBIT in the first 9 months of 2019 amounted to minus EUR56.3 million compared to minus EUR13 million for the first 9 months of 2018. Validated net loss reached minus EUR52.7 million for the first 9 months of 2019. Let's now move to our financial guidance. Today, we would like to reaffirm our financial guidance for the full year 2019, which was updated in July in connection with the start of a Phase 3 clinical development program with otilimab, formerly MOR103 as described before.

For 2019, we anticipate group revenues in the range of EUR65 million to EUR72 million. As mentioned earlier, we updated our royalty guidance due to strong Tremfya sales in Q3 2019 as reported by Janssen. Thus we now estimate Tremfya royalties to be in the range of EUR30 million to EUR35 million and consequently we anticipate to reach the upper end of our revenue guidance for 2019.

We expect an EBIT in the range of minus EUR105 million to minus EUR115 million. Proprietary R&D expenses including technology development in 2019 anticipated in a corridor of EUR95 million to EUR105 million. Of note, the guidance does not include revenues from potential future partnerships or licensing agreements for tafasitamab or any other compound that is in our proprietary development.

Effects from potential in licensing or co-development deals for new development candidates also not included in this guide. Ladies and gentlemen, this concludes my review for the third quarter of 2019, I would like to hand over to Sarah again. Thank you.

Sarah Fakih -- Head of Corporate Communications and Investor Relations

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

Questions and Answers:

Operator

[Operator Instructions] The first question we received is from Konstantinos Aprilakis from Deutsche Bank. Your line is open sir.

Konstantinos Aprilakis -- Deutsche Bank -- Analyst

And thanks for taking my questions and congrats to Jean-Paul on his first MorphoSys call into the team for initiating BLA submission for TAPA. So my questions relate to Re-MIND are the results from the lenalidomide monotherapy arm in line with your expectations, what should we expect to see in the detailed presentation at ASH versus the top-line release, and will you include duration of response and progression-free survival data?

Jean-Paul Kress -- Chief Executive Officer

Thanks Konstantinos and Malte

Operator

handle question.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Thank you Konstantinos, thank you, Jean-Paul. In the outcome of the Re-MIND lenalidomide monotherapy arm met our expectations. And if you recall that we have frequently refer to published lenalidomide monotherapy trials published by [Indecipherable] , for example and [Indecipherable] . You can see that the data we published yesterday are fully in line with what has been published before. So we are extremely encouraged and also satisfied to see this data. We are extremely encouraged by the magnitude of the treatment of the differences between the treatment effect between the two arms. And in our eyes, this increases certainly the chances that FDA will look at our data with a positive opinion. To your second point regarding ASH, we will providing more data, we will includes duration of response and progression-free survival data in that presentation and we will provide also more details on the parameters on the covariance that we have selected together with the FDA. So you can expect to see more data at that meeting.

Konstantinos Aprilakis -- Deutsche Bank -- Analyst

And then a quick follow-up on Re-MIND, do you expect the data, especially the overall survival findings to affect your chances for full versus accelerated approval for TAPA? What are your thoughts there?

Graig Suvannavejh -- Goldman Sachs -- Analyst

Yeah, I mean that's the million-dollar question. Of course, I know from having spoken several times to FDA that they will make this a review issue. So they will look at the data and during review, will take a decision as to whether this is a full approval or conditional approval. I don't want to stick my head out here to give you any speculation. But as I said in my first reply, I think the probability of success of our filing has certainly gone up with looking at the very significant magnitude of difference that we have reported. So I would leave it as that to not put any words into FDAs mouth.

Operator

And the next question we received is from ShanShan Xu from Berenberg Capital Markets. Your line is now open, madam.

ShanShan Xu -- Berenberg Capital Market -- Analyst

Good morning and good afternoon. Dr. Kress, welcome to MorphoSys earning call, given it your first time I'll go easy on you with a very simple question. So Can you please share more color with us regarding the progress of securing the European partnerships for tafasitamab given the recent news that the ex-CEO, Dr. Simon Moroney was nominated as a Board member of Novartis. Is it an indicator of future partnership between MorphoSys and Novartis?

Jean-Paul Kress -- Chief Executive Officer

Hi ShanShan, thank you for the question and the kind words. So you might remember that they've always been very open on the partnership philosophy and approach. The idea is basically to maximize the value of tafasitamab not only commercially short term but also for the pipeline and the product approach we think this asset has blockbuster potential at the least and obviously, a partnership makes a lot of sense. So to realize all the potential there is, a need to broaden beyond one single geography.

And that's the approach we've been taking a very disciplined way over the last couple of weeks, since I joined. As you know there had been discussions in the past, but probably more regional or kind of out-licensing of these kind of things. So this is not completely out of the table, but my approach is more global and I have to say that we got great traction from strategic potential partners and we are in the middle of very positive discussions that are very promising.

And again, I mean, we can probably expect that the discussions are also around US co-promotion. Thank you. Maybe one for Malte. Malte can you please confirm the reason you used the investigator assessed data in Re-MIND is because lenalidomide monotherapy is not really officially approved for relapsed refractory DLBCL and there might be a lot of single center data in your real world dataset and also for your ASH, L-MIND presentation, are you going to stratify your patients into natural killer cell high versus low? Thank you.

Graig Suvannavejh -- Goldman Sachs -- Analyst

So let me start with the second question first. We will not stratify in NK high and NK low patients because we have looked at the data and are fairly confident that the combination of tafasitamab and lenalidomide sort of mitigates the difference between NK high and low. So the presence of lenalidomide basically outweighs the number of end cases that a patients had to begin with. So that's the reason why we haven't seen a striking difference, you will hopefully see a subgroup analysis, but we'll show this data, so I can't really pre-empt that's discussion but that's the reason why we were not stratify for that's in L-MIND. With respect to your first question because of the nature of the real worlds data study. It's actually impossible to have an independent review committee level-off review for real world data. So that's why you have to go with investigator real data and we discussed it with FDA, FDA was fully aware and supportive of this fact. And just to compare like to like we for this analysis compared, then the investigator data from Re-MIND with the investigator data from L-MIND. The concordance stage in L-MIND for investigator and independent review committee data is extremely high so it didn't make a lot of difference. So that's why we decided to do this.

Operator

The next question we received is from James Gordon from JPMorgan. Your line is now open, sir.

James Gordon -- JPMorgan -- Analyst

One was just on B-MIND's utility and I appreciate it's in the hands of the DSM , but can you narrow down the timelines -- Is it possible, it's late November could it even be into December. And how likely do you see the different outcomes as in continuing all-comers or continuing to NK subpopulations versus total futility?

And just one other one on B-MIND which could also be, so if you do pass through the futility analysis when are you expecting to have the efficacy analysis results and could they also be pushed out because the futility has been pushed out and I think that's event driven, the final result I think it's also event driven but I'm not sure if that has been pushed out and then maybe--

Unidentified Speaker

Hi, James.

James Gordon -- JPMorgan -- Analyst

So just to be the final one is actually -- also just on partnering. Can you talk about what are the key things you must looking for in a partner?

Jean-Paul Kress -- Chief Executive Officer

Hi James. I'll start by the partnering and Malte will handle B-MIND. So I mean there is a couple of components here, and you have some proxies of deals on the market, which makes sense for us, I think we need first and foremost to think about the synergies commercially, but also for development. I think it's very important that we -- if and when we'll establish a partnership we'll have someone complementary but at the same time, very focused on the same aim which is to unlock the pipeline and the product.

So we need competences and obviously there is a timing, which is important for potential partner, what is the status in terms of other priorities. So we want the commitment we want the right economics for us obviously, and in a fair way that both parties are incentivized. We also want to make sure that our asset it is handled properly and that we will be sure that there will be the right commitment, for me, it's very important. So in the discussions we've been having, I think we are pretty confident that it is following these lines and hopefully, more to come soon.

So Malte, for the other question, please.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Yeah, thanks Jean-Paul. Before going through the, to answer your questions, I may repeat what Jean-Paul said in his initial remarks, that in our eyes the data that we published yesterday significantly reduced the risk associated to the L-MIND filing or in other words, the probability of success in our opinion has clearly gone up.

So that means that B-MIND in itself becomes almost a moot point in our eyes, because of what I just said before. But answering your question the futility analysis will be performed in the 4th quarter, so it's coming up really fairly soon. I don't want to give a firm dates, but we are on track with what we had planned. With respect to the probability, that's a very difficult question also, I think it's fair to say that with the introduction of the amendment the probability that B-MIND becomes a positive study has gone up.

And with respect to the timeline for the overall study we are enrolling well we don't see any dip in terms of enrolments or the timeline have not changed compared to what we have had before.

Operator

The next question we received is from Graig Suvannavejh[Phonetic]. Your line is now open, sir.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Great, thank you very much for taking my questions and congratulations on the progress in the quarter. Maybe I could just switch to the commercialization efforts as you ramp up for potential launch in the US and whether there are things that you can help either qualitatively or quantitatively describe for us in terms of your commercialization efforts and how the progress has been in the past quarter, and kind of what else needs to be done before you feel that you are in a very good place to launch?

Also just on that in terms of whether there has been any incremental work has been done on your end in terms of gauging physician and/or payer feedback just as to the profile of tafasitamab. I'll stop there and then I have one other follow-up question. Thank you.

Jean-Paul Kress -- Chief Executive Officer

Hi, Greg. Thanks for the question. So obviously the commercialization has been a big focus of mine since I joined for many reasons, the main one is probably the timing and encouraging data that we just generating which make us very certain that we will be launching in the next year. So I think it's very important that everybody understands that we are in a very good position in the US with a very good team that we've put in place and now which is going from the hiring mode to execution mode to bring fully for launch, which for every launch, like for every launch is obviously a lot of tasks.

And we also gaining customer intimacy and engagement with the space we have people in the field, professional in the field engaging not only with the KOLs and the prescribers but at the same time also with patient associations and to your question with payers at least we're doing payer research to make sure that we will make sense when we launch at the same time for the reputation of the company, but also for the economics and the NPV. So this is going well, Craig, obviously it's a little bit where it come from. So that's a big focus, we've been with my colleagues here very much kind of shifting from probably more development stage to commercially then some stage, that's actually very pleased with the progress we are making here.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Then my follow-up question does focus kind of on your BD strategy, partnership strategy, in general, obviously there's been a lot of focus around what the potential partnership strategy around tafasitamab are. The first part of this question is now that you've got your positive Re-MIND data in hand, does that change in any way, how you think about kind of deal value that you can potentially extract from a partner, and do you necessarily feel that the B-MIND data changes that dynamic. So that's the first question.

And then my second question, or second part of that question with regards to BD strategy is beyond just partnerships for tafasitamab, can you give us a flavor of any other BD interests that you may have in the company that are non-tafasitamab related, whether they're in licensing or any other efforts. Thank you.

Jean-Paul Kress -- Chief Executive Officer

Thanks. So regarding the partnership, obviously, the data we just announced puts us in a stronger position, I mean it was obviously assumed that we would be successful, but now it's out there. It's very good, it's a very good timing. It will help everyone to take an informed decision and because this is again the regulatory pathway, it's very important for everyone here. So we obviously feel in a very good position, now saying that we will extract more value, I don't know in what form, but at the same time. I think the simple fact that these data out are very helpful.

And, and I'll let Jens comments, maybe on that path as well. The other deal, I think it's very important that we prioritize. We are a lean organization, we have to be mission critical, focused on tafasitamab, it's also what I've been trying to really push in the organization, that we really focus on the main asset which is a pipeline in the product and it doesn't mean we stopped looking at other things, because they are ongoing assessments of potential in licensing opportunities but it is not something I would put at the top of the priority right now.

Jens Holstein -- Chief Financial Officer

Yeah. And maybe to add, Greg[Phonetic]. And also maybe starting with your first question, I mean we are really well on track in terms of the set up of that organization in the US, you will see that specifically when you look at our year-end forecast in terms of EBIT, the spend will increase and that will come mainly from that activities that we actually have in the US. So, to a lesser extent coming from the R&D, they will also increase versus the previous quarters but not -- to that great extent.

So it is actually highlighting what sort of effort we undertake and as Jean-Paul said, I think the organization has shifted to the priorities Jean-Paul said in his speech at the beginning to really focus our activities on of course delivering due to the plan in terms of development. But to make the launch of tafasitamab a success and then thirdly, of course the partnering has gained a lot of traction and the stronger the package is the higher the interest of the people are to participate in such a product and we feel very good. We feel that we are well on track and therefore, we are really optimistic for the rest of the year and for 2020 that we deliver, according to what we told you

Operator

The next question we received is from Danielle Brill from Piper Jaffray. Line is now open. Madam.

Danielle Brill -- Piper Jaffray -- Analyst

Thank you. Thanks guys for the questions. Just a few can you remind us which baseline characteristics were matched for Re-MIND how much variability is there between the two datasets and how much is acceptable and then I have a quick follow-up.

Graig Suvannavejh -- Goldman Sachs -- Analyst

So we have not publicly disclosed what the matching criteria were between in the Re-MIND study to compare the tafasitamab-lenalidomide combination with lenalidomide single agent data, but I can make a couple of comments and say that this was very very fruitful discussion with FDA where we agreed on criteria. There are 9 criteria. So that's a lot and whenever we speak about the design of our Re-MIND study to investigator, for example, they are really surprised about how many matching criteria we have selected together with FDA, which speaks to the quality of the data and to the robustness of the whole exercise here.

So stay tuned for more information that's coming out and the fact that we have selected 9 criteria also led to the fact that from the 5 -- almost 500 patients that we found globally we boiled it down to 76 who met all of these criteria. So that's in itself shows you how massive the effort was and how broad we started and we are, really happy to have found a very, a well-defined patient population that allowed us for a very strong matching exercise.

Danielle Brill -- Piper Jaffray -- Analyst

Thanks. Thanks a lot. That's helpful and then I'm just curious, more broadly speaking about higher efforts to increase physician awareness of MOR208 in the US are progressing.

Jean-Paul Kress -- Chief Executive Officer

So Danielle this is Jean-Paul, very well actually, this is part of my comment I made earlier on the execution acceleration we are doing now, which is normal -- 6 to 9 months before the launch. We are in the field, we have a great opportunity at ASH in a few weeks, we will have many, many engagement Interactions with the space and obviously the publications and presentations of the data, the numerous data including this ones will help in that regard. So, it's going well it is progressing. It's obviously one of our main priorities. And we have the right teams in the field.

It's important to understand that regardless of a partnership with you in a very good position to launch in the US. I would say of partnership with a co-promotion in the US would double down, but our goal and our aim is to be resourced adequately for a solo launch.

Malte?

Graig Suvannavejh -- Goldman Sachs -- Analyst

Yeah, Maybe just to add one or two more details on what John Paul said, we have massively increased on a medical affairs capabilities, we are son a role starting investigator-initiated trials. We have a medical science, like in the fields as we speak. We are way beyond 700 visits of our own MSAs with key opinion leaders and doctors in the United States. We want to bring this number close to 2000, so that we spread the word of our product.

So I think I can only support for Jean-Paul said, we are making a massive efforts to double down on these activities.

Jean-Paul Kress -- Chief Executive Officer

And I would add Danielle that time, the product profile, it's emerging now is data is best in class and we really I would say filled in the [Indecipherable] here and we that the feedback we get.

Operator

The next question we received is from Jason Butler from JMP Securities. Your line is now open, sir.

Jason Butler -- JMP Securities -- Analyst

Hi, thanks for taking the questions. Just a couple of pipeline assets. The first on MOR202, can you just tell us what you're looking for in terms of first signs of efficacy inn terms of nephropathy and are there any PD markers that we should be looking for as that trial progresses? And then on more want to just any thoughts on the potential path forward here. Do you see any potential in other indications or not? Thanks.

Jean-Paul Kress -- Chief Executive Officer

So, Hi Jason, Malte will handle the first part and I'll add to comment--

Graig Suvannavejh -- Goldman Sachs -- Analyst

So let me start with MOR202 I can give you a little bit more detail here. So we selected the indication because it's characterized by the presence of n auto antibody directed against the PLA2R antigen and these antigen -- antibody deposits are found in the glomerular capillary membrane leading to nephrotic syndrome in roughly 80% of patients. There is a direct correlation, which makes this indication extremely well studiable, I would say between the presence of the auto antibodies and the disease severity and this has been confirmed by several publication and treatments. So you can actually consider the presence of the autoantibody, a true surrogates marker, which has also been accepted by FDA. So coming to your question, what I'm looking for? I'm really looking for decrease in the autoantibody levels. We know that's roughly 80% of patients that we enroll in our study are positive for the autoantibody.

So it doesn't require a lot of pre-testing and of course, I'm looking at signs of amelioration of the nephrotic syndrome. So that's the I would say high level perspective of what we're trying to accomplish here.

Jean-Paul Kress -- Chief Executive Officer

I would add that the indication is actually underserved. There is a high unmet need, patients on the immunosuppressants and corticosteroids, and some ritixumab and so there is no modern agent, and not many -- are as we know products in the pipeline. So I think we are excited by the fact we would fill a met need here and the mechanism seems to make a lot of sense.

Graig Suvannavejh -- Goldman Sachs -- Analyst

Yeah. Excellent comment, and rituximab to make it work for patients, works only in those patients with low levels of the antibody. So we believe we have a real unmet medical need here where our antibody could make a true difference.

Jean-Paul Kress -- Chief Executive Officer

And last comment on that stage between that and me, but we're excited by this company increasingly because of the unmet need and a series of indication. That's what I wanted to say, here. We can actually double down in nephrology. There are other nephrology kidney indications that we could leverage here and there are obviously other autoimmunities. We will be disciplined, but it's exciting.

Jason Butler -- JMP Securities -- Analyst

Yeah.

Jean-Paul Kress -- Chief Executive Officer

And 106.

Graig Suvannavejh -- Goldman Sachs -- Analyst

106, what was the question, again. Sorry--

Jason Butler -- JMP Securities -- Analyst

Each of 106 -- can you give any [Indecipherable]

Malte Peters -- Chief Development Officer

Yeah. So I think it's a little early to really speculate on that with the three companies had a good development program in atopic dermatitis, which we terminated as you read today and we are certainly doing everything that's needed to finish up the clinical development program. We are now in the process between the three companies to look again at the preclinical data to brainstorm essentially what other opportunities there are and then two collectively decide what other possibilities may come up in the future.

I think I would leave it as this, it's a bit too early to really be precise or I will be more precise because these these discussions are ongoing as we speak.

Operator

And the next question we received is from Zoe Karamanoli from RBC. Your line is now open.

Zoe Karamanoli -- RBC Capital Markets -- Analyst

Hello. Thanks for taking my question. I have two questions. The first one. So I think now I totally understand why you're only matched with 15% of the actual real world data, but at the same time, I'm just not wondering why did you feel that you need to have nine eligibility criteria in order to do the comparison analysis? My sort of thought is that are you not by default then reducing the variability of the sample? And therefore, it's almost like you're looking at a sub cohort of the real world setting? And as a follow-up, in theory, if you had to actual Phase 3 trial with LEN as a control, would you have used to say nine eligibility criteria

Malte Peters -- Chief Development Officer

Yeah, really great questions. Thank you very much. So as I've said to the earlier participants, we agreed on the nine criteria with theFDA. Because if you remember the earlier discussions we had, it was very important for us that we select a patient population that is highly matchable and highly similar to the population that we have in L-MIND.

So the more criteria you select the higher is your confidence level that you're really looking at almost identical patients, I would say. And we also agreed on the level of stringency that we wanted to accomplish between the two study cohorts and we are very pleased about what we accomplished on the stringency side. And your last question is also very good. If you would design a Phase 3 study now you would select these criteria because they are known to be prognostic and have a big influence on the natural history of disease in this patient population. So-- we have selected, of course, highly clinically relevant criteria that are applied in the everyday treatments paradigm of patients.

Zoe Karamanoli -- RBC Capital Markets -- Analyst

Great. And as a follow-up with regards to the patients that were excluded from the L-MIND arm for the purpose of this analysis, I know that could you say or maybe perhaps what were the characteristics of those patients? Where they complete response, partial response? And also, why they didn't make it in the analysis? How much different they were versus the rest of the patients of the L-MIND population?

Malte Peters -- Chief Development Officer

Yes. So these four patients didn't match the criteria that I just specified. We haven't given details, but we will describe these patients in our future publication. Hopefully, it will come up at ASH, but they did not match the criteria. And at that moment, we will also give you more details on the treatment outcome of these patients that were included -- that were excluded.

Zoe Karamanoli -- RBC Capital Markets -- Analyst

Okay. Could I just follow-up? Should we then perhaps see there might be a risk that the FDA will request these patients to be excluded from the final analysis?

Malte Peters -- Chief Development Officer

No, I don't think so. Because what we will do is we were basically submit two datasets, right. That's how you have to look at it. So we will submit our L-MIND data, that's the 81 patients that we always have spoke about and then we will submit the Re-Mind dataset which will contain the comparison of the 76 and 76 or FDA will get to see everything, they will get to see the raw data of every single patient that was involved and L-MIND and then Re-MIND and of course as you know, FDA is free to conduct their own statistical analysis. They get the raw data, and then can apply their raw data in any way or form they consider adequate, but they will of course see all data sets and containing of every single patient that was treated.

Zoe Karamanoli -- RBC Capital Markets -- Analyst

Okay, thank you very much.

Malte Peters -- Chief Development Officer

You're welcome.

Operator

Ladies and gentlemen, as far as we have no further questions, I hand back to the speakers.

Jean-Paul Kress -- Chief Executive Officer

Thank you all very much for your questions. To wrap up, I hope you got the sentiment that we're well on track to achieving our goals, set for this year. We're very pleased by the recently announced Re-MIND data. With Re-MIND, we achieved an important milestone that brings us closer to our planned completion of the based on L-MIND to the FDA by year-end as planned. If accepted it allows us approval and market entry by mid 2020. In parallel, our plans for Europe remain unchanged, we still intend to file an MAA to the European Medicine Agency by mid 2020. For B-Mind the event driven by interim analysis opportunity by the IDMC is expected to occur until year end. We initiate the frontline study, we shall file the DLBCL soon and aim to further broaden the development of this key assets.

Our other operating program MOR202 is also making good progress, we announced progress for our partner I-MAB as well in our own clinical development for MOR202 and I'm very pleased to see this compound contributing to our operating clinical footprint. Altogether, we look forward to the very exciting developments head of us. Thank you.

Operator

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

Duration: 60 minutes

Call participants:

Sarah Fakih -- Head of Corporate Communications and Investor Relations

Jean-Paul Kress -- Chief Executive Officer

Jens Holstein -- Chief Financial Officer

Unidentified Speaker

Malte Peters -- Chief Development Officer

Konstantinos Aprilakis -- Deutsche Bank -- Analyst

Graig Suvannavejh -- Goldman Sachs -- Analyst

ShanShan Xu -- Berenberg Capital Market -- Analyst

James Gordon -- JPMorgan -- Analyst

Graig Suvannavejh -- Goldman Sachs -- Analyst

Danielle Brill -- Piper Jaffray -- Analyst

Jason Butler -- JMP Securities -- Analyst

Zoe Karamanoli -- RBC Capital Markets -- Analyst

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