Legend Biotech Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 15, 2023

There are 15 speakers on the call.

Operator

Good morning, and thank you for standing by. Welcome to the Legend Biotech Reports Second Quarter 2023 Financial Results.

Speaker 1

Good morning. This is Jessie Yang, are Head of Investor Relations and Public Relations at Legend Biotech. Thank you for joining our conference call today to review our second quarter 2023 performance. Joining me on today's call are Ying Huang, our CEO And Laurie McCumber, Lisen's CFO. Following the prepared remarks, we will open up the call for Q and A.

Speaker 1

We have Guo Wei Fan, Chief Scientific Officer and Steve Gaffel, Head of Commercial Development for the U. S. And Europe joining the Q and A session. During today's call, we will be making forward looking statements, which are subject to risks and uncertainties that may cause our actual results to differ materially from those expressed or implied herein. These forward looking statements are discussed in greater detail in our SEC filings, which we encourage you to read and can be found under the Investors discussion of our company website.

Speaker 1

Thank you, and I will now turn the call over to Ying.

Speaker 2

Good morning, everyone. Thank you for joining us today. We have had a very busy first half of the year, and we're excited to be sharing our latest corporate developments with you on a quarterly basis, starting with today's call. Over the past 6 months, our teams have worked incredibly hard to accomplish a number of critical milestones That has set the stage for decisive growth for our company for years to come. 1st and foremost, as you may have seen, reported by our partner J.

Speaker 2

N. J. On July 20. Our first approved therapy, CARVEKT, generated total sales are in the Q2 of 2023, amounting to $189,000,000 in sales in the first half are in the quarter. The strong performance in the quarter exceeded our expectations, which was driven by continued strong demand for our product and a meaningful increase in our daily slot capacity.

Speaker 2

We were able to ramp up a lot more quickly than anticipated, and we made continue improvements in our manufacturing processes. We're very pleased by the progress made in our commercial launch and remain committed are making Correvte available and accessible to patients who are eligible for treatment through our ongoing investments to increase capacity and improve efficiency in the second half of twenty twenty three. We continue to find success in our portfolio and pipeline, including the CARTTITUDE clinical development program that investigates CARVERTY in additional patient populations. These results demonstrate the strength of our company in our relentless pursuit of novel therapies for patients with unmet needs. This year, at the American Society of Clinical Oncology meeting in June, we presented new data from our Phase III CAR T2-four study investigating CARVETI in BLAST and lenalidomide refractory patients with 1 to 3 prior lines of treatment.

Speaker 2

In this study, CARVICTI reduced the risk of disease progression or death by 74% are in the range of 10% compared to standard of care regimens. The data were also published in the New England Journal of Medicine and presented at the European are participating in the Q3 of 2019. Based on the CARTTITUDE-four data, our partner, Janssen submitted a Type II variation application to the European Medicines Agency and the Supplemental Biologics license application to the U. S. Food and Drug Administration to expand the indication for CARVEXTA for use in earlier lines of multiple myeloma treatment as early as after first relapse.

Speaker 2

We see CARRICTI as the crux of the new myeloma landscape and have submitted regulatory applications for its expansion from 4 plus lines to 2 plus lines. We're excited by the potential to provide treatment options to patients earlier in their treatment journey and are encouraged are encouraged by the results of ongoing CAR TAVR-four study. We look forward to working closely with regulatory authorities around the world as we seek to expand the indication. As part of our efforts to expand manufacturing capacity, we signed a 3 year contract with Novartis to manufacture additional clinical doses of CARIPTIN in April and added additional certified treatment centers this quarter as part of our ongoing efforts to improve efficiencies, while expanding capacity and access to this novel therapy. In addition to our success with CARVICTI, we're also advancing our pipeline of therapies for solid tumors.

Speaker 2

This quarter, the U. S. Food and Drug Administration branded LB2101 targeting DLL3, are investigational therapy for small cell lung cancer, an orphan drug designation, in which we were able to open a trial site in the U. S. To prepare for patient recruitment.

Speaker 2

Another one of our solid tumor programs, LB-nineteen08, targeting claudine 18.2 in gastric cancer is also progressing on track. We recently opened 2 clinical trial sites in the U. S. For this program in the Q2, and we anticipate dosing our first patient soon. We look forward to reporting on the progress across are in the future.

Speaker 2

And finally, our financial outlook is equally promising and positions us to execute our plans through 2025. On the heels of our strong CAR T2-four data, we were able to raise approximately are $785,000,000 in gross proceeds in the quarter through a registered direct offering, private placements and the exercise of a warrant, bringing our cash, cash equivalents, deposits and investments to are $1,500,000,000 at quarter end. Further, as part of our collaboration with Janssen for CARVICTI and the CARTITU clinical development program, we received a $15,000,000 milestone payment this quarter at the acceptance of the Type 2 application for Cervicti and achieved Another milestone for $20,000,000 and the U. S. FDA acceptance of the SBLA of CAR TUBE-four.

Speaker 2

We continue to see additional revenue from CARVICTI as we reach additional key data and regulatory milestones. Turning to the next slide, Slide 6, a final analysis of data from the pivotal Phase IbII participants are presented at the ASCO and EHA Annual Meetings this year that showed sustained deep and durable responses in heavily pretreated patients with relapsed or refractory multiple myeloma. These data show that CARVERTY continue to demonstrate both efficacy and safety years after treatment, which has made our therapy a leading option for adult patients with relapsed are refractory myeloma. In addition, 5 year follow-up data from LAGEN II were presented. It is the longest follow-up by any BCMA targeted CAR T cell therapy.

Speaker 2

At the 5 year follow-up, These data are encouraging and bolster our belief that fusiltercell or CARVICTID is a paradigm shifting therapy. Moving on to Slide 7. As I mentioned earlier, we recently announced the submission of the supplemental biologics license application to the U. S. Food and Drug Administration to expand the label for CARVICTI.

Speaker 2

The application for expansion includes the treatment of adult patients with relapse and lenalidomide refractory multiple myeloma, who have received at least one prior line of therapy, including a proticin inhibitor and an immunomodulatory agent. With this finding, we hope to move CARVICTI into the 2 to 4 prime lines of therapy setting in myeloma subject to FDA approval. FDA has now accepted this have filed a PDUFA date of April 5, 2024. In the clinic, We plan to complete enrollment of the ongoing Phase III CARTTITUDE-five trial, which evaluates lutefil in newly diagnosed patients for whom transplant is not intended by end of this year. Furthermore, we're planning to initiate enrollment of our first line CARTTITUDE-six study in Q4 of 2023.

Speaker 2

Next slide, Slide 8. We're pleased to report that Pravette continues market penetration with net sales of $170,000,000 in Q2 of 2023, consisting of $140,000,000 in the U. S. And $3,000,000 in EU. The 63% quarter over quarter sequential growth in the U.

Speaker 2

S. Was primarily driven by high demand from physicians and patients, higher slot availability and lower out of spec rate. As of June 30, the number of active U. S. Treatment sites was 54.

Speaker 2

On Slide 9, you will see our R and D team continues to advance our proprietary pipeline in the 2nd quarter. In last quarter, we opened our 1st clinical trial site for our DLL3 program in the U. S, are our 2nd ongoing clinical trial in the U. S. In addition, a number of patients are being enrolled and dosed in a number of Phase 1 IIT programs in China.

Speaker 2

I'll now turn the call over to our CFO, Laurie Machenberg, to go over our Q2 financial performance in more detail.

Speaker 3

Thank you, Ying, and good morning, everyone. As Ying mentioned, we are very pleased with the performance of our commercial product, CARVICTI, this quarter, which generated approximately $117,000,000 in total sales, representing a 63% sequential growth are in the range of 3.88% growth over the Q2 of 2022. As a reminder, we share equally in all profits and losses of CARVICTI, are in the range of $1,000,000 with our partner, Janssen. Starting with revenue. Total revenues for the Q2 were $73,300,000 are participating in collaboration revenue from the sales of CARVICTI and $15,100,000 in license revenue for the achievement of a milestone during the quarter is outlined in the global development plan under the Janssen agreement for sitasil.

Speaker 3

Net loss for the 3 months ended June 30, 2023 was $199,100,000 or a loss of $0.57 per share are in the range of $193,200,000 or $0.62 loss per share for the same period last year. For the 6 months ended June 30, 2023, net loss was $311,200,000 or a loss of $0.91 per share are compared to a net loss of $225,500,000 or a loss of $0.73 per share for the 6 months ended June 30, are in 2020 2. Moving on to expenses. Collaboration cost of revenue for the Q2 2020 were $32,700,000 compared to $16,900,000 for the same period last year. These are Legends portions of collaboration cost of sales in connection with collaboration revenue under the Janssen agreement, along with expenditures to support the manufacturing capacity expansion.

Speaker 3

Research and development expenses for the Q2 2023 were $95,800,000 compared to $68,800,000 for the same period last here. The increase of $27,000,000 year over year is due to higher patient enrollment for Phase 3 clinical development programs for sitacel and increases in R and D activities for our other pipeline program. Administrative expenses for the 3 months ended June 30, 2023 were $27,800,000 compared to $18,100,000 for the same period last year. The increase of $9,700,000 year over year is primarily for the further build out of administrative functions and continued investment in building our global IT infrastructure, along with non reoccurring financial and legal fees related to the company's restatement have a listen only mode of its historical financial statements. Selling and distribution expense for the 3 months ended June 30, 2023, was $21,400,000 compared to $27,400,000 for the same period last year.

Speaker 3

The decrease year over year is primarily due to non reoccurring launch expenses incurred in the first half of last year to support the U. S. Launch of CARVICTI. To wrap up, Our spending remains on track, and we continue to maintain a strong balance sheet. As of June 30, we had $1,500,000,000 in cash and equivalents, are participating in our financial results.

Speaker 3

Thank you. I will now pass it back to Ying for closing remarks.

Speaker 2

Thanks, Laurence. In closing, we're very encouraged by the performance in this year thus far. Our teams continue to execute, are making tremendous progress to bring Pervicti to more patients while continuing to supply our clinical programs. We have a healthy cash balance to carry out our long range plans across all areas of the business. We now have cash runway sufficient to fund operations throughout 2025.

Speaker 2

Looking ahead, our priorities include increasing manufacturing capacity, Which we will do by continuing to invest in our facilities and working with the FDA to ramp up, activating more treatment centers in the U. S. And ex U. S, are progressing our frontline studies across CARG-five and CARG-five and CARG-six studies. Last but not least, advancing our pipeline programs.

Speaker 2

We remain steadfast in our commitment to capturing the full potential of COREVITA. Our teams across are working tirelessly to enable reliable and consistent product availability to continue with this momentum. I would like to take this opportunity to thank the more than 1500 Legend team members across the globe for their dedication and effort. Before I close the earnings close today, this is a picture of our Obelisk facility in Ghent, Belgium, which we anticipate will be operational for clinical production by end of 2023. We will now open up the call for your questions.

Speaker 2

Thank you.

Operator

The first question comes from Kelly Hsieh with Jefferies. Your line is

Speaker 4

open. Congrats on the progress and thank you for taking my questions. My first question is regarding the auto spec rate. I'm curious, is Legend expecting higher project specification limit when corrected guest approval in earlier lines from second to 4th line. And should we expect out of spec rate improve accordingly for this early line products?

Speaker 4

Congrats on the progress and thank you for taking my questions. My first question is regarding the auto spec rate. I'm curious, Is Legend expecting higher project specification limits when corrected to get approval in earlier lines are subject to follow-up. And should we expect our tobacco rate improve accordingly for this early line product? Thank you.

Speaker 5

Hey, Kelly, thanks for the question. So this

Speaker 6

is Ying. I'm going to answer your questions about auto spec. First of all, after all the work we have done in the last 6 to 12 months, we're very happy to report that Today, our current out of spec rate is trending down continuously and it's very close to the labeled rate And not much really higher than our competition's out of spec rate. So we're happy. We have made a lot of progress over there.

Speaker 6

Thanks to the effort from our Raritan operation team. And then secondly, to answer your question about the widening specs through the CAR T4 application. We did submit in our SBLA package to the FDA when we filed in June that a comprehensive, correlated analysis that provides data to convince the agency, we believe, to widen our spec pending FDA approval. So if we do get a wider spec from the agency when we receive the CAR TULIPRA are on the label. We expect auto spec rate to be down another meaningful amount from the current auto spec rate here.

Operator

The next question comes from Terence Flynn with Morgan Stanley. Your line is open.

Speaker 7

Great. Thanks so much for taking the questions. Maybe 2 for me. I was just wondering if you can comment at all about the cadence of slots in the second half of the year, if we should still expect an increase there or is it more steady state until 2024. And then my second one relates to the ASH conference, obviously always a big event in Myeloma, just wondering, Ying, if you could give us a preview of any potential, data that you guys might plan on submitting.

Speaker 7

Thank you.

Speaker 3

Hi, Terence. This is Laurie. Thank you for the question. So the cadence that you're going to see for the second half of the year, you will see a step up from Q2. As you know, we got the capacity ramped in Q2, but we didn't realize that for a full quarter.

Speaker 3

So you will see somewhat of a step up in Q3 and in Q4 we'll continue with that ramp. Regarding the ASH question, I'll turn it over to Ying.

Speaker 5

Hey, Terence. Thanks for the question.

Speaker 6

So Consistent with J and J's disclosure policy, we do not really comment on submitted abstracts. But I think given the CAR T4 data, the initial presentation was made at ASCO and EHA. You should probably expect some more subgroup analysis coming from Cardio 4. Other than that, stay tuned until the ASH abstracts are published. Thank you.

Operator

Please stand by for the next question. The next question comes from Gena Wang with Barclays. Your line is open.

Speaker 8

Thank you for taking my questions. The first question is regarding the manufacturing The balance between clinical trial enrollment versus commercial patient. So just want to make sure The Belgium site, since active by the year end 2023, will Cartitude 6 manufacturing will be all at the Belgium site initially and then you will move to Novartis sites by second half twenty twenty four. And also regarding current active sites in the U. S, do you still have a slot limitation for each site?

Speaker 8

And quickly, another set have questions regarding PDUFA. You announced April 5, 2024. Just want to confirm, this is a standard review

Operator

please stand by.

Speaker 6

Good morning, Gina. Thanks for the question. I'll answer the first and the third, and then I'll ask So on your first question, yes, we do fully expect our first stage of our Ghent, Belgium facility to come online by end of this year, and we're planning to start enrollment for CAR TU VI, basically around the timing of are coming up online for our Ghent facility. So we will start clinical production for CAR TU VI from our Ghent facility. I can't comment on Novartis at this point, but suffice to say everything is on track at this point in terms of tech transfer and related activities.

Speaker 6

And then on your third question on PDUFA date, yes, I can confirm that the PDUFA date is April 5, 2024 are under standard review.

Speaker 9

Keith? Yes. Thanks, Aeng. Thanks, Gina. Yes.

Speaker 9

So the question had to do with allocation for sites. So, you're correct. So we launched on an allocated model here in the U. S, and we continue to be in an allocated model for the foreseeable future. However, what we did do recently as our out of spec continued to have significant improvements, we also added a pool concept into the U.

Speaker 9

S. We have additional slots that our sites can then go into providing they have obviously that level of patient demand. So right now in the U. S, we have a bit of a hybrid where we have all sites being allocated as well as an open pool approach for some specific sites within the U. S.

Operator

Please stand by for the next question. The next question comes from Umer Raffat with Evercore. Your line is open.

Speaker 5

Hi, guys. Thanks for taking my question. Ying, first, can you remind us what's going on with the Board dynamics and Genscript and what changes may or may not be happening. If we can just understand what's happening on the board front and governance front. Secondly, I know you have a DLL3 CAR T in your Phase 1 right now.

Speaker 5

Can you remind us, A, what did we learn from the

Operator

please stand by.

Speaker 6

Hi, Umer. Thanks for the questions. This is Ying. So I'll answer first about the Board. As you know, we have a 10 member Board and our shareholder, Genscript, actually has appointed 3 Board members.

Speaker 6

And this is consistent with the 48 percent equity ownership held by GenScrip. I think the Board is very productive Because we do have a good mix of independent board members, 6 of those and 1 represented from the company and 3 from our sizable shareholder transcript. So I think in terms of the Board dynamics, it's a pretty good mix between a large shareholder and the 6 independent Board members. And as you can tell, in terms of CAR VICTI and the CAR VICTI program as well as our pipeline, the company is doing very well in terms of are advancing on both fronts and that is under the guidance of the Board of Directors. So that's the first question.

Speaker 6

And What's your second question, Umer?

Speaker 5

My second question was around the DLLC RT.

Speaker 10

Yes. This is Guo Wei Fang. Yes. I can comment on the second question that is with regard to the Amgen's BL3 targeted CAR T therapy. As we know that Amgen has 2 different DR3 target product in clinical trial and one of them was autologous CAR T therapy, second one is DRC target CD3 bispecific.

Speaker 10

For the autologous CAR T product, we tried in several patients in the second dose cohort. Tested in 2 patients, while patient actually gave a fairly durable response. Based on Amgen's communication, their decision on stopping the autopsys card key product is solely based on their portfolio prioritization. They want they decide to focus on the DR3, CD3 bispecific antibody. We think that the DRS3 targeted autox CAR T therapy could provide are substantial benefits to the patient.

Speaker 10

First, from a disease perspective, this is disease of a highly Ms. Hardy, I'm in Medical Need. From the targeted perspective, this is also an ideal target for all participants are in solid tumor indications. As we know that DSR3 is an image specific biomarker for neuroendocrine are in this respect, it's very similar to some of the very successful our design of the DS-three product is quite different from Amgen's product. First, we have a unique car design in term of binder, in term of overall are on the architecture of the car structure.

Speaker 10

Secondly, adding a unique armor mechanism. And currently, this program is are already being cleared by R and D and we have 2 sites activates and we are actively moving the program forward.

Speaker 6

And Umer, this is he. Maybe I want to add the fact that you probably have noticed this, DL3 is the first ever IND and clinical program, we moved into the U. S. Without conducting a first in human study in China. So We do believe that the competitor in GL3 from Amgen actually shows very promising data from the Phase II recently.

Speaker 6

And I think that's somewhat clinically validate targets. That's why we decided to bring this into IND at risk. Thank you.

Operator

The next question comes from Yaron Werber with Cowen. Your line is open.

Speaker 11

Good morning and thanks for taking my questions as well. So Ying, it's a little bit about, we're seeing from Some of your competitors that they had extra capacity for CAR T in Q2 and it looks like it was demand driven exactly when you ramped up Both your out of spec and your overall capacity. Can you talk a little bit what is your demand backlog looking like? Are you still are seeing more demand than you actually have supply. And what are you seeing from Pykveili and now Tavlay as they're coming to the market?

Speaker 11

Have you seen any impact in your demand and how is J and J going to position just sequencing wise? Thank you.

Speaker 6

Leo, thanks for the question. I'll ask my colleague, Steve to answer his question. Steve?

Speaker 9

Yes. Thanks, Ming. Hi, Leo. Yes, we've seen just the opposite, especially coming out of ASCO with release of the CAR T4 data. We've done a lot of research, as you can imagine, in this space.

Speaker 9

And market demand has done nothing but increase for silt to sell. So, in terms of your question, in terms of the backlog that we're seeing, we have seen a reduction for sure since launch in terms of the Q, Especially in the later line population and that's been largely driven to the fact of like you mentioned, there has been bispecific entry into market. But mostly on our front is just in the near term or I should say when we launched, our inability unfortunately to meet that demand out of the gate. But for sure, we are not seeing any lessening at all in demand in these late lines of treatment in particular and just the opposite in these earlier lines of treatment, should we get this indication in second line plus demand there has been very strong, especially in the high risk population.

Speaker 6

And maybe I want to add, Leo, that I talked to our Head of Technical Operations very frequently. I can confirm that starting from January of this year, we have not seen any meaningful change at all in our backlog in terms of the backlog are manufacturing operation to process.

Speaker 9

I think there was a second question knowing on that around bispecifics. I didn't yes, so let me just address that. So I think the question had to do what's happening with the bispecifics in market and also I think it was a question related to Janssen. So what we're seeing very clearly around the bispecifics is a bridge to get to the CAR T therapies. Again, it's in reaction to our manufacturing constraints that we're working under.

Speaker 9

So for sure, and this is a good situation obviously are able to bridge to a CAR T therapy, I. E. Siltacel and bridging from whatever that bispecific may be. You've seen recently a number of bispecifics being approved. Again, this is a very good situation for patients to have these different options.

Speaker 9

And also most importantly, I think this is a very key point, Is that the commercial insurers in the U. S. Continue to reimburse for CAR T therapy once a bispecific or if a bispecific is used prior to siltasil. So that again speaks to the overwhelming efficacy that we're seeing for this program, even when a prior BCMA therapy is used.

Operator

The next question comes from Leonid Timoshenko with RBC Capital. Your line is open.

Speaker 12

Hi, guys. Congrats on the progress and thanks for taking my questions. I guess going back to the priority review and the potential launch in second or fourth line. I guess

Speaker 8

Any impacts

Speaker 12

to the launch timing and readiness? Or will you be able to create a backlog of lots for the second to do a 4th line launch as well? And then I guess related to that, what are you hearing on the ground about how physicians are thinking about using CARVICTI when it becomes available in this 2nd to 4th line indication, are they going to slowly move up starting in 4th line and third line or would you expect them to jump straight to second line given the strength of data which might potentially require more supply. Thanks.

Speaker 9

Yes. Hey, Leo. Excuse me, it's Steve. Why don't I go ahead and answer your question. It's the right question, right?

Speaker 9

So what our models have shown and what the research is showing, and I mentioned this in the earlier response I just made, In particular, in the high risk population, we're seeing very quick adoption, regardless of line of therapy, right. So and I'm sure you're probably working your models. In the particular in the second line setting in particular, we noticed between anywhere between 15% to 20% of that second line population is deemed to be at high risk. Our research is telling us very clearly based upon the data we presented that is a population that Our physicians in the U. S.

Speaker 9

Is that's a very much of a treatable population for siltacel. And that's how we're modeling this as well. As you go in later lines of therapy, You see more aggressive use of siltacel. So that's how we are modeling it from our perspective, but you will see across the board use for this product and like I said, in particular in the high risk population, you'll see very high use once we have this approval.

Operator

Please stand by for the next question. The next question comes from Costas Billeris with BMO Capital. Your line is open.

Speaker 13

Congrats on the progress and thanks for taking our questions. A couple of questions from us. The first one for Laurie. In the Q1 of 2023, Abekmart generated U. S.

Speaker 13

Sales, Which were similar to your sales in the Q2 2023. Given that Abeka was a profitable product In the Q1 of 2023, can you discuss your timeline to profitability? And the second question is, BMS and 270 Bio announced recently a maintenance at one of their manufacturing sites, which have likely impacted the revenues. I was wondering, will you also need this type of maintenance at your manufacturing site? And how frequently would you need that, if at all?

Speaker 13

Thank you.

Speaker 3

Hi, Curtis. How are you doing? So regarding the question of our sales and profitability, as you know, we've been steadily ramping up and as our volumes have been increasing, participants are participating, particularly in our gross margin is improving. Overall, from a collaboration standpoint, as you know, we're continuing to make significant investments into the frontline clinical trial studies as well as manufacturing capacity. So from a program standpoint, It will still be a while before we see overall profitability for the program.

Speaker 3

But as you saw in Q2, we're making significant strides on the gross margin side. Regarding the second question, I'm sorry, can you repeat the second question?

Speaker 13

The second question has to do with the maintenance. So 270 Bio and BMS performed maintenance at 1 of the Eira Beqba manufacturing sites And this slowed down the production and are impacted. The revenues of Abekma, I was wondering whether we will also need to at your manufacturing site at some point for TARVICTI and how frequently would you need that, if at all? Thank you.

Speaker 6

Hey, Kostas, this is Dean. I'll take this part of the question from you on maintenance. So As you know, for any aseptic GMP manufacturer, every year, you are required by FDA to do this kind of maintenance. However, our operation from the Janssen and Legend teams in New Jersey, we have decided to take a very smart approach, which is we're not going to shut down facility at all. Instead, we'll do a rotation from all the different suites.

Speaker 6

So yes, every 6 months, we will have to do the so called aseptic simulation, Ross. But it really wouldn't affect the revenue So much that you're going to see a quarter over quarter decrease here. So we are planning for the smarty and We will obviously conduct all the required aseptic processes for the rest of the year. But suffice to say, we're not planning a shutdown of the facility, just to confirm. Thank you.

Speaker 13

Thank you. Very helpful.

Operator

Please standby for the next question. The next question comes from Justin Zillan with

Speaker 9

Hi, congrats on the progress and thanks for taking the questions. Maybe for Steve, Just assuming you get approval in the earlier lines here, maybe you could help us understand how slots will be prioritized, whether The line of therapy will make an impact here or whether the high risk patients may be prioritized for slots? And if you could just also comment on outpatient administration. Thank you. Yes.

Speaker 9

Hey, Justin. Yes, in terms of slot priorities or slot prioritizations. So a couple of things, just to kind of maybe rewind in terms of how we allocate and How things happen what happens at the site. So we will make our allocations. And as I mentioned to you, as capacity increases, we'll actually be allocating higher amounts as well as increasing what we call this open pool for all sites to get into.

Speaker 9

In terms of what types of patients in the allocation in terms of patient type, in terms of who gets what slot, that is basically driven at the site. I know the sites now have different criteria that each of these sites are using in terms of who will be getting cilta cel and other therapies. So that will be driven at the are at our end. In terms of I think you had a question on outpatient. Thanks for that question, right.

Speaker 9

So for those of you who've been following us for quite some time know that that's an important dynamic, as especially as we get more and larger and larger indications for this therapy. The So what we're seeing and this is interesting, we've seen now quarter over quarter quite a bit of an increase in outpatient use. We've seen in the Q1 for silpatasil, about 18% of the claims that we've analyzed have shown about of 18% of the time that these patients are being treated in outpatient clinic within the hospitals. Now for the Q2, we're seeing quite a bit of a jump now up to 30%. So you're seeing this really dynamic move from inpatient to outpatient for CAR T therapy, which is exciting for a number of reasons, especially for patients and also keeping costs down.

Speaker 9

But also the follow-up question you might have is what's happening with the marketplace. Our competitor, you're seeing less than 10% of the time, our competitors actually being used in the outpatient setting. So for sure, we believe we have more operational with Silptocel and more importantly now you're starting to see this play out in the market and we believe that's again benefits everyone, but most importantly the patient.

Operator

The next question comes from Mitchell Kapoor with H. C. Wainwright, your line is open.

Speaker 14

Hi, everyone. Thanks for taking the questions. Firstly, I just wanted you to comment broadly on the out of can virtually not be an issue anymore. And then secondly, if you could just comment on the earlier pipeline, some and timelines we could expect for the next 12 to 24 months. Thank you.

Speaker 6

Hi, Mitchell. Thank you for your question. This is Ying. So on out of spec, I'll quote one industry example, which is The Tim Ryan from Novartis, right? There's a paper out there in the public demand that describes originally of the OS rate was probably in the high 20s or 30s, but then after about 1 to 2 years of improvement in the work stream, Novartis was able to reduce that to now about 2%.

Speaker 6

So obviously, this can be done. And also from our own experience, The Janssen and Legend teams worked really hard in the last year also, and we were also able to see a very meaningful and significant reduction in our OS from the beginning of the launch to now in the teens. And we continue to optimize our work stream and there's a lot of work we can do. As I mentioned previously in this call, we have submitted a lot of data to the agency as part of the SPLA, And we do expect that we can get a wider release back from the agency on the CARTA G4 data. So when that happens, we expect a very meaningful reduction in the out of spec rate.

Speaker 6

And eventually, our goal is to reduce that to Low single digit, low to middle single digit out of spec rate. So that's our expectation. That's what we're working towards to. On your second part of the question, in terms of the next 6 to 12 months, obviously, our first priority is to get the FDA approved increase in our capacity. We're planning for another one by end of this year and then we plan to launch the 2nd line indication pending on the FDA approval by or on the PDIFRS date of April 5, 2024.

Speaker 6

And we continue to work in terms of increasing the number of facilities that will supply Carvictis. So we're doing expansion work in Raritan, And we expect the capacity from iratin will meaningful increase in 2025. And then we're opening up our first stage of Belgium are participating in Ghent. By end of next year, our large greenfield facility will be also coming online from Ghent. And as you know, we've been working with 3rd party CMO to expand our network.

Speaker 6

So all this effort will crystallize into a much higher capacity in the next couple of years. And we have said previously that we aspire to come up with an annual capacity of 10,000 doses or more by end of 2025. We're very much on track to achieve that goal at this point given our progress in the construction and also the other front. So that's probably what's really the most important catalyst or priorities for us Next step is to tell them out.

Speaker 9

Thank you.

Operator

Please stand by for the next question. The next question comes from Sami Corwin with William Blair. Your line is open.

Speaker 4

Hi, thank you for taking my question. This is Brooke Shuster on for Sami. We are wondering if you could provide any color on reimbursement and if you saw any challenges in security reimbursement, Like in comparison to inpatient versus outpatient or the academic versus community setting?

Speaker 9

Hi, Brooks. It's Steve again. The short answer is no. The as of today, Silpa Cella has really enjoyed quite open access from a reimbursement perspective. And as we lead into the 2nd line plus indication, all indications are very positive.

Speaker 9

As a matter of fact, when you look at the value capture modeling that we've done, insurers love a drug like siltycel, because of the potential it has in terms of cost containment, potentially long term cost reduction. So no, really right now, we'll continue to monitor that area. Obviously, it's a very important one for us. But to date, reimbursement has not been a problem. We don't foresee any problems in the future.

Speaker 4

Thank you.

Operator

The next question comes from Kelsey Goodwin with Guggenheim. Your line is open.

Speaker 4

Hey, guys. Good morning and thanks for taking my questions. I guess first, I saw in CARTTITUDE 4, the median time from APHIRIS is to infusion was 79 days. I guess, what are you seeing in the commercial setting? And what can be done to speed that up.

Speaker 4

And then separately, maybe building off that last question, could you maybe just provide more color on what you're seeing in terms of community patient mix and referrals from the community. Thanks

Speaker 9

so much. Sure. I'll take the question around the commercial cycle time that you referenced. We're seeing the cycle time from receipts release, anywhere between 4 to 5 weeks on average, which I think is fairly consistent to what you're seeing in market today with most CAR T therapies. I think if there's a second question, I might refer over to Inc.

Speaker 6

Hi, Kelsey. Thanks for the question on CAR T So yes, I can confirm that the medium time was 79 day cycle time in terms of van to van. There are 2 drivers behind that. Number 1 is that if you look at the trial sites we opened for CARDIO4, The large majority, I believe about 75% to 80% at least from CAR TUL4 were enrolled in Europe and the other international regions Outside of the U. S.

Speaker 6

So if you recall, that was actually conducted during the peak of COVID outbreak. That contributes significantly to the cycle time, because we had to clear the customs and also unfortunately, supply chain was severely disrupted during the COVID outbreak. That's really the major driver behind that. And then secondly, obviously, if you look at the protocol, right, there's all this bridging therapy and the requirement of the standard of care, which is either That's really the another reason why we see a higher than normal cycle time of N2 events for CAR T4. But As you just heard from Steve, right, today, during our commercialization in the U.

Speaker 6

S, we can confirm that The typical, the receipt to our release time is about 35 to 40 days in inspect samples. And we continue to make improvement on that.

Operator

I show no further questions at this time. This concludes today's conference call and thank you for participating. You may now disconnect.

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Key Takeaways

  • Legend’s first approved therapy, CARVECTI, generated approximately $117 million in Q2 sales—marking a 63% sequential increase—and $189 million in sales in H1, driven by strong demand, higher daily slot capacity, and manufacturing improvements.
  • The Phase III CARTITUDE-4 study showed a 74% reduction in the risk of progression or death versus standard care in earlier‐line multiple myeloma, leading to a U.S. SBLA acceptance with a PDUFA date of April 5, 2024, and a Type II variation filing with the EMA.
  • Legend is expanding manufacturing capacity via a three-year Novartis contract for clinical doses, the planned 2023 start of its Ghent, Belgium facility, and ongoing process optimizations to lower out-of-spec rates and widen product specifications.
  • Its pipeline for solid tumors is advancing, with LB2101 (DLL3-targeted for small-cell lung cancer) securing orphan drug designation and U.S. trial sites opened, and LB1908 (claudin 18.2 in gastric cancer) on track to dose its first patient soon.
  • Financially, Legend raised about $785 million in Q2 through equity offerings, holds $1.5 billion in cash and investments, and received $35 million in collaboration milestones—providing a cash runway through 2025.
A.I. generated. May contain errors.
Earnings Conference Call
Legend Biotech Q2 2023
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