Genmab A/S Q2 2024 Earnings Call Transcript

Quartr
Provided by Quartr
August 8, 2024

There are 15 speakers on the call.

Operator

Hello, and welcome to the Genmapped First Half twenty twenty four Financial Results Conference Call. As a reminder, this conference call is being recorded. During this telephone conference, you may be presented with forward looking statements that include words such as beliefs, anticipates, plans or expects. Actual results may differ materially, for example, as a result of delayed or unsuccessful development projects. Genmab is not under any obligation to update statements regarding the future nor to confirm such statements in relation to actual results, unless this is required by law.

Operator

Please also note that Genmab may hold your personal data as indicated by you as a part of our Investor Relations outreach activities in order to update you on Genmab going forward. Please refer to our website for more information on Genmab and our privacy policy. I would like to hand the conference over to our 1st speaker today, Jan van der Linkkel. Please go ahead.

Speaker 1

Hello, and welcome to Genmab's conference call to discuss the company's financial results for the period ending June 30, 2024. With me today to present these results is our CFO, Anthony Percano our Chief Operating Officer, Anthony Monsigni and our Chief Medical Officer, Tayah Mady. For the Q and A, we will be joined by our Chief Development Officer, Judith Klimovsky. As already said, we will be making forward looking statements. So please keep that in mind as we go through this call.

Speaker 1

During today's presentation, we will reference products being developed under some of our strategic collaborations. This slide acknowledges those relationships. We have had a very exciting Q2. The acquisition of ProFound Bio, which was completed in May, was an historic event for Genmab and one that will enhance our long term growth profile. In just a moment, you will hear from Tahi on some of the exciting next steps that we have planned for Rainer S and later Anthony Pagano will walk you through the financial impact of the acquisition.

Speaker 1

June was an exceptionally eventful month for Abkinley, which is now the 1st and only bispecific antibody approved in the U. S. To treat both relapsed or refractory follicular lymphoma and relapsed or refractory diffuse large B cell lymphoma. In addition to the U. S.

Speaker 1

Approval in relapsed or refractory follicular lymphoma, the CHMP adopted a positive opinion recommending TAP Kinley, as abcuritumab is called in Europe, for the same indication. Both regulatory actions were supported by data from the APCORE NHL-one trial, which was also recently published in the Lancet Hematology. We'd also like to note the potentially imminent start of another Phase III trial for aparitamab. This one in combination with lenalidomide for transplant ineligible patients with relapsed or refractory diffuse large B cell lymphoma. Together with our partner AbbVie, we continue to evaluate abcuritumab in multiple patient populations and treatment settings with the goal of establishing aparitamab as a core therapy in B cell malignancies.

Speaker 1

During our Q1 earnings call, we discussed the FDA approval and Japan NDA submission for TifTec, both of which occurred early in the quarter. As a reminder, with its approval in the U. S, TifDAC became the 1st ADC with demonstrated overall survival data to be granted full FDA approval for the treatment of patients with recurrence or metastatic cervical cancer with disease progression on or after chemotherapy. I'm also excited to note that data from the innovative 301 study on which the approval was based was recently published in the prestigious New England Journal of Medicine. By now we hope that you've all had the chance to listen to our June 3rd call to review some of the exciting data that we presented at ASCO, including for TivDAC, Abkinzi and of course, Akasunlimab.

Speaker 1

Ty will provide you with a brief reminder of the very promising arcosunlimab data and our next steps for the program on today's call. Before this, I would like to highlight the key change to the acasulinumab program that we announced on Monday. Genmab has now taken full control of the development of acasunlimab. This is a fantastic opportunity for us to own and advance these promising assets. Our partner Biotech has opted to not participate in the further development of acasunlimab.

Speaker 1

And we understand that this decision was based on their strategic portfolio prioritization and does not reflect the strength or potential of acasunlimab. This now becomes our 2nd wholly owned candidate medicine entering Phase 3 by the end of this year, underscoring our strong confidence in the clinical promise and commercial potential. We are exceptionally well positioned to maximize of acasunlimab as we are very excited about the future of this program. I would also like to add that even though our partnership is changing on this program, it remains extremely strong and collaborative, and we are committed to continuing to work together to advance innovative antibody treatments for patients. Finally, turning to medicines powered by our innovation.

Speaker 1

Janssen announced that ribofound has now been approved by the European Commission for the first line treatment of adult patients with advanced non small cell lung cancer with activating each of our exon 20 insertion mutations. In addition, they have submitted a BLA for a subcutaneous version of amivantamab for all currently approved or submitted indication of IV type of ones in certain patients with non small cell lung cancer. More recently in July, Janssen announced approval in the U. S. For DARZALEX FOSPO in combination with botizumab, linalidomide and dexamethasone for the treatment of patients who are newly diagnosed with multiple myeloma and are eligible for autologous stem cell transplant.

Speaker 1

This combination based on data from the Phase 3 Perseus study has the potential to improve long term outcomes for patients newly diagnosed with multiple myeloma and further supports DARZALEX as a backbone therapy for this disease. Anthony Monsigny will provide you with a review of the recent performance for DARZALEX plus other select royalty medicines as well as of course for Abkinli and Tivtec. First, I'm pleased to hand over now to Tahi, who will provide you with a reminder of the significant progress we are making with our wholly owned late stage clinical programs, acasulimab and RINA S. Tay, the floor is yours.

Speaker 2

Thank you, Jan. I'm sure by now you have all seen the Phase 2 acasolumab data in combination with pembrolizumab in second line non small cell lung cancer that we presented at ASCO. This data is very encouraging, demonstrating significant disease control and over survival alongside a manageable safety profile. As a reminder, in this CPI pretreated patient population, we presented an impressive median over survival of 17.5 months and a 12 months OS rate of 69%. Additional data will be presented at medical conferences, including the World Conference on Lung Cancer in September next month.

Speaker 2

This will include traditional translational data that should help you better understand our confidence in the Q6 week dosing schedule. And to ensure that there is no confusion, this will not include updated clinical data. We are simply too close to ASCO and therefore limited by a very short follow-up, which really prevents a meaningful impact on time to events analysis. That said, the encouraging data both from ASCO and the translation data that will be presented at WCLC reinforces our commitment to swiftly progressing the Phase III trial in PD L1 positive patients with non small lung cancer who progressed on a CPI either alone or in combination chemotherapy. And we expect to start this study before the end of the year.

Speaker 2

Given both our proven and extensive clinical development experience and our track record of acceleration as you've seen with Abkinli, we are confident in our ability to advance arcosolumab through Phase 3 and beyond. Moving now to Vina S. As a reminder, this slide summarizes why VENA S aligns with our vision to transform the lives of patients. We believe it has the potential to broaden, deepen and consequently expand activity beyond what has been seen with 1st generation folate receptor alpha approaches, becoming a potential best in class treatment for ovarian cancer and other forward receptor alpha expressing solid tumors. In addition to the efficacy, it also has a differentiated safety profile avoiding interstitial lung disease and corneal toxicities seen with other ADCE therapies.

Speaker 2

This differentiation, both in efficacy and safety is a direct result of the novel proprietary hydrophilic linker technology developed by ProFound Bio. We're exceptionally well positioned to maximize the potential of VENA S given both our full clinical development capabilities, the track record of acceleration and our experience in the gynox space already with TIFTAK. And as we said before, we anticipate the first potential approval for Arena as could be in 2027 and importantly we anticipate blockbuster peak sales potential. Now this is what we shared with you when we announced the acquisition of ProFound Bio. Now that we are officially responsible for the development of Athena S, let's take a look at our near term plans.

Speaker 2

Previously, we told you that we'll be providing an update to the initial encouraging Phase 1 ovarian cancer data that was presented at SITC last year. We can now confirm that you will see both updated data and additional follow-up at ESMO in September. I'm also pleased to note that we are on track to deliver on our accelerated development plan. We have aligned on the dose with health authorities and expect to start a Phase 3 trial in second line plus platinum resistant ovarian cancer before the end of the year. So in summary, significant progress for both acasunumab and RENA S, and we look forward to sharing more information with you when it becomes available.

Speaker 2

I will now hand it over to my colleague, Anthony Mancini.

Speaker 3

Thanks, Todd. In Q2 and in the first half of twenty twenty four, performance across our 2 key revenue streams, Royalty Medicines and Genmab Commercialized Medicines continued to demonstrate strong growth. Turning to our Royalty Medicines portfolio on Slide 8, DARZALEX delivered strong demand growth with $5,570,000,000 in first half net sales, a 19% year over year growth driven by market share gains overall and meaningful market share increases in frontline multiple myeloma. As Jan mentioned, on July 30, FDA approval was received for a new indication for Darzalex for a Darzalex Faspro quad combination based on the Perseus study in newly diagnosed transplant eligible multiple myeloma. As J and J mentioned in their earnings call, primary endpoints were also met in 2 additional DARZALEX studies in Q2.

Speaker 3

Cepheus, a DARZALEX based quad regimen in transplant ineligible newly diagnosed multiple myeloma and Aquila in smoldering myeloma. Detailed results from these studies will be presented in an upcoming scientific meeting. Coupled with the final analysis of MAIA showing a median overall survival of 7.5 years, it's clear that DARZALEX is foundational to survival in multiple myeloma and that growth opportunities will continue with DARZALEX in early treatment settings. Beyond the early settings, DARZALEX is continuing to be a backbone therapy in combination with both newer and older therapies in relapse or refractory multiple myeloma, including with TEGVILI, our CD3 BCMA dual body bispecific and TALVE, our CD3 GPRC5D dual body bispecific, which each delivered solid performance in the first half of twenty twenty four. We expect continued growth and continued usage of DARZALEX throughout the multiple myeloma patient journey.

Speaker 3

Kasympa achieved continued strong demand performance with over $1,400,000,000 in the first half, a 64% year over year growth. Cosympta performance is not only progressing well in the United States, but also outside the United States, it continues to be the new to brand prescription share leader in 7 of 10 major markets outside the U. S. TABEZZA, the 1st and only FDA approved treatment for thyroid eye disease generated net sales of $479,000,000 in Q2. In addition, with the June 17th FDA submission for the subcutaneous formulation of Rybovant, our EGFR c Met bispecific, it's another milestone to help make an even bigger impact on EGFR mutated non small cell lung cancer patients.

Speaker 3

In summary, we expect continued strong Genmab revenue growth from our 6 diverse royalty medicines in the second half of twenty twenty four and beyond. Turning to our Genmab commercialized medicines on Slide 9. On June 26, we received accelerated approval in the U. S. For our second indication for APKINLE as a monotherapy for patients with relapsed or refractory follicular lymphoma after 2 more lines of prior therapy.

Speaker 3

We also received a positive CHMP opinion for this indication on June 27 with an approval decision in Europe expected in Q3. The early response in the U. S. To Abkinley in follicular lymphoma has been very positive. We continue to hear encouraging feedback from our customers across diverse sites of care regarding the FL label that does not require hospitalization.

Speaker 3

This gives us confidence in expanding our kinli utilization across practice settings as the 1st and only T cell engaging specific antibody approved for both 3rd line plus DLBCL and 3rd line plus FL. In addition, we presented 2.5 year follow-up data at ASCO demonstrating the long term durability and powerful responses with that Kinley in 3rd line plus DLBCL. We're very pleased with that Kinley demand performance across our key geographies with over 90% of net sales coming from the U. S. And Japan.

Speaker 3

Kinley delivered $121,000,000 in net sales for the first half with $70,000,000 in Q2, which includes foreign exchange headwinds in the first half of twenty twenty four. In both the U. S. And Japan, McKinley has seen robust uptake across key accounts, strong field execution and positive responses from customers and the patients we serve, really validating at Kinley's differentiated profile that balances powerful efficacy, manageable safety and a seamless patient experience with subcutaneous administration. Overall, the launch is exceeding our expectations with our 3rd line plus DLBCL and 3rd line plus FL indications as the first steps towards establishing at Kinley as the core therapy across B cell malignancies.

Speaker 3

Turning to TIVDAC, our tissue factor directed ADC, it delivered $60,000,000 in net sales for the first half twenty twenty four, a year over year growth of 48%. This represents the 11th consecutive quarter of demand growth for TypTap. We're very pleased with the performance and the recent full approval based on the significant 30% improvement in overall survival in the innovative 301 study is driving increased breadth and depth of prescribing. Gynonc and MedOnc customers continue to provide positive feedback on the impact TIVDAC is making on the lives of women with cervical cancer. And we're well on our way to establishing TIVDAC as a clear standard of care in second line plus recurrent or metastatic cervical cancer.

Speaker 3

The success we're building in gynecologic oncology with TIVDAC is an important foundation to prepare for future potential launches such as RENA S in folate receptor alpha expressing platinum resistant ovarian cancer. As an end to end biotech company, we're very pleased that our Genmab commercialized medicines performance represents 31% of Genmab's overall revenue growth in the first half and look forward to carrying this momentum through the second half of twenty twenty four and beyond. I'd like to take a moment to thank our partners and our entire cross functional Genmab team across commercialization, R and D and enabling functions for their tireless efforts every day to make a meaningful difference to the patients we serve. With that, I'll hand the call to Anthony Pagano to provide more perspective on both our first half financials and our updated guidance.

Speaker 4

Great. Thanks, Anthony. We continue to strengthen our foundation throughout H1. Having delivered on our goal of successful regulatory approvals and launches for Abkinley in the U. S, Europe and Japan in 2023, we are pleased with how these launches are progressing.

Speaker 4

And even more so now with the second indication in the U. S. And the potential for additional approvals in Europe and Japan for late line follicular lymphoma. We've also significantly enhanced our long term growth potential with the completion of the acquisition of Profound Bio. And as we'll see, our financials remain strong.

Speaker 4

Recurring revenues grew by 42% in H1. This was principally driven by strong royalties from DARZALEX, KOSIMTA and other approved medicines as well as strong performance from both Epkinley and TIVDAC. This strong H1 performance is driving an increase to our full year revenue guidance. Our solid balance sheet, growing recurring revenues and significant underlying profitability allow us to continue to invest in our business, our pipeline and our team and capabilities in a very focused and disciplined way. Now before we take a closer look at the results from H1 and our improved guidance, I'd like to provide you with an overview of some of the details and financial impact of the acquisition of Profound Bio.

Speaker 4

Starting on the left, we've summarized how the DKK 13,100,000,000 purchase price has been allocated. First, you can see the largest portion of the purchase price has been allocated to RENA S. And here amortization will begin on regulatory approval which is estimated to be in 2027. 2nd, for the ADC Tech platform, amortization started at the closing of the transaction and will continue over 15 years. And this is what you can already see impacting the P and L in 2024 with an estimated full year impact of 48,000,000 dollars We also have goodwill, which isn't amortized and will be tested for impairment every year.

Speaker 4

And finally, the difference between the purchase price and the total fair value listed here is primarily due to an assumed deferred tax liability of $2,100,000,000 This reflects the estimated future tax obligations related to the acquired intangible assets, primarily RENA S and ADC tech platform. Now moving to the right, you can see that since closing the deal, we've incurred $330,000,000 of costs related to Profound Bio. And on a full year basis, we expect costs of around 1,150,000,000 dollars As you will see, acquisition and integration related charges or deal costs are a separate line item on our P and L. Taken together with the ADC amortization expenses, these are expected to be around $400,000,000 for the year. And as a reminder, these costs were excluded from the directional financial guidance I provided when we announced the deal back in April.

Speaker 4

So with this background, let's take a look at our results for H1 and let's start with our revenues. We grew total revenue to over DKK 9,500,000,000 in H1. And as I've already highlighted, that included a 42% increase in our recurring revenue. This strong growth was driven by higher DARZALEX and KASIMTA royalties as well as royalties from other products. And we're pleased with how APKINLE and TIVDAC are performing.

Speaker 4

Taken together, these two products contributed 31% of our total revenue growth in H1. And this really illustrates the power of our recurring revenue. And overall, this strong recurring revenue growth enables our continued highly focused investment as you can see on the next slide. In line with our significant growth opportunities, total OpEx was approximately DKK 6,700,000,000 in H1. As you can see, the majority of the growth was driven by R and D investments.

Speaker 4

Here, we've accelerated our investment into our product portfolio, especially the advancement of our mid to late stage pipeline. Specifically, we're expanding the development for Epkinley, TIVDAC, acasunlimab, now of course, RENA S. As you can also see, SG and A growth moderated and was up only 12% and this reflects our continued focus on driving SG and A efficiency. As previously highlighted, we continue to invest to secure a successful Epkinley launch in our 2 key markets, the U. S.

Speaker 4

And Japan. And of course, we've been really focused on the acquisition and integration of Profound Bio. Now let's take a look at our financials as a whole. Here you can see our summary P and L. Revenue came in at over DKK9.5 billion.

Speaker 4

That's up 36% on last year. Total OpEx was around DKK 6,700,000,000 and here again most of which was R and D. And even with that increased investment, we're still delivering over $2,400,000,000 of operating profit and that's up more than 29%. Moving to our net financial items. Here we have a gain of 1,400,000,000 dollars This gain was driven by the strengthening of the dollar against the kroner in the first half of the year as well as by an increase in interest income.

Speaker 4

Then we have tax expense of $1,100,000,000 which equates to an effective tax rate of 28.9%. And here, I do want to pause for a moment and note that we are currently evaluating the integration of Profound Bio operations from a tax perspective. So our effective tax rate may experience some volatility as integration activities progress. However, we do anticipate that this is going to normalize within the next 12 to 18 months. And that brings us to our net profit of over DKK 2,700,000,000.

Speaker 4

So as you can see, continued strong underlying financial performance. Having now looked at our H1 results, let's take a look at our updated guidance. At a macro level, you'll see we're projecting higher revenues and operating profit even as we take on 2 wholly owned Phase 3 programs. I've already covered in some detail the impact of the ProFound Bio acquisition. Now as far as us taking on full responsibility for acasunumab, this does have the effect of grossing up both our revenue and our expenses for all products that remained in our collaboration with BioNTech.

Speaker 4

This results in around DKK600 1,000,000 of both higher revenue and higher costs. But really here it's important to note, this classification change in our guidance does not impact our operating profit. Now looking at the highlights of our revised guidance, we now expect our revenue at the midpoint to be up 28% over last year and be in the range of DKK 20.5 billion to DKK 21.7 billion. One of the drivers of this increase is strong net sales of our royalty medicines. We are now anticipating higher DARZALEX net sales in the range of $11,400,000,000 to $11,800,000,000 So here we've increased our royalty guidance to DKK13.3 billion to DKK13.8 1,000,000,000 and that's an increase to both the top and bottom end of the range.

Speaker 4

And importantly, we also anticipate that we're going to have over DKK 1,300,000,000 of growth from Abkinley and TivDAC. Now turning to our OpEx. Excluding deal and amortization costs, we are anticipating OpEx to be in the range of $13,700,000,000 to $14,300,000,000 which includes R and D investment to support the advancement of ProFound Bio's clinical programs primarily RINA S and also on our side acasulamab. Now I told you when we announced the acquisition of ProFound Bio that excluding acquisition and integration related charges, we are anticipating OpEx at or moderately above the upper end of our previously disclosed OpEx guidance. So now excluding both the ProFound Bio deal and amortization costs and this DKK 600,000,000 item that I just described relates to the BioNTech collaboration, this classification change, you can see that we're absolutely delivering on that guidance commitment.

Speaker 4

And note that even with our increased investments, we continue to generate significant underlying profitability and we're on track to deliver another year of substantial operating profit. In fact, when you exclude the acquisition, integration and amortization costs for Profound Bio, the midpoint of our current operating profit guidance is now at $6,200,000,000 and that compares favorably to our previous guidance of $5,900,000,000 and that's up 17% over 2023. Now before wrapping up, I'm going to spend just a minute to double click on the changes to our OpEx guidance. As a reminder, at the midpoint, our original OpEx guidance was DKK 12,900,000,000. As you can see, the impact of the operational changes for Genmab and ProFound Bio is around 500,000,000 dollars This includes the $800,000,000 of costs related to ProFound Bio's operations and this is really driven by investment in RENA S that I referenced earlier.

Speaker 4

It also includes a net $300,000,000 reduction related to Genmab driven by continued prioritization efforts and scale benefits partially offset by acasimlimab development. And that brings us to DKK 13,400,000,000 which is fully in line with what we communicated when we announced the acquisition in early April. Then you can see the impact of the classification item or gross up of the expenses for the products remaining in the BioNTech collaboration of $600,000,000 Now again to be clear, these higher costs are fully offset by higher revenue and have no impact on operating profit. And finally, you can see here we have the ProFound Bio deal and amortization costs of 400,000,000 dollars Now having gone through the H1 numbers as well as our revised and improved guidance, let me provide a few closing remarks. In summary, we've had a very solid first half of the year.

Speaker 4

We have growing recurring revenue streams increasingly from our proprietary products and that gives us a strong backbone of significant underlying profitability. And we're investing those revenues in a highly focused way to realize our vision and to capitalize on the very significant growth opportunities in front of us. And on that note, I'm going to hand you back over to Jan.

Speaker 1

Thanks, Anthony. Let's move to our final slides. During the first half of the year, we have made significant progress towards our 2024 goals. Especially for Abkinley, we have now announced or initiated 2 new Phase 3 trials and the label has been expanded in the U. S.

Speaker 1

To include relapsed or refractory follicular lymphoma. And of course, we are extremely pleased with the full approval for TIVDAC that occurred in April and the encouraging Phase 2 acasolumab data that has informed the planned Phase 3 trial. And as a reminder, that makes 2 wholly owned assets, acosunumab and Triana S that we anticipate will both enter late stage development before the end of this year. As we move into the second half of the year, we continue to have a lot to look forward to. That ends our presentation of GenMark's financial results for the first half of twenty twenty four.

Speaker 1

Operator, let's go to the questions.

Operator

Thank you so much. And now we're going to take our first question. And it comes from the line of Emily Field from Barclays. Your line is open. Please ask your question.

Speaker 5

Hi. Thanks for taking my question. I just wanted to I'll ask 2 and I guess one kind of as a follow-up. Just on acasalone when do you expect you start enrolling patients in the Phase 3? Are you expecting that you would use docetaxel as a control arm?

Speaker 5

And just how are you thinking about a potential changing standard of care with the potential of the approval of TRO-two ADCs? And then secondly, just now that you're going to have 2 wholly owned projects that you're starting going into Phase III, how should we think about Genmab R and D cost in 2025 and 2026? Thanks.

Speaker 1

Thanks, Anthony. Thanks, Emily, for the questions. And let's take the first one to Tay, who can give a bit more color on the Phase III trial for acasunlimab. And then Anthony Parcana can undoubtedly give you further color on the R and D costs, Emily. Tay, why don't you start?

Speaker 2

Yes. Thank you for the question. I mean, as it relates to the control arm, I think we've mentioned this multiple times, we had all the relevant health authority interactions and the relevant and the only relevant comparison at this point is docetaxel. I think there's a lot of heightened discussion about whether a subgroup analysis of

Speaker 6

a

Speaker 2

principal negative trial can lead to an approval. I think this is a discussion for another company, but all health authorities have been crystal clear on this particular question. So it will be Doxidaxel as a control arm. That's the regulatory approved control arm. And I think we mentioned this in the prepared remarks.

Speaker 2

We are operationalizing towards having this study up and running by the end of the year.

Speaker 1

Thanks, Thij. And I think further details will come in the future, Emily. Let's move to Anthony and then have a further color on the R and D expenses. Anthony?

Speaker 4

Yes. Thanks, Emily. As we think about our investment in R and D, we've been super clear about our priorities. And I think the way a good way to sort of frame this out is to break R and D down into 2 segments. Segment number 1 being research and discovery all the way through to early development and then the second segment being that mid to late stage segment.

Speaker 4

As we think about that first segment being research and discovery through the early stage development, we've talked quite a bit about us scaling that up over the last number of years. We view that as an underutilized asset in the company and we can see that we're now bearing the fruits of that investment in terms of scaling that up, in terms of the number and quality of INDs we see coming through. We've been very clear now as we've gotten into 2023, 2024, we think that that whole setup and that investment, the amount of money we're allocating there is now at the appropriate level and any investments there will be much more moderate, if any will be much more moderate in nature. The second segment is that mid to late stage segment. And here, this is where the focus of the organization is.

Speaker 4

This is our priority. We are prioritizing investments in this area versus investments in other areas. So clearly investments in McKinley, TIV DAC, 1046 and now RENA S will get the lion's share of any growth here moving forward. And I think it's very obvious as to why this is, particularly any registration type trials, again, we're prioritizing those are potentially revenue generating in nature. And that's what we're really focused on doing, Emily.

Speaker 4

So you should very much sort of think about R and D along these two segments and any growth moving forward or the majority of the growth moving forward is really going to be from segment number 2 that mid to late stage programs particularly potentially registration enabling trials.

Speaker 1

Thanks, Anthony. Thanks, Emily for the questions. Operator, let's move to the next questions.

Operator

Thank you. And the next question comes from the line of Shang Dang from UBS. Your line is open. Please ask your question.

Speaker 7

Hi. Thank you for taking my questions. 2, please. The first one is on arcosumab. You mentioned now you are this is a wholly owned asset.

Speaker 7

But just wondering, would you still be open to, for example, new partners here? Or are you committed that this is what we wholly owned going forward? And if you are open to new partners, what sort of things would you be looking for in your ID partner, please? So that's the first question. And the second one is on apasonumab data update for word long.

Speaker 7

Just wondering, maybe for Tachy, so what sort of things can we actually expect? Will we have a bigger patient size for the every 6 week arm, please? Thank you.

Speaker 1

Thanks, Jan, for the question. So for acasunumab, I can tell you that we are very, very, very pleased to have it now wholly owned. So we are not foreseeing that we need to look for a on what and we intend to hold on to it for the time being. What we could do in the future is potentially look for a partner in select areas, for example, for China, because that sets a different dynamics in the markets. Right now, as you know, we have key priority markets, U.

Speaker 1

S. And Japan. We will likely move into EU5, EU4 plus UK, also with some of our products in the future, but maybe China is a good territory we think to look for a partner. So maybe a regional partnership is potentially an option, but we have not decided that. We are just very, very pleased with the 100 percent ownership and we will progress as aggressively as we can see on to move it towards registration trials and then to the markets.

Speaker 1

And then maybe Tay, you can give a bit more color on the type of data as World Plumbing and other conferences because there will likely be other conferences in the coming months, see on where we will present data. Tay?

Speaker 2

Sure. Thank you, Jan, and thank you for the question. The data that you will see is essentially trying to provide granularity on how a Q6 week schedule changes the biology. So you will see data on T cell expansion of relevant subgroups of T cells. You will see data on T cell exhaustion and relevant T cell subsets and other pharmacodynamic markers relevant to the mechanism of action as well as PK data that correlates and explains what really the pharmacokinetic and pharmacodynamic differences are between Q3 and Q6 and why that matters and how that translates into the clinical observations that we observed.

Speaker 2

So that is the main focus on these data sets to provide additional color on the mechanism on the biology and how we concluded the differentiated profile for Q6 week scheduling.

Speaker 1

Thanks, Thijs. Let's move to other questions. Operator?

Operator

Thank you. And now we're going to take the question from Jonathan Chang from Leerink. Your line is open. Please ask your question.

Speaker 8

Hi, guys. Thanks for taking my questions. First question, what are your latest thoughts on the next development steps of reninase in ovarian cancer? When could we learn the details of the Phase 3 second line plus platinum resistant ovarian cancer study expected to start toward the end

Speaker 9

of the

Speaker 8

year? And then as a follow-up to that, what is your confidence level and ability of RINAS to address patients across the biomarker spectrum in ovarian? And how important is that to your strategy? Thank you.

Speaker 1

Thanks Jonathan for the questions on RINOS, another molecule we are super excited about. Let's ask Tay to start and then you the 2 chair to step in if to provide extra color. Tay, why don't you start with both questions?

Speaker 2

Sure. I'll take the second one first. I mean, this is from the very beginning, was part of our excitement about MENA as a molecule and also relates to our excitement in the LinkedNet technology that we believe quite firmly. And I think you will then have the opportunity to see the data at ESMO that, we know ESMO have activity, meaningful activity across the spectrum and beyond of photoreceptor expression in PROG patients. So that's the first part.

Speaker 2

As it relates to the details on the Phase III, I mean, some of this will become public as the study goes into the public space in clinicaltrials.gov. We're very clear what the segment is. I think I already kind of addressed a sub question that you may have in your mind around what the population is. And I think the control arm is a hodgepodge of available alternative therapies in this setting in a dealer charge trial. And so that will be the first study, not the last one.

Speaker 2

And so I think you will have to wait. To some degree, we are in a dynamic where we obviously want to update you. And so we updated you on informing you that we're very well in the start up of the study already. But we also want to be cognizant of the fact that this is a hypercompetitive environment. And so you'll see it as it gets executed, but it will get executed quite rapidly and accelerated.

Speaker 2

I promise you that.

Speaker 1

Thank you, Thijs. So more to come Jonathan in the very near future, very near.

Operator

Thank you. Now we will take our next question. And the next question comes from the line of Asthika Gudevardene from Trist. Your line is open. Please ask your question.

Speaker 10

Hi, guys. Thanks for taking my question and congrats on the progress and the impressive outlook that's laid out for the second half this year and future. I want to go back to 1046 and also Taiwan 1042. Tahira, you mentioned you were clear on what to expect and what not to expect at World Lung. I'm curious if there are other conferences later in the year where you could provide an update for 1046, just given how exciting that the ASPO data was and do you want to see more follow-up?

Speaker 10

And related to that, in previous calls, I think we've kind of got the feeling that there might be something on 1042 perhaps

Speaker 11

in head and

Speaker 10

neck later on this year. Just want to check back on that and see if that's still possibility or what kind of update we can expect on that module as well?

Speaker 1

Thanks. Thanks, Astika for the questions. I think, Tay, you can handle them both. Maybe shed a bit of light on other conferences.

Speaker 2

Sure. So let's take 1042 first. I think what we've said multiple times, what we're clear is there were some observation learnings that I hope will also become a little bit more transparent with the mentioned presentation at Wertlong that were at least taken into consideration and are being tested as we speak. And when that data is mature, then we'll present that and that will then provide, we're quite confident, a very clear answer on 1042. So I'm not going to comment on this any more than that because to some degree, we'll just have to wait for data in our hands.

Speaker 2

On 1046, I think Jan already mentioned there's going to be additional data at SITC. There will be a lot around translational data. What do you in terms of clinical data, I think it makes sense to generate a little bit more follow-up on also more patients that have been enrolled in order to better elucidate the mitigation strategy that we implemented to make it more safe. And so that with the time to event readout takes a little bit more time. So we'll bring that into the public domain as soon as it makes sense on the data set.

Speaker 1

Thanks, Dai. And we give you extra Astigata also at ZCEDCED and then to present some further preclinical data, It will further help you to understand this new biology of activating T cells and NK cells for 1 would be bispecific. So lots of new data supporting I think the excitement around acasunlimab.

Operator

Thank you. Now we'll go and take our next question. And the next question comes from the line of Peter Beldout from Citi. Your line is open. Please ask your question.

Speaker 6

Yes. Thank you. Peter, Citi. Two questions please. Jan speaking to the Pfizer oncology team, they've got 4 head and neck cancer assets that could go into Phase 3, but they're saying not all will.

Speaker 6

So I just wanted to confirm and apologies if I've missed this, but is the head and neck Phase 3 program for TIVDAC confirmed or do we await confirmation of that? And then for Tahi or Vian, I'm sorry to test your patience, but what is the latest on hexa body timelines in terms of data release and J and J decision? Or is it unchanged since the last update? Again, apologies for testing your patience. Thank you.

Speaker 1

Thanks, Peter, for the question. So why don't I ask Judith to give a bit of color on the head and neck plans for TIV DAC. But before that, I can probably handle the hexaBody CD38 question, Peter. We are progressing really, really rapidly and we are fully on schedule to present to have the data and present them to J and J in the second half for high antibody CD38 versus subcu DARA and there will likely be an update from the company also by the end of this year. Maybe not at the medical conference, but then in another format.

Speaker 1

So maybe Judith, you can give a bit of color on head and neck cancer data for TIVDAC.

Speaker 9

Yes. So as you know, we present the encouraging data on order based on RMC at ASCO. Of course, we are waiting for maturity of this data. And in parallel, we open another cohort with Part E, which is combination to assess the strategic fit for the company and for TIVDAC and make further decisions by the end of the year. So we are closely monitoring the data.

Speaker 9

Yes, yes. Thank you.

Speaker 6

Just to be clear sorry Julian, just to be clear, is our Phase 3 program confirmed or you're awaiting that data first?

Speaker 9

No, usually, we start some things at risk, but we jump into the pool when it's the right strategic fit and we have the right target profile for a particular indication and this is what we are following the data for.

Speaker 6

Thank you. Thank you.

Operator

Thank you.

Speaker 1

Next one please operator.

Operator

Yes, of course. Now we're going to take our next question and it comes from the line of Yaron Weber from TD Securities. Your line is open. Please ask the question.

Speaker 6

Great. Also maybe just a quick follow on tiktizumab. I just want to confirm, so it sounds like the Phase 3 is only going to be testing the Q6 week, head to head against docetaxel. And can you I don't know if you can comment, would the primary be just PFS or is that going to be PFS and then OS kind of co primary? Thank you.

Speaker 1

Thanks, Jahan, for the questions. Thij, can you give a bit of color on the endpoints for the Phase 3?

Speaker 2

Sure. It will be a 2 arm study with a control arm and with the Q6 arm of acasunibar in combination with pembo. This is where we have the signal. This is where the data leads us. And the endpoint will be over survival.

Speaker 1

Thanks. Very clear, Thijs. I think that's the answer, Jaren, for your question.

Operator

Thank you.

Speaker 1

Let's move to the next one, operator.

Operator

Thank you. And now we're going to take our next question and it comes from the line of Matthew Sykes from William Blair. Your line is open. Please ask your question.

Speaker 6

Hi, there. I apologize for that. Thanks for taking my question. You've had a nice launch of Upkinley in lymphoma so far to date in the DLBCL space. Just wondering how we should think about uptake in follicular lymphoma given already another approved price difference there and how much that can contribute in the near term?

Speaker 6

Thank you.

Speaker 1

Thanks, Matthew, for the question. And then Anthony Monsigni, I think you can best handle this one. Maybe a bit more on color, uptake in follicular lymphoma versus diffuse large B cell lymphoma?

Speaker 3

Yes. Thanks, Matt, for the question. Workload for we're about 6 weeks into the launch here, but it's going really, really well. We're again really encouraged by what we hear in terms of the customer reaction to the favorable label without required hospitalization or monitoring. And we think it gives us confidence that we can advance that Kenly use across diverse sites of care.

Speaker 3

We're starting to see growing Kenly adoption in many of the large physician group practices. And we believe that the 3rd line plus FL label is going to really enhance our ability to deliver innovation more broadly to patients in need where they want to be treated closer to home and we think the Kenley profile really enables that. In terms of the size of the population, it's really a modest population size, but because of the differentiation of having one product across both indications, we think it's the reactions have been very favorable so far in the community. So I'll leave it there.

Speaker 1

Thanks, Anthony. Thanks, Matt, for the question. Let's move on to the next one, operator.

Operator

Yes, of course. And now we're going to take our next question and it comes from the line of Michael Schmidt from Guggenheim Partners. Your line is open. Please ask your question.

Speaker 11

Hey, thanks for taking my questions. I had a commercial question, a follow-up on eclaridumab. And just thinking ahead, wondering how we should think about the launch trajectory perhaps in follicular lymphoma relative to the initial launch in DLBCL, given presumably there is a fair amount of commercial synergies with the SLIP expansion? And in DLBCL specifically, how much visibility do you have perhaps based on claims data and other sources on how the drug is used relative to other treatment options, be it other antibodies or CAR T cell therapies? Thanks so much.

Speaker 1

Thanks, Michael, for the questions. I think Anthony Molcini at this will keep you busy for a few minutes.

Speaker 3

Thanks, Michael, for the question. In terms of the launch trajectory in FL versus DLBCL, to give you a little bit of context, and this is really drug treated patients. The DLBCL 3rd line plus market is about 3,600 patients in the U. S. Are really actually quite similar size in Japan.

Speaker 3

In FL, it's about half of that. So it's about close to 2,000 patients. We really we with the claims data that we are seeing right now, we the capture, as you know, is not great. So we're not able to see the great detail, but we do a lot of market research and we do a lot some customer research on a qualitative basis. So we're able to see where the drugs are used.

Speaker 3

And in a DLBCL space where we've had 4, 4 quarters in the U. S, we really are starting to see now more truly third line patients. And again, what we're seeing in the real world is really nearing what we see in the clinical trial, so very positive customer reactions. In FL, it's really too early to tell. That said, I think that when we ask physicians what they're after, the profile in terms of powerful efficacy, manageable safety and really seamless and efficient step up dosing and subcuadministration that's offered with McKinley is something that's really attractive, particularly across diverse practice settings.

Speaker 3

So when you think about staff time, chair time, scheduling efficiency, these are things that position us really well. So we're encouraged by these first few steps here to make Epkentaly truly the core therapy across B cell malignancies. And we're we'll leave it there.

Speaker 1

Thank you, Anthony. Thanks for the question, Michael.

Operator

Thank you. Now we're going to take our next question and it comes from the line of Rajan Sharma from Goldman Sachs. Your line is open. Please ask your question.

Speaker 12

Hi, thanks for taking my question. And just one follow-up on ethylene actually and Antimantini that is you made a comment in the prepared remarks that the launch is exceeding your expectations. So I'd just be interested in what's driving that. Is that better uptake than you're initially expecting? Or is it actually potentially a larger market in third line DLBCL than you were initially expecting?

Speaker 12

And then secondly, actually on acne again. In the past, you've talked to potential of removing the need for hospitalization from the DLBCL label. Could you just provide an update on progress there and when it could actually be reflected in the label? Thank you.

Speaker 1

All right. Thanks, Faiza, for the questions. Anthony Molcini, why don't you try the first one? And then maybe Tay on the next one for the second question.

Speaker 3

So thanks for the question, Rajan. Yes, we really are seeing execution of our launch plans, exceeding our expectations. We continue to be the in class market leader. And I think it's really driven by a couple of different things. First thing is strong execution across our field based teams.

Speaker 3

That's the medical affairs team, the sales team, the market access and patient services team, really with a focus on where we think the key business segments are, the key accounts are. That's not just in the U. S, it's actually in Japan as well. So we've really seen strong customer engagement and over 85% of our key accounts ordering in the U. S.

Speaker 3

To date and over 80% also in Japan.

Speaker 4

And of

Speaker 3

course, we have had no barriers from an access perspective with 99% of covered medical lives in the U. S. With functional access to Abkinley. So again, that's what I mean in terms of the rationale for exceeding expectations. And I think for removing hospitalization from the DLBCL label, Taki?

Speaker 2

Well, sure. I mean, we're obviously actively working on this. There are essentially 2 data sets that will inform and provide the relevant data to approach the health authorities with the change in the label. 1 is similar to what happened on the lymphoma, although with a different strategy, we had a so called optimization cohort for diffuse B cell where with a more tighter prescription on steroids and fluids, we were able to reduce the CS rate, particularly with this grade 3 and higher actually didn't have any grade 3 and higher anymore than the grade 2 rate. And then the second data package, which is probably more relevant because it's also practice informing is a study conducted by our collaborator, Abi, really conducted in the outpatient setting, really conducted in the community hospital setting and for the first time really generating clinical data in these practices with their own setup, their own challenges and opportunities to provide comfort and guidance to prescribers who operate in these settings on the safe administration of Abkini in the setting for the Fusas B cell and this is all going to be compiled and discuss what the health authorities in the near future.

Speaker 1

Thanks, Thijs. Thank you, Anton, for the questions.

Operator

Thank you. Now we're going to take our next question. And the question comes from the line of Yifeng Liu from HSBC. Your line is open. Please ask your question.

Speaker 13

Hi. Thanks for taking my question. I've got one on acasunlimab. And just based on the Phase 2 dates, obviously, for the 6 weeks dosing regimen, how do you think about incorporating those responders in your Phase III design? And then secondly, on also on aracilimumab, I guess, on the BioNTech gross up cost, is there anything that being taken into account in your 2025?

Speaker 13

Or is everything taken into account already in 2094 guidance? And thirdly, maybe could you give an update on the EPCOR DLBCL Phase III trial DLBCL1 Phase III trial, the second line transplant in eligible DLBCL? Thanks.

Speaker 1

Thanks, Ethan, for the questions. The first one, I think, is one for Tay again. The second one, Anthony Pagano and the third one on the Fusil BCL1 trial to units. Maybe, Tay, you can start with the acasunumab question on the Q6 week dosing and Phase III design.

Speaker 2

Yes. Thank you. If I understood you correctly, I wasn't really totally clear, you're asking whether we would consider some response adaptive approach. That wasn't really clear.

Speaker 13

So just maybe I can make myself quite clear because I think in the Phase II results, the overall survival benefit is predominantly driven by the responders. Just wonder how you're taking that thinking into a Phase III design in terms of maybe opportunity to recruiting more potentially that patient can respond better? Yes.

Speaker 2

Yes. So okay. Now I understand it a little bit better. I'm not 100% sure whether it's only responders. I would say it's probably a subset of patients that have also significant stabilization.

Speaker 2

So it's not only purely responsive. And I think this is one of the hallmarks of immunocology that response doesn't A2A translate into the population that benefits for event driven outcomes, particular survival. But of course, and we have and this is probably arguably the largest randomized Phase II study conducted pre studying a Phase III in that setting as far as I can tell. We're taking all the data that we have and trying to interrogate and better understand if there are ways to hone on the specific patients that benefit the most. And some of this is already reflected, of course, in the inclusion exclusion of the Phase III.

Speaker 2

That's good practice.

Speaker 1

Thanks, Thijs. Let's move over to Anthony Pagano for the second question on the BioNTech, the guidance basically for 2024, 2025.

Speaker 4

Yes, thanks. And I'll step through this rather carefully in detail. Now I'm going to start with maybe the economics, right? And the economics are effectively not impacted by this growth up, right? To be very clear, this is a classification matter.

Speaker 4

The impact to operating profit, which is ultimately what matters is 0. But now let's step through it. We provided our original guidance for 2024. I was really clear that we were looking for an opportunity to transition to net expense accounting and our P and L for 2024, I. E.

Speaker 4

That we would not have to gross up our P and L for the expenses with the higher expenses and then offset by revenue. That's what was assumed in our original guidance for 2024. Now as we got to where we got to, we arrived with BioNTech and their decision to opt out of the 1046 program In conjunction with that, we concluded that we will not be able to move forward with that net accounting moving forward. And that resulted in what I explained today in some level of detail for programs remaining in the BioNTech collaboration, again, not 1046, for all the other programs remaining in the collaboration, we will have to go with this grossed up classification if you like it, where we're going to have a larger cost if you like, but that will be fully offset by the higher cost reimbursement revenue. As I sit here today, that is what we should assume for 2025 and moving forward.

Speaker 4

If there's an opportunity to further align this accounting and classification with our other agreements like we have with AbbVie, we'll certainly look for that opportunity, but I don't want to bank on that right now. And just to conclude, I do want to finish where I started that this classification item and matter does not in any way shape or form impact our operating profit. This is simply a grossing up if you like in plain terms of our P and L. I trust that's clear.

Speaker 13

Yes. Thank you. That's really helpful. Thank you very much.

Speaker 1

Thanks, Anthony. Last question for Judith, an update on the status of the DLBCL I study. Judith, any color?

Speaker 9

Yes. No. So I don't know which one you alluded to. We have 3 studies, Phase III in DLBCL. So which one are you particularly asking about?

Speaker 1

Ethan? Ethan, this one?

Speaker 9

Yes. So I can give you a summary. So we have a study, which is EPCO in comparison with standard of care of 5, which we are it's time to event study. So we are following up events to get the study to completion. There is a study in the first line DLBCL, which is EPCO plus ArcCorp, which is actively recruiting.

Speaker 9

I would say that this is going very, very well in terms of recruitment. And there is a new study posted, which is in relapsedrefractory Phase 3 with EPCOLEN, which will start recruiting very soon. So these are the 3 studies and the status.

Speaker 1

Thanks, Judith. I think that should help Ethan for a bit the modeling. Let's go for the next question, maybe the last one.

Speaker 9

Yes, of course. Operator?

Operator

Yes, of course. Now we're going to take our next question.

Speaker 9

Just give me a moment.

Operator

And now we're going to take our next question and it comes from the line of Matthias Hagblom from Handelsbanken. Please ask your question.

Speaker 14

Thank you so much. Andreas here from Handelsbanken, I'll keep it with 1. So BioNTech faced the decision to opt out from AKA Sundinab on their earnings call as we already have critical mass in non small lung cancer. So judging from the market reaction on the day news were announced, investors were obviously disappointed by the change. So where in particular do you think Genmab and BioNTech valued the asset differently?

Speaker 14

I guess I'm trying to better understand what you described at Ascot's unprecedented Ovid data, if you think there is something in particular with the asset data generated so far or profile with the molecule that you perhaps appreciated more than your partner did? Thanks so much.

Speaker 1

I think I can handle that question. Thanks for the question. This was purely a strategic priority driven decision. There was no data analysis involved in that. We got feedback from BioNTech on that.

Speaker 1

I think ask BioNTech about the prioritization of some of the other programs in lung cancer and you will find the answer. But this was a strategic prioritization, which led to that opt out of BioNTech. So no other factors were involved at all. Operator, maybe on to the next one.

Operator

Dear participants, thank you for all your questions for today. I would now like to hand the conference over to Jan van der Winkle for any closing remarks.

Speaker 1

Thank you for calling in today to discuss GenMark's financial results for the first half of twenty twenty four. If you have additional questions, please reach out to our Investor Relations team. We hope that you all stay safe and keep optimistic. And we very much look forward to speaking with you again soon.

Operator

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

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Key Takeaways

  • In May, Genmab completed the acquisition of ProFound Bio, securing full rights to the ADC platform and the folate receptor–targeting candidate Vena S to bolster long-term growth.
  • In June, the bispecific antibody Abkinley (aparatumumab) became the first approved U.S. therapy for relapsed/refractory follicular lymphoma and DLBCL, with a positive CHMP opinion in Europe and plans for additional Phase III trials to establish it as a core B-cell malignancy treatment.
  • Genmab assumed full control of acasunlimab after BioNTech opted out, making it a wholly owned program entering Phase III by year-end following encouraging Phase II NSCLC data (median OS 17.5 months, 12-month OS 69%).
  • The folate receptor α–targeting ADC Vena S showed promising Phase I/II ovarian cancer data and is on track to start a Phase III trial in second-line, platinum-resistant patients before year-end, with a potential 2027 approval and blockbuster sales outlook.
  • Financially, first-half recurring revenues rose 42% driven by royalties from DARZALEX and Cosimta, while Genmab-commercialized products contributed 31% of revenue growth, prompting an upward revision of full-year 2024 guidance to ~28% growth.
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Earnings Conference Call
Genmab A/S Q2 2024
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