Genmab A/S

So hello and welcome to the general conference call to discuss the company's financial results for the first nine months of 2020. With me today to present these results is our CFO Anthony Pagano, and for the Q&A we will also welcome our Chief Development Officer, Judith Klimovsky, and our Chief Operating Officer, Anthony Mancini. Let's move to slide two. As already said, we will be making forward-looking statements, so please keep that in mind as we go through this call. Let's move to slide 3. We have seen significant advances in our and our partners' pipelines throughout 2020, and the third quarter was no exception. On a single day in August, the US FDA granted approvals to Novartis for Casinta in relapsing MS and to Janssen for the eighth multiple myeloma indication for Darzalex. The Casimta approval was highly anticipated and we were very pleased that RMS patients in the US had this convenient treatment option approved nearly a month earlier than expected. I am also very pleased to note the progress in our proprietary pipeline where we have at least 50% ownership of potential therapies. In July, we dosed the first patient in an expansion cohort for abcorritumab As you may have seen this morning, Abcorritumab will be featured in an oral presentation at ASH. In August, we saw the start of the first inhuman trial of dual-body CD3-5T4. And as you may recall, we are developing both Abcorritumab and CD3-5T4 as part of our broad oncology collaboration with AbbVie. It is also my pleasure to announce that in October we submitted the IND for Hexabody CD38, the second IND GenMob submitted this year. We are also very much looking forward to the presentation of the first clinical data for Duobody PD-L1-4-1-BB, a major milestone in our collaboration with BioNTech at the CIDC annual meeting next week. In September, we presented key data for Tisotamab-Fedotin, which we are developing with C-GEN, from the Phase 2 Innovative 204 Trial during a late-breaking oral presentation at ESMO. Based on these results, we, together with C-GEN, look forward to submitting the BLA to the FDA under the Accelerated Approval Pathway. Recently, we entered into a joint commercialization agreement with C-GEN. Genmoper co-promotes Tisotamab-Fedotin in the US, Anthony will lead commercial operational activities and book sales in Japan, while Sijun will lead operational commercial activities in the US, Europe and China, with a 50-50 cost and profit split in those markets. In any other market, Sijun will be responsible for commercializing T-Sotoma Phaedotum, and Jan will receive royalties based on a percentage of aggregate net sales ranging from the mid-teens to the mid-twenties. The companies will continue the practice of joint decision making on the worldwide development and commercialization strategy for tisotamab-pvidotin. I would also like to highlight recent developments in the very productive dual-body research and license agreement with Janssen. A seventh dual-body molecule has now entered the clinic and there are two phase 3 trials by Janssen for amivantamab in non-small cell lung cancer listed on CT.gov. In late October, clinicaltrials.gov was updated with an expanded access program to provide amivantamab to patients with metastatic non-small cell lung cancer who have epidermal growth factor receptor exon 20 insertion mutations and whose disease has progressed during and after current standard of care platinum-based chemotherapy. Excitingly, Janssen has announced that they are planning a U.S. filing for amivantamab. If this occurs, it will be the first investigational therapy using our proprietary dual-body technology platform submitted for approval in the US, a major milestone for this technology and for GENMOB. And we are very excited that ASH has selected two Janssen products that were created using our dual-body bispecific platform for all presentation at our annual meeting. Turning to Darzalex. As I mentioned, the FDA broadened the label for the eighth time with an approval based on the Phase III Condor Study. Janssen has now also submitted an SPLA seeking approval in AL amyloidosis, and if this is approved, it would become the first indication for Darzalex outside of multiple myeloma. Recently, we announced data from the second part of the Phase 3 Cassiopeia study, which met the primary endpoint of progression-free survival at a pre-planned interim analysis. Following the positive data from the first part of Cassiopeia, we are very pleased to see this benefit in the Part 2 of this study. Finally, we reported $2,937 million in net sales by J&J during the first nine months of the year, an increase of 35% over the first nine months of 2019, resulting in about 2.9 billion kronen in royalties. On September 22nd, GenMob commenced a binding arbitration of two matters under the license agreement with Janssen. We refer you to the details mentioned in the announcement, and we cannot provide additional information until the arbitration is concluded. TINHOB intends to vigorously protect its rights under the agreement. However, the outcome of any arbitration proceeding is inherently uncertain. I'm pleased to now turn over the call to Anthony Pagano to present our detailed financial results for the first nine months of 2020. Anthony, go ahead.

Thanks, Jan. Let's move to step four. Before I get into the results and the guidance, I'm going to spend a moment reiterating our overarching financial framework. First off, let's look at our revenue profile. On the left, you can see the component parts of our current and future recurring revenue streams. It starts with Darzalex, and here we are looking forward to continued growth and expansion. And you can also see Casimta and Tepeza. We're excited about the launch of Casimta in RMS that occurred in August. and the Tepeza launch continues to be strong. Next, onto R&D investment shown on the right. And this is one of the areas where our collaboration with AbbVie makes a real difference. We'll continue to be focused and disciplined in our approach, and as we've told you before, we're going to continue to expand and accelerate our potential winners. But clearly, The cash from AbbVie and the fact that we're sharing the investment in the existing clinical programs on a 50-50 basis means we'll be able to do more and faster. Now, stepping back, what continues to stand out for me from this overall framework is that GemMab remains a resilient business with a very high-quality product pipeline and great growth prospects. Now, let's move to Darzalex on slide five. Here we saw continued strong performance in the third quarter with the first single quarter with sales over $1 billion. You can see that in the chart on the left. Overall, Darzalex worldwide sales grew by 35% year over year. That's net sales of $2.9 billion, which translates to $2.9 billion Danish kroner in royalty income for GenMap. For Q3, We believe this shows a normalizing of the sales following the softness we saw in Q2 due to COVID-19. Additionally, we're pleased that sales include continued uptake of the sub-Q formulation, which was approved in the second quarter. As I've just highlighted, Q3 was strong. And so far, in Q4, we like what we're seeing in the US. But we do need to bear in mind the context of the unfortunate the emergence of COVID-19. Even so, we continue to expect that Darzalex sales will be in the range of 3.9 to $4.2 billion for 2020. So Darzalex continues to be on a clear path to market leadership in multiple myeloma and remains a key driver of our revenue as you can see on slide six. Looking at the graph on the left, you can see that there were three significant contributors to the increase in revenue. First, as we noted in Q2, we recognized 90% of the $750 million upfront payment from AbbVie. Now clearly, that's a one-off contribution. And second, Darzalex world fees grew 43% compared to the first nine months of 2019. Finally, you see other. Most of that 399 million Danish kroner comes from two main items. First, Tepeza royalties. Here, we've seen a really strong start. It's still early days, but we see this as a very promising launch. And second, the payment from Novartis as a result of Novartis' plan to transition Arzera to an oncology access program for CLL patients in the U.S. Now, if we take DARS election together, we're really pleased to have seen the current revenues grow by 51% in the first nine months of 2020. As well as increasing revenues, we also increased investment in our pipeline, in our team, and in our capabilities, as you can see on the next slide. On the graph on the left, you can see the major drivers of our increased investment in the first nine months of the year. In total, operating expenses increased by 698 million Danish kroner, which was driven by the accelerated investment in our product portfolio, including the advancement of both Eptridimab and dual-body PD-L1-01-BBB. We've also spent more on expanding our very talented team We've continued to hire key team members to support our growing product pipeline, and we've continued to build our commercial capabilities. With the upfront from the admin collaboration, our revenue growth significantly outpaced the higher investment levels, driving 5.4 billion kroner of operating income. Now, having looked at the individual parts, let's look at our financials as a whole on slide eight. Here you'll see a P&L summary. In the first nine months of the year, revenue came in at 8.1 billion Danish kroner, an increase of nearly 5.7 billion kroner compared to the first nine months of 2019. The increase was primarily driven by the upfront payment from AbbVie and higher Darzalex royalties. So expenses were 2.6 billion kroner with 84% being R&D and 16% G&A. Operating income, as I noted, was 5.4 billion kroner compared to 462 million in the first nine months of 2019, driven by higher revenue. And that brings us to our net income of 4.2 billion kroner. So an extremely strong 2020 so far, despite the COVID-19 pandemic. Which brings me to our guidance on slide nine. We are maintaining our 2020 guidance. In summary, we expect our revenue to be in the range of 9.25 to 9.85 billion Danish kroner. This is still driven by the upfront payment from AbbVie and the continued growth of Darzelex, complemented by the strong launch of Tepeza. We continue to anticipate our 2020 OPEX to be in the range of 3.85 to 3.95 billion kroner. Putting this together, we're planning for substantial operating income in a range of 5.35 to 5.95 billion kroner. Now I'll move to my final slide, slide 10. In conclusion, I just want to take a moment to reflect on our business and financial position. We have a very strong foundation, even stronger following our collaboration with AbbVie. Especially important in today's environment We've got a robust balance sheet, $2.7 billion of cash at the end of the quarter, and no debt. We have great recurring revenues, and they're growing. And we're using those revenues to invest in a really focused and disciplined way. We're investing in our highly innovative and differentiated product pipeline, as well as in the team and capabilities to deliver it, all driving towards our 2025 vision. Now I'll turn it back over to Jan.

Thanks Anthony. Let's move to slide 11. 2020 has been an incredibly successful year for GenMob. Due to the drive and determination of our team, we have already hit over half of our key goals and I am confident that over the final quarter of this year, we will continue to make progress against our priorities. That said, the target we set for ourselves for this year were extremely ambitious, and as you will have noted here, we are no longer anticipating additional solid tumor data for T-SOTUM and for DOTEN in 2020. One goal we will meet very soon is, as I mentioned, the presentation of the preliminary clinical data for dual-body PD-L1-4-1-BB at SITC next week. We look forward to being able to walk you through that data, among other topics, during our Capital Markets Day next Friday, November 13. We are furthermore very excited to inform you that our abstract for dual-body PD-L1-4-1-BB has been selected to be presented and discussed with selected media outlets at the CITSE virtual press conference next Monday on November the 9th. We are also anticipating a very exciting ASH this year. We will hold a virtual 2020 ASH data review meeting following ASH on December 8th. At this event we will discuss the data from some of the well over 40 accepted presentations. on GENMAP-created antibody programs, including many that were accepted for oral presentation. And details about this event have been released about an hour ago and can be found on our website. So let's move to slide 12. That ends our presentation of GENMAP's first nine months of 2020 financial results. Now, operator, please open the call for questions.