Genmab A/S

Hello and welcome to the GENMAP first half 2024 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. GENMAP 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. Please also note that GENMAP may hold your personal data as indicated by you as a part of our investor relations outreach activities in order to update you on GENMAP going forward. Please refer to our website for more information on GENMAP and our privacy policy. I would like to hand the conference over to our first speaker today, Jan van de Winkel. Please go ahead.

Hello and welcome to GenMob'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 Pagano, our Chief Operating Officer Anthony Mancini, and our Chief Medical Officer Tai Yamadi. For the Q&A, we will be joined by our Chief Development Officer, Judith Klimovski. As already said, we will be making forward-looking statements, so please keep that in mind as we go through this call. 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 second quarter. The acquisition of ProfoundBio, which was completed in May, was an historic event for GenMob 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 Reina S. And later, Anthony Pagano will walk you through the financial impact of the acquisition. June was an exceptionally eventful month for Epkinley, which is now the first 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. approval in relapsed or refractory follicular lymphoma, the CHMP adopted a positive opinion recommending TEP-Kinley, as abcaritumab is called in Europe, for the same indication. Both regulatory actions were supported by data from the APCOR NHL-1 trial, which was also recently published in the Lancet Hematology. I would also like to note the potentially imminent start of another Phase III trial for abcaritumab. 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 abcaritumab in multiple patient populations and treatment settings with the goal of establishing abcaritumab as a core therapy in B-cell malignancies. During our Q1 earnings call, we discussed the FDA approval and Japan NDA submission for TIFTAC, both of which occurred early in the quarter. As a reminder, with its approval in the U.S., TIFDAC became the first 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 have all had the chance to listen to our June 3rd call to review some of the exciting data that we presented at ESCO, including for TIFDAC, APKINDI, and of course, AKASUNLIMOP. Ty will provide you with a brief reminder of the very promising AKASUNLIMOP data and our next steps for the program on today's call. Before this, I would like to highlight the key change to the Akkasunlimab program that we announced on Monday. GenMob has now taken full control of the development of Akkasunlimab. This is a fantastic opportunity for us to own and advance this promising asset. Our partner BioNTech has opted to not participate in the further development of Akkasunlimab. And we understand that this decision was based on their strategic portfolio prioritization and does not reflect the strength or potential of Akasunlimab. This now becomes our second wholly owned candidate, medicine, entering phase three by the end of this year, underscoring our strong confidence in the clinical promise and commercial potential. We are exceptionally well-positioned to maximize the potential of Akasunlimab, and 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. Johnson announced that tripovans 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 EGFR 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 tripovans in certain patients with non-small cell lung cancer. More recently, in July, Janssen announced approval in the U.S. for Darfalex Fospro 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 transplants. This combination, based on data from the Phase III 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 Mancini will provide you with a review of the recent performance for Darzalex, plus other select royalty medicines, as well as, of course, for Apkinley and TifTac. 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, Akasunimab and Rhino-S. Tahi, the floor is yours.

Thank you, Jan. I'm sure by now you have all seen the Phase II Akasunimab 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 pre-treated patient population, we presented an impressive median over-survival of 17.5 months and a 12-month OS rate of 69%. Additional data will be presented at medical conferences, including the World Conference on Lung Cancer in September next month. This will include 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 three trial in PDR1 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. Given both our proven and extensive clinical development experience and our track record of acceleration, as you've seen with Epkinley, we are confident in our ability to advance acasunium up through phase 3 and beyond. Moving now to RINA-S. As a reminder, this slide summarizes why RINA-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 first-generation photoreceptor alpha approaches. becoming a potential best-in-class treatment for ovarian cancer and other folate receptor alpha-expressing solid tumors. In addition to efficacy, it also has a differentiated safety profile, avoiding interstitial lung disease and corneal toxicities seen with other ADC therapies. This differentiation, both in efficacy and safety, is a direct result of the novel proprietary hydrophilic linker technology developed by ProfoundBio. 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 Gainox space already with TIFTAC. And as we said before, we anticipate the first potential approval for Vena S could be in 27, and importantly, we anticipate blockbuster peak sales potential. Now, this is what we shared with you when we announced the acquisition of ProfoundBio. Now that we are officially responsible for the development of reNA-S, let's take a look at our near-term plans. Previously, we told you that we would be providing an update to the initial encouraging Phase I ovarian cancer data that was presented at CITC 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 three trial in second line plus platinum resistant ovarian cancer before the end of the year. So in summary, significant progress for both Akasunimab and Rina S. And we look forward to sharing more information with you when it becomes available. I will now hand it over to my colleague, Anthony Mancini. Thanks, Todd.

In Q2 and in the first half of 2024, performance across our two key revenue streams, Royalty Medicines and GenMav Commercialized Medicines, continued to demonstrate strong growth. Turning to our Royalty Medicines portfolio on slide eight, Darzelex delivered strong demand growth with $5.57 billion 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 30th, FDA approval was received for a new indication for a Darzalex-Faspro quad combination based on the Perseus study in newly diagnosed transplant-eligible multiple myeloma. As J&J mentioned in their earnings call, primary endpoints were also met in two additional Darzalex studies in Q2. 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 Maya, showing a median overall survival of seven and a half 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 Tecfile, our CD3-BCMA dual-body bispecific, and Talve, our CD3-GPRC5D dual-body bispecific, which each delivered solid performance in the first half of 2024. We expect continued growth and continued usage of Darzalex throughout the multiple myeloma patient journey. Cosimta achieved continued strong demand performance with over $1.4 billion in the first half, a 64% year-over-year growth. Casimta 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 seven of 10 major markets outside the U.S. Tepeza, the first and only FDA-approved treatment for thyroid eye disease, generated net sales 479 million in Q2. In addition, with the June 17th FDA submission for the subcutaneous formulation of ribavent, our EGFR-CMET bispecific, it's another milestone to help make an even bigger impact on EGFR-mutated non-small cell lung cancer patients. In summary, we expect continued strong GenMAP revenue growth from our six diverse royalty medicines, in the second half of 2024 and beyond. Turning to our GENMAB commercialized medicines on slide nine, on June 26th, we received accelerated approval in the U.S. for our second indication for Epkinley as a monotherapy for patients with relapsed or refractory follicular lymphoma after two more lines of prior therapy. We also received a positive CHMP opinion for this indication on June 27th with an approval decision in Europe expected in Q3. The early response in the U.S. to epkinley and 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. This gives us confidence in expanding Epkinley utilization across practice settings as the first and only T-cell engaging bispecific antibody approved for both third-line plus DLBCL and third-line plus FL. In addition, we presented two-and-a-half-year follow-up data at ASCO demonstrating the long-term durability and powerful responses with Epkinley in third-line plus DLBCL. We're very pleased with Epkinley demand performance across our key geographies, with over 90% of net sales coming from the US and Japan. Epkinley delivered 121 million in net sales for the first half, with 70 million in Q2, which includes foreign exchange headwinds in the first half of 2024. In both the US and Japan, Epkinley has seen robust uptake across key accounts, strong field execution, and positive responses from customers and the patients we serve, really validating Epkinley'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 third line plus DLDCL and third line plus FL indications as the first steps towards establishing Epkinley as the core therapy across B-cell malignancies. Turning to TIVDAC, our tissue factor directed ADC, it delivered 60 million in net sales for the first half of 2024, a year-over-year growth of 48%. This represents the 11th consecutive quarter of demand growth for TIVDAC. 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 TIBDAC is making on the lives of women with cervical cancer. And we're well on our way to establishing TIBDAC as a clear standard of care and second-line plus recurrent or metastatic cervical cancer. The successful building in gynecologic oncology with TIVDAC is an important foundation to prepare for future potential launches, such as RHNA-S and folate receptor alpha expressing platinum-resistant ovarian cancer. As an end-to-end biotech company, we're very pleased that our GenMAP 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 2024 and beyond. I'd like to take a moment to thank our partners and our entire cross-functional GenMab team across commercialization, R&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.

Great. Thanks, Anthony. We continue to strengthen our foundation throughout H1. Having delivered on our goal of successful regulatory approvals and launches for Epkinley in the U.S., Europe, and Japan in 2023, we are pleased with how these launches are progressing, and even more so now. with a second indication in the US, 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 ProfoundBio. And as we'll see, our financials remain strong. Recurring revenues grew by 42% in H1. This was principally driven by strong royalties from Darzalex, Kesimpta, and other approved medicines, as well as strong performance from both F. Kinley 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 ProfoundBio. Starting on the left, we've summarized how the 13.1 billion kroner purchase price has been allocated. First, you can see the largest portion of the purchase price has been allocated to RHNA-S. And here, amortization will begin on regulatory approval, which is estimated to be in 2027. Second, 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&L in 2024 with an estimated full-year impact of $48 million. We also have Goodwill, which isn't amortized and will be tested for impairment every year. 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 $2.1 billion. This reflects the estimated future tax obligations related to the acquired intangible assets, primarily RENA-S and the ADC tech platform. Now moving to the right, you can see that since closing the deal, we've incurred $330 million of costs related to ProfoundBio. And on a full year basis, we expect costs of around $1.15 billion. As you will see, acquisition and integration related charges or deal costs are a separate line item on our P&L. Taken together with the ADC amortization expenses, These are expected to be around 400 million 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. 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 9.5 billion kroner in H1. As I've already highlighted, that included a 42% increase in our recurring revenue. This strong growth was driven by higher Darzalex and Cosimta royalties, as well as royalties from other products. And we're pleased with how Epkinley and TivDAC are performing. 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 6.7 billion kroner in H1. As you can see, the majority of the growth was driven by R&D investments. 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, acosinolimab, now, of course, RENA-S. As you can also see, SG&A growth moderated and was up only 12%, and this reflects our continued focus on driving SG&A efficiency. As previously highlighted, We continue to invest to secure a successful AppKindly launch in our two key markets, the US and Japan. And of course, we've been really focused on the acquisition and integration of ProfoundBio. Now, let's take a look at our financials as a whole. Here, you can see our summary P&L. Revenue came in at over 9.5 billion kroner. That's up 36% on last year. Total OPEX was around $6.7 billion, and here again, most of which was R&D. And even with that increased investment, we're still delivering over $2.4 billion of operating profit, and that's not more than 29%. Moving to our net financial items, here we have a gain of $1.4 billion. 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. Then we have tax expense of $1.1 billion, 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 2.7 billion kroner. 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 to wholly owned Phase III programs. I've already covered in some detail the impact of the profound bioacquisition. Now, as far as us taking on full responsibility for Acusunumab, this does have the effect of grossing up both our revenue and our expenses for all products that remain in our collaboration with BioNTech. This results in around 600 million kroner 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 20.5 to 21.7 billion kroner. 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 11.4 to 11.8 billion dollars so here we've increased our royalty guidance to 13.3 to 13.8 billion kroner and that's an increase to both the top and bottom end of the range and importantly We also anticipate that we're going to have over 1.3 billion kroner of growth from Epkinley and TIVDAC. Now, turning to our OPEX. Excluding deal and amortization costs, we are anticipating OPEX to be in the range of 13.7 to 14.3 billion, which includes R&D investment to support the advancement of profound BIOS clinical programs, primarily RENA-S, and also on our side, Acusulimab. Now I told you when we announced the acquisition of ProfoundBio that excluding acquisition and integration related charges, we were anticipating OPEX at or moderately above the upper end of our previously disclosed OPEX guidance. So now excluding both the ProfoundBio deal and amortization costs and this 600 million kroner item that I just described relates to the buy and set collaboration, this classification change, you can see that we're absolutely delivering on that guidance commitment. 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 ProfoundBio, The midpoint of our current operating profit guidance is now at $6.2 billion, and that compares favorably to our previous guidance of $5.9 billion. 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 12.9 billion kroner. As you can see, the impact of the operational changes for GEMMAP and ProfoundBio is around 500 million. This includes the 800 million of costs related to ProfoundBio's operations, and this is really driven by investment in RHNA-S that I referenced earlier. It also includes a net 300 million reduction related to GEMMAB driven by continued prioritization efforts and scale benefits partially offset by acosinolumab development. And that brings us to 13.4 billion kroner, 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 bi-insect collaboration of $600 million. 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 million. 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. 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.

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 Epkinley, we have now announced or initiated two new Phase III trials, and the label has been expanded in the U.S. to include relapsed or refractory follicular lymphoma. And of course, we are extremely pleased with the full approval for TIFDAC that occurred in April and the encouraging Phase 2 Acrosunlimab data that has informed the planned Phase 3 trial. And as a reminder, that makes two wholly owned assets, Acrosunlimab and Rhynas, 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 Genmos financial results for the first half of 2024. Operator, let's go to the questions.

Thank you so much, dear participants. As a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 11 again. To ensure everyone has the opportunity to ask a question today, please limit yourself just to one question and one follow-up question. Thank you so much.

And now we're going to take our first question.

And it comes from the line of Emily Fields from Barclays. Your line is open. Please ask your question.

Hi. Thanks for taking my question. I just wanted to, I'll ask two, and I guess one kind of is a follow-up. Just on Acosomalab, you know, when do you expect you to start enrolling patients in the phase three? Are you expecting that you would use docetaxel as a control arm? You know, and just how are you thinking about a potential changing standard of care with with the potential of the approval of trope two ADCs. And then secondly, just, you know, now that you're going to have two wholly owned projects that you're starting going into phase three, how should we think about gen med R and D cost in 25 and 26? Thanks.

Thanks, Anthony. Thanks, Emily, for the questions. The first one to tie, you can give a bit more color on the phase three trial for Akasuni MOB. And then Anthony Pacano can undoubtedly give you a protocol on the R&D costs, Emily. Tai, why don't you start?

Yeah. 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 hype and discussion about whether a subgroup analysis of a principle 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 those that access the control arm. That's the regulatory-approved control arm. And I think I mentioned this in the prepared remark. We are operationalizing towards having this study up and running by the end of the year.

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

Yeah, thanks, Emily. You know, as we think about our investment in R&D, we've been super clear about, you know, our priorities. And I think a good way to sort of frame this out is to, you know, break R&D down into two segments. Segment number one being research and discovery all the way through to early development and And then the second segment being that mid to late stage segment. As we think about that first segment being research and discovery through to early stage development, we've talked quite a bit about us scaling that up over the last number of years. We viewed 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 sort of 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. This is where the focus of the organization is. This is our priority. We are prioritizing investments in this area versus investments in other areas. So clearly investments in Epkinley, TIVDAC, 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. potentially revenue generating in nature and that's what we're really focused on doing Emily so you should very much sort of think about R&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 two that mid to late stage programs particularly potentially registration enabling trials thanks Anthony thanks Emily for the question so that's operator let's move to the next questions

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

Hi. Thank you for taking my questions. Two, please. The first one is on . You mentioned now this is a wholly owned asset, but just wondering, would you still be open to, for example, new partners here, or are you committed that this will be wholly owned going forward. And if you are open to new partners, what sort of things would you be looking for in an ideal partner, please? So that's the first question. And the second one is on Acosunimab data update for work-long. Just wondering, maybe for TAHI, so what sort of things can we actually expect? Will we have a bigger patient size for the every six-week arm, please? Thank you.

Thanks, Sian, for the question. So for Akasunimab, I can tell you that we are very, very, very pleased to have it on our wholly own. So we are not foreseeing that we need to look for a partner. We think this is a fantastic molecule, which could potentially be much broader position than the initial indication. And we intend to hold onto it for the time being, Sian. 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 a key priority market, the US 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% ownership, and we will progress as aggressively as we can, Sian, to move it towards registration trials and then to the market. And then maybe, Tai, you can give a bit more color on the type of data at WorldLung and other conferences, because there will likely be other conferences in the coming months, Sian, where we will present data. Tai?

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

Thanks, Tai. Let's move to other questions. Operator.

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

Hi, guys. Thanks for taking my questions. First question, what are your latest thoughts on the next development steps of renal and ovarian cancer? when could we learn the details of the phase three second line plus platen resist ovarian cancer study expected to start for the end of the year? And then as a follow-up to that, what is your confidence level in the ability of RENAS to address patients across the biomarker spectrum in ovarian? And how important is that to your strategy? Thank you.

Thanks Jonathan for the questions on Rhino-S, another molecule we're super excited about. Let's ask Thay to start and then Judith to step in to provide extra call. Thay, why don't you start with both questions?

Sure, I'll take the second one first. I mean, this is from the very beginning, was part of our excitement about Rhino-S as a molecule and also relates to our excitement in the LinkedIn technology that we believe quite firmly, and I think you will then have the opportunity to see the data at ESMO, that vena S will have meaningful activity across the spectrum and beyond of photoreceptor expression in PROC patients. So that's the first part. As it relates to the details on the phase three, 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. And indeed a choice trial and so that will be the first study not the last one 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 and Informing that we very well in the startup of the study already but we also want to be cognizant of the fact that this is a hyper competitive environment and so You'll see it as it gets executed, but it will get executed and quite rapidly and accelerated. I promise you that.

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

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

Hi, guys. Thanks for taking my question and investing on the progress and the impressive outlook that's laid out for the second half of this year and future. I want to go back to 1046 and also tag on 1042. Tahi, you mentioned you were clear on what to expect and what not to expect at World Lungs. 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 ASCO data was, and we want to see more follow-up. And related to that, in previous calls, I think we've kind of got the feeling that there might be something on 1042, perhaps in head and neck later on this year. Just want to check back on that and see if that's still a possibility or what kind of update we can expect on that module as well. Thanks.

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

Sure. So let's take 1042 first. I think what we've said multiple times over here is there were some observation learnings that I hope will also become a little bit more transparent with the mentioned presentation at WorldLong 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. On 1046, I think Jan already mentioned there's going to be additional data at CIDC. This will be a lot around translational data. In terms of clinical data, I think it makes sense to generate a little bit more follow-up and also more patients that have been enrolled in order to better elucidate the mitigation strategies that were implemented to make it more safe. With a time-to-event readout, it takes a little bit more time. We'll bring that into the public domain as soon as it make sense from a data set.

Thanks. Thanks, Tahir. And we give you extra astica that also at CITC we intend to present some further preclinical data, which will further help you to understand this new biology of activating T cells and K cells via 400B bispecifics. So lots of new data supporting, I think, the excitement around . Thank you.

Now we're going to take our next question. And the next question comes from the line of Peter Baldot from CT. Your line is open. Please ask your question.

Yeah, thank you, Peter. Two questions, please. Jan, speaking to the Pfizer oncology team, they've got four head and neck cancer assets that they could go into phase three, but they're saying not all will. So I just wanted to confirm, and apologies if I've missed this, but is the head and neck phase three program for TIVDAC confirmed, or do we await confirmation of that? And then for Tahi or for Jan, I'm sorry to test your patience, but what is the latest on hexabody timelines in terms of data release and J&J decision, or is it unchanged since the last update? Again, apologies for testing your patience. Thank you.

Thanks, Peter, for the question. So why don't I ask Jule to give a bit of color on the head and neck plans for TIFFDAQ. 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 have the data and present them to J&J in the second half for Hexabody CD38 versus SubQ DARA. And there will likely be an update from the company also by the end of this year. maybe not at a medical conference, but in another format. So maybe Judith, you can give a bit of color on head and neck cancer data for TIFDAC.

Yeah, so as you know, we present the encouraging data on ORR based on RMC at ASCO. Of course, you know, we are waiting for maturity of this data and in parallel, We open another cohort with a strict eligibility criteria, and we are assessing this in conjunction with Part E, which is a combination to assess the strategic fit for the company and for TIFDAG and make further decisions by the end of the year. So we are closely monitoring the data. Yeah, yeah. Thank you.

Just to be clear, sorry, just to be clear, is our phase three program confirmed, or are you awaiting that data first?

Usually, you know, we start some things at risk, but we jump into the pool. We need the right strategic fit, and we have the right target product profile for a particular indication, and this is what we are following the data for.

Thank you.

Thank you.

Thanks, Peter. Thank you. Next one, please operate.

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 your question.

Great. I also made just a quick follow-on. I just want to confirm. So it sounds like the phase three is only going to be testing the Q6 week, head-to-head against docetaxel, I don't know if you can comment. Would the primary be just PFS, or is it going to be PFS and an OS kind of core primary? Thank you.

Thanks, Jaron, for the questions. Ty, can you give a bit of color on the endpoints for the FAKE-3?

Sure. It will be a two-arm study with a control arm and with the Q6 arm of Akasunia 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.

Thanks. Very clear, Tai. I think that's the answer, Yaron, for your question. Thank you. Let's move to the next one, operator.

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

I have a question. You know, you've had a nice launch of Upkinley in lymphoma so far to date in the GLBCL space. Just wondering how we should think about uptake in follicular lymphoma given already another approved right specific there and how much that can contribute in the term. Thank you.

Thanks, Matthew, for the question. And then Anthony Monsini, I think you can best handle this one. Maybe a bit more on color. Uptake in follicular lymphoma versus diffused live B-cell lymphoma.

Yeah, thanks, Matt, for the question. Look, we're about six 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 Kenley use across diverse sites of care. We're starting to see growing Epkinley adoption in many of the large physician group practices. And we believe that the third 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 Epkinley profile really enables that. In terms of the size of the population, it's really a modest population. population size, but because of the differentiation of having one product across both indications, we think the reactions have been very favorable so far in the community. So I'll leave it there.

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

Hey, thanks for taking my questions. I had a commercial question, a follow-up on that corridor map. And, yeah, just thinking ahead, wondering how we should think about the launch trajectory, perhaps, in follicle lymphoma relative to the initial launch in DLBCL, given presumably there's a fair amount of commercial synergies, you know, with the SLEP 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, you know, be it other antibodies or CAR T cell therapies? Thanks so much.

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

Thanks. Thanks, Michael, for the question. In terms of the launch trajectory in FL versus DLBCL, to give you a little bit of context, you know, and this is really drug-treated patients, the DLBCL third-line plus market is about 3,600 patients in the U.S. It's really actually quite similar size in Japan. In FL, it's about half of that. So it's about, you know, close to 2,000 patients. With the claims data that we are seeing right now, 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 of customer research on a qualitative basis. So we're able to see where the drugs are used. And in a DLBCL space where we've had four full 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 mirroring what we see in the clinical trials. 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 sub-Q administration that's offered with Epkinley is something that's really attractive, particularly across diverse practice settings. So when you think about staff time, chair time, scheduling efficiency, these are things that position us really well. So we'll We're encouraged by these first few steps here to make Epkin-Leach really the core therapy across B-cell malignancies, and we'll leave it there.

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

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.

Hi, thanks for taking my question. And just one follow-up on Epp Kinley, actually, and Anthony Mancini, 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 were initially expecting, or is it actually potentially a larger market in third-line DLBCL than you were initially expecting? And then secondly, actually, on Epkinley 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.

All right. Thanks, Rajan, for the questions. Anthony Monsini, why don't you try the first one and then maybe Tai on the next one for the second question.

So thanks for the question, Rajan. Yeah, 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. 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. And that's not just in the US, 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 US to date and over 80% also in Japan. And of course, we have had no barriers from an access perspective. 99% of covered medical lives in the U.S. with functional access to Epkinley. 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, Tahi?

Well, sure. I mean, we're obviously actively working on this. There are essentially two data sets that will inform patients. and provide the relevant data to approach the health authorities with the change in the label. One is similar to what happened on filigree and FOMA, although with a different strategy. We had a so-called optimization cohort for difusor-spicer, where with a more tighter prescription on steroids and fluids, we were able to reduce the CS rate, particularly reduce grade three and higher, actually. didn't have any grade three or higher anymore, and then the grade two weight. And then the second data package, which is probably more relevant because it's also practice informing, is a study conducted by our collaborator, Abby, 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 Epkinney in the setting for the FUSH-PSL. And this is all going to be compiled and discussed with the authorities in the near future.

Thanks, Tai. Thank you, Rajon, for the questions.

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

Hi. Thanks for taking my question. I've got one on . And just based on the Phase II dates, obviously, for the six weeks dosing regimen, how do you think about incorporating those responders in your Phase III design? And then secondly, also on ,, I guess, on the BioNTech cross-ups, Is there anything that's being taken into account in your 2025 or is everything sort of taken into account already in 2024 guidance? And thirdly, maybe could you give an update on the EPCOR DLBCL phase 3 trial, DLBCL 1 phase 3 trial, the second line transformed in eligible DLBCL? Thanks.

Thanks, Ethan, for the questions. The first one, I think, is one for Thijs again. The second one, Anthony Pagano, and the third one on the Diffusel BCL-1 trial, two units. Maybe, Thijs, you can start with the Akasunimop question on the Q6 week dosing and phase 3 design.

Yeah, thank you. If I understood you correctly, it wasn't really totally clear. You're asking whether we would consider some response adaptive approach? That wasn't really clear.

So just maybe I didn't make myself quite clear, just because I think in the phase two results, the overall survival benefit is predominantly driven by the responders. Just wonder how you're taking that thinking into a phase three design in terms of maybe opportunities of recruiting more potentially that patient can respond better. Yeah.

Yeah, so okay. Now I understand it a little bit better. I'm not 100% sure whether it's only the responders. I would say it's probably a subset of patients that have also significant stabilization. So it's not only purely responsive, and I think this is one of the hallmarks of immune oncology that response doesn't A to A translate into the population that benefits for event-driven outcomes. particular survival. But of course, and this is probably arguably the largest randomized phase two study conducted pre-studying a phase three 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. Some of this is already reflected, of course, in the inclusion-exclusion of the phase three. That's good practice.

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

Yeah, 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? It would be very clear this is a classification matter. The impact to operating profit, which is ultimately what matters, is zero. 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&L for 2024. i.e., that we would not have to gross up our P&L for the expenses with, you know, 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 would not be able to move forward with that net accounting program. moving forward. And that resulted in what I explained today in some level of detail. For programs remaining in the buy-in-tech 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. 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&L. I trust that's clear.

Yeah, thank you. That's really helpful. Thank you very much.

Thanks, Anthony. Last question for Judith, an update on the status of the DLBCL1 study. Judith, any call on?

Yeah, no. So I don't know which one you alluded to. We have three studies, phase three in the LBCL. So which one are you particularly asking about?

Ethan? Ethan, which one?

Yeah, so I can give you a summary. So we have a study which is EBCO and comparison with standard of care of five, which we are, it's a 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 EBCO plus ARCHOP. which is actively recruiting. I would say that this is going very, very well in terms of recruitment. And there is a new study posted, which is in relapsed refractory phase three with EPCO-LEN, which will start recruiting very soon. So these are the three studies and the status.

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

Yes, of course.

Operator?

Yes, of course. Now we're going to take our next question. Just give me a moment.

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.

Thank you so much. I'll keep it to one. So BioNTech phrased the decision to opt out from Aka Sundinab on their earnings call as we are ordered to 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 GenMem and BioNTech value the asset differently? I guess I'm trying to better understand what you described at ASCA as unprecedented 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.

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. I think ask BioNTech about the prioritization of some of the other problems 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.

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

Thank you for calling in today to discuss GenMod financial results for the first half of 2024. 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.