Genmab A/S

Hello and welcome to the GenMAP full year 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 now like to hand the conference over to our first speaker today, Jan van der Winkel. Please go ahead.

Hello and welcome to GenMob's conference call to discuss our financial results for the period ending December 31st, 2024. With me today to present these results is our CFO, Anthony Pagano, and our Chief Commercial Officer, Brad Bailey. For the Q&A, we will be joined by our Chief Medical Officer, Tai Yamadi, and our Chief Development Officer, Judith Klimowski. 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, and this slide acknowledges those relationships. 2024 was marked by significant milestones towards our mission to deliver innovative medicines to patients. We made strategic investments to both accelerate the development of late-stage programs with the potential to generate meaningful revenue by the end of the decade, and to maximizing the success of our commercialized medicines. So we delivered on our capital allocation priorities in 2024, and as Anthony will describe later, we will do so again in 2025. Overall, our financial performance in 2024 was exceptionally strong, And we have further solidified our foundation for sustainable future success. Let's take a look at this in more detail. 2024 was a year of strong execution and disciplined investments, driving 31% total revenue growth, fueled by the success of our eight commercialized medicines, including Apkinly and Tifdac. Our investments were fully aligned with our strategic priorities, supporting key late-stage pipeline programs and commercial expansion, allowing us to grow operating profit by an impressive 26%, demonstrating the strength of our business. Despite significant investments, including the $1.8 billion acquisition of ProfoundBio and a $500 million share buyback, we ended the year with nearly $3 billion in cash, reinforcing our financial strength. This exceptionally strong financial position gives us the flexibility to continue investing in innovation while delivering long-term value to shareholders. Taken together, our financial results for 2024 exemplify our ability to deliver strong revenue growth while simultaneously advancing high potential programs. Now let's look forward, starting with our pipelines. We currently have 12 products or product candidates in 30 clinical trials, either ongoing or recruiting. This includes seven phase three trials between AppKinley, RhynAS, and Akkasunlimob. And based on the strong emerging data, we expect more to come. Because these three programs are poised to drive significant revenue growth for GenMob by the end of this decade. We have prioritized investments for 2025 and purposely reallocated our R&D dollars to these programs. Now let's take a deeper look at why we are confident in their significant potential. Starting with APKINDY. Together with APFI, we continue to advance an ambitious clinical development program for apcaritumab across B-cell malignancies, including frontline studies in diffuse large B-cell lymphoma and follicular lymphoma. Three of five ongoing phase three studies have been fully recruited well ahead of schedule. And in addition to confirmatory data based on accelerated enrollment, we now anticipate three potentially significant pivotal readouts by the end of 2026. Second line plus follicular lymphoma, front line diffuse large B cell lymphoma, and in second line plus diffuse large B cell lymphoma for transplant in illegible patients. If successful, this could lead to significant market expansion, especially as frontline diffuse LASB cell lymphoma represents the single largest indication. As you can see, see this on the next slide, where we summarize the significant market opportunity for APKinley. We have successfully obtained multiple regulatory approvals for APKinley, making this therapy accessible to a broader patient population. And thanks to our exceptionally strong performance in key markets like the U.S. and Japan, we are confident in our ability to expand AppKinley's reach even further. In fact, our commitment to advancing AppKinley across multiple indications in B-cell cancers underscores its potential as a best-in-class treatment with a peak sales opportunity exceeding $3 billion. Let's now turn to Reiner S., As we have shared previously, we have now initiated the first phase three trial for rhinoacin second-line plus platinum-resistant ovarian cancer. This trial is designed to address all comers, regardless of folate alpha receptor alpha expression, expanding its potential reach to a broader patient population. We intend to present meaningful follow-up data from the expansion cohort with PROC early in the first half of 2025. Additionally, we are actively generating combination data to inform next steps in platinum-sensitive ovarian cancer. Beyond development in ovarian cancer, we are also planning to present data in endometrial cancer in the first half of this year. And based on the strong signals we are seeing, we plan to start a phase 3 study in second-line plus endometrial cancer by the end of the year. All this adds up to a significant market opportunity for Reina S, which you can see on the next slide. Reina S's differentiated profile has the potential to address a broader patient population than is served by current standard of care, including low to medium folate receptor alpha expression, targeting about 85% of the platinum-resistant ovarian patient population. We are exceptionally well positioned to maximize the potential of Reina-S, given our proven clinical development capabilities, track record of acceleration, and our experience in the Gynon space with TiffDeck. Based on the exceptionally strong execution of the team post acquisition, we remain on track to bring Reina-S to patients by 2027. With its best in class profile, expected to achieve peak sales exceeding $2 billion. And with the two phase 3s we plan to have underway by year's end, we are well on track to putting in place the building blocks to achieve this target. Finally, let's take a look at the market opportunity for Akkasun Limob. In 2024, Genmob took full control of the Akkasun Limob program, providing us with a remarkable opportunity to fully own and advance this promising asset. Non-driver mutated second line non-small cell lung cancer continue to be an area of significant need. Given the worsening of performance status as patients progress through lines of therapy, physicians are interested in more tolerable, chemo-free regimens. Yet with many novel treatments failing in phase three trials, docetaxel continues to be the current standard of care. By identifying potential synergies of IO therapies, we have the potential to unlock clinical benefits that are not possible with monotherapy alone. So there is meaningful opportunity for novel treatments like acasulimab in the second line plus setting to provide not just improved response rates, but durability of response. And we are progressing a strategic development program to explore acasulimab's full potential across solid tumors. So in summary, in 2025, we will be in execution mode. We will continue to deliver on our financial commitments through focused investments in our high-priority, late-stage and commercial programs. Because it is the investment in these areas today that will position us well at the end of the decade. I will now hand over the presentation to Brad, who will provide you with a review of the recent performance for Tiffdeck and Upkinley, both of which have seen growth in 2024. Brad, the floor is yours.

Thank you, Jan. Over the course of 2024, our commercialization teams executed effectively to bring Epkinley and TIBDAC to an increasing number of patients around the world. Overall, Epkinley and TIBDAC ended the year in a strong position, demonstrating the strength of our commercialization strategy and the performance of our field teams. We also achieved critical milestones, including two new regulatory approvals in the US and continued our work to rapidly progress our development program to fuel our future growth. Through these efforts, our commercialized medicines contributed 29% of our revenue growth for the year. Moving to highlights from our commercialized portfolio, we achieved meaningful milestones with both medicines that contributed to their overall growth. Over the past three months, TVDAC and Depp Kinley have collectively received three new or updated NCCN guidelines designations. First, in December, Tyvdak monotherapy was upgraded from Category 2A to Category 1 designation for the treatment of recurrent or metastatic cervical cancer, further validating its clinical benefit for these patients. Tyvdak, in combination with pembrolizumab, was also added as a Category 2B designation for patients with PD-L1-positive disease. And earlier this month, Epkinley, in combination with Gemox, received a Category 2A designation for the treatment of diffuse large B-cell lymphoma in the relapsed refractory setting. This is especially notable as we look to bring the potential of Epkinley into earlier lines of therapy in the future. Lastly, for Epkinley at ASH, we presented a three-year long-term data from our EPCOR NHL-1 study, which evaluated Epkinley in patients with third-line or later relapsed or refractory DLBCL. These data showed that over half of patients who achieved a complete response in the trial maintained their response for more than three years with no new safety signals identified. These results represent the longest duration of CRs reported by a bispecific in this setting, further reinforcing Epkinley's clinically differentiated profile and potential to deliver deep, durable responses. Now let's turn to performance, beginning with Epkinley. Epkinley's continued to perform exceptionally well since its initial launch in 2023. It closed 2024 in a position of strength achieving $78 million in sales in the quarter and $281 million in sales for the year. This growth was driven primarily by sales in the United States and Japan. In the U.S., Epkinley remains the first and only bispecific approved with a dual indication in third-line plus DLBCL and follicular lymphoma. Throughout 2024, we continue to see sustained uptake across sites of care driven by targeted field execution and the successful FL launch in June. Since the FL launch, we have observed accelerated growth in positive physician feedback, highlighting the value of Epkinley's dual indication, its uniquely differentiated clinical profile, and seamless administration. Moving forward, we will continue to focus on accelerated adoption across broad sites of care. In Japan, Epkinley is the only approved CD3-CD20 bispecific and third-line-plus relapsed or refractory large B-cell lymphoma, and we continue to see strong, stable performance, largely driven by field execution and account activation. We are well positioned to build on this leadership position in Japan with the anticipated approval for third-line plus relapsed or refractory follicular lymphoma in early 2025. With this indication, Epikinley will become the first and only bispecific approved in Japan with a dual indication in LBCL and FL. In the rest of the world, we're seeing increased utilization of Epkinley through our partner, AbbVie, and achieved approvals in more than 50 countries worldwide by the end of 2024. We look forward to this trajectory continuing in 2025 and beyond. Looking ahead, our teams remain focused on driving adoption in priority markets while accelerating our robust development program to establish Epkinley as the core therapy in B-cell lymphomas, including in earlier lines of therapy. As we continue to target areas of high-end med need, Our commercialization teams remain focused on creating optimal customer experiences through the disciplined execution of our targeted go-to-market strategy that has consistently driven our success to date. Turning now to TIVDAC. As the only ADC with a proven survival benefit in advanced cervical cancer, TIVDAC has continued to achieve solid growth since its launch in 2021 and is regarded by physicians as the global standard of care and the clear answer in second-line plus recurrent or metastatic cervical cancer. TIVDAC produced $131 million in sales during the year, including $38 million in the fourth quarter, driven by depth and breadth of ordering accounts. With strong utilization rates in this setting, we anticipate modest growth in the U.S. in 2025. Looking ahead, we see opportunities to expand the potential of TIVDAC in advanced cervical cancer to new markets where patients' needs remain high. We expect approval in Japan early this year, where GENMAB will lead full commercialization responsibilities, and in Europe later this year following a positive CHMP opinion issued in January. Importantly, the anticipated launch in Europe provides a catalyst to enter the next phase of our commercialization strategy as we expand our work to new markets. As of January 1st, GENMAB and Pfizer have agreed to transition full commercialization responsibilities for TEPDAC in Second Line Plus recurrent or metastatic cervical cancer to GENMAB for all countries outside the U.S. and China, where Pfizer will continue to partner with GENMAB and Zylab, respectively. We're pleased with the terms of this updated agreement as it optimally positions us to expand our commercialization capabilities first to Europe in a strategic and financially disciplined manner, just as we have successfully done in the U.S. and Japan to date. We're confident that with this approach, we can optimize the launch opportunity for TIVDAC and also build a strong foundation for the potential launches of RHNA-S and aclosunumab in the future. We are extremely pleased by the performance of our commercialized brands in 2024, validating our strategic approach and investments to date. As we look toward 2025 and beyond, our focus remains on building upon the strong foundation we've established in the U.S. and Japan to capture more value from our commercialized medicines, increasing utilization of epikinley and tib-dac across regions, and strategically entering new markets to prepare for the launches of our wholly-owned medicines to reach even more patients in the future. With that, I'll hand the call to Anthony to provide more perspective on our financials.

Thanks, Brad. We continue to strengthen our foundation throughout the year. We delivered on our goal of multiple successful regulatory approvals and launches for Epkinley, and we're pleased with how these launches are progressing. We've also significantly enhanced our long-term growth potential with the addition of RHNA-S to our late-stage pipeline as part of the acquisition of ProfoundBio. And as we'll see, our financials remain exceptionally strong. We achieved 31% total revenue growth. And importantly, we grew our recurring revenues by 35%. This was driven by strong royalties from Darzelex and Cosimta and from product sales from Ebb Kinley and TIBDAC. This growth reflects sustained recurring revenue expansion and robust execution across markets. We can see that the investments we made in building out our commercialization teams and capabilities are paying off. And this sets us up well as we prepare for potential expansion into earlier lines for Ebb Kinley and the potential launch of RENA-S in 2027. Stepping back and looking at our revenues, what really stands out for me is the improving quality of our revenue profile. In 2024, recurring revenues rose to represent 91% of total revenue, and that's compared to 88% in 2023. Finally, looking at Darzelek specifically. Overall, net sales grew by almost 20%. That's net sales of nearly $11.7 billion for the year, which translates to almost 14 billion kroner in royalty revenue. This growth was driven by continued share gains and strong performance in the frontline setting. Turning to our investments, where we continue to take a disciplined approach. Total operating expenses in 2024 were 13.8 billion kroner. As you can see, the majority of the investment over 70% was driven by R&D, reflecting our focus on late-stage priority programs at Kinley, RHNA-S, and Akkasun Limap. Our investment in SG&A was focused to put us in a strong position for key market launches in the US and Japan. So if we step back and think about our investment levels for 2024, we over-delivered on our financial commitments made at the time of the profound bio-acquisition. This was achieved through the balance of discipline investing in line with our capital allocation framework and a continued and increased focus on productivity and prioritization efforts. And in a minute, you're going to see how this has been effectively carried through to 2025. Pulling this all together, our operating profit for 2024 grew 26%. we delivered exceptionally strong profitability while investing to advance those programs with the highest potential for long-term growth. Then moving on to tax. As you can see in the appendix of this presentation, we have tax expense of around 1.3 billion, which equates to an effective tax rate of 14.4%. The decrease compared to last year's rate of 22.8% was primarily due to our ability So recognize deferred tax assets that were not previously recognized. Moving forward, we anticipate that our effective tax rate should be closer to the Danish statutory rate of 22%. Taken together, our net profit amounts to nearly 7.8 billion kroner. So as you can see, continued strong underlying financial performance. With that, let's move to our 2025 financial guidance. To start, the guidance we're providing today is in dollars. That's because as of January 1st, our functional currency changed from kroner to dollars due to the growing number and significance of our US dollar denominated transactions. For comparison, we've converted our 2024 results from kroner to dollars using an exchange rate of 6.89, representing the average rate during the year. With that background, now let's take a look at our 2025 guidance. We expect our revenue to be in the range of around $3.3 to $3.7 billion, delivering robust growth of 12% at the midpoint. And this is despite our non-recurring revenue decreasing by more than $100 million. So it's our recurring revenues from Royalty Medicines and revenues from Epkinley and TIVDAC that's driving our anticipated growth in 2025. For operating expenses, as I highlighted for you at Q3 last year, expectations were in a reasonable place. For 2025, we expect to be in a range of around $2.1 to $2.2 billion. So as you can see, we not only delivered, but over-delivered on the commitment we made at Q3. This reflects our disciplined approach to investments, as well as rigorous portfolio prioritization. Putting all this together, we're planning for operating profit in a range between $895 million to nearly $1.4 billion, with the midpoint of guidance amounting to more than $1.1 billion of operating profit and year-over-year growth of 16%. Now, let's take a look at the components of our guidance. Building on the exceptional growth in 2024, we expect recurring revenues to grow 18% in 2025, driven by Darzalex and Cosimta, and this increasingly includes contributions from Ed Kinley and TivDec. Taken together, these two products contribute 34% of our total projected revenue growth. This really highlights the continually improving quality of our revenue profile. Notably, our recurring revenue represents 95% of our total projected revenue in 2025. Looking beyond 2025, for Rep Kinley, we anticipate three potentially significant pivotal readouts by the end of 2026, including frontline and second line, DLBCL, and second line, FL. that could support regulatory filings and subsequently additional meaningful revenue growth. Finally, coming back to Darzelex, we anticipate that Darzelex sales will continue to ramp up and be in the range of $12.6 to $13.4 billion. Turning now to OpEx. We've purposely reallocated our R&D investments in 2025 and are focused on advancing our high-impact, late-stage programs at Kinley RENA-S, and Akasum Lemap. So here, we are prioritizing late-stage assets with strong commercial potential while also applying a balanced approach to our investments in our early pipeline. As a result, our investment in these late-stage programs increases from 45% of total R&D spending in 2024 to more than 55% or 55% in 2025. Our sales and marketing investments are focused on launch readiness and key markets, most notably for RENA-S with a disciplined approach that balances growth and efficiency. These investments are aligned to drive both immediate launches and long-term revenue. For G&A, I am pleased to note that spend is broadly flat between 2024 and 2025. And here, our G&A capabilities are increasingly at scale, so we expect minimal growth. If you add it all together, you can see the power of our growing recurring revenues and underlying profitability. In 2025, we'll make significant investments in late-stage R&D and launch preparations. At the same time, we plan to deliver 16% operating profit growth at the midpoint. This reflects our ability to scale efficiently and control costs, supporting both near-term launches and long-term value creation. So when you look at our 2025 guidance, as well as our 2024 results, you can see that we continue to deliver on our financial commitments. Having covered our results for 2024 and our guidance for 2025, let me outline our capital allocation strategy aimed at fueling revenue growth by the end of the decade and enhancing shareholder value. First, we will continue to invest and accelerating the development of our high-impact, late-stage programs at Kinley, Rina S., and Akkasun Lamath, with investment into Phase III clinical trials. We will also continue to maximize the success of our commercialized medicines, because it's our investment in these programs now that will potentially generate meaningful revenue for us by the end of the decade. we will continue to seek out business development and M&A opportunities that fit within our core focus areas. As you know, we executed on our acquisition of ProfoundBio last year. Here, I'd like to highlight how quickly and successfully we were able to integrate ProfoundBio into our business, as evidenced by our ability to progress Arena S so significantly. We not only brought forward the start of the first phase three trial for Arena S, But today we announced a second phase three trial in an additional indication. Now, having built out our development and commercialization capabilities, we're well positioned to continue to consider both mid to late stage development and commercial stage product opportunities. And finally, today we're announcing our plan to repurchase an additional approximate 1.9 million shares. which is equivalent to around $370 million at our current stock price. This underscores our confidence in GEMMAP's future and our commitment to delivering value to our shareholders, both in the short and long term. In summary, our performance in 2024 underscores our ability to deliver exceptional revenue growth, advance key pipeline assets, and maintain strong profitability through disciplined execution. Looking ahead to 2025, we are building on this momentum by further prioritizing our investments and expanding market opportunities, positioning us for sustained growth and long-term value creation for our shareholders. And on that note, I'm going to hand you back over to Jan.

Thank you, Anthony. Let's move on to our final slides. Now with this strong foundation supporting us, we are looking ahead to an energizing 2025. starting with Hexabody CD38. We submitted the data packets to J&J, and we anticipate a decision from them no later than the first quarter of this year. At that time, we will press release the decision and include top-line clinical data. Regardless of J&J's decision, GenMob's strategic priorities in 2025 and beyond remain unchanged. Looking beyond this event, This year, we are anticipating additional regulatory decisions for both APKINLY and TIFDAC, including the potential approval of TIFDAC in Europe, following a positive opinion from the CHMP in January. For both AKASUNLIMOP and ANTRA-NRS, we anticipate presenting additional supportive clinical data, and both have the potential to move into broader indications with new clinical trials. And we will continue to actively look for opportunities to grow our pipeline, both organically and inorganically, positioning us for sustained growth and long-term value creation for our shareholders. In summary, in 2024, we further solidified our already very strong foundation and delivered on our commitments. And in 2025, we will continue our laser-sharp focus on and investment in our late-stage product pipeline and commercial execution. That ends our formal presentation. Operator, please open the call for questions.

Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 1-1 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press star 1-1 again. To ensure everyone has the opportunity to ask a question today, please limit yourself just to one question. Please stand by, we'll compile the Q&A or studies. We'll take a few moments. And now we're going to take our first question. And it comes from Jonathan Chang from Learing. Your line is open. Please ask a question.

Hi, guys. Thanks for taking my questions. Can you discuss your reasons for confidence in the endometrial cancer opportunity for RENA-S and for committing to a Phase III second-line plus endometrial cancer study by year-end? Thank you.

Thanks, Jonathan, for the question. I will let Tai dive into this. Tai, can you talk about the endometrial cancer data and the commitment to go into Phase III?

Sure. Jonathan, thank you for the question. I think you heard from Jan earlier that we will present data in endometrial, so we have the data. It's been submitted, and it will be publicly available in the end of this first half. That data, in our mind, is highly competitive. It is the most robust efficacy signal that is currently being generated in that new population that you described, patients with endometrial cancer who at chemotherapy and check-in inhibition. And so we are very excited about that data. We think it's going to be robust data. It will be very well appreciated by investigators and investors when it is public. And that's driving our excitement to move forward aggressively with the phase three.

Thanks, Tai. Thanks, Jonathan, for a very good question. Let's move on to the next analyst.

Thank you. And the next question comes to the line of Michael Schmidt from Guggenheim Partners. Your line is open. Please ask your question.

Hi, this is Paul on for Michael. Thanks for taking our question. Just for EPCO and the DLBCL landscape, there's a competing CD20 bispecific that could potentially have combo data approved this year for the transplant and eligible second line plus setting. What do you have to show to be competitive here for EPCO monotherapy? And can you provide any updates on the status of your efforts there with GEMOX? And as a follow-up, you know, how are physicians currently thinking about the potential to sequence multiple CD25 specifics for DL-BCL? Thank you.

Thanks very much, Paul, for the questions. I'll let Tahi address those for Apcoritumab. Tahi?

Yeah, thank you again for the question. So the second line in the first part, of course, we just, a couple of days ago, got the good news that the NCCN has included our data with Gemmox and EBCO in second line patients who are ineligible for transplant with a type 2a recommendation. So that's very exciting. And then there's of course the phase three ongoing in combination with lenalidomide. So from our end, we kind of capture both opportunities, the debulking with chemotherapy followed in conjunction with the CD3-CD20 bispecific GMOX strategy, as well as the more outpatient-oriented oral medication plus a subcutaneous administration enhancing T-cell function strategy. And these two things are going to play out. I think, as we have said many, many times, the opportunity in the relapse refractory setting for the FUSH-P cell is... really in expanding access to this novel mechanism. And we think that from the whole target product profile for the subcutaneous administration, the fact that it is the only one that is approved in both indication, it is extremely well positioned to enter the community space and provide access to patients in those settings.

Thanks. Thanks, Tai. Let's give the floor back to the operator.

Thank you. And now I'm going to take our next question. And it comes from the line of Ashtika Gunavardana from Twist. Your line is open. Please ask a question.

Hi, guys. Just very quick to follow up on Kinley. $281 million in the first full year of launch is very commendable. I just want to delve into the market dynamics in the second half. I wanted to see if there's something funky about Q4, given that it was kind of flat on Q3, if there's anything unusual you'd point to. And then if I can ask, on ACASUN, I like that you're putting peak sales number here for the key pipeline assets, but with 136,000 potential treatable patients for ACASUN, The one billion in peak sales seems a little light compared to the others that you provided. Can you tell us a little bit about what goes into this estimate here? Is that something to do with the longer treatment interval, the six weeks versus three weeks, or is there something else that you're anticipating with ACOSUN? Thanks.

Thanks, Ashika, for the questions. I will ask Brad to comment on the first two, and then maybe Judith can step in also on the estimates for ACOSUN Limob. Brad, why don't you start with APCO?

Thank you very much for the question, and we remain very confident, actually, in the core markets with the U.S. and Japan, with EpiKinley's performance with the growth that we're seeing there. We did have a one-time accounting adjustment for sales in Europe, France specifically, that impacted the Q4 number specifically. Otherwise, again, feel very confident with our growth trajectory at this point.

Then maybe the market size for Acasunlimab, as we estimated it, around a billion, 436,000 patients. Do you want to add anything to that, Brad?

Yeah, no, for ACA, it's certainly a competitive space that we see, particularly in this post-Iowa setting, a significant opportunity, as you showed on your slide earlier, but nothing really further to comment on that from a size perspective at this point.

All right. Thanks, Brad. Judith, any call from the clinical site on Akasunlimab and the estimated markets?

Yeah. The only thing to add is, as you know, we preselect for PD-L1 positive. So this came into account on the assessment of the market opportunity.

Thanks. Thanks, Judith. Hope that's clear, Astika. Let's give the floor back to the operator.

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

Thanks for taking my question. I have one on . So in 2025, the phase two of data updates, what are we expecting to see in the data in the presentation? And then what's roughly the timing of that presentation? And then secondly, on the second line, and transplant ineligible. So you've launched a DL-BCL4 trial last year. Could you maybe talk a little bit about the proposition for that setting against the DL-BCL1? Thanks.

Thanks for both questions. Judith, why don't you talk a bit more about the Akkasunimab data, which we are very excited about to present this year, and a bit more on timing. And then Tai can address the Apcaritumab question in the second and plus DL-BCL setting after that. Judith?

Yes, so thank you for the question. As you know, we presented the first Kaplan-Meier curves on overall survival last year at ASCO. We saw very interesting durability. Albeit the curves were not with enough maturity or with more maturity, we expect to see the same string signal, and this is what we will present later this year. So basically durability of the time to event and points mainly OS.

Thanks. Thanks Judith. And Ty maybe a comment on the second line plus question for APCO.

Yeah, thank you. And then maybe I use it as an opportunity to more broadly layout or diffuse such piece of strategy as it relates to AppKindy. So initial launch, as you know, as a single agent in third line plus, going really well. Then the next extension of data was in combination, getting data in our hands and providing confidence to physicians and patients that this is a safe and an efficient way of administering this new mechanism. The GEMOX data now recognized with a 2A classification by the NCCN, meaning this is something that in the judgment of the NCCN, is providing benefits to patients. And then we have this phase three that is ongoing with lenalidomide. These are complementary in our minds and give an opportunity of choices for investigators to treat their patients respected of their needs. Either somebody who needs more debunking or maybe somebody who's a little bit more frail. Really, the main focus is actually frontline. This is something I think we We spoke about this, and we also put this on the slide. The study is fully cool to anticipate the readout in 2076. And a lot of the data that we're generating now is in anticipation of that data set and to really supplement a very robust complementary data set in frontline such that when this indication hopefully is going to read out positive, we'll have, again, a very complementary data set to provide physicians with all opportunities to treat their patients. That's essentially broadly the strategy. And this is why also in the second line, we have a chemo and a non-chemo combination strategy, if that makes sense.

Thanks, Tai. I think it's very clear. Let's move on to the next question.

Thank you. And now we're going to take our next question. It comes from the line of Xian Deng from UBS. Your line is open. Please ask your question.

Hey, thank you very much for taking my question. Just one on Aptili, please. I'm just wondering, you mentioned the frontline DLBCL trial could have readout by the end of 2026. Just wondering, if you have a readout by end of 2026, do you think you will have two-year or three-year follow-up at that time? And that follow-up timeframe, do you think that's actually enough to allow FDA to give a decision without being asked for longer follow-up, just considering the previous precedent? Thank you very much.

Thanks, Sian, for the question. Very exciting one. So I'll let Thay address that. Thay?

Yeah, sure. I mean, so first things first. So the study was fully approved in the summer of last year. And so then there is an event-driven endpoint, PFS. That is the accepted endpoint. And the population in the study is two IPI or higher, but there's also a subgroup analysis for three IPI and higher. these events play out and we anticipate they play out in 2026, that would mean that the study would meet its statistical defined primary endpoint. I think what you're referring to is the challenge that the FDA had with a lack of over survival benefit initially as it relates to the Polarix study. And so obviously it will be whatever the data will be, but Based on the Phase II data set that we have generated, a pretty robust Phase II data set, we are quite optimistic, actually, that the signal in the experimental arm will be significantly stronger than the one that was seen in Polarex. And so we don't anticipate that this is going to be an issue for us.

Thanks, Tai. Let's move on to the next question. Thank you, Sian.

Thank you. And the next question comes to the line of Yaron Webeck from TD Security. Your line is open. Please ask your question.

Great. Thank you so much. So maybe just, Tavi, just to follow up, should we assume that the second line, follicular and second line DLBCL, that data by year on 26, is that fileable, assuming positive as well? So you can file both for first and second line, or do you need more data from second line? And then just secondly on TIVDAC, So it sounds like from now on, you're going to be the lead commercialization party, and you will book sales in the U.S., Europe, and Japan. And how do we model that? Like, is there a world, I assume, back to Pfizer? And congrats on getting that. Thank you.

Thanks, Jaron, for the question. So, Tai, you can address the question on the very exciting developments with Adcoritum up. And then, Brad, why don't you explain the exact – contract on TIFDAQ and commercialization to Yaron after TAI.

Well, just to clarify what Jan also said at the beginning and his prepared remarks, there are three of the five ongoing phase threes that are fully accrued and awaiting a readout based on events. This is in third-line diffuse HB cell. In second-line follicular lymphoma, which is in combination with R-squared, and in frontline diffuse HPSA. And we were talking about the frontline diffuse HPSA study that I finished at the core last year, and where we anticipate a readout by events earlier than it was initially prognosticated. And that's also true for the second line follicular lymphoma phase three, which also accrued significantly faster than initially projected, and thus, because this is event-driven studies, we anticipate a readout earlier than initially projected.

Thanks, Ty. And then maybe move on to Brad for the exact commercial formulation of the contract for TIFTAC. Ty, Brad?

Yeah, no, just thank you. And again, we are excited about the opportunity as it provides us the opportunity to expand our commercialization footprint. But the terms of the agreement, as mentioned earlier, remain that U.S. and China are as is, where Pfizer is actually still a lead party. in both of those areas, as we're still co-promoting here in the U.S. and in Europe and rest of the world, including Japan. We will be the lead party at that point, and there will be low double-digit royalties involved as per the contract that we've already set up. But it's just as a reminder, the U.S. and China remain the same.

Thanks. Thanks, Brad. Very clear. Thanks, Jaron, for the questions. Let's move on to the next question.

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

Well, thanks for taking my questions. Are you guys able to disclose if you're going to use a folate receptor alpha expression cutoff for the endometrial cancer phase three? And then on a Kinley, you know, given, I don't know, maybe half a year of launch, maybe a little more on that infollicular lymphoma at this point, do you see any broader utilization in follicular given no need for hospitalization. Just wondering if that is helping get into community settings and if you think that will be a continuing trend. Thank you.

Thanks, Matt. For the questions, and I think, Tai, you can address both, both the folate receptor alpha question for endometrial and then also the APCO question.

All right. First things first. So this question has come up a couple of times, so I'll try to be very clear. So first, folate receptor alpha is a validated target in ovarian. In PROC, essentially all patients have some degree of folate receptor alpha expression. Second, and this is partially related to the antibody that is the component of Vena S and the internalization rate, and partially related to the linker and the stability that comes to the hydrophilic linker. The profile of Vena S is that it has generated, and we have this data, and we, to a degree, also in the asthma presentation already disclosed it, but there's obviously more data that we have internally that we're not able to disclose yet, has generated robust data across the entire spectrum of folate receptor alpha expression, including patients who are, by the technicality of the assay, called negative. And I spoke to that before. This is, to a degree, also a function of the sensitivity. So to be clear, our strategy in the phase two And our strategy in the phase three is to not select folate alpha receptor expression. Now we do stratify in the phase three by the various cutoffs, which is 125 and 75, and that's just good practice. And Abkindi, sorry. On Abkindi, the question was whether the lack of hospitalization is going to help us expand into areas outside of the larger academic institutions. And I think that that is certainly a general part of our strategy with HEPKINDY. And that's my understanding also playing out already that the utilization of HEPKINDY in follicular reformer is helping us to get access into institutions that originally were not open to using AppKindy in the diffuse HBISA setting, and that's also how the community is getting more comfortable, and that leads also to the discussion on our active efforts to remove hospitalization from the diffuse HBISA label, but I would actually ask Brad to maybe add from his point of view to this.

Brad, do you want to comment on this? Yeah.

Yeah, thanks, Ty, and I agree with what you said. I think it's just another... validation of physicians reported really strong response to our favorable clinical profile, the dual indication as well as the positive label without hospitalization that's required or not required in FL. So we do feel confident that this FL approval has and will continue to help us deliver innovative biospecifics across multiple histologies across broad and diverse sites of care as well. So it's just reinforcing that from the physician standpoint.

Thanks, Brad. And Matt, to top it off, as a reminder, there is no requirement for any hospitalization in any of the ongoing Phase III trials. So I think that should clarify that. Let's move to the next question.

Thank you. The next question comes from Redburn Atlantic. Your line is open. Please ask your question.

Hi, just one quick question on the RENA-S. Because you just mentioned about your clinical development plan in ovarian cancer and endometrial cancer, I just wonder what is your clinical development plan for other solid tumor indications, such as lung and breast? Thank you.

Very good question, Chris. And comment on that, or excitement over tumors.

Yes. There is indeed, as you were alluding to, for the sub-diagraphic expression in non-small cell lung cancer, particularly in patients who have EGFR mutation, but not only restricted to that, and in triple negative breast. And we already spoke about that. There will be activities in that range. We already have a cohort in non-small cell lung cancer with patients who have EGFR mutations in second line open and are enrolling patients in that cohort. And so hopefully we'll get validation of what we all believe, which is that this... this asset will also have efficacy in these two indications. And then we're going to inform you about next steps quite timely.

Thanks, Tai. Thanks, Kisa, for the question. Let's move on to the next question.

Thank you. And now we're going to take our next question. And it comes from Justin Smith from Bernstein. Your line is open. Please ask a question.

Yeah, thanks very much. I've got two. First one just on Dara, if you wanted to possibly share any thoughts about the potential impact from the potential relaunch of BlendRep this year. And then the second one, just on the buyback, I'm sorry if I'm thinking about things the wrong way, but just trying to understand why you've announced that now and not waiting till after the Hexabody decision from J&J. Is it a case of there just aren't interesting assets out there or just any thoughts on why the buyback timing now? Thank you.

Thanks, Justin, for the question. So I think the DARA question is definitely more a question for J&J, because they are developing Dara-Turma. But I will ask Ty to give his perspective, because he's an expert in multiple myeloma. Maybe you can say some general things there on the landscape, Ty. And then Anthony can absolutely give you more rationale and thinking behind the buyback. which we just announced today, Justin. Ty, maybe some further color on blend wrap in the landscape in multiple myeloma?

Yeah. I would hesitate to comment on another company's assets. So broadly speaking, it's always good for patients that there are a lot of opportunities, and I think we should leave it at that.

All right. I agree with that, Ty. So ask J&J is the feedback, Justin. And then for Anthony, maybe more rationale on the buyback right now.

Yeah, happy to give you a little bit more context here. Look, our capital allocation priorities are super clear and are aligned with fueling revenue growth and enhancing shareholder value. Our first priority, as I highlighted, is really accelerating the development of our late-stage pipeline and maximizing the success of our commercialized medicine, as I highlighted earlier. Second priority is pursuing focused BD and M&A. And after we've evaluated these opportunities from these first two priorities, we can consider our third priority, which your question is about, which is return of capital. As a reminder, here in 2024, we executed an approximate $500 million buyback of 1.8 million shares. And for 2025, having carefully considered this, looking at all factors, we announced today our plans to buy back an additional 1.9 million shares And we really think this strikes the right balance of fueling the revenue growth and enhancing shareholder value. So I think this is the appropriate time to really outline for all of our stakeholders, our shareholders, our capital allocation framework and priorities. And I think we've stepped through that in a fair amount of detail and very clearly outlined these priorities and also demonstrated how we've executed against that framework in 2024. and how we're set up very well to continue to execute against that in 2025.

Thanks, Anthony. I think it's crystal clear. Thanks, Justin, for the questions. Let's move on to the next analyst.

Thank you. And the question comes from Morgan Stanley. Your line is open. Please ask your question.

Great. Thanks for taking our questions. We had one on BD is a follow-up to the last question and then one on guidance. So on BD, I mean, given you noted 2025 is a heavy execution year for the pipeline, I just wanted to see how strong of a priority external BD and M&A could be for the year. And if you decide to go that route, what is the profile of the assets you'd find most interesting and attractive to kind of bring into the pipeline where it stands now? And then secondly, on guidance, I was just wondering if you could provide a bit more color about what the drivers are for the bookends for the revenue, gross profit, and OPEX guidance that you outlined for the year. Thank you.

Thanks, Vikram, for the questions. Let me address the BD one, and then Anthony can do the guidance question. So, BD is very, very important for us. Vikram, we want to organically and inorganically strengthen the pipeline, accelerate it. What we will do is focus on antibody-based medicines, because that is our field of expertise. We did it very well last year with ProfoundBio. I can tell you that we did this acquisition in record time and actually run into the chief medical officer of a very large pharma and the head of oncology of a very large biotech we all know. who said, well, basically, congratulations on the profound bio deal. And you snapped it away in front of our face because we were simply much quicker than other companies. And what we are looking for, VECOM, is antibody-based medicines which are totally differentiated. We can use our expertise in this field for over 25 years now. To really zoom into the right opportunities and that should be phase three programs or phase three ready programs, ideally. For for general up and that is to complement our own pipeline, we also filling our own pipeline, we are bringing more and more new molecules into the pipeline ourselves from our own platforms, you have several platforms now adc platforms, which are. responsible for over 50% of our pipeline right now. Then we have, sorry, 40% of our pipeline and the 50% is about bispecifics at this moment and the rest is hexabody. So we have molecules from our own pipeline, but we also look very actively at companies having interesting assets which we can then accelerate like we did for as we described today in the call. I mean, within a year of the acquisition already announcing two phase threes and potentially others to come in other tumors. I think it's really belonging, it's fitting very well with our expertise as a developer of differentiated antibody medicines I think I will leave it with that, Vikram. So we'll have to see how effectively we can execute that we are looking at multiple opportunities as we speak. So we are very busy with that. And let's now move to Anthony to give a bit more color of the guidance.

Yeah, Vikram, I think the starting point I would really just highlight for you to really kind of frame this out. And hopefully this is super clear for both 2024 and 2025. From my perspective, we absolutely delivered on our financial commitments. If we zoom in on 2025 and just look at really the quality of the guidance we put forward, total revenue growth, and all my comments will be at the midpoint, total revenue growth at 12%, recurring revenue growth of 18%. We had the $100 million plus non-recurring revenue headwind. Looking at the improving quality of our revenue profile, recurring revenues now at 95%. If we look at then the performance of Epkinley and TIVDAC, we can really see the investments we've made, really focused investments we've made over the last couple of years and building out our commercialization capabilities really paying off. You can look at the net product sales collaboration revenue line where we see growth for that line really driven by, again, Epkinley and TIVDAC. Primarily Epkinley, to be clear, projected growth of around 39%, nearly 40%. at the midpoint. So it gives you a sense of the quality of the revenue profile. Of course, a big driver of our revenue continues to be Darzalex. And here, we provided our range of 12.6 to $13.4 billion, $13 billion at the midpoint. So I would say this is probably the primary driver here of the revenue guidance range. In terms of our investments, again, we've really delivered on our commitments here really purposefully reallocating our investments to the late stage pipeline and really investing in a smart way in sales and marketing to really deliver on today's launches, but to continue to build that foundation and platform for upcoming future launches. And again, delivering on our commitments. In terms of the OPEX range, around $2.1 to $2.2 billion, this is really driven by the three investment priorities and where these exactly will land. It really has to do with the expansion and acceleration of EPCOR clinical development with the five phase three trials ongoing and expansion of EPCOR in our key markets. Then we have RENA-S with the start of phase three and second line plus endometrial cancer, as well as the overall trajectory of the phase three trial in PROC. And of course, we have the ongoing work with GEN1046 or acosumab with the phase two start and another indication and also progressing the phase three. So it's really going to be These three programs, I would say, that are largely driving the variability of OPEX. But again, if I finish my comments where I started, really, we continue to deliver on our financial commitments, very strong recurring revenue growth, and seeing that come through to the bottom line in terms of the 16% operating profit growth at the midpoint, we're projecting more than $1.1 billion.

Thanks, Anthony. Very helpful.

Thank you.

All right. Thanks, Vikram, for the questions. Let's move on to the next one.

Thank you. And now we're going to take our last question for today. And it comes from Rajan Sharma from Goldman Sachs. Your line is open. Please ask your question.

Hi. Thanks for taking my question. So I was just wondering if we could get an update on Gen 1042. I know this slide said that there's going to be a decision in 2025, but it's obviously been a decision that's been pending for some time. So just interested in understanding what you're still trying to establish here And if we could just get a little bit more clarity on the timing, is that likely to be first half or second half of the year? And just one for Anthony on clarification on the guidance, is there anything assumed in guidance for 1042 development? And then a very quick one to wrap up. You previously talked about potential developments in immunology and inflammatory disease, either through your own internal pipeline or through external sources. Could you just kind of talk to your latest thoughts there and and appetite both from an internal and external perspective. Thank you.

Thanks, Raijan, for the questions. I will ask Judith to comment on the timing for 1042 and Anthony for what is in the plans for 1042 and development. Let me start with the I&I question. What we already said, Raijan, is that AppKindy, we believe, is an excellent candidate for development also in select INI indications, and we are in discussions now with APFI to actually plan and discuss next steps for APKinley. We think it's an excellent molecule, which will likely work really, really well in the INI area, but we also have collaboration with Argenix, which is preclinical, and a number of internal, 100% owned programs for GenMob. So we continue to be very focused on creating next-generation differentiated antibody-based medicine candidates for INI. And we will update you once we are closer to the clinic. But the most advanced candidate is Apkin Lee. Then let's move on to Judith to speak a bit about timing for 1042 units.

Yeah, thank you, Jan, and thank you for the question. So as we put in the slide, it's by 2025. I cannot be more precise at this point, because as you know, durability is key for IO, and we need to assess durability on first line, and then, you know, undergo the prioritization within our own pipeline, and head and neck external is moving as well, and we will come with all these data sets more likely by the second half of the year.

Thanks, Judith. And then, Anthony, what is in the budget of the guidance for 2025 for 1042?

Yeah, well, look, Rajan, thanks, and, you know, good to hear from you. I think if we sort of think about 1042 as the, of course, the ongoing work that Judith just alluded to, and I would say, you know, the future work, you know, is really just not really material one way or the other this year. That's primarily based in the function of timing.

Then finally, to top it off, Rayan, I can tell you that not only we, but also a part of BioNTech is very excited about what we have seen up to now with 1042. We need more data, as you already alluded to. But we also think there is a great potential for combining 1042 with different ADCs and other concepts which both companies are working on. So I think exciting times. We'll need a bit more data to get a better feeling for durability, but a high level of excitement. All right, operator, this was the last question. So thank you all for calling in today to discuss 10 most financial results for 2024. If you have additional questions, please reach out to our investor relations team. They're ready to answer your questions. And then we hope that you all stay safe, keep optimistic, and we very much look forward to speaking with you all again soon.

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