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spk12: Good morning and thank you for standing by. Welcome to the Legend Biotech Report second quarter 2023 financial results. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Jessie Young, Head of Investor Relations and Public Relations. Please go ahead.
spk02: Good morning. This is Jessie Young, Head of Investor Relations and Public Relations at Legend Biotech. Thank you for joining our conference call today to review our second quarter 2023 performance. Joining me on today's call are Ying Huang, our CEO, and Lolly McComber, Legend CFO. Following the prepared remarks, we will open up the call for Q&A. We have Guo Wei Fan, Chief Scientific Officer, and Steve Gaffel, Head of Commercial Development for the U.S. and Europe, joining the Q&A session. During today's call, we will be making forward-looking statements. which are subject to risk and uncertainties that may cause our actual results to differ materially from those expressed or implied herewithin. These forward-looking statements are discussed in greater detail in our SEC filings, which we encourage you to read and can be found under the investor session of our company website. Thank you, and I will now turn the call over to Ying.
spk09: Good morning, everyone. Thank you for joining us today. We have had a very busy first half of the year and we're excited to be sharing our latest corporate developments with you on a quarterly basis, starting with today's call. Over the past six months, our teams have worked incredibly hard to accomplish a number of critical milestones that have set the stage for decisive growth for our company for years to come. First and foremost, as you may have seen, reported by our partner J&J on July 20th, our first approved therapy CARVICTI generated total sales of $170 million in the second quarter of 2023. amounting to $189 million in sales in the first half of 2023. The strong performance in the quarter exceeded our expectations, which was driven by continued strong demand for our product and a meaningful increase in our daily slot capacity. We were able to ramp up a lot more quickly than anticipated and we made continued improvements in our manufacturing processes. We're very pleased by the progress made in our commercial launch and remain committed to making CARVICT available and accessible to patients who are eligible for treatments through our ongoing investments to increase capacity and improve efficiency in the second half of 2023. We continue to find success in our portfolio and pipeline, including the CARTITUDE clinical development program that investigates CARVICT in additional patient populations. These results demonstrate the strength of our company in our relentless pursuit of novel therapies for patients with unmet needs. This year, at the American Society of Clinical Oncology meeting in June, we presented new data from our Phase III CARTTITUDE IV study investigating CARVICT in relapsed and lenalidomide refractory patients with one to three prior lines of treatment. In this study, CARVICTI reduced the risk of disease progression or death by 74% compared to standard of care regimens. The data were also published in the New England Journal of Medicine and presented at the European Hematology Association 2023 Congress later that month. Based on the CART2 score data, our partner Janssen submitted a type 2 variation application to the European Medicines Agency and a supplemental biologic license application to the US Food and Drug Administration to expand the indication for CARVICTI for use in earlier lines of multiple myeloma treatment as early as after first relapse. We see CARVICTI as the crux of the new myeloma landscape and have submitted regulatory applications for its expansion from 4 plus lines to 2 plus lines. We're excited by the potential to provide treatment options to patients earlier in their treatment journey and are encouraged by the results of ongoing CARDI4 study. We look forward to working closely with regulatory authorities around the world as we seek to expand the indication. As part of our efforts to expand manufacturing capacity, we signed a three-year contract with Novartis to manufacture additional clinical doses of Carvicti in April and added additional certified treatment centers this quarter as part of our ongoing efforts to improve efficiencies while expanding capacity and access to this novel therapy. In addition to our success with CARVICTI, we're also advancing our pipeline of therapies for solid tumors. This quarter, the U.S. Food and Drug Administration granted LB2101, targeting DLL3, our investigational therapy for small cell lung cancer, an orphan drug designation, in which we were able to open a trial site in the U.S. to prepare for patient recruitment. Another one of our solid tumor programs, LB1908, targeting Claudine 18.2 in gastric cancer, is also progressing on track. We recently opened two clinical trial sites in the U.S. for this program in the second quarter, and we anticipate dosing our first patient soon. We look forward to reporting on the progress across both of these solid tumor programs in the future. And finally, our financial outlook is equally promising and positions us to execute our plans through 2025. On the heels of our strong Caritude4 data, we were able to raise approximately $785 million in gross proceeds in a quarter through a registered direct offering, private placement, and the exercise of a warrant. bringing our cash, cash equivalents, deposits, and investments to $1.5 billion at quarter end. Further, as part of our collaboration with Janssen for Curvicti and the Carditude Clinical Development Program, we received a $15 million milestone payment this quarter at the acceptance of the Type 2 application for Curvicti and achieved another milestone for $20 million at the US FDA acceptance of the SPLA of Carditude 4. We continue to see additional revenue from Curvicti as we reach additional key data and regulatory milestones. Turning to the next slide, slide six, a final analysis of data from the pivotal phase 1B2, Partitude 1 study was presented at the ASCO and EHA annual meetings this year that showed sustained, deep, and durable responses in heavily pretreated patients with relapsed or refractory multiple myeloma. This data shows that CARVICTi continues to demonstrate both efficacy and safety years after treatment, which has made our therapy a leading option for adult patients with relapsed or refractory myeloma. In addition, five-year follow-up data from LEGEN2 were presented. It is the longest follow-up by any BCMA-target CAR-T cell therapy. At the five-year follow-up, these data are encouraging and bolster our belief that siltacel or Carvicti is a paradigm-shifting therapy. Moving on to slide seven, as I mentioned earlier, we recently announced the submission of the supplemental biologics license application to the U.S. Food and Drug Administration to expand the label for Carvicti. The application for expansion includes the treatment of adult patients with relapse and lanolidomide refractory multiple myeloma who have received at least one prior line of therapy, including a proteasome inhibitor and an immunomodulatory agent. With this finding, we hope to move Carvicti into the two to four prior lines of therapy setting in multiple myeloma subject to FDA approval. FDA has now accepted this SBLA filing and assigned a PDUPA date of April 5, 2024. In the clinic, we plan to complete enrollment of the ongoing Phase III CARTITUDE V trial, which evaluates psilocybin in newly diagnosed patients for whom transplant is not intended by end of this year. Furthermore, we're planning to initiate enrollment of our first-line CARTITUDE 6 study in fourth quarter of 2023. Next slide, slide eight. We're pleased to report that Carvicti continues market penetration with net sales of $170 million in second quarter of 2023, consisting of $140 million in the US and $3 million in EU. The 63% quarter-over-quarter sequential growth in the US was primarily driven by high demand from physicians and patients, higher slot availability, and lower out-of-spec rate. As of June 30th, the number of activated US treatment sites was 54. On slide 9, you will see our R&D team continues to advance our proprietary pipeline in the second quarter. In last quarter, we opened our first clinical trial site for our DLL3 program in the US. our second ongoing clinical trial in the U.S. In addition, a number of patients are being enrolled and dosed in a number of phase one IIT programs in China. I'll now turn the call over to our CFO, Laurie Makenberg, to go over our second quarter financial performance in more detail.
spk17: Thank you, Ying, and good morning, everyone. As Ying mentioned, we are very pleased with the performance of our commercial product, Carvicti, this quarter. which generated approximately 117 million in total sales, representing a 63% sequential growth and 388% growth over the second quarter of 2022. As a reminder, we share equally in all profits and losses of Carvicti X China with our partner, Janssen. Starting with revenue, total revenues for the second quarter were 73.3 million, consisting of $58.2 million in collaboration revenue from the sales of Carvicti and $15.1 million in license revenue for the achievement of a milestone during the quarter as outlined in the Global Development Plan under the Janssen Agreement for Sit to Sell. Net loss for the three months ended June 30th, 2023 was $199.1 million or a loss of $0.57 per share compared to the net loss of $193.2 million, or a $0.62 loss per share for the same period last year. For the six months ended June 30, 2023, net loss was $311.2 million, or a loss of $0.91 per share, compared to a net loss of $225.5 million, or a loss of $0.73 per share for the six months ended June 30, 2022. Moving on to expenses, collaboration cost of revenue for the second quarter 2023 was $32.7 million, compared to $16.9 million for the same period last year. These are Legends portions of collaboration cost of sales in connection with collaboration revenue under the Janssen Agreement, along with expenditures to support the manufacturing capacity expansion. Research and development expenses for the second quarter 2023 were $95.8 million compared to $68.8 million for the same period last year. The increase of $27 million year-over-year is due to higher patient enrollment for Phase III clinical development programs for Sit to Sell and increases in R&D activities for our other pipeline programs. Administrative expenses for the three months ended June 30, 2023, were $27.8 million compared to $18.1 million for this same period last year. The increase of $9.7 million year-over-year is primarily for the further build-out of administrative functions and continued investment in building our global IT infrastructure, along with non-reoccurring financial and legal fees related to the company's restatement of its historical financial statements. Selling and distribution expense for the three months ended June 30th, 2023 was 21.4 million compared to 27.4 million for the same period last year. The decrease year over year is primarily due to non-reoccurring launch expenses incurred in the first half of last year to support the U.S. launch of Carvicti. To wrap up, our spending remains on track and we continue to maintain a strong balance sheet. As of June 30th, We had $1.5 billion in cash and equivalents, deposits, and investments extending our cash runway through 2025. Thank you. I will now pass it back to Ying for closing remarks.
spk09: Thanks, Laura. In closing. We're very encouraged by the performance in this year thus far. Our teams continue to execute, making tremendous progress to bring Curvicti to more patients while continuing to supply our clinical programs. We have a healthy cash balance to carry out our long-range plans across all areas of the business. We now have cash flow sufficient to fund operations throughout 2025. Looking ahead, our priorities include Increasing manufacturing capacity, which we will do by continuing to invest in our facilities and working with the FDA to ramp up. Activating more treatment centers in the U.S. and ex-U.S. Progressing our frontline studies across Cardio 5 and 6 studies. Last but not least, advancing our pipeline programs. We remain steadfast in our commitment to capturing the full potential of Carvicti. Our teams across the globe are working tirelessly to enable reliable and consistent product availability to continue with this momentum. I would like to take this opportunity to thank the more than 1,500 Legend team members across the globe for their dedication and effort. Before I close the earnings close today, this is a picture of our Oblisk facilities in Ghent, Belgium, which we anticipate will be operational for clinical production by end of 2023. We'll now open up the call for your questions. Thank you.
spk12: As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. The first question comes from Kelly Shee with Jefferies. Your line is open.
spk05: Congrats on the progress and thank you for taking my questions. My first question is regarding the auto-stack rate. I'm curious, is Legend expecting a higher project specification limit when corrected gets approval in earlier lines from second to fourth line? And should we expect out-of-spec rate improve accordingly for this early line product? Thank you. Congrats on the progress and thank you for taking my questions. My first question is regarding the auto spec rate. I'm curious, is Legend expecting higher project specification limits when corrected against approval in earlier months from second to fourth one? And should we expect auto spec rate to improve accordingly for this early launch product. Thank you.
spk09: Hey, Kelly. Thanks for the question. So this is Ying. I'm going to answer your questions about auto spec. First of all, after all the work we have done in the last six to 12 months, we're very happy to report that today our current auto spec rate is trending down continuously, and it's very close to the labeled rate. and not much really higher than our competition's out-of-spec rate. So we're happy we have made a lot of progress over there, thanks to the effort from our Raritan operation team. And then secondly, transfer question about the widening specs through the CAR2-4 application. We did submit in our SBLA package to the FDA when we filed in June that a comprehensive correlative analysis That provides data to convince the agency, we believe, to widen our spec, pending FDA approval. So if we do get a wider spec from the agency when we receive the Cardio24 approval on the label, we expect out-of-spec rate to be down another meaningful amount from the current out-of-spec rate here.
spk08: Thank you very much, and I'll go ahead.
spk05: Sorry, go ahead.
spk14: Please stand by for the next question.
spk12: The next question comes from Terrence Flynn with Morgan Stanley. Your line is open.
spk00: Great. Thanks so much for taking the questions. Maybe two for me. I was just wondering if you can comment at all about the cadence of slots in the second half of the year. if we should still expect an increase there, or is it more steady state until 2024? And then my second one relates to the ASH conference, obviously always a big event in myeloma. Just wondering, Ying, if you could give us a preview of any potential data that you guys might plan on submitting. Thank you.
spk14: Stand by for one moment, please. Please stand by. Hi, Terrence. This is Lori.
spk17: Thank you for the question. So the cadence that you're going to see for the second half of the year, you will see a step up from Q2. As you know, we got the capacity ramp in Q2, but we didn't realize that for a full quarter. So you will see somewhat of a step up in Q3, and in Q4, we'll continue with that ramp. Regarding the ASH question, I'll turn that over to Ying.
spk09: Hey, Terrence. Thanks for the question. Consistent with the J&J's disclosure policy, we do not really comment on submitted abstracts, but I think given the CAR2-4 data, the initial presentation was made at ASK on the EHA. You should probably expect some more subgroup analysis coming from CAR2-4. Other than that, stay tuned until the ASHE abstracts are published. Thank you.
spk12: Please stand by for the next question. The next question comes from Gina Wang with Barclays. Your line is open.
spk18: Thank you for taking my questions. The first question is regarding the manufacturing between the balance, you know, the balance between clinical trial enrollment versus commercial patient. So, just want to make sure the Belgian site since active by the year end 23 will have Cartitude 6 manufacturing will be all at the Belgian side initially, and then you will move to Novartis sites by second half 2024. And also regarding current active sites in the U.S., do you still have a slot limitation for each site? And quickly, another set of questions regarding PDUFA. You announced April 5, 2024. Just want to confirm this is a standard review. and you do not expect an ad account.
spk14: Please stand by. Morning, Gina. Thanks for the question.
spk09: I'll answer the first and the third, and then I'll ask Steve to answer the second question. So on your first question, yes, we do fully expect our first stage of our Ghent, Belgium facility to come online by end of this year, and we're planning to start enrollment for Cartier 6. basically around the timing of the coming up online for a Gantt facility. So we will start clinical production for CARB2-6 from our Gantt facility. I can't comment on Novartis at this point, but suffice to say everything is on track at this point in terms of tech transfer and related activities. And then on your third question on PDUFA data, yes, I can confirm that. The Purdue data is April 5, 2024, under standard review. Steve?
spk10: Yeah, thanks, Ang. Thanks, Sheena. Yeah, so the question had to do with allocation for sites. So you're correct. So we launched on an allocated model here in the U.S., and we continue to be in an allocated model for the foreseeable future. However, what we did do recently as our out-of-spec continued to have significant improvements, we also added a pool concept into the US. We have additional slots that our sites can then go into providing they have obviously that level of patient demand. So right now in the US, we have a bit of a hybrid where we have all sites being allocated as well as an open pool approach for some specific sites within the US.
spk14: Please stand by for the next question.
spk12: The next question comes from Umar Rafat with Evercore. Your line is open.
spk16: Hi, guys. Thanks for taking my question. Ying, first, can you remind us what's going on with the board dynamics and Genscript and what changes may or may not be happening, if we can just understand what's happening on the board front and governance front? Secondly, I know you have a DLL-3 CAR-T in your phase one right now. Can you remind us, A, what did we learn from the DLL-3 CAR-T failure at Amgen? This is a 2019 program. And also, what was the lag between when your IND was filed or cleared back in fall last year versus about seven or eight months it took to actually get the first patient recruited? Thank you very much.
spk14: Please standby. Please standby. Please stand by. Hi, Omer.
spk09: Thanks for the questions. This is Ying. So I'll answer first about the board. As you know, we have a 10-member board, and our shareholder, Genscript, actually has appointed three board members, and this is consistent with the 48% equity ownership held by Genscript. I think the board is very productive because we do have a good mix of independent board members, six of those, and one representative from the company and three from our sizable shareholder transcript. So I think in terms of board dynamics, it's a pretty good mix between a large shareholder and the six independent board members. And as you can tell, in terms of CARVIC-T and the CARVIC-T program, as well as our pipeline, The company is doing very well in terms of advancing on both fronts, and that is under the guidance of the board of directors. So that's the first question. And what was your second question, Umar?
spk16: My second question was around the DLL3-RT.
spk15: Yeah, this is what we found, yeah. I can comment on the second question that is with regard to the Amgen's DL3-targeted CAR-T therapy. As we know that Amgen has two different DR3 target product in clinical trial, and one of them was autarkus CAR-T therapy. Second one is the DR3 target, CD3 bispecific. For the autarkus CAR-T product, they tried in several patients in the second dose cohort. They tested in two patients. One patient actually gave fairly durable response. Based on Amigen's communication, their decision on stopping the autoxic CAR-T product development is solely based on their portfolio prioritization. They decide to focus on the DR3-CD3 bispecific antibody. We think that the DR3-targeted autoxic CAR-T therapy could provide a substantial benefit to the patient. First, from a disease perspective, this is a disease with highly unmet medical need. From the targeted perspective, this is also an ideal target for autologous cell therapy in solid tumor indications, as we know that DR3 is a lineage-specific biomarker for neuroendocrine cell lineage. In this aspect, it's very similar to some of the very successful CAR-T target in blood cancer, all of them targeting the lineage-specific biomarker. Our design of the DL3 product is quite different from Amgen's product. We have a unique car design in terms of binder, in terms of overall architecture of the car structure. Secondly, adding a unique armor mechanism. And currently, this program is already being cleared by R&D, and we have two side activities, and we are actively moving the program forward.
spk09: And Umar, this is him. Maybe I want to add the fact that You probably have noticed this. DL3 is the first ever IND and clinical program we moved into the U.S. without conducting a first in human study in China. So we do believe that the competitor data in DL3 from Amgen actually shows very promising data from the phase two recently. And I think that's a somewhat clinically validated target. That's why we decided to bring this into IND at risk. Thank you.
spk12: Please stand by for the next question. The next question comes from Aaron Werber with Cowan. Your line is open.
spk06: Hi, good morning and thanks for taking my questions as well. So Ying, it's a little bit about what we're seeing from some of your competitors that they had extra capacity for CAR T. and it looks like it was demand-driven exactly when you ramped up both your out-of-spec and your overall capacity. Can you talk a little bit, what is your demand backlog looking like? Are you still seeing more demand than you actually have supply? And what are you seeing from Tickvalley and now Tovele as they're coming to the market? Have you seen any impact in your demand, and how is J&J going to position just sequencing-wise? Thank you.
spk14: Please standby. Please standby. Please standby. Leo, thanks for the question.
spk09: I'll ask my colleague, Steve, to answer this question. Steve?
spk10: Yeah, thanks, Ang. Hi, Leo. Yeah, we've seen just the opposite, especially coming out of ASCO with release of the CART4 data. We've done a lot of research, as you can imagine, in this space. And market demand has done nothing but increase for silt to silt. So in terms of your question, in terms of the backlog that we're seeing, we have seen a reduction for sure since launch in terms of the Q. especially in the later line population. And that's been largely driven to the fact of, like you mentioned, there has been bispecific entry into market. But mostly on our front is just in the near term, or I should say when we launched, our inability, unfortunately, to meet that demand out of the gate. But for sure, we are not seeing any lessening at all in demand in these late lines of treatment in particular, and just the opposite in these earlier lines of treatment. Should we get this indication second line plus, demand there has been very strong, especially in the high-risk population.
spk09: And maybe I want to add, Leo, that, you know, I talk to our head of technical operations very frequently. I can confirm that starting from January of this year, We have not seen any meaningful change at all in our backlog in terms of the backlog for our manufacturing operation to process.
spk10: I think there was a second question, knowing on that, around buy specifics. Yeah, so let me just address that. So I think the question had to do what's happening with the buy specifics in market, and also I think there was a question related to Janssen. So what we're seeing very clearly around the bispecifics is a bridge to get to the CAR-T therapies. Again, it's in reaction to our manufacturing constraint that we're working under. So for sure, and this is a good situation, obviously, for patients to be able to bridge to a CAR-T therapy, i.e. Siltacel, and bridging from whatever that bispecific may be. You've seen recently a number of bispecifics being approved. Again, this is a very good situation for patients to have these different options. And also, most importantly, I think this is a very key point, is that the commercial insurers in the U.S. continue to reimburse for CAR-T therapy once a bispecific or if a bispecific is used prior to Cilta-Cell. So that, again, speaks to the overwhelming efficacy that we're seeing for this program, even when a prior BCMA therapy is used.
spk12: Please stand by for the next question. The next question comes from Leonid Timoshev with RBC Capital. Your line is open.
spk01: Hi, guys. Congrats on the progress, and thanks for taking my question. I guess going back to the priority review and the potential launch in second to fourth line, I guess any impacts to the launch timing and readiness or, you know, will you be able to create a backlog of slots for the second through fourth line launch as well? And then I guess related to that, what are you hearing on the ground about how physicians are thinking about using CARVICTI when it becomes available in this second to fourth line indication? Are they going to slowly move up, you know, starting in fourth line and third line, or would you expect them to jump straight to second line given the strength of data, which might potentially require more supply?
spk10: Yeah. Hey, Leo. Excuse me. It's Steve. Why don't I go ahead and answer your question? It's the right question, right? So what our models have shown and what the research is showing, and I mentioned this in the earlier response I just made, is in particular in the high-risk population, we're seeing very quick adoption regardless of line of therapy, right? And I'm sure you're probably working your models. In the second line setting in particular, we noticed anywhere between 15% to 20% of that second line population is deemed to be at high risk. Our research is telling us very clearly based on the data we presented, that is a population that our physicians in the U.S. is at the very much of a treatable population for cilta-cel. And that's how we're modeling this as well. As you go in later lines of therapy, you see more aggressive use of cilta-cel. So that's how we are modeling it from our perspective, but you will see across the board use. for this product. And like I said, in particular in the high-risk population, you'll see very, very high use once we have this approval.
spk14: Please stand by for the next question.
spk12: The next question comes from Costas Biliris with BMO Capital. Your line is open.
spk08: Congrats on the progress and thanks for taking our questions. A couple of questions from us. The first one for Laurie. In the first quarter of 2023, Abecma generated US sales which were similar to your sales in the second quarter of 2023. Given that Abecma was a profitable product in the first quarter of 2023, can you discuss your timeline to profitability? And the second question is, BMS and 270Bio announced recently a maintenance at one of their manufacturing sites, which has likely impacted the revenues. I was wondering, will you also need this type of maintenance at your manufacturing sites, and how frequently would you need that, if at all? Thank you.
spk17: Hi, Carlos. How are you doing? So regarding the question of our sales and profitability, as you know, we've been steadily ramping up. And as our volumes have been increasing, our profitability, particularly in our gross margin, is improving. Overall, from a collaboration standpoint, as you know, we're continuing to make significant investments into the frontline clinical trial studies as well as manufacturing capacity. So from a program standpoint, it will still be a while before we see overall profitability for the program. But as you saw in Q2, we're making significant strides on the gross margin side. Regarding the second question, I'm sorry, can you repeat the second question?
spk08: The second question has to do with the maintenance. So 270Bio and BMS performed maintenance at one of their ABECMA manufacturing sites, and this slowed down the production and impacted the revenues of ABECMA. I was wondering whether you will also need to perform maintenance at your manufacturing site at some point for CARVICTI, and how frequently would you need that, if at all? Thank you.
spk09: Hey, Costas. This is Vinh. I'll take this part of the question from you on maintenance. So, as you know, for any aseptic GMP manufacturer, every year you are required by FDA to do this kind of maintenance. However, our operation from the Janssen and Legend teams in New Jersey, we have decided to take a very smart approach, which is we're not going to shut down the facility at all. Instead, we'll do a rotation from all the different suites. So, yes, every six months, we will have to do the so-called aseptic simulation run, but it really wouldn't affect the revenue so much that you're going to see a quarter over a quarter decrease here. So we are planning for this smartly, and we will obviously conduct all the required aseptic processes for the rest of the year. But suffice to say, we're not planning a shutdown of the facility, just to confirm. Thank you.
spk08: Thank you. Very helpful.
spk12: Please stand by for the next question. The next question comes from Justin Zillin with BTIG. Your line is open.
spk11: Hi. Congrats on the progress, and thanks for taking the questions. Maybe for Steve, just assuming you get approval in the earlier lines here, maybe you could help us understand how slots will be prioritized, whether the line of therapy will make an impact here or whether the high-risk patients may be prioritized for slots. And if you could just also comment on outpatient administration. Thank you.
spk10: Yeah, hey, Justin. Yeah, in terms of slot priorities or slot prioritizations, so a couple things, just to kind of maybe rewind in terms of how we allocate and how things happen, what happens at the site. So, we will make our allocations, and as I mentioned to you, as capacity increases, we'll actually be allocating higher amounts as well as increasing what we call this open pools. for all sites to get into. In terms of what types of patients and the allocation in terms of patient type, in terms of who gets what slot, that is basically driven at the site. I know the sites now have different criteria that each of these sites are using in terms of who will be getting CiltaCell and other therapies. So that will be driven at the site level, not at our end. In terms of, I think I had a question on outpatient. Thanks for that question, right? So for those of you who have been following us for quite some time, know that that's an important dynamic, especially as we get more larger and larger indications for this therapy. So what we're seeing, and this is interesting, we've seen now quarter over quarter quite a bit of an increase in outpatient use. We've seen in the first quarter for CiltaCel about 18% of the claims that we've analyzed have shown about 18% of the time that these patients are being treated in outpatient clinic within the hospitals. Now for the second quarter, we're seeing quite a bit of a jump now up to 30%. So you're seeing this really dynamic move from inpatient to outpatient for CAR T therapy, which is exciting for a number of reasons, especially for patients and also keeping costs down. But also the follow up question you might have is what's happening with the marketplace. Our competitor, you're seeing less than 10% of the time our competitor is actually being used in the outpatient setting. So for sure, we believe we have more operational flexibility with CiltaCell. And more importantly, now you're starting to see this play out in the market. And we believe that, again, benefits everyone, most importantly, the patient.
spk11: Excellent. Thanks for taking the question.
spk12: Please stand by for the next question. The next question comes from Mitchell Kapoor with HC Wainwright. Your line is open.
spk07: Hi, everyone. Thanks for taking the questions. Firstly, I just wanted you to comment broadly on the out-of-spec rate when this could virtually not be an issue anymore. And then, secondly, if you could just comment on the earlier pipeline, some of the catalysts and timelines we could expect for the next 12 to 24 months. Thank you.
spk09: Hi, Mitchell. Thank you for your question. This is Ying. So on our spec, I'll quote one industry example, which is the Kim Ryan from Novartis, right? There's a paper out there in the public demand that describes originally the OS rate was probably in the high 20s or 30s. But then after about one to two years of improvement in the work stream, Novartis was able to reduce that to now about 2%. So obviously this can be done. And also from our own experience, the Jensen and Legend teams worked really hard in the last year or so, and we were also able to see a very meaningful and significant reduction in our OS from the beginning of the launch to now in the teams. And we continue to optimize our work stream, and there's a lot of work we can do. As I mentioned previously in this call, we have submitted a lot of data to the agency as part of the SBLA And we do expect that we can get a wider release back from the agency on the Carter G4 data. So when that happens, we expect a very meaningful reduction in the out-of-spec rate. And eventually, our goal is to reduce that to low single-digit, low to middle single-digit out-of-spec rate. So that's our expectation. That's what we're working towards, too. On your second part of the question, in terms of the next – six to 12 months. Obviously, our first priority is to get the FDA-approved increase in our capacity. We're planning for another one by end of this year, and then we plan to launch the second line indication pending on the FDA approval by or on the particular date of April 5th, 2024. And we continue to work in terms of increasing the number of facilities that will supply CARVICTI. so we're doing expansion work in raritan and we expect the capacity from a rioting will meaningful increase in 25 and then we're opening up our first stage of belgium facility in ghent by end of next year our large greenfield facility will be also coming online from ghent and as you know we've been working with third-party cmo to expand our network so all this effort will crystallized into a much higher capacity in the next couple of years. And we have said previously that we aspire to come up with an annual capacity of 10,000 doses or more by end of 2025. We're very much on track to achieve that goal at this point, given our progress in the construction and also the other fronts. So that's probably what's really the most important catalyst or priorities for us in the next six to 12 months. Thank you.
spk12: Please stand by for the next question. The next question comes from Sammy Corwin with William Blair. Your line is open.
spk04: Hi, thank you for taking my question. This is Brooke Schuster on for Sammy. We were wondering if you could provide any color on reimbursement and if you saw any challenges in security reimbursement, like, you know, in comparison to inpatient versus outpatient or the academic versus community setting.
spk10: Hi, Brooks. It's Steve again. The short answer is no. As of to date, Cilta-Cell has really enjoyed quite open access from a reimbursement perspective. And as we lead into the second line plus indication, all indications are very positive. As a matter of fact, when you look at the value capture modeling that we've done, insurers love a drug like Cilta-Cell because of the potential it has in terms of cost containment, potentially long-term cost reduction. So no, really right now, We'll continue to monitor that area. Obviously, it's a very important one for us, but to date, reimbursement has not been a problem. We don't foresee any problems in the future.
spk12: Thank you. Please stand by for the next question. The next question comes from Kelsey Goodwin with Guggenheim. Your line is open.
spk03: Oh, hey, guys. Good morning, and thanks for taking my questions. I guess first, I saw in Carditude 4, the median time from apheresis to infusion was 79 days. I guess, what are you seeing in the commercial setting, and what can be done to speed that up? And then separately, maybe building off that last question, could you maybe just provide more color on what you're seeing in terms of community patient mix and referrals from the community? Thanks so much.
spk10: Sure. I'll take the question around the commercial cycle time that you referenced. We're seeing the cycle time from receipt to release anywhere between four to five weeks on average, which I think is fairly consistent with what you're seeing in market today with most CAR-T therapies. I think if there's a second question, I might refer over to Ing.
spk09: Hi, Kelsey. Thanks for the question on CAR-T4. So, yes, I can confirm that the median time was 79-day cycle time in terms of vent-to-vent. There are two drivers behind that. Number one is that if you look at the trial sites we opened for Cardio 4, the large majority, I believe about 75 to 80% at least, from Cardio 4 were enrolled in Europe and the other international regions outside of the U.S. So if you recall, that was actually conducted during the peak of COVID outbreak. That contributed significantly to the cycle time because we had to clear the customs. And also, unfortunately, you know, supply chain was severely disrupted during the COVID outbreak. That's really the major driver behind that. And then secondly, obviously, you know, if you look at the protocol, right, there's all this bridging therapy and the requirement of the standard care, which is either PVD or DP. So... That's really another reason why we see a higher than normal cycle time of end-to-end for CAR-TU4. But as you just heard from Steve today, during our commercialization in the U.S., we can confirm that the typical receipt to a release time is about 35 to 40 days in spec samples. And we continue to make improvement on that, and we hope that we can report shorter end-to-end time in the next quarter. Thank you.
spk12: I show no further questions at this time. This concludes today's conference call and thank you for participating. You may now disconnect.
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