Genmab A/S (GMAB) Earnings Call Transcript & Summary

Good morning. I'm James Gordon, JPMorgan European Pharma and Biotech analyst. And today, I've got the pleasure of introducing the Genmab presentation. So you're going to hear from Genmab's CEO, Jan van de Winkel, and then we can have a Q&A here afterwards for the further 20 minutes. Thanks a lot for joining us today, Jan. Looking forward to the presentation.

Thank you very much, James. It's really a pleasure to join you all again at the annual JPMorgan Healthcare Conference as we kick off 2023. So slides from today's presentation will be available for download at our website immediately after the event. Let's get started. I think I can do that myself. Forward-looking statements. As you are aware, this presentation may contain forward-looking statements and as such, contain certain risks and uncertainties, as you're all familiar with. Over 20-year history. We have in that history we had a laser-sharp focus on harnessing the power of human antibodies to develop differentiated antibody therapeutics. And behind this focus is an unstoppable team and a strong core purpose that guides our work. Extremely -- we have an extremely successful strategy and an inspirational and ambitious vision for the company, which you see here on this slide. We've never been in a better position to achieve our inspirational vision than now, and we have a consistent and solid track record of success, as many of you are aware of. Our world-class team is really experienced and dedicated and motivated to make a real difference for patients, that in the end is the real goal for the company. And the results of that drive is that we have a number of proprietary antibody technologies that fuel first-in-class or best-in-class pipeline for Genmab. We have an expertise that makes us the partner of choice for a large -- we have a large variety of collaborations with industry leaders across the innovation ecosystem, not only in biotech but also with data sciences and digital companies now. We are -- our work is supported by extremely strong financials, which allow us to actually keep investing in opportunities ahead of us. So taken together, we have built a very solid foundation that has supported the evolution into a fully integrated biotech innovation powerhouse. The successes have only been possible because of what makes us unique. We firmly believe in the natural ability of the immune system to fight against disease. We use our deep understanding of disease mechanisms, targets and antibody biology to invent proprietary antibody technologies. And our in-house expertise is then matched with strategic partnerships that help us take products further than we could do on our own or to gain access to high-quality, unique disease targets and also cutting-edge technologies that can be combined with our own suite of technologies. So we leverage the combination of cutting-edge scientific capabilities, innovative scientific approach, expertise in translational research and strategic partnerships to create a robust pipeline of investigational medicines. So let's look at that pipeline then. The summary of our innovative clinical pipeline, as it exists today, is presented on this slide. We actually have investigational medicines created by Genmab science or technologies that are currently in active clinical development. We have now 9 programs; it went up from 6 to 9 last year. And these programs we all hold 50% or larger ownership of these products. And most of these molecules are actually first-in-class and have the potential to be best-in-class, including epcoritamab, which is now in Phase III development. And tisotumab vedotin is approved for certain patients with cervical cancer in '21. So we have 6 approved medicines, powered by Genmab innovation. And this year, very excitingly, that may go up to 7 or even 8 in 2023. So let's look at our future pipeline then. Our maturing pipeline is the result of a world-class R&D engine. We're highly confident that unique next-generation antibody technology platforms will continue to grow our pipeline. We don't have a single unmodified antibody in our pipeline anymore. And then the reason we are so confident is that we already have been doing this for a number of years. So the chart on the right, you see the composition of our pipeline, both preclinical and clinical programs. And actually the majority is based on our own proprietary next-generation antibody technologies. You see about 50% DuoBody, about 20% HexaBody and 30% is a mix of different technology platforms. So the approval of TIVDAK in September 2021 introduced a critically needed treatment option for patients with advanced cervical cancer with disease progression on or after chemotherapy. This represents a very significant scientific advancement as this is the first and only ADC, or antibody drug conjugate, for treatment in this patient population. So the first -- it's also the first Genmab-owned therapy to receive regulatory approval in the United States. And we have seen a very successful uptake since launch in a very limited market along with Seagen. We have a very broad development program in place for TIVDAK. We're going to move to earlier lines of therapy for cervical cancer, and we will evaluate the molecule in other solid tumors. Last year, we have actually presented Phase II data of the innovaTV 207 study at ASTRO earlier in the year at head and neck cancer symposium. This year, you will see more head and neck cancer data from Seagen. We also had an oral presentation of the innovaTV 205 in different combination arms last year at ASCO in June; more to come this year. So let's now move to an even more exciting molecule. This is a T-cell engager called epcoritamab, which we are developing in collaboration with AbbVie. This is a very exciting bispecific antibody, which is actively studied now in diffuse large B-cell lymphoma and follicular lymphoma, which is the 2 most common types of non-Hodgkin lymphoma. And it also has the potential to be used in a much broader range of B-cell malignancies, and we are going to pursue that. So we believe that the mechanism of effective T-cell redirection against CD20 has the potential to fundamentally disrupt and transform the treatment paradigm for patients with B-cell malignancies across all lines of therapy. So we continue to show data with epcoritamab that supports its potential to be best-in-class. We have positive top line results from the first cohort of the so-called EPCORE NHL-1 study in large B-cell lymphoma last year in April, followed by a late-breaking abstract presentation at a presidential symposium in Vienna at the European Hematology Meeting in June last year. We had 10 clinical presentations at ASH in New Orleans more recently, including 4 oral presentations. So we have a lot of data coming on epcoritamab. This molecule is differentiated because of the convenient subcutaneous route of administration. It's off-the-shelf, and it also offers timely treatment and consistency, and we believe that this is really going to be an advantage for the positioning of EPCORE. So based on the data of the EPCORE NHL-1 study, Genmab submitted a BLA to the FDA in relapsed/refractory large B-cell lymphoma. We received priority review, and we are very pleased with that with a PDUFA date of May 21 this year. End of December, we also submitted with our team in Japan for approval in Japan. We had very positive regulatory interactions there. And AbbVie submitted in between those submissions, an MAA application to the EMA in relapsed/refractory diffuse large B-cell lymphoma. So let's look at the partial list of clinical trials here. We have, together with AbbVie, a very ambitious vision for the development of epcoritamab. We have a broad and comprehensive development program across aggressive and indolent histologies in place. So building on both single-agent activity and most importantly, of course, in combination with current or emerging or future standard-of-care therapies in several B-cell malignancies and to achieve the full potential of epcoritamab in the future. So we look forward to initiating multiple new Phase III studies as well as Phase II studies. And most recently, we actually started a study in relapsed/refractory follicular lymphoma Phase III together with R squared, epcoritamab with R squared. You'll see more coming in the coming months. So other promising investigational medicines, which get a lot of attention right now, GEN1046 and GEN1042, which are both developed in collaboration with BioNTech. They are first-in-class bispecific antibodies in development for treatment of solid tumors. And we have seen some very exciting data so far that includes preliminary data for GEN1042. There is a lot of discussion, I can tell you at this conference, on that right now in head and neck cancer. This was presented at ESMO IO in December last year. We have also an alliance combining here Genmab's expertise in antibody biology and bispecific antibodies with BioNTech's immuno-oncology know-how. And that creates a very powerful partnership. We have over a handful of joint programs now with BioNTech. And we are actively expanding the collaboration with BioNTech and look forward to working on additional investigational medicines in the future. All of these programs, it's 50-50. So we actually share 50% of the expenses, 50% of the upside in the future. And the first of this new generation of investigational medicines is GEN1053, which is a very exciting HexaBody program, targeting CD27 that just moved into the clinic last year in solid tumors. And we had the first preclinical disclosure of data at SITC last year. We have also in development GEN1056, which is an antibody product that we have not disclosed the target for, in co-development again with BioNTech for solid tumors, and that will be used in combination with some of our other immuno-oncology programs in the future. So we have 3 additional Genmab-owned investigational medicines in the clinic right now. On the left, you see DuoHexaBody-CD37, which is -- it's now involved in first-in-human clinical trial dose escalation. We're nearly at the end of the dose escalation, and we're going to combine it with epcoritamab to come to a chemo-free combination regimen for B-cell cancers. Then HexaBody CD38. This is a very exciting potential next-generation CD38 targeting molecule with very, very prominent preclinical activity against CD38 positive cells. We actually presented the first data from the dose escalation part of the study at ASH in December in New Orleans a month ago. And then we have another exciting T-cell engaging antibody, also bispecific, targeting CD3 and B7H4. It's a bispecific T-cell engager, where we actually presented some initial preclinical data at SITC last year. And we actually are moving forward this program very aggressively. And hopefully, at the end of this year, we'll have some dose escalation data for you. So the expanding and maturing pipeline is really possible because of investments in key areas, which you see displayed here on this slide. In research, we are building on a strong record. We have state-of-the-art R&D facilities in both the Netherlands and in the U.S. now. They're both growing, and we continue to invest in new antibody technologies and formats. We're actually investing heavily in development because we're focusing on scaling that up so that we can actually rapidly move from early to late-stage clinical development and do multiple late-stage clinical trials in parallel. I mean the whole strategy of Genmab is actually aimed at identifying 2 or 3 potential winners and are massively expanding the clinical program for those potential winners because that is the best and most optimal way to build value for stakeholders. So we actually see a significant potential to drive insights through data sciences. We have invested heavily in data sciences over the last years. And we believe that actually data sciences and real-time integration of translational research are key to accelerate product development in the future, ensure that the right patients -- the right therapies get to the right patients more effectively than it is currently common. And then commercialization, the last part, we're investing in that very significantly. We have a highly experienced team in place. We are ready for launching epcoritamab. We had a first successful launch of TIVDAK in the United States, and we actually are very much gearing up to make the launch for epcoritamab a success, hopefully this year. Underpinning all of this is investment in key enabling functions, of course, to really support the growth and manage the risk going forward. Now very exciting slide when you look at the validation of our breakthrough innovation at Genmab. It's already seen in 5 approved medicines by partners. Let's move on the first left, you see DARZALEX. This is a molecule which many of you know. And that molecule has truly redefined the treatment of multiple myeloma. It already generated about $6 billion in sales in 2021. The '22 numbers are not yet there, but they will come this month via Janssen. And Genmab is entitled, as many of you know, to 12 -- to between 12% and 20% royalties on net sales, which drives a lot of recurring revenue for the company. Then moving to the right. Kesimpta is the very first B-cell therapy that can be self-administered by patients at home. It's now developed by Novartis. It generated $372 million in sales in 2021. And Genmab is entitled to a solid 10% royalty on net sales for Kesimpta. And that is a molecule which does better and better and better. It has already been given to over 27,000 patients, and that number is rapidly increasing. Then the third one, TEPEZZA is the first and only ever FDA-approved medicine for the treatment of thyroid eye disease with Horizon Therapeutics, and that molecule will soon move to Amgen because of the acquisition of Horizon. And Genmab is entitled to mid-single-digit royalties of net sales. And that is also a molecule now shaping up for a very robust market. You've heard probably Amgen speak at this conference on the potential for TEPEZZA. Then RYBREVANT, a bispecific antibody. It's the very first bispecific antibody ever to be approved in lung cancer, by J&J. It's the first product which came on the market with Genmab DuoBody technology to receive an approval. And Genmab is entitled to milestones and royalties between 8% and 10% on net sales; also very significant income driver, we believe, in the future. Then there is a second DuoBody product on the market now. It's called TECVAYLI, also by Janssen. It's approved now in the U.S. and in Europe. And we are entitled to milestones and mid-single-digit royalties on net sales on TECVAYLI. And then there's another one coming potentially this year. And that is talquetamab. We have -- Janssen has filed to the FDA in December and to EMA in January. It's another bispecific antibody for treatment of multiple myeloma. We get very similar royalties as on TECVAYLI. And these medicines, all powered by our technology and innovation, exemplify the commitments to applying world-class antibody expertise to create truly differentiated antibody therapeutics with the potential to fundamentally improve patients' lives. And the success of the approved product also demonstrates the benefit of working collaboratively with strong partners, and I've mentioned a few here on this slide. There is complementary expertise to Genmab in terms of technologies, capabilities or knowledge across the whole ecosystem of pharma, biotech and also academia as well as data sciences companies. So 2022 is anticipated to become our 10th year of profitability, which is quite unique for a biotech company. And the products on the market that we have discussed provide us with very significant recurring revenue growth. And this growth actually allows us to continue to invest in our pipeline and our organization to allow us to create significant long-term value and evolve for continued success of the company, which gives us a strong backbone of significant underlying profitability and many of you will like that. Then in 2023, we will continue to work towards our new 2030 vision. The KYSO antibody medicines from Genmab are fundamentally transforming the lives of people not only with cancer, but also other serious diseases. And we actually flagged up that we will add one more disease area on top of oncology to the focus areas for Genmab. And we will start talking about that as soon as we have product candidates slotted to be moved into the clinic, and we are already testing a number of candidates as we speak. So bringing our own medicines to patients, epcoritamab, we look forward to expanding the further development with new Phase III studies and excitingly launching epcoritamab in the U.S. and in Europe, subjective, of course, to approvals in both of these territories this year. And then if epcoritamab is approved in '23, it will join TIVDAK as the second Genmab-owned product on the market. We plan to work with our partner Seagen to continue to broaden the clinical development program for TIVDAK and establish it as a clear choice for patients with cervical cancer. Then we have a world-class differentiated pipeline, and I highlighted some of the programs here. And this year, we very much look forward to the clinical expansion cohort data for both actually, for the 4-1BB targeted bispecific antibodies, 1042 and 1046, which are in development with BioNTech. We anticipate expanding and advancing other earlier-stage programs and include a potential for more INDs or CTAs this year, and we hope to move 2 to 3 new molecules into the clinic in 2023. We have the right team and culture in place. And that is essential for our future success. And we intend to continue to scale our organization based on our expansive portfolio developments and business needs. And we intend to leverage our solid financial base. The last numbers were from November. We have over $3 billion in cash and no debt to support our growth, which could entail external opportunities as well in this year. So in summary, my last slide, I have only 12 seconds left but I'll try to bang it in here, we have a laser-sharp strategy, which will effectively drive us towards our 2030 vision. We are solidly on track, we believe. Our vision will continue to act as a guiding light. Our first own medicine was launched in '21, TIVDAK, and we anticipate the second one actually in the near term, and it gives us a strong rationale to make focused investments to make the most of opportunities ahead of us. So we continue to be disciplined in our approach, as you know it from us. We are confident that as we look into the future, that you will see the realization of our continued evolution into a leading fully integrated biotech innovation powerhouse. We have never been in a better position to achieve the vision of transforming the lives of patients with cancer and other serious diseases. And that brings me to the end of the presentation, and now we get into an even more lively Q&A, I hope, James.

Thanks a lot, Jan. Lots to talk about. So I've got a couple of e-mail questions already, but anyone have a question in the room? In that case, I'll go to the first question I received, which was, to paraphrase slightly: epco, you're about to launch the product but how much of the cost associated with epco is Genmab going to have to fund? And how quickly could this be a product that contributes significant profits to Genmab?

I mean we -- it's a 50-50 with AbbVie. So 50% of the cost will be for us, 50% will be for AbbVie. We have massive investments scheduled for the coming years, and we should because we actually are going to put a very comprehensive development program in place. And the initial market, as we already flagged up earlier, is quite limited. It's only like between 3,000 and 3,500 patients in the U.S. in the original -- in the initial market. So it will be very limited, James. But then very quickly, over the coming years, we'll move it into follicular lymphoma and into other B-cell cancers. And that will initially be, of course, in the relapsed/refractory setting, but then we move to second line and frontline, but that will take actually a number of years. And I would say not too different from when you think about the successful trajectory for daratumumab that also started very slowly in the beginning with actually fourth-line therapy for DARZALEX and then move this way to frontline all in parallel. And we actually look forward to actually executing multiple Phase III programs all in parallel and there may also be Phase II regulatory studies which qualify for initial regulatory registration of the product. So I think it will be a whole setting. It actually will take a number of years before we actually can book profitability based on epcoritamab and that's entirely how amazing medicines are being developed also by other companies.

And I saw in your slides, you talked about filing an sBLA for the product this year. So what additional filings will we be filing for?

There's a number of candidate filings. And, of course, it all depends on the timing when do these studies read out. But very -- at the minimum, we would hope to file in the relapsed/refractory follicular lymphoma setting on the very first study, the NHL-1 study. We have basically all the patients in, and that study is slotted to read out this year. And we have seen some very encouraging data already in follicular lymphoma with only epcoritamab. So we hope that we can actually file an sBLA for that setting. And potentially, it could also be a Phase III study. The initial Phase III study could also read out this year. We don't know whether that will bring us to a filing. So we have kept it actually quite conservative in the targets for this year. So there's actually a number of candidates where we could actually move for an sBLA filing. But we think that the follicular lymphoma one is the most certain.

And you're not the only company who's going to be launching CD3, CD20. So how are prescribers or patients going to choose which CD3, CD20 to get?

I mean it remains to be seen, James, and I think this needs to develop. I think this is going to be a paradigm change, I think, for patients with B-cell cancers. I think one of the differentiators is that epcoritamab is subcutaneously administered and it seems to be very, very easy to combine with other medicines, which is a very strong play. It's off-the-shelf. So -- and actually, when you look at the data of some of our cohorts, it's very comparable to CAR-T data. And right now, the paradigm is in the United States and also in other countries that many of these patients are initially with diffuse large B-cell lymphoma treated in community healthcare centers. And when these patients get more and more refractory to the current lines of treatment, they need to be sent to cancer centers or to large academic hospitals because then they could potentially be treated with CAR-T. And that is really not advantageous for either the patients or for the doctors because they really don't like to send the patients in that phase of their disease history to these larger hospitals. And one of the things which could happen with epcoritamab, and I think it's a bit too early to conclude that now, James, is that actually these patients could in the future potentially be treated and continue to be treated in the community healthcare centers with epcoritamab probably in combination with other medicines. And that would be an enormous [ play ]. And that way, you would actually create a market which is not existing for the CD3/CD20 T-cell engagers. And yes, there is a number of other competing molecules also moving towards advanced lines of development. And I think we'll have to see how these molecules will look relative to one another. I think it's a bit too early. But up to now, I think, when you look at it in an analytical way, is that the epcoritamab data are either the best or at least on par with the best at this moment. Safety-wise, combinability-wise and convenience-wise, I think it's definitely at the top. And we hope that really in combination with very good marketing by AbbVie and Genmab, Genmab will lead the commercialization in the United States and in Japan and AbbVie will actually lead in the other countries the commercialization, we can actually build a stronger and stronger market for epcoritamab, and this is going to be taken very, very seriously. I can tell you that we have a very experienced team in place with a lot of talent coming from other companies with many, many years of experience in hematological malignancies. We are actually doing a lot with digital information, data science actually by combining different data sets. We actually believe that we can target epcoritamab much more selectively to the right hospital, to the right centers where patients are being treated. And we will see, James, over the coming years how this will pan out under the assumption that we get a product approval this year.

Maybe in the interest of time, I'll shift gears a little bit to talking about some other assets within the pipeline. And so you're also talking about the 2 products you have, which are bispecifics that target 4-1BB. And I think if I think back to last year, it sounded like you were probably only going to take one of the assets forward, whereas looking at the presentation, it suggested that CD40 bispecific is definitely going forward. And the 4-1BB/PD-L1 also might well be going forward?