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

Good afternoon. I'm James Gordon, JPMorgan European pharma biotech analyst. And it's my pleasure to introduce the Genmab presentation this afternoon. And we're going to hear from Genmab's CEO, Jan de Winkel. Thank you very much for joining us today. We look forward to the presentation and the Q&A.

Thank you, James. It's a pleasure to join you once again at the JPMorgan Healthcare Conference as we kick off 2025. The slides from today's presentation will be available for download on our website immediately after the event. So let's get started. And this presentation may contain forward-looking statements and as such, may contain certain risks and uncertainties. Over our more than 25-year history, we've had a laser sharp focus on harnessing the power of human antibodies to develop differentiated antibody therapeutics. Behind that focus is an unstoppable team and a core purpose, which guides our work. an extremely successful strategy and an ambitious vision for the company. And now we are 5 years away from this vision. We are entering a new phase in our evolution to become a fully integrated biotech innovation powerhouse. Following the approval of our second product in 2023, we have never been in a better position to achieve our inspirational vision. We have a strong and consistent track record of success, as you see here on the left, and this success has resulted in extremely strong financials that allow us to invest in growth opportunities, including the acquisition of ProfoundBio 2024 that unlock new opportunities as we strengthen our oncology portfolio and generate and develop new medicines with the potential to transform the treatment of cancer. Taken together, we have built a solid foundation that has supported our evolution into a fully integrated biotech innovation powerhouse. So now let's take a look at the innovative clinical pipeline as it exists today. In green, at the top, we have 12 products or product candidates where we own at least 50% of them. And most of these programs either are or have the potential to be first or best-in-class. That includes 2 approved medicines, EPKINLY and Tivdak and our 2 late-stage programs, Rina-S and acasunlimab. We are utilizing our suite of proprietary technologies to create a differentiated pipeline that will set us up for future success. And then in blue at the bottom, you see the multiple programs being developed by partners that were either created by Genmab or via our proprietary DuoBody bispecific technology. There is no cost first for these programs and once approved, they provide us with growing recurring royalty revenue. The second Genmab medicine on the market was EPKINLY, which we are codeveloping and co-commercializing with AbbVie. EPKINLY has a differentiated clinical profile, delivering deep and durable responses, manageable safety and seamless subcutaneous administration. As a reminder, Genmab is the commercialization lead for EPKINLY in both the U.S. and Japan, which is the first for our company. And it's clear that our commercialization strategy with EPKINLY is working. Today, nearly 90% of the global revenues are from the U.S. and Japan, the 2 primary markets that we defined as Genmab Labs. EPKINLY has already achieved a significant milestone as the first bispecific antibody approved for both third line plus diffuse large B-cell lymphoma and follicular lymphoma in both the U.S. and in Europe. We anticipate a dual indication in Japan as well. The multiple approvals for EPKINLY allow us to address critical needs in these patient populations, particularly those who have exhausted other treatment options while at the same time, providing a single option for providers, especially those in the community setting. We are pleased by the ongoing launch, which has demonstrated 5 consecutive quarters of growth. And together with AbbVie, we are advancing an ambitious clinical development program for epcoritamab, across B-cell malignancies, which includes 5 Phase III trials ongoing with more in the planning. This work will build upon our initial opportunity in later-line disease by significantly expanding our addressable patient population in earlier lines of therapy across diffuse large B-cell lymphoma and follicular lymphoma. Our commitment to advancing EPKINLY across various indications in B-cell cancers is a testament to its potential as a best-in-class treatment. Turning specifically to the market opportunity for EPKINLY. We are extremely encouraged by our launch performance to date. We hear from physicians that EPKINLY's clinical differentiated profile and subcutaneous administration have together been very positively received. And we view these factors as key drivers for our opportunity to expand and differentiate across histologies and in earlier line settings, potentially establishing epcoritamab as the core therapy across diffuse large B-cell lymphoma, follicular lymphoma and beyond. So the first Genmab-owned medicine on the market was Tivdak, which we are codeveloping and co-commercializing with Pfizer. The approval of Tivdak was the first advanced in second-line plus cervical cancer in more than 20 years. Consistent with our approach to focus on the best and first-in-class medicines in areas of high clinical needs. This will continue to be a key focus as we strengthen our commitment to transforming the treatment of gynecological cancers as we grow our portfolio. With Tivdak, we are continuing to build on our successful launch, which has generated 12 consecutive quarters of demand growth to contribute to the global needs for innovative treatments in this disease -- in this disease state with an anticipated approval in Japan in the first half of this year. Taken together, the success we have seen in advanced cervical cancer and the strong presence we have built within this community and the physicians set a strong foundation to catalyze the growth of our gynecological oncology portfolio. With the acquisition of ProfoundBio last year, we capitalized on this foundation with the ownership of Rina-S. Based on the encouraging data that we have seen, we are confident that Rina-S has a potential to become a best-in-class treatment for ovarian cancer and other folate receptor alpha-expressing solid tumors. We believe it has the potential to benefit a broader patient population than currently approved therapies. With antitumor activity seen across the full spectrum of folate receptor alpha expression as well as in patients with prior exposure to mirvetuximab. In addition to efficacy, there's also a differentiated safety profile, avoiding interstitial lung disease, or ILD, and corneal toxicities, which is seen with other ADC therapies. This differentiation, both in efficacy and in safety is a direct result of the novel proprietary hydrophilic linker technology developed by ProfoundBio. Here I present our near-term vision for Rina-S focusing on its development in ovarian and endometrial cancer. I'm pleased to note that we now have initiated the first Phase III trial for Rina-S and second line PROC. This is important to reiterate here is that this is a trial including all comers, regardless of folate receptor alpha expression as well as patients with prior exposure to mirvetuximab. This trial design will allow Rina-S to meet the significant needs of patients who either cannot be treated with mirvetuximab or who will progress afterwards. In 2025, we will continue to explore combinations to expand the potential of Rina-S beyond PROC. Our investment in expanded development for Rina-S aligns with our commitment to deliver innovative and truly differentiated therapies for patients. Current standard of care in folate receptor alpha plus ovarian cancer is for patients with folate receptor alpha expression levels larger than 75% or high expression. This is estimated to be about 30% of the platinum-resistant ovarian cancer patient population. With Rina-S, Rina-S' differentiated profile has the potential to address a broader patient population, including low to medium expression, which is about 85% of platinum-resistant ovarian patient population. We anticipate the first potential approval for Rina-S could be in 2027 in second-line plus platinum-resistant ovarian cancer. Importantly, we anticipate at least blockbuster sales potential supported by expansion into other indications in ovarian and endometrial, as you see on this slide. We are exceptionally well positioned to maximize the potential of Rina-S given both our proven clinical development capabilities, track record of acceleration and our experience in the gyn-onc space with Tivdak. In 2024, Genmab took full control of the acasunlimab program, assuming sole responsibility for the continued development of acasunlimab offers Genmab a remarkable opportunity to fully own and advance this promising asset. The Phase II data for acasunlimab has been very encouraging, demonstrating significant disease control and overall survival alongside a manageable safety profile. This encouraging data supports a first-in-class opportunity for non-small cell lung cancer patients following treatment with a checkpoint inhibitor. We look forward to providing an update to this data later in the year and the positive data we have seen so far reinforce our firm commitment to swiftly progress to Phase III. And we are pleased that at the end of last year, acasunlimab became our second wholly owned asset in late-stage development, underscoring our confidence in its clinical promise and commercial potential. We are progressing a strategic development program to explore acasunlimab's full potential across solid tumors, and we will announce additional trials as appropriate. We are exceptionally well positioned to maximize the potential of acasunlimab given our proven clinical development capabilities and track record of acceleration and commercialization. Non-driver mutated second-line non-small cell lung cancer continues to be an area of significant needs with many novel treatments failing in Phase III trials, docetaxel continues to be the current standard of care. Patients who either progress or are refractory to immunotherapy need treatment options to deliver a durable survival benefit without significant safety concerns. By identifying potential synergies of IO therapies, we have the potential to unlock clinical benefits that were not possible with monotherapy alone. And there is a meaningful opportunity for novel treatments in the second-line plus setting to provide not just improved response rates, but durability of response. Given the worsening of performance status as patients progress through lines of therapy, physicians are interested in more tolerable chemo-free regimens in their second-line plus patients. Investment in our late-stage priorities is possible in part because of the growing recurring revenue streams from 6 approved partnered medicines that you see here on this slide. These medicines, which are followed by our technology and innovation, exemplify our commitment to applying world-class antibody expertise to truly -- to create truly differentiated antibody therapeutics with the potential to fundamentally improve patient lives. Our 6 royalty medicines together with 2 Genmab-owned medicines on the market are driving significant revenue growth. Importantly, all 8 medicines are projected to grow significantly with our 2 owned medicines increasingly contributing to that growth. We have scaled our investment with the majority in R&D, where we have prioritized investments in our mid- and late-stage pipeline. We are currently having 7 active Phase III trials with more Phase III trials to come, which are anticipated to drive most of our investment growth. And we are substantially profitable and anticipate to continue to be so as we continue to invest in programs that have the potential to be revenue generating in the near to mid-term. Genmab has an established track record of being able to select and develop innovative and differentiated therapies. We are able to do this because we are a company deeply rooted in science, and we follow the data derived from our clinical programs. And here, you can see some of the key pipeline events we are anticipating as part of our continued development. So let's now start with HexaBody-CD38. Here, I will reiterate what I said during our third quarter results call in November. We have submitted the data package to J&J, and we anticipate a decision from them no later than in the first quarter of this year. We will inform the market via press release when J&J has made their decision, and this release will include relevant clinical data. To support the integrity of J&J's review process, we will not disclose this information before the official release. Looking beyond this event, this year, we are anticipating additional regulatory decisions for both EPKINLY and Tivdak as well as additional data for both acasunlimab and Rina-S. For Rina-S specifically, the expansion data in endometrial cancer will also inform next step for that indication. Finally, for GEN1042, I look forward to providing you with an update on our next step for the program in frontline head and neck cancer. In 2024, Genmab made significant strides by investing in our pipeline and technologies with a strong focus on prioritizing late-stage development and expansion for EPKINLY, Rina-S and acasunlimab. As we prioritize investments in these key programs, 2025 will serve as a key stepping stone on our path forward -- on a path towards our 2030 vision of fundamentally transforming the lives of people with cancer and other serious diseases. Our strategic focus ensures that our pipeline remains robust, impactful and aligned with our long-term goals. In summary, our laser sharp strategy will effectively drive us towards our 2030 vision. This vision will continue to act as a guiding light, anchored in our core purpose where our unstoppable team will improve the lives of patients through innovative and differentiated antibody therapeutics. Two Genmab-owned medicines are now on the market, together with 6 royalty medicines, which provides solid financial growth, given a strong rationale to invest in our 2 wholly owned assets, Rina-S and acasunlimab as well as our proprietary pipeline to make the most of the opportunities ahead of us. And we will continue to be disciplined in our approach to this investment. We are confident that as we look to the future, we will see the realization of our continued evolution into a fully integrated biotech innovation powerhouse. We have never been in a better position to achieve our vision of transforming the life of people with cancer and other serious diseases. Thank you all. I think we now go into a lively Q&A.

As usual, for the Q&A, I don't know if this microphone is on, but you can raise your hand if you have a question or in theory, you can use this app, but I think raising your hand may work better. Does anyone have a question that you like to start with? Maybe I'll start with a question which just -- so HexaBody-CD38. So can you confirm the data has now gone to J&J? Their clock has already started, is that where we are?

Absolutely. The J&J has access to all the data and the data room. We loaded it up in different batches, but it's all there. Clock has started and the decision as per the contract, James, must come in Q1 at the latest.

And in terms of the different scenarios there, so J&J could opt in or not opt in. But if they were not to opt in, could you potentially still develop the asset in some areas yourself? And could you even renegotiate with them to have more or freedom to where you develop the asset as well?

I mean as per the contract, yes, we can develop the molecule of cells if the J&J would decide not to opt in but not any indications where daratumumab is on the market or where it's in late-stage clinical development. That means other indications in multiple myeloma. There's still some areas left where daratumumab doesn't work or stopped working. We can potentially think about other cancers like AML, diffuse large B-cell lymphoma, where we have seen some very good preclinical data with this molecule. Another potential is solid tumors. Look, and the reason that I mentioned that, James, is that the antibody, which is part of HexaBody-CD38 is a very good block of the ecto-enzymatic activity of the CD38 molecule, which is involved in the creation of adenosine. Adenosine is an immunosuppressive molecule. So potentially, this antibody is much better immune activator than daratumumab. It could be a key reason to use it in combination with checkpoint targeted molecules based on preclinical data. Finally, this could be a molecule which is of important for treatment of I&I of autoimmune diseases and inflammatory diseases because of the effect that daratumumab is known to be actually pretty active in some of the inflammatory diseases. But this is all speculation, let's first wait on the J&J opt-in decision. We believe that all the data is there and we have presented that also to them already last year, I can tell you at the end of last year. So I think they are now doing the number crunching and looking at all the patients individually and then make -- hopefully make an informed decision.

And could it potentially be attractive to -- if they were not to opt in to try and renegotiate so that you could try and develop the drug for the same place -- for some of the places where DARZALEX has been approved?

Absolutely, yes, and we have renegotiated contracts before, like the GSK contract. That was one of the first thing I think I did when I became the CEO of the company in 2010, a bit in a week I renegotiated together with Anthony and David Eatwell at that time, the contract with GSK, and I think it really stabilized the company overnight. At that time, that was for Arzerra for ofatumumab. But I think there is a possibility always, of course, to do a contract negotiation. But let's first wait on the opt-in decision. I think that's the next step.

And maybe just the final one on that theme, which would be some of the other areas that could be interesting. Would you be in a position to say, right, we're really like taking this into clinical development? Or would it more be we now need to do some very early exploratory trials because you just don't know that much yet about how well it would work, say, outside the DARZALEX indications?

You definitely need to look at safety and you probably need a subcutaneous formulation, I think, for many of these indications because what you see the trend is with antibody medicines that more and more of them are formulated a subcu formulations and definitely in multiple myeloma that is the situation. But also, of course, in autoimmune diseases, I mean, and that needs to be a next step, I think, once you decide on developing that program. For Genmab, James, I'd be very honest, we need to, I think, under that scenario I would say, let's park it for now. But under that scenario, we would have to balance that with other programs we have in our own pipeline, which we already own 100% and we need to balance that. What you will see from Genmab over the coming years and that will become clear on the 12th of February when we give financial guidance, we actually are going to grow operating expenses but in a very focused manner, actually focusing on late-stage clinical development, mid- to late-stage clinical development and be very rigorous in the pipeline, actually not shying away from killing programs where despite -- sometimes despite activity showing activity in the clinical setting, but simply not being super competitive in the evolving landscape. I mean we have several programs now that we have decided to stop over the last several months, not because they are not active. But we think that in the evolving landscape, they're not going to be differentiated molecules because -- but the reality, I think, is dictating right now is that in oncology, more and more competition is going to become available for different areas of cancer and these markets will be sliced up. So what we want to do is focus on parts of the market where we actually can have a really differentiated molecule also in the evolving landscape, which is changing the whole time. So I think the dynamics is going to change. So we have to balance that in a very careful way.

And you've trimmed some internal programs, I think, partly because you acquired Rina-S and some funds are going into that. Is that a shape of how things might evolve that Genmab might develop a few less drugs that are internal or might be more mixed in terms of internal drugs versus actually bringing in innovation as well?

I mean we definitely -- I mean started that trend in 2024. I mean for the very first time in 25 years, we have actually done an acquisition, adding complementary ADC technologies and skills to a set of proprietary antibody platforms which really broadened our suite of technologies in a very, very elegant way. And right now, I think 40% of our -- of all the total programs, clinical and preclinical 40% is ADCs. Over 50% is based on the DuoBody technology and roughly 10% is based on HexaBody technology. So we have a truly innovative set of technologies, creating next-generation antibody medicines, but we also brought on board not only Rina-S, which I described in my presentation, which is now in Phase III clinical development based on very, very good data in PROC. And this year, you will see also data in endometrial cancer. We already know from the ESMO presentation that endometrial cancers also respond really, really well to Rina-S, but it also brought in 3 other clinical states programs, which are now all in the clinic, it's a PTK7 ADC, CD70 ADC and a bispecific cMet EGFR ADC, all with very, very good preclinical data. They all 3 are now in dose escalation. And so we will see actually a mix of internally generated molecules and externally sourced molecules. And I think that could actually be the right thing for the company to move forward and actually accelerate its revenue stream going forward. But we wouldn't focus on very early-stage molecules, James, but we are clearly scanning the market, I think, for late-stage molecules, perhaps even early commercial molecules because we now have a very solid commercial presence in both U.S. and Japan, and we are going to prepare to become broader commercially active in the coming time also in the context of Rina-S because that can potentially already be launched in 2027, as I said in my presentation. So Genmab will become more and more an integrated end-to-end biotech company. And I think to accelerate growth and accelerate revenue streams by sourcing external innovation is something which I think fits very well with our profile. That is definitely a relatively new trend, yes.

Maybe another trend is you fully owning an asset yourself rather than being partners. So Rina-S, you're going to own it all. Is that the sign of everything to come now so you won't do partnering? You're going to be -- you want to fully own everything you work on?

I think it will be a mix, James. We will do 50% ownership as the minimum. You will not see us doing single digit for sure, or low double-digit type partnering like we did in the early days of the company. Now roughly 20 years ago, then we moved to a 50-50 era, which is basically a decade old now with initially Seagen and now Pfizer. And then in 2020, the corona year with AbbVie for EPKINLY, which we are pretty happy with. But it will be a mix between 50-50, and I think 100%-owned molecules. And you will see the directionally more and more 100%-owned molecules in our pipeline because simply the impact on our business model will be much more strong and it's more impactful with products where you actually own a smaller part of the ownership from. So the trends will be to move more and more towards 100%-owned.

And are you still in digest mode on Rina-S? Or if there was something else I know that beyond all these exciting meetings, there's a BD that goes in the background. Are you meeting new friends as well?