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

Good afternoon, everyone. I'm James Quigley, European pharma and biotech analyst at JPMorgan. It's my pleasure to welcome you all to the Genmab presentation. With us today is Genmab's CEO, Jan van de Winkel. After Jan's presentation, there'll be a breakout session in the Yorkshire Room, which is out the door to the back and left. So with that, over to you, Jan.

Thank you very much. So good afternoon, everybody. It's a real pleasure to join you once again at the Annual JPMorgan Healthcare Conference as we kick off 2020. So welcome to those of you who are participating via webcast as well. The slides from today's presentation will be made available for download in PDF format at the end of the presentation after the event. So let's now get started. And this is what you're very familiar with. This presentation may contain forward-looking statements, and as such, may contain certain risks and uncertainties. So at Genmab, we are really determined to develop antibody therapeutics that will transform the treatment of cancer and improve the lives of cancer patients. And we have a very strong core purpose linked to a laser-sharp strategy that you will see described here. And the successful execution of this strategy will actually allow us to achieve our 2025 vision of having our own product on the market that has really transformed cancer treatments. And I really believe that during -- that through our research, we can turn a cancer diagnosis from a potential death sentence to a manageable chronic condition, very much like diseases like diabetes are treated today. So at Genmab, we profoundly believe in the natural ability of the human immune system to fight against disease, and we are already transforming cancer treatments and creating value for patients and our shareholders as we speak. We combine a deep understanding of disease mechanisms, targets and cutting-edge technologies with strategic partnerships. These partnerships can either give us access to other technologies, which we can use to create even further differentiated products. And also, these partnerships can actually help our products to be developed further than we can do on our own. I will discuss a -- the partnerships with Janssen for DARZALEX and also the 50-50 partnership with Seattle Genetics on tisotumab vedotin in the coming slides. So we use our in-house proprietary technologies to create novel assets for Genmab as well as for our partners. And by harnessing the power of human antibodies for combating cancer, we create revenue streams that we can actually use to invest back into Genmab and into our continual development of our innovations, which are central to the company and to our company as a whole. Genmab has experienced many successes since I co-founded the company in February '99, which continue to propel our growth into 2020 and beyond. Since our founding, we have filed 34 INDs, and we have 18 Genmab-created products in active clinical trials. Six of it are owned 50% or more by Genmab. So much of our success is tied, of course, to DARZALEX. This is considered a game-changing therapy for patients with multiple myeloma. Prior to DARZALEX, we also created Arzerra, which is approved for certain CLL indications, which may actually have a new life in relapsing MS. We're very proud that our 2 Genmab-created products on the market that we -- and we could see actually a third one this year as the FDA Advisory Committee unanimously voted in favor of teprotumumab for the thyroid eye disorder in December last year. So our revenue has expanded exponentially with 2019 being actually the seventh year in a row of profitability for the company. So the company is in very good shape. Another exciting achievement in 2019 was our extremely successful IPO in the U.S., which helped to further diversify our shareholder base. And that is actually getting more and more traction as we speak. So overall, these successes have provided us with a strong financial foundation to continue to invest in antibody products that can actually change the way cancers are treated, ultimately creating more value for both shareholders and for patients and to the next 20 years and beyond. So Genmab's proven track record is seen in the partner products that we created that are on the market already. And these products provide a solid financial base. We are executing on a strategic and very targeted investment of income into a strong proprietary clinical pipeline. We closed last year with 6 proprietary products in clinical trials and anticipate we will soon have a seventh clinical product once DuoHexaBody-CD37 end of the clinic. We filed an IND last year, and we will start treating patients very soon with this molecule. There are also 10 other Genmab-created product candidates in the clinical partners, and that includes, for example, 6 DuoBody products in the clinic with Janssen. Two of these are already being tested in the coming months with daratumumab in multiple myeloma. Should any of these come to the markets, of course, that will provide additional royalty streams to the company. These products are the result of our unique proprietary next-generation antibody platforms, and I'm very proud to actually say here that we don't have a single unmodified traditional antibody in our pipeline. And over 75% of our pipeline is consisting of bispecific molecules. Lastly, we have over 20 active preclinical programs, either as Genmab or partner products. And as such, we expect multiple INDs over the coming few years. In the next slide, I will actually give you greater detail on our products and pipeline. So let's start with one of the most exciting ones, DARZALEX. The creation of daratumumab and its development to date is a remarkable achievement that is transforming already the treatment of multiple myeloma. Daratumumab was the first CD38 antibody approved anywhere in the world. And as you may know, CD38 is highly and universally expressed for each and every cancer cell in multiple myeloma patients. Daratumumab was also the first antibody approved in the U.S. and Europe for newly diagnosed multiple myeloma and now -- and is now approved globally with 7 approved indications in the U.S. alone and more than 100,000 patients treated with this antibody outside of clinical trials. The multiple myeloma market is very large. In 2018, it was about $17 billion, and it will grow actually in the next few years -- the next 3 years to over $25 billion. This double blockbuster is providing much of the foundation to our success, and actually, the sales of the drug are anticipated to grow as this medicine is redefining multiple myeloma treatments with excellent efficacy, consistent safety and potentially soon with added convenience because that is what is missing right now by having a subcutaneous delivery of this molecule. Our partner, Janssen, has been very, very good and diligent about building a broad label for a long patent life with a very rapid and expansive military development program. In addition to the many studies in multiple myeloma, including over 20 Phase III studies, it's also being investigated outside of multiple myeloma, in NK/T-cell lymphoma and amyloidosis and also just recently started in a small trial in Alzheimer's disease. So we have a highly productive partnership with Janssen, who funds actually all of the development and commercialization. And the nice thing is 0 cost for Genmab. So this revenue will actually create the ability to invest further in a very strong proprietary product portfolio for the company. We're also very pleased with the commercial execution of Janssen. So here is a closer look of all of the current U.S. and European approvals for DARZALEX. So DARZALEX is now approved in frontline multiple myeloma in the U.S., in combinations for the patients -- for treatment of patients who are at a transplant eligible or transplant ineligible and following a positive CHMP recommendation. In Europe, based on the Phase III CASSIOPEIA study, we also anticipate this to be true in Europe very soon as well. This is an illustration of actually how daratumumab is redefining the treatment across all lines of therapy. No matter what daratumumab is combined with, dara makes the combination treatment substantially better. Daratumumab is approved in indications in this slide in the U.S. and Europe with the exception, of course, of GRIFFIN, which is a Phase II trial; and CASSIOPEIA, which was just approved in the U.S. in September last year and received a CHMP positive recommendation in Europe in December and hopefully soon be on the market in Europe as well based on the CASSIOPEIA study. So not featured in this slide because we cannot put everything in these slides because they get very crowded are 2 additional points I want to make. Amgen reported positive data in the so-called CONDOR Phase III study of daratumumab plus KYPROLIS, dexamethasone. It's not the primary endpoint of PFS. The data was presented at ASH in an oral presentation. And the second point I want to make is the anticipated approval of a subcu formulation of DARZALEX in all of the currently approved multiple myeloma indications, which was submitted for regulatory review last July. And an approval of the subcu DARZALEX would potentially provide patients with the efficacy of DARZALEX but with a vastly improved convenience and ease of dosing, in effect reshaping the treatment of multiple myeloma yet once again. On the prior slide, you've noticed the ALCYONE study already, which I didn't highlight because actually it deserves its own slides. And I'm super excited about this one. Data from ALCYONE was presented at the 2019 ASH Meeting in Orlando and published simultaneously, immediately after the presentation in the prestigious journal, The Lancet. You can all look at that paper for yourself. And this -- actually, this data shows that the overall survival analysis was being looked at after 40.1 months. And what we saw exactly for the first time, we saw a very dramatic and impressive 40% drop in the risk of patients dying in the daratumumab arm versus the control arm. And that is, of course, after all, the most meaningful endpoint for cancer patients, and that is overall survival. So it's a very clear survival effect by the addition of daratumumab. So let's now move to the second product, ofatumumab, where we could actually see a dramatic advancement with the potential use of that agent in multiple sclerosis and relapsing multiple sclerosis. So ofatumumab is clearly approved as Arzerra in certain territories for various CLL indications, and we are very excited actually about the potential new life of this molecule in the treatment of relapsing MS. And this is already considered a potential blockbuster molecule by Novartis, our partner for ofatumumab. The nice thing is Genmab will receive a flat 10% royalty once this antibody reaches the market, which may actually be very soon, for the treatment of relapsing MS at no cost to Genmab. So it's a pure income provider for the company for the coming years. So in addition to the stellar Phase II data sets and 2 studies, ASCLEPIOS I and II, we also saw very, very convenient dosing with an auto-injector, 20 milligrams every 4 weeks. So we think that this will really be a massive change for patients with MS in the coming years. Let's move to one of our proprietary pipeline programs. And this is a program, tisotumab vedotin, which we actually co-own 50-50 with Seattle Genetics, which provided the warhead for this antibody. This is our most advanced proprietary product candidate and actually become -- could become the first Genmab-owned product that reaches the market. It's a first-in-class antibody-drug conjugate targeting tissue factor, which is actually aberrantly expressed in a number of solid tumors, which gives tisotumab vedotin broad therapeutic potential. So the potential registration of Phase II study called innovaTV 204 in cervical cancer is ongoing and has completed recruitment last year. And we actually expect that the top line data from this trial will become available in the first half of this year with plans to engage the FDA for BLA, subject to, of course, the trial results. And this is a very exciting trial. Beyond this one, there's 4 other trials ongoing with tisotumab vedotin. Cervical cancer is actually a devastating disease, which poses a significant medical problem worldwide. The incidence -- estimated incidence is over 570,000 new cases per year and actually over 300,000 annual deaths. And in the U.S. alone, approximately 12,800 new cases with over 4,000 deaths. The prognosis for women with advanced or recurrent cervical cancer remains very poor. Standard therapies for previously treated recurrent or metastatic cervical cancer, in general, resulted in response rate lower than 15% and a median overall survival of 6 to 8 months. So it's really a very, very poor prospect for patients with cervical cancer. So currently, there is no standard of care in the second-line treatment for cervical cancer after patients progress. So there is a highly significant unmet medical need in this population. We saw in the earlier studies that tisotumab vedotin -- we saw actually confirmed overall response rate of 22% with a median duration of 6 months, which we believe is very competitive data. Let's move to our next product candidate, enapotamab vedotin, the old AXL-ADC program. It's a first-in-class antibody-drug conjugate targeting AXL. This is a super exciting signaling molecule, which tends to be over-expressed on many cancers. These are solid tumors which are refractory or resistant to either chemotherapy or small molecule drugs. Genmab owns this molecule 100% and actually licensed the ADC technology, the warhead technology, again, from Seattle Genetics. It's the same warhead which is present on tisotumab vedotin. This molecule has robust potential in a variety of solid tumors and has shown already impressive preclinical data in different tumors refractory to small molecule, kinase inhibitors and chemo. We have a beautiful Nature Medicine paper and a paper in the Journal of Clinical Investigation, when you want to look at the preclinical data. It's got 6 expansion cohorts ongoing in the Phase I/II clinical trial with about 165 patients. And then actually, the first data in lung cancer was presented last year in Barcelona at the World Lung Cancer Conference, which was very encouraging, but we actually expect to see data from these expansion cohorts in the second half of this year. Let me walk through the first HexaBody product, which is another proprietary product from Genmab, 100% owned by the company. It's targeting death receptor 5. It's a TNF receptor family member, and it's actually a receptor that mediates programmed cell death in cancer cells. So here, we are using our HexaBody platform to actually induce clustering of the DR5 molecule, which is very, very efficient, resulting in DR5 agonistic activity. And we have seen that increased DR5 expression is actually present in many, many different tumor indications. And we have shown to very effectively being able to reduce tumor growth in animal models. And we, in fact, already presented very strong data in at least 7 different cancer models. We're doing the dose-escalation trial as we speak, and we anticipate the first data of this exciting program within this year. Now let's look at our molecule which actually received most interest at this point from our proprietary clinical pipeline. This is a DuoBody product, which we 100% own, targeting CD3 and CD20. It's a so-called T-cell engager. And this molecule is super potent, actually, preclinically very differentiated from other CD3, CD20 antibodies. It actually is not a first-in-class but potentially a best-in-class molecule according to its preclinical characteristics. We also are differentiated from other molecules from Roche and Regeneron and some other companies because we give this antibody subcutaneously. It's so potent that you only need minimal amounts, and that is actually a very, very significant step-up over intravenous use, we believe. And we would -- I would now like to walk you briefly over some of the data which we actually presented last year at the ASH Conference in 2019, which generated a lot of attention. We think this data is highly encouraging because we actually see at very low doses, we already see some very impressive clinical data. In follicular lymphoma, 5 out of 5 patients with very low doses showed a partial response or better. And additionally, we saw better dose escalation, no apparent increase in toxicity. We have not seen any grade 3 type cytokine release syndrome of neurotoxicity due to cytokine releases, and this is very different from other CD3, CD20 therapeutic programs. So this is a candidate that we have planned to aggressively develop in 2020. We anticipate to actually start within this year multiple new studies once the recommended Phase II dose is established for this molecule. And so we intend to seek for a partner for this molecule to actually put into place with a partner a military-style development program. So the breadth and depth of our pipeline will continue to grow in 2020. This is a product which we are creating together with our partner BioNTech. It's a bispecific antibody, targeting PD-L1 and 4-1BB. This is an unbelievably potent molecule in preclinical settings. We have actually generated an inert DuoBody program here. We made literally thousands of candidates and selected the best program together with our colleagues at BioNTech. And this bispecific antibody is now in dose escalation. And they have actually a fair number of patients already in different solid tumors, and we hope to actually show you some clinical data either at the end of this year or early next year. We haven't yet decided on the final timing of the data presentation. Then the second product we are actually developing together with BioNTech, which also is in the clinic, targeting CD40 and 4-1BB. This is actually a first-in-class molecule, which is now being tested in different solid tumors. It actually moved into the clinic in September last year. We have treated a few patients now with this bispecific. And this molecule was actually designed also again based on the knowledge from BioNTech, very good preclinical work, to enhance DC and antigen-dependent T-cell activation. So to locally actually expand the specific T cells only at the site of the tumor. And this is a super exciting new concept. This molecule has again been selected from thousands of potential candidates. And we -- I think this year, we will not see clinical data, but we will continue to dose escalate with this molecule. Finally, the seventh proprietary product, which will move into the clinic in the coming months, is targeting CD37. We actually make use of both our bispecific technology, which is called DuoBody, and the HexaBody technology platform to create a very, very potent molecule. We have presented some of the preclinical data at ASH in 2018. This is a product that is a very potent killer of target cells. We have actually shown completely treatment-refractory cell from CLL patients and all of our B-cell cancer patients to be very, very sensitive to killing by this molecule. CD37 is also pursued by some other molecule -- other companies in the clinic. So we believe it's a validated target, but we believe that DuoHexaBody-CD37 has the potential not only to be first-in-class but also best-in-class targeting this molecule. So a lot to look forward to in the coming years. Let me go over the finances very briefly. Our 2019 guidance was actually issued in February last year. And as you may recall, we updated that in August and again in November. We anticipate DARZALEX sales over 2019 to be more than $3 billion. And we feel that we are on track basically to actually hit that sales number for last year. You'll probably hear from J&J and the update on -- next week, on the 22nd where the full year numbers on the actual number reached. We actually anticipate a total revenue of Genmab to be around NOK 5.1 billion. This is roughly $750 million. We have expenses of around $400 million. We intend to step up the expenses for next year because we are going to further broaden our clinical pipeline. We will add at least 2 more clinical programs to the pipeline, bringing the total up to 9. And we actually anticipate that last year will be actually the seventh year of profitability, reaching roughly around $350 million of profitability. This is the highest up to now for Genmab. Let me walk over the key milestones for this year because last year was an exciting year where we actually hit most of the priorities we have set for ourselves at the beginning of the year. And we intend to keep on doing that. This year, we intend to actually continue building on this momentum that further progress across our pipeline. We actually have a lot of data for our own proprietary products. For 4 or 5 of our programs, we expect to come with data this year. For daratumumab, we expect further data from the APOLLO study, which is a Phase III study in relapsed or refractory multiple myeloma. For the ANDROMEDA Phase III study, which is a very new indication, amyloidosis, which we could potentially add on the back of that data. And ofatumumab, we know that Novartis has filed actually last year for relapsing MS for ofa. And we hope for a very quick approval this year so that we can start helping relapsed MS patients in a more effective way. And lastly, of course, teprotumumab, I already spoke about at Horizon Therapeutics, has a PDUFA date in March of this year. So we hope that actually after the very positive FDA Advisory Committee meeting that we get that product on the market, making it the third Genmab-created molecule reaching the commercial markets this year for thyroid eye disease. Then my last slide. I really believe that taking everything together, investments in the pipeline, in technologies, people and partnerships, we are able at Genmab to create substantial further value for shareholders and patients. Genmab has, up to now, delivered on the promise of building a very robust and innovative pipeline. We have a pipeline unparalleled, we believe, for antibody therapeutic companies, definitely companies of our size. We are less than 600 employees at this time. And then 7 proprietary clinical programs, that matches basically a mid-sized -- mid-pharma type -- the midsized pharma-type pipeline. So we are very excited about the foundation. We believe that strategic investments which will help us to continue to deliver basically on the promises to stakeholders. For future partnerships, we intend to actually have a seat on the table and actually have our own developers actually determine the strategy of the products. And we also expect to book sales for -- in significant territories like the United States for the next products basically reaching the market. So we are absolutely excited about the transformational journey the company is on. As we actually set for transforming the next generation of treatments in oncology, we really need new treatments. And the nice thing for all of you is that Genmab is only at the beginning of this journey. We are 21 years young. And actually, we believe in the future our own product has actually transformed cancer treatments. We have a very rich product pipeline of first or best-in-class antibodies. And then I want to thank you all for your attention, and let's hope that we go for a lively Q&A session then. Thank you very much.