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

Hello, and welcome to the Genmab conference call. [Operator Instructions] And just to remind you, this conference call is being recorded. During this telephone conference, you may be presented with forward-looking statements that include words such as believes, anticipates, plans or expects. Actual results may differ materially, for example, as a result of delayed or unsuccessful development projects. Genmab is not under any obligation to update statements regarding the future nor to confirm such statements in relation to actual results, unless this is required by law. Please also note that Genmab may hold your personal data as indicated by you as part of our Investor Relations outreach activities in order to update you on Genmab going forward. Please refer to our website for more information on Genmab and our privacy policy. Today, I'm pleased to present Jan van de Winkel. Please go ahead with your meeting.

So hello, and welcome all to the Genmab conference call to discuss our broad and transformational oncology collaboration with AbbVie. With me today to present this exciting news is our CFO, Anthony Pagano. And we will be joined for the Q&A by Neil Gallagher, Vice President, Head of Development and Chief Medical Officer from AbbVie. Let's move to Slide 2. We will be making forward-looking statements. So please keep that in mind as we go through this call. Let's move to Slide 3. We are very pleased to announce a landmark event in Genmab's history. This sets us on a path to accelerate, broaden and maximize the development of some of our promising bispecific antibody therapies, including epcoritamab, with the ultimate goal to bring new potential therapies much faster to cancer patients. As you saw from our announcement, Genmab and AbbVie have entered into a broad, long-term global oncology collaboration that brings together 2 companies that share a deep commitment to making a difference for patients as well as a solid track record of innovation. Genmab and AbbVie will be equal partners, working together to jointly make all strategy, clinical development and commercialization decisions for 3 Genmab bispecific antibody therapies, epcoritamab, DuoHexaBody-CD37 and DuoBody-CD3x5T4 as well as potential novel, differentiated cancer therapies created under a discovery research collaboration. Importantly, Genmab will book sales of epcoritamab in the U.S. and Japan, while AbbVie will commercialize epcoritamab in the rest of the world. In a moment, Anthony Pagano will provide you with more details on the structure and the financials of this collaboration. But first, I would like to review the 3 promising bispecific antibody therapeutics and the discovery research collaboration of the -- actually at the heart of this agreement. Let's move to Slide 4. Let's look at the centerpiece of this collaboration, epcoritamab, currently in Phase I/II developments. As recently presented at ASCO and following the impressive data from last year's ASH, subcutaneous epcoritamab induced rapid and deep responses in heavily pretreated patients with B-cell non-Hodgkin lymphoma or B-NHL, across different subtypes, including patients who failed prior CAR-T therapy. This includes 3 complete responses for patients with diffuse large B-cell lymphoma. It has also demonstrated a favorable safety profile across all doses with no dose-limiting toxicities observed. In fact, dose escalation data show improved efficacy as doses reached above the model-predicted exposure thresholds and maximum tolerated dose has not been reached. Looking at this data, we are extremely confident that in the promise of epcoritamab to be a potential best-in-class therapy, and we are very much looking forward to the dose expansion phase of the trial. Let's move to Slide 5. The other 2 early assets in our collaboration with AbbVie have the potential to be first and best-in-class within hematology and solid tumors. The more advanced of the 2 is DuoHexaBody-CD37, which entered into the clinic earlier this year. This potential therapy is based on the combination of Genmab proprietary DuoBody and HexaBody platforms and has a unique mechanism of action, targeting 2 different epitopes on CD37, a target broadly expressed on hematological cancers. We have already seen promising antitumor activity in CLL and non-Hodgkin lymphoma patient cells ex vivo. Dose escalation in the first-in-human trial is currently actively ongoing. Next in the clinic is DuoBody-CD3x5T4, a CD3 bispecific that has shown potent antitumor activity in vitro and in vivo in a range of cancer indications. It induces effective T cell-mediated cytotoxicity of 5T4-positive tumor cells. And as a target, 5T4 is expressed on multiple solid cancers and have limited expression and healthy tissues. The IND for this potential therapy, along with multiple CTAs, were submitted in the first quarter of 2020, and we very much look forward to DuoBody-CD3x5T4 entering the clinic shortly. Now let's turn to Slide 6. Creating differentiated next-generation cancer treatments is about innovation and collaboration. One of the most exciting aspects of this new relationship between Genmab and AbbVie is the opportunity to join forces in a very exciting recovery -- discovery research collaboration. This foundational long-term collaboration will combine Genmab's DuoBody technology platform with AbbVie's novel payloads and ADC platforms as well as proprietary antibody panels from both companies with a goal of identifying up to 4 truly differentiated antibody therapeutic candidates for cancer. If all are successful, this collaboration would be -- would then include a total of 7 potential next-generation cancer treatments for patients faced with a cancer diagnosis. Now I would like to introduce Anthony Pagano, who will walk you through the financial details of this collaboration. Anthony?

Thanks, Jan. Let's move to Slide 7. I couldn't be more pleased to be here with Jan and Neil to announce the strategic and complementary win-win partnership. We've conducted a really thoughtful and thorough process to get both the right partner and the right structure. For us, AbbVie is that right partner who will work with us to expand and accelerate the development and commercialization of our programs. AbbVie has deep experience with 50-50 partnerships and a track record of success with ibrutinib and Venclexta, and it's the right structure. It's a 50-50 partnership across all the clinical assets as well as for the research collaboration. For Genmab, this is a partnership that allows us to evolve into a fully integrated biotechnology powerhouse in line with our 2025 vision. And lastly, it's a partnership that further strengthens our financial position and provides financial flexibility while further enhancing our resilience. Let's move to Slide 8. This is one of the largest oncology partnerships in history, with a potential total deal value of up to $3.9 billion. This includes an upfront payment of $750 million and the remainder of $3.15 billion relates to the achievement of additional development, regulatory and sales milestones as well as opt-in payments. For our existing clinical programs, that's epco, DuoHexaBody-CD37 and DuoBody-CD3x5T4, that means potential milestone payments of up to $1.15 billion. And approximately 50% of that relates to epco. Now it's important to understand that we've agreed slightly different terms for our collaboration on epco versus on DuoHexaBody-CD37 and DuoBody-CD3x5T4. For epco, Genmab and AbbVie will co-commercialize in the U.S. and Japan with profits shared equally between the companies. Importantly, Genmab will book revenue from epco in both these countries, and AbbVie will commercialize epco in the rest of the world. And there, we'll receive tiered royalties on net sales ranging from 22% to 26%. For DuoHexaBody-CD37 and DuoBody-CD3x5T4, Genmab and AbbVie will co-develop and co-commercialize the products in the U.S. and Japan with profit shared equally. And we'll alternate on a product-by-product basis who books these sales starting with AbbVie. And AbbVie will commercialize the products in rest of world with a right for Genmab to opt-in to co-commercialize. For us, that's an important option, enabling us to further broaden our commercial footprint. In all cases, the companies will share all development and regulatory costs for these products 50-50. For the research collaboration, Genmab is eligible to receive up to $2 billion in total option exercise payments and milestones if all 4 differentiated next-generation antibody product candidates are successful and all milestones are met. Let's move to Slide 9. As I said, this is a partnership that further strengthens our financial position, including improving our guidance for 2020. Starting with revenue, nearly 90% of the $750 million upfront will be recognized immediately, with the remainder being recognized over a number of years. The other elements of our original revenue guidance remain unchanged. Moving to our operating costs. We'll recognize 50% of costs of the existing clinical programs and 100% of the costs for the discovery collaboration in our operating costs. The reduction in our operating costs due to AbbVie's contribution will likely be fully reallocated to additional investments to further expand and accelerate partnership programs, meaning our OpEx guidance remains unchanged. Now looking at the specific impact on our guidance, our revenue will increase by DKK 4.35 billion and be in a range of DKK 9.1 billion to DKK 9.5 billion. And we now expect our operating income to be approximately DKK 5.2 billion to DKK 5.6 billion due to the increase in revenue I just described. So stepping back, this partnership will materially add to our already really solid foundation and will provide enhanced resilience and further improve our growth profile. And with that, let me hand back to Jan.

Thanks, Anthony. Let's move to Slide 10. So last year, Genmab celebrated its 20th anniversary. And I said at that time that our journey was only just beginning. Looking at the events that have taken place in just the first half of 2020, you can see clear evidence of this. There have been numerous key events over the course of Genmab's history, including the 3 Genmab-created human antibody medicines, now making a difference for patients, the invention of 4 proprietary next-generation antibody technology platforms and the track record of having 20 Genmab-created antibody therapeutic candidates and active clinical developments, to name just a few. We believe that this broad long-term transformational collaboration with AbbVie, which is now our 18th partnership, is a capitalizer for Genmab to continue to evolve into a fully integrated biotechnology innovation powerhouse and represents a key vehicle, allowing us to further expand and accelerate our differentiated antibody product programs as we build and scale up our company. So let's move to Slide 11. Today's landmark collaboration between 2 biopharma powerhouses underline the commitment to create a win-win alliance, focused on creating and developing transformational next-generation antibody therapies for cancer. By combining Genmab's world-class insight in antibody biology and highly effective research and development engine with AbbVie's leading clinical and commercial execution, excellence in hematological cancers, we believe we will ultimately be able to bring truly differentiated next-generation antibody therapies to patients faster. We share a deep commitment at AbbVie to making a difference for patients and look forward to a truly energizing, inspirational and very successful and productive collaboration. So now let's move to Slide 12 and our Q&A. So we are very pleased to answer any questions you may have. So I'll now turn the call to -- back to the operator and open the call for questions.

[Operator Instructions] Our first question comes from the line of James Gordon from JPMorgan.

James Gordon from JPMorgan. 3 questions, please. One would just be the breakdown of the milestones. So I can see $1.15 billion in milestones for the 3 bispecifics. In terms of the split between development and regulatory versus commercial, is it something like the 1/3, 2/3 split? So that would be the first question. Second question would be on the time lines for CD3xCD20. Now you've got a partner on board and they're contributing as well. Latest thinking on the time lines of the earliest that this product could potentially come to market and what the range might be? And then a final question on CD3xCD20, so we've got some updated data in the epco abstract, then at the conference. So just at the latest phase, how do you think your product stacks up versus the competitive molecules, please?

Thanks, James. Welcome. Let me hand over the milestones question over to Anthony. And it actually is better than what you described, James, and I'll let Anthony give you some further details. And then I would like to hand over to my new colleague, the 2 other questions, Neil Gallagher from AbbVie. But let's start with Anthony, James, on the milestones split between development, regulatory versus sales. Anthony?

Yes. So thanks, James. You're right. The $1.15 billion relates to the 3 existing clinical programs. And for that, we said around 50% related to epco. Probably the additional color I could provide is around 60% out of the total $1.15 billion. Again, that 60% are clinical and regulatory, and that's probably where I ought to leave it, James.

Thanks, Anthony. And maybe, Neil, you can take the epcoritamab time line question and maybe the latest -- the third question from James.

Certainly. Thanks, Jan. So on the time line question, it's a little early for us to be committing to time line for first approval. But what I will say is that one of the things that brought the 2 parties together was -- is a commitment to advancing the molecule as rapidly as possible. So we will come back with more details around timing in due course. With respect to the potential for the molecule, we have been with Genmab observing excitedly the emerging data. We believe that the data in terms of efficacy are extremely robust in class. The safety -- emerging safety profile is extremely encouraging. And the potential for subcutaneous administration is also extremely encouraging. So putting all of these things together, emerging efficacy, emerging safety data and the subcu potential for subcu administration, we believe that this is a potentially best-in-class molecule.

Thanks, Neil. And then next Friday, James, at the European Hematology meeting -- virtual meeting, there will be a further update of the data with epcoritamab. So you can look forward to that.

And the next question comes from the line of Sachin Jain from Bank of America.

Sachin Jain from Bank of America. A few questions, please. Firstly, on the Phase III program, when could we expect to hear about the breadth of that? And any indications you can give today as to how broad within the hematology landscape you're going and what lines you're pursuing? And second question is, one of the things you talked about on prior calls, Jan, was potential synergy with other mechanisms in a partner's pipeline. Some of the partners announced, but wondering if you could just touch on what mechanism do you think this is potential synergistic with? And then thirdly, for AbbVie, 2 additional molecules have been included in this partnership, the CD37 and 5T4. Just a bit of color from your perspective as to why you've chosen those in particular versus the other assets that Genmab had?

Thanks, Sachin. And I propose that I will take the first question on the Phase III program. I already said, Sachin, that we will have a very broad and extensive program. We have already mapped it out together with AbbVie, and we will give you that full color in due time. So we keep the cards close to the chest right now, apart from saying that we will definitely hope to start at least one Phase III this year, before the end of this year and then multiple next year. And I will give you in time further color. Then the -- as it relates to the second question, I'll probably take that as well, and I'll leave the third one for Neil. We have actually shown in the laboratory, Sachin, a number of very exciting synergistic effects of small molecule inhibitors, other antibodies and epcoritamab, we will actually test some of these combinations in the clinic, and it's clear that AbbVie has, of course, Venclexta and ibrutinib as very, very potent drugs, which could potentially be among those, but we, again, want to keep the cards close to our chest, Sachin, and we'll tell you that when we are ready to launch clinical evaluation of some of these combinations. But preclinical data is incredibly strong. This is a competitive area that we decided to actually keep the cards close to our chest here. But maybe, Neil, you can give further color on why AbbVie was so interested in DuoHexaBody-CD37 and the CD3x5T4 programs to be included in this transformational partnership, Neil?

Certainly. Thanks, Jan. So first of all, we are extremely impressed to buy Genmab's platform, by their technology in general. But specifically, with respect to the 5T4 and CD37, obviously, we're not here to talk about AbbVie's existing pipeline, which we've discussed at another forum, but you probably know that we have an extremely -- a pretty robust pipeline. But our intention in entering into this broad collaboration with Genmab is, as I mentioned, that we're extremely impressed by their technology. And also, we have a deep interest in CD3 bispecifics in general. When we actually look -- in terms of selecting these 2 targets, we see a high degree of complementarity with some existing assets and the potential for these assets, in particular -- against these particular targets to be best-in-class.

Thanks, Neil. Thanks, Sachin.

The next question comes from the line of Michael Novod from Nordea Markets.

It's Michael from Nordea Markets. And congratulations with the great deal. Just 2 questions. One on -- additional on the milestones. Just digging a bit further into the split, also if you look beyond the $1.15 billion. Maybe you could just give a bit more color to how they are split? I know you want to keep the cards closed, but still it would be nice just for modeling purposes. And then secondly, Jan, maybe for you. You previously said that you wanted to sort of a cap on what kind of cost you would commit to in this deal. Can you talk about how these things are going to ramp up during '21 and '22, both for the R&D side and also the commercial side. And whether there any sort of caps to how much you can ultimately spend in the deal?

Thanks, Michael. So first of all, thanks for the question. So I leave the milestone split call out to Anthony, and he can probably also give further insights on the cap because we have per product, Michael, negotiated the cap. It's per year, so that when we would spend more, would actually later on, pay that to AbbVie. So I think we have protected the company for the product development going forward. And maybe I can ask Anthony to give a bit more color to you, Michael, on both of these aspects, both on the milestones as well as on the yearly cap.

Yes. Thanks, Jan, and thanks, Michael. Starting with the question around the research collaboration. And just sort of maybe step through the mechanics. For -- maybe I'll start the existing clinical programs. So there, it's a 50-50 cost split. For the research collaboration, we'll still be working very closely together with AbbVie and bringing these programs forward. But Genmab will be bearing the cost 100% from the beginning up until a predefined point, let's call it, around Phase I. At that point, AbbVie would look at the data and then decide to opt-in, if they do opt-in, will make an opt-in payment. And then beyond that, it would be a 50-50. And what I can probably share with you, Michael, is that really the -- any of the milestones for those programs as part of the research collaboration, come after the opt-in point. That's probably where I need to -- that one. In terms of the cap, I think Jan has answered that, there is an annual cap on a per program basis. What I would say is that we've entered this collaboration, very important collaboration with AbbVie from a real position of strength, both from an operational capabilities perspective, but also from a financial perspective and really look forward to working on this 50-50 collaboration with our new colleagues at AbbVie.

Can I just add one follow-up. Yes, just maybe you can -- I know it's only June, but maybe you could just give some flavor for how we should sort of position the cost for next year? Would be a bit more easier for us. If you have any, say, color on costs for next year, just to get sort of the trend lines in.

Anthony, do you want to give a bit more color for Michael? What I can say, before you start, Anthony, is, Michael, we will have a Capital Markets Day still scheduled for November 13 for our Princeton site. And that is a moment, I think that we can actually begin to give you further color on the expansive program for epcoritamab, but also, hopefully, the further program for CD37 and for 5T4. But maybe Anthony can give you already some early color on how we think that we are going to ramp up from here.

Yes. Thanks, Jan. Maybe what I'd point you back to is our -- the financial framework that I've described, right, in terms of the recurring revenue growth. And obviously, we're not going to here talk about that today, but then really the other element is the focused investment in R&D. And in 2020, we talked a lot about our focus and that focused approach certainly included epcoritamab among other programs. And what I'd say is, moving forward, we're going to continue to be very disciplined in our approach. You think about our investment profile and our cost profile, we do have this additional, let's call it, R&D leverage, meaning we're able to execute now potentially very, very large development programs with partners like AbbVie, where we only have 50% of the cost, which gives us some additional bandwidth, if you like. So Michael, that's where I think we'll leave it. And certainly, we'll look forward to sort of coming back and sharing more later on.

The next question comes from the line of Matthew Harrison from Morgan Stanley.

I guess 2 for me. One, could you just maybe talk a little bit more about the 2 other targets that you've chosen, I guess, specifically about CD37, there are a handful of those programs out there, maybe for AbbVie, if you could just comment on what you viewed in this program as significantly differentiating. And then, Jan, I guess, could you also talk about -- you obviously have other bispecifics that weren't chosen as part of this collaboration. Does your either view on potential success of those programs or your investment in those programs change based on this collaboration?

Thanks, Matthew. I will pass the first question for Neil, so that he can give further perspective on CD37 and 5T4. But I can -- let me take the second question, Matthew. Over 75% of our pipeline is based off on bispecific programs. We have 3 in the clinic right now. And then the 5T4 program will go into the clinic very quickly, now partnered with AbbVie. But I can tell you that many of the other programs are earlier stage, and that is, I think, why we have chosen to include these more advanced programs into the partnership agreement with AbbVie. And not the earlier stage ones, but of course, we could also decide when the partnership works well, Matthew, to really broaden that further in the future, step it up because we are very excited about what we see in some of the very early stage bispecific programs, like we have the Immatics program, which we're very excited about; and also some programs which we have not yet flagged up to the market. But we intend to, from here on, bring every year at least 1 or 2 programs into the clinic, Matthew, and then basically be very rigorous in selecting the clinically differentiated ones for further expansion and killing the others. But I can assure you that we are, especially in the immuno-oncology field, working on some very exciting promising concepts. They all follow the same route, Matthew, that we make thousands of candidates and empirically screen based on very, very rigorous selection criteria, the best candidates. And I think that's the reason that epcoritamab is doing so well preclinically and also the early clinical data looks so encouraging versus the competition. And the same holds for the 2 BioNTech collaborations. I mean we are seeing some exciting, very exciting data in both of these programs and come in the second half of this year with the PD-L1x4-1BB early data from the dose escalation together with BioNTech. But I see more and more of our pipeline drifting towards the bispecific area. And many of them are CD3 bispecifics and also some other trigger molecules are now in the loop, Matthew. So I think exciting times are certainly here. And I'll let -- leave it now to Neil to give a bit more color on how you think about CD37, Neil, in the context of your expertise in the hematological cancer field.

Thanks, Jan. You partly answered my question. So as you mentioned, there are a number of CD37 bispecifics. But if I can just talk about bispecifics in general, right? So just because 2 bispecifics happened to be in the same class with the same target, target protein and a CD3 does not mean that it's the same. And as Jan just said, there's a degree -- there's a need to really screen out the best candidates prior to entering into the clinic because the differences in epitope binding on the target can make a huge difference. And this is something, as I mentioned earlier on in the call, that we have a deep interest in. So difference is in epitope binding, difference is in CD3 binding affinity, the confirmation of the synapse between the target and the effector cell. All of these things are incredibly important. And one of the ways to deconvolute that challenge and optimize the candidates, as Jan just alluded to, being clever about actually screening empirically. And again, as I mentioned earlier, we've been extremely impressed by Genmab's ability in general, right, their platform in general, but particularly by their ability to be able to do exactly what Jan said. And therefore, if we look at the other molecules that they've produced, if we look at the emerging data with epcoritamab, we are extremely encouraged that they really know how to do this extremely well.

Thanks, Neil. I hope that, that's answering your question, Matthew?

Yes.

And the next question comes from the line of Trung Huynh from Crédit Suisse.

Trung from Crédit Suisse. Firstly, congratulations on the deal. Just some commercialization questions left, really. So just in terms of the epco. Can you talk about your plans in building out the U.S. and Japan platform here? And do you think tisotumab vedotin would already be available at this time? Is there something you can do to leverage the platform you're building there as well? And just perhaps how many people do you need? And when are you starting all of this process? And then finally, just on the ex U.S., ex Japan regions for epco, what factors are there that will help your decision in wanting to kind of opt-in in these regions?

Thanks, Trung, for the questions. Let me be brief about that. U.S. and Japan, we are really building up the framework. As we speak, we brought Anthony Mancini on board in March -- beginning of March. And then we have actually already projected how the buildup of the teams is going to happen in the U.S. and Japan. And Japan, we know, a small group in Tokyo, which is already expanding, but still from a small base, I think, 7, 8 people right now. But we are -- indeed believe that we can actually also work on the commercialization together with Seattle Genetics of tisotumab vedotin, and that will actually help us to accelerate and broaden the team in the U.S. very rapidly. Probably in the second half of this year, Trung, we are going to give you further color on the exact numbers of people, probably around the Capital Market Day on November 13. I think it's a bit early to really speak about it now, but we are already setting up the framework for marketing and commercialization in the U.S. and this deal will allow us to really accelerate that and really progress much more rapidly. And then the second question on the ex U.S. positioning. I think it's incredibly valuable that we have a co-commercialization option in countries at our decision from AbbVie for the other products outside of epcoritamab. And I think we will decide that in due time. So the clear focus right is U.S. and Japan. Japan because it really makes a lot of sense for tisotumab vedotin. We will do the commercialization and the booking of sales in Japan for TV. And Seattle will book the sales for TV in the United States, which we will actually co-promote the drug there. And I think in this way, we can actually build up momentum and actually build the company to the next stage, Trung. In time, we may actually elect to also go for some of the top European countries for other products. But I think, this deal structure gives us the time to really think about it and first build and focus on the U.S. and Japan, and then in time expand it because we really believe in stepping up the company in stages. And I clearly -- some of the biggest, most attractive markets, not only for hematological cancers, but certainly for tisotumab vedotin if -- are U.S. and Japan. So I think this is very well fitting with our strategy and more to come. And I will let Anthony Mancini at another time give you further color, Trung. Thank you.

And the next question comes from the line of Emily Field from Barclays.

I was just wondering, I don't think I saw this in the release, if you could let us know what -- when you're targeting the close of the transaction, whether it's third quarter or fourth quarter? And just to confirm that the 2020 OpEx guidance does include any adjustments that would occur following the date of closing as obviously the revenue does? Because it would seem that depending on the timing of closing, that would imply a pretty significant ramp in the investment in the other assets given that epcoritamab, I believe, was a significant portion of the R&D year-over-year cost increase for this year? And then you did just mention it, but I just wanted to confirm that your -- as of this date, obviously, I know things are in flux, so you're still planning on having an R&D day of some kind in the fall? And just also, was 4-1BB -- since that's already a partnered asset, not eligible for this partnership. So that was just another question I had.

Emily, let me dive in, and then I will definitely let -- give the operating guidance question to Anthony, but let me first give you the good news. We and AbbVie believe that we don't need Hart-Scott-Rodino clearance. So the close of the transaction is right now. So that means that within the few weeks, you will get the $750 million on our account from AbbVie because we actually signed and closed the deal today. So that's the good part. Then the operating expense guidance, I will actually ask Anthony to give you further color. But let me first give -- answer your other 2 questions, Emily. November 13, we are organizing a Capital Markets Day from our Princeton site in the United States, which we'll, of course, also webcast, given the coronavirus era we're all still living in at this time. And hopefully, that are in November. And the 4-1BB programs, we have actually 2 bispecifics. One is PD-L1x4-1BB. The other one is CD40x4-1BB. They are both already 50-50 partnered with BioNTech. So they were not on the table for this agreement -- transformational agreement with AbbVie. But let me now ask Anthony to give you a bit more color, Emily, for your modeling, on the operating expense guidance and how that is impacted by the wonderful deal we have now entered into today with AbbVie.

Yes. So thanks, Emily. And maybe I'll start where sort of Jan started as well. It's great news that we're able to start collaborating with our new colleagues at AbbVie immediately. And I know the teams are already texting and sharing e-mails, and they couldn't be more excited things to really get started. Coming back to OpEx, really why I sort of think about it is there's sort of 2 moving parts. One is from now on, we'll be sharing costs with AbbVie. So we'll get the partner contribution. Sort of any savings there will be fully offset or really -- we should think about really reallocate to opportunities to further expand and accelerate epco. And that's really a function of 2 things, right? It's the continued very positive emerging data for epco and now having AbbVie on board to really turbocharge all of our activities. And as I mentioned, the great news is that we're able to get started now and work upon moving these programs forward as quickly as possible. So putting this all together, Emily, we're back to a place where we believe that our existing guidance range of DKK 3.85 billion DKK 3.95 billion is still appropriate.

And the next question comes from the line of Carsten Lønborg from SEB.

Yes. Carsten from SEB. Congratulations on this very nice deal. Two questions I have left here. First of all, for Jan. When you mentioned sort of a last broad Phase III setup for epcoritamab, should we then think of something similar to what Janssen carried for DARZALEX? Is it that type of broad Phase III trial outlook we are looking into? And in relation to that, for Anthony, when we have accused your predecessor about what you needed to -- all that cash on your balance sheet, you often said that it could be used, for example, in the situation where we need to build up a commercial operation, could be a point in time where those need to draw on cash from the balance sheet. But now you're talking about costs being capped at a certain rate, and it seems like you will not be in a situation where you need to dig into your money just here. So could you share some color on what you need, approximately $20 billion for -- DKK 20 billion on your balance sheet?

Thanks, Carsten. Let me start with the first question. And without giving you the further details, I can already allude that, yes, this is a daratumumab-type development program. We already have -- together with the AbbVie team from Neil, we have already basically modeled over 10 studies, the majority being Phase IIIs. And yes, we will give you further color in time. And yes, we will involve multiple thousands patients. So we're going to do a very aggressive, expansive epcoritamab program over the coming years. And I think the metaphor of comparing it to the daratumumab expansion, as we have seen it very successfully being done by J&J is, I think, an appropriate one here. And I want to leave it at that, Carsten, and then give the second question to Anthony.

Yes. So thanks, Carsten. I think -- so yes, glad you said it was DKK 20 billion and not dollars. Maybe it's not quite $20 billion quite yet. Thinking about your question, I think it comes back to what I said a lot more recently, thinking about our -- this overall strong foundation, right? And it's beyond the financials, right? It's the capabilities, it's the technology, it's the pipeline, it's the team, it's the partnerships that really strong foundation. And now as it relates to the financials and that sort of strong financial foundation, that resiliency, that robustness and really, particularly on your question on the balance sheet, really, in my mind, what that enables us to do is really move forward and execute against our strategy, right, around transitioning from an early-stage development to late-stage development to commercial to really move forward, execute against our strategy with absolute confidence and from a position of strength. And I give you 2 recent examples in way that sort of that strong financial foundation has really been helpful. One is, as we sort of all experienced the impacts of COVID-19, it means that we're able to look through any immediate disruption and it has been the laser-sharp focus on executing against our overall mission, which is to get these therapies to cancer patients as quickly as possible. That's one way. And the second is really what's led us to this partnership today with AbbVie that we were able to enter those discussions as a highly, highly credible partner and one that could sit there across the table and really be talking about a true 50-50 and one where we have this very meaningful presence, both in development and commercial and then really credibly talk about and actually achieving the ability to book sales in the United States and Japan. So I think the strong balance sheet has served us very well. Historically, it served us well here and more recently. And I think moving forward, it's going to continue to serve us extremely well.

And the next question comes from the line of Peter Verdult from Citi.

Pete Verdult, Citi. 3 questions, please. Jan, in the past, you talked about Phase III for epco across all lines of therapy being somewhere to the tune of $600 million to $800 million and that you're about -- you believe you're only a year behind Roche and Regeneron. Does that still hold in light of you wanting to explore BTK or BCL2 combo studies in CLL? And just specifically on CLL, BTK or BCL2 has been so successful that how do you raise the bar further? Just want to know how you're thinking about CLL specifically? Secondly, for Neil or Jan, just pardon my ignorance, but could you talk a little more about AbbVie's ADC platform. How is it differentiated versus the many other technologies out there, be it a Seattle or Daiichi Sankyo, to name but a few? And then lastly, a clarification from Neil. I apologize for the question. I hope you understand why I'm asking. But I just want to confirm that AbbVie does not have any in-house bispecifics against the same targets covered by your deal with Genmab? But I'm only asking that question in light of the JAK experience we saw years ago with Galapagos and how that played out versus the AbbVie in-house asset?

Thanks, Peter. Let me start with the first question and then also have the CLL part for you Neil because you're the expert here. So for the Phase III program for epcoritamab, this is going to be massive and very aggressive, I can assure you. And I think we still believe that we are, probably now, at this moment, people less than a year behind the lead program from Roche. And we are catching up. And I think we have mapped out how we can actually shorten that delay even further. I should probably keep it at that. We're going to test in all of the lines of treatment, epcoritamab and different combinations. I will leave the CLL part to Neil. And then the ADC platform, I can start with that, Neil, and then you can jump in. One of the true attractions for the ADC platforms and technology from AbbVie to us is novel linkers, novel toxins and potentially dual warheads, Peter, so different warheads on the same antibody. And by combining panels of antibodies from Genmab with ADC technology with novel linkers, novel toxins from AbbVie, we think that we can potentially create truly differentiated next-generation ADCs. It's going to work much better than the earlier generation of ADCs, but I'll leave it up to Neil to see whether he wants to add further color there. And of course, I certainly hope, Neil, that we don't have competing bispecifics for some of the targets we have chosen in this collaboration, but I'll leave it up to you to answer that one as well. So over to you, Neil.

So let's start with that last one first. And no, we do not. Clearly, that wouldn't be a -- that would not be something that we would want to do. With respect to CLL, you're absolutely right. We've been extremely successful with both our marketed medicines, IMBRUVICA and Venclexta in treating CLL. That said, we strive to continue to improve the outcomes for patients with that particular disease in parallel with developing epcoritamab in combination with our existing portfolio for not only CLL but also other indications as well as with in other combinations of epcoritamab. I don't really have a lot to add with respect to the -- our ADC platform that hasn't been said elsewhere. We've spoken a lot about that elsewhere. We have novel linkers. We have novel warheads. And I think Jan has covered that pretty adequately. Thanks.

And the next question comes from the line of Robert Burns from H.C. Wainwright.

Just 2, if I may. So I know you were just talking about the combinations with the existing AbbVie portfolio within CLL. I was curious if you guys were also positioning for a combination of epcoritamab plus the DuoHexaBody-CD37 within that space, considering the nonoverlapping mechanisms of action there. And then lastly, I was curious that if you could discuss more about the 5T4 bispecific. And where you see the potential or the most potential for that asset within the -- some of the tumor landscape.

Thanks, Robert, and thank you for the questions. Let me start off with the questions and then ask at the end if Neil wants to chip in there. So yes, I think we're going to test multiple combinations with epcoritamab. We've already tested many of them, Robert, in the lab. And yes, the DuoHexaBody-CD37 is potentially a very attractive combination partner for epcoritamab because their CD20 and CD37 are not overlapping and many times co-expressed on B-cell malignancies. And they could actually synergize in a very nice way. They certainly seem to do that preclinically, but we have not, of course, tested that in the clinic yet. And it's up to Neil and the team to figure out how to optimally, I think, combine different agents with epcoritamab in the very near future in the B-cell cancer area. Then 5T4, I mean this is a very attractive target for potentially multiple solid cancers. I mean in solid tumors, CAR T approaches have not been very good, as we all know. And we really need novel targets and novel mechanisms of action. And we believe that the CD3x5T4 has huge potential for solid tumors if the molecule can be given in a safe manner with the preclinical data support. And then I probably will stop there, Neil, and give you the floor to see whether you want to add anything on that, either on the combination with DuoHexaBody-CD37 for epco or on the potential for a CD3x5T4 DuoBody for solid tumors. Neil?

Yes. Thanks, Jan. So I have nothing further to add on the combination question with respect to 5T4. As Jan said, it's an extremely attractive target. The IND -- as he also mentioned during his presentation, the IND has been filed in 1Q this year. Its attractiveness as a target is because it is, as mentioned, expressed in a wide variety of solid tumors, including many GI tumors, colorectal, for instance, gastric, et cetera. The -- because it's so early in development, I think we will learn more as we develop the molecule and to speculate now as to exactly where in solid tumor oncology we would target our efforts would be premature. So as the data emerge, we'll be better informed about answering that question.

That was the last question we had time for. So I'm handing back to you, Jan.

All right. So thank you all for calling in today to discuss our new and exciting collaboration with AbbVie. And we look forward to speaking to you again soon. But I first want to thank also, of course, Neil, for joining us today and for becoming our new colleague. We're super excited, Neil, and looking forward to a very energizing and productive collaboration with AbbVie over many, many years to come. So thank you all for joining, and we can't wait to speak with you all again soon with further updates. Thank you.

This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.