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

Everybody, I'm Matthew Harrison, one of the Biotech analyst here at Morgan Stanley. Very pleased to have you join day 1 of our virtual conference and pleased to get started off with Genmab. And Jan van de Winkel, the CEO and President from Genmab. Just quickly before we start, I just need to read a disclosure statement. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures appear on the Morgan Stanley public website at morganstanley.com/researchdisclosures. And with that, Jan, I'm going to turn it over to you to make a couple of minutes of opening remarks, and then we can jump into the Q&A.

Thanks, Matthew. Good morning, everybody. We are delighted to be at this meeting. So Genmab had a very strong first half of the year and is on track, I think, for an excellent second half. We had, of course, the first DuoBody product approved RYBREVANT by J&J in May; tisotumab vedotin which is the partner program with CGEN, that got priority review from the U.S. FDA. Very soon, there will be 5 marketed antibody products based on Genmab expertise on the market, which we're really delighted about. Genmab has a clinical pipeline of 8 products to 9 proprietary clinical products. Tisotumab vedotin got priority review, the data on which the filing was based was published in The Lancet Oncology, which we are very excited about, and we're all ready to launch. The team is launch-ready for the moment we get the label. Epcoritamab, we started the first Phase III in early this year in relapsed refractory diffuse/B-cell lymphoma, and we're now stepping up and actually broadening that program. Actually today, the initial dose escalation data was just published in the Lancet journal. So we're very excited about that. The 2 DuoBody programs, which we partner together with BioNTech, the DuoBody-PD-L1x4-1BB and the DuoBody-CD40x4-1BB are both coming with data like we had SITC in the coming months. We closed a partnership agreement with Bolt Biotherapeutics for next-generation immunostimulatory biospecific conjugates. Daratumumab is having a very good momentum. First half sales were close to $2.8 billion. When we look at IMS, we see very stably sales -- weekly sales above $70 million and the brand impact data look really, really good. But now 29% of the patients in the States treated with dara, 30% of the new patients start and in frontline, it's 18% now. But when you look at the new patient start there, 24% is continuously trending up. Kesimpta is doing very well. The real sales acceleration by Novartis is expected in the second half. And TEPEZZA just doing wonderfully well, and we had no sales in the first quarter, but in the second quarter, $453 million in sales and Horizon guided for over $1.5 billion this year. Then the DuoBody programs continue to do really, really well beyond RYBREVANT which got approved in the U.S. And very soon, we hope to also see it approved in Europe. We see other product from J&J, They have 7 products in the clinic. Teclistamab got a break therapy designation, we believe, is on the way to Phase III trial. Talquetamab, very good data. talquetamab and teclistamab got prime designations and several other programs in the clinic now, very strong financials in which we released in August. So summing it up, Matthew, we are in excellent shape, we have a fantastic team in place, we're building the U.S. and Japanese commercial teams, getting ready for T-cell and also for epcoritamab. And we have a strongly expanding clinical pipeline, a key focus on a number of bispecific programs as well as HexaBody programs and a robust financial position. So we are on track I believe, to become an integrated end-to-end biotech innovation powerhouse. Having said that, Matthew, I think it's actually good to get to some questions from your investors.

Good. Good. No, perfect. Maybe we could start with tiso. Obviously, you mentioned tiso fifth product. Just give us the outlook there. Assuming you get approved, how you think about that commercially? And what sort of contribution you think you can get from that given that it's partnered with Seagen.

It's a 50-50, so we will split worldwide income, 50-50% The original market is, of course, a smaller market. We know that the second- and third-line cervical cancer market, but we will also come very soon at ASCO with frontline data together with carboplatin. The abstract title, I think, is out. Very soon, you will see the data. And second line, very good data, I can pay with pembro. So we think we can broaden the market further from the original smaller indication that will leave the projections up to you for that second-, third-line cervical market. And we believe that also this year, we will get some -- to see some of the data in other cancers, to see whether we can potentially broaden the market beyond second- and third-line cervical cancer. We are ready to launch, I can tell you. So both Seagen and Genmab are ready within weeks basically after we get the label to actually move the product to U.S. patients, and we're very excited about that. I think it's a very good antibody drug conjugate, and we need to work on broadening the market from the original smaller indication which we'll get.

And maybe can you talk a little bit about the basket study, the kinds of tumors that you've enrolled there, where you're sort of most focused or must think you could demonstrate some effect.

I think there's a number of tumors where we actually can demonstrate effects. So we want to actually only move towards the market, Matthew, with differentiated antibody therapeutics that are the only ones which makes sense to us. So I think we have to probably await the data, but we are encouraged by that data. And I think so is Seagen, but I think a bit too early to conclude which tumor we will actually select, but there will be tumors for sure outside of cervical, where we will develop the product further, and we will also broaden the lines of treatment in cervical as well as in other cancers. So I think it will be a bit more slowly than some other products, Matthew, because it takes time I think to do these trials and so be it. For example, when you compare it with epcoritamab, I think that will be much more a blast, like a large-scale development together with AbbVie where we can actually penetrate different lines of treatments, much more quickly, we believe, than in the solid cancers. But I think it's important to comment new approaches also for solid tumors because that is where actually the most challenges are right now in treating patients optimally. And we really want to make a difference to patients' lives. So we really are very motivated to do our best to actually broadly develop these products for different markets.

Okay. And then I guess just one more question. I mean, is there a set threshold that you need to be out of that basket study for different tumor types? Or is it more about the sort of totality of the data and you'll pick based on that, which ones you're going to move ahead with?

Yes, it's totality of the data. I think it's a bit too early, I think, to comment with thresholds. And clearly, we are looking at that, Matthew. But it's a component of the response rates and the duration is always combined. It's not only the response rate. So don't focus too much on percentages, but I can tell you that we are encouraged. I think we've got a good feeling of combination therapy at ESMO on the mini oral presentation already of how well the antibody drug conjugate actually synergizes with some other approaches. And I think since 90% of the cancer patients, as we both know, is going to be treated in combination therapy anyhow. I think yes, it is important to see that monotherapy is doing, Matthew, in some of these tumors. But I think in most of them, you will in the end use mostly the medicine in combination with other regimens. So I take a look at the totality. I think that's probably the better way of doing it.

Okay. All right. Perfect. Maybe we should switch to SITC. Obviously, that's upcoming catalysts. I think people are very focused on both programs you have there. So maybe start with PD-1-4-1BB combination. And maybe the best place to start is just talk people through what we should expect to see in terms of the kind of data you're going to present there?

Yes. We have multiple cohorts -- expansion cohorts ongoing and we are testing different combinations as we speak. I think only -- I think the [ Taxotere ] combination is now on the ct.gov, but there's going to be multiple combinations. We very much believe in the potential of this product. And you will see from one of the expansion cohorts biomarker data, coupled to response data. And then next year, there will be multiple cohorts, I think, where we will present data of. And this is for the same reason, Matthew, I mean it's not only response rate. It's also the duration, I think, which you need to get a feeling for. And I think we know are getting more and more used to this candidate therapeutic. We know better and better how to use it. And I think also this therapeutic will actually be used mostly in combination with other regimens, I think, in the future. And the same holds for actually CD40x4-1BB which we are super excited about from that molecule. You will get the dose escalation data in multiple tumors. I've already said publicly that there's an active molecule for sure, in the clinic, so we are super excited. Also, there, Matthew, you will see us launching expansion arm, after expansion arm, after expansion arm in the coming time. So I would say next year, you'll probably get the bulk of the data also for that program, but this is a program which gets more and more focused also in the company, as our several other programs. I think at the end of this year, you probably get also a feeling for some other programs, but be it that will probably be brief updates and a more robust data next year because actually, Genmab is now of a size, I think, another robustness that we really want to give you data sets where you can actually digest the data in a much better way we used to do some years ago with bit sporadic data on small groups of patients. I don't think that doesn't really help you, I think, in evaluating what the potential is basically and the parts for drugs. I think we'll probably -- we have come increasingly with more robust data sets, I think once the data are ready. And sometimes you have to wait a bit on that because you need also duration not only response rate. And I think that's -- yes, I think in a broader perspective, Matthew, that is probably the right thing to do, we feel at this time.

Okay. Can you talk about the biomarker strategy and just how people should think about that in terms of how you're choosing biomarkers and what we should expect to sort of learn from the data about the subsets that you might be thinking about?

Yes, yes. We will definitely, at SITC, comment in more details, but we have a fantastic translational research group. We build it up on Kate Sasser's direction and based on Princeton team -- and we're actually doing a lot of biomarker work on all of our programs essentially, Matthew. But definitely for the immuno-oncology checkpoint-targeted molecules, that makes a lot of sense. And yes, the answer is, we have combinations of different biomarkers, which actually do protect which patients are going to be optimally responsible to this type of intervention because these are truly novel next-generation checkpoint targeted bispecifics with different kinetics, Matthew, than earlier generations. I mean there are many times these bispecifics, as you and I know, a bell-shaped curve. So you need to dose them really carefully. And sometimes, you can really do some very, very important work by switching doses during the treatment, basically, you can actually activate and accentuate different parts of the pathway. So -- but I think without giving any further color on the data, I think this will be quite exciting. But it also tells us that we're getting better and better together with biotech and understanding how these molecules work. And we are convinced, Matthew, that some of them, if not several, will actually make a big impact, I think, in cancer treatment in the coming years. So we are super excited about the pipeline and the quality of the pipeline. We've never had this type of pipeline in a whole -- what is it? 22-year past, I think we are really stepping up now to another level. And I think the excitement is super high also at our partner, BioNTech. I mean they are, of course, now world famous because of the COVID vaccine and thank heavens that they have generated that for all of us, I think, to help us out of this pandemic. But I think the real focus for [indiscernible] and team is on cancer on trying to really move the cancer field further, where we originally started also together with BioNTech. And I think that the coming years are going to be super exciting. So we are very, very eager to, yes -- I think, push out the program for several of these molecules. And I can tell you too, now we are speaking about the BioNTech collaboration, we are broad on that. We got multiple more programs into the clinic, which are probably all going to be 50-50 with BioNTech because we have a very wide preclinical activity between the companies and the only know now of too. programs with both an early stage clinical development, but I think that will broaden quite a bit over the coming time. So we are very excited about the near-time future.

Okay. Great. And then, I guess, second thing, just -- and then we can probably move on to a little bit more detail on some of the other programs. But people hear biomarker. And I think that makes them worried about the size of the commercial opportunity or scaling back. So maybe just tell us your confidence on what that means in terms of -- or what it doesn't mean in terms of the commercial opportunity and how you think about the outlook for the program?

I mean some of the tumors, Matthew, we are looking at that as -- can take, I mean, it's markers. And yes, biomarkers always mean that they you come -- with the subset of the marker, for sure, by definition. But when you can actually predict accurately which patients are going to respond. I think it's the right thing to do. And I learned in my time in drug development that a really good drug creates on market, actually. I mean, honestly, yes, I think we have to probably get used to, probably many of these cancer therapeutic approaches, Matthew, going from more and more targeted markets. And so be it. I think that when you know for the patients and for the health care system that you have a much higher chance to make a meaningful impact on patients' lives. I think it makes complete sense. So yes, by definition, you are targeting subsets of markets, but when these markets are big, and when the drug is working really much, much better than what has been shown before, you will create your own markets. Remember that I was an adviser to IDEC, not many years ago, that took us -- there were some very clever half of the professors I can tell you, who said, why are you developing a CD20 antibody for non-Hodgkin lymphoma, it's a small market, a $150 million market. And you and I know the answer, Matthew. In the end it became an $8 billion product for growth for many, many years. Why? Because Rituxan was creating its own market basically and revolutionized the treatment of non-Hodgkin lymphoma. And my dream is that with the team and together with people like [indiscernible] and his team, we can actually substantially revolutionize the treatment of some of these solid tumors because that is really, really needed, I think, to really, yes, give a better future to these patients. And there is really new drug approach is needed. And I don't care whether we have to select a subset as long as I can treat them much better and hopefully keep these patients in very good condition for a much longer period of time. I think we'll do something really good and then the business, Matthew, will follow, I'm sure.

Okay. Okay. Cool. Great. Good. Epco, you obviously talked about that and having a very broad development program and fairly quick development program. Maybe just comment, I think we're going to get some CLL data towards the end of this year. I think we haven't seen that before. Just help investors think about expectations for that data and then maybe comment a little bit more broadly on how those pivotal trials are going with AbbVie?

Yes, it's a good question. And of course, a key one because epco was about 80% of our questions now we're [indiscernible] This time. So CLL data, this will be dose escalation data from a limited number of patients, but there will be very clear data. And the abstract, I think, we submitted that to a hematology conference. And that will give you a pretty good feeling, Matthew, for what the potential is. In CLL, we're obviously going to do combination studies also in CLL and other B-cell cancers. And I think it will give you a good feeling for what the potential is of epcoritamab. We will also get data combination data in diffuse large B-cell lymphoma and follicular lymphoma on one of our studies which we submitted to a conference for the second half. So I think it will become clearer and clearer what the real potential is of epcoritamab, I think, also to the market. But there will be data in overseeable cohorts of patients. And what you want to see is, of course, more patients, and they will come. This will be actually a prelude to larger studies, many times Phase III studies basically that we have already planned together with AbbVie. What I can tell you is that we hope to actually start the initiation of clinical sites for the second Phase III, which will be part of multiple Phase IIIs are coming in the first quarter of next year. So we have ongoing discussions with the regulators on many of these trials, many of these data sets, they have now finished finalization, the programming of these trials, but it needs some time to really get into traction basically. And yes, we are staying on course, I think for some of the expansion cohorts on the Phase I/II, which is part of the data from the dose escalation study today published in the Lancet, which I quoted in my intro remarks. On the expansion cohorts that same Phase I/II study, we believe that there is a good potential to file next year basically in one of the cohorts, if not more, of the cohorts depending on how much of the data we will get how quickly the recruitment go. So yes, the epco program will continuously expand. We will test novel combinations, Matthew, as well as combinations you can more or less predict. And I think in time, which is where you see more data, you become -- will become more and more condensed, but there is actually a real good, yes, likelihood that this is a differentiated molecule, a really differentiated molecule from competitors. And then in CLL, as you and I know, Regeneron has -- I think a trial in CLL with their CD3/CD20. Roche has with them also. Honestly, I think you need to ask them about those trials and the initial results, but I think our data, initial data looks really, really, really good. And I think we have a, yes, potential best-in-class, I think, in our hands. And that conviction, I think is shared also with AbbVie. So we are putting a lot of energy and push behind it now. And yes, I think you get more and more traction from here.

Good. And you mentioned some of the competitors, maybe just talk a little bit about the emerging competitive landscape here. There are obviously a lot of people developing bispecifics for hematologic tumors. So just give us your updated thoughts there.

I mean there's a number of bispecifics, but it depends on the actual bispecific, what the potential is of these molecules. And I think we learned that more and more, Matthew. I mean it's the uniqueness of the individual molecule, which will actually determine how good of a drug it actually is. And I think that what you see is big differences between the different bispecifics, some of them are more toxic like the Pfizer one, you could quite easily see that targeting BCMA, than the Janssen one and multiple myeloma is a very much better toxicity profile also recently published in the Lancet. So I think it's the uniqueness of the individual molecule, this will actually determine the part for that candidate actually to move to the landscape, the landscape in the different areas. So I think it's very difficult to generalize, actually. And I've given you many examples before, like Novo Nordisk, hemophilia bispecific. They made over 30,000, literally, the data is published in blogs recently, the journal blogs recently. And only one of the over 30,000 is better than -- like 50-fold better than HEMLIBRA, which is a very good bispecific from Roche. And the other, we don't know, why they are not as good, basically. But their bind is just as good when you do the binding. And that's the same at what we actually have seen now with several of our programs now, Matthew, it depends on the individual molecule to really see what the potential is of that molecule. And I think we got better and better at Genmab in trying to sort out these molecules. And that is, I think, what we'll -- you will see over the coming, I think half year to a year is multiple DuoBody and multiple HexaBody programs coming into advanced stage of clinical development because we keep on seeing that they actually have a much better therapeutic potential than some of the competitors. And I think that we'll get very, very clear over the coming months and why. I think it's the uniqueness of having a large panel of candidates and then screening empirically, but the most potent molecules, it then have many times also a better clinical potency. But you need to, of course, always be alert to is the toxicity profile. I mean they can also be more toxic than really strong pathway. And that is, I think, going to be, I think, a bigger focus for all of you in the coming time. It's not the potency by itself, it's the whole picture, the whole therapeutic index, I think, which you can actually get to with these novel molecules. So I would say, well, you need to probably be much more differentiated in thinking about the therapeutic landscape because it is the individual characteristics of the molecule which will make it a winner for just an okay drug, basically.

Okay. Okay. Good. Maybe we've got 5 or 6 minutes left. Maybe we should talk about next-gen CD38? Obviously, I think that's starting to be a bit more of a focus for people. You're obviously just starting dose escalation there. So maybe just give people expectations on when we can learn something there and how you're thinking about what sort of data you need to generate to figure out the profile versus DARZALEX?

Yes. Very good question. I think HexaBody CD38 is preclinically like between 10- and 100-fold more potent than dara, which is like shocking because we never believed that we could make an antibody better than dara because dara is a unique antibody. We both have seen well, it actually does in the clinic in multiple myeloma and amyloidosis. But this one is so potent, it's actually more potent than any other upwards we tested in the labs, Matthew, that I think the real focus point should be safety. Is it really safe because that really can hit targets with express CD38, much more potently than daratumumab can, but much lower levels of CD38 expressed on the target cell. And then your body have quite a lot of cells, Matthew, which have CD38 on them. So what I can tell you is that we are dose escalating, we've done several of dose escalation steps in multiple myeloma. Next year, we probably move into head-to-head trials with SubQ dara because we wanted to be substantially better than dara in order to develop it in multiple myeloma. Next year, we'll probably go into the -- when we have the recommended Phase II dose, we go into a diffuse large B-cell lymphoma to potentially an oral types of cancer where dara didn't do a lot to really see what the potential is of that molecule. Janssen has an option on that opting in on that molecule because the mother antibody the HexaBody-CD38 molecule is based on was in the original panel where Janssen also picked up with us daratumumab from. And I think once they exercise the option, they will do all the development and then the economics are better for us than for dara. But I would say this year, you can probably get some kind of very short update, on the data next year, I think we'll have the whole dose escalation done. We're increasingly going to actually start giving you data sets, as I said in the beginning, when we have already determined the recommended Phase II dose so that you really get a more substantial data set and that will be in '22, for sure, for HexaBody-CD38. But we hope to give you a nice [ flag up ] I think, of what the data looks like from a more distant perspective. And the same probably for some other programs, Matthew, where you see the 32, the more robust data sets. And then this year, probably some kind of heads up, I think, on how we are doing. Right now, I would say no news is good news. but HexaBody-CD38, because you would probably have to message it to the market when we would be stopped by toxicity or something would happen like, we would have a temporary halt in a clinical study, this could be the result when we would see toxicity. That hasn't happened up to now, Matthew. So we are very excited actually about HexaBody-CD38 as a number of other HexaBody programs. And also the CD37 HexaBody program, which is a bispecific with a fee, as I can tell you, is doing really, really well at this moment. So probably also there next year, you will get some further data almost from a collated data set for CD37 and CD38.

Good, good. In the last, I don't know, 2, 3 minutes, why don't we just try and quickly go through 2 other topics that I think people ask about? Updates to the extent you have any on the arbitration with J&J, I think most people just want to know time lines of when we might be able to hear something?

Yes, I want to know the time lines also. So I can tell you the -- no, it's a full swing. I mean the case is in full -- lots of data being exchanged, lots of documents being exchanged. I think technically, Matthew, it's running optimally and it's up to the judges and the system, basically to determine when they come their verdict I think it would be good when this thing would be over sooner rather than later for all of us. I don't particularly enjoy being in this litigation with our partner J&J who are deeply respect us, a very good drug developer. I mean they did do amazing things for daratumumab. So I mean I can really not say anything negative about that. But sometimes in life, you need to keep your back straight and defend your corner. That's what we're doing right now. So I would say doing well, timing is uncertain. And I hope that it is actually over sooner rather than later. And I think there is a potential for that to happen. But it's not and I don't have any influence over that. It's a process which we basically moved into in September last year. So nothing further to say there.

Okay. Okay. Good. But that's helpful. And then you've called out a lot of stuff in -- or a handful of things in early-stage pipeline. I'm just wondering if there's maybe 1 or 2 assets in the early stage pipeline, you would just want to highlight to people that maybe we're not talking a lot about, but you think are pretty interesting?

Yes. I think we already said CD38 -- HexaBody CD38, the Duo HexaBody-CD37 is, I think, really, really interesting. And then some of the earlier stage programs, we are doing dose escalations from, also there, I think we really see some very interesting signs of biological activity. So Genmab, I think, with having 39 INDs filed alone or with our partners in the last 22 years. And then 24 of these programs, Matthew, are in full swing clinical development, 4 for the 20 -- 4 are on the market already, a fifth one will be on the market pretty soon. We hope that this [indiscernible]. That's an amazing hit rate. I mean, it's an over 60% hit rate. No other company can say that basically. I think that the market can become more and more confident that we are having a real good feeling for each molecules to develop and how to select the high potentials, basically preclinically. So I think with the pipeline getting broader and broader, what we will do is trying to select 1 or 2 more clear menus and then maximize the potential. We have close to $3 billion on the bank, no debt, basically. So we can accelerate them quite strongly. And that is, I think, the task of the team in the coming years. But I think the -- yes, the prospects have never looked better, I think. And then there's multiple candidates. I cannot guarantee you which ones will be the next 2 winners, Matthew, but I can actually with very high certainty say, well, there's a good likelihood that there will be several potential winners. The winners are -- the drugs which are substantially better than the gold standard in certain areas because that is what we aim for, Matthew, to really make a substantial difference to the treatment of cancer because that is, I think, the goal of all of us to really turn life of cancer patients into a better life basically by these new medicines. And I think it has never looked better than it does right now.

Good. Well, Jan, thanks for being here. We very much appreciate your time and your insights.

You're very welcome, and thanks for giving us the floor and looking forward to meet in person soon, I hope.

Indeed, I hope too.

All right. Take care, Matthew.