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

All right. Perfect. I think we are ready to go. Good morning, everybody. Thanks for joining us for the next session. I'm Matthew Harrison, one of the biotech analysts here at Morgan Stanley. Very pleased to have Genmab with us this morning. Briefly before we get started, I 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. So with that, I'm pleased to have Jan van de Winkel, the CEO of Genmab; and Anthony Pagano, who is the CFO. Jan, I thought maybe a good place to start would be to talk about epco and maybe just update people on where we are in terms of filing and path to market there.

Thanks for having us here today. We are delighted to be at your meeting. It's wonderful to see living people again after all the video meetings we all had over the last 2 years or so. So epcoritamab been incredibly busy, I can say -- and get the program gets more and more traction. We are basically ready to file in the U.S. as well as in Europe. And that will happen in the coming months, if not sooner. So we are really on track. We are working day and night to really get the filings done, also further building the program. We are actually going to introduce a lot of Phase II and Phase II trials -- new Phase II and Phase III trials in the coming time. Yes, we are doing more dose titrations in the context of the FDA Optimus program. We have submitted a lot of abstracts, over 20 abstracts on our own proprietary pipeline programs to ASH. So -- and that is not counting all the dara, teclistamab, talquetamab and other abstracts from partners. So we have a very, I think, robust presence at ASH. We actually become more and more pleased with what we see with epcoritamab in combination. As you know, many of the antibodies will be used in combination in the end anyhow in a different setting. So this is really a key. So I think epcoritamab is getting more and more traction. We're also getting ready commercially with gearing up and scaling up our commercial organization in the United States. Genmab is going to lead the commercialization in the U.S., as you know, we are going to book the sales, and we're going to do a lot of the technical aspects of the commercialization. So we are really, really pleased in building that up at a very rapid pace. That is going very well. We are all getting ready to basically launch the drug next year in the United States and hopefully also in Europe and perhaps even in other territories already. So I think epco is in very, very good momentum right now.

Can you talk a little bit about the competitive environment and how you think about that versus sort of maybe when you had the original molecule and your thesis about how the competitive environment may play out? I think around the same time you launch you'll probably have Roche, who may have Regeneron, there may be some others. So maybe just talk about your thoughts on that.

Yes, absolutely. So there will definitely be -- it will be a very intensely competitive market. And that's absolutely clear, and that is also what most of the analysts catch quite well. I think Roche is the key competitor because they, of course, they factor already or it dominates the B-cell cancer area since the 1997, basically with Rituxan, of course, from that era on. And today, they understand the market really well. They have 2 CD3/CD20 bispecifics. One of them glofi is, I think, having very similar data to epcoritamab. It's always difficult based on low patient numbers to actually say which one of the two is better. We seem to be numerically better. And we have the advantage of being subcu. This is a big advantage, even Roche admits that now because they're also developing subcu formulations at this point. But we believe that we have a competitive edge there. I think that the key data will be for both us and for Roche will be combination data because most of these bispecifics will be used most frequently in combination with other drugs, and we are going to test out novel combinations pretty soon. This has not been tested out. So I think the competitive landscape will be primarily, I think, a battle between us and Roche. And of course, Regeneron is a fantastic company with a very good track record in the antibody therapeutics space. But their molecule seems to be a bit more toxic and less active, at least from the preclinical data, I should express myself carefully here. So I think that Roche because its dominant presence in the B-cell cancer area will be the party to compete with. And we finally have now a very, very good molecule to fight for. So we are very upbeat and enthusiastic about it. But in the end, of course, we will have to see what this thing pans out. And also filing. I think we will file in a very similar time frame, if not sooner than glofi in the United States, which is quite remarkable, if you put it in perspective. I mean, we started over 3.5 years later than Roche and later than Regeneron with epcoritamab. So we really launched forward very, very actively with the program and created some very good data in a very short period of time. We were brave enough that we were the first testing it already as a subcu formulation while others in IV because we are convinced based on the preclinical testing and the preclinical animal testing that the subcu made complete sense basically for this molecule. And I think in that sense, we were pioneers, and I think it's remarkable that we hopefully, we'll manage to file in the same time frame, if not sooner than glofi in the United States. It's, I think, the key market for us start off with, and then the other markets will follow later, I think. AbbVie is very much geared up to file in Europe, also in the coming time. And then we'll hopefully also start filing in other territories very quickly for epco. But of course, the really meaningful markets will be frontline, second-line markets, and they require larger studies. So they still need to be kicked into gear, but that's why we did the deal with AbbVie in June 2020 that we have this big military machine now behind us who can really do very large trials in a very short period of time. And I think that the whole machinery is really now getting into gear and then beginning to turn more and more actively. So we are very enthusiastic about that. And we look forward with confidence to the battle in the B-cell cancer area.

Can you talk about some of the combinations you're thinking about? Are you thinking about CLL combinations? Are you thinking about DLBCL combinations?

Yes, we are thinking about a number of new combinations. I mean some of them are already in the public domain, like combination with R-CHOP in the diffuse large B-cell lymphoma area, the combination with R2 in follicular lymphoma that is already in the public domain. You can already see that we also presented some data at ASH and CLO basically together with Venclexta with obinutuzumab. So those are the ones I think I can highlight right now. We already announced that we would like to combine epcoritamab also with DuoHexaBody-CD37, one of our own bispecific programs that makes complete sense. We have very strong preclinical data, CD37, the CD20 are [indiscernible] for many of the cancers. So -- that is, I think, a combination I can speak about. There are several other combinations I would be willing to speak about that. I don't do that because of the competitive climate. We rather want to first get the approval from the authorities that we can actually move into clinical testing. And then once it's on Ct.gov, speak about it because of the, I think, intensely competitive space we are now entering with epcoritamab.

And can you talk a little bit about how to think about the initial launch trajectory? And I ask this question in this context, we've seen other new agents in late line DLBCL launch, they've penetrated fairly quickly, but at a modest level and then sort of plateaued. And I think when you ask a lot of investors, they go back and they say, well, it's an intensely competitive market. There are many different new therapies in that late-line setting, and they're each getting a little bit of share, but there's not -- it's just due to patient numbers and other factors. I mean, would you agree to that? Do you think this launch is going to look different from that? Maybe just give us some points about how you're thinking about it?

It's difficult to predict how the launch will go. What we will do is we'll launch in an entirely different way from other products and other companies, we actually use -- make use of data in a much more proactive way. We actually are using a lot of data and databases which we combine to predict where the patients are actually in a very, I think, innovative way. We are using similar technology now with TIVDAK together with Seagen. And we are very successful in actually, I mean, outperforming our own projected launch trajectory there in a very small market, second-line, third-line cervical cancer in that setting and this B-cell cancer area will be different. But I can tell you that there's a lot of enthusiasm at AbbVie about our plans to use -- more proactively used data and analytics to predict how to position epco. So I think this cannot be compared with any of the other recent market introductions. But of course, I need to also be humble and modest. I think until you do it, it's very difficult to really predict how these dynamics of the market will actually pan out at you. So I think we need to be careful there. Maybe Anthony wants to add a bit more on the initial trajectory because it will be a very narrow market initially. Let's be realistic. I mean, this refractory diffuse large B-cell lymphoma setting is very competitive and very small. The real markets of interest will come with the second line and frontline markets. It will, of course, come later because of the virtue of the trials reading out later. But maybe Anthony, you can add some further perspective there on the potential launch trajectory.

Yes. So I think you kind of hit the nail on the head. It is a more modest opportunity in terms of the patients that we have access to and depending on the label and so forth. But I think ultimately, the thing that could potentially give us a little bit more confidence would be just the strength of the data, the strength of the molecule. We think that epco has very distinct characteristics in terms of the combination of convenience, efficacy in a relatively clean safety profile. I think we'll certainly see that play out much more over the medium term as we get into broader patient populations. But initially, we want the expectations to be in the right place. This is for a pretty limited set of patients in the U.S., Europe and other markets around the world.

Okay. Great. Good. Maybe we could move on to some of your other bispecific antibodies. You've got 2 partnered with BioNTech. I guess maybe a broad question just to start out, I think there should be some data updates later this year. What should people be thinking about in terms of what we might see in those updates?

So we are really moving ahead quite nicely with both programs. They are recruiting in the different cohorts very, very actively. And we are actually optimistic that we actually -- for one or both of these programs can actually get the data this year. This will allow us to actually make a decision on the next stage. The next stage of clinical development. The enthusiasm level is very high for both at BioNTech and at Genmab. The question will be how much data can we actually share this year? And that will be a matter of, well, do you have the data available at the time that you need to submit key abstracts to medical meetings or scientific meetings. And I think that will be very limited to make a long story short because of the fact that there are only a few meetings left for solid tumors this year. I think it is possible for one of these programs that we can actually share some data. But more likely is that we actually will flag up the decision to the markets. Basically, this is what we're going to do with that program. That will likely happen this year. And let me give you some clues of why we are making the decision to move to the next stage and then flag up what the data sets will be presented next year, because of the simple fact that you need basically 3 parameters. You not only want to look at response rates, you also want to look at the quality of the response. This is immuno-oncology bispecific antibody. So they will activate the immune system. And these responses tend to get better and better and better in time. And you want to see something about duration. And I can give you as an example for the PD-L1 4-1BB program initially without pembro, I think that with Pembro, you'll see in a completely different situation. So some very good responses, but they were very short lasting in that study, and that is data which is already in the public domain. And what -- that's really that you don't want to hear, you really want to get a feeling for the depth of the responses and the duration because that is super important for the potential of the medicine. And simply because of the time factor, you need probably more time to really get to that depth of data which will allow you to really share at a medical meeting because we wanted to be meaningful and impactful. And also, just as Genmab has decided some years ago, that's why the early stage programs, we will not show you like little flares of data like we did in the daratumumab era. Remember that -- I think you and I remember that we were at some point issuing press releases for cohorts of 3 patients. Every cohort we were issuing a press release and then the [indiscernible] said, hurray, hurray! But that's not any longer. I think what we should do at a company of our stage, we will only share that data when we have to complete dose escalation so you can get more meaningful digestion of the data. And it's the same here with these 2 biotech partners for the bispecific programs. I think before we share it with the outside world in a medical forum, you really want to get all these 3 parameters in place, but you may already have seen enough with -- from the initial data to conclude that you -- that this is a winner or not, and then move it forward to the next stage. And that is more likely what you will see this year actually for one of out of the programs.

Okay. And are we looking for things like -- because I believe you have a Phase II program in checkpoint experience patients in lung cancer for the 4-1BB combination. So are you thinking we're going to see more trials like that. Is that what you're talking about in terms of moving forward?

Yes, we will actually -- we have for the 1046 we indeed have [indiscernible] trial, a Phase II trial together with or without [ tisotumab ] and pembro. And for the 1042 program, we have actually frontline studies in 4 different types of cancers, melanoma, lung cancer, pancreatic cancer and head and neck cancer. And there, we actually combined it with either pembro alone or pembro plus chemo because that makes complete sense when you think about the biology of that bispecific, which is a potentially universal potentiator of the immune system to activate the immune system, but the immune system needs to know what to fight and that is where you need to chemo for. And then we already knew from the beginning that we didn't block the PD-1, PD-L1 access, which is a dominant access in immuno-oncology. So with adding pembro to it and blocking that access effectively, I mean we were brave enough to really move to frontline basically there. And that can actually potentially unlock significant markets, I think, in some of these cancers. So 1042 will ultimately be combined with I think either chemo alone or chemo plus a PD-1 access blocker. And I think we'll get that data for sure, to be presented next year. I can tell you that the cohorts are recruiting quite quickly which is usually a pretty good sign and doctors are putting their patients into the studies, especially when you think about frontline patients. So I think that we need a bit more time, I think, to really see how the data develops because of the time factor. But we're very excited about both of these programs. And I can only sit still here. I try to sit still here in this chair, but I can hardly sit still about both of these programs.

Okay. Okay. Got you. And sorry, just to clarify for the announcement that we should expect later this year. Is this more about multiple of those Phase II programs? Or you're talking about some pivotal programs you might be thinking about?

Some arms in some of the programs for either one or both of the molecules, where we actually have taken a decision based on data, to move to the next stage. So we will probably be very explicit about this arms. And that doesn't mean that's not mature, that the other arms are no okay, it just means that they are less mature, but we actually need to see more data with all of the other arms. And that is what we'll likely flag up. There's a number of occasions where we could do that, I think, this year. And then proper sharing of the data, allowing you to probably dive into the data is for the next year.

Okay. Okay. Perfect. Maybe since we've got another 10 minutes or so, next-gen DARZALEX, probably another topic that people are focused on. obviously, you previously talked about how the head-to-head data is what's going to matter, but we obviously do have some monotherapy data. So I don't know, just what should investors be expecting that we might see there? And how are you thinking about that program right now?

Yes. It's a super important program. I mean I'm now working for over 30 years on antibodies, first in academic, than with Medarex and then with Genmab. And I can say daratumumab is still the most potent antibody I know in the cancer therapeutic area, and it's a fantastic medicine as we have all witnessed, I think, over the last 3 years. . And I thought it would be basically impossible to make a more potent version than -- targeting CD38 than daratumumab. Despite that, we managed to find a far more potent molecule preclinically in daratumumab versus HexaBody-CD38. It's between 10 and 100-fold more potent than daratumumab, depends on which function and which assay you're evaluating. And what we have been doing is we have been in steps have been dose escalating. We have done the complete dose escalation in multiple myeloma patients, but Matthew, these are very heavily beaten-up patients. Some of them have seen all the therapeutic agents you can imagine, basically, and really with no other options left. So this will be a very, very beaten-up patient population.

You're talking like post CAR-T patients...

Yes. Many of them are. So there is no -- because that's your next question. What is the comparable data set basically to this type of [indiscernible] because this is like the most heavily pre-treated, beaten-up patient population you can think of. And that is -- and then in that set, you will see the dose escalation data. We are now -- we have now the recommended Phase II dose. We are doing the expansion cohorts with either for dara-naive or CD38-naive, multiple myeloma patients with then all treated with the optimal dose basically or CD38 pre-exposed patients and all treated with the optimal dose or what you're waiting for is the head-to-head data against subcu daratumumab, which is the gold standard. In that trial, all of these cohorts are being moved into gear now. Some of them are recruiting very quickly, what I understand, because now the doctors know that you give an active molecule and to give at the optimal dose. So that data will likely come next year at different meetings, Matthew. And then we're also going to move into place the diffuse large B-cell lymphoma very quickly in that -- in one of the expansion cohorts and potentially AML, acute myeloid leukemia because of the sensational data we have preclinically with that molecule. So we're very enthusiastic and I think what Janssen wants to hear. This is probably your next question about what Janssen want to see is probably the head-to-head data because that is, of course, the most meaningful, I think, for them to make a potential opt-in decision or not. And that will not come this year, but likely next year, and the data are getting ready and getting -- become available.

Are you looking at any solid tumor cohorts, just given the potency versus DARZALEX?

Not yet, but there could be one of the most attractive areas for HexaBody-CD38. And the reason is that actually this is a very different antibody from daratumumab. And it actually is an antibody that blocks the enzymatic activity of CD38, very, very profoundly, which is a very big difference from dara. So we think the blockade of the enzymatic activity is key to activation of the immune system. And that could actually be very relevant for solid tumors because we are both aware of one study Janssen did with dara in lung cancer which failed, basically where they didn't see a difference between the dara arm or the control arm. And initially, it actually looked like there were more patients dying in the dara arm, which later on was not panned out in a further analysis. At least not a big difference, but that's also a trial that we gave very high doses of dexamethasone to lung cancer patients, which may have dampened the immune system rather than activating the immune system. And I think what -- I think not only is solid tumors is a very, very attractive area. We have decided not to do that yet because we are now doing the minimal package, which you know Janssen will need for the opt-in decision. That doesn't mean actually that we are not interested in it. We're actually quite interested in exploring that with HexaBody-CD38, but we needed to first go through the standard packets. And then another potential area for the future because one of your questions could be as well, what if Janssen doesn't opt-in basically with good data, that's what I predict. I think we haven't orchestrated this. So this is what I'm speculating because I...

You're for doing my job for me. It's really nice. I appreciate it.

All right. But anyhow one of the really attractive areas potentially is autoimmune diseases. And I say that because we actually already in 2006 generated some very good data, very good data together with [ Tom Harrison guys group and Lyden ] if you get our A models with daratumumab, showing that daratumumab could completely stop progression of RA in relevant animal models with human tissue. And I was always a bit puzzled why our partner, Janssen, has never developed it seriously in autoimmune. And one of the reasons may be Matthew, and that's speculation, pricing complications because of the fact that you need a very high dose for cancer, you need the subcu dara that is 1.8 grams per patient, which you inject in the belly. And then autoimmune, many times, you need to push balances so you can get away with much lower doses to push the balance in the inflammatory disease. And that leads you to a huge pricing complications because you price antibodies based on per milligram price. All of the antibodies are priced on a milligram -- from a milligram perspective. But when you would see a scenario that you don't develop it for cancer, but only for autoimmune, then you could actually have a potentially very, very attractive medicine there. So I think that left or right, we are very keenly focused on developing HexaBody-CD38. This year, the initial data, next year, there will be a lot more data becoming available from the different expansion cohorts, not only, I think, in multiple myeloma, but also in diffuse large B-cell lymphoma and other cancers. And while that is all ongoing, I think Janssen may or may not take this opt-in decision, and that's up to them. So we're very excited. So exciting times to come.

And maybe just -- no dara conversation would be complete without talking about arbitration, even though I thought we could have been [indiscernible]. So maybe just remind us of -- you have 2 things going on now. You have an appeal in the arbitration. And I think that's novel to certain people because I think most people didn't think there was an appeal. So just how does that play out? And then you obviously have the second arbitration that you've started?

So the appeal we didn't take. So we didn't appeal at all and neither did Janssen because both parties could actually appeal strangely enough and try to like get a reformulation of wording, et cetera, into the award. So that's done. It's final. And that's good, Matthew, because one of the key factors of the award was that we were judged to be -- we had to pay part of the Halozyme royalties with Janssen, needs to pay because of the [indiscernible] component in the subcu because of the reason that this was just to be a separate licensed product. And basically, once we saw that we were like, of course, disappointed because we lost on both counts, but then we were jumping in the sky. We said, well, okay, that means that we have another 30-year royalty term, but it's a separate product as per the contract. So Anthony did his best and he sent a bill of $105 million to Janssen. And unfortunately, they didn't pay that bill because I think they should have paid that bill according to the award. So then we basically said well, the only way to resolve this is to file for a second arbitration, and that's what we did. So right now, I think the panel has been put in place or is in place with 3 new judges who will just look at the documents, just look at the, what is it, 35-page arbitration award. And then make a decision if this indeed a separate licensed product or not. So it's a very -- I call it in the one of the conference call a simple case, much simpler case than the initial arbitration. And we hope that justice prevails and that actually we will get a clear verdict out of this second arbitration. What I don't want to do is to raise any hopes here. Please don't put it into your models. I really don't want to create another overhang, which was clearly the case with the first arbitration. Hopefully, that negative, negative award is being priced in, and people don't hope for anything at this moment. But this is one of the things, Matthew that we felt we needed to do. And we are not the type of company which is rolling over the table with all other partners. I mean we really don't like this, but we felt that this was the right thing to do here for the company and for the stakeholders. And then let's hope that this will not take 18 months, but can be resolved quicker but we'll have to see. We have to let the process run its course, I think, in the coming time.

And then you've got a few or potentially a few new assets that with royalties that are launching. J&J has a few licensed drugs that are launching. Maybe just highlight them for people and how you think about some of those opportunities?

Absolutely. So one of the -- one that I'm very excited about is TECVAYLI, which is approved in Europe in July, it's teclistamab. And on to your multiple myeloma bispecific antibodies, we got a single-digit royalty. And J&J itself says that this could become a multibillion-dollar opportunity. We have not modeled that but that's, I think, very exciting. We actually have [indiscernible], which is another bispecific that also got breakthrough therapy designation in June. It also has a prime designation with sensational data. Also that molecule J&J says could become a multibillion-dollar opportunity and could be combinable with daratumumab, could be combinable with TECVAYLI. So I think that is in the multiple myeloma space. Then we have Mim8, which is an anti-hemophilia bispecific where we also get a mid-single-digit royalty from [indiscernible] would reach the market from Novo Nordisk. This molecule is preclinically, the data has been published last year in blood, Matthew more than 50-fold more potent than HEMLIBRA. And now we're in 2 Phase IIIs, actually, with that molecule, which I think could become a future income generator for our company in addition to daratumumab. This is a very, very robust income generator. Kesimpta, it's become probably a close to blockbuster product this year with Novartis where we get a 10% royalty. [indiscernible], this is doing really, really well despite this sentiment on Q2 sales, but we still had very close to $2 billion in sales this year where we get a 6% royalty on. And then I think very excitingly, we also have an antibody with Global Blood Therapeutics, inclacumab, a P-selectin antibody that are [ not a ] mid-single-digit royalty potentially to us. And Global Blood of course, will be acquired by Pfizer. And that is also in 2 different Phase III. So the recurring revenue stream will get real momentum now for Genmab in the coming years. And on top of that, of 8 proprietary clinical problems, we added the HexaBody-CD27 program into the clinic. Recently, it's recruiting right now. And next year, we hope to add 2 or 3 more products into the clinic. So for all of you, the best is yet to come. So we're only at the beginning, I think, with Genmab and it's very exciting times.

And then maybe last minute, you talked about TIVDAK. I mean, I think I've been surprised about the trajectory of TIVDAK, how well that's launched. So just what's the outlook? And maybe more importantly, what's the outlook for some of the basket studies that you're doing there?

I mean, TIVDAK is doing indeed better, much better than we anticipated. We are also using a lot of data there to really target the right clinics and the right doctors with TIVDAK. The interaction with Seagen is going really, really well. And I can tell you that we are going to add probably 1 or 2 other cancers pretty soon. And we are firmly motivated to move to frontline cervical cancer. So in time, I think TIVDAK will become a really important drug for patients with cervical cancer and potentially other broad cancers next year. We'll probably hear from Seagen, some more data from the basket study.

Great. Thanks for being here. Really nice to see both of you in person.

Thank you for having us here. Thank you all for your attention. It was great.