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

And welcome to the next session. So it's sticking with -- we've got a European pharma afternoon, in fact, pharma biotech afternoon. So we have with Genmab and Anthony Pagano, who is the CFO. Anthony, I don't know if you wanted to make some sort of opening remarks, there's been obviously a lot going on for Genmab the last 6, 12 months, maybe just run through some key points, and then we'll get into some Q&A.

Yes. Thanks, Graham. And again, thanks for having us at the conference back here again. It's a pleasure to be here and have a chance to engage with all of our investors. As we start to get in the process of exiting 2025, I find it really useful to reflect on the progress that we've made here at Genmab during the course of the year. And I think it's really interesting to kind of tell the story through the lens of 3 of our late-stage programs, now assuming that the peto and Merus transaction closes, but to really tell that story through the lens of these 3 assets. And that's EPKINLEY, Rina-S and peto. And what you have across all 3 assets is each of them have at least 1 FDA breakthrough therapy designation. During the course of 2025, each of them have had really significant clinical data that has only served to increase our conviction in the programs, and you look forward to 2026, each of them also have meaningful registrational data that could set up some very important potential launches in 2027. So if you step back, you really have is a very strong set of late-stage programs between EPKINLEY, Rina-S and peto and not forget about acasunlimab as well. And you look forward to '26, again, a number of important readouts and then potential launches in 2027. And this is underpinned by continued very strong financial performance. Through the first 9 months of this year, total revenue growth has been 21% and recurring revenue growth of 26%. And what you've seen as well is continued focus on running the business in a very financially disciplined way. As you can see a lot of that revenue growth really coming through to the bottom line. So as we kind of really now sort of step back for a minute and think about Genmab, really, you have is a very strong existing oncology business that we're building with a set of very nice growth prospects here moving forward, and we'll continue to run this business in a very operationally and financially disciplined manner and really zooming out, thinking about continuing to sort of translate this antibody science, knowledge expertise into meaningful breakthrough therapies for patients and ultimately delivering value for patients and shareholders. So that's some opening remarks to set the context, Graham and now maybe let's get into some questions.

Yes. Great. Maybe sort of a question on strategy, sort of bigger picture of obviously Genmab inception, it was really a technology company, then came an out-licensing company, and now you're a company that has own assets that are growing. So perhaps you can just talk to over the midterm, what the strategy is to continue with that growth of your own products being marketed.

Yes. So for a number of years, I mean, really want to go back in time, it's really to 2013, we were very clear that new products going into the clinic that originated from Genmab but the absolute base case was for us to own those assets at least 50%, and it's really start to forward integrate around those products. that strategy really started to come to life as we got into that 2019, 2020 time frame when we started seeing some encouraging mid-stage clinical data for both at EPKINLEY and Tivdak. So at that point, we really started building out the development, late-stage development and commercialization capabilities particularly in the United States and Japan to really be very good owners of those programs. But as importantly, to set the stage for where we are today to really now see the expansion of EPKINLEY, and really now looking forward see execution and expansion both around Rina-S and Peto moving forward. So overall, this has been a very sort of thoughtful, well thought out, stepwise plan to get us where we are today, which is having a very strong platform and foundation to allow us, as we have these readouts that I explained across the 3 programs to really harvest that clinical data, take it to regulators and then being very well positioned to market the program. So we're very excited about what's been built up here over the last number of years, but very -- even more excited about the next couple of years, particularly 2026 with a number of very important clinical readouts.

Got it. Okay. And obviously, part of that strategy now has got M&A in there as well with the Merus acquisition. So perhaps you can just talk through the deal rationale for Merus or you think it brings to plate and why go external?

Yes. So it goes back to this capability build. So these are not just generic capabilities and expertise we've been building. Our focus, as everyone knows, at Genmab has antibodies in oncology. We have a very nice platform, and we're looking for opportunities to further leverage that platform and of course, we look for internal growth opportunities. But of course, our job is also to survey the landscape and look for external opportunities and ultimately, we landed on the Merus potential acquisition of Merus. Here again, going to this concept of natural ownership in the first order, how can you be a very good evaluator of Merus or particularly in peto. Again, it starts with antibodies in oncology, then deep understanding of a bispecific, an EGFR bispecific and then the therapeutic area being head and neck cancer. These are all areas where we've invested quite a bit over the last couple of decades in areas we know very, very well. So ultimately, we're in a position to evaluate this opportunity and then really think about post deal close, how can we add substantial value. And here, as we all know, peto has 2 ongoing Phase III trials, 1 or both of them will likely read out in 2026. We said, how can we add on to this? And what we said here is that we plan to start another Phase III trial in locally advanced head and neck cancer already in 2026. And I think it's a natural evolution of the Genmab business, thinking about how we can further fuel the overall growth profile of the business. Again, very excited about the prospects of peto. We can maybe dive a bit deeper into the product profile in a minute Graham. But overall, it makes sense with that overall, again, forward integration of our business and really setting us up on a very nice growth trajectory here as we exit this decade and get into the early part of the next decade.

Okay. As you highlight, you've got 2 Phase IIIs running, 1 potentially reading out next year. The -- I guess what is it in the data perhaps discuss the earlier data on peto to sort of explain what gives you the confidence that this is going to be a successful asset in Phase III?

Yes. So again, we start off with building off what you just said. We have super high conviction in the program. A couple of things that really stand out for me is, of course, the external validation via the each of these indications, both in second line, third line, but also in frontline, having breakthrough therapy designation from the FDA. If you actually kind of dig into the data, particularly in front line in the data set we're looking at, you can see when you add peto to pembro or Keytruda, you get to a response rate of north of 60%. So 60 out of. Every 100 patients are potentially going to benefit from this combination therapy. And what's important to think about that is what does pembro do or Keytruda do by itself, which is around 19% or 20%. So you have a tripling of the potential benefit. And you see, as you look at duration of response or PFS and the overall survival preliminarily, of course, you see, again, a pretty significant amount of headroom between the combo of peto and Keytruda versus Keytruda alone. So that headroom, that powerful efficacy gives us a lot of confidence here moving forward. And it's this profile as well that gave us the confidence to already commit to starting a Phase III in locally advanced head and neck cancer.

Got it. Okay. Perhaps you can talk through how it compares to the competition. So in particular, J&J's RYBREVANT?

Of course, I think all of us would acknowledge in biopharma, generally speaking, competition is a reality. There's not a lot of white space or very little white space really at all. So competition is a reality -- then the question is, if that's a given, how are you going to operate within that reality? You want to have high conviction programs like peto, like Rina-S like EPKINLEY that really have super strong target product profiles that could lead to a best-in-class profile as a starting point. We think peto ticks those boxes versus existing competition as well as potential future competition. So first is best-in-class, then you have first-in-class. We think we have a real shot here to be first-in-class relative to competition. And then you can't take your foot off the gas pedal, it's about how can you be potentially broadest in class. And here, I go back to what I've said now maybe for the third time, is we already have very clear plans to expand beyond the existing 2 Phase IIIs, and we're going to start that first Phase III in locally advanced head and neck cancer. And this is maybe a point around the data that we're seeing, you don't only see the strong efficacy and combo that I alluded to in terms of the response rate, but what we're also highly encouraged by is what seems to be a rapid response. We're seeing a fair number of responses already show up in that first scan. So it's really the combination of having a very competitive product profile in terms of best-in-class, be first-in-class where you can and then go as broad as you can. And we feel very comfortable that we have the theme in place both from a development perspective, but also a commercialization perspective that we can compete. And I think we've demonstrated that with what we've been able to do with EPKINLEY. EPKINLEY is also obviously operating in a hypercompetitive environment. And I'd say the battle is not over yet, but we're more than holding our own as we sit here today.

Got it. And then with peto, there was some earlier data in colorectal cancer results when you talk about broadening. Is that an indication that type on the list of places to expand.

So as we think about peto, where the most amount of data very clearly is in head and neck cancer. There's 2 ongoing Phase IIIs. We're going to start another Phase III. That's what we publicly kind of -- is out there and we've committed to. So as you think about the rationale and the logic for the deal, it was really primarily around head and neck cancer. But of course, with any drug, when you see activity and a very strong activity, to be clear, and a particular tumor type, you're always going to look for expansion opportunities right now where we've seen some data, it's early and encouraging is in colorectal cancer. I think for now, that's what we're going to say on the topic. That's the data that's out there. And we're ready to sort of talk about more broadly about peto, we'll kind of save that for a later day. But what I would say again is that we're encouraged by the data, it's early and more to come.

Okay. So perhaps you can just help us with just the cadence that you're expecting the data readouts for what's in development at the moment or any other way points we should look to, to give the market the confidence in the multibillion peak sales that you've communicated that you think that this can be.

So for peto, where we're at right now, again, just to summarize for everyone, there's the 2 ongoing Phase IIIs. We expect 1 or both of those to read out next year. And that's where we would kind of anchor everybody for now is 1 or both of those readout next year. And again, that's what's important, and obviously, the development side of things is important, -- of course, to see that clinical data. The next step is a potential launch. There, we've said that we expect the first commercial launch to be in 2027. We've also, based upon the product profile, I think it could be a very nice launch curve. And here, we've indicated we expect peto to exceed $1 billion of sales by 2029. So we're pretty confident in what we're seeing so far.

Okay, good. Any other questions on Merus in the room? Okay. So I might shift gears to EPKINLEY. the CD20/CD3 bispecific T cell engager. You've got, I guess, a broad indication strategy for that product as well. So maybe just talk through initially how you think about positioning across follicular lymphoma DLBCL across first and second line, just the broader strategy for the asset before we dive into any data.

So to remind everyone, at present broadly speaking, EPKINLEY is approved in third line plus DLBCL and third line plus follicular lymphoma. It was originally in the market, the first approval in May of 2023, and we've kind of added it on the FL indication in different countries and so forth and so on over the last number of years. As a starting point, we're very pleased with the launch to date. Again, we are launching into a competitive environment with entrenched competition and at EPKINLEY has performed very well. Again, that's underwritten by very compelling product profile, and in some cases, us being first to market in particular markets like, for example, in Japan, overall, the existing base business, if you like, of third line plus FL and DLBCL is a really nice business and very strong data. We all know that ultimately, if EPKINLEY is going to hit its $3 billion peak year sales target, which we put out there and really have a lot of confidence in, it's going to be around getting into earlier lines of therapy. And that's where we had the ongoing 5 Phase IIIs to really take it from a later line product to an earlier line product. And here, we had the first positive Phase III among those 5 read out earlier this year. This is the second line follicular lymphoma in combination with rituximab and Revlimid right out earlier this year, filed and was approved just a couple of weeks ago. So this will be the first of the 5 Phase IIIs to read out. And then next year, we look forward to 2 additional Phase III readouts, second-line DLBCL monotherapy as well as importantly, the frontline diffuse large DLBCL readout. This will be at EPKINLEY plus R-CHOP, and this represents a meaningful part of that $3 billion peak year sales forecast.

Got it. Okay. As you're launching in the second line follicular lymphoma to a recent approval there, just help us understand uptake, a sort of change in trajectory versus the existing indication as you sort of exit this year and go into '26.

Yes. So look, it's too early to get into launch dynamics. It's literally been less than 2 weeks. But I think what's important to maybe sort of think about as we think about the data, a couple of things. The data in the second line follicular lymphoma, we presented at ASH next week, just unbelievably strong data really show the combination power of adding EPKINLEY to existing standard of care. This remarkable efficacy. Now what's going to be important for this -- everyone to understand is the total addressable market in this indication. It's around 9,000 patients across the 3 major markets the U.S., Europe and Japan. And that 9,000 is out of that total addressable market for EPKINLEY around 146,000. So it's important for the brand, I think, qualitatively in that it shows how -- what EPKINLEY can do in combination. It's something now for us to be out there in the marketplace promoting now in the United States to show that power of that combination therapy, financially, it's not going to be a hockey stick for us, certainly not in 2025 nor in 2026 really, as we think about the growth profile of EPKINLEY, it's going to be the accumulation of the broadening more generally, getting into earlier lines but most notably, that frontline diffuse large B-cell lymphoma readout, that represents around almost half around 70,000 out of the 146,000 of the total addressable market. So we're -- the data are super. I encourage everybody to listen into the post ASH conference call, we'll be hosting very compelling data. But financially, it's just not going to be the major driver towards the peak year sales target.

So first-line DLBCL readout still expected 2026 for that and perhaps any more specifics you can add to that?

No. So here, our guidance remains unchanged. It's 2026. We have 2 Phase III trials we expect to read out in 2026. It's the second-line DLBCL EPCO monotherapy and then the frontline DLBCL, EPCO plus R-CHOP. Again, here, there will be some additional data for the -- for you all to sort of consider. We've done a fair amount of Phase II work of looking at EPKINLEY in lots of different settings, lots of different combinations. And among those is the EPKINLEY plus R-CHOP in frontline DLBCL, some Phase II data, and some of that will be profiled at ASH next week.

And you said first-line DLBCL, about half of the total opportunity. Then you're also running the, as you said, pointed out the second line study. So maybe just talk through the strategy of why run second line as well as first line or patients eventually not once they're treated, then would there be an opportunity in second line. So over the long term, do you -- how big do you see the opportunity for the second line trials?

So maybe sort of like level up and zoom out I don't think there are any products that have 100% share in frontline. So even if you assume very high shares, market share calls in frontline. Not every customer is going to -- or every patient, excuse me, is going to get your drug or even the class. So even the class share CD3/C20 bispecific is never going to be 100% in front line. That's just the reality of the marketplace. So there's always going to be space for your product to be used in a later line. We think it's important for as people are -- there's also a timing element here as people transition from front line to second line or to third line vis-a-vis when these products are approved. So it is important to really cover all of your bases as it relates to different lines and also in either Phase IIs or Phase IIIs, different combination therapy. So that's what -- that was the initial kind of concept as we thought about the CDP is essentially covering first line, second line, third line DLBCL and in the same front line, second line, third line follicular lymphoma, and that's exactly what we're doing.

Got it. Perhaps just talk to what differentiation you see versus the Roche bispecific, Columvi Lunsumio and what do you need to see out of that first-line DLBCL readout to feel that you've got a competitive asset there?

So first of all, we're absolutely mindful of the competition. I kind of said that earlier on. There's going to be competition out there. It goes back to that framework of best-in-class, first-in-class and then broadest. And we think we're competing effectively, depending on a particular indication and setting very effectively vis-a-vis the competition. If we look at the product profile for EPKINLEY, we think about a single option across both DLBCL and FL that distinguishes us from the competition today a,s we know they have 2 different options depending on the setting. So it's 1 product option regardless of disease. Secondly, we have the subcutaneous delivery, which we think is additive in terms of the overall customer experience, both from the physician as well as the patient. We think this is also a distinguishing characteristic. And we think overall, if you think about EPKINLEY, we think relative to the 2 different products that are out there from the competition, we look at the efficacy, very strong efficacy we see as well as a very manageable safety profile. We think that stacks up very nicely relative to the competition. There will be some areas where the competition will be ahead of us. We have to acknowledge that and compete effectively. There'll be other areas like second-line follicular lymphoma, where very clearly, it looks like we are ahead, and we'll look to continue to look for opportunities to do that. And then perhaps depending on timing of various trial readouts we could have the potential to be ahead in frontline DLBCL as well. I think that kind of brings back to your other question was around that product profile in frontline DLBCL. The existing standard of care is R-CHOP. We're adding on to R-CHOP. Of course, we have to see our Phase III data, but we've seen so far in the Phase II data is highly compelling. We think it's going to be additive to the existing standard of care R-CHOP, and we think it's going to be competitive to other things that are out there in the marketplace.

Okay. Just from a practical standpoint, as you go earlier lines, you're going to be -- the patients that are going to be increasingly treated in the community setting, just perhaps talk through your commercial capabilities in community versus in academic centers?

So yes, increasingly, ultimately, in any product scenario, you want to meet the customer where they are, in this case, the patient. And we know that in the earlier lines, particularly in DLBCL and follicular lymphoma, they are treated in the community. So what have we been doing here to effectuate that. So get us closer to the customer. So we have been really being thoughtful about the overall commercialization build. Now, we go back to the overall mindset of how we resource EPKINLEY from day 1. Remind everybody, this product was approved in May of 2023 in third-line DLBCL. As we thought about the go-to-market plan, particularly where Genmab is sort of the lead commercialization party in the United States and Japan, as we thought about that, we were not resourcing at EPKINLEY for a late-line therapy. We are resourcing it that it was going to be competitive or is competitive, and ultimately, this could be a multibillion-dollar blockbuster or $3 billion-plus product, and we've resourced it accordingly. So really, the resource is there. It's in place. Of course, you always revisit your brand plans on an annual basis, but there's a very significant investment behind the brand already that we think positions us well together with AbbVie to get into the earlier lines, particularly also to increase the reach out into the community setting. So of course, it's something that's top of mind. But as we sit here today, we feel confident in our ability together with AbbVie in the U.S., in particular, to hit those key accounts in the community.

And I might move on to Rina-S, and the folate receptor ADC. I think you guided $2 billion peak on that one. And you're in Phase III for platinum-resistant ovarian cancer and endometrial cancer, I think you started Phase III or are starting Phase III. So perhaps just talk through the development plans and commercial opportunity across the different indications to start off with.

So to ground everybody, maybe where were we in H1 of 2024, where are we today? So H1 of 2024, there's roughly 50 patients worth of clinical data. As we exit 2025, we're going to have 2 ongoing registrational -- potentially registrational Phase IIs and 3 Phase IIIs. So there's been a material expansion and acceleration of the program. As we think about 2026, we expect to have the first potentially registrational Phase II data in platinum-resistant ovarian cancer. So let's maybe sort of think about that platinum-resistant ovarian cancer opportunity for a moment. Here, what we've seen is, again, highly compelling data so far, both from a safety and efficacy perspective. And the safety is a key part here because safety is driving the efficacy. So let's unpack that efficacy just a little bit. What we've seen so far in the emerging, let's call it, Phase I/II data that we published is a response rate of around 50%. And that response rate is across all levels of folate receptor alpha expression, whereas the existing approved therapy is only looking at the high expressers, which is around 30% or 33% of the patient population. So we're seeing a highly compelling response rate regardless of expression level, so we can treat in theory many, many more patients. I highlighted safety. Safety is a key part of this because what we think is and what we're seeing is that people are -- patients are staying on the therapy for much longer, which is then ultimately driving the duration of response the most publicly reported data at a medical conference is, we still have not reached the median duration of response at 11 months and that's still ongoing. So we think we're going to have a very compelling efficacy profile in terms of number of patients we're able to help as well as for how long we're able to help them. So we'll see hopefully now the registrational Phase II data in 2026. And then ultimately, first potential launch in 2027, and that's obviously an important part for the brand and is going to be a first important stepping stone to hitting that $2 billion peak year sales potential. So in addition to that Phase II trial in PROC, we also have an ongoing Phase III trial in that same indication. Sticking within ovarian cancer, we've also initiated a trial in platinum-sensitive ovarian cancer. So we feel very comfortable and confident with what we're doing in ovarian cancer today, probably with more to come here. Now in terms of endometrial cancer, we're seeing a consistent theme of very strong efficacy and duration with a nice safety profile. For those of you that don't know, endometrial cancer is a cancer where the folate receptor alpha expression levels are generally lower. So here, what we -- that's why we're very encouraged about the activity we're seeing, again, regardless of expression level, we're seeing again around a 50% response rate with very nice durability and on the endometrial cancer side in terms of the CDP, we also have an ongoing potentially registrational Phase II and then a corresponding Phase III trial. So overall, what you've seen here, Graham, is really since the beginning of 2024, a material expansion and acceleration of the program with more to come, I think, in terms of the clinical development, I wouldn't be surprised at all if we start some more Phase IIIs in the gynecological oncology space as we move forward.

Got it. And -- so the 2 of the folate receptors, are in similar stage of development for Lilly and Astra. Perhaps compare and contrast the data, I think the Phase 1 data that Lilly put out in the summer, had numerically very similar sort of overall response rate. So are there any other differentiating point in features you'd point out between Rina-S and those 2 assets?

Look, it goes back to the same framework that I highlighted around best, first, broadest and there's going to be competition. So we want to look to be best. I think right now, if you look at the totality of the data, we're certainly in that conversation, we think that we have the best profile. And certainly, if you look at the totality of the data, we have the most data in terms of the next-generation ADC folate receptor alpha products. Unquestionably, we have the most amount of data. And right now, we have the most advanced clinical development program and as I indicated, we're going to add on to that moving forward. Competition is a reality. Our job is to leverage the capabilities in place. As I highlighted those earlier, both from a development and a commercialization perspective. Again, here, one thing I would probably highlight for everyone is focus, right? We have 4 late-stage programs. These programs at Genmab, EPKINLEY, Rina-S, now peto as well as acasunlimab are getting the absolute focus, attention and resources of the organization. And I think on the margin, this does make an important difference as we think about competing more effectively. But overall, whether it be EPKINLEY, Rina-S, peto, we really like our products and are very happy owners of those products.

I think you started the Phase II or planning state sort of Phase II non-small cell lung cancer trials. So I'll just talk quickly through the rationale and how you think that fits into the paradigm there.

Yes. I think this comes back to just investing generally, we see a product that is working, talking here about Rina-S, very, very well based upon the emerging clinical data in both platinum-resistant ovarian cancer as well as in endometrial cancer. We have very clear line of sight to expand that even further in the GYN space. So we see very clear activity and a nice safety profile. Then the next question is, okay, where else can I take this product?" And the team did a lot of work. And I think Tahi did a wonderful job of outlining the different areas we could go into. And we decided the first area or the next area we would go into would be non-small cell lung cancer. We think there's a clear rationale here in terms of doing a signal-seeking study. So let's not get ahead of ourselves. It's a signal-seeking study. This is an investment, I think you should be asking the opposite question, Graham, is if we're not making this investment, why we weren't making this investment. I think I'd kind of turn it around and look at it that way. It's a very clear and obvious thing we want to be doing. We're starting the trial as we speak, and we look forward to when we have data to us the first order evaluating it and then taking it and sharing it at a medical conference. And the same approach is sort of come back to the kind of the question in colorectal cancer or other opportunities for peto, it's the same thing. You see very strong activity and very strong efficacy, manageable safety. You have to sort of think about doing other exploratory work or signal seeking work. I think if we weren't doing that, you should be asking us the question, why aren't you doing those.

Sticking with non-small cell lung cancer, the other asset you mentioned actually there about being very happy owners of his acasunlimab, the PD-L1, 4-1BB. Just I think just perhaps an update on the Phase III progress and timing of that readout, how important do you think that is again to the sort of materiality for the business?

So acasunlimab is a product where we saw very encouraging data that was presented at ASCO in 2024. Based upon that strong signal, we decided to start the Phase III. The Phase III is progressing well. There'll be some updated data that's presented here in a week or so at ESMO, IO. So look forward to sharing that data. We remain encouraged with what we're seeing. I think just in terms of the context, it's a -- right now, we've pegged it being around $1 billion opportunity. So it is at least in the first order smaller. And right now, we have 1 Phase III here versus all of the other programs, as I've already articulated at length over the last half an hour or so, there's multiple Phase IIIs that are ongoing with a very clear intention to start more Phase IIIs moving forward. So I think it's an important potentially an important product in the second-line non-small cell lung cancer setting, saw some strong overall survival data. And yes, the Phase III is progressing well.

Great. And maybe given you're CFO, we should ask some financial questions as well.

It's a novel concept, right?

But -- so I guess, post Merus, perhaps just talk to gearing, capacity, capital allocation how do you think about growing the business from a capital point of view?

So if I think about the business right now, and this is where we spent the bulk of the time talking today, we have 4 late-stage programs with ongoing Phase IIIs. And I highlighted at length EPKINLEY, Rina-S and peto, all having breakthrough therapy designation, all with meaningful readouts in '26 as well as potential launches in 2027. So when you look at across the entire portfolio, you really have a very nice oncology platform today with a very nice growth profile moving forward. If you think about from a capital allocation perspective, priority #1 is investing back into those programs, both from a development and a commercialization perspective. That brings us to your question around kind of leverage. As we thought about funding the acquisition, as you all know, we're using a $5.5 billion of debt, we did not go into this decision lightly. We went into this eyes wide open. And here, I bring it back to what I just said from an R&D and a commercialization investment perspective, we thought about the overall financial profile of the business moving forward, we fully baked in all of the required investments to unleash the full potential of that late-stage portfolio on the investment side, particularly what we said from a leverage perspective, we said we hit -- we plan to be below 3x gross leverage within 24 months of deal close. So particularly in 2027, I did not over-index on all of these launches that I just alluded to. I did not stretch out our next too much and think relying on those 2027 launches to drive that deleveraging profile, really looked at the strength of that existing base business, whether it be the existing royalty business, which have a very nice growth profile or the existing base business of EPKINLEY and Tivdak. So capital allocation perspective, invest back in the business. And then obviously hit our deleveraging target, which we feel comfortable we can hit within 24 months of deal close.

Got it. And then do you still see then that M&A would be part of the strategy going forward from there?

Look, I think as I just articulated right now, the focus is on being very good owners of the late-stage programs that we have. We also have a lot of innovation going on here at Genmab in terms of research and discovery preclinical Phase I, Phase II. I'm confident that 1 or more programs will move forward to late stage. And of course, as we get into -- beyond this deleveraging point, we can, of course, see where we're at and think about what opportunities we want to pursue, whether it be internal or external.

And then last question for me, just on operating leverage. So obviously, you've been displaying some as you've gone through this year just if you think about sort of your OpEx outlook into next year with, I guess, more launches, R&D as well. Just can you keep a cap on that? Or is that -- or how do you keep the capital on that?

So 2 things we're going to do. We're going to invest where there's very clear return opportunities. Sounds simple, but that we're going to allocate the resources to in a very thoughtful way. We're not going to spread the peanut butter evenly across the bread. We're going to think about opportunities where we can very clearly invest. We're not going to shy away from those investments. At the same time, we're going to do those -- make those investments in the most productive and efficient way possible. We're looking across our entire business and being very thoughtful about realizing these scale benefits, whether it be in development or in commercialization. And here, we're looking for every -- in detail, looking at our Phase III trial costs, bringing down the per patient costs in a very thoughtful, diligent way. And likewise, from a commercialization, we're looking for any and all opportunities to leverage the investments we've made in that commercialization capability, particularly at the kind of the foundation level where our investments in commercialization, particularly in the United States and Japan are going to be more of the brand, brand level. The foundation is there. And then finally, we said on Q3 in terms of operating costs or investments that we thought that consensus both from a Genmab perspective, as well as Merus perspective are in a reasonable place. So ultimately, we feel like we're doing -- making the right investments in a productive and efficient manner.

Great. I think the clock we're up on time, but I really appreciate the time today Anthony, thanks for coming, and thanks, everybody, for listening in. Thank you.

Yes. Thank you, Graham. Thanks for having me. Thank you.