Merck KGaA (MRK) Earnings Call Transcript & Summary

Good day, and welcome to the bintrafusp alfa update Capital Markets Q&A call. Today's conference is being recorded. At this time, I would like to turn the conference over to Constantin Fest. Please go ahead, sir.

Dear ladies and gentlemen, a very warm welcome to this Merck Capital Markets call. My name is Constantin Fest, I'm Head of Investor Relations. And today, we have this call to discuss today's news. I'm delighted to have with me here today on this call, Marcus Kuhnert, our Group CFO; as well as Peter Guenter, our CEO of the Health Care sector; as well as Danny Bar-Zohar, our Global Head of Development; and Rehan Verjee, President of EMD Serono and Global Head of Innovative Medicine Franchises; as well as Peter Halle, Head of Research, Global R&D Healthcare to discuss all of your questions. And without any further pause or delay, I would like directly to hand over to Marcus for a short introduction.

Thank you very much, Constantin, and good afternoon and also to our U.S. colleagues, a good morning from my side. As Constantin said, we have set up this call to inform you on the news of this morning. We want to provide transparency, what this news means and what are the implications on us going forward. And in the spirit of the aforementioned, we want, of course, to give you now the opportunity to ask your most pressing questions. With that, I want to hand over to Peter to start the message.

Yes. Thanks a lot, Marcus, and good afternoon, ladies and gentlemen, also from my side, and also good morning to those of you joining us from the U.S. So thanks a lot for joining us on this call, especially given the very short notice. You have seen the news on our bintrafusp alfa program, shared with you a couple of minutes ago. While reviewing the totality of data from the Lung 037 trial in the first-line treatment of patients with stage IV non-small cell lung cancer with high PD-L1 expression, the independent data monitoring committee recommended the trial discontinuing. Based on this recommendation, we have decided to discontinue the trial as the study is unlikely to meet the primary efficacy endpoints. Over the next hour or so, we would like to update you on this news, share with you where we stand with the rest of the program, and give you the opportunity to have your questions answered. Before handing over to my colleagues, however, let me highlight that at the end of the day, this is what drug development is all about. It's about advancing promising candidates with the potential to significantly progress standards of care and doing so while being conscious of both the risk and the upside. The bintrafusp alfa program is an example of a very strong, strategic management in that sense. Having generated more than 700 patients of safety and efficacy data and identifying numerous indications of interest, we proceeded to partner in order to ensure an ability to pursue multiple noncorrelated hypothesis in parallel and at the same time, significantly reduce the financial opportunity costs. Now today, we have indeed news on the 037 trial. Let me also add that it is clear that this news does not affect our EUR 2 billion pipeline ambition by 2022. Let me remind you that the EUR 2 billion is very largely driven by Mavenclad and Bavencio, and that actually -- the contributions of tepotinib and bintrafusp alfa were actually very, very marginal. So with that, let me hand it over to Danny to share his perspective.

Thank you. Thank you so much, Peter, and again, good afternoon, good morning, and thank you for joining in the short notice. So the bintrafusp alfa program is a very broad one, consisting actually of 11 different studies, assessing largely independent hypothesis in different settings, and it's very important. Now the program consists of studies in non-small cell lung cancer; biliary tract cancer, both first-line and second line; cervical cancer, both lines; triple-negative breast cancer; urothelial cancer; and also an exploration of a rather exciting combination with our differentiated anti-TIGIT compound. So this is very broad. Now TGF-beta is a key player in the tumor microenvironment, involved in important processes that relate to immunosuppression, to fibrosis, to the growth of blood vessels and also to reduce response to chemotherapy and metastasis. Now the body of evidence that we have come up with, preclinical and clinically suggests quite promising benefits to patients from this combination of PD-L1 blockade as well as trapping of TGF-beta. Now the purpose of the call is, as Peter said, is actually to give you some more color and more context on the 037 study that you read about. So the 037 is a randomized controlled trial, assessing bintrafusp alfa versus pembrolizumab in PD-L1 high stage IV non-small cell lung cancer. Now we have obviously put a very, very high bar for bintrafusp and in this specific setting, we wanted to know whether targeting TGF beta, the fibrotic phenotype in this highly immunogenic setting is relevant for patients. So very high bar. Now just to remind everyone, in a recently published Phase Ib study with 80 patients at the 1,200-milligram dose, patients with non-small cell lung cancer with PD-L1 high had objective response rate as high as 85.7%. So that gave us the reassurance that we are going to something tangible in this comparison. Now as we communicated last year, the study passed -- the 037 passed an objective response rate-based futility analysis and continued with the sample size of 300 patients towards a PFS OS readout. Now yesterday, there was a pre-planned routine DMC meeting, during which they [ obviously ] look at the data emerging from the trial like they should do, and their recommendation was to stop the study. It is very important to say -- or the very important take-home message that there was no new safety signal that drove this recommendation. And when we looked at the data after this recommendation, we actually saw that the likelihood of the study to meet the primary efficacy endpoint is very, very low. And from our experience, it's actually 0. Now we saw clearly that it cannot meet the primary endpoint. And this is the reason why we decided to endorse actually this recommendation and to announce discontinuation or early termination of the trial, which triggers the chain of notifications to investigators, to health authorities, to the media and so on and so forth. Now the bintrafusp program is diverse. It has, as we mentioned before, and we can address a couple of your questions, a variety of hypothesis. With or without chemotherapy, it may potentiate the effect of chemotherapy in this deleterious effect called epithelial-mesenchymal transition, which is impacted by TGF-beta. We are also very excited with the HPV hypothesis. Science and clinical data tell us that HPV is strongly associated with TGF-beta expression, and we showed very promising objective response rates in our HPV-associated tumor cohort and this is the reason why we're also very excited with our cervical study in the second line and the first line setting that I mentioned before. So all in all, we -- obviously, it's negative news for non-small cell lung cancer stage IV with PD-L1 high. And we will do what needs to be done because we care for the patients and care for the rest of the development program. But other studies are currently ongoing. We will obviously look at the data and try to see whether there are implications for the rest of the program, and we'll take it from there. Thank you so much.

Thanks a lot, Danny, and I'll turn it over to Constantin to open the Q&A session.

Yes, please. Let's have the first question, please.

[Operator Instructions] And our first question comes from Matthew Weston from Crédit Suisse.

Two questions from me, please. The first is that in lung, you also have a head-to-head study versus avelumab in the stage 3 unresectable patients. Can you comment as to whether or not you remain excited about that program and you expect it to continue? I noticed that I don't think you referred to it in your recent discussion a couple of minutes ago. And then secondly, Marcus, can you remind us what it means for the additional payments that were potentially due from GSK that were linked to lung in inverted commerce? Can you clarify whether they were just linked to the 037 KEYTRUDA study? Or whether or not any further development or future development in lung or the durva study itself could trigger that incremental lung payment?

Yes. Thanks, Matthew, for the question. I suggest that, Danny, you take the question on durva first.

Yes. So Matthew, thanks for the question. It's a very valid one. The lung program consists of 3 studies. The 037, that we -- that's the subject of the discussion today; the 005, which is the head-to-head versus avelumab in a different setting of stage 3, in which we are treating patients in combination with -- in the induction phase in combination with chemotherapy, trying to address a different hypothesis in the same tumor at a different stage. So there are some differences in this study and a smaller study in Phase I, where we are assessing in the metastatic setting combinations in the first line, which is -- it's a much smaller study. To your point, as I said before, we will look -- learn more, because we just learned about this DMC, I would say, 12 hours ago or less. And we'll look at the data, and we will assess together with the DMC, the potential implication if there are on the ongoing 005 study, which is a very long study. It is a study versus durvalumab, as you said, and we just learned that a couple of months ago, that the median overall survival with durvalumab is 4 years in the setting. So it's a very, very long study, and we need to look into it and take it from there.

Yes. This is a perfect starting point, Danny, to answer your second question, Matthew. First of all, let me reiterate again that potential development milestone payments are linked to the entire lung program. Given what Danny just said, namely that we are now carefully assessing what the most recent news on the 037 study means for all the other parts of the lung program, I would say that this -- the news from this morning obviously makes it, from my point of view, rather unlikely that we should think about -- or rather unlikely that we get in the future, a development milestone from the lung program, yes? But as I said, we first need to assess the concrete implications on the 2 other lung studies, but the likelihood definitely has significantly decreased.

We'll now move to our next question from Sachin Jain from Bank of America.

[indiscernible] questions, please. So first, can you just remind us of the timing of the biliary tract data and what response rate is, in your mind, needed there for it to be just competitive? And if that data does meet the hurdle, how do we [ analyze ] implication for the order around or beyond lung? You clearly referenced you're recessing lung. How important is that biliary tract [ case for ] a broader program? Second question is to go back to what you've learned from 037 failure. So clearly, obviously, early days and data analysis suggest that it might be trial design versus lung-specific versus an active molecule versus your PD-1 high definition, which I know has been a debate. And then the final question...

Sachin, can you -- Sachin? Apologies. Can you repeat the last sentence because you have bad reception. Just the last full sentence, please?

So 037 failure, you're clearly reassessing the data but what additional color can you give from what you've learned on whether that failure is trial design versus lung specific versus an active molecule versus your definition of PD-1 high? I mean, there are lots of variables in that study. And then the final question is a follow-on on financials. So beyond the milestone, you've obviously been receiving EUR 120 million, EUR 130 million on R&D reimbursement. Should we expect any change in the cadence of that back, so annual income?

I'll take the last one first, Sachin. So just to remind you, so we have 2 different components, which will continue. The one is the 50-50 cost-sharing agreement that is ongoing for all running studies and trials. So no change here. The second one is the so-called deferred income, where we are actually spreading the upfront payment of GSK over the time of the collaboration. We have so far realized some EUR 160 million, so slightly more than half of it. The other EUR 140 million are still to come. As I said -- or we would have to carefully assess now the implications of this news from this morning on the rest of the lung program, as we just said, but also all other running studies. And that will then determine, I would say, the speed of realization. For the time being, I think the best assumption is to stick to what we have said, I think, end of last year, that we would expect a similar amount in 2021 than what we have seen in 2020. So around about EUR 70 million.

Shall I take the other ones? So Sachin, it's Danny. You asked about BTC. So as we communicated, the readouts -- top line results from the BTC second line study will be available, I think, in a matter of between a week or 2 or something along these lines, so very soon. We're also running a study in first-line BTC, but the readout there is 2022, which is further down the road. So this is with regards to BTC. Now you asked a very good question about what did we learn from this study. At this stage, obviously, we will look very deep into the data in very critical eye. We should do that, and we will do that. It's so important to reiterate again that this study, and I wholeheartedly believe that from the design perspective, the design was good. We tested it in the right population, we set the bar very high, we used the commonly used marker for PD-L1. And in terms of conduct of the study, there were no comments, and the study was also monitored, as we know, by DMC, and there were no comments from them with regards to the conduct. So from that perspective, I think that we can shut it off. From the other perspective, in terms of the science and in terms of the hypothesis, yes, TGF-beta is implicated in the tumor microenvironment in a variety of roles. And lung cancer -- also lung cancer is a very complex disease, which are the patients who are going to respond to this combo of PD-L1 plus TGF-beta. It's still also knowing what we know today about the 037 study is still an enigma for us, and we're putting a lot of effort in trying to find a biomarker or the predictive biomarker that will guide us either in lung or in other indications. There are other indications, like I mentioned, the HPV-driven tumors where it is much easier to know which patient is more -- is going to be more driven in terms of his or her tumor by TGF-beta. So we remain excited about that. So all in all, I don't think that this is, at this stage, a design thing. No, the compound works. We saw that in other studies in 800 patients, we saw that in preclinical, and we need to dig into the data and further understand what are the implications.

Can I just take one follow-up on the biliary tract question? Are you willing to communicate that hurdle rate on your response rate where you would view this as molecule active, given it isn't a head-to-head study?

Yes. So with regards to the biliary tract, I forgot this. We cannot communicate the actual hurdle that we put there. We will be able to do that. But just to give you a flavor, in a 100-patient second line study with pembrolizumab, the objective response rate was 5.8%, okay? So this is just a benchmark for you to understand why -- where we are aiming. Now in terms of the actual results, we will have it in several weeks from now, as I've said, and we'll be able to communicate that.

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

Peter Verdult, Citi. Just a few quick questions for the team. Over and above biliary tract, can you remind us, are we going to see any additional data sets for indications that you mentioned earlier in your comments in the next 12 months? So any other data sets over and above second line biliary in '21. And then secondly, a quick one for Marcus. Can you give any sense of what sort of magnitude of write-offs you will take, given the news on 037 study? And then, sorry for sort of moving away from TGF-beta. But if we think about Merck's IO efforts going forward, you've had a lot of interest in DNA damage repair assets in the portfolio for some time. You also communicated about your TIGIT at the CMD last year. Could you just remind us what other IO data sets we should expect from Merck over the next 12 months?

That's right. I suggest we take first the question by Danny on the additional readouts in the next 12 months.

Yes. So broadly speaking and we -- and we said that in terms of formal readouts, apart from the BTC second line, there is no expectation. However, when it comes to the cervical second line study, the HPV hypothesis, human papillomavirus, the study is recruiting very well. And we may be in a position towards the middle of the year or slightly after the middle of the year, to have some interim results. I'm saying it cautiously, but I'm optimistic because I see that the study is recruiting very nicely. Other than that, if I got the question correctly about other IO studies, we are running the JAVELIN 100 lung study with avelumab and the results of this study, chemo head-to-head, 2-doses -- 2-dose regimens of Bavencio, and the results of this study will be available towards the third quarter of this year, right, avelumab?

Apologies. I was focusing -- apologies. I was focusing on the DNA damage repair portfolio as well as the TIGIT. Sorry, my bad. I should have been clearer. Sorry.

Oh, sorry for that. So DNA damage repair, this is something that is extremely exciting for us. We're sitting on 5 assets. And we have a very clear strategy to advance this portfolio very soon. In terms of readouts -- tangible readouts, if I'm not mistaken, I need to go back to my list. I don't expect something. However, there is going to be a publication on berzosertib, our intravenous ATR inhibitor in small cell lung cancer, combination with topotecan. It's an NCI study with 26 patients that will show -- I can give you a peek. Very encouraging results that made us prioritize this indication. And we'll move forward with initiating a sizable clinical study in this indication very early this year. So this is in terms of, I would say, highlights from the DR portfolio. Other studies are ongoing with the DNA-PK. With the oral ATR inhibitor, we have 2, one in combination with the PARP inhibitor, but these studies are relatively early, but very promising for us.

The write-off question, Peter, I cannot fully exclude it at this point in time, but it is too early to give you any information. We have to look into that.

The next question comes from Luisa Hector from Berenberg.

Can you confirm that Glaxo remains fully committed to the asset and the ongoing developments in the knowledge of this data today? And on the 005 study, could you also remind us what early stage data you have that's triggered the decision to enter a pivotal study here against Imfinzi?

Yes, Luisa. So let me take the first question on the GSK commitment. As of today, we have absolutely no indication that GSK would contemplate exiting the collaboration. I can tell you that the collaboration is going overall extremely well. We are very well aligned with GSK. So we have no indication that, that would change in the foreseeable future. On the second question, I'll also defer to Danny.

Yes. Thank you. So for the durvalumab study -- so for the durvalumab study, the hypothesis, first of all, is -- and it's a very sound, scientific rationale that was supported by our experts and also preclinically, this combination of chemoradiation concomitant with bintrafusp alfa is important. Because in many cases, and we know that, that these cells, the cancer cells, escape the chemotherapy because of TGF-beta-driven mechanisms. And hitting the TGF-beta while the patient is on chemotherapy as compared to the Imfinzi approach that gives first chemoradiotherapy and then durvalumab makes a lot of sense. Now in terms of data that led us to -- I'm just looking at my notes here, we have -- just a second -- yes, the data were not driven mainly from the phase -- from stage 3 lung cancer. It's mostly in advanced cancers that I reiterated at the beginning of the call, the 85.7% ORR in PD-L1 positive. So this gave us the directionality plus the hypothesis that I told you about, about concomitant chemoradiation to start with this study.

Our next question comes from Simon Baker from Redburn.

Just continuing on from Sachin's question about reasons for failure. I was just wondering if you had -- you said that the totality of the data led to this decision. Is there anything you can share or will share in the future on any particular subgroups that show differential efficacy? And related to that, do you have any other biomarker data on the patients, not just on things like TGF-beta expression itself, but other markets which have potentially been implicated like SMAD4, for instance? And finally, do you plan to publish this study in the future?

So can I -- so great question. I'll start from the end because it's in the core of what we do. We will publish the results of the study because we must publish the results. And we are very proud of the study and are pioneering approach to collect biomarkers. We did collect samples. And we are, as you can imagine, and I think that you are imagining that we're very keen to look into them and try to decipher it. In terms of the clinical data, the totality of data, when I say totality, it's all the data. And these are very sick patients, and these are very active compounds, yes? Now again, to reiterate, because it is important, there was no new safety signal that led us or drove this decision. So that's one thing to take into a very strong consideration. With regards to the totality of the data, which includes safety, efficacy, biomarkers, imaging, we need to look into that and to spend at least a couple of weeks to figure out better the reasons for this negative result.

Our next question come from Laerke Engkilde from JPMorgan.

Laerke Engkilde from JPMorgan, on for Richard Vosser. Most of my questions have already been answered. But if you could just say a bit more about, in light of today's data, where in which indications you see greater success? It sounds like you're quite excited about cervical cancer. So any commentary there, please?

Yes. Thank you for the question. So I am excited about the HPV-driven tumors. And just to give context, we're talking about more than 600,000 patients every year that are diagnosed with HPV-driven tumors, and you were talking about cervical cancer, anal cancer, vulvar, head and neck, which is becoming increasingly high in terms of HPV-driven disease. Now the hypothesis regarding HPV and TGF-beta is very strong. It's very strong, and we can spend the next 20 minutes to describe that. It's highly implicated in overexpression of TGF-beta, independent, in some cases, of PD-L1 exposure. And we saw very encouraging results in a 50-patient cohort recently published -- recently presented and published and -- that showed very promising objective response rate in a variety of HPV-driven tumors with something like, if I'm not mistaken, 25% ORR in cervical cancer. Just to put some -- to give some color and context in this setting, when you're talking about PD-L1s, pembro and alike, we're talking about response rates that are in the range of 15% to 20%. And this is only in PD-L1 high. The response rates that I gave you were in [ oldcomers ]. So we are very excited about that. And we saw also very durable responses. So that's with cervical cancer. And of course, we are testing that in second line, which is a huge unmet need. Study is ongoing, recruiting very well. And in first line, we started the study, and we will, of course, look at the data and take the decision whether to even further expand it. So that's with HPV-driven tumors. With -- there is another exciting small study. Currently, it's small. It is the triple-negative breast cancer. It's a huge unmet need. We know that. And we also know that atezolizumab, pembrolizumab gave something tangible to patients, which it's exciting for patients. And we believe, also with knowing quite a lot of TGF-beta in these specific tumors, we believe that we can give them more. We actually showed in our relatively small cohort that patients with a mutation -- sorry, patients with overexpression of HMGA2, which is a transcription factor, which is closely associated with TGF-beta expression by the way, these patients had objective response rate as high as 50% to 60%, which is something that we cannot ignore. So we started a study in these triple-negative breast cancer patients with this over-expression of HMGA2, and we are looking forward to that. Part of that, another approach that we are very excited about is the combination with our TIGIT compound. Our TIGIT compound, we believe, first of all, that, as itself, is well differentiated because it is an Fc-competent compound, which means it triggers ADCC killing of cells that we don't like in the tumor microenvironment, i.e., regulatory T cells and also exhausted T cells. So our TGF compound -- sorry, our anti-TIGIT compound does that very nicely. We also know that NK cells, natural killer cells, that are supposed to perform, to execute this killing are suppressed by TGF-beta. So adding bintrafusp alfa to the mix makes total sense to us, and this is what we're already doing in a Phase I study. So these are hypothesis that are slightly more focused in terms of what we know about the biology. Again, different hypothesis that we're pursuing and still very excited.

Our next question comes from Emily Field from Barclays.

I just wanted to dig into some of the comments that you have made. It's seemingly indicating that perhaps, the mechanism of action could be synergistic with chemotherapy combos. I mean do you think that there's a higher likelihood of success in those 3 trials where bintrafusp alfa is being trialed with chemo? Or just that perhaps there's a brighter future for this asset in combination versus in monotherapy? And then just another timing question. So it would seem that given the cadence of the trials and the comments you made with enrollment in the second line cervical cancer study, that biliary tract second line is successful, that, that will likely be the second indication on the market in the U.S., and that could potentially be, I don't know, maybe at the end of 2022?

If I got the questions correctly, so in terms of timing, it's very premature to comment right now. We will report at the BTC second line in several weeks now and we'll take it from there. With regards to cervical second line, as I said, the study is recruiting very, very nicely. Very excited with the hypothesis that drives it. It's a huge unmet need. So yes, there is a potential in the second-line setting to go relatively fast to market. We need to, of course, with all the disclosures, this needs to be vetted with close discussions with FDA, and FDA is very well aware of this program. So I cannot comment on time line, whether cervical will be here or there because we need to see more data in order to substantiate what we're saying. With regards to combinations, again, the hypothesis behind combinate with chemotherapy is actually twofold. You know what, Peter, do you want to address? I have Peter Halle, Head of Research here that knows much more about combinations with chemo.

Yes. Thanks, Danny. And as we upside the system, for example, the R&D [ up ] is a clear preclinical evidence about the interplay between chemotherapy and especially also radiation with TGF-beta. As Danny already explained, both agents, especially radiation isn't using fibrosis via TGF-beta, so it makes a lot of sense to block this resistance mechanism. So fibrosis via TGF-beta, that gives you one idea about the synergy here. You probably also know that chemotherapy is inducing PD-L1 expression, which drives bintrafusp to the tumor. We see this in preclinical model very nicely. And maybe the third element here, especially for the earlier settings, what we also observed and what is known for TGF-beta is the development of metastases, which are inhibited by these processes. And if you think about the stage 3 lung trial, actually, what the unmet medical need there is not a response rate, but prevention of metastases so that patients are progressing from stage 3 to stage 4. This is what we want to prevent in that study. So again, speaking to the synergy between chemo radiation and TGF-beta, bintrafusp, obviously, and the -- what we said earlier in the call that we are testing here very different hypothesis and just because it's the same indication doesn't mean that you should see the negative news of today in stage 4 non-small cell lung cancer monotherapy as a predictor for the outcome of the other trials.

Our next question comes from Michael Leuchten from UBS.

Just one question left for me. Just trying to understand the timing of events here. So you had a futility analysis in the second half last year. The decision was made not to expand the number of patients and now, a futility analysis shortly thereafter has shown futility. So is this a function of maybe it would have been better to have more patients in the trial? Or was it a pretty close call the last time around? I mean futilities showed it's okay, but it was just okay. And this time, the futility analysis has shifted. So I was just trying to understand the futility then was okay and now it isn't.

So can I take it?

Yes. Sure.

Michael, that's a very good question. I did mention, but maybe I mentioned briefly. The futility analysis that was conducted for bintrafusp last year was based on ORR. It is actually the most preliminary endpoint objective response rate, mainly based on imaging, that gives you a hint whether the study is a non-loser, okay? And it's good because this is good drug development to do that. You set a certain bar and you look at this endpoint, and if it is nonfutile, you continue the study. Now with regards to the criteria that made us led to expanding or not expanding, whatever, I cannot drill down into it right now, the study, although we know what happened to the study, it's still alive. We need to talk to investigators. I don't want to create a situation here when we are creating a sort of asymmetric data sharing before investigators know that. But in terms of powering the study, the study was well powered with 300 patients for an OS PFS readout, mainly focusing on OS because the study's main endpoint -- not just the study's, it's how the regulators look at that and how the physicians in the field look at that. They want to see overall survival, particularly if you're setting the bar very high against a very commonly used drug like KEYTRUDA. So from the powering perspective, we were okay. Third, this DMC meeting that took place yesterday, the DMC did not perform a planned futility analysis. It's very important to know that they looked at the data, and they made their own recommendation. So there was no formal -- a futility analysis is a very formal, statistical analysis with very strong constraints. And in terms of spending the p-value and -- there are other implications to a full-blown futility analysis. And they looked at that and today, the data is much more mature as compared to an ORR we have PFS, progression-free survival, which is one of the co-primary endpoints in this study. And with -- looking at the PFS, as I said before, without even running a full-blown futility, the study is very unlikely to meet a reasonable clinical endpoint in the future.

I think we have one more last question.

KC Arikatla from Goldman Sachs.

KC from Goldman Sachs. On 005 trial, can you confirm if recruitment has concluded, please? And if not, are you concerned about recruitment in that trial, given what we know from 037? And on second question, Marcus, on deferred income, you had an upfront payment of EUR 300 million. You mentioned EUR 160 million being recognized in 2020 and potentially around EUR 70 million in 2021. Is it that the pace of recognition is a function of progress on other trials? Or is there a risk that you will only recognize EUR 230 million or less than EUR 300 million as deferred income over time?

If I understood you right, KC, it is actually both. So we will recognize the EUR 300 million upfront over time in our P&L. We have done so, EUR 160 million. So EUR 90 million in 2019 and another EUR 70 million in 2020. And yes, so we always said that the realization of the deferred income is following the progress that we make in the overall bintrafusp program. You can think about that this will be stretched basically over the duration of the collaboration. So yes, it is, in a way, a function of the progress that we make in the studies. And as I said earlier, as we need to dig deeper what the news of today finally mean for lung and for the other studies in the bintrafusp program, it would be premature now to make, let's say, a precise guidance on what we believe will happen in deferred income in 2021. I think for the time being, the safest assumption is to believe that it will be on a similar level like last year.

And the 005 is still recruiting patients.

With this, I think we have all the questions addressed, and I'd like to hand over to Marcus to close this call.

Yes. So thank you for your interest for dialing in. We are, of course, aware that this was not good news today. Unfortunately, also, this may happen from time to time. But we will now, as I think it hopefully get clear -- got clear, we will now analyze the implications of the 037 study news carefully, and we will take the appropriate actions. Although the payment of any development milestone has become rather unlikely, as we said, the financial implications in any outcome will be minor. And this is a direct consequence of the smart deal design or the smart design of the collaboration. And lastly, let me reiterate what Peter said at the beginning in his intro, we stick to the EUR 2 billion target because always, bintrafusp alfa was, I would say, a nice add-on, a nice opportunity to get eventually a little bit on top. But the major contributors will be Mavenclad and Bavencio, and we will now see also in the coming months what eventually, what kind of contribution we can expect from tepotinib. But we stick to the EUR 2 billion and we also stick to the profitable growth path of Healthcare, which we have embarked on since 2018. This is not going to change when we go into the future. Thank you very much.

This concludes today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.