Q3 2019 Earnings Call
Sarah Faki: Thank you for joining the development of MorphoSys' core technologies and the progress of its current research and development programs.
Sarah Faki: and the initiation of additional programs. Should actual results differ from the company's assumptions, and suing actions may differ from those anticipated? You are therefore cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. With me on the call today are Jean-Paul Kress, our Chief Executive Officer; Jens Holstein, our Chief Financial Officer; and Malte Peters, our Chief Development Officer. In this presentation, Jean-Paul will start by giving you an operational review of the third quarter as well as an outlook for the rest of this year. After that, Jens will review the financial results of the third quarter and the first nine months of 2019. After the presentation, we will all be available for your questions. You will find the slide deck for this presentation on our corporate website. With that, I would now like to hand over to Jean-Paul Kress.
Jean-Paul Kress: Thank you, Sarah, and also from me, a warm welcome to our Q3 2019 earnings call. Yesterday was a very important day for the company, on which we made great progress on our main priority. We published impressive results from our real-world data approach, confirming our regulatory strategy around our L9 trial. With this data, we were able to deliver a critical component of the BLA filing package to the FDA. The rolling submission to the FDA has been initiated, and we have already submitted the first pre-clinical data. Another top priority for us is the Tafasitama partner. I have made clear that I am open to broad partnership settings, including U.S. co-promotion.
Ladies and gentlemen, I come to come off of this Q3 results 2019 conference call.
No that's for the duration of the presentation, all participants will be not listen only mode and the conference is being recorded.
After the presentation that we'd be an opportunity to ask questions.
Please note that we can only take your questions. If you all right just by name.
Should anyone need assistance during the conference call or they may signal, that's by pressing star and they're on a telephone.
Jean-Paul Kress: Our partnering approach follows the goal to maximize the value of TASA SITAMAP and the pipeline in a product value proposition. We are also finalizing the build-up of our U.S. commercial organization, and we are executing on a flawless U.S. pre-launch plan. In our proprietary clinical pipeline, we are accelerating the development of our anti-CD38 antibody, MOH2O2, for which the start of a clinical trial in membranous nephropathy is imminent. Lastly, we were encouraged by the latest news from Biogen on aducanumab and what this may represent for patients. And for the scientific community, though it is premature to draw any conclusions about the investigations of gantanirumab by our partner Roche, as studies are ongoing. I would now like to walk you through the details of our progress, and then Jens will provide a final shout-out.
Now I'd like to turn the conference call at all but two South Africa. Please go ahead.
Good afternoon, good morning, and welcome to our Q3 2019 conference call and webcast.
My name is tariffs hockey and I'm, the head of corporate communications and Investor Relations at Morphosis.
Before we start I would like to remind you that during this conference call, we would present and discuss set the forward looking statements concerning the development off from a focus core technology. The progress of its current research and development program and the initiation off additional programs.
Should actual results may differ from the company's assumption ensuing actions may differ from don't anticipate can.
You are therefore cautioned not to place undue reliance on such forward looking statements, which speak only as of the date fuel.
With me on the call today, our joke, that's our Chief Executive Officer inputs Stein, our Chief Financial Officer, and Mike Peterson, Our Chief Development Officer.
In the presentation don't call was stopped giving you an operational review after first quarter as well as an outlook for the rest of this year.
After that yes, we'll review the financial results of the third quarter and the first nine month or 2019.
Jean-Paul Kress: Let me start with Tapasitamab, our proprietary antibody against CD19 for application in hematological malignancies and the key asset of our clinical pipeline. Tafacitamab is differentiated from other antibody drug candidates because it is based on an FC fragment selectively engineered to enable better recruitment of effector cells and a potentially increased elimination of cancer cells. Our most important trial is L-. The phase 2 study of tapacitamab in combination with lenalidomide, or LEN, in patients with relapsed or refractory diffuse large B cell lymphoma who are transplant ineligible and ineligible for high dose chemotherapy. The study reached its primary completion in May earlier this year. Yesterday, we announced very compelling top-line results from RE-MIND. The Synthetic Control Arm for Elmite
After the presentation, we will all be available for your question.
You will find the flight deck for this presentation on more corporate website.
With this I would now like to hand over to jump okay.
Thank you Sarah and also from me, while warm welcome to our Q3 2019 earnings call.
Yesterday was a very important day for the company on which we made great progress on all main priorities.
We published impressive results on our real world data approach consuming our regulatory strategy around no as nine trial.
With this data we were able to deliver a critical component.
Of the B.L.A. filing big package to the ft.
The rolling submission to the Ft was initiated and we already submitted the first preclinical data package.
But another top priority for us is the toughest you're talking about partnership.
I have made clear that they have opened two broad partnerships settings.
Including a you wesco promotion.
Jean-Paul Kress: As L-MIND is a single-arm, uncontrolled trial, reMIND was designed to compare the effectiveness of LEN monotherapy based on real-world patient data with the efficacy of the tafacitamab-LEN combination from L-MIND. The study met its primary end point, showing statistically significant superiority of the best objective response rates of the tafacitamab-LEN combination therapy compared to Let me give you some insights on how this analysis was carried out. Remind collected real-world data from 490 overall non-transplant-eligible relapsed refractory DLBCL patients who had received LEND monotherapy in the US and in Europe. Qualification criteria for matching patients from both studies were discussed and agreed with the FDA. Eligible patients were identified from this pool and matched one-to-one with patients from the L-Mind study based on important baseline characteristics.
Our partnering approach for those the goal to maximize the value of stuff, that's come up and the pipeline into product value proposition.
We are also finalizing buildup of follow us commercial organization and where our executive team on a slow this you with pre launch plan.
In our proprietary can you tell pipeline, we are accelerating the development of our LTC dissipate on Peabody mold too old to.
Well, which distaso for clinical trials in Mumbai news nipple, but the is imminent.
Lastly, we were encouraged by the latest news from Biogen on Aducanumab and what these may represent a patients.
Families.
And for the scientific community, though it is pretty much your control any conclusions about the investigations have gone to never mob bio Buckner rush.
Studies.
Ongoing.
I would now like to walk you through the details of ballpark right and then Yens will provide the financial update.
Let me stuff, we step I see them up.
Our proprietary antibody against CD 19 for application Haematological malignancies, and the key upset the fall clinical pipeline.
Jean-Paul Kress: This resulted in 76 eligible remined patients that could be matched with 76 of the overall ATL mined patients. Objective response rates were calculated on the basis of this subset of 76 patients in RE-MIND and L-MIND, respectively. Within this comparison, the objective response rate of the TAFALEN combination was 67.1%, and significantly superior to the real-world data-based LENMONO objective response rate of 34.2%. Superiority of the tapasitama blend combination was consistently observed across all secondary endpoints, including complete response, which was 39.5%, for the tafacitamab-LEN combination compared to 11.8% for LEN monotherapy. There was also a significant difference observed in overall survival, which was not reached in the TAFALEN combination, compared to 9.3 months with LEN monotherapy only, most impressive based on the haz
Tough at the time of differentiated from other antibody drug candidates.
Based on an FC fragment selectively engineered to enable bits of liquids month of his picasso's and put them slowly increase elimination of cancer cells.
Our most important try out east and mind the phase two study of Takita mob in combination with Lenalidomide, all Len in patients with relapsed or refractory diffuse large b cell lymphoma.
Hi, Rob transplant in energy boom, and you need to drill for high dose chemotherapy.
The study it reached his primary completion m- barrel yield this year.
Yesterday.
We announced very compelling topline results from remind.
The seem to decompose had in mind.
As as mainly as a single.
Controlled trials remind was designed to compare the effectiveness of Len monotherapy based on real world patient data with the efficacy of the tough I see them up lend combination from L. mine.
The study met its primary endpoint.
Jean-Paul Kress: The probability of survival is twice as high in the Tafacitamab-LEN combination versus the LEN monotherapy. We believe this is an outstanding outcome and confirms our confidence in the path forward. Importantly, Since the real-world land monotherapy data was collected from local sources, It was analyzed by the investigator to allow for a like-to-like comparison of the efficacy of both therapy approaches. The data of the 76 L-MIND patients were therefore also the investigator-assessed data. The data we reported on the Elmine primary analysis in June were centrally assessed data, so the outcome of RE-MIND clearly supports the clinical superiority of the tafacitama-blend combination and significantly complements the compelling primary analysis of L-MIND data we reported earlier this year. Both studies will form core components of the BLA filing package, as I have already highlighted.
Showing static statistically significant superiority of the best objective response rate.
Of the tougher to get them, a blend combination therapy compared to a therapy with let alone.
Let me give you some insights on how these under license was carried out.
Remind collected real world data from overall 490, non transplant eligible relapsed refractory.
Patients, who has received lend mono therapy in the U.S and in Europe .
Qualification criteria for much in patients of both studies.
Were discussed and agreed with the 88.
Eligible patients where you don't see fight from these pool and must one to one with patients from the end mindset.
Based on important baseline characteristics.
This resulted in 76 eligible remind patients that could be matched with 76 of the overall 80 as mine patients.
Objective response rates were calculated on the basis of the subset of 76 patients in remind and mind respectively.
Jean-Paul Kress: We are now executing on our rolling submission to the FDA, and this also demonstrates how confident we are that this package is very robust. I am very confident that this is the right strategy to move ahead with the approval. We remain fully committed to finalizing the submission to the FDA by the end of the year, and we are planning for a U.S. launch by mid-2020. The other ongoing trials with Tafasitamab are the Phase III BMI trial, also in relapse of a factory DLVCL, and the COSMOS trial, a phase 2 trial focusing on patients with chronic lymphocytic leukemia or small lymphocytic lymphoma. For BEMIND, we await the outcome of the interim analysis until year-end. The interim analysis will be done by an Independent Data Monitoring Committee, or IDMC. And as a result of this analysis, The IDMC will inform us about their recommendation on how to proceed with the study. To clarify, again,
Within this comparison.
The objective response rate of the thus far lend combination.
Was 67.1%.
And significantly superior to the real world data being lend money objective response rate of 34.2%.
Superiority of the tough at the time upland combination was consistently observed across all secondary endpoints.
Including complete response, which was 39.5% fall to track the Dublin combination compared to lend monotherapy with 11.8%.
That was also a significant difference of failed in over as CEO of IPO, which was not reached in the tough file in combination compared to 9.3 months, we lend monotherapy on money.
Most impressively.
Based on the hazard ratio.
The probability to survive is twice as high in the tougher to become a blend combination.
Jean-Paul Kress: The L-mine and R-mine data approach is robust, and is the regulatory pathway agreed with the FDA? We believe the outcome of B-Mine will have no effect on the U.S. approvability of the TAF-FACITA-MAB-LEN combination. However, Be Mine has an upside potential for us, as it could serve as one of the possible options for a confirmatory trial in case of conditional approval. Our plans to start a front-line trial in DLBCL are also well on track, and we expect to start it in the next few weeks. The trial will enroll about 60 patients and will evaluate safety and first signs of efficacy of the combination of tafacitamab plus R-CHOP versus tafacitamab plus LEN plus R-CHOP in previously untreated DLBCL patients. We are confident we have designed a trial with great chances of success, and depending on the outcome, the study will be followed by a pivotal phase 2-3 study with roughly 900 patients as soon as possible.
Assist to lend monotherapy.
We believe this has been outstanding outcome and confirms our confidence in the past Paul.
Importantly.
Since the real World late monotherapy data was collected from local sources.
It was investigator asset.
Two will fall like to like comparison of the efficacy of both therapy approaches.
The data of the 76 as mine patients. We have therefore also the investigator assessed data.
The data, where we reported on the as mine primary highlighted in July in June with Suntrust.
So the outcome of free mine clearly to both the tunica superiority of the perfected Dublin combination and significantly complements the compelling primary analysis of as mine data we reported yield is here.
Both studies will call components of the BLE filing package.
As I already highlighted.
We are now exhibiting on our rolling submission to the FDA and this also demonstrate how confident we off at this package is very robust.
I am very confident that this is the right strategy to move ahead with the approval.
Jean-Paul Kress: Lastly... For our exploratory Phase II COSMOS trial in CLL, we plan to present updated data at ASH at the beginning of December. Obviously, our top priority remains to execute on a flawless BLA submission for Tafasitamab to the USFDA by the end of this year, and given FDA approval to be launch ready by mid next, Also, we reaffirm our plans to seek regulatory approval in Europe based on L-MIND and intend to complete submission of a marketing authorization application to EMA by mid-2020. I would now like to update you on more 202, our anti-CD38 antibody that we are pursuing in membranous nephropathy, a chronic autoimmune kidney disease with high unmet needs. The Phase 1-2 study will assess the safety and tolerability of Mord2O2 and also first signs of efficacy in this indication. The first clinical sites have been activated, and we expect the dosing of the first patient to happen very shortly.
We remain fully committed to finalize the submission to the FDA by the end of the year and we are planning for you with loans by mid 2020 .
The other ongoing trials with deficit the map out the phase three being mined trial.
Also in relapsed or refractory B NBC.
And of course, most try out the phase two trial focusing on patients with chronic lymphocytic leukemia of small lymphocytic lymphoma.
Well be mind, we await the outcome of the interim analyzes until year end.
The interim analyze this will be done by an independent data monitoring committee Idmc and as a result of these analyzes the idmc, we inform US both buried commendation on how to proceed with the study.
To clarify again.
The L. mine and remind beta approach is robust.
And he is a regulatory pathway agreed with the FDA.
We believe the outcome of be mine will have no effect on the you with approvability of the tough Sacituzumab Len combination.
Jean-Paul Kress: As you know, Morpho2 is also currently being developed by our partner IMab for multiple myeloma in greater China. With the Regional Licensing Agreement we signed with IMAB in November 2017, IMAB was granted exclusive rights to the development of Morph-202 in the Greater China Region. IMAB is currently conducting two clinical trials with Morph 202 in multiple myeloma in Taiwan. A phase 2 study with Morph202 in third-line relapsed refractory multiple myeloma and a phase 3 study in combination with LEN as second-line treatment will start in mid-October. IMAD also received IMD clearances granted by the Chinese National Medical Products Administration for both ongoing multiple myeloma trials. These clearances allow IMAP to expand the ongoing trials also to mainland China and are proof of IMAP's successful fast-to-market strategy.
However be mine as an upside potential for us as it could serve as one of the possible options fall a confirmatory trial in case of a conditional approval.
Our plans to stop the frontline trial in Dsps. Yet also went on track and we expect to stop in the next few weeks.
The trial will enroll about 60 patients and we'll evaluate safety and first signs of 50 Casey of the combination of deficit the mob plus off Chupp vestas deficit.
Less than plus our child in previously untreated DLP skilled patients.
We are confident we have design to try out with great chances of success and debunking depending on the outcome.
This study will be followed by a public Pete looked at a phase two three study with roughly 9900 patients as soon as possible.
Lastly.
Jean-Paul Kress: Let me continue with the update on More 106, the antibody directed against IL-17C, which we jointly developed with Galapagos and fully out-licensed to Novartis in July 2018. You may have seen from our announcement on Monday that, based on a joint decision between MorphoSys, Galapagos, and Novartis. The clinical development of Morph-106 in atopic dermatitis, or AD, has been ended. The decision was based on an interim analysis for futility, which was performed in the Phase II Iguana trial and which resulted in a low probability of the study meeting its primary endpoint. All of the currently four ongoing studies in IAD will end, and the decision was based on the lack of efficacy and not on any safety issues.
For our exploratory phase two costs, most trialling CLL, we plan to present updated data at ash.
At the beginning of December .
Obviously, our top priority remains to execute on afloat spls submission for capacity come up to the Usfifty eight by end of this year and given MTS promote to be launch ready by mid next year.
Also we beat our CMO plans to seek regulatory approval in Europe based on as mind.
And intend to complete submission of a marketing authorization application to eight by mid 2020 .
I would now like to update you on mall tool to.
Our anti CD felt the antibody that we are pursuing in men membranous nephropathy, the chronic what to even kidney diseases.
Jean-Paul Kress: All three parties will explore the future strategy with more one on... Now, let me briefly turn to our partner discovery segment. The most advanced product of the Partner Discovery System is Janssen StreamFire. We are very pleased by Johnson's strong and continuous commitment to Trem Fire, as expressed in this broad spectrum of indications in the ongoing trial conducted by Johnson. Johnson also reported a strong quarter for trim fire sales, which led us to adjust our expectations for the 2019 royalty income, and Jens will cover that in a minute. That concludes my part of the presentation. Before I hand over to Jens for the financial review, I would like to take the opportunity to thank our employees and our partners for their commitment and key contribution to the success of MorphoSys. I am very excited by this opportunity.
With high unmet need.
The phase one two study with us as the safety and Tolerability of milk to a two and also first signs of efficacy in this indication.
The first can you guys sites have been activated and we expect building of the first patient to happened very shortly.
As you know most to either also currently developed by our partner Imada in multiple myeloma in greater China.
With original licensing agreement, we signed with IMA in November 2017, Imap, but ground of exclusive rights for the development of multitude to integrate of China region.
I might be is currently conducting two clinical trials, we spoke to a two in multiple myeloma Taiwan.
Phase two study was not to a two in third line relapse refractory multiple myeloma and the phase three study in combination with Lynn.
Jean-Paul Kress: Yes, please.
Jens Holstein: Yeah, thank you, Jean-Paul. Ladies and gentlemen, also from my side, a warm welcome to all of you. And, as we just heard, we look back on an operationally very successful quarter for the company. And I will now guide you through the most important financial figures of MorphoSys for the third quarter of 2019. I would like to start with a consolidated statement of profit over loss.
Second line treatment.
In mid October I might also receive high end Dk Renesas granted by the Chinese Chinese National Medical products administration for both ongoing multiple myeloma trials.
These clearances, though I'd love to expand the ongoing trials also to mainland China and now proof for IMAX successful fast to market strategy.
Jens Holstein: Group revenues in Q3 totaled €12.5 million, compared to revenues of €55 million in the third quarter of 2018. Please remember that revenues in the third quarter of 2018 included the payment to Novartis of 47.5 million euros following the licensing agreement for Moor 106. Looking at expenses, our total operating expenses reached 40.3 million euros. The expenses for research and development amounted to €25.9 million compared to €18 million in Q3 2008. Expenses for proprietary R&D and technology development amounted to 23.7 million euros, compared to 15.9 million euros in the previous year. Selling expenses rose to 4.4 million euros as compared to an expense of 1.3 million euros in the year before.
Let me continue with the updates on mall one of the six the antibody directed against eyes 17 seat.
Which we jointly developed with Galapagos and fully Outlicense to Novartis in July 2018.
You may have seen from our announcement on Monday.
Based on the joint decision of possibilities Galapagos and.
And Novartis clinical development of more 106 in atopic dermatitis or 80 what ended.
The decision was based on an interim analysis for futility, which was performed in the phase two why not trial and which resulted in a low probability of the study to meet its primary endpoint.
All of the currently for ongoing studies in a de will be ended.
And the decision was based on the lack of efficacy and not on any safety issues.
Jens Holstein: Looking at general and administrative expenses, those increased to 9 million euros versus 5.1 million euros in Q3 2018. Cost of sales for the third quarter of 2019 were €1m after €0.9m in the three previous quarters. This item consists of expenses related to services provided to partners such as Novartis or IMF and also manufacturing costs for the expected market supply of Tafasitima. Earnings before interest and taxes amounted to minus 27 million euros in Q3 2019 in comparison to plus 30.1 million euros in the third quarter of 2018. Our consolidated net loss after taxes amounted to €24.2 million in Q3 2019 compared to a net profit after taxes of €30.2 million in Q3 of the previous year. The earnings per share for Q3 2019 reached minus 76 Eurocents after plus 96 Eurocents in Q3 of the previous year. I'm now on slide 13 to give you an overview of our second reporting for Q3 2019.
All three parties will explore that you to petition with more one of the six.
Now, let me briefly turn to our Putnam discovery segment.
The most advanced product of the button is terrific monies Johnson's trim file.
We're very pleased by Johnson's strong and continuous commitment to swim fire.
As expressed in these broad spectrum of indications.
In ongoing trial conducted by Janssen.
Johnson also reported a strong quasi from fire losses.
Which led us to adapt our expectations fell to 2019 royalty income and Yens will cover that in them units.
That concludes my part of the presentation.
Before I hand over to yet for the financial review I would like to take the opportunity to thank our employees and our partners for the commitment and key contribution to the success of multiples.
I'm very excited by the opportunity to head office.
Jens Holstein: In our proprietary development segment, in which we focus on the research and clinical development of our own drug candidates, we recorded revenues of 1.4 million euros in the third quarter of 2019 compared to 48.8 million euros in Q3 2018. Operating expenses in this segment amounted to 32 million euros as compared to 18.6 million euros in Q3 2018. The main reason for this increase is our increasing investment in the development of our proprietary program. Consequently, the EBIT of our proprietary development segment amounted to minus 30.5 million euros compared to 30.3 million euros in the previous year. You know, a part of the discovery We apply our proprietary technology to discover new antibodies for third parties and benefit from our partners' development advancements through R&D funding, licensing fees, success-based milestone payments, and royalties.
Yes. Please.
Yes, Thank you John Paul.
Ladies and gentlemen, also from my side, a warm welcome to all of you.
And this was just heard debt, we look back on the operation in very successful quarter for the company.
And I will now guide use of the most important financial figures of multiples as for the third quarter 2019.
I would like to start with a consolidated statement of profit or loss on slide 12.
Group revenues in Q3 totaled 12.5 million euros compared to revenues of 55 million euros in the third quarter of 2018.
Please remember that revenues in the third quarter 2018 included the payment of Novartiss of putting seven and a half million euros. Following the licensing agreement for more 106.
Looking at expenses I will total operating expenses Sweet 40.3 million euros.
The expenses for research and development amounted to 25.9 million euros compared to 18 million euros in Q3 2018.
Jens Holstein: In the third quarter of 2019, revenues amounted to €11 million as compared to €6.2 million in Q3 2018. These revenues include an estimate of tram-fire revenues of €9.3 million. As Jensen reported strong sales for Tramfi in Q3 of this year, we adapted our royalty guidance for 2019. We now expect revenues between 30 to 35 million euros, up from 23 to 30 million euros at a constant U.S. dollar exchange rate. The EBIT on our apartment discovery segment increased and amounted to plus 8.8 million euros as compared to plus 3.8 million euros in Q3 2018.
Expenses for proprietary R&D in technology development amounted to 23.7 million euros compared to 15.9 million euros in the previous year selling expenses rose to 4.4 million euros as compared to an extent the 1.3 million yields in the year before.
Looking at general and administrative expenses those increased to 9 million euros was as high point 1 million euros in Q3 2018.
Cost of sales for the third quarter of 2019 were 1 million Euro Ive to open nominating rules in the previous here.
This item consist of expenses related to services provided to pop of such as Novakov Imap and also manufacturing costs for the expected market supply efficacy tomorrow.
Earnings before interest in Texas amounted to minus 27 million euros in Q3 2019 in comparison to plus 50.1 million euros in the third quarter 2018.
Jens Holstein: Moving on to the balance sheet, on slide 14, as of September 30, 2019, we recorded total assets of €541.1 million, compared to €538.8 million by year-end 2018. At the end of Q3, we had a cash position of 412.4 million euros, compared to 454.7 million euros as of December 31st, 2008. On the balance sheet, this cash position is reported under the following items: cash and cash equivalents.
Our consolidated net loss after Texas amounted to 24.2 million euros in Q3 2019 compared to a net profit after tax of 30.2 million euros in Q3 of opinions here.
The earnings per share for Q3, 2019 reached minus 76 heroes and after plus 96 cents in Q3 of the previous year.
Im not on slide 13 to give you an overview of our segment reporting for Q3 2019.
Jens Holstein: Financial Assets at Fair Value with Profit and Loss, and Current and Non-Current Other Financial Assets at Amitabh. The number of shares issued totaled 31,927,958 at the end of Q3 2019 compared to 31,839,572 shares at year-end 2018. To briefly sum up the key figures for the first nine months of 2019, please turn to slide 15. Group revenues amounted to €60.7 million for the first nine months of 2019. In the first nine months of 2018, group revenues reached €66 million. Of the revenues in the first nine months of 2019, €53.4 million were success-based payments. The majority of this sum was made up by the milestone payment received from GSK, as well as Trampire loyalty income that amounted in total to €23 million.
In our proprietary development segment in which we focus on the research and clinical development of our own drug candidates.
We recorded revenues of 1.4 million euros in the third quarter of 2019 compared to 48.8 million euros in Q3 2018.
Operating expenses in this segment amounted to 32 million euros as compared to 18.6 million euros in Q3 2018.
The main reason for this increases our increasing investments for the development of our proprietary programs.
Consequently, the EBIT of our proprietary development segment amounted to minus 50.5 million euros compared to 30.3 million units in the period.
And our part with discovery segment, we apply our proprietary cannot technology to discover new antibodies for third party and benefit from our partners development about when we'll R&D funding licensing fees access based milestone payments and royalties.
Jens Holstein: R&D expenses amounted to €75.3 million in the first 9 months, of which €68.8 million represented R&D expenses for proprietary drug development and technology development. Hence, EBIT in the first nine months of 2019 amounted to minus 56.3 million euros compared to minus 30 million euros for the first nine months of 2018. Consolidated in a single slot, net loss reached minus 52.7 million euros for the first nine months of 2009.
In the third quarter of 2019 revenues amounted to 11 million euros as compared to 6.2 million euros in Q3 2018.
The revenues include an estimate.
Fire revenues of 9.3 million euros.
As Tencent reported strong sales will transpire in Q3 of this year, we adapted our royalty guidance for 2019.
We now expect revenues between 30 to 55 million euros up from 23 to 30 million euros.
Jens Holstein: Let's now move to our financial guidance. Today we would like to reaffirm our financial guidance for the full year 2019, which was updated in July in connection with the start of a phase 3 clinical development program with T-Limap, formerly Moor 103, as described before. For 2019, we anticipate group revenues in the range of 65 to 72 million euros. As mentioned earlier, we updated our Royalty Guidance due to strong term power sales in Q3 2019, as recorded in January. Thus, we now estimate the trend probabilities to be in the range of 30 to 35 million euros, and consequently, we anticipate reaching the upper end of our revenue guidance for 2009. We expect an EBIT in the range of minus 105 to minus 115 million euros.
At a constant U.S. dollar exchange rate.
The EBITDA on our part and discovery segment increased and amounted to plus 8.8 million euros as compared to plus 3.8 million euros in Q3 2018.
Moving onto the balance sheet on slide 14 as of September 32019, we recorded total assets of 541.1 million euros compared to 558.8 million euros by year end 2018.
At the end of Q3, we had a cash position of 412.4 million euros compared to 454.7 million Euro as of December 31st 2018.
On the balance sheet. This cash position this reported on the following items cash and cash equivalent.
Jens Holstein: Proprietary R&D expenses, including technology development in 2019, are anticipated in a corridor of 95 to 105 million euros. Of note, the guidance does not include revenues from potential future partnerships or licensing agreements for Tafasitamab or any other compound that is in our proprietary right to develop. Effects from potential in-licensing or co-development agreements for new development candidates are also not included in this guide.
Financial assets at fair value for profit and loss and Karen to Noncurrent other financial assets at amortized cost.
The number of shares issued totaled 31 million line and 27958 at the end of Q3 2019 compared to 31 million 18 to 39000 covenant, having two shares by year end 2018.
To briefly sum up the key figures for the first nine months of 2019, please turn to slide 15.
Group revenues amounted to 60.7 million euros for the first nine months of 2019 in the first nine months of 2018 group revenues reached 66 million euros.
Other revenues in the first nine months of 2019 53.4 million euros, where success based payments. The majority of the some was made up by the milestone payment received from GSK as well as trend firewall to income that amounted and total to 23 million euros.
Sarah Faki: Ladies and gentlemen, this concludes my review for the third quarter of 2019. I would like to hand over to Sarah again. Thank you.
Operator: Thank you again. We will now open the call to your questions. Ladies and gentlemen, we will now begin.
Operator: and gentlemen,
Operator: If you have a question for our speakers, please press 01 on your telephone keypad now. You will be advised when you ask your question. If you change your mind and wish to withdraw your question, please press 0 and 2. Please use only the handsets while asking a question. The next question received is from Konstantinos Abrilakis from Deutsche Bank. Your line is open, sir. Thanks for taking my questions and congrats to John Paul and his first MorphoSys call into the team for initiating the VLA submission for TAPA. My questions relate to RE-MIND.
R&D expenses amounted to 75.3 million euros in the first nine months of which 68.8 million represent R&D expenses for proprietary drug development and technology development.
Hence EBIT in the first nine months of 2019 amounted to minus 56.3 million euros compared to minus 50 million euros for first nine months of 2018 consolidated and thus lots net loss breached minus 52.7 million euros.
The first nine months stuff with of 19.
Let's now move to all financial guidance.
Today, we would like to reaffirm our financial guidance for for the full year 2019, which was updated in July in connection with the stop offer phase three clinical development program with mop formally more one or three as described before.
Manos Mastorakis: Are the results from the lenalidomide monotherapy arm in line with your expectations? What should we expect to see in the detailed presentation at ASH? First, the top line release. And will you include duration of response and progression-free survival data?
For 2019, we anticipate group revenues in the range of 60 572 million Euro.
As mentioned earlier, we updated our royalty guidance due to strong turnpike sales in Q3 2019 as reported by Janssen.
Malte Peters: Thanks, Cosoptimus, and Malte will handle the questions.
Yes, we now estimate Trump qualities to be in the range of 30 to 35 million euros.
Malte Peters: Thank you, Konstantin. Thank you, Jean-Paul.
And consequently, we anticipate we'd see upper end of our revenue guidance for 2019.
We expect an EBIT in the range of minus 105 to minus one in the 15 million euros proprietary R&D expenses, including technology development in 2019 anticipated in a corridor of 95 to 105 million euros.
Malte Peters: The Monotherapy Arm met our expectations, and if you recall that we had frequently referred to published lenalidomide monotherapy trials published by Witzig, for example, and Virnig, you can see that the data we published yesterday are fully in line with what has been published before, so we are extremely encouraged and also satisfied to see these data. We are extremely encouraged by the magnitude of the differences between the treatment effect between the two arms, and in our eyes, this certainly increases the chances that FDA will look at our data with a positive opinion. To your second point...
Of note the guidance does not include revenues on potential future partnerships or licensing agreements potassium up or any other compounds that is in our proprietary development.
Effects on potential in licensing or co development teams for New development candidate also not included in this guidance.
Ladies and gentlemen, this concludes my revenue for the third quarter of 2019, I would like to hand over to Sarah again. Thank you.
Malte Peters: Regarding ASH, we will provide more data. We will include duration of response and progression-free survival data in that presentation, and we will also provide more details on the parameters and the covariates that we have selected together with FDA. So you can expect to see that.
Thank you again, we'll now open the call for your question.
Thanks.
Ladies and gentlemen, we will now begin the question answer session.
Question for our speak ASP PRASA zero, one telephone keypad now.
The advice when you ask your question.
Malte Peters: And then a quick follow-up on ReMind. Do you expect the data, especially the overall...
If you change your mind and wish to withdraw your question. Please press narrow and two.
Operator: You know, do you expect the
Operator: chances for full versus accelerator approval for TAFAA. What are your thoughts there?
Participants are requested to use only handsets.
Asking a question.
Malte Peters: Yeah, I mean, that's a million-dollar question, of course. I know from having spoken several times to FDA that they will make this a review issue, so they will look at the data and, during review, make a decision as to whether this is a full approval or a conditional approval. I don't want to stick my head out here to give you any regulations, but as I said in my first reply, I think the probability of success of our filing here has certainly gone up, looking at the very significant magnitude of difference that we have reported. So I would leave it at that, not to put any words into FDA's mouth.
First question received as from Constantinos, Okay Lackeys from Deutsche Bank Your line open Sir.
Thanks for taking my questions and congrats to John Paul on his first Morphoses call into the team for initiating bulent submission for Tassler.
So my questions relate to remind our the results from the Lenalidomide monotherapy arm in line with your expectations, what should we expect to see in the detailed presentation at Ash first the topline release and will you include duration of response and progression free survival data.
Thanks goes up you notice and.
Multiple under the question.
Thank you are going to do thank you Ron Paul the outcome of the remind.
And I did remark monotherapy arm met our expectations and if you recall that we had less frequently refer to published Lenalidomide monotherapy trials published by the Big for example, and we are Nick.
Shanshan Xu: The next question we received is from Shanshan Xu from Barenberg Capital Market. Your line is now open, madam. Good morning and good afternoon, Dr. Gress. Given it is your first time, I'll go easy on you with a very simple question.
You can see that the data we published.
Yesterday, our fully in line with what has published what have been published before so we are extremely encouraged and also satisfied to see these to see this.
Jean-Paul Kress: So, can you please share more color with us regarding the progress of securing the European partnership for Tefacitimat? Given the recent news that Dr. Simon Moroney was nominated as a board member of Novartis, it is an indicator of future partnership between MorphoSys and Novartis.
In data.
We are extremely encouraged by the magnitude of the treatment of the differences between the treatment effect between the two arms and in our eyes. This increase certainly the chances that FDA, we'll look at our data.
Jean-Paul Kress: Hi Shanshan, thank you for the question and the kind words. So, you might remember that I've always been very open about the partnership philosophy and approach. The idea is basically to maximize the value of TerraCityMap, not only commercially in the short term, but also for the pipeline in a product approach. We think this asset has...
With a positive opinion.
To your second point.
Regarding ash, we will provide more data we will prove in crude duration of response and progression fee survival data.
In that.
Presentation and.
We will provide also more details on the parameters to on the.
Jean-Paul Kress: blockbuster potential, at the least. And obviously, a partnership makes a lot of sense. So, you know, to realize all the potential, there is a need to broaden beyond one single geography. And that's the approach we've been taking in a very disciplined way over the last couple of weeks since I joined. As you know, there have been discussions in the past, but probably more regional or, you know, kind of out licensing or this kind of thing. So this is not completely out of the table, but my approach is more global. And I have to say that we got great traction from several strategic groups of potential partners, and we are in the middle of very productive discussions that, you know, are very promising. And again, you know, I mean, you can probably expect that the discussions are also around U.S. co-promotion.
On the.
Our covariance that we had selected together with FDA. So you can expect to see more data at that meeting.
And then a quick follow up on remind you do so do you expect to date, especially the overall survival findings to affect the chances outperformed versus accelerated approval for tougher what are your thoughts there.
Yeah, I mean, that's a that's the million dollar question of costs.
I know from having spoken several times after day that.
They would it make this a review issue. So they will look at the data enduring revenue will take a decision as to whether this is a full approval or a conditional approval.
I don't want to stick my head out yet to give you any.
The explanation, but as I've said in my first reply I think the probability of success of our.
Operator: Thank you. Maybe one for Malta?
Malte Peters: Malta, can you please confirm the reason you used the investigator-assessed data in GreenMind is because lenalidomide monotherapy is not really officially approved for relapsed refractory DL-BCL, and there might be a lot of single-center data in your real-world data set. And also, for your ASH-LMIND presentation, are you going to stratify your patients into natural killer cell high versus low? Thank
Filing here certainly gone up.
With looking at.
Very significant magnitude of difference that we have reported so I wouldn't even debts as stats to not put any words into ft Ace models.
The next question received as fun Shanshan Xu from better and better capital markets. Your line is now open Madam.
Malte Peters: So let me start with the second question first. We will not stratify patients into NK high and NK low because we have looked at the data and are fairly confident that the combination of tanfazitamab and lenalidomide sort of mitigates the difference between NK high and low. So the presence of lenalidomide basically outweighs the number of NK cells that a patient had to begin with, so that's the reason why we haven't seen a striking difference. You will hopefully see a subgroup analysis that will show this data, so I can't really preempt that discussion, but that's the reason why we will not stratify for that in LMIND. With respect to your first question, because of the nature of the real-world data study, it's actually impossible to have an independent review committee level of review for real-world data.
Good morning, and good afternoon, Dr., Greg a welcome.
Earning call given is your first time.
Very good question.
So can you please share more color with us.
Securing the European partnership.
Given the recent news that the Axiata dr. osten them around.
At the board member of targets indicator of future partnerships between from Novartis.
Hi, Shanshan. Thank you for for the question and the kind words.
So you might remember that there will always be in a.
Very open and partnership philosophy and approach.
The idea is basically to maximize the value of divesting them up not only commercially shop them, but also for the pipeline into product approach. We think this asset has.
Blockbuster potential at at the least and obviously a partnership makes a lot of so.
To realize all the to potential there is a need to broaden beyond the one single Jakafi and that's the our push we've been taking very disciplined way over the last couple of weeks since I joined.
Malte Peters: So that's why you have to go with investigator-read data. We discussed it with FDA. FDA was fully aware and supportive of this fact. And just to compare like to like, we, for this analysis, compared then the investigator data from ReMIND with the investigator data from LMIND. The concordance rate in LMIND for investigator and independent review committee data is extremely high, so it didn't make a lot of difference. So that's why we decided to...
As as you know they had been discussions in the past, but probably more regional art.
No.
You know kind of outlets on sitting on these kind of thing. So this is not completely out of the tables, but my apologies more globally and I have to say that we've got great traction from several other strategic so potential partners and we are in the middle of very positive discussions that.
You know are very promising and again.
James Daniel Gordon: The next question we received is from James Gordon from DC Morgan. Your line is now open, sir.
I mean, you can probably expect that the decisions also around us co promotion.
Thanks, Keith maybe one for Mark.
Please confirm the reason you use that investigator assessed data Embry mine is because lenalidomide monotherapies not really officially approved for relapsed refractory CLL and they might be a lot of single center dating of network eight OSAT and also for Ash L. mind presentation I'd like to stratify patients.
James Daniel Gordon: One was just on beemind futility, and I appreciate it's in the hands of the DSM, but can you narrow down the timelines at all? Is it plausible it's late November or could it even be into December, and how likely do you see the different outcomes as in continuing all comers or continuing the NK subpopulation versus total futility? And just one other one on Beemind, which would also be, so if you do pass through the futility analysis... When are you expecting to have the efficacy analysis results? And could they also be pushed out because the futility has been pushed out, and I think that's event driven. The final result, I think, is also event-driven, but I'm not sure if that has been pushed out. And maybe the final one, actually, just on partnering, can you talk about the key things you're most looking for in a partner?
Q natural killer cell hybrid low thank you.
So let me start with the second question first.
We will not stratify in and Kehinde NK low patients because.
We have looked at the data and.
Our fairly confident that the combination of to hit them up and Lenalidomide.
In sort of mitigates the difference between NK high end goal so the presence of Lenalidomide.
Jean-Paul Kress: So, hi James. I'll start with the partnership and Malte, how does that sound in your mind? So, you know, I mean, there are a couple of components here, and you have some proxies of deals on the market, which makes sense for us. You know, I think we need, first and foremost, to think about the synergies, commercially, but also for development. I think it's very important that we... We, if and when we establish a partnership, we'll have, you know, someone complementary but, at the same time, very focused on the same aim, which is to unlock the pipeline for a product. So we need competencies. And obviously, there is timing, which is important for a potential partner. What is the status in terms of other priorities?
Basically outweighs the number of NK cells that are patients had to begin with so.
Thats. The reason why we havent seen a striking difference you will hopefully see a subgroup analysis that.
Sure. This data so I can't really preempt thats.
Discussion, but thats. The reason why we were not stratified put that in.
In mind with respect to your first question.
Because of the nature of the rewards database study.
It's actually impossible to have.
And independent revenue Committee leveled off revenue for real World data. So thats why you have to goal ways.
Investigator read data.
We discussed it with an FDA was fully.
Aware and supportive of this fact and just to compare like to like.
We.
Jean-Paul Kress: So we want the commitment. We want the right economics for us, obviously, and in a fair way that both parties are incentivized. We also want to make sure that our assets are handled properly and that we will be sure that there will be the right commitment. For me, it's very important. So in the discussions we've been having, I think we are pretty confident that it is following these lines, and hopefully, more to come. So Malte, for the other question, please.
This analysis compared to then the investigator data from remind with investigator data from mind. The concordance date in end mind for investigator and Independent Review Committee data is extremely high.
So it didn't make a lot of difference so thats why we decided to do this.
The next question received as from James Gordon from Jpmorgan. Your line is now open SAR.
Okay.
One was just on three months utility and I appreciate the man to the DSMB, but can you narrowed down the timelines at all it closed on it.
Malte Peters: Thanks, Jean-Paul. Before going to answer your questions, I may repeat what Jean-Paul said in his initial remarks, that in our eyes, the data that we published yesterday significantly reduced the risk associated with the L-Mines filing. Or in other words, the probability of success, in our opinion, has clearly gone up. So that means that B-Mines in itself has become almost a moot point in our eyes because of what I just said before.
Late November could even be into December and how likely do you see the different outcomes I didn't continue no commercial continue the NK cell population versus touch a futility.
Just one other one on Pete mine, which would also be if you talk through the futility analysis.
When are you expecting kind of the efficacy analysis results and could they will still be pushed out because the futility pushed out.
Thats event, driven the fundamental I think it's also event driven but I'm not sure for has been pushed out.
Malte Peters: But answering your question, the futility analysis will be performed in the fourth quarter, so it's coming up really fairly soon. I don't want to give a firm date, but we are on track with what we had planned. With respect to the probability, you know, that's a very difficult question; I think it's fair to say that with the introduction of the amendment, the probability that BeMind becomes a positive study has gone up. And with respect to the timelines for the overall study, we are enrolling well. We don't see any dip in terms of enrollment, so the timelines have not changed compared to what we had.
And maybe high Genfund.
So to speak to find what it actually also just on partnering could you talk about what will be key things you're much looking forward to partner.
Hi, James.
By the partnering and multi hundred decline.
So I mean areas. There is a couple of components here and you have some poke season on opinions on the market.
Which makes sense for us.
I think we need we need first and foremost to think about the synergies commercially but also for development I think it's very important but we we and when will establish a partnership will have.
So someone complementarity, but at the same temporary focus on the same aim which is to unlock the pipeline in a product. So we need competencies and obviously there is.
There is a timing which is important for potential partner what what.
Malte Peters: And the next question we received is from Greg. Your line is now open, sir.
What is that too in terms of.
Greg: Great, thank you very much for taking my questions and congratulations on the progress in the quarter. Maybe I could just switch to the commercialization efforts as you ramp up for potential launch in the U.S. and whether there are things that you can help either qualitatively or quantitatively describe for us in terms of your commercialization efforts and how the progress has been in the past quarter and kind of what else needs to be done before you feel that you are in a very good place to launch. Also, just on that in terms of whether there's been any incremental work that's been done on your end in terms of gauging physician and repair feedback as to the profile of tafacitimab. I'll stop there, and then I have one more follow-up question. Thank you.
Other parties. So we wanted the commitment we want the right economics for us obviously and in a fair way that both parties are incentivized will also one to make sure that our cities on the properly and that we will be a we will be show that there will be the right commitment from its very important so in the discussions we've been here.
Being.
I think we are.
Pretty confident that.
It is following these lines.
And hopefully more to come soon.
So most of all the other question, yes, thanks, some Paul.
Before going to the to answer your questions I need we repeat what John Paul said in his.
Initial remarks that in our highest.
The data that we published yesterday significantly reduced the risk.
Associated to the online filing on other words the probability of success in our opinion has clearly going up so that means that the mines in it so.
Jean-Paul Kress: Hi Greg. Thanks for the question. So obviously, commercialization has been a big focus of mine since I joined, for many reasons. The main one is probably the timing and encouraging data that we just generated, which makes us three companies that we will be launching next year. So, you know, I think it's very important that everybody understands that we are in a very good position in the U.S. with a very good team that we've put in place, and now which is going from the hiring mode to the execution mode, preparing fully for launch, which for every launch, like for every launch, involves obviously a lot of tasks. And we're also gaining customer intimacy and engagement with the space. We have people in the field, professionals in the field, engaging not only with the KOLs and the prescribers but, at the same time, also now with patient associations. And to your question about payers, at least we're doing payer research to make sure that we will make sense when we launch, at the same time for the reputation of the company, but also for the economics and the NPV. So this is going well, Craig. And obviously, it's a little bit where I come from.
Becomes almost a mortgage.
Coins in our eyes, because of what I've said before but answering your question.
A futility analysis will be performed in this in the fourth quarter, So it's coming out.
We do fairly soon I.
I don't want to give the from dates but we are on track.
What we had planned.
With respect to the probability.
That's very difficult question also I think it's fair to say that with the introduction of the amendment.
The probability that the mind becomes a positive study has.
Going up.
And with respect to their timelines for the overall study we are enrolling where we don't see any dip.
In terms of enrollments all other timeline.
Not changed compared to what we had Uh huh.
Okay.
Jean-Paul Kress: So that's a big, big focus. We've been, with my colleagues here, very much kind of shifting from probably more the development stage to the commercialization stage. And I'm actually very pleased with the progress we're making here.
And the next question received as from GEC Grech of an out your line is now open Sir.
Great. Thank you very much for taking my questions and congratulations on the progress on a quarter.
Maybe I could.
Just switched to the commercialization efforts as you ramp up for potential.
Greg: And my follow-up question does focus kind of on your BD strategy, partnership strategy. In general, obviously, there's been a lot of focus around what the potential partnership strategies around Tapa-Sitamab are. The first part of this question is, you know, now that you've got your positive reMIND data in hand, does that change in any way how you think about the kind of deal value that you can potentially extract from a partner, and do you necessarily feel that the ME-MIND data changes that dynamic? So that's the first question. And then my second question, or the second part of that question with regard to BD strategy, is beyond just partnerships for Tapacitamab; can you give us a flavor of any other BD interests that you may have as a company that are non-Tapacitamab related, whether they're in-license?
The launch in the U.S. and.
Whether there are things that you can help.
Either qualitatively or quantitatively describe for us in terms of your commercialization efforts and how the progress.
Has been.
In the past quarter, and kind of what else needs to be done before you feel that youre in a in a very good places to launch also.
Just on that in terms of whether there's been any incremental work that's been done on on your end in terms of gauging physician and are payer.
Feed back just after the profile.
After a set amount I'll stop there and I have one other follow up question. Thank you.
Hi, Greg Thanks for the question.
So obviously the commercialization has been a big focus of mine since I joined fall for many reasons. The main one is probably the timing.
And to encouraging data as we just generic meeting which make us.
Jean-Paul Kress: Thanks. So regarding the partnership, obviously, the data we just announced puts us in a stronger position. I mean, it was obviously assumed that we would be successful, but now it's out there. It's very good.
Sep theme that we will be launching mid next year. So.
I think it's very important that.
Nobody understands that we are in a very good position into you with with.
Very good team that we put in place and now which is going from the high remote to the execution mode.
Jean-Paul Kress: It's very good timing. It will help everyone to take an informed decision. And because this is, again, the regulatory pathway, it's very important for everyone here. So we obviously feel in a very good position. Now, you know, saying that we'll extract more value, I don't know in what form, but at the same time, I think the simple fact that these data are out is very helpful, and I'll let you know maybe on that path as well. The other deal, I think, you know, I think it's very important that we prioritize. We are a lean organization. We have to be mission critical, focused on Tafasitama. It's also what I've been trying to really push through the organization, to really focus on the main asset, which is a pipeline for a product. And it doesn't mean we stop looking at other things, because there are ongoing assessments of potential in-licensing opportunities. But this is not something I would put at the top of the list.
Bring fully fall launch, which for every launch like five Relaunching is obviously a lot of tasks.
And we also gaining customer intimacy and.
Engagement with the space, we have people in the field portion in the field engaging not only with the cable as and subscribers at the same time also known as patient associations and to your question with.
With the years at least within payer research to make sure that we we will make sense. When we launched at the same time for the reputation of the company, but also for the economics.
And.
The NPV. So this is this is going well, Craig and obviously, it's a little bit where I come from so that's that's a big big focus weve been with my colleagues here very.
Much kind of shifting from.
Probably more development stage to commercially that at some stage in et cetera that section very pleased with the progress we're making here.
Then my follow up question.
Don't.
Focus kind of on your BD strategy partnership strategy.
Jens Holstein: And maybe to add, Greg, and also maybe start with your first question, I mean, we are really well on track in terms of, you know, the establishment of that organization in the US. You will see that, specifically, when you look at our year-end forecast in terms of EBIT, the spend will increase, and that will come mainly from the activities that we actually have in the US. So to a lesser extent, coming from R&D, they will also increase versus the previous quarters, but not to such a great extent.
In general obviously, there's been a lot of focus around what the potential partnership strategy around tap a set amount bar.
The first part of this question is the on now that you've got.
The or positive remind data in hand does that change in any way how you think about.
Kind of deal value that you can potentially extract from a partner.
And do you necessarily.
I feel that doesn't leave mine data.
Changes that dynamic.
Jens Holstein: So it is actually highlighting, you know, what sort of effort we are making. And, as Jean-Paul said, I think the organization has shifted to the priorities that Jean-Paul said in his speech at the beginning, to really focus our activities on, of course, delivering on the plan in terms of development but to make the launch of Tapasitama a success. And then thirdly, of course, the partnering has gained a lot of traction, and the stronger the package is, I mean, that's normal, you know, the higher the interest of the people are to participate in such a product. And, you know, we'll feel very good. We feel that we're well on track. And therefore, you know, we're really optimistic for the rest of the year and for 2020, that we will deliver according to what we told you.
So that's the first question I know my second question.
Our second part of that question with regards to BT strategy is beyond just partnerships for tough a set amount.
Can you give us a flavor of any other.
BT interest that you may have a company that are non tap a set amount related to weather there.
Licensing or any other efforts. Thank you.
Oh, thanks, so regarding the partnership.
Obviously data, we just announced with dosing.
In a stronger position I mean, it was obviously assume that wouldn't be successful, but now it's out there. It's it's very good it's a very good timing. It we learn it will help everyone to take an informed decision and because this is again the regulatory pathway.
It's very important for everyone. Here. So we obviously have filled a very good position now, saying that will extract more value.
I don't know what form but at the same time I think the simple fact that these data out.
Danielle Brell: The next question we received is from Danielle Brell of Piper Jeffries. Your line is now open, madam. Thank you. Just a few questions. Can you remind us which baseline characteristics were matched for Remind? How much variability is there between the two data sets, and how much is acceptable? And then I have a quick follow-up.
Our our very helpful.
And and I led teams governments may be on on that but as with the older deals I think we note I think is very important we prioritize.
We are selling organization, we have to be mission critical.
Focused on deficit them up it's also what have been trying to really pushing the organization that we really focus on domain, I said, which is a pipeline into product and.
Malte Peters: So, we have not publicly disclosed what the matching criteria were in the RE-MIND study to compare the... Tafacitamab lenalidomide combination with lenalidomide single agent data. But I can make a couple of comments and say that this was a very fruitful discussion with FDA where we agreed on criteria. There are nine criteria, so that's a lot. And whenever we speak about the design of our ReMIND study to investigators, for example, they are really surprised about how many matching criteria we have selected together with FDA, which speaks to the quality of the data and to the robustness of the whole exercise here. So stay tuned for more information that's coming out. And the fact that we selected nine criteria also led to the fact that from the almost 500 patients that we found globally, we boiled it down to 76 who met all of these criteria. So that in itself shows you how massive the effort was and how broad we started. And we're really, really happy to have found a very well-defined patient population that allowed us to do a very strong matching exercise.
It doesn't mean, we stopped looking at other things because they are ongoing assessments of potential in licensing opportunities, but it is not something I would put that the top that the priority right now.
Yeah, and and maybe to add Greg.
And also maybe starting with your first question I mean, where we are really well on track in terms of the set of that organization in the U.S.
You will see that specifically when you when you look at our and year end forecast in terms of EBIT. This spend will increase and it will come.
Mainly from you know that activities that we actually have in the U.S. so to a lesser extend coming from the R&D. They will also increase versus the previous quarters, but not to that great extent am. So it is actually highlighting you know what sort of effort, we undertake and as John .
Paul said I think the organization has shifted to the to the priorities that he some Paul said in his speech at the beginning to really focus our activities and on of course, delivering and due to the plan in terms of development, but to make the launch of tough I see some of it.
Success, and EM and then thirdly of course, the partnering has gained a lot of traction and the stronger packages I mean as normal.
The you know that the higher the interest of the people onto participate in such a product and we'll see very quickly feel that we're well on track.
And therefore, you know where we're very optimistic for the rest of the yen fall for 2020 that we deliver according to what we told you.
Danielle Brell: Thanks Malta, that's helpful. And then I'm just curious, more broadly speaking, about how your efforts to increase physician awareness of mortality in the U.S. are progressing.
The next question received as from done yet.
Jean-Paul Kress: So. So, Daniel, this is Jean-Paul.
Pipe at Jefferies minus now open Adam.
Jean-Paul Kress: Very well, actually. This is part of my comment I made earlier on the execution acceleration we're doing now, which is normal, like six to nine months before the launch. We are in the field. We have a great opportunity at ASH. [inaudible] publications and the presentations of the data, the numerous data, including these ones, will help in that regard.
Thank you thanks, guys, but the question.
Just a few can you remind us which baseline characteristics from match for for remind how much variability is there between the two data sets and how much is acceptable and then I have a quick follow up.
So.
We have we have not publicly disclosed what the.
Jean-Paul Kress: So it's going well, it's progressing, it's obviously one of our main priorities, and we have the right teams in the field. It's important to understand that regardless of a partnership, we feel in a very good position to launch in the US. I would say a partnership with a co-promotion in the US would double down, but our goal and our aim is to be resourced adequately for a solo launch.
Action criteria.
Were between for in the remind study two compared to.
Tougher pick them up.
The might combination with the Lenalidomide.
Finger agents data.
But I can make a couple of comments.
Say that.
This was a very tight.
They would put discussion with the FDA, where we agreed on material.
If they are nine criteria, so thats a lot.
And whenever we speak about the design of all our remind study two investigator for example, they are really.
Malte Peters: Yeah, maybe just to add one or two more details on what John-Paul said. We have massively increased our medical affairs capabilities. We are on the roll of starting investigator-initiated trials. We have medical science liaisons in the field as we speak. We are way beyond 700 visits by our own MSLs with key opinion leaders and doctors in the We want to bring this number close to 2,000 visits, so that we really spread the word of our product. So I think I can only support what Jean-Paul said. We are making a massive effort to double down on these activities.
Surprised about how many matching criteria, we have selected together with FDA, which speaks to the quality of the data into the robustness of the whole exercise here. So.
Stay tuned for more information that.
Upcoming that's coming out.
And.
The fact that we have selected nine criteria also led to the fact that from the five almost 500 patients that we found globally, we boiled it down to 76, who met.
All of these criteria. So that's in the tariff show fuel hall massive or the effort was and how broad we started.
Malte Peters: And I would add, Daniel, that, you know, the product profile that is emerging now with this data is best in class. We really, I would say, feel the need here, and that's the feedback we get.
And we are really really happy to have found.
Very.
Well defined patient population that allowed us for a very strong matching exercise.
Thanks. Thanks, Okay. That's helpful. And then I'm just curious I'm more broadly speaking about higher efforts to increase physician awareness of markedly in the U.S. are progressing.
Jason Butler: The next question we received is from Jason Butler from JMP Security. Your line is now open, sir. Hi, thanks for taking the questions. Just a couple of questions on pipeline assets. The first on More 202, can you just tell us what you're looking for in terms of early signs of efficacy and membranous nephropathy, and are there any PD markers that we should be looking for as that trial progresses? And then on More 106...
So.
So then you will jump all very well actually is is this is part of my comment I made earlier on.
Execution acceleration, we're doing now which normally like 96 to nine months before the launch.
We are in the field, we have a great opportunity at ash in a few weeks, we'll have many many engagement.
Operator: and on more.
Interactions with the space and obviously the.
Operator: Unknown Executive, Zain Ebrahim, Gabriela Hobbs, Charles Mabbutt, Philippa Pritchard
Publications and presentations of.
Operator: Thank you.
Malte Peters: Hi Jason, Malte will handle the first part, and I'll add a comment.
The data.
The numerous data including.
Malte Peters: So let me start with Morpho2. I can give you a little bit more detail about that. So we selected this indication because it's characterized by the presence of an autoantibody directed against the PLA2R antigen. And these antigen-antibody deposits are found in the glomerular capillary membrane, leading to nephrotic syndrome in roughly 80% of patients. There's a direct correlation, which makes this indication extremely well-studied, I would say, between the presence of the autoantibodies and the disease severity, and this has been confirmed by several publications and treatments, so you can actually consider the presence of the autoantibody a true surrogate marker, which has also been accepted by FDA. So, coming to your question, what am I looking for? I'm really looking for a decrease in the autoantibody levels. We know that roughly 80% of patients that we enroll in our study are positive for the autoantibody, so it doesn't require a lot of pretesting, and of course, I'm looking at signs of amelioration of the nephrotic syndrome. So that's the, I would say, high-level bird's-eye view of what we're trying to accomplish.
These ones will help with that regardless, so it's going well is progressing.
Obviously, a waterfall main parties and the we have the right teams.
In the field.
It's important to understand that regardless of a partnership with feeling very good position to launch into us I would say a partnership with the co promotion in the with would double down but our goal in our aim is to be resourced adequately for solo launches.
But.
Yeah, maybe just to add one or two more details on what John Paul said.
We have massively increased on a medical affairs.
Capabilities, we are on.
On a roll off starting investigator initiated trials, we have a medical science liaisons in the fields as we speak.
We are.
Way beyond 700 visits of our own I Miss ads with key opinion leaders and doctors in the United States.
We want to bring this number close to 2000 visits so that we really spread the word of.
Our our product.
So I think I can only support which on Pall sets, we are making a massive efforts to ER to double down on on these activities.
And I would add the Daniel that.
The the product profile at its emerging now these data is best in class we really.
With that field in the momentum here.
And we that the feedback we get.
Jean-Paul Kress: I would add that syndication is actually underserved. There is a high unmet need. It's only immunosuppressants and corticosteroids and some rituximab.
The next question received as from Jason Butler from JMP Securities. Your line is now open sorry.
Hi, Thanks for taking the questions I'm just a couple on pipeline assets. The first on more too old to.
Jean-Paul Kress: And so there is no modern agent and not many, as we know, products in the pipeline. So I think we are excited by the fact we could feel the need here. And the mechanism seems to make a lot of sense.
Can you just tells what you're looking for in terms of first signs of efficacy in membranous nephropathy and are there any PD markers that we should be looking for as that trial progressive.
Malte Peters: Yeah, excellent comment, and we took it up to make it worse for patients, working only in those patients with low titers of the antibody. So we believe we have a real unmet medical need here where our antibody could make a true difference.
And then on more want to that just any thoughts on almost you know potential path forward here do you see any potential in other indications or or not thanks.
Jean-Paul Kress: And last comment on that, this is not a stage between Malte and me, but we're excited by this campaign increasingly because of the unmet need and the series of indications, but I wanted to say here that we can actually double down in nephrology. There are other nephrology keynaming indications that we could leverage here, and there are obviously other autoimmunities.
So so hi, Jason Multer will handle the first part and the other column.
So let me start with motto tool I can give you little bit more detail here.
So we selected the indication because it's characterized by the presence often auto antibody.
Directed against appear a to our antigen and these.
Jean-Paul Kress: We'll be disciplined, but it's exciting and one of six.
Antigen antibody.
Deposits.
Our found in the glomerular capillary.
Membrane, leading to new Flotek syndrome in a roughly 80% of patients.
Malte Peters: Yeah, so I think it's a little early to really speculate on that. The three companies had a good development program for atopic dermatitis, which we terminated, as you read two days ago, and we are certainly doing everything that's needed to finish up the clinical development program. We are now in the process between the three companies to look again at the preclinical data to brainstorm essentially what other opportunities there are and then to collectively decide what other possibilities may come up in the future. I think I would leave it at that. It's a bit too early to really be more precise because these discussions are ongoing at this point.
There is a direct correlation which makes this indication extremely.
Got you move I would say between the presence of the auto antibodies and the disease severity.
And this has been confirmed by several publication and treatment. So you can actually consider the presence of the auto onto body. It's a true surrogate marker, which has also been.
Accepted by by FDA, So coming to your question what am I looking for I'm really looking for a decrease in the auto antibody Levered. We know that's roughly 80% of patients that we enrolled in our study are positive for the auto antibody thoughts.
Doesn't require a lot of pre pre testing.
And of course, I am looking at signs of amelioration, often for Arctic syndrome. So thats. The I would say high lever broadside perspective of what we're trying to accomplish here I would add uptime.
The syndication is actually under Sir yes, there is a high unmet needs on the Oh.
Immunosuppressants and corticosteroids and some rituximab.
Derek Archila: And the next question we received is from Derek Minnoli from RBC. Your line is now open.
And so there is no modern agent and not many are as we know.
Malte Peters: But at the same time, I'm just now wondering why you felt that you needed to have nine eligibility criteria in order to do the comparison analysis? My thought of that is that you are, by default, then reducing the variability of the sample, and therefore it's almost like you're looking at a subcohort of the real world setting. And as a follow-up, in theory, if you had to run an actual phase three trial with LEN as a control, would you have used the same nine eligibility criteria?
Products in the pipeline. So I think we're excited by the fact, we would fill unmet need here and the mechanism seems to make a lot of sounds excellent comment and we took from up to.
To make it was for patients work only in those patients with low title of the antibody.
So we believe we have a real unmet medical needs, you're well aware all onto body equipped make a true difference and last comment on that.
Page between men and women.
We're excited by this company increasingly because of the unmet need and and a series of indication.
Derek Archila: Yeah, really great questions. Thank you very much.
That's what I wanted to see year.
We can actually double down in Florida, all during the polar GQ naming indications that we could live which here and then obviously other alternatives will be discipline, but it's exciting.
Malte Peters: So, as I said to the earlier participants, we agreed on the nine criteria with FDA because, if you remember the earlier discussions we had, it was very important for us to select a patient population that's highly matchable and highly similar to the population that we have in our mind. So, the more criteria you select, the higher your confidence level is that you're really looking at almost identical patients, I would say. And we also agreed on the level of stringency that we wanted to achieve between the two study cohorts, and we're very pleased about what we accomplished on the stringency side. And your last question is also very good. If you were designing a phase three study now, you would select these criteria because they are known to be prognostic and have a big influence on the natural history of disease in this patient population. So, we have selected, of course, highly clinically relevant criteria that are applied in the everyday treatment paradigm of patients.
And one of six.
Wanted to fix what was the question again sorry.
At each of 106 of it.
Can you give any initial yes, so I think it's a little too early to really speculate on that.
We will the three companies had.
A good development program in atopic dermatitis, which we terminated as you Reds two days ago.
And.
We are certainly.
Doing everything that needed to finish up the clinical development program.
We are now in the process between the three companies to look again at the preclinical data to brainstorm essentially what other opportunities there are and then to collectively these sites.
What are the possibilities may come up.
In the future I think I would leave it at this it's a bit too early to really.
Pre size there I'll be more precise because these are these discussions are ongoing as we speak.
Derek Archila: Great. And as a follow-up, with regard to the patients that were excluded from the L-MIND arm for the purpose of this analysis, I know that, could you share maybe perhaps what were the characteristics of those patients? Were they complete response, partial response? And also, why they didn't make it in the analysis? How much different were they versus the rest of the patients in the L-MIND population?
And for next question received as from Sarah Carmody monopoly from RBC. Your line is now them.
Hello, Thanks for taking my question I have two questions. The first one so I think now I totally understand why.
We're all new matched with 15% of them.
Actual real world data, but at the same time I'm just not wondering why did you feel that you need to have nine eligibility criteria in order to do the comparison analysis.
Malte Peters: Yeah, so these four patients didn't match the criteria that I just specified. We haven't given details, but we will describe these patients in our future publication. Hopefully, it will come up at ASH, but they did not match the criteria. And at that moment, we will also give you more details on the treatment outcome of these patients that were excluded.
My thought how does that not by default then reducing the variability of the sample and therefore, it's almost like you're looking at a sub par.
Part of the real.
Setting.
And as a follow up here, if you had actual phase three trial with land.
The control would you have used to say nine eligibility criteria.
Derek Archila: Okay. Could I just follow up? Should we then perhaps see that there may be a risk that the FDA will request these patients be excluded from the final analysis?
Yes, really great questions. Thank you very much.
So as I've said through the earlier participants we agreed on the nine criteria with FDA.
Malte Peters: No, I don't think so, because what we will do is we will basically submit two data sets, right? That's how you have to look at it.
And because of.
If you remember the earlier discussions we have it was very important for us that we selected patient population thats highly matchup and highly.
Malte Peters: So we will submit our L-MIND data, that is, the 81 patients that we always spoke about, and then we will submit the R-MIND data set, which will contain the comparison of the 76 and 76. FDA will get to see everything; they will get to see the raw data of every single patient that was enrolled in L-MIND and in R-MIND. And of course, as you know, FDA is free to conduct its own statistical analysis, right? So they get the raw data and then can apply the raw data in any way or form they consider adequate. But they will, of course, see all the data sets and contents of every single patient that
Similar to the population that we have in mind. So the more criteria. If you will select the idea is your confidence level that you're really looking at almost identically patients I would say.
And we also agreed on the level of stringency that we wanted to accomplish between the two study costs and we're very pleased about what we accomplished on the stringency side and your last question is also very good if you would design phase three study now.
You would select.
These criteria because they are known to be prognostic and have a big influence off.
On the natural history off disease in this patient population.
So we have selected of cross highly clinically relevant criteria that our apply in the everyday treatments.
Derek Archila: Okay, thank you very much. You're welcome.
Paradigm of patients.
Jean-Paul Kress: Thank you all very much for your questions. To wrap up,
Hi.
And as a follow up with regards to the patients that were excluded from the L. mind arm for the purpose of this analysis.
Jean-Paul Kress: I hope you get the feeling that we're well on track to achieving our goal set for this year. We're very pleased by the recently announced RE-MIND data. With RE-MIND, we achieved an important milestone that brings us closer to our planned completion of the PLA filing based on L-MIND to the FDA by year-end, as planned. If accepted, it will allow us approval and market entry by mid-2020. In parallel, our plans for Europe remain unchanged.
I know that you could you share maybe perhaps what were the characteristics of those stations, where they complete response partial response and also why they didn't make it in the analysis.
How much different they were versus the rest of the patients of the L. mine.
Relation.
Yeah. So and these are these four patients.
Jean-Paul Kress: We still intend to file an MAA with the European Medicine Agency by mid-2020. For P-MIND, the event-driven immunolysis utility by IDMSE is expected to occur by year-end. We will initiate the frontline study with TAFA and DLBCL soon and aim to further broaden the development of this key asset. Meanwhile, our other proprietary program, MOC-202, is also making good progress. We are announcing progress for our partner IMAB as well as for our own clinical development for MOP202 and are very pleased to see this campaign contributing to a proprietary clinical footprint. All together, we look forward to the very exciting developments ahead of us. Thank you.
Didnt match the criteria that I just specified we haven't given our distressed but we will describe these patients in our future a publication hopefully it will come up.
At ash, but they did not match.
The criteria and at that moment, we will also give you more details on.
Treatment outcome of these patients that were included networks quarters.
Okay.
Hi, just follow up do you should we then perhaps see that they may be a risk that.
Yes, Steve patients to be excluded from the final analysis.
Operator: That concludes the call. If any of you would like to follow up, we're in the office for the remainder of the day. Thank you for your...
No I don't think so because what we will do if we were basically submits to datasets right that that's how you have to look at it. So we were submitted our M&A target. The 81 patients that we always talk about and then we will submit the remind dataset, which will contain the comparison also.
Operator: Thank you for your participation on the call, and goodbye.
Operator: Thank you for your attention on the call, and goodbye.
Operator: Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining us, and have a pleasant day. Goodbye.
70, 676, or if they will get to see everything they will get to feed the raw data off every single patient that wasn't wallets and mine to entering the mind and of course as you know is free to do to conduct their own statistical analysis right. So they get the raw data and then can apply that was.
Daytime anyway or form they consider.
Adequate but they were of coffee.
All dataset and containing of every single patient that was treaters.
Okay. Thank you very much.
You're welcome.
Ladies and gentlemen, as far as Matt No further questions I hand back to the speakers.
Thank you all are very much for your questions.
With that.
I Hope you got the.
Sentiment as well on track to achieving our goals set for this year. We're very pleased by the recently announced remind the tough with remind which is an important milestones that brings us closer to our plan completion of the appeal of filing based on L. mine to the Estee Lauder and as planned.
Accepted it the lowest us approval and markets on three by mid 2020 in parallel our plans for Europe remain unchanged, we still intend to file a sooty European medicines agency by mid 2020 .
I'll be mine, even driven in during eyes is capacity by the idea Missy is expected to occur until year end, we initiate the frontline study, we still find deals bcm soon and aim to further broadens development of these key assets.
Our other property program March two two is also making good progress we announced progress for partner I might as well and our own clinical development from up to two in a very pleased to see this compound contributing to a proper into clinical footprint.
Altogether, we look forward to the very exciting developments that office. Thank you.
That concludes the call if any of you would like to fill up when.
Made up today.
Thank you for your participation on the call and Goodbye.
Yes.
Ladies and gentlemen, the conference has now concluded and you may disconnect your telephone.
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