Half Year 2021 MorphoSys AG Earnings Call
Ladies and gentlemen, and welcome to the for the second quarter 2021 and financial results Conference call.
Ladies and note that for the duration of the presentation, all participants will be in listen only mode and that's a car.
For instance, being recorded.
After the presentation, there will be and opportunity to ask questions.
Please note that we can only take your questions. If you have for adjusted by name.
Should anyone need assistance during the conference calls they may signaled this by pressing star and zero on the telephone.
Now I would like to turn on the conference over to Doctor He and I Cabello. Please go ahead.
Ladies and gentlemen, good afternoon al. Good morning, My name is <unk> Senior director Investor Relations on the horses and it is my pleasure to work coming into our second quarter 2021, and financial results Conference call.
Joining me on the call today are strong for crest, Chief Executive Officer sung Lee Chief Financial Officer, Paul and I'll, let chip.
Operating officer, and Mike and Peter <unk>, Chief Research and development.
Before we begin I'd like to remind you on slide 2 that some of the statements made during the call today are forward looking statements, including statements regarding our expectations for the commercialization of our products and our development plans and impact of COVID-19 on our.
Business and expectations for the compounds and our pipeline.
As well as the development plan.
Our collaboration partner.
These forward looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described and a further 20-F and handheld report or for the year ended December 30.
For 2020 and from time to time and other SEC documents on smartphones.
It is important to keep in mind that our statements on this webcast speak as of to date.
On slide 3 you will find the agenda for today's call.
So on call will begin with an overview of the second quarter and were given outlook for language.
<unk> provide a commercial update and Martin will provide an update.
On our development pipeline the price before turning the call to sung for a summary of our second quarter and first half 2021 and financial results for.
Following these prepared remarks, we'll open the call for your questions with that and I'll hand, the call over to Sean.
Language.
And welcome everyone and thank you for joining us today for our second quarter financial results and business update.
I am, particularly excited about the addition of constellation pharmaceuticals to muscle and wants to express <unk>.
Very warm welcome to our new Timna.
So on players.
Together with constellation, which caused the great to bolt on energy to bring new breakthrough therapies to patients.
And this is an exciting new chapter for our company as we significantly expand our pipeline and bolster our position and hematology oncology.
Constellation's mid to late stage candidates fit well with our proven clinical development regulatory and commercial capabilities.
And allow us to potentially expand into solid tumors and.
And shop.
We are uniquely positioned to unlock that value.
Over the last several weeks I've had the opportunity to spend time and can bridge with the constellation team and there is tremendous excitement amongst both organizations.
Integration is well underway and we are focused on what we can do together to bring constellation's mid and.
And late stage candidates to market to meet the needs of patients.
Key opinion leaders and physicians have also expressed their enthusiasm as we would enhance our presence in hematology oncology.
And increase our efforts to improve the lives of patients living with.
Sir.
Okay.
Moving to <unk>.
And we achieved $18 million and sales and grew 16% quarter over quarter.
And with a vaccination and rollout well and the way and the U S. We saw the positive impact to module sales.
And we.
Wisconsin, and the second quarter and are encouraged to see that has regained momentum continuing in July.
While we anticipate increased module the uptake and the second half we ended the first half with a lower number of patients on therapy than we had anticipated.
Due to the challenging.
<unk> and Varian won brought on by Covid for the majority of the first half.
For that reason.
And we're narrowing our group revenue runs guidance, which Sun will elaborate further on.
Nevertheless, we are encouraged by module is leading market share position and remain optimistic.
About the future trajectory, especially given the recent positive momentum.
We are seeing a shift to more second line patients, which will naturally lead to longer duration of treatment.
We have a broad development program for <unk> as it underway and.
And we believe 30 day Mab.
Has the potential to be a backbone therapy for non Hodgkin's lymphomas.
Alongside our partner insight.
We have initiated 2 pivotal trials this year in first line and DLP, Seattle, and relapsing refractory Follicular and marginal zone lymphoma, respectively and.
And we don't.
Paid beginning a third pivotal trial and C. L. L. Later this year.
We're also progressing with sales up from up our RTC. This opioid candidate for autoimmune membranous nephropathy and.
And we will be providing a proof of concept of data at a scientific conference later this year.
And we also are on track to start the trial in Iga.
A net property another autoimmune disease with high unmet need.
Turning now to our newly acquired clinical stage assets from constellation starting with collaborative.
Petrobras is.
And being evaluated.
LTC and the phase III trial manifest 2 for myelofibrosis in combination with rock solid and EBIT.
There remains a large unmet need for patients with myelofibrosis, and we believe that Brazil has the potential to chance to treatment paradigm multi.
<unk> will give an update about.
And now we will optimize the manifest to try out for maximum success.
Constellation's next compound is a second generation easy H 2 inhibitor, which is currently in phase 2 clinical trial and has best in class potential for treating both hematologic and solid tumors.
The second generation Z H 2 inhibitor has shown promising preclinical data.
And we are looking for what's to advancing in the clinic.
We see lots of Polemize in constellation's overall pipeline too.
Together, we have the great opportunity to bring breakthrough therapies to.
And and to write the next chapter in our company's history.
With that I will turn the call over to how long for a commercial update.
Thank you Carol and Paul and Hello, everyone.
We reported second quarter non sugar sales of $80 million. This represents a 16%.
<unk> sequential increase over first quarter, and which will be sales of $15.5 million.
Importantly, the results were driven primarily by demand the.
The quarter also benefited from clinical trial orders of approximately $1 million.
We are encouraged with the results, our leading market share and especially.
Basically the momentum we saw build throughout the quarter.
After anticipated headwinds from Covid in April and May we.
We exited June with a positive uptick in demand and we have seen this trend continue into the third quarter.
We see incremental momentum and module this growth and the community setting.
And growth in academic centers, holding steady 70% of module sales coming from the community setting.
The relative ease of administration safety profile efficacy and duration of response and second line treatment for relapsed refractory <unk> Bcl are key drivers for adoption as we increase.
Witness and differentiation and this market with a large unmet patient need.
Yeah.
Looking at demand and more detail more than 700 accounts in aggregate have ordered matures since launch during.
During the second quarter, nearly 500 accounts ordered with approximately 70%.
And where it counts representing repeat orders.
The proportion of accounts that Reorders in Q2 increased and in June we saw the highest level of repeat orders since launch. These trends are encouraging as we approach the 1 year anniversary of maturities approval.
Another important.
And of those rig and we are tracking is the penetration into the second line setting.
We are observing increased usage in second line therapy, which we are confident over time will lead to increased duration of response and.
And enable patients to benefit and stay on treatment longer in the relapsed refractory setting.
We are also seeing an overall increase and patient treatments as restrictions continue to ease.
We present, a trailing 3 year long term L mind data and our scope, where we received positive customer feedback.
The data not only show a durable response and consistent safety profile.
It also.
Suggests that the combination with lenalidomide could potentially lead to durable remission.
We expect to present additional data at Soho and ash in the coming months to continue to define the clinical profile of maturity.
Building on the momentum we were able to take into July.
We remain optimistic.
Second half of 2021.
And while there are still site of care that are either closed or not fully up and running for industry to engage healthcare professionals due to the global pandemic. We are seeing an increase in physician's ability to meet in person.
And the morphosis and inside teams are at the ready sites of care continue to become more.
More accessible.
With that I'll turn the call over to Montana.
Thanks, Paul and we have made tremendous progress across our pipeline throughout the first half of 2021.
With the acquisition of constellation, we now have a robust pipeline of for advanced clinical programs.
Which we believe could change the way cancer is treated.
For more jewelry or toughest hit them up we dose the first patients and 2 pivotal trials and extending the clinical development to frontline diffuse large b cell lymphoma, and relapsed refractory indolent lymphoma.
Later this year or early next.
Year, we plan to start and additional pivotal trial assessing toughest hit them up in combination with insights PSV kinase data and EBITA Pasok CUSIP for CLI patients.
We will also initiate mined way a study that will investigate and optimized treatment schedule with over with a reduced.
And number of modules administrations for patients with NHL.
Optimizing the treatment schedule is particularly important for patients with Follicular lymphoma, and relapsed refractory dob's yet.
We are excited about developing collaborative in myelofibrosis, and I will share some updates.
We will enhance the manifest to trial and a minutes.
We are evaluating for is optimal for patients with autoimmune membranous nephropathy or a M N and disease with a significant unmet medical need and the emplace study.
And we are about to start another another trial in Iga nephropathy.
Iga nephropathy is and autoimmune disease with high unmet needs.
It's about 8000, new patients per year, and the United States and.
And about 11000, new patients per year and.
On the EU.
These clinical trials, which run in parallel and highlight our confidence and.
And on Hoffman to develop for us at him up broadly and autoimmune diseases.
CPI to 029 is a potent is a potentially best in class easy H 2 inhibitor.
It is currently and a phase 2 clinical trial investigating its potential and inhibit and hematological and solid tumors.
In addition, we are excited about preclinical data showing that CPI 2 zero to 9 is synergistic with Lenalidomide and <unk>.
These data suggest that this molecule could have the potential to offer long term treatment for patients with this disease.
Now, let's take a look at some exciting.
And commenced for toughest hit them up.
We received a positive <unk> opinion much earlier than we had hoped for and it is a pivotal step towards bringing this important treatment to patients in Europe as soon as possible.
The 3 year long term follow up data were included in the European.
Getting new and dossier and we are now eagerly awaiting the European Commission's decision.
We are very encouraged by the confirmation of the orphan drug designation status by the C. O M. P mid July.
Firming that mean jewelry may be of potential significant benefits compared to.
The existing therapy in this setting for Levi.
And <unk> and <unk>, we share strong 3 year follow up data from our airline trial.
We are encouraged by the maturing and mine data and that it continues to show durable responses and a consistent safety profile.
The median overall survival is 33.5 months and it for years, 42% of patients are still alive.
Suggesting that this regimen could offer a functional cure for certain patients.
We are excited that there is significant benefits for patients with second line and also.
Also certain non <unk>, which is demonstrated by the Kaplan Meier curve on slide 11.
Polaris is a potential first in class and best in class bet inhibitor may have the potential to become the new standard of care for patients with myelofibrosis.
Type of bone marrow cancer with high.
Unmet medical needs.
It may be the only therapy that impacts all for hallmarks of myelofibrosis bone marrow fibrosis spleen volume.
Anemia and constitutional symptoms.
Operator: Gentlemen, welcome to the Maphosa Second Quarter 2021 Financial Results Conference Call. Please note that for the duration of the presentation, all participants will be in listen-only mode, and that the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Please note that we can only take your questions if you have registered by name. Should anyone need assistance during the conference call, they may signal this by pressing star and zero on their telephone. Now, I would like to turn the conference over to Dr. Julianneuagabauer. Please go ahead.
In the United States and Europe, there are an estimated 30000 to 35000 patients.
With myelofibrosis debt are considered intermediate or high risk.
Only about half of these patients are receiving <unk> therapy, a JAK inhibitor and many patients are experiencing a suboptimal response. So there is a high unmet need.
<unk> has shown a strong response.
<unk> in combination with <unk>.
Achieving a spleen volume reduction and 67% of first line myelofibrosis patients.
It has to architect has also shown strong data and the second line or.
Julia Neugebauer: Ladies and gentlemen, good afternoon or good morning. My name is Wila Neugebauer, Senior Director of Reservations at Nothosis, and it is my pleasure to welcome you to our second quarter 2021 Financial Results Conference Call. Joining me on the call today are Sean Paul Crest, Chief Executive Officer; Sun Li, Chief Financial Officer; Roland Wandler, Chief Operating Officer; and Maltepeters, Chief Research and Development Officer. Before we begin, I'd like to remind you on slide two that some of the statements made during the call today are forward-looking statements, including statements regarding our expectations for the commercialization of our products and our development plans, the impact of COVID-19 on our business, and expectations for the compound in our pipeline, as well as the development plans of our collaboration partners.
Third line myelofibrosis.
This data makes us very confident about the.
And rest of the ongoing global Phase III study manifest tool.
And just a randomized study comparing <unk> plus <unk> against <unk> alone and frontline myelofibrosis.
During our due diligence process prior to the acquisition we looked carefully.
Into every aspect of constellation's clinical development programs, specifically the manifest to study.
Based on our detailed assessment, we decided to optimize the trial designed to raise its overall probability of success by increasing the number of trial participants to approximately 400 patients.
Julia Neugebauer: These forward-looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in Morphosis 20s, an annual report, all for the year ending December 31st, 2020, and from time to time in other SEC documents of Morphosis. It is important to keep in mind that our statements on this webcast speak only as of today. On slide three, you will find the agenda for today's call.
And <unk>.
We will also improve the speed of enrollment.
And have already launched and mitigation plan, ensuring operational excellence.
This includes adding additional C R <unk>.
Improving interaction with investigators and expanding the number of countries and sites and other.
Other measures.
With all activities in place we expect to report topline data from this study and the first half of 2024.
Julia Neugebauer: Jompong will begin with an overview of the second quarter, and we'll give an outlook. Roland will then provide a commercial update, and multiple will provide an update on our development pipeline before turning the call to sum for a summary of our second quarter and first half 2021 financial results. Following these prepared remarks, we'll open the call for your questions. With that, I now hand the call over to Joan Paul.
Morphosis enters the second half of 2021 with a stronger position than ever to achieve its goal to develop transformative medicines.
<unk> and potential cure for people living with cancer.
Throughout the remainder of the year and beyond we expect to achieve key clinical milestones that will advance this mission.
Unknown Executive: Welcome, everyone, and thank you for joining us today for our second quarter financial results and business update. I am particularly excited about the addition of Constellation Pharmaceuticals to Morphosis and want to express a very warm welcome to our new team members. Together with Constellation, we have a great opportunity to bring new breakthrough therapies to patients. This is an exciting new chapter for our company as we significantly expand our pipeline and bolster our position in hematology and oncology. Constellations' meet to late-stage candidates fit well with our proven clinical development, regulatory, and commercial capabilities and allow us to potentially expand into solid tumors. In short,
For <unk>, we expect to share exciting clinical data and a M and at a medical conference later this year.
And we are excited to start a study and a second immune indication, namely Iga and nephritis.
For collaborative and we expect to provide data of a new data cutoff of the manifest phase II study at a medical conference later this year.
Next year will be the year.
And where we will start several other combination studies, combining tougher set them up with novel agents and feel it and and non Hodgkin lymphoma.
We also expect data from our phase III study in mind and 2023.
In 2024, and 2025, we will see.
Total studies reading out, namely manifest too and front of mind on.
Offering potentially clinical benefit to first line patients with myelofibrosis and you'll be Sierra.
Unknown Executive: We are uniquely positioned to unlock that value. Over the last several weeks, I've had the opportunity to spend time in Cambridge with the Constellation team, and there is tremendous excitement amongst both organizations. Integration is well underway, and we are focused on what we can do together to bring constellations, mid- and late-stage candidates to market to meet the needs of patients. Key opinion leaders and physicians have also expressed their enthusiasm as we will enhance our presence in hematology oncology and increase our efforts to improve the lives of patients living with cancer. Moving to Monjuvi.
So you can see that there is exciting news coming at the horizon and we're looking forward to sharing these news.
E P.
That I turn the call over to Sam for a review of the financials.
Thank you Martha.
We're pleased to share our financial results for the second quarter and first half of 2021.
Moving to slide 16 total revenues for the second quarter of 2021 were $38.2 million euros.
Compared to $18.4 million euros for the comparable period in 2020.
<unk> sales in Q2 were $14.9 million euros, reflecting 16% growth quarter over quarter.
Royalties from net sales of <unk> and the second quarter were $13.7 million euros.
Unknown Executive: We achieved $18 million in sales and grew 16% quarter of a quarter. With the vaccination, we'll allow well in the way in the US. We saw the positive impact on Monjuvi cells as we exited the second quarter and are encouraged to see that regain momentum continuing in July. While we anticipate increased Monjuvi uptake in the second half, we ended the first half with a lower number of patients on therapy than we had anticipated, due to the challenging environment brought on by COVID for the majority of the first half. For that reason, we are narrowing our group revenue run guidance, which San will elaborate further on.
<unk> and increase of 18% quarter over quarter.
Cost of sales were $10.1 million euros, and the second quarter compared to a credit of $7.2 million euros from the second quarter of 2020 due to a reversal of impairment charges.
Turning to operating expenses.
<unk> expenses and the second quarter were $40.5 million euros compared to $30.9 million euros and the same period of 2020.
The growth primarily reflects the increased investment to support the advancement of our proprietary programs.
Selling expenses were slightly down at $28.5 million.
R&D and the second quarter compared to $29.3 million euros, and the second quarter of last year.
Unknown Executive: Nevertheless, we are encouraged by Monjuvi's leading market share position and remain optimistic about the future trajectory, especially given the recent positive momentum. We are seeing a shift to more second-line patients, which will naturally lead to a longer duration of treatment. We have a broad development program for Tafacitamab underway, and we believe Tafatidamab has the potential to be a backbone therapy for non-Hodgkin's lymph
G&A expenses and the second quarter were $30.5 million euros compared to $13.8 million euros for the second quarter of 2020. This.
And this increase was driven by $18.8 million euros and <unk>.
<unk> costs related to our recent acquisition of constellation and partnership with royalty pharma.
For the second quarter, we reported a consolidated net profit of $20.9 million euros compared to a consolidated net loss of $53.1 million euros and the second quarter of 2020.
Unknown Executive: Alongside our Partner Insight, we have initiated two pivotal trials this year, in first-line DLBCL and relapsing factory follicular and marginal zone lymphomas, respectively. And we anticipate beginning a third pivotal trial in CLL later this year. We're also progressing with Celsartamab, our anti-CISOPT8 candidate for autoimmune membranous nephropathy, and we will be providing a proof of concept update at a scientific conference later this year. And we are also on track to start a trial in IGA nephropathy, another autoimmune disease with high unmet needs.
And the second quarter finance income of $102.4 million euros was recognized mainly due to a decline of the financial liability from collaborations.
Overall, the financial liabilities from collaborations declined by $101.7 million euros quarter over quarter and.
And at $445.9 million euros.
Recall that the balance and financial liabilities from collaborations.
<unk> and accounting view of expected profits from the net product sales of <unk> and the U S and the relapsed refractory <unk> setting owed to our partner.
<unk> finished.
Unknown Executive: Turning now to our newly acquired clinical stage assets from Constellation, starting with Pellabres, Pelabresib is being evaluated in the Phase 3 trial Manifest 2 for myelofibrosis in combination with ruxolitinip. There remains a large unmet need for patients with myelofibrosis, and we believe that Blabresib has the potential to change the treatment paradigm. Malta will give an update about how we will optimize the manifest two trial for maximum success.
The recognition of finance income and reduction of liabilities both related to the inside collaboration do not have any impact on cash.
Moving to slide 17 for the results for the first half of 2021.
Total revenues for the first half of 2021 were <unk> 85.
$5.4 million euros, compared to $269.7 million euros for the comparable period and 2020.
The year over year decline was entirely driven by the recognition of $236.1 million euros as part of the upfront consideration from our partner insight and the first half of 2020.
Unknown Executive: Constellation's next compound is a second-generation easy H2 inhibitor, which is currently in phase two clinical trial and has best in class potential for treating both hematologic and solid tumors. The second generation EZH2 inhibitor has shown promise from My sync Preclinical Data, and we are looking forward to advancing it in the clinic. We see lots of promise in Constellation's overall pipeline. Together, we have the great opportunity to bring breakthrough therapies to patients and to write the next chapter in our company's history. With that, I will turn the call over to Roland for a commercial update. Thank you, Jean-Paul, and hello everyone.
And cost of sales were $15.2 million euros, and the first half of 2021 compared to a credit of 4 million euros and the first half of 2020 due to a reversal of impairment charges.
Turning to operating expenses R&D expenses, and the first half for $73.8 million euros compared to 52.
$2.4 million euros for the same period of 2020.
Selling expenses were $56.6 million euros, and the first half compared to $42.1 million euros and the first half of last year.
Recall that the second quarter of 2020 was the first full quarter impacted by expenses for services provided.
And by our partner insight and connection with <unk>.
G&A expenses and the first half were $40.8 million euros compared to $23.9 million euros for the first half of 2020.
Roland Wandler: We reported second quarter Montchubi sales of 18 million. This represents a 16% sequential increase over the first quarter Montchubi sales of 15.5 million. Importantly, the results were driven primarily by demand, and the quarter also benefited from clinical trial orders of approximately $1 million. We are encouraged with the results, our leading market share, and especially the momentum we saw built throughout the quarter. After anticipated headwinds from COVID in April and May, we exited June with a positive outlook on demand, and we have seen the trend continue into the third quarter. We see incremental momentum in Montjuvi's growth in the community setting, with growth in academic centers holding steady. 70% of Montchouvi sales come from the community setting.
As previously mentioned the second quarter of 2021 was impacted by transaction costs related to console.
Constellation and royalty pharma for.
For the first half of 2021, we reported a consolidated net loss of $20.7 million euros compared to a consolidated net profit of $179.8 million euros and the first half of 2020.
As mentioned earlier 2000.
Provided and it benefited from the recognition of $236.1 million euros as part of the upfront consideration from our partner insight.
Turning to the balance sheet, we ended the second quarter with cash and investments of $1, 1.3 billion euros compared to.
Roland Wandler: The relative ease of administration, safety profile, efficacy, and duration of response in second-line treatment for relapse refractory deal with DCL are key drivers for adoption as we increase awareness and differentiation in this market with a large unmet patient need. Looking at demand in more detail, more than 700 accounts in aggregate have ordered Montjuvi for a long time. During the second quarter, nearly 500 accounts ordered Montjuvi, with approximately 70% of those
<unk>, 2.4 billion euros as of the end of 2020.
Pro forma cash and investments following the completion of the constellation acquisition and the recent equity purchased by royalty pharma was $1.1.7 billion euros.
And we have closed.
And our transactions with constellation and royalty pharma I'd like to walk you through some key elements of these agreements.
Recall that royalty pharma made an upfront payment of 1 for $2.5 billion and return from our focus will pass on 100% of trim fire royalty to royalty pharma starting with.
Roland Wandler: The proportion of accounts that reordered in Q2 increased, and in June, we saw the highest level of repeat orders since launch. These trends are encouraging as we approach the one-year anniversary of Montchouvi's approval. Another important metric we are tracking is penetration into the second line setting; we are observing increased usage in second-line therapy, which we are confident over time will lead to increased duration of response and enable patients to benefit and stay on treatment longer in the relapse-refractory setting.
Royalties earned for the second quarter of 2021 and thereafter.
And our focus will also pass on 80% and future royalties and 100% of future milestone payments on hotel amount for <unk>.
60% and future royalties on <unk> and 3% on future net sales of constellation's clinical.
Nicole assets.
<unk> and CPI <unk> hundred 9.
All of these royalty payments will be recorded and the morphosis income statement.
As such we will record a financial liability and the third quarter for the future royalty payments that royalty pharma is entitled to.
Roland Wandler: We are also seeing an overall increase in patient treatments as restrictions continue to ease. We presented Kelling's three-long-term Elmine data at ASCO, where we received positive customer feedback. The data not only show a durable response and a consistent safety profile, but it also suggests that the combination with Lenadomide could potentially lead to durable remission. We expect to present additional data at Soho and Ash in the coming months to continue to define the clinical profile of Montchou.
And measurement of the financial liability is initially at fair value and subsequently based on the effective interest method.
Following the close of the constellation acquisition royalty pharma purchase morphosis shares and the aggregated amount of $100 million as part of the funding agreement.
They.
Our 1 million 337552, new ordinary shares at a price of 60.335 euros per share the volume weighted average price of <unk> shares 5 trading days prior to the acquisition of constellation.
Roland Wandler: Building on the momentum we were able to take into July, we remain optimistic for the second half of 2021. While there are still sites of care that are either closed or not fully up and running for industry to engage healthcare professionals due to the global pandemic, we are seeing an increase in physicians' ability to meet in person. Anthomorphosis and internal teams are at the ready as sites of care continue to become more accessible. With that, I turned a call over to Mount Sinai. Thanks, Roland.
Pro forma shares outstanding on a diluted.
The acquired basis is $34 million 128053, following the purchase.
Turning to our guidance for 2021 on slide 19.
Starting with group revenues.
And we are updating the previously provided range of 150 million euros to 2.
Maltepeters: We have made tremendous progress across our pipeline throughout the first half of 2021. With the acquisition of Constellation, we now have a robust pipeline of four advanced clinical programs that we believe could change the way cancer is treated. For Monjuvi, or tapathetamap, we dosed the first patients in two pivotal trials, extending the clinical development to frontline, diffuse large B-cell lymphoma and relapsed refractory ind
Diluted million euros to a range of 155 million euros to 180 million euros and.
And narrowing of the guidance range reflects updated non Judy product sales expectations as.
As mentioned previously we will continue to record from fire revenues and this is reflected in the guidance range.
<unk> hundred and are moving to operating expenses, which is comprised of R&D and SG&A expenses. We expect 2021 operating expenses to be and the range of 435 million euros to 400.465 million euros, which include expenses for constellation as of July 15th 2000.
Maltepeters: Later this year or early next year, we plan to start an additional pivotal trial, assessing Tepathetamab in combination with insights PS3-Kinase-Delta inhibitor parsaclysyp for CLL patients. We will also initiate Mindway, a study that will investigate an optimized treatment schedule with a reduced number of Monjouf administrations for patients with NHL. Optimizing the treatment schedule is particularly important for patients with follicular lymphoma and relapsed refractory DLBCL.
1.
The range also includes 1 time transaction related costs of 36 million euros and.
And we anticipate R&D expenses to comprise between 52% to 57% of operating expenses, excluding the 1 time transaction related costs with.
And with that and we would like to open the call for questions operator.
Maltepeters: We are excited about developing Pellarerib in myelophabrosis, and I will share some updates on how we will enhance the Manifest II trial in a minute. Additionally, we are evaluating phythalamap for patients with autoimmune membranous nephropathy, or AMN, a disease with a significant unmet medical need in the M-PLAE study. And we are about to start another trial in IGA nephropathy. Hypergia nephropathy is an autoimmune disease with high unmet needs, with about 8,000 new patients per year in the United States and about 11,000 new patients per year in the EU.
Thank you ladies and gentlemen, we will now begin the question and answer session.
I would like to question piece price zero and 1 on your telephone keypad now.
And you will be advised when you asked your question.
Jim.
If you change your mind and wish to withdraw your question. Please.
Zero and key.
Participants are requested to use on handsets will asking a question.
Maltepeters: These clinical trials, which run in parallel, highlight our confidence and commitment to develop philatamap broadly in autoimmune diseases. CPI 2029 is a potentially best-in-class EZH2 inhibitor. It is currently in a phase two clinical trial investigating its potential in hematological and solid tumors. In addition, we are excited about preclinical data showing that CPI 2029 is synergistic with lanylidomide. These data suggest that this molecule could have the potential to offer long-term treatment for patients with this disease. Now, let's take a look at some exciting news about Tafetamop. We received the positive CHMP opinion much earlier than we had hoped for.
We've received the first question and that is from James quickly Morgan Stanley. Your line is now open. Please go ahead.
Hello, and thank you for taking my questions.
A couple for first of all of them on JV can you give us a bit more details on how the key launch metrics for tracking our ongoing since you've had a bit more of a reopening and.
And the U S and in terms of number of accounts of accounts that you manage to have face to face interactions with them as well as some some physician feedback and are in and the last quarter on and then also and we.
And speaking to send Kols and there seems to be I suppose some retrofits to maybe use.
And Oh and JV given the the the lack of efficacy.
Maltepeters: And it is a pivotal step towards bringing this important treatment to patients in Europe as soon as possible. The three-year long-term follow-up data were included in the European Submission Dossier, and we are now eagerly awaiting the European Commission's decisions. We are very encouraged by the confirmation of the orphan drug designation status by the COMP in mid-July, confirming that Minjuvi may be of potential significant benefit compared to the existing therapy in the setting, Polyvi. At ASCO, EHA, and ICML, we shared strong three-year follow-up data from our L-Mine trial. We are encouraged by the maturing Elmine data and that it continues to show durable responses and a consistent safety profile.
And I think I see and.
Oh, and perceived lack of efficacy and a double hit patients or and primary refractory patients and so what are the key sort of pushback. So reasons to not describe them on JV that youre hearing.
And from Us and the field.
Question number 1 and question number 2.
And pellet Brexit had been and manifest 2 trials clinical.
Clinical trials Gov and September 'twenty, 'twenty, 2 readout for apartment completion and with the trial starting in November.
2020, so just to just under 2 years for stopping the trial to and to primary readout and adding 1919.
And more patients and 18 more months in terms of the potential readout. So is the original enrollment is slower than anticipated or are you looking for for a longer follow up and and what was the key decision to increase the number of patients with it.
Maltepeters: The median overall survival is 33.5 months, and at four years, 42% of patients are still alive, suggesting that this regimen could offer a functional cure for certain patients. We are excited that there are significant benefits for patients with second line and also third line DLBCL, which is demonstrated by the Kaplan-Meyer curves on slide 11. Pellabresip, a potential first-in-class and western-class VETI inhibitor, may have the potential to become the new standard of care for patients with myelofibrosis, a type of bone marrow cancer with high unmet medical need.
And so more power for the primary endpoint on spleen volume reduction or was it.
<unk> to debt.
How other secondary endpoints, particularly total.
To symptom score and do you need to show a benefit on benefit when it took a simple school and for either approval for or uptake and Keith.
And <unk>.
Thanks, James for the question on.
The rollout will uncertainty and monitor the.
Other questions on multiple will go for the non who became a little.
A question and it would just seem to collaborate and Christian.
Thank you so on Poland, Hi, James regarding your questions on module the metrics, we of course track a range of metrics.
Maltepeters: It may be the only therapy that impacts all four hallmarks of myelofibrosis, bone marrow fibrosis, spleen volume, anemia, and constitutional symptoms. In the United States and Europe, there are an estimated 30,000 to 35,000 patients with myelofabrosis that are considered intermediate or high risk. Only about half of these patients are receiving ruxolitinip therapy, a jack inhibitor, and many patients are experiencing a suboptimal response.
Some of which we outlined on slide 8 debt you have and the presentation.
We provided.
Do you see interest as 1 example, the number of accounts that are adopting on jewelry and.
We are since launch now at the number of 700 accounts, 70% of which are and community with increasing traction there.
And we also just shared that we had close to 500 accounts ordering just in Q2.
Which we find very exciting.
Maltepeters: So there is a high unmet need. Pelopresip has shown a strong response rate in combination with ruxilitinib, achieving a spleen volume reduction in 67% of first-line myelofabrosis patients. It has also shown strong data in the second line or third line myelofabrosis. This data makes us very confident about the success of the ongoing global phase three study, Manifest 2. It is a randomized study comparing Pelarbresib plus ruxilitinip against ruxilitinip alone in frontline myelofibrosis.
Your question to our ability to engage physicians in person and we had a tough first half of the year due to the pandemic.
Everyone, but.
But we saw increasing.
Possibilities for us to engage physicians in person as we execute to and in fact are now at about 70% of our own engagements with physicians being in person and importantly, we see that whenever we're able to engage with health care professionals and person that we see our 3 year data and our message.
Leasing truly resonate and translate into adoption when it comes to physician feedback we are especially encouraged with what we hear with the 3 year long term data that we shared at our school.
Maltepeters: During our due diligence process, prior to the acquisition, we looked carefully into every aspect of Constellation's clinical development programs, specifically the Manifest II study. Based on our detailed assessment, we decided to optimize the trial design to raise its overall probability of success by increasing the number of trial participants to approximately 400 patients. We will also improve the speed of enrollment, and we have already launched a mitigation plan ensuring operational excellence.
And especially the duration of therapy, there and as multi explained the potential that this could mean for patients to actually have durable.
<unk>.
In terms of what we hear from Kols and it is actually that excitement around the 3 year data and what this could mean for patients also knowing that the studies still going on and patients are still continuing and we hear debt as we look across subgroups that kols actually appreciate that module the offers and on.
Page for many patients, but multiple if you can just expand on that on some of the details and I think you.
Maltepeters: This includes adding additional CROs, improving interaction with investigators, expanding the number of countries and sites, and other measures. With all activities in place, Morphosis enters the second half of 2021 with a stronger position than ever to achieve its goal of developing transformative medicines and potential cures for people living with cancer.
You had some questions on the doublet and triplet hits patients.
And we.
And.
And published the L mind data several times and.
We are aware of that.
We had only a few patients with double and triple hits.
Considerations in this study, but the ones that we had enrolled did extremely well.
So we had 1 partial response 1 complete response.
On to fairly long degree so I think the fee.
Maltepeters: Throughout the remainder of the year and beyond, we expect to achieve key clinical milestones that will advance this mission. For Phelsatomop, we expect to share exciting clinical data in AMN at a medical conference later this year. And we are excited to start a study in a second immune indication, namely IGA and If Right. For Pilarp, we expect to provide data from a new data cutoff for the manifest phase two study at a medical conference later this year. Next year will be the year we start several combination studies combining tapathetamab with novel agents in CLL and in non-Hodgkin lymphoma.
Data.
For points that we have actually point to.
Fairly high.
Activity of the regimen in this and this.
Setting.
So maybe with that I move to your second.
Complex of collaborative.
And you wanted to have some information on.
The.
The trial execution, let me just say when we performed our due diligence with the constellation company. We did a really very thorough analysis of the situation. So we knew what the situation was with a with a try it.
Yes the study.
Yes.
And plan to be opened in November and we knew it took until April until actually the first patients became enrolled.
Maltepeters: We also expect data from our phase three study in mind in 2023. In 2024 and 2025, we will see pivotal studies read out, namely Manifest II and Frontmind, offering potentially clinical benefit to first-line patients with myelophabrosis and DLBCL. So you can see that there is exciting news coming on the horizon, and we are looking forward to sharing this news. With that, I turn the call over to Thung for a review of the financials. Thank you, Maltiff.
So we were from day, 1 a certain debt.
And we could pay more attention on and optimizing the clinical execution and as I said in my prepared.
Pat remarks, we have already a full fleshed out plan in place.
To do exactly that.
With respect to.
The increase of the number of trial participants on.
We have.
Have increased and we will increase the number.
On costs, we feel that we need to be we want to give to try and the highest probability of success, we want to be successful on both endpoints on the primary endpoints spleen volume reduction and 35 and also on the key secondary endpoint TFS 50 to accomplish that and also to.
Sun Li: We're pleased to share our financial results for the second quarter and first half of 2021. Moving to slide 16, total revenues for the second quarter of 2021 were 38.2 million euros compared to 18.4 million euros for the comparable period in 2020. Manjubi sales in Q2 were 14.9 million euros, reflecting 16% growth quarter over quarter.
Understand and also understanding a bit the current health care has hitachi.
Feedback.
And we decided that it's on.
Sun Li: Royalties from net sales of Trimphaya in the second quarter were 13.7 million euros, an increase of 18% quarter over quarter. Cost of sales was 10.1 million euros in the second quarter compared to a credit of 7.2 million euros from the second quarter of 2020 due to a reversal of impairment charges. Turning to operating expenses, R&D expenses in the second quarter were 40.5 million euros compared to 30.9 million euros in the same period of 2020. The growth primarily reflects the increased involvement to support the advancement of our proprietary programs.
The best decision to 2 and increase the sample size.
Great. Thanks very much.
Thank you.
On the next question is from.
And a fair bet.
Please go ahead.
Hi, Thanks for taking my questions.
So the first question is around Bon Jovi, particularly I want to understand your decision to run a trial.
Modify.
2 months of dosing.
Management schedule.
Is that something on.
Based on the feedback you've received from from physicians or.
Sun Li: Selling expenses were slightly down at 28.5 million euros in the second quarter compared to 29.3 million euros in the second quarter of last year. GNA expenses in the second quarter were 30.5 million euros compared to 13.8 million euros for the second quarter of 2020. This increase was driven by 18.8 million euros in transaction costs related to our recent acquisition of Constellation and partnership with royalty pharma. For the second quarter, we reported a consolidated net profit of 20.9 million euros compared to a consolidated net loss of 53.1 million euros in the second quarter of 2020.
Or something else.
And the second question on and as much UV is around the.
At the peak sales guidance.
And I recall, you mentioned about 500 interest on $750 million of peak sales in the U S are you confirming this guidance.
The third question is related to our resorts on that.
And into Q4 did not release.
And what should we expect to see in this.
And initial.
That release, and and what's your plan and trends going forward.
For this.
Very much.
Okay. Thank you for the question.
I'll start by your second question on the peak sales.
Yes, we still think it's possible to achieve this round.
Sun Li: In the second quarter, finance income of 102.4 million euros was recognized, mainly due to a decline in the financial liability from collaborations. Overall, the financial liabilities from collaborations declined by 101.7 million euros, quarter over quarter, and finished at 445.9 million euros. Recall that the balance and financial liabilities from collaborations reflect an accounting view of expected profits from the net product sales of Manjuvia in the U.S. In the relapse refractory DLBCL setting, according to our partner Insight, The recognition of finance income and reduction of liability, both related to the inside collaboration, do not have any impact on cash. Moving to slide 17 for the results for the first half of 2021.
Of peak sales and it's our goal to achieve it in the U S.
Offsetting.
Given the stuff we had it may take us longer to get there, but as we just mentioned and we're very encouraged with the Q2 trends that are continuing so far and Q3. So again for instance, we have a leading share and second.
And so.
What I'd like also to emphasize here is that keep in mind is just the beginning of the deficit and <unk> opportunity.
The toughest demand opportunity is bigger than all of the and this year. We just detailed day number of.
Trials.
On slide 3 is included to broaden the development planning and.
And improve our label with new indications.
With multiple studies underway to move for instance, and first line <unk> and other indications. So that also goes back to the backbone strategy. So we are pursuing so yes, we still think it's achievable.
Sun Li: Total revenues for the first half of 2021 were 85.4 million euros compared to 269.7 million euros for the comparable period in 2020. The year-over-year decline was entirely driven by the recognition of 236.1 million euros as part of the upfront consideration from our partner insight in the first half of 2020. The cost of sales was 15.2 million euros in the first half of 2021 compared to a credit of 4 million euros in the first half of 2020 due to a reversal of impairment charges.
<unk>, but I would put debt in the context of the much larger operating we have for instance, with first line and probably some numbers.
Some other company.
<unk> thrown out there and recently on the first on opportunity is significant and there is a high unmet need and we have a high confidence.
And our clinical development and our trial to compete and very effective in this space and.
On that I'd like to function to the other questions from other I think the first question was on the IV optimization.
Sun Li: Turning to operating expenses, R&D expenses in the first half were 73.8 million euros compared to 52.4 million euros for the same period of 2020. Selling expenses were 56.6 million euros in the first half compared to 42.1 million euros in the first half of last year.
Study.
This study is Cogs on mind way.
It is aiming.
Aiming at reducing the number of intravenous administrations of non Julie.
Of module B by 50%, which were increased significantly the confidence for the patients, particularly those undergoing longer treatment durations and.
Sun Li: Recall that the second quarter of 2020 was the first full quarter impacted by expenses for services provided by our partner insight in connection with Manjuvi. GNA expenses in the first half were 40.8 million euros compared to 23.9 million euros for the first half of 2020. As previously mentioned, the second quarter of 2021 was impacted by transaction costs related to consolation and royalty pharma. For the first half of 2021, we reported a consolidated net loss of 20.7 million euros compared to a consolidated net profit of 179.8 million euros in the first half of 2020.
And.
We had already very successful for feedback from health authorities on the study design. So you can expect once you see the details and clinical trials, our golf, which we are.
Appear shortly that this trial design has already been vetted and agreed upon with the health authorities.
Yourself.
Remind me what was the question and I've got a question was why.
And we said we would at least on rhythms and when GAAP on them.
Please.
Yes, sorry for forgetting and so we have already submitted an abstract to.
Sun Li: As mentioned earlier, 2020 benefited from the recognition of 236.1 million euros as part of the upfront consideration from our partner insight. Turning to the balance sheet, we ended the second quarter with cash and investments of 1.13 billion euros compared to 1.24 billion euros as of the end of 2020. Proforma cash and investments following the completion of the consolation acquisition, and the recent equity purchased by Roe-T-Farma was 1.17 billion euros. As we have closed our transactions with Constellation and Royalty Farma, I'd like to walk you through some key elements of these agreements.
And to our conference, which will happen in November this year and.
And we.
We will be excited to share some data from the ongoing study in autoimmune membranous nephropathy at that conference, including data with.
With respect to the auto antibody and.
Changes, but also proteinuria changes.
Great and.
And just for.
It's out there.
Yeah.
And then what's the plan in terms of on going out there and other autoimmune indications.
Yes, remember we just.
<unk> spoke about a second indication that we are going to start probably.
Probably any week now.
Second indication.
Sun Li: Recall that royalty pharma made an upfront payment of $1.45 billion. In return, Morphosis will pass on 100% of Trimphio royalties to royalty pharma, starting with royalties earned for the second quarter of 2021 and thereafter. Marfostas will also pass on 80% of future royalties than 100% of future milestone payments on Othelamab, 60% of future royalties on Gentanarama, and 3% of future net sales of Constellations, clinical assets, Collaborative, and CPI-209. All of these royalty payments will be recorded in the Morphosis income statement.
And our Iga and nephritis, which is.
On autoimmune kidney disease with a significant unmet need. So we are basically developing 2 indications in parallel and based on these results we will take further decisions.
Regarding future development plans.
Great.
Thanks very much.
Youre welcome.
Thank you. The next question is from Jason Butler of JMP Securities. Your line is now open. Please go ahead.
Hi, it's Roy in for Jason and thanks for taking that.
Question for I guess, the first 1.
For eminent approval and and.
And Europe for them on television.
Sun Li: As such, we will record a financial liability in the third quarter for the future royalty payments that Royalty Farma is entitled to. The measurement of the financial liability is initially at fair value and subsequently based on the effective interest method.
How do you guys see the competitive landscape there as being different from the U S and.
How does the peak opportunity compare to that 500 and $750 million you've mentioned for the U S.
Yeah right. Thanks for the question.
We'd like to be able to elaborate on this question, but as you would know well insights is handling the ex U S operations and commercial market access so we defer to them to come on.
Sun Li: Following the close of the consolation acquisition, Royalty Farma purchased Morphosa shares in the aggregated amount of $100 million as part of the funding agreement. They acquired 1,337,552 new ordinary shares at a price of 63.353.353 euros per share, the volume weighted average price of Morphosa shares five trading days prior to the acquisition of Constellations. Proformer shares outstanding on a diluted basis are 34,128,053 following the purchase.
Uptake the plans for markets.
Texas.
And of your CD.
Our forecast question.
Martha you want to.
And I will start on approval I was just going to say first of all maybe to just 2 quick remarks first of all the approval came really much earlier than we anticipated and.
And showed us a high interest.
<unk> P. M E on the second important remark is that we.
Sun Li: Turning to our guidance for 2021 on slide 19, starting with group revenues. We are updating the previously provided range of 150 million euros to 200 million euros to a range of 155 million euros to 180 million euros. The narrowing of the guidance range reflects updated Mungudi product sales expectations. As mentioned previously, we will continue to record revenue from FIROVe, and this is reflected in the guidance range. Moving to operating expenses, which is comprised of R&D and SGNA expenses, we expect 2021 operating expenses to be in the range of 435 million euros to 465 million euros, which include expenses for consolation as of July 15, 2021. The range also includes one-time transaction-related costs of 36 million euros. We anticipate R&D expenses to comprise between 52% to 57% of operating expenses, excluding the one-time transaction-related costs.
Succeeded to maintain the orphan status for and Julie.
And in the orphan.
On designation on.
There is a statement by the OCR cheese, that's a mean jewelry and combination with lenalidomide.
Provides significant additional benefits over a over existing therapies, which is in this case a police and.
So I think these are 2 remarks, that's where.
And with HIPAA head would help you or maybe to put our product into perspective.
Okay, Great and then just on the.
I'm from.
The level of royalty where are you guys recognizing that.
And presumably all and the third quarter and also that 36 million Euro 1 time expense for the.
The constellation acquisition, where is that going to be recognized.
Yes, so on your last part we did recognize.
For part of the transaction related costs already.
About $18.8 million euros, and Q2 there'll be subsequent amounts and Q3.
As well as Q4, all totaling 36 million euros for this year.
In terms of revenue recognition and Q3.
The transaction closed in Q3 with royalty pharma, so we would expect.
Operator: With that, we would like to open the call for questions. Operator? Thank you. Ladies and gentlemen, we will not begin the question in our, We would like to ask questions, please press 0 and 1 on your telephone keypad now.
For <unk> purposes that would be recognized in Q3.
Okay, great. Thank you.
Thank you and the next question.
Operator: Thank you. Ladies and gentlemen, we will now begin the question-announced session. If you would like to ask questions, please press 0 and 1 on your telephone keypad now. You will be advised when to 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. We've received the first question. It is from James Cooley, of Morgan Stanley. Your line is not open; please go ahead.
And Sean.
And then perhaps.
Okay.
Please go ahead your line is NAV.
Great. Thanks for taking our questions first 1 just wanted to make that any updates on the design of the Iga nephropathy study on <unk>.
You've mentioned multiple dose schedules on.
And placebo controlled study against any addition.
And I'll call. It based on any read throughs from the <unk> plc studied that you'll be announcing data on and look for.
And fourth quarter, and then I have a second question.
Yes, it's all for the design of the Iga Nephropathy study, we have not disclosed the design and I would like to ask for a little.
Patients onto <unk>.
And that information is publicly available.
With respect to the preliminary data that we will show at the at the conference later this year I can only say debt.
James Daniel Gordon: Hello, thank you for taking my question. So, a couple. First of all, on Monjuvi, can you give us a bit more details on how the key launch metrics you're tracking are going since? You've had a bit more of a reopening in the US, so in terms of the number of accounts that you've managed to have face-to-face interactions with, as well as some physician feedback in the last quarter. And then also, we've talked to some KOLs that there seems to be, I suppose, some reticence to maybe use Monjuvi, given the lack of efficacy in, or perceived lack of So what are the key sorts of pushbacks or reasons not to describe Monjuvia that you're hearing from out in the field? Question number one: And question number two for Pell Abrasib in the Manifest 2 trial.
And that we took a very informed decision to submit an abstract with exciting data on both.
Little bit on from the <unk>.
Auto antibody level and on proteinuria and.
And we are hoping that the fields and medical community.
I'll agree with us that this data is clinically meaningful.
Got it thank you and I guess, given sort of the news around the.
The Alzheimers States just wondering if you had any recent communication with Roche on debt to know roadmap sort of given sort of all the news around around Alzheimer's.
We typically don't have comp.
Tax with the our oil and key partners.
Unknown Executive: So clinical trials had a September 2020 readout for primary completion, with the trial starting in November 2020, so just under two years from the start of the trial to primary readout, adding 19 more patients and 18 more months in terms of potential readout. So is the original enrolment slower than anticipated, or are you looking for longer follow-up? And what was the key decision to increase the number of patients, was it? for more power for the primary end point on volume reduction, or was it to power the secondary endpoints, particularly total symptom score? And do you need to show a benefit on, a statistically significant benefit on total symptom score for either approval or uptake? Thank you. Thanks, James, for all the questions.
And on and we've not heard much.
I guess is what you've seen publicly.
We remain obviously very.
<unk>.
On.
<unk> interest by progress that all she is making as we retained 40% on <unk>.
On on continuing and Bob.
Got it alright.
Okay.
Thank you.
Thank you a question from Craig.
Lee of Goldman Sachs. Your line is now and from please go ahead.
Right.
Good afternoon, and good morning, and thanks for taking my questions I've got several.
My first is just on pellet presses.
And.
Thanks for sharing the update on the clinical trial.
And lines are there could you just maybe remind us of your current powering assumptions on the phase III trial relative for the data that you saw in and phase 2 and <unk>.
Jean-Paul: Thanks, James, for the question. Roland will answer the Monjuvi commercial questions. Malte will go for the Monjuvi Kael question and, obviously, the collaboratively.
Follow up on on pellet breath days I believe.
And that when you first announced the acquisition of constellation you had guided to a significant revenue contribution from constellation assets beginning in the period of about 2026, so given today's update on the clinical trial timelines.
Roland Wandler: Thank you, Jean-Paul, and hi, James. Regarding your questions on Montchouvi metrics, we, of course, track a range of metrics, some of which we outlined on slide 8 that you have in the presentation that we provided. You can see, just as one example, the number of accounts that are adopting Montjuvi, and there we have since launched now at the number of 700 accounts, 70% of which are in the community with increasing traction there. And we also just shared that. we had close to 500 accounts ordering just in Q2, which we find very exciting.
Is there a revision to that prior.
Statement that you made and then I've got.
Another question separately, just on current cash and I'm wondering if you could comment on your anticipated.
Cash runway.
In other words, given current cash you know how long does that.
And <unk> out to.
And then secondly, given that and given that you just announced the constellation and completed the constellation and deal.
Roland Wandler: Your question about our ability to engage physicians in person: we had a tough first half of the year due to the pandemic, like everyone else, but we saw increasing possibilities for us to engage physicians in person as we did, and in fact, we are now at about 70% of our own engagement with physicians being in person. And importantly, we see that whenever we are able to engage with healthcare professionals in person, we will see our three-year data, and our message truly will resonate and translate into adoption.
Does your current cash gives you the optionality of considering additional business development transactions.
Thanks, Craig for your questions, let's stop.
Take care of other financial questions.
And might stop by the BD and I start with your question and some will come on and on the cash runway.
And we have our homes very full and now with a lots of programs going on.
The 2 mid to late stage assets from constellation and addition to our very comprehensive.
On CBS.
By the current plan with the deficit and sensor.
So we have to focus the organization on on execution.
Grow excited day after day on pillar, Brazil, with our discussions with the Kols and multi will elaborate on that and these answers to your power assumption question, but.
Roland Wandler: When it comes to physician feedback, we are especially encouraged by what we hear from the three-year long-term data that we shared at ASCO, and especially the duration of therapy there, and, as Maltai explained, the potential that this could mean for patients to actually have durable remissions. In terms of what we hear from KOLs, it is actually excitement around the three data and what this could mean for patients, also knowing that the study is still going on and patients are still continuing.
<unk> developed and I'd like to say that never say never our cash position will allow us and our optionality and if you'd have to trigger mark more financing will.
Below us too.
Make potential moves if it makes sense, but it's not the same focus and it was a couple of months ago, and we had our discussions per.
Escalation.
Some great and Greg you had a few questions on well I'll start with the.
On the significant revenue and 2026, so that factored in the timeline and designing plans we had for manifest to multi said.
Roland Wandler: And, you know, we hear that as we look across subgroups, KOLs actually appreciate that Montchouvi offers an option for many patients, but multipropsy can just expand on that with some of the details. Yeah, and I think you had some questions about double-hits and triple-hits patients. We published the L-Mind data several times, and we are aware that we had only a few patients with double and triple hits considerations in the study, but the ones that we had enrolled did extremely well.
And this was well known to us during our <unk>.
For recurrence process.
And when we made that comment about significant revenue contribution in 2026 at the time of the deal announcement.
That would not be the first year of revenues potentially for collaborative that wouldn't be the first full year of revenues and 2026 and you.
You would expect a partial revenue contribution for collaborative and 2025.
Okay and.
Terms of cash runway, obviously, we're sitting on a very comfortable balance here, but recognizing our operating expense run rate has increased with the acquisition of constellation, but as I mentioned.
On a pro forma basis, we have $1.1.7 billion euros.
Roland Wandler: So we had one partial response, and one complete response to a fairly long degree. So I think the few data points that we actually have point to a fairly high activity of the regimen in this setting. So maybe with that, I can move to your second complex of Pellarcip.
We believe this will take us for multiple years.
Into the future and the ability to invest not only and toughest cinema pivotal studies and manifest as well we're going to go through a portfolio review.
Paul and pending the outcome of that.
And this would impact the cash runway, but from the current vantage point.
Maltepeters: You wanted to have some information on, you know, the trial execution. Let me just say when we performed our due diligence with the consolation company, we did a really very thorough analysis of the situation. So we knew what the situation was with the trial. Yes, the study was planned to be open in November, and we knew it took until April until the first patient actually arrived. became enrolled. So we were from day one certain that, you know, we could pay more attention to optimizing the clinical execution.
It would be multiple years and I know your follow up question maybe on.
Do you defined multiple years and the way I look at it right here, it's at least 2 and a half years.
Potentially longer.
And we have some options in terms of credit facilities et cetera, So I'll leave it at that.
Yeah, and maybe just a couple of comments on how we see <unk> and.
On.
So we are we have very good report with leading kols to cost with some.
And leaders and the field yesterday.
I think we are hearing that the medical community really is really excited about bill opposite they may see it as the.
Maltepeters: And as I said, in my prepared remarks, we already have a full-fleshed-out plan in place to do exactly that. With respect to the increase in the number of trial participants, we have increased, and we will increase the number because we feel that we need to be, we want to give the trial the highest probability of success. We want to be successful on both endpoints, on the primary endpoints, screen volume reduction 35, and also on the key secondary endpoint, TSS 50. To accomplish that and also to understand a bit the current health care and health authority feedback, we decided that it was the best decision to increase the sample.
And most exciting compound compared to other investigational agents and we have not changed a bit.
And our assessment regarding probability of success of the product.
I think and that possibly have done a very good job and finding the rights middle ground between being aggressive and achieving a high probability of success and who and we want to do the same thing with pillar with collaborative again so.
That was the reason why we.
We adapted the Tri designed to make to give it the highest probability of success, but our assessment of collaborative as a future druck and myelofibrosis remains completely unchanged and it's super bullish.
Operator: Thank you. The next question is from Cigran True of Ferenberg. And is it our open question? Go ahead.
And the 2026 revenue assumption.
Cigran True: Hi, thanks for taking my questions. So the first question is about Bonjuvi. In particular, I want to understand your decision to run a trial to modify, to optimize the dosing, regimen, and statute. I wonder if that is something based on the feedback you receive from physicians or something else.
Alright, okay.
So I'm sorry.
Okay.
Alright, that's quite for surface.
Okay. Thank you. So a reminder for everyone. If you would like to ask a question. Please press star zero and 1 on.
Unknown Executive: And the second question related to Montjuvi is around peak sales guidance. I recall you mentioned about 500 to 750 million peak sales in the U.S. Are you confirming this guidance? The third question is related to physartumab.
Thank you Pat now.
Yes.
And next question is from James Gordon Jpmorgan. Your line is now and can please go ahead.
Cigran True: In the Q4 data release, what should we expect to see in the initial release of their product and what's your plan? Okay, thank you for the question. I'll start with your second question on the pixels.
Hello, James Gordon Jpmorgan credit.
For taking the questions and apologies if I'm repeating the question for unfortunately missed the very beginning.
Moving on because it's too many overlapping calls so just wanted to confirm 2 points. So on the pilot phase III data is it definitive that we couldn't see anything before 2020 full or is there any possibility that you could do some sort of interim analysis. So that'd be the first question. Please.
Unknown Executive: Yes, we still think it's possible to achieve this range of pixels, and it's our goal to achieve it in the USRR setting. Given the start we had, it may take us longer to get there, but, as we just mentioned, we are very encouraged with the Q2 exit trends that are continuing so far in Q3. So again, for instance, we have a leading share second line. What I'd also like to emphasize here is that this is just the beginning of the Safasitamab opportunity. The toughest system of opportunity is bigger than our LDLBCL.
And second 1 was just confirming that was previously the $500 million to $750 million peak potential.
For come on JV, and the U S and we've got some credit treat there'll be CEO.
Has that come down by 20% and the same way to be.
Liabilities come down and.
And if not why is it don't move by the same amount.
And jami thanks for the questions.
Let me start by the second 1.
It's a bit echoing the previous question on debt on the peak sales around being still achievable. So we you know.
Unknown Executive: We just detailed the number of trials, phase 3s included, to broaden the development plan and improve our label with new indications, with multiple studies underway to move, for instance, in first-line, DLBCL, and other indications. So that also goes back to the backbone strategy that we are pursuing. So, yes, we still think it's achievable, but I would put that in the context of the much larger opportunity that we have, for instance, with first-line. You probably saw some numbers that some other company threw out there recently on the first-line opportunity. It's significant.
We see it as a long term opportunity that we still very much believe in and are very much focusing on and we see all day and day various into studies that.
And the capital relocating to the development of the product so.
I think.
I would encourage everyone to keep in mind, the 2 large long term opportunity.
Beyond all the LPC and I think the space is also starting to recognize that there are other indications like first line and which are very much intact.
And to play here.
And that's why the short term.
I would say adjustments, we're making now.
Not really a reflection on the long term M C.
Unknown Executive: There is a high unmet need, and we have. We have high confidence in our clinical development and our trial to compete very effectively. On that, I'd like to transition to the other questions for Maldo. I think the first question was about the IV optimization study. This study is called Mindway. It is aiming at reducing the number of intervenious administrations of Monjuvi by 50%, which will significantly increase comfort for patients, particularly those undergoing longer treatment durations.
I'll turn the question on the pillar study on the on the pillar study yes.
Yeah I think.
Of course, there are always.
Opportunities to accelerate on them I think with our plans.
<unk> alluded to earlier.
We are really confident that we can execute on the Tri Ed.
As quickly and as aggressively as we can.
I think and I.
I would prefer.
To have on maybe on a 6 to 9 months of time and see how our measures are taking off and then we can give maybe a bit of more updates on how we think we end up and our timelines with respect for interim analysis I really prefer not to touch on this because we want to keep the integrity of to try and design intact.
Unknown Executive: And we already had very successful feedback from health authorities on the study design, so you can expect once you see the details in clinical trials.gov, which will appear shortly, that this trial design has already been vetted and agreed upon with the health authorities.
And commenting on the interim analysis on.
Possibly introducing a buyer so I would like to.
You know.
Leave it as debt.
Thank you.
Maltepeters: Felza. Remind me what the question was again? The question was, why?
Thank.
Unknown Executive: I mean, we said we would publish some results and when on the M-Play study.
We have no further questions coming through so I would like to hand back to Dr. Julia Neugebauer to wrap up today's call.
Maltepeters: on the M-PLA study. Okay, yeah, sorry, so I'm forgetting. So we have already submitted an abstract to a conference which will happen in November this year, and we will be excited to share some data from the ongoing study in autoimmune membranous nephropathy at that conference, including data with respect to the auto-antibody changes but also proteinuria changes. Great.
Ladies and gentlemen, this concludes today's conference call on it if any of you would like to follow up with the Investor Relations team on from for this it's available for the remainder of the day 1.
And once again, thank you for joining our call have a good day and goodbye.
Ladies and gentlemen, thank you for your attendance this call and that's been completed.
Disconnect.
Maltepeters: And just for Feltz, what's the plan in terms of going to other auto-mars? Yeah, remember we just spoke about the second indication that we are going to start probably any week now. The second indication is IGA in Ephritis, which is an autoimmune kidney disease with a significant unmet need. So we are basically developing two indications in parallel, and based on these results, we will take further decisions regarding future development.
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Operator: Thank you. The next question is from Jason Butler of day-MP securities. Your line is now open, please go ahead.
Jason Butler: Hi, it's Royne for Jason. Thanks for taking the questions. I guess the first one, you know, with the eminent approval in Europe for Munguvi. How do you guys see the competitive landscape there and how is it different from the U.S.? How does the peak opportunity compare to that $500 to $750 million you've mentioned for the U.S.
Unknown Executive: Yeah, right, thanks for the question. We'd like to be able to elaborate on this question, but, as you know well, Insight is handling the ex-US operations and commercial market access. So we differ from them on the uptake, the plans for market access, and obviously the forecast question. Malta, you want to... Yeah, I was just... Approval, yeah, I was just going to say, first of all, maybe two quick remarks. First of all, the approval came really much earlier than we anticipated and showed us a high level of interest at the EMA level.
Unknown Executive: The second important remark is that we succeeded in maintaining the orphan status for Minjuvi. And in the orphan designation, there is a statement from the authorities that Minjuvian combination with selenalidomide provides significant additional benefit over existing therapies, which in this case are Polyvi. So I think these are two remarks that will help you maybe to put our product into perspective.
Maltepeters: Okay, great. And then just on the royalty, I'm upfront from royalty, where are you guys recognizing that, presumably all in the third quarter, and also that $36 million one-time expense for the Constellation acquisition? Where is that going to be recognized?
Unknown Executive: Yes, so on your last part, we did recognize part of the transaction-related costs already, about 18.8 million euros in Q2. There would be subsequent amounts in Q3 as well as Q4, all totaling 36 million euros for this year. In terms of revenue recognition in Q3, the transaction closed in Q3 with RIOT Farma, so we would expect, for IFRS purposes, that would be recognized in Q3.
Unknown Executive: Okay, great, thank you.
Operator: Thank you. The next question is from Edsa Deroo of Hoganheim Securities. Please go ahead. Your line is now open.
Edsa Deroo: Great, thanks for taking the questions. First one, just wanted to know if you had any updates on the design of the IGA neproperity study. You mentioned multiple dose schedules for any placebo control study against any additional color based on any readthroughs from the in-place POC study that you'll be announcing data on in the fourth quarter. And then I have a second question.
Maltepeters: Yeah, so for the design of the IGA Ennifrite study, we have not disclosed the design, and I would like to ask you for a little bit of patients until, you know, that information is publicly available. With respect to the preliminary data that we will show at the conference later this year, I can only say that we took a very informed decision to submit an abstract with exciting data, both on the auto-antibody level and... on proteinuria, and we are hoping that the medical community will agree with us that this data is clinically meaningful.
Unknown Executive: Got it, thank you. And I guess given sort of the news around the Alzheimer's space, just wondered if you had any recent communication with Roche on Gentonarumab, given sort of all of the news around Alzheimer's.
Unknown Executive: We typically don't have contacts with our royalty partners, and we've not heard much versus what you've seen publicly. We remain obviously very, you know, interested in the progress that Roche is making as we retain 40% of the royalties on container maps. Got it.
Unknown Executive: Got it. All right, thank you.
Operator: Thank you. The next question is from Prax to Wendellon of Goldman Sachs. The line is not open, please go ahead.
Prax to Wendellon: Good afternoon or good morning, and thanks for taking my questions. I've got several.
Unknown Executive: My first is just on Pellopresib. Thanks for sharing the update on the clinical trial timelines for that. Could you just maybe remind us of your current powering assumptions on the Phase 3 trial relative to the data that you saw in Phase 2? And a follow-up on Pellibrescip, I believe that when you first announced the acquisition of Constellation, you guided to a significant revenue contribution from Constellation assets beginning in the period of about 2026.
Unknown Executive: So given today's update on the clinical trial timelines, is there a revision to that prior statement that you made. And then I've got another question separately just on current cash, and I'm wondering if you could comment on your anticipated cash runway. In other words, given your current cash, you know, how long does that take you out to? And then, secondly, given that and given that you just announced the constellation or completed the consolation deal, does your current cash? gives you the optionality of considering additional business development transactions. Thanks.
Unknown Executive: Thanks, Craig, for your questions. Let's stop by the financial questions, and I might start with the VD strategic question, and we'll come on the cash runway. You know, I mean, we have our hands very full now with lots of programs going on. The two mids to late-stage assets from Constellation, in addition to our very comprehensive development plan with Tafatimab and Felsar Tamab. So we have to focus the organization on execution. We grow excited day after day on Pellabrasib, with all the discussions with the KOL, and Malte will elaborate on that in his answers to your power assumption question.
Unknown Executive: But I'd like to say that, you know, never say never. Our cash position will allow us, and our optionality in the future to trigger more financing will allow us to, you know, make potential moves if it makes sense. But it's not the same focus than it was a couple of questions months ago, and we had our discussions pre-constitutions.
Sun Li: Great. And Greg, you had a few questions, well, I'll start with the significant revenue in 2026. So that factored in the timeline and design plans we had for Manifest 2. As Malta said, this was well known to us during our due diligence process.
Sun Li: And when we made that comment about significant revenue contribution in 2026 at the time of the deal announcement, that would not be the first year of revenues, potentially for collaborative. That would be the first full year of revenues in 2026, and you would expect a partial revenue contribution from collaborative in 2025. In terms of cash runway, obviously, we're sitting on a very comfortable balance here, but recognizing our operating expense run rate has increased with the acquisition of Consolation.
Sun Li: But as I mentioned, on a pro forma basis, we have 1.17 billion euros. We believe this would take us for multiple years into the future, the ability to invest not only in Tappasitima but in studies that manifest as well. We're going to go through a portfolio review this fall, and pending the outcome of that, this would impact the cash runway, but from the current vantage point, it would be multiple years. And I know your follow-up question may be, how do you define multiple years? The way I look at it right here, it's at least two and a half years, potentially longer, and we have some options in terms of credit facilities, et cetera.
Sun Li: So, I'll leave it at that. Yeah, and maybe just a couple of comments on how we see Pellaborasip. And so we have a very good report with leading KOS. I had two calls with some of the leaders in the field yesterday.
Maltepeters: I think we are hearing that the medical community really is really excited about Pilarbysip. They may see it as the... most exciting compound compared to other investigational agents, and we have not changed a bit our assessment regarding the probability of success of the product. I think in the past we have done a very good job of finding the right middle ground between being aggressive and achieving a high probability of success, and we want to do the same thing with Pelaarcip again.
Maltepeters: So that was the reason why we adapted the tri-design to make it to give it the highest probability of success, but our assessment of Pelarbysip as a future drug in mylofabrosis remains completely unchanged and is super bullish, and the 2026 revenue assumption.
Unknown Executive: Oh, yes, thank you. Sorry. All right. Next question. Okay, thank you.
Operator: Okay, thank you. So a reminder for everyone, if you would like to ask a question, please press 0 and 1 on your telephone keypad now. The next question is from James Gordon, J.P. Morgan. The line is now open, please go ahead.
James Daniel Gordon: Hello, James Gordon, thank you for taking the questions and apologies if I'm repeating the questions. Unfortunately, I missed the very beginning because of too many overlapping calls. I just wanted to confirm two points. So, on the Pella Phase 3 data, is it definitive that we won't see anything before 2024, or is there any possibility that you could do some sort of interim analysis? So that would be the first question, please. And the second one was just confirming that there was previously the $500 to $750 million peak potential for
James Daniel Gordon: and once you are in the US, in relapse refractory, LBCL. So has that come down by 20% in the same way that the insight liability has come down?
Unknown Executive: Liability has come down, and if not, why is it not moved by the same amount? Thank you. James, thanks for the questions. Let me start with the second one. It's a bit echoing the previous question on the pixels around being still achievable.
Unknown Executive: So, you know, we see it as a long-term opportunity.
Unknown Executive: You know, we see it as a long-term opportunity that we still very much believe in and are very much focusing on. We see all the endeavors and the studies that in the capital we're locating to the development of the product. So I think I would encourage everyone to keep in mind the large long-term opportunity beyond our LDLBCL. I think the space is also starting to recognize that there are other indications like first-line. Which are very much into play here.
Unknown Executive: And that's why the short term, I would say the adjustments we're making now are not really a reflection of the long term. I'll turn the question on the Pela study. On the Pela study, yeah, I think, of course, there are always opportunities to accelerate. I think, with the plans I alluded to earlier, we are really confident that we can execute on the trial as quickly and as aggressively as we can. I think, you know, I would prefer to have maybe six or nine.
Unknown Executive: months of time and see how our measures are taking off, and then we can give maybe a bit more updates on how we think we end up in our timelines. With respect to interim analysis, I really prefer not to touch on this because we want to keep the integrity of the trial design intact. And commenting on interim analysis, you know, is possibly introducing a buyer. So I would like to, you know, leave it at that.
Maltepeters: Thank you. We have no further questions coming through, so I would like to hand over to Dr. Yulia Noegaboa to wrap up today's call.
Operator: Ladies and gentlemen, this concludes today's conference call. If any of you would like to follow up, the Investor Relations Team of Mphosis is available for the remainder of the day. Once again, thank you for joining our call. Have a good day, and goodbye.
Operator: Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.