Q1 2021 Genmab A/S Earnings Call
And.
[music].
Hello, and welcome to the Genmab Q1, 2021 conference call for.
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And I'm pleased to present.
Zhang for Wrinkle. Please go ahead for two meeting.
So hello, and welcome to the chunk of conference call to discuss the company's financial results for the period and at March 31st plant is on Q1 with me today to present. These results is our CFO Anthony Pocano, let's move to slide two.
As already said, we will be making forward looking statements. So please keep that in mind as we go through the skull, let's move to slide three.
Some of the house of innovation based culture and collaborations and partnerships have always been part of all of DNA.
During today's presentation, we will reference some of the products being developed under the strategic collaborations.
On this slide acknowledges those relationships, let's move to slide four.
Two of 22 year history, we've had the laser sharp focused on harnessing the power of human antibodies to develop differentiated cancer Therapeutics. This slide provides for a review of what is behind that focus on.
For purpose.
Titus guide for work.
And while extremely successful strategy and on.
Our ambitious vision for the company.
Kevin lots of evolution into a fully integrated biotechnology powerhouse continues with the events of the first quarter of 2021.
So now let's move to slide five and the look at some of these recent achievements.
We continue with ambitious part of bringing our own medicines to patients and are excited about the recent U S. FDA acceptance of the day showed them up for Dota BLA for priorities of view based on the end of phase two of for Phase II study.
And if approved this autumn and for data would be a first in class therapy and he believes that it has the potential to become an important treatment option for patients with recurrent or metastatic cervical cancer.
The Purdue for target date for potential U S. FDA approval as of October of this year.
Along with the partner Seta and continuing to assess our regulatory strategy for submission of the silicone on for Dalton and metastatic cervical cancer with health authorities and plan to prepare the most robust regulatory package to support the potential regulatory approval in Japan, and the rest of the world.
A submission in Japan will take place later than we initially anticipated to ensure we meet the chatbot and health authority requirements. So our pipeline for potential filing of Japan will reflect the inclusion of data from the innovative team and.
<unk> of 301 Phase III study.
The first patient of dose of the study during the first quarter of 2021.
Additional pipeline focus included the first patient dose of the first phase III study of after each of them up.
And the first half of patients dosed with extra body sheet 30 H.
The company also expanded our executive management team on March the first one as we discussed during our full year 2020 results presentation.
<unk> was appointed to the position of Chief Medical Officer for the Admob.
In addition to focusing on our own pipeline.
The power of chunk of innovation of reflected and important updates for therapies created by channel that are being developed by other companies.
Let's move to slide six.
As a reminder of that clearly PJM of creative therapies on the market developed and commercialized the other companies the Asa.
At the same time and to touch on.
During the first quarter of 2021 because of it.
The significant difference for both our selection and Cassandra.
And generally younger and staff of ex fastball became the first and the only FDA approved treatment for al amyloidosis.
So for the quarter. The also strong have you reported to us and on a $65 million and.
Net sales by J&J and increase of 46% over the first quarter of 2020 consulting and nine out of the 84 million Kona and royalties to Genmab.
Turning to the center at the end of March the pockets receipt of approval in Europe for the treatment of the relapsing forms of multiple sclerosis and.
And adults with active disease defined by clinical or imaging features.
This approval makes the simple the first T cell therapy that can be self administered one for months at home book.
And the U S and in Europe.
We are enthusiastic about the future of all three of these medicines as day exemplify our commitment to apply our world class antibody expertise to create differentiated antibody therapeutics with the potential to fundamentally improve patients' lives.
And as Anthony will discuss in further detail the collaborations for the street medicines for flattish at the financial Foundation of our current success with recurring revenue from royalties. This week and then use to invest and thus further in our business to deliver our inspirational session I'm pleased to now turn over the call to Anthony Anthony.
Please go ahead.
Great. Thanks, Jan let's move to slide seven.
To start I'd like to take a moment and highlight our financial framework and the related key drivers.
The first off let's think about our revenue profile on.
Unless you can see on current and future recurring revenue streams.
And we're all very familiar with our three existing approved products as dorsal ex deposits and cause symptoms of.
Each of these have exceptional growth profiles and are expected to generate significant cash flows us for us for the years to come.
And we have two potential revenue streams that could come on line later this year we.
We submitted the BLA for <unk> zone to zone.
And Q1.
And at the end of last year, Yes, and submitted a BLA and MAA for Ami van to map.
Our approved that will bring our total number of approved products to five which for me is really exciting.
Now onto our focused approach to investment and shown on the right.
We will continue to invest and our business and capabilities to position us for sustained success, and we will accelerate and expand the potential winners and our pipeline.
We will also ensure we are ready to launch should to sort of map with Hilton and and the future at credit might be approved.
As well as investing we will of course remain focused on the bottom line.
Let's take a closer look at an important component of our recurring revenue growth.
<unk> sales on slide eight.
We saw continued strong performance for <unk> and Q1, you can see that and the chart on the left.
Overall <unk> sales grew by 46% that's net sales of nearly $1 4 billion.
Which translates to 984 million kroner and royalty revenue.
This exceptional growth was driven by continued strong market shares across all lines and by the strong uptake of the sub Q formulation.
So dark helix remains a key driver of our revenue as you can see on slide nine.
Looking at the graph on the left you can see our revenues grew by 77% and Q1 there were two main drivers.
First recurring revenue grew by 30% and Thats, primarily due to higher darts of alleged royalties.
Second we recognize the milestone payments from Abbvie for ESCO and from Jensen for debt to map.
Now coming back to our recurring revenues, it's useful to unpack this a bit.
We've already spoken about <unk> and the very strong performance there for.
For the sinter, we're encouraged by the nice quarter over quarter growth seen in Q1, and the recent approvals in Europe and Japan.
Now onto deposits here due to the supply chain disruption, we didn't record any royalties for the quarter. However.
However, we believe the strong fundamentals of the product remain intact and we are pleased to hear the positive commentary from horizon earlier today and they have started to supply the market again.
So our revenue profile continues to get stronger.
And we're taking those revenues and investing and are highly focused way as you can see on the next slide.
Total operating expenses grew by 28% and Q1.
And here you can see where we invested.
And we accelerated our investment into our product portfolio, especially the advancement of both echo and dual body of PDL one for <unk>.
We've also spent more on expanding our team hiring key team members to support our growing product pipeline.
And we've continued to build our commercialization and broader organizational capabilities to support our expansion.
Finally, we are leveraging the abbvie collaboration by utilizing their expertise and significant financial contributions to further expand and accelerate our partnership programs.
Now, let's look at our financials as a whole on slide 11.
Here, you can see our summary P&L.
For Q1 revenue came in at approximately $1 6 billion kroner up nearly 700 million the.
The increase was primarily driven by higher <unk> royalties and the milestones related to <unk> and Dara I mentioned earlier.
Total expenses were slightly north of $1 billion, with 81% being R&D and 19% G&A.
Operating income was $532 million compared to $71 million last year.
Our net financial items amounted to a gain of $892 million, which was primarily driven by unrealized foreign exchange rate gains related to our U S dollar denominated cash and investments due to the move higher and the dollar during the quarter.
And we have tax of of $328 million, which equates to an effective tax rate of 23%.
And that brings us to our net income of $1 1 billion.
So by any measure the first quarter of 2021 was extremely strong.
Now, let's take a look at our guidance on slide 12.
Following our strong Q1 numbers and will provide some additional color on where we are headed for the balance of the year.
To start we are confirming our full year guidance.
If we look at our revenues were unquestionably off to a strong start for.
First with our marketed products that are generating royalty revenues.
We really like what we've seen here in Q1 from Daragh and cause symptoms and we're looking forward to deposits coming back on line for me moving forward. It will be important to see this momentum continue as we progressed and the Q2 and Q3.
In addition, we are of a fairly sizable chunk of revenue to come in order to hit our nonrecurring revenue guidance, which includes both milestones and cost reimbursement.
For operating expenses, we expect the step up our investments as the year progresses.
This is in line with our overall strategy and the key priorities I highlighted at our capital markets day in November and reiterated in February.
And for US it starts with our focus on progressing <unk> and the rest of our pipeline and preparing for the potential launch of generic methadone and later this year.
Putting all of US together, we're on track to deliver another year of substantial operating income and a range of one to 2 billion kroner.
Now for my final Slide let me provide a few closing remarks.
In summary, we've had a very solid start to the year.
Create of growing recurring revenue streams based on products with exceptional growth profiles and that gives us a strong backbone of significant underlying profitability.
And we're investing those revenues and a highly focused way to realize our vision and capitalize on the significant growth opportunities in front of us.
And on that note I'll hand, you back to Jan to discuss our key priorities.
Thanks, Anthony let's move to slide 14.
As we have discussed the key priorities are central to our success in 2021 of them.
The submission of the day soda on a per dose and BLA and the subsequent the sheets of priority review we are on track.
Reaching these goals, even with the adjustment of a timeline quality silicones for dose on the regulatory submission in Japan.
While other goals remain on track and thanks to the excellent work and tireless dedication of our team members. We will continue to focus our resources on further progressing expanding and developing our world class antibody product pipeline.
We very much look forward to providing you with updates on the number of our clinical programs over the course of this year as we evolve into a leading fully integrated biotech innovation powerhouse, let's move to our final slide slide 15.
And for presentation of gem of first quarter of 2020 on the financial results operator, Please open the call for questions.
Thank you ex U.
We wish to ask on over to your question. Please press the zero, one and the telephone keypad, if you wish or of Troponin. A question you may do so part of precedence for acute capsule. Once again. Please press and is number one on your sort of try and keep that tissue resource can order to your question.
Our first question comes from for more Kapadia from Bernstein. Please go ahead.
Great. Thank you very much for taking my questions that we want the party from Bernstein.
Just a first one a bit of clarity. Please just on the halos on royalty impact I see.
Ah 64 million DKK impact from <unk>, but can you just confirm what percentage of sales and of course the came from the sub Q.
And then and how do we think about how does <unk> think about that number by the end of the year and what do you think will be steady state. My second question is just the on event and Matt. Please I appreciate this and the J&J asset, but I'm curious to hear agenda up's view on the potential for the drug for the initial targets exon 20 for given J&J of running <unk>.
And the board of population and hit the headwinds, particularly so the profile of the products may change significantly. So how are you thinking about the contribution for this asset.
And what impact of that make for Genmab.
And <unk>.
Thanks, Tobey model and we bought for the questions and I will definitely part of the first one for Anthony So he can think about the dot one for the health of the time of royalty rates.
Let me take the army from from up one.
As we both know the initial population and lung cancer is quite small and it's a <unk>.
Set of patients and the very small subset, but the rest of already of trial ongoing and the much larger population that's on me.
Bumped them up on the over 1000 patient trial of fee.
Because this is representing about 20% of the of lung cancer patients. So we think that the contribution of bumped them up to our income stream of B malls for this year, but these are the limiter.
And I'm, a approval and the metal this year for a subset of lung cancer patients, but <unk> actually got larger population with the readout positively then the income profile is quite substantial especially when the the realized that we had kept royalties from the high single digit to the low double digits.
The percentage.
Range, So that's pretty substantial.
And potential.
No.
Think of I'm going to pockets here I think we of all first make the see the data from the phase III trial of the lots of phase III trial before we can.
The project.
Constraints more reliably.
The next year, we will probably guide.
And our guidance take into account for you on these on term of contribution if the purpose of.
Approved the mall the for this year absorb the small and we will update you hopefully in Q3 and Q4.
All of this year, assuming that the kind of net mid 2020 of on a pull forward for on the bump them up as the third.
And the dual body generated on.
Antibody products and the <unk>.
Nice thing is just north of 13 dual body.
And the molecules and the clinic five by channel and then chef and bye Bye jumpshot and the one by Novo Nordisk and I think this will be the year of that so I think of dual body will become very very hopeful on the radar screen.
The key technology for driving excellent next generation of antibody products not only for jumbo, but also for box on seltzer shut them off of the sheet at least are getting longer for sure alright, EBIT in 2021, having said that I am going to hand over to Anthony to see what you can say about the halo time.
The contribution.
And now and potentially near the end of the year.
Anthony the floor is yours.
Great. Thanks.
Yes.
First of all I and I certainly appreciate that you want to.
The fine tune your models and I'll try to be and how helpful. As I can but you can also appreciate I really can't comment on the specific.
Royalty debt.
And that J&J is paint the held on and that's really a relationship between the two of them, but maybe I'll try to walk you through some additional pieces of information and we can hopefully it will be helpful. So overall.
The key message I want to leave you with here today is that the guidance that we gave on this back in February remains.
Intact and hear what I said was that of the of full year impact would be around 450 million of <unk>.
<unk> for Q1, the headwind was 64 million kroner for 2021, we expect more than 50% of global <unk> sales will be sub Q. So far what we've seen is a rapid uptake of the sub Q in the U S and and other parts of the world to provide a little bit more context, and the U S market where are we.
And of the best visibility to some data currently sub Q accounts for around 60% of dorsal ex gross sales. According to IMS and this compares to give you a sense to around 50% at the beginning of the year and it.
As a reminder, and we do have limited access to timely info in terms of splits the sales between <unk> and sub Q and markets outside the U S and I think the get the other part of your question. If we step back for a moment. We continue to believe the overall gross profit profile for Dara, including the sub Q version is exceptional and we expect the trend towards strong sub Q <unk>.
<unk> will continue so hopefully that gives you some context.
In terms of where we're headed for the balance of the year and where we landed in Q1, great much appreciated.
And thank you.
And thanks for your model.
Our next question comes from my question, Matt <unk> from Guggenheim. Please go ahead.
Hey, guys. Thanks for taking my questions I had a few on <unk> career to map, perhaps first I know you have on update coming up here at the <unk> contracts.
Could you just help us understand how significant this update will be perhaps relative to what we've seen at ash last year is will there be a focus on the phase two expansion cohorts, perhaps or is it longer term follow up still on the on the dose escalation portion of the study.
And secondly, could you remind us what the target size is of the three planned expansion cohorts and the study and what duration of follow up.
<unk> is required for a potential filing for accelerated approval and those indications and.
And lastly.
Where are you with respect to a meeting potential of CMC and manufacturing requirements for potential approval down the relative thanks, so much.
Thanks, Michael for the questions.
The <unk> you've seen the title of for ethical there'll be a follow up on.
And update on the on the dose expansion cohorts and Follicular lymphoma, diffuse large b cell lymphoma, and multiple cell and the tool gives you more information and clarity on duration of response as the development of the depth of the response et cetera, but no data from the expansion of it from the dose escalation part of the phase for them too.
The although the auto of data and <unk>.
Current tumors potentially also and CLO, maybe the scheduled for the second half of the year and Michael but that's what I can say right now on the <unk> data at the ESCO.
And the absolutely I think we will come out I think on the 19th of May of SKU and I know the.
The expansion cohorts will be all for 100 patients for each of the expansion cohorts. The diffuse large b cell lymphoma of honors. The most advanced followed by Follicular lymphoma mantle cell. So hopefully updates also during this year on how that's the <unk>.
Progressive.
And we think that for each of these could potentially be used for potential accelerated filing if the data with the allowed that.
On the circle, you'll have interactions with the regulatory authorities on the on that and then finally your CMC of question that is on full chain.
And potentially of supporting us too.
Assuming that's the expansion cohorts.
I'll read out positively Michael.
And potentially file in 2020 two.
For an accelerated the pace for at least one of these expansion cohorts, perhaps more depending on how recruitment of all go in the coming on time and for CMC is completely on board and in line, the or the potential product filing and approval by the et cetera.
22, but I think sort of on the use probably during this year the Michael and we will keep you very firmly update of what I can tell you also is that the more data we see the more of you become a and by the potential of our profit the must be thinking sort of fantastic kind of therapeutic.
Actually got more and more of reassurance of interest put the potential real the best in class and dish and the skeptically.
Thank you Jan and I appreciate it.
Alright, thank you.
Our next question comes from Jonathan Chang from SVP. Please go ahead.
Yeah.
Hi, guys. Thanks for taking my questions.
First question when should we expect to see update of Gen 10, and 46 date on this yet.
We have not yet.
Sided on the exact timing will be and the second half of this year and we expect to.
To see data from from different to expand coming from different expansion cohorts at the right dose Jonathan debt.
We are going to pick one of the conferences likely and the second half of this year.
Understood and and second question and I wanted to touch on a topic that we haven't heard much about I'd love to get your latest thoughts on your partnership with inadequate and the ongoing efforts there what's the latest status of this early stage of niche initiatives and more broadly.
And your thoughts on the promise and and risks associated with the PCR Biospecifics. Thank you.
Thank you Jonathan and for that question of you haven't had that for them. So for a long time and I can tell you that the the partnership is progressing progressing really well.
Generate the tunnels against a number of sockets on behalf of created the bi specifics that we are now comparing to actually select the alt a pyrrhic or the the most potent molecule you'll know that our strategy is bye bye to do about the technology platform is to actually generate.
Lots of candidates and then empirically screen for the most bolt on and so on so we are and that process Jonathan on the T that some of the emetic share programs. So it's a number of them running in parallel and so we believe that this.
This unique antibody ships can be made by our bi and analytics.
The technology.
Which of targeting.
Totally tumor specific epitopes and the context of MHC molecules are very probably the.
Promising molecules to allow for really specific by specific mediated tumor cell targeting and so we're very excited about the potential of the technology I think the partnership is going well as progressing and.
Hopefully probably leave it and this year and we come to final clinical candidates and then we can then discuss also and more detail. The route towards the clinic et cetera. So we think the potential is absolutely there.
Two of fit in the midst of generating really good.
The pizza candidates from panels of soft of bi specific antibodies and.
I think one of the strength of Denmark approaches that we actually have been very good and the selecting truly differentiated the product candidates because of the robustness of the dual body of platform and so.
I think it's the basis of all of us being so successful and the and actually progressing the IND candidates to work day.
Markets are up to now with the company and we think that that's the hit rate is going to get that's all rather than the us going forward because the.
I think we understand better and better of what makes a good.
Kind of the antibody the components for a differentiated next generation antibody to book and.
We will see a number of really really promising candidates from from other.
All of the partnerships and from our own and house, our pipeline moving towards the clinic very rapidly and they'll they'll certainly be updates Jonathan this year. So we will broaden the pipeline of H proprietary clinical programs through a higher number of this year and some of them build the bi specifics and all of those maybe coming from other technology.
And from like our hexcel body blocks for the slower revenue for that at this time.
Thank you.
Thank you.
Our next question comes from and then we show from Barclays. Please go ahead.
Hi, Thank you and I was just wondering if you could provide any color on the increase and the expected enrolment and the ongoing John Ken and 46 study and.
And whether you think that any of the data from that trial could be registrational. Okay.
Thanks, Emily I think right on nine expansion cohort, which are the two.
For our recruiting patients for you will see more expansion cohorts for tariff of current 46, and the coming time and I think each of these expansion cohorts can be expanded up to a number of patients that could potentially support.
The accelerated regulatory approval path.
I think it's still a bit too early of only to say more about it right now, but I think the there's definitely potential debt debt.
We could find the data.
And some of these expansion cohorts, which would allow us up on discussion with the regulatory authorities to where to go for a wrap up.
And the accelerated approval path.
I think more and more data and there'll be presented this year and the second half of this year and then more on next year. So we are the continued to be very very excited about that the molecule you have already seen a combination between 10 and 46 cents and <unk>.
A toxicity of.
Chemotherapeutic and one of the cohorts and the there'll be other new expansion cohorts.
And the coming the time. So so we look forward to be able to present the data to you all right and this year at the medical conference.
Thank you.
Thank you Emily.
Our next question comes and assessing Zhang from Bank of America. Please go ahead.
Hi, Sachin Jain a couple of questions. Please firstly on <unk>, Yeah, and you mentioned the potential Seattle data to H. So one of you can just give us any early comments on the signs of efficacy of staying in that setting and then.
And you're aware of any other <unk>, having seen efficacy and that setting.
And secondly on the full one day be just a follow on sort of the last question on the <unk>.
Sanction of the recent study size any comments you can make more of that implies wary of comfort on liver tox and.
And whether you are seeing efficacy signals beyond lung and.
And then a follow on on your long sorry, a follow on on the accelerated funding question and some of the physician feedback. We've had is the obviously the long day, two and a very refractory population data and eight.
600 patients with roughly a 20% response rate could be a reasonable basis for and any files. So just any comments you have there as to whether you've had any discussions in that regard and Keith.
Thanks for the question the CLO I think it's still early stage, we are recruiting patients and one of the study showed that for each of them up and.
So I can tell you and we certainly see that so you have an active book there I should probably limit the keep it to adapt the session and.
The this new data that is unique data for <unk>, 'twenty or 'twenty targeted antibody and so I think we need to see how the day cause it's on ups with the cash in two different doses of up because each of them up and CLO hopefully and the second half of this year. We can show you the.
Sales from that and.
And they still shut off of.
And patients being treated with Opco.
And then moving to 10 and 46, the PDL one for them to be antibody liver tox from the.
The fact that I described to Emily that's the Aqua question before on the expansion cohorts you can.
Draw the conclusion that we actually can manage the.
The toxicity, we think it's actually a very manageable.
And what we see the type of 10, and 46 days as a unique very very bolt on to.
And immune checkpoint targets of the bi specific antibody and <unk>.
You asked for is the evidence for the auto Cumulus non lung cancer of course, one city of the Amtrust absolutely, yes, and we have already described I think it's the city last year of in November and Triple negative breast and ovarian cancer patients responding to this antibody I think this is actually the very first.
For when we'd be talking about the antibody that.
As shown to induce with sponsors and.
And patients with refractory the.
Two of immune checkpoints.
Targeting antibodies before.
So I think it's the very I think promise of concept the still early days and.
And we think that.
Does he can and we need to see more data also on duration of the sponsor of before we can the 12 sort of conclusions that we continue to be very very excited and that excitement is not only 10 and 46 session also 10 and 42 of the CD for key for them to be antibody is also doing very very low and we hope to show you also and the second.
Half of this year of dose escalation data from debt from the Bispecific antibody.
Difficult concept, that's targeting CD 40 theater, Auckland and stick.
And the antibody and then for one of the B.
On T cells via the other automotive by specific also there we see clear of the responses of different dose levels of you're going to progress that a lot of specific took out of it for the buying cycle of smell and.
The initial clinical data towards the very much look forward to percentage and this year probably also on the second half of this year and then your third question was so have the already beaten the context, the regulatory authorities about some of the expansion cohorts at the 10 and 46.
No not up to the all but we are following that.
The book question, really really well and share.
And so we will give you updates once piece of there are likely in the second half of this year of session.
And Keith.
Our next question comes from Charles Young from Credit Suisse. Please go ahead.
Hi, guys. Its turn on from credit Suisse. Just the three questions from me. Please.
And that's why I'm just following up on the most question on subcutaneous share.
Just can you just give us a bit more help for a ballpark of the share of subcutaneous starplex.
Ex U S for one key useful.
And on the kind of.
And while she is Pilau ex study and first line <unk>, which we'll see later this year if it becomes the new standard of cash how does that change your thinking on kind of this development.
Development program.
And what you're targeting.
Great and lines.
Therapy.
On the still committed to multiple lines of strategy from here.
Combinations.
And then finally earlier this week, we saw signs of pause the enrollment of the PCM a CD three G to new deposits.
I'm aware of J&J is handling the development of the <unk>.
Can you, perhaps give us your thoughts on the peripheral neuropathy safety and is there any potential this could be a class effect for them.
Much.
Thanks for playing for the questions and I will definitely ask Anthony to speak more about the Sip queue share ex U S.
And because he already did speak about the share of the U S, which was over 60% of trunk show of Park. That's a question for Anthony Let me move into absolute return of developments yes.
Yes, the landscape is.
Hang on to the are adapting contains the adapting our development plan for them.
You will see a very rapid expansion of the number of studies for <unk>.
The political and.
And on the golf and the coming time and that will also speak about that very actively and you will see novel combinations.
It's not been the show before for Aldo and <unk> 'twenty by specifics and your question about multiple lines of therapy for sure we are.
The planning phase III and different lines of therapy for different b cell cancers, and so that.
And to share some level of gross up and all of them also not despite the landscape of changing terms.
So I think this year will give you a lot more clarity on the how we're going to position of COVID-19 Tomorrow, and you will get more and more data the hopefully at the <unk> initially and then probably the second half of the year.
And I look more data on different b cell cancers, and that will hopefully help you to also built by the appreciation of the potential or perhaps because of its them up and we are to get all of it actually getting more and more enthusiastic about the potential of this share by specific which we think is truly unique and differentiated from the other TD plenty of targets that antibody.
And then the third question on the Feis obese you may.
The C D to the bi specific.
And I cannot really comment on the cliffs from out because I really don't have and oversight over the data the <unk>.
Data the thought I can tell you is that the will be an oral presentation on the on the crystal ball.
Of the ESCO.
And actually also on top of create them up the auto bi specific antibody for multiple myeloma by your answer the <unk>.
<unk> the GDP by specific and I think you would probably have heard us and when they would have had the stops.
Bye.
The <unk> like the toxicity seen with the price of compounds, but I think the technology base towards the.
It's very very different I mean, the about the answer debt and all of surfing the guy.
Specifics in the clinic for the dealer body technology for all of nine clinical candidates for different programs selected and for each of them. They made hundreds of candidates and I bet you only can do with the very good to the robust technology like dual body and that is very different from about Pfizer Pfizer debt. The initial the very very simplistic basic took out all of the arms of MTS.
Bodies, which you can only do what a few antibodies and not of large panel. So I think that the chance that the close them up as the very very different molecule from the Pfizer of of antibody is really there, but you need to ask you answer and I think for more details on the toxicity profile of the cliffs from up and at the very latest I think.
You will see an abstract on may the 19th on the on the.
Oh of presentation, and I think that's actually a few more abstracts also on post of suppose the puts and takes control of the system.
The ESCO.
I think it's not possible for me to comment on that and you've talked about here Anthony do you want to speak a bit more on the ex U S. A.
Share of <unk>.
For credit.
Sure. Thanks, Thanks, John and yes. It is.
And I'll try to be helpful. Here and again I do appreciate similar to a sense of the malls that you want to fine tune and your models, but again I'll talk you through the way I kind of think about this and it starts with debt. We certainly expect the trend towards strong substitute conversion will continue and gain I walked you through the specific metrics and the U S and again, here's where we actually have to really think of as good data.
And that's on a real time basis for the rest of the World I mean, we really don't have access to the same quality of information I guess, what I can say and this is I think reiterating what I said, probably in the Q4 call.
And certain markets.
On the reimbursement it almost becomes a little bit binary not where it goes from zero to a 100 zero and sort of very high number.
Rather quickly again this is on a.
Market by market basis. So it comes down to the individual markets in terms of any particular market dynamics there for a particular market of country and also be a function of the deeper.
First one approval.
And as well so from that's probably where I got on either the ultimately.
To conclude here, we see the overall trend towards <unk> adoption to continue.
Thanks, Anthony and I can probably share with your trunk debt in some countries, it's over 90% usage already of sub Q doghouse.
Some of the Nordic countries and from other European countries, sorry lots of countries and other countries, it's closer to 30% of the building up rapidly and I think you. Obviously can give you a sort of a color on that we are not allowed to share anything further, but I think ex.
Very very rapidly progressing towards sub Q and now in Europe.
Thank you Jordan I still there.
Okay.
I think operator, we can probably go to the next question yet on that.
Next question comes from the Pizza Rockford from Jefferies. Please go ahead.
Hi, Thanks, so much for taking my questions, let me start with Sidoti.
Just curious there if you could talk a little bit about whether you've had discussions yet in other markets outside of U S and Japan with regards to what sort of clinical data essentially required to consider a condition of accelerated type of pathway and in those countries and whether or not the decision and Japan to wait.
For three of one data impacts of tools, you're thinking with regards to building the commercial infrastructure and give.
When the the agreement with the CJ and and how that sort of impacts of that thinking.
And if I could then just ask on does the likes of just with regards to the guidance.
J&J made Mitch comment about this but I'm just curious if you have any insight into the the first quarter trend ex U S. Obviously, youll reiterating the array, which seemingly at the first quarter sales were flat for the remaining quarters you'd be above the midpoint of that so curious as to what you will see the with regards to the trend of.
What we should perhaps into the from the first quarter ex U S number.
And then just finally, sorry, a quick point of clarification just on the balance of that I think Jan said it was royalties of high single to low double.
Is that an equivalent of turbo side for the all of the J&J day reported or does it does.
It does the royalty rate essentially battery baidu and Bonnie Thank you.
Thanks, Peter for the question, let me take the first one on the third one and then the refer the doctor of guidance wanted to Anthony.
Part of the Silicon epidote on the.
The situation in Japan is not impacting the strategy Peter for the other markets for Europe. We also feel that we need the data from the COO on phase III study, but just sort of clothing right. So right, though of T V for us, it's chemo and second and third line. So for cancer patients. This year, we are expecting data from all of our cohort.
Lots of people. So we think that we can broaden the market beyond the.
The second and third line.
If this are.
Basically the new situation of the delay in Japan.
You spoke about the reintroduction and production and niches and the Q1 reports impacting the the.
The buildup of the commercial teams the answer was no debt.
Definitely the from the introduction of commercially and Japan will now be later that we originally on the ambitious and tissue the two of them.
Remember that also under the <unk> agreements up credit them up.
We need to prepare the.
The team commercial team and Japan, and also for actually moving of create them up to two patients potentially even.
Already and the next year or the year the off Tau. So we need to build up of commercial team anyhow, we probably do with a bit more slowly and all.
Because of.
The longer time needed for the short term of for bolt on but the <unk>.
Infrastructure is really needed to be of very very serious about the two priority markets.
This will not impact any of the commercial arrangements that seats and we're super enthusiastic about working together the teaching and the states are really getting ready launched ready already immediately after the summer and hopefully get on approval done and the October timeframe for the short term and for Dalton and.
And the states and then they stopped co promoting the.
The drug and the states to kind of a teacher and so that is all moving very rapidly and the right direction. So Japan.
I think a bit slow down of pizza, but not the lots and lots of very substantially and I can assure you of this this time sort of a container to be very motivated to to actually build of commercial presence and <unk>.
And with the Japan, and and the U S and the later on potentially looking at all of our markets and the future that on many fronts.
The royalty rate, it's difficult for the day.
And to do a body of molecules for what you may remember pizza and stuff you have two different <unk>.
So for of of.
Of agreements with Johnson, and I think 2012 and then.
And then in 2013 for.
For a broader on board of set of of of.
Do a body of candidates for projects for young son, and the actually I'll be Frank about the SD Wan, but we get the highest loyalty people from all of the dual body molecules and the reason there's a journal of not only allowed access to the duopoly of technology platform.
And by your answer to create panels of the shift from speed also created physically and created the each of our.
And the she met all of the panels with Johnson and used to built on beef.
And from a problem so because of that for reasons that we also not only the.
Access to the technology of Pizza, but also created the compulsion arms of the specific by specific.
It makes sense, we got a higher and higher royalty and for the although of young son and by specific they are and the single digit the royalty range of Peter and I kind of of BMO.
Specific but we are lucky because of Ivanka mother's day.
For the next to potentially pay is the highest.
Royalty rate of because of that unique aspect that we created also the the <unk>.
<unk> arms of the bi specific and.
And I think more data of the ESCO for different presentations, which is very very exciting I think therefore darva guidance Anthony.
Yeah, Thanks, Jan and Hi.
Hi, Peter.
And then certainly after a strong Q1 I can absolutely see why you would ask this question for me at the stage and from my perspective, our guidance continues to be appropriate now let me spend a few moments and explain why.
The start I think it's really useful to drill down into the geographic split and sales for the U S sales of $691 million were up 49% compared to the Q1 of the previous year, but the sequential quarter over quarter performance was more muted. So here its not uncommon for us to experience lower to modest sequential growth and the U S and Q1 compared to Q4.
So if you take this into account and if we look at the rest of the World. This was the real driver of the strong Q1 performance with sales of $674 million, which was up 20% compared to Q4 and up 42% year over year, and we're really encouraged by the strong growth year. However, as we previously highlighted we do have less visibility as to the individual.
The dual markets and growth drivers and also Q1, there was some some tailwind from FX.
The other thing I want to highlight which I think is useful to remind ourselves and we've heard this from a number of other companies that have been here reporting during earning season and that's the COVID-19 continues to represent the challenge in terms of diagnosing new Kid cancer patients and get it and need of treatment for existing cancer patients now so far this doesn't seem to have been a significant barrier.
For Dara, but it's something we need to take into consideration. So overall, if I sort of the sort of step back from this what we really want to see here is the strong momentum that we observed in Q1 really continue here as we move forward here into Q2 and Q3, so with that and I think all of this together Peter.
I think and I hope you can see why we feel our guidance continues to be appropriate.
Yes, that's great. Thank you.
Our net current spreads on it.
The next question comes from Pizza and Burgers from Citi. Please go ahead.
Yeah, Thanks people the city.
And you briefly.
Away from the pipelines and then we can dive back and.
The share price of oil calculations for the pricing and.
The downside from the spot with J&J no dogs likes royalties due on 2030.
Despite your paying 50% of the.
And it is I'm royalty for the foreseeable future just wanted to check in on the arbitration and I know youre going to say much and you can't say much but is there anything.
You can say on timelines or even willingness to seek the resolution of this through alternative avenues. That's question number one and then on to the more interesting pipeline questions just checking in on midnight.
Any sense of feel as to whether the the emerging data for strong enough for a move into phase III just interested to hear your views on the asset realize its fuel technology and the hands of a partner.
And then the last question and this will just require a yes or no answer any chance, we will see the body cities and 38 data that could lead to an opt in this year or is that very much a 2022 of the thank you.
Thanks, Thanks, Peter for the question of interesting questions for sure. Let me start for the arbitration I can tell you that we are feeling very strongly that we are more.
On the and ethically and do it.
On the right thing here by the funding opposition.
Timing is uncertain as I already said before the pizza, but what I can tell you that the process is progressing fairly rapidly I mean lots of documents are being exchanged and and and.
I think both parties are working on the case and.
We would very much like you bumped that says that the overhang.
The overhang could be there to be and disappear disappearing as quickly as possible, but it's in the hands of the of the judge us on the process or kind of the basically the comment any further on timelines with the rest of clear activity I can tell you about the or and to really get to get that debt.
That's the case.
The finished and the shortest possible timeframe and and yes, I think the have been hit by the by the uncertainty here, but sometimes in life and you have to keep you up ex credit and you feel that youre doing the right thing and this is one of those situations and of course to be able to be open to resolve this and any possible way.
But do you have to the central the opposition here and we feel that way of doing the right thing here and feel very strong and the NIM H.
Yeah, I'm not so I don't know the data that's all but I know the preclinical data actually it's already of all the and this is a super well differentiated molecule for hemophilia and created with the duopoly of technology platform, where the.
No for us in the over 15 fold better activity and the theme of kind of Libre and in vitro studies. So I think the clinical data of people that have to to give you. The the guidance for all of rapidly disc of most of the phase III, but what I can tell you and stopped Novo is super enthusiastic about what they see clinically.
The I've not seen the data and I hope that it will people sense of put the soon but that's definitely.
We also look forward to quite easily and then the third question and I escaped me, maybe you kind of of Peter sorry briefly of Pizza.
With your back straight just the question on <unk>.
The body CD 30 day, just yes, or no is there any chance of you'll see data that could trigger notes and for the asset this year or is that very much of 2020 to COVID-19.
And.
Oh, and I said I think it's the full known yes and of course, you also could potentially based on data from the from the comparison between the extra bodies CD 38, and Dara So kudos and of course, they are entitled to wait on the data before deciding on the potential often but I can tell you that we are now treating patients for pizza.
And we think that this molecule, it's potentially 10 folds of all more and more potent and Dara and of.
And we could potentially during the dose escalation and already see the this is it.
And much more potent molecule and with the right safety profile and it's definitely possible that a company like your answer on who wants to work on a on the follow up.
Or maybe a expansion from the from the tumor could opt in and so the risk definitely potential but I think the the likelihood is very low the pizza I think they will want to see potentially more data, but we hope to show you. Some data on the second half of this of this a heck.
Ex the body and force molecule I think this will be of good cheer as I already said before of our dual body platform of 13 molecules for the clinic and more to come with key ex the body molecules and the clinic notice to the telco on extra body sheet too at the age of your Super enthusiastic about what we see with the different molecules also the city.
Several of them on is doing really really well I can assure you of clinically. So so I think this could be a good CFO, Jim not the technology platforms and put us firmly on the radar screen technologies to allow for for a generation of all for for truly differentiate the two excellent antibody therapeutics.
So there'll be a <unk>, Peter and I think this could be one of the spearhead molecules for the extra body, but it'll still be early days, because I think the real comparison.
With that I will come not this year, but potentially the next year and 'twenty two.
Thanks very much.
And Jean Thanks, Peter.
Our next question comes from Michael <unk>.
From low tier so yes go ahead.
Yes, just a few follow up questions. So.
So first of all of the on the cash position. So youre accumulating a lot of of cash and youre going to be extremely cash generative and the in the years to come so.
Maybe just a brief update on on sort of how you intend to deploy it in terms of targeting the M&A et cetera, and there'll be very interesting and then just a housekeeping question on the modeling in terms of the of net financials for the full year.
Maybe Anthony has some some comments too.
How should we expect that two of Japan out given the the major boost we saw in Q1.
Thanks for thanks, Michael for the questions on the <unk> and the can start off with the first one on the Anthony can you kind of step in there and then follow on with the modeling of on net financials and Michael for the second question. So of Jumbo is going to really focus on the on the the.
And the creation of the development of differentiated antibody therapeutics and yes the Asa.
And getting more and more cash share of risks risks are rich and we will focus on accelerating the potential there and it looks like we're doing now with the 10 and 46 and the depth of its them up and and potentially this year, we will actually identify and other potential then all from a pipeline of and all eight proprietary clinical programs.
Michael and we will sort of built the pipeline and in the in the post us the already discussed the aromatics. The collaborations we will and on new agreements with other companies that can get us access to components, which we can then use together with our partner Michael to create differentiated next generation antibody therapeutic candidates and.
That'll be a area of value of silicone. He spent the money you could see from the Q1 repo book of <unk> is the company, we work with the close the deal and the number of years ago and.
And we decided to sell actually 30 per cent of the of the of the share for T accumulated and the deal and that was to get access to all of them on <unk>.
Based on the technology and for potential future delivery of antibody therapeutics and the form of end of an a and we now know how and push of the pharmacy. Okay. So it's about a and a base to therapeutic. So you will see genmab spend money and the coming time proactively and getting access to components, which you can use the building blocks.
To create truly differentiate that the next generation of antibody therapeutics. So do you expect to the two to spend some money on debt and you could potentially even acquire a technology platform. If you think of that fits all of the portfolio of the of platforms already and the company the better.
We will do this and the careful manner and then spent the majority of the of the cash on on accelerating potential of and also bring them to the market and then commercialize from them Michael and the key markets initially focus of them focusing on the U S and Japan of potential later on also looking at the other markets and that's probably the I want to leave at that.
At this point and then I'll ask Anthony to chip in here.
Yes.
Great Yeah, Thanks, John and Michael maybe see the so I could add on to what Jan said I think the first thing would be that overall I think historically this is having the strong cash position has really served as well I mean, other I think about.
On a year ago now, reflecting on it where we were a year ago. When the pandemic was emerging that the store.
On cash position the recurring revenue profile and that we could really stay focused on executing against our strategy.
And our key priorities for for last year. So I think it's served us well historically.
I also think of as we sort of think about this this growth cycle that we're kind of and the middle of having that really strong robust balance sheet is going to continue to serve us well moving forward. So I think overall this kind of level of cash on our balance sheet continues to be absolutely appropriate and for running our business and the way that we we have been so I think.
And that gives you some color on that that the.
And Mike Michael in terms of our cash position.
In terms of the net financial items, I mean, I might ask you. If you have a crystal ball as it relates to one of the dollar and Euro is going to go and then.
And that's what this is really about if you look at the number of really for for.
For Q1, it was really around the FX movements of the vast majority.
Of the move was to FX and it was really just the reversal of the the FX losses that we saw in Q4. So now the majority of our cash and investment position is held in U S. Dollar denominated securities. So, it's really going to be a function of unrealized gains coming through that line as the euro dollar.
Moves give you some context, we ended the year and I'm not referring to Danish.
Kroner dollar rates were 605.
And we went up to 630 for at the end of the quarter and now I believe we're at 620 today. So it's really going to be a function of that that Michael So I can't give you a precise guidance, but at least it gives you a sense of.
And what's going through that line and the other thing since the since Jan alluded to it and you can find the center of interim report and we did take the opportunity to take a little bit of money off the table with our investment and care back as we sold down around 30% of the position and so we're now holding at the end of the quarter around one 5 million shares and that's the other significant items flowing through that line.
And.
So with that Michael hopefully that gives you a sense.
Do you have an inside track on where the Euro dollar is going just the.
Order rates for me and let me know.
Yeah.
Thanks.
Thank you for both thanks Michael.
Operator are there any further questions. Thank you. Unfortunately, Pascal we have questions for more time for questions for some kind of unpack for the speech.
Alright, Thank you of all for calling in today to discuss jumbos financial results for the first quarter of 2021.
We will not if we're not able to catch the question about when you're thinking about the question right now please reach out to our Investor Relations team.
We hope that you all stay safe and remain healthy and optimistic and very much look forward to speaking with you all again soon.
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