Q2 2022 Genmab A/S Earnings Call
Thank you.
Hello and welcome to the GenMAB Q2 2022 conference call. Throughout the call, all participants will be in listen only mode and afterwards there will be a question and answer session. Just to remind you, this conference call is being recorded. During this conference you may be presented with forward looking statements that include words such as believes, anticipates, plans, or expects. Actual results may differ materially, for example, as a result of delayed or unsuccessful development projects.
GenMab is not under any obligation to update statements required in the future nor to confirm such statements in relation to actual results unless this is required by law. Please also note that GenMab may hold your personal data as indicated by you as part of our investor relations outreach activities in order to update you on GenMab going forward. Please refer to our website for more information on GenMab and our privacy policy. Today I'm pleased to present Jan van der Winkel. Please begin your meeting.
Hello and welcome to the GenMop conference call to discuss the company's financial results for the first half of 2022.
With me today to present these results is our CFO Anthony Pagano and then for the Q&A we will be joined by our Chief Development Officer Judith Kilimoski, our Chief Operating Officer Anthony Mancini and our Chief Medical Officer Tanya Mahdi. Let's move to slide 2.
As already said, we will be making forward-looking statements, so please keep that in mind as we go through this goal.
Let's move to slide 3.
GenMOP has an innovation-based culture, and collaborations and partnerships have always been thought about DNA.
During today's presentation we will reference some of the products being developed under these strategic collaborations. And this slide acknowledges those relationships.
Let's now move to slide 4.
Yandmop has experienced significant growth over the past few years in all areas of our business.
Based on this progress, our Executive Committee determined that it was time to look beyond our 2025 vision for the company to see how we can continue to impact the lives of patients and the healthcare community even further into the future.
Working with a broad cross-functional team of GenMop colleagues, we created our updated Core Purpose and 2030 vision that you see here.
The biggest change between our 2025 and our 2030 visions is the expansion in our focus from just cancer to cancer and other diseases.
We know that our antibody know-how, assets and technologies can be applied to diseases outside of cancer.
The approvals of Novartis' Casinta in relapsing MS and Horizon's Tepesa in thyroid eye disease are proof of this. In the next slide, oneFix option moves into the left hand side as age
So while we will continue to create and develop new treatment concepts in oncology, we will remain open to other potential indications outside of cancer.
With the ultimate goal of improving the lives of as many people as possible, two are innovative and differentiated antibody therapeutics.
So now let's take a look at some of the recent events that propelled us closer to our 2025 and our 2030 visions on the next slide.
Slide 5.
General's innovative excellence and the hard work and commitment of our unstoppable team have been on display recently with a number of important events.
At the end of June , we announced our intent to submit a PLA to the FDA for aprioritumab for the treatment of patients that relapsed or refractory large B-cell lymphoma.
In the second half of this year,
Subsequently, in July , we announced that AbbVie will submit a conditional MAA to the EMA in Amsterdam for the treatment of patients with relapsed or refractory diffused large B-cell lymphoma also in the second half of this year.
And as a reminder of our collaboration details, Jan-Werp and Apfel share commercial responsibilities in the US and in Japan, with Apfel responsible for further global commercialization.
The submissions will be supported by results from the LBCL cohort of the pivotal EBSCoR NSL-1 study.
VNIPV announced the top-line results from this study in April , with primary results presented in a late-breaking oral presentation as part of the prestigious Presidential Symposium at the EHA Conference in Vienna in June .
The results from this study support our belief that Abcorithmop has the potential to offer people living with LBCL a new therapeutic option with a manageable safety profile, as we are very much looking forward to next steps.
The late breaking abcaritoma presentation at EHA was one of the many recent data presentations. There were multiple abcaritoma poser presentations at ASCO with NCORES at EHA, highlighting data in a variety of treatment settings and hematological malignancies.
In addition, Bea and her partner Sejan were pleased that several abstracts evaluating T-sotem of pedoton and various tubotypes were presented at ESCO.
This included an oral presentation of the innovative 205 study, evaluating Tisotemab fadoltin in combination with carboplatin, or padrolizumab, in first-line patients with recurrent or metastatic cervical cancer.
The data presented recently for both abcaritamab and Sotema-Fidotan are reflective of our commitment and the commitment of our partners to investigating these therapies across different lines and combinations. Thank you.
Turning to our earlier stage pipeline, as it relates to Doer Hexabody CD37, one of our assets with AppVee, we will discontinue the co-development with AppVee and Genrok will continue development of this program on its own.
As we continue to explore this program, we look forward to providing you with further updates.
I'm excited to announce an additional update to our product pipeline. A new antibody in the clinic by the end of this year for solid tumors.
Hexabody CD27, also known as Gen 1053.
The development of this hexabody-based product is part of our broadening partnership with BioNTech. And like Gen1046 and Gen1042, we will be co-developing this investigational medicine with BioNTech 5050.
The foundation of our differentiated products pipeline is our proprietary technologies. And I am extremely pleased to share with you that our HEXelect technology was recently featured in an article in the journal Nature by Technology.
The HEXEC-LAC technology is an approach to enhance the functional selectivity of therapeutic antibodies by making their activity dependent on clustering after binding to two different antigens expressed on the same target cell.
The potential of this technology is another example of the innovative spirit of a world-class team.
I'm also enthusiastic about the fact that Janssen has announced a positive CHMP opinion for tecvioli, or teclistamab, recommending conditional marketing authorization for the treatment of patients with relapsed and trifecta multiple myeloma.
Should STEC finally receive approval in either Europe or in the US?
Meri Janssen's BLA is currently under review. There would then be six medicines on the market that leverage GenMops innovation and technology.
including two medicines, Janssen's Ribrofont and TechVialy, created using our proprietary dual body technology platform.
As we look forward to regulatory submissions for Abcorithmop, we are hopeful that medicines created with our dual body platform will continue to become new treatment options for people with unmatched medical needs.
DARZAL-X continues to redefine the treatment of multiple myeloma with strong sales for the first half of the year, as we reported $3842 million in net sales by J&J, an increase of 37% over the first half of 2021, resulting in 4,024 million corona in royalties to GenMob.
This brings me to our new arbitration with Janssen relating to our Dara Tumop license agreements.
As we announced in the beginning of April , in the original arbitration, the tribunal ruled in favor of Janssen on the question as to whether Gen-Mob is required to share in Janssen's royalty payments to Helo-Seim for its technology used in the subcutaneous formulation of the ARA tumor map.
The tribunal based its ruling on the finding that Darcel X Fast Pro constitutes a new licensed product under the license agreement.
In the new arbitration we are seeking an award of $405 million plus interest in accrued milestone payments for Darcel X FastPro and a declaration that we are entitled to a new 13-year royalty term from the date of Darcel X FastPro's first commercial sale.
As the arbitration is confidential, outside of our disclosure obligations we do not intend to commence further and we look forward to our continued collaborations with Janssen.
I'm pleased to now hand over the call to Anthony Pagano to take you through our first half financial results. Anthony, the floor is yours.
Great. Thanks, John .
Let's move to slide six.
We continue to strengthen our foundation during the first half of 2022.
To start, we're on track for regulatory submissions for ETCO in both the US and Europe in the second half of this year.
And, as we'll see, our H1 financials are exceptionally strong.
We grew operating profit by 34%. And importantly, we also increased recurring revenues by 86%.
This was driven by strong royalties from Darzalex and other approved medicines.
You'll remember, of course, that we didn't have any SEPESA revenues in Q1 of last year.
Our strong balance sheet.
growing recurring revenues, and significant underlying profitability allow us to continue to invest in our business and our pipeline in a very focused and disciplined way.
Especially in these volatile times, the strength of our financial profile really stands out.
An important part of this has been to continue to build a team and our capabilities to enable us to succeed.
So let's take a look at those revenues in a bit more detail on the next slide.
We saw continued strong performance for Darzalex in the first half of the year.
As you can see in the chart.
Overall, net sales grew by 37%.
That's net sales of $3.84 billion, which translates to over 4 billion kronor in royalty revenue.
This exceptional growth was driven by continued strong market shares across all lines and continued uptake of the sub-Q formulation.
So Darzalex remains a key driver of our revenue, as you can see on slide 8.
We grew total revenue to almost 5.3 billion kroner in H1. And as I've already highlighted, that included an 86% increase in our recurring revenue.
We've already spoken about Darzalex and the very strong performance there.
Turning to Casimpta and Tepesa, we saw an increase of 452 million kronor in royalties compared to last year.
Taken together, this growth really illustrates the power of our recurring revenue.
In fact, over 90% of our H1 revenue is recurring.
So our revenue profile continues to get stronger.
our strong recurring revenue and investing in a highly focused way as you can see on the next slide.
In line with our significant growth opportunities, total operating expenses grew 58% in the first half.
In R&D, we've accelerated our investment into our product portfolio, especially the advancement of both EPCO and dual body CD40-41BB.
We've also further strengthened the GenMap team to support our growth in commercialization and our expanding pipeline.
And that includes supporting TIVDAC and preparing for the filings and potential launch for EPCO.
Finally, we're leveraging the AvDU collaboration by utilizing their expertise and significant financial contributions to further expand and accelerate our partnership programs.
Now, let's take a look at our financials as a whole on slide 10.
Here, you can see our summary P&L.
Revenue for the first half came in at approximately 5.3 billion kronor. And that's up 49% on last year.
Total expenses were about $3.5 billion with 69% being R&D and 31% SG&A.
And that brings us to our very strong operating profit of nearly $1.8 billion.
And for me, this result is particularly impressive given the context.
Why do I say that?
Last year's H1 makes for a somewhat tough comparator, as it included more than $700 million of milestone revenue.
And this year, we've also increased our total investment in H1 by nearly 1.3 billion kroner.
And even considering these items, we still delivered a 34% increase in operating profit in H1.
Moving to our net financial items.
Here we have income of 1.3 billion, which is primarily driven by the same two partially offsetting items that we highlighted in Q1.
First, we've got the strengthening of the US dollar against the Danish kronor, positively impacting the value of our cash and investments.
And on the other side of the ledger, we have losses on our marketable securities due to rising interest rates and some losses on our public equity investments that we made in conjunction with recent licensing deals.
Then we have tax expense of $745 million, which equates to an effective tax rate of 24%.
And that brings us to our net profit of nearly 2.4 billion kronor. So as you can see, extremely strong financial performance for H1.
Before we take a look at our improved guidance, I want to take just a minute to revisit our robust financial framework on the next slide.
First off, let's think about our revenue profile, which you can see on the left.
At the beginning of 2020, Darzalex was our only product on the market.
Today, we have five.
And that provides us with expected recurring revenue growth of 53% in 2022.
And there's a clear path to potentially expand the number of approved products with Janssen's BLA and MAA for Teclistimab and, most excitingly, our planned submissions for EPCO later this year.
Taken together, we expect significant cash inflows in the years to come.
Moving to the right, we continue to be focused on our investments as we evolve our organization for continued success. And right at the top of the list is accelerating and expanding EPCO.
Based on the work we've done so far and the data we've seen, including the recent top-line data, we're convinced EPCO is a drug that has the potential to really make a difference for patients.
And EPCO is just one of the exciting opportunities that provide us with a compelling rationale for increasing our investment.
As we told you before, if we want to seize these meaningful opportunities, we've got to invest. And that's exactly what we're doing.
background, let's look at our improved guidance on slide 12.
Driven by continued strong Darzalex growth and the positive net impact of the strong US dollar, we raised our 2022 guidance earlier in the week.
We now expect our revenue to be in a range of 12 to 13 billion kronor, an increase of 1 billion to both the bottom and top end of our range.
This increase is driven by higher Darzalex royalties following the strong H1 performance.
Here, we've increased our guidance for Darzalex net sales to a range of $7.8 to $8.2 billion.
Our revenue also continues to be positively impacted by the strong U.S. dollar.
Turning to our investments, really focus on executing against our strategy and key priorities and creating long term value.
Here, we are increasing our OpEx guidance to a range of 7.6 to 8.2 billion kronor. This is driven by pipeline progression and accelerated F-Pyridomab launch readiness activities, as well as the strong dollar.
Putting all this together, we're planning for substantial operating profit in a range of 3.8 to 5.4 billion kronor.
Now.
Clearly, we've all seen a material appreciation of the dollar so far this year.
Taking this into account, we've updated our guidance rate for the Danish kronor US dollar from 6.4 to 6.8 to reflect the year-to-date average through Q2 as well as consensus.
Overall, our increase in revenue is approximately 40% operational and 60% FX.
and the increase in operating costs is roughly evenly split between operational items and FX.
And finally, to give you just a bit more color on foreign exchange, every 10 point move in the exchange rate relative to our guidance rate is worth around 50 million kroner in operating income for the balance of the year.
Now for my final slide, let me provide just a few closing remarks.
In summary, we've had an exceptional first half of 2022.
We've created growing recurring revenue streams.
And that gives us a strong backbone of significant underlying profitability.
and we continue to invest those revenues in a highly focused way to realize our vision and capitalize on the very significant growth opportunities in front of us.
Now on that note, I'm going to hand you back over to Jan to discuss our key priorities for 2022.
Thank you, Anthony. Let's move to slide 14. Our key priorities are essential to our success and we are making excellent progress.
We are especially excited about the recent advancements for APCO-RITOMAP. And in addition to the recent data and the announcements of our intent to submit a BLA in the US and APPSE's intent to submit a conditional MAA in Europe , a new Phase III study APCO-RFL1 is now listed on clinicaltrials.gov.
The study will evaluate safety and efficacy of abcaridomab in combination with tritoxilmab and lenolinamide or R2.
compared to ask-we-are-alone in patients with relapsed or refractory follicular lymphoma.
Together with APSI, we anticipate that this study will start in the second half of this year.
We look forward to providing you with further updates on AbcoRitaMapp, as well as on other clinical programs as GenRoc continues to evolve into a leading fully integrated biotech innovation powerhouse. We look forward to providing you with further updates on AbcoRitaMapp, as well as on other clinical programs as GenRoc.
So let's now move to our final slides.
Slide 15.
That ends our presentation of Genrops first half 2022 financial results. Operator, please open the call for questions.
Thank you. If you wish to ask a question, please dial 01 on your telephone keypad now to enter the queue.
Once your name has been announced, you can ask your question. If you find it's answered before it's your turn to speak, you can dial at 02 to cancel. So once again, that's 01 to ask a question, or 02 if you need to cancel. Our first question comes from the line of Wimal Kapadia of Bernstein. Please go ahead, your line is open. Oh great, thank you very much for taking my question. So can I first just ask about the HexaBody CD38 please? So when can we expect?
the DARA head-to-head trial to begin. Is it fair to assume we won't really get an update from a data perspective until quite late into 2023? So, and just tied to that, any update you can provide on what you've seen so far from the current data set that gives you confidence to begin that head-to-head study. Now, my second question really is just in terms of EPCO and filing, the 2H is quite a broad range. We're in August . So, what more is really needed to file with FDA? Are you in the process of putting the package together?
Is there more data needed? If there's any update, that would be great. Thank you. Thanks, Vimal, for the questions. I think I can handle both of them myself. HexaBody CD38, we're very excited about the data. You will see the dose escalation data this year, Vimal, and we hope to start the head-to-head.
against the sub-Q data near the end of this year. So no data will be there this year. And indeed, I think end of 23 for the head-to-head data is probably the right approximation. Then for the algorithm of filing in the second half, we have all the data and we are now basically working on the filing as we speak, VMO, and we hope to actually finalize that filing in the coming months, literally.
That's probably all we can say on the timing. Thanks very much.
say on the timing. Great, thanks very much. Thanks, Vimal.
Thank you. Our next question comes from the line of Jonathan Chang at SBB. Please go ahead. Your line is open.
Hi guys, thanks for taking my questions. A couple from me. First one, on your updated 2030 vision, can you provide more granularity on your plans outside of oncology? And then second question, when could investors see additional clinical data for Gen 1046 and 1042? Will these be in the second half of this year or not? Thank you.
Thanks Jonathan for the questions. I will ask Judith Klimoski to basically give us a start on both of your questions and then I can see what I can add. Judith, the floor is yours.
Yes, so to answer the first question on areas beyond oncology is, you know, in serious diseases where our technologies and antibody expertise can make a difference. So we are assessing actively as we speak, there could be low-hanging fruits and as Jan mentioned some examples of Tepro, Kesimt, even the piece selecting.
to gather this data by the end of the year. The opportunity to present, we are actively assessing, vis-a-vis the timelines for the different conventions, but we feel committed to our goal to present this data by the end of the year.
Thanks, thanks, Judith. I think nothing to add, Jonathan, for now, but thanks for the questions.
Got it. Thank you.
All right.
Thank you. Our next question comes from the line of Sachin Jain at Bank of America. Please go ahead, your line is open.
Thanks very much. A couple of pipeline and then just one financial. Just to follow up on 1042 and 1046, I wonder if you just provide more color where you are with the program. So my interpretation of prior commentary had been that you obviously got multiple combinations going.
with different sequences. And there have been signs of initial efficacy. You're really trying to work out what combinations are giving you the best your ability of response vis-a-vis safety. So with that interpretation fair, and just any color you can provide us where you are on the path to finding the right combination and sequence. Second pipeline is the CD37. Just any color as to what Avi saw to hand that asset to you. And then just one financial for Anthony.
just given the variability of milestone income, just any color you can give us as to how to think about milestone revenue expectations this year within guidance and obviously any color you can give on that, Chris, rather than that would be super helpful. Thank you.
Thanks, Sasin, for the questions. What I will do is I will hand the first questions on 10.42, 10.46 to Tahi and also ask Tahi to basically comment further on the AppVIA decision if possible and then Anthony Pagano can pick up on the milestone and APCO questions. Tahi, provide the floor to Sasin.
Thank you, Jan. Well, I mean, this is going to be relatively short. I think, you know, beyond what Judith earlier said around 1040 to 2046, I don't think we are in a position to give any more clarity on the data that we're generating. Obviously, you can tell from clinical trials that apart from prior… …
commentary on our end as you correctly so honest
the team really supporting the overall progression of our research activities and progression of our clinical development pipeline and assorted manufacturing activities. So as you just probably heard, the two biggest drivers are EPCO and Build Out of the Team. So then obviously CD40, 4-1BB would rank behind that. I would say it ranks behind certainly EPCO and a map by a fair margin at this point. Again, you shouldn't read anything into this other than where we're at in the overall stage of the development of the program.
Thanks, Anthony. Thanks, James, for the questions.
Thank you. And our next question comes from the line of Michael Schmidt at Gubenheim Securities. Please come ahead, you are on the line.
Hi, this is Paul on for Michael. Thanks for taking your questions. Just a few on your recent expanded partnership with BioNTech. I guess first, was there anything that was observed in your ongoing clinical hexabody programs or partner duo body programs that sort of triggered this deal? And then are there any precepts by number of monospecific candidates that you plan to nominate under the collaboration? And then lastly, any additional color on how the hexabody platform might assist you to address the CD27 target? Thank you.
Thanks, Paul. Good questions. We are very excited about the BioNTech partnership. We are working on a number of programs. There are already candidates selected for Hexabody approaches beyond CD27. But I will ask Tahi, who is actually overseeing part of that work with BioNTech, to give you some further reflection and comments on your questions. Tahi? Thank you very much.
Thank you, Yangon. I would first say that the collaboration with BioNTech has been ongoing for several years and has been an extremely fruitful collaborative collaboration.
And as we have worked together on a multitude of targets and learned more and more about how to better address them.
And this has led now to the expansion of this collaboration to also include hexagonization as a gem of developed technology for certain targets that are part of our collaboration. The first one that is going to be finished.
As I was saying is CD 27
very clearly and we will show that data presented to you in the future have preclinical evidence that our hexa body technology the ability to hexameralize
leads to a significantly stronger
signal than a comparative antibody, including those that are in clinical development already.
And so that's where our condition comes that this could be a differentiated approach to this particular target. And obviously that insight also translates to potential other targets.
And there are, as Jan already said, other programs that are in development in this collaboration with BioTECH, which is an extremely fruitful and efficient and effective collaboration.
Thanks, Ty. Thank you, Paul, for the questions.
Thank you. Our next question comes from the line of Chris Yu at More Stanley. Please go ahead, your line is open.
Thank you for taking my questions. I'm speaking on behalf of Matthew Harrison. So I have two questions. One is on EPCO. So what do you think are the key factors around commercialization? Because we have recently seen a lot of late line DLBCL launches that have plateaued after a few quarters. So with that information, what do you think that has told you about the market potential in this particular disease?
The second question is about the 4-1-BD programs later this year. What bar in the lung cancer expansion cohort is enough in terms of the overall response rate or would you need to see MPSS? Thanks.
Thanks, Chris. I will hand the first question over to Anthony Maffini to talk a bit about market potential of Abcaritomab and the potential in commercialization there. And then the second question probably to Judith to speak a bit more about lung cancer and the bar for the 400BE programs. Anthony, the floor is yours.
Thanks, Jan and thanks, Chris, for the question. Just to provide some context on the commercial potential, the initial addressable patient population in DLBCL across US, Europe , and Japan, about 9,000 patients in late lines, it steps up quite significantly in the second line and then the front line. But what's really important here is if I focus on the US market is the site of care dynamics.
And today, they're such that LBCL is largely treated in the community in the first and second line setting. And in later lines, although more therapies have recently become available, what we're hearing from our customers is that there's quite a large degree of dissatisfaction in that setting. And the patients more often refer to a hospital or academic setting. And it's clearly driven by the fact that more effective options are only available there.
What we also hear pretty consistently from treating clinicians is that off-the-shelf therapies that can deliver the right balance of efficacy and safety and also have the accessibility of an off-the-shelf sub-q administration, if those types of therapies were available, that they would continue to treat these patients in the later line settings in the community. And frankly, a large portion of...
potential patients that are referred do not get the therapies that they're hoping to get it in an academic setting. So we still think that
the potential to have to be best in class and have the right balance. Of efficacy and safety. That's certainly what we've observed thus far and you know with the accessibility of a sub two administration. We still see meaningful potential opportunities in the long term and not just in the late line settings, but particularly as we continue to explore it in earlier lines and across the cell the latency, so I think I'll leave it at that, Chris. Thanks. Thanks, Anthony. Then
inhibitors and doublet chemo. So let's start with the unmet medical need. As a checkpoint plus chemo are moving to the first line for most of the patients or sequential on some, there's a huge unmet medical need for patients that exhaust these main options.
Durability as well because what we want is improved survival and for that it should be durable. So I won't give you the bar but you can, it's huge and you can make it very poorly served with the current option with the Dositaxel. And the bar for other small studies, more current contemporaneous data on Dositaxel is in the single digit order.
Thanks, Yudat. Thanks, Chris, for the questions.
for the questions. Thank you.
Thank you.
The next question comes from the line of Yaron Werber at Kahan. Please go ahead, your line is open.
Hi, this is Jana on For Your Own. Thanks for taking my question. I actually have a few questions on Darzalex.
Given previous Casiopeia data showing that Darzalex maintenance improves PFS over observation, do you think that Darzalex is actually going to become a key component of maintenance therapy as well? And also along those lines, what's your expected timeline for initial data from the ARRIGA trial?
Secondly, I see that you are also testing Darzalex and newly diagnosed multiple myeloma as part of the VRD quadruplet in trans eligible and non-eligible myeloma patients. Could you give some guidance as to when we could see that data from Cepheus and Perseus? Thank you so much.
It is of course event driven that it has an estimated completion date of September 22. So that is probably where we need to leave it at and then the further information needs to come from our partner Johnson Estates already set.
Okay, thank you very much.
Thank you.
The next question comes from the line of Elizabeth Walton at Credit Suisse. Please go ahead, your line is open.
Thanks so much for squeezing me in Elizabeth Holton from Credit Suisse. I just have a couple of questions left. Firstly, one on costs. I'm curious if you can provide us any colour on the relative spend to SG&A and R&D. We saw a meaningful step up in your SG&A spending this quarter versus expectations. How should we think about that going forward? Is there much more that needs to be done to prep for EPCO?
And then secondly on Darzalex, curious on your view on the conversion rate from the intravenous to the subcutaneous formulation. J&J told us in their results it's about 85% subcub use in the US and 80% in Europe . How does that track versus your internal expectations? Thank you.
Thanks a little bit for the questions. I propose that the cost question goes to Anthony Pagano and that Anthony Mancini gives us a bit of perspective on how we think about IV to sub-Q conversion as we see it not only in the States but also outside of the States. Maybe Anthony Pagano can start.
Sure happy to do so thanks for the question Elizabeth. Yeah you're right as our business you know evolves you know we're grounded in investing you know for what makes sense for GenMAB right. So historically think about it everything was going into R&D and as we got closer to the filing last year and then the launch of Tivdac obviously we ramped up that investment in a very focused way together with our partner. So what you're seeing now for Tivdac in particular you
Whereas an H1 last year, you wouldn't have had a ton of cost for TIVDAC and H1, I would say, a fully loaded, let's call it a cost structure for TIVDAC in our H1 P&L. And that will continue moving forward in the second half of this year and also into 2023. Now for EPCO, I would say the beginning of last year, getting into H1 this year, we've started launch readiness activities for EPCRITIMAP in earnest.
And now following the positive readout of data that we saw in April , and now with our announcement of the intent to file, particularly in the U.S., we are going to have to invest for success here. So we are starting to ramp up, as you've just alluded to, our investment in SG&A in H1, and that will continue here in the back half of next year and also into next year. Again, a really focused and disciplined way to add value to the industry. So far, we've found reaching out to calm people and be able to make their decisions and continue to do just that andae the best possible business in the world and between $30 and $4 for being a development firm
here to make sure that we really are well positioned to let F-CURTAMAP shine in the marketplace, you know, should it be approved. And I think just wrapping this all together, just with the overall expansion of our really exciting clinical pipeline and the two commercial drivers that I just highlighted, there is an increased need to invest in systems, whether it be CRM, ERP, enhanced compliance functions, to really round out and make sure that GenMAB as a whole is really well positioned.
to support the growth and manage risk appropriately along the way. Hopefully, Elizabeth, that gives you a little bit of color, and I think Anthony Mantini can take on the other question.
Yeah, thanks Anthony and thanks Elizabeth for the question on conversion rate. And the way we think about it is that really the availability of the subcutaneous formulation around the world really was a clear driver of strong share performance.
And as J&J outlined on their call, it accounts for over 80% in terms of usage, in terms of weekly growth sales in the US, and around 80% in Europe . And what I would say is that, largely in line with our expectations, I think where we continue to applaud Janssen's execution in Europe and rest of the world in particular, is the rapid availability and access to the sub-Q formulation.
But when we look at frontline share, we saw an absolute share gain in the US of 12%, which is impressive, but an even more impressive 22% improvement in share points in this new frontline setting in the EU5. So we think that's driven by strong execution, resonance of the overall survival benefit, and the availability of sub-Q, which as you know well...
leads to, facilitates earlier usage due to its convenience, efficacy being the same as IV, and of course the safety benefits and convenience benefits that exist.
So hopefully that covers
Thank you.
Thanks Anthony, thanks Anthony and Elizabeth. Let's go on to the next question. That's from the line of, sorry, Karen Marley of RBC Capital Markets. Please go ahead, your line is open.
Thank you for taking my questions. So I'd like to ask the question on ENCOR commercialization in a different way, if I may. So from the discussions you have with physicians so far, how they view the data for ESCO, and in particular, how it compares versus glofatimab from ROG. And the latest data you shared at EHAB points to slightly better safety and efficacy for ESCO. Just what came to understand whether this is something you hear from physicians or, you know, at this point in time or...
perhaps both drugs at this point are viewed more or less comparable. And my second question is, I noticed on clinicaltrials.gov that you have initiated a phase two safety study for EPCO. And is this something you need to have in place before you submit to the BLA application? Is it to support or strengthen the data? Or there's a safety concern here? I'm just wondering of the rationale for this. Thank you.
Thanks, Zoe, for the questions. I propose that definitely Judith will speak a bit more about APCO versus GloFi and also the safety trial in the context of the filing and the route forward for APCO. But maybe, Anthony Mocini, you can also give some perspective on commercialization as Zoe wants to hear of APCO versus other CD3, CD20 buy specifics.
Anthony?
Do you want me to start? Okay, but look, I think in line with what I said earlier in terms of what we're hearing from clinicians is the desire to treat these patients. And we believe, based on the data that we've seen, the LBCL cohort of the EPCOR NHL1 study, which were shared at the EHOP Presidential, show that really, EPCO F. guridomab offers a balance between efficacy, safety, and the accessibility of sub-Q administration. And what we're hearing from clinicians is that that.
Although you might have similar eligibility criteria, there are nuances that can impact the result. For example, when you see the glo-fi, it's in the same population. However, the median lines of treatment with EPCO is 3.5 versus 3. The transformed follicular abubilation, super difficult to treat, is 29% for EPCO and 17% for glo-fi and so on and so forth. So you see...
So you cannot compare because you will be doing biased comparisons influenced by factors that you don't control. Having said that, when we put vis-a-vis the data on EPCO, vis-a-vis GloFi and some other merchandise, we see that numerically there is a trend for better efficacy, better safety.
And last but not least, advantage of subcutaneous and doesn't need of opinutuzumab or any preparation for the patient. So as the whole package, we see that it's very robust to support the whole value proposition for EPCO. And I'm in a testament, I mean, I am a development person, but I am telling you when studies and roll fast is a good signal of the...
of the belief of competence in an investigational agent. And as you have seen our program progress, you can guess that enrollment has been, we had the support of the medical community for enrollment. This is with regard to comparative data. With regard to the outpatient study, it's not a request, it's some data that we wanted to generate.
to give more to have this data to help the community centers or, you know, every physician that want to have, potentially when it's approved, prescribed EPCOT, that we have the whole set of data and information to help, you know, that you correct the aud 202
data helps physicians understand how to use the drug. So this is the reason. It's a very nice study which is exploring EPCO in a fully outpatient basis.
Thank you, Yudhav. Thanks, Zoe, for the questions. Excellent questions. Let's move on to the next one.
Thank you and we have time for one further question that's from the line of BMO Capital Markets. Please go ahead, your line is open.
Hi, this is Luke Shumway on for ETSUR-DURU. Thanks for taking my question. I guess on the Gen1 L5-3 asset with BioNTech, you said that you're going to be looking at solid tumors. Do you have any more clarity on that? Like, are there specific indications that you're going for, or are you going for a tumor-agnostic approach? That's questions.
Thanks for the questions Rich. Ty, are you willing to provide some sort of call on that? Sure, what I would say to the question is
the first question that we need to address in our first annual trial.
will be the biology of CU27.
essentially a tumor agnostic biology. And then we can.
and then make subsequent steps, identify opportunities which may not necessarily be only restricted to solitude.
if indeed we elicit the biology that we have pre-clinically seen, I want to see the 27 biology, particularly the increase of C-A-P cells.
to more micro-enormous and deactivation death. Then we can have second steps questions around what is appropriate setting for interrogating that particular biology is or in what combination.
Thanks, bye.
is that okay, Rich?
I think operator I think we lost we lost them
His line's still open, he may have muted himself. No, sorry, no, that's it, thank you.
All right, thank you very much for the question. Operator, back to you.
Thank you. As we have run out of time for questions, I'll hand back to the speakers for any closing comments.
Thank you for calling in today to discuss GenMOP's financial results for the first half of 2022. And if you have any additional questions, please reach out to our investor relations team. We hope you all stay safe, remain healthy, and very much look forward to speaking with you all again soon.
This now concludes the conference. Thank you all very much for attending. You may now disconnect.
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