Q3 2022 Genmab A/S Earnings Call
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
[music].
Okay.
Hello, and welcome to the Gen. <unk> Q3, 2022 conference call as a reminder, this conference call is being recorded.
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Now I'd like to hand, the conference over to your first speaker today, Yeah bottom that we think are please go ahead.
Hello, and welcome to the General conference call to discuss our financial results for the first nine months of 2022.
With me today to present these results as our CFO Anthony Pocano and then for the Q&A, we will be joined by our Chief Medical officer, tying them already.
Move to slide two.
As already said, we will be making forward looking statements. So please keep that in mind as we go through this call.
Let's move to slide three.
Shannon will pass a sign think of that innovation based culture and collaborations and partnerships have always been part of our DNA.
During today's presentation, we will reference some of the products being developed Adobe strategic collaborations and this slide acknowledges those relationships, let's move to slide four.
Let me presented this slide during our first quarter earnings call. We set up he has never been in a better position to achieve our ambitious vision.
<unk> cancelled lead times.
We made that assertion on the basis of our consistent track Records, our world class team and our strong financial Foundation.
Since Q1, we have strengthened our.
Opposition.
And the first nine months of the year, we increased the number of cumulative.
The number of approved medicines, followed by Jamie Foxx innovation and the number of clinical stage products in our pipeline.
Pipeline.
We have also grown and strengthened the team.
And our financial foundation is even more robust so.
We continue to feel really well positioned for growth moving forward.
Excitingly, we have the potential to further increase the number of approved products in the coming year.
You can see that on the next slides the scope is a recent key updates let's move to slide five.
As we announced over the summer Zander panel part of Etsy and tended to submit applications for regulatory approval of <unk> in the U S and Europe .
During the second half of this year.
I am thrilled to say that these submissions have novocure.
An important step in potentially bring up Korea came up to people living with certain Hematological malignancies, who are in need of a new therapeutic option.
If approved could hit them up with also become our second Madison on the markets and the tariffs do a body based therapy to receive regulatory approval.
I'm also excited to announce that the broad potential of app because they come up we will be on display at this year's prestigious Ash annual meeting in New Orleans.
19, total abstracts showcasing our work in Hematological malignancies, where acceptance including Tom.
Highlighting data for accurate about clinical studies.
All presentations.
These presentations include initial data of <unk> in patients with <unk> syndrome from the <unk> CLR, one trial and data from three arms of the Opco NHL to study.
Updated data from four <unk> in patients with relapsed or refractory Follicular lymphoma, diffuse large b cell lymphoma.
Initial results in first line Follicular lymphoma.
Our earlier stage investigational medicines will be recognized at this year's ash with a poster presentation on preliminary dose escalation results for <unk> 38.
And preclinical data for <unk> III <unk>.
If we look beyond our own pipeline and includes all products that are powered by Joe Bob John Knox innovations.
More than 50 total abstracts accepted for presentation at this year's Ash.
Some of them are whole presentations.
In addition to US we're looking forward to preliminary duopoly CD 40 times for one <unk> data at ESMO, I O and assemble in Geneva.
And later this week preclinical presentations at 64, <unk> 784, and two of our investigational medicines in development stage biotech do about a PDL one forward will be at <unk> 27.
For Hexcel body CD 27, this will be the first preclinical disclosure.
Beyond our own pipeline Johnson has announced that they received approvals in both Europe and the U S was <unk> <unk> for.
<unk> for the treatment of patients with relapsed or refractory multiple myeloma.
<unk> created and developed by young son is a second approved medicine created using our dual body.
Your body platform.
Further support of this innovative bi specific antibody technology came from Novo Nordisk <unk> announcement last week that treatment was initiated in the first phase III study of <unk> in hemophilia.
As we look forward to next steps following the regulatory submissions for <unk>. We are optimistic that dual body based medicines, we will continue to become new treatment options for people with unmet medical needs.
And of course, <unk> continues to redefine the treatment of multiple myeloma.
<unk> net sales for Dara.
<unk>, 5% so far this year.
And that's generating more than 7 billion Danish krone and royalties for us.
Contributing materially to the robust financials I spoke about earlier.
I am pleased to now turn the call over to Anthony Pellicano Who'll take you through our first nine months financial results Anthony given ago.
Great. Thanks, Jan let's move to slide six.
We continue to strengthen our foundation during the first nine months of 2022.
Dark as John just mentioned together with our partner Abbvie, we achieved our goal our regulatory submissions for <unk> in both the U S and Europe .
And as we'll see our financials are exceptionally strong.
We grew operating profit by 67% in the first nine months of the year.
We also increased recurring revenues by 81%.
This was driven by strong royalties from <unk> and other approved medicines.
You'll remember of course that we didn't have any deposit 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.
We continue to do that in a very focused and disciplined way.
And especially in these volatile times the strength of our financial profile really does stand out.
And an important part of this has been a continued to build the team and capabilities to enable us to succeed.
So, let's look at those revenues and a bit more detail on the next slide.
We saw continued strong performance for <unk> in the first nine months of the year.
As you can see in the chart overall net sales grew by 35%.
That's net sales of $5 89 billion.
Which translates to over 7 billion kroner and royalty revenue.
This exceptional growth was driven by continued strong market shares and continued uptake of the sub Q formulation.
So <unk> remains a key driver of our revenue as you can see on slide eight.
We grew total revenue to over $9 3 billion kroner in the first nine months of the year.
And as I've already highlighted that included an 81% increase in our recurring revenue.
We've already spoken about <unk> and the very strong performance there.
Turning to <unk>, we saw an increase of 582 million kroner in royalties compared to last year.
In addition to royalties are recurring revenue also includes collaboration revenue.
And for Q3 of this year here, we had a one off payment from <unk> of approximately $15 million.
This revenue reflects our 50% share of payments received by sea Gen related to the deal with XI lab for <unk> in China.
Now taken together this growth really illustrates the power of our recurring revenue.
And finally <unk>.
We're seeing some pretty significant tailwind, particularly for our royalty revenue related to some positive foreign exchange rate impacts and I'm going to come back to that in just a bit.
In summary, our revenue profile continues to get stronger.
And we're using our strong recurring revenue to continue 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 55% in the first nine months of the year.
And R&D, we've accelerated our investment into our product portfolio, especially the advancement of <unk> and multiple other pipeline projects.
We've also further strengthen the <unk> team to support our growth in commercialization and our expanding pipeline.
That includes supporting <unk>, and the filings and potential launch for ESCO.
And finally, we're leveraging the abbvie collaboration by utilizing their expertise and significant financial contributions to further expand ESCO.
Now, let's take a look at our financials as a whole on slide 10.
Here you can see our summary, P&L for the first nine months.
Revenue came in at over $9 3 billion kroner.
That's up 60% on last year.
Total expenses were about $5 7 billion with 69% being R&D and 31% SG&A.
And that brings us to our very strong operating profit of nearly $3 7 billion.
And for me this result continuously particularly impressive given the context.
And why do I say that.
Through Q3, we have lower nonrecurring revenue this year and we've also increased our total investment by more than 2 billion kroner.
And even considering these items, we still delivered a 67% increase in operating profit.
Now moving to our net financial items here, we have income of nearly $2 7 billion, which was primarily driven by the same two partially offsetting items that we highlighted in both Q1 and Q2.
First we've got we've got the strengthening of the US dollar against the Danish kroner 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 licensing deals.
Then we have a tax expense of around $1 4 billion, which equates to an effective tax rate of 22, 5%.
And that brings us to a net profit of over $4 9 billion kroner.
So as you can see extremely strong financial performance.
Now before we take a look at our improved guidance.
I want to take 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 was our only product on the market.
Today, we have six.
And that provides us with expected recurring revenue growth of 69% in 2022.
And there's a clear path to potentially expand the number of approved products with the recent submissions for <unk>.
Taken together, we expect significant cash inflows in the years to come.
Moving to the right.
<unk> to be focused on our investments as we evolve our organization for continued success.
At the top of the list is accelerating and expanding <unk>.
Based upon the work that we've done so far and the data. We've seen we're convinced <unk> is a drug that has the potential to really make a difference for patients.
And <unk> was just one of the exciting opportunities that provide us with a compelling rationale for increasing our investment.
As we've told you before we want to see these meaningful opportunities, we've got to invest and that's exactly what we're doing.
So with that background, let's look at our guidance on slide 12.
As you'll have seen we raised our 2022 guidance last week.
We now expect our revenue to be in a range of 13, five to $14 5 billion kroner and Thats, an increase of $1 5 billion to both the bottom and top end of our range.
There are four items driving this increase.
First based on our strong performance. So far this year, we've increased the bottom end of the range for <unk> net sales.
Our new range is eight to $8 2 billion.
Second the upper end of our revenue range now assumes an additional milestone.
Specifically, we've included a significant milestone associated with the potential acceptance of the <unk> BLA for review by the FDA.
Third our revenue continues to be positively impacted by the strong U S dollar.
And fourth the largest driver for our increased revenue guidance is related to a significant tailwind for our <unk> royalties.
Under our <unk> agreement for purposes of calculating our royalties sales outside of the U S are translated to U S dollars at a specified annual hedged foreign exchange rate.
The positive impact of this has increased throughout the year and it has become more significant as we've gotten into Q3 and looking ahead to Q4.
More specifically as the US dollar has strengthened materially against most major currencies. This year there could have been an expectation that we would have seen a significant headwind for Sarah reported zero net sales.
However, we've not only maintained our total <unk> net sales guidance, we've actually been able to raise our guidance throughout the year.
So in many respects for <unk> royalties in 2022.
Been pretty fortunate.
I guess, you could say, we've gotten our cake and eating it too.
But that's a pretty unusual situation. So we certainly shouldn't count on it moving forward.
To summarize the main takeaway here for <unk> royalties is that in addition to the very strong year over year operational growth, we have a significant benefit in 2022 due to this contractual hedge rate.
And as you think about updating your models for <unk> royalties moving forward you should not use 2022 kronor denominated royalties as a base.
Now one final comment on revenue overall, our increase in revenue is approximately 30% operational and 70% FX.
Now having covered revenue, let's turn to our investments.
We remain focused on executing against our strategy and key priorities and creating long term value.
Here, we are increasing our opex guidance to a range of eight to $8 4 billion kroner. This increase is primarily driven by the negative impact of the strong U S. Dollar.
Putting all that together, we're planning for substantial operating profit and a range of $5 one to $6 5 billion kroner.
Now as I've already highlighted we've continued to see a material appreciation of the dollar so far this year.
Taking this into account we have updated our guidance rate for the Danish kroner U S. Dollar from six eight to seven two.
And finally to give you a bit more color on FX every 10 point move in the exchange rate relative to our guidance rate is worth around 30 million kroner in operating income for the balance of the year.
Now for my final Slide let me provide a few closing remarks.
In summary, we've had an exceptional first nine months of 2022.
We've created a growing recurring revenue streams 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 to capitalize on the very significant growth opportunities in front of us.
And on that note I'm going to hand, you back over to Jan.
Thanks, Anthony let's move to slide 14.
We continue to work towards our goal of goals for the year and especially excited about the recent advancement of Cogeco, Inc.
Including the two regulatory submissions the many abstracts accepted for presentation at Ash <unk>.
And that's an additional phase III study <unk> DSO deal Bcl two is now listed on clinical trials costs.
The study will evaluate the safety and efficacy of <unk> in combination with R Chop and.
In patients with newly diagnosed diffuse large b cell lymphoma.
To cover the wrap fee, we anticipate that this study will start early next year.
I'm also excited to announce that we will hold our annual R&D update at Ash data review.
On December itself and that the events will once again be in person.
Details about the events are available on our website and we look forward to seeing you all in New Orleans.
So let's move to our final slide.
Yes.
Our presentation of <unk> financial results for the first nine months of 2022, operator now please open the call for questions.
Thank you.
As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.
Please limit yourself to one question per person.
We will now take the first question.
One moment. Please it comes from line of <unk> Kapadia.
<unk> from Bernstein. Please go ahead your line is open.
Great. Thank you very much for taking my question so could I. Please ask.
<unk>.
Context on the Ash abstracts in particular around around the competitive data actually so the roche seem to have quite a credible approach with the fixed dose period for glo fit and they also they are also.
Presenting data on most in.
In the elderly unfit population given its safety profile. So im really just curious how you think about <unk> in particular.
Any comments around the fixed dosing period for <unk>.
Because that seems like quite an attractive offering. So just curious how you think about that thank you very much.
Thanks, Thanks, very much for the question I'm going to hand, it off to <unk> I think an expert in this area and maybe you can answer that question. This is actually composed of three questions from my remodel.
Sure.
So the first question is essentially the question around.
Peanuts internet treatment in a setting where.
Patient, so I expect us to.
Relapse, and then succumb to the disease.
Within <unk>.
Prior to the.
None of this novel mechanism.
And I think the jewelry frankly is I think this is.
Everybody has their own biases, so anticipate Kenny Roche made a decision.
And the development.
If fixed tuition.
And to be suddenly in the setting where it is used as a single agent.
Decision to continue on simple question.
If you look a little bit.
And so the card data and you use that to understand biology then.
Comes to parent debt.
If patients who lose their response to cards.
Patients who lose.
The presence of the card sales.
Okay extrapolate from that.
There is reason to believe that.
This maintained in maintenance of TCR switches keeps these patients essentially a lifecycle cost and they relapse.
<unk> often globally.
The survival ratio, because that's really not opportunities available.
And they are already at the at the very end of treatment opportunities.
There's some reason to believe I think and Thats at least will be upcoming from the discontinuation of treatment.
May actually have.
The opportunity to prolong Crs even longer.
And really the way we've cut some bus down to us for the question.
<unk> was this an IV infusion.
It makes it a little bit more easy for us to have a.
Long term maintenance once a month of substitution, but I don't think that Marshall for both on the patient.
That gives them a higher chance sustain NCR.
The second question was I guess.
Touching on more so.
And the elderly.
I think they've done some.
Interesting work in generating data in this patient population that is not eligible for onshore.
I would also say that very clearly.
Most of that does not have.
Anywhere close to the efficacy signal.
That <unk> had.
And if you said should be sent in the anthrax.
Disease patients that come through if they don't go into CR.
So I think we're quite comfortable.
Generating data in a similar setting.
We will generate.
Significantly more.
Efficacy.
That is relevant to the patients.
Alright.
Frontline elderly patient is eligible for still a frontline patient that has.
Some chance to have a.
The highlight of Crs.
Great. Thank you. Thanks, Thanks, guys. Thanks, very much for the questions very good.
As most of the next month.
Thank you.
We will now take the next question.
It comes from the line of Jonathan Chang from SCP Securities. Please go ahead. Your line is open.
Hi, guys. Thanks for taking my question and congrats on the progress and delicious cake.
My question is there are other companies that have recently set the FDA is asking for confirmatory studies to be mostly enrolled before granting accelerated approval could you provide some insight on where you stand with respect to this on at Kurt. Thank you.
Thanks, Thanks, Jonathan for the question I think Ty is completely up to speed on the confirmatory study maybe you can give some color there yes.
I want to tell you exactly where we are because that's just not the way this works.
What I can tell you is that we.
Started this phase III that is a confirmatory phase III for the indication, which was seeking accelerated approval.
In December of 'twenty 'twenty also.
Okay.
I would say, it's fair to say that some foresight.
We're very aggressive in the initiation of the.
The phase III.
And tenants of the confirmation.
For the.
Instead of the approval of you'll see candy indication, which is in the reverse effect.
Such visa.
So we are.
Quite confident with where we are.
Thanks, Syed Thanks, Jonathan for the question.
Thank you.
Let's move to the next one.
Thank you.
It comes from the line of Matthew Harrison from Morgan Stanley .
Hi, This is Chris on for Matthew Thank you for taking our questions.
For Gen <unk>.
Q4, given the encouraging data that you have shown in ash any update on the head to head study against <unk>.
So thanks for the question Chris.
No updates for the head to head against <unk>.
Q <unk> that will start early in the new year that will have.
And that's and that study is actually a multi arm study.
But I have to ask will start early next year.
Okay. Thank you.
Thank you.
Thank you.
We will now take the next question.
It comes from not enough Peter from Citi. Please go ahead. Your line is open.
Yes. Thank you.
Just one question for <unk>.
Should we take it as read.
The Gen 10, 40 to go into phase III, given that you are calling it out including the ESMO data presentation.
In the prepared remarks.
I realize you can't get into details of front run the data, but perhaps you could provide some mood music like you did last quarter going into the body.
Strike. So the question is on Gen simply too thank you.
Thanks, Thanks, Peter for the question and Unfortunately, the data centre on Basel I think on December 1st you will see the abstract on 10 42 and.
Preliminary data and a solid cancel.
We also set up earlier this year, we hope to make a decision Peter on that will be more.
10, 42, and <unk> 46, all boats.
Two late stage clinical developments, we will update the market. Once we are ready to do that but we're clearly very excited about presenting that data at <unk> in Geneva.
But we all know embargo, we cannot share any further about the data.
Zinc hopefully this won't show up a bit Peter for that.
Thanks, Ken.
Alright, Thank you, let's move to the next.
Hello.
No problem.
Thank you.
Next one is Michael Smith from Guggenheim Partners. Please go ahead your line is open.
Hi, This is Paul on for Michael Thanks for taking our question just another one on Pepco. There was some discussion with Abbvie on their recent earnings call on the requirement for that 24 hour inpatient stay after the first full dose and potential efforts to remove that requirement with subsequent studies just wanted to get your comments on current perspective and go forward plans for that.
In patient monitoring and how we should think about sort of plans going forward.
Hey, Paul that's a good question and I'll pass it onto two times fully on the up to speed on the on the efforts to remove out stuff that's staying on the ball side.
Hospitalization so as of now.
Patients get hospitalized exactly one day, that's when they get the first full dose.
We have a study that is active and enrolling.
That is now testing.
It is.
Assessing wherever we can.
Mr <unk>.
Through the learnings <unk> had held to manage the guys.
It's fluid management and <unk>.
And steroids.
In an outpatient setting and then maybe more importantly actually it tests.
Whether this can also be done in a.
Non academic institution city.
So these are sites that are specifically chosen United States community hospitals.
Fundamentally what this is all about the Psych hospital gets too safe process that allows the administration of <unk>.
Echo for patients.
And the communities, where they are being treated with it being seen with such visa. So we're working on that and generating the data to.
To support that.
For the.
The phase III is that I actually enrolling.
Actually demand.
<unk> already.
How that's going to play out in the discussions with the.
I think it's a completely separate topic.
I think theres some clues how the agency is thinking about this that one can draw from.
Recent label.
So we'd be CMA against them.
Okay.
Thanks, Ty Thanks, Paul for the question, let's move on to the next one.
Sure.
Thank you.
Next one is from the line of Peter was far from Jefferies. Please go ahead. Your line is open.
Hi, Thanks for taking my question.
Question back on <unk> CD 38.
I appreciate that obviously the ash abstract is coming so the ash data is coming in with any book the abstract but I wonder if you can just comment a little bit in terms of what we see at the moment, what we can all read.
Can you just talk a little bit about how you're seeing a dose response across the various doses to the recommended phase two dose.
Also what I guess, we will get incremental at ash, because I guess my point of view is looking at the data, particularly in those patients who have had prior <unk>.
It looks like the incremental ability to generate a response of <unk> 38 is relatively minimal pieces too.
With two acknowledged in the population could you just talk a little about how we should I guess easy statement consider it when we see the detailed presentation at ash. Thank you.
Thanks, Thanks, Peter I don't think we can actually give you too much information before the ash presentation, but I'm handing it over to tie you can perhaps provide a bit more color on the dose response relationship.
Are you able to say anything about that wasn't maybe I'll try my best to contextualize. The data that was presented at the San was saying we cannot really comment anything on new should also not expect.
Much more than as you said yourself incremental data because.
So our ongoing data generation, but this is how we see the data thats been presented and this is I think maybe helpful to you first of all.
We had and wanting a study in relapsed refractory multiple myeloma.
But in a very different time with very different treatment paradigms and options than the original.
Dara.
Is it took him up data was generated the patients on the trial.
As a median of seven prior lines of therapy for the most part they are also exhausted.
Recent be CMA opportunity. So it's a completely different patient population, that's the first part to understand.
The second part is this discussion of all patients who have seen CD 38 registration has not seen 38 September refractories.
It really boils down to have you seen or have you not seen the CSL antibody.
<unk>.
This phenomenon of telcos Thats also slipped.
<unk> antibodies in simplistic terms seem to shred of.
So you have the surface and while after a period of time it does.
Appear to come back at the lower expression level.
S as patients continue to be that slow progress.
I think it's fair and it was always clear to us that.
The main play.
The ability to offer any improvement on the <unk> antibody.
As in the population.
That is sensitive.
So that's making this on which is why our.
Our priority from the initiation of the program.
We incorporated as a proof of concept the head to head comparison to sub Q.
As you look at the.
Data.
There's some in the assay.
I think it's.
It could be quite helpful to look at the PD markers.
To understand.
The degree of depletion of NK cells.
Reduction of the complement that these are the things that we looked at as we try to the cost compared to what it used to do unless you didn't take into context for us I mentioned above.
Some of the more refractory patients more heavily pre treated.
That's where we are continuously seeing I think the evidence that's the ex amortization doesn't it.
Proof.
At least company with many.
Efficacy.
And that's also somewhat evidenced by the desktop response.
Thanks.
I think Peter we cannot give any further color or we have to wait till the ash presentation to which we are very much looking forward and I hope we can speak about I think you were too.
Alright, thank you.
Alright. Thanks.
Thank you.
We will now take the next question.
It comes from the line of Emily <unk> from Barclays. Please go ahead. Your line is open.
Hi, Thanks for taking my question.
If I can just squeeze two and I just wanted to follow up on that last question on talks about a CD 38.
Given the thought of positioning head to head versus <unk>.
Maybe just pivoting to the safety component of the discussion.
Is it is it too early to draw any conclusions from the abstract in terms of adverse events relative to the Pollak study would that be the right comparator or just any color you can give on what youre seeing on safety early on there and then just.
Anthony Yes.
That was very helpful in terms of the FX.
Commentary on modeling.
Just a question on the exact mechanics, because I don't want to get wrong.
Is it that there's FX conversion rate for the royalty stream chosen at the beginning of each year that we thought kind of like how the royalty stream itself reset on an annual basis.
And so that's why that that benefit is it.
Creasing throughout the year is that the right way to think about it. Thank you.
Thanks, Emily for the two questions. So maybe first asking tie to give a bit of color on the safety patent alpha extra bonus CD 38 versus perhaps the die and then Anthony will hopefully give you a bit more technical information on the on the hatch and the.
And the tailwind basically Emily next time.
Safety so first.
If you wanted to compare it than probably the final 100 series study would be the datasets for telecom up to look at then now comes to reason why you shouldn't look at them.
Partially because as I just mentioned.
There is a difference on.
Uncontrolled.
Phase two study.
This case actually a first in human study.
The attribution of an observed.
<unk> always complicated and so.
We do see a few more as related to <unk>.
<unk>.
For the most part actually they are related to the disease burden and that the patients have at the time was just slightly different than for 501 serious as I mentioned before.
What is interesting what is different and what also took us a little bit of time, where are we getting a much better handle on this that the.
The infusion related reactions are different so far.
More specifically the infusion related reactions were were a major problem to get to the first infusion specifically.
And they were predominantly related to <unk>.
This very unique pattern.
Upper airway symptoms.
Bronchospasm.
And the same version.
Laryngitis.
Sure.
Sure.
Rhinitis.
Almost every single patient.
And.
And it was actually thought to be related to the release of <unk>.
Positive basophils, which is why we had it at some point.
Inhibition of Deluca, Chilean peso pathway and the management of <unk>.
Flexibility, so that's actually not at all losing.
We don't see anything remotely like that actually behaves.
From an infusion related trying to if you like.
Any other.
Complement or any other.
<unk> targeting antibody.
Previously.
So it's more of the classic Avago.
Thank you Bob.
Symptomology so.
<unk>.
That has been.
Much better handled now may have forgotten a much better handle on that as well.
So it's a very different pattern.
And it doesn't.
So just would like to conclude and it doesn't lead to these.
So this issue. So if you have it that way at these extremely long infusion durations in the beginning.
Thanks, Thanks for that that's probably all we can say and more at Ash Emily maybe Anthony you can give a bit more technical insight into the haps et cetera.
Sure happy to try to help I.
I guess just to start the way Youre thinking about it is correct essentially it does.
Reset every year to use your language again, just to reiterate what I said on my opening remarks under the diary agreement for purposes of calculating the royalties sales outside the U S are translated to U S dollars at a specified annual hedged foreign exchange rate and that mechanism really as part of the.
2012 contract that we had.
Yeah, I think if you look at the.
Our performance this year, whether it be compared to last year or how we've managed to improve our guidance throughout the year.
Here in 2022 has been very significant and its been positive really in the history of the <unk> sales is probably by far and away. The most significant impacts we've ever had and again look this could come around the other way in future periods, but this year. It certainly has served us very <unk>.
Well my advice for everyone out there modeling <unk> royalties is really not to extrapolate from 2022 kronor denominated royalties really start with the basics in terms of U.
U S dollar denominated sales work through our royalty tiers remember the contribution to the <unk> royalties and then convert that over to kroner at whatever rate you think is best but closer to spot. So Emily I hope that gives you some additional.
Insight into the mechanics, but also some additional <unk>.
Guidance moving forward.
Thank you.
Thanks, Anthony Thanks, Emily for the questions, let's move on to the next.
Analyst.
Thank you.
Next question comes from the line of Elizabeth Walton from Credit Suisse. Please go ahead. Your line is now open.
Hi, Thank you very much for taking my questions I have two left.
This fast.
Hey, guys I'm helpfully provided that faas praise now reached 85%. It also like sales in the U S.
I'm wondering if you could provide some color on the level of Fas pray and penetration outside of the U S. As you have done in previous quarters.
And then my second question relates to your new Phase III study in previously untreated.
The LDC al you've chosen <unk> as Youll comparator.
Love a little bit more context on how we should think about your trial design given the <unk> data the European approval in this setting and the ongoing with <unk> by regulators in the U S. Thank you.
Thanks for the question I'm going to pause a second serve on to die if a bit more context on the R. Chop.
The comparator for for Opco.
And then the question on the on the first row.
Outside the U S penetration.
I think the latest data we have seen is that it's about 80% in Europe and in some countries. It's a close to a 100% basically also a fastball use but overall I think the effort is around 80% or less of that.
Maybe you can give a bit of context on why we have chosen <unk>.
As a control arm.
And as you can imagine this is a big study.
It's a large phase III.
That was just.
Made public on Victoza cough, and so we've had.
Of course, the interactions with another <unk>. This is a little bit the difference between whether it's the regulatory standard of care and what may be it may not be approved so even though.
Hello, Alex.
Approval in Europe .
As of February with the FDA.
It is quite a large not available.
<unk> in the world and so for that simple reason, it's just not the simple at the center of care at this point.
So our job is still the standard of care.
So let's say that.
The.
Incremental improvement this.
It's not necessarily consistent across all <unk>.
Subgroups.
And then the product side. So it's the regulatory standard of care and that's why it's all controller.
Thanks, Tom I think that's crystal clear Elizabeth hopefully that's okay with you.
Yes, perfect that's mostly thanks, Elizabeth let's move to the next.
Yes, Joe.
Thank you.
We will now take the next question comes from the line of Michael <unk> from Nordea. Please go ahead.
Yes, Thanks a lot.
A brief follow up on Hix about <unk> 38.
Maybe you could just give us a sort of a better understanding of the actual timeline how long it.
Takes on a base case scenario to run the hip to hip so pyxis CD 38 versus Das lakes the structure of the trial size of the trial because inevitably.
Inevitably it's going to be that sort of besides the defining decision from from J&J. So just to get a feeling of whether this is something 23 ish or sort of first half of 'twenty for second half of 'twenty for which this is sort of going to be done.
And company. Thanks, Thanks, Michael for the question I don't think we are giving away. The exact details of the trial, but I can tell you that.
What would it take between 12 months to 16 17 months, we've got all the data from do you have to have Michael So end of 'twenty three.
First half of 2004 is probably the right denominator here.
Okay.
Great. Thank you.
Thank you.
Let's move to the next one.
We will now take the next question.
It comes from the line of.
<unk> Chica.
<unk>. Please go ahead.
Hey, guys.
Thanks for taking my question.
To follow suit and ask two as well as the mine one.
<unk> is the sales force in place and ready to go on one thing can you gave.
A day one launch.
Sure.
Awesome.
On launch.
I'd like to ask one hit that yet.
You have two potential volume growth opportunities in first line cervical and perhaps other indications like head and neck.
No.
And I know that the decision that would also involve the partner, but Richard with label expansion opportunity is more real view on when do you expect to take next clinical.
Clinical steps in collaboration with our partner and pursue them. Thank you.
Thanks Oscar for boat.
Question so at coal.
We are getting completely launch already.
Everything is ready to go I think early next next year and to the belief that we can actually actually.
I thought that's a pretty good group of patients for the for the launch assuming that's because our label SP expect it.
To be but we have not given any sort of color a sticker on the.
How many patients and that's a bolus et cetera, I think probably come in closer to the launch we will probably give you a little bit.
More color on that.
<unk>.
Certainly moving.
Falloff towards two potential combined cyclical as well as all.
Almost two months and I think that's probably got clear due in the next year so data.
<unk> has already hinted that data in head and neck cancer and potentially although tumor supportive that could come next year. They are running the trial data.
They are assuming Germany.
The facing and I think during 'twenty three it will come very clear.
The studies are going to initiate that we're getting more and more excited about the <unk> is actually doing and cervical cancer, how enthusiastic doctors and patients are about the medicine.
Clearly, we hope to broaden the label beyond the second and third line sales called cancel a label in the coming years.
Let's look at clear probably mid next year I think we should get us further color on that.
Thanks, Dan.
Thank you Oscar.
Thank you, let's move to the next one.
No problem.
Next one comes from the line of John <unk> from Cowen. Please go ahead. Your line is open.
Hi, This is Dana on for you Ron.
On a solid quarter and thanks for taking my question.
A couple on Gen three elements for you.
The eighth.
Given that Gen 315 has shown promising data in preclinical models for the LTC on AML what are your plans for the drug in these indications include suggest multiple myeloma.
And also are you thinking accounting a sub Q formulation that you did for <unk>. Thank you so much.
Thanks, Jana for the questions.
Very strong diffuse large b cell lymphoma data as well as AML data and we have actually arms now we know the recommended phase II dose Jaina, yes, actually arms and the.
And the phase one two study, which is ongoing where we will hopefully soon in 33 move to boats diffuse large b cell lymphoma, and AML and call. So hopefully that will start collecting clinical data next year.
If not two thoughts as to your second question, Yes, we have not yet decided to go for a sub Q formulation. We now know the recommended a recommended phase II dose, which we first want to see how well.
Actually what it does.
You're actually doing versus that.
So we believe that in principle this can be transformed into a sub Q formulation, which we havent nature.
<unk> four development, let's first look at the at the clinical data and the different settings.
Great. Thank you so much.
Thank you.
We will now take the next question.
It comes from the line of Joey Karam. Please go ahead. Your line is open.
Hi, Thanks for taking my question.
This also relates to abstract.
For the first time that data in winter syndrome.
I appreciate that this is only from patients, but can you comment on how.
It's the first time compares to other therapy available or in development.
Especially since some of your competitors don't seem to have generated portfolio. Thank you.
Thank you very much for the question sorry, I didn't catch your name, but this is very exciting data. We are really really pleased with that data not only the 60% of our but also the complete response rate of 50% described unusual but I will ask Tom to give a bit of a perspective, maybe you can put it in perspective versus other auto medicine.
Basically yes.
Thank you for the question and then I would say this so.
Yes.
You will see this with actually a hospital shelf.
<unk>.
Patients, who were diagnosed with Victor or who had already failed one line of treatment for Victor.
There's really nothing there and then I think.
One of the reasons why.
This is getting the attention that is.
Because of this.
To be careful with the suite, but as with all the precedent in the too many of the of the with this.
<unk> data.
Forcing an agent.
In that.
Well, it's essentially biologically the equivalent of a transformed tissue such visa on top off back on CLO.
That gets that kind of a disease control. So we are very excited.
It is.
Part of when we maybe start off on the eco reset that the ambition for of course.
To develop it across the entire spectrum of these opportunities.
And I hope you start to see this if we meant.
Generating data in a number of sub segments.
Not only in the main two kind of like larger indications.
And so Victor is certainly part of that equation.
Okay.
Thanks Ty.
Thanks for the question.
And let's look forward to ash and this is not the only exciting presentation also that <unk> b cell lymphoma, the presentations in the Follicular lymphoma presentations.
Once you should really focus on because it's very exciting data.
We will now take the next question.
It comes from the line of Matthew Harrison from Morgan Stanley . Please go ahead.
Hi.
One question about J&J <unk> Bailey.
What is the royalty that Jim that is expected to get and how do you. How do you see its impact on <unk>. Thank you.
Finally, we had mid single digit royalties basically protect by Lee and.
The belief that this bill district will actually be used in combination with dara to them up and I think theres already a number of phase III.
Testing.
Ongoing by J&J. So we believe it will actually broaden the market for the tumor and not cannibalize it.
I think for further questions you need to ask J&J because they are developing finally, but today I think another one of the banks came up came also had a very good reports, where they did interviews of hematologists basically on the basis of the tech by the data and predicting that basically do its like <unk> <unk>.
Diesel engage us.
Alright appreciate them up like <unk> could potentially quite easily replace Scotty. This is very exciting and then and then I think become make it make basins and community health care centers.
Available for therapy, where these off the shelf CDP diesel engage us so I think very exciting times for other questions on how take finally there'll be positioned in the multiple myeloma.
Arena I think should go towards J&J.
Great. Thank you.
Thank you.
Thank you I would like to hand back over to Yan for final remarks.
Alright. Thank you all for calling in today to discuss <unk> financial results for the first nine months of 2022, and if you have any additional questions don't hesitate to reach out to our investor.
Nations team.
Hope that you all stay safe keep very optimistic and remain healthy and very much looking forward to speaking with all of you again soon.
That does conclude our conference for today. Thank you for participating you may all disconnect.
The conference will begin shortly to raise your hand during Q&A you can dial one one.
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