Full Year 2022 MorphoSys AG Earnings Call
Speaker 1: Elaborative, if it's approved by regulatory authorities, as many of these doctors treat patients with both conditions.
Speaker 2: We believe the largest opportunity for Moonjouvi is yet to come.
Speaker 3: Beyond the currently approved indications, we are exploring Monjovi's use in two pivotal studies for patients with first-line DLBCL and for patients with indolent lymphomas.
Speaker 4: The France Mind Study
Speaker 5: In first line DLB CL is progressing very well and we look forward to sharing data from the trial in the second half of 2025.
Speaker 6: Over the past 12 months, we also took steps to optimize our cost structure and to further strengthen our financial position.
Speaker 7: This included, for example, the adjustment of our selling expenses or, most recently, the decision to stop work and operations on our pre-clinical research programmes.
Speaker 8: We continue to concentrate our investments on our most advanced clinical programs that will create near-term value.
Speaker 9: As part of this focused strategy, last year we also outlicensed product candidates that are outside our focus in oncology or are in early stage development.
Speaker 10: This included a licensing agreement with Novartis for pre-clinical inhibitors of a new concert target.
Speaker 11: and with high bio for phelzartamab and
Speaker 12: Under the terms of these agreements, we received competitive upfront payments
Speaker 13: and we will be eligible to receive certain milestone payments and royalties.
Speaker 14: Also, three of our partner programs, Yanaloumab, Abilacimab and Festrusumab are now in late stage clinical development.
Speaker 15: At the end of last year, we announced that some lead, our Chief Financial Officer, will leave more poses at the end of this week.
Speaker 16: I would like to thank Sang for his contributions and I wish him the best for his future.
Speaker 17: I am very pleased that Lucinda Crap Tree will join more for this other chief financial officer.
Speaker 18: She will start in the third quarter of 2023 at the latest.
Speaker 19: Lucinda joins us from Autolyse.
Speaker 20: She is a seasoned executive with broad biotech experience, in corporate roles and as an investment professional, both on the buy side and the sell side.
Speaker 21: I would now like to turn the call over to Team to provide a development update. Team over to you. Thank you, Shampo. In 2022, we announced our ongoing clinical programs and made great strides.
Speaker 22: Let's start with collaborative.
Speaker 23: As you're all mentioned, the Phase III Manifest II study of collaborative in combination with rectalytinib in patients with mylofibosis is our key priority.
Speaker 24: The trial is progressing well, and we expect to report top-line data in early 2024.
Speaker 25: The primary endpoint of the study is a proportion of patients who achieve a 35% or greater reduction in screen volume at week 24, known as SVR35.
Speaker 26: Reduction in spleen size is used as a clinical endpoint in myelofibrosis because spleen enlargement causes significant pain and is associated with disease activity.
Speaker 27: The key secondary endpoint of this study is a proportion of patients achieving a 50% or greater improvement in total symptom score, as measured by the mylofibrosis symptom assessment form or M-Safe from baseline at week 24.
Speaker 28: Patients with mylofibosis experience a severely diminished quality of life due to symptoms such as fatigue, fever and weight loss.
Speaker 29: The M-SERF is a validated tool specifically for mylofibosis patients that can track changes in these symptoms.
Speaker 30: Please recall that when we took over the program from constellation, we optimized the study by increasing the number of patients to approximately 400, and we feel very confident with the improved trial design.
Speaker 31: The MANIFEST-2 study is supported by findings from the Phase II MANIFEST trial of telabrasib in combination with waxolitinib in patients with myelofibrosis.
Speaker 32: including those who were JAC inhibitor naive.
Updated results from manifest were presented at the ASH Annual Meeting in December 2022.
These results suggest that Pellabrasip in combination with Faxillitinip provides prolonged improvement in both spleen size and symptom severity, at and beyond 24 weeks.
We also presented preliminary research indicating the association of biomarkers with disease-modifying activity of palabrasib.
The results from the Manifest study were also recently published in the Journal of Clinical Un Vater en ??—
Based on the body of data we have presented thus far, our confidence in parabrasic and the phase 3 manifest 2 study is high.
Moving on to test the CIDA map.
This medicine continues to address an important need for patients with relapse or refractory in the obco billion.
At the 2023 AACR Annual Meeting, final data from our pivotal L-MIND study will be presented during an oral presentation spotlighting five-year efficacy and safety results in these patients.
The results which built on the data presented at SOHO last year further support the curative treatment potential of the Tephacidum app and Lennelidomite combination for patients with the OBCL. As these patients are experiencing durable remissions.
and long-term responses with treatments.
Beyond the currently approved indication, we're exploring tefazitamab in two phase three studies, front mind and first mind, DOBCO, and in mind in relapsed or refractory follicular or marginal zone lymphoma, which is being driven by our partner INSIGHT.
For about 50% of patients with high intermediate and high risk DLBCL, the standard of care first-line therapy, our job is ineffective.
And the prognosis for patients with relapsed or refractory disease is very poor.
We are investigating the potential of adding Tefacitimab and Lenalidomide to our shop to increase the DOBCO cure rate in the first line and help more patients avoid relapse.
At the 2022 ASH Annual Meeting, we presented final safety and efficacy results from our Phase 1B trial, FirstMind, the precursor study to FrontMind.
These results underscore the therapeutic potential of tefacetamab in combination with lenalidomide added onto standard ERTRP therapy for patients with first-line DOBCL.
Finally, let's turn our attention to tolimimetastad, our mid-stage investigational next generation ECH2 inhibitor.
Abnormal ECH2 function is implicated in several ways in cancer and may make tumors more resistant to anti-cancer treatment.
TOLME-Mettustadt is designed to improve on first generation ECH2 inhibitors to increase potency, longer residence time on target, and a longer half-life.
Our excitement about this mid-stage program increased in 2022 with the release of early proof-of-concept data. Initial data from our Phase 1-2 basket study showed encouraging monotherapy responses in heavily pretreated patients with ovarian and endometrial cancers.
as well as mesothelioma and peripheral T-cell lymphoma. These preliminary results are promising, and we look forward to learning more as the trial progresses.
We have a strong mid-to-late stage pipeline. We look forward to sharing pivotal data of the next few years, but the Manifest 2 trial results expected in less than 12 months.
With that, I will turn the call over to thank to review the financials.
Thank you, Tim. We're pleased to share our financial results for the fourth quarter and full year of 2022.
Thank you, Tim. We're pleased to share our financial results for the fourth quarter and full year of 2022. Moving to slide 17.
Monjuby sales were $25.3 million in the fourth quarter of 2022, reflecting a 7% year-over-year growth driven by demand.
Tails in the fourth quarter benefit approximately $1.2 million from seasonal inventory dynamics.
For the full year, Monjuby sales were $89.4 million, delivering 13% year-over-year growth.
In the fourth quarter of 2022, we recorded €0.7 million in royalty revenue for Minjivi sales outside of the U.S. from our partner Insight and recognized €3 million for the full year.
As our partner, Insight, has recently initiated, the Minjubi launch is ongoing in four key markets, with the majority of sales thus far coming from Germany. Total revenues in 2022 were €278.3 million compared to €179.6 million in 2021.
This increase resulted mainly from higher revenues from licenses driven by the out-licensing agreements with Hyvial and Novartis.
Total cost of sales was 48.6 million euros in 2022 compared to 32.2 million euros in 2021.
Cost of sales specific to Monjovi U.S. product sales was 22.6 million euros in 2022 compared to 12.3 million euros in 2021.
The year-over-year increase was driven by higher sales of Monjuby and a 5.1 million euro charge related to activities to optimize the Monjuby supply chain.
Turning to operating expenses, R&D expenses in 2022 were 297.8 million euros compared to 225.2 million euros in 2021. The growth was driven primarily by the advancement of our clinical programs and the full year impact of the constellation acquisition.
Selling expenses decreased to 92.4 million euros in 2022 compared to 121.5 million euros in 2021. Recall that we made additional investments in 2021 to support the first full year of the Monjovi launch.
We will continue to carefully monitor our Monjovi co-commercialization investment to ensure that it is commensurate with revenue expectations.
G&A expenses in 2022 were 60.1 million euros compared to 78.3 million euros in 2021.
The year-over-year decrease is primarily due to the transaction costs for the consolation and royalty pharma agreements completed in the third quarter of 2021. For the full year of 2022, we reported a consolidated net loss of 151.1 million euros.
compared to a net loss of 514.5 million euros for the same period a year ago.
The lower consolidated net loss in 2022 was driven mainly by the recognition of finance income triggered by the reduction in financial liabilities from collaborations.
Turning to our balance sheet, we end the 2022 with cash and investments of 907 million euros compared to 977 million euros at the end of 2021.
Our solid cache position enables us to not only reach the pivotal data milestone for the Phase III study of CollaborSIB, which is anticipated in early 2024, but to also provide a cache runway of at least 12 months before the pivotal data readout. Going to our guidance for 2023 on slide 19.
due to seasonal dynamics and remain on track to deliver within our full year guidance range.
Before I hand the call back to Jean-Paul, I would like to conclude by thanking you, the investment community. I have truly enjoyed our interactions over the past two years.
Back to you Jean-Paul. Before we go into Q&A, I would like to conclude with a few words.
We remain focused on driving our mid to late stage pipeline forward. With PELAbrasives, we have a tremendous opportunity to improve the standard of care for patients with first-line myelophybosis.
and we expect the top-line data from our phase 3 study in less than a year from now.
We are well financed to advance our clinical programs and we will continue to focus our resources on our strategic priorities. And with that, I'd like to open the call for questions.
Operator, please open the line.
Ladies and gentlemen, at this time we will begin the question and answer session.
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The first question comes from James Quigley from Morgan Stanley . Please go ahead.
Great, thank you for taking my questions. I've got two please. So first of all on the Polaris Adcom. So Tim I've been interested in your views here particularly around the relative importance of the endpoints and also again maybe it's before your time but in terms of your discussions with the FDA today
give you any indication of what they think would be a clinically meaningful absolute PFS benefit and also their thoughts on the importance of the A Many
And then secondly, with again related to Polarics and the Adcom, what was your thoughts on the fact that most of the OS benefit or the DOS was driven by the high-grades DLBCL patients? And is that something you've seen?
in earlier studies. And then the quick one on first mind as well.
When can we expect the next cut of the data? You said in the slides that 94% of patients are alive after 24 months. Have you done any work to track what this looks like versus historical R-Chop or the R-Chop arm in Polaris? On some elements of your treatment at all levels of theings I see that you think there are possible
First mind, can you give us an idea of what the CR rate was as it wasn't spit out in the slides or in the presentation? Thanks.
Thank you, James. Let me try to summarize the questions you asked. First of all, you wanted to hear importance of the endpoint, FDA expectations on the PFS benefits, importance of OS trends and the contribution of high grades and then some more details on the first mind.
So let me try to start with the importance of the endpoint. So first of all, I think the ODAC was a very positive ODAC for first-line DOBCL patients. It clearly has a positive read-through on our FrontMight trial. The panel very clearly endorsed PFS as an accepted endpoint.
I guess that also answers your question around the relative importance of that OS trend. It is clear from the advisors that OS could not be shown in a reasonable period of time. At the same time of course you want to see a positive trend in OS.
And if I go back to the data we've presented from First Minds, there was the poster at ASH last year, it very nicely shows and gives us a lot of confidence hitting the relevant endpoint here. I can just quote the overall response rates that you were asking for.
We're talking about response rates of close to 94%, 93.9% to be correct in the overall population which I think tracks very nicely against what the Polartuzumab trial showed as well. Again, additional confidence. I'm looking at our 24-month PFS rate which is right up there with Polartuzumab. By certain means you're just
Hello, James Gordon, JP Morgan, thanks for taking two questions. One question was just on Pella, so hematology being a pretty popular area with lots of companies, is it possible we see anything ahead of you actually announcing the data early next year in terms of partnerships or sort of involvement with other companies? Or is it really just wait for the data now? Could there be anything else that happens ahead of it?
And then the other question was on one juvie. So the symphony data when I look at the February is showing a sequential decline. And is your competitive intelligence saying that's just seasonality or is that the step up in competition that I think you're expecting to see as well? So do you think we're going to see a sequential growth in Q2 and Q3 as we move through the year? And looking longer term, so guidance is roughly from one juvie sales to be about flat this year.
The window we are operating in now, there's been 12 months for the pivotal data is extremely encouraging for us. And that means a lot of optionality. But that being said, obviously the value creation opportunity is so important here that...
we would rather obviously wait for exercising these options later on after we know the results and we can publish them. But never say never. Right now we are focusing mostly on executing swiftly the trial, ensuring the right level of quality. We've been over delivering on that. We're very pleased.
and one of partnerships or others. So we'll keep you posted, of course. And on the second question regarding the Monjuvi output for the year, I'll ask Sam to answer. Yeah, James, thanks for the question. So in my prepared comments, I did mention that we would be sequentially down in quarter one. And this is just for the usual seasonal dynamics.
Delta, Omicron variants and obviously we don't have that in this quarter one. And therefore, you know, we're tracking right where we want to be, despite the fact that it was predictable that we would be sequentially down in quarter one. With regard to the rest of the year, yes, we would expect quarter one to be a little bit more than quarter one.
increasing competitive landscape.
So, with regard to your question about will this be a peak year, I'll just highlight that the upper end of the guidance does suggest modest year-over-year growth and, of course, the bottom end suggests year-over-year decline. So, I think it's way too soon to say exactly where we fall in that range. But…
We feel we're right on track to be within that guidance range. As a reminder, if you wish to register for a question, please press star and one.
The next question comes from Rajan Sharma from Goldman Sachs. Please go ahead.
Hi, thanks for taking my question. Just on Pallabrasib, could you just kind of discuss your expectations for the clinical profile and specifically I guess what you think would constitute a best case outcome in terms of SVR and also total symptom score. And then specifically within total symptom score.
What do you think the most important underlying symptoms within that and is a potential polar-resib to differentiate any of these? And then just want to follow upon Mondjavi. So in terms of the prescriber base, I think you've split out kind of the 70-30 between community and academic. Do you think that's steady state now or do you...
So on the SVR expectation, I think we are in a very comfortable position. We have the manifest study, particularly arm 3, that's investigating palabrasib in combination with the raxolipnib in that naive patient population of myelofibrosis where of course we showed data at ash last year.
the same study with a 56%, 54% TSS improvement at week 24. So I think we know what to expect and as I mentioned in my prepared remarks when we took over the study from Constellation, we increased the sample size to further boost the confidence in hitting that TSS.
But as we know, the sheer volume of patients are seen out in the community. We approximately have a 70-30 split right now and as we continue to increase awareness and understanding and utility, the sites of care growth that we see a greater amount of is coming from the community. So I think you continue to see a greater amount of people in the community.
a bit of a shift to more of a community. So I think that's the right way of looking at it. For any further questions, please press star followed by one.
We have the next question from Suzanne Van Forsten from VLK. Please go ahead.
Hi there, good afternoon, thanks for taking my questions. Firstly, I would like to ask if you can elaborate a bit on the operating expenses. For R&D, can you indicate what proportion of the total roughly 300 million relates to the major parts, pylabrasib versus dafasetumab and the rest?
And then circling back to your fine-tuned sales and marketing expenses and the decision to also know the response preclinical programs, I was just wondering how are you looking to or are you looking to further reduce expenses going forward? What can we expect for the call savings initiative during the coming year?
Thanks. Suzanne, this is Sung. I appreciate the question. With regard to operating expenses and specifically R&D and how it's broken out by the various clinical stage programs, I think a way to look at this is about two-thirds of our R&D nose stints.
driven by the pivotal studies, so that's substantial. And this year you would expect the collaborative pivotal study manifest to to be peaking. The other studies...
that are related to taphocytoma, bermangi, front mind, and in mind, we are past the peak on those.
So hopefully that gives you a way to think about the direction of these different pivotal studies in terms of how they impact R&D expense.
Now, with regard to your other question about other things the company could do in terms of cost structure optimization, look, there is no complacency here, and that's reflected in the actions we've taken over the 18 months. Since we've acquired Constellation in mid-2021, we've been able to do a lot of work in the
our commercial expenses and we'll continue to keep an eye on that based on developments of Manjubi revenue. And of course the recent action of you know the difficult decision to close our operations on research and discovery efforts here in Germany.
These are very important decisions to help us optimize our cost structure and the work will be ongoing. There's no complacency as I mentioned before and we'll continue to monitor this as things develop. One follow up if I may. Given the
somewhat complicated accounting with the inside partnership, profile royalties and the one-offs from the last two years. Can you help us understand what your current cash burn rate is? Well, if you look at last year, it was above, on an operating cash burn basis, it's over 30 million euros per month.
Now, I would expect this year to be.
somewhat at similar levels and maybe even slightly lower. But the important thing here is, with our 907 million euros at the end of last year, this gets us well past the pivotal data for PELAverCID. And in fact, I mentioned in my prepared comments, we expect to have at least 12 months of cash post the pivotal data for PELA.
And I think the way to look at this is when we get to that inflection point, the Pella data readout, and if it's positive, which we believe it can be, I think we will have good options to consider. So I think that should be the focus right now is we have ample cash.
more than enough to get through that inflection point, and then we'll think about, we'll deal with the options at that point.
more than enough to get through that inflection point, and then we'll think about, we'll deal with the options at that point. All right, thanks a lot.
Once again, for any further questions, please press star and one. Madam and gentlemen, so far there are no more questions from the phone. Thank you.
Can you forward any updates on the progress of this trial and what potential impact this data could have on the future of the morphosis?
pipeline and a strategy. Thank you. Mohamed, thank you for the question. This manifest to study is our pivotal study as you probably know on our main asset, Pella Precip and it's from far our largest opportunity for one changing the standard of care in my05 position.
and one, I would say, value creation. So this is really an extremely important study for us. And so far, so good, as we mentioned several times. You know, we have been executing in a very...
a swift pace. We've advanced the date of the top-line results to early 2024, as you just mentioned. And again, the demand from the study from the space of the investigators has been very, very high.
So all is on the green for this one, which is full blast on execution, continuing to balance the speed versus quality. And we are now in this 11, 12 month window. So super important for us, but super exciting. And we're very, very excited by the potential outcome for the patients and the company.
Thank you, just a very short question. So do you see any kind of portfolio focus and prioritization? Like how is the company actually prioritizing its development pipeline and allocating the resources to different programs? Something like that? We have already done that.
So, some said that in his comments on the expenses allocation. I mean, we've really prioritized towards these late stage programs, and namely the PELA-bressive program and the MANI Phase II trial. We've taken these difficult decisions to end earlier discovery stage programs and operations.
We want to talk.
Thank you so much, Wasaufu. Thank you. There are no further questions at this time. I would now like to hand the conference back over to Yuliya Noikebauer for any closing comments. Thank you.
Ladies and gentlemen, this concludes today's conference call. If any of you would like to follow up, the investor relations team of Infosys is available for the remainder of the day. Once again, thank you for joining our call. Have a good day and goodbye.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a great day. Thank you for joining us.