MorphoSys AG Q1 2023 Earnings Call
Speaker 2: Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the first quarter interim statement 2023 of morphosis.
Speaker 2: Throughout today's recorded call all participants will be in the listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question you may press star followed by one on your touch-tone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Julia Neugebauer. Please go ahead.
Speaker 3: Ladies and gentlemen, good afternoon or good morning. My name is Jule Nagy-Bauer, Head of Industrial Relations at Maphosas, and it is my pleasure to welcome you to our first order 2023 Financial Results Conference call. Joining me on the call today are Jean-Paul Kretz, Chief Executive Officer, and
Speaker 3: Tim DeMoot, Chief Research and Development Officer, and Joe Hobart, US General Manager, Hoover joined for the Q&A.
Speaker 3: Before we begin, I would like to remind you on slide two that some of the statements made during the call today are forward-looking statements, including statements regarding our expectations for the commercialization of our products and our development plans and expectations for the components in our pipeline, as well as the development plans of our collaboration partners.
Speaker 3: The forward-looking statement is subject to a number of risk and uncertainties that may cause our actual results to differ materially, including those described in MOSFOSIS 20F, an annual report, all for the year ended December 31, 2022, and from time to time in other SEC document of MOSFOSIS.
Speaker 3: It is important to keep in mind that our statements in this webcast speak as of today.
Speaker 3: On slide three, you will find the agenda for today's call. Jean-Paul will begin with an overview and a look. After that, Tim will share an update on our clinical development work, and then we will provide a summary of our first quarter 2023 financial results.
Speaker 3: Following our prepared remarks, we will open the call for your questions. With that, I now hand the call over to Jean-Paul.
Speaker 3: Good morning and good afternoon everyone. Thanks for joining us today.
Speaker 3: We had this drone first co-opter mocked by Numeruth achievements.
Speaker 4: We are more focused than ever on the opportunity that has had a path, this year, and I'm confident that we will be living.
Speaker 4: Pelagrosib, our investigational best inhibitor, is a potential best and first in class foundational first line treatment of patients with myelofibrosis.
Speaker 4: It could raise them for our largest and most immediate opportunity.
Speaker 4: With Qua-term, we announced that we completed enrollment of our Phase III Manifest II study of pela-brist seed in myelocybosis ahead of schedule.
Speaker 4: As a result, the top-line data from the trial are now expected by the end of 2023, months earlier than previously anticipated.
Speaker 4: With advancement of the trial timeline, also provided with the opportunity to bring to Laplace to patients much earlier.
Speaker 4: The Manifest-2 study enrolling a head of schedule underscores that there is a significant need for better treatment options for patients with myelopibrosis. Further, it shows the enthusiasm of investigators and treating physicians for pellabrasis.
Speaker 4: In speaking with physicians who treat mylofibolinspations, we constantly hear that depth and durability of responses to treatment are limited with current first-line therapy.
Speaker 4: results from our phase to manifest study of Pellabricid in mylocybolis, suggests that Pellabricid in combination with a jack-in-hibitor may offer prolonged improvement in both screen size and symptom severity path and pignons 24 weeks.
Speaker 4: Rule careful
Speaker 4: In the Manifest Study,
Speaker 4: Changes in biomarkers correlated with improvements in clinical measures of treatment success.
Speaker 4: Suggesting the potential disease modifying the effect of Pellabrasid.
Speaker 4: The body of data presented on telabrasib to date reiterates its potential to address the critical needs of myelophyte of these patients.
Speaker 4: We are later focused on delivering the top line data from the Faith3 manifest to study by the end of this year.
Speaker 4: We also see great potential for collaborative beyond my office.
Speaker 4: and we will continue to explore it in treating patients with other myeloid diseases.
Speaker 4: Munguvi continues to address critical needs of patients, living with relaxed or refactory conduit in the ties in renewable energy thank you very much, thank you very much of your
Speaker 4: also known as DLDCL.
Speaker 4: as DLDCL. In the first quarter,
Speaker 4: Monjouvinet sales were $20.8 million US dollars.
Speaker 4: representing an 11th year of the year goals.
Speaker 4: and on track with our 2023 guidance.
Speaker 4: At the 2023 AACR Annual Meeting,
Speaker 4: We presented final five-year follow-up data from the phase to l mine study.
Speaker 4: These data show that Monjuvi plus the limalidomide offers prolonged and durable responses in adults with relapse of a factory DLDCL.
Speaker 4: with 14,000 percent of patients who received the regimen still alive after five years.
Speaker 4: The durable responses and consistent safety profile observed in the five-year analysis further support the Monjuby regimen as a potential curative option for appropriate patients.
Speaker 4: We believe the largest opportunity for Montreal will be, during the first line, GLBCL City.
Speaker 4: Last month, we announced that enrollment of the Phase III France 9 study is also complete.
Speaker 4: with more than 880 patients enrolled in the trial. The study is exploring Tafasitamab to a slinely-domide in addition to our shop. The current standard of care for this patient population versus our shop alone are the first line treatment for patients.
Speaker 4: with high intermediate and high risk BLBCL. We look forward to sharing data from the trial in the second half of 2025.
Speaker 4: We have a rich set of p-bottle catalysts over the next two years. Start team with a collaborative phase 3 data in first line Marlophagolins later this year.
Speaker 4: So, ensure we have set the full success.
Speaker 4: We continue to take steps to optimize our cost structure and further strengthen our financial position.
Speaker 4: For example, we recently purchased parts of our cove festival bones that are due in 2025 to reduce our debt.
Speaker 4: We did this to take advantage of the market dynamics as the bond is trading in the significant discount. As a result, we were able to buy back approximately 19% of our outstanding principal amount at the lower cost.
Speaker 4: We continue to concentrate our investments and our most advanced clinical programs that we create near-term value.
Speaker 4: I would now like to sum the call over to team to provide the development update. Team over to you. Thank you, Shampoan. We continue to advance our ongoing MIPS to late stage clinical programs and make exceptional progress. We'll start with Palabrasip. Thank you.
Speaker 5: The Faithfully Manifest 2 Study is our number one priority.
Speaker 5: Manifest 2 is a global multi-center double blind study of more than 400 patients who were naive to Jack inhibitors.
Speaker 5: Patients who are randomized, one-to-one, to collaborative, in combination with rectilipinip or placebo-class rectilipinip.
Speaker 5: 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 5: The key secondary endpoints is a proportion of patients achieving a 50% or greater improvement in total symptom score at week 24. This is known as TSS50 and is measured by the Milo Fibrosis Symptom Assessment Forum version 4.0.
Speaker 5: The Manifest 2 study is supported by findings from the Phase 2 Manifest trial of Calabricip in combination with Raxlytnip in patients of mylofibrosis, including those who were Jack inhibitor naif.
Speaker 5: Updated results for MANIFEST were presented at the ASH meeting in December 2022 and were recently published in the Journal of Clinical Oncology. These results suggest that palabrasib in combination with ruxolipnib provides prolonged improvement in both spleen size and symptom severity.
Speaker 5: AF and beyond 24 weeks.
Speaker 5: In the manifest study, changes in biomarkers correlated with improvements in clinical measures of treatment success. This included SVR35.
Speaker 5: TSS50 and hemoglobin increases indicative of improved anemia, suggesting a disease modifying effect of Pelabrasib.
Speaker 5: Examined biomarkers included bone marrow scarring, known as fibrosis, and the frequency of the JAG2 allele that is known to drive disease activity.
Speaker 5: All patients who had clinical responses, plus reduced allele frequency, and improvement in bone marrow fibrosis were naïve to jack inhibitors.
Speaker 5: Based on the body of data we have presented thus far, our confidence in TEL is high.
Speaker 5: and we look forward to releasing the top line data from the trial data this year. Moving on to Tafacidem app.
Speaker 5: As Shropho mentioned, at the 2023 AACR annual meeting, final data from our phase 2 L-Mine study were presented during a late-breaking oral presentation, spotlighting five-year efficacy and safety results in patients with relapsed or refractory DOBCL.
Speaker 5: with 34 months with 40% of patients alive at five years.
Speaker 5: The regimen was well tolerated and no new safety signals were identified.
Speaker 5: The prolonged and durable responses seen at five years among patients in this study are very meaningful and show that the Monjuby treatment regimen has curative potential.
Speaker 5: Beyond the currently approved indication,
Speaker 5: We also exploring Tephacidamab in two phase three studies, front-mind in first-line DLBCL and in-mind in relapsed or refractory follicular or marginal zone lymphoma, which is being driven by our partner inside.
Speaker 5: For about 50% of patients with high intermediate and high risk DOB-CL, the standard of care for slence therapy, hard-shop is ineffective.
Speaker 5: And the prognosis for patients with relapsed or refractory disease is very poor.
Speaker 5: We are investigating the potential of adding Tephasitamap and Lina Lidomite to our shop to increase the DLBCL cure rate in the first line and help more patients avoid relapse. At the ASCO 2023 and your meeting in early June .
Speaker 5: we will present data that reinforces the strong potential of our pipeline.
Speaker 5: Our presentations feature proof-of-concept data on collaborative, inessential fumbles at Kenya and tummy-metastats, our investigational next-generation dual inhibitor of ECH2 and ECH1 in a broad array of advanced tumors. In our Phase 2 Manifest Study,
Speaker 5: Pelabrasib is also being investigated in patients with essential thrombocytemia in addition to myelofibrosis.
Speaker 5: These indications are both myeloprolyphrative neoplasms, which are types of blood cancers that begin with a genetic change in bone marrow stem cells.
Speaker 5: One arm of the manifest study is exploring collaborative esmonotherapy in patients with high risk essential sombosatemia, who are refractory or intolerant to hydroxyoreal. The chemotherapy agents most use to treat this disease.
Speaker 5: Proof of concept data from this arm of the Phase II study will be presented during a poster discussion session.
Speaker 5: Total meta-stats is being evaluated in a Phase 1, 2 trial in patients with advanced solid tumors or lymphomas, including arid 1A mutated ovarian carcinoma and endometrial carcinoma, that one mutated mesoteloma and peripheral T cell lymphoma.
Speaker 5: Tony Metastat was designed to improve on first-generation ETH2 inhibitors through increased potency, longer residence time on targets, and a longer half-life, offering the potential for enhanced anti-tumor activity.
Speaker 5: Preliminary results from the Phase II portion of the study, evaluating tool-me-metastats across multiple tumor types, will be presented during a post-recession. In summary, the data we are presenting at ASCO 2023 showcased the wealth of potential opportunities.
Speaker 5: that our pipeline offers to address the critical needs of people living with blood cancers, including myelot malignancies and those patients with solid tumors.
Speaker 5: With that, I now turn the call over to Julia to review our financials.
Speaker 3: Thank you, Tim. We're pleased to share our financial results for the first quarter.
Speaker 3: We're pleased to share our financial results for the first quarter of 2023.
Speaker 3: When do we face with $20.8 million in the first quarter of 2023, reflecting a year-over-year growth of 11% driven by higher demand?
Speaker 3: On a sequential basis, say it's the 9 per 18 percent, largely due to the inventory dynamics and demand seasonality.
Speaker 3: We continue to be excited for the Minjudi opportunity outside of the US, which our partner InSight is responsible for. In the first quarter of 2023, we recorded 0.7 million euros or 0.8 million dollars in volunteer revenue for Minjudi.
Speaker 3: Total revenues in the first quarter of 2023 were 62.3 million euros compared to 41.5 million euros in the same period a year ago.
Speaker 3: This increase resulted many from higher readiness on the sale of clinical vials.
Speaker 3: Total cost of sales, which is 21 million years in the first quarter of 2023, compared to 7.9 million years a year ago. The year over year increased, decided primarily from expenses related to biospace to a partner insight.
Speaker 3: Cost of sales specific to the Monjuby US product sales was 3.1 million euros in the first quarter of 2023.
Speaker 3: Turning to operating expenses. R&D expenses in the third quarter of 2023 were 83.1 million years compared to 65 million years for the first quarter of 2022.
Speaker 3: The growth primarily reflects the additional costs incurred due to the positive development of the patient recruitment in the major ongoing clinical studies and a one-time effect resulting from severance payments in connection with the restructuring of the research area.
Speaker 3: Shelling extends its decrease to 16.9 million Euros in the first quarter of 2023, compared to 21.9 million Euros for the same period in 2022.
Speaker 3: The year-over-year decline was driven by streamlining and focusing on selling efforts. G&A expanded in the first quarter of 2023 with 10.9 million euros compared to 14.6 million euros in the first quarter of 2022.
Speaker 3: For the first quarter of 2023, we reported a concentrated net loss of 44.4 million euros compared to a net loss of 122.7 million euros in the first quarter of 2022.
Speaker 3: The lower consummated net loss in 2023 was driven mainly by the recognition of finance income in relation to the financial liabilities from future payments to royalty farmers, and by additional finance income derived from the repurchase of a portion of outstanding convertible bonds.
Speaker 3: Turning to our balance sheet, we ended the first quarter of 2023 with cash and investments of 791.5 million euros, compared to 907.2 million euros at the end of 2022.
Speaker 3: Our Islamic cash provision enables us not only to reach the pivotal data milestone for the faith-free study of pinnatizib, now expected by the end of 2023, but to also provide a cash-on-way of at least 12 months beyond the pivotal data readout.
Speaker 3: Turning to our guidance for 2023, we are reiterating our guidance that has provided at the beginning of January this year on aspects of our guidance remain the same.
Speaker 3: Turning to our guidance for 2023, we are reiterating our guidance that is provided at the beginning of January this year. All aspects of our guidance remain the same. With that, I now turn to the callback tutorial poll.
Speaker 4: Before we go into Q&A, I want to conclude a few words. We made exceptional progress in squatting.
Speaker 4: and we are more focused than ever to build on this great momentum and drive our strong mid to late stage pipeline for a while.
Speaker 4: With PELABRASIB, we have the opportunity to bring a foundational first line treatment to patients living with myelofibrosis with the potential to improve the standard of care.
Speaker 4: Now that our Phase 3 Manifest 2 study has completed enrollment earlier than anticipated, we will release top-line data later this year. On one day June 21st, we will host the virtual event that provides...
Speaker 4: in depth overview of the lably sheet and its potential.
Speaker 4: Dr. John Mascarenas, Professor of Medicine and Director of the Adult Leukemia Program at the Tisch Cancer Institute at Mount Sinai, New York, will speak and be available for questions. Further details about this session will be provided closer to the date. We are well financed to deliver on our priorities and we will continue to work with the public
Speaker 2: who wishes to ask a question may press star followed by one on their touchstone telephone.
Speaker 2: If you wish to remove yourself from the question queue, you may press star followed by two. If you are using Steak Air Corp today, please just hand that before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question please.
Speaker 2: And the first question comes from Jason Butler from JMP Securities. Please go ahead.
Speaker 4: Hi, thanks for taking the questions and I can grab some of the progress. Just one on Manifest 2. Can you, now you've completed enrollment, can you comment on the comparability of the patient population in Manifest 2 to arm 3 of the Manifest 1 trial? And then, wondering if you could just walk us through a little bit more detail of your commercial prep for...
Speaker 5: of manifest two and arm three in the manifest. Generally, the populations are very comparable. That was intentional, so we can really use manifest as a very good benchmark for what to expect in manifest two. So highly comparable patient populations there.
Speaker 4: And Jason, on the commercial readiness, a couple of thoughts here. First and foremost, we have
Speaker 4: We have our organization, Professor Lavin, the lead in interact with you, as you know, is a space for Montjuvian. There is a very high level of overlap.
Speaker 3: in the target. So we don't have to start from scratch. Obviously, we make adjustment with time. We have time for that. What is really important now is to continue to engage with the key opinion leaders. And we've been doing that through our development program so that we can get a Keshe look more into that specific view.
Speaker 3: interacted with the most colored on-site world wide including very much so in the US.
Speaker 3: for that, but at the same time now we are having our medical affairs organizations work with the field on engaging on the data and raising excitement. So it's going very well and we constantly hear very strong engulfments of our regimen and desire.
Speaker 3: to continue these interactions and engagements. And again, the fact that we have enrolled that swiftly and ahead of time is a really, really strong indicator of thegentle active use ofstudent.
Speaker 3: continue these interactions and engagements. And again, the fact that we have enrolled that sweetly and ahead of time is really really strong indicator of the interest of the time. Thank you. Thank you for taking questions.
Speaker 2: And the next question comes from James quickly from Morg Stanley. Please go ahead.
Speaker 6: Hello, thank you for your questions, I've got three please. So on palli-brecym and think about other end points beyond SBR 35 and TSS 50, in terms of a digital data on home-murphy-bosy, and survival data.
Speaker 6: At what point can we expect this data to come through? And it's not listed as a second-ring point on clinical trials.gov, but how important could these additional data be in terms of driving uptake or from your conversations? Did that no matter is more of a nice to have for the future? Secondly, on one due to curative potential, in the L-Mine 5-year update, are there any patients that are in the L-Mine 5-year update?
Speaker 6: due to the phase three trials, which can give us a sense of what portion of your current R&D is late stage or is related to late stage assets. Obviously, you've stopped the early stage research, but how should we think about how R&D develops over time? You gave a little hint with the essential thrombocytopenia, but should this step down?
Speaker 3: over time as those trials run off. Thank you. Thanks James. I stopped by the last question and the team address the line, the monthly questions. Regarding the evolution of our focus and capital allocation to what?
We are in this spectrum. In your current, we are obviously now very much focusing on our late stage opportunities. And it would be a phase in with that. Right now, you can probably assume that we are at a peak in terms of all phase three of thoughts.
But, you know, we've got the Pellan and the Festio study, we've got the front-mind study and together with the inside of the in-mind study for polygloninforma. But, that aside.
kind of decrease in the future. So we're not saying that we must have new things, but if you take the ISO picture here, that we're probably peaking now. And so we will actually see a no text reduction towards R&D and development in the future.
So, yeah, that's the answer to that. And indeed, we have, you know, greatly reduced all expenses in pre-cleanment to make sure that we could fuel your possibilities as we mentioned.
Jim, on the two other questions. Yep, thank you. So hi, James. On the first question, Pella, other endpoints beyond SVR and TSS. So yes, there are other endpoints in the study, as you mentioned, just to come back to the primary endpoint and the key secondary. Obviously, we have a lot of questions.
endpoints and we feel very good about meeting those endpoints. You remember, we particularly increased the sample size from 330 to 400 patients to be particularly well-powered for that key secondary endpoint, the TSS50. As regards bone marrow fibrosis...
that is carrying the bone marrow and being able to demonstrate reversal of that fibrosis, I think helps a lot understanding further trajectory. And there is a lot of reason to believe that improvement in bone marrow fibrosis will translate to long-term.
as soon as we're done with analysis of the top-line data and then have this ready for a presentation at an available scientific conference in the near future. As it comes to Tefesida MAP and the curative potential, you asked about...
few weeks ago in Florida there are a number of patients who actually complete and discontinue treatment and who remain in complete response despite discontinuing or completing treatment
That's great. Thank you very much.
And the next question comes from Zain Ibrahim from JP Morgan.
Hello, thank you for taking my questions. Just two from me please. My first question would be on Manifest 2. You've brought forward the timing for the study a few times now and that's because of completing enrollment. But is there any chance of that readout being brought forward even further or is the idea that we can expect the data in 2023? And my second question would be on the Milo Fibrosis competitive landscape.
So one of potential competitors for Papella, Mommolotinib, that's due for approval in June , possibly in second line, but I think there's some discussion at the moment as to whether that could receive a line-agnostic approval. How are you thinking about positioning of Papella and Jacque V?
combination relative to Moamalotnib and also other potential competitors.
that we've seen. Thanks for your questions, Dijon Paul.
You know, for many, the timing is already greatly improved compared to what we had in mind probably a year ago or a year and a half ago, two years ago, and we required constellation. There are not many companies that are studying.
So I think we've been extraordinary well here and we don't want to see that in this attention outside. It's a couple of more moments. I think now it's about making sure that we get another life quality together with this time line. So.
That's for the timeline. Regarding the compositioning of the
in the landscape, but first of all the landscape is evolving very much.
And there has been a decade of the same kind of care with monotherapy, Jackie and Edytion, building up a very big deal of unmet need. And this unmet need is really, really giving us the opportunity to make a big change here. And it is what we hear constantly from the space. There is an awful lot of expectations for what's gonna happen to the planet. And this big deal of us not being able to createazaar old space isn't happening at all. And actually trying to do something along this way, isn't actually very important at all for some?I h
mostly in the jack inhibition segments actually. You know, the real unmet need is a paradigm change in first lining combination, which should increase and improve the quality of life of the patient and the intimate survival of the patients. They need to live longer and better lives and we can provide that with our regimen.
with a collaborative plus or two-lady need, but there are other possibilities, which would put that at the cornerstone in the treatment of by the cyclopsis. Perfect, that's really helpful. Thank you. Thank you. Ladies and gentlemen, as a reminder, if you would like to.
if you have shared any data on the rate of the patients on the Pelopasib combo, I'm just trying to understand how important is the rate gain for these myelofibrosis patients. And just on the biomarker analysis, I think Navitoclax showed 50% of patients reaching more than 20% reduction in JAK2LL frequency.
I'm wondering if you could comment on your position there from the biomarker analysis perspective. Thank you. Thanks for the question. Go on. Okay. Yeah.
On the first question, have we shown data regarding weight gain in manifest? The answer is no, we haven't done that. It's something the team is looking into. As far as it goes in terms of the JAG allele burden, we had a presentation on the JAG allele
reasonably across trial comparison. But the overall reduction in the JAG2 allele burden is certainly very impressive and something that again fits together into that picture of modifying disease activity, particularly when you put this together with some of the cytokine data that was presented also at EHA.
All right, thank you.
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So, there are no further questions at this time and I hand back to Julia Neugebauer for closing comments.
Ladies and gentlemen, this concludes today's conference call. If any of you would like to follow up, the FOSIS investor relations team 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 pleasant day. Goodbye.
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