Half Year 2023 Genmab AS Earnings Call
Okay.
Hello, and welcome to second quarter 2023 financial results Conference call.
As a reminder, this conference call is being recorded.
This telephone conference you may be presented with forward looking statements that include words, such as believes anticipates plans expects.
Actual results may differ materially for example, as a result of delays or unsuccessful development projects Genmab is not under any obligation to update statements regarding the future no to confirm such statements in relation to actual results unless this is required by law.
No.
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I would now like to hand the conference.
Over to your first speaker today young guns Winkle. Please go ahead.
Hello, and welcome to General <unk> Conference call to discuss our financial results for the period ending June 32023.
With me today to put Sunday was also saw CFO Anthony Pellicano.
For the Q&A, we will be joined by our Chief Development Officer Chlebowski.
Our Chief operating officer, Anthony months Sydney.
And somebody says we will be making forward looking statements. So please keep that in mind as we go through this call.
During today's presentation, we will be there.
No reference products being developed under some of our strategic collaborations.
This slide acknowledges those relationships.
In my opinion, he became the first T cell engagement engaging by specific antibody approved for use in the U S for third line plus a few slots b cell lymphoma.
This is a pull forward we achieved an important milestone both for <unk> and most importantly for patients with third line plus the fewest lost B cell lymphoma, who are in need of an innovative treatment option administered subcutaneously.
Our teams along with our partner Etsy.
The in place fully prepared prior to launch.
No. They are actively engaged in key stakeholders and we are encouraged by the overall positive response, we have received as we deliver a purely to appropriate patients.
And we look forward to the potential for additional additional opportunities for opportunity as we work with that fee to progress development and to a variety of patient populations of treatment settings.
The third line plus a few slots piece and a former indication is the first step to potentially establishing <unk> as the core therapy across the few slides b cell lymphoma, follicular lymphoma and beyond.
Achilles approval is also a testament to our team's dedication to novel science into medicine.
And to develop differentiated antibody therapeutics with the goal of improving the lives of patients.
It is the tariff approved therapy to be developed using our proprietary <unk> technology and.
And overall, it's the severance medicine based on our innovation.
I would like to thank the patients and investigators who took part in the Opco NFL one trial.
What's the basis for this approval.
Our partners at Etsy for the excellent collaboration and the unstoppable team at Genmab responsible for the discovery development and commercialization of <unk>.
Let's now turn to our other recent highlights.
In June we announced that <unk> has been added to the MCC and guidelines for B cell lymphomas, where the category to a designation.
As these guidelines are an important resource for providing U S healthcare provider with the information they need to make optimal treatment decisions. We were pleased that David updated to include aggregate them up so soon after approval.
Looking beyond the U S approval, we were pleased to announce in July that <unk> received a positive opinion from the <unk> recommending the conditional marketing authorization of <unk> for the treatment of adult patients with relapsed or refractory diffuse large b cell lymphoma, after two or more lines of systemic therapy.
And if approved.
Upgrades to.
Come the first and only subcutaneous bi specific antibody conditionally approved in Europe as a monotherapy in this indication.
As I mentioned together with Hep C. We are advancing a robust clinical development program for Africa, written up across B cell malignancies, including diffuse large b cell lymphoma, and Follicular lymphoma.
And to this and also in June we announced positive topline results from the Follicular lymphoma cohort of the phase two amcor NFL one trial.
So also showed an overall response rate of 82%.
This exceeded the protocols pre specified threshold for efficacy.
The observed median duration of response was not reached and no new safety signals were observed.
These results are encouraging for patients with relapsed or refractory follicular lymphoma that are in need of new treatment options and based on the data together with a fee we will engage with global regulatory authorities to determine next steps.
The full results will be submitted for presentation at a future medical Congress.
As we noted last quarter, we had.
Data presentations at a number of recent medical conferences, covering a variety of our investigational antibody therapeutics, including up to write them up.
We also continue to grow our pipeline last quarter with an IND submission for Gen 3017, or dual body CDP CD 30. This has the potential it has potential in hematological malignancies.
Turning to auto programs that incorporate our innovation.
Last month, Johnson announced that they have received positive <unk> opinion for both sulfate or create them up and take valley, both of which were created via audio body platform.
The <unk> recommended conditional market marketing authorization for <unk> as monotherapy for patients with relapsed or refractory multiple myeloma, who have received at least three prior therapies, including an immuno model modern lottery agents, a proteasome inhibitor and an anti CD 38 antibody.
We have demonstrated disease progression on the last therapy.
The <unk> also recommended the approval of a type two variation, particularly some up well.
We're finding a reduced by weekly dosing schedule of one five milligrams per kilogram every other week and patients who have achieved a complete response or better for six months or longer.
Dr. <unk> also continues to redefine the treatment of multiple myeloma.
As you have seen J&J snack sales for Dara were up 22% over the first half of 2022.
And that is generating $4 9 billion, Danish krone, and royalties for us contributing materially to our robust financials.
I will now hand over the call to Anthony Pocano take to take you through our first half 2033 financial results Anthony the floor is yours.
Great. Thanks, John .
We continue to strengthen our foundation over the first half of the year.
Of course top of mind for everyone is the FDA approval of <unk>.
And as we'll see our financials continue to be strong.
Recurring revenues grew by 27% in each one.
This was principally driven by strong royalties from <unk> and other approved medicines.
Our solid balance sheet growing recurring revenues and significant underlying profitability allow us to continue to invest in our business and our pipeline and a very focused and disciplined way.
And an important part of this has been to continue to build the team and capabilities that we need to succeed.
So, let's take a look at those revenues and a bit more detail.
We saw robust performance for <unk> and <unk>.
As you can see in the chart.
Overall net sales grew by 22%.
Net sales of nearly $4 7 billion.
Which translates to over $4 9 billion kroner and royalty revenue.
This growth was driven by continued share gains and strong performance in the frontline setting.
So <unk> remains a key driver of our revenue.
And each one we grew total revenue to over 7 billion kroner.
And as I've already highlighted that included a 27% increase in our recurring revenue.
To be clear that's on a reported basis.
Excluding some minor FX headwinds recurring revenues grew by 30% on an operational basis.
And as a reminder, last year's H, one results make for a somewhat tough comparator given that in 2022, we had significant FX tailwind and this is primarily related to the benefit from the <unk> ex currency hedge rate.
The strong operational growth in each one for this year was driven by higher <unk> royalties as well as royalties from other products.
Taken together this really illustrates the power of our recurring revenue.
In Q2, we also recognized net product sales for <unk> and we're pleased with how the initial launch is progressing so far.
It's of course Super early days at this stage so it shouldnt draw too many conclusions from a single months of sales.
Nevertheless, you want.
Main excited by <unk> potential to transform the lives of patients.
And as we said, we're taking our strong recurring revenue and investing in a highly focused way as you can see on the next slide.
In line with our significant growth opportunities total opex grew 45% in each one.
In R&D, we have accelerated our investment into our product portfolio.
Especially the advancement and expansion of <unk> and other pipeline projects.
We've also further strengthened our team to enhance our commercial capabilities and support our expanding pipeline and of course that includes the launch of <unk>.
Now, let's take a look at our financials as a whole.
Here, you can see our summary P&L.
Revenue came in at over 7 billion kroner.
Up 34% on last year.
As mentioned that is negatively impacted by a small FX headwind.
Total expenses were $5 1 billion with 70% being R&D and 30% SG&A.
And even with this increased investment we're still delivering over $1 9 billion of operating profit.
Moving to our net financial items here.
Here, we have a gain of $75 million so far in 2023, and this is driven by two partially offsetting items.
First we've got a weakening of the U S dollar against the Danish kroner, and Thats negatively impacting the value of our cash and investments.
On the other side of the Ledger, we have an increase in interest income due to a higher effective interest rates.
Then we have tax expense of 426 million, which equates to an effective tax rate of 21, 2%.
And that brings us to our net profit of nearly $1 6 billion kroner.
As you can see strong financial performance for each one.
With that let's take a minute to revisit our robust financial framework.
First off our revenue profile on the left.
With the approval of <unk>, we now have seven products on the market that are generating significant recurring revenues.
And we see a clear path to potentially expand the number of approved products with the potential approval of <unk> top way to map.
Taken together, we expect significant cash inflows for the years to come.
Moving to the right we remain focused in our investments as we evolve our organization for continued success.
At the top of the list is accelerating and expanding at Corp.
But that's just one of the exciting opportunities that provide us with a compelling rationale for increasing investment.
As we've told you before if we want to seize these meaningful opportunities we've got to invest and that's exactly what we're doing.
So with that background, let's take a look at our guidance.
As you will have seen we updated our 2023 guidance last week.
We now expect our revenue to be in a range of 15 five to $16 5 billion kroner and that's an increase to both the bottom and top end of our range.
This increase is driven by continued strong recurring revenue growth, including higher total royalty revenues from <unk> and other marketed products.
For <unk> following strong <unk> performance, we've increased the low end of our guidance for net sales and now estimate a range of $9 $8 billion to $10 billion.
Turning to our investments.
As always we remain focused on executing against our strategy and key priorities and at the same time, creating long term value.
So we're investing to capture the significant opportunities in front of us.
And here, we're increasing our opex guidance to a range of $10 four to 10 now.
9 billion kroner.
This is primarily related to increased and accelerated investment in <unk> and the progression of other pipeline products.
More specifically for <unk> or higher investment reflects increased and accelerated dose optimization work to potentially achieve a best in class profile.
We are also accelerating our investment for our frontline trial in FL.
As you know this is a significant value driver for the core franchise and we're doing everything we can to accelerate this opportunity.
Putting all this together.
We're on track to deliver another year of substantial operating profit and a range of $4 five to 6 billion kroner.
And finally as a reminder, note that these projects.
Projections are based on an assumed U S dollar Danish kroner exchange rate of six eight.
Now let me provide a few closing remarks.
In summary, we've had a very solid <unk>.
We've created growing recurring revenue streams, including now two of our own products on the market.
And that gives us a strong backbone a 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'll hand, you back over to Jan.
Thank you Anthony and the first half of 2023, we continue to work towards our 2030 vision.
Our queso antibody medicines are fundamentally transforming the lives of people with cancer and other serious diseases.
We're very excited about the launch of our Kennedy in the US and we look forward to working with <unk> to continue to expand <unk> development with new studies.
We are collaborating with our partner <unk> to establish <unk> as a clear choice for patients with metastatic cervical cancer and.
Together, we will continue to broaden the <unk> for those in clinical development program in cervical cancer and beyond.
We also continue to look forward to data.
On the clinical expansion cohorts and focus to the next steps for boats do a body molecules targeting <unk> that are in development that biotech.
And we anticipate expanding and advancing our early stage programs, including the potential for additional IND or Cta this year.
Fundamental to our success is having the right team and culture in place.
We intend to continue to scale general based on our planned portfolio development and business needs.
Finally, we will continue to leverage our solid financial base to support our growth.
We have a lot to look forward to in the second half of the year.
That ends our presentation of Genworth financial results for the first half of 2023, operator, Please open the call for questions.
Thank you.
Wish to ask a question you will need to press star one and one on your telephone and wait for your name to be announced to withdraw your question. Please press star one.
One again.
Once again, if you wish to ask a question. Please press star one and one.
We will take our first question.
Your first question comes from the line of Vikram <unk> from Morgan Stanley . Please go ahead. Your line is open.
Alright, Thank you for taking our questions.
We had two on the F. Kennedy launch first we were just wondering if you could provide some color on the types of patients you have been able to treat so far in the first phase of the launch and.
Any kind of patient characteristics, you're observing in the patients you have been able to treat and also in the centers that these patients are coming from and then secondly on a related note.
Are you benchmarking in the early phases of the larger internally versus other.
Second line plus TWC are larger than.
How are you framing what youre seeing in terms of the launch trajectory here versus other other recent launches in the space right.
Thanks for the questions.
Move them over to Anthony Marc Sidney I think he can give you color on both both of the questions Anthony floor is yours.
Thanks, John and thanks, Vikram for the question first.
We're really really pleased with the upcoming launch uptake to date I think your question around characterizing a little bit the types of patients that we're seeing here in these early first early.
<unk> is very.
Difficult at this point, but.
Because really claims data is pretty limited, but I can give you some sort of sense quantitatively, what we're hearing but it's really in line with our expectations with.
About a 27 day head start versus competition.
Most of the early patient starts here are some of the patients or some of the early patient starts or later line refractory patients and most of them are coming from.
Our centers, we have identified as key accounts, mostly academic centers.
For the most part.
But as the first FDA approved T cell engaging by specific antibody for the treatment of third line <unk> really what customers are telling us.
They are enthusiastic about the power of that Kelly overall responses than.
As a manageable safety profile, and a seamless and efficient step up dosing and subcutaneous administration.
That goes along with it in this what's encouraging as this is really consistent with what we've been hearing prelaunch from opinion leaders and clinical trial sites and in our view reinforces a really differentiated profile for <unk> kenley.
In terms of framing.
The launch uptake relative to other launches in this space I think it's important to ground ourselves and the.
The size of this first indication. So this third line plus relapse.
Relapsed refractory <unk> population is a modest one with about 3600 patients in.
In the U S and it's it's really an important starting point from which we will build to.
Help.
Make kenley of core therapy across B cell malignancies in collaboration with Abbvie.
Think I think that covers it.
Thanks, Anthony and thanks for the question, let's move on to the next.
Question.
Yes of course, please standby.
Your next question comes from the line of Pizza Fidel from Citi. Please go ahead. Your line is open.
Yes, Thanks, Pete <unk> Citi two questions of our channels to first one events.
Firstly just on.
Gen 300, <unk> 38.
Understand and J&J swing versus opting decision could potentially come in 2023, now I realize you're not going to comment on that per se, but could you just remind us how the open label head to head trial is progressing in terms of recruitment event rate and your level of confidence.
Body count indeed raise the bar in myeloma versus it sounds likes.
The meaningful way.
Then just quickly on 42 to 46 can you provide an update on what data you expect to have in house.
As presented at a scientific Congress in 2023.
Thanks, Peter for the questions for the <unk> program I can tell you happily that we actually are very actively recruiting the head to head.
Arms of the trial that the optimal dose of <unk> 38 versus <unk> data.
We will still need.
This year for recruitment of the of the patients.
And we actually anticipate that next year at 74, if you'll have the readout of that head to head study, but of course, we got on an ongoing basis basis under under a confidentiality share data with J&J.
We still believe that it's very likely that they want to see all the data at least a meaningful part of the data all of that to happen.
Guessing well and are in multiple countries, we have initiated new sites in new countries.
And I think we're doing fine there and once you have all these patients and pizza or we will be happy to give you a good update to the markets.
Then for 10 and $42 46.
<unk> actually.
I want to do is come to a decision point ish this year to progress one or both of these programs to the next stage of clinical development and that is the key target for this year, Peter So we will actually.
Internally.
Hopefully you get the data to allow us to take a rational decision to move to the next stage and then it's possible to share that data at a medical conference. This year than we are in time for an abstract et cetera, maybe a late breaker for conference. We will also try to present that data publicly.
Could of course do is is take the decision internally and then potentially flagged up at like any fed likely post ash update event from Genmab. After after ash as you usually do towards actually.
Educate the market on key key steps happening with the company.
It's very likely that the full complement of data for either of these programs of boats.
Would be presented incentive for because we may simply not make the upside that line this year, but we hope that these cuts.
The data to allow for rational decision to move to potential next steps to kind of a biotech.
I, probably want to lever that Peter at this point.
Very clear thank you.
Thank you.
We will take our next question.
Your next question comes from the line of John <unk> from Bank of America. Please go ahead. Your line is open.
Hi, Thanks for taking my questions actually two follow ups on the same cycle peak.
The first one is do you have any.
Yes, how many patients you may have on export CD 38 by year end should J&J wants to make a decision just to get a sense of how quickly that patient recruitment is Gary if you could just give us a sense of where you think you might be by the end of this year and then just secondly to clarify as I think it was carrying the answer.
So you basically ruling out a conference presentation contemporary excuse me 46. This year are your working assumptions two updates to your post ash R&D event.
Thanks sessions for questions for the Hatter has I mean, I cannot give you a prediction because recruitment is not linear usually once you build momentum session fiscal quicker and quicker. So hopefully by year end you will have many of the patients in that arm of the of the of the trial with <unk>.
But if you did 38, but probably not all I think there's still some remaining patients that are that will be enough and follow up to your in Peter's question for J&J.
I don't know I mean, it's their decision, but I would still stick with 2024 is the more likely I think pointed out we have enough data.
So for J&J to take a good decision on potential next steps for 10 $42 46.
Very likely.
The bulk of the data will be described in 24 at a medical conference because I think for at least one of those we hope to present also some data this year at a medical conference both of our key medical conferences in the second quarter.
The last part of the fourth quarter of this year, which we could potentially use for data dissemination that at.
At this moment, we don't have that data, but that.
I think it's a very good likelihood that we will actually.
It will be able to share at least some data at a medical conference session and then potentially further color on the data at a post as Ivan said its speculation at this point very rapidly now collecting data that is going well. We are preparing for next steps for sure for a number of programs, but you need the data.
To allow for rationalization, that's probably directionally for the clients.
Can I just take one follow on can you remind me of your target recruitment number of patients with expertise.
Yes.
Yes, yes.
Sorry, I was just asking what the number of patients you're targeting to recruiting that study is.
Yes, we don't we haven't made that public session that we are well on track basically for targeting the number we want to actually recruit there because we haven't put it in the public domain session.
Okay. Thank you.
Alright, thank you.
Thank you we will take our next question.
Another question comes from the line of Michael Schmidt from Guggenheim Partners. Please go ahead. Your line is open.
Hey, good afternoon, thanks for taking my questions.
Hi.
Follow up on F. Keenly, obviously understanding that the initial indication.
Smaller opportunity in third line.
<unk>, but could you talk about the cadence of possible label expansions I know the second line Phase III trial I believe is fully enrolled now.
At the start of the first line <unk> trial recently, just curious sort of how we should think about the pace of.
Possible label expansions into larger markets and then the follow up.
<unk> marketing sort of this fixed duration treatment aggressively for the FTE 'twenty Bispecific antibodies just curious.
If that is something that is under consideration for a kidney as well or if you are sticking with the continuous treatment and the early patient populations. Thanks, so much.
Thanks, Michael I'll handoff of both questions to units, whose online here units you can start with giving your colon then I could potentially add to that is neither units. Please go ahead. Thank you yeah. Thank you Yan.
The label expansion.
Yeah.
We announced the positive opinion from C. H M D.
Or just headline in N V C N O D M D C N.
Now that we find in Japan.
That indication so you nowadays.
How do you get that more opportunities with each payer.
I need.
And I think toys.
The initial indication.
I mean, we.
And now with the positive data from <unk>.
Hello, Matt.
And we've been engaging with health authorities and SDN are well under way.
Right.
Yeah.
Have you seen them.
Yeah.
Expansion into that it.
B cell malignancies in this case.
How many.
The phase III studies.
Today, I'm going to call that to me in fatigue with having more money in their.
With that Tony in combination with <unk>.
In first line Dnb Seattle.
In combination with R chop based on this.
With that we made probably oh.
Yeah.
We have indeed.
Your line or Apple.
Club channels Oh, yeah. So all of these phase three studies.
It allows us more opportunities to conduct a full approval or expand the indications.
So this is with regard to question one will that I have two questions too.
Like to make a clarification.
That the treatment in theater.
On a disease setting dependent.
That didn't mean that their reputation and what's important and Indian paddling Plasterboard D. M D C and because of the nature of the disease.
I wouldn't believe that day.
Dean.
Elevation of B cells with video and it could be beneficial.
And having said that you know we also Cid and loyalty in this study that showed that.
Good proportion of patients about 50%.
It might be and they've got DVD. So we allowed one.
We suggest that the right thing to do is you know.
Well two things.
Probation in the belief that these patients will continue to get benefit, but you know if you.
It's a decision from the <unk> side.
Acquisition and integration and the patients in other settings.
The duration is more limited in D C, but maybe to add to their lives.
Yeah.
Total one year before.
Depending on the disease of the sad thing so I hope this helps.
Thanks, Thanks for that maybe Anthony Mckiernan add some further color on the fixed duration question Anthony on Sidney. Please go ahead.
Yes, no. Thanks, John and Thanks, Michael for the question I think in third line plus <unk> is due to.
Sort of described the setting matters.
<unk> to treat patients have already undergone.
Several unsuccessful fixed duration therapy, so maintaining treatment until progression effectively provides in our view patients the greatest chance for a positive outcome.
And with that keenly obviously this is done with.
Even with a treat to progression approach with with less chair time per patient.
Through the first six months compared to the competition and as Judas outlined earlier.
In other disease settings in earlier lines with less heavily pretreated patients.
We're exploring sixth generation regiments for Kelly.
Okay. Thanks, very clear Anthony Thanks, Thanks, a lot thanks, Michael for the question Sean.
Let's move to the next question. Thank you we will take our next question.
The next question comes from the line of Etsy.
Gordon from <unk>. Please go ahead your line is open.
Hi, guys. Thanks for taking my question.
Again, congrats on delivering on another solid quarter.
<unk>.
Quick financial one does the increased Opex guidance for 2023 include an increase in expenditure for Gen $10 42, a gen $10 46.
And then.
And your first month of sales of asking Lee I know I don't want to give too much out of the data here, but have you had any patients from the community centers that are being referred to the academic center. Just wondering if you have seen that in the early data already and lastly on the potential data that you hope to present at $10 40 to 146 later this year.
If you do do that would that be in just one tumor type or could there be possibility up more than one tumor type that thanks.
Thanks Oscar for the question. The first one I will definitely hand over to Anthony Pocano. The second one to Anthony Mancini, Let me take the third one I think right now we're collecting data in multiple cohorts of sika.
Well, we haven't decided yet.
This quarter, we have enough data to make a decision to move to the next step that very likely in the public presentation is we'll probably be in very there are one or maximize two settings. I think for 10, 42, and <unk> 46, but thats not decided yet but at least give you. Some direction. So maybe we can move over to Anthony Pagano for the.
Question on the Opex guidance.
Sure, yes to be clear.
Vast majority of the higher investment is reflective of what I said in my comments, where I get a double click for you in terms of the increased and accelerated investment in for <unk>.
The comments in the text of our company announcement interim report around other <unk>.
Pine products Theres nothing there for any of the products, that's individually significant or material.
I really would like you all to leave with is really that the increase in acceleration.
The vast majority of it is absolutely down to <unk> and the key drivers supporting that that I outlined in my opening remarks.
Thanks, Anthony maybe move over to Anthony <unk> for the <unk> question on community center patients versus academic a bit more color there potentially.
Yes, It really Africa at this at this point in the launch the vast majority of the of the starts are coming from academic centers and hospitals at this point, so I'll leave it at that end and as as well as more data matures, we'll be able to share a little bit more around the.
Setting detail.
Alright, Thanks John .
Thanks, guys Africa, let's move to the next question operator.
Yes of course, please standby.
Your next question comes from the line of Emily Field from Barclays. Please go ahead. Your line is open.
Hi, Thanks for taking my questions.
And I was just checking here because I wanted to start with.
Kimberley Walsh said last week that they are absolutely the afternoon regulators that.
Our next regimen.
The.
Given that it is moving towards standard of care should be a comparator arm planning first line <unk> LPC all trials.
Is that your take and.
Is that included in our first line programs.
Just any thoughts on the first line development and then also a question.
I know that the label language for Kelly.
Should be hospitalized and that did allow for some flexibility for health care professionals to determine the appropriate level of monitoring. So just any color that you could give on how.
Thats being enacted in the real world setting and just what the regulatory process is to getting that hospitalization requirement removed. Thank you.
Thank you Emily for very good questions. So I will handle over both to do that first and then maybe Anthony amongst many can give that.
Add to the second one if needed units why don't you give us give it ago yes.
Yeah. Thank you yeah. Thank you and maybe I will start with the second one with regard to the.
The hospitalization.
Well I alluded their wedding.
Would be hospitalized not must be hospitalized whoever you now there sure.
Is that the patient safety money, it's hard.
I'll close today hosted that alright.
Does that sort of thing.
I move that the Hospitalisation last week after I did that answer.
Cool.
And then there was unable to being and knowledge we have.
Some of it can be in terms of death requirements for patient monitoring.
And and index funds on board approval.
He made the day 15, 24 hours with Dennis that's pathetic Samsung mandatory.
Impart on man in meal studies, we made it all personnel and.
And to the patients and investigators to discuss whether they can be accessed at all.
In hospitality, but not in the hospital. So we made the hospitalisation option that and gave the older son, who traded in the out.
Patient setting athletic.
Additionally, we have a study ongoing.
Only these outpatient testing so we would have data and Aquila. The athlete go with both options for patients in the hospital patients remaining in close proximity to the hospital.
This is something I had two question to the question, one with and I think I think to quality.
With your question.
Yes, and just whether that needs to be the comparator arm.
Yeah, Yeah. So again, thank you for the question. So we will probably be some option in first line that they or do you see it.
Income tax suddenly the anti toxin mab and chemotherapy.
We have it.
The ongoing study is.
Some of their society chop because R chop is.
I think on standard of care as well.
It is an option.
Your line, but as you well know the approval was based on PFS and.
And always benefit so some site my Chaucer footprint basin, some chat some site Mike not so the standard of care you know it's.
Our job is to stay strong.
But in conjunction with that and we have in one of our what I would call a basket study.
We are exploring very actively to potential combination of <unk> with a part of it is they took setting up and chemotherapy and this is ongoing.
Thanks.
It is clear I mean this is an option. This is not mandatory so it's different from what I think you've heard from our competitors.
Great. Thank you.
Now, let's move on to the next question.
Yeah.
We will take our next question on the <unk>.
<unk> comes from the line of Alan There that from Cowen. Please go ahead. Your line is open.
Great.
A couple of questions maybe the first one just thinking about is there any way to get an accelerated approval into first line <unk>.
Or is the only way is to really do a full study.
I know you're doing a combination you alluded to plus or minus R. Chop in the first line.
I think thats, probably going to have data in about four years or so but is there any chance to get an earlier approval and then secondly on 30 <unk> are you able to release data publicly before J&J up an option.
Or are you just going to wait for J&J to making decision when overdone presented data because I believe that show datasets. So did you drive the public disclosure of the data. Thank you.
Thanks, Thanks for the questions I think the first question I will handover to unit to see what are the options with potential mall.
With more rapid.
Approval for the first line diffuse large b cell lymphoma, setting, but let me take the second one therefore for <unk> 14 for <unk> exceeded 38 is all data and yes, we can release the data without the.
Agreement of J&J for sure. So it's the option of general to do that.
And maybe you can handle the first question.
Yeah. So the delta it really sounds like maybe the wesson entity that pool and that took part H E. W. E T.
And the first line D L B Seattle doesn't support in this category.
Thanks, Thanks for that so that's clear.
Let's move to the next question then.
Thank you please standby.
Your next question comes from the line of Shandong from UBS. Please go ahead. Your line is open.
Hi, Thank you for taking my questions two please both on <unk>.
Potentially additional indications so the first one for Follicular lymphoma.
Frontline I can see you have a trial the phase III trial in combination with <unk>, but you also have a lot of other trials trials <unk> follicular lymphoma ways.
Either rituxan or just with Revlimid. So just wondering how do you actually think of all the combination partner in Follicular lymphoma in general, especially how that is working in terms of and this is a much more indolent disease are you more cautious with combination with other drugs.
The second question is on C. O L. I am just wondering if you could remind us where you know where are you with with <unk> and what is your generation at general strategy here are you.
Are you aiming to potentially target the high risk patients like a restart syndrome first of all they were talking to you all commerce.
You very much.
Excellent question and see on that I will hand on both over two units, who can address them really well units. Yeah. Thank you. So dam safety on ballooning in relapsed refractory Follicular lymphoma in combination with IL two.
Based on the approval of IL, two regimen and for this particular disease and this is based on I would say a very very nice data of the.
Some of the Black card that was presented in the third.
Thing that as.
And how do you see that.
And then precedent at 11 a M.
If you guys see.
And in particular in those difficult to treat patients patients with part D flawed or that was the factory. So the phase III is comparing to.
<unk>, which is approved in these that line setting.
Very soon.
Uh huh.
And you know is driven by the fact that.
There is no restrictions or April to be infused with rituximab, because it's a different epitope to win lots of mistakes did anybody that says this is the phase three ongoing. Additionally, we are testing in a phase one b two.
According to my Pulaski and indeed, all night only without great Oxy map to have these data, but the phase three is in combination with IL, two which is that but overtime Chamberlain.
This is with regard to with regard to see Atlanta Andrey.
We have a study ongoing with prison D and the.
Good day that and Lee there as well.
In C N N in patients heavily penetrated.
All of them trading at below the knee than most of the M. D C S.
Well most of them with TP <unk> mutations.
And they are.
We found it very interesting and encouraging single agent activity in both diseases.
Yes that is easy to combine.
To make it even better for patients and to combine whether they're not always online video to.
To enable that chop it based on the disease in both disease.
He is actively ongoing and and we plan to share more data in these two very promising things in in a coming in Congress.
Thank you. Thank you. Thank you.
Thanks, Phil.
Thank you that we will move to the next Bob Yeah. Please.
Please go ahead.
Please standby.
Your next question comes from the line of Peter Welford from Jefferies. Please go ahead. Your line is open.
Hi, Thanks, two questions just two quick ones Firstly, a financial one just trying to understand the spirit of the P&L in terms of.
Should we be thinking about on the Cogs side of things the will be a cost of goods by understanding was that you pay 50% of the gross profit to abbvie and the cost of good side, a little bit confused I guess as to why that isn't that how you whether you're going to disclose that in the future and just on the.
Split it costs the guidance would seem to suggest relatively modest second half versus first half increase so were there any sort of one off detour in the TQ R&D.
We should think about it.
The phasing.
And then secondly, it does come back to a comment that said Randy made money in 18 months about the course, where you said that some of the region was increased an accelerated dose optimization work <unk> to improve the profile.
Just curious if you'd go into any more detail overnight in terms of what does increase an accelerated dose optimization work me. Thank you.
Thanks, Peter and I will ask Anthony per kind of four to address both of these questions and potentially use it to step in on the second one Anthony.
Got going.
Yes of course in terms of the Cogs and the elements being there the cost of the actual product as well as the pay away to two abbvie, Peter you're exactly spot on our view for Q2.
Was that it wasn't material.
Do you have a chance to read the detailed financials, we disclosed that we put that in SG&A for this quarter moving forward that will most likely be broken out as a separate line.
Your second question around phasing I, Wouldnt say, theres, nothing or anything too specific as it relates to the phasing what you would've seen in Q1.
Our year over year growth rate was 51% now on a year to date basis that has moderated a little bit now down to 45% as you would imagine if you think about <unk> of last year.
That's when we really started to put our foot on the gas pedal as it relates to a number of investment opportunities including.
Further building out the U S market in anticipation of the launch for <unk>. So I think the comps in the second half of the year in terms of Opex will will be.
Place relative to where they were in each one and as it relates to specifically around phasing there wasn't anything necessarily one offish in the first half of the year.
Judy you want to take it.
The address Peter's question on the dose optimization.
Yes sure. Thank you.
And as Anthony Express it is accelerating means you're not paying anything at all and then increasing the number of patients to potentially provide the date that to it.
Boy It candidly as a best in class in terms of safety and efficacy.
In Follicular lymphoma.
In political that in pharma.
Thanks.
Peter Thats, probably where we can leave with us.
Okay.
So is it just because there is no defined.
The plan to make any fundamental changes beyond in terms of the device or in terms of the drug itself. This is this is purely a profile of what you've talked about before intensive outpatient in terms of Follicular lymphoma mutation.
This is the step up dosing regimen. Peter this is just basically to get a more optimal regimen for follicular lymphoma.
That's great. Thank you.
Alright, thanks, Thanks Peter.
Thank you we will take our next question.
And the question comes from the line of Matthew Phipps from William Blair. Please go ahead. Your line is open.
Thank you for taking my questions.
It can be tough this early in the launch but was any of them can you contribute to myself to channel inventory than you might think.
Look here in the near term and then <unk> phase III trial recently changed our control book pushing back the primary completion from 2024 to 2028 wondering if that is what we should expect or kind of other analysis that could come with what I'm thinking.
Thanks, very much for the questions I missed the first part I must admit equivalent theater, maybe you can repeat the first one the second one can definitely be answered by units for sure.
To repeat the first one please.
Kelly was there any kind of excess of channel inventory build initially that can sometimes happen.
Okay.
Okay, all right. Thanks, Matt.
First of all maybe you can anthony mechanic and that kind of address that one.
Yes, sure happy to.
I did in my opening remarks look I mean, we're super pleased.
With the launch so far the team has in place are executing well feed.
Feedback has been positive as Anthony <unk> highlighted.
Look I think we're talking about really pretty small numbers here around a month of sales. There's nothing in the reported number Matt to you that I would kind of be pointing you to really really focus on it at this stage and again I think its just small numbers a month of sales nothing that I would.
Particularly get you to focus on other than what's already been said on today's call.
Thanks, Thanks, Anthony I think maybe that's a bit of color on the timeline change on the <unk> diffuse large b cell lymphoma trial.
Yeah, I think in events that either in the study's endpoint that their fans that he then you can have a protection, but they know you forego the course of sedans and protect completion database on course with events.
The only comment I can make.
Thank you.
Alright.
For these two questions and then let's move to the next one operator.
Please standby.
Your question comes from the line of <unk> Sharma from Goldman Sachs. Please go ahead. Your line is open.
Hi, Thanks for taking my questions just two so firstly on <unk>, obviously that scenario that you're expanding into so could you just kind of helps understand when we may get some additional clarity on plans there and whether we may be able to get some clarity on what the specific asset for the first half and I will be in within that will be.
Thanks, Yes.
Then secondly, just on the additional investment behind <unk>.
Can you just help us understand how much of that is actually kind of a pull forward from what you were expecting to do in future years versus how much is.
Absolutely new.
Thanks for the question, let me give you a bit of color on ini. It's very early days, we have a number of programs internally.
We are progressing pre clinically and then they need to be tested in animal models and then the best parts will be ready potentially for clinical work. So that is a few years from clinical introduction of hearthstone.
Of course, the organics partnership.
They have two concrete targets, we're working on one for ini one for cancel but you are now creating the the lead molecule. So also that is superior to all clinic.
Clinical introduction, so we will actually update you in the future on the exact phasing, but we are only going for differentiated truly differentiated antibody based.
It appears the candidates here, but the good thing is we have a number of programs already ongoing adjourn mop and autos are starting up now with the organics.
The timing is still very much dependent on how effectively we can move forward to the preclinical animal testing phase and animal fats that some of the candidates are going to be slaughter them pretty quickly. So we are moving rapidly, but it's still a few years from clinical introduction in patients. Therefore pepco.
The.
The investment.
A question maybe to Anthony per panel.
So we think about.
Investing in our business, we're always on the lookout for opportunities, particularly for <unk>, where we can expand and accelerate and outlined for you the areas, which we've done that for so far this year.
In my opening remarks, as I think about the increase here look I think this is a little bit on the margin, we're probably talking about relatively small numbers.
And I would say that the vast majority of this is probably.
Expansion of work and acceleration and again, we're always looking for opportunities where it makes sense to.
From an investment perspective to expand and accelerate particularly on <unk>, we're going to do just that so I know, we're not I'm not really giving you a precise number but I would leave you with those remarks and really for you to think about this as more of our investment framework and how we think about investing in our products.
And the majority would be around.
Expansion.
Thanks, Anthony Thanks Hassan.
Let's move to the next question operator.
Kim.
We will take our final question.
Yeah.
Your final question comes from the line of Jonathan Chang from Leerink. Please go ahead. Your line is open.
Hi, guys. This is the first casino on for Jonathan just wanted to ask if you could sort of remind us how you're thinking about the potential positioning of opportunities for gen $10 46 compared to Gen. $10 42 for example, like how could these probably speak potentially complementary to each other versus.
It's actually being like more of an either or type of decision. Thank you.
That is a very detailed question for rich.
We can give a very lengthy answer, but what I said perfectly.
Up to now is a real belief that we can actually position them differently in different settings of different tumors.
Based on what we see in the clinic right now and Thats all become clearer hopefully in the coming months.
We are going to share data I hope they speak about the data at all of our post ash.
But the short version is we take because we can actually position them in different tumors in different settings. So it will not be an either or but they will be very clearly developed we hope and different therapeutic sessions.
Thank you.
Thank you.
Yes.
Okay.
Thank you I would like to hand back for any closing remarks.
So thank you for calling in today to discuss general financial results for the first half of 2023.
If you have additional questions. Please reach out to our Investor Relations team and we hope that you all stay safe and remain healthy and very much look forward to speaking with you again soon.
This concludes today's conference call. Thank you for participating you may now disconnect.
Speakers please standby.
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