Q3 2023 Legend Biotech Corp Earnings Call

Good day, ladies and gentlemen, thank you for standing by welcome to legend Biotech reports third quarter 2023 financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask.

Speaker 1: Good day, ladies and gentlemen. Thank you for standing by. Welcome to Legend Biotech Reports' third quarter 2023 financial results conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during this session, you will need to press star one, one on your telephone. You will then hear an automatic message advising your hand is raised.

Question during the session you will need to press star one on your telephone you will then hear an automatic message advising yohan histories.

Speaker 1: Please note that today's conference may be recorded. I will now hand the conference over to your speaker host, Jesse Young, head of investor relations and public relations. You may begin.

No doubt today's conference maybe recorded.

I'll now hand, the conference over to your Speaker host Jesse I'm head of Investor Relations and public relations you may begin.

Speaker 2: Good morning. This is Jesse Young, Head of Infested Relations and Public Relations at Legend Biotech.

Good morning. This is Jesse head of Investor Relations and public relations at legend biotech.

Speaker 2: Thank you for joining our conference call today to review our third quarter 2023 performance.

Thank you for joining our conference call today to review, our third quarter 2023 performance.

Joining me on today's call are young along the company's Chief Executive Officer, and Lori Mccumber, the company's Chief Financial Officer.

Speaker 2: Joining me on today's call are Ying Huang, the company's chief executive officer, and Laurie McConville, the company's chief financial officer.

Following the prepared remarks, we will open up the call for Q&A, we'll be joined by Huawei Fun, Chief Scientific Officer, and Steve Scafell head of commercial development for the U S and Europe.

Joined today's call, we will be making forward looking statements, which are subject to risks and uncertainties that may cause our actual results to differ materially from those expressed or implied here with it.

These forward looking statements are discussed in greater detail in our SEC filings, which we encourage you to read and can be found under the investors section of I'll come on to your website.

Thank you I will now turn the call over to Yang.

Good morning, and thank you for joining us today to discuss the third quarter financial and corporate accomplishments of legend biotech.

Speaker 3: We are pleased with the progress we have made over the last quarter to advance our portfolio and pipeline of innovative therapies that are focused on addressing the serious and intractable disease patients face.

We are pleased with the progress we have made over the last quarter to advance our portfolio and pipeline of innovative therapies that are focused on addressing the serious and intractable disease patients face.

Last week, we announced that we have entered into an exclusive global licensing agreement with Novartis, which grants novartis the rights to develop manufacture and commercialize L. B 2102, and other potential car T therapies selectively targeting D O L. Three.

That'll be 2102 event investigational autologous chimeric antigen receptor T cell therapy for the treatment of adult patients with extensive stage small cell lung cancer.

Speaker 3: LB2102 is an investigational autologous chimeric antigen receptor T-cell therapy for the treatment of adult patients with extensive stage small cell lung cancer.

Speaker 3: As part of this agreement, we will receive an upfront payment of $100 million and are eligible to receive up to $1.01 billion in milestone payments, as well as tiered royalties.

As part of this agreement, we will receive an upfront payment of $100 million and are eligible to receive up to $1.01 billion in milestone payments.

I'll ask tiered royalties on net sales.

Speaker 3: We'll also be reimbursed for development costs for the ongoing phase one clinical trial, which will evaluate the safety and efficacy in patients with small cell lung cancer and patients with large cell neuroendocrine carcinoma. And to determine the recommended dose for phase two study.

We will also be reimbursed for development costs for the ongoing phase one clinical trial, which will evaluate the safety and efficacy in patients with small cell lung cancer in patients with large cell.

Our endocrine carcinoma and to determine the recommended dose for phase II study.

We're excited by this transaction and we look forward to seeing how this therapy performs in a clinic.

Speaker 3: We're excited by this transaction, and we look forward to seeing how this therapy performs in a clinic.

Speaker 3: CARVICTI or Thiotacel continues to drive our revenue and direct our priorities. We have worked tirelessly to bring CARVICTI to patients who are eligible for treatment.

<unk> continues to drive our revenue and direct our priorities. We have worked tirelessly to bring <unk> to patients who are eligible for treatment.

Speaker 3: and our efforts are reflected in the total net sales of $152 million in third quarter.

And our efforts are reflected in the total net sales of $152 million in third quarter.

Speaker 3: green total net sales for 2023 to 341 million dollars so far this

Bringing total net sales for 2000 $23 million to $341 million so far this year.

Speaker 3: Our third quarter performance was driven by ongoing market launches, expanding market share and capacity improvements, as well as the commercial launch of Carvita in Germany, which contributed to quarter over quarter ex-U.S. growth of 300 percent.

Our third quarter performance was driven by ongoing market launches expanding market share and capacity improvements.

As the commercial launch of <unk> in Germany, which contributed to quarter over quarter X U S growth of 300%.

In the U S.

Speaker 3: with experience growth of 23% quarter over quarter.

We have experienced growth of 23% quarter over quarter.

Speaker 3: We remain steadfast in our goal to make Carvicti available and accessible to patients worldwide. And we look forward to sharing highlights of that journey with you today.

We remain steadfast in our goal to make car victory available and accessible to patients worldwide and we look forward to sharing highlights of that journey with you today.

We have progressively met strong demand for car victory in collaboration with Janssen.

Speaker 3: We have progressively met strong demand for CARVICTI in collaboration with Janssen. First, Janssen has scaled the in-house production of lentivirus at its factories in Switzerland and has another factory in the Netherlands under construction to complement and support LV supply, which should be online by 2025.

First Janssen has scaled in house production of Lentivirus at its factories in Switzerland and has another factory in the Netherlands under construction to complement and support Lv supply.

Which should be online by 2025.

Speaker 3: LV expansion is crucial because it is often the rate limiting factor in any car key manufacturing and growing LV supply is an important front in our ramp-up.

I'll be fashion is crucial because it is often the rate limiting factor and in car T manufacturing and growing, albeit supplies and important from in a ramp up.

Speaker 3: Second, we're still on track with our pre-plant capacity increase at our Raritan site, and production from our CDMO is supporting that expansion next year.

Second we're still on track with our pre planned capacity increase at our rabbits inside and production from our CDM always supporting that expansion next year.

Speaker 3: And third, the first of our state-of-the-art manufacturing facilities in Ghent has received a license from the Federal Agency for Medicines and Health Products in Belgium.

Third the first of our state of the art manufacturing facility in Kent has received a license from the Federal agency for medicines and health products in Belgium.

This was an important hurdle to clear and then once the investigational medicinal product dossier is approved by local authorities will begin manufacturing supercell again for clinical use by end of this year.

Speaker 3: This was an important hurdle to clear, and once the investigation on medicinal product dossier is approved by local authorities, we'll begin manufacturing pseudocell at Gantt for clinical use by end of this year. The Gantt facility will be an important part of the CARVICTI supply chain network.

Against that facility will be an important part of the <unk> supply chain network.

We're committed to bringing <unk> to more patients who are eligible for this important therapy, our manufacturing ramp up of supports commercial delivery as well as our ongoing <unk> clinical development program with Janssen.

Speaker 3: We're committed to bring CARVICTI to more patients who are eligible for this important therapy. Our manufacturing ramp-up supports commercial delivery as well as our ongoing CARLITUDE clinical development program with Janssen.

Speaker 3: Of the five clinical trials evaluated in SILTA-Cell, three are ongoing, and CARTITUDE-6, our Phase 3 study for frontline patients, enrolled its first patient.

After five clinical trials evaluating suit yourself III are ongoing and card use six our phase III study for frontline patients enrolled its first patient.

Speaker 3: The activation of one of our Gantt facilities will enable us to continue the commercial ramp we began in the U.S., while onboarding new clinical patients.

The activation of one of our again facilities will enable us to continue the commercial ramp we began in the U S. While on boarding new clinical patients.

In addition to making capacity enhancements, we work with roughly 60 35 treatment centers across the U S and our expanding access to car victim in select European countries, including Germany.

Speaker 3: In addition to making capacity enhancements, we work with roughly 60 certified treatment centers across the U.S. and are expanding access to CARB-X in select European countries, including Germany.

Speaker 3: Our teams are working hard on multiple fronts to bring this efficacious one-time treatment to patients in need.

Our teams are working hard on multiple fronts to bring this efficacious onetime treatment to patients in need.

Speaker 3: We are pleased to share that since trials began in 2018, we have treated more than 2,000 people with Siltacel.

We're pleased to share that since <unk> began in 2018, we have treated more than 2000 people with CF to sell.

Our pipeline is also robust and we're exploring the potential of cell therapies in both hematology malignancies and solid tumors.

Speaker 3: Our pipeline is also robust, and we're exploring the potential of cell therapies in both hematologic malignancies and solid tumors.

Speaker 3: The funds from our transaction with Novartis will primarily be used to develop other promising pipeline assets, such as our allogeneic cell therapy.

The funds from our transaction with Novartis will primarily be used to develop other promising pipeline assets such as our allogeneic cell therapies.

Speaker 3: The armoring used in LG2102 can also be deployed in other pipeline programs if validated in a clinic. We continue to explore innovation in our pipeline and are excited about their progression. Now I want to

The armoring using algae to 102 can also be deployed in other pipeline program. If validate in the clinic, we continue to explore innovation in our pipeline and are excited about their progression.

Now I want to turn it to Lori.

Speaker 4: Thank you, Ying, and good morning, everyone. As Ying mentioned, we are very pleased with the performance of our commercial product, Carvicti, this quarter, which generated approximately $152 million in total sales, an increase of 30% over the previous quarter, driven by ongoing market launches, expanding market share, and capacity improvement.

Thank you <unk> and good morning, everyone. As gene mentioned, we are very pleased with the performance of our commercial private car Vicki this quarter, which generated approximately 152 million and total sales an increase of 30% over the previous quarter, driven by ongoing market lunches expanding market share and capacity improves.

That performance also represents a 176% year over year increase.

Speaker 4: That performance also represents 176% year-over-year increase.

Speaker 4: As a reminder, we share equally in all profits and losses of Carvicti x China with our partner Janssen.

As a reminder, we share equally in all profits and losses of <unk> ex China with our partner Johnson.

Speaker 4: Starting with cash and cash equivalents, time deposits, and short-term investments of $1.4 billion, this will fund our planned operating and capital expenditures into 2025.

Starting with cash and cash equivalents time deposits and short term investments of $1 4 billion. This will fund our planned operating and capital expenditures into 2025.

Starting with revenues total revenues for the third quarter were $96 million, consisting of $75 9 million in collaboration revenue from the Silicon Mickey and $21 million in license revenue for the achievement of a milestone during the quarter as outlined in the global development plan under the Allison agreement Preceptor.

Speaker 4: Starting with revenue, total revenues for the third quarter were 96 million, consisting of 75.9 million in collaboration revenue from the sale of Carvicti and 20.1 million in licensed revenue for the achievement of a milestone during the quarter as outlined in the global development plan under the Janssen agreement for sit to sell.

Well.

Net loss for the three months ended September 32023 was $62 2 million or a loss of <unk> 17 per share compared to a net loss of $85 million or 26 cents loss per share for the same period last year for.

Speaker 4: Net loss for the three months ended September 30th, 2023 was 62.2 million or a loss of 17 cents per share compared to a net loss of 85 million or 26 cents loss per share for the same period last year.

Speaker 4: For the nine months ending September 30th, 2023, net loss was $373.4 million, or a loss of $1.07 per share, compared to a net loss of $310.5 million, or a loss of $0.99 per share, for the nine months ended September 30th, 2022.

For the nine months ending September 32023, net loss was $373 4 million or a loss of $1 <unk> per share compared to a net loss of $310 5 million or a loss of 99 cents per share for the nine months ended September 32022.

Okay.

Speaker 4: Moving on to expenses, collaboration cost of revenue for the third quarter 2023 was $43.5 million compared to $25.5 million for the same period last year. These are Legend's portion of collaboration cost of sales in connection with the collaboration revenue under the Janssen agreement along with expenditures to support the manufacturing capacity expansion.

Moving on to expenses collaboration cost of revenue for the third quarter 2023 was $43 5 million compared to $25 5 million for the same period last year.

Legend portion of collaboration cost of sales in connection with the collaboration revenue under the Johnson agreement along with expenditures to support the manufacturing capacity expansion.

Speaker 4: Research and development expenses for the third quarter 2023 were $95.9 million, compared to $104.5 million for the same period last year.

Research and development expenses for the third quarter 2023.

$95 9 million compared to $104 5 million for the same period last year.

Speaker 4: The decrease of 8.7 million for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, was due to timing of expenses incurred in connection with the master technology transfer, manufacturing and clinical service agreement for VCMA CAR-T product with Johnson and Novartis Pharmaceuticals Corporation.

The decrease of $8 7 million for the three months ended September 32023, compared to the three months ended September 32022 was due to timing of expenses incurred in connection with the Master technology transfer manufacturing and clinical service agreement for <unk> car T product with Johnson and Novartis pharmacy.

<unk> Corporation.

Speaker 4: Administrative expenses for three months ended September 30, 2023, were $28.1 million, compared to $23.2 million for the same period last year. The increase of $4.9 million year over year is primarily due to the expansion of administrative functions to facilitate continuous business growth and continued investment in building Legend Biotech's global information technology infrastructure.

Administrative expenses for three months ended September 32023, or $28 1 million compared to $23 2 million for the same period last year. The increase of $4 9 million year over year is primarily due to the expansion of the administrative functions to facilitate continuous business grow.

And continued investment in building legend biotech global information technology infrastructure.

Speaker 4: Selling and distribution expense for the three months ended September 30th, 2023 was 21.1 million compared to 18.9 million for the same period last year. The increase of 2 million year over year due to costs associated with the commercialization of CARBIC-D.

Selling and distribution expense for the three months ended September 32023 was $21 1 million compared to $18 9 million for the same period last year, the increase of $2 million year over year due to cost associated with the commercialization of perfecting.

To wrap up our spending remains on track and we continue to maintain a strong balance sheet.

Speaker 4: To wrap up, our spending remains on track, and we continue to maintain a strong balance sheet. As of September 30th, we have $1.4 billion in cash and equivalents, deposits, and investment, which Legend Biotech believes will fund operating and capital expenditures into 2025.

As of September 30, we had $1 4 billion in cash and equivalents deposits and investment, which legend biotech believes will fund operating and capital expenditures into 2025.

Speaker 4: Thank you. I will now pass it back to Ying for closing remarks.

Thank you I will now pass it back to you for closing remarks.

Speaker 3: Thank you, Laurie. 2023 continues to be another remarkable year for Legend Biotech, and we look forward to closing out the year strong in the fourth quarter.

Thank you Laurie.

2023 continues to be another remarkable year for legend biotech and we look forward to closing out the year strong in the fourth quarter.

Speaker 3: We have made considerable strides in enhancing our manufacturing capabilities and lowering our out-of-spec...

We have made considerable strides in enhancing our manufacturing capabilities and lowering our out of spec rate.

Speaker 3: We're proud to be a fully integrated cell therapy company focused on both hematology, malignancies and solid tumors.

We're proud to be a fully integrated cell therapy company focused on both hematologic malignancies and solid tumors.

Speaker 3: Looking forward, we'll continue to invest in our manufacturing capacity as we work to deliver COVID-19 to patients expeditiously and responsibly.

Looking forward, we will continue to invest in our manufacturing capacity as we work to deliver <unk> to patients expeditiously and responsibly.

Speaker 3: We'll also continue to expand our pipeline. At Legend Biotech, we strive to deliver long-term value to our shareholders and are encouraged by these developments.

We will also continue to expand our pipeline.

Legend biotech, we strive to deliver long term value to our shareholders and are encouraged by these developments.

Speaker 3: Thank you for joining us today. We'll now open the call up for questions.

Thank you for joining us today, we will now open the call up for questions.

Speaker 1: Thank you. Ladies and gentlemen, to ask a question, you will need to press star 1-1 on your telephone and wait for your name to be announced.

Thank you, ladies and gentlemen to ask a question Yolanda to press Star one on your telephone and wait for your name to be announced.

Please standby, while we compile the Q&A roster.

And our first question coming from the lineup Gena Wang with Barclays. Your line is open.

Speaker 1: And our first question coming from the line of Gina Wang with Barclays, your line is open.

Speaker 5: Thank you for taking my questions. Also, congrats on the great quarter. So, maybe I have a 2 questions. 1 is regarding I think of this morning. We saw the news, the Bristol's a back man. Now, they will require at a come and a push out and maybe, you know, based on that news. What is your interaction with the FDA so far? And are you also anticipating an ad?

Thank you for taking my questions also congrats on the great quarter.

Maybe I have two questions. One is regarding I think that this morning, we saw the news that Bruce.

Those are backman now they will require AD com and produce it got pushed out.

And maybe based on that use what is your interaction with the FDA. So far and are you also anticipating an ad com.

Speaker 5: And the second question is regarding the competitive landscape in terms of, say, efficacy profile. We will see some update at ASH. You know, what is your thoughts regarding staying competitive? And the other related question is a commercial strategy in the outpatient.

Second question is regarding the competitive landscape.

In terms of see efficacy profile, we will see some update at ash what is your thoughts regarding staying competitive.

The related question is of commercials strategy.

In the outpatient setting.

Speaker 6: Hi, good morning, Gina. Thanks for the question. So I'll take the first one first, which is regarding the outcome that will be hosted by FDA ODAX for our competition. So I can tell you that, um,

Hi, good morning, Thanks for the question. So I'll take the first one first which is regarding the.

Outcome that will be hosted by Afghan Kodak for all competition. So I.

I can tell you that given our interactions with the FDA so far on our card. It's your fault finding clearly the agency placed an emphasis on the OS benefit overall survival benefit and typically the agent standard is that you have to demonstrate a significant PFS benefit.

Speaker 6: interactions with the FDA so far on our card to for filing clearly the agency place an emphasis on

Speaker 6: the OS benefit, overall survival benefit. And typically, the aging standard is that you have to demonstrate a significant PFS benefit.

Speaker 6: with an overall encouraging trend in survival.

And overall encouraging trend and survival so without disclosing anything further I can tell you is that all.

Speaker 6: So without disclosing anything further, I can tell you that on August 4th, when we received the filing acceptance.

August 4th when we received a 504.

Speaker 6: for a country for by agency. We were advised that FDA was not planning to hold an outcome or advisory committee to discuss this document. That was as of August .

<unk> was bought by the agency we were advised that FDA was not planning to hold an <unk>.

Our advisory Committee to discuss this document that was until August.

Speaker 6: Secondly, I'm also very pleased to tell you that as part of our so-called four-month safety update, we did submit to the FDA additional data. And again, we are seeing a stronger trend of overall survival since the last update when the data was presented at ASCO. So that's what I would say about the overall survival from CAR-2 to 4. And we remain very confident on the profile for CAR-B-P.

Secondly, I'm also very pleased to tell you that as part of volatile quad.

Formal safety update we did submit to the FDA additional data and again, we are seeing a stronger trend over viable in the last update when the data was presented at <unk>. So that's what I'll say about the overall survival from <unk>.

Paul and we remain very confident.

Four.

Perfect.

Secondly, on ash and competition.

Speaker 6: I'm not a comment into any competitive data, but we stand behind the safety and efficacy of CARVICT, which has been dosed by more than 2,000 patients already since we started the program. And that includes patients we dosed in the commercial setting after FDA approval last year, and also patients who are dosed in various CARDI-2 program and also CARDI-5 program in China.

Another comment into any competitive data, but we stand behind the safety and efficacy of <unk>.

Victory, which has been dosed by more than 2000 patients already since we started the program and that includes patients. We built in the commercial setting after FDA approval last year and also patients who are adults in various <unk> two program and also kartik. Thanks Carla.

In China. So we are very very happy to see the very deep consistent durable response in every setting of multiple myeloma, we have tested so far with the commercial strategy I'll ask my colleague Steve too Keith Yes. Thanks, Thanks, Hi, Gena I think your question had to do around outpatient.

Speaker 7: we are very, very happy to see the very deep, consistent, durable response in every setting of multiple myeloma we have tested so far. With the commercial strategy, I'll ask my colleague, Steve, to come up. Steve? Yeah, thanks. Hi, Drina. I think your question had to do around outpatient and

Maybe I can just give you an update on what's happening in that particular area. We were holding constant at about 30% share in terms of inpatient versus outpatient.

Speaker 7: If I could just give you an update on what's happening in that particular area, we were holding constant at about 30% share in terms of inpatient versus outpatient.

Speaker 7: We're also forecasting, as we enter in earlier lines with the Carta 2.4 launch next year, is to exit, we hope to exit next year, I would assume maybe even doubling that. It's really predicated on bringing on board our sites and obviously getting our consistent supply into market. But right now, from a share perspective, that's how our claims data is measuring up.

We're also forecasting as we enter in earlier lines with the card a tooth for launch next year.

Exit we hope to exit next year, I would assume maybe even doubling that.

Really predicated on bringing onboard our sites obviously.

Getting our kisses consistent supply into market, but right now from.

A share perspective, that's how our claims data is measuring up.

Thank you very much.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the lineup, Jessica Firewoods, JPM, Chasey Aloniso.

Thank you one moment for our next question and our next question coming from the line of Jessica Fye with J P. M. Chase Your line is open.

Yeah.

Speaker 8: Great. Good morning. Thanks so much for taking my question on the heels of the Novartis licensing. Can you talk about what the next wave of targets legend is interested in pursuing might be

Great. Good morning, Thanks, so much for taking my question.

On the heels of the Novartis licensing can you talk about what the next wave of targets.

Legend is interested in pursuing might be.

Speaker 9: Thanks, Jessica, this is Gloria. So we have extensive internal pipeline, both in autologous as well as in allogeneic cell-cell B front. In autologous space, we continue to focus on blood cancer, building the vitamin melanoma franchise, at the same time also expanding to the solid tumor indications. In autologous space, we have several different platforms, and we have deep investment in gamma delta T allogeneic platform in the past several years.

Thanks, Yes, Scott this is quality.

So we have extensively in turn our pipeline both in our targets sys in.

No generic SaaS happy front.

Public space, we continue to focus on brand building.

My franchise at the same time also.

And into the solid tumor indications.

In the generic space, who have several different platforms and we have deep investment to a comment that Archie allogeneic craft for in the past several years to allow for our compound is R&D testing in the community setting and we're waiting to connect a clinical response profile.

Speaker 10: Two of our compound is already tested in the community setting and we're waiting to collect a clinical response profile and expand the allergenic platform as well. Currently, the allergenic platform is primarily focused on a blood cancer indication. Thank you.

<unk>.

Energetic platform as well currently our generic pipeline is primarily focused on a blood cancer indications.

Thank you.

Thank you one moment our next question.

And our next question coming from the line of.

Kelly she with Jefferies. Your line is open.

Speaker 2: Thank you. Congrats on the great progress. How should we think about the Q over Q growth of COVID-19 into Q4, considering the GMG and legend manufacturing capacity increase, and also the level of demand in the baseline settings as the Tucker Daily experienced a great launch? And also, how do you estimate the seasonality impact from holidays? And also have a follow-up. Thank you.

Thank you congrats on the great progress.

And how should we think about Q over Q growth into Q4, considering the J&J legend of manufacturing capacity in place.

And also the level of demand in the late line setting.

I only experienced a great launch.

And also how do you estimated a seasonality impact from holidays and also have a follow up thank you.

Hey, Kelly this is Lori I'm going to give you just overview of quarter over quarter, and then I'll turn it over to Steve.

Speaker 4: Kelly, this is Lori. I'm going to give you just overview quarter over quarter, and then I'll turn it over to Steve. As you look at going into Q4, as we talked about before, we are doing a step up. We have gotten that approved, but as we've indicated before, you won't really see the impact of that until Q1 of 2024.

As you look out going into Q4 as.

As we've talked about before we are doing a step up we have gotten that approved but as we've indicated before you won't really see the impact of that until Q1 of 2024 and as a reminder, we've also signaled that in Q4, we will be doing some comparability runs as we're getting some of our additional notes or manufacturing capacity.

Speaker 4: And as a reminder, we've also signaled that in Q4, we will be doing some comparability runs as we're getting some of our additional nodes for manufacturing capacity up and running for 2024 to help support the 2nd line.

And running for 2024 to help support a.

Second line launch, but with that if you look at Q4, we're not giving specific guidance, but youre not going to see significant growth quarter over quarter because of both of those.

Speaker 4: So, with that, if you look at Q4, we're not giving specific guidance, but you're not going to see significant growth quarter over quarter because of both of those activities.

Activities and with that Steve I'll turn it over to you.

Speaker 11: And with that, Steve, I'll turn it over to you. Yeah, yeah. Hey, Kelly. Yeah, Steve. I think your question had to do with the.

Yeah, Hey, Steve I think you are essentially to do it.

Tech launch so what we're seeing in market research that we're running is where you see market share coming out of market in terms of car T. Therapies has been that from a beckman as opposed to sell to sell we're seeing still a robust demand in later line settings, and I think youre going to see that continue in market with the bi specifics.

Speaker 7: So what we're seeing in market research that we're running is where you see market share coming out of market in terms of CAR T therapies has been that from Becma as opposed to Siltacel. We're seeing still a robust demand in later line settings. I think you're going to see that continue in market with the bispecifics where if you see erosion in terms of share erosion I see it coming from Becma at least that's been the latest data we've seen in our research.

If you see erosion in terms of share erosion I see it coming from vacuum at least that's been the latest data we have seen in our research.

Terrific. Thanks, and also regarding the initiation of Carty two to six trial in the frontline transplant eligible patient population.

Speaker 2: Terrific, thanks. And also regarding the initiation of the CAR-T2-6 trial in the frontline transplant eligible patient population, could you actually share, should we expect the US enrollment to start in near term? And even majority of the enrollment come from Europe , do you consider impact on the enrollment pace compared to CAR-T2-5 trial? Thank you.

Could you actually share should we expect the U S enrollment to start near term and even majority any moment.

Come from Europe.

Do you consider it impacted on the enrolment pace compared to cut a unified trial. Thank you.

Yes.

Speaker 3: Thanks, Kelly. So we're very pleased to announce that the first patient has been enrolled last month in Spain. So we officially have kicked off the initiation of CAR-2-6.

Thanks, Kelly So we're very pleased to announce that the first patient has been enrolled.

Marketing spend so we officially have kicked off the initiation of cartoon six and we are going to initiate enrollment in the U S. Also very soon.

Speaker 6: And we are going to initiate enrollment in the U.S. also very soon. At this point, I can tell you that we will promise to enroll a certain percentage of U.S.-based patients because we have to submit the data to the agency later to make sure that we have a representative U.S. patient population in the overall patient, although probably the majority of the patients will be enrolled ex-U.S. for CARDI 2-6.

At this point I can tell you that we will promise to enroll a certain percentage of U S based patients because we.

We have to submit the data to the agency later to make sure that we have a representative U S patient population and the overall, although probably the majority of patients will be enrolled ex U S for our cartage usage.

Thank you very much.

Thank you.

Speaker 1: Thank you. And our next question coming from the line out.

And our next question coming from the line.

The Crown Brian <unk> from Morgan Stanley Your line is open.

Speaker 1: The chrome prohibit for Morgan Stanley Yellen is open.

Speaker 11: Hi, good morning. Thank you for taking our questions. This is Vikram. We have two. First, assuming you were to obtain approval for CARVIC-D for the expanded label based on the CARTITUDE IV data by next April , could you just walk us through your latest thinking on what you expect the ramp to look like in earlier line use in 2024 onwards?

Hi, Good morning, Thank you for taking our questions. This is vikram we had to.

First assuming you were to obtain approval for perfect for the expanded label based on the criteria for data by next April.

Could you just walk us through your latest thinking on what you expect the expected ramp to look like.

In earlier line use in 2024 onwards, and then secondly back to the.

Speaker 11: And then secondly, back to the topic of competition. So Bristol-Myers and 270 have mentioned that they're making a bigger commercial push for Abecma that includes site expansion to broaden out access for the therapy. I wanted to see if you've noticed any competitive impact at this point from those efforts and if you and J&J feel the need to increase your marketing and promotional spend behind CARB-XD in response to the efforts from Bristol-Myers and 270. Thanks.

The topic of competition.

Bristol Myers, <unk> 270, <unk> mentioned that Theyre, making a bigger commercial push for at Beckman that includes that expansion to broaden our access to the therapy.

Wanted to see if you've noticed any competitive impact at this point from those efforts and if you and J&J feel the need to.

Increased your marketing and promotional spend behind <unk> in response to the efforts from BMS, Bristol Myers and <unk>. Thanks.

Yes, Hi, it's Steve So let me let me try to take them I think the second part of your question I had to do with site expansion also promotional spend we will continue to expand sites over time, we will exit this year, we think right around 70 sites.

Speaker 7: Yeah, hi, it's Steve. So let me let me try to take them. I think the second part of your question had to do with site expansion, also promote promotional spend. We'll continue to expand sites over time. We'll exit this year. We think right around 70 sites.

Speaker 7: I will see, you know, our site expansion is predicated on delivering in our manufacturing capacity increasing. So we are targeting by the end of next year to be to be exiting at about between 90 to 100. so that hopefully answers your question around site expansion.

And we will see our site expansion is predicated on delivering in our manufacturing capacity increasing so.

We are targeting by the end of next year to be to be exiting at about between 90 to 100, so that hopefully answers your question around site expansion and.

Speaker 7: And as I remember, as I continue to state there, this is more than just site expansion where all these sites are not created equal in terms of the numbers of patients that they treat.

As you'll remember.

Continue to state that this is more than just site expansion.

All these sites are not created equal in terms of the numbers of patients that they treat.

Speaker 7: Our philosophy is continue to increase our site expansion to ensure that we can accommodate the demand within those sites.

Our philosophy has continued to increase our site expansion to ensure that we can accommodate the demand within those sites.

Speaker 7: I think your second question had to do with CARTITUDE 4. Can somebody help me here? The ramp. The ramp. Yeah, so thanks. So how we're planning the CARTITUDE 4 ramp in terms of the forecast perspective, we were initially and we continue to assume a very quick ramp up, especially in the high-risk population in second line plus.

I think your second question had to do with harder.

Or can somebody help me here.

Grant the ramp yes. So thanks, so how were planning the card of 204 ramp contributor forecast perspective.

We were initially and we continue to assume a very quick ramp up, especially in the high risk population in second line plus.

Speaker 7: In some of the research that we fielded post-ASCA, once we released the CARTITUDE-4 data, we're also seeing high demand also in the standard risk population. So generally speaking, again, we're very excited, as you can imagine, in launching CARTITUDE-4 for our patients, but we see it much broader than we were initially thinking beyond the high-risk group.

And some of the research that we feel that post <unk>. Once we released the card at <unk> four data. We're also seeing high demand also in the standard risk population. So so generally speaking again work very excited as you can imagine and launching a card at Q4 for our patients but.

But we see it much broader than we were initially thinking beyond the high risk group.

Got it thank you.

Thank you one moment, our next question and our next question coming from the line.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of...

Liana <unk> from RBC capital markets. Your line is now open.

Speaker 1: Leone Timashev from RBC Capital Markets here on the South.

Hi, guys. Thanks for taking my question and congrats on the quarter I wanted to stick with the competition discussion for just a little bit.

Speaker 12: Hi, guys, thanks for taking my question and congrats on the quarter. I want to stick with the competition discussion for just a little bit. We've been hearing that there's actually been capacity constraints in the CAR-T space as a whole, with actually BCMA and CD19 directed CAR-Ts competing for beds and infusion capacity. I guess, is this something that you're seeing as you're continuing to launch CAR-VIC-T, do you expect these dynamics to lift or continue?

Been hearing that theres actually been capacity.

Constraints in the car T space as a whole.

<unk> CD 19, directed car T is competing for beds in infusion capacity.

Is this something that Youre seeing is youre continuing to launch curve do.

Do you expect any dynamics.

So lift or continue.

Speaker 7: Yeah, Steve, I'll take that again. I think that's a very, very good point. So that's why it's so important. This is why you're seeing...

Yes.

Steve I'll take that again, I think thats, a very very good point.

So that's why it's so important is this is why youre seeing.

A large percentage now of sites moving to hospital outpatient for cell to cell.

Speaker 7: a large percentage now of sites moving to hospital outpatient for siltacel. So, yes, so to your point, it's a very valid point that you cannot continue to treat CAR T therapies as just a single inpatient modality. We knew that leading into launch, and it was the reason why we were continuing to monitor how the market was moving to outpatient to increase capacity, to your point. So you address capacity in two, in essence, two ways, so you continue to monitor to see how the market's moving in the outpatient setting, and as I stated earlier, we're running at about 3 out of 10 patients now being treated that way, and we see that continuing to grow significantly over time. So that's the first piece of that, of solving that issue. And then the second way you resolve that is by increasing sites themselves, and we'll continue to do that as well. So it's a combination of a number of different moving parts.

So yes, so to your point, it's a very valid point that you cannot continue to to treat car T therapies as just a single inpatient modality.

We knew that leading into launch and that was the reason why we were continuing to monitor how the market was moving to outpatient to increase capacity to your point. So you address capacity into an essence two ways right. So you continue to monitor to see how the market is moving in the outpatient setting and as I stated earlier, we're running at about three out of 10 patients now being treated that.

And we see that continuing to grow significantly over time. So that's the first first piece of that of solving that issue and then the second way you resolve that is by increasing sites themselves and we will continue to do that as well. So it's a combination of a number of different moving parts. So we'll see how the market is moving in the outpatient setting and then we will also continue to add more and more.

Speaker 7: So we'll see how the market is moving in the outpatient setting. And then we'll also continue to add more and more sites to accommodate to your point, the patient volume to ensure that we have enough or the sites have enough volume to pull through the volume of patients for our indication.

More sites to accommodate.

To your point the patient volume to ensure that we have enough or the sites have enough volume to pull through the volume of patients for our indication.

Speaker 10: And, Leonid, this is Ian. Maybe I want to add that, you know, if you look at the number of transplants that are performed in a setting of myeloma, it's about 9,000 transplants that's performed every year in the United States market. So we think at this point, at least for multiple myeloma, we're not approaching that limit in terms of possible bets yet. As you know, if you look at our supply into the market, right, we're nowhere near that 9,000 number yet. Thank you. Thank you.

And Liana. This is Ian maybe I want to add that you know if you look at the number of transplants that are performed in a setting of myeloma. It's about 9000 transplants. That's performed every year in the United States market. So we think at this point at least for multiple myeloma, we're not approaching that limit in terms of hospital beds yet.

As you know if you look at dollars supply into the market right. We're nowhere near that 9000 number yet thank you.

Thank you one moment please for our next question.

And our next question coming from the line of.

Speaker 1: You're on Weber with TD Colony. The line is open.

John Weber with TD Cowen Your line is open.

Speaker 13: Great, thanks for taking my questions. I just have two. The first one, can you give us a little bit of a sense, we're hearing that not now, but potentially later on, if a resus slot might become more of a bottleneck as you're ramping up capacity. I don't know if you can give us a little bit of a sense how much capacity there is now and what can you do to enhance it. And then secondly, it looks like the facility in Europe , in Belgium.

Great. Thanks for taking my question.

To the.

The first one can you give us a little bit of a sense, we're hearing that not now but potentially later on if a reset slots might become more of a bottleneck as youre ramping up capacity I don't know if you can give us a little bit of a sense of how much capacity. There is now and what can we do to enhance it and then secondly.

It looks like the.

The facility in Europe.

In Belgium has now got approved on a local basis and you're noting that you need to wait for an investigational medicinal product dossier approval and local authorities is that.

Speaker 13: is now got approved on a local basis and you're noting that you need to wait for investigational medicinal product FDA approval and local authorities. Is that not centralized to the EMA or is it sort of different done differently in Europe ? And just reaffirm that you're not foreseeing any sort of

Centralized to the EMA.

Or is it sort of different done differently in Europe and.

Just reaffirm that youre not foreseeing any.

Sort of.

Speaker 13: limitation and how many slots you're going to have in that plant in Europe . Thank you.

Limitation on how many how many slots you're going to have an uplift in Europe. Thank you.

Hi, This is Steve again, why don't I take a crack at the <unk> question <unk> question, It really varies by site.

Speaker 7: Hi there, it's Steve again. Why don't I take a crack at the apheresis question. The apheresis question really varies by site.

Speaker 7: I know we've been having a number of conversations with our sites as we work collaboratively, you know, to onboard them and certify them. So the apheresis question really is being up front addressed by our sites because what they are doing.

I know, we've been having a number of conversations with our sites.

As we work collaboratively to onboard them and certify them. So the <unk> question really as being upfront addressed by our sites because what they are doing is forecasting what the volume looks like for them whether it be for obviously the card into one launch with they have a pretty good idea of obviously by now but more importantly Carter.

Speaker 7: is forecasting what the volume looks like for them, whether it be for obviously the Carter 2-1 launch, which they have a pretty good idea of obviously by now, but more importantly Carter 2-4.

For so.

Speaker 7: So, as I keep mentioning, we are addressing this in a number of different ways, this question around capacity, and right now, like I said, the number that I was guiding earlier in terms of roughly 90 to 100 that I gave earlier in terms of number of sites.

As I keep mentioning we are addressing this and a number of different ways as question around capacity.

And right now like I said, the number that I was guiding earlier in terms of roughly 90 to 100.

I gave earlier in terms of number of sites is in response to a number of these capacity questions to ensure that the marketplace is enough aggregate capacity to pull this indication through thank you want to take the final question here.

Speaker 6: is in response to a number of these capacity questions to ensure that the marketplace has enough aggregate capacity to pull this indication through. Thank you. I'll take the second question. Hey, Yaron. I'll take the question about European facilities. So, we did receive a GMP certificate issued by the local FAAG, which is the counterpart of FDA in Belgium.

I'll take the question about European facility. So we did receive a GMP certificate issued by the local FAA G, which is the counterpart of FDA in Belgium, and that is sufficient for us to start the clinical production next month in.

Speaker 13: And that is sufficient for us to start the clinical production next month in the US. Sorry, in Belgium. And then, specifically, I want to question about the US FDA. So right now, our plan is to start clinical production by end of this year in Belgium for certain clinical trials.

In the U S. That's already in.

In Belgium, and then specifically on your question about the U S. FDA. So right now our plan is to start clinical production by end of this year in Belgium for certain clinical trials and then about mid year next year in 2024, we're planning to seek regulatory approval for <unk>.

IDT to start produce commercial correctly.

Usually we're planning to supply only in the European market. So at this point, we would not need FDA approval in the future in.

In the case, where we do have excess capacity that we could use from the again.

Facilities that we plan to come back and ask FDA approval. So you are right in the case of commercial production for U S. Patients, we would need SPRI approval by the FDA, but right now in the very near future. We're only designating the again facilities for our European.

Speaker 1: commercial demand and also clinical trial demand. But still, that does help our supply in the U.S. because, as you know, right now we're only producing both clinical trial material and commercial CARBICTE from our New Jersey facility. So, whenever we can divert some of the demand from European market and also clinical trials to Ghent, that will free up more slots from our Raritan, New Jersey facility. I hope that answers your question. Thank you. One moment, please, for our next question. And our next question coming from the line of Lynn Heisel from Goldman Sachs. Your line is open.

Commercial demand and also clinical trial demand.

Speaker 6: But still, that does help our supply in the U.S. because, as you know, right now we're only producing both clinical trial material and commercial CARBIC-T from our New Jersey facilities. So whenever we can divert some of the demand from European market and also clinical trials to get.

That does help.

Supply in the U S. Because as you know right now we're only producing both clinical trial material and commercial <unk> from our New Jersey facility. So whenever we can divert some of the demand from European market and also clinical trials to get that will free up more slots from our Raritan, New Jersey facility I hope that answers your question.

Speaker 14: that will free up more slots from our Raritan, New Jersey facility. I hope that answers your question.

Okay.

Thank you one moment please for our next question.

Speaker 1: And our next question coming from the line of Lynn Hysel from Goldman Sachs. Your line is open.

And our next question coming from the line of Lianhai itself from Goldman Sachs. Your line is now open.

Hi, Thanks for taking my question two quick questions on the financials the.

Speaker 15: Hi, thanks for taking my question. Two quick questions on the financials. The first one is, as you're still enrolling for Card 5 and now starting to enroll for Card 6, and the R&D expenses remain flat for over a quarter, how should we see the R&D spending in fourth quarter and

First of all it is.

Yes.

Rolling into a car five and now starting to Angola, RC and R&D expenses remained flat quarter over quarter also we see the R&D spending in the fourth quarter and in 2024 and the second question is it seems that the gross profit margin slightly decreased.

Speaker 15: And the second question is, it seems that the gross profit margin slightly decreased quarter over quarter. And can you share with us any colors on potential gross profit margin improvement?

<unk>.

Can you share with us.

Any color on potential.

Profit margin improvement.

The near term.

Speaker 4: Hi, this is Lori. In regards to the R&D spend, I think you'll see a consistent quarter over quarter. I mean, the activities itself have been pretty consistent with our investment in front lines for the Curvixi program, as well as our pipeline. So we continue going into 2024, we expect to see continual spend consistent with our historic.

Hi, this is Lori.

<unk> to the R&D spend I think you'll see a consistent quarter over quarter I mean, the activities itself has been pretty consistent with our investment in frontline's further corrective program as well as our pipeline continues going into 2024, and we expect to see continual.

Spend consistent with our historic.

Okay.

I'm sorry can you repeat the second question.

Yes, Sir the second question is about gross profit margin.

Speaker 15: Yeah, sure. The second question is about the gross profit margin. When do we expect to see a further increase on profit?

When do we expect to see further decrease a decrease on the profit margin.

Okay.

Speaker 4: So from a gross margin perspective, we have been seeing improvements from a product perspective. As a reminder for gross margins, we have the product gross margin in there as well as the op-ex related to the investment.

So from a gross margin perspective, we have been seeing improvements from a product perspective as a reminder for gross margins.

The product gross margin in there as well as the opex related to the investment.

Speaker 4: So, that's why it's hard for you to see the continual improvement in gross margins. Because as we've talked about, we continue to expand our capacity with manufacturing. So, we continue to have expenses getting in that gross margin line. But as our volumes have increased, and as we've made also some process improvements, our margins are improving from a product perspective. But we don't give specific guidance on those actual percentages.

That's why it's hard for you to see the continual improvement in gross margins because as we've talked about we continue to expand our capacity with manufacturing. So we continue to have expense hitting in that gross margin.

But as our volumes have increased and.

As we've made also some process improvements our margins are improving from a product perspective, but we don't give specific guidance on those actual percentages.

Okay.

Got it thanks.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Jonathan Miller from Evercore SI, your line is open.

Thank you.

Our next question.

And our next question coming from the line of Jonathan Miller from Evercore ISI. Your line is now open.

Speaker 6: Hi, guys. Thanks for taking my question. I'm going to ask about DLL-3, actually, as an entree to solid tumors more broadly. Can you walk us through the dose levels for the DLL-3 phase 1 versus CAR-VIC-D, and maybe talk a little bit about how that relates to your expectations for dosing in solid tumors more broadly? And I have a follow-up. Thanks.

Hi, guys. Thank for taking my question.

Im going to ask about the DLL three actually as an entre to solid tumors more broadly can you walk us through the dose levels, where the Diablo III phase one versus quite Vicki and maybe talk a little bit about how.

That relates to your expectations for dosing in solid tumors more broadly and then I have a follow up thank you.

Speaker 6: Hey, John , thanks for the question. This is Dean. So if you look at our disclosure on clinical trials dot gov, you will see that we're planning to test four different doses ranging from point three minutes out per kilogram body weight up until one to two minutes out per kilogram body weight. So this is a weight based dosing plan and.

Hey, Jonathan Thanks for the question. This is dean so if you look at our disclosure on Clinicaltrials Gov, you will see that we're planning to test for different doses ranging from <unk>.

3 million cells per kilogram body weight.

Tier one to two minutes.

Per kilogram body weight. So this is a weight based dosing plan.

And.

Because this is a solid tumor and we foresee that you may need a little bit bigger dose than in the hematology, Kansas. So if you look at our prior dose ranging finding trials for the hematology such as multiple myeloma indications. This is a little bit higher starting dose give.

Speaker 14: because this is a solid tumor and we foresee that you may need a little bit bigger dose than in the hematology cancers.

Speaker 14: So if you look at our prior dose ranging finding trials for the hematology, such as multiple myeloma indication, this is a little bit higher starting dose, given that we probably need a larger amount of T cells. But on the other hand, we did put an armor, namely the dominant negative TGF beta armor to help expansion and penetration to the tumor setting. So that is the dose we're looking at for DL3 in phase one.

Given that we probably need a larger amount of T cells, but on the other hand, we did put in armor.

Namely, India dominant negative TGF beta armor to help expansion and penetration into the tumor setting.

So that is the dose we are looking at for Dr.

And phase III.

Okay.

Speaker 6: Thank you. And then on the CARTITUDE 4 label, can you remind us how big an impact that will have on out-of-spec rate when, assuming it does get approved? And should we expect that out-of-spec rate change to happen immediately on approval, or will there be a ramp period or some sort of recertification for that? Thank you.

Thank you and then on the quota to four label can you.

Remind us how big an impact that will have an out of spec rate.

Assuming it does get approved and should we expect that out of spec rate change to happen immediately on an approval or will there be a ramp period or some sort of reclassification for them.

Sure so.

Speaker 14: In part of our SBLA filing submitted to the FDA, we asked the agency to widen the release spec based on the clinical data from the phase 3 randomized controlled trial in second line and beyond population. Because we provided a significant amount of so-called sensitivity analysis to the agency, trying to correlate the release spec with the clinical outcomes, such as TFS and survival. So based on that data, we and our partner at GNG are very confident that we should be able to receive a wider release spec.

And part of our SPL E filing submitted to the FDA, we ask the agency to widen the release back based on the clinical data from the phase III randomized controlled.

Trial in second line and beyond population.

So we provided a significant amount of a so called a sensitivity analysis to the agency trying to correlate the release back with the clinical outcomes, such as PFS and survival.

So based on that data we.

And our partner at J&J are very confident that we should be able to receive a wider release back and if we do receive such a wide already spectrum agency. Then eventually we hope that the out of spec rate can decrease by additional five to 10 percentage points from where it is today that is all <unk>.

Speaker 14: And if we do receive such a wider release back from the agency, then eventually we hope that the out-of-spec rate can decrease by additional 5% to 10% points from where it is today. That is our expectation, of course. We have to wait until we see the label and also the FDA-approved release back next April when the PDUFA date hits. But that is our hope. And to the second part of your question, let's say if we do receive a label and a wider release back today, it is going to take a little bit of time. Because once we start to roll out the second line in the market and then we start to see more uptake, you will gradually see that lower OS will take place in the manufacturing process.

<unk> of course, we have to wait until we see the label and also the FDA approved a release back.

Next April when you have had your first data yet but that is our hope.

<unk>.

So the second part of your question, let's say, if we do receive a label and a wider release back today. It is going to take a little bit of time, because once we start to rollout. The second line in the market and then we start to see more uptake. Your graduate do you see that lower or will take place in the manufacturing process.

Speaker 6: Just to clarify what you just said there, when you say you'll take a little time to see that out-of-spec benefit come through, is that because you're only going to see that out-of-spec benefit in the second-line plus patients? Is it not going to also apply to manufacturing and later lines?

Just to clarify what you just said there when you say you did take a little time to see that out of stack benefit come through is that because youre only going to see that benefit in the second line plus patients is it not going to also apply to manufacturing in later lines.

Speaker 14: Um, you raise a very good question, Joe. Um, unfortunately, I don't have answer to you because

You raise a very good question John.

Fortunately I don't have answer to you because we would have.

Speaker 14: we would have to wait and see what the agency gives us. It's possible that we'll get a uniform release back from both the first indication and the second indication, but it's also possible that the agency decides to give us two sets of release backs, which haven't before, I'm sure you're aware, to one of the CD19 CAR-Ts in the market. So at this point, I actually don't know the answer, but it's a very good question. We'll have to wait and see what the FDA says.

Wait and see what the agency gives us.

Possible that we'll get a uniform release back from.

The FERC indication and a second indication, but it's also possible that the agents decided to give us to setup release facts, which happened before I'm sure you're aware too one of the CD 19 car Ts in our market. So at this point I actually don't know the answer but it's a very good question, we will have to wait and see what the FDA says.

Great. Thanks, so much.

Thank you our next question.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Asperma from UBS Yelena Sofya.

Our next question coming from the line of.

Burma from UBS Your line is open.

Hey, guys. Thanks for taking my question good morning, I have two.

Speaker 16: Hey, guys, thanks for taking my question. Good morning. I have to so just in terms of your partnership with know what is, could that eventually allow you to use their teachers program to, you know, for the lower the carpet TV into in.

So just in terms of your partnership with Novartis conduct eventually allow you to use the P type program.

<unk>.

The lower <unk> doing.

Speaker 16: time. And then second one, just wanted to see where you are on the Cardio 2 study with the cohort E and F. I just wanted to get an idea. Is that something that we could see at the ASH Abstracts Late Breaker tomorrow? Or is this more for ASCO next year?

And then second one just wanted to see maybe you are on the <unk> two study with the cohort E&S I just wanted to get an idea is that something that you could see at the late breaker tomorrow or is this more for next year. Thanks.

So for the <unk> platform, it's a unique manufacturer platform developed by Novartis and this is the only apply for.

Speaker 9: So for the T-Charger platform, it's a unique manufacturing platform developed by Novartis. And this is only applied for LB2102. Internally, we are also developing novel manufacturing process. And we are going to move internal developed manufacturing process into other cell-cell-product in the future. Thank you.

<unk> Wow two internally we are also developing novel manufacturing process.

And we are going to move internal development manufacture process on.

<unk>.

SaaS apps product in the future. Thank you.

Speaker 14: Ash, this is Gene. I'll take the second part of your question, which has to do with the Part C2 cohort E and F.

As this is Ian I'll take the second part of your question, which has to do with the card <unk> cohort E. L F.

Speaker 14: So I can tell you that at this point, we have completed the enrollment for both CODE Partitude II Cohort E and F in the newly diagnosed patient cohort. But we're not going to release data at this moment because, as you know, typically in the frontline setting, the PFS is relatively low.

So I can tell you that at this point, we have completed enrollment for both.

Two cohort E and F in the newly diagnosed patient cohort.

We're not going to release data at this moment because as you know typically in the frontline setting.

First is relatively low so we believe it will be more informative when we presented data with a longer follow up. So you should stay tuned when we present, our cohort and out in the future. Thank you.

Speaker 14: So, we believe it will be more informative when we present data with a longer follow-up. So, you should stay tuned when we present corporate ENF in the future. Thank you.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Casas Priotas from BMO Capital Markets. Your line is open.

Thank you our next question and our next question coming from the line of Costa Spangle just.

From BMO capital markets. Your line is open.

Okay.

Speaker 17: Hello, everyone. Thanks for taking our question and congrats on the quarter one question from us on.

Hello, everyone and thanks for taking our question and congrats on the quarter one question from us on.

Speaker 17: the clinical ongoing trials. Can you comment on whether the enrollment in category 5 is completed? And given that the category 6 trial is slightly larger than category 5, should we expect any impact from this increase on the commercial slots, or these two are somewhat independent now with the clinical manufacturing support from Novartis and the GARB sites? Thank you.

The clinical are ongoing tiles can you comment on whether the enrollment in coffee with Pi is completed and given that the capital seeks tile is slightly a lot of data around cognitive five should we expect any impact from these increase on the commercial slots or these two are somewhat independent now with the <unk>.

Clinical manufacturing support from Nevada.

Got it sites. Thank you.

Speaker 14: Thank you, Kosta, for your questions. So on CAR-T2-5, we're very much on track to complete the ex-US enrollment of CAR-T2-5 by end of this year. And now we're looking at potentially over-enrolling CAR-T2-5 in the US because, as I mentioned previously in this call, we would like to have a very representative US patient population in the overall patient enrolled in CAR-T2-5. So we're going to probably extend the US enrollment by about one quarter into the first quarter of next year. But at this point, I can tell you that we're very pleased with the enrollment status. Like I said, we're pretty much down for the ex-US portion for CAR-T5 by end of this year. So everything is going according to plan. But we do want to over-enroll in the US.

Thank you Costa for your questions. So on cartoon five.

We're very much on track to complete the ex U S enrollment of cardio five by end of this year and now we're looking at potentially over enrolling card issued five.

In the U S. Because as I mentioned previously in this call we would like to have a very representative of the U S patient population in the overall.

Patient enrolled in cardio five so we're going to probably extend the UFC enrollment by about one quarter into the first quarter of next year.

But at this point I can tell you that we're very pleased with the enrollment status like I said, we're pretty much down for the ex U S portion for cardio five by end of this year. So everything is going according to plan, but we do want to over enroll in the U S. Given the demand from patients and also given the fact that we'd like to have a higher percentage of U S patients in this trial on <unk>.

Speaker 14: given the demand from patients and also given the fact that we would like to have a higher percentage of U.S. patients in this trial. On Carter Tuesday,

Two six we just started our first patient last month.

Speaker 14: We just started our first patient last month in Spain, and it will probably take us about a couple of years while we enroll. So regarding to the production, we likely will utilize our Gantt facility that's coming online next month to start production of CardiTube 6.

And it will probably take us about a couple of years.

So regarding to the production.

We likely will utilize our Kent facility, that's coming online next March to start production card achieved six.

Speaker 11: We could also use additional capacity from our CDMO to satisfy that demand for Cardioid 6 production. That is our current plan now.

Also used additional capacity from our CMO to satisfy that demand forecast six production that is our current plan now.

Okay.

Thank you one moment for our next question.

Speaker 1: And our next question coming from the line up, Justin Selin with BGIG. The line is open.

And our next question coming from the line of Justin <unk> with <unk>. Your line is open.

Speaker 18: Thanks for taking the questions and congrats on a strong quarter. So, can you give us an update on the out of spec rate for Curvixi today, just how things have been trending? And second, just on pipeline strategy, will you look to continue to seek partnerships for your pipeline assets in the future, or could you internally develop them and bring them forward? Thank you.

Thanks for taking my questions and congrats on the strong quarter. So can you give us an update on the out of spec rate for perfect day today, just how things have been trending and second just on pipeline strategy. When you look to continue to seek partnerships for your pipeline assets in the future or.

Could you internally developed them and bring them forward. Thank you.

Suggesting I'll talk about the out of spec rate.

Speaker 14: So, Justin, I'll talk about the out-of-spec rate question. We're very pleased where things have been trending in the last six months also. Our out-of-spec rate has been decreasing and also stabilizing, and it's been consistently in the teens range. And right now, it does stand below the 18 percent on-label out-of-spec rate, thanks to the very hard – very much hard work from the Legend team and J&J team in the New Jersey facility.

<unk>.

We're very pleased where things have been trending in the last six months or so.

Our out of spec rate has been decreasing and also stabilizing and.

It has been consistently in the teens range and right now it does stand below the 18% on label on our spec rate. Thanks to the very hard very much hard work from the legend team and J&J team in the New Jersey facility. We haven't really tried very hard to refine our manufacturing our protocol by look at various reasons for OLED.

Speaker 14: We have really tried very hard to refine our manufacturing protocol by looking at.

Speaker 14: various reasons for OS and also improving OS on various workstreams.

And also improving Oh as various work streams. So thats, where we are I don't think we are very much <expletive>.

Speaker 14: So that's where we are. I don't think we're very much different from the competitions out of spec rate at this point. So I think we're seeing a very encouraging trend. And like I mentioned, we do expect this to continue to go down, especially after FDA approved the second line indication. On the pipeline, the BD question, I'm gonna refer that to our colleague, Guo Wei.

From the competitions.

I wouldn't speculate at this point, so I think.

We're seeing a very encouraging trend and like I mentioned, we do expect it to continue to go down, especially after FDA approved the second line indication.

On the pipeline the BD question I'm going to refer that to our aquatic boy.

Yes, thanks for the question.

Speaker 9: Yeah, thanks for the question. In terms of pipeline development strategy, we are open to both internal development as well as seeking out the collaboration partnership. Our goal of pipeline development is to accelerate the development timeline and maximize the value.

Pipeline development strategy, we are open to both internal development as well seeking out collaboration partnership Oh.

Pipeline the remedies.

Accelerated the development timeline and maximize the value for.

Speaker 9: for each individual asset, so that we can bring differentiated and potentially transformative therapy to patients with asthma. In this particular case for LB2102, we see a unique synergy between ourselves and Novartis. We have a unique product design, a unique construct sequence, and a unique armament mechanism to facilitate the

For each individual assets is that can we can bring differentiated and potentially transformative therapy to.

Patients some of them.

In this particular case for L B 21 or two.

<unk> unique synergy between our self and Novartis. So we have a unique product design a unique.

Construct sequence and a unique almond mechanism to facilities.

Immune cell infiltration and overcome.

Immune suppression in the tumor micro environment, whereas novartis has a unique manufacturing process, which is particularly important for a disease of the small cell lung cancer.

The disease progress very fast and fastener manufacturer process that would add value to the product profile.

It pays we see the synergy and then in the future.

We continue to evaluate the asset by asset and try to find the seamless Jen realized.

Speaker 9: additional value where it's possible. At the same time, if we have an asset we can develop by ourselves, we will also do it either way. Thank you.

Additional value, where it's possible at the same time.

For us that we can do math.

Our south without also add to it.

Speaker 19: it that way. Thank you. Thanks for taking my questions. Thank you. One more for our next questions. And our next question coming from the line of Michele Kapoor from HC Wind Regulon is open. Hi, everyone. Thanks for taking the questions. I just wanted to ask a little bit more about the supply constraints and if you could give kind of a quantitative sense of where we are in terms of meeting demand. I think at one point there was a lot of supply

Thank you.

Yeah.

Thanks for taking my questions.

Thank you our next question.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Michelle Kapoor from HCP.

And our next question coming from the line of Mitchell Kapoor.

From H C. Wainwright your line is open.

Speaker 19: Hi, everyone. Thanks for taking the questions. I just wanted to ask a little bit more about the supply constraints and if you could give kind of a quantitative sense of where we are in terms of meeting demand. I think at one point there was a lot of supply exceeding demand in terms of, you know, I think there was about 15% being able to be met. Could you just talk about where we're at today and if you can't, you know, give a quantitative number, could you just kind of help us understand the trend?

Hi, everyone. Thanks for taking my questions I, just wanted to ask a little bit more about the supply constraints and if you could give kind of a quantitative sense of where we are in terms of meeting demand I think at one point.

There was a lot of supply exceeding demand in terms of I think there was about 15% being able to be Matt could you just talk about where we're at today and if you can't give a quantitative number could you just kind of help us understand the trend.

Speaker 14: Good morning, Mitch. Thanks for the question and I'm going to answer this one.

Good morning, Mitch Thanks for the question and I'm going to answer this one so.

Speaker 14: If you look at the reported revenue last quarter, which was $152 million and $140 million coming from the U.S., you sort of can guesstimate the number of patients we served in the commercial setting last quarter.

If you look at the reported revenue last quarter, which was $152 million and $140 million coming from the U S. You thought of Ken Guesstimate the number of patients we serve in the commercial setting last quarter.

Speaker 14: I cannot give you exactly the percentage of demand we are satisfying, but I can tell you, starting from the beginning of the year, we always track our backlog in terms of patients waiting in the queue every month. And I can tell you from January until now, really, essentially, we're seeing exactly pretty much the same number of patients in the backlog in the queue. So we're not seeing any difference in terms of demand for this product at this point.

I cannot give you exactly the percentage of demand we are satisfying but I can tell you starting from the beginning of the year, we always track our backlog in terms of patients waiting in the queue every month and I can tell you from January until now.

Essentially we're seeing exactly at pretty much the same.

Number of patients in the backlog in the Q. So we're not seeing any difference in terms of demand for this product at this point.

Speaker 14: Um, and we're working very hard to ensure a robust and reliable supply. So we are going to continue to expand our supply. As you just heard from our colleagues on the call, we did receive the second FDA approval in the increase of our capacity recently. So we're continuing to ramp up, given that approval, and then we're planning additional increase in capacity from our New Jersey facility next year as well. If you look at the number of patients we think are within the so-called addressable market in the U.S.,

And we're working very hard to ensure a robust and reliable supply. So we are going to continue to expand our supply as you just heard from our colleagues are on the call. We did receive the second half da approval in the increase of our capacity recently, so we're continuing to ramp up.

Given that the approval and then we're planning additional increases.

Capacity from our New Jersey facility next year as well.

If you look at a number of patients we think are within the so called addressable market in the U S.

Speaker 14: About 13,000 patients die every year, unfortunately, from multiple myeloma.

About 13000 patients die every year, Unfortunately for multiple myeloma and probably around.

Speaker 14: and probably around 8,000 to 9,000 patients are eligible for receiving CAR T therapy. So at this point, given our supply, we think still we're nowhere near being able to supply all the demand for Covictia at this point.

8% to 9000 patients are eligible for a receive a car T therapy. So at this point given our supply we think steel, we're nowhere near being able to supply all the demand for a big deal at this point.

Speaker 11: Okay, thank you very much. And could you just kind of help us understand what the launch preparation is looking like for moving into earlier lines? Is it mainly just messaging changes with the sales force? Or what else? Can you tell us about how you're preparing if approved? Yeah, hey, Matt.

Okay. Thank you very much and could you just kind of help us understand what the launch preparation is looking by for moving into earlier lines is it mainly just messaging changes with the salesforce or what else can you tell us about how you are preparing for launch.

Approved.

Yeah, Hey, Matt I'll take that Steve.

Speaker 7: So no, it's a bit different, right? So you're moving from a later line population that was largely, these patients were largely in many of our major academic centers. In the earlier lines from the second line population, this will be a very different type of launch where you're largely reliant on the referral. So what the US team has been working very closely with our partner is working through the models in terms of how to appropriately reach that outpatient clinic to ensure that an appropriate referral.

So no it's a bit different right. So you are moving from a later line population that was largely these patients were largely in many of our major academic centers in.

In the earlier lines from the second line population. This will be a very different type of launch where you are largely reliant on the referral so what with the U S team has been working very closely with our partner is working through the models in terms of how to appropriately reach that outpatient clinic.

To ensure that an appropriate referral is made.

Speaker 7: to one of our cell-to-cell centers? So it's a bit different. You'll see some increase in FTE expansion on behalf largely of our partner at Janssen because they play largely in that outpatient space. From the U.S. legend perspective, you'll see some increase as we increase sites, but our commercial footprint for legend has been largely built around the inpatient setting as opposed to outpatient. I hope that answers your question.

Two one of our silver sell centers, so it's a bit different youll see youll see some increase in FTE expansion on behalf largely of our partner Janssen because they play largely in that outpatient space.

From the from the U S legend perspective, Youll see some increase as we increase sites, but our commercial footprint for legend has been largely built around the inpatient setting as opposed to outpatient I hope that answers your question.

Speaker 19: It does. Thank you all very much for taking the questions. Thank you. Thank you.

It does thank you all very much for taking the questions. Thank you. Thank you.

Thank you and our next question coming from the line of will Fredkin Goodbye.

Speaker 1: Thank you. And our next question coming from the line of Wilfred Huyen from DY Yonis Open.

Your line is open.

Hello.

Speaker 20: Hello. Well, congrats on the result and thank you for taking my questions. Well, I just have a follow-up on the gross margin currently at 43, 44% over the past two quarters. So, and you mentioned about the expanding capacity.

Congrats on the results and thank you for taking my questions well I just have a follow up on the gross margin currently at 43, 44% over the past two quarters.

So and you mentioned about the expanding capacity.

Speaker 20: So what are the other drivers on margin, on the gross margin, given we have multiple facilities, both internal and external coming online, as well as an improving overspec rate. So what are the key thing part actually, and how should we be thinking of margin profile, maybe even in a longer term as well? Thank you.

The other driver on margin on the gross margin.

Multiple facilities, both internal and external coming online as well as an improving our spend rate. So what are the key moving parts actually.

How should we be thinking of the margin profile, maybe even in the longer term as well. Thank you.

So just on.

Speaker 4: So, just on the growth margin again, as we talked about, there's two components in the growth margin. So, from your perspective when you look at quarter over quarter, it's a little bit hard for you to model it out.

The gross margin again as we've talked about there's two components in the gross margin. So from your perspective, when you look at quarter over quarter, it's a little bit hard for you to model it out.

Speaker 4: As I mentioned before, we continue to see improvement in the gross margin from a product perspective. Your gross margins are going to improve as your volumes go up.

As I mentioned before we continue to see improvement in the gross margin from a product perspective.

Gross margins are going to approve as your volumes go up.

Speaker 4: We've also have our out of spec that's gone down based upon also process improvements we've made at the plant. So we're seeing the steady progression of the improvement under the gross margins from a product perspective. But you're going to continually get noise in that number we report externally. Because we have to report the facilities expansion, the expense side of it that cannot be capitalized.

So have our out of spec that's gone down based upon also a process improvements we've made at the plant. So we are seeing the steady progression of the improvement under gross margin from a product perspective, but.

Get noise in that number we report externally because we have to report the facilities expansion and the expense side of it that cannot be capitalized and as you know we have expansion going on in Raritan, we have expansion going on in Belgium, and we also have expansion going on.

Speaker 4: And as you know, we have expansion going on in Raritan, we have expansion going on in Belgium, and we also have expansion going on with our CMOs. So you're going to continue to see a lot of facilities expense related to those capital investments.

With our CMO, so youre going to continue to see a lot of facilities expense related to those capital investments through.

Speaker 4: through the end of 2025, so it's going to create noise. Some quarters are going to be higher than others, just depending upon where we are with some of those capital projects.

Through the end of 2025, so it's going to create noise.

Quarters are going to be higher than others, just depending upon where we are with some of those capital projects.

Speaker 4: But if there's something specific, if you want to talk and submit more of question, and we can always set up a call with you and try to go over a little bit more detail, but I can't give any granular numbers. I can't disclose any granular numbers from a product perspective.

But if there's something specific if you want to talk and submit a more a question and we can always set up a call with you and try to go over a little bit more detail, but I can't give any granular numbers I can't disclose any granular numbers from a product perspective.

Understood. That's helpful. Thank you.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Kelsey Goodwin with Guggenheim. Your line is open.

Thank you our next question.

Our next question coming from the line of Kelsey Goodwin with Guggenheim. Your line is open.

Oh, Hey, good morning, Thanks for taking my question and congrats on the quarter.

Speaker 2: Oh, hey, good morning. Thanks for taking my question, and congrats on the quarter. I guess two quick ones from me. I guess first, do you have any updated view on how we should think about profitability for the joint venture, maybe kind of building on some of these past questions on gross margin, and then kind of following up on that? I guess how should we think about the longer-term COGS for CARVICTY kind of once these capital expenses are no longer included in those line items?

Two two quick ones from me I guess first do you have any updated view on how we should think about profitability for the joint venture maybe kind of building on some of these past questions on gross margin and then kind of following up on that I guess, how should we think about the longer term Cogs for perfect day. One once these capital expenses are no longer.

In those line items.

Speaker 8: And, yeah, maybe kind of what out-of-spec and manufacturing failure rate do you base in the assumption for longer-term COGS? Thank you.

<unk>.

Yeah, maybe kind of what out of spec and manufacturing failure rate do you baked in the assumption for longer term Cogs. Thank you.

Speaker 4: Hi Kelsey, so profitability the messaging is still consistent with what we've signaled before or the BCMA program. We're looking to have break even and profitability by the end of 2025.

Hey, Kelcey, so profitability the messaging is still consistent with what we signaled before.

The CMA program, we're looking to have breakeven and profitability by the end of 2025 and from a company perspective are striving for profitability by 2026, and I always just put a disclaimer in there it will depend upon what happens with our pipeline development.

Speaker 4: And from a company perspective, we're striving for profitability by 2026.

Speaker 4: And I always just put a disclaimer in there. It will depend upon what happens with our pipeline development, what we look to do from a business development perspective. But based upon the trajectory of what we know now, that is what we've been signaling. From a longer term COGS, as I mentioned earlier, you're going to continue to see noise in that COGS line all the way through at the end of 25 going into 2026.

Look to you from a business development perspective, but based upon the trajectory of what we know now that is what we've been signaling from a longer term call.

As I mentioned earlier Youre going to continue to see noise in that Cogs line, all the way through to the end of 'twenty five going into 2026.

Speaker 4: We're not giving any guidance on our actual COGS. I would say for your modeling purposes, you could probably use what's been the standard in the industry. It would be a good proxy for you for your modeling.

We're not giving any guidance on our actual Cogs I would say for your modeling purposes, you could probably use what's been the standard in the industry.

Would be a good proxy for your for your modeling.

Okay.

Speaker 8: Okay, great. Thanks. And maybe just one quick follow up then on the profitability, I guess, to what extent is that break even profitability by 2025? How much is that reliant on hitting that 10,000 commercial doses by the end of the year?

Okay, great. Thanks, and maybe just one quick follow up then on.

On the profitability I guess to what extent is that breakeven profitability by 2025, how much is that reliant on hitting that 10000 commercial doses by the end of the year.

Speaker 14: Kelsey, I hope you understand that we cannot really disclose our internal modeling.

Galaxy I hope you understand that we cannot really disclose our internal modeling.

But.

What I can say is that if you look at the Cogs for car T. As a general modality. The cost of goods is probably from a higher than typical cost of goods of monoclonal antibodies. However, the SG&A in terms of selling and distribution costs it'll be much lower you can tell that from our financials right, while we almost quadrupled.

Speaker 14: a general modality. The cost of goods is probably somewhat higher than the typical cost of goods of monoclonal antibodies. However, the SG&A in terms of selling and distribution cost, it will be much lower. You can tell that from our financials, right? While we almost quadrupling our sales for CARVICTI this year versus last year, if you look at quarterly spend in sales and marketing, it's actually slightly lower than what we spent last year. So that gives a hint how we think about the profitability of CARVICTI in the long run. Thank you.

Our sales for car Victor this year versus last year, if you look at quarter.

The quarterly spend in sales and marketing, it's actually slightly lower than what we spent last year. So that gives you a hint how.

Speaker 5: how we think about the profitability of CARVICT in the long run. Thank you. Got it. Okay.

How do we think about the profitability of carving out India Laura Thank you.

Got it okay. Thank you so much.

Thank you.

Hello, gentlemen, our next question.

Speaker 1: And our next question, coming from the lineup, Sammy Corwin with William Blair, your line is open.

And our next question coming from the line of Sami Corwin with William Blair. Your line is open.

Speaker 21: Good morning. Thanks for taking my question. I'm giving you plan on over enrolling card to five. Now, will that delay when we should expect data from that trial and then do you plan on providing any revenue guidance for curvy at the beginning of twenty twenty four.

Good morning, Thanks for taking my question I'm, giving you plan on over enrolling card achieved five now that go away. When we should expect data from that trial and then do you plan on providing any revenue guidance for Kirby D. I b.

The beginning of 2024.

Speaker 14: Thanks for the question, Sammy. So on the first question, no, we don't expect any delay. Because like I mentioned, we are pretty much on track to close all the ex-US enrollment for CAR-T5, which is the majority of patients by end of this year. That's exactly according to our plan. And then we're only over-enrolling in the US next quarter just to make sure that we have a representative percentage of US patients in this trial. So at this point, we do not expect any delay in terms of readout of CAR-T5.

Thanks for the question. So on the first question no. We don't expect any delay because like I mentioned, we are pretty much on track to close all the ex U S enrollment in <unk>, which.

Which is the majority of patients by end of this year, that's exactly according to our plan and then we're only over enrolling in the U S. Next quarter just to make sure that we have a representative percentage of U S patients in this trial. So at this point, we do not expect any delay in terms of readout of <unk> five.

Speaker 14: And then on product guidance, we're not really giving product guidance for 2024 because our partner, J&J, has this policy of not providing product-specific guidance. So unfortunately, we will not be in a position to provide you with guidance for CARB-T sales.

And then.

Product guidance.

We're not.

Giving product guidance for year 2024, because our partner J&J has this policy of not providing product specific guidance.

Unfortunately, we bought not be in a position to provide you with our guidance for cardiac yourself.

Yeah.

Got you. Thank you.

Okay.

Okay.

Speaker 1: Thank you, and at this time we have no further questions in the queue. Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation and you may now disconnect.

Thank you.

At this time, we have no further questions in the queue, ladies and gentlemen, This concludes today's conference call.

You all for your participation and you may now disconnect.

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Speaker 1: Good day, ladies and gentlemen. Thank you for standing by. Welcome to Legend Biotech Reports third quarter 2023 financial results conference call. At this time, all participants on a listen only mode.

Good day, ladies and gentlemen, thank you for standing by welcome to legend Biotech reports third quarter 2023 financial results Conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question. During the session you will need to press star one wanting you to.

Speaker 1: After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1-1 on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference...

Telephone you will then hear an automatic message advising yohan histories. Please note that today's conference maybe recorded.

Speaker 1: I will now hand the conference over to your speaker host, Jessie Young, head of investor relations and public relations. You may begin.

I will now hand, the conference over to your Speaker host Jesse I head of Investor Relations and public relations you may begin.

Speaker 2: Good morning, this is Jessie Yang, Head of Investor Relations and Public Relations at Legend Biotech.

Good morning. This is Jesse head of Investor Relations and public relations at legend biotech.

Speaker 2: Thank you for joining our conference call today to review our third quarter 2023 performance.

Thank you for joining our conference call today to review, our third quarter 2023 performance.

Speaker 2: Joining me on today's call are Ying Huang, the company's chief executive officer, and Laurie McCumber, the company's chief financial officer.

Joining me on today's call are young Wang the company's Chief Executive Officer, and Lori Mccumber, the company's Chief Financial Officer.

Speaker 2: Following the prepared remarks, we will open up the call for Q&A. We will be joined by Guo Wei Fan, Chief Scientific Officer, and Steve Scavo, Head of Commercial Development for the U.S. and Europe .

Following the prepared remarks, we will open up the call for Q&A, we'll be joined by Huawei fan Chief Scientific Officer, and Steve Scafell head of commercial development for the U S and Europe.

Speaker 2: During today's call, we will be making forward-looking statements, which are subject to risks and uncertainties that may cause our actual results to differ materially from those expressed or implied herewithin.

Joining today's call, we will be making forward looking statements, which are subject to risks and uncertainties that may cause our actual results to differ materially from those expressed or implied here with it.

Speaker 2: These forward-looking statements are discussed in greater detail in our SEC filings, which we encourage you to read and can be found under the investment section of our company website. Thank you. I will now turn the call over to Ying.

These forward looking statements are discussed in greater detail in our SEC filings, which we encourage you to read and can be found under the investors section of all come on the website.

Thank you I will now turn the call over to Yang.

Speaker 3: Good morning and thank you for joining us today to discuss the third quarter financial and corporate accomplishments of Legend Biotech.

Good morning, and thank you for joining us today to discuss the third quarter financial and corporate accomplishments of legend biotech.

Speaker 6: We are pleased with the progress we have made over the last quarter to advance our portfolio and pipeline of innovative therapies that are focused on addressing the serious and intractable disease patients face.

We are pleased with the progress we have made over the last quarter to advance our portfolio and pipeline of innovative therapies that are focused on addressing the serious and intractable disease patients face.

Speaker 3: Last week, we announced that we have entered into an exclusive global licensing agreement with Novartis, which grants Novartis the right to develop, manufacture, and commercialize LB2102 and other potential CAR T therapies, selectively targeting DLLs.

Last week, we announced that we have entered into an exclusive global licensing agreement with Novartis, which grants novartis the rights to develop manufacture and commercialize L. B 2102, and other potential car T therapies selectively targeting D O L. Three.

L. B 2102 is an investigational autologous chimeric antigen receptor T cell therapy for the treatment of adult patients with extensive stage small cell lung cancer.

As part of this agreement, we will receive an upfront payment of $100 million and are eligible to receive up to $1.01 billion in milestone payments.

Speaker 3: As part of this agreement, we will receive an upfront payment of $100 million and are eligible to receive up to $1.01 billion in milestone payments, as well as tiered royalties.

I'll ask tiered royalties on net sales.

Speaker 3: We'll also be reimbursed for development costs for the ongoing phase one clinical trial, which will evaluate the safety and efficacy in patients with small cell lung cancer and patients with large cell neuroendocrine carcinoma. And to determine the recommended dose for phase two study.

We will also be reimbursed for development costs for the ongoing phase one clinical trial, which will evaluate the safety and efficacy in patients with small cell lung cancer in patients with large cell.

Your endocrine carcinoma and to determine the recommended dose for phase II study.

We're excited by this transaction and we look forward to seeing how this therapy performs in the clinic.

Car Vicki Arthur cell continues to drive our revenue and direct our priorities. We have worked tirelessly to bring <unk> to patients who are eligible for treatment.

And our efforts are reflected in the total net sales of $152 million in third quarter.

Bringing total net sales for 2000 $23 million to $341 million so far this year.

Our third quarter performance was driven by ongoing market launches expanding market share and capacity improvements as well as the commercial launch of <unk> in Germany, which contributed to quarter over quarter X U S growth of 300%.

Speaker 3: Our third quarter performance was driven by ongoing market launches, expanding market share and capacity improvements, as well as the commercial launch of Carvita in Germany, which contributed to quarter over quarter ex-U.S. growth of 300 percent.

In the U S.

Speaker 3: with experience growth of 23% quarter over quarter.

We're experienced growth of 23% quarter over quarter.

Speaker 3: We remain steadfast in our goal to make Carvicti available and accessible to patients worldwide. And we look forward to sharing highlights of that journey with you today.

We remain steadfast in our go to make car victory available and accessible to patients worldwide and we look forward to sharing highlights of that journey with you today.

Speaker 3: We have progressively met strong demand for CARVICTI in collaboration with Janssen. First, Janssen has scaled the in-house production of lentivirus at its factories in Switzerland and has another factory in the Netherlands under construction to complement and support LV supply, which should be online by 2025.

We have progressively met strong demand for <unk> in collaboration with Janssen.

Janssen has scaled in house production of lengthy virus at its factories in Switzerland and has another factory in the Netherlands under construction to complement and support Lv supply.

Which should be online by 2025.

Speaker 3: LV expansion is crucial because it is often the rate limiting factor in any car key manufacturing and growing LV supply is an important front in our ramp-up.

L. B expansion is crucial because it is often the rate limiting factor any car T manufacturing and growing alvey supplies and importantly from in a ramp up.

Speaker 3: Second, we're still on track with our pre-plant capacity increase at our Ryerson site, and production from our CDMO is supporting that expansion next year.

Second we're still on track with our Preplanned capacity increase at our rights inside and production from our CDM always supporting that expansion next year.

Speaker 3: And third, the first of our state-of-the-art manufacturing facilities in Ghent has received a license from the Federal Agency for Medicines and Health Products in Belgium.

Third the first of our state of the art manufacturing facilities in Ghent has received a license from the federal agency for medicines and health products in Belgium.

Speaker 3: This was an important hurdle to clear, and once the investigation of medicinal product dossier is approved by local authorities, we'll begin manufacturing Pseudocell at Gantt for clinical use by end of this year. The Gantt facility will be an important part of the Carvictis supply chain network.

This was an important hurdle to clear and once the investigational medicinal product dossier is approved by local authorities will begin manufacturing suite to sell again for clinical use by end of this year.

Again facility will be an important part of our car victim supply chain network.

We're committed to bringing <unk> to more patients who are eligible for this important therapy, our manufacturing ramp up to support commercial delivery as well as our ongoing <unk> clinical development program with Janssen.

Speaker 3: We're committed to bring CARVICTI to more patients who are eligible for this important therapy. Our manufacturing ramp-up supports commercial delivery as well as our ongoing CARLITUDE clinical development program with Janssen.

Speaker 3: Of the five clinical trials evaluating SILTA cells, three are ongoing. And CARTITUDE 6, our phase 3 study for frontline patients, enrolled its first patient.

After five clinical trials evaluating suit yourself three are ongoing and Carter to your six our phase III study for frontline patients enrolled its first patient.

Speaker 3: The activation of one of our GEND facilities will enable us to continue the commercial ramp we began in the U.S. while onboarding new clinical patients.

The activation of one of our Oregon facility will enable us to continue the commercial ramp we began in the U S. While on boarding new clinical patients.

Speaker 3: In addition to making capacity enhancements, we work with roughly 60 certified treatment centers across the U.S. and are expanding access to CARVICTI in select European countries, including Germany.

In addition to making capacity enhancements, we work with roughly 60 35 treatment centers across the U S and our expanding access to car victory in select European countries, including Germany.

Speaker 3: Our teams are working hard on multiple fronts to bring this efficacious one-time treatment to patients in need.

Our teams are working hard on multiple fronts to bring this efficacious onetime treatment to patients in need.

Speaker 3: We are pleased to share that since COWS began in 2018, we have treated more than 2,000 people with Siltacel.

We're pleased to share that since trials began in 2018, we have treated more than 2000 people with CF herself.

Our pipeline is also robust and we're exploring the potential of cell therapies in both hematology malignancies and solid tumors.

Speaker 3: Our pipeline is also robust, and we're exploring the potential of cell therapies in both hematologic malignancies and solid tumors.

Speaker 3: The funds from our transaction with Novartis will primarily be used to develop other promising pipeline assets, such as our allogeneic cell therapy.

The funds from our transaction with Novartis will primarily be used to develop other promising pipeline assets such as our allogeneic cell therapies.

Speaker 3: The armoring used in LG2102 can also be deployed in other pipeline programs if validated in a clinic. We continue to explore innovation in our pipeline and are excited about their progression. Now I want to

The amarin using allergy to Wednesday O. Two can also be deployed in other pipeline program. If validate in the clinic, we continue to explore innovation in our pipeline and are excited about their progression.

Now I want to turn this to Laurie.

Speaker 4: Thank you, Ying, and good morning, everyone. As Ying mentioned, we are very pleased with the performance of our commercial product, Carvicti, this quarter, which generated approximately $152 million in total sales, an increase of 30% over the previous quarter, driven by ongoing market launches, expanding market share, and capacity improvement.

Thank you Ian and good morning, everyone. As gene mentioned, we are very pleased with their performance of our commercial product <unk> this quarter, which generated approximately $152 million in total sales an increase of 30% over the previous quarter, driven by ongoing market launches expanding market share and capacity improve.

Smith.

Speaker 4: That performance also represents 176% year-over-year increase.

That performance also represents a 176% year over year increase.

Speaker 4: As a reminder, we share equally in all profits and losses of Carvicti x China with our partner Janssen.

As a reminder, we share equally in all profits and losses of <unk> ex China with our partner Johnson.

Speaker 4: Starting with cash and cash equivalents, time deposits, and short-term investments of $1.4 billion, this will fund our planned operating and capital expenditures into 2025.

Starting with cash and cash equivalents time deposits and short term investments of $1 4 billion.

Fund, our planned operating and capital expenditures into 2025.

Speaker 4: Starting with revenue, total revenues for the third quarter were $96 million, consisting of $75.9 million in collaboration revenue from the sale of Carvicti and $20.1 million in licensed revenue for the achievement of a milestone during the quarter as outlined in the global development plan under the Janssen agreement for sit to sell.

Starting with revenue.

Revenues for the third quarter were $96 million, consisting of $75 9 million in collaboration revenue from the sale of <unk> and $21 million in license revenue for the achievement of a milestone during the quarter as outlined in the global development plan under the Allison agreement for CIT to sell.

Net loss for the three months ended September 32023 was $62 2 million or a loss of <unk> 17 per share compared to a net loss of 85 million or <unk> 26 cents loss per share for the same period last year.

Speaker 4: Net loss for the three months ended September 30, 2023 was $62.2 million or a loss of $0.17 per share compared to a net loss of $85 million or $0.26 loss per share for the same period last year.

Speaker 4: For the nine months ending September 30th, 2023, net loss was $373.4 million or a loss of $1.07 per share compared to a net loss of $310.5 million or a loss of $0.99 per share for the nine months ended September 30th, 2022.

For the nine months ending September 32023, net loss was $373 4 million or a loss of $1 <unk> per share compared to a net loss of $310 5 million or a loss of <unk> 99 per share for the nine months ended September 30th 2022.

Okay.

Speaker 4: Moving on to expenses, collaboration cost of revenue for the third quarter 2023 was $43.5 million compared to $25.5 million for the same period last year. These are Legend's portion of collaboration cost of sales in connection with the collaboration revenue under the Janssen agreement along with expenditures to support the manufacturing capacity expansion.

Moving on to expenses collaboration cost of revenue for the third quarter 2023 was $43 5 million compared to $25 5 million for the same period last year.

Legend portion of collaboration cost of sales in connection with the collaboration revenue under the Johnson agreement along with expenditures to support the manufacturing capacity expansion.

Speaker 4: Research and development expenses for the third quarter 2023 were $95.9 million, compared to $104.5 million for the same period last year.

Research and development expenses for the third quarter 2023.

$95 9 million compared to $104 5 million for the same period last year.

Speaker 4: The decrease of 8.7 million for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, was due to timing of expenses incurred in connection with the master technology transfer, manufacturing and clinical service agreement for VCMA CAR-T product with Johnson and Novartis Pharmaceuticals Corporation.

The decrease of $8 7 million for the three months ended September 32023, compared to the three months ended September 32022 was due to timing of expenses incurred in connection with the Master technology transfer manufacturing and clinical service agreement for VCA May car T product with Johnson and Novartis pharmacy.

<unk> Corporation.

Speaker 4: Administrative expenses for three months ended September 30, 2023 were $28.1 million compared to $23.2 million for the same period last year. The increase of $4.9 million year over year is primarily due to the expansion of administrative functions to facilitate continuous business growth and continue investment in building Legend Biotech's global information technology infrastructure.

Administrative expenses for three months ended September 32023, or $28 1 million compared to $23 2 million for the same period last year. The increase of $4 9 million year over year is primarily due to the expansion of the administrative functions to facilitate continuous business grow.

And continued investment in building legend biotech global information technology infrastructure.

Selling and distribution expense for the three months ended September 32023 was $21 1 million compared to $18 9 million for the same period last year the.

Speaker 4: Selling and distribution expense for the three months ended September 30th, 2023 was $21.1 million compared to $18.9 million for the same period last year, the increase of $2 million year over year due to costs associated with the commercialization of CARBIC-D.

The increase of $2 million year over year due to costs associated with the commercialization of perfecting.

Speaker 4: To wrap up, our spending remains on track and we continue to maintain a strong balance sheet. As of September 30th, we have $1.4 billion in cash and equivalents, deposits and investment, which Legend Biotech believes will fund operating and capital expenditures into 2025.

To wrap up our spending remains on track and we continue to maintain a strong balance sheet.

As of September 30, we had $1 4 billion in cash and equivalents deposits and investment, which legend biotech believes will fund operating and capital expenditures into 2025.

Speaker 4: Thank you. I will now pass it back to Ying for closing remarks.

Thank you I will now pass it back to you for closing remarks.

Speaker 3: Thank you, Laurie. 2023 continues to be another remarkable year for Legend Biotech, and we look forward to closing out the year strong in the fourth quarter.

Thank you Laurie.

2023 continues to be another remarkable year for legend biotech and we look forward to closing out the year strong in the fourth quarter.

Speaker 3: We have made considerable strides in enhancing our manufacturing capabilities and lowering our out-of-spec requirements.

We have made considerable strides in enhancing our manufacturing capabilities and lowering our auto spec rate.

Speaker 3: We're proud to be a fully integrated cell therapy company focused on both hematology, malignancies and solid tumors.

Proud to be a fully integrated cell therapy company focused on both hematologic malignancies and solid tumors.

Speaker 3: Looking forward, we'll continue to invest in our manufacturing capacity as we work to deliver COVID-19 to patients expeditiously and responsibly.

Looking forward, we will continue to invest in our manufacturing capacity as we work to deliver <unk> to patients expeditiously and responsibly.

Speaker 3: We'll also continue to expand our pipeline. At Legend Biotech, we strive to deliver long-term value to our shareholders and are encouraged by these developments.

We will also continue to expand our pipeline.

I'll, let Jim biotech, we strive to deliver long term value to our shareholders and are encouraged by these developments. Thank.

Speaker 3: Thank you for joining us today. We'll now open the call up for questions.

Thank you for joining US today, we'll now open the call up for questions.

Speaker 1: Thank you. Ladies and gentlemen, to ask a question, you will need to press star one one on your telephone and wait for your name to be announced.

Thank you, ladies and gentlemen to ask a question you will need to press star one on your telephone and wait for your name to be announced.

Please standby, while we compile the Q&A roster.

And our first question coming from the line of Gena Wang with Barclays. Your line is open.

Speaker 1: And our first question coming from the lineup, Gina Wang with Barclays, your line is open.

Speaker 22: Thank you for taking my questions. Also congrats on the great quarter. So maybe I have two questions. One is regarding, I think this morning we saw the news, the Bristol's BACMA now, they will require Atacom and Paducah pushed out. And maybe based on that news, what is your interaction with the FDA so far? And are you also anticipating an Atacom?

Thank you for taking my questions also congrats on a great quarter. So maybe I have two questions. One is regarding adding at this morning, we saw the news the.

Christos Backman now.

Will require AD com and produce it got pushed out and maybe based on that use what is your interaction with the FDA. So far and are you also anticipating an ad com.

Speaker 22: And the second question is regarding the competitive landscape in terms of, say, efficacy profile. We will see some update at ASH, you know, what is your thoughts regarding staying competitive? And the other related question is a commercial strategy in the outpatient.

Second question is regarding the competitive landscape.

In terms of efficacy profile, we will see some update at ash what is your thoughts regarding staying competitive in the other related question is the commercial strategy.

In the outpatient setting.

Speaker 14: Hi, good morning, Gina. Thanks for the question. So I'll take the first one first, which is regarding the outcome that will be hosted by FGA ODAC for our competition. So I can tell you that, um,

Hi, Good morning, Gina Thanks for the question. So I'll take the first one first which is regarding the.

Outcome that will be hosted by FDA <unk> for all competition. So.

I can tell you that.

Given our interactions with the FDA so far on our Carty two faultfinding clearly the agency placed an emphasis on the OS benefit overall survival benefit and typically the Aegean standard is that you have to demonstrate a significant PFS benefit.

Speaker 14: interactions with the FDA so far on our card to fall filing clearly the agency place an emphasis on

Speaker 6: the OS benefit, overall survival benefit. And typically, the aging standard is that you have to demonstrate a significant PFS benefit.

Speaker 6: with an overall encouraging trend in survival.

And overall encouraging trends and survival, so without disclosing anything better I can tell you is that.

Speaker 14: So without disclosing anything further, I can tell you that on August 4th, when we received the filing acceptance.

August 4th when we received the five years.

Speaker 6: for a country for by agency. We were advised that FDA was not planning to hold an outcome or advisory committee to discuss this document. That was as of August .

For a copy report by the agency, we were advised that FDA was not planning to hold an.

Advisory Committee to discuss this document that was as of August <unk>.

Speaker 14: Secondly, I'm also very pleased to tell you that as part of our so-called

I'm also very pleased to tell you that as part of volatile Claude.

Speaker 6: form of safety update. We did submit to the FDA additional data. And again, we are seeing a stronger trend of overall survival since the last update when the data was presented at ASCO. That's what I would say about the overall survival from CAR-T4. And we remain very confident on the profile for CAR-BP.

Formal safety update we did submit to the FDA additional data and again, we are seeing a stronger trend over survival at the end of last update when the data was presented at <unk>. So that's what I'll say about the overall survival from car T to fall and we remain very confident on the floor.

Sure.

Perfect.

Secondly, on ash and the competition.

Speaker 14: I'm not going to comment into any competitive data, but we stand behind the safety and efficacy of CARVICTI, which has been dosed by more than 2,000 patients already since we started the program. And that includes patients we dosed in the commercial setting after FDA approval last year, and also patients who are dosed in various CARDI-2 program and also CARDI-5 program in China. Thank you.

Comment into any competitive data, but we stand behind the safety and efficacy of <unk>, which has been dose by more than 2000 patients already since we started the program and that includes patients. We built in the commercial setting after FDA approval last year and also patients who are adults in various cut it.

Two program and also cardiac bank rollout in China. So we are very very happy to see the very deep consistent durable response in every setting of multiple myeloma, we have tested so far with the commercial strategy I'll ask my colleague Steve too Keith Yes. Thanks, Thanks, Hi, Gena I think your question had to do around outpatient.

Speaker 11: we are very, very happy to see the very deep, consistent, durable response in every setting of multiple myeloma we have tested so far. With the commercial strategy, I'll ask my colleague Steve to comment. Steve? Yeah, thanks. Hi, Drina. I think your question had to do around outpatient and

Speaker 7: If I could just give you an update on what's happening in that particular area, we were holding constant at about 30% share in terms of inpatient versus outpatient.

Maybe I can just give you an update on what's happening in that particular area. We were holding constant at about 30% share in terms of inpatient versus outpatient.

Speaker 7: We're also forecasting, as we enter in earlier lines with the Carta 2.4 launch next year, is to exit. We hope to exit next year. I would assume maybe even doubling that. It's really predicated on bringing on board our sites and obviously getting our consistent supply into market. But right now, from a share perspective, that's how our claims data is measuring up.

We're also forecasting as we enter in earlier lines with a card or two for launch next year.

Exit we hope to exit next year, I would assume maybe even doubling that.

Really predicated on bringing on board our sites obviously.

Getting our kisses consistent supply into market, but right now from.

A share perspective, that's how our claims data is measuring up.

Okay.

Thank you very much.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Jessica Firewoods, JPM, Chasey Aloniso.

Thank you one moment for our next question and our next question coming from the line of Jessica Fye with J P. M. Chase Your line is open.

Okay.

Speaker 8: Great. Good morning. Thanks so much for taking my question on the heels of the Novartis licensing. Can you talk about what the next wave of targets legend is interested in pursuing might be

Great. Good morning, Thanks, so much for taking my question.

On the heels of the Nevada.

Novartis licensing can you talk about what the next wave of targets.

Legend is interested in pursuing might be.

Yeah.

Speaker 9: Thanks, Jessica, this is Gloria. So we have extensive internal pipeline, both in autologous as well as in allogeneic cell-cell B front. In autologous space, we continue to focus on blood cancer, building the multiple myeloma franchise, at the same time also expanding to the solid tumor indications. In autologous space, we have several different platforms, and we have deep investment in gamma data at the genetic platform in the past several years.

Thanks, Yes, Scott this is Kelly.

So it would have a extensive internal pipeline both in the <unk> in <unk>.

No generic sappy front.

Public space, we continue to focus on pad building.

My franchise at the same time also.

And then into the solid tumor indications.

In the generic space, who have several different platforms and we have deep investments in E.

Comment that Archie allogeneic platform in the past several year two of <unk>.

Speaker 1: Two of our, one of our compound is already tested in the clinical setting, and we are waiting to collect a clinical response profile and expand the allogeneic platform as well. Currently, the allogeneic platform is primarily focused on a blood cancer indication. Thank you. Thank you. One moment for our next question. And our next question coming from.

For our compound is the R&D testing in the community setting and we're waiting to collect clinical response profile.

Expand.

Jack platform well currently at a generic pipeline is primarily focused on cancer indications.

Thank you one moment our next question.

And our next question coming from the line of.

Kelly <unk> with Jefferies. Your line is open.

Thank you congrats on the great progress.

Speaker 2: Thank you. Congrats on the great progress. How should we think about the Q over Q growth of CARB-IPT into Q4, considering the GMG and legend manufacturing capacity increase and also the level of the demand in the baseline settings as Taka Bailey experienced a great launch. And also how do you estimate the seasonality impact from holidays and also have a follow-up. Thank you.

How should we think about Q over Q growth of <unk> into Q4, considering the J&J legend of manufacturing capacity in place.

And also the level of demand in the later line settings.

Bailey experienced a great launch and also how do you estimated a seasonality impact from holidays and also have a follow up thank you.

Hey, Kelly this is Lori I'm going to give you just overview of quarter over quarter, and then I'll turn it over to Steve.

Speaker 4: Kelly, this is Lori. I'm going to give you just overview quarter over quarter, and then I'll turn it over to Steve. As you look at going into Q4, as we talked about before, we are doing a step up. We have gotten that approved, but as we've indicated before, you won't really see the impact of that until Q1 of 2024.

As you look out going into Q4 as.

As we've talked about before we are doing a step up we have gotten that approved but as we've indicated before you won't really see the impact of that until Q1 of 2024 and as a reminder, we've also signaled that in Q4, we will be doing some comparability runs as we're getting some of our additional notes or manufacturing capacity.

Speaker 4: And as a reminder, we've also signaled that in Q4, we will be doing some comparability runs as we're getting some of our additional nodes for manufacturing capacity up and running for 2024 to help support the 2nd line.

And running for 2024 to help support these second line launch, but with that if you look at Q4, we're not giving specific guidance, but youre not going to see significant growth quarter over quarter because of both of those activities and with that Steve I'll turn it over to you.

Speaker 4: So, with that, if you look at Q4, we're not giving specific guidance, but you're not going to see significant growth quarter over quarter because of both of those activities.

Speaker 11: And with that, Steve, I'll turn it over to you. Yeah. Yeah. Hey, Kelly. Yeah. Steve. I think it's something to do with the.

Hey, Steve.

Thank you Sachin.

Tech launch so what we're seeing in market research that we're running is where you see market share coming out of market in terms of car T. Therapies has been that from a beckman as opposed to sell to so we're seeing still a robust demand in later line settings, I think youre going to see that continue in market with the bi specifics.

Speaker 7: So what we're seeing in market research that we're running is where you see market share coming out of market in terms of CAR T therapies has been that from a VECMA as opposed to Siltacel, we're seeing still a robust demand in later line settings. And I think you're going to see that continue in market with the bispecifics where if you see erosion in terms of share erosion, I see it coming from VECMA, at least that's been the latest data we've seen in our research.

If you see erosion in terms of share erosion I see it coming from vacuum at least that's been the latest data we have seen in our research.

Terrific. Thanks, and also regarding the initiation of Coty Q to six trial in the frontline transplant eligible patient population.

Speaker 1: Terrific, thanks. And also regarding the initiation of the CAR T2-6 trial in the front-line transplant eligible patient population, could you actually share, should we expect the U.S. enrollment to start in the near term? And if the majority of enrollment comes from Europe , do you consider impact on the enrollment pace compared to CAR T2-5 trial? Thank you.

Could you actually share should we expect the U S enrollment to start to near term and even majority in enrollment.

I'm from Europe.

Do you consider it impacted on the enrollment pace compared to cut a unified trial. Thank you.

Yes.

Speaker 14: Thanks, Kelly. So we're very pleased to announce that the first patient has been enrolled last month in Spain. So we officially have kicked off the initiation of CAR-2-6.

Thanks, Kelly So we're very pleased to announce that the first patient has been enrolled last month in Spain. So we officially have kicked off the initiation of cartoon six and we are going to initiate enrollment in the U S. Also very soon.

Speaker 14: And we are going to initiate the enrollment in the U.S. also very soon. At this point, I can tell you that we will promise to enroll a certain percentage of U.S.-based patients because we have to submit the data to the agency later to make sure that we have a representative U.S. patient population in the overall patient, although probably the majority of patients will be enrolled ex-U.S. for CARDI 2-6.

At this point I can tell you that we will promise to enroll a certain percentage of U S based patients because.

We have to submit the data to the agency later to make sure that we have a representative of the U S patient population and the overall, although probably the majority of patients will be enrolled ex U S for a card usage.

Thank you very much.

Thank you.

Speaker 1: Thank you. And our next question coming from the line-out.

And our next question coming from the line.

The Crown Brian <unk> from Morgan Stanley Your line is open.

Speaker 1: The crown prohibit for Morgan Stanley Yellen is open.

Hi, Good morning, Thank you for taking our questions. This is vikram we had to.

Speaker 7: Hi, good morning. Thank you for taking our questions. This is Vikram. We have two. First, assuming you were to obtain approval for CARVIC-D for the expanded label based on the CARTITUDE-4 data by next April , could you just walk us through your latest thinking on what you expect the ramp to look like in earlier line use in 2024 onwards?

Assuming you were to obtain approval for <unk> for the expanded label based on the quality for data by next April.

Could you just walk us through your latest thinking on what you expect there expect that ramp to look like in earlier line use.

2024 onwards, and then secondly back to the.

Speaker 7: And then secondly, back to the topic of competition. So Bristol-Myers and 270 have mentioned that they're making a bigger commercial push for a BECMA that includes site expansion to broaden out access for the therapy. I wanted to see if you've noticed any competitive impact at this point from those efforts, and if you and J&J feel the need to increase your marketing and promotional spend behind CARB-XD in response to the efforts from Bristol-Myers and 270. Thanks.

The topic of competition.

Bristol Myers, and 270, <unk> mentioned that Theyre, making a bigger commercial push for Beckman that include site expansion to broaden our access to the therapy.

I wanted to see if you've noticed any competitive impact at this point from those efforts in a few and J&J feel the need to.

Increased your marketing and promotional spend behind <unk> in response to the efforts from BMS Bristol.

Bristol Myers and <unk>. Thanks.

Speaker 7: Yeah, hi, it's Steve. So let me let me try to take them. I think the second part of your question had to do with site expansion also promote promotional spend. We'll continue to expand sites over time. We'll exit this year. We think right around 70 sites.

Yes, Hi, it's Steve So let me let me try to take them I think the second part of your question I had to do with site expansion also promotional spend we will continue to expand sites over time, we will exit this year, we think right around 70 sites.

Speaker 7: I will see, you know, our site expansion is predicated on delivering in our manufacturing capacity increasing. So we are targeting by the end of next year to be exiting at about between 90 to 100. so that hopefully answers your question around site expansion.

And we will see our site expansion is predicated on delivering in our manufacturing capacity increasing so we.

We are targeting by the end of next year to be to be exiting at about between 90 to 100, so that hopefully answers your question around site expansion and.

Speaker 7: And as I remember, just as I continue to state there, this is more than just site expansion where all these sites are not created equal in terms of the numbers of patients that they treat.

As you remember.

Continue to state that this is more than just site expansion.

All of these sites are not created equal in terms of the numbers of patients that they treat.

Speaker 7: Our philosophy is continue to increase our site expansion to ensure that we can accommodate the demand within those sites.

Our philosophy has continued to increase our site expansion to ensure that we can accommodate the demand within those sites.

Speaker 7: I think your second question had to do with CARTITUDE 4. Can somebody help me here? The ramp. The ramp. Yeah, so thanks. So how we're planning the CARTITUDE 4 ramp in terms of the forecast perspective, we were initially and we continue to assume a very quick ramp up, especially in the high-risk population in second line plus.

I think your second question had to do with Carter.

Or can somebody help me Joe.

Ramp the ramp yes. So thanks, so how were planning the Carter for ramp contributed a forecast perspective.

We were initially and we continue to assume a very quick ramp up, especially in the high risk population in second line plus.

Speaker 7: In some of the research that we fielded post-ASCO, once we released the CARTITUDE-4 data, we're also seeing high demand also in the standard risk population. So generally speaking, again, we're very excited, as you can imagine, in launching CARTITUDE-4 for our patients, but we see it much broader than we were initially thinking beyond the high-risk group. Got it. Thank you.

And some of the research that we feel that in post <unk>. Once we released the card at <unk> four data. We're also seeing high demand also in the standard risk population. So so generally speaking again work very excited as you can imagine and launching <unk> for for our patients, but we see it much broader than we were initially thinking beyond the high risk group got it. Thank you.

Thank you one moment our next question.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of...

Our next question coming from the lineup.

Leon in two months' shelf from RBC capital markets. Your line is now open.

Speaker 1: Leonid Timashev from RBC Capital Markets here on the South.

Speaker 12: Hi, guys, thanks for taking my question and congrats on the quarter. I want to stick with the competition discussion for just a little bit. We've been hearing that there's actually been capacity constraints in the CAR-T space as a whole, with actually BCMA and CD19 directed CAR-Ts competing for beds and infusion capacity. I guess, is this something that you're seeing as you're continuing to launch CAR-VIC-T, do you expect these dynamics to lift or continue?

Hi, guys. Thanks for taking my question and congrats on the quarter.

Wanted to stick with the competition discussion for just a little bit we've.

We've been hearing that theres actually been.

Passive constraints in the car T space as a whole would actually be CMA and CD 19, directed car T is competing for beds in infusion capacity I guess is this something that youre seeing is youre continuing to launch <unk> do you expect any dynamic so.

<unk> continue.

Yeah.

Yes.

Speaker 7: Yeah, Steve, I'll take that again. I think that's a very, very good point. So that's why it's so important. This is why you're seeing...

Steve I'll take that again, I think thats, a very very good point.

So that's why it's so important is this is why youre seeing.

A large percentage now of sites moving to hospital outpatient for cell to cell.

Speaker 7: a large percentage now of sites moving to hospital outpatient for siltacel. So, yes, so to your point, it's a very valid point that you cannot continue to treat CAR-T therapies as just a single inpatient modality. We knew that leading into launch, and it was the reason why we were continuing to monitor how the market was moving to outpatient to increase capacity, to your point. So you address capacity in two, in essence, two ways, right? So you continue to monitor to see how the market's moving in the outpatient setting, and as I stated earlier, we're running at about three out of ten patients now being treated that way, and we see that continuing to grow significantly over time. So that's the first piece of that, of solving that issue. And then the second way you resolve that is by increasing sites themselves, and we'll continue to do that as well. So it's a combination of a number of different moving parts.

So yes, so to your point, it's a very valid point that you cannot continue to to treat car T therapies as just a single inpatient modality.

That leading into launch and that was the reason why we were continuing to monitor how the market was moving to outpatient to increase capacity to your point. So you address capacity into an essence two ways right. So you continue to monitor to see how the market is moving in the outpatient setting and as I stated earlier, we're running at about three out of 10 patients now are being treated that way.

And we see that continuing to grow significantly over time. So that's the first first piece of that of solving that issue and then the second way you resolve that is by increasing sites themselves and we will continue to do that as well. So it's a combination of a number of different moving parts. So we'll see how the market is moving in the outpatient setting and then we'll also continue to add more and more.

Speaker 7: So we'll see how the market is moving in the outpatient setting. And then we'll also continue to add more and more sites to accommodate, to your point, the patient volume to ensure that we have enough, or the sites have enough volume to pull through the volume of patients for our indication.

To accommodate this.

To your point the patient volume to ensure that we have enough for the sites have enough volume to pull through the volume of patients for our indication.

Speaker 1: And, Leonie, this is Ian. Maybe I want to add that, you know, if you look at the number of transplants that are performed in a setting of myeloma, it's about 9,000 transplants that's performed every year in the United States market. So we think at this point, at least for multiple myeloma, we're not approaching that limit in terms of hospital beds yet. As you know, if you look at our supply into the market, right, we're nowhere near that 9,000 number yet. Thank you. Thank you. One moment, please, for our next question. And our next question coming.

And the only this is dean maybe I want to add that you know if you look at the number of transplants that are performed in a setting of myeloma. It's about 9000 transplants that's for.

Formed in the United States market. So we think at this point at least for multiple myeloma, we're not approaching that limit in terms of hospital beds yet.

Now if you look at dollars supply into the market right. We're nowhere near that 9000 number yet thank you.

One moment please for our next question.

Our next question coming from the lineup.

Speaker 1: You're on Weber with TD Colony. Line is open.

Yaron Weber with TD Colin Your line is now open.

Speaker 13: Great, thanks for taking my questions. I just have two. The first one, can you give us a little bit of a sense, we're hearing that not now, but potentially later on, a phoresis slot might become more of a bottleneck as you're ramping up capacity. I don't know if you can give us a little bit of a sense how much capacity there is now and what can you do to enhance it. And then secondly, it looks like the facility in Europe , in Belgium.

Great. Thanks for taking my questions I just have two.

The first one can you give us a little bit of a sense, we're hearing that not now but potentially later on for reach the slots might become more of a bottleneck as youre ramping up capacity I don't know if you can give us a little bit of a sense how much capacity there is.

And what can we do to enhance it and then secondly.

It looks like the.

The facility in Europe.

In Belgium has now got approved on a local basis and you're noting that you need to wait for an investigational medicinal product dossier approval and local authorities is that not centralized to the EMA.

Speaker 13: is now got approved on the local basis and you're noting that you need to wait for invest investigational medicinal product FDA approval and local authorities is that not centralized to the EMA or is it sort of uh different done differently in Europe and um I just reaffirmed that you're not foreseeing any um sort of um

Or is it sort of a different done differently in Europe and.

Just reaffirm that youre not foreseeing any.

Sort of.

Speaker 13: limitation and how many slots you're going to have in that plant in Europe .

Limitation on how many how.

How many slots you're going to have an uplift in Europe. Thank you.

Speaker 7: Hi there, it's Steve again. Why don't I take a crack at the apheresis question. The apheresis question really varies by site.

Hi, This is Steve again, why don't I take a crack at the <unk> question <unk> question, It really varies by site.

Speaker 7: I know we've been having a number of conversations with our sites as we work collaboratively, you know, to onboard them and certify them. So the apheresis question really is being up front addressed by our sites because what they are doing.

I know, we've been having a number of conversations with our sites as we work collaboratively to onboard them and certify them. So the <unk> question really as being upfront addressed by our sites because what they are doing is forecasting what the volume looks like for them whether it be for obviously the card into one.

Speaker 7: is forecasting what the volume looks like for them, whether it be for obviously the Cartitude 1 launch, which they have a pretty good idea of obviously by now, but more importantly, Cartitude 4.

Launch with they have a pretty good idea of obviously by now but more importantly, Carter to four so.

Speaker 7: So, as I keep mentioning, we are addressing this in a number of different ways, this question around capacity, and right now, like I said, the number that I was guiding earlier in terms of roughly 90 to 100 that I gave earlier in terms of number of sites.

As I keep mentioning we are addressing this and a number of different ways as question around capacity.

And right now like I said, the number that I was guiding earlier in terms of roughly 90 to 100 I gave earlier in terms of number of sites is in response to a number of these capacity questions to ensure that the marketplace has enough aggregate capacity to pull this indication through Dan do you want to take the final question here.

Speaker 7: is in response to a number of these capacity questions to ensure that the marketplace has enough aggregate capacity to pull this indication through.

Speaker 14: Hey, I'll take the question about European facilities. So we did receive a GMP certificate issued by the local FAAG, which is the counterpart of FDA in Belgium.

Take the question about European facility. So we did receive a GMP certificate issued by the local FAA G, which is the counterpart of FDA in Belgium, and that is sufficient for us to start.

The clinical production next month.

In the U S I'm sorry.

Belgium, and then some.

No question about the U S. FDA. So right now our plan is to start clinical production by end of this year in Belgium for certain clinical trials and then about midyear next year in 2024, we're planning to seek regulatory approval for <unk>, Kent facility to start produce commercial.

Speaker 14: clinical trials. And then about mid-year next year in 2024, we're planning to seek regulatory approval for our Obelisk Gantt facility to start produce commercial CARVICTY. Initially, we're planning to supply only the European market. So at this point, we would not need FDA approval. In the future, in the case where we do have access capacity that we could use from the Gantt facilities, then we plan to come back and ask FDA approval. So you're right. In the case of commercial production for U.S. patients, we would need SBLA approval by the FDA. But right now, in the very near future, we're only designating the Gantt facilities for European commercial demand and also clinical trial demand. But still, that does help our supply in the U.S. because, as you know, right now we're only producing both clinical trial material and commercial CARVICTY from our New Jersey facilities. So whenever we can divert some of the demand from European market and also clinical trials to Gantt, that will free up more slots from our rarity.

Our victory initial.

Initially we are planning to supply only in the European market. So at this point, we would not need FDA approval in the future.

Case, where we do have excess capacity that we could use from the Ghent facility that we plan to come back and ask FDA approval. So you are right in the case of commercial production for U S. Patients, we would need S. BLA approval by the FDA, but right now in the very near future. We're only designating the again facilities.

For our European.

Commercial demand and also clinical trial demand.

Speaker 14: But still, that does help our supply in the U.S. because, as you know, right now we're only producing both clinical trial material and commercial CARBIC-T from our New Jersey facilities. So whenever we can divert some of the demand from European market and also clinical trials to get.

That does help.

In the U S. Because as you know right now we're only producing both clinical trial material and commercial <unk> from our New Jersey facility. So whenever we can divert some of the demand from European market and also clinical trials to get that will free up more slots from our Raritan, New Jersey facility I hope that answers your question.

Speaker 14: that will free up more slots from our Raritan New Jersey facility. I hope that answers your question. Thank you. One moment please for our next question.

Thank you one moment please for our next question.

And our next question coming from the line of Lianhai itself from Goldman Sachs. Your line is now open.

Speaker 1: And our next question coming from the line of Lynn Hysel from Goldman Sachs. Your line is open.

Speaker 15: Hi, thanks for taking my question. Two quick questions on the financials. The first one is, as you're still enrolling for Card 5 and now starting to enroll for Card 6, and the R&D expenses remain flat for over a quarter, how should we see the R&D spending in fourth quarter and

Hi, Thanks for taking my question.

Two quick questions on the financials.

First of all it is.

Yes.

Rolling into a car five and now starting to Angola with car seats.

And R&D expenses remain flat quarter over quarter, possibly see the R&D spending in fourth quarter and in 2024 and the second question is it seems that the gross profit margin slightly decreased.

Speaker 15: And the second question is, it seems that the gross profit margin slightly decreased quarter over quarter. And can you share with us any colors on potential gross profit margin improvement?

And can you share with us.

Any color on potential profit.

Profit margin improvement.

The near term.

Hi, this is Lori.

Speaker 4: Hi, this is Lori. In regards to the R&D spend, I think you'll see a consistent quarter over quarter. I mean, the activities itself have been pretty consistent with our investment in front lines for the Curvixi program, as well as our pipeline. So we continue going into 2024, we expect to see continual spend consistent with our historic.

<unk> to the R&D spend I think you'll see a consistent quarter over quarter I mean, the activities itself has been pretty consistent with our investment in frontline's further corrective program as well as our pipeline. So we continue going into 2024, and we expect to see continual.

Spend consistent with our historic.

Yes.

I'm sorry can you repeat the second question.

Speaker 15: Yeah, sure. The second question is about the gross profit margin. When do we expect to see a further increase on profit?

Yes, Sir the second question is about the gross profit margin.

When do we expect to see further decrease a decrease on profit margin.

Speaker 4: So from a gross margin perspective, we have been seeing improvements from a product perspective. As a reminder for gross margins, we have the product gross margin in there as well as the op-ex related to the investment.

So from a gross margin perspective, we have been seeing improvements from a product perspective as a reminder for gross margins.

The product gross margin in there as well as the opex related to the investment so.

Speaker 4: So, that's why it's hard for you to see the continual improvement in gross margins. Because as we've talked about, we continue to expand our capacity with manufacturing. So, we continue to have expenses hitting in that growth margin line. But as our volumes have increased, and as we've made also some process improvements, our margins are improving from a product perspective. But we don't give specific guidance on those actual percentages.

That's why it's hard for you to see the continual improvement in gross margins because as we've talked about we continue to expand our capacity with manufacturing. So we continue to have expense hitting in that gross margin.

But as our volumes have increased and.

As we've made also some process improvements our margins are improving from a product perspective, but we don't give specific guidance on those actual percentages.

Okay.

Got it thanks.

Thank you one moment our next question.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Jonathan Miller from Evercore SI. Your line is open.

And our next question coming from the line of Jonathan Miller from Evercore ISI. Your line is now open.

Speaker 19: Hi guys, thanks for taking my question. I'm going to ask about DLL-3 actually as an entree to solid tumors more broadly. Can you walk us through the dose levels for the DLL-3 phase 1 versus CAR-VIC-D and maybe talk a little bit about how that relates to your expectations for dosing in solid tumors more broadly? And I have a follow-up. Thank you.

Hi, guys. Thanks for taking my question.

I'm going to ask about the DLL three actually as an entre to solid tumors more broadly can you walk us through the dose levels, where the Diablo III phase one versus <unk>, and maybe talk a little bit about how.

That relates to your expectations for dosing in solid tumors more broadly and I have a follow up thank you.

Speaker 14: Hey, Jonathan. Thanks for the question. This is Dean. So if you look at our disclosure on clinical trials dot gov, you will see that we're planning to test four different doses ranging from point three million cells per kilogram body weight up until one to two minutes per kilogram body weight. So this is a weight based dosing plan and.

Hey, Jonathan Thanks for the question. This is dean so if you look at our disclosure on Clinicaltrials Gov, you will see that we're planning to test for different doses ranging from <unk>.

3 million cells per kilogram body weight.

Tier one to two minutes.

Her kilogram bodyweight. So this is a weight based dosing plan.

And.

Because this is a solid tumor and we foresee that you may need a little bit bigger dose than in the hematology, Kansas. So if you look at our prior dose ranging finding trials for the hematology such as multiple myeloma indications. This is a little bit higher starting dose gives.

Speaker 14: Because this is a solid tumor and we foresee that you may need a little bit bigger dose than in the hematology cancers.

Speaker 14: So if you look at our prior dose ranging finding trials for the hematology, such as multiple myeloma indication, this is a little bit higher starting dose, given that we probably need a larger amount of T cells. But on the other hand, we did put an armor, namely the dominant negative TGF beta armor to help expansion and penetration to the tumor setting. So that is the dose we're looking at for DL3 in phase one.

Given that we probably need a larger amount of T cells, but on the other hand, we did put in armor.

Namely, India dominant negative TGF beta AMR to help expansion and penetration into the tumor setting.

That is the dose we're looking at for Dr. <unk>.

Three in phase one.

Okay.

Speaker 19: Thank you. And then on the CARTITUDE 4 label, can you remind us how big an impact that will have on out-of-spec rate when assuming it does get approved? And should we expect that out-of-spec rate change to happen immediately on approval, or will there be a ramp period or some sort of recertification for that?

Thank you and then on the quota to four label can you.

Remind us how big an impact that will have an out of spec rate.

Assuming it does get approved and should we expect that out of spec rate change to happen immediately on an approval or will there be a ramp period or some sort of re certification for them.

Sure so.

And part of our SPL E filing submitted to the FDA, we ask the agency to widen the release back based on the clinical data from the phase III randomized controlled trial.

Speaker 14: In part of our SBLA filing submitted to the FDA, we asked the agency to widen the release spec based on the clinical data from the phase 3 randomized controlled trial in second line and beyond population. Because we provided a significant amount of so-called sensitivity analysis to the agency, trying to correlate the release spec with the clinical outcomes, such as TFS and survival. So based on that data, we and our partner at GNJ are very confident that we should be able to receive a wider release spec.

Trial in second line and beyond population.

Because we provide a significant amount of a so called a sensitivity analysis to the agency trying to correlate the release back with the clinical outcomes, such as PFS and survival.

Based on that data.

And our partner at J&J are very confident that we should be able to receive a wider release back and if we do receive such a wider risk spectrum agency. Then eventually we hope that the artist spec rate can decrease by additional five to 10 percentage points from where it is today that is all expect.

Speaker 3: And if we do receive such a wider release back from the agency, then eventually we hope that the out-of-spec rate can decrease by additional 5% to 10% points from where it is today. That is our expectation, of course. We have to wait until we see the label and also the FDA-approved release back next April when the PDUFA date hits. But that is our hope. And to the second part of your question, let's say if we do receive a label and a wider release back today, it is going to take a little bit of time. Because once we start to roll out the second line in the market, and then we start to see more uptake, you will gradually see that lower OS will take place in the manufacturing process.

<unk> of course, we have to wait until we see the label and also the FDA approved a release back.

April when you put your data yet but that is our hope.

<unk>.

So the second part of your question, let's say, if we do receive a label and why do we leaseback today. It is going to take a little bit time, because once we start to rollout. The second line in the market and then we start to see more uptake. Your graduate you see that lower OS will take place in the manufacturing process.

Speaker 14: Just to clarify what you just said there, when you say you'll take a little time to see that out-of-spec benefit come through, is that because you're only going to see that out-of-spec benefit in the second line plus patients? Is it not going to also apply to manufacturing and later lines?

Just to clarify what you just said there when you say you did take a little time to see that added stack benefit come through is that because youre only going to see that benefit in the second line plus patients is it not going to also apply to <unk>.

Manufacturing in later lines.

Speaker 14: You raise a very good question, John . Unfortunately, I don't have answer to you because

You raise a very good question John.

Fortunately I don't have answer to you because we would have.

Speaker 14: we would have to wait and see what the agency gives us. It's possible that we'll get a uniform release back from both the first indication and the second indication, but it's also possible that the agency decides to give us two sets of release backs, which haven't before, I'm sure you're aware, to one of the CD19 CAR-Ts in the market. So at this point, I actually don't know the answer, but it's a very good question. We'll have to wait and see what the FDA says.

And see what the agency gives us it's possible that we will get a uniform release back from both the first indication and a second indication, but it's also possible that the agents decided to give us to setup release facts, which happened before I'm sure you're aware too one of the CD 19 car Ts in our market. So at this point.

I don't know the answer but it's a very good question, we will have to wait and see what the FDA says.

Okay. Thanks, so much.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Asperma from UBS Yelena Sokol.

Thank you our next question.

And our next question coming from the line of Ash Birla from UBS. Your line is open.

Speaker 16: Hey guys, thanks for taking my question. Good morning. I have two. So, just in terms of your partnership with Novartis, could that eventually allow you to use the T-Charge program to further lower the carbic debate to win?

Hey, guys. Thanks for taking my question. Good morning, I have two so just in terms of the other.

Partnership with Novartis conduct eventually allow you to use the P type program.

For the lower the car with Duane Duane.

Speaker 16: Um, time and then 2nd, 1 just wanted to see where you are on the cardinal to study with the cohort and F. I just wanted to get an idea. Is that something that we could see at the as abstract late breaker tomorrow? Or is this more for next year?

And then second one just wanted to see maybe you are on the <unk> two study with the cohort E&S I just wanted to get an idea is that something that you can see at the late breaker tomorrow or is this more for next year.

Speaker 9: So for the T-Charger platform, it's a unique manufacturing platform developed by Novartis. And this is only applied for LV2102. Internally, we are also developing novel manufacturing process. And we are going to move internal development manufacturing process into other sales IP product in the future. Thank you.

So for the <unk> platform, it's a unique manufacturer platform developed by Novartis and this is the only apply for <unk>.

Wow two internally we are also developing novel manufacturing process.

We have been to move internal development manufacture process on into SaaS.

<unk> product in the future. Thank you.

Speaker 14: Ash, this is Dean. I'll take the second part of your question, which has to do with the Part C2 cohort E and F.

And this is again I'll take the second part of your question, which has to do with the card <unk> cohort E. L F.

Speaker 14: So I can tell you that at this point, we have completed the enrollment for both CODE CAR T2 cohort E and F in the newly diagnosed patient cohort, but we're not going to release data at this moment because, as you know, typically in the frontline setting, the PFS is relatively low.

So I can tell you that at this point, we have completed enrollment for both.

<unk> cohort E and F in the newly diagnosed patient cohort.

We're not going to release data at this moment because as you know typically in the frontline setting.

First is relatively low so we believe it will be more informative when we presented data with a longer follow up. So you should stay tuned when we present, our cohort E and F. In the future. Thank you.

Speaker 14: So we believe it will be more informative when we present data with a longer follow-up. So you should stay tuned when we present cohort E and F in the future. Thank you.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of CASA's pre-ordered from BMO Capital Markets. Your line is open.

Thank you our next question and our next question coming from the line of cost us, bringing all of this.

From BMO capital markets. Your line is now open.

Speaker 17: Hello, everyone. Thanks for taking our question and congrats on the quarter one question from us on

Hello, everyone and thanks for taking our question and congrats on the quarter one question from us on.

Speaker 17: the clinical ongoing trials. Can you comment on whether the enrollment in Category 5 is completed? And given that the Category 6 trial is slightly larger than Category 5, should we expect an impact from this increase on the commercial slots? Or these two are somewhat independent now with the clinical manufacturing support from Novartis and the GARB sites? Thank you.

The clinical ongoing tie else can you comment on whether the enrollment and copier Pi is completed.

Given that the capital seeks tile is slightly a lot a bit about car T to five should we expect any impact from these increase on the commercial slots or these two are somewhat independent now with the clinical manufacturing support from Novartis and they've got sites. Thank you.

Speaker 14: Thank you, Kosta, for your questions. So on CAR-T2-5, we're very much on track to complete the ex-US enrollment of CAR-T2-5 by end of this year. And now we're looking at potentially over-enrolling CAR-T2-5 in the US because, as I mentioned previously in this call, we would like to have a very representative US patient population in the overall patient enrolled in CAR-T2-5. So we're going to probably extend the US enrollment by about one quarter into the first quarter of next year. But at this point, I can tell you that we're very pleased with the enrollment status. Like I said, we're pretty much down for the ex-US portion for CAR-T5 by end of this year. So everything is going according to plan. But we do want to over-enroll in the US.

Thank you for your questions so on cartoon five.

We're very much on track to complete the ex U S.

The enrollment of cardio five by end of this year.

And now we're looking at potentially over enrolling card issued five.

In the U S. Because as I've mentioned previously in this call we would like to have a very representative of the U S patient population in the overall.

Patient enrolled in cardio five so we're going to probably extend the UFC enrollment by about one quarter into the first quarter of next year.

But at this point I can tell you that we're very pleased with the enrollment status like I said, we're pretty much down for the <unk> portion for cardio five by end of this year. So everything is going according to plan, but we do want to over enroll in the U S. Given the demand from patients and also given the fact that we would like to have a higher percentage of U S patients in this trial on <unk>.

Speaker 14: given the demand from patients and also given the fact that we would like to have a higher percentage of U.S. patients in this trial.

Two six we just started our first patient last month in Spain, and it will probably take us about a couple of years.

Speaker 14: We just started our first patient last month in Spain and it will probably take us about a couple of years while we enroll. So regarding to the production, we likely will utilize our Gantt facility that's coming online next month to start production of CardiTube 6.

So regarding to the production.

We likely will utilize our Ghent facility, that's coming online next month to start production card achieved six.

Speaker 14: We could also use additional capacity from our CDMO to satisfy that demand for Cardio 6 production. That is our current plan now.

Also used additional capacity from our CMO to satisfy that demand for cars used six production that is our current plan now.

Speaker 1: Thank you. One moment for our next question.

Thank you one moment for our next question.

Speaker 1: And our next question coming from the line up, Justin Sellin with BGIG. The line is open.

And our next question coming from the line of Justin <unk> with <unk>. Your line is open.

Speaker 18: Thanks for taking the questions and congrats on a strong quarter. So, can you give us an update on the out-of-spec rate for Curvicti today, just how things have been trending? And second, just on pipeline strategy, will you look to continue to seek partnerships for your pipeline assets in the future or could you internally develop them and bring them forward? Thank you.

Thanks for taking my questions and congrats on the strong quarter. So can you give us an update on the out of spec rate for for perfect day today, just how things have been trending.

And second just on pipeline strategy. When you look to continue to seek partnerships for your pipeline assets in the future or could.

Could you internally developed them and bring them forward. Thank you.

Speaker 14: So, Justin, I'll talk about the out-of-spec rate question. We're very pleased where things have been trending in the last six months also. Our out-of-spec rate has been decreasing and also stabilizing, and it's been consistently in the teens range, and right now it does stand below the 18% on-label out-of-spec rate.

Suggesting I'll talk about the out of spec rate.

<unk>.

We're very pleased where things have been trending in the last six months or so.

Our out of spec rate has been decreasing and also stabilizing and.

It has been consistently in the teens range and right now it does 10 below the 18% own label on our spec rate. Thanks to the very hard very much hard work from the legend team and J&J team in the New Jersey facility. We haven't really tried very hard to refine our manufacturing our protocol by look at various reasons for OS.

Speaker 14: Thanks to the very hard, very much hard work from the Legend team and J&J team in the New Jersey facility.

Speaker 14: We have really tried very hard to refine our manufacturing protocol by looking at.

Speaker 14: various reasons for OS and also improving OS on various workstreams.

And also improving our various work streams. So that's where we are I don't think we are very much different from the competition.

Speaker 14: So that's where we are. I don't think we're very much different from the competitions out of spec rate at this point. So I think we're seeing a very encouraging trend. And like I mentioned, we do expect this to continue to go down, especially after FDA approved the second line indication. On the pipeline, the BD question, I'm gonna refer that to our colleague, Guo Wei.

I wouldn't speculate at this point, so I think.

We're seeing a very encouraging trend and like I mentioned, we do expect it to continue to go down, especially after FDA approved the second line indication on the pipeline. The BD question I'm going to refer that to Ekati POI.

Yes, thanks for the question.

Speaker 9: Yeah, thanks for the question. In terms of pipeline development strategy, we are open to both internal development as well as seeking out the collaboration partnership. Our goal of pipeline development is to accelerate the development timeline and maximize the value.

Of pipeline development strategy, we are open to both internal development as well seeking out collaboration partnership with all of our pipeline.

Pipeline the remedies.

Salaries through the development timeline and maximize the value.

Speaker 9: for each individual asset so that we can bring differentiated and potentially transformative therapy to patients with asthma. In this particular case for LB21,

Each individual assets is that can we can bring differentiated and potentially transformative therapy to patients some of them.

This particular case for L. B 21, or two we see unique synergy between our self and Novartis. So we have a unique product design a unique comp.

Speaker 9: or two. We see a unique synergy between ourself and Novartis. We have a unique product design a unique construct sequence and the unique armor mechanism to facilitate that.

Construct sequence and a unique almond mechanism to facilities.

Immune cell infiltration and overcome.

Immune suppression in the tumor marker environment, whereas novartis has a unique manufacturing process, which is particularly important for a disease of the small cell lung cancer.

At the disease progress very fast and fastener manufacturer process that would add value to the product profile.

At pace, and we see the synergy and in the future.

Continue to evaluate the asset by asset and tried to find assume that Jan realized.

Speaker 9: additional value, where it's possible, at the same time, if we have, as I said, we can develop by ourselves, we can also do it either way. Thank you.

Additional value where it is.

Possible at the same time.

So we can do better.

Our south without also add to it.

Speaker 19: it. I eat out. Thank you. Thanks for taking my questions. Thank you. One moment for our next question. And our next question coming from the line of Michelle Kapoor from HCWIN. Your line is open. Hi, everyone. Thanks for taking the questions. I just wanted to ask a little bit more about the supply constraints and if you could give kind of a quantitative sense of where we are in terms of meeting demand. I think at one point there was a lot of supply

Okay.

Yeah.

Thanks for taking my questions.

Thank you our next question.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Michelle Kapoor from HCP.

And our next question coming from the line of Mitchell Kapoor.

From H C. Wainwright your line is open.

Speaker 19: Hi, everyone. Thanks for taking the questions. I just wanted to ask a little bit more about the supply constraints and if you could give kind of a quantitative sense of where we are in terms of meeting demand. I think at one point there was a lot of supply exceeding demand in terms of, you know, I think there was about 15% being able to be met. Could you just talk about where we're at today? And if you can't, you know, give a quantitative number, could you just kind of help us understand the trend?

Hi, everyone. Thanks for taking the questions I just wanted to ask a little bit more about the supply constraints and if you could give kind of a quantitative sense of where we are in terms of meeting demand I think at one point.

There was a lot of supply exceeding demand in terms of I think there was about 15% being able to be met could you just talk about where we're at today and if you can't give a quantitative number could you just kind of help us understand the trend.

Speaker 14: Good morning, Mitch. Thanks for the question and I'm going to answer this one.

Good morning, Mitch Thanks for the question and I'm going to answer this one so.

Speaker 14: If you look at the reported revenue last quarter, which was $152 million and $140 million coming from the U.S., you sort of can guesstimate the number of patients we served in the commercial setting last quarter.

If you look at the reported revenue last quarter, which was $152 million and $140 million coming from the U S. You sort of can guesstimate the number of patients we serve in the commercial setting last quarter.

Speaker 14: I cannot give you exactly the percentage of demand we are satisfying, but I can tell you, starting from the beginning of the year, we always track our backlog in terms of patients waiting in the queue every month. And I can tell you from January until now, really, essentially, we're seeing exactly pretty much the same number of patients in the backlog in the queue. So we're not seeing any difference in terms of demand for this product at this point.

I cannot give you exactly the percentage of demand we are satisfying but I can tell you starting from the beginning of the year.

We track our backlog in terms of patients waiting in the queue every month and I can tell you from January until now.

Essentially we're seeing exactly at pretty much the same.

Number of patients in the backlog in the Q. So we're not seeing any difference in terms of demand for this product at this point.

Speaker 14: And we're working very hard to ensure a robust and reliable supply, so we are going to continue to expand our supply. As you just heard from our colleagues on the call, we did receive the second FDA approval in the increase of our capacity recently. So we're continuing to ramp up, given that approval. And then we're planning additional increase in capacity from our New Jersey facility next year as well. If you look at the number of patients we think are within the so-called addressable market in the U.S.

And we're working very hard to ensure a robust and reliable supply. So we are going to continue to expand our supply as you just heard from our colleagues on the call. We did receive the second FDA approval in the increase of our capacity recently, so we're continuing to ramp up.

Given that the approval and then we're planning additional increases.

Capacity from our New Jersey facility next year as well.

If you look at a number of patients we think are within the so called addressable market in the U S.

Speaker 14: About 13,000 patients die every year, unfortunately, from multiple myeloma.

About 13000 patients die every year, Unfortunately for multiple myeloma and probably around.

Speaker 14: and probably around 8,000 to 9,000 patients are eligible for receiving CAR T therapy. So at this point, given our supply, we think still we're nowhere near being able to supply all the demand for Covictia at this point.

8% to 9000 patients are eligible for a receive a car T therapy. So at this point given our supply we think steel, we're nowhere near being able to supply all the demand for a big deal at this point.

Speaker 11: Okay, thank you very much. And could you just kind of help us understand what the launch preparation is looking like for moving into earlier lines? Is it mainly just messaging changes with the sales force? Or what else? Can you tell us about how you're preparing? If approved, yeah, hey, man.

Okay. Thank you very much and could you just kind of help us understand what the launch preparation is looking by for moving into earlier lines is it mainly just messaging changes with the salesforce or what else can you tell us about how you are preparing for launch.

Approved.

Yeah, Hey, Matt ill take that Steve.

Speaker 7: So no, it's a bit different, right? So you're moving from a later line population that was largely, these patients were largely in many of our major academic centers. In the earlier lines from the second line population, this will be a very different type of launch where you're largely reliant on the referral. So what the US team has been working very closely with their partner is working through the models in terms of how to appropriately reach that outpatient clinic to ensure that an appropriate referral.

So no it's a bit different right. So you are moving from a later line population that was largely these patients were largely in many of our major academic centers in.

In the earlier lines from the second line population. This will be a very different type of launch where you are largely reliant on the referral so what with the U S team has been working very closely with our partner is working through the models in terms of how to appropriately reach that outpatient clinic.

To ensure that an appropriate referral is made.

Speaker 7: to one of our cell-to-cell centers? So it's a bit different. You'll see some increase in FTE expansion on behalf largely of our partner at Janssen because they play largely in that outpatient space. From the U.S. legend perspective, you'll see some increase as we increase sites, but our commercial footprint for legend has been largely built around the inpatient setting as opposed to outpatient. I hope that answers your question.

Two one of our silica sell centers, so it's a bit different youll see youll see some increase in FTE expansion on behalf largely of our partner Janssen because they play largely in that outpatient space.

From the from the U S legend perspective, Youll see some increase as we increase sites, but our commercial footprint for legend has been largely built around the inpatient setting as opposed to outpatient I hope that answers your question.

Speaker 19: It does. Thank you all very much for taking the questions. Thank you. Thank you.

It does thank you all very much for taking the questions. Thank you. Thank you.

Thank you and our next question coming from the line of Fred <unk>. Your line is open.

Speaker 1: Thank you. And our next question coming from the line of Wilfred Huyen from Diyana, Copenhagen.

Hello.

Speaker 20: Hello. Well, congrats on the result and thank you for taking my questions. Well, I just have a follow-up on the gross margin currently at 43, 44% over the past two quarters. So, and you mentioned about the expanding capacity.

Congrats on the results and thank you for taking my questions.

Just have a follow up on the gross margin currently at 43, 44% over the past two quarters.

So and you mentioned about the expanding capacity.

Speaker 20: So what are the other drivers on margin, on the gross margin, Jason? We have multiple facility, both internal and external coming online, as well as an improving.

The other driver on margin on the gross margin, Jason with multiple facilities, both internal and external coming online as.

As well as an improving our spend rate.

Speaker 4: So what are the key moving parts, actually, and how should we be thinking of margin profile, maybe even in a longer term as well? Thank you. So just on the growth margin again, as we talked about, there's two components in the growth margin. So from your perspective, when you look at quarter over quarter, it's a little bit hard for you to model it out.

What are the key moving parts actually and how should we be thinking of the margin profile, maybe even in a longer tenor as well. Thank you. So just on the.

Gross margin again as we've talked about there's two components in the gross margin. So from your perspective, when you look at quarter over quarter, it's a little bit hard for you to model it out.

Speaker 4: As I mentioned before, we continue to see improvement in the growth margin from a product perspective. Your growth margins are going to improve as your volumes go up.

As I mentioned before we continue to see improvement in the gross margin from a product perspective.

Gross margins are going to approve as your volumes go up you would also have our out of spec that's gone down based upon.

Speaker 4: We've also have our out of spec that's gone down based upon also process improvements we've made at the plant. So we're seeing the steady progression of the improvement under the gross margins from product perspective. But you're continually getting noise in that number we report externally. Because we have to report the facilities expansion, the expense side of it that cannot be capitalized.

Process improvements we've made at the plant. So we are seeing the steady progression of the improvement under the gross margins from a product perspective, but.

<unk> get noise in that number we report externally because we have to report the facilities expansion and the expense side of it that cannot be capitalized and as you know we have expansion going on in Raritan, we have expansion going on in Belgium, and we also have expansion going on.

Speaker 4: And as you know, we have expansion going on in Raritan, we have expansion going on in Belgium, and we also have expansion going on with our CMOs. So you're gonna continue to see a lot of facilities expense related to those capital investments.

With our CMO, so youre going to continue to see a lot of facilities expense related to those capital investments through.

Speaker 4: through the end of 2025. So it's going to create noise. Some quarters are going to be higher than others, just depending upon where we are with some of those capital projects.

Through the end of 2025, so it's going to create noise.

Quarters are going to be higher than others, just depending upon where we are with some of those capital projects.

Speaker 4: But if there's something specific, if you want to talk and submit more of question and we can always set up a call with you and try to go over a little bit more detail, but I can't give any granular numbers. I can't disclose any granular numbers from a product perspective.

But if there's something specific if you want to talk and submit a more question and we can always set up a call with you and try to go over a little bit more in detail, but I can't give any granular numbers I can't disclose any granular numbers from a product perspective.

Understood. That's helpful. Thank you.

Speaker 1: Thank you. One moment for our next question. And our next question coming from the line of Kelsey Goodwin with Guggenheim. Your line is open.

Thank you our next question.

Our next question coming from the line of Kelsey Goodwin with Guggenheim. Your line is open.

Speaker 8: Oh, hey. Good morning. Thanks for taking my question and congrats on the quarter. I guess two quick ones for me, I guess. First, do you have any updated view on how we should think about profitability for the joint venture, maybe kind of building on some of these past questions on gross margin. And then kind of following up on that, I guess, how should we think about the longer term COGS for CARVICTY kind of once these capital expenses are no longer included in those line items.

Oh, Hey, good morning, Thanks for taking my question and congrats on the quarter.

Two two quick ones from me I guess first do you have any updated view on how we should think about profitability for the joint venture maybe kind of building on some of these past questions on gross margin and then kind of following up on that I guess, how should we think about the longer term Cogs for perfect day kind of once these capital expenses are no longer.

In those line items.

Speaker 8: And yeah, maybe kind of what out of second manufacturing failure rate do you base in the assumption for longer term COGS? Thank you.

<unk>.

Yes, maybe kind of what out of spec and manufacturing failure rate do you bake in the assumption for longer term Cogs. Thank you.

Hey, Kelcey, so profitability the messaging is still consistent with what we signaled before.

Speaker 4: Hi Kelsey, so profitability the messaging is still consistent with what we've signaled before for the BCMA program. We're looking to have break even and profitability by the end of 2025.

The CMA program, we're looking to have breakeven and profitability by the end of 2025 and from a company perspective are striving for profitability by 2026, and I always just put a disclaimer in there it will depend upon what happens with our pipeline development.

Speaker 4: And from a company perspective, we're striving for profitability by 2026.

Speaker 4: And I always just put a disclaimer in there. It will depend upon what happens with our pipeline development, what we look to do from a business development perspective. But based upon the trajectory of what we know now, that is what we've been signaling. From a longer term COGS, as I mentioned earlier, you're going to continue to see noise in that COGS line all the way through at the end of 25 going into 2026.

Look to do from a business development perspective, but based upon the trajectory of what we know now that is what we've been signaling from a longer term cod.

As I mentioned earlier Youre going to continue to see noise in that Cogs line, all the way through to the end of 'twenty five going into 2026.

Speaker 4: We're not giving any guidance on our actual COGS. I would say for your modeling purposes, you could probably use what's been the standard in the industry. It would be a good proxy for you for your modeling.

We're not giving any guidance on our actual Cogs I would say for your modeling purposes, you could probably use what's been the standard in the industry.

Would be a good proxy for your for your modeling.

Okay.

Speaker 8: Okay, great. Thanks. And maybe just one quick follow up then on the profitability, I guess, to what extent is that break even profitability by 2025? How much is that reliant on hitting that 10,000 commercial doses by the end of the year?

Okay, great. Thanks, and maybe just one quick follow up then on the profitability I guess to what extent is that breakeven profitability by 2025, how much is that reliant on hitting that 10000 commercial doses by the end of the year.

Speaker 14: Hey Kelsey, I hope you understand that we cannot really disclose our internal modeling.

Galaxy I hope you understand that we cannot really disclose our internal modeling.

But.

What I can say is that if you look at the Cogs fault car T. As a general modality the cost of goods is probably somewhat higher than the typical cost of goods of monoclonal antibodies. However, the SG&A in terms of selling and distribution costs. It will be much lower you can tell that from our financials right, while we almost quadruple.

Speaker 5: a general modality. The cost of goods is probably somewhat higher than the typical cost of goods of monoclonal antibodies. However, the SG&A in terms of selling and distribution costs, it will be much lower. You can tell that from our financials, right? While we almost quadrupling our sales for CARVICTI this year versus last year, if you look at quarterly spend in sales and marketing, it's actually slightly lower than what we spent last year. So that gives a hint how we think about the profitability of CARVICTI in the long run. Thank you.

Our sales for <unk> this year versus last year, if you look at quarter.

Quarterly spend in sales and marketing, it's actually slightly lower than what we spent last year. So that gives you a hint how.

Speaker 5: how we think about the profitability of CARVIC in the long run. Thank you. Got it. Okay.

How do we think about the profitability of car victory in the Lora. Thank you.

Got it okay. Thank you so much.

Thank you.

Enrollment for our next question.

Speaker 1: And our next question, coming from the lineup, Sammy Corwin with William Blair, your line is open.

And our next question coming from the line of Sami Corwin with William Blair. Your line is open.

Good morning, Thanks for taking my question and giving you plan on over enrolling card achieved five now that go live when we should expect data from that trial.

Speaker 21: Good morning. Thanks for taking my question. I'm giving you plan on over enrolling car to choose five. Now will that delay when we should expect data from that trial and then do you plan on providing any revenue guidance for curvy at the beginning of 2024.

And then do you plan on providing any revenue guidance for <unk>.

The beginning of 2024.

Speaker 14: Thanks for the question, Sammy. So on the first question, no, we don't expect any delay. Because like I mentioned, we are pretty much on track to close all the ex-US enrollment for CAR-T5, which is the majority of patients by end of this year. That's exactly according to our plan. And then we're only over-enrolling in the US next quarter, just to make sure that we have a representative percentage of US patients in this trial. So at this point, we do not expect any delay in terms of readout of CAR-T5.

Thanks for the questions. So on the first question no. We don't expect any delay because like I mentioned, we are pretty much on track to close all the ex U S enrollment in <unk>.

Which is the majority of patients by end of this year, that's exactly according to our plan and then we're only over enrolling in the U S. Next quarter just to make sure that we have a representative percentage of U S patients in this trial. So at this point, we do not expect any delay in terms of readout of <unk> five.

And then.

Speaker 14: And then on product guidance, we're not really giving product guidance for year 2024 because our partner, J&J, has this policy of not providing product-specific guidance. So unfortunately, we will not be in a position to provide you with guidance for Carb-A-T sales.

Guidance.

We're not.

Giving product guidance for year 2024, because our partner J&J has this policy of not providing.

Specific guidance so.

Unfortunately, we will not be in a position to provide you with our guidance for <unk> sales.

Yeah.

Got you. Thank you.

Okay.

Speaker 1: Thank you and at this time we have no further questions in the queue. Ladies and gentlemen, this concludes today's conference call. Thank you all for your participation and you may now disconnect.

Thank you and at this time, we have no further questions in the queue, ladies and gentlemen. This concludes today's conference call. Thank you all for your participation and you may now disconnect.