Q4 2024 Genmab AS Earnings Call
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Speaker Change: Hello and welcome to the GenMAP for Year 2024 Financial Results conference call. As a reminder, this conference call is being recorded.
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Speaker Change: I would now like to hand the conference over to our first speaker today, Jan van der Winkel. Please go ahead.
Speaker Change: Hello and welcome to GenMob's conference call to discuss our financial results for the period ending December 31st, 2024. With me today to present these results is our CFO, Anthony Pagano, and our Chief Commercial Officer, Brad Bailey.
Speaker Change: For the Q&A, we will be joined by our Chief Medical Officer, Tai Ahmadi, and our Chief Development Officer, Judith Klimowski.
Speaker Change: As already said, we will be making forward-looking statements, so please keep that in mind as we go through this call.
Speaker Change: During today's presentation, we will reference products being developed under some of our strategic collaborations. And this slide acknowledges those relationships.
Thank you.
Speaker Change: 2024 was marked by significant milestones towards our mission to deliver innovative medicines to patients.
Speaker Change: We made strategic investments to both accelerate the development of late-stage programs with the potential to generate meaningful revenue by the end of the decade.
and to maximizing the success of our commercialized medicines.
Speaker Change: So, we delivered on our capital allocation priorities in 2024, and as Anthony will describe later, we will do so again in 2025.
Overall, our financial performance in 2024 was exceptionally strong.
Speaker Change: and we have further solidified our foundation for sustainable future success.
Let's take a look at this in more detail.
Speaker Change: 2024 was a year of strong execution and disciplined investments, driving 31% total revenue growth, fueled by the success of our eight commercialized medicines, including Apkinly and Tifdec.
Speaker Change: Our investments are fully aligned with our strategic priorities, supporting key late-stage pipeline programs and commercial expansion, allowing us to grow operating profit by an impressive 26%, demonstrating the strength of our business.
Speaker Change: Despite significant investments, including the $1.8 billion acquisition of ProfoundBio and a $500 million share buyback, we ended the year with nearly $3 billion in cash, reinforcing our financial strength.
Speaker Change: This exceptionally strong financial position gives us the flexibility to continue investing in innovation while delivering long-term value to shareholders.
Speaker Change: Taken together, our financial results for 2024 exemplify our ability to deliver strong revenue growth while simultaneously advancing high-potential programs. Now let's look forward, starting with our pipelines.
Speaker Change: We currently have 12 products or product candidates in 30 clinical trials, either ongoing or recruiting. This includes 7 Phase III trials between Abkinli, Reiner S., and Akersulni Mob.
Speaker Change: And based on the strong emerging data, we expect more to come.
Speaker Change: because these three programs are poised to drive significant revenue growth for GenMob by the end of this decade.
Speaker Change: We have prioritized investments for 2025 and purposely reallocated our R&D dollars to these programs.
Speaker Change: Now let's take a deeper look at why we are confident in their significant potential.
Speaker Change: Starting with APKINDI, together with APPHI, we continue to advance an ambitious clinical development program for apgaritumab across B-cell malignancies, including frontline studies in diffuse large B-cell lymphoma and follicular lymphoma.
Speaker Change: And in addition to confirmatory data based on accelerated enrollment, we now anticipate three potentially significant pivotal readouts by the end of 2026.
Speaker Change: second line plus follicular lymphoma, front line diffuse large B-cell lymphoma, and in second line plus diffuse large B-cell lymphoma for transplant ineligible patients.
As you can see,
Speaker Change: See this on the next slide where we summarize the significant market opportunity for AppKindly.
Speaker Change: We have successfully obtained multiple regulatory approvals for APKINLY, making this therapy accessible to a broader patient population. And thanks to our exceptionally strong performance in key markets like the U.S. and Japan, we are confident in our ability to expand APKINLY's reach even further.
Speaker Change: In fact, our commitment to advancing Apkinley across multiple indications in B-cell cancers underscores its potential as a best-in-class treatment with a peak sales opportunity exceeding $3 billion.
Let's now turn to Raina S.
Raina S.: As we have shared previously, we have now initiated the first Phase III trial for Rhinosin 2nd line plus platinum-resistant ovarian cancer.
Raina S.: This trial is designed to address all comers, regardless of folate-alpha-receptor-alpha expression, expanding its potential reach to a broader patient population.
Raina S.: We intend to present meaningful follow-up data from the expansion cohort with PROC early in the first half of 2025.
Raina S.: Additionally, we are actively generating combination data to inform next steps in platinum-sensitive ovarian cancer.
Raina S.: Beyond development in ovarian cancer, we are also planning to present data in endometrial cancer in the first half of this year.
Raina S.: And based on the strong signals we are seeing, we plan to start a phase 3 study in second line plus endometrial cancer by the end of the year.
Raina S.: Reiner S.'s differentiated profile has the potential to address a broader patient population than is served by current standard of care, including low to medium folate receptor alpha expression, targeting about 85% of the platinum-resistant.
Ovarian Patient Population.
Raina S.: We are exceptionally well-positioned to maximize the potential of Rhino S, given our proven clinical development capabilities, track record of acceleration, and our experience in the Gynon space with DiffDag.
Raina S.: Based on the exceptionally strong execution of the team post-acquisition, we remain on track to bring Rhino S to patients by 2027.
Raina S.: With its best-in-class profile, expected to achieve peak sales exceeding $2 billion.
Raina S.: And with the two phase threes we plan to have underway by year's end, we are well on track to putting in place the building blocks to achieve this target.
Raina S.: Finally, let's take a look at the market opportunity for Akka Sunimop.
Raina S.: In 2024, GenMob took full control of the Akasunima program, providing us with a remarkable opportunity to fully own and advance this promising asset.
Raina S.: Non-driver-mutated second-line non-small cell lung cancer continues to be an area of significant need.
Raina S.: Given the worsening of performance status as patients progress through lines of therapy, physicians are interested in more tolerable, chemo-free regimens.
Raina S.: Yet with many novel treatments failing in phase 3 trials, docetoxin continues to be the current standard of care.
Raina S.: By identifying potential synergies of IO therapies, we have the potential to unlock clinical benefits that were not possible with monotherapy alone.
Raina S.: So there is meaningful opportunity for novel treatments like Akasunlimab in the second line plus setting to provide not just improved response rates, but durability of response.
Raina S.: And we are progressing a strategic development program to explore acosulimab's full potential across solid tumors.
Raina S.: Because it is the investment in these areas today that will position us well at the end of the decades.
Raina S.: I will now hand over the presentation to Brad, who will provide you with a review of the recent performance for TifDeck and AppKinley, both of which have seen growth in 2024. Brad, the floor is yours.
Brad Bailey: Thank you, Jan. Over the course of 2024 our commercialization teams executed effectively to bring Epkinly and TIBDAQ to an increasing number of patients around the world. Overall, Epkinly and TIBDAQ ended the year in a strong position demonstrating the strength of our commercialization strategy and the performance of our field teams.
Brad Bailey: We also achieved critical milestones including two new regulatory approvals in the U.S. and continued our work to rapidly progress our development program to fuel our future growth. Through these efforts, our commercialized medicines contributed 29% of our revenue growth for the year.
Brad Bailey: Moving to highlights from our commercialized portfolio, we achieved meaningful milestones with both medicines that contributed to their overall growth.
Brad Bailey: Over the past three months, CIBDAC and UpKinley have collectively received three new or updated NCCN Guidelines designations.
Brad Bailey: First, in December, Temtac Monotherapy was upgraded from Category 2A to Category 1 designation for the treatment of recurrent or metastatic cervical cancer, further validating its clinical benefit for these patients.
Brad Bailey: TIBDAC, in combination with Pembrolizumab, was also added as a Category 2B designation for patients with PD-L1 positive disease.
Brad Bailey: And earlier this month, Epkinly in combination with Gemox received a Category 2a designation for the treatment of diffuse large B-cell lymphoma in the relapsed refractory setting. This is especially notable as we look to bring the potential of Epkinly into earlier lines of therapy in the future.
Brad Bailey: Lastly, for Epkinly at Ashe, we presented a three-year long-term data from our EPCOR NHL-1 study, which evaluated Epkinly in patients with third-line or later relapsed or refractory DL-BCL.
Brad Bailey: These data showed that over half of patients who achieved a complete response in the trial maintained their response for more than three years, with no new safety signals identified.
Brad Bailey: These results represent the longest duration of CRs reported by a bi-specific in this setting, further reinforcing up Kenley's clinically differentiated profile and potential to deliver deep durable responses.
Now let's turn to performance, beginning with Epkinle.
Speaker Change: McKinley's continued to perform exceptionally well since its initial launch in 2023.
Speaker Change: They closed 2024 in a position of strength, achieving $78 million in sales in the quarter and $281 million in sales for the year.
Speaker Change: This growth was driven primarily by sales in the United States and Japan.
Speaker Change: In the U.S., Epkinly remains the first and only bispecific approved with a dual indication in 3rd line plus DLBCL and follicular lymphoma.
Speaker Change: Throughout 2024, we continue to see sustained uptake across sites of care driven by targeted field execution and the successful FL launch in June.
Speaker Change: Since the FL launch, we have observed accelerated growth and positive physician feedback, highlighting the value of Epkinly's dual indication, its uniquely differentiated clinical profile, and seamless administration.
Speaker Change: Moving forward, we will continue to focus on accelerated adoption across broad sites of care.
Speaker Change: In Japan, Epikinle is the only approved CD3, CD20 bispecific in 3rd line plus relapsed or refractory large B-cell lymphoma, and we continue to see strong, stable performance, largely driven by field execution and account activation.
Speaker Change: We are well positioned to build on this leadership position in Japan with the anticipated approval for Third Line Plus Relapsed Refractory Follicular Lymphoma in early 2025.
Speaker Change: With this indication, Epikinle will become the first and only bispecific approved in Japan with a dual indication in LBCL and FL.
Speaker Change: In the rest of the world, we're seeing increased utilization of Epi-Kinley through our partner AbbVie and achieved approvals in more than 50 countries worldwide by the end of 2024. We look forward to this trajectory continuing in 2025 and beyond.
Speaker Change: Looking ahead, our teams remain focused on driving adoption and priority markets while accelerating our robust development program to establish Epkinly as the core therapy in B-cell lymphomas, including in earlier lines of therapy.
Speaker Change: As we continue to target areas of high unmet need, our commercialization teams remain focused on creating optimal customer experiences through the disciplined execution of our targeted go-to-market strategy that has consistently driven our success to date.
Thank you for watching!
Turning now to TIBDAC.
Speaker Change: As the only ADC with a proven survival benefit in advanced cervical cancer, TempDAC has continued to achieve solid growth since its launch in 2021 and is regarded by physicians as the global standard of care and the clear answer in second-line plus recurrent or metastatic cervical cancer.
Speaker Change: TipDeck produced $131 million in sales during the year, including $38 million in the fourth quarter, driven by depth and breadth of ordering accounts.
Speaker Change: With strong utilization rates in this setting, we anticipate modest growth in the U.S. in 2025.
Speaker Change: Looking ahead, we see opportunities to expand the potential of TIBDAC and advanced cervical cancer to new markets where patients' needs remain high.
Speaker Change: We expect approval in Japan early this year, where GenMab will lead full commercialization responsibilities, and in Europe later this year following a positive CHMP opinion issued in January.
Speaker Change: Importantly, the anticipated launch in Europe provides a catalyst to enter the next phase of our commercialization strategy as we expand our work to new markets.
Speaker Change: As of January 1st, Genmab and Pfizer have agreed to transition full commercialization responsibilities for Tevdak and Second Line Plus recurrent or metastatic cervical cancer to Genmab for all countries outside the U.S. and China, where Pfizer will continue to partner with Genmab and Zylab, respectively.
Speaker Change: We're pleased with the terms of this updated agreement as it optimally positions us to expand our commercialization capabilities first to Europe in a strategic and financially disciplined manner just as we have successfully done in the U.S. and Japan to date.
Thank you for watching!
Speaker Change: We are extremely pleased by the performance of our commercialized brands in 2024, validating our strategic approach and investments to date.
Speaker Change: As we look toward 2025 and beyond, our focus remains on building upon the strong foundation we've established in the U.S. and Japan to capture more value from our commercialized medicines, increasing utilization of Epkinlein and Tivdac across regions, and strategically entering new markets.
Speaker Change: to prepare for the launches of our whole new medicines to reach even more patients in the future.
Speaker Change: With that, I'll hand the call to Anthony to provide more perspective on our financials.
Anthony Pagano: Thanks Brad. We continue to strengthen our foundation throughout the year.
Anthony Pagano: We delivered on our goal of multiple successful regulatory approvals and launches for Epkinly.
and we're pleased with how these launches are progressing.
Anthony Pagano: We've also significantly enhanced our long-term growth potential with the addition of RENA-S to our late-stage pipeline as part of the acquisition of ProfoundBio.
And as we'll see, our financials remain exceptionally strong.
Anthony Pagano: We achieved 31% total revenue growth. Importantly, we grew our recurring revenues by 35%.
Anthony Pagano: This was driven by strong royalties from Darzalex and Cosimta and from product sales from Epkinley and TibDak.
Thank you.
Anthony Pagano: This growth reflects sustained recurring revenue expansion and robust execution across markets.
Anthony Pagano: We can see that the investments we've made in building out our commercialization teams and capabilities are paying off.
Anthony Pagano: And this sets us up well as we prepare for potential expansion into earlier lines for Epkinly and the potential launch of Vreena S in 2027.
Anthony Pagano: stepping back and looking at our revenues. What really stands out for me is the improving quality of our revenue profile.
Anthony Pagano: In 2024, recurring revenues rose to represent 91% of total revenue, and that's compared to 88% in 2023.
Finally, looking at Darzalex specifically.
Overall, net sales grew by almost 20%.
Anthony Pagano: This growth was driven by continued share gains and strong performance in the frontline setting.
Anthony Pagano: Turning to our investments, where we continue to take a disciplined approach.
Total operating expenses in 2024 were 13.8 billion kroner.
Anthony Pagano: As you can see, the majority of the investment, over 70%, was driven by R&D, reflecting our focus on late-stage priority programs at Kinley, RENA-S, and Akosunlemap.
Anthony Pagano: Our investment in SG&A was focused to put us in a strong position for key market launches in the U.S. and Japan.
Anthony Pagano: So if we step back and think about our investment levels for 2024, we over delivered on our financial commitments made at the time of the profound bio acquisition.
Anthony Pagano: This was achieved through the balance of discipline investing in line with our capital allocation framework and a continued and increased focus on productivity and prioritization efforts.
Anthony Pagano: And in a minute, you're going to see how this has been effectively carried through to 2025.
Anthony Pagano: Pulling this all together, our operating profit for 2024 grew 26%.
Anthony Pagano: So, we delivered exceptionally strong profitability while investing to advance those programs with the highest potential for long-term growth.
Thank you.
Then moving on to tax.
Anthony Pagano: As you can see in the appendix of this presentation, we have tax expense of around $1.3 billion, which equates to an effective tax rate of 14.4%.
Anthony Pagano: The decrease compared to last year's rate of 22.8% was primarily due to our ability to recognize deferred tax assets that were not previously recognized.
Anthony Pagano: Moving forward, we anticipate that our effective tax rate should be closer to the Danish statutory rate of 22%.
Anthony Pagano: Taken together, our net profit amounts to nearly 7.8 billion kroner.
So, as you can see, continued strong underlying financial performance.
With that, let's move to our 2025 financial guidance.
To start, the guidance we're providing today is in dollars.
Anthony Pagano: That's because, as of January 1st, our functional currency changed from Kronor to dollars, due to the growing number and significance of our U.S. dollar-denominated transactions.
Anthony Pagano: For comparison, we've converted our 2024 results from Kroner to dollars using an exchange rate of 6.89, representing the average rate during the year.
Anthony Pagano: With that background, now let's take a look at our 2025 guidance.
Anthony Pagano: We expect our revenue to be in the range of around $3.3 to $3.7 billion, delivering robust growth of 12% at the midpoint.
Anthony Pagano: And this is despite our non-recurring revenue decreasing by more than $100 million.
Anthony Pagano: So, it's our recurring revenues from Royalty Medicines and revenues from Epkinly and TIVDAC that's driving our anticipated growth in 2025.
Good morning. Good morning. Good morning.
Anthony Pagano: For operating expenses, as I highlighted for you at Q3 last year, expectations were in a reasonable place.
Anthony Pagano: For 2025 we expect to be in a range of around 2.1 to 2.2 billion dollars. So as you can see we not only delivered but over delivered on the commitment we made at Q3.
Anthony Pagano: This reflects our disciplined approach to investments as well as rigorous portfolio prioritization.
Anthony Pagano: Putting all this together, we're planning for operating profit in a range between $895 million to nearly $1.4 billion dollars.
Anthony Pagano: with the midpoint of diets amounting to more than 1.1 billion of operating profit and year-over-year growth of 16%
Anthony Pagano: Now, let's take a look at the components of our guidance.
Anthony Pagano: Building on the exceptional growth in 2024, we expect recurring revenues to grow 18% in 2025, driven by Darzalex and Cosimta, and this increasingly includes contributions from Epkinley and TivDec.
Anthony Pagano: Taken together, these two products contribute 34% of our total projected revenue growth.
Anthony Pagano: This really highlights the continually improving quality of our revenue profile.
Anthony Pagano: Notably, our recurring revenue represents 95% of our total projected revenue in 2025.
Anthony Pagano: Looking beyond 2025, for Rep Kinley, we anticipate three potentially significant pivotal readouts by the end of 2026.
Anthony Pagano: including frontline and second line DLBCL and second line FL that could support regulatory filings and subsequently additional meaningful revenue growth.
Thank you.
Anthony Pagano: Finally, coming back to Darzalex, we anticipate that Darzalex sales will continue to ramp up and be in the range of $12.6 to $13.4 billion.
Turning now to OPEX.
Anthony Pagano: We've purposely reallocated our R&D investments in 2025 and are focused on advancing our high-impact, late-stage programs at Kinley, RENA-S, and Akosuma MAP.
Anthony Pagano: So, here we are prioritizing late-stage assets with strong commercial potential while also applying a balanced approach to our investments in our early pipeline.
Anthony Pagano: As a result, our investment in these late-stage programs increases from 45% of total R&D spending in 2024 to more than 55% or 55% in 2025.
Anthony Pagano: Our sales and marketing investments are focused on launch readiness and key markets, most notably for RENA-S with a disciplined approach that balances growth and efficiency.
Anthony Pagano: These investments are aligned to drive both immediate launches and long-term revenue.
Anthony Pagano: For G&A, I am pleased to note that spend is broadly flat between 2024 and 2025.
Anthony Pagano: And here, our GNA capabilities are increasingly at scale, so we expect minimal growth.
Anthony Pagano: If you add it all together, you can see the power of our growing recurring revenues and underlying profitability.
Anthony Pagano: In 2025, we'll make significant investments in late-stage R&D and launch preparations. At the same time, we plan to deliver 16% operating profit growth at the midpoint.
Anthony Pagano: This reflects our ability to scale efficiently and control costs, supporting both near-term launches and long-term value creation.
Anthony Pagano: So when you look at our 2025 guidance as well as our 2024 results, you can see that we continue to deliver on our financial commitments.
Anthony Pagano: Having covered our results for 2024 and our guidance for 2025, let me outline our capital allocation strategy aimed at fueling revenue growth by the end of the decade and enhancing shareholder value.
Anthony Pagano: First, we will continue to invest in accelerating the development of our high-impact, late-stage programs at Kinley, Rena-S, and Akosunlamat, with investment into Phase III clinical trials.
Anthony Pagano: We will also continue to maximize the success of our commercialized medicines.
Anthony Pagano: Because it's our investment in these programs now that will potentially generate meaningful revenue for us by the end of the decade.
Thank you.
Anthony Pagano: Second, we will continue to seek out business development and M&A opportunities that fit within our core focus areas.
Anthony Pagano: As you know, we executed on our acquisition of ProfoundBio last year.
Anthony Pagano: Here, I'd like to highlight how quickly and successfully we were able to integrate ProfoundBio into our business, as evidenced by our ability to progress RENA-S so significantly.
Anthony Pagano: We not only brought forward the start of the first Phase 3 trial for ARENA-S, but today we announced a second Phase 3 trial and an additional indication.
Anthony Pagano: Now, having built out our development and commercialization capabilities, we're well positioned to continue to consider both mid to late stage development and commercial stage product opportunities.
Anthony Pagano: And finally, today we're announcing our plan to re-purchase an additional approximate 1.9 million shares, which is equivalent to around $370 million at our current stock price.
Anthony Pagano: This underscores our confidence in GenMap's future and our commitment to delivering value to our shareholders both in the short and long term.
Anthony Pagano: In summary, our performance in 2024 underscores our ability to deliver exceptional revenue growth, advance key pipeline assets, and maintain strong profitability through disciplined execution.
Anthony Pagano: Looking ahead to 2025, we are building on this momentum by further prioritizing our investments and expanding market opportunities, positioning us for sustained growth and long-term value creation for our shareholders. And on that note, I'm gonna hand you back over to Jan.
Thank you, Anthony. Let's move on to our final slides.
Jan: Now, with this strong foundation supporting us, we are looking ahead to an energizing 2025. Starting with Hexabody CD38, we submitted the data packets to J&J, and we anticipate a decision from them no later than the first quarter of this year.
Jan: At that time, we will press release the decision and include top-line clinical data.
Jan: Regardless of J&J's decision, Genlock's strategic priorities in 2025 and beyond remain unchanged.
Jan: Looking beyond this event, this year we are anticipating additional regulatory decisions for both AppKinley and TIFDAC.
Jan: including the potential approval of TIFTEC in Europe following a positive opinion from the CHMP in January.
Jan: For both Akers-Solimop and Tri-NRS, we anticipate presenting additional supportive clinical data, and both have the potential to move into broader indications with new clinical trials.
Jan: And we will continue to actively look for opportunities to grow our pipeline, both organically and inorganically, positioning us for sustained growth and long-term value creation for our shareholders.
Jan: In summary, in 2024, we further solidified our already very strong foundation and delivered on our commitments.
Jan: And in 2025, we will continue our laser-sharp focus on and investment in our late-stage product pipeline and commercial execution.
Jan: That ends our formal presentation. Operator, please open the call for questions.
Speaker Change: Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star 1 1 on your telephone keypad and wait for a name to be announced. To withdraw a question, please press star 1 1 again. To ensure everyone has the opportunity to ask a question today, please limit yourself just to one question. Please stand by while we compile the Q&A roster. This will take a few moments.
And now we're going to take our first question.
Jonathan Chang: And it comes from the line of Jonathan Chang from Lear Inc. Your line is open, please ask a question.
For more information visit www.FEMA.gov
Hi guys, thanks for taking my questions.
Speaker Change: Can you discuss your reasons for confidence in the endometrial cancer opportunity for RENA-S and for committing to a Phase III, second-line plus endometrial cancer study by year-end? Thank you.
Speaker Change: Thanks, Jonathan, for the question. I will let Ty dive into this. Ty, can you talk about the endometrial cancer data and the commitment to going to a phase 3?
Ty: Jonathan, thank you for the question. I think you heard from Jan earlier that we will present data in Endometrial, so we have the data. It's been submitted and it will be publicly available.
Ty: in the end of this first half. That data in our mind is highly competitive, it is
Ty: The most robust efficacy signal that is currently being generated in that new population that you described, patients with endometrial cancer who...
Ty: at Chemotherapy and Checkpoint Inhibition. And so we are very excited about that data. We think it's gonna be robust data that will be very well appreciated by investigators and investors when it is public. And that's driving our excitement to move forward aggressively with the phase three.
Speaker Change: Thanks, Ty. Thanks, Jonathan, for a very good question. Let's move on to the next analyst.
Thank you.
Thank you.
Speaker Change: And the next question comes to the line of Michael Schmidt from Guggenheim Partners. Your line is open, please ask your question.
Speaker Change: Hi, this is Paul on for Michael. Thanks for taking our question. Just for EPCO and the DLBCL landscape, there's a competing CD20 bispecific that could potentially have combo data approved this year for the transplant and eligible second line plus setting. What do you have to show to be competitive here for EPCO monotherapy? And can you provide any updates on the status of your efforts there with GEMOX?
Speaker Change: And as a follow-up, you know, how are physicians currently thinking about the potential to sequence multiple CD25 specifics for DLBCL? Thank you.
Speaker Change: Thanks very much, Paul, for the questions. I will let Tahi address those for Apco Rhythm Hub. Tahi? Yeah, thank you again for the question. So, second line, in the first part, of course, we just, a couple of days ago,
Speaker Change: got the good news that the NCCN has included our data with Genmox and Epco.
Speaker Change: and second-line patients who are ineligible for transplant with a type 2a recommendation. So that's very exciting. And then there's, of course, the phase 3 ongoing in combination with linoleumide. So from our end, we kind of capture both opportunities, the debunking,
Speaker Change: with chemotherapy followed in conjunction with the CD3, CD20 bispecific GMOX strategy as well as the...
Speaker Change: more outpatient oriented, all medication plus a subcutaneous administration enhancing T cell function strategy and these two things are going to play out
Speaker Change: I think, as we have said many, many times, the opportunity in the wheelhouse refactoring setting for the future of peace health.
is
Speaker Change: really in expanding access to this novel mechanism. And we think that from the whole target product profile for subcutaneous administration, the fact that it is the only one that is approved in both indications, it is extremely well positioned to enter the community space and provide access to patients in those settings.
Speaker Change: Thanks, Thai. Let's give the floor back to the operator. Thank you. And now we will take the next question.
Speaker Change: Astika Gunawardene from Twist. Your line is open, please ask a question.
Speaker Change: Hi guys, just very quick to follow up on Ken Lee.
Speaker Change: $281 million in the first full year of launch. It's very commendable. It's going to delve into the market dynamics in the second half.
Speaker Change: Wanted to see if there's something funky about Q4, given that it was kind of flat on Q3, if there's anything unusual you'd point to. And then if I can ask.
Speaker Change: On Akka's funding map, I like that you're putting peak sales number here for the key pipeline assets.
over the 136,000...
Speaker Change: potential treatable patients back as one billion in peak sales teams a little light compared to the others that you provided
Speaker Change: Can you tell us a little bit about what goes into this estimature? Is that something to do with the longer treatment interval, the six weeks versus three weeks, or is there something else that you're anticipating with Icosan? Thanks.
Speaker Change: Thanks, Ashika, for the questions. I will ask Brad to comment on the first two, and then maybe Judith can step in also on the estimates for icosahedron map. Brad, why don't you start with EPCO?
Speaker Change: Thank you very much for the question and we remain very confident actually in the core markets with the U.S. and Japan with Epkinley's performance with the growth.
Speaker Change: that we're seeing there. We did have a one-time accounting adjustment for sales in Europe, France specifically, that impacted the Q4 numbers specifically. Otherwise, again, feel very confident with our growth trajectory at this point.
Thank you. Thank you.
Brad Bailey: There may be the market size for Acosulimab, as we estimated it, around a billion for 136,000 patients. Do you want to add anything to that, Brad?
Brad Bailey: Yeah, no, for ACCA, it's certainly a competitive space that we see, particularly in this post-Iowa setting, a significant opportunity, as you showed on your slide earlier, but nothing really further to comment on that from a science perspective at this point.
Brad Bailey: All right, thanks. Thanks, Brad. Unit, any call-off from the clinical side on Akosunlimab and the estimated markers?
Brad Bailey: Yeah, the only thing to add is, as you know, we pre-select for PD-L1 positive, so this came into account on the assessment of the market opportunity.
Brad Bailey: Thanks. Thanks, Judith. Hope that's clear, Astika. Let's give the floor back to the operator.
Thank you.
Speaker Change: And now we're going to take our next question and it comes from Yifan Liu from HSBC. Your line is open, please ask a question.
Yifan Liu: Thanks for taking my question. I have one follow-up on Agassiz-Solimab. So in 2025, the Phase 2 of data updates, what...
Speaker Change: Are we expecting to see in the data in the presentation and then what sort of roughly the timing?
Speaker Change: of that presentation, and then secondly on Abkinli, second line, and transplant ineligible. So you launched a DLBCL4 trial last year. Could you maybe talk a little bit about the proposition for that setting against the DLBCL1? Thanks.
Speaker Change: Thanks for both questions. Judith, why don't you talk a bit more about the AkasumiMAP data, which we are very excited about to present this year, and a bit more on timing. And then Tai can address the ApkaritaMAP question in the second and plus DL-BCL setting after that. Judith?
Speaker Change: Thank you for the question. As you know, we presented the first Kaplan-Meier Curse on overall survival.
Speaker Change: last year at ASCO. We saw very interesting durability. Albeit, the curves were not with enough maturity or, you know, with more maturity. We expect to stay the same string signal and this is what we will present later this year.
So basically, durability of the time-to-event endpoints, mainly OS.
Speaker Change: Thanks, thanks, Judith. And Ty, maybe a comment on the second line plus question for EPCO. Yeah, thank you. And then maybe I use it as an opportunity to more broadly lay out our Diffuse Search B-Cell strategy as it relates to AppKindy. So initial launch, as you know, as a single agent in...
Speaker Change: and third line plus, going really well. Then the next extension of data was in combination, getting data in our hands and providing confidence.
Speaker Change: physicians and patients that this is a safe and an efficient way of administering this new mechanism. The GEMOX data now recognized with the 2A classification by the NCCN, meaning
Speaker Change: This is something that, in the judgment of the NCCN, is providing benefits to patients. And then we have this phase 3 that is ongoing with lenalidomide. These are complementary in our minds and give a...
Thank you.
Speaker Change: a opportunity of choices for investigators to treat their patients respected of their needs. Either somebody who needs more debunking or maybe somebody who's a little bit more fair. Really the main focus is actually frontline. This is saying, I think we.
Speaker Change: spoke about this and we also put this on the slide. The study is fully equipped to anticipate the readout in 2076 and a lot of the data that we're generating now is in anticipation of that data set and to really supplement a very robust complementary data set in front line.
Speaker Change: such that when this indication hopefully is going to be the positive, we'll have again a very complementary data set to provide physicians with all opportunities to treat their patients. That's essentially broadly the strategy.
Speaker Change: and this is why also in the second line we have a chemo and a non-chemo combination strategy, if that makes sense.
Speaker Change: Thanks, Tai. I think it's very clear. Let's move on to the next question.
Speaker Change: Thank you. And now we're going to take our next question. It comes to the line of Xiang Deng from UBS. Your line is open. Please ask your question.
Xiang Deng: Hey, thank you very much for taking my question. Just one on Aptinley please.
I'm just wondering, as you mentioned,
Xiang Deng: The frontline DLBCL trial could have rebound by the end of 2026.
Xiang Deng: Just wondering, if you have a readout by end of 2026, do you think you will have two-year or three-year follow-up at that time? And that follow-up timeframe, do you think that's actually enough to allow FDA to give a decision without being asked for longer follow-up, just considering the previous precedent? Thank you very much.
Xiang Deng: Thanks, Dion, for the question. Very exciting one. So I'll let Ty address that. Ty? Yeah, sure. I mean, so first things first. So the study was fully approved in the summer of last year. And so then there is an event-driven endpoint, PFS. That is the accepted endpoint.
and the population in this study is
Speaker Change: the challenge that the FDA had with a lack of over survival benefit.
initially as it relates to the polaric study.
Speaker Change: And so obviously it will be whatever the data will be, but based on the phase 2 data set that we have generated, a pretty robust phase 2 data set, we are quite optimistic actually that the signal in the experimental arm will be
significantly stronger than the one I was seeing in Polarix.
Speaker Change: And so we don't anticipate that it's going to be an issue for us.
Speaker Change: Thanks, Ty. Let's move on to the next question. Thank you, Siyang.
Thank you.
Speaker Change: And the next question comes from Yaron Weber from TD Security. Your line is open, please ask your question.
Speaker Change: Assuming positive as well, so you can follow both for first and second line, but do you need more data from second line?
And then just secondly, on Tuesday,
Speaker Change: So it sounds like from now on, you're going to be the lead commercialization party and you will book sales in the U.S., Europe, and Japan. And how do we model that? How do we... Is there a world? Yeah, I assume, back to Pfizer. And congrats on getting that.
Speaker Change: Thanks, Jeroen, for the question. So, Tai, you can address the question on the very exciting developments with AppCorridorMap. And then, Brad, why don't you explain the exact contract on TIFFDAQ and commercialization to Jeroen after Tai.
Speaker Change: Well, just to clarify what Jan also said at the beginning and his prepared remarks, there are three of the five ongoing phase threes that are fully accrued and awaiting a readout based on events. This is in third line, if you such be so.
in second-line follicle reformer, which is in combination with R-square.
Speaker Change: and in Frontline Diffuse HPSA. And we were talking about the Frontline Diffuse HPSA study that finished its course last year.
and where we anticipate a readout by events.
Speaker Change: earlier than it was initially prognosticated. And that's also true for the second line follicular lymphoma, phase three, which also accrued significantly faster than initially projected. And thus, because this is event-driven studies, we anticipate a readout.
earlier than initially projected.
Speaker Change: Terms of the agreement, as mentioned earlier, remain that U.S. and China are as is, where Pfizer is actually still a lead party in both of those areas, as we're still co-promoting here in the U.S. and in Europe.
Speaker Change: and the rest of the world, including Japan, we will be the lead party at that point and there will be low double-digit royalties involved per the contract that we've already set up, but it's just as a reminder that the U.S. and China remain the same.
Speaker Change: Thanks, thanks Brad, very clear. Thanks Jaren for the questions. Let's move on to the next question. Thank you Jan. And now we are going to take our next question at Council Line of Matthew Phipps from William Blair. Your line is open, please ask your question.
Matthew Phipps: Hello, thanks for taking my questions. Are you guys able to disclose if you're going to use a folate receptor alpha expression cutoff for the endometrial cancer phase three? And then on Akinle, you know, given, I don't know, maybe half a year of launch, maybe a little more than that, in follicular lymphoma at this point, do you see any broader utilization in follicular given no need for hospitalization? Just wondering if that is helping get into community settings and if you think that will be a continuing trend. Thank you.
Matthew Phipps: clear. So first, folate receptor alpha is a validated target in ovarian. In PROC, essentially all patients have some degree of folate receptor alpha expression.
Thank you for using Red Bee Media's YouTube audio.
second and this is
Matthew Phipps: also in the ESMO presentation already disclosed it but there's obviously more data that we have internally that we're not able to disclose yet, has generated robust data across the entire spectrum.
Matthew Phipps: Afforded Receptor Alpha Expression, including patients who are, by the technicality of the essay, called negative.
Matthew Phipps: And I spoke to that before, this is to a degree also a function of the sensitivity. So to be clear, our strategy in the phase 2 and our strategy in the phase 3 is to not select a foliate alpha receptor expression. Now we do stratify in the phase 3.
Matthew Phipps: by the various cutoffs which is 125 and 75 and that's just good practice.
Thank you.
Matthew Phipps: and Abkini. On Abkini, the question was whether the lack of hospitalization is going to help us expand into areas outside of the
Matthew Phipps: And I think that that is certainly a general part of our strategy with Ipkindi.
and that's...
Matthew Phipps: my understanding also playing out already that the utilization of a kidney in follicular forma is helping us to get access into institutions that originally were not
label, but I would actually ask Brad to maybe...
add from his point of view to this.
Thank you. Thank you.
Brian, do you want to comment on this?
Brian: Yeah, thanks. Thanks, Ty. I agree with what you said. I think it's just another...
Speaker Change: validation of physicians reported really strong response to our favorable clinical profile, the dual indication, as well as the positive label without hospitalization that's required or not required in FL. So we do feel confident that this FL approval has and will continue to help us deliver.
Speaker Change: innovated by specifics across multiple histologies across broad and diverse sites of care as well. So it's just reinforcing that from from the physician standpoint.
Brad Bailey: Thanks, Brad. And Matt, to top it off, as a reminder, there's no requirements for any hospitalization in any of the ongoing phase 3 trials, so I think that should clarify them.
Let's move to the next question. Thank you.
Speaker Change: The next question comes from Lan Ophkisi-Ding from Redburn, Atlanta. If your line is open, please ask your question.
Lan Ophkisi-Ding: Hi, just one quick question on the RENAR-S. Because you just mentioned about your clinical development plan in ovarian cancer and endometrial cancer, I'm just wondering what is your clinical development plan for other solid tumor indications such as lung and breast? Thank you.
Speaker Change: Very good question, Chris, and we will let Tye comment on that. Tye, are you excited on all of the tumors? Yes, so...
Speaker Change: There is indeed, as you were alluding to, photodisruptor-alpha expression in non-smooth lung cancer, particularly in patients who have AGOR mutation, but not only restricted to that, and in triple negative breast. And we already spoke about that there will be activities in that range. We already...
Speaker Change: have a cohort in non-small cell lung cancer with patients who have EGFR mutations in second line open and are enrolling patients in that cohort and so hopefully we'll get validation of what we all believe which is that this
Speaker Change: This asset will also have efficacy in these two indications, and then we're going to inform you about next steps quite timely.
Speaker Change: Thanks, Ty. Thanks, Kiesha, for the question. Let's move on to the next question.
Speaker Change: Thank you and now we're going to take our next question and it comes to the line of Justin Smith from Bernstein. Your line is open, please ask your question.
Justin Smith: Yeah, thanks very much. I've got two. First one just on Dara, if you wanted to possibly share any thoughts about the potential...
Justin Smith: and then the second one just on the buyback and sorry if i'm thinking about things the wrong way but just trying to understand why you've announced that now and not waiting to after the Hexabody decision from J&J and just is it a case of it's just aren't interesting assets out there or just any thoughts on why that the buyback timing now thank you
Speaker Change: Thanks, Justin, for the question. So I think that the Dara question is definitely more a question for J&J, because they are developing Dara Tumama, but I will ask Ty to give his perspective, because he's an expert in multiple myeloma. Maybe you can say some general things there on the landscape, Ty, and then Anthony can absolutely give you more rationale and thinking behind the buyback.
Speaker Change: which we just announced today at just on time, maybe some further color on brand wrap and the landscape in multiple myeloma.
Yeah, um...
Speaker Change: I will hesitate to comment on another company's assets, so broadly speaking it's always good for patients that there are a lot of opportunities and I think we should leave it at that.
Speaker Change: All right, I agree with that, Ty. So ask J&J as the feedback, Justin. And then for Anthony, maybe more rationale on the buyback right now?
Speaker Change: Yeah, happy to give you a little bit more context here.
You know look
Speaker Change: Our capital allocation priorities are super clear and are aligned with fueling revenue growth and enhancing shareholder value. Our first priority, as I highlighted, is really accelerating the development of our late-stage pipeline and maximizing the success of our commercialized medicine, as I highlighted.
Speaker Change: Second priority is pursuing Focus, BD, and M&A. And after we've evaluated these opportunities from these first two priorities, we can consider
Speaker Change: You know, our third priority, which which your question is about, which is return of capital. As a reminder, here in 2024, we executed an approximate $500 million buyback of 1.8 million shares. And for 2025, you know, having carefully considered this, you're looking at all all factors.
Speaker Change: We announced today our plans to buy back an additional 1.9 million shares, and we really think this, you know, strikes the right balance.
Speaker Change: of fueling the revenue growth and enhancing shareholder value. So I think this is the appropriate time to really outline for all of our stakeholders, our shareholders.
Speaker Change: our capital allocation framework and priorities. And I think we stepped through that in a fair amount of detail and very clearly, you know, outlined these priorities and also demonstrated how we've executed against that framework.
Speaker Change: in 2024, and how we're set up very well to continue to execute against that in 2025.
Anthony Pagano: Thanks, Anthony. I think it's crystal clear. Thanks, Justin, for the questions. Let's move on to the next analyst.
Anthony Pagano: Thank you. And the question comes from Vikram Purohit from Morgan Stanley. Your line is open, please ask your question.
Thank you.
Vikram Purohit: Great, thanks for taking our questions. We had one on BD as a follow-up to the last question and then one on guidance. So, on BD, I mean, given you noted 2025 is a heavy execution year for the pipeline, I just wanted to see how strong of a priority external BD and M&A could be for the year-end.
the pipeline where it stands now.
Vikram Purohit: And then secondly, on guidance, I was just wondering if you could provide a bit more color about what the drivers are for the bookends for the revenue, gross profit, and OPEX guidance that you outlined for the year. Thank you.
Speaker Change: Thanks Vikram for the for the questions. Let me address the BD one and then Anthony can do the guidance question. So the BD is very very important to us. Vikram, we want to organically and inorganically strengthen the pipeline, accelerate it. What we will do is focus on antibody-based medicines because that is our field of expertise.
We did it very well last year with ProfoundBio.
Speaker Change: I can tell you that we did this acquisition in record time and actually ran into the chief medical officer of a very large pharma and the head of oncology of a very large biotech we all know.
Speaker Change: who said, well, basically congratulations on the ProfoundBio deal. And you snapped it away in front of our face because we were simply much quicker than other companies. And what we are looking for if we come is antibody-based medicines that are totally differentiated. We can use our expertise in this field for over 25 years now.
Speaker Change: to really zoom into the right opportunities. And that should be phase three programs or phase three ready programs ideally for GEDMAP. And that is to complement our own pipeline. We are also filling our own pipeline. We are bringing more and more new molecules into the pipeline ourselves from our own platforms.
We have several platforms now, ADC platforms, which are...
responsible for over 50% of our pipeline right now.
Speaker Change: Then we have 40% of our pipeline, and 50% is about bi-specifics at this moment, and the rest is HexaBody. So we have molecules from our own pipeline, but we also look very actively at companies having interesting assets, which we can then accelerate, like we did for RhinoS, as we described today in the call. I mean, within a year of the acquisition, already announcing two phase trees and potentially others to come.
Speaker Change: The belonging is fitting with our expertise as a developer of differentiated antibody medicines. I think with that, Vikram, we will have to see how effectively we can execute that. We are looking at multiple opportunities as we speak.
Anthony Pagano: So, we are very busy with that and let's now move to Anthony to give a bit more color of the guidance.
Anthony Pagano: Yeah, Vikram, I think the starting point I would really just highlight for you to really kind of frame this out, and hopefully this is super clear for both 2024 and 2025.
From my perspective, we absolutely delivered on our financial commitments.
Anthony Pagano: You know if we zoom in on 2025 and just look at the really the quality of the guidance we put forward
Anthony Pagano: Total revenue growth, and all my comments will be at the midpoint, total revenue growth at 12%.
Anthony Pagano: recurring revenue growth of 18%, we had $100 million plus non-recurring revenue headwind. Looking at the improving quality of our revenue profile.
Recurring revenue is now at 95%.
If we look at then the performance
Anthony Pagano: of Epkinley and TIVJAC, we can really see the investments we've made, really focused investments we've made over the last couple of years.
Anthony Pagano: and building out our commercialization capabilities really paying off. You can look at the Net Product Sales Collaboration Revenue line where we see growth for that line really driven by, again, Epkinley and TIBDAQ. Primarily Epkinley, to be clear, projected growth of around 39%, nearly 40%.
Anthony Pagano: at the midpoint. So it gives you a sense of the the quality of the the revenue profile. Of course a big driver of our revenue continues to be Darzalex.
and here we provided our range of 12.6
Anthony Pagano: to $13.4 billion, $13 billion at the midpoint. So I would say this is probably the primary driver here of the revenue guidance range. In terms of our investments, again, we've really delivered on our commitments here, really purposely reallocating our investments.
Anthony Pagano: to the late stage pipeline and really investing in a smart way in sales and marketing to really deliver on today's launches but to continue to build that foundation and platform for upcoming.
Anthony Pagano: future launches and again delivering on our commitments. In terms of the OPEX range around 2.1 to 2.2 billion
Anthony Pagano: Now, this is really driven by the three investment priorities and where these exactly will land. It really has to do with the expansion and acceleration of EPCOR clinical development with the five phase three trials ongoing and expansion of EPCOR in our key markets. Then we have RENA-S.
Anthony Pagano: with the start of the phase three and second line plus endometrial cancer, as well as, you know, the overall trajectory of the phase three trial in PROC. And of course, we have the ongoing work with Gen 1046.
Anthony Pagano: or Akosuma Mab with the phase three, phase two start and another indication and also progressing.
Anthony Pagano: the Phase III VCRM. So it's really going to be these three programs, I would say, that are largely driving the variability in HopX. But again, if we sort of... If I finish my comments where I started...
Anthony Pagano: Really, we continue to deliver on our financial commitments, very strong recurring revenue growth and seeing that come through to the bottom line in terms of the 16% operating profit growth at the midpoint, we're projecting, or more than $1.1 billion.
Thanks, that's very helpful. Thank you.
Speaker Change: All right, thanks Vikram for the questions. Let's move on to the next one. Thank you and now we're going to take our last question for today.
Speaker Change: And it comes to the line of Rajan Sharma from Goldman Sachs. Your line is open, please ask your question.
Rajan Sharma: Hi, thanks for taking my question. So I was just wondering if we could get an update on Gen 1042. I know this slide said that there's going to be a decision in 2025.
Rajan Sharma: but it's obviously been a decision that's been pending for some time so just interested in understanding what you're still trying to establish here and if we could just get a little bit more clarity on the timing is that likely to be first half or second half of the year and just one for Anthony on clarification on the guidance is there anything assumed in guidance for 1042 development and then a very quick one to
Rajan Sharma: Wrap up, you previously talked about potential developments in immunology and inflammatory disease either through your own internal pipeline or through external sources. Could you just kind of talk to your latest thoughts there and an appetite both from an internal and external perspective? Thank you.
Lan Ophkisi-Ding: Thanks Rajan for the questions. I will ask you to comment on the timing for 1042 and Anthony for the plans for 1042 and development. Let me start with the I&I question. What we already said, Rajan, is that AppKindy, we believe, is an excellent candidate.
Lan Ophkisi-Ding: for development also and select I&I indications that we are in discussions now with App-V.
Lan Ophkisi-Ding: to actually plan and discuss next steps for Apkinly. We think it's an excellent molecule, which will likely work really, really well in the INI area, but we also have collaboration with Argenix, which is preclinical, and a number of internal, 100% owned programs for GenMob. So we continue to be very focused on.
creating next-generation differentiated antibody-based medicine.
Speaker Change: candidates for INI and we will update you once we are closer to the clinic. But the most advanced candidate is Apkin Lee. Then let's move on to Judith to speak a bit about timing for 1042 units.
Speaker Change: Yeah, thank you, Jan, and thank you for the question, so sweet.
Speaker Change: Putting the slides by 2025. I cannot be more precise at this point because, as you know, durability is key for IELTS.
Speaker Change: and we need to assess durability in first line and then, you know, undergo the prioritization within our own pipeline. And Head & Neck external is moving as well, and we will come with all these data sets.
more likely by the second half of the year.
Speaker Change: Thanks, Judith. And then Anthony, what is in the budget of the guidance for 2025 for 1042?
Anthony Pagano: Yeah, well, Rajan, thanks and good to hear from you. I think we sort of think about 1042 as the, of course, the ongoing work that Judith just alluded to, and I'd say, you know, the future work.
Anthony Pagano: you know, is really just not really material one way or the other this year. That's primarily based and is a function of timing.
Anthony Pagano: And finally, to top it off, Ryan, I can tell you that not only we, but also a part of BioNTech is very excited about what we have seen up to now with 1042. We need more data, as you already alluded to.
Anthony Pagano: But we also think there is a great potential for combining 1042 with different ADCs and other concepts which both companies are working on. So I think exciting times, we will need a bit more data to get a better feeling for durability but a high level of excitement.
Speaker Change: All right, operator, this was the last question. So thank you all for calling in today to discuss Genmos Financial Results for 2024. If you have additional questions, please reach out to our investor relations team. They're ready to answer your questions and then we hope that you all stay safe, keep optimistic and we very much look forward to speaking with you all again soon.
Anthony Pagano: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.
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