Q1 2025 Legend Biotech Corp Earnings Call
[music].
Good day and thank you for standing by welcome to the legend biotech first quarter 2025 earnings call. At this time participants are in a listen only mode.
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 on your telephone.
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Speaker Change: I'd like to hand, the conference over to your first speaker today, Caroline Paul Associate Director of Investor Relations. Please go ahead.
Speaker Change: Good morning. This is Caroline Paul Associate director of Investor Relations at legend biotech.
Speaker Change: Thank you for joining our conference call today to review, our first quarter of 2025 performance.
Speaker Change: Prior to this call we issued a press release announcing our financial results for the quarter you can find the press release on our IR website legend biotech dot com.
Speaker Change: Joining me on today's call are Yang the Companys Chief Executive Officer.
Alan Bash: Alan Bash, the company's president of cardiac D and Jessie young the Companys interim Chief Financial Officer.
Alan Bash: Following the prepared remarks, we will open up the call for Q&A.
Speaker Change: Our president of R&D go away Fang and Chief Medical Officer, Mike Healy scenario, joining the Q&A session.
Speaker Change: 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 here with that.
Speaker Change: 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 our company website.
Speaker Change: In addition, adjusted net loss is a non IRS metric.
Speaker Change: This non <unk> financial measure is in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with IRS Rs.
Speaker Change: There are a number of limitations related to the use of these non <unk> financial measures versus their closest IRS equivalents.
Speaker Change: However, we believe that providing information concerning adjusted net loss and adjusted net loss per share enhances an investors' understanding of our financial performance.
Speaker Change: We use adjusted net loss as a performance metric the guide management and its operation of and planning for the future of the business.
Speaker Change: We believe that adjusted net loss provides a useful measure of our operating performance from period to period by excluding certain items that we believe are not representative of our core business.
Speaker Change: Our press release includes <unk> for us to non <unk> reconciliations for these measures.
Yan: With that I will now turn the call over to Yan.
Yan: Hello, everyone. Thank you for joining us today.
Yan: During the first quarter, we continued executing on our strategic priorities by increasing the number of global Atc's and patients treated with <unk> in partnership with J&J delivering operational efficiency, making continued investments.
Yan: We continue to anticipate achieving operational breakeven for <unk> by the end of 2025 and the company wide profitability in 2026, excluding unrealized foreign exchange gains or losses.
Yan: Regarding <unk> performance during the first quarter net trade sales were approximately $369 million.
Yan: Which is a 135% increase year over year.
Yan: We have now treated over 6000 patients with carve HD and all Kahveci launch remains the strongest party launch to date.
Yan: In the U S more than half of our utilization is now in the earlier line settings.
Yan: In a recent 50 respondents survey after presenting cartoon for data to 86% of physicians from the community setting.
Yan: <unk> for car victim in early line multiple myeloma rose from 34% to 55%.
Yan: On this note.
Yan: We're very pleased that overall survival was added to <unk> EMEA label based on the <unk> positive opinion.
Yan: Data from part a to the floor.
Yan: We're also pleased that Australia regulator has now approved our victory in the second line plus setting we're looking forward to bringing <unk> to more patients outside of the U S will benefit from its differentiated efficacy.
Yan: Perfect with unique profile continues to be demonstrated through extensive data and we continue to facilitate best practice sharing as we treat more and more patients and generate additional safety data.
Yan: For example, we've already incorporate additional safety measures in our ongoing <unk> programs.
Yan: And new data is constantly being generated about a <unk> <unk> benefit versus risk profile.
Yan: As a result of the posters presented at the meeting and given that patients are already doing routine blood work. The majority of centers administrative car victim have implement monitoring for absolute lymphocyte com followed by dexamethasone intervention as needed.
Yan: We continue highlighting new safety data to the oncology community as it is reported.
Yan: On the clinical front for <unk>, we continue to expect to complete enrolment for co. Two six this year, we believe the cards in five and six trials are key to moving <unk> into the frontline study.
Yan: Looking at long term growth for legend in addition to moving <unk> into the frontline we remain focused on building out our pipeline programs as part of our mission to serve more patients around the world through innovative cell therapies, we're investing in research and development, where we can bring to bear our industry.
Yan: Adding expertise to drive the advancement of innovative new assets. This includes in vivo car T delivery, which we believe represents an important opportunity to strengthen our cell therapies in dealership.
Yan: We are excited about the new research facility currently being built in Philadelphia, where in vivo delivery will be one of its key focuses.
Yan: Positioning us well to pursue this area of innovation with the right infrastructure and resources.
Yan: We believe this next generation approach to off the shelf therapy holds a lot of promise for incurable diseases by reprogramming immune cells directly in the body through direct infusion the need for ex vivo cell engineering and manufacturing is eliminated.
Yan: No LIFO depletion, a freezes are necessary for in vivo delivery, enabling even more scalable manufacturing.
Yan: We're excited to be embarking on the next frontier of cell therapy innovation, and we look forward to providing additional updates as we make progress on this front.
Alan Bash: Turning to our upcoming anticipated company milestones, we anticipate growth to be driven by capacity expansion in Belgium, and in New Jersey, which Alan will detail in just a moment.
Alan Bash: In addition to increasing our manufacturing capacity, we continue to work towards the overall survival benefit being included in the U S label now that it's already in the European label.
Alan Bash: To sum up regardless of the current macroeconomic uncertainties legend endures as largest stand alone cell therapy company with over 6000 patients treated by car victim as we forged a path to cure.
Alan Bash: With a cash position of approximately $1 billion, we are investing in our core differentiators and remain focused on delivering operational efficiency in order to ensure durable long term growth.
Alan Bash: With that I'll pass it over to Alan to provide an update on <unk>.
Alan Bash: Thanks, seeing moving onto <unk> performance as Jim mentioned net trade sales of <unk> were approximately $369 million, which is a 135% increase year over year and a 10.
Alan Bash: <unk> increase from the fourth quarter, our global growth was driven by continued share gains and capacity expansion U.
Alan Bash: U S net trade sales of $318 million grew 127% year over year, and 5% quarter over quarter in the U S. We continue to certify more hospitals as authorized treatment centers and the total number of U S. Hospitals that are certified to treat with the <unk> is now 114, we remain pleased with the progress.
Alan Bash: We have made in the outpatient setting and continue to anticipate that a majority of our volume will be coming from outpatient use by the end of this year.
Alan Bash: Regarding our U S performance, which was notably strong we had sales of $51 million, which is more than double compared to the same period, a year ago and represents a 65% increase quarter over quarter.
Alan Bash: <unk> performance was driven by expansion in Germany, Switzerland, Austria, and Brazil, and we are pleased to be bringing <unk> to more eligible patients in Spain, the U K, Denmark, Belgium in Israel, where we recently launched.
Alan Bash: To this end we're excited to share that Tech Lane initiated clinical production again during the first quarter and remains on track to initiate commercial production. There later this year.
Alan Bash: This is another critical component of our plans for serving patients in Europe to meet the increasing demand and to meet additional demand in the United States, We expect to receive approval for our physical expansion in Raritan and the second half of the year.
Alan Bash: The progress we've made in executing our manufacturing plan and investments has enabled us to be among the best in class. We now have a 97% manufacturing success rate, which we believe is the highest in the car T industry, 95% of the time, we deliver <unk> on or before the promised delivery date and our medium.
Alan Bash: Turnaround time has been consistently declining and now stands at 30 days. We believe it is turnaround time is more than sufficient based on our conversations with physicians and physician to place their orders. They are mindful that bridging therapy alone takes multiple weeks for a number of patients going forward, we expect to continue to reduce out of spec rates and <unk>.
Alan Bash: Greece, our efficiency and expect further declines in our turnaround time now it's time to take a closer look at the financials. So I will turn the call over to Jesse.
Jesse: Thank you Alan and good morning, everyone. Joining the first quarter, we delivered solid financial results with net sales up 135% year over year.
Jesse: Total revenues were $195 million driven by collaboration revenue growth of 137% year over year.
Jesse: Q1 delivered a 101 million net loss and 27 million adjusted net loss. After excluding items that are not representative of the company's core business such as a 52 million unrealized foreign exchange loss due to our Treasury Center based in Ireland.
Jesse: Importantly, our operating loss of $118 million in the same period, one year ago was reduced by over half to an operating loss of $51 million.
Jesse: Meaningful improvement in operating results was driven by our operational efficiency and disciplined expense management.
Jesse: Even though we continue to invest in our robust pipeline and support in the second line indication launch as well as our manufacturing capacity.
Jesse: Our first quarter gross margin on net product sales was 63% improving from the pit.
Jesse: <unk>, 9% in Q4.
Jesse: As expected R&D expense and Ifr Ias basis grew only 1% year over year and SG&A on an <unk> basis, only grew 29% from the prior year to $72 million.
Jesse: Overall, we believe we have been making strides towards positive operating cash flow generation and profitability.
Jesse: Diluted earnings per share were negative <unk> <unk>.
Jesse: Compared to negative 23 for the same period last year.
Jesse: Now turning to capital allocation, we continue to have a strong balance sheet with 1 billion in cash and equivalents and time deposits. We believe this is a competitive advantage for us in our industry and we will continue to prioritize disciplined expense management as we fund, our operating and capital expenditures, including <unk>.
Jesse: Innovation until we achieve profitability, which we anticipate in 2026, excluding unrealized foreign exchange gains or losses.
Jesse: In summary, our first quarter results demonstrate the durability of our stand alone cell therapy platform. We are pleased with our performance and advancement of many impactful initiatives along with increasing operational efficiency in 2025 and now it's time to take your questions. Operator, we are ready for the first.
Speaker Change: <unk> please.
Speaker Change: Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one on one of your telephone and wait for your name to be announced to charter. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Speaker Change: And our first question comes from the line of Gena Wang of Barclays. Your line is now open.
Gena Wang: Thank you for taking my questions I have a three quick questions.
Gena Wang: First one is regarding the Coffey D.
Gena Wang: Rice differences between U S and ex U S. If you can give any color there and then secondly is regarding the new Robinson section approval in second half 'twenty five.
Speaker Change: Would you be able to walk us through the steps you need FTE sign offs and any concern on FTE on time execution and then lastly, very quickly I know you have a multiple pipeline assets.
Speaker Change: Just give us a.
Speaker Change: A rough idea when should we see a which program first.
Speaker Change: Coming yeah.
Speaker Change: He is our 2025, we will see additional data.
Speaker Change: Hi, Gena, it's Alan the price differential between the U S and ex U S is approximately 30% obviously varies country to country.
Speaker Change: In terms of the railroad and approval in the second half we're confident that we.
Speaker Change: We will be able to achieve.
Speaker Change: The approval from FDA in terms of capacity expansion.
Speaker Change: That is based on.
Speaker Change: The filings with them and.
Speaker Change: The CBE 30 with that process.
Speaker Change: So in terms of pipeline our folks are on two different technology platform in vivo SaaS ERP platform for oncology indications and the added generic the SAP platform for auto immune diseases.
Speaker Change: Looking forward to a multiple clinical readout later this year.
Speaker Change: For the illegal cuts you have for <unk>, we expect to have first patient dose.
Speaker Change: In our investigator initiated study in June or July back to have preliminary.
Speaker Change: Clinical readout towards the end of this year.
Speaker Change: Hello.
Speaker Change: Allo platform side that we expect to have four clinical readout in the second half of this year against the investigator initiate study.
Speaker Change: Auto immune currently we are running some trials in China using triple capacity in autologous cell therapy product pathway CD 19, CD 20 series on it to try to drive a deeper response.
Speaker Change: And we also expect to have four clinical readout in the later part of the velocity on U S side, we have two ongoing phase <unk> program targeting car the ATM crime true for gastric cancer and <unk>.
Speaker Change: Yes.
Small cell lung cancer again, we are really at a phase one dose escalation data for both.
Speaker Change: Yeah, I think I can expand on that a little bit further deal III program. We have an oral presentation at <unk> next week and both E.
Speaker Change: Yellow three programs in the <unk> two.
Speaker Change: <unk> programs have ASKO sensors that you may have seen from the titles that were released in April.
Gena Wang: Hi, Gina obviously, maybe I'll supplement the answer Pat pointed out two things first of all I know you guys look at the price difference right. So youre pretty much everywhere in the United States. There are three types of customers that we pay a mandatory federal are required it.
Rebates Medicaid.
Speaker Change: <unk> hundred 40, <unk> Hospital, and also VA hospitals right.
Speaker Change: Provided 23, 1% rebate to those customers from the list price.
Speaker Change: And this is why we don't see really a significant difference between the your price and those types of customers in the U S. So we don't see a big impact regarding you know somewhat proposals from <unk>.
Speaker Change: Penetration here and then on FDA approval I know people are concerned that youre seeing some staff reduction agency, but based on our current interaction with FDA on these fashion right.
Speaker Change: Robertson like Allen mentioned FDA agreed that we will use the sofa CBE 30 pathway that is once we and J&J followed the application in writing within 30 days, if we don't hear from the agency approval.
Speaker Change: If there is any requests during that 30 day, we cancer and again, we don't expect any in 90 days here. So we fully expect the on time.
Speaker Change: Approval from FDA for the physical expansion for marathon and right now we're still on track to achieve that by end of this year.
Speaker Change: Thank you.
Speaker Change: Thank you for our next question.
Speaker Change: And our next question comes from the line of Jessica Fye of Jpmorgan. Your line is now open.
Jessica Fye: Hey, guys. Good morning. Thanks for taking my question I was wondering if you could just take a minute to kind of make the case to investors that curve Victor will successfully penetrate the community and the reason I ask is one pushback we hear from investors is that when they do kols calls so with key centers and physicians.
Speaker Change: <unk> indicated they don't have a backlog and thus I think some investors come away thinking that demand is largely satisfied and there's limited growth ahead.
Jessica Fye: So just hoping you can spend a minute on kind of making the case about why you have conviction this product can get into the community. Thank you.
Jessica Fye: Okay.
Jessica Fye: Based on many of the discussions we've had both with the Kols and the authorized treatment centers as well as physicians out in the community. There is a high demand for providing <unk> as an option for patients in earlier lines.
Jessica Fye: And what we hear is that the benefit based on the profile of extending survival extending long term remission to these patients is very attractive and there are obviously as you know the majority of the nearly 80% of the patients out there in the community.
Jessica Fye: What we have done is and based on the feedback. We've received is we've increased our investment and efforts along with J&J in terms of educating the community going out and reaching all the major community sites and we're in the process of doing that and not only raising awareness. There is already high awareness of <unk> as an option, but actually where we saw.
Jessica Fye: See more opportunities to raise awareness and increase that call to action in terms of referring patients until the authorized treatment centers. The second thing. We're doing is we are connecting the experts in the authorized treatment centers with the experts out in the community and this is getting a lot of great traction a lot of <unk>.
Jessica Fye: Increased dialogue a lot of.
Jessica Fye: Really good opportunities for those referrals to happen.
Jessica Fye: And then thirdly, we are explaining to the community that those patients are going to be coming back to them and we are building a platform around transition of support so that those patients actually will need to get back to their community physician for ongoing monitoring other health checks and so that the community understands that they will.
Jessica Fye: Not be losing those patients.
Jessica Fye: So the profile of the product the outpatient administration. The overall survival benefit the unique differentiated benefit. These are all things that we see gaining traction in the community.
Jessica Fye: And Jeff This is Jim maybe I'll just add one more point to Alan's comments. So we will present some long term data at <unk>. In fact, you will see the abstract coming out next week and we add J&J are extremely pleased with the results and we think this will be actually another impetus for the community.
Jessica Fye: <unk> two <unk>.
Speaker Change: Hey, Kevin Harvick and secondly, given the unprecedented benefit.
Speaker Change: Also I'm happy to report that our overall survival result was just added officially into the label in Europe. Following the positive <unk>.
Speaker Change: Alright, so again in both the U S market and the European markets, we won't be able to promote on the Merry go overall survival and also the significant to our results from careful that demonstrates both clinically meaningful and also statistically significant.
Speaker Change: A majority of the survival over standard of care, so that will help the community upticks.
Speaker Change: Thank you.
Speaker Change: Thank you next question.
Speaker Change: And our next question comes from the line of Yaron Werber of TD caller. Your line is now open.
Yaron Werber: Great. Thanks, so much.
Yaron Werber: Two quick questions number one in terms of capacity for Q2, now that <unk> is online and continuing to sort of you pushing volume through it should we expect can you give us a sense sort of what we're expecting obviously a step up in terms of quarter over quarter growth in Q over Q1, but is that going to be more you.
Yaron Werber: Rypien centric than the U S. And then secondly, it sounds like you do not need to get the new Raritan facility expect inspected the new expansion can you just confirm that thank you.
Yaron Werber: Yeah. So in terms of <unk> Youre, absolutely right. It came online in September of last year and it is now.
Yaron Werber: Delivering for Europe. So we do expect that that will continue to.
<unk>, our ability to supply Europe, and we do expect modest growth in Q2.
Yaron Werber: With more sequential growth and acceleration in the back half of the year supported by not only <unk>, but also the U S capacity expansions as we've outlined previously with rare it in as well as Novartis coming online in the first half of this year.
Yaron Werber: In terms of the in terms of the rare in physical plant expansion is being described.
Yaron Werber: At this point, we do not expect that there will be required any inspections relative to that CBE 30 process and the approval there.
Yaron Werber: Thank you Amit for next question.
Speaker Change: And our next question comes from the line of cost of salaries of BMO capital markets. Your line is now open.
Speaker Change: Good morning, everyone. Thanks for taking out of question.
Can you remind us. Please what is the difference between Hyatt <unk> and Fox Youre not as high risk patients what is the percent that your functional high risk patients in multiple myeloma and what percentage of the patients treated with <unk> Natalie lines correspond to functional high risk patients. Thank you.
Speaker Change: Sure when we refer to high risk patients, we are referring to patients with certain cytogenetic factors.
Speaker Change: Or is the definition of functional high risk is more related to the concept that they progress.
Speaker Change: Quickly after sort of a frontline setting so it's more of a <unk>.
Speaker Change: Related to how the patients respond to a particular therapy.
Speaker Change: In terms of the <unk> four study as the abstract titles show for <unk>, we will be having data coming out on the subgroup analysis.
Speaker Change: On these various patients and current Q4.
Speaker Change: But in general cartage for on as showing very strong.
Speaker Change: <unk>.
Speaker Change: Both PFS and OS in.
Speaker Change: The population in these early lines.
Speaker Change: Ah patients. So we feel confident that both of these populations, both high risk and functional high risk.
Speaker Change: <unk> very well with cell to cell administration.
Speaker Change: And in terms of the uptake the battery lives what dynamics do you see that always functional side. These days.
Speaker Change: 5%, that's a SaaS basins in the update that Youll see that lines.
Speaker Change: Yes, I think in the early lines, namely the second through fourth line, we do see that where physicians tend to start are in these categories that Mike just described the functional high risk and high risk patients that the natural place for them to begin to think about for victory is an option, but we've also in our conversations for that many <unk>.
Speaker Change: <unk> once they've gotten comfortable there and they have started to use it in that population will then expand so I think to your point. This is a progression from utilizing <unk> in the early lives for the patients who are either fast fast progresses or have the highest size of genetic risk and then moving on from there.
Speaker Change: Thank you.
Speaker Change: Thank you Amit for next question.
Speaker Change: And our next question comes from the line of Kelly shy of Jefferies. Your line is now open.
Speaker Change: Okay.
Speaker Change: Hi, Good morning. This is clearer for Tony Thanks for taking our questions. So so you just initiated preclinical production thats a tackling facilities. So just wondering if you can.
Speaker Change: Give us color about the manufacturing expansion moving forward.
Speaker Change: And also just wanted to quickly touch upon the in vivo car key initiative, you mentioned, one area, where do you see the differentiation My London This novel space.
Speaker Change: Thank you.
Speaker Change: Yes, as you mentioned, we achieved approval for the clinical production began that in Tech Lane.
Speaker Change: That sets us up well for the ability to start commercial production in Sakhalin by the end of this year and we're on track for that so between Tech Lane and the <unk> facility, which is already approved in commercial we are.
Speaker Change: Significantly ramping there to support the European launches and just to remind you.
Speaker Change: Remind you the European launches or across.
Speaker Change: Germany, Switzerland, Austria, Denmark.
Speaker Change: And then.
Speaker Change: Throughout the World, we have the U K in private market Israel, the private market.
Speaker Change: Brazil, as well and as you saw from the release Australia is now.
Speaker Change: <unk> approval reimbursement and launch will come later.
Speaker Change: To add to the two facilities again as we've already mentioned, we've talked about the railroad and expansion and the Novartis commercial production, which started the first part of this year. In January is also starting to meaningfully contribute in Q2 here and then Q3 and beyond.
Speaker Change: In addition, let me just mentioned because we have talked about the fact that there is an investment in tackling that accompanies a jointly approved and so that speaks to the additional capacity that we plan to build in tech lane to the tune of $150 million jointly by the collaboration.
Speaker Change: So in terms of illegal cut sheet approach.
Speaker Change: This is a platform where you we use molecular engineering 19 virus that kind of specialty and realize the immune cell uses case T cell in the body of pace at the same time, we also engineered virus to reduce the generic.
Speaker Change: The transaction two novel tissue.
Speaker Change: And we.
Speaker Change: We are expecting the first patient dosing in June and July this year in terms of the advantage of illegal cut sheet com.
Speaker Change: Patrick combination law ex vivo and then that should SaaS out a few key why is that.
Speaker Change: Anthony and recognize the engineering in the body of patient and therefore in general it battery cell phenotype based on our pieces of data.
Speaker Change: Secondly is completely off shore without the need for depletion. So there's no delay in tomo at Michigan.
Speaker Change: Sarah.
And no need for depletion also provide additional safety benefits to the page lots of the <unk>.
Speaker Change: Scalpel manufacturer due to the nature of 19 virus being the drug product. So those are a few key areas.
Speaker Change: Okay.
Speaker Change: Thank you one moment for our next question.
Jon Miller: And our next question comes from the line of Jon Miller with Evercore ISI. Your line is now open.
Jon Miller: Hi, guys. Thanks, so much for taking the question.
Jon Miller: A couple of clarifications, if I may start with those I know you already spoke about the general price difference U S versus ex U S, but whats the price delta between the U S and the lowest cost anywhere else in the world not just the average difference.
Jon Miller: And secondly, you talked a little bit about penetrating the community, but most of the stuff that you were talking about is how to get referrals into academic centers. I know you've also talked about getting actual car T infusion into select community centers. This year can you give us an update on how that process is going and how rapidly you expect to be able to deliver.
Jon Miller: <unk> car T. In the community itself and then maybe lastly on those in vivo currency Differentiators that you that you just spoke of that makes sense relative to an ex vivo car T. But how do you feel differentiated for your approach in vivo space relative to other in vivo players who are also working on similar.
Speaker Change: Lindsay based approaches.
Speaker Change: Okay.
Alan Bash: This is Alan I don't think it will be commenting on the specific lowest price, but I do I do want to just remind you that we have a band of pricing band that J&J given their pricing policy does adhere to so we don't go below that price.
Speaker Change: Supported basically based on.
Speaker Change: The costs and other factors, obviously speaking to the value of <unk> in the marketplace as well. So there is a price band there.
Speaker Change: Youre absolutely right that I was speaking to the penetrating of the community in terms of referral base, but to add to that we are also in active discussions around having perfect day closer to the patient and administered in the community setting we have several I would say sort of demonstration projects and initial.
Speaker Change: Plans with certain community centers. This year in the works nothing to announce as of yet, but we do expect that this year, we will have at least one if not two or more.
Speaker Change: Community, a large treaty networks, starting to administer <unk>.
Speaker Change: Some of their centers and then the third leg of that journey. If you will is actually bringing it to even more sites around the country and having <unk> adopted in the community setting as well. So we are on that journey, starting with some centers this year.
Speaker Change: Yes getting to your second question in terms of depreciation of our in vivo approach versus.
Speaker Change: Our peer groups approach across the industry. This is a novel platform and rapidly evolving we began to invest into this platform three years ago, we think that.
Speaker Change: Before a final area of key differentiation is that we actually.
Speaker Change: Setup from the get go.
Speaker Change: Is that T cell recognition mechanism, so that many different ways to recognize.
Speaker Change: And then in deals so that transaction.
Speaker Change: We are testing multiple mechanism of <unk> and to drive through that.
Speaker Change: Staci efficiency as well as to control the safety signal those.
Speaker Change: Sure.
Speaker Change: Invested well play out in the community setting.
Speaker Change: The second area of differentiation is really about engineering.
Speaker Change: 19, reducing.
Speaker Change: Generic transaction capacity buyers, that's a good point mutations.
Speaker Change: We saw it.
Speaker Change: Are you positioned to really.
Speaker Change: Reduce the generic transaction and therefore expand the potential therapeutic window between the T cell repletion.
Speaker Change: Nonspecific that recognition.
Speaker Change: Third area is the card is that we have.
Speaker Change: Large.
Speaker Change: Experience and expertise in optimizing the car design.
Speaker Change: Combined it with <unk> since I think that's a key area that can.
Speaker Change: Drive the differentiation and the activity that we'll be able to cut the fourth area is another area, we have a tremendous expertise coming from <unk> <unk>.
Speaker Change: That is the last CMC.
Speaker Change: The process development and the processing capacity and ability to scale up our final.
Speaker Change: Our goal is.
Speaker Change: To optimize the CMC process, so that we cannot only.
Speaker Change: Part of the initial.
Speaker Change: <unk> five but also have ability to further.
Speaker Change: Down the road and then lost the fifth area of differentiation.
Speaker Change: We focus on is really the execution.
Speaker Change: League of validation for those platform.
Speaker Change: We have end to end capacity to increase demand.
Speaker Change: In China, we can execute that.
Speaker Change: While our first development candidate for in vivo platform was selected last December and six months. Later, we are looking forward to first patient dosing, so that speak to the speed and efficiency of our clinical development process. All of those I would say, we're bringing value to our illegal.
Speaker Change: Thank you one moment for our next question.
Speaker Change: And our next question comes from the line of Liana <unk> of RBC. Your line is now open.
Liana: Okay. Thanks, guys. Thanks for taking my question I Wonder if you could talk a bit more about the community referral process I guess I'm wondering how much brand awareness stickiness actually is there in the community for carving specifically versus that decision being made at other centers I guess effectively are you laying the groundwork for car victory.
For all car Ts, including I guess future and current competitors and then related to that I guess, what's the messaging from you and your partner in the community given that commercialization partner also as by specific offerings, which are pretty popular in the community.
Liana: Yeah.
Liana: Yes, there is growing awareness of.
Speaker Change: Car T and specifically her car Vicki in the community, we estimate and we do some surveys that about 70% of community oncologists are aware of <unk>, where we see more opportunity is actually to get them to kind of go from awareness to action based on the earlier line approval of the <unk> four.
Speaker Change: Our population, but we are certainly laying the groundwork for that in the ways that I described earlier in terms of strong education through our field teams through our medical education through connecting the experts at the treatment centers to the community and making sure that the community understands that they will be getting their patients back for transition of support and monitoring and ongoing.
Speaker Change: <unk>.
Speaker Change: Our care.
Speaker Change: In terms of.
Speaker Change: In terms of.
Speaker Change: I think that was the answer on that other messaging with a partner yet so.
Speaker Change: We and our partners are very committed to the fact that cell therapy, specifically be CMA car T is a very best option for patients.
Speaker Change: In terms of earlier lines, we have the overall survival data, we have the durability and the <unk>.
Speaker Change: Recommendations are very clear that for patients who are eligible for both bi specifics and car T should really be evaluated for car T. First.
Speaker Change: And Thats based on the clinical profile of J&J is <unk>.
Speaker Change: Committed to this.
Speaker Change: And I should just remind you that we have our own teams out in the field our own sales teams dedicated to <unk>, both on the J&J side and on the license side, making this case.
Speaker Change: Thank you won't limit for our next question.
Moderator: And our next question comes from the lineup Vikram <unk> of Morgan Stanley. Your line is now open.
Vikram: Hi, Good morning, Thank you for taking our questions we are too.
Speaker Change: I'll go first.
Speaker Change: Could you just kind of walk us through your initial thoughts on the.
Speaker Change: Our recently appointed leadership at Heber.
What.
Speaker Change: You see as the potential implications and considerations here that we should keep in mind for yes perfect development.
Speaker Change: <unk> program and then secondly related to an earlier question could you remind us what portion of connecting users currently in the quarter to four population and where do you see that trending over the course of the next year. Thank you.
Speaker Change: Yes, just to answer your second question first we see that nearly 60% of our patients and this is based on.
Speaker Change: Our ordering system nearly 60% are coming from that Carter to four population, we expect that to continue to evolve in that direction and get to about three quarters either by the end of this year or certainly before our competitor there in this space has launched so again as they get into the market in a later line population.
Speaker Change: We will have significantly evolved.
Speaker Change: Our business into the earlier lines.
Speaker Change: Hey, Vikram, so I'll answer the question about the new <unk> leadership at FDA. So.
Speaker Change: We're happy to see that Doctor facade has been appointed the direct top fever, which regulates all the cell and gene therapy approvals.
Speaker Change: First of all we agree with Doctor per Sean's point that any cancer trial, you shouldn't use goes off standard survival benefit and to that end. We're happy to report that first of all we will report long term minimum five year follow up from <unk>, One and you guys will review the data and ask or in fact, the abstracts coming out next week. So you will see.
Speaker Change: The entrepreneur benefit we bring to this population and that is survival, which is a hard endpoint right.
Speaker Change: Secondly, I think if you look at the history of Cartage approval, we did secure FDA approval back in February of 2022 based on the primary endpoint of overall response rate. However, when we started the trial back in 2018 2019. These patients have exhausted all of the available therapy to them. So it represents a very significant unmet medical.
Speaker Change: Indeed.
Speaker Change: Hi, Dan today of course, you can argue things are different because you have to be targeting car to your available as commercial therapy and three soon to be 453 antibodies again indicated for myeloma. So its very different but since we conducted that pretty one trial. We have demonstrated the survival benefits demonstrated PFS, which is near.
Speaker Change: Three years from historically about four to five months in this patient population. So that is the hard evidence we've demonstrated and uncertainty. We also secured both FDA and also EMEA approval based on PFS endpoint. However in September of last year, we've demonstrated again clinically meaningful and also statistically significant benefit.
Speaker Change: In survival with hazard ratio of <unk>, 500, which means 45% improvement in survival from standard of care. So we think <unk> comes with a very very strong benefit in terms of clinical outcome, which survival and Thats also accompanied by the surrogate endpoint such as PFS and overall response rate right that is why legend.
Speaker Change: And also with J&J stance by the packaging costs.
Speaker Change: So we welcome Dr. <unk> presented at the Sea Bird leadership, because we're clearly demonstrated survival benefit here now I know there are questions from investors about <unk> activity. So we think that given the supply from <unk> last year using <unk> as a surrogate endpoint, we plan to sit down with you after.
Speaker Change: To explore.
Speaker Change: The possibility of using and market activity as a potential endpoint for accelerated approval. We think this is a good starting in the FERC class eight because as you know today is the newly diagnosed multiple myeloma patients.
Speaker Change: We expect survival is probably over a five to seven years. Therefore in this setting a surrogate endpoint makes perfect sense now in Lafayette or even secondly, if you look at our data from car for the standard of care arm had a PFS of shorter than one year. So in that study.
Speaker Change: We're not sure whether surrogate endpoint makes sense or not under the leadership of Dr. <unk> as I mentioned again, we agreed that oncology settings of ours should be to go with vendor and we're happy to report that harvested green dot lifesaving benefits to patients.
Speaker Change: Great. Thanks, so much.
Speaker Change: Thank you Mohammed for next question.
Speaker Change: And our next question comes from the line of James Sheehan of DB. Your line is now open.
James Sheehan: Hey, good morning, guys. Thank you for taking my question.
Speaker Change: I wanted to kind of piggyback on the Dr side question.
Speaker Change: I know a base case for cards grew 6% to lean on PFS and it sounds like you have engaged on possibly exploring MLD, but any thoughts on.
Speaker Change: What competitors are doing.
Speaker Change: Utilization of.
Alan Bash: Percentage of patients completing 12 months of follow up and then for Alan what is the status on.
Speaker Change: I believe there was an industry coalition for lowering community to community based car T. Accreditation is that I guess.
Speaker Change: The bottleneck for community adoption right now thank you.
Speaker Change: Okay.
Speaker Change: Regarding your first question on <unk>.
Speaker Change: Unfortunately, we do not comment on competitors I can say.
Speaker Change: They are doing we're confident about our approach and discussions that we were having with the FDA on R&R cortex study.
Speaker Change: Eddie.
Speaker Change: Yes.
Speaker Change: Industry discussions around.
Speaker Change: Providing some sort of sort of fact light accreditation are ongoing there are.
Speaker Change: Some centers, we are in discussions with that and they are affiliated with a larger academic centers.
Speaker Change: The country. So that I would say is in process and that should potentially unlock some of the opportunity in the community as well.
Speaker Change: Okay.
Speaker Change: In addition, just to add to the.
Speaker Change: Currency effects.
As I mentioned, we have a clear plan to have conversations with the FDA and we intend on meeting with them.
Speaker Change: In about two months' time frame.
Speaker Change: Yeah.
Speaker Change: Thank you one moment for our next question.
Speaker Change: Yeah.
Speaker Change: And our next question comes from the line of Mitchell Kapoor of H C. Wainwright. Your line is now open.
Mitchell Kapoor: Hey, everyone. Thanks for taking my questions wanted to ask one about outpatient volume I think last quarter. You had mentioned that the comprised over half of our volume for <unk> can you quantify that trend now and just give us a little bit of the direction of where that is heading.
Mitchell Kapoor: And then secondly can you talk through your assumptions and pipeline efforts for cash runway through second quarter of 2026, but you need to seek some avenues of non dilutive capital to bridge yourself like well into profitability or do you think that maybe there are some other opportunities you might see.
Mitchell Kapoor: In terms of outpatient volume, we see that growing.
Mitchell Kapoor: Steadily but slowly also because as new centers come on sometimes they start in the inpatient. So our latest claims data continues to show that it's a little over half we do see we do see growth each quarter, but it's kind of in the single digit percentage points.
Mitchell Kapoor: I expect that over time, we will continue to see continued.
Mitchell Kapoor: Move to the outpatient setting.
Mitchell Kapoor: This might be center specific or it might be patient specific depending on the patient characteristics, but I would say, we probably get into kind of the two thirds.
Mitchell Kapoor: Third outpatient versus inpatient overtime.
Mitchell Kapoor: With the treatment centers that we have now and the ones that will be coming on board in the future.
Mitchell Kapoor: And Mitchell as you know we have many reasons to be optimistic about license co chair and we as a market leader with the fastest launch when Cathy space and we continue to expect <unk> will breakeven operationally by the end of 'twenty five and we anticipate profitability in 2020, excluding FX fluctuation, we have $1 billion.
Mitchell Kapoor: Of cash on hand, and that will reach profitability.
Mitchell Kapoor: We have a lot to 2026, so we don't have any pressing needs to raise capital and we have HR under investment with J&J on Capex $110 million that will last through 2028.
Mitchell Kapoor: A phase II expansion.
Mitchell Kapoor: Included in our cash run way. Thank you.
Mitchell Kapoor: Great. Thank you guys.
Speaker Change: Thank you Omar for.
Mitchell Kapoor: Our next question.
Speaker Change: Our next question comes from the line of cheap Mukherjee of <unk>. Your line is now open.
Speaker Change: Great. Thanks for taking my question just two from me.
Speaker Change: First coming back to integrating car T therapy into the community setting when it comes to the tertiary in regional centers what are the biggest infrastructural hurdles for them currently and what are you doing to facilitate this and second on the DLL, three and Claude and $18 two datasets we're expecting.
Speaker Change: Will the data be as part of the conference abstracts are all that perhaps be say for the conference presentations themselves. Thank you.
Speaker Change: Yes.
Speaker Change: In terms of infrastructure.
Speaker Change: Certainly capacity in and share space and staff or some of the factors that we look at but again speaking to the prior question around outpatient we do see that over half of our patients are getting perfect in the outpatient setting and.
Speaker Change: That's based on a couple of factors one of which importantly is our profile around the time of onset for Crs and that gives the centers confidence to safely infuse. It in the community and then monitor their patients and that opportunity for outpatient is one of the ways that we overcome some of the infrastructure hurdles there.
Speaker Change: One of the other infrastructure hurdles that we are monitoring and we keep a close conversation with our centers is any capacity limits in terms of pickups in April resistant cryopreservation again, there are multiple ways that centers around the country are addressing this including use of third party.
Speaker Change: Suppliers for <unk> pick up as well as cryopreservation and we're engaging those companies to help make sure that those infrastructure hurdles are not a limit to patients are getting inquiries.
Speaker Change: Regarding deals between cloud and $18 two as I mentioned, Dr. <unk> will have an oral presentation at <unk> next week regarding the <unk> as Jack.
Speaker Change: There will be key data from the dose escalation in those studies that will be available.
Speaker Change: Next week when the abstracts are released and look forward to providing more details at the conference is now.
Speaker Change: Okay.
Speaker Change: Thank you Mohammed for next question.
Speaker Change: And our next question comes from the line of Ash from of UBS. Your line is now open.
Ash: Yes, thanks for taking our questions.
Ash: Maybe just on <unk> I know you've talked about second quarter or the step ups since the northeast supply comes online is that a step up in order to magnitude with what we saw in the third quarter of last year, which was pretty robust sequential growth quarter for you.
Ash: And then secondly, any thoughts you can share on the potential upcoming clinical data from our select so we saw 98 patients.
Ash: Data at the Ash conference and presumably now getting 19 additional patients with the most.
Ash: And two months of follow up anything that they can be any non ICANN sneer tox that can show up in the upcoming update thanks.
Ash: Okay.
Ash: The step up for Novartis is now starting to contribute to our capacity expansion towards our goal of 10000 doses by the end of this year and we feel very confident with that target of providing the ability to supply 10000 annualized patient doses.
Ash: In terms of.
Ash: The size of the step ups and size of the growth I think we're we're projecting that Q2 will be another modest step up in terms of our growth based on demand and supply with sequential growth and then further acceleration in the back half of the year just in terms of some of the dynamics for Q1.
Ash: I think one of the reasons why we saw a solid 10% growth not only because of the <unk>.
Ash: The European markets coming online, but also based on some of the improvements we saw in out of spec with turnaround time, and our <unk> facility ramping.
Ash: Little bit faster than we expected.
Ash: This is just great execution from our team in Europe to supply the European launches and that helped pull in some of the revenue from.
Ash: What we have projected for Q2 into Q1.
Ash: For a solid Q1 performance.
Ash: Regarding your second question on the clinical data.
Ash: I can't comment on what's going to be presenting besides just the <unk> that we are aware of at <unk>.
Ash: And what I can say is that.
Ash: Or whether they will have any evidence of neurotoxin in their study.
Ash: They are obviously, starting a phase III randomized study and so I think that will be very telling about more of their safety profile on what I can say is regarding our study we're very excited about the <unk> presentation of our predicated one.
Ash: Long term data that.
Ash: I think it will be.
Ash: Pleasantly.
Ash: We're excited as well when you see the data being presented in addition, I can also say that.
Ash:
Speaker Change: That are.
Speaker Change: Monitoring of absolute lymphocyte count, our ALC and use of prophylactic steroids.
Speaker Change: ALC counts at greater than 3000 is being.
Speaker Change: Further incorporated in Q.
Speaker Change: Major academic centers as well as in our <unk> studies and we are seeing.
Speaker Change: Yes.
Speaker Change: Good response from the Kols, who are implementing this and we expect additional data to come out.
Speaker Change: Later this year, so we will report on that.
Speaker Change: In the near future.
Speaker Change: Thank you Mohammed for next question.
Speaker Change: And our next question comes from the line of George Farmer of Scotiabank. Your line is now open.
Speaker Change: Hi, Good morning. This is clearly on for George Thank you for squeezing us in.
Speaker Change: A couple from us.
Speaker Change: So I wanted to double click on.
This survey.
Speaker Change: Number that you mentioned earlier about the pressure in his script.
Speaker Change: Second line.
Speaker Change: Prescribing kind of between the second line.
Speaker Change: Rising from $34, 55% I was wondering if you could provide a little bit more color here on on.
Speaker Change: Yeah.
Speaker Change: B.
Speaker Change: Diversity.
Speaker Change: Geographically.
Speaker Change: Geographic location volume.
Speaker Change: All of the centers, where these few months.
Speaker Change: Reading at and what do.
Speaker Change: To see to keep pushing beyond that 55%.
Speaker Change: And if you could also comment on uptick in this earlier line setting in the EU. If you expect the updated label to have a significant impact there.
Speaker Change: Your line is.
Speaker Change: Also wanted to ask about outpatient administration, you did see a little over 50% now.
Speaker Change: And could you maybe break that down for us between the earlier and B.
Speaker Change: End stage disease like in your second to fourth line patients what proportion of those have been treated in outpatient location and how does that compare to the end stage patients.
Speaker Change: And our last question if I may.
Speaker Change: Just to clarify when you.
McCarty: Specify the Indian turnaround time is around 30 days Mccarthy.
McCarty: Are you using that kind of interchangeably with vein to vein.
McCarty: Time here.
McCarty: Thanks.
McCarty: Yeah.
Speaker Change: Yes, so first of all in terms of the EU.
Speaker Change: We do expect that the updated label will support.
Speaker Change: We use in the earlier lines and that's the that's the feedback we've been getting from the centers in Germany that are now online and in the other European markets. As we mentioned so we do expect that as the overall survival data that is very compelling and this will enable patients much like it has in the U S to sort.
Speaker Change: Move into the earlier treatment settings with perfect day.
Speaker Change: In terms of outpatient we don't have a specific breakdown between how much of the outpatient uses in the earlier line versus the end stage, but.
Speaker Change: Quantitatively I will tell you that as we get into more patients receiving correcting the earlier lines that does correlate somewhat with the ability and the comfort level with physicians to administer in the outpatient setting although the outpatient setting is more a factor of sort of.
Speaker Change: Safety monitoring and we do see.
Speaker Change: <unk>.
Speaker Change: In the earlier lines are lower rates of Crs and lower rates of <unk> and so these are the things that our physicians do gain comfort with us as they move to earlier lines.
Speaker Change: In terms of turnaround time.
Speaker Change: Hi.
Speaker Change: Our immediate 30 days.
Speaker Change: Everyone uses a bit of a different definition in terms of what vein to vein is but we think this is the most relevant way to think about our ability to deliver to physicians. Because this is the point at which they.
Speaker Change: <unk> the patient and then when is the product available for them to take it back.
Speaker Change: And infuse patients.
Speaker Change: And as we discussed on the presentation.
Speaker Change: Bridging therapy. This is a very <unk>.
Speaker Change: Acceptable I wouldn't say, even acceptable I would say comfortable place for physicians to be by the time they get through the bridging therapy that most patients are going to receive whether that's in later lines or in earlier lines.
Speaker Change: We're really at the 30 day, Mark and so turnaround time is is quite competitive to wear.
Speaker Change: Where physicians needed to be at this point, but we do expect that will continue to be able to reduce that over time.
Speaker Change: Yes, I mean, you heard from Alan how much improvement we have seen in our manufacturing process. In fact, the latest data from <unk> suggests that the median efficiency. Every time is about 2007 days now and then I want to answer a question about the population. So it's a paper published actually from Cardinal health with collaboration with Vanderbilt.
Speaker Change: University Medical Center and it was based on the response from 50, Hematologists and oncologists in terms of the.
Speaker Change: Breakdown of the survey of physicians.
Speaker Change: About 86% in the community practice, and then 14% India setting. It's also very well distributed in terms of geographic distribution of these doctors so its 28% from the south 28% from the western area, 24%, 20% northeast.
Speaker Change: If you want to know more about this paper on the survey of 50 physicians on car for data, we're happy to send you out of paper, but it's.
Speaker Change: It's a very well on a representative sample.
Speaker Change: Sample set here.
Speaker Change: Yes.
Speaker Change: Okay. Thanks, Keith I'm wondering if you could maybe comment on what feedback you've got from them on what.
Speaker Change: Well I guess.
Speaker Change: What are you hearing.
Speaker Change: What is needed to further improve kind of their approval ratings second line drive prescriber setting.
Speaker Change: Yes.
Speaker Change: So what we're hearing anecdotally from the field is that obviously the community based Hematologists and oncologists are really excited about survival. When we survey them on the three most important decision factors when they choose a messaging for second line the ranking such audit rights survival.
Speaker Change: All followed by PFS, and then followed by a response rate, including complete response rate. So that shows you. There is a divergence here because in the academic setting.
Speaker Change: Physicians in Turkey also tend to put PFS on par with OSB in the community setting.
Speaker Change: Clearly there is a very strong preference on survival here, that's what we're finding out in the community setting and back with.
Speaker Change: We fully expect the FDA.
Speaker Change: FDA to approve our survival data in the label and therefore this year, we havent the duvernay here and.
Speaker Change: The survival benefit it will also.
Speaker Change: Be augmented by our <unk> presentation in the next month, so you'll see that once we have the detailed data and physicians I'm sure. We're excited by the long term follow up data in terms of your long term remission.
Speaker Change: Got it thank you so much.
Speaker Change: Yes.
Speaker Change: Thank you Mo moment for our next question.
Speaker Change: And our next question comes from the line of Sean <unk> of Raymond James Your line is now open.
Speaker Change: Hey, guys. Thanks for squeezing me in can you speak to the bar to take the cloud and $18. Two program forward, we've seen some decent results from.
Speaker Change: Cars again with some intriguing frontline.
Speaker Change: Signals in sequence with chemo.
Speaker Change: But the durability for the second line setting it looks like it could be more of a question.
Speaker Change: And.
Speaker Change: And maybe it's restricted to the cloud and $80 to high expresses.
Speaker Change: And secondarily should we expect a similar approach on the development compared to the DLL three program, meaning would you.
Speaker Change: I want to take it forward with a partner.
Thanks.
Speaker Change: Okay.
Speaker Change: Thank you for your question so regarding the cloud and 18.
Speaker Change: You study.
Speaker Change: We are.
Speaker Change: Discussed earlier going to be presenting some data at <unk> and we anticipate the dose escalation can be complete.
Speaker Change: Li later.
Speaker Change: At the end of summer and then we anticipate the expansion to begin.
Speaker Change: At that time.
Speaker Change: We have obviously cloud and $18 two is important dosing gastric cancer, but also pancreatic cancer.
Speaker Change: Also while there is an antibody approved so that has not in the frontline setting in gastric cancer the expression.
Speaker Change: The cloud and expression is.
Speaker Change: Is quite high in order for people to use that antibody I think in general we've seen that car T cells.
Speaker Change: Tend to have more sensitivity for lower expressing cells.
Speaker Change: I think an opportunity.
Speaker Change: Two.
Speaker Change: <unk> car T in the space, both in gastric cancer and pancreatic cancer. So we'll have to wait and see how.
Speaker Change: How the completion of the safety dose escalation is but we are excited for the opportunity to explore this further and expansion.
Speaker Change: Thank you. This concludes our question and answer session. Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Speaker Change: Okay.
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