Genmab A/S (GMAB) 2020 Q2 法說會逐字稿

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And now without further delay, I would like to hand the conference over to our speaker today, Jan van de Winkel. Please go ahead, Jan.

So hello, and welcome to the Genmab conference call to discuss the company's financial results for the first half of this year. With me today to present these results is our CFO, Anthony Pagano. And we will be joined for the Q&A by our Chief Development Officer, Judith Klimovsky; and our Chief Operating Officer, Anthony Mancini.

Let's move to Slide 2. As already said, we will be making forward-looking statements, so please keep that in mind as we go through this call.

Let's move to Slide 3. I'm proud to say that despite the universal challenges posed by the COVID-19 pandemic, Genmab not only had a strong second quarter but a transformative one. Two key events have occurred since we presented you with our first quarter results. We reported very favorable top line results for tisotumab vedotin in cervical cancer. And of course, we announced a broad foundational oncology collaboration with AbbVie.

Starting with the most recent event, the highly anticipated tisotumab vedotin data in late June. We, along with our partner, Seattle Genetics, announced that the innovaTV 204 trial of tisotumab vedotin for patients with recurrent or metastatic cervical cancer had met its primary endpoint with a 24% confirmed overall response rate and a median duration of response of 8.3 months. We very much look forward to discussing these results with the FDA and the potential for the first BLA submission for one of our proprietary therapeutic candidates. This would be an important milestone in our company's history.

Our landmark AbbVie collaboration was also one of the most anticipated events of the year for Genmab. Genmab and AbbVie will be equal partners, working together to jointly make all strategy, clinical development and commercialization decisions for 3 Genmab bispecific antibody therapies: epcoritamab, DuoHexaBody-CD37 and DuoBody-CD3x5T4 as well as potential novel differentiated cancer therapies created under a discovery research collaboration. So this collaboration sets us on a path to accelerate, broaden and maximize the development of some of our promising bispecific antibody therapies, including epcoritamab, with the ultimate goal to bring differentiated new potential therapies much faster to cancer patients.

So as you can see on the slide, we have advances to report with 2 of these potential therapies as we recently dosed the first patient in an expansion cohort for epcoritamab and initiated a first-in-human trial of DuoBody-CD3x5T4.

I would also like to mention that there is now a Phase III trial by Janssen for amivantamab as first-line treatment in non-small cell lung cancer listed on clinicaltrials.gov. This represents the first Phase III trial for a DuoBody therapy, and we very much look forward to this study being initiated.

In addition, you may have seen the very impressive results from the 2 ASCLEPIOS Phase III trials of ofatumumab in relapsing MS that were published on August 6 in the prestigious New England Journal of Medicine.

Of course, DARZALEX also remains an important factor in our success. Another major 2020 milestone was achieved in the second quarter with the subcu formulation of DARZALEX, called DARZALEX FASPRO in the U.S. -- approval in both U.S. and in Europe. This is the first and only subcu CD38 antibody approved in the world, and we look forward to potential approval in Japan as well following Janssen's submission of an NDA there in April.

As a reminder, there is also potential for approvals based on Amgen's CONDOR study of daratumumab in combination with carfilzomib and dexamethasone in relapsed or refractory multiple myeloma, with submissions by Janssen to regulatory authorities in the U.S. and Japan in Q1 as well as a submission by Amgen in Europe in the same quarter.

And while daratumumab may already be considered an important therapy for multiple myeloma, we continue to see the potential for further expansion and positive top line data sets. At the end of May, we saw the first Phase III results from an indication outside of multiple myeloma with positive top line data from the ANDROMEDA study of subcu daratumumab in combination with cyclophosphamide, bortezomib and dexamethasone, or in short, CyBorD, for patients with newly diagnosed AL amyloidosis. This was followed very recently by positive results of the Phase III APOLLO study of daratumumab plus pomalidomide and dexamethasone, or Pom-d, in relapsed or refractory multiple myeloma. This study was designed to confirm the results from the Phase I EQUULEUS trial, which investigated the IV, or intravenous, formulation of daratumumab in combination -- in the same combination and which was the basis for an approval in the U.S. in 2017.

Finally, and very excitingly, we reported $1,838 million in net sales by J&J during the first half of the year, an increase of 31% over the first half of 2019, resulting in DKK 1,652 million in royalties to Genmab.

Given the challenging coronavirus situation, we are pleased with DARZALEX's performance in the first half of 2020, and we look forward to seeing the further impact of the subcu formulation as it continues to be rolled out by Janssen.

I will now turn the call over to Anthony Pagano to present our detailed financial results for the first half of 2020. Anthony, go ahead.

Great. Thanks, Jan. Let's move to Slide 4. Before I get into the results and the guidance, I'm going to spend a moment reiterating our overarching financial framework because I think we have materially strengthened what was already a strong foundation with our AbbVie collaboration.

First off, let's look at our revenue profile. On the left, you can see the component parts of our current and future recurring revenue streams. It starts with DARZALEX. And here, we are looking forward to continued growth and expansion. And you can also see ofatumumab and TEPEZZA. We're excited about the potential ofatumumab approval in RMS that is expected in September, and the TEPEZZA launch is off to an exceptionally strong start.

Next, on to R&D investment, shown on the right. And this is one of the areas where our collaboration with AbbVie is going to make a real difference. We'll continue to be focused and disciplined in our approach. And as we've told you before, we're going to continue to expand and accelerate our potential winners. But clearly, the cash from AbbVie and the fact that we're sharing the investment in the existing clinical programs on a 50-50 basis means we'll be able to do more and faster.

Stepping back, what continues to stand out for me from this overall framework is that Genmab remains a resilient business with a very high-quality product pipeline and great growth prospects, and these prospects have now been further strengthened by our collaboration with AbbVie. We see this collaboration kind of like a turbocharger towards our 2025 vision.

With that intro, we can turn to Slide 5. If you attended our call on our transformational collaboration with AbbVie, then the information on this slide will look familiar to you. As a reminder, here are its key elements. This is one of the largest oncology partnerships in history with a potential total deal value of up to $3.9 billion. This includes the upfront payment of $750 million and $3.15 billion related to the achievement of additional development, regulatory and sales milestones and opt-in payments. The collaboration includes 3 existing clinical programs. And it is important to remember that we've got material commercialization rights for these potential products, which will enable us to build and increase our commercial footprint, and we'll do that with an initial focus on the U.S. and Japanese markets.

We've also agreed a broad research collaboration, combining the R&D capabilities of both companies. This is definitely a situation where the whole is greater than the sum of the parts, and we've got the potential to create 4 additional differentiated next-generation antibody product candidates. Overall, this is a partnership that further strengthens our financial position and supports our evolution into a fully integrated biotech powerhouse, all working towards our 2025 vision.

Now let's move to DARZALEX on Slide 6. Here, we saw continued strong performance with only a modest COVID impact in the second quarter. You can see that in the chart on the left. As noted by J&J during their first half results call, DARZALEX saw continued strong market growth and share gains in the U.S. And overall, DARZALEX worldwide sales grew by 31% year-on-year. That's net sales of $1.84 billion, which translates to DKK 1.65 billion in royalty income for Genmab.

Now calculating the exact impact from COVID-19 is difficult, especially as we have limited insight into sales in countries outside the U.S. But as we highlighted during our first quarter call, we believe this is a short-term delay and not a fundamental disruption, and that's because of the seriousness of the disease and the need for patients to be treated, coupled with DARZALEX's strong product profile. Additionally, we expect to see continued uptake of the subcu formulation, which was approved in the second quarter. So for the second half of 2020, we anticipate that sales will ramp up, and we're already seeing early signs of that in the U.S.

So DARZALEX continues to be on a clear path to market leadership in multiple myeloma and remains a key driver of our revenue, as you can see on Slide 7. Looking at the graph on the left, you can see that there were 3 significant contributors to the increase in revenue in the first half. First, we recognized nearly 90% of the $750 million upfront payment from AbbVie. Now clearly, it's important to remember that that's a one-off contribution. And second, DARZALEX royalties grew more than 40% compared to the first half of 2019. Finally, you see other, and most of that $97 million comes from TEPEZZA, and we've seen a really strong start here. As you may have seen, Horizon has now raised its 2020 sales guidance for TEPEZZA. Of course, it's early days, but we see this as a very promising launch.

Now if we take DARZALEX and TEPEZZA together, we're really pleased to have seen recurring revenues grow by 47% in H1. As well as increasing revenues, we also increased investment in our pipeline, in our team and in our capabilities, as you can see on the next slide. On the graph on the left, you can see the major drivers of our increased investment in the first half of the year. In total, operating expenses increased by DKK 521 million, which was driven by the accelerated investment in our product portfolio, including the advancement of both epcoritamab and DuoBody-PD-L1x4-1BB. We also spent more on expanding our very talented team. We've continued to hire key team members to support our growing product pipeline, and we've continued to build our commercial capabilities.

With the upfront from the AbbVie collaboration, our revenue growth significantly outpaced the higher investment levels, driving DKK 4.57 billion of operating income.

Now having looked at the individual parts, let's look at our first half 2020 financials as a whole on Slide 9. Here, you will see a P&L summary. In the first 6 months of the year, revenue came in at DKK 6.34 billion, an increase of nearly DKK 5 billion compared to the first half of 2019. The increase was primarily driven by the upfront payment from AbbVie and higher DARZALEX royalties. Total expenses in the first half of 2020 were DKK 1.78 billion with 84% being R&D and 16% G&A. Operating income, as I noted, was DKK 4.57 billion compared to DKK 111 million in the first half of 2019, driven by higher revenue. And that brings us to our net income of DKK 3.6 billion.

So an extremely strong first half of 2020 despite the COVID-19 pandemic, which brings me to our guidance on Slide 10. We are updating certain aspects of our 2020 guidance previously published on June 10. We now expect our revenue to be in the range of DKK 9.1 billion to DKK 9.7 billion, an increase of DKK 200 million to the top end of the previous guidance. This is still driven by the upfront payment from AbbVie and the continued growth of DARZALEX, complemented by a strong start from TEPEZZA. We continue to anticipate our 2020 OpEx to be in the range of DKK 3.85 billion to DKK 3.95 billion. Putting this together, we're planning for substantial operating income in 2020 in a range of DKK 5.2 billion to DKK 5.8 billion.

Now I'll move to my final slide. Clearly, COVID-19 continues to affect everyone's lives. I think in times like this, it's useful to take a step back and reflect on our business and financial position. We have a very strong foundation, even stronger now with our collaboration with AbbVie. Especially important in today's environment, we've got a robust balance sheet, $1.9 billion of cash at the end of the second quarter and no debt. We have great recurring revenues, and they're growing, and we're using those revenues to invest in a really focused and disciplined way. We're investing in our highly innovative and differentiated product pipeline as well as in the team and capabilities to deliver it, all driving towards our 2025 vision.

Now I'll turn it back over to Jan.

Thanks, Anthony. Let's move to Slide 12. So looking at this list, we set many ambitious goals for ourselves in 2020. Based on the robust progress we've made year-to-date, our strong financial foundation and our world-class expertise and capabilities, I'm confident that we will continue to be successful in the remainder of this year. Not only will our proprietary clinical pipeline continue to advance, the many regulatory milestones on this list, and some of these have already been met, including the spectacular launch for TEPEZZA, means that there is potential for many more patients to one day have access to and hopefully benefit from novel therapies created by Genmab.

Let's move to Slide 13. This ends our presentation of Genmab's first half 2020 financial results. Before we take your questions, I wanted to point out one of the events we have listed on this slide here, our 2020 Capital Markets Day taking place in November. For the safety of our attendees and speakers, the event will be virtual this year, but it will still feature a comprehensive update on our business and presentations from many of our talented and passionate team members. We will be sending a safe date for this event soon, and details on how you can register and listen to the webcast will be available on our website closer to the event.

So now operator, please open this call for questions.

(Operator Instructions) Our first question is coming from the line of Peter Verdult from Citi.

Peter Verdult, Citi. Jan, just one question on the data that we can expect in 2020 and 2021, particularly thinking about a full-on PD-L1 and epco in terms of incremental data and Phase III plans. So could you just map out for us what we can expect for those 2 assets data-wise and strategy-wise in 2020 and 2021?

Thanks, Peter, for the question. I will start with that question, and then I'll ask Judith to basically add to that. So for PD-L1x4-1BB DuoBody, we expect data in the coming months, Peter, at the conference, and that will be data from the dose escalation and maybe limited data also from the expansion cohorts.

For epcoritamab, we expect also data in the coming months at a key conference, and that will be at the optimal dose level for epco in different B-cell tumors. That is for 2020. For '21, I will ask Judith to give you some further perspective on data from these 2 compounds, Peter, and potentially others, like tisotumab vedotin, daratumumab, et cetera. Judith, maybe you can step in here.

Yes. Thank you, Jan. So for 2020, nothing to add, but we are very well on track for those 2 major milestones. For 2021, we haven't mapped yet, but it could be the case that we could present some more data toward the second half of 2021 on PD-L1x4-1BB, but not yet mapped, so take it with a grain of salt. It's a little early for the projections, but we are on track for 2020.

Thanks, Judith. Thanks, Peter.

Our next question comes from the line of Wimal Kapadia from Bernstein.

Wimal Kapadia from Bernstein. Just following up with Pete's question on the PD-L1x4-1BB. Jan, you previously mentioned 6 patients were treated with the product, and you had seen good responses, including in PDX failures, and that you had selected a Phase II dose. So I just wondered if you had any incremental color to add. And in particular, I appreciate that the molecule looks relatively potent from what we've seen so far. So any additional color on tolerability would be greatly appreciated.

Thanks, Wimal, for the question. I think we have to keep very brief here until we present the data. I can tell you, we have actually now treated a pretty nice number of patients, and that includes patients who were either already treated with other checkpoint blockers, Wimal, or patients with tumors which are normally not responsive to checkpoint blockers. And you will probably have to wait until we present the data, but we are super excited about this compound.

As Anthony already mentioned in the introductory remarks, Wimal, we have stepped up this program considerably, and so we did for the epcoritamab program this year. And we are really a company who want to invest in a potential winner. So we think that this is -- this one is a potential winner in a very exciting expanding market for where we really need new and differentiated drugs, I think, to help cancer patients better. But I think you have to wait the clinical presentation in the coming months, but we're very excited. That's probably where I want to keep it at.

Our next question comes now from the line of Michael Schmidt from Guggenheim.

I just had a bigger picture question on epcoritamab. I was just wondering, Jan, if you could maybe just share your vision for the longer-term development plan for this antibody, just given that in DLBCL, for example, there -- it seems like that it's getting a little bit more crowded with novel antibody and ADCs entering the market there in addition to CAR-T. And I was just curious how you think about the optimum development strategy longer term for epcoritamab.

Thanks, Michael, for the question. I will start with that answer, and then we'll also ask Judith to complement me on that. I can tell you that we have very big plans for epcoritamab. We are continuously dosing patients. We have started dosing in the expansion cohorts, Michael. And one of the ways we're seeing is that not only do we think that we have a very competitive molecule in indications like diffuse large B-cell lymphoma, follicular lymphoma, we are also having a very active molecule as it now looks in other types of B cancers -- B-cell cancers where other components are far less active and potent.

So we think that we can actually, in one way, open up new markets, basically with this asset, which is given in a subcutaneous formulation, which we think has very distinct advantages, Michael, over the IV-delivered antibodies. And we are going to penetrate all of the lines of treatment in different B-cell tumors. We are working with our partner AbbVie now to work on a very comprehensive, very aggressive plan. And that's probably where I want to keep it at for the time being, but certainly new insight this year, certainly, data, Michael, at key conferences. And yes, we only get more and more excited about this asset.

And also in the context of the competitive landscape, we have seen some other compounds circling from other companies recently. And we think that there's real opportunity here for a game-changing, differentiated novel B-cell-targeting antibody therapeutic. So we believe that we have one of the potentially best in our hands here. We have a very strong partner, AbbVie.

Maybe I can hand over to Judith to see whether you could shed further color without going in too much detail on the development plan, Judith.

Yes. Thank you, Jan. So the vision is based on the data and the data so far and the data that you will see will come in by the end of the year. It speaks to the fact that this epcoritamab can be best-in-class. And it's not only the subcutaneous formulation but also the efficacy and safety. And based on that and leveraging on the partnership with AbbVie, we have mapped a very thorough comprehensive plan, and you will see more in clinicaltrials.gov and when it becomes public in coming months. So stay tuned.

Basically, I cannot disclose the clinical development plan because for -- you need to understand, it's a competitive space. But again, the competition encourages us because we truly believe that we have something in hand that is differentiated and better.

Thanks, Judith. Thanks, Michael, for the question.

Your next question comes now from the line of Matthew Harrison from Morgan Stanley.

I guess 2 from me that I just wanted to ask. One, can you just talk a little bit about AXL and what you're doing internally to decide how you may move that compound forward or not? And then on tiso, now that you have the pivotal data in hand, how are you thinking about potential other indications with solid tumors? And when might we hear something about that?

Thanks, Matt, for the questions. I'm going to hand over both to Judith, who's heading our development. Judith, maybe you can give further perspective on AXL.

Yes, yes. Thank you. So for AXL, as we made public like when we presented the data in September last year, we are in the process of optimizing the PK and understanding the biomarkers data to guide us further on potential future steps. The biomarker piece is with fresh biopsies, so it's taking a little bit longer in terms of recruitment, given the hurdle that is imposed on patients in the COVID era. But we still are confident that by the end of the year, we will have enough data to guide us on future steps. So this is with regard to AXL.

With regard to tisotumab vedotin, I want to first echo Jan and how excited we are about the data in cervical cancer. And so per se, the data is exciting. But in addition, we can take it as a proof of concept for tissue factor as a target for potential other tumors. Because as we know, tissue factor is broadly expressed in other tumor types, I mean, particularly those with very bad prognosis. So this is why we started in partnership with Seattle Genetics, the basket study and the ovarian study. And in ovarian, we have an interesting signal even in the Phase I expansion in the 30 patients there. So we are looking -- monitoring very closely with Sea Gen the progress of the basket study in what we enroll like 4 different tumor types and to understand where we gather enough data of substance to present in the public domain. So it will be in the future at certain point, so stay tuned. I cannot provide a commitment because we are monitoring it closely, but we expect to have data in the future.

Thanks, Judith. Thanks, Matthew, for the question.

Our following question comes from the line of Trung Huynh from Credit Suisse.

I've got a couple on dara. Can you just give us a bit more color on the progress of the subcu dara? I know it's pretty early in the launch, but are you seeing any kind of accelerating use in dara in the earlier lines of therapy? And are you seeing -- are you managing to get -- capture new patients, new DARZALEX patients with this subcu formulation?

And then perhaps can you update us where you are on the penetration you have with dara across all of the lines of therapy?

Thanks, Trung, for excellent questions. And I am happy to actually hand them over to Anthony Mancini, our Head of Operations, and Anthony will give you a good perspective for both of these questions. Anthony?

Thanks for the questions. I'll -- I think we're -- as Anthony Pagano mentioned earlier, we're really pleased with the strong growth in share gains across dara for the first half of 2020 in the FASPRO launch overall. I think J&J has really done a nice job on the FASPRO launch with early and rapid access in the U.S. with NCCN listing very quickly as well as all of the details related to access like P&T and pathways lining up really well. And the customer feedback on FASPRO has been very positive to date with them replaying the fact that there's a significant benefit both to patients and offices related to reduce chair time and short duration of in-person visits. So in a -- when you have a 3- to 5-minute injection, as Jan mentioned, versus a several-hour infusion, it's particularly valuable in a COVID-19 environment. So we're very pleased with the overarching uptake. In fact, the launch uptake of FASPRO is tracking at a similar pace to DARZALEX overall, and we really look forward to seeing the continued positive impact of the subcu formulation in the second half.

Just to comment a little bit about market shares in terms of your question. Overarching market share in the latest data point was 24%, which is the highest overall patient share that DARZALEX has achieved to date, and it's really being driven by earlier and earlier lines of usage of DARZALEX. So in the front-line setting compared to last year, we're seeing a threefold increase in frontline uptake, so 9% in the latest data point and 3% last year at the same time. But really, what's driving a large part of the gains is the second-line patient setting where DARZALEX achieved 42% overall share, and that compares to about 34% last year.

So overall, I think really strong uptake of the FASPRO not just in the U.S., but actually around the world. And we're looking forward to much more of that in the back half of the year in order to reaffirm our guidance that Anthony referred to earlier of $3.9 billion to $4.2 billion. And maybe, Anthony Pagano, you can comment further on that -- on the guidance.

Yes. Thanks, Anthony. I mean, overall, as you've heard from us today -- and I guess, taking a step back, right, it does start with that very, very strong product profile for DARZALEX. I think those of you who've heard me say it before, it really is the complete package, I think, looking at the 7 approved indications, now the subcu, the approval in 85 countries, reimbursement in 40 countries, now more than 130,000 patients treated. So I think overall, sort of -- we're very happy with the first half of the year. Obviously, we saw a little bit of softness in April, some stabilization in May. But as we exited Q2 and got into Q3, we really like what we're starting to see here, particularly in the U.S.

Thanks, Anthony. Thank you, Trung, for the questions.

And our following question comes from the line of Kennen MacKay from RBC Capital Markets.

Congrats to the team. I certainly agree with you, Jan, that this has really been a really transformational year despite everything going on with COVID-19.

Thanks, Kennen.

My question is also on the 4-1BB PD-L1 DuoBody. You're enrolling a number of different cancers with really varying degrees of immunologic temperature, as we say, from lung cancer to triple-negative breast cancer, which is basically the extreme of hot versus not. So from the emerging trial data or biomarker data, really any other distinguishing features of differentiation, which tumors are you so far most excited about for the 4-1BB DuoBody?

Thanks, Kennen, for the question.

I can take this one.

Yes, please do, Judith.

Yes. Thank you. So as you alluded to, by design, the Phase I component of the study, it's not restrictive, and then we have expansions. And because of the mechanism of action, which is totally different because it's not just the blockage of the PD-1, PD-L1 access, but the conditional activation of 4-1BB. We see the opportunity broader and the potential to impact tumors that are traditionally sensitive to PD-1s or checkpoint inhibitors like PD-1s, PD-L1s and those which are like difficult or nonsensitive.

So you -- and part of this data will be presented at the future meeting, and you will see more by yourself, so we'll present actual data. And based on that, the cohorts that were selected for the expansion are to dissect out biologically what are the different tumors that we can go. And there you have some cohorts that focus on these sensitive tumors where they can relapse or didn't respond to or which would be like the post-checkpoint scenario or tumors that today cannot be tackled by PD-1 and PD-L1s. And so these cohorts will give us this data and benchmark with current PD-1, PD-L1 inhibitors. So by the end of the year, we will have this based on dose escalation that will give you more color and the basis for the expansions.

And Judith, maybe to follow-up on that. When this data are presented, I'm just trying to understand if we'll have sufficient data to really sort of make a call on efficacy here. Is this going to just sort of be PK-PD? Or will we also see response rates and even duration of response? Or will it just be too...

No. Okay. Yes. Yes. It's a little bit -- so it's a Phase I dose escalation. So the objective of the study is to determine the recommended Phase II dose and safety. But we also collected activity, so some activity will be presented. For sure, the dose escalation won't give you -- it's not designed, per se, for efficacy, but for safety, but you will see some preliminary activity on the dose escalation. These data will be presented as any additional -- if any other Phase I.

Thanks, Judith. Thanks, Kennen.

Our next question comes now from the line of James Gordon from JPMorgan.

James Gordon from JPMorgan. My question was about CD3, CD20 versus mosunetuzumab. So they recently got breakthrough designation in FL. Just curious, does that change your view about sort of how far you are in terms of time to market behind them? Are you also seeing an expedited route? Does everyone get sped up or just whoever gets there first? That was the question.

But if I could also just squeeze in a quick clarification as well. So 4-1BB, given the timing of the CMD on November 13, is it plausible that you actually present the data at SITC, so November 9 to 14. So you're actually going to have the data at the CMD and it would have already been at the conference.

I think I will pass. Thanks, James, for joining. Thank you for the questions. I think both questions will go to Judith. And maybe you can start with epco, Judith.

Yes. So epco, we -- for sure, I mean, we are aware of the data from every other asset in the CD3, CD20 space or in the lymphoma space. It makes us even more excited at what we have done in 2 years, from first-in-human to recommended Phase II dose and expansions and makes us even working harder with our partner, AbbVie, to try to take any other step to safely accelerate. And this is what we are doing. So we know that the space is competitive, but we know the value that epco could potentially bring to patients. So it doesn't change the plan. It rather encourages us to work harder and better and with more excellence.

And with regard to PD-L1x4-1BB, could you repeat the question?

Sure. The question is in terms of when exactly we see the data. So I know you're having a Capital Markets Day, I believe, on the 13th of November, and I believe at the SITC virtual conference.

Yes. You will see the data in the medical conference.

Got you. And so that could be in time for the CMD as well to be discussed?

Yes.

Thank you, Judith. Thanks, James. Very sharp question.

Our following question comes from the line of Emily Field from Barclays.

I was just going to try to get a little bit more precise on the last question just because I know in prior communications this year, you've talked about closing the gap with Roche. So I know we...

Are you still there, Emily. I don't think we hear you. Operator, is she still there?

I think the line dropped.

I think the line dropped. But I think the question was closing the gap between epcoritamab and Roche's mosunetuzumab. Maybe, Judith, you can say a bit more on how we think we can actually progress epco.

Yes. No. Thank you. So this is what I said, we are actively working hand in hand with AbbVie to try to safely accelerate and close the gap as much as possible. We cannot quantify in months, but the fact that we started expansion cohorts tells you that we have caught up substantially vis--vis other CD3, CD20s, and we will continue in that -- taking this momentum to continue accelerating.

Thanks, Judith. And Emily, when you hear the recording, we will definitely follow up with you and see if you have additional questions.

Yes. And just only one thing. I mean we never said like close the gap, but our goal is to minimize the gap and to shrink the gap as much as possible in a realistic manner.

Thanks, Judith.

Our following question comes from the line of Carsten Lnborg from SEB.

Carsten Lnborg from SEB. Another question on your CMD. I was wondering whether you see the CMDs as strictly as a science event? I know there will also be some financial outlook. Maybe what I'm trying to understand here is whether you would maybe consider updating your 2025 vision with maybe some financial targets now that you are a more mature company? Would that be something that you could discuss at the CMD?

Carsten, thanks for the question. What we're thinking about is, of course, the bulk will be on the science and on the products. We have some very exciting things cooking now. And the Genmab pipeline has never had the quality it has now, and we want to give you further insight on that, and then some use of the novel technology platforms. But we will, of course, also speak about some financial aspects, how we see the future and also about the next phase and basically investing wisely and selectively in the potential winners. But the bulk will be on the scientific and the development angle.

Great. And then just a follow-up to that because now we're talking a little bit financials. Could you also maybe, Anthony or Jan, detail the increase in the G&A cost for the quarter? How much of this was commercial costs related to tisotumab?

That's -- I hand that question over to Anthony Pagano, Carsten, and he can handle that for sure. Anthony?

Yes. So -- great. So Carsten, yes, I mean, looking about sort of the higher G&A costs, I think there are a couple of moving parts here, right? In terms of R&D versus G&A split, for Q1 this year, we were at 87-13. And for Q2, we were at 81 versus 19. If i put those 2 quarters together, for the first half of the year, we're at 84-16, right? And maybe now I'll sort of talk you through these actual moving parts with that framework. So for the H1 2020, we have higher costs compared to last year, and a lot of this is down to some incremental costs following our U.S. IPO in July of 2019. Separately apart from those sort of ongoing recurring costs, separately for Q2 2020, we do have some one-off costs that we incurred in conjunction with the AbbVie collaboration. If we were to exclude these one-off costs, our R&D and G&A cost split for Q2 would be more similar to what we saw in Q1. So there are some moving parts here, Carsten, but there certainly is one-off element that I just described, which is impacting the numbers.

Thanks, Anthony. Thanks, Carsten, for the questions.

And our following question comes from the line of Emily Field from Barclays.

Can you hear me now?

Yes. Please go ahead.

I just had another follow-up. I believe in one of the prior answers, you mentioned epcoritamab having a place kind of across all lines of therapy. I just wanted to dig in to that in terms of what maybe you see as the ideal place for the drug in terms of the treatment paradigm in DLBCL, whether relapsed/refractory, second line, if you could just give some more thoughts on that.

Thanks, Emily. I will pass the question over to Judith.

Yes. No. Thank you for the questions. I think it's premature. I think that there are still unmet medical needs in every line of therapy, and this is what I'm like most excited about because this is where the impact on patients will be more evident and remarkable. But still I think that we are looking for opportunities to improve the whole continuum of treatment, given the differential aspects and potential transformative nature of CD3, CD20. So I will stop there.

Thanks, Judith. Thanks, Emily.

Our following question comes from the line of Laura Sutcliffe from UBS.

Just a quick one on DARZALEX, please. Could you give us any thoughts on how you're looking at the potential in the amyloidosis market? And in particular, any thoughts around duration would be welcomed.

Thanks, Laura, for the question. I think I will first hand it over to Judith, and then probably Anthony Mancini. Judith?

Yes. So -- yes, thank you, Jan. So for amyloidosis, I mean, I am -- personally as a hematologist, I'm super excited about these results because, as you know, there are no drugs approved in amyloidosis. And so it's really rewarding as a hematologist like to see something that provides such a benefit in terms of organ damage. Because, as you know, many tried, but nothing succeeded. So again, I mean, talking about the full package of DARZALEX.

In terms of market, it's hard to predict because the prevalence, like in the U.S., for example, they say that it's 12,000 patients dealing with amyloidosis. But as you know, when there are no good treatments, diseases are not in the radar screen of physicians and therefore, not diagnosed, under-diagnosed or diagnosed late. So part of the -- I mean, it's very hard to predict, I mean, what is underneath the water, let's say, that the patient population that have amyloidosis that they don't get the Congo Red test to be diagnosed because there's no awareness if there is not a good treatment.

So part of the -- understanding the commercial opportunity is working on really an awareness campaign not only -- because this is not a disease that come through hematologists. It comes through cardiologists, to nephrologists, to clinicians because this is the (inaudible) symptoms of the disease. So this is from a medical background.

Now, Anthony M., if you want to elaborate a little more.

Thanks, Judith.

Thanks, Judith. I don't know that I can add much more except to say that really, this is great news for patients. As you mentioned, it's an area of huge unmet medical need and yet another positive data set to add to the many positive DARZALEX data sets. I think once filed and approved, J&J is probably best positioned to provide more color on incremental impact and duration. But it's a great question, Laura. Thank you.

Thank you, Laura. Thanks, Anthony.

Our following question comes from the line of Graig Suvannavejh from Goldman Sachs.

Can you hear me?

Yes. We can hear you now.

Congrats on all the progress and your achievements year-to-date. I had just one question on capital allocation. You've got almost -- you've got a very nice cash balance right now. And I'm just wondering, as you think about your business, where are you prioritizing investment? Is it in the internal pipeline? Is it around commercialization? Are you thinking strategically around BD opportunities? Any color around how you're thinking about that would be appreciated.

Thanks, Graig, for the question. I will first hand it over to Anthony Pagano, and then see whether Anthony Mancini wants to add anything on the commercialization, which is a very important part of the company now going forward. Anthony Pagano?

Yes. So Graig, yes, so look, I think first of all, just thinking about our balance sheet, you're right to sort of pointing out, we do have a strong balance sheet. And I think this has sort of been very useful for us here over the most recent period, right? I think more recently, when you sort of think about being able to look through any issues as it relates to COVID-19, with that -- from that position of strength that the strong balance sheet also met when we were sort of negotiating and what ultimately resulted in the wonderful collaboration with AbbVie that we were also negotiating from a position of strength for that collaboration. And I think moving forward, the strong balance sheet is going to continue to be super important as we execute towards our 2025 vision.

And now with the T-cell data, there's potentially a clear path to market there. We'll have to wait and see and work our way through the FDA interactions, but we're super excited about that. But also looking at our pipeline and how that's maturing, having that rock-solid balance sheet means that we can absolutely execute against moving those programs forward and our 2025 vision with sort of the absolute confidence and the power of the balance sheet behind us.

Sort of thinking a bit about our maybe OpEx levels moving forward, we're going to continue to be focused and disciplined as we invest in our business and the growth opportunities that are in front of us. I think when you think about being focused and disciplined, there are really 2 sides to the coin, right? On the one hand, when we think about discipline, we can think about derisking investments and -- when we can and making tough decisions along the way. That's really around discipline. On the other hand, thinking about focus, it starts with our focused strategy that we've alluded to that we've been executing again since 2013, and that's our 2025 vision, right? So we're really laser-sharp focused on delivering against that.

And as it relates to -- final point, Graig, as it relates to kind of external opportunities, I think we'll continue to be focused there, right? And the theme I've talked about more recently is really where we can be natural owners, right, where we can be good evaluators of what we're bringing in and then ultimately good owners of it once we have it in-house. So I think at least for the shorter term, more of the same in terms of the deals we've done more recently.

Maybe, Anthony Mancini, do you want to add some stuff on the commercial side?

Yes. No, look, I would reiterate what Anthony Pagano mentioned in terms of how the AbbVie collaboration is a critical step towards our 2025 vision and part of investing behind that thoughtful step is really being thoughtful about our priorities from a commercialization standpoint. And we've taken steps now to start to build our commercial organization in the U.S. and Japan. Recently making key strategic appointments there, and we'll continue to do that. And looking externally, we'll continue to look for, as Anthony Pagano talked about, opportunities to complement what we have opportunities to deepen what we have and accelerate our quest to achieve that vision and beyond.

So I think I'll leave it there, Jan, and pass it back to you. But thanks, Graig, for the question.

Thanks, Anthony and Anthony. I think, Graig, we will leave it this here.

Our last question comes from the line of Sachin Jain from Bank of America.

Just a couple of pipeline questions to wrap up. On epcoritamab for the CMD in November, will you be able to outline the full Phase III program at that point? And by then, do you expect to have visibility on how you've closed the time line versus competition on the fast-to-market strategy to be able to give us further color there?

Second question is on HexaBody-CD38. Do we still expect some initial data from that through '21? And then the final question. Obviously, there's a lot of exciting data coming at year-end. But I wonder if you could just flag some earlier stage assets, which will be giving initial data next year that we can perhaps begin to focus on now?

Thanks, Sachin. Let me start with question 2. I will give the first one to Judith, so that she can think about what will be known at the time of the Capital Markets Day and can communicate it separately given the competitive landscape on epcoritamab.

So for HexaBody-CD38, we still plan to move it into the clinic this year. So it's fully on scheduled session. And I think at the very earliest, end of next year, we could see some data, but more likely in '22. And then in the new year, probably some early data from some of the programs which are now in the clinic. We now have several new programs in the clinic, which could be the DuoHexaBody-CD37 program, but that could be in the second half of '21, I would say. And for the DuoBody-CD3x5T4, probably second half of next year at the very earliest or in '22 more realistically.

Maybe, Judith, you can give some further color to Sachin on the full Phase III program for epcoritamab as we are working on and planning with AbbVie.

Yes. So we -- at the Capital Markets Day, I mean, we won't disclose all our plans because this won't be smart from our part. But by November, there will be -- the clinical development plan is like a map, so you will have 2 or more, 3 points on that map to guide on the whole journey. But we will never ever discuss at the Capital Markets Day the whole clinical development plan because this could be -- why to do that.

Thanks, Judith. Thanks, Sachin.

And there are no further questions at this time. Please go ahead.

All right. So thank you all for calling in today to discuss Genmab financial results for the first quarter of 2020. If you were not able to give your question or you were unable to get to us for the question, please reach out to the Investor Relations team. We hope that you all stay safe, remain healthy, keep optimistic, and very much look forward to speaking with you again soon. And this concludes the call.

That does conclude our conference for today. Thank you for participating. You may all disconnect.