Genmab A/S (GMAB) 2024 Q2 法說會逐字稿

Hello, and welcome to the Genmab first-half 2024 financial results conference call. As a reminder, this conference call is being recorded. During this telephone conference, you may be presented with forward-looking statements that include words such as believes, anticipates, plans or expects. Actual results may differ materially, for example, as a result of delayed or unsuccessful development projects. Genmab is not under any obligation to update statements regarding the future nor to confirm such statements in relation to actual results unless this is required by law.

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I would now like to hand the conference over to your first speaker today, Jan Van de Winkel. Please go ahead.

Hello and welcome to Genmab's conference call to discuss the company's financial results for the period ending June 30, 2024. With me today to present these results is our CFO, Anthony Pagano; our Chief Operating Officer, Anthony Mancini; and our Chief Medical Officer, Tahi Ahmadi.

For the Q&A, we will be joined by our Chief Development Officer, Judith Klimovsky. As I have already said we will be making forward-looking statements. So please keep that in mind as we go through this call.

During today's presentation, we will reference products being developed under some of our strategic collaborations. This slide acknowledges those relationships. We have had a very exciting second quarter. The acquisition of ProfoundBio, which was completed in May, was an historic event for Genmab and one that will enhance our long-term growth profile.

In just a moment, you'll hear from today from Tahi some of the exciting next steps that we have planned for Rina-S and later Anthony Pagano, who will walk you through the financial impact of the acquisition. June was an exceptionally eventful month of EPKINLY, which is now the first and only bispecific antibody approved in the US to treat boats relapsed or refractory follicular lymphoma and relapsed or refractory diffuse large B-cell lymphoma.

In addition to the US approval in relapsed or refractory follicular lymphoma, the CHMP adopted a positive opinion, recommending EPKINLY as epcoritamab what is called in Europe for the same indication. Both regulatory actions were supported by data from the EPCORE NHL-1 trial, which was also recently published in The Lancet Haematology.

We'd also like to note the potentially imminent start of another Phase 3 trial for epcoritamab. This one in combination with lenalidomide for transplant ineligible patients with relapsed or refractory diffuse large B-cell lymphoma.

Together with our partner AbbVie, we continue to evaluate epcoritamab in multiple patient populations and treatment settings with the goal of establishing epcoritamab them up as a co-therapy in B-cell malignancies.

During our Q1 earnings call, we discussed the FDA approval and Japan NDA submission for TIVDAK, both of which occurred early in the quarter. As a reminder, this approval in the US TIVDAK became the first ADC with demonstrated overall survival data to be granted full FDA approval for the treatment of patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy.

I'm also excited to note that data from the innovative 301 study from FDA approval was based was recently published in the prestigious New England Journal of Medicine. By now, we hope that you have all had the chance to listen to our June third call to review some of the exciting data that we presented at ASCO, including for TIVDAK, EPKINLY and of course, Acasunlimab. Dave will provide you with a brief reminder of the very promising our consumer data and our next steps for the program on today's call.

Before this, I would like to highlight a key change to the Acasunlimab that we announced on Monday, Genmab has now taken full control of the development of Acasunlimab. This is a fantastic opportunity for us to own and advance this promising assets.

Our partner BioNTech has opted to not participate in further development of Acasunlimab. We understand that this decision was based on their strategic portfolio prioritization and does not reflect the center of potential of Acasunlimab.

It now becomes our second wholly owned candidates medicine entering Phase 3 by the end of this year, underscoring our strong confidence in the clinical promise and commercial potential. We are exceptionally well positioned to maximize the potential of Acasunlimab as we are, and we are very excited about the future of this program.

I would also like to add that even though our partnership is changing on this program, it remains extremely strong and collaborative, and we are committed to continuing to work together to advance innovative antibody treatments to [CD4] patients.

Finally, turning to medicines powered by our innovation, Johnson announced that type of [propounds] has now been approved by the European Commission for the first-line treatment of adult patients with advanced non-small cell lung cancer with activating EGFR exon 20 insertion mutations.

In addition, they have submitted a BLA for a subcutaneous version of amivantamab for all currently approved or submitted indication of IV type of arms in certain patients with non-small cell lung cancer. More recently, in July, Johnson announced approval in the US for DARZALEX phospho in combination with bortezomib, lenalidomide and dexamethasone for the treatment of patients who are newly diagnosed with multiple myeloma and are eligible for autologous stem cell transplants.

This combination based on that on data from the Phase 3 Perseus study has the potential to improve long-term outcomes for patients newly diagnosed with multiple myeloma and further supports DARZALEX as a backbone therapy for this disease. And we do not see any from provides you with a review of the recent performance for DARZALEX plus other select royalty medicines for EPKINLY and TIVDAK.

First, I'm pleased to like to hand over now to Tahi who will provide you with a reminder of the significant progress we are making with our wholly owned late-stage clinical programs Acasunlimab and Rina-S. Tahi floor is yours.

Thank Jan. I'm sure by now you have all seen the Phase 2 Acasunlimab of data in combination with pembrolizumab in second-line non-small cell lung cancer that we presented at ASCO. This data is very encouraging, demonstrating significant disease control and over survival alongside a manageable safety profile.

As a reminder, in this CPI pretreated patient population, we presented an impressive median overall survival of 17.5 months in a 12 months OS rate of 69%. Additional data will be presented at medical conferences, including the World Conference on Lung Cancer in September next month.

This will include translational data that should help you better understand our confidence in the Q6 week dosing schedule. And to ensure that there is no confusion. This will not include updated clinical data, we are simply to close ASCO and therefore limited by a very short follow-up, which really prevents a meaningful impact on time to events analysis.

That set encouraging data both from ASCO and the translational data that will be presented at WCLC reinforces our commitment to swiftly progressing the Phase 3 trial in PD-L1 positive patients with non-small lung cancer progressed on SCPI either alone or in combination chemotherapy and we expect to start this study before the end of the year.

Given both our proven and extensive clinical development experience and our track record of acceleration, as you've seen with EPKINLY, we are confident in our ability to advance Acasunlimab up through Phase 3 and beyond.

Moving now to venous. As a reminder, this slide summarizes why venous aligns with our vision to transform the lives of patients. We believe it has the potential to broaden deepen and consequently expand activity beyond what has been seen with first-generation folate receptor alpha approaches, becoming a potential best-in-class treatment for ovarian cancer and other folate receptor alpha expressing solid tumors.

In addition to the efficacy, it also has a differentiated safety profile, avoiding interstitial lung disease and corneal toxicities seen with other ADC therapies. This differentiation both in efficacy and safety is a direct result of the novel proprietary hydrophilic linker technology developed by ProfoundBio.

Exceptionally well positioned to maximize the potential for us, given both of whom clinical development capabilities, track record of acceleration and our experience in the gynoc space already with TIVDAK. And as we said before, we anticipate the first potential pool of organized could be in '27 and importantly, we anticipate blockbuster peak sales potential.

Now this is what we shared with you when we announced the acquisition of ProfoundBio. Now that we are officially responsible for the development of venous, let's take a look at our near term plants. Previously, we told you that we'll be providing an update to the initial encouraging Phase 1 ovarian cancer data that was presented at SID C last year. We can now confirm that you will see both updated data and additional follow up at ESMO in September.

I'm also pleased to note that we are on track to deliver on our accelerated development plan. We have aligned on the dose with health authorities and expect to start a Phase 3 trial in second-line plus platinum resistant ovarian cancer before the end of the year.

So in summary, significant progress for both Acasunlimab and venous and we look forward to sharing more information with you when it becomes available.

I will now hand it over to my colleague, Anthony Mancini.

Thanks, Tahi. In Q2 and in the first half of 2024 performance across our 2Q revenue streams, royalty medicines and Genmab commercialize medicines continued to demonstrate strong growth.

Turning to our royalty medicines portfolio on slide 8, DARZALEX delivered strong demand growth with DKK5.57 billion in first half net sales, a 19% year-over-year growth, driven by market share gains overall and meaningful market share increases in frontline multiple myeloma.

As Jan mentioned, on July 30, FDA approval was received for a new indication for DARZALEX for a DARZALEX FASPRO quad combination, based on the Perseus study in newly diagnosed transplant eligible multiple myeloma. As JJ mentioned in the earnings call, primary endpoints were also met in two additional DARZALEX studies in Q2, CEPHEUS has a DARZALEX based quad regimen in transplant ineligible, newly diagnosed multiple myeloma and AQUILA in smoldering myeloma.

Detailed results from these studies will be presented in an upcoming scientific meeting, coupled with the final analysis of MAIA showing a median overall survival of 7.5 years. It's clear that DARZALEX is foundational to survival in multiple myeloma and the growth opportunities will continue with DARZALEX in the early treatment setting.

Beyond the early settings, DARZALEX is continuing to be a backbone therapy in combination with both newer and older therapies in relapse or refractory multiple myeloma, including with [tecfili] our CD3 BCMA DuoBody bispecific and today, our CD3 GPRC5D DuoBody bispecific, which each delivered solid performance in the first half of 2024. We expect continued growth and continued usage of DARZALEX throughout the multiple myeloma patient journey.

Concentra achieved continued strong demand performance with over DKK1.4 billion in the first half, a 64% year-over-year growth. Concentra performance is not only progressing well in the United States, but also outside the United States., it continues to be the new-to-brand prescription share leader in 7 of 10 major markets outside the US.

TEPEZZA, the first and only FDA approved treatment for thyroid eye disease generated net sales of DKK479 million in Q2. In addition, with the June 17th FDA submission for the subcutaneous formulation of ribavirin or EGFR c-Met bispecific, it's another milestone to help make an even bigger impact on EGFR mutated non-small cell lung cancer patients.

In summary, we expect continued strong Genmab revenue growth from our six diverse royalty medicines in the second half of 2024 and beyond.

Turning to our agenda of commercialized medicines on slide 9. On June 26th, we received accelerated approval in the US for our second indication for EPKINLY, a monotherapy for patients with relapsed or refractory follicular lymphoma after two more lines of prior therapy.

We also received a positive CHMP opinion for this indication on June 27th with an approval decision in Europe expecting in Q3. The early response in the US to EPKINLY and follicular lymphoma has been very positive. We continue to hear encouraging feedback from our customers across diverse sites of care regarding the FL label that does not require hospitalization.

This gives us confidence in expanding KINLY utilization across practice settings as the first and only T-cell engaging bispecific antibody approved for both third-line plus DLBCL and third-line plus assets. In addition, we presented 2.5 year follow-up data at ASCO, demonstrating the long-term durability and powerful responses with it currently in third-line plus DLBCL.

We're very pleased with EPKINLY demand performance across our key geographies with over 90% of net sales coming from the US and Japan. EPKINLY delivered DKK121 million in net sales for the first half with DKK70 million in Q2, which includes foreign exchange headwinds in the first half of 2024.

In both the US and Japan, EPKINLY has seen robust uptake across key accounts, strong field execution and positive responses from customers and the patients we serve really validating at KINLY's differentiated profile that balances powerful efficacy, manageable safety and a seamless patient experience with subcutaneous administration.

Overall, the launch is exceeding our expectations with our third-line plus DLBCL and third-line plus SL indications as the first steps towards establishing EPKINLY as the core therapy across B-cell malignancies.

Turning to TIDVAK, our tissue factor directed ADC, it delivered DKK60 million in net sales for the first half 2024. A year-over-year growth of 48%. This represents the 11th consecutive quarter of demand growth for Genentec.

We were very pleased with the performance and the recent full approval based on the significant 30% improvement in overall survival in the innovative 301 study is driving increased breadth and depth of prescribing.

Gynoc and meta customers continued to provide positive feedback on the impact of doc is making on the lives of women with cervical cancer. And we're well on our way to establishing TIDVAK has a clear standard of care in second-line plus recurrent or metastatic cervical cancer.

The success we're building in gynecologic oncology with TIDVAK is an important foundation to prepare for future potential launches such as arena as in folate receptor alpha expressing platinum-resistant ovarian cancer.

As an end to end biotech company, we're very pleased that our Genmab commercialized medicines performance represents 31% of Genmab's overall revenue growth in the first half and look forward to carrying this momentum through the second half of 2024 and beyond.

I'd like to take a moment to thank our partners and our entire cross-functional Genmab team across commercialization, R&D and enabling functions for their tireless efforts every day to make a meaningful difference to the patients we serve.

With that, I'll hand the call to Anthony Pagano to provide more perspective on both our first half financials and our updated guide.

Yes, great. Thanks, Anthony. We continued to strengthen our foundation throughout H1, having delivered on our goal of successful regulatory approvals and launches for EPKINLY in the US, Europe and Japan in 2023. We are pleased with how these launches are progressing and even more so now.

With a second indication in the US and the potential for additional approvals in Europe and Japan for late-line follicular lymphoma. We've also significantly enhanced our long-term growth potential with the completion of the acquisition of ProfoundBio. And as we'll see, our financials remain strong.

Recurring revenues grew by 42% in H1. This was principally driven by strong royalties from DARZALEX, Kesimpta and other approved medicines as well as strong performance from both EPKINLY and TIDVAK. This strong H1 performance is driving an increase to our full year revenue guidance.

Our solid balance sheet, growing recurring revenues and significant underlying profitability allow us to continue to invest in our business. Our pipeline and our team and capabilities in a very focused and disciplined way.

Now before we take a closer look at the results from H1 and our improved guidance, I'd like to provide you with an overview of some of the details and financial impact of the acquisition, a ProfoundBio. Starting on the left, we've summarized how the DKK13.1 billion purchase price has been allocated. First, you can see the largest portion of the purchase price has been allocated to Rina-S and here amortization will begin on regulatory approval, which is estimated to be in 2027.

Second for the ADC tech platform, amortization started at the closing of the transaction and will continue over 15 years. And this is what you can already see impacting the P&L in 2024 with an estimated full year impact of 48 million.

We also have goodwill, which isn't amortized and will be tested for impairment every year. And finally, the difference between the purchase price and the total fair value listed here is primarily due to an assumed deferred tax liability of DKK2.1 billion. This reflects the estimated future tax obligations related to the acquired intangible assets, primarily Rina-S and ADC tech platform.

Now moving to the right, you can see that since closing the deal, we've incurred DKK330 million of costs related to ProfoundBio. And on a full year basis, we expect cost of around DKK1.15 billion. As you will see acquisition and integration-related charges or deal costs are a separate line item on our P&L.

Taken together, with the ADC amortization expenses, these are expected to be around DKK400 million for the year. And as a reminder, these costs were excluded from the directional financial guidance I provided when we announced the deal back in April.

So with this background, let's take a look at our results for H1 and let's start with our revenues. We grew total revenue to over DKK9.5 billion in H1. And as I already highlighted that included a 42% increase in our recurring revenue.

This strong growth was driven by higher DARZALEX and Kesimpta royalties as well as royalties from other products. And we're pleased with how EPKINLY and TIDVAK performing. Taken together, these two products contributed 31% of our total revenue growth in H1, and this really illustrates the power of our recurring revenue.

And overall, this strong recurring revenue growth enables our continued highly focused investment, as you can see on the next slide. In line with our significant growth opportunities, total OpEx was approximately DKK6.7 billion in H1.

As you can see, the majority of the growth was driven by R&D investments. Here, we've accelerated our investment into our product portfolio, especially the advancement of our mid to late-stage pipeline. Specifically, we're expanding the development for EPKINLY, TIDVAK, Acasunlimab and of course Rina-S.

As you can also see SG&A growth moderated and was up only 12% and this reflects our continued focus on driving SG&A efficiency. As previously highlighted, we continue to invest to secure a successful EPKINLY launch in our two key markets, the US and Japan. And of course, we've been really focused on the acquisition and integration of ProfoundBio.

Now let's take a look at our financials as a whole. Here, you can see our summary P&. Revenue came in at over DKK9.5 billion, that's up 36% on last year. Total OpEx was around DKK6.7 billion and here again, most of or most of which was R&D. And even with that increased investment, we're still delivering over DKK2.4 billion of operating profit, and that's up more than 29%.

Moving to our net financial items. Here, we have a gain of DKK1.4 billion. This gain was driven by the strengthening of the dollar against the DKK in the first half of the year, as well as by an increase in interest income. Then we have tax expense of DKK1.1 billion, which equates to an effective tax rate of 28.9%. And here I do want to pause for a moment and note that we are currently evaluating the integration of ProfoundBio operations from a tax perspective.

So our effective tax rate may experience some volatility as integration activities progress. However, we do anticipate that this is going to normalize within the next 12 to 18 months. And that brings us to a net profit of over DKK2.7 billion. So as you can see, continued strong underlying financial performance.

Having now looked at our H1 results, let's take a look at our updated guidance. At a macro level, you'll see we're projecting higher revenues and operating profit even as we take on two wholly owned Phase 3 programs.

I've already covered in some detail the impact of the ProfoundBio acquisition. Now as far as us taking on full responsibility for Acasunlimab, this does have the effect of grossing up both our revenue and our expenses for all products that remain in our collaboration with BioNTech. This results in around DKK600 million of both higher revenue and higher costs. But really here it's important to note this classification change in our guidance does not impact our operating profit.

Now looking at the highlights of our revised guidance, we now expect our revenue at the midpoint to be up 28% over last year and be in the range of DKK20.5 million to DKK21.7 billion. One of the drivers of this increase is strong net sales of our royalty medicines.

We are now anticipating higher DARZALEX net sales in the range of $11.4 billion to $11.8 billion. So here we've increased our royalty guidance to DKK13.3 billion to DKK13.8 billion, and that's an increase to both the top and bottom end of the range.

And importantly, we also anticipate that you're going to have over DKK1.3 billion of growth from EPKINLY and TIDVAK Now turning to our OpEx, excluding deal and amortization costs, we are anticipating OpEx to be in the range of DKK13.7 billion to DKK14.3 billion, which includes R&D investment to support the advancement of ProfoundBio clinical programs, primarily Rina-S and Acasunlimab.

Now I told you when we announced the acquisition of ProfoundBio that excluding acquisition and integration related charges, we are anticipating OpEx at or moderately above the upper end of our previously disclosed OpEx guidance.

So now excluding both the ProfoundBio deal and amortization costs and this DKK600 million item that I just described relates to buying that collaboration, this classification change, you can see that we're absolutely delivering on that guidance commitment.

And note that even with our increased investments, we continue to generate significant underlying profitability, and we're on track to deliver another year of substantial operating profit. In fact, when you exclude the acquisition integration and amortization costs for ProfoundBio the midpoint of our current operating profit guidance is now at DKK6.2 billion. That compares favorably to our previously previous guidance of 5.9 billion, and that's up 17% over 2023.

Now before wrapping up, I'm going to spend just a minute to double-click on the changes to our OpEx guidance. As a reminder, at the midpoint, our original OpEx guidance was DKK12.9 billion. As you can see, the impact of the operational changes for Genmab and ProfoundBio is around DKK500 million. This includes the DKK800 million of costs related to ProfoundBio operations and this is really driven by investment in Rina-S that I referenced earlier.

It also includes a net DKK300 million reduction related to Genmab, driven by continued prioritization efforts and scale benefits, partially offset by Acasunlimab development. And that brings us to DKK13.4 billion, which is fully in line with what we communicated when we announced the acquisition in early April.

And you can see the impact of the classification item are gross up of the expenses for the products remaining in the BioNTech collaboration of DKK600 million. Now, again, to be clear, these higher costs are fully offset by higher revenue and have no impact on operating profit.

And finally, you can see here and we have the ProfoundBio deal and amortization costs of DKK400 million now having gone through the H1 numbers as well as our revised and improved guidance.

Let me provide a few closing remarks. In summary, we've had a very solid first half of the year. We have growing recurring revenue streams increasingly from our proprietary products. And that gives us a strong backbone of significant underlying profitability. And we're investing those revenues in a highly focused way to realize our vision and to capitalize on the very significant growth opportunities in front of us.

And on that note, I'm going to hand you back over to Jan.

Thanks, Anthony. Let's move to a final slide. During the first half of the year, we have made significant progress towards our 2024 goals, especially for EPKINLY we have now announced or initiated two new Phase 3 trials and the label has been expanded in the US to include relapsed or refractory follicular lymphoma.

And of course, we are extremely pleased that the full approval for TIVDAK that occurred in April and the encouraging Phase 2, Acasunlimab data that has informed the planned Phase 3 trial. And as a reminder that makes two wholly owned assets Acasunlimab and Rina-S that we anticipate the boat until late stage development before the end of this year.

As we move into the second half of the year, we continue to have a lot to look forward to. That ends our presentation of Genmab's financial results for the first half of 2024. Operator let's go to the questions.

(Operator Instructions)

Emily Field, Barclays.

Hi. Thanks for taking my question. I just wanted to ask -- I guess one kind of as a follow-up, just on Acasunlimab. When do you when do you expect to start enrolling patients in the Phase 3? Are you expecting that you used docetaxel as a control? Just how are you thinking about a potential change in standard of care with the potential put of the approval of Trop-2 ADCs? And then secondly, just -- now that you're going to have two wholly-owned projects that you're starting going into Phase 3, how should we think about Genmab R&D cost in '25 and '26 things?

Thanks, Anthony -- thanks, Emily, for the questions. I first want to tie you can give a bit more color on the Phase 3 trial for Acasunlimab and then Anthony Pagano and and Dr. Tehi give you further color on the R&D costs, M&A. why don't you start?

Yes. Thanks for the question. I mean, as it relates to the control arm, I think we've mentioned this multiple times yet and are all the relevant health authority interactions and the relevant. And the only relevant comparison at this point is docetaxel arm. I think there's a lot of heightened discussion about whether in a subgroup analysis of a principle negative to our arm can lead to an approval.

I think this is a discussion for another company, but all health authorities have been crystal clear on this particular question, answer will be docetaxel as a control arm. That's the regulatory approval time. And I think I mentioned this in the prepared remarks, we are operationalizing towards having this study up and running, by the end of the.

Thanks. Tahi. And I think Further details will come in the future, Emily.

Emily, let's move to Anthony and then I have a further color on the R&D expenses. Anthony?

Yes. Thanks, Emily. As we think about our investment in R&D, we've been super clear about our priorities. And I think the way a good way to sort of frame this out is to break R&D down into two segments, segment, number one, being research and discovery all the way through to early development.

And then the second segment being that mid to late stage segment. We think about that first segment being research and discovery through to early-stage development, we've talked quite a bit about scaling that up over the last number of years.

We viewed that as an underline under utilized asset in the company, and we can see that we're now bearing the fruits of that investment in terms of scaling that up in terms of the number and quality of INDs we see coming through. We've been very clear now as we've gotten into sort of 2023, 2024, we think that that whole setup and that investment, the amount of money we're allocating there is now at the appropriate level and any investments there will be much more moderate -- if any will be much more moderate in nature.

The second segment is that mid to late stage segment and here this is where the focus of the organization is, this is our priority. We are prioritizing investments in this area versus investments in other areas. So clearly investments in EPKINLY, TIDVAK [1046], and Rina-S will get the lion's share of any growth here moving forward.

And I think that's very obvious as to why this is particularly any registration type trials. Again, we're prioritizing those our potentially revenue generating in nature, and that's what we're really focused on doing, Emily. So you should very much sort of think about R&D along these two segments and any growth moving forward -- the majority of the growth moving forward is really going to be from segment number two that mid to late-stage programs, particularly our potentially registration enabling trials.

Thanks, Anthony. Thanks, Emily, for the question. So let's Operator, let's move to the next questions.

Xian Deng, UBS

Hi, thank you for taking my questions. Two, please. The first one is on Acasunlimab. You mentioned now you are this is a wholly owned asset, but just wondering, would you still be open to focus on when you partner here or are you committed that this will be wholly owned going forward? And if you are open to new partners, what sort of things would you be looking for your ideal partner, please? So that's the first question.

And the second one is, Acasunlimab data update for word long. Just wondering maybe if I'll talkies or what sort of things can we actually expect where we have a bigger patient size for the every six week off-peak? Thank you.

Thanks, Jan, for the question. So Acasunlimab, I can tell you that we are very, very, pleased to have another wholly owned. So we are not foreseeing that we need to look for a partner. We think this is a fantastic molecule which could potentially be much broader position than the initial indication, and we intend to hold onto it for the time being.

I see on the what we could do in the future, potentially look for partner and select areas, for example, for China because that sets a different dynamics in the markets right now, as you know, we have a key priority markets, the US and Japan, you will likely move into your five, your four plus UK also that some of our other products in the future. But maybe China is a good territory we tend to look for partners.

So maybe a regional partnership is potentially an option that we have not decided that, we are just very very pleased with the 100% ownership and we are well progressed as aggressively as we can see onto a move towards registration trials and then to the market. And then maybe Tahi, you can give a bit more color on the type of data as well, and other conferences because that will likely be other conferences in the coming months, see on very well present data. Tahi?

Sure. Thank you, Jan, and thanks for the question. The data that you that you will see is essentially trying to provide clarity on how a Q6 week schedule changes the biology. So you will see data on T-cell expansion of relevant subgroups of T-cells. You will data see data on T-cell exhaustion and relevant T-cell subsets and other pharmacodynamic markers relevant to the mechanism of action as well as PK data that correlates and explains what we the pharmacokinetic and pharmacodynamic differences are between Q3 and Q6 and why that matters and how that translates into the clinical observations that we observed.

So that is the main focus on these data sets to provide additional color on on the mechanism on the biology and how we concluded on the differentiated profile for Q6, we scheduling.

Thanks Tahi. Let's move to other questions. Operator?

Jonathan Chang, Leerink.

Hi, guys. Thanks for taking my questions. First question, what are your latest thoughts on the next development steps I've been asked in ovarian cancer and when could we learn the details of the Phase 3 second-line plus platinum-resistant ovarian cancer study expected to start before the end of the year? And then as a follow-up to that, what is your confidence level in the ability of been asked to address patients across the biomarker spectrum in ovarian and how important is that to your strategy? Thank you.

Thanks, Jonathan, for the questions on Rina-S a novel molecule, we are super excited about. I will ask Tahi to start and give it to Judith to step in to provide extra color, Tahi you got to started both questions.

Sure, I'll take the second first. I mean, this is on from the very beginning. It was part of our excitement about I mean as a molecule and also relates to our excitement in the [linker] technology that we believe quite firmly and I think you will then have the opportunity to see the data at ASTRO. That means we'll have activity meaningful activity across the spectrum and beyond, for the receptor expression in patients, so that's the first part.

As it relates to the details on the Phase 3, some of this will become public as the study goes into the public space in clinicaltrials.gov. Very clear what the segment is. I think I kind of addressed a question that you may have in your mind what the population is and I think the control arm is a hodgepodge of available alternative therapies in this setting and a dealer choice trial.

And so that will be the first study, not the last one. And so I think you will have to wait to some degree. We are in a dynamic where we obviously want to update you. And so we updated you -- informing you that we could very well in the startup of the study already, but we also want to be cognizant of the fact that this is a hypercompetitive environment and so. You'll see it as it gets executed, but it will get executed quite rapidly and accelerated. I promise you that.

Thank you, Tahi. So more to come, Jonathan, in the very near future, very near.

Asthika Goonewardene, Truist.

Hi, guys. Thanks for taking my question and congrats on the progress and the impressive outlook that we could answer part of it for the second half this year and future. Wanted to go back to 1046 and also GEN1042. Tahi, you mentioned you were clear on what to expect and what not to expect that were lung. I'm curious if there are other conferences later in the year where you could provide an update for 1046, just given how exciting that the ASTRO data world, and we want to see more follow-up.

And related to that in previous calls, I think we've kind of got the feeling that there might be something on 1042, perhaps in head and neck later on this year. Just wanted to check back on that and see that still possibility or what kind of uptake we can expect in the future as well. Thanks.

Thanks, Ashthika, for the questions.I think Tahi, you can handle them both. Maybe shed a bit of light on other conferences.

Sure. So let's take time for it to first I think what we've said multiple times over the years and there were some observation learnings that I hope will also become a little more transparent with the mentioned presentation at [World Lung] on that were at least taking into consideration and I'm being tested as we speak.

And when that data is mature on, then we'll present that. And that will then provide, we're quite confident of a clear answer on 1042. So I'm not going to comment on this any more than that because to some degree, we'll just have to wait for data in our hands.

On on 1046, I think Jan already mentioned there's going to be additional data sets. See this will be a large amount of translational data. What you are -- in terms of clinical data I think you know, it makes sense to generate a little bit more follow-up. And I'll say more patients that have been enrolled in order to to better elucidate the mitigation strategy ever implemented to make it more safe. And so that's with a temporary event, we that takes a little bit more time. And so we'll bring that into the public domain as soon as it makes sense from a data set.

Thanks, Tahi. I will give you extra us because it also at said CV, we intend to present some further preclinical data. That's also to help you to understand this new biology of activating T-cells and NK cells via 4-1BB bispecific. So lots of new data and supporting, I think the excitement Acasunlimab.

Peter Verdult, Citi.

Yes, thank you. Peter Verdult, Citi. Three question, please. Again speaking to the Pfizer Oncology team, they've got for head-and-neck cancer assets that they could go into Phase 3. Well, they're saying they're all well.

So I just wanted to confirm and apologies if I've missed this, but is the head and neck Phase 3 program for TIDVAK confirmed or we do we await confirmation of that. And then Tahi or Jan, I'm sorry to test your patience, but What is the latest on HexaBody time lines in terms of data release and J&J decision? Or is it unchanged since the last update, again, apologies for testing your patience? Thank you.

Thanks, Peter, for the questions. So why don't I ask Judith to give a bit of color on the head and neck have plans for TIDVAK, but before that, I can probably handle the HexaBody CD38 question Peter, we are progressing really, really rapidly, and we are fully on schedule to present to have the data and present them to J&J in the second half,

FASPRO CD38 versus Subcutaneous and other likely be an update from the company also by the end of this year and maybe not at the medical conference, but then another form of. So maybe Judith can give a bit of color on head and neck cancer data for TIDVAK.

And so as you know, we presented encouraging data on order based on RMC at ASCO. We are waiting for maturity of this data and in parallel, we are opened another cohort with a state eligibility criteria and we are assessing these in conjunction with Part A, which is combination to assess the strategic fit for the company and TIDVAK that make further decision by the end of the year. So we are closely monitoring the data.

Can just to be clear, sorry, to be clear. I mean, is our Phase I Phase 3 program confirmed, are you awaiting that data first?

Now usually, you know, is that something that the fees that we jump into the pool when it's the right strategic fit and value that we have that are high the target product profile for a particular indication and this is what we are following the data for.

Thank you.

Yaron Werber, TD Securities.

Great. I also just want to make a quick follow up on Acasunlimab. So I just want to confirm. So it sounds like the Phase 3 is only been with us through the Q6 week on head to head against dose of Taxol. And can you I don't know if you can comment it would primarily be just PFS or is it going to be PFS and OS kind of co-primary? Thank you.

Thanks, Yaron, for the questions.Tahi can you give a bit of color on the endpoints for the Phase 3?

Sure, it will be a two arm study with a control arm and with the Q6 arm of combination in September, this is where we have to signal. This is where the data leads us and the endpoint will be overall survival.

Thanks very clear, Tahi. I think that's the answer, Yaron, for your question.

Thank you.

Move them move to the next one, operator.

Matthew Pfau, William Blair.

I'm sorry about the baground noises in the question. You've had a nice launch of EPKINLY in lymphoma. So far to date in the DLBCL space. Just wondering how we should think about uptake in follicular lymphoma given already in an accurate or not, right, because we share a second term and mid term. Thank you.

Thanks, Matthew, for the question. And then Anthony Mancini, I think you can best handle this one. Maybe a bit more on color uptake in follicular lymphoma versus diffuse large B-cell lymphoma?

Yes. Thanks, Matt, for the question. We're look for -- we're about six weeks into launch here, but it's going really, really well. We're again, really encouraged by what we hear in terms of the customer reaction to the favorable label without required hospitalization or monitoring.

And we think it gives us confidence that we can advance that can we use across diverse sites of care that we're starting to see growing EPKINLY adoption in many of the large physician group practices. And we believe that the third-line plus SL label is going to really enhance our ability to deliver innovation more broadly to patients in need where they want to be treated closer to home. And we think EPKINLY profile really enables that.

In terms of the size of the population, it's really time a modest population size, but because of the differentiation of having one product across both indications we think it's a the reaction has been very favorable so far in the community. So I'll leave it there.

Thanks, Anthony, and thanks, Matt, for the question. Let's move on to the next one, operator?

Michael Schmidt, Guggenheim Partners.

Hey, thanks for taking my questions. I had of a commercial question, a follow up on epcoritamab. I'm just thinking ahead, wondering how we should think about the launch trajectory perhaps in follicular lymphoma relative to the initial launch in DLBCL, given presumably there's a fair amount of commercial synergies with this sleep expansion and gem in DLBCL specifically, how much visibility do you have perhaps based on claims data and other sources on how the drug is used relative to other treatment options, beat other antibodies or CAR-T cell therapies? Thanks so much.

Thanks, Michael, for the questions. I think Anthony Mancini at this will keep you busy for a few minutes.

Thanks, Michael, for the question. In terms of the launch trajectory in assets versus DLBCL, to give you a little bit of context, this is really a drug treated patients, DLBCL, third-line plus markets, about 3,600 patients in the US are really actually quite similar size in Japan, in FL.

It's about half of that on those about close to 2000 patients. We really -- with the claims data that we are seeing right now. We know the capture, as you know, is not great. So we're not able to see the great detail, but we do a lot of market research and we do a lot of some customer customer research on a qualitative basis.

So we're able to see where the drugs are used and in a DLBCL space where we've had four full quarters in the US, we really are starting to see now more truly third-line patients. And again, what we're seeing in the real world is really mirroring what we see in the clinical trial.

So very positive customer reaction in FL. It's really too early to tell that said, I think that when we asked physicians, what they're after the profile in terms of powerful efficacy, manageable safety and really a seamless and efficient step-up dosing and subcu administration.

That's offered with that, candidly, is something that's really attractive, particularly across diverse practice settings. So when you think about staff time, Chair, time, scheduling efficiency, these are things that position us really well. So we're encouraged by these first few steps here to make EPKINLY truly the core therapy across B-cell malignancies and I will leave it there.

Thank you, Anthony. Thanks for the question, Michael.

Ranjan Sharma, Goldman Sachs.

Hi. Thanks for taking my question. Just one follow up on EPKINLY actually Antony Mancini that is you made a comment in the prepared remarks that the launch is exceeding your expectations. And so I'd just be interested in what's driving that. Is that better uptake than you were initially expecting? Or is it actually potentially a larger market in third-line DLBCL and then you than you were initially expecting?

And then secondly, actually on EPKINLY, again, in the past, you've talked to potential for moving the need for hospitalization from the DLBCL label. Could you just provide an update on progress there and when it could actually be reflected in the label? Thank you.

All right. Thanks, Ranjan, for the questions. Anthony Mancini why don't you try the first one and then maybe a Tahi on the next one for the second question.

So thanks for the question, Ranjan. Yes, we we really are seeing on execution of our launch plans, exceeding our expectations. We continue to be the in-class market leader, and I think it's really driven by a couple of different things.

First, thing is strong execution across our field-based teams. That's the medical affairs team, the sales team that the market access and patient services team and really with a focus on where we think the key business segments are the key accounts are, and that's not just in the US, but actually in Japan as well.

So we've really seen strong customer engagement and over 85% of our key accounts ordering in the US to date and over 80% also in Japan. And of course, we have had no barriers from an access perspective with 90%, 99% of covered medical lives in the US with functional access to EPKINLY. So again, that's what I mean in terms of the rationale for exceeding expectations and I think for removing population from the DLBCL label. Tahi.

Well, sure. I mean, we're obviously actively working on this to essentially two datasets that will inform on and provide the relevant data to approach the health authorities with the change in label. One is home similar to what happened on follicular lymphoma, although with a different strategy, we had a so called optimization cohorts of diffuse large B-cell, where with a much tighter description on steroids and fluids, we were able to reduce the sales rate, particularly reduce Grade 3 and higher, didn't have any grade three or higher anymore and then the Grade 2 rate.

And then the second data package, which is probably more relevant because it's also practice and forming as a study conducted by our collaborator, AbbVie really conducted in the outpatient setting really conducted in the community hospital setting and for the first time, really generating clinical data and these practices and set up their own challenges and opportunities to provide comfort and guidance on two prescribers who operate in these settings on the safe administration of EPKINLY, in the setting for the for research PCL and saw them be compiled and discuss with the health authorities in the near future.

Thanks, Tahi. Thank you, Ranjan, for the questions.

Yifeng Liu, HSBC.

Hi. Thanks for taking my question. I got one Acasunlimab. Just based on the Phase 2 data. So obviously, the for the six weeks dosing regimen. How do you think about incorporating those responders in your Phase 3 design?

And secondly, on also on, acasunlimab, on the bounce-back gross up, of course, there is anything that being taking into account in your 2025? Or is everything so taken account already in 2024 guidance?

And thirdly, maybe could you give an update on you have core DLBCL Phase 3 trial deal, DLBCL, one Phase 3 trial, the second line transplant ineligible and DLBCL? Thanks.

Thanks, Peter, for the questions. The first one is for Tahi again. The second one for Anthony Pagano.

And the third one on the DLBCL on trail to you. So maybe Tahi, you can start with Acasunlimab question on the year on the Q6 week dosing in Phase 3 designs?

Yes, thank you. If I understood you correctly, it wasn't really totally clear.

So just maybe I can make myself clear. Just because I think IND in the Phase 2 results and the overall survival benefit is pretty predominately driven by the responders. Just wonder how you taking that thinking into a Phase 3 design in terms of maybe opportunity to recruiting more potentially that patient can respond better.

Yes, okay. On known, sensible, but on. But I'm not 100% sure. Whether it's only the responders, I would say it's probably a subset of patients that have also significant stabilization. So it's a it's not only purely responsive. And I think this is one of the hallmarks of immunology that response doesn't A2A translate into the population that benefits for event-driven outcomes, particular survival.

But of course, we have and this is publicly arguably the largest randomized Phase 2 study conducted pre starting a Phase 3 in that setting. As far as I can tell on, we're taking all the data that we have and trying to interrogate and better understand if there are ways to hone on the specific patients that benefit the most. And some of this is already reflected, of course, in the inclusion exclusion of the Phase 3. That's good practice.

Thanks. Let's move over to Anthony Pagano for the second question on the BioNTech and the guidance basically for '24 '25?

Yes. Thanks. And I'll step through this rather carefully in detail that I'm going to start with maybe the economics, right? And the economics are effectively not impacted by this gross up, right?

And be very clear, this is a classification matter, the impact to operating profit, which is ultimately what matters is zero. But now let's let's step through it. We provided our original guidance for 2024, it was really clear that we were looking for opportunity to trigger the transition to net expense accounting and are in our P&L for 2024 i.e., that we would not have to gross up our P&L and for the expenses with you know, the higher expenses and an offset by by revenue. That's what was assumed in our original guidance for 2024.

Now as we got to where we got to come when we arrived with BioNTech and their decision to opt out of the 1046 program. In conjunction with that, we concluded that we will not be able to move forward with that net accounting moving forward.

And that resulted in what I explained today and some level of detail around for for programs remaining in the BioNTech collaboration. Again, not 1046 for all the other programs remaining the collaboration. We will have to go at this grossed-up classification, if you like it where we're going to have a larger a cost, if you like, but that will be fully offset by the higher cost reimbursement revenue.

As I sit here today that is what we should assume for 2025 and moving forward, if there is an opportunity to further align this accounting and classification with our other agreements like we have with AbbVie, we'll certainly look for that opportunity. But I do want to bank on that right now.

Just to conclude, I do want to finish where I started that this classification item and matter does not in any way shape or form our impact our operating profit. This is simply a grossing up, if you like, in plain terms of our P&L. I trust that's clear.

Thank you. That's really helpful. Thank you very much.

Thanks, Anthony.

Third question for units, an update on the status of the DLBCL launch study, Judith any color?

And also I don't know which one, you allude to we have three studies Phase 3 in DLBCL and if so, which one are you particularly asking about?

Yifeng, which one?

So I can give you I can give you a summary. So we have is dairy, which is epco in comparison with standard of care, of which we are it's a time to event data. So we are following up events and two to get the study to completion. There is a study in the first-line DLBCL, which is a core plus R-CHOP, which is actively recruiting, I would say that this is going very, very well in terms of recruitment and there is a new style in both and which isn't a time-lapse refractory, a Phase 3 with him at call it land, which you know is that there is recruiting very soon. So these are the three factories.

Thanks you. That I think that should that should help even further with the modeling.

Let's go for the next question. Maybe the last one.

Operator?

Mattias Haggblom, Handelsbanken.

Please ask your question because so much of that 700, I cannot keep it to one. So BioNTech face the decision to opt out from Aker, certainly not on their earnings call as we are all going to have critical mass in non-small cell lung cancer. So judging from the market traction on the day, you Surround House investor, we're obviously disappointed by the chain.

So where, in particular, do you think Genmab and BioNTech valued asset differently. I guess I'm trying to better understand, given what you described with Ask Us, unprecedented was data if you think there's something in particular with the asset data generated. So far profile with a molecule that you perhaps appreciated more than your partner did. Thanks so much.

And I think I can handle that question. Thanks.. Thanks for the question. This was purely a such a strategic priority driven decision. There was no data analysis involved in that because the feedback from BioNTech BioNTech on that, I think I asked BioNTech about the prioritization of some of the other programs in lung cancer and you will find the answer. But this was a strategic prioritization which led to that opt out of biotechs or no other affect us all involved at all.

Operator, maybe it onto the next one.

Dear participants, Thank you for all your questions for today. And I would now like to hand the conference over to Jan van de Winkel for any closing remarks.

Thank you for calling in today to discuss Genmab's financial results for the first half of 2024. If you have additional questions brief, please reach out to our Investor Relations team. We hope that you all stay safe and keep optimistic, and we very much look forward to speaking with you again soon.