Genmab A/S (GMAB) 2005 Q2 法說會逐字稿

Good morning and welcome, ladies and gentlemen, to the Genmab conference call.

(OPERATOR INSTRUCTIONS.)

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.

I will now turn the conference over to CEO, Dr. Lisa Drakeman. Please go ahead.

Good afternoon. Good morning to any of you calling in from the United States. Thank you for joining the conference call to discuss Genmab’s six months’ results. If you have seen last night’s news, you know that our results were as expected, that our net operating loss was very similar to the net operating loss in 2004, and that we ended the six month period with a cash position of just over 1 billion Krone, which is a very good figure for us, well in line with the guidance that we made public earlier this year.

We also had a very [juicy] quarter. We had a lot of accomplishments. We reached an agreement with the FDA on the design of the HuMax-CD4 pivotal study under the special protocol assessment process. That Phase III study is underway.

We also were able to consolidate the rights for HuMax-CD4. We licensed the European and the Asian rights, so now we have the worldwide rights for this product.

We had very encouraging Phase I/II data from HuMax-CD20 in follicular lymphoma, and we also concluded the enrollment and the dosing in a Phase I/II study in chronic lymphocytic leukemia. We do expect data later this year from that study.

We presented some additional data on HuMax-EGFr, which again looks very encouraging. And we announced that we have a new antibody program, HuMax-CD38 for multiple myeloma.

We had a very good job done by our business development team, acquiring rights for 16 potential cancer targets from the [inaudible] Administrative Europroteome. We are actually generating antibodies to one of the targets already. It’s a colon cancer target.

We licensed exclusive worldwide rights to HuMax-TAC, one of our preclinical programs, to Serono. And finally, we also extended our business development team, and that team will continue the level of activities that we’ve seen so far this year.

I have on the call with me today Bo Kruse. He is VP and Acting CFO. And I’d now like to open the call to any questions you may have.

(OPERATOR INSTRUCTIONS.) From Merrill Lynch, we’ll hear from Mr. Peter Welford.

Three questions. Firstly, can you just highlight the revenues that you’ve received in the second quarter? We know that 2 million dollars were from Serono. Can we assume that the other 2 million were from the Roche -- or roughly 2 million dollars -- were from the Roche collaboration?

Secondly, can you just give us an update on whether you’ve heard anything from Amgen on the 714 project recently?

And thirdly, can you just talk a little bit about the phasing of R&D over the third and fourth quarters? I know you obviously paid [Medrex] for the [XUS] rights in the third quarter, so does that mean we can anticipate a sort of third quarter heavy in perhaps spend, or do you anticipate that will just continue to grow during the third and fourth quarters due to the Phase III trials of CD4?

Let’s start with the revenue question. So, I think Peter’s right, that the balance of the revenues came from the Roche partnership.

Yes, together with the payment for HuMax-TAC. Correct.

OK, great. Then in terms of Amgen, we have had some recent conversations with them. And I think you can call their Investor Relations Department and they will say similar things to what I’m saying. They’re very actively developing AMG-714. They have a full development team on it, including work on the manufacturing process and improving the manufacturing.

So, our understanding is, is that they are working on this with the same priority that the would for any other Amgen program, and we are looking forward to their continued activity with AMG-714.

Finally, in terms of R&D spend, you’ll notice that we’re probably a little behind our guidance, if you look at these numbers, if you were to divide the guidance in half. But we have reiterated our guidance in the six months’ results. So, we still expect to fall within the range of the guidance, assuming that there are no major milestones or partnerships signed between now and the end of the year.

Sally Bennett.

Just a few questions. I’m just wondering if you can make a comment on perhaps how recruitment’s going in the pivotal CTCL study? And then just also on CTCL, now that you’ve consolidated those European rights, just if you can give us an update for your plans in terms of -- I’m thinking about European approval and perhaps the earlier stage study that you had talked about initiating earlier in the year.

OK. I don’t think we said anything publicly about a crew and the study size. I don’t believe I can add anything to that, and the studies are ongoing. There are, I think, more than 20 sites in the U.S. that will be participating in this. And we are even hoping that we might find a few European sites, because there are some sites in Europe where Targretin is used to treat these patients, although not a lot of them.

In terms of the consolidated rights, I think it’s a very important point. We already received a European orphan drug designation. We were very hopeful that we’d be able to consolidate the rights and we were. So, we have been making plans and we will, of course, try to move the European development forward as rapidly as we can. Probably the next study in the program would be targeted at Europe, so that a group of patients who are not [inaudible] Targretin failures would probably make sense to include in the European study.

Do think that study is going to start this year?

Well, we’ve been working to that end. That’s certainly an announced milestone that we’d start an earlier stage study in this. The thinking has been that if we start that in Europe, that that helps us move the potential registration process along. So, we still hope that happens, but I can’t predict, obviously -- I mean, we did just consolidate the rights. I can’t predict exactly when we’ll start, but that’s still one of our goals for 2005.

OK. Can I just ask another question?

Go ahead.

In terms of HuMax-CD20, I think the next stage we’re expecting is from the chronic lymphocytic leukemia study. And I think just sort of working out when you said you have full recruitment, we might anticipate data this quarter. I’m just wondering, when you make an announcement about the data, will you tell us at that point if you intend to progress it into a pivotal study, so we can make some conclusion, I guess, about the efficacy?

Yes. We really hope to be able to do that. I think you’re right, Sally. If you look at when we announced that the dosing was finished in the spring. And we really do expect that we’ll be able to talk about the results this quarter. And we also hope there’s enough data there to tell us that we can go forward. So, we’re very optimistic about that and we’ll hope to be telling you more about it fairly soon.

(OPERATOR INSTRUCTIONS.) Mr. Steve McGarry.

I just have a couple of small questions. Firstly, on HuMax-CD4, obviously, you have worldwide marketing rights and you intend to go ahead and market this yourself in the U.S. What about marketing strategy elsewhere, and when we can envisage having some of those [inaudible]?

I think that’s a really important point, Steve. Once we have the rights in Asia and Europe, that starts to sound like a pretty big undertaking for Genmab’s first marketing effort. So, a number of people have looked at the consolidated rights and they’ve speculated, but we might decide the right way to market this product would be through a partnership. I think that that’s certainly something that we have under consideration, rather than thinking that we could have a marketing team in 25 countries covered by [AMIA] and also the Asian territory.

So, to envision that plan, you would have to conduct [inaudible] studies, or more specifically [inaudible] studies in Japan [inaudible] conduct [inaudible] studies in Japan, and if we can track the progress there.

We haven’t actually made a strategy for the Asian territory yet. We’re obviously doing everything we can to learn about and understand the Asian territories, not just for this product but for other products. And I don’t think I can make any announcement at the moment about exactly when we would anticipate approvals in Japan or other Asian countries.

OK. And just [inaudible] you might see [inaudible] HuMax-EGFr. Obviously, lots of speculation about what licensing strategy might be put in place and, more importantly, when that might be put in place. And should we assume we may see something before year end, or should we be more prudent on assumptions about when the marketing partnerships may be signed there?

Well, I think we always have to be prudent about when partnerships are signed. I was a business development person in my previous position, and I learned from that you cannot predict the timing of partnerships, no matter how close you are to the goal line.

We have made it a goal to put in place some kind of a financing arrangement or a partnership for one of those two cancer programs this year. I hope that we’ll be able to reach that goal. These products are both really scheduled. If the data from the CD20 program is positive, that is scheduled to go to a pivotal study next. With the EGFr, we also hope we’ll be able to move into a pivotal study in head and neck cancer patients sometime in the spring of next year. So, these are extensive programs. And we would very much like to find ways to keep carrying them forward in an accelerated method. So, keep your fingers crossed that we’ll see some business development changes.

Thanks for that. And the same with CD20. I mean, it’s one of the strategies going forward then to be going to the top [inaudible] patients, or at some point if there’s going to be a head-to-head study?

That’s something I think we’ll need to do a lot of thinking about. Our initial thoughts are that we like to look at accelerated pathways. That’s why we have the fast track for the CLL and why we’re hoping we can go to pivotal study there.

One of the pieces of data that was really intriguing in the Phase I/II follicular lymphoma study was that we had a number of patients who had previously been treated with Rytoxan, they’d relapsed, and a very high percentage of them responded to HuMax-CD20. If you compare that to publicly available data about patients who are re-treated with Rytoxan -- there’s an article I think in the Journal of Clinical Oncology about this -- we seem to have a much higher response rate. However, we didn’t have a lot of patients in that step. I think we had 13 or 14 in ours and there were 60 patients in the JCO article, something to that effect.

Even so, the Rytoxan [inaudible] group may be a possibility for us because it could be that they have lower expression of the CD20 molecule on their B-cells, and our antibody seems to be able to bind even when that’s the case on the basis of all their preclinical data we’ve collected.

So, those are two strategies that we think are potentially very useful for us. But in terms of long term development, obviously, we think it would be a good plan to enter into some form or partnership and work out with a partner what the right way is to capture as much of the market as possible.

I should make one other comment. Our objective with the HuMax-CD partnering is to try to retain as much of the value of that program as possible for Genmab. We believe that it has the greatest market potential of any of the programs we have in the clinic, that it gives us an opportunity to really think about building a business long term. And we have made it a goal to find the way to hold on to as much of that as we possibly can.

Sally Bennett

Sorry, just a couple of follow-ups. Just to go back to HuMax-CD20 and what you were talking about in terms of partnering or a financing agreement. Just to clarify, do you kind of agree though, that even if you were to put in some sort of financing agreement, that you do need a partner for CD20 to maximize the value? I mean, I understand you clearly want to retain as much of it as you can yourselves, but do you agree that to really maximize CD20, you do need a partner?

If you were to say right now what is our preferred strategy, Sally, I think that right now we probably think that the co-development arrangement would make the most sense, that it might be nice to have a partner who has established distribution capacity, who has development capacity, because our goal has been to develop in both oncology and inflammation. So we’re talking about a pretty intensive program that would need a lot of resources.

So, I would say that right now our preferred strategy would be to work with a partner, probably in a co-development type of arrangement, so that we would retain potentially some co-promotion rights, at least in some territories that we felt we could manage. So, I don’t disagree with you that the resources that would be involved in trying to maximize the value of this antibody would probably be best found by signing some form or partnership.

OK. Sorry, just another follow-up. Just recently we saw Roche acquire GlycArt, which is a kind of next generation antibody technology company. So just a couple of questions. I’m just wondering if you think that will have any impact on your relationship ultimately, and perhaps where we are in terms of that collaboration. Can we expect any of those antibodies to move into the clinic in the short term?

Well, we know -- let’s start with the GlycArt thing. I believe that that would be considered a technology you would use in addition to the technology used to discover antibodies. My understanding is that you could potentially engineer the antibodies to increase their ability to interact with the immune system using that technology, but you have to have an antibody to start with.

So, I don’t think that there’s a situation where Roche will say their antibodies are coming from GlycArt, although that’s certainly their choice and any choice they want to make about where they find their antibodies.

In terms of clinical candidates, they do have four. We believe they’re very committed to them and we hope we will start to see some of those four antibodies move towards a clinic, but it’s up to them in terms of the timing. We believe that they are doing the work to take them forward, though.

(OPERATOR INSTRUCTIONS.) Ivos Stagen (ph).

I have a question on the HuMax-CD20 NHL data. The way they were presented last time, I think they were still kind of interim. Just wondering whether we’ll see the full dataset sometime this year at some conference--.

[Ivos], I think we’re hoping that we will be able to make a presentation at ASH. Obviously, no one’s heard anything yet. But I think that we’re hoping we’ll have some more data, sort of duration of response and more complete data. But I can’t promise that until ASH makes its own decisions about who’s invited.

Sure. And on HuMax-CD4, I think we’ve seen the total benefit there on the Phase I/II trials, right? Is that correct?

We have seen duration -- on HuMax-CD4?

Yes, HuMax-CD4--.

The Phase II. I think it’s possible we might have some additional duration of response data in the future, because some of the patients are still maintaining their responses. So at the last data in February, we had median duration of response at 11.5 months.

And it appears there are no further questions. I will now turn the conference back over to you, Dr. Lisa Drakeman.

Well, thank you all for joining us today. We appreciate the change to bring you up to date on Genmab. And in the meantime, we will continue work on reaching new goals in 2005. Thank you and goodbye.

This concludes our conference for today. Thank you all for participating and have a nice day. All parties may now disconnect.