Genmab A/S (GMAB) 2009 Q4 法說會逐字稿

Welcome to the financial statement release presentation on Wednesday, 3 March 2010. (Operator Instructions). During this teleconference 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 developments projects.

Genmab is not under an obligation to update statements regarding the future, nor to confirm such statements in relation to actual results, unless as required by law. I would now like to hand the conference over to Dr. Lisa Drakeman, Chief Executive Officer.

Hello, and welcome to the Genmab year-end results conference call. As a first priority I would like to summarize the results from the 12 months ended December 31, 2009, which were broadly in line with our most recently issued guidance.

We recognized revenues of DKK586 million, approximately $113 million, and recorded a net loss for continuing operations of DKK348 million or about $67 million.

We ended the year with a cash position of DKK1.3 billion, which is approximately DKK247 million (sic - see press release). The highlight of the year was the conditional FDA approval are of Arzerra for CLL in patients who were refractory to fludarabine and alemtuzumab. We brought Arzerra, our first marketed antibody, to patients after a little more than seven years in development, and we believe this is a remarkable achievement.

This milestone is not only significant in terms of what a product approval means for the Company, but it is also a source of pride for Genmab employees, whose work has brought new hope to cancer patients with refractory CLL.

Another important event occurred at the beginning of this year when the European Medicines Agency's Committee for Medicinal Products for Human Use adopted a positive opinion recommending the granting of a conditional marketing authorization in the European Union for ofatumumab. This will also be for the treatment of CLL in patients who are refractory to fludarabine and alemtuzumab. We now anticipate approval of Arzerra in Europe during the first half of this year.

We also have many things to look forward to in 2010. On the clinical trial front we expect to present the first set of Phase 3 data from a Zalutumumab trial in refractory head and neck cancer. We also look forward to the possibility of data from the second Phase 3 rheumatoid arthritis trial with ofatumumab, as well as data from the Phase 1/2 subcutaneous arthritis study.

In addition, we hope to sell our state-of-the-art Minnesota manufacturing facility. We have launched an active sales process, and you can find details about the facility at a newly created website, www.Genmab-facility.com.

We believe this facility has a number of benefits and advantages over other facilities in the marketplace for a variety of protein manufacturing tasks, including vaccine production. It has high quality construction and equipment, which is only matched by the newest of facilities. With the added bonus that it has been proven to be operationally effective with the manufacture of clinical lots.

It also has the unusual feature of flexible capacity that is suitable for today's new and improved high-yield manufacturing processes. The large fermentation vessels are 10,000 liters, but they can be run at a 5,000 liter volume, and the smaller ones, the two 1,000 liter vessels can be run at a 400 liter volume. In addition, the facility has also successfully run what we call higher titer products, high productive -- highly productive cell line products.

There is also the possibility to adapt an area in the existing building to include an on-site sterile filling suite or development lab. If a buyer desires further expansion this is possible on the 36 acre site that allows for doubling of the building footprint. The facility also has a separate fully equipped development building that can be employed to engineer and improve manufacturing processes.

Moving on to another important point, Arzerra was launched in the US late in November. We were able to announce the very first Arzerra net sales numbers in February of this year. During the fourth-quarter sales were approximately DKK29 million or about $5.5 million. This resulted in royalty income to Genmab of approximately DKK6 million. We are, of course, very excited to know that the first patients received Arzerra late last year, and we look forward to seeing the sales numbers for 2010.

Having said that, with only a few weeks sales data for information, we are not in a position to estimate 2010 sales. Consequently, we have not included royalty income from Arzerra sales in the guidance for 2010, as it is simply not possible to accurately estimate product revenues this year. We are also not in a position to include any revenue from a potential Zalutumumab partnership in 2010 guidance, as we have not signed an agreement at this time.

With these points in mind, we expect revenue of approximately DKK350 million to DKK450 million, operating expenses in the range of DKK950,000 to DKK1.050 million, and an operating loss on continuing operations of DKK550 million to DKK650 million.

Assuming the sale of the facility to replenish the cash position, we expect to end the year with somewhere between DKK1.05 billion and DKK1.2 billion, around $202 million to $230 million in cash.

To conclude, the US approval of Arzerra in 2009 represented the culmination of 10 years of dedicated effort to provide patients with urgently needed new treatment options. I would like to thank the Genmab employees for their extraordinary efforts in this task, as well as our partner GSK, and all of our investors who helped make this achievement possible. We can all share in the pride and satisfaction of this accomplishment now and in the future.

We now look forward to answering questions from all of you. Joining me on the call today are Dr. Jan van de Winkel, President of Research and Development and Chief Scientific Officer, and David Eatwell, Chief Financial Officer. Operator, could you please open the call to questions?

(Operator Instructions). Richard Parkes. Please state your company name followed by your question.

It is Richard Parkes calling from Piper Jaffray. I've got a few questions, if that is okay. Firstly, just on the revenue guidance. I am just wondering if you could give us some kind of feel as to what milestone revenues is factored into that guidance. I'm just wondering if there might be upside to that guidance if any programs move more quickly than you had anticipated.

Secondly, on the sale of the facility, I am just wondering if you can give us any feel for the number of parties that have expressed indications of interest?

And thirdly, just on Arzerra, I know you can't give us sales guidance, but can you give us any metrics on which we could gauge how the launch is going, i.e., numbers of patients treated thus far? And I'm wondering whether you are seeing physicians using the high dose regime as according to the label, or whether you are seeing any use with physicians using a lower dose in combination with chemotherapy? I will stop there.

David, I wonder if you could take the initial question on the milestone?

Yes, you notice Richard, we've got a revenue projection of DKK350 million to DKK450 million in 2010. I am afraid as usual we can't really discuss individual milestones in advance of their achievement. That is agreed with our partner, GSK. But as you know and because you can see in the financial statements in 2009 we had DKK217 million of deferred revenue. That is the amortization of the upfront fees from the GSK deal. So that was -- is expected to continue in 2010 and 2011.

Also, in November when we changed our guidance we did say that we had taken down our revenue by DKK110 million, and that was due to a delay of the start of a new study into 2010. So that is about the only clues I can give you. Also, we are optimistic on the European approval in CLL. Whilst I won't predict a milestone on that one, you will note that in 2009 we did receive a milestone of DKK116 million on the BLA approval in the US. I think that is about it on the milestones.

Then in terms of the facility, at this point what I can tell you is that we launched an e-mail message system, where we contacted a very large number of parties, that we have had hundreds of hits on the website, and that we have had a double-digit number of parties that have contacted us with significant interest in learning more about the facility.

Now it is still early days. We did just launch this process in the last few weeks, and obviously people will need to work hard to study the facility, see how it matches their needs. And we will need to work with them to make sure that they know everything they need to know about it. So this is a process that we continue to believe will take some time, because it would be a major acquisition. But we think that the launch is off to a very good start.

Your final question was about Arzerra sales. I wish I were in a position to give you more information to try to make an estimate for 2010. At this point I am not able to provide information about the numbers of patients or exactly how physicians are using the drug. But we all look forward to the first-quarter results, which should give us all more insight into the sales process and how the launch is going.

Okay, great, I will jump back in the queue. Thank you.

Guillaume van Renterghem. Please go ahead with your question.

I actually have three questions, if you don't mind. The first one relates to Arzerra in the US. I am just wondering how many hospitals -- I mean is the product actually listed in all the hospitals in the US, and (inaudible) what portion of the hospitals is it registered with?

In terms of head and neck -- sorry, the head-to-head study in DLBCL against Rituxan, I'm just wondering how is (inaudible) going, and whether you have already started to dose with those patients and how it is going. And lastly, in Arzerra -- with Arzerra in RA any news actually on the timeline of the different trials in regards to the IV formulation?

Thank you again for your questions. Let me start with your first question about the hospitals. I think I need to give you the same answer we gave Richard. We are not in a position to give you that detailed information at this point.

Going on to the Arzerra on RA, I think we have said for some time now we are in ongoing discussions with our partner GSK about the best way to move Arzerra forward in RA.

You will notice I mentioned in the highlights for 2010 that we hope to see data from the first study with the subcutaneous administration. So at this point I can't give you a specific timeline about when we will have the next announcement about RA, but we are working very diligently with our partner to try to finalize a plan.

Then DLBCL, I don't believe we have any update. Jan, let me turn to you for that.

Not a lot, but what we can say to you the recruitment has started in that study.

Peter Welford. Please state your company name followed by your question.

A couple of things. Firstly, on the financial outlook you are providing for 2010. I guess there's two things really here. Firstly, what sort of operating expenses are you assuming for the discontinued operations, if you like, the manufacturing facility, in your expense guidance for 2010? And equally, is that -- that presumably is included in your cash balance guidance for the end of the year. So obviously as that process goes on, presumably there are ongoing spends associated with that facility, what benchmark number should we take as the ongoing operating spend for that discontinued operation, if you like, on a monthly basis through 2010?

I guess secondly then on the facility sale itself, I am interested to know your views on, given you have obviously committed to selling it this year, what your sensitivity is with regards to the valuation of that facility, and what you see potentially as being a discount you would be -- I guess, you would consider? I appreciate it is going to be difficult to comment on this, given obviously the need to sell the facility this year.

Then finally, just coming back to the point on the milestones for Arzerra. Are there any potential other milestone that could come due if studies report out this year I guess I am not going to ask you which studies those are, when or if, but are there potentially milestones that could be due as additional studies report out this year? Thank you.

David, I think these questions are for you.

First off on the outlook for 2010 and the operating expense for Minnesota. In the guidance for 2010 you can see a separate line called discontinued operations. It is DKK50 million. All of that refers to the ongoing running cost of the Minnesota facility. So we are projecting that to keep it in a fully validated state and a maintenance mode that it will be about $10 million for a full year of operating costs.

Now, of course, if the facility is sold sooner then that DKK50 million, $10 million, will be a smaller number. So the DKK50 million is in the guidance and in the cash burn and the closing cash, hence is included within that guidance number.

In terms of the second sale in terms of evaluation, we did take a write-down on the facility in Q4 of 2009. The non-cash impairment was DKK419 million. Now that impairment meant that we wrote the facility down to an expected sales value of $150 million, less about $5 million as an allowance for the cost of selling the facility. So $145 million is our best appraised value. We have used outside experts to help us with that valuation. It is benchmarked against other facilities, pharmaceutical, biotechnology facilities of other similar quality. So our expectation at this point is still the $145 million after this cost of selling or DKK750 million.

In terms of the third question on the milestones, I don't think I can really say much more than that. I think that you can see the DKK350 million to DKK450 million as I mentioned earlier, around half of that is the deferred revenue, and that means a couple of milestones of reasonable size to come through. But I can't make really anymore comments really or commitments on future potential milestones beyond that.

Brigitte de Lima. Please state your company name followed by your question.

It is Brigitte de Lima from Banc of America - Merrill Lynch. I've got three questions please. The first one is getting back to the guidance again. I was just wondering if you expect any significant changes in the amount -- in the cost that you get reimbursed from GSK, or should we assume that this will be similar into 2009?

The second question will be on Arzerra. I was just wondering, I know it is early on in the launch, but I was just wondering if you have any feedback on whether clinicians have been treating both to double refractory patients after the label, and also patients with bulky tumors, who shouldn't be allowed to receive Arzerra?

And the third one, I am not sure whether you have disclosed much about this, but the deal you did for CD4 antibody with TenX Biopharma, you mentioned that there was a small upfront payment of $4.5 million. I was just wondering how that will be recognized. Thank you.

David, could you take these also for us please?

Yes, in terms of the first question, in terms of the reimbursement from GSK, I would say it would be probably similar, maybe slightly less in 2010 versus 2009. The only reason it would be slightly less is that the new studies are mainly run by GSK, and we were running some of the original studies. So as those begin to tail through that will gradually lower that reimbursement number coming from GSK.

Overall it doesn't make any difference to Genmab. There is the total development cost and we share it 50-50, it just happens then that some will be in the operating cost line and some will be in the revenue line.

In terms of TenX for $4.5 million, that will be recorded in Q1 of 2010. Sorry, the question on the Arzerra (inaudible)?

I think I have to answer that the same way I've taken the other ones, that we are just not supposed to make any comment on how the sales are going or what the specific uses are.

Gustaf Vahlne. Please state your company name followed by your question.

Thank you for taking my question. Gustaf on the phone. Just one short question. The Zalutumumab Phase 3 study, or pivotal study, are you in the stage of analyzing the data, so we can really expect the result in Q1 or are the patients still alive, so to speak?

What we can tell you is that we are analyzing the data at present and we continue to expect the data fairly soon. So we hope to be able to give you the data sometime in the relatively near future.

Sho Matsubara. Please state your company name, followed by your questions.

Sho Matsubara, Standard & Poor's. We have heard that GSK anticipates a moderate growth with lifecycle for its biopharm portfolio, including Arzerra. And having said that, you excluded royalties from the guidance. And if I may, in 2010, or even just a rough estimate, how much marketshare would you expect for Arzerra in relapsed CLL?

Secondly, perhaps for David, could you provide quarterly impact of the discontinued operations for 2008 as well as 2009? Thanks.

I am so sorry to tell you that we are simply not in a position to make a projection for what portion of the market we hope to attain with Arzerra this year. I don't believe that GSK has given any specific forecast, although if you have heard them and we have not, we would be very appreciative if you would share that information with us.

Having said that, let me hand over to David for the questions.

On the terms of the quarterly cost of the discontinued operations, I don't happen to have those in front of me at this point. But if you want to send me am e-mail we can discuss that.

In terms of 2010 guidance for the discontinued operation, the DKK50 million, that is a full-year charge, so you can assume that DKK50 million would be even over the four quarters.

Richard Parkes.

I've actually got three follow-ups. Firstly, on the subcutaneous study of Arzerra, I'm just wondering how you will communicate that data. I am assuming -- this is an open label trial, and it is obviously quite competitively sensitive, I'm just wondering if there is any risk that we might not get any data from that study until you have made a decision as to what the ultimate path forward is for Arzerra in the autoimmune indication. I'm just trying to get a feel for how that might affect when we see that data.

Secondly, am I correct that we are still waiting for a further randomized study in non-Hodgkin's lymphoma to start this year?

And, thirdly, there is a lot of detail on the progress in your pre-clinical pipeline in the annual report. I'm just wondering what your current thinking is on partnering, and is there any possibility of any platform type deals this year or is it too early?

On the subcu, I don't think we have reached an agreement with GSK on how this information will be made public and when. So I don't have any details to give you. I can tell you that we don't have any data yet from that study.

Having said -- or don't have any results I should say. Then I would also like to say that to the best of my knowledge -- and Jan, you should tell me -- I believe there is an upcoming NHL randomized study. Jan, do you agree with that?

Well, absolutely. I also can say I think on this call that we just noted that actually one new study has been posted on clinicaltrial.com in non-Hodgkin's lymphoma that is a randomized study.

Then on the pre-clinical pipeline, you have actually touched on a point I think is real important. We have made a lot of progress in the pre-clinical pipeline. We believe we have a tremendous amount of value there. Not only do we have a number of important new antibodies that we are working on, like the Her2 antibody, but we have the UniBody technology, which we think has a wide variety of potential applications. And we have a discovery organization that we believe is unusually able when it comes to identifying good targets, and also creating a very good library of the antibodies from which we can select the best functioning antibody to take forward.

So we think there is a lot of value there. I think that it is possible to consider partnerships at a variety of time points in the development of that pipeline. I also think it is possible for us to talk about platform partnerships with companies that do not already have access to antibody technology. Jan, would you like to add anything about the pre-clinical pipeline?

Well, it is a very robust pipeline. As Lisa already said that in addition to the programs we have already mentioned publicly there is a number of other programs that we have generated fairly large numbers of human antibodies, and are in the process of both in getting proof of concept for these new antibodies, as well as in the process of selecting clinical candidates. I expect there to be an update this year.

Great, thank you. Can I just confirm the randomized NHL study, is that the study listed as a combination with bendamustine versus bendamustine alone in patients that didn't respond to first line Rituxan?

Yes. That came online February [26], yes.

And is that associated with any kind of milestone?

I don't think we can comment on that.

Okay, no problem. Thank you very much.

Lars Hatholt. Please go ahead with your question.

Lars Hatholt, Nordea. I had a question regarding the timelines for your RA study. Did I get you right, do you expect that we are getting the subcutaneous data here in the first half year? And furthermore are we getting data on your ongoing Phase 3 study in the first half year?

Another question that is regarding follow-up on more detailed data from your previous RA Phase 3 study. Are we getting more data than the data that we have received until now? As far as I know, we got ACR20, the primary endpoint data, are we getting more data on this trial?

And the third question is regarding Zalutumumab. One might be concerned that the trial is too small to come up with any robust conclusions. Taking into account that you didn't give any or you couldn't have or we didn't have any conclusive or we didn't have any very strong results from the interim data that came out, or that the commission looked into, so if you had -- if you have any comment on that please.

Let me start on the timing of the RA data. I don't think we can give you an exact timeline for when we may be able to talk about the subcu data, or the Phase 3 data from the ongoing study in TNF refractory patients. We hope that we will see data from the other Phase 3 later this year, but that is dependent on the study concluding in time for that.

Jan, would you like to make any comments on whether there will be follow-up data from the RA Phase 3 -- more data this year?

Yes. I can absolutely do that. Yes, there will be -- at a medical conference there will be follow-up data, more detailed data of the Phase 3 study where we announce the first set of data from end of July last year. And we have not announced that our partner -- GSK yet has not (inaudible) and also hope to present at those medical meetings. And, Lisa, do you want me to also discuss a little bit more the question on Zalutumumab (multiple speakers)?

That would be great.

That other study is too know small. We don't believe so, because we have actually powered the study based on this number of patients. The total number of patients is 273 patients in that study. And actually there is a 2 to 1 distribution between the patients with solid tumor (inaudible) care. So we have a pretty good power to detect a two-month increase in survival between the Zalutumumab arm versus the control arm. We were pretty optimistic, I think, that this is the right setting. This is a refractory set of patients, head and neck cancer patients. And we think this is actually an appropriately sized study which will give us the answer at a suitable power.

Yasir Al-Wakeel. Please state your company name followed by your question.

It is Yasir Al-Wakeel from Credit Suisse here. Just to follow up on the last question, you just mentioned the Zalutumumab trial is powered to detect a two-month increase. Do you think a two-month increase will be sufficient for, number one, approval and, number two, to make a significant commercial impact, or are you hoping for significantly more than the two-month?

Secondly, with regards to Zalutumumab, have you had much interest in the drug prior to the readout of the head and neck cancer trial?

Then my third and final question is just on [the catalyst]. So you have discussed the autoimmune side with regards to Arzerra. Are we to expect any of the Phase 2 trial, so the second-line CLL combination data or the Phase 2 DLBCL data, this year or even the Phase 3 first-line CLL with (inaudible) trial data in 2010?

That is a lot of questions. Let me try to go back to the beginning. You have asked us questions about what we think in terms of approval. And I think that is always a question that we have to take into account the regulatory authorityies' perspective. The regulatory authorities always reserve to themself the right to make decisions about what is approvable or what isn't approvable. So we're really not ever in a position to say we think we have an approval in our hands. We always need to do the best job we can to show the strengths of the program, the strengths of the results, discuss those with the regulatory authorities and answer any questions they have. So I think it would be premature for us to comment on what is approvable.

In terms of commercial impact, there are two antibodies on the market to treat cancers that are (inaudible). Having said that, we believe there are aspects of our antibody that distinguish it or the potential to distinguish it from existing programs.

Jan, maybe you could speak briefly about what we know in terms of our analysis of our antibody in terms of the mechanisms of actions? And also I think there's a chance there is a safety benefit to our antibody as well.

For Arzerra you mean?

No, for Zalutumumab.

Oh, Zalutumumab.

(multiple speakers) the question is about the commercial impact of Zalutumumab. And my comment was I think there are features of our antibody that may help distinguish it.

Absolutely. This antibody is a very good binder for deposits, and also is very good in (inaudible), which we believe -- and the field believes it is actually contributing to the mechanism of action of each of our (inaudible) of drugs.

This antibody doesn't suffer from a problem with the carbohydrate. Actually in [subscription] markets, it is one of the marketed antibodies. There is actually a hypersensitivity problem associated with antibodies that can be bound to a sugar chain in the antibody. This is actually an increasingly important problem, given side effects in patients which have a certain type of antibody -- allergic antibody reactive to the sugar.

This type of hypersensitivity reaction can not happen with solid tumor. So this is much more -- potentially a more safe drug than third-generation. It is (inaudible) drug which in vitro and in animal models seem to be more efficacious. So we believe that we actually have a molecule that is differentiated on a mechanism of action level from the first-generation antibodies now approved in the market.

So we believe there is actually a very good window of opportunity there (inaudible). And, of course, we need the data to be sufficiently strong -- the clinical data to actually allow us to go forward to a registration. But that (inaudible) already is a very complex type of discussion. But we believe we have a differentiated molecule.

Then let's move onto your question about what data might be forthcoming from Arzerra this year. Until we finish recruitment in these studies and know the timetable for analysis, we are not in a position to predict exactly when data will be available for the ongoing studies.

Jan, I don't have anything to add beyond that, do you have any comments on any of the Phase 2s or any of the other studies?

Absolutely. One of the (inaudible) studies, a study that (inaudible) recruitment last year, that will definitely read out in the first half of this year, so you will see data from Phase 2 in the (inaudible). And this regards to the Phase 3. That is very dependent on how these studies go. We have not given further guidance to that, but you will definitely see the first half data on the (inaudible) trial.

Sachin Soni. Please state your company name followed by your question.

This is Sachin from Kempen & Co. My question is regarding collaboration with Roche. How is that going on there with Roche? Is there any feedback on the ongoing collaboration?

And then regarding the cash position, once you have achieved a stable cash position imagining that things are sold at the price you are expecting, what would be the priority for Genmab -- the first three priorities. Of course, Arzerra, but in what indication? There is (inaudible) MS also, there is RA also. What would Genmab look forward to for that?

The Roche collaboration, as you know, was a research collaboration where Genmab created a number of antibodies to alter targets that Roche identified. Roche went forward and took four of those programs into the clinic. And once we handed the antibodies off to Roche, then the responsibilities were all theirs to take the projects forward. So we don't have an ongoing active partnership in terms of running the clinical trials or working with the development of the antibodies.

Having said that, we receive regular updates from them. They are extremely diligent in their development efforts for the projects. And there are still two products in clinical development, and now I think there's a little more public information about those. Jan, would you like to comment on the two antibodies that Roche has in the clinic?

Absolutely. One of the antibodies is directed to OX40 ligand. It is a very potent antibody in Phase 2 and actually being evaluated in asthma, and potentially also goes to a number of other indications, but right now it is on trial for asthma. And we expect that antibody to move forward to the next phase. It is, of course, dependent on the data and Roche's internal decision.

The second antibody is targeted to P-selectin. It is a peripheral vascular disease. This is also I think a large indication, but is in a earlier phase clinical study, but it is doing very well. So a lot of I think positive feedback from that clinical study. We also expect that antibody to move forward to the next stage in development. So it is pretty active, I think, and also positive collaboration, but Roche is fully responsible for the clinical evaluation.

Then I think our -- thank you, Jan, for doing that. I think the next question is what are our priorities. And the nice thing about Genmab is we have choices in the sense that there is so much that is interesting in the pipeline in addition to Arzerra that is already approved in one indication.

So we have a well-defined development plan that was agreed with GSK at the beginning of the collaboration. And it sets out plans to work in a variety of indications. And addition to that, we have a lot of interest in a number of the pipeline products, and in working with our UniBody technology. So I think our goal on a going forward basis is continue to look at a variety of possibilities for new products from Genmab.

David, would you like to add anything to that, or Jan, about how you think about priorities looking forward?

I think certainly Arzerra obviously is a near-term opportunity. It the big thing for 2009 was really getting on the beachhead and then really expanding from there -- probably earlier in the oncology indications and then going forward into autoimmune.

Zalutumumab, because we are waiting for the data, and hopefully (inaudible) to have with a partner to take Zalutumumab forward and to expand into more indications there.

And then as Lisa and Jan have mentioned, a very broad pipeline there. And I think really as we go forward we will be able to scale up and invest (technical difficulty) as those products advance.

We can make the decision, as we have done in the past. Some products we may take forward to Phase 1, get through proof of concept, look for licensing then. Some we may take further interface to Phase 2 and try and create more value for the Company. But we will probably do that on individual products, take an individual view, and really invest in a stepwise fashion on that pipeline.

And a quick clarification. The end of year cash guidance, does it or does it not include the sale of manufacturing facility?

Yes, it does include it. So we are saying year-end cash at the end of 2010 between DKK1.050 billion and DKK1.2 billion. That includes the DKK750 million for the facility sale.

It sounds good. Thank you.

Guillaume van Renterghem.

I actually have two questions, if you don't mind. The first one relates to the Brooklyn Park facility. Your current cash means that you will sell it this year. Fair enough. I am just wondering, if you don't sell it this year, what are you going to do? Do you have more flexibility on the cost line and should be able next year maybe to reduce your cost base? That is my first question.

The second question as well, your $145 million estimate for the facility, on what is it based? Is it based on similar transactions, recent transaction or a transaction two or three years ago?

And lastly actually you just made a comment on the UniBody, saying that there was many parties interested. Actually you made exactly the same content four years ago, if I remember correctly. I'm just wondering what four years ago the interested party actually -- why didn't they move into a partnership with you? So what was the main concern they had on the UniBody?

Let me start from the back. I don't think I said anything about many parties interested. What I said is we think there are a lot of possible uses for the UniBody technology. Jan, would you like to comment on UniBody? Jan and his team have been working hard on finding some new possible uses for it, and also on continuing to develop it.

Absolutely. I just got disconnected, so I'm afraid I missed Guillaume's question, but I just got online again.

The question was, Guillaume asked why people --.

You want me to repeat it?

Go ahead.

I don't remember if actually four years ago you mentioned UniBody, and I think you said there was many parties interested in UniBody. You had a lot of interest. So I am just wondering what was the reasons -- the main reason why the parties interested didn't move ahead and didn't even sign a [three-year] partnership. What was the main concerns, the main issue with the platform?

So we announced the platform in 2006 -- in the fall of 2006 and we had just generated the molecules. These are half molecules that are smaller than whole antibodies. This combined (inaudible) monovalent with one arm. This is a distinct advantage for certain therapeutic targets. And also they are based on IgG4, which is a type of antibody. It is seen as an inert antibody, which is not actively interacting with immune cells and and immune (inaudible) mechanisms.

So the most optimal use for UniBody may be in diseases like asthma or autoimmune diseases, and may actually want to dampen a certain clinical affect and not want to engage the activity of the immune system.

So what happened is that since 2006 we have further worked on the blood transfer to optimize the blood form. And actually perform proof of concept studies for different UniBodies in different therapeutic settings. And actually got proof of concept which we hope to also present within this year.

And in 2008 we actually made a new strategic focus in our Company in Denmark in October of 2008. We actually only focus on cancer therapeutic programs predominantly. That is a type of disease where UniBody molecules can be used, but probably not most optimally because we think this format is actually better suitable for diseases that you actually want to have dampening therapeutics and not therapeutics that can engage manufactured activities.

So from that moment on we have actually refocused on -- more specifically on cancer therapeutic use, where UniBody molecules can be used better than normal antibodies. At this time we have generated proof of concept for a number of those targets. And, yes, we are in discussion with potential partners for access to this technology. So we have made a lot of progress. I think in this year we will actually also inform the market about that progress and show this proof of concept. Because we believe this is an important new therapeutic paradigm and a therapeutic option that has simply taken a number of years to actually come to consensus proof of concept for a number of targets.

And on the Brooklyn Park facility.

Let's start by talking about the future. We think that the facility, as I have explained earlier, has a number of advantages over other possible facilities that people could purchase right now. So we think that there are good reasons to anticipate a sale of that in 2010.

Having said that, as you will recall that we have not included Arzerra royalties in guidance. We have not included the possibilities for a Zalutumumab partnership either. So I think -- and we have not talked about partnerships for other assets that we have, like pipeline antibodies. So I think there are other alternatives to Genmab when it comes to thinking about the cash position at the end of 2010.

David, I think could walk you through the reasons for the estimated sales price, which has to do with consulting with outside experts.

Yes, we took a very long and hard look when we brought the value of the facility to the $145 million, including the cost of sale. That was based on using third-party appraisers. It was based on looking at benchmark data. And we feel that we have really got a very appropriate value of the $145 million today.

One of the things with benchmarking, it is difficult to find facilities that are exactly the same. But I think that is a distinct advantage with this facility. Looking at everything else that has been either recently sold in recent years or is currently on the market, there is really very little else out there which could really compare with this facility. It is unique. It is a very high-quality construction. It has been proven operationally effective. And it is a very new facility. Some of the other ones that are out there are very old and perhaps getting towards end of life and are not good design.

So I think in a combination, as well it could be used for vaccines, we think it is a very unique opportunity, and we think the $145 million valuation is correct.

In terms of the ongoing running costs, as we noted earlier, around $10 million a year or DKK50 million. We thought it was important to keep the facility in a validated state. We have retained 20 full key staff there today. That includes people in process development, people that were involved in the engineering and the original facility design, people involved in [QATC].

So we have really kept some of the very core expertise. And we think that really is an asset that goes along with the physical building and the machinery that these 24 staff have got some very unique skills and important skills for the new owner.

And just to make sure, the $145 million is the asking price?

Well, there isn't -- I wouldn't say there is an asking price. The $145 million is the price that we are carrying the asset on our books. Do you agree with that, David?

That is right. We actually got an estimated fair value of $150 million, less cost of sales $5 million, coming to a net sales value of $145 million. We would be quite happy to take offers higher than that.

Samir Devani. Please state your company name followed by your question.

Samir Devani from Nomura Code. I have just got a quick question on the R&D expenditure. It is quite clear that a significant element of it relates to the Arzerra development payment to GSK, your shared costs. I am wondering -- and you mentioned during the call that you've got a defined development plan. I am wondering how far advanced you get a budget from GSK in terms of how much they're going to spend on that program, and what you're going to be asked for? And if there is anyway that you can influence that at this point?

Well, let's actually talk about the budget and how it is decided and how the collaboration is governed. When you go back to the beginning of the contract, we agreed a development plan with GSK. It is very detailed. It runs over a number of years. That development plan cannot be changed without agreement from both parties. So your question is how do we influence it. It is really a question to both parties, because both parties need to agree that a study or a program should go forward in a certain way. And so it isn't as if one party comes and says to the other party, this is how the developmental progress will be, and this is your share of the budget. We agree together.

(Operator Instructions). Brigitte de Lima.

I have just got one follow-up question please. I was just wondering if you're fully happy with GSK's commitment to Arzerra following the failure of the NHL trial? Would you feel that things are progressing a little bit slowly, that they're not really putting in a lot of effort into what they're doing with Arzerra and things are getting delayed as a result of that?

Why do you think that things are going slowly and there is a delay? We have actually announced a number of new studies and they have talked repeatedly about Arzerra at their results. Is there something in particular that makes you think that?

Well, for example, the RA trial in TNF failure, it looks like enrollment has been very slow, and I wonder if that is -- I just wonder what the cause of that is. If it means that not enough trial centers have been opened or clinicians are not hugely interested in putting patients on the drug? Any clarity?

Well, I am going to ask Jan to comment on that. But before I say that, let me just reiterate that to the best of our knowledge GSK is very enthusiastic about Arzerra. They have made a number of public statements in their discussions with us. They show a lot of commitment to working to expand the label of this product into a lot of new studies.

I think that the TNF study may just be an issue that a lot of large clinical trials face, that when you need large numbers of patients that you need to sometimes wait longer than you would expect for those studies to finish accural. Jan, do you have any comments on that, because I don't think it's lack of commitment on anyone's part.

I would say on the contrary, I think the TNF failure population is -- there is a lot of competition, a lot of compounds that they get, so that is definitely one of the components here.

On the cancer side, I would say that Glaxo's commitment has been fabulous, absolutely fabulous to the development of Arzerra. It is very, very enthusiastic, very positive. They are continuously talking about new plans for new studies (inaudible). So I think it has actually increased rather than decreased since last year. So -- and that is also what we see publicly from -- as Lisa has already expressed from GSK's interactions with the media and with the investment community that Arzerra has a very high profile. I think they are pretty pleased with the compound. And we are planning a very robust number of studies. And as I discussed with Richard, even one of them has been posted on clinicaltrials.gov a week ago. So I don't think that there is a lack of commitment. It is on the contrary I would say.

Well, that is why I asked the question. I thought maybe Brigitte knew something or has heard something.

Now, I just find it interesting to see what your views are and how your partner is performing, that is all. Because I think we have seen a few cases where partners had lost interest in development progress. It is just encouraging to know the same commitment is still there. Thank you.

I think it is a higher commitment (inaudible).

(Operator Instructions). There appears to be no further questions at this time. Please continue with whatever points you wish to raise.

Well, we would like very much to thank you all for joining us on this results conference call. We appreciate your interest in Genmab. We also look forward to a number of important events in 2010, including the ongoing US launch, and we hope the European approval sometime in the first half of this year. So thank you for joining us. And we hope to talk to you again in the future.

Thank you, Madam. Ladies and gentlemen, this concludes the financial statement release presentation. Thanks for participating. You may now disconnect.