Genmab A/S (GMAB) 2017 Q1 法說會逐字稿

Good day and welcome to the Q1 report 2017 conference call. Today's conference is being recorded. During this telephone conference you may be presented with forward-looking statements that include words such as believe, anticipate, plan or expect. 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.

At this time, I would like to turn the conference over to Jan van de Winkel. Please go ahead, sir.

Hello and welcome to Genmab conference call to discuss the Company's financial results for the quarter ended March 31, 2017. Joining me on today's call is David Eatwell, our CFO; our new Chief Development Officer, Dr. Judith Klimovsky will also available for questions during the Q&A session. Let's move to slide 2. As already said, we will be making forward-looking statements, so please keep that in mind as we go through this call.

Let's move to slide 3. During the first quarter of 2017, we have seen continued progress with DARZALEX. The regulatory authorities in Europe issued a positive opinion for the marketing application for DARZALEX in combination with lenalidomide and dexamethasone or bortezomib and dexamethasone for patients with multiple myeloma, who received at least one prior therapy. The opinion was based on data from the Phase III CASTOR and POLLUX studies, which were announced last year. Approval for DARZALEX in this indication was granted in Europe on April 28. The new approval also converts the previous conditional approval for DARZALEX to a standard approval. But on the first commercial sales of DARZALEX in the new indications, Genmab will receive a total of $48 million in milestones from Janssen. The clinical development of daratumumab in a range of indications is also continuing. New studies recently announced via clinicaltrials.gov include trials combining daratumumab with nivolumab for colon cancer; various advanced on metastatic solid tumors and for virus associated with solid tumors. As well as the study combining daratumumab with atezolizumab or TECENTRIQ for non-small-cell lung cancer and a study evaluating daratumumab in myelodysplastic syndromes or MDS.

In April, we also announced a new Phase III study combining daratumumab with pomalidomide and dexamethasone for relapsed or refractory multiple myeloma. The study named APOLLO is expected to start during the second quarter of this year and it's designed to confirm the results from the Phase I MMY1001 or EQUULEUS study. We are very excited about the numerous new studies of daratumumab and look forward to seeing additional studies start throughout the rest of 2017.

I now want to take a moment to discuss the daratumumab Phase II CARINA study in non-Hodgkin's lymphoma. This was a two-stage study, let's look at daratumumab monotherapy in three types of non-Hodgkin's lymphoma. After a data review, Janssen determined not to move this study forward to stage 2, since the arms of the study in follicular lymphoma and diffuse large B-cell lymphoma did not reach the very stringent pre-defined futility thresholds set for this study. The third arm of this study in mantle cell lymphoma was slow to recruit patients. We were not only disappointed, but this study did not progress. We still see opportunities for daratumumab in hematological cancers and a number of studies in areas such as MDS and NK/T-cell lymphoma are currently ongoing.

DARZALEX has been launched in the US and 18 European countries. And sales in marketed multiple myeloma indications continue to be robust. With net sales, reaching $255 million in the first quarter of this year, resulting in DKK211 million in royalties.

Other key highlights of this chapter include the addition of Judith Klimovsky to the team as our Chief Development Officer. With her extensive experience in drug developmental at [play], Judith has already begun to make a mark on our organization and we look forward to a key role as we continue to strengthen our innovative product pipeline. Furthermore, the clinical hold placed last year on one of the DuoBody programs run by Janssen, JNJ-63709178 targeting acute myeloid leukemia has been lifted and patient recruitment has resumed.

Additionally, last week exciting data showing that teprotumumab induced impressive clinical benefits in patients with Graves' orbitopathy was published in prestigious New England Journal of Medicine. As a reminder, teprotumumab was created by Genmab under the collaboration with Roche, and was subsequently licensed to River Vision. As announced this week, River Vision was acquired by Horizon Pharma.

Finally, as David will discuss in detail, we continue to perform well financially and improved our revenues by DKK81 million compared to the same period in 2016. I will now turn the call over to David to describe our financial results for the first quarter. David?

Thank you very much, Jan. Let's move to slide 4 in the income statement for Q1. Revenue came in for the period at DKK251 million, that's an increase of DKK81 million or 48% compared to the first quarter of 2016. The increase was mainly driven by higher royalty revenue related to our DARZALEX collaboration with Janssen. Partially offset by a decrease in milestone revenue. Total royalties comprised of 90% of the revenue in the first quarter of 2017 compared to 59% in 2016. So, not only was the revenue higher than 2016, the quality of the revenue also continued to improve.

The expenses came in at DKK205 million in 2017 compared to DKK154 million in the previous year's first quarter. The increase of DKK51 million or 33% was primarily related to additional investment in our key products, the strengthening of our management team and additional resources.

Moving to the operating result. We had an operating income of DKK46 million for 2017 compared to DKK16 million in the prior year. The increase of DKK30 million was driven by the higher revenue, which is partially offset by the increased operating expenses.

The net financial items were a loss of DKK26 million in 2017 compared to a similar loss of DKK28 million in 2016. The net loss in both periods was driven by foreign exchange movements, which negatively impacted our US denominated portfolio and our US dollar cash holdings. And that brings us to the net result, which was an income of DKK16 million in 2017, compared to a loss of DKK12 million in the same period of last year.

Finally, our cash position increased by DKK829 million during the first three months of 2017. This is mainly due to positive working capital adjustments of DKK665 million related to the payment of milestones achieved in the fourth quarter of 2016, as well as proceeds from warrant exercises of DKK103 million, as well as the positive income from operations. This resulted in a cash position at the end of the quarter of just under DKK4.8 billion.

Now let's move on to slide 5, on the revenue. The revenue breakdown by category is shown on the left hand side of the slide. In the first three months of 2017, DARZALEX royalties were the largest portion of revenue at DKK211 million, compared to DKK83 million in the same period of 2016. Janssen' sales as Jan mentioned earlier were $255 million in Q1, 2017 compared to $101 million in Q1, 2016. The increase in sales of $154 million was driven by the uptake following regulatory approvals in both the US and in Europe.

There was no milestone income recognized in the first quarter of 2017. Last year in Q1, we achieved DKK45 million in milestone revenue, which included DARZALEX milestone of DKK34 million and Lundbeck milestone of DKK11 million. The graph on the right bridges the revenue between the two periods, and as discussed the changes in large part due to the increased DARZALEX royalties, which were partially offset by the reduction in DARZALEX and Lundbeck milestones.

Now let's move to slide 6, on the operating income and expenses. The graph on the left shows the change in expenses between the first quarter of 2016 and Q1 2017. As you can see, there was an increase in the operating expenses of DKK51 million, which was driven by our decision to accelerate our pipeline. Over 50% of the expense increase was due to the additional investment in our pipeline products, including the advancement of DuoBody-CD3xCD20, HexaBody-DR5/DR5, tisotumab vedotin and HuMax-AXL-ADC.

FTE costs have also increased year-over-year as we hired key personnel to support our product pipeline growth and we've also strengthened our Management Team, as Jan mentioned earlier. We ended the quarter with 219 FTEs compared to 189 at the end of Q1, 2016, that's an increase of 30 FTEs. Looking at the chart on the right, as we've already discussed, you can see that the increase in the operating income from DKK16 million to DKK 46 million. Again the increase was mainly due to the higher revenue, partially offset by the increased expenses.

Now let's discuss the 2017 guidance on slide 7. We are maintaining our 2017 financial guidance, which was published on February 22. We expect to -- continue to expect the revenue to be in the range of DKK1,950 million to DKK2,150 million. Our projected revenue for 2017 consist of DARZALEX royalties of around DKK1 billion, based on Genmab's estimate of DARZALEX net sales of $1.1 billion to $1.3 billion. We also project DARZALEX milestones of DKK800 million in 2017. And as Jan mentioned this $48 million or around DKK170 million attached to the recent European approvals. The remainder of the revenue mainly consist of Arzerra royalties, DuoBody milestones, and deferred revenue.

Overall, the quality of revenue continues to improve with the DARZALEX royalty income stream doubling year-over-year and nearly covering the total operating expenses in 2017. This gets us closer to our aim of being a sustainably profitable company, where royalties from products covers our total expense base. We anticipate our 2017 operating expenses will be in the range of DKK1 billion to DKK1.1 billion, which mainly consisted the advancement in continued investment in our pipeline of products including those four products that I mentioned earlier, but also for other products that are currently in our preclinical pipeline. In 2017, we'll spend about DKK440 million on these eight projects, that will be about approximately 42% of our total expense base.

We expect the operating income to 2017 to be in the range of DKK900 million to DKK1.1 billion and we project the cash position of more than DKK4.5 billion at the end of 2017. Also note as usual the 2017 guidance does not include any new potential deals or potential proceeds from future warrant exercises.

In summary, the increasing royalties from DARZALEX in 2017 are enabling Genmab to increase the investment to selectively advance our pipeline and create even more value. Now, I'd like to hand back to Jan to discuss our goals for 2017. Jan?

Thanks, David. Let's move to slide 8. We continue to work towards our 2017 goals. As mentioned earlier, DARZALEX was recently approved for a new indication in Europe and we hope to see additional regulatory approvals in different territories in 2017, this could potentially bring the products to wider variety of patients around the world.

This year, we expect a number of new trials to start in a variety of new blood cancer and solid tumor indications, as well as into the subcutaneous formulation. And indeed, multiple new studies have already been made public on clinicaltrials.gov. We also anticipate key data from the Phase III ALCYONE study, which evaluate daratumumab in combination with Velcade, melphalan and prednisone or VMP versus CMP alone in frontline multiple myeloma in the second half of the year.

In addition to this, we will have seven daratumumab abstracts as well as an abstract on the design of the first HuMax-AXL-ADC clinical study, presented at the prestigious ASCO Annual Meeting in Chicago in early June. The abstracts will feature updates on the CASTOR and POLLUX studies, as well as data from the Phase 1b MMY1001 study of daratumumab in combination with KY-PROLIS, lenalidomide or REVLIMID and dexamethasone in frontline multiple myeloma. Excitingly, MMY1001 data has also been selected for presentation in the Best of ASCO 2017 regional meetings. Finally, for daratumumab we expect to report data from studies and indications other than multiple myeloma in 2017.

Turning to the rest of the pipeline, we expect to see Phase III results for ofatumumab and follicular lymphoma, further clinical data from the Phase I/II tisotumab vedotin trial in solid cancers, progress in the recently started HuMax-AXL-ADC Phase I/II trial and new IND submissions for HexaBody and DuoBody projects. We plan to continue to build a robust and innovative portfolio by entering new DuoBody and HexaBody collaborations and progressing our partner programs.

Finally, we will continue to focus on disciplined financial management, the controlled Company growth as David has described, and smart selective investments in the most exciting and highest potential programs.

Let's move to the final slide, slide 9, that ends our presentation of Genmab's Q1 2017 financial results.

Operator, please open the call for questions.

(Operator Instructions). James Quigley, JPMorgan.

Two quick questions. First of all, could you give us an update on the expected timing, when would you expect to start the Phase III subcutaneous trial and any updates or any details of what your formulation, I think last I heard the FDA, we're looking at [50 milliliters] formulation? And secondly, can you give us an idea or has Janssen done any analysis of what the actual reason was for the failure of (inaudible) failure to meet the criteria in NHL, especially given that the trial was or the selection of patient was for 50% CD38 expression and is there any real cause to other hematological cancers in that setting? Thanks.

Thanks, James. Thanks for coming on the call and thanks for the excellent questions. First one is on timing for the Phase III subcu, normal [severity] study, that will be the second half of this year. And the reason is that Janssen is still working on getting the okay for the formulations and that will indeed be a 15 mL formulation that can be infused in 45 minutes or less into patients. It's a co-formulation of daratumumab, the enzyme Halozyme. So that's slow progressing, but it will be in the second half of the year for the study to start. And I think Janssen will soon give updates from that James.

Then the perceived failure in non-Hodgkin's lymphoma, I wouldn't call that a failure, to a very high threshold -- futility thresholds - responding thresholds of 50% for follicular lymphoma and 30% for diffuse large B-cell lymphoma. There's not a single drug that actually makes that the monotherapy to put this data in perspective and I can tell you data will be presented in a publication by Janssen, I don't know what the timing is there. And there should be no [re-through] for other cancers because we are doing studies already in MDS and then in NK/T-cell lymphoma, was an [ISS] study in AML, ongoing (inaudible). And I predict that both Janssen studies testing with regard to blood cancers as well as [ISS] study, show investigative-driven studies will further test the potential of daratumumab in blood cancers. Probably in many of these cancers, James, in combination with chemotherapy (inaudible) works because mostly in these cancers and the refractory the first-line treatment resumes, you need to hit them, where the -- hit the tumors with a combination regimen and that is what I predict will happen there. But the focus for daratumumab particularly on a multiple myeloma and basically the whole [stress] from smoldering to frontline treatments and in solid cancers where we have seen a number of new studies as I already eluded to in my answer intro, being pushed in the first quarter, there will be more studies following. So very, very robust activity and hopefully next week on May 17, will be a business update from Janssen Pharma, hopefully more to come there, James.

Michael Novod, Nordea.

Yes, hello, it's Michael from Nordea in Copenhagen. Few questions also on the financials. So, on the royalty rate, it looks to be around 11.9% again. Going back to your Q4 call, you talked about reaching another TFO for the royalty. How should we view the -- the mechanism in this going further into 2017? And then secondly on the tax, lot of discussion also on the last call. So the tax this quarter due to be 20%, is that any way a proxy for how we should view the reported tax rate for 2017? And then the last question on APOLLO, should we mainly view this as a preparation for a potential FDA requirement if they choose to approve the label expansion for pomalidomide in June?

Thanks Michael for the questions, I will happily delegate the first two to David and second and I then will start with the most exciting question that's APOLLO. As we have stated in the Company announcement, Michael, this is a confirmatory study and very likely based on discussions with the FDA, and you know that we have an ongoing review of the data sets of -- I think a little bit over 100 patients in the Phase 1 trial where patient were treated with daratumumab + pomalidomide + dexamethasone, excellent data that we already presented publicly and yes you can see this is a confirmatory study. Maybe David for the first two questions?

Yes, very good. First of all on the royalty tiers, remember there is royalty tiers and that actually you go up in tiers the royalty rate goes up. So, what that means is the clock resets each year. So, your first dollar of sale at the beginning of the year is going to be at your lowest tier of 12%, when you move up next tier that will move up to next percentage. So, it's not an average royalty you get paid throughout the year. It will escalate as you move through the tiers. I can't tell you what the second tier is either in terms of where it comes in or what the percentage would be because it was more important for us to be able to tell you at Q4, where the 20% royalty rate kicks in, when sales go above the $3 billion, that there are number of different tiers between the 12% and the 20% overall. So, our royalty for Q1 of 2017 is all about the 12% rate. Of course, you've got the foreign currency movements between the US dollars, which Janssen report in and on Danish kroner. But it is a 12% royalty we're getting in the first quarter.

In terms of the tax, ye, we had a small tax charge in the first quarter, that's because we are profitable, we expect to be profitable of course for 2017. As you saw in 2016, we will take another look at the deferred tax assets as we move throughout the year. So if we're confident of our profitability and confident of our profitability going forward into 2018-2019, then it is possible that we would have some of that deferred tax assets that will take that value on to our balance sheet, hence that would potentially give us a credit so the P&L later in the year when we reassess that. So for the first quarter the small tax charge in there, that is effectively the tax at the current Danish rate. Hopefully that answers your questions.

Can I just ask one follow-up? Maybe just to have -- Judith joined the call, I Just maybe hear her perspective on say joining Genmab coming from a large and solid position in a large pharma company and then just top two reasons to join in Genmab?

Yes, thank you for the question. I think that with all what we've had, I think that is very easy to understand my decision and basically on the strength of the science and on promise that for the patients that we have with our pipeline.

So it was more the pipeline then the myeloma asset?

Yes, I think that the myeloma -- I mean speaks for the fact about the strength of the science. So what we are seeing in myeloma, (inaudible) by specifics, I think that we will see more in the coming years. But it's a science-driven company with a focus on patient needs. So this is totally identified with my values and my principles in pharma or biotech.

Thanks a lot.

Thanks, Michael. Thanks, Judith. Let's go to queue, question for. Operator?

Yan Li, Citi.

I have a few questions only for Judith on the development of DARZALEX in solid tumor in the patients. So first, given the recent finding presented by [Gibson's Group] at MD Anderson, where they see induction of CD38 on solid tumors following PD-1 -- paid. Would they make more sense for you enter into a two-month trial in PD-1/PD-L1 refractory patients?

And second, just thinking about other solid tumor indications where you could make more sense for DARZALEX. There was a recent paper highlighting CD38 being a key market for T-cell (inaudible) in renal cell carcinoma. So, yes CD38 being a more prominent marker than even (inaudible), CTLA4 and 4-1BB. So, my question is, are there plans to expand the current program into new solid tumor indications such as benign cancer.

And lastly, when can we expect first clinical results from the ongoing solid tumor trial. I mean, we have the date on clinicaltrials.gov, but some more detail would be helpful? Thank you.

Okay, thank you for the questions. So, I think that the paper you alluded (inaudible) publication presented at the AACR and ASCO, SITC in (inaudible) 259 patients some proof and we are all excited about these, and this is why several sponsors have PD-1 and have partnered with Janssen to conduct studies with (inaudible). So we have -- combination in non-small cell lung cancer in newer combinations in several solid tumors and those are combination in MM. I think that how to position an asset as daratumumab with an immunomodulatory effects in patients, we will learn very soon from the several combinations ongoing to assess the -- PD-L1 positive versus negative and the added value to address in small cell lung cancer and the renal cancer date presented -- published is super excited, is aligned and was presented for lung and is portrayed CD38 as a mechanism of escape for checkpoint inhibitor. I think that we will know very soon in the coming year with a heavy biomarker component in the atezolizumab combination, what could be the rest population that could benefit. But the science is strong and this is what makes it so exciting about the potential in solid tumors. I think I answered your question.

So, how about new indications, the new solid tumor indications, that's outside -- the ones already announced?

Yes, so I think Janssen is partnering in a very broad basis, so we have colorectal, triple-negative pancreas, non-small cell lung cancer, (inaudible) tumors, I think that the prioritization is always a matter for different sponsors, but it wouldn't surprise me that more to come in the future, but I cannot answer this question right now.

So Yan, there's probably more on this also, potentially next week in the Janssen update. I think it will still be likely that it will be the focus on daratumumab and potentially on the immunomodulatory effects. So, probably more to come next week and very nice of you to ask about the renal cell carcinoma data. I think this paper is indeed super exciting with the CD38 positive macrophages. So, I think that gives more food for thought for a lot of people to focus on CD38 as a check point.

I'll look forward to the 10-K. Thanks.

Me too. Thanks, Yan.

Richard Parkes, Deutsche Bank.

Hi. Yes, it's Richard Parkes from Deutsche Bank. Can you hear me okay?

Yes, perfect.

Yes, thanks for taking my questions. I just got two or three, firstly on -- just thinking about ASCO, it looks like the Phase Ib with the carfilzomib combo first line study it looks like, might be the most interesting presentation. I think it's been slightly [visible]. I just wondered if you could give us some kind of indication of the extent of data and the duration of follow-up, that study will include at the conference?

And then secondly, I'm sure this has been asked in previous quarterly calls, but I don't know whether Jan -- give you any data on patient share. I'm just wondering if there's any patient share data in their lab setting, since the launch and whether there were any effects of stocking when we look at the 1Q versus Q4 trends for US DARZALEX?

And then the third question, just -- there's no data on HuMax tissue factor obviously ASCO, I mean just wondering when we can next expect an update? Thanks.

Thanks Richard. I'll start probably with questions one and three and then I'll hand over question two to David to basically give you further perspective on the different lines of treatment and how DARZALEX is actually being used. Of course you have a little bit of visibility into that. So, let's start with ASCO. I think the CASTOR and POLLUX combination data on frontline are going to be -- I think very, very exciting, it says relatively small number of patients, I think a little bit over 20 patients, and I think I cannot tell you more at this time, but it will be a pretty good data set on those patients. Indeed this work has not only been selected for an (inaudible) at ASCO, which we're super excited about, but also has been selected already best of ASCO for the regional meetings as one of the top flying pieces of data. So, I think in that context, I think this is very interesting data.

The second, well is, of course of more data on POLLUX and CASTOR, because we have very deep response there and probably a very good download of updated data because Janssen keeps following the data in both the POLLUX and CASTOR study, very, very carefully. So I think that is going to be exciting. And or in -- little like an [add] at this time and the third question on tissue factor ADC or tisotumab vedotin, we are very, very confident that we will -- [today] submit an abstract for ASMO in early September in Madrid and we hope to present more robust data with more long-term duration of responses on follow-up of the assets they have Richard also little. You can see at this moment on top of -- we are very excited what we see, but it's still early days at this time.

Thank you.

And then David, probably to give a little bit more color to Richard on way daratumumab is actually being used in the four lines of treatment for multiple myeloma as we speak at this time.

Very good. We will obviously keep a very careful eye on the -- any data on sales that we can get hold of. I won't give you [J&Js] numbers that's up to [J&J], although we do keep close contact with the commercial people and get updates and then also purchases independent market share data as well to keep an eye on the market, of course, we will look at the IMS in the Symphony data, that's coming through. So, I think first up on your question around stocking, if we look at the Symphony data for Q4 that was $155 million dollars for the US market. The Janssen reported net sales number was $151 million, so fairly close, remembering that both IMS and Symphony data is gross data, whereas the numbers reported by Janssen would be net sales. If you look at the first quarter 2017, the Symphony data was $201 million, very close to IMS of $202 million and also very close to Janssen's net sales number of $201 million. Personally, I would have expected perhaps a slightly larger difference between the Symphony number and the net sales number of Janssen, but I think you know, you're going to get into spurious accuracy trained to look down to that level, there is always going to be some timing differences and we have potential stocking, particularly as you go through our expanded labels and the distribution companies will more likely hold and the hospitals will hold slightly higher inventory as the label expands.

We're also be looking at the market share data and these numbers are from March, 2017. First off, we'll be looking the third-line usage and the fourth-line usage. DARZALEX is now taking number one slot in both of those, and what we're seeing interestingly overall and this you probably expect is that [DRd] is being used more than [DVd], and I think you'd expect that when you look at the POLLUX and CASTOR data, you would think that the daratumumab and Revlimid combination would be the strongest one. But both of those particular combinations are growing and probably as you'd also expect that is taking some -- from the mono sales, again just looking at the data, you're seeing stronger data overall for the patients in the combination. So, I don't think any surprises there, but it is growing overall.

If you look at the second line for the US market, which is probably more interesting for us. Of course Revlimid containing treatments are still dominant in the market with about 60% of the market share. But DARZALEX-containing regimens you now may see moving up to number three, and it's only just behind Velcade in March, and giving us trajectory, I think we could be looking to overtake Velcade and become number two position in the second line in the not too distant future.

Of course, you're seeing both [DRd] and [DVd] growing, and you're seeing the overall market share in second line in March in the low single-digit. So, I think for us, it's all moving in the right direction, and we were very pleased with the combined US and Rest of World sales $255 million, is off to a great start, and giving us a great promise to the classic blockbuster drug in 2017.

Peter Welford, Jefferies.

Thanks for taking my questions, a couple left. So on the Horizon acquisition, I just wonder if there's any money if at all, that payers payable by Tjem, whether the license agreement just stays as is on the acquisition of teprotumumab that has come through? Second question on the AXL-ADC, wonder if you can give us an update there on the dose range finding that is going on if you go beyond the first lowest curve yet. And what are your findings there so far in terms of the rate at which you can explain the doses. Thirdly, then on JNJ, would you can give us an update on the number of DuoBody programs that are still active. Almost, I little bit lost in terms of the programs that were activated, they went to various stages I know a few have dropped out, can give us an update on the number of DuoBody that is still active with JNJ? And also if you can, any progress potentially from Lunbeck that may -- I guess trigger your future income and I think as number of those went into preclinical? Thank you.

Thanks, Peter for the questions. I can probably handle them all. The Horizon acquisition of River Vision, we will simply keep the same royalty and milestone agreement as we have put into place with Roche. So, we don't get any money from the acquisition of River Vision Cooperation, but of course we now will probably get increasing recap income from Horizon, and that will be the same royalty percentages as we have negotiated with Roche now in the early 2000 basically. So, no other money is coming to us, but of course the milestones to follow from the further progression of the drug because I think Horizon is quite enthusiastic of moving the drug further towards patients based on the excellent data, whichever was referring to and published in the New England Journal last week.

On AXL-ADC, we already [adopted] those cohort, Peter; so we are progressing towards very quickly. And that means that we don't run into toxicity. This is not manageable. So, we think actually that we have an active to work here, we can already see that and hopefully more data and a better feel of where we are going with AXL-ADC next year, not this year, but very, very good progress in those escalation and it's more rapid than we anticipated.

For Janssen and DuoBody, I think there are 12 activated programs. I think a number of them have been stopped. I think two have been flagged up as not being prioritized for further progression. Three programs are in the clinic, right now and are active in the clinic, (inaudible) was added today on clinicaltrials.gov, CD3 by specific targeting BCMA for multiple myeloma and several programs are streaming towards -- I understand streaming towards the clinic, Peter. So, very robust progress, maybe again referring to potential updates at Janssen's business and business update in pharma next Wednesday. That it could potentially address DuoBody programs as well with lot of activity there, three programs in the clinic and fully active in the clinic and I understand it is doing quite well. So, I think DuoBody is getting more and more traction. Then last question escalates to Lundbeck. They have -- number of programs active and I think one of these programs is going very well pre-clinically and may also is streamed towards the clinic, that's to Lundbeck to the site, but very good progress there as well.

That's great. Thank you.

(Operator Instructions). Peter Sehested, Handelsbanken.

Hi, it's Peter from Handelsbanken and thank you for taking my questions. I have two bit of housekeeping. Could you just remind us what kind of non-multiple myeloma clinical data that we should expect to see this year, talking particularly about the work that you mentioned in your 2017 goals? And secondly with respect to the interims frontline data, a bit of flavor on the timing -- I'm still talking about September or so timeline? I think those were the two questions I had, thank you very much.

Thanks Peter for the questions. Let me start with the timing. That is still I think developing what I understand from Janssen the last time I've spoken to them, that it will be in the Q3\Q4 region, so more towards the middle of the next half of the year. And I think probably more concrete timing of dates can be given in our quarterly call Peter, but that's what I've heard latest. So, this will not be a closer to the summer, but probably late autumn, that's what they predict right now for the ALCYONE study. And then for the data outside of multiple myeloma, I think you can expect non-Hodgkin lymphoma data, I think in the form of a publication at some point and there are also several other studies ongoing in NK/T-cell lymphoma and MDS and AMO and other indications and right now it's not clear to me, what exactly will be presented. I know that a week ago, I've been case studies on a patient with glomerulonephritis with very positive data with daratumumab. In a single patient you've seen similar data in NK/T-cell lymphoma, of course in an American patient last year in September also published in the New England Journal. So, I think there are a number of studies ongoing, where you can anticipate data from, but I think the non-Hodgkin's lymphoma data is pretty -- as I think is the most -- I think concrete.

Okay, then I have just a follow-up. I know that research into CD38 expression mechanism of action, [tumor micro] environment, I mean that is progressing extremely fast at the moment. But, sort of looking at the published data, I mean that mechanism for DARZALEX to work in these hematological malignancies -- yes, I'm particularly talking about direct expression on tumor cells, that is -- I mean that is limited if not sell at least not totally absent. So could you just elaborate a little bit about -- what are the mechanisms that we expect to see at play here or is this simply just a question of shots on goal? Thank you, very much.

Yes, I can give you a very long or very short answer, Peter . So, let's go for a very long one, because it's easing now anyhow. So, the immuno-oncology effects, I think are very well documented, we already heard from one of your colleagues, Yan Li from Citi speaking about the (inaudible) from last week in the renal cell carcinoma, the results were very, very good data set from MD Anderson, which we also refer to -- this presented two times last year already in lung cancer and in solid tumors that knocks out regulatory cells of the immune system like myeloid-derived suppressor cells and regulatory T-cells, that really unleashes to break of the immune system. You will can see a clone of T-cell expansion and very robust activation of the immune system leading to T-cell attacking cancer cells in models and potentially also in patients as we have seen it in multiple myeloma. So, that side of the coin has gotten clearer and clearer. The other side you were asking about the direct killing of CD38 positive cancer cells, like for example, AML cells or ALL cells or [BCLL] cells that has been very well documented already a number of years ago that we have presented at ASH ,at numerous ASH meetings, posters and presentations that we showed that daratumumab is very active in killing -- at least five different ways of killing, ADCC complement killing, antibody dependent cellular phagocytosis, apoptosis induction, and also interference with the enzymatic activity of CD38 because it's an active enzyme involved in calcium metabolism. These mechanisms can lead to direct killing of CD38 positive cancer cells and that have been documented in at least eight blood cancers. So, it's not so much shot on goal, but we don't know whether in these therapies of blood cancers, Peter, that also the activation of the immune system plays a role because we know that looks like checkpoint blockers like PD-1 blockers or PD-L1 brokers or CTLA4 blockers are not that active in some of these blood cancer. So, suggesting that these tumors are not very visible for the immune system. So I think it's a combination of looking at tumors which are directly expressing CD38 like NK/T-cell lymphoma relatively logical, but daratumumab can kill these cells because of the expression of the target already on the cell surface and in other tumors where the immune system can be put into gear, it's a more immunogenic cancers and that may be onset of the blood cancer. So, what we are doing is we are looking at a combination of different tumor targets for presented daratumumab, probably using different mechanisms of action.

As there are no further questions in the queue that will conclude the question-and-answer session. I would like to turn the call back to the speakers for any additional closing remarks.

Well, thank you for calling in today to discuss general financial results for the first three months of 2017 and we look forward to speaking with you again soon.

That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.