Y-mAbs Therapeutics Inc (YMAB) 2021 Q3 法說會逐字稿

Good day, and welcome to the Y-mAbs Therapeutics, Inc.'s Third Quarter 2021 Earnings Conference Call. Today's conference is being recorded.

Let me quickly remind you that the following discussion contains certain statements that are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because forward-looking statements involve risks and uncertainties, they are not guarantees of future performance, and actual results may differ materially from those expressed or implied by these forward-looking statements due to a variety of factors, including those risk factors discussed in the company's annual report on Form 10-K for the fiscal year ended December 31, 2020, as filed with the SEC on March 1, 2021, and in the company's subsequently filed SEC reports.

At this time, I would like to turn the conference over to Thomas Gad, the company's Founder, Chairman and President. Please go ahead, sir.

Thank you, Hilary. Good morning, everyone, and thank you for joining us today for our third quarter earnings call. During the quarter, we have made notable progress with DANYELZA and omburtamab as well as our bispecific compounds created under the Y-BiClone platform and the SADA platform essentially constituting the 3 pillars of our business. We had a strong 2021 thus far, and the resubmission of the omburtamab BLA is progressing well. We had a Type B meeting with the FDA in September, during which we confirmed our path towards a pre-BLA meeting in January, potentially followed by resubmission of that BLA. Both DANYELZA revenues and the number of treatment centers have exceeded our internal expectation for the launch, so we're very pleased with the initial adoption of DANYELZA. Claus Moller will provide more details shortly.

I'm also pleased to report that we made additional progress in China this quarter, together with SciClone Pharmaceuticals, our strategic partner for Mainland China, Hong Kong and Macau. The BLA for DANYELZA for treatment of patients relapsed and refractory high-risk neuroblastoma was accepted by the NMPA in China and subsequently granted priority review by the Center for Drug Evaluation. In addition, it's notable that DANYELZA has been prescribed for the first time in China, and the first 7 patients have received treatment in the Hainan Boao Medical Tourism Pilot Zone. Notably, a significant number of new patients are lined up and further SciClone plans to open up a second center in the [Shenzhen] pilot zone.

The bispecific programs under the Y-BiClone platform continues to advance. We are now dosing patients in our Phase II small cell lung cancer study with nivatrotamab in a subcutaneous formulation. The IND for our CD33 bispecific for pediatric AML has been submitted. And this promising treatment will potentially address an important pediatric unmet need. Our excitement over the SADA technology remains strong as we continue to optimize the platform that potentially will be able to deliver medicines to treat many cancers and move -- and it moves closer to the clinic. We are on track to file the first IND for GD2 SADA in the fourth quarter. Next year, we are planning to file at least one more IND for the SADA construct.

We ended the third quarter with $215 million in cash, so we believe we have a strong balance sheet to not only support the continued commercialization of DANYELZA and the potential launch of omburtamab, but we are also advancing the lutetium-conjugated omburtamab DTPA and nivatrotamab into late-stage development. At the same time, we continue to advance construct developed on the Y-BiClone and SADA technology platforms. And we are actively working with both our platforms and business development. We are very pleased with our current financial position, which Bo Kruse, our Chief Financial Officer, will elaborate on later on this call.

And with that, I'm very pleased to turn it over to Claus. Thank you.

Thank you, Thomas, and welcome to Y-mAbs Therapeutics Third Quarter 2021 Earnings Calls. We are very pleased that you have chosen to join us today. Let me start out with naxitamab or DANYELZA. DANYELZA is approved for the treatment of patients with relapsed or refractory high-risk neuroblastoma in the bone or bone marrow, who have demonstrated a partial response, minor response or stable disease to prior therapy and was approved by the FDA under accelerated approval pathway. We recorded DANYELZA net sales of $9 million in the third quarter, which reflects a strong 10% vial shipment growth over last quarter, offset by an impact of certain rebates, reflecting a shift from both the treatment center mix and the patient mix from independent inpatient to outpatient.

We are particularly encouraged by the increase in the number of centers -- treatment centers that have gained experience with DANYELZA. At the end of the quarter, we had delivered to 24 centers across the nation. We continue to be very pleased with DANYELZA, with the DANYELZA launch. While revenues look promising, and the number of treatment sites are ramping up nicely, it is also notable that we have seen a more than 40% increase in the number of vials delivered in the U.S. outside MSK compared to second quarter. In other words, a significant increase in the business across the country.

The overall number of vials shipped in the U.S. increased, as mentioned, with approximately 10% in the third quarter versus second quarter. And our gross revenue reflected that 1:1. We did, however, see a shift towards more patients being treated on an outpatient basis, some of which started as inpatient treatments in their first cycles, but then thereby becoming subject to available rebates as outpatients from the Public Health System or PHS. This shift, together with a significant increased share of vials being sold outside MSK has had an impact on the gross to net calculation. And this impacted the reported growth in net revenues for the third quarter.

Going forward, I believe the increase in the gross to net calculation related to the PHS eligible hospitals will subside, but the mix shift in favor of non MSK institutions is expected to continue into 2022 as more and more centers outside MSK learn about and start prescribing DANYELZA. We are very pleased to see DANYELZA get substantial traction in the market at this point. It is also notable that we are now seeing commercial uses of DANYELZA in early access programs in China, MENA and LatAm. Royalty income is obviously still very modest, but we have high hopes for future growth and are putting significant effort into expansion into additional international markets.

We've recently held a key opinion leader webinar that included a detailed review of data from DANYELZA in first-line as well as HITS data. HITS refers to chemoimmunotherapy for resistant high-risk neuroblastoma, where DANYELZA is given in a combination treatment often referred to as HITS consisting of DANYELZA. Actually humanized naxitamab and thereby the 8 irinotecan, temozolomide and sargramostim. The key opinion leaders as well as other medical doctors in the field appreciate the solid data that forms the basis for the FDA approval and the convenience of being able to offer an outpatient treatment, which brings new degrees of freedom to the table as opposed to watching the patient nonstop in the ICU day in and day out.

I'm very pleased with our commercial and medical affairs organization, whom has done an outstanding job of educating physicians and nurses about DANYELZA and guiding the many new treatment centers through their very first experience with DANYELZA during the quarter. Our ongoing clinical trials for DANYELZA in Barcelona, Spain and MSK in New York for first-line neuroblastoma maintenance treatment as well as chemo combination trials for refractory in neuroblastoma patients are progressing nicely. We are still in the process of initiating an international Phase II multicenter frontline trial, and our multicenter chemo combination trial will start screening patients from next week. We also have a Phase II osteosarcoma trial ongoing.

Now turning to omburtamab for the treatment of pediatric patients with CNS/leptomeningeal metastasis from neuroblastoma. Based on feedback from the FDA at a Type B meeting in September, where we provided the FDA with additional detailed data and statistical analysis plan, we have recently requested a pre-BLA meeting. Pending a positive pre-BLA meeting in January, we aim to initiate a resubmission of the omburtamab BLA shortly after the meeting. And we believe we are positioned to complete the submission during the course of the first quarter 2022, potentially allowing for FDA approval of omburtamab in the fourth quarter of 2022. Needless to say, we are very pleased to be aligned with the FDA on next steps and believe that if approved, omburtamab will be a significant benefit to patients with CNS/leptomeningeal metastasis from neuroblastoma, who are currently facing a major unmet medical need.

The European marketing application for omburtamab was prepared in parallel with the U.S. BLA and was submitted to EMA in the April of this year. Preliminary feedback from EMA was received back in September, and we are in the process of responding to questions raised by that agency. We believe the evaluation of our application is progressing as planned. Furthermore, our interim Phase I dose escalation data for omburtamab for diffuse intrinsic pontine glioma or DIPG, has paved the way for our multicenter Phase II study known as Study 102, for which we have filed an IND recently. We expect to administer up to 3 repeated doses of omburtamab in that study.

Now turning to the lutetium labeled omburtamab. Our IND for 177 lutetium omburtamab DTPA for the treatment of medulloblastoma, which is the most common type of primary brain cancer in children is now open, and the first patient had been treated. This multicenter Phase I/II trial is based on our clinical experience from treating medulloblastoma patients with iodine-131-omburtamab, and we are obviously excited to see 177 lutetium omburtamab DTPA make its way into the clinic to establish the safety profile and determine the maximum tolerated dose. The FDA has granted us rare pediatric disease designation for the lutetium labeled omburtamab antibody program for the treatment of medulloblastoma, which makes us eligible for a priority review voucher upon potential approval of the BLA for this rare pediatric cancer.

Among our leading compounds under development, 4 have now rare pediatric disease designation and this designation for 177 lutetium omburtamab DTPA further increases our chances of ultimately receiving multiple PRVs. In addition, we have opened a basket trial in B7-H3 positive CNS/leptomeningeal cancers in adults, where we hope to leverage our prior experience from treating adults with B7-H3 positive brain metastasis with iodine-131-omburtamab. The study has started screening patients, and we hope to see the first adult patients treated with 177 lutetium omburtamab DTPA in late November. We are thrilled to widen our clinical reach to include adult indications for the lutetium 177 omburtamab also.

Our Y-BiClone constructs are a new generation of T-cell engaging bispecific antibodies that may potentially destroy tumor cells by recruiting -- of recruitment of host T-cells. The BiClone formats contains 2 binding arms for the tumor target and 2 binding arms for the T-cells. The BiClone format was designed to have minimal binding affinity necessary to recruit T-cells. We have expanded nivatrotamab's clinical trial to include small cell lung cancer patients in our Phase II study with the subcutaneous administration, and the study is now recruiting patients.

We also plan to expand the ongoing study of nivatrotamab at MSK into 2 separate Phase II arms, one in neuroblastoma and one in osteosarcoma. We have submitted an IND for our next in line bispecific antibody, the CD33/CD3-bispecific generated on the Y-BiClone platform. And we have already experienced significant interest from multiple clinical sites to participate in the study. We hope to open the study for pediatric AML patients within the next 3 to 6 months.

Turning to our SADA technology. As you know, we are very excited about the prospect of this technology, and we are making good progress. We are preparing a handful of SADA targets for clinical development. And as previously announced, the first SADA IND is expected to be against GD2 and planned for filing in December this year. We are seeing significant partnership interest for the SADA technology, and we are positioned to leverage the SADA platform in the coming months. We believe the SADA technology has already shown great potential and that it can potentially improve the efficacy of radiolabeled therapeutics in tumors that have not historically demonstrated meaningful responses to radiolabeled agents. We are truly excited about this platform.

Thus, let me finish off with some more general comments. We believe we are well positioned to grow Y-mAbs as a commercial stage company. With DANYELZA already being shipped to multiple treatment centers across the country and significant international progress being made, the DANYELZA franchise is progressing even better than we had hoped for. For omburtamab, the resubmission of the BLA is inside and the pre-BLA meeting has been requested. At the same time, we are widening and deepening our pipeline by advancing our antibody constructs through the clinic, predominantly the SADA constructs, the bispecifics and the next-generation of omburtamab radiolabeled antibodies. In other words, we remain busy and we are very excited to move forward to build a commercial business that helps patients and further elevate our continued development.

Now let me invite Bo to share his remarks on this quarter's financials. Thanks.

Thank you, Claus. We reported DANYELZA net revenue of $9 million for the quarter ended September 30, 2021. There were no revenues reported in the quarter ended September 30, 2020. As we take a closer look at the operating expenses for the third quarter of 2021, we note that research and development expenses increased by $2.1 million from $21 million for the quarter ended September 30, 2020 to $23.1 million for the quarter ended September 30, 2021. This increase was primarily attributable to a $1.9 million increase in clinical trial expenses and $1.8 million increase in employee-related costs, including salary, benefits and noncash stock-based compensation for personnel related to our expanding workforce. These increases were partially offset by a $1.4 million increase -- or decrease in outsourced manufacturing costs.

Selling, general and administrative expenses increased by $2.4 million from $11.6 million for the quarter ended September 30, 2020, to $14 million for the quarter ended September 30, 2021. The increase in selling, general and administrative expenses primarily reflect a $2.1 million increase in employee-related costs, including salary, benefits and noncash stock-based compensation for personnel related to the launch and commercialization of DANYELZA. We reported a net loss for the quarter ended September 30, 2021, of $28.9 million. This corresponds to $0.66 per share, basic and diluted, compared to a net loss of $32.8 million or $0.82 per share, basic and diluted for the quarter ended September 30, 2020. The decrease in net loss was primarily driven by the DANYELZA revenue stream.

We ended the third quarter with a cash position of $215.7 million compared to $114.6 million at year-end 2020. The increase reflects proceeds from the sale of our DANYELZA priority review voucher in January 2021, where we netted $62 million after sharing 40% of the net proceeds from the sale with MSK as per our licensed agreement. Our September 30 cash balance also reflect the $107.7 million net proceeds raised in our public offering in February 2021, partially offset by the net cash used in operational activities of $68.7 million for the 9 months ended September 30, 2021. We continue to believe Y-mAbs remains in a healthy financial position.

Now this concludes the financial update. And I'll now turn the call over to Thomas.

Okay. Thank you very much, Bo. This marks the end of today's prepared remarks. And at this time, I'd like to -- Okay. Thank you, Bo. This remarks the end of today's prepared remarks and -- We're going to open up the call for Q&A. Claus and Bo, can you hear us?

Okay. Thank you very much, Bo. This marks the end of today's prepared remarks. At this time, I would like to open the call up for questions. Let's open the line now, and perhaps I can ask the operator to remind you that the procedures or the procedures are for submitting your questions. Thanks.

(Operator Instructions) Our first question is from Alec Stranahan of Bank of America.

So 2 from me, both just trying to get a temperature on the DANYELZA launch. So I guess, could you speak to the timing of when patients started therapy in 3Q? Was it fairly evenly spread? Or was it more weighted to either at the beginning or the end? And is it possible that we'll see many of those patients carrying over into 4Q as well? And I guess, of the patients that started therapy in 1Q and 2Q, how many completed therapy at this point? And were there any, I guess, discontinuations from treatment?

(technical difficulty) Okay. Ladies and gentlemen, please stand by while we handle it -- while we deal with the technical difficulty. Okay. Ladies and gentlemen, we are back. One moment, while I reopen the question queue. Okay. All right. Our first question was from Alec Stranahan of Bank of America.

So just trying to get a temperature on the DANYELZA launch. I guess could you just speak to sort of the timing of when patients started therapy in 3Q? Was it fairly evenly spread across the quarter? Was it more sort of weighted in the beginning or the end? And I guess, of the patients that started therapy in 1Q or, I guess, most of 2Q, how many have completed therapy at this point? And were there any discontinuations? And then I have a follow-up.

Well, I mean, obviously, new sites outside MSK, many of the first patients they try out is not primary or secondary refractory patients. But typically, patients that have received chemotherapy in combination with dinutuximab and these -- and are still not coming into remission. And many of these patients do not complete more than 2 or 3 cycles of DANYELZA. But as we see more and more sites retreating or treating new patients, we also see these sites starting to treat patients that are actually true primary, secondary refractory patients.

But as I said also, what we can see is that these patients after the first cycle, where they often do it as inpatient treatment when they realize the patients are actually capable of moving out of the hospital the same day, they received the treatment a few hours later, then they start converting to outpatient. But additional details on the distribution of type of patients, I think it's a bit too early to start giving out.

Okay. Okay. But would you say that, I guess, most of the patients were sort of spread across the quarter in terms of treatment? Or was this maybe like a [bolus] towards the end of the quarter that could…

It was pretty -- I would say it was pretty evenly spread throughout the quarter. Yes. No, it's…

Okay. Okay. And then my second question, looking to next year…

No. As July as the summer months was maybe a little bit more silent than August, September. But that's -- it can also be reflecting other things.

Okay. That's helpful. And then, I guess, looking to next year, how big or old do you see the EU and China playing into expanding the market for DANYELZA? And I guess, do you have any comments around your approach to the launch in those geographies?

Well, EU is probably going to be just early access programs for next year. China, we have quite good expectations for. We see a very significant interest in China. And as we previously have said, we expect based on the regulatory feedback that we have received that we could get a Chinese approval late first quarter or during the beginning of second quarter next year in China, which means that in second quarter, we could come to the Chinese market with the DANYELZA and start expanding it. And as Thomas mentioned, we are already treating commercial patients in China in some of these research areas where it's allowed to treat with products that are approved in EU or the U.S. So we have quite big expectations. There's a lot of patients that are available for treatment out there and need the treatment.

Our next question is from Joseph Thome of Cowen.

Maybe just the first one. In terms of bringing some of these new centers online, can you just kind of walk us through what's necessary? Do you have to work through like a formal P&T committee to get approval before in a new center of line? And is that easing at all? And then maybe the second point on the SADA technology, you indicated seeing significant partner interest. If you could just kind of qualify what you're doing there? Is this a geographic partner? Is this a combo partner? Or would you be looking to license sort of individual (inaudible)?

Sure. So I think the challenges we are seeing on activating new sites with DANYELZA is primarily getting education of the staff and making sure that they can make the staffs available for the actual treatment. Because it's such a quick infusion, it does take more than 1 person to be close to the patient and they need somebody to manage the pain side of it also. And -- but in particular, making sure that the staff is trained on handling the side effects. The pharmacy buying procedures and the reimbursement setups, et cetera, is normally not giving any major hassles or problems. So we have not experienced any in the sites where we have actually sent the product to. So I think it's primarily getting the education. I think the MSL team is doing a great job there.

On the SADA BD side, what we can see now is that -- and what we are looking for, SADA is a tech platform. It's basically like when I was with Genmab, when we had the fully humanized antibody technology that there's no limit to how many SADA constructs you can make. There's no limit to how many different antibodies you can make. So if a company outside Y-mAbs has a target where they believe that their antibody against this target would be fantastic to have a way to conjugate against, but are concerned about the traditional problems with these, which is that you have the circulating antibody for such a long time, the startup would solve that problem. And we could license the rights to use that particular target and antibody for -- with our SADA technology to that company, and we could do another platform deal with another company that has different target, so and the (inaudible).

So there's basically no limits to how many different companies we can make partnerships with for as long as there's targets that have not been, you can say, taken. And technically, there's no problem. So if 2 different partners wants to make each of their own CD20 or CD39, whatever you can think of as potential targets for a SADA construct, then they can do them. And that's why I'm saying that we can do multiple partnerships where the partner get the right to develop their SADA constructs for the entire world. So it's not regional for that -- to that extent. And of course, our own SADA constructs, including the first one where we are filing the IND for the GD2 SADA here in December, potentially could be available for partnering also, like one of our partners, or those that we are talking to would be interested in that. So there's multiple possibilities for partnerships for the SADA tech platform.

(Operator Instructions) Our next question is from Tessa Romero of JPMorgan.

So my first question is about DANYELZA. You talked about the ex MSK volume increase, but could you just clarify what portion of sales actually came outside of MSK? And how many sites have been activated at this point? I think you've talked in the past about a 40 target for the year. I guess how are you tracking towards that target? And I have a follow-up as well.

Yes. Okay. So first, I think we had 24 sites by the end of the quarter that has received DANYELZA. And during the quarter, more than 40% of sales is now outside MSK. Did that -- was that what you asked?

Yes. So I guess as we're thinking about sort of 4Q here, Claus, how are you thinking about what target site number you might be able to hit by the end of this year? Do you think it may take a little bit longer than originally anticipated to hit that 40 target?

I think it's a little early to say whether we have -- I mean, maybe 40 sites is on the high end, but we are making a good effort to visit sites every day to reach out to doctors, to meet them at conferences. And -- but when we get to 40 sites, it seems like it's a stretch since we on average have had 8 new sites, if you divide the 3 quarters up to the 24. But let's see where we end up. I think the important thing is that we continue to see an interest in learning about DANYELZA and trying it out on patients. And I think, as I said, we are early into the launch with the launch starting in February this year. So we are looking at the first 8 months right now. And let's see what happens in the rest of the year.

I'm still very positive on what we have seen. And I think we had not anticipated to see the level of sales that we have actually reached this year. So it's -- I'm positive, and I still think that this makes a huge difference for a lot of patients. But of course, it takes time to penetrate into a market where the existing product has been on the market for 4 to 5 years, and that has been in a number of clinical studies at some of the leading sites. So that's, of course, making it -- you can say, a lot of hard work for our team to get in and have the doctors having practical experience with the product.

Yes. That's helpful. And then if I could squeeze just a quick follow-up on the frontline MSK Phase II study, what is the latest on when we could see those results presented? I think you've talked about potentially presenting them at December R&D Day. So I just was wondering what the latest thought was there.

Yes, I don't think we have said anything new. I still haven't seen the data. So -- but as I said, the patient -- the last patient came into the study in February. So it's data collection. So we're still hoping to have data available and give an update at the R&D Day in December.

There are no more questions at this time. We have reached the end of the question-and-answer session, and I will now turn the call over to Thomas Gad for closing remarks.

All right. Thank you, everyone, for participating in today's call, and have a great weekend. Thank you. Bye-bye.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and have a great day.