Y-mAbs Therapeutics Inc (YMAB) 2021 Q2 法說會逐字稿

Good day and welcome to the Y-mAbs Therapeutics, Inc. Second 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 very much. Good morning, everyone, and thank you for joining us today for our second quarter earnings call. During the second quarter of 2021, we continued to make notable progress across all 3 pillars of our business: first, our leading monoclonal antibodies, DANYELZA and omburtamab; secondly, our bispecific compounds developed under the Y-BiClone platform; and finally, the SADA platform, which also we refer to as Liquid Radiation.

We had a strong start to 2021. We were very thrilled to submit the marketing authorization to EMA for omburtamab for the treatment of pediatric patients with CNS/leptomeningeal metastasis from high-risk neuroblastoma back in April. Also after our Type B meeting with the FDA in June, we believe we now have a clear path towards resubmission of the omburtamab BLA in the form of a rolling submission. We intend to initiate this by the end of this year.

As you know, we started delivering DANYELZA in the beginning of February, and we are seeing demand from hospitals across the U.S. Second quarter net sales were $9 million, up 67% as compared to first quarter net sales of $5.4 million. During the second quarter, we have roughly doubled the number of treatment centers that have gained experience with DANYELZA, and we have now delivered to approximately 20 centers across the nation. Although we have not provided guidance on DANYELZA sales, I'm pleased to note that both revenues and the number of treatment centers have exceeded our internal expectations for the first 2 quarters, so we could not be more pleased with that.

I'm also pleased to report the progress we've made so far in China, together with SciClone Pharmaceuticals, our strategic partner for Mainland China, Hong Kong and Macau. In June, SciClone Pharmaceuticals held a pilot launch presentation of GD2 therapy for neuroblastoma in the tourism pilot zone in Boao, Hainan, also known as Boao Hope City. Thanks to the drug approval process in Boao Hope City and strong support of the local medical institutions, we believe that SciClone will soon be able to provide DANYELZA to neuroblastoma patients in China. You'll recall that in March, SciClone received a clinical trial waiver for DANYELZA, and in July, the BLA for DANYELZA for the treatment of patients with relapsed and refractory high-risk neuroblastoma was submitted to NMPA in China.

We're also very excited to enter into an exclusive distribution agreement with Adium Pharma, also known as [Tecnofarma], a company with significant oncology and rare disease businesses and a commercial presence in 18 countries across Latin America. Tecnofarma will employ its sales and marketing expertise to distribute DANYELZA and omburtamab if approved in that region. [Tecno] will also submit registration files on our behalf in this territory.

The SADA technology continues to look very promising, and Dr. Nai-Kon Cheung from Memorial Sloan Kettering Cancer Center recently gave a presentation at PEGS in Boston to demonstrate how cancer therapeutics often fail in development because of dose-limiting toxicities or subtherapeutic dosing as a consequence of insufficient therapeutic indexes. Our 2-step SADA technology uses unique pharmacokinetics to potentially improve therapeutic index of oncology therapeutics.

The bispecific programs under the Y-BiClone platform continue to advance. Our IND for nivatrotamab was clear last year, and we are getting ready to dose the first patients in our small cell lung cancer study as we speak. Phase II expansions with nivatrotamab in neuroblastoma and osteosarcoma are also planned for later this year.

The IND for our CD33 bispecific for pediatric AML has been submitted. And this promising treatment will potentially address a very important pediatric unmet need as AML remains one of the most challenging hematological malignancies for children today.

We ended the second quarter with $233.6 million in cash. So we believe we have a strong balance sheet and only support the continued commercialization of DANYELZA and the potential launch of omburtamab, but also to advance both our lutetium-conjugated omburtamab DTPA and nivatrotamab into late-stage development. At the same time, we continue to advance our Y-BiClone and SADA technology platforms. So we are very pleased with our current financial position, which Bo will elaborate on later on this call.

Taking our achievements into consideration, we believe Y-mAbs is very well positioned to expand our commercial activities while at the same time, advancing our pipeline to continue to address unmet medical needs, and we are very excited to continue to do so.

And with that, I'm very pleased to hand over the call to Dr. Claus Møller, our Chief Executive Officer. Thank you.

Thank you, Thomas, and welcome to Y-mAbs Therapeutics' Second Quarter 2021 Earnings Call. We're very pleased that you have chosen to join us today.

During the second quarter, we have worked hard to ensure that our pipeline continues to advance towards the market. DANYELZA for the treatment of patients with relapsed/refractory high-risk neuroblastoma in the bone or bone marrow who have demonstrated a partial response, minor response or stable disease to prior therapy once approved by the FDA under Accelerated Approval Pathway. We were thrilled to shift the first commercial vials to treatment centers across the country during the first quarter, and I'm very pleased with the launch to date. And as you would expect, MSK is our largest customer at this stage. But with the continued addition of new sites using DANYELZA during second quarter, we expect that in the third quarter, almost 50% of the vials will be sold to other cancer treatment centers across the U.S.

Our commercial and medical affairs organization has done an outstanding job educating physicians and nurses about DANYELZA, and many treatment centers have now had their first experience with DANYELZA. Our understanding is that these treatments have generally gone very well.

In frontline updated clinical data for DANYELZA and GM-CSF from a consolidation of high-risk neuroblastoma patients in complete remission was presented at the American Society of Clinical Oncology, also known as ASCO, Annual Meeting in June 2021. Patients received 5 cycles of DANYELZA and GM-CSF in a compassionate use setting for consolidation of high-risk neuroblastoma in first or subsequent CR. The 3-year, event-free survival for patients in first CR was 74% and 19% for second or later CRs. The 3-year overall survival for patients in first CR was 92% and 66% for second or later CRs. 2-year inventory survival and overall survival was previously presented at our R&D Day in December 2020, and those data points are now poised for the 3-year follow-up. I'm very pleased to see how well both duration of response and survival rates seem to be holding up.

Our ongoing clinical trials for DANYELZA in Barcelona, Spain, and MSK in New York City for the first-line neuroblastoma maintenance treatment as well as chemo combination trials for refractory neuroblastoma patients are all progressing nicely. We are working to initiate international Phase II multicenter trials for both frontline and chemo combination treatments, and we also have a Phase II osteosarcoma trial ongoing.

Now turning to omburtamab. On June 1, we had another Type B meeting with the FDA to discuss the route towards resubmission of the BLA for omburtamab for the treatment of pediatric patients with CNS/leptomeningeal metastasis from neuroblastoma. We are maintaining a very close and open dialogue with the FDA regarding the resubmission and hope to reach a final agreement with the agency for the remaining details shortly. We aim to resubmit the omburtamab BLA in the form of a rolling BLA by the end of this year. If approved, we strongly believe that omburtamab will represent a very significant advancement in the treatment landscape for CNS metastasis where no standard therapy exists today.

The European marketing application for omburtamab was prepared in parallel with the U.S. BLA and was submitted to EMA in April of this year. The evaluation of our application is expected to take 210 days plus potential clock stop addition of days.

In addition, interim Phase I dose escalation data for omburtamab for diffuse intrinsic pontine glioma, known as DIPG, was presented at ASCO in June and showed the dosing of omburtamab radiolabeled with 8 millicurie of iodine-124 appeared to be well tolerated, improved distribution volume to potentially cover tumor volumes of up to 20 cubic centimeters. The median overall survival of all 46 patients in the dose escalation study increased by 3 to 4 months as compared to the historical control group. This study will continue dose escalation for both infused volume and dose. We are excited to share these results that significantly broaden the potential reach of omburtamab.

The results have also paved the way for our multicenter Phase II study in DIPG later this year where we expect to administer up to 3 repeated doses of omburtamab and thereby further, hopefully, improving efficacy. As previously discussed, we are also developing omburtamab for desmoplastic small round cell tumors, known as DSRCT, and we have a Phase II study ongoing at MSK.

The FDA has also cleared our IND for 177 lutetium omburtamab DTPA for the treatment of medulloblastoma, which is the most common type of primary brain cancer in children. Our international multicenter Phase I, II clinical trial is now open for pediatric patients with medulloblastoma, and the study is based on our clinical experience from treating 27 medulloblastoma patients with the iodine-131-omburtamab construct.

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. In this study, known as Study 301, we hope to leverage our prior clinical experience with iodine-131-omburtamab, and we will once again be giving the infusion to an Ommaya reservoir.

It is also notable that in June, the Committee for Orphan Medicinal Products, also called COMP, of the European Medicines Agency has recommended an orphan drug designation in the EU for 177 lutetium omburtamab DTPA for the treatment of medulloblastoma.

In addition, our basket trial in B7-H3 positive CNS/leptomeningeal cancers in adult patients, known as Study 302, where we hope to leverage our prior experience from treating more than 25 adults with B7-H3 positive brain metastasis with iodine-131-omburtamab, is now also open for first adult patients to be screened and treated with 177 lutetium omburtamab DTPA. We are thrilled to widen our clinical reach to include adult patients also now.

And then turning to the Y-BiClone. We have expanded nivatrotamab's clinical reach to include small cell lung cancer patients in our Phase II study with subcutaneous administration of the bispecific antibody. We also plan to expand our ongoing study of nivatrotamab at MSK into 2 separate Phase II studies, one arm in neuroblastoma and another in osteosarcoma.

In addition, as planned, during the second quarter, we submitted an IND for the next in line bispecific antibody, the CD33 bispecific generated on the Y-BiClone platform during the quarter as we had planned. We hope to open the study for pediatric AML patients within the next 6 to 9 months.

Turning to our SADA technology. As you know, we are very excited about the prospect for this technology, and we are making good progress. We are preparing our 4 disclosed data targets for clinical development. The first data IND is expected to be against GD2. We expect to file this IND in the fourth quarter of this year, and we have recently received what we believe to be positive feedback on our pre-IND package from the FDA.

In addition, at American Association for Cancer Research, AACR, in the conference in April, we reported that pretargeted radio immunotherapy against GPA33 in a xenograft model for colon cancer had shown a tumor to blood radioactivity uptake of 122 measured 24 hours after injection. GPA33 is expressed on 95% of all colorectal cancers. And an IND for GPA33 SADA is targeted for the end of next year.

Our other publicly announced targets include B7-H3 SADA intended for the treatment of prostate cancer and HER2 SADA for potential use in breast cancer. We believe the SADA technology can potentially improve the efficacy of radiolabeled therapeutics in tumors that have not historically demonstrated meaningful responses to radiolabeled agents, and we are truly excited about this platform.

Looking at some more general aspects. We believe that we are well poised to continue to grow Y-mAbs as a commercial-stage company, with DANYELZA already being shipped to multiple centers across the country and significant international progress being made on the DANYELZA franchise is promising, even better than we had hoped for.

For omburtamab, the path to resubmission of omburtamab BLA is much clearer after our recent meeting with the FDA, and we now have an understanding of the (inaudible) that are required by the FDA prior to initiating the resubmission.

At the same time, we are widening and deepening our pipeline by advancing our antibody construct through the clinic, predominantly the SADA constructs, the bispecifics and the next-generation omburtamab DTPA 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 -- for this quarter's financials.

Thank you, Claus. We reported net revenues of $11 million for the quarter ended June 30, 2021, representing DANYELZA sales of $9 million and license revenues of $2 million. There were no revenues recorded in the quarter ended June 30, 2020.

As we take a closer look at the operating expenses for the second quarter of 2021, we note that research and development expenses decreased by $10.3 million from $30.1 million for the quarter ended June 30, 2020, to $19.8 million for the quarter ended June 30, 2021. This decrease was primarily attributable to a $13.1 million decrease in milestone payments and license acquisition costs (inaudible) to the SADA license agreements, which were incurred in the second quarter of 2020.

Selling, general and administrative expenses increased by $3.1 million from $10.4 million for the quarter ended June 30, 2020, to $13.5 million for the quarter ended June 30, 2021. The increase in selling, general and administrative expenses primarily reflected a $3.1 million increase in employee-related costs, including salary, benefits and noncash stock-based compensation for personnel related to the loans and commercialization of DANYELZA.

We reported a net loss for the quarter ended June 30, 2021, of $22.9 million, and this corresponds to $0.53 per share basic and diluted compared to a net loss of $40.4 million or $1.01 per share basic and diluted for the quarter ended June 30, 2020.

We ended the second quarter with a cash position of $233.6 million compared to $114.6 million at year-end 2020. The increase reflects the proceeds from the sale of our DANYELZA priority review voucher in January where we netted $62 million after sharing 40% of the net proceeds from the sale through our license agreement with MSK.

Our June 30 cash balance also reflected $107.7 million net proceeds raised in our public offering in February 2021, partially offset by the net cash used in operational activities of $50.6 million for the 6 months ended June 30, 2021.

We continue to believe Y-mAbs remains in a very healthy financial position.

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

Thank you, Bo. This marks the end of our prepared remarks for today, and I'd like to open up the call for Q&A right now. Thank you.

(Operator Instructions) The first question comes from Alec Stranahan with Bank of America.

Just a couple on DANYELZA from us. First, when you look at ways to grow market share in neuroblastoma, I guess, at this point, how much is adding new treatment centers versus shifting patients over from DANYELZA that would have otherwise gotten unituxin, sort of your focus at this point? And how much do you think positive chemo combo data could feed into uptake in the relapsed/refractory setting?

And then my second question, I believe you mentioned that we could see osteosarcoma data at a conference in the fall. So if you could just help us frame the extent of data and ballpark on sample size we should expect in the update, that would be great.

Thanks, Alec. Well, I mean, it's too early to say anything about what kind of market share we are digging into. But it's pretty clear to us that -- of course, at MSK, they are doing it, they've been doing it all along while we developed this. They're using it in numerous lines of treatment of neuroblastoma patients.

But I think what we are seeing is on the new sites that have previously been using dinutuximab, they are primarily using it for patients where they have tried dinutuximab, eventually dinutuximab in combination with chemotherapy, which is the most common, and not achieved sufficient response in the patients. And then some sites have also started using it and in the primary refractory, secondary relapsed patients. So -- but most of the treatment we are seeing on these sites is kind of like that's what also typically happens when you have a new product entering the market.

So there's definitely lots of space for additional growth, and we continue to see very high levels of interest there. Also, I can say that our MSLs and our research nurses and our sales teams have had hundreds and hundreds of meetings with -- and interactions with both physicians and other hospital professionals at sites outside of MSK. So we continue to see a strong interest in understanding how to use DANYELZA at the sites.

Your last question about the eventual presentation of osteosarcoma data. I think it's most likely that you will be seeing the data presented at our R&D Day in December. But it's -- I think it's too early yet because the study is still missing one patient for recruitment, and then we can do the analysis afterwards. I think -- was that the answer to your questions?

Yes. Yes, that's perfect. And if I could just lob another one in. Could you maybe talk about your -- for omburtamab, your go-to-market strategy in the EU, assuming approval comes, I guess, later this year or early next?

Yes. It's more likely since we submitted in April of 210 days. I know that it is normal, easy calculation, 7 months. That would take us to November, but you have this clock stop situation. So the most likely, EMA will come back to us in September with a bunch of questions after their qualified review of the file. And then we will be probably spending somewhere between 30 and 90 days, depending on how detailed the questions they have, on putting together the responses, and then the clock stops while we are putting together this. Then the clock starts again when we have submitted the responses. Then if they have additional questions to the responses, then the clock stops again. So although it's called the 210-day review period, it means that, that's in an ideal situation without any clock stop.

But having said that, I think it's highly likely that we would be on the market in second quarter next year pending approval. And we are already now in the process of building up a European organization that can handle the sales and distribution of omburtamab in Europe. Is that answering your question?

That's perfect.

The next question comes from David Lebowitz with Morgan Stanley.

First, on DANYELZA on the corner, you seem to say that next quarter MSK would be about 50% of sales. I'm just curious as to -- is that kind of the run rate we should expect from MSK going forward? As a contributor, it seems that there has to be an upper limit from one hospital as far as how much it can contribute to sale. That's my first question.

Yes. No, absolutely. I understand the question. I mean I don't think MSK is going to be much bigger than they are now. I think that we will see the growth is from outside MSK. And where we're also continuing to add new centers -- basically, every month, new centers are joining and working with -- and we can see several of the sites that started using omburtamab -- not omburtamab, naxitamab and DANYELZA early on have treated more than one patient. I think the highest number is up to 6 patients outside MSK. So definitely, the growth will come from outside MSK.

Excellent. And with respect to the omburtamab submission, given that the FDA has already reviewed substantial parts of the submission before, what do you anticipate the review process would be like this time? Would they ultimately need the full 6 months review period? Or could it be more abbreviated given that they've probably seen a lot of the data in the past?

I tend to agree with you that most likely it will be abbreviated. But I think it's highly likely -- it's unlikely they would not give us the traditional 8 months fast track review PDUFA date. But most likely, they will be able to approve before the end of that 8 months period. But let's see how it goes when we get it submitted. But we definitely hope and expect to be on the market next year with omburtamab in the U.S. also.

The next question comes from Robert Burns with H.C. Wainwright.

Congrats on all the progress. Just 2 for me, if I may. First, so you stated in your prepared remarks that DANYELZA has been shipped to roughly 20 centers as of today. I was just curious, as we think about the rest of this year, what are you thinking about from an internal metric sort of benchmark? Where do you think you'll be able to get to by year-end with regards to the number of centers actually prescribing DANYELZA?

And then my second question. So I know that there's going to be a subsequent Type B meeting with the FDA this quarter. I was just curious whether there are any other points of alignment that you're seeking with the FDA to move forward with that rolling submission. And if so, what were those points that you're still seeking alignment on?

Well, to finish off the first one -- the last one first. I think we have everything aligned. The FDA has asked us to prepare some analysis. And then we'll be discussing those data points and how we are doing them, and the update is statistical analysis plan. And I think we should then be ready to resubmit. So -- but then they would ask us to have a formal pre-BLA meeting and to take it, and most likely it can even be a written response to that.

So I think we are -- we're not expecting any additional alignment except for making sure that we have understood precisely what the FDA asked us, and they want to make sure that we understood that. So -- but I think we are pretty much on track with that.

In terms of additional sites, I mean, I think it's -- as I've previously said, there's about 160 sites in the U.S. that, on a more regular basis or on a rare occasion, treats patients with neuroblastoma. And I think if we can penetrate into 1/4 of these sites, especially if we can penetrate into some of the more important ones, the bigger sites, in the first year, I think we have done a pretty nice job. And I think we hopefully can see a bit more acceleration in that. But until now, I would have to say that I'm very pleased to see that we have managed to get almost 20 sites in addition to MSK to start using the product. I think it's been a very positive uptake.

And in the beginning, there was some concern that many doctors will say, we have what we need with dinutuximab. But that's definitely an attitude that is changing in many places. And also that it seems that the sites are better than we had been concerned about and that they have been concerned about themselves to actually use DANYELZA and that it is not as complicated as somebody might have tried to convince them it was to use DANYELZA. So I think it'd be very positive about the continued development.

Awesome. Congrats again.

The next question comes from Joseph Thome with Cowen and Company.

Maybe just the first one on the omburtamab resubmission. Are you able to provide just maybe a little bit more context around kind of what the additional detailed data the agency requested sort of after the last meeting ahead of the next Type B.? And then I know the rolling BLA submission is targeted beginning at the end of this year. Are there additional modules that would need to be submitted next year to sort of complete the submission? And then I have a follow-up on DANYELZA as well.

Well, I think it's too early now to say when we will be able to finalize the clinical study report based on the statistical analysis plan that we hopefully get a green light from the FDA arm at this upcoming meeting. But having said that, it was pretty clear that the FDA wanted to make sure that the analysis where we compare the data from Study 133, 03-133, with the data from the historical control groups, that those 2 patient cohorts were made comparable. And we're using what's called a synthetic control arm after having discussed this forward and back on with the FDA.

So we are putting that together, and that data set we have agreed with the FDA about also how to generate the synthetic control arm based on the available historical patient data. So that's what has been going on, and we are building that database. So actually, we have done it, and the whole data set will be submitted and the results with the FDA very shortly.

So I think that's as far as we can get it now. When it comes to when we will be having everything ready for completing the rolling resubmission, I think we will take that when we have had the pre-BLA agreement in place with the FDA.

Okay. Perfect. And then just in terms of DANYELZA in new centers, can you give us a little bit more information around kind of how these new sites go on? Do they take sort of an initial pilot dose and then choose to expand it more broadly to sort of their individual center? Or is it sort of ordering patterns based on kind of the individual patients?

Yes. You can see what's happening, and that's happening to all sites, is that they typically -- if they have a patient and they screen the patient to find out they want to put the patients on DANYELZA, then the treatment would be Monday, Wednesday and Friday for the first treatment cycle. So they would order drug for those 3 treatments. And then if the patient does well and they want to continue, then 4 weeks after the first cycle, then they start the second one. So they will order them so they have a product for the next one. Nobody orders for 5 cycles and then leave it empty. We can see that also. So that's why, I mean, we receive orders almost on a weekly basis from the MSK, and we receive orders from most of the other sites that are treating more patients also on a weekly or biweekly basis. So I think that's how all sites would do because it's such an expensive therapy. So if you buy 6 vials and -- or 70 vials and you only end up spending 6 of them and you pay $20,000 per vial, then you have a pretty expensive inventory.

The next question comes from Etzer Darout with Guggenheim Securities.

Just one question for me on DANYELZA. To recall sort of conversations around increasing engagement with the FDA on the frontline setting as -- at post launch and with a couple of quarters under your belt, just wondered if you've initiated those conversations. Or if not, when do you plan to start to have dialogue on sort of a buy in, if you will, into sort of the plans for a frontline setting for DANYELZA?

I think I have been saying before that, we expect to do that in the beginning of next year. We are waiting for the MSK close in the first quarter this year their frontline study. And then we need some follow-up on the last patients in that frontline study with naxitamab. So when we have those data towards the end of this year, together with the data set with 3 years follow-up from Dr. Mora's study, I think we have sufficient material to approach the FDA early next year and have a discussion on what additional data could eventually be necessary if we wanted a supplementary BLA approval. So we are continuing to collect the data from the MSK study, and then together with the data from Dr. Mora's study, I think we have a nice data set to discuss with the agency.

Congrats on the progress.

The next question comes from David Nierengarten with Wedbush Securities.

I had a couple. First, on DANYELZA. I mean, is part of the appeal -- or we've talked in the past about part of the appeal being maybe a less of a requirement to refer a patient to a larger center for treatment or things like that. So is that part of this kind of, the right word, diffusion into -- are they diffusion into smaller centers, diffusion into use in centers that would otherwise be referring to MSK? I'm just kind of curious if part of the selling point here is that and it's part of the strength in the prescriptions?

And then on lutetium, on the DTPA omburtamab, I think you commented that the -- you expected the first patient in Q3 this quarter. The IND was submitted a few months -- well, late last year. Is part of that gap getting sites signed up or kind of -- or trying to find qualified patients? I'm just curious why it's taking a little bit of time there and if we could expect for enrollment trends going forward.

Sure. I mean, I think for the DANYELZA, what we are seeing is that definitely sites that might not have treated patients in the past with -- but just referred to them can now, because it is an easier-to-handle product, treat patients with DANYELZA. But I also think that's actually driving some of the bigger sites that could have been showing more resistance to what's moving from what they have been heavily involved in developing themselves, dinutuximab, to move towards being open to actually treat with DANYELZA. Some parents then simply will say that, but then we go to another site that actually will be using DANYELZA. We want to have our -- the treatment as an outpatient treatment. We want to have this new antibody approved by the FDA.

So -- but I think that's helping to open up. But again, as I said, it's very limited knowledge we have until now and we are still learning every day, but very positive with what we have been seeing until now. Also that some of the bigger COG sites have started using naxitamab.

In terms of the -- starting up recruitment of patients with omburtamab DTPA lutetium-177, it has taken a while to get through all the approval processes in the institutions. But both studies are open for recruitment, and I know they are actively screening patients and they know that they are planning to start treating the first patients also now. So it did take some time. Was it caused by -- I mean everybody is claiming COVID-19 for everything, so I'm happy to do that here also. But I think it's -- there are some things that have been a little bit delayed in those settings. But it's a complicated treatment. And with the Ommaya catheters and the radiolabel with lutetium, we have the radio pharmacy security group involved in addition to the IRB at the hospital. So there's a long process of activities going on.

So typically, from when you get an IND approved today, it is a minimum of 6 months before you see the first patient entering a study, simply because most institutions do not want to sign a contract. They may tell you that they want to work with you and do this, but until the IND is approved and the protocol is carved in stone, they're not signing the contract with you. So -- and then you need to go to the IRB also. So things take a little time. I hope that explains what I said.

Yes. Yes. It's understandable. I was just curious if there was a particular factor beyond that. Like, again, as you mentioned, the radiation approval or if it was patient availability, but it sounds like all of the above.

Yes. No, patient availability doesn't seem to be an issue.

The next question comes from Tessa Romero with JPMorgan.

So my first one is kind of around what your latest thoughts are on how we should be thinking about the accuracy of tracking with third-party vendors such as Symphony. Should these services over time be expected to be tracking DANYELZA accurately? And then I have one more.

Well, I mean, I'm actually amazed that they were disclosed. I think they were pretty close. I think they were about 10% below our actuals. But having said that, I think based on the way they are actually collecting the data, there is definitely a high risk of some uncertainty. But we are trying to find out precisely how they are collecting their information. But definitely, they did a good job this time. It's hard to be more precise, but -- sorry, Tessa.

No problem. That's helpful. And then I guess my next question is just -- I think you've discussed this before. Kind of how has reimbursement and formulary access been going as you move into more sites and new treatment centers? And I think we have talked about kind of 10% of use going into the front line. Is this kind of what you're seeing as you're kind of moving forward here about right? Or how is it looking?

Well, I think as we grow sales outside of MSK, more and more sales are in the second line and third line setting. And I would say, we're actually seeing way more sales in sort of fourth line setting than we had expected because that's where many sites would start treating patients. But having looked at reimbursement issues, there's absolutely no issues. We haven't seen any issues with reimbursement, and that's been very positive.

The next question comes from Arlinda Lee with Canaccord.

I guess I had another one on the market. You just talked about how as sites start gaining experience with this, they tend to go in a later line. Can you maybe talk about the 20 sites that are open right now? What proportion of the population do you think that covers? And then the larger sites that you're most interested in, what proportion of patients do those cover? And what do you think your penetration is right now?

Well, I think it's very difficult to give anything precisely here. And initially, there's 160 sites treating patients with neuroblastoma in the U.S. on a more or less regular basis. 50 of those sites are treating probably 70% to 80% of all the patients. And I would say a lot of the sites we have been dipping through is belonging to the medium-sized sites where there's 10 sites that are really [chopping out] sites, and until now, I think we're into 2 or 3 of these top sites.

But a lot of it is also to get into the formulary in the hospital is more laborsome in the bigger hospital than it is in the smaller hospitals. And I see that we are making good progress there. I also have said with the first site, the big ones starting to use it. And I even saw that -- I think that (inaudible) announced that they had been treating -- or were planning to treat their first 2 patients with naxitamab, and they also had experience treating patients in osteosarcoma, which I know for sure is true because they are part of our osteosarcoma study. So I think we will see this spreading out, but it takes a little time to get on the formulary in these bigger sites and it takes a little longer than in the smaller sites.

Great. And then on the ex U.S. market -- yes. No, that makes sense. It's great progress. On the ex U.S. market, can you maybe talk a little bit about what the normal time lines are for the China market? And then I think you previously mentioned that some of the -- that this is a pretty large market. Can you provide additional color on how big do you think the China market is and whether that impacts someone who have been traveling to other places to get treatment?

Yes. I would say most of the Chinese patients that we have treated have been treated at Dr. Mora's site in Barcelona. I think he is up to about 100 Chinese patients that he has treated until now in the last 3 years. But the approval process in China is not something where you can get a clear guidance and now you don't get a PDUFA like we do. But I think a qualified guess is that sometimes in the end of first half next year, we should be able to get an approval in China. That's our initial expectation.

Having said that, initially, you will be on the Chinese market approved and you can sell without reimbursement, then it takes a while to get government-funded reimbursement, and that could be another year. So -- but that also would require you to negotiate prices.

But having said that, it is our guesstimation that the Chinese market is at least 2 to 3x as big in number of patients as the U.S. market. And -- but it's also our estimation that we will probably not be able to hit more than about 20% to 25% of the price in the U.S. So value-wise, the Chinese market would be anywhere between half of the value of the U.S. market and actually the same value as the U.S. market.

But it's depending on where pricing and reimbursement ends up, but we are definitely very excited about this. And as you can see with the most recent data from United Therapeutics where they had sales of about $53 million in second quarter of -- for unituxin, even estimated that at about $40 million to $44 million of those sales -- that sales was in the U.S. That means that combined with our sales, we are looking right now at a $200 million U.S. market. But the price per patient and drug costs for dinutuximab is about 40% of ours. So in reality, we're looking at a -- then we also supply to some market that potentially could be more than $400 million per year.

So the U.S. market in itself is interesting. Then with the Chinese market, if that turns out to be in the ballpark of a couple of hundred million or so, then we have (inaudible) into some very interesting markets here. And also with the 18 countries covered by our Latin American partner [Tecnofarma] and those mix in Europe -- or Eastern Europe and Russia, I think we are pretty well poised for a nice growth in the coming years.

This concludes the question-and-answer session. I would like to turn the conference back over to Thomas Gad for any closing remarks.

Thank you, everyone, for joining our call today, and we hope you have a great day and look forward to speaking to you soon. Thank you. Bye.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.