Genmab [GMAB] Conference call transcript for 2022 q1
2022-05-11 18:08:05
Fiscal: 2022 q1
Operator: Hello, and welcome to the Genmab Q1 2022 Conference Call. Throughout the call, all participants will be in listen only mode. And afterwards, there will be a question-and-answer session. Just to remind you, this conference call is being recorded. During the telephone conference, you may be presented with forward-looking statements that include words such as believes, anticipates, plans or expects. Actual results may differ materially. For example, as a result of delayed or unsuccessful development projects. Genmab is not under any obligation to update statements regarding the future, nor to confirm such statements in relation to actual results, unless this is required by law. Please also note that Genmab may hold your personal data as indicated by you as part of our Investor Relations outreach activities in order to update you on Genmab going forward. Please refer to our website for more information on Genmab and our privacy policy. Today, I’m pleased to present Jan van de Winkel. Please go ahead with your meeting.
Jan van de Winkel: Hello and welcome to the Genmab conference call to discuss the Company’s financial results for the period ended March 31, 2022. With me today to present these results is our CFO, Anthony Pagano. 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. Genmab has a innovation-based culture, and collaborations and partnerships have always been part of our DNA. During today’s presentation, we will reference some of the products being developed under these strategic collaborations, and this slide acknowledges those relationships. Let’s move to Slide 4. I would like begin with a reminder that thanks to a consistent and solid track record of success, our world class team and our strong financial foundation, we have never been in a better position to achieve our ambitious vision of transforming cancer treatment. During the first quarter of 2022, we continue to build on this foundation with multiple advancements in our pipeline. So now let's move to Slide 5, and take a look at some of the recent achievements and updates. I'm excited to start with the fact that last month we and AbbVie announced top-line results from the first cohort of the Phase 1/2 study of epcoritamab in patients with relapsed or refractory large B-cell lymphoma, who have received at least two prior lines of systemic therapy, including 38.9% who received prior treatment with CAR-T therapy. And these high risk heavily pretreated patients, epcoritamab demonstrated an overall response rate of 63.1% with a median duration of response of 12 months. The data will be submitted for presentation at a future medical meeting. And based on these results, together with AbbVie, we will engage global regulatory authorities to determine next steps. In March, we announced another important milestone for epcoritamab that the FDA has granted Orphan Drug Designation for the treatment of follicular lymphoma. So let's now turn to tisotumab vedotin. Together with Seagen, we presented tisotumab vedotin data at a number of conferences during the first quarter. Key among these presentations was preliminary data from the innovaTV 207 study of tisotumab vedotin monotherapy in patients with squamous cell carcinoma of the head and neck, who experienced disease progression on or after a first line platinum-containing regimen, and a checkpoint inhibitor. Early results show tisotumab vedotin demonstrated manageable safety profile and promising preliminary anti-tumor activity in this patient population with the primary endpoint of concerned overall response rate per investigator achieved in 16% of head and neck cancer patients. The findings were presented as part of a plenary session at the ASCO 2022, Multidisciplinary Head and Neck Cancer Symposium in Arizona in February. We also presented interim results from the innovaTV 205 study during a virtual oral session at SGO in March. Excitingly, as you may have seen on the ASCO 2022 websites, an abstract on innovate -- on the innovaTV 205 data was also accepted for all presentation at ASCO. And this is one of multiple tisotumab vedotin and epcoritamab abstracts that have been accepted for presentation. Our clinical pipeline also expanded in the first quarter with the first patient dose in the first-in-human study of DuoBody-CD3xB7H4. The power of Genmab’s innovation was reflected in updates for therapies created by Genmab that are being developed by other companies. A variety of programs are either added or initiated clinical studies. With regard to Janssen's product incorporating our DuoBody technology, as Janssen announced, they submitted a Marketing Authorization Application to the EMA seeking approval of the teclistamab for the treatment of patients with relapsed or refractory multiple myeloma and the U.S. FDA BLA for teclistamab in this indication received Priority Review from the U.S. FDA. Sales for DARZALEX over the quarter also strong and we reported US$1,856 million in net sales by J&J, an increase of 36% over the first quarter of 2021, resulting in DKK 1,501 million in royalties. This brings me to the resolution of our arbitration with Janssen relating to our daratumumab license agreement. As we announced in the beginning of April, the arbitral tribunal decided both issues in favor of Janssen. We did not seek a review of the awards and it's not final. As the arbitration is confidential, we do not intend to commence further, and we look forward to our continued collaborations with Janssen. Finally, we expanded our executive management team on March 1st with the appointment of Birgitte Stephensen to Chief Legal Officer, and Chris Cozic to Chief People Officer. And these appointments elevated critical work of the groups as well as further strengthens our world class executive management team. I'm pleased to now turn the call over to Anthony Pagano to take you through our first quarter financial results. Anthony, go ahead.
Anthony Pagano : Great. Thanks, Jan. Let's move to Slide 6. First off, as Jan just said, we're not going to comment any further on the arbitration. But as a reminder, we already assumed a royalty reduction of around DKK 700 million when we issued our 2022 guidance in February. Now with that behind us, let's take a look at Q1, where we continue to strengthen our foundation and drive towards our 2025 vision. Our first commercial launch, bringing Tivdak to U.S. cervical cancer patients is progressing well. We grew recurring revenue by 84% in Q1. This was driven by strong royalties from DARZALEX and other approved medicines. You’ll remember, of course, that we essentially had no TEPEZZA revenues in Q1 of last year. Now, in these -- especially in these volatile times, the strength of our financial profile really stands out. Our strong balance sheet and growing recurring revenues allow us to continue to invest in our business and our pipeline in a very focused and disciplined way. And an important part of this has been to continue to build the team and capabilities to enable us to succeed. So let's take a look at those revenues in a bit more detail on the next slide. We saw continued strong performance for DARZALEX in the first quarter. You can see that in the chart. Overall, net sales grew by 36%. That's net sales of $1.86 billion, which translates to DKK 1.5 billion in royalty revenue. This exceptional growth was driven by continued strong market share across all lines, and continued uptake of the subcu formulation. So DARZALEX remains a key driver of our revenue as you can see on Slide 8. Our recurring revenues grew by 84% in the first quarter of the year. We've already spoken about DARZALEX and the very strong performance there. We're also encouraged by the growth of Kesimpta and TEPEZZA, where we saw an increase of almost DKK 300 million in royalties compared to last year. This growth really illustrates the power of our recurring revenues. In fact, 88% of our Q1 revenue was recurring revenue. And that's compared to 64% in Q1 of last year. So our revenue profile continues to get stronger. And we're taking those revenues and investing in a highly focused way as you can see on the next slide. In line with our significant growth opportunities, total OpEx grew 53% in the first quarter, and here you can see where we invested. We accelerated our investment into our product portfolio, especially the advancement of both epco, and DuoBody-CD40x4-1BB. We've also further strengthened the Genmab team to support our growth in commercialization and our expanding pipeline. That includes supporting Tivdak and preparing for the potential filing and launch for epco. Finally, we're leveraging our collaboration with AbbVie by utilizing their expertise and significant financial contributions to further expand and accelerate our partnership programs. Now, let's take a look at our financials as a whole on Slide 10. Here, you can see our summary P&L. Revenue for Q1 came in at approximately DKK 2.1 billion, that's up 34% on last year. Total expenses were about 1.6 billion, with 72% being R&D, and 28% SG&A. We expect our investment levels to ramp up during the year as our pipeline and launch-readiness activities continue to progress. And we again reported very strong operating profit. For me, this result is particularly impressive given the context. And why do I say that? Last year's Q1 makes for somewhat a tough comparator, as it included more than DKK 400 million of milestone payments. And this year, we've also increased our total investment in Q1 by more than DKK 500 million. So even considering these items, we still delivered some DKK 514 million of operating profit for the quarter. Turning now to our net financial items. Here we have income of 98 million, which was primarily driven by two partially offsetting items. First, we have the strengthening of the U.S. dollar against the Danish kroner, positively impacting the value of our cash and investments. And on the other side of the ledger, we have losses on our marketable securities due to rising interest rates and some losses on our public equity investments that we made in conjunction with recent licensing deals. Then we have tax expense of 147 million, which equates to an effective tax rate of 24%. And that brings us to our net profit of DKK 465 million. So as you can see, extremely strong financial performance for the first quarter of the year. Now, before we turn to our '22 guidance, I want to take a minute to revisit our robust financial framework on the next slide. First off, let's think about our revenue profile, which you can see on the left. At the beginning of 2020, DARZALEX was our only product on the market. Today, we have five. And that provides us with expected recurring revenue growth of 40% in 2022. And there's a clear path to potentially expand the number of approved products with the Janssen’s BLA for teclistamab and our planned submission for epco this year. Taken together, we expect significant cash inflows for us in the years to come. Moving to the right, we continue to be focused in our investments as we evolve our organization for continued success. At the top of the list is accelerating and expanding the development of epco. Based upon the work we've done so far, and the data we've seen, including the recent top-line data, we're convinced epco is a drug that has the potential to really make a difference for patients. And epco is just one of the exciting opportunities that provide us with a compelling rationale for increasing our investment. As we told you before, if we want to see these meaningful opportunities, we've got to invest. And that's exactly what we continue to do. So with that background, let's look at our guidance on Slide 12. Driven by strong DARZALEX growth, we're updating certain aspects of our 2022 guidance. We now expect our revenue to be in a range of DKK 11 billion to DKK 12 billion and that's an increase of 200 million to the bottom end of our range. This increase is primarily driven by higher DARZALEX royalties following the strong Q1 performance. Here, we've increased the bottom end of our guidance range for DARZALEX net sales from $7.3 billion to $7.5 billion, while keeping the upper end of our range at 8 billion. Our OpEx guidance remains in the range of DKK 7.2 billion to DKK 7.8 billion kroner. As I previously highlighted, this investment is fully in line with our strategy and our focus on creating long-term value. Putting all this together, we're planning for substantial operating profit in a range of DKK 3.2 billion to DKK 4.8 billion. Finally, we've maintained our guidance rate for the Danish kroner/U.S. dollar at 6.4. Clearly, as we've all seen, there's been some rather significant volatility here. And that may continue. Now, to give you just a bit of color on this topic, every 10 point move in this exchange rate, relative to our guidance rate is worth around DKK 70 million in our operating income. Now to my final slide, let me provide a few closing remarks. In summary, we've had a very solid start to the year. And we continue to execute against our 2025 vision. We've created growing recurring revenue streams and that gives us a strong backbone of significant underlying profitability. And we're investing those revenues in a highly focused way to realize our vision and to capitalize on the very significant growth opportunities in front of us. And on that note, I'll hand you back to Jan to discuss our key priorities for 2022.
Jan van de Winkel: Thanks, Anthony. Let's move to Slide 14. Our key priorities are essential to our success. And thanks to the excellent work and tireless dedication of our team members, we are on track to meet these goals. We will continue to focus on resources progressing, expanding and developing our world class antibody product pipeline and on further scaling our organization based on our plans, innovative portfolio developments. We very much look forward to providing you with updates on our clinical programs over the course of this year as we continue to evolve into a leading fully integrated biotech innovation powerhouse. Let's move to our final slide. That ends our presentation of Genmab's first quarter 2022 financial results. Operator, please open the call for questions now.
Operator: Our first question comes from the line of Peter Virgil with Citi.
Peter Virgil: Peter Virgil, Citi. And Anthony, thank you for the clarification in terms of the FX. My only question then is, Jan, anything incremental, you can say on the ongoing HexaBody-CD38 dose escalation study, as well as the timelines for the FASPRO head-to-head and the DLBCL studies I believe are part of the requirements related to the J&J potential opt in?
Jan van de Winkel: Thanks, Peter, for the questions. HexaBody-CD38 is going very well. We are still testing out some different doses for HexaBody-CD38. And in the second half of this year, we are going to initiate the head-to-head against subcu dara in multiple myeloma patients and probably the diffuse large B-cell lymphoma cohort will probably be added next year, Peter. So we will hope to progress first the multiple myeloma head-to-head against subcu dara.
Operator: Our next question comes from the line of James Gordon at JP Morgan.
James Gordon: Hello, James Gordon, JPMorgan. My question is, you’ve got confidence in epco filing. I think one question, but two parts. For RR DLBCL and follicular, how different will be data that you actually intend to potentially file on beating the data we've already seen? So are you going to be enrolling or needing to pay for a lot more patients or much of a follow-up? Or we’ve substantially seen the data that now that you're going to file one? And the other part of the question was just -- I know FDA is a sort of a bit tougher on blood cancer drugs and single arm studies for different classes, the PI3-kinated. But have you had a chance to have interactions with the FDA since some of their commentaries come out? And any concerns the FDA might be tougher on single arm studies or that's not a worry?
Jan van de Winkel: Thanks, James for the questions. On epco, the potential filing of epco, we are very excited about the data. There will be -- this will be the data you have seen in the top-line results, James. There are data we are going to present at a conference and are the data we are going to share with the -- not only with the FDA, but also with other regulators. And I can assure you that a lot of data you haven't seen yet. I mean, this is a very heavily pretreated population. And we have not told you anything yet on complete responses, duration, et cetera, or dose responses and other color in the dataset. So we believe the dataset is very encouraging. And we have scheduled meetings with the FDA on this data. And we believe that because of the unmet medical need here and the strength of the data that we actually, yes, are very encouraged by the prospect of moving this forward towards a filing. And I don't think that it's necessarily impacted by the very stringent -- I think stringent way the regulators looked at the PI3-kinase inhibitors recently. I think this is a very different situation. But of course, James, we need to see the feedback from the regulators. We also are going to move forward in other territories than the U.S. with this data. And we can't wait to share that with you and with all others at a medical meeting, which will hopefully be in the middle of this year. We are very excited about sharing the data with the medical community. I think we have caught up quite a bit with some of our competitors like Roche and Regeneron. And I think the dataset continues to be very strong and yes, we are also going to share other data of epco at for example ASCO and several other meetings in the coming time. It's data of combination therapies and different settings, which we are very, very excited about how they progress. So now I think epco is basically developing very well, James, and we are highly encouraged by the data. That's probably I shall leave it at, at this time. Thank you.
Operator: Our next question comes from the line of Wimal Kapadia at Bernstein.
Wimal Kapadia: So kind of coming back to the HexaBody-CD38. So just Jan, I want to get your view on what's the real unmet need for a superior CD38 in myeloma? No doubt it’s pretty good. How much higher can you actually push the efficacy ball? Is it a case of a year on PFS in first-line, could it be more? And then just tied to that, is it really then the non-myeloma indication which could be the more interesting opportunity?
Jan van de Winkel: Yes, thanks, Wimal, for the questions. We believe that with a molecule which is at least tenfold and in some experiments 100 fold more potent than daratumumab there is actually a room to really push the responses further. For example, Wimal, when you look at the data of daratumumab monotherapy versus teclistamab, the CD3 BCMA bispecific created, the dual body technology from Janssen, the data from tecli is a lot better and the monotherapy dara data. So I think there is room I think to further improve on the efficacy of daratumumab. For sure in multiple myeloma, even better in other indications like AML, diffuse large B-cell lymphoma. And potentially the biggest I think, potential impacts HexaBody-CD38 could make is in solid cancers because there’s still very strong data, Wimal, in the effect of anti-CD38 antibodies and actually stimulating the immune system to attack cancer in animal models, that has not yet led to convincing data in the clinic with daratumumab and also not with Sarclisa from Sanofi. But I think a far better molecule which can actually kill tumors with lower levels of expression of CD38 and that's definitely what we see with HexaBody-CD38 in the laboratory. It could be very, very meaningful, I think to broaden the market. But we also see a very good possibilities in multiple myeloma and I think that is shared with what Janssen is seeing because we are having a very open interaction with Janssen. There we share the data of HexaBody-CD38 with them. And I think finally, what could be a possibility is to develop the candidate therapeutic Wimal in other indications like autoimmune diseases because remember, we have already in the early 2005, '06 timeframe, we had fantastic data in like SCID RA models and other autoimmune models with daratumumab. Janssen never developed it in autoimmune, which may be related to the fact that it is difficult to actually look at the dosing because you need completely different doses in cancer therapy versus autoimmune diseases that may be difficult to price a drug with issues in autoimmune and cancer. But when you have a completely novel drug, Wimal which is working well, and it's super potent and targeting CD38, perhaps the biggest opportunity is in diseases outside of cancer. And I think that's all speculative as we speak, but we're super excited about what we see in the data, Wimal. We are going to share that with you, the dose escalation data, hopefully, also, at the end of the year, some early head-to-head data against subcu dara, which is arguably one of the most successful medicines ever developed for a hem indication. I heard recently that this is the fastest launching medicine ever in hem, daratumumab. So I think, yes, it's a good hurdle to beat Wimal. But I think if there's any molecule, which has the potential to do that targeted CD38, it's HexaBody-CD38. So we are really, really encouraged by what we see. And what I told you already in December last year is the safety profile looks very, very good and clean, which is I think we were most worried about, not the efficacy. So we can't wait Wimal. this is going to be a very good year, as it relates to I think, data -- clinical data from Genmab, I can assure you.
Operator: And our next question comes from the line of Peter Welford at Jefferies.
Peter Welford : It's actually a sort of contract legal question for instance. I noticed that the reports of epcoritamab using the CD20 antibody that's derived from Medarex. Now, if I recall, all of the coritamab technology came from Medarex, I only mean that have you -- has the number of paid up initial licenses to Medarex expired? And which products if any, in your pipeline are potentially now eligible for royalties you can say that, on the Medarex technology, if that still applies? Apologies if that's completely off base, but wondering if you could possibly just outline your obligations under that IP.
Jan van de Winkel: Thanks, Peter, for the question. I don't know whether we have any slots left under the original Medarex agreement. I don't know whether that's actually public information bit. So we may have to come back to you and others on that. But what I can tell you is that basically, we use a variety of technologies now, also other technologies to create antibodies, which can be the basis for the next generation antibody based therapeutics, which is outside of the Medarex -- original Medarex contract. So -- and also some of the options we got for free, remember, and that was because we gave Medarex shares in Genmab in '99, when we founded the company. So I don't know -- I don't remember whether for epcoritamab, we're in any royalties for epco to Medarex, because it may have been one of the free slots, which we actually don't have to pay any royalties on anymore. So -- but I will definitely check that. And if that is public information, Peter, we will get back to you and others on that. But I think that we still have some remaining slots under the original Medarex agreement, and I don't know whether we have used them or for all of the candidate therapeutics, because the volume of new antibodies, which are being created by Genmab goes up tremendously. We have invested really, really significantly in building a stronger and stronger pipeline. I think that is what we need to do as an innovation powerhouse, which is very much science focused and I can assure you that we are going to expand the clinical pipeline this year, as well as in the coming years with novel candidates. And basically none of those molecules are traditional human antibodies from technologies like the Medarex towards Genmab’s technology anymore. They're all based on our new technology platforms, Peter. So I think over 50% of our pipeline right now is based on the DuoBody technology, about 30%, on the HexaBody technology, you will see new HexaBody molecules move into the clinic soon. And although the remaining part of the pipeline is ADCs, and not only with toxic payloads, we also have now in our preclinical pipeline immune stimulatory ADC concept. So we have never been more excited Peter on the pipeline, but the exact answer on how many slots left? I don't have that here in front of me. Sorry.
Operator: Our next question comes from the line of Michael Schmidt at Guggenheim Securities.
Michael Schmidt: I had a bigger picture question as well. Jan, I guess, to what degree does the outcome of the Janssen arbitration, in particular, the ending of the DARZALEX royalty payments now in the U.S., at least in the late ? To what degree does clear visibility on that perhaps impact your longer term R&D strategy? Or does it impact your perhaps aggressiveness to move new project forward? Or perhaps even your business development strategy longer term? Thanks so much.
Jan van de Winkel: Thanks, Michael, for the question. I can tell you it will have very minimal impact on our strategy, because we are already having a very aggressive strategy. Epcoritamab will be an important string factor, of course in the early 2030s, Michael. To really keep the same growth, the compound annual growth rates, we are building up now with the very strongly increasing recurring revenue streams over the coming years until the early 2030s. And dara is of course, playing a key role in that. But also, we believe that we have the pipeline already, which will allow us to accelerate some of the programs like for example, the BioNTech partner to bispecific programs massively in the coming years. And that will be as all models predict, or long range plans predict Michael we’ll be able to fill up the hole, which is of course created by the loss of the income in time for daratumumab very well. But, of course, we will try to add other antibody programs and public programs to that as rapidly as we can. We will increase the number of INDs, which we start per year in the coming years to keep filling that pipeline, because that has been one of the things Michael we have been unusually good at Genmab is in creating very good therapeutic candidates. I mean, even I think an unparalleled hit rate in molecules we brought in the clinic, and then still actively clinically developing them with or -- alone or with our partners, of which over 50% of the molecules we ever brought into the clinic Michael are still in active clinical development, and five of these products are on the market. Several of them are on the slot to become basically blockbusters or multi-blockbuster. So that is a really good, I think hit rate. And I think we are getting better now. I think we are going to see that the efficacy of bringing molecules through to products, which can really in a meaningful way impact the lives of patients. I think we will get better at that, not worse. And I've never been more excited about the pipeline than I am today. I mean, we see amazing things Michael with the candidate products in the preclinical and early clinical pipeline. So this year, we will share some of the data with you of some of the younger clinical programs. And yes -- and I think all of these could be used to basically continue the growth rates up to the -- which just needed from the early 2030s on to the end of '30. So we're very, very excited. And I don't think the verdict of the arbitration will make any difference to that. And it has not slowed down our ambition level, I can tell you, to create a game changing -- potentially game changing products, Michael, but I think it has more -- it has stimulated it actually from here.
Operator: Our next question comes from the line of Asthika Goonewardene of Truist Securities.
Asthika Goonewardene : I kind of want to build on James Gordon's question a little bit here and maybe ask it differently. How confident are you that the data you have in hand right now can be the basis of a filing and potential approval of epco? And then would this be in sort of a general all-comer third-line plus DLBCL population? Are you specifically going to go after a subgroup like CAR-T progresses? And then if I can also just be cheeky in adding, can you talk what the prespecified efficacy threshold was for this study?
Jan van de Winkel: Asthika, thanks for the questions. And we need to be very careful until we have spoken with the regulators, as you know, to basically give you any sort of color on the confidence level. But what I can tell you is that we are super enthusiastic about the data, ourselves. And we have also now discussed them with independent experts in the field. I mean this is one of the most heavily pretreated populations of large B-cell lymphoma patients. And there is actually no good comparator data. So I think we need to await the interactions with the regulators, which have been scheduled now. I can tell you before I can give you any sort of color on the level of confidence, but internally, that's very high. The independent consultants are very, very enthusiastic about the data. This is I think, unprecedented data. Whether that will be good enough for a filing in the different territories, or some of the territories? I cannot tell you that right now. Nor I can tell you what the exact indication is, which we will be seeking, if the regulators are positive about the data, but we will let you know. I said already the top line data is released and we will let you know, once we have taken a decision based on the feedback from the regulators Asthika, we will let you know via a press release what our next steps will be. And we are still very, very confident that we can actually go forward with a potential filing in the second half. So not much later than Roche and/or Regeneron. So I think this is going to be a pretty good competition I think in the coming years. We are very, very enthusiastic about moving into that competition and helping more and more patients. So I think we're doing a good thing there Asthika.
Asthika Goonewardene : And what about the prespecified efficacy threshold?
Jan van de Winkel: We have not discussed that perfectly, because this is a heavily beaten up and pretreated population, and we are going to share datasets with the regulators. But we have not done that perfectly. But we will do that after we have engaged with the regulators for sure.
Operator: Our next question comes from Xian Deng of Berenberg.
Xian Deng : I actually have a question on DARZALEX regarding a potential future competition. So now the CAR-T from J&J and Legend has been approved, so they are actually doing a range of studies. And I noticed one of the study constitute for is actually a study in second line onward patient, is actually looking to compare versus DARZALEX combo, VCd. I know, this is, you know, CAR-T and it’s a different target, I think in the trial design. I mean, it's positive and more efficacious and thorough combo. Just wondering, do you think that could be a competitive threat to DARZALEX in the future?
Jan van de Winkel: Thanks for the question. And I mean, we never know, of course. And I think what Janssen is doing there, they're very broadly developing different combinations in multiple myeloma. I heard yesterday I was speaking with one of the Janssen colleagues and they're super enthusiastic about teclistamab, the molecule I already referred to, which has the same efficacy as some of the CAR-T approaches. And I can tell you that, that will be combined with daratumumab, also CAR-T is sometimes combined with daratumumab and in other trials, they run it against daratumumab to really see what the best regimen is. And also Janssen is very actively now thinking about like basically, the sequencing, the order of the different therapies because an anti-BCMA therapy one can only use once. And maybe it's good in the future to start with a CD38 therapy with daratumumab and then follow it up when the tumor relapses with a CAR-T. So I've not heard -- not that there's any plans of basically replacing daratumumab. Most of the plans actually, I think over 80% of the plans right now are combinations with dara, not competition. But I think they're properly exploring the area. I think what you should do is really ask Pete a little bit from J&J what the long-term strategy is for J&J. But they seem to be pretty happy with daratumumab and how it's developing. It's the most successful hem product launch ever in history up to now from all products. So I think we couldn't be more pleased that how daratumumab is doing. And I think the perfect competitor to daratumumab we are developing right now ourselves, which is HexaBody-CD38, we have never seen a more potent molecule. Yes, CAR-T is effective, but it's also very, very laborious and expensive and certainly not ready for primetime in community healthcare centers, and so on and so forth. The biggest market will be for multiple myeloma definitely in frontline. So when you ask me about, are you intimidated by them during one of the trials, maybe one out of the 50 or so or 60 trials, where their is being run against the dara? The answer is full-blown, no, absolutely not. I think it’s good to explore. I think also J&J is a science-focused company, a data-driven company. And I think that's the thing to do. But I think you should probably ask Pete a little bit, or one of the other Janssen colleagues about their strategy there.
Operator: Our next question comes from the line of Matthew Harrison at Morgan Stanley.
Charlie Yang: This is Charlie Yang on for Matthew. So for the 4-1BB combinations, can you just provide more clarity? I think you still expect to present that data this year, or will they just be an update on the program and with data presentation in 2023? And maybe just in terms of potential kind of launch timing, like what will be the realistic expectation on when we can see -- if everything goes well, when can we see the product launch? Will that be in the 2024 or 2025 and beyond timing? Thank you.
Jan van de Winkel: I can assure you that both of the 4-1BB and targeted bispecific programs are going very well. We have multiple cohorts that are actively recruiting patients as we speak. We believe that for either the CD40 4-1BB or the PD-L1 4-1BB programs, we can actually take a decision in the coming -- in this year, in the coming months to take them forward to late stage clinical development. And we believe that we are in a position to share data for both programs this year. Whether that will be at a medical conference? We don't know because there's two things important. One is the response rate and the depth of response. And then the second component is, of course, the duration of response. So we don't know how much duration data we will have for the different arms of these two bispecific programs. So what I said publicly before is that we could potentially have a scenario that you see limited data from both of these programs this year, and then full blown data at a prestigious medical conference next year, but that you will hear from us and BioNTech that we have already used the data which we have collected in-house to accelerate the program and move it to the next stage of clinical development. And that is a realistic scenario that we will end up in that type of scenario. It's a bit premature to discuss about the timeline for potential approval for either one of these programs, because a lot depends on where we will see the responses and in what line of treatment we will see the responses but now with the new so called FDA FrontRunner program, where the FDA is actually stimulating companies to move to frontline earlier on. We believe that definitely for the CD40 4-1BB, we could potentially move to frontline in one of the cancers based on solid data. And then by hopefully being allowed to use surrogate endpoints have pretty quick readouts. And I think, yes, let us come back after we get the data this year, with some firmer estimates on the timelines. I think the '24-'25 timeline sounds ambitious to me, but possible potentially in some of the cancers. But when you ask me about our enthusiasm level, we are super enthusiastic about both bispecific programs that we welcome a data this year, with maybe more extensive data next year in '23. I hope that answers your questions.
Operator: We have one further one in the queue so far. That's from Yaron Werber at Cowen.
Yaron Werber : Jan, I have a -- it's a question that’s sort of interrelated, it's two parts. The first one is, the Halozyme patents or at least some of them in the U.S. expire in '27, in Europe in '24. Do you have anything you can say as to what connotation if any, does that have on the -- your share of royalties on DARZALEX before the expiration of those patents? And then secondly, from a best commercial efforts sort of clause in your relationship and your deal with Janssen, what -- their own patents on FASPRO obviously won't expire until 2036. So it gives them a long horizon to sort of get the next product approved. But I imagine they need to be on some kind of a clock based on best commercial efforts. So I don't know if you can talk about that at all to expedite development to market.
Jan van de Winkel: Now, these are two very sharp questions, Yaron. And thank you for joining the team, following us very, very actively. We are super pleased with that. So as it relates to the Halozyme patents, I cannot give you any further information, because it basically boils down to the Johnson contract with Halozyme. And I don't have any insight into that contract that has been kept hidden from me. The lawyers have seen that Yaron. And I think you need to ask J&J. And also the best commercial effort, I think question is probably a question for J&J. I probably cannot go into that, because then my lawyers will hit me after the call. So I think I should probably refer you to J&J. But -- and you are welcome to the routine covering us. And we really, really pleased and look forward to meet you soon in person. Now, we are living in the post pandemic era at this time.
Yaron Werber: Awesome. Thanks, Jan. And maybe I'll call you a lawyer. I'm kidding, of course.
Jan van de Winkel: Very good, maybe the J&J lawyer. Now you probably got the answer there.
Operator: Our next question comes from the line of Jonathan Chang at SVB Securities.
Unidentified Analyst : Hi, guys. This is on for Jonathan. Just wanted to ask, are we still expecting to see data in the second half for GEN3009 and GEN3014? And could you help set expectations for those data readouts?
Jan van de Winkel: Let me -- 3009 and 3014, that is the CD37 and CD38 programs I think. Yes, definitely you will get data for both for the dose escalation of the two, HexaBody-CD37 and for the HexaBody-CD38 program. You will get data at a medical meeting from the dose escalation and probably for the CD37 program, hopefully some early data perhaps of the combination with epcoritamab which preclinically synergizes greatly. For the HexaBody-CD38 program, you will get the data from the dose escalation and maybe some very early data from the head-to-head against subcu dara.
Operator: Our next question comes from Asthika Goonewardene of Truist Securities.
Asthika Goonewardene: Jan, I initially asked you about GEN1046 and 1042. But let me get back on that. And talk about the development strategy here of these two assets. Do you see much overlap between these two? Or are you looking to develop these in some very unique indications? And can you maybe talk a little bit more about the FDA’s interest pushing companies going to the front line a little bit more. I think we need to appreciate that a little bit more here with these two assets. Thanks.
Jan van de Winkel: Thanks, Asthika. So let me about 1042 and 1046. It's too early. We don't know basically, whether we can position both of these bispecifics into different indications. Right now we are testing different combinations. As you know, we're doing front line melanoma, lung cancer, head and neck cancer, pancreatic cancer with 1042 either together with pembro or pembro plus chemo in these different settings. And for 1046 I think we have now 12 cohorts in different tumors, I think six or seven different tumors, where we also combine some of the cohorts 1046 with pembro and in other cohorts, 1046 with chemo, with Taxotere. So it's a bit too early, I think to talk about positioning, but what we see is a difference in safety profiles. 1042 seems to be a bit cleaner than 1046. And we believe that they may, in the end, both find a place Asthika for use in solid cancer therapy. So we are actually very excited and I think we have done more with 1046 up to now and 1042 and what we learned about biomarkers and what was needed in order to get good and solid responses, which are durable. But I think this year will be the year of truth that we can actually get a good idea about positioning of these molecules, and then move it further from there. And your second question is on the FDA FrontRunner program, which was only introduced a few weeks ago. This is a program from the FDA, but the FDA basically says well, we really don't want to use accelerated approvals in the future so much for like really unstaged patients with diseases like cancer, which have no other treatment options anymore, but we think it's actually more valuable and more impactful for patients to move to front line treatment of these patients. And then we will help the sponsor by not -- and asking for the traditional front line endpoints, Asthika, like a PFS or overall survival, because in some cancers the time that you need to wait to reach the endpoints are so long that it is simply not practical to move to front line therapy. So we will help the sponsors by using surrogate endpoints, which can be molecular endpoints like MLD or other surrogate endpoints depending on which tumor the one is studying, so that you can actually come quicker to a readout. But then it needs to be a control arm based study. And Genmab right now has the financial robustness Asthika, that with good early data on the ongoing studies we could actually potentially engage with the regulator, like the FDA and move to another FrontRunner program, if they would allow us to front line patients, which of course, where the market is much, much bigger and where we can be much more impactful to the lives of patients. So we are actually super excited and we are thinking of that in the context of 1042, 1046, but also of course epcoritamab, because we have started later than Roche in some of the areas and this could be an excellent molecule also to move on under the FrontRunner program to actually penetrate front line settings much more quickly. So we are very excited I can tell you about the new way of thinking of the regulator. I think it's the right thinking. And we think that Genmab is the perfect company to actually use that type of program. And there's of course, the other program, which I spoken about at the full year results in February, the Optimus program, which is requiring more dosing iterations, which is certainly going to be asked from Genmab, as well as from all other companies in the oncology area, under the rationale that perhaps in some combinations, one could use a lower dose of the other therapeutic candidates than what is used in monotherapy, Asthika. And that could of course, slow down a bit the developments unless you agree with the regulator to do multiple arm studies. And again, Genmab is now in a position with a better pipeline than we ever had before, a better team than we ever had before in our history and a robust cash position to do actually multiple arm studies, also under the Optimus program to actually very quickly titrate and get obtain optimal doses of new therapeutic antibody candidates. So yes, we are very busy. I can assure you that it may sound silent around general, but we are like dosing like never before in our history with other molecules than we ever had before in our history, Asthika. So this year there will be fireworks, I can tell you at all levels here from all sides.
Operator: And we have one final question, that's from the line of Matthew Harrison with Morgan Stanley.
Charlie Yang: Hi, this is Charlie Yang for Matthew. And maybe just if you can tell us a little bit more about health of the B7H4 molecule and how do you see the bispecific compete with the current ADC in development, and whether you're looking at the other kind of B7 targets such as H3? And maybe if I can -- squeezing on one last one, just could you just reiterate your 2025 vision? Are there any kind of financial guidance that you have in mind? Or maybe other metrics that you could point us to? Thank you.
Jan van de Winkel: Thank you, Charlie, for the question. So the B7H4 molecule is a super potent bispecific a CD3 engaging bispecific with -- and B7H4 is very attractive as a target. Preclinically, it's very selectively expressed on cancers, on a number of cancers. So we are doing a whole group of cancers now. It's all overexpressing B7H4. In dose escalation, we are doing that as we speak. And I can tell you that preclinical we have compared our CD3 bispecific with a number of other approaches, including ADC approaches. And this one was always the more potent molecule. We don't know yet, Charlie, whether this is going to be reflected in better potency in the clinic. But we are highly encouraged by what we see preclinically and I think will come this year, again, at conferences with more preclinical models and to basically showing you the underlining data for -- enthusiasm for this molecule. And I think next year, you will get probably the dose escalation data from the CD3 B7H4 program. But we are very, very enthusiastic, we're also looking at other family members, I can tell you, preclinically Charlie, but we have not yet presented any data from other family members of B7H4. But we are looking broader at the family of targets, because it's very difficult as you and I know, to find really, truly tumor selective and tumor specific targets for solid cancers. And I think this is one of the really, really good ones. And I think it preclinically differentiates quite nicely from other approaches. Now as it relates to our 2025 vision, we are well on track, I think to actually reach that vision. We have never had a better pipeline than we have right now. It's all based on the next generation antibody technologies. We have already, of course, one product on the market together with Seagen, Tivdak, which is doing well, it's well received. Doctors are really positive about a molecule. It’s very, very potent, and straightforward to work with. So we are pleased with our launch, the early launch is going for Tivdak and hopefully we will add epcoritamab next year to that to that clinical product pipeline which we own, together with AbbVie. Yes, we have never been more enthusiastic about any molecule than about epco. I think this is potentially a very, very good medicine. So we are well on track I can tell you to really hit our vision, reach our vision by 2025. And I can tell you very soon we start speaking about our 2030 vision, where we hope to actually make an even more impactful impact on the lives of patients, cancer patients and perhaps even patients outside of cancer because some of our products are being used now like TEPEZZA in thyroid eye disease and, of course Kesimpta in relapsing MS. So we are going to make a bigger and bigger impact on the lives of patients with our products. And I think we're gearing up towards the 2030 patients, 2025 we’re well on track. And hopefully we can get our second product that we own 50% or more on the market by next year. So we can actually build a very solid market for treatment of patients.
Operator: And as there are no further questions at this time, I'll hand the floor back to our speakers for the closing comments.
Jan van de Winkel: So thank you all for calling in today to discuss Genmab’s financial results for the first quarter of 2022. If you have any additional questions, please do not hesitate to reach out to our Investor Relations team. We hope that you all stay safe, remain healthy and optimistic and very much look forward to speaking with all of you again soon.
Operator: This now concludes the conference. Thank you all very much for attending. You may now disconnect your lines.
