Genmab - Q1 2024

Transcript

Operator (participant)

Hello and welcome to the Genmab First Quarter 2024 Conference Call. As a reminder, this conference call is being recorded. During this 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 delays 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. I would now like to hand the conference over to your first speaker today, Jan van de Winkel.

Anthony Mancini (COO)

Please go ahead.

Jan van de Winkel (CEO)

Hello and welcome to Genmab's conference call to discuss the company's financial results for the period ending March 31st, 2024. With me today to present these results is our CFO, Anthony Pagano, and our Chief Operating Officer, Anthony Mancini. For the Q&A, we will be joined by our Chief Medical Officer, Tahamtan Ahmadi, and Chief Development Officer, Judith Klimovsky. As already said, we will be making forward-looking statements, so please keep that in mind as we go through this call. During today's presentation, we will reference products being developed under some of our strategic collaborations, and this slide acknowledges those relationships. Before we look at our first quarter results, I want to remind you of our consistent track record of success.

Our proprietary technologies, our robust product pipeline, which is both expanding and maturing, and our growing revenue streams allow us to continue to invest in our people and in our pipeline. These are investments that will further accelerate our evolution into a fully integrated biotech innovation powerhouse. In addition to our existing technologies and mid- to late-stage pipeline, a key investment that will enhance our long-term growth profile is the exciting proposed acquisition of ProfoundBio. So let us turn to that briefly now. The proposed acquisition of ProfoundBio firmly aligns with our core vision and strategy of transforming the lives of people with cancer and other serious diseases.

It is highly complementary to our business, and the addition of ProfoundBio's next-generation ADCs, including Rina-S, plus its novel ADC technology, will further strengthen our already very strong and innovative mid- to late-stage clinical pipeline. This will also strengthen and accelerate our capabilities in the ADC space, in addition to helping to propel us towards a 100% owned model with more value captured. So we are investing to unlock meaningful value by the end of the decade, with significant upside into the 2030s. We expect to close the acquisition in the first half of 2024, subject to the receipt of regulatory clearances. So now let us turn to other important recent events. Epcoritamab continues to receive regulatory approvals in relapsed or refractory diffuse large B-cell lymphoma in various territories, with additional filings underway.

We and our partner, AbbVie, have a robust development plan for epcoritamab, and in the first quarter of the year, we took significant steps to move into follicular lymphoma. In March, we, along with AbbVie, initiated the first of multiple phase III trials anticipated to start this year: epcoritamab in combination with rituximab and lenalidomide for the treatment of patients with previously untreated follicular lymphoma. Looking at relapsed or refractory follicular lymphoma, in addition to the JNDA submission in Japan, the FDA granted priority review to a supplemental biologic license application for EPKINLY as a treatment for relapsed or refractory follicular lymphoma following at least two prior lines of therapy, with a PDUFA date of June 28th. If approved, EPKINLY will be the first and only subcutaneous bispecific antibody approved to treat this indication. These were not the only regulatory events.

Excitingly, the FDA has now approved a supplemental biologics license application for TIVDAK for the treatment of patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy. This converts the 2021 accelerated approval of TIVDAK to a full approval, making TIVDAK the first ADC with demonstrated overall survival data to be granted full approval in this patient population. This approval represents a significant achievement for women with recurrent or metastatic cervical cancer, as it reinforces TIVDAK as a survival-extending treatment option in patients whose disease has advanced after initial treatments. In addition to this approval, I'm very excited to share that at the end of April, we filed a JNDA requesting approval for TIVDAK for patients with advanced or recurrent cervical cancer in Japan.

This is excellent news for patients in Japan in need of this potential therapy and a milestone for Genmab as we continue to build our presence in Japan. I would like to thank the patients and investigators who took part in the clinical trials that formed the basis of the U.S. approval and Japanese submission, our partners at Pfizer for their collaboration, and the passionate and determined teams at Genmab whose hard work and commitment made these events possible. Before moving on, I would also like to note that we were very pleased to hear that in March, TIVDAK was added to the NCCN Clinical Practice Guidelines in Oncology for vaginal cancer under other recommended regimens.

In the first quarter, there were several data presentations across our programs, including an oral presentation for TIVDAK at the SGO Annual Meeting on Women's Cancer and presentations for EPKINLY at conferences, including the Annual Meeting of the Japanese Society for Medical Oncology and the AACR Annual Meeting. We are all also looking forward to multiple upcoming data presentations at ASCO. These include two rapid oral presentations for EPKINLY of new data in both relapsed or refractory and untreated follicular lymphoma, a rapid oral presentation on TIVDAK in head and neck cancer, and a poster presentation for acasunlimab or GEN1046 in second-line non-small cell lung cancer. This is, of course, the data that we and our partner, BioNTech, anticipated presenting in the first half of this year.

We are currently engaging with health authorities on the design of a pivotal trial in this patient population with an aim to start this trial in late 2024. Finally, turning to medicines powered by our innovation, in March, Janssen announced that the FDA approved RYBREVANT in combination with chemotherapy for the first-line treatment of patients with non-small cell lung cancer with EGFR exon 20 insertion mutations, converting the May 2021 accelerated approval to a full approval. In addition, in Q1, Janssen submitted applications for approval in both the U.S. and Europe for subcutaneous daratumumab based on data from the phase III PERSEUS study. I'm pleased to now hand over the call to Anthony Mancini to take you through our first quarter 2024 net product sales, including for DARZALEX. Anthony, the floor is yours.

Anthony Mancini (COO)

Thank you, Jan. In Q1, product performance across our two key revenue streams, royalty medicines and Genmab commercialized medicines, showed very strong growth. Our portfolio includes six royalty medicines: DARZALEX, KESIMPTA, TEPEZZA, TECVAYLI, RYBREVANT, and TALVEY. DARZALEX demonstrated strong demand growth in Q1 with just under $2.7 billion in net sales, a 19% year-over-year growth driven predominantly from share gains in front-line multiple myeloma. With the recent filing of PERSEUS, there are continued growth opportunities ahead with DARZALEX subcutaneous-based therapies in the front-line transplant-eligible multiple myeloma space, including maintenance. DARZALEX is also being combined with both newer and older therapies in multiple myeloma, including with two of our recently approved DuoBody medicines, TECVAYLI and TALVEY. We expect continued growth and use of DARZALEX as a backbone in later-line settings as well. KESIMPTA achieved continued strong demand growth with $637 million in Q1, a 66% year-over-year growth.

KESIMPTA demand growth is not only progressing well in the United States but also outside the United States. It continues to be the number one brand share leader in 7 of 10 major markets outside the U.S. The performance across our other recently launched royalty medicines, TECVAYLI, TALVEY, and RYBREVANT, all bispecifics based on our DuoBody technology, each delivered strong growth in the quarter. The TECVAYLI launch is continuing to go very well and delivered $133 million in the quarter with strong uptake and rapid adoption in the U.S. and other key markets, reflecting a best-in-class, off-the-shelf BCMA bispecific therapy that's offering deep and durable responses in relapsed or refractory multiple myeloma. We expect to see continued strong Genmab revenue growth from our diverse royalty medicines portfolio in 2024 and beyond.

Turning to our Genmab commercialized medicines on slide eight, EPKINLY delivered $54 million in net sales for Q1, with over 90% coming from strong launch performance in both the U.S. and Japan. We are very pleased with the EPKINLY launch performance across geographies. In the U.S., we continue to see robust uptake across key accounts. EPKINLY was launched in Japan late last year and were highly encouraged by the early launch uptake and overall positive response from our customers there. EPKINLY is the first and only approved bispecific antibody in the U.S., the EU, and Japan for patients with third-line plus diffuse large B-cell lymphoma. We are preparing for potential approvals for EPKINLY in third-line plus follicular lymphoma with the U.S. PDUFA date of June 28th.

We're also pleased to announce that earlier this week, the NCCN has included EPKINLY monotherapy as a preferred regimen with a 2A designation in follicular lymphoma after two prior lines of therapy. Our first indication in third-line plus DLBCL, an area of significant unmet need, is the first step to establishing EPKINLY as the core therapy across B-cell malignancies, including follicular lymphoma and in earlier lines of treatment. TIVDAK delivered $27 million in net sales for Q1, representing the 10th consecutive quarter of demand growth. We're pleased with TIVDAK's performance, which was primarily driven by an increasing breadth of ordering accounts. GYN/ONC and MED/ONC customers continue to provide positive feedback on the impact TIVDAK is making on the lives of women with cervical cancer.

As Jan mentioned, the Japan New Drug Application for TIVDAK was submitted in late April, and the FDA approval on April 29th based on the innovaTV 301 study, which demonstrated a 30% improvement in overall survival and a 33% improvement in progression-free survival, will help establish TIVDAK as the clear standard of care in second-line plus recurrent or metastatic cervical cancer. We're enthusiastic about the proposed acquisition of ProfoundBio, whose lead asset, Rina-S, is a potential best-in-class ADC in ovarian cancer that would add a second ADC in gynecologic oncology to our portfolio in addition to TIVDAK. As an end-to-end biotech company, we're very pleased with the performance of our Genmab commercialized medicines and look forward to carrying this momentum through 2024 and beyond.

Thanks to our partners, and thanks to the entire cross-functional Genmab team for all they do every day to deliver for the patients we serve. With that, let me hand it off to Anthony Pagano to provide additional perspective on our Q1 financials. Anthony?

Anthony Pagano (CFO)

Great. Thanks, Anthony. We continue to strengthen our foundation in Q1. Having reached our goal of successful regulatory approvals and launches for EPKINLY in the US, Europe, and Japan in 2023, we are pleased with how the launches are progressing into Q1. Now, we're looking forward to the potential for additional approvals in these territories for late-line follicular lymphoma and continuing to expand and accelerate EPKINLY's clinical development. And as we'll see, our financials remain strong. Recurring revenues grew by 42% in Q1. This was principally driven by strong royalties from DARZALEX, KESIMPTA, and other approved medicines, as well as net product sales for EPKINLY. Our solid balance sheet, growing recurring revenues, and significant underlying profitability allow us to continue to invest in our business and our pipeline in a very focused and disciplined way.

An important part of this has been to continue to build the team and capabilities that we need to succeed. So let's take a look at those revenues in a bit more detail. We grew total revenue to over DKK 4.1 billion in Q1. As I've already highlighted, that included a 42% increase in our recurring revenue. This strong growth was driven by higher DARZALEX and KESIMPTA royalties, as well as royalties from other products. We're really pleased with how EPKINLY and TIVDAK are performing. Taken together, these two products contributed 27% of the total growth in revenue that we realized in Q1. This really illustrates the power of our recurring revenue. Overall, this strong recurring revenue growth enables our continued highly focused investment, as you can see on the next slide. In line with our significant growth opportunities, total OpEx grew 31% in Q1.

In R&D, we've accelerated our investment into our product portfolio, especially the advancement of our mid- to late-stage pipeline. Here, we're expanding the development for EPKINLY, TIVDAK, GEN1046, and GEN1042. We continue to invest to secure a successful EPKINLY launch in our two key markets, the U.S. and Japan. Now, let's take a look at our financials as a whole. Here, you can see our summary P&L for Q1. Revenue came in at over DKK 4.1 billion, and that's up 46% on last year. Total expenses were just under DKK 3.2 billion, with 73% being R&D and 27% SG&A. Even with the increased investment, we're still delivering over DKK 800 million of operating profit, and that's up more than 90%. Moving now to our net financial items, here we have a gain of DKK 915 million.

This gain was driven by the strengthening of the dollar against the kroner in Q1, as well as by an increase in interest income. We have tax expense of just over DKK 390 million, which equates to an effective tax rate of 22.8%. That brings us to our net profit of over DKK 1.3 billion. As you can see, continued strong underlying financial performance. With that, let's take a minute to revisit our robust financial framework. First off, our revenue profile on the left. There are now eight products on the market that are generating recurring revenues for us. Three of these are already blockbusters, and the remaining five all have significant potential for future revenue growth. For this year, we're anticipating 25% recurring revenue growth at the midpoint, and we expect significant cash inflows in the years to come.

Moving to the right, we remain focused on our investments as we evolve our organization for continued success. At the top of the list is accelerating and expanding epcoritamab. That's just one of the exciting opportunities that provide us with a compelling rationale for investing back into our business. As we've told you before, if we want to seize these meaningful opportunities, we've got to invest. That's exactly what we're doing with the phase III trials we anticipate will start in 2024. On top of this, we also have the proposed acquisition of ProfoundBio, including its most advanced program, Rina-S. Rina-S is potentially best-in-class and registration trial-ready. We anticipate the first potential approval for Rina-S in 2027. Importantly, we are anticipating blockbuster peak sales potential. With that background, let's now take a look at our guidance.

Here, you can see our existing guidance, which we announced in February. We're currently on track to meet these financial targets, excluding the impact of the proposed ProfoundBio acquisition and related deal costs. We continue to anticipate strong growth in revenue for 2024 of 19% at the midpoint, driven by both our royalty medicines. And importantly, we anticipate that we will have over DKK 1.2 billion of growth from EPKINLY and TIVDAK. In fact, EPKINLY and TIVDAK are driving nearly 40% of our total revenue growth in 2024. Now, as I told you back in April, we anticipate that the proposed acquisition of ProfoundBio will impact our guidance. Pending closing of the deal, OpEx before transaction expenses are now anticipated to be at or moderately above the upper end of the guidance range of DKK 12.4 billion-DKK 13.4 billion.

The anticipated increase reflects the incremental R&D investment to support the advancement of ProfoundBio's clinical programs, primarily Rina-S. This potential incremental investment is fully in line with our previously communicated priority of increasingly focusing our investment on mid- to late-stage R&D programs with high potential. Finally, as a reminder, we plan to update our overall guidance no later than our second quarter 2024 earnings. Now, let me provide a few closing remarks. In summary, we've had a very solid start to the year. We have growing recurring revenue streams, increasingly from our proprietary products. That gives us a strong backbone of significant underlying profitability. 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. On that note, I'm going to hand you back over to Jan.

Jan van de Winkel (CEO)

Thanks, Anthony. Let's move to our final slide. Over the past few months, we have made significant progress towards our 2024 goals, especially for EPKINLY. We made strides towards both goals you see here with the initiation of a new phase III trial, as well as priority review from the FDA for relapsed or refractory follicular lymphoma. We look forward to the PDUFA date and potential approval of this new indication in June. Of course, we are extremely pleased with the recent approval for TIVDAK. We are also very much looking forward to presenting the phase II acasunlimab data at ASCO next month. We continue to have a lot to look forward to in 2024, and we look forward to providing you with additional updates. That ends our presentation of Genmab's financial results for the first quarter of 2024. Operator, please open the call for questions.

Operator (participant)

Thank you. If you wish to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will take our first question, and your first question comes from the line of James Gordon. Please go ahead. Your line is open. James Gordon, your line is open. Please ask your question.

Jan van de Winkel (CEO)

Maybe move on to the next one, Operator, and then take James back when he is back online.

Operator (participant)

Of course. Yes, of course. Please stand by. The next question comes from the line of Sachin Jain. Please go ahead. Your line is open.

Sachin Jain (Senior Analyst - Healthcare)

Hi, there, Sachin. 2 pipeline questions, if I may. Firstly, just post-recent FDA Adcom on MRD negativity and first-line myeloma. Just wondered on your headline thoughts as to how that may change development and whether you sense any shift in J&J as to whether this is a key decision metric for them as part of a HexaBody decision expected end of this year, early into next year. And then secondly, on 1046, just 2 quick questions. One, at ASCO, should we be thinking about potential OS data in addition to the PFS you flagged before? And then on the phase III trial design discussions with regulators, just wondering if that's taking a little bit longer than expected and if there are any specific aspects of the design that are holding us up at this moment. Thank you.

Jan van de Winkel (CEO)

Thanks, Sachin, for the questions. I think I'm going to hand over both of the questions to Tahi, and then maybe Judith can add to that. Tahi, why don't you start with the MRD negative molecular endpoint?

Tahamtan Ahmadi (CMO)

Sure. Thank you for the question. So the first question, MRD negative. I think the reaction generally to this is that this is a good thing for patients with multiple myeloma because it, frankly, allows the opportunity to the development of novel mechanisms in frontline, which otherwise would have been extremely challenging. And I think, as it relates to J&J, they also, in their own call, recognized the opportunity that MRD negativity as a surrogate endpoint provides for the development of novel mechanisms in multiple myeloma. I think we can leave it at that. As it relates to 1046, where we actually had all of our health authority interactions, so we met with the FDA, the European, and Japanese health authorities, and have gotten the feedback and incorporating as we speak and are continually operationalizing towards activating the study by the end of the year.

So there's nothing really to hold up. Your other question around the specifics of the abstract. We've done this many times. I tried to avoid getting into the details of the abstract or the presentation, but I would, again, emphasize that OS is the appropriate endpoint in that space and, of course, an important data point, probably the most important data point in the decision-making process for us.

Jan van de Winkel (CEO)

Thanks. Thanks, Tahi. I think, Sachin, we probably need to keep it to that.

Sachin Jain (Senior Analyst - Healthcare)

Perfect. No, thank you very much.

Jan van de Winkel (CEO)

Thanks, Sachin, for the question. So maybe, Operator, let's see whether we can get James Gordon back.

Operator (participant)

One moment, please. At the moment, he's not in the queue. Are you happy to move to the next question?

Jan van de Winkel (CEO)

Absolutely, Operator. Please move on to the next one. He may have lost the line.

Operator (participant)

Of course. Your next question comes from the line of Vikram Purohit. Please go ahead. Your line is open.

Vikram Purohit (Executive Director - Biopharma Equity Research)

Hi. Thank you for taking our questions. We had two, one on GEN3014 and then one on just your thoughts on business development broadly. On GEN3014, just wanted to see if there's any updated thoughts from your side on timelines to the next data update and then also how much of a time lapse there may be between the release of the data and the potential decision from J&J regarding potential next steps? On business development, moving forward, how are you thinking about prioritizing between opportunities in oncology and potential efforts in immunology? Thank you.

Jan van de Winkel (CEO)

Thanks. Thanks for the question. So I will pass the first one to Tahi. But let me start with the second one on BD. I mean, we are going to be very, very focused on oncology. I mean, currently, the dominant focus is on oncology. And priority one is to actually, as it relates to the opportunities, is closing ProfoundBio acquisition, which we hope to do after getting regulatory clearance in the coming months, and then integrate and execute the development plan for Rina-S. And then beyond that, we continue to look for opportunities such as bringing in tools and components for the R&D engine. And oncology is getting a lot of attention, but also INI, because we are increasingly also looking at immunology and inflammation. But the dominant focus is oncology for the time being.

Let me move to Tahamtan now for the GEN3014 data and the decision timing for J&J, Tahamtan.

Tahamtan Ahmadi (CMO)

Yeah. I think on this particular question, I think we have been very clear and consistent. There's a pre-agreed dataset with J&J that includes a number of patients and a number of months' follow-up for these patients. And also have in previous calls repeatedly reiterated that there's a predefined time window, and that is relatively confined for J&J to make that decision. And if you take this all together, you can imagine that we said we are continuing to operationalize towards providing that data by the end of the year. And the time window probably between that data becoming public then and the decision is not that long. We should probably leave it at that. I don't think we can be more specific around this, but it's a very clearly laid out timetable, contextually.

Jan van de Winkel (CEO)

Thanks, Tahamtan. Thanks, Tahamtan. Thanks, Vikram, for the questions. So let's move back to the Operator.

Operator (participant)

Thank you. We will take our next question. Your next question comes from the line of Xian Deng. Please go ahead. Your line is open.

Xian Deng (Executive Director, Equity Research - European Pharmaceuticals)

Hi. Could you hear me all right?

Jan van de Winkel (CEO)

Yes, we can hear you.

Xian Deng (Executive Director, Equity Research - European Pharmaceuticals)

Yeah. Perfect. Yeah. 3 questions, please, if I may, all on 1046, please. The first one is, your data so far on liver tox seems to be quite manageable. Just wondering, what are your thoughts on the long-term safety profile on that side? Any potential for accumulated liver tox for the patient who use it for longer? Have you seen any accumulated sort of liver tox data? That's the first one. The second question is, just wondering, I mean, understand the 1046 for ASCO, this is a poster presentation, not an oral presentation. Just wondering whether it's possible to disclose the data cutoff for the abstract you submitted and what is the data cutoff roughly for the actual data to be presented, please? Just wondering whether the data has evolved a lot since that.

And then the third one is, given the feedback you had from the FDA on phase III trial design, just wondering whether you could disclose that you will focus on PD1 positive only or it's going to be more defined, such as PD1 high only? Thank you.

Jan van de Winkel (CEO)

Thanks, Sian. These are very good questions. I will, again, hand them over to Tahamtan, and then maybe Judith can step in there. Tahamtan, on liver tox maybe to start off with? Tahamtan, are you there?

Tahamtan Ahmadi (CMO)

I was on mute.

Xian Deng (Executive Director, Equity Research - European Pharmaceuticals)

Hi, guys.

Tahamtan Ahmadi (CMO)

Yes. Thank you for the question. On liver tox, you're absolutely correct. And we have now a substantial amount of experience with the asset, also in combination with the PD1 and also decent follow-up. It seems manageable in our hands. Patients can get re-exposed after a recovery period. And broadly speaking, tolerate the re-exposure really well. And we have absolutely no evidence of accumulation of liver toxicity with, as I said, substantial amount of patients across many trials with a relatively long follow-up. So that was the first question. The second question was on cutoffs. I'm not really going to go into the specifics, but previous calls already indicated that there is a cutoff used for the abstract, and then there is an updated, more timely cutoff used for the presentation. So there will be updated data at the presentation.

There is more follow-up, obviously, and more data as in the abstract. And then the last question was on the trial design and the population. And I think we've also been very clear on this. The intent is, and then there's nothing changed on this, to explore the combination of 1046+ pembro in control against the current standard of care, which is docetaxel in patients who are PD-L1 positive. And PD-L1 positivity here predominantly is necessary because the drug is PD-L1-4-1BB, and it requires PD-L1 on the tumor cells to activate 4-1BB on T cells.

Jan van de Winkel (CEO)

Thank you, Tahamtan. Very clear. Thanks, Xian. Let's move on to the next Operator.

Operator (participant)

Of course. Please stand by. Your next question comes from the line of Qize Ding. Please go ahead. Your line is open.

Qize Ding (Equity Research - US and EU Major Biopharmaceuticals)

Thanks. Thank you for taking the question. Just a couple of questions, if you can, on sort of phase III design. First, around TIVDAK and head and neck, your sort of thoughts around sort of the patient population control arm for that study, as well as sort of your sort of expectations around sort of the initial indication for Rina-S for the 2027 potential launch that you highlight in terms of sort of what population you would go into there and sort of the line of treatment as well. Just a little bit more color around those phase III designs, if you can. Thank you.

Jan van de Winkel (CEO)

Thanks, Qize, for the question. So Judith, why don't you take the first one on head and neck design for phase III for TIVDAK? And then Tahi can potentially give a bit more color, Qize, on the Rina-S first trial.

We hope to actually put into place several trials, but the one leading to a potential 2027 initial approval. Judith, maybe you can start.

Judith Klimovsky (Chief Development Officer)

Yeah. So with the phase III, we are engaging with health authorities as we speak to finalize the details of the study design. But it's based on the initial data presented at ASTRO and the updated data that will be presented as an oral this year at ASCO. So more to come. But the population that we presented at ASTRO, consistent with what we will present, is second, third line after checkpoint inhibitors, platinum, and we allow for cetuximab as well. And as you know, the three of them are given almost in the majority of patients in ASTRO. And with regard to the phase III design, more to come based on the interactions that we are currently having.

Jan van de Winkel (CEO)

Thanks. Thanks, Judith. And then maybe we can move to Rina-S. And then maybe, Tahi, you can start and potentially, Judith, you can add to that. Tahi?

Tahamtan Ahmadi (CMO)

Yeah. I want to be very careful what I'm going to say because we're still in the HOS period. And so I'm going to stay with what ProfoundBio has publicly already stated on their end, which is that they are planning to initiate a phase III in PROC and that they are planning to initiate a study that looks at folate receptor expression across the spectrum.

Jan van de Winkel (CEO)

Thanks. Thanks, Tahi. I think that's very wise to stay on the right side of the line because we still need regulatory clearance for that proposed acquisition. We could probably, Qize, not be further detailed at this moment. We will do that after we hopefully execute successfully. I appreciate the color. Thank you. Thanks. Thanks. Let's move on to the next analyst.

Operator (participant)

Thank you. Your next question comes from the line of Yaron Werber. Please go ahead. Your line is open.

Yana Anfri-Rone (Biotechnology Equity Research)

Hi. This is Yana Anfri-Rone. Thanks for taking my question. I couldn't go back on the quarter. I have two, one on DARZALEX and one on EPKINLY. You mentioned on the call that DARZALEX, you expected to continue to have some presence in the relapse refractory setting. Can you actually give us a breakdown of DARZALEX share across lines of therapy? And then for EPKINLY, how are you thinking about EPKINLY's advantage of kind of subcutaneous administration versus Columvi's advantage of fixed-duration dosing? And do you think that EPKINLY is also going to have fixed-duration dosing over time? Thank you.

Jan van de Winkel (CEO)

Thanks very much for the questions. Anthony Mancini, can I think best go into the first question? Then Tahi can give further color on sub-Q of EPKINLY and then fixed-duration of dosing in the newer studies. Maybe Anthony Mancini, you can start.

Anthony Mancini (COO)

Yeah. So thanks for the question. I'll just start by summarizing what I said earlier, which is the DARZALEX share gains are really driven by a frontline, continued growth in frontline. So if you look at the frontline new patient share, it's now 53%, which is over 14% absolute growth versus same time last year, which is really the key driver. And the other key number is overall DARZALEX patient share was about 43%. This is based on IQVIA brand impact Rx data. And the new patient share overall is exceeding the total patient share with a year-on-year 4-point uptake versus last year on an absolute basis. So we continue to see that leading indicator being really important to predict continued growth of DARZALEX. Frontline and second line were where the majority of the growth came and at the expense of third and fourth line.

I think I'll leave it there and pass it to Tahamtan to talk a little bit about duration. I'm happy to add in on that one too. Tahamtan?

Tahamtan Ahmadi (CMO)

Yeah. Sure. So I think the first question and also answer the second question. So generally, I think this discussion, this messaging around duration of treatment is a very academic one in my mind. As you noted, in combination, EPKINLY will also be given an efficacy duration. That is because in combination, the efficacy is, of course, enhanced and the CR rates are higher. So potential to achieve long-term durable remissions is higher. I would say the final judgment on whether it is wise to stop treatment in the relapsed/refractory setting with a single agent will probably come from the updated longer-term follow-up data. And then people can cross-compare. Anyhow, they can stop if they would like to, but they can probably not start if they are forced to stop by label. So that's my first thing.

I think this is less of an important differentiator, frankly, as you can hear from my commentary, than IV versus sub-Q because fundamentally, the sub-Q route together with the also optimized safety profile gives us the opportunity to reach the patients in pretty different healthcare settings than with IV administration.

Jan van de Winkel (CEO)

Thanks, Tahamtan. And maybe you can give a bit more color on the more recent studies and earlier lines of treatment where we don't use fixed where we also use a fixed duration.

Tahamtan Ahmadi (CMO)

Yeah. Yeah. So all EPKINLY studies that are in combination, either in DLBCL or in follicular lymphoma, in combination have a fixed duration treatment. And that, as I kind of alluded to in the earlier commentary, is a function of our belief that in combination, we've seen increased significantly in times increased CR rates. And this is fundamentally all about CR. The durability of the remission, which is driven by the CR, the potential to give these patients the benefit of a very long, sometimes maybe possibly a curative response to EPKINLY, is significantly enhanced when it comes in combination. And then it makes sense to think about stopping treatment vis-à-vis as a monotherapy, at least in the refractory DLBCL setting.

Jan van de Winkel (CEO)

Thanks. Thanks, Tahamtan. I think that should be, hopefully, it's clear now, Jan.

Yana Anfri-Rone (Biotechnology Equity Research)

Yep. Thank you.

Jan van de Winkel (CEO)

All right. Thanks. Let's move on to the next.

Operator (participant)

Thank you. Your next question comes from the line of Asthika Goonewardene. Please go ahead. Your line is open.

Asthika Goonewardene (Managing Director - Senior Biotech)

Hi, guys. Thanks for taking my question. So I've got a couple on EPKINLY, please. How much of your sales are coming from academic centers versus community? And then are you getting any pushback from the community practitioners about having to send the patient to the academic center to be admitted for the monitoring required on just the one dose? Related to that, how are things going with the outpatient study? I'm wondering when we could see that data presented and perhaps filed. And then if I can sneak one in on 1046 on the pivotal trial design that you've discussed with regulators, I'm wondering if you had any differential dosing of 1046 based on PD-L1 status, maybe in the 1%-49% if you were dosing at a different rate versus patients who had about 50% PD-L1 expression. Thank you.

Jan van de Winkel (CEO)

Thanks, Asthika, for the question. So the first two, I think I want to hand over to Anthony Mancini. Then Tahi can address the last one. Anthony?

Anthony Mancini (COO)

Yeah. Thanks, Asthika, for the question. So I think it's a great question, academic versus community. I think in the earlier part of our launch, we really had a focus on new starts that were heavily pretreated patients were being treated, that was really largely academic-focused. We've started to see in recent months now that there's been a modest shift beyond the major academic centers. Of course, our key accounts are primarily major research institutions and health systems that have CAR-T capabilities. So we have seen a shift of late beyond major academic centers. And we're encouraged by our ability to get to broader sites of care. And we've now seen large physician group practices starting to use EPKINLY. But it's at the early stages, Asthika, at this point in the community. Of course, that's a U.S. dynamic. In Japan, it's really a hospital-based dynamic overall.

But I think this will continue to evolve over time. And as data evolves with outpatient data, as you mentioned, and optimization data, both in DLBCL and FL, I think we'll start to see more large physician group practices start to use EPKINLY in a greater way. But again, this is the shift. And with that, maybe I'll pass it to Tahi to talk about the next 1046 design question.

Jan van de Winkel (CEO)

Maybe Tahi can start with the status of the outpatient study, the phase II outpatient study. That's one of the questions from Asthika. Any updates, Tahi, on the status of that phase II study?

Tahamtan Ahmadi (CMO)

Well, I mean, it's going quite well. And I think they also plan to present some of the data towards the end of the year. But that's probably all I can say. It's an ARCHI-run study, actually. So that's all there is. And on 1046, what a simple question is, the answer is no. So one dose, one schedule, regardless of the PD-L1 status. Also, I'm not entirely sure if I would understand how that would work with the bispecific that wants to engage 4-1BB maybe. But simple answer, one dose, one schedule.

Jan van de Winkel (CEO)

All right. Thanks. All right. Thanks, Asthika, for the question.

Operator (participant)

Thank you. We will take our next question. Your next question comes from the line of Emily Field. Please go ahead. Your line is open.

Emily Field (Director, Head of European Pharmaceuticals Equity Research)

Hi. Thanks for taking my question. I'll just ask two quick ones. For the first one, for acasunlimab, are we going to be seeing the data at ASCO in the poster for both cohort A and cohort B? And then a question on DARZALEX and just sort of the multiple myeloma competitive environment. Obviously, earlier this year, we saw the DREAM7 data for BLENREP, which had DARZALEX in the comparator arm. I know this is second-line plus. And the share numbers you gave earlier in first line are super helpful. But are you seeing that asset re-entry into the market based on the data you've seen so far as a competitive threat to DARZALEX? Thank you.

Jan van de Winkel (CEO)

Thanks, Emily, for the questions. I think, Tahi, you can probably handle both of the questions. The data at the poster at ASCO for acasunlimab and then the Blenrep new data from GSK and the impact on the DARZALEX landscape.

Tahamtan Ahmadi (CMO)

Well, so the first thing, I'll take the 1046, and then I'll give my impression on the Blenrep data. And then maybe Anthony Mancini may also have his own view on this. But on 1046, what you will see is the data that we used to make the decision. And obviously, the decision was twofold. One, what is the appropriate dosing schedule? And B, overall, is there a path forward? What's the proof of concept for this combination? And you will see essentially the answer to both of these questions. So that means you will see the relevant data from the arms. On Blenrep, I don't want to sound this way, but it feels like it's a little bit, I think, a little bit too late as the treatment paradigm has changed and daratumumab has moved into earlier lines.

I think the study asked a question that was certainly relevant at the time when it was designed but may not be necessarily relevant at the time it was answered. I don't know if Anthony wants to add further to that.

Jan van de Winkel (CEO)

No, I think you covered it. All right. I think we need to leave it with that, Emily. I think there's now probably better BCMA-targeted molecules like bispecifics. And the teclistamab is doing really well. As you heard from Anthony Mancini.

Tahamtan Ahmadi (CMO)

Great.

Jan van de Winkel (CEO)

All right. Operator, let's move to the next question.

Operator (participant)

Thank you. Your next question comes from the line of Peter Verdult. Please go ahead. Your line is open.

Peter Verdult (Managing Director - Pharmaceuticals)

Thank you. Peter Verdult, Citi Group. 2 questions, please. To Jan and Tahi, and I asked for your patience here, but I just want to ask Sachin's question differently. On this GEN1046 data, we're going to see why you've moved into phase III. Rather than trying to be cute, can I speak a bit bluntly? I mean, it's a big area, huge commercial opportunity, but also very competitive. So my simple question is, is there enough data to materially change consensus expectations on this drug? Do you feel that there could be a pivotal moment in terms of how people view 1046, given how long we've been waiting for this data to come through? So that's question number 1.

Number 2 for Anthony Pagano, just ballpark, when we think about ProfoundBio on an annualized basis, is a good starting point to think of a cost base around $100 million, including what might be needed to prosecute Rina-S? Just anything you can help us with in terms of a run rate, in terms of the ProfoundBio cost base. Thank you.

Jan van de Winkel (CEO)

Thanks, Peter, for the questions. The first one, I will move on to Tahi because he's really on top of that data together with Judith. We're very excited to present that. I think it's going to be very clear, Peter, in underlining the decisions we have taken towards pivotal. But with Tahi, maybe you can give a bit more color for Peter here.

Tahamtan Ahmadi (CMO)

Yeah. I will try. It's not that easy because I don't necessarily know how you guys are going to react because it all depends on what one has in mind in terms of expectations and reality. The way I look at this and the way I think about this and the way we think about this and the reason we are excited goes something like this. This is going to be an IO option with similar benefits that immune oncology approaches in the past have shown when they were compared against chemotherapy in our mind. And that's what we hope to achieve with the study, which we hope you will appreciate in the dataset, is that efficacy is important. Durability is probably even more important. And overall survival is the sine qua non. And so it is indeed a competitive space.

I think it's also fair to say that a lot of the approaches have not met the criteria that I just laid out. They've met maybe one, but not all of them. I think this is how we look at it. This is why we're excited about it. It's, in many ways, also validation of a long effort to validate 4-1BB as a mechanism. That in and of itself also has some value for us.

Jan van de Winkel (CEO)

Thanks, Tahi. I think we should keep it to that. And then finally, also a question for Anthony Pagano. I was worried that there wouldn't be a question for you, Anthony, but now you can go.

Anthony Pagano (CFO)

Yeah. Yeah. I stayed on the line, Jan. Don't worry. Thanks, Pete. Yeah. Maybe to start off with the shorter term, Pete, in terms of our 2024 guidance. It's what we indicated as part of announcing the proposed acquisition. I reiterated again today that for 2024, we expect to be at or moderately above the upper end of our current guidance range, which is DKK 12.4 billion-DKK 13.4 billion. To be clear, as I sort of think about what the upper bound of that could be, it's certainly going to have a 13 handle on it, meaning our OpEx numbers are going to start with a 13. We're really focused on, as you would expect, continuing to manage our overall investments in a focused and disciplined way as we've done historically.

Now, if I try to zoom out a little bit, Pete, as you'd expect, we have to invest to unlock the full potential, particularly around Rina-S, as well as our existing late-stage programs. So as I highlighted on our call to announce the proposed acquisition of Profound, we do expect R&D investments to step up over the near- to medium-term. Now, what you should be really clear on, though, is that we fully intend to remain substantially profitable throughout this investment period. So we're going to manage our expenses accordingly. And that means that moving forward, we're going to continue to be focused and disciplined in our approach to allocating the capital across these mid- to late-stage R&D programs with the most potential.

As we've done in the past, we're not going to shy away from deprioritizing other programs, particularly early-stage programs that won't meet our high bar for continued development. And then finally, and as we talk about Rina-S in a little bit more detail, we expect Rina-S could be accretive to earnings by the first full year of launch, given its potential approval in 2027. And as Jan highlighted, we do anticipate that we're going to unlock meaningful value from this program by the end of the decade with significant further upside into the 2030s. Maybe one other point, Pete, and you might have seen this in the Q1 print. When we gave our guidance for 2024, we were very clear that we're going to be managing our investments, particularly as it relates to SG&A. You can see the SG&A print here in Q1 is further evidence of that.

We're absolutely focused on making the appropriate investments to run our business the right way. But also, when we have clear investment opportunities, particularly these, let's call it, registration trials, we can't shy away from making these investments. And likewise, when the data aren't clearing the very high bar, we can't shy away from that either. So I'm not going to give you a precise number. We've highlighted, Pete, that we are anticipating starting phase IIIs for Rina-S. And you can do some of your normal modeling as you expect what the incremental investment is to run Rina-S. And then we'll be back as part of our Q2 earnings to provide some incremental detail, particularly as it relates to 2024 numbers.

Jan van de Winkel (CEO)

Thanks, Anthony. Thanks, Peter. Let's see whether there are further questions, Operator.

Operator (participant)

Thank you. We will take a next question. The question comes from the line of Suzanne van Voorthuizen. Please go ahead. Your line is open.

Suzanne van Voorthuizen (Head of Life Sciences Research)

Hi, team. This is Suzanne from Piper. Thanks for taking my question. I got disconnected for a bit, so apologies if this is maybe a repetitive question. But I wondered if you can elaborate on the tisotumab dataset in head and neck cancer that is coming at ASCO. Could you remind us of the potential that you see for the drug in this setting and expand on what we should expect for next month's update in terms of sample size, efficacy metrics, and follow-up time? Thank you.

Jan van de Winkel (CEO)

Thanks, Suzanne, for the question. And I think, yes, you did miss, I think, some of the updates. But I will ask Judith to give you further color on the dataset at ASCO for head and neck and TIVDAK and tisotumab for the tumor. Judith?

Judith Klimovsky (Chief Development Officer)

Yeah. So yeah, thank you, Jan. So the data is based on a phase II study, Arm C. The initial data was presented at ASTRO. So this is a much more substantial dataset with longer follow-up. But the setting is the same. So it's patients with head and neck that fail standard of care, meaning PD-1, chemo, and cetuximab.

Jan van de Winkel (CEO)

Thanks. Thanks, Judith. Only a few weeks, Suzanne, and then you will know it all.

Suzanne van Voorthuizen (Head of Life Sciences Research)

Thanks a lot.

Jan van de Winkel (CEO)

Thank you. Let's see, Operator, whether there are further questions.

Operator (participant)

Thank you. In the interest of time, I will hand back for closing remarks.

Jan van de Winkel (CEO)

All right. Thank you all for calling in today to discuss Genmab financial results for the first quarter of 2024. If you have additional questions, don't hesitate to reach out to our investor relations team. We hope that you all stay safe and keep optimistic. We very much look forward to speaking with you all again soon.

Operator (participant)

This concludes today's conference call. Thank you for participating. You may now disconnect.