Genmab A/S Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
February 12, 2025

There are 15 speakers on the call.

Operator

Hello, and welcome to the Genmab Full Year twenty twenty four Financial Results 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 beliefs, anticipates, plans or expects. Actual results may differ materially, for example, as a result of delayed or unsuccessful development projects. Genmapped 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.

Operator

Please also note that Genmab may hold your personal data as indicated by you as a 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 our first speaker today, Jan van der Winkle. Please go ahead.

Speaker 1

Hello and welcome to Genmab's conference call to discuss our financial results for the period ending 12/31/2024. With me today to present these results is our CFO, Anthony Pagano and our Chief Commercial Officer, Brad Bailey. For the Q and A, we will be joined by our Chief Medical Officer, Tay Yamady and our 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.

Speaker 1

2024 was marked by significant milestones towards our mission to deliver innovative medicines to patients. We made strategic investments to both accelerate the development of late stage programs with the potential to generate meaningful revenue by the end of the decade and to maximizing the success of our commercialized medicines. So we delivered on our capital allocation priorities in 2024 and as Anthony will describe later, we will do so again in 2025. Overall, our financial performance in 2024 was exceptionally strong and we have further solidified our foundation for sustainable future success. Let's take a look at this in more detail.

Speaker 1

2024 was a year of strong execution and disciplined investments driving 31% total revenue growth fueled by the success of our eight commercialized medicines including Abkinley and TivDAC. Our investments are fully aligned with our strategic priorities supporting key late stage pipeline programs and commercial expansion, allowing us to grow operating profit by an impressive 26%, demonstrating the strength of our business. Despite significant investments, including the $1,800,000,000 acquisition of Profound Bio and a 500,000,000 share buyback, we ended the year with nearly $3,000,000,000 in cash, reinforcing our financial strength. This exceptionally strong financial position gives us the flexibility to continue investing in innovation while delivering long term value to shareholders. Taken together, our financial results for 2024 exemplify our ability to deliver strong revenue growth, while simultaneously advancing high potential programs.

Speaker 1

Now let's look forward starting with our pipelines. We currently have 12 products or product candidates in 30 clinical trials, either ongoing or recruiting. This includes seven Phase three trials between APKINDLY, RINARS and acasunumab. And based on the strong emerging data, we expect more to come, because these three programs are poised to drive significant revenue growth for Genmab by the end of this decade. We have prioritized investments for 2025 and purposely reallocated our R and D dollars to these programs.

Speaker 1

Now let's take a deeper look at why we are confident in their significant potential. Starting with APKINDI, together with APFE, we continue to advance an ambitious clinical development program for eperitimab across B cell malignancies, including frontline studies in diffuse large B cell lymphoma and follicular lymphoma. Three of five ongoing Phase three studies have been fully recruited well ahead of schedule. And in addition to confirmatory data based on accelerated enrollment, we now anticipate three potentially significant pivotal readouts by the end of twenty twenty six second line plus follicular lymphoma, frontline diffuse large B cell lymphoma and in second line plus diffuse large B cell lymphoma for transplant ineligible patients. If successful, this could lead to significant market expansion, especially as frontline diffuse large B cell lymphoma represents the single largest indication.

Speaker 1

As you can see this on the next slide, where we summarize the significant market opportunity for Abkinli. We have successfully obtained multiple regulatory approvals for Abkinli making this therapy accessible to a broader patient population. And thanks to our exceptionally strong performance in key markets like The U. S. And Japan, we are confident in our ability to expand that Kinley's reach even further.

Speaker 1

In fact, our commitment to advancing up Kinley across multiple indications in B cell cancers underscores its potential as a best in class treatment with a peak sales opportunity exceeding $3,000,000,000 Let's now turn to RINOS. As we have shared previously, we have now initiated the first Phase three trial for RINOS in second line plus platinum resistant ovarian cancer. This trial is designed to address all comers regardless of folate receptor alpha expression, expanding its potential reach to a broader patient population. We intend to present meaningful follow-up data from the expansion cohorts with prog early in the first half of twenty twenty five. Additionally, we are actively generating combination data to inform next steps in platinum sensitive ovarian cancer.

Speaker 1

Beyond development in ovarian cancer, we are also planning to present data in endometrial cancer in the first half of this year. And based on the strong signals we are seeing, we plan to start a Phase three study in second line plus endometrial cancer by the end of the year. All this adds up to a significant market opportunity for RINOS, which you can see on the next slides. Rhinor S's differentiated profile has the potential to address a broader patient population than is served by current standard of care including low to medium folate receptor alpha expression targeting about eighty five percent of the platinum resistant ovarian patient population. We are exceptionally well positioned to maximize the potential of RhinnaS given our proven clinical development capabilities, track record of acceleration and our experience in the guidance space with TifDAC.

Speaker 1

Based on the exceptionally strong execution of the team post acquisition, we remain on track to bring Rhinor S to patients by 2027. With its best in class profile expected to achieve peak sales exceeding $2,000,000,000 And with the two Phase 3s we plan to have underway by year's end, we are well on track to put in to putting in place the building blocks to achieve this target. Finally, let's take a look at the market opportunity for acasunumab. In 2024, Genmab took full control of the acasunumab program, providing us with a remarkable opportunity to fully own and advance this promising assets. Non driver mutated second line non small cell lung cancer continue to be an area of significant needs, Given the worsening of performance status as patients progress through lines of therapy, physicians are interested in more tolerable chemo free regimens.

Speaker 1

Yet with many novel treatments failing in Phase three trials, docetaxel continues to be the current standard of care. By identifying potential synergies of IO therapies, we have the potential to unlock clinical benefits that are not possible with monotherapy alone. So there is meaningful opportunity for novel treatments like acasolumab in the second line plus setting to provide not just improved response rates, but durability of response. And we are progressing a strategic development program to explore acasulumab's full potential across solid tumors. So in summary, in 2025, we will be in execution mode.

Speaker 1

We will continue to deliver on our financial commitments to focused investments in our high priority late stage and commercial programs. Because of this, the investment in these areas today that will position us well at the end of the decade. I will now hand over the presentation to Brad, who will provide you with a review of the recent performance for Tivtek and Abkinly, both of which have seen growth in 2024. Brad, the floor is yours.

Speaker 2

Thank you, Jan. Over the course of 2024, our commercialization teams executed effectively to bring Evkendly and TivDac to an increasing number of patients around the world. Overall, Evkendly and TivDac ended the year in a strong position, demonstrating the strength of our commercialization strategy and the performance of our field teams. We also achieved critical milestones including two new regulatory approvals in The U. S.

Speaker 2

And continued our work to rapidly progress our development program to fuel our future growth. Through these efforts, our commercialized medicines contributed 29% of our revenue growth for the year. Moving to highlights from our commercialized portfolio, we achieved meaningful milestones with both medicines that contributed to their overall growth. Over the past three months, TimDAC and Epkinley have collectively received three new or updated NCCN guidelines designations. First, in December, TimDAC monotherapy was upgraded from category 2A to category one designation for treatment of recurrent or metastatic cervical cancer further validating its clinical benefit for these patients.

Speaker 2

TIVDAC in combination with pembrolizumab was also added as a category 2B designation for patients with PD L1 positive disease. And earlier this month, Ep Kinley in combination with Gemox received a category 2a designation for the treatment of diffuse large B cell lymphoma in the relapsed refractory setting. This is especially notable as we look to bring the potential of Ep Kinley into earlier lines of therapy in the future. Lastly, for Ep Kinley at ASH, we presented a three year long term data from our EPCCOR NHL1 study, which evaluated Epikinley in patients with third line or later relapsed or refractory DLBCL. These data showed that over half of patients who achieved a complete response in the trial maintained their response for more than three years with no new safety signals identified.

Speaker 2

These results represent the longest duration of CRs reported by a bispecific in this setting further reinforcing Ep Kinley's clinically differentiated profile and potential to deliver deep durable responses. Now let's turn to performance beginning with Ep Kinley. Ep Kinley has continued to perform exceptionally well since its initial launch in 2023. It closed 2024 in a position of strength, achieving $78,000,000 in sales in the quarter and $281,000,000 in sales for the year. This growth was driven primarily by sales in The United States and Japan.

Speaker 2

In The U. S, McKinley remains the first and only bispecific approved with a dual indication in third line plus DLBCL and follicular lymphoma. Throughout 2024, we continue to see sustained uptake across sites of care driven by targeted field execution and the successful FL launch in June. Since the FL launch, we have observed accelerated growth and positive physician feedback highlighting the value of Ep Kinley's dual indication, its uniquely differentiated clinical profile and seamless administration. Moving forward, we will continue to focus on accelerated adoption across broad sites of care.

Speaker 2

In Japan, Epikinley is the only approved CD3, CD20 bispecific and third line plus relapsed or refractory large B cell lymphoma and we continue to see strong stable performance largely driven by field execution and account activation. We are well positioned to build on this leadership position in Japan with the anticipated approval for third line plus relapsed or refractory flickular lymphoma in early twenty twenty five. With this indication, Epitinib will become the first and only bispecific approved in Japan with a dual indication in LBCL and FL. In the rest of the world, we're seeing increased utilization of Epikinley through our partner, AbbVie, and achieved approvals in more than 50 countries worldwide by the end of twenty twenty four. We look forward to this trajectory continuing in 2025 and beyond.

Speaker 2

Looking ahead, our teams remain focused on driving adoption in priority markets, while accelerating our robust development program to establish Ep Kinley as the core therapy in B cell lymphomas, including an earlier lines of therapy. As we continue to target areas of high unmet need, our commercialization teams remain focused on creating optimal customer experiences through the disciplined execution of our targeted go to market strategy that has consistently driven our success to date. Turning now to TivDAC. As the only ADC with a proven survival benefit in advanced cervical cancer, TypDAC has continued to achieve solid growth since its launch in 2021 and is regarded by physicians as the global standard of care and the clear answer in second line plus recurrent or metastatic cervical cancer. TivDAC produced $131,000,000 in sales during the year, including $38,000,000 in the fourth quarter, driven by depth and breadth of ordering accounts.

Speaker 2

With strong utilization rates in this setting, we anticipate modest growth in The U. S. In 2025. Looking ahead, we see opportunities to expand the potential of TIVDAC in advanced cervical cancer to new markets where patients' needs remain high. We expect approval in Japan early this year, where Genmab will lead full commercialization responsibilities and in Europe later this year following a positive CHMP opinion issued in January.

Speaker 2

Importantly, the anticipated launch in Europe provides a catalyst to enter the next phase of our commercialization strategy as we expand our work to new markets. As of January 1, Genmab and Pfizer have agreed to transition full commercialization responsibilities for TivDac in second line plus recurrent or metastatic cervical cancer to Genmab for all countries outside The U. S. And China where Pfizer will continue to partner with Genmab and Zai Lab respectively. We're pleased with the terms of this updated agreement as it optimally positions us to expand our commercialization capabilities first to Europe in a strategic and financially disciplined manner just as we have successfully done in The U.

Speaker 2

S. And Japan to date. We're confident that with this approach, we can optimize the launch opportunity for TIVDAC and also build a strong foundation for the potential launches of RINA S and aclasumumab in the future. We are extremely pleased by the performance of our commercialized brands in 2024, validating our strategic approach and investments to date. As we look toward 2025 and beyond, our focus remains on building upon the strong foundation we've established in The U.

Speaker 2

S. And Japan to capture more value from our commercialized medicines, increasing utilization of Eptanley and TypTap across regions and strategically entering new markets to prepare for the launches of our wholly owned medicines to reach even more patients in the future. With that, I'll hand the call to Anthony to provide more perspective on our financials.

Speaker 3

Thanks, Brad. We continue to strengthen our foundation throughout the year. We delivered on our goal of multiple successful regulatory approvals and launches for Ep Kinley. And we're pleased with how these launches are progressing. We've also significantly enhanced our long term growth potential with the addition of RHNA S to our late stage pipeline as part of the acquisition of Profound Bio.

Speaker 3

And as we'll see, our financials remain exceptionally strong. We achieved 31% total revenue growth. And importantly, we grew our recurring revenues by 35%. This was driven by strong royalties from DARZALEX and KOSIMTA and from product sales from Ept Kinley and TIVDAC. This growth reflects sustained recurring revenue expansion and robust execution across markets.

Speaker 3

We can see that the investments we've made in building out our commercialization teams and capabilities are paying off. And this sets us up well as we prepare for potential expansion into earlier lines for F Kinley and the potential launch of Vrina S in 2027. Stepping back and looking at our revenues, what really stands out for me is the improving quality of our revenue profile. In 2024, recurring revenues rose to represent 91% of total revenue and that's compared to 88% in 2023. Finally, looking at DARZALEX specifically.

Speaker 3

Overall, net sales grew by almost 20%. That's net sales of nearly $11,700,000,000 for the year, which translates to almost DKK 14,000,000,000 in royalty revenue. This growth was driven by continued share gains and strong performance in the frontline setting. Turning to our investments, where we continue to take a disciplined approach. Total operating expenses in 2024 were DKK 13,800,000,000.0.

Speaker 3

As you can see, the majority of the investment over 70% was driven by R and D, reflecting our focus on late stage priority programs at Kinley, RINA S and acasumumab. Our investment in SG and A was focused to put us in a strong position for key market launches in The U. S. And Japan. So if we step back and think about our investment levels for 2024, we over delivered on our financial commitments made at the time with the Profound Bio acquisition.

Speaker 3

This was achieved through the balance of disciplined investing in line with our capital allocation framework and a continued and increased focus on productivity and prioritization efforts. And in a minute, you're going to see how this has been effectively carried through to 2025. Pulling this all together, our operating profit for 2024 grew 26%. So we delivered exceptionally strong profitability while investing to advance those programs with the highest potential for long term growth. Then moving on to tax.

Speaker 3

As you can see in the appendix of this presentation, we have tax expense of around $1,300,000,000 which equates to an effective tax rate of 14.4. The decrease compared to last year's rate of 22.8% was primarily due to our ability to recognize deferred tax assets that were not previously recognized. Moving forward, we anticipate that our effective tax rate should be closer to the Danish statutory rate of 22. Taken together, our net profit amounts to nearly SEK 7,800,000,000.0. So as you can see, continued strong underlying financial performance.

Speaker 3

With that, let's move to our 2025 financial guidance. To start, the guidance we're providing today is in dollars. That's because as of January 1, our functional currency changed from kroner to dollars due to the growing number and significance of our U. S. Dollar denominated transactions.

Speaker 3

For comparison, we've converted our 2024 results from kroner to dollars using an exchange rate of 6.89, representing the average rate during the year. With that background, now let's take a look at our 2025 guidance. We expect our revenue to be in the range of around $3,300,000,000 to $3,700,000,000 delivering robust growth of 12% at the midpoint. And this is despite our non recurring revenue decreasing by more than $100,000,000 So it's our recurring revenues from Royalty Medicines and revenues from Atkinley and TivDac that's driving our anticipated growth in 2025. For operating expenses, as I highlighted for you at Q3 last year, expectations were in a reasonable place.

Speaker 3

For 2025, we expect to be in a range of around $2,100,000,000 to $2,200,000,000 So as you can see, we not only delivered, but over delivered on the commitment we made at Q3. This reflects our disciplined approach to investments as well as rigorous portfolio prioritization. Putting all this together, we're planning for operating profit in a range between $895,000,000 to nearly $1,400,000,000 with the midpoint of guidance amounting to more than $1,100,000,000 of operating profit and year over year growth of 16%. Now let's take a look at the components of our guidance. Building on the exceptional growth in 2024, we expect recurring revenues to grow 18% in 2025, driven by DARZALEX and KOCYMTA and this increasingly includes contributions from Etkinley and TIVDAC.

Speaker 3

Taken together, these two products contribute 34% of our total projected revenue growth. This really highlights the continually improving quality of our revenue profile. Notably, our recurring revenue represents 95% of our total projected revenue in 2025. Looking beyond 2025, for Evkindly, we anticipate three potentially significant pivotal readouts by the end of twenty twenty six, including frontline and second line DLBCL and second line FL that could support regulatory filings and subsequently additional meaningful revenue growth. Finally, coming back to DARZALEX, we anticipate that DARZALEX sales will continue to ramp up and be in the range of $12,600,000,000 to $13,400,000,000 Turning now to OpEx.

Speaker 3

We've purposely reallocated our R and D investments in 2025 and are focused on advancing our high impact late stage programs at Kinley, RENA S and acosunlumab. So here we are prioritizing late stage assets with strong commercial potential, while also applying a balanced approach to our investments in our early pipeline. As a result, our investment in these late stage programs increases from 45% of total R and D spending in 2024 to more than 55% or 55% in 2025. Our sales and marketing investments are focused on launch readiness in key markets, most notably for RENA S with a disciplined approach that balances growth and efficiency. These investments are aligned to drive both immediate launches and long term revenue.

Speaker 3

For G and A, I'm pleased to note that spend is broadly flat between 2024 and 2025. And here, our G and A capabilities are increasingly at scale, so we expect minimal growth. If you add it all together, you can see the power of our growing recurring revenues and underlying profitability. In 2025, we'll make significant investments in late stage R and D and launch preparations. At the same time, we plan to deliver 16% operating profit growth at the midpoint.

Speaker 3

This reflects our ability to scale efficiently and control costs, supporting both near term launches and long term value creation. So when you look at our 2025 guidance, as well as our 2024 results, you can see that we continue to deliver on our financial commitments. Having covered our results for 2024 and our guidance for 2025, let me outline our capital allocation strategy aimed at fueling revenue growth by the end of the decade and enhancing shareholder value. First, we will continue to invest in accelerating the development of our high impact late stage programs at Kinley, RENA S and acasumumab with investment into Phase three clinical trials. We will also continue to maximize the success of our commercialized medicines because it's our investment in these programs now that will potentially generate meaningful revenue for us by the end of the decade.

Speaker 3

Second, we will continue to seek out business development and M and A opportunities that fit within our core focus areas. As you know, we executed on our acquisition of Profound Bio last year. Here, I'd like to highlight how quickly and successfully we were able to integrate PROFOUND BIO into our business as evidenced by our ability to progress VIRENA S so significantly. We not only brought forward the start of the first Phase three trial for VIRENA S, but today we announced a second Phase three trial in an additional indication. Now having built out our development and commercialization capabilities, we're well positioned to continue to consider both mid to late stage development and commercial stage product opportunities.

Speaker 3

And finally, today we're announcing our plan to repurchase an additional approximate 1,900,000.0 shares, which is equivalent to around $370,000,000 at our current stock price. This underscores our confidence in Genmapped's future and our commitment to delivering value to our shareholders both in the short and long term. In summary, our performance in 2024 underscores our ability to deliver exceptional revenue growth, advance key pipeline assets and maintain strong profitability through disciplined execution. Looking ahead to 2025, we are building on this momentum by further prioritizing our investments and expanding market opportunities, positioning us for sustained growth and long term value creation for our shareholders. And on that note, I'm going to hand you back over to Jan.

Speaker 1

Thank you, Anthony. Let's move on to our final slides. Now with this strong foundation supporting us, we are looking ahead to an energizing 2025. Starting with HexaBody CD38, we submitted the data packets to J and J and we anticipate a decision from them no later than the first quarter of this year. At that time, we will press release the decision and includes top line clinical data.

Speaker 1

Regardless of J and J's decision, Genomex strategic priorities in 2025 and beyond remain unchanged. Looking beyond this event, this year we are anticipating additional regulatory decisions for both Abkinli and TifDac, including the potential approval of TIVDAC in Europe following a positive opinion from the CHMP in January. For both arkesolumab and China S, we anticipate presenting additional supportive clinical data and both have the potential to move into broader indications with new clinical trials. And we will continue to actively look for opportunities to grow our pipeline, both organically and inorganically positioning us for sustained growth and long term value creation for our shareholders. In summary, in 2024, we further solidified already very strong foundation and delivered on our commitments.

Speaker 1

And in 2025, we will continue our laser sharp focus on an investment in our late stage product pipeline and commercial execution. That ends our formal presentation. Operator, please open the call for questions.

Operator

Thank you. And now we're going to take our first question. And it comes from the line of Jonathan Chang from Leerink. Your line is open. Please ask the question.

Speaker 4

Hi guys. Thanks for taking my questions. Can you discuss your reasons for confidence in the endometrial cancer opportunity for RINA S and for committing to a Phase III second line plus endometrial cancer study by year end? Thank you.

Speaker 1

Thanks, Jonathan for the question. I will let Tay dive into this. Tay, can you talk about the endometrial cancer data and the commitment to go into Phase III?

Speaker 5

Sure. Jonathan, thank you for the question. I think you heard from Jan earlier that we will present data in endometrial. So we have the data. It's been submitted and it will be publicly available in the end of this first half.

Speaker 5

That data in our mind is highly competitive. It is the most robust efficacy signal that is currently being generated in that new population that you described, patients with endometrial cancer who had chemotherapy and checkpoint inhibition. And so we are very excited about that data. We think it's going to be robust data. It will be very well appreciated by investigators and investors when it is public and that's driving our excitement to move forward aggressively with the Phase three.

Speaker 1

Thanks, Tay. Thanks, Jonathan for a very good question. Let's move on to the next analyst.

Operator

Thank you. And the next And the next question comes from the line of Michael Schmidt from Guggenheim Partners. Your line is open. Please ask your question.

Speaker 6

Hi, this is Paul on for Michael. Thanks for taking our question. Just for EPCO and the DLBCL landscape, there's a competing CD20 bispecific that could potentially have combo data approved this year for the transplant in eligible second line plus setting. What do you have to show to be competitive here for EPCO monotherapy? And can you provide any updates on the status of your efforts there with Gemox?

Speaker 6

And as a follow-up, how are physicians currently thinking about potential to sequence multiple CD25 specifics for DLBCL? Thank you.

Speaker 1

Thanks very much, Paul, for the questions. I'll let Tahi address those for eperitimab. Tahi?

Speaker 5

Yes. Thank you again for the question. So second line, in the first part, of course, we just a couple of days ago, got the good news that the NCCN has included our data with JEMOX and EBCO in second line patients who are ineligible for transplant with a type 2a recommendation. So that's very exciting. And then there's, of course, the Phase III ongoing in combination with lenalidomide.

Speaker 5

So from our end, we kind of capture both opportunities, the debulking with chemotherapy for in conjunction with the CD3C20 bispecific JAMARC strategy as well as the more outpatient oriented oral medication plus a subcutaneous administration enhancing T cell function strategy and these two things are going to play out. I think as we have said many, many times, the opportunity in the relapse refractory setting for the Fusaj B cell is really in expanding access to this novel mechanism. And we think that from the whole target product profile for zuclideanine zaprutinib's administration, the fact that it is the only one that is approved in both indications, it is extremely well positioned to enter the community space and provide access to patients in those settings.

Speaker 1

Thanks, Tay. Let's give the floor back to the operator.

Operator

Thank you. And now when we take our next question and it comes from the line of Asthika Gunewardene from Twist. Your line is open. Please ask your question.

Speaker 7

Hi guys. Just very quick to follow-up on McKinley. Two eighty one million dollars in the first full year of launch is very commendable. Just wanted to delve into the market dynamics in the second half. Wanted to see if there's something funky about Q4 given that it was kind of flat on Q3, if there's anything unusual you'd point to.

Speaker 7

And then if I can ask on acasanumab, I like that you're putting peak sales number here for the key pipeline assets. Over the 136,000 potential pitiable patients, Baccasan, the $1,000,000,000 in peak sales team is a little bit light compared to the others that you provided. Can Could you tell us a little bit about what goes into this estimate? Is that something to do with the longer treatment interval

Speaker 1

for six weeks versus three weeks?

Speaker 7

Or is there something else that you're anticipating with IQOSAN? Thanks.

Speaker 1

Thanks, Asthika, for the questions. I will ask Brad to comment on the first two and then maybe Judith can step in also on the estimates for icosanumab. Brad, why don't you start with EPCO?

Speaker 2

Thank you very much for the question. And we remain very confident actually in the core markets with U. S. And Japan with Epkinley's performance with the growth that we're seeing there. We did have a one time accounting adjustment for sales in Europe, France specifically that impacted the Q4 numbers specifically.

Speaker 2

Otherwise, again, feel very confident with our growth trajectory at this point.

Speaker 1

Then maybe the market size for acasolumab as we estimated it around one point four three six zero zero zero zero patients. Do you want to add anything to that, Brad?

Speaker 2

Yes. No, for ACA, it's certainly a competitive space that we see, particularly in this post I was setting a significant opportunity, as you showed on your slide earlier, and but nothing really further to comment on that from a size perspective at this point.

Speaker 1

All right. Thanks, Brad. Eunice, any color from the clinical side on acasulimap and the estimated markets?

Speaker 8

Yes. The only thing to add is, as you know, we pre select for PD L1 positive. So this came into account on the assessment of the market opportunity.

Speaker 1

Thanks. Thank you. Hope that's clear, Astika. Let's give the floor back to the operator.

Operator

Thank you. And now we're going to take our next question and it comes from the line of Yifan Liu from HSBC. Your line is open. Please ask the question.

Speaker 9

Thanks for taking my question. Maybe one on follow-up on acasunumab. So in 2025, the Phase II data update, what are we expecting to see in the data in the presentation? And then what sort of roughly the timing of that presentation? And then secondly, on Abkinley second line and Transplant ineligible.

Speaker 9

So you've launched a DLBCL4 trial last year. Could you maybe talk a little bit about the proposition for that setting against the DLBCL1? Thanks.

Speaker 1

Thanks for both questions. Judith, why don't you talk a bit more about the acasunumab data, which we are very excited about to present this year and a bit more on timing. And then Tay can address the abcuritumab question in the second and plus DLBCL setting after that. Judith?

Speaker 8

Yes. So thank you for the question. As you know, we presented the best the first Kaplan Meier curves on overall survival last year at ASCO. We show very interesting durability, albeit the curves were not with enough maturity or with more maturity, we expect to say the same signal and this is what we will present later this year. So basically, durability of the time to event endpoints mainly OS.

Speaker 1

Thanks, Judith. And Tay, maybe a comment on the second line plus question for APCO.

Speaker 5

Yes. Thank you. And then maybe I use it as an opportunity to more broadly layout our diffuse such B cell strategy as it relates to Abkinje. So initial launch as you know as a single agent in third line plus going really well. Then the next extension of data was in combination, getting data in our hands and providing confidence to physicians and patients that this is a safe and an efficient way of administering this new mechanism.

Speaker 5

The GMOX data now recognized with 2a classification by the NCCN, meaning this is something that in the judgment of the NCCN is providing benefits to patients. And then we have the Phase III that is ongoing with lenalidomide. These are complementary in our minds and give a opportunity of choices for investigators to treat their patients respected of their needs, either somebody who needs more debarking or maybe somebody who's a little bit more fair. Really, the main focus is actually frontline. This is something I think we spoke about this and we also put this on the slide.

Speaker 5

The study is fully accrued to anticipate the readout in 2026. And a lot of the data that we're generating now is in anticipation of that dataset and to really supplement a very robust complementary data set in frontline such that when this indication hopefully is going to be that positive, we'll have again a very complementary data set to provide physicians with all opportunities to treat their patients. That's essentially broadly the strategy. And this is why also in second line we have a chemo and a non chemo combination strategy, if that makes sense.

Speaker 1

Thanks, Tay. I think it's very clear. Let's move on to the next question.

Operator

Thank you. And now we're going to take our next question. It comes from the line of Shandeng from UBS. Your line is open. Please ask your question.

Speaker 10

Hey, thank you very much for taking my question. Just one on Abkinje, please. Just wondering, you mentioned the frontline DLBCL trial could be could have readout by the end of twenty twenty six. Just wondering, if you have a readout by end of twenty twenty six, do you think you will have two year or three year follow-up at that time? And that time that follow-up time frame, do you think that's actually enough to allow FDA to give a decision without being asked for longer follow-up just considering the previous precedent?

Speaker 10

Thank you very much.

Speaker 1

Thanks, Seon, for the question. Very exciting one. So I'll let Tay address that. Tay?

Speaker 5

Yes, sure. I mean, so first things first, so the study was fully approved in the summer of last year. And so then there is an event driven endpoint PFS that is the accepted endpoint. And the population in the study is two IPI or higher, but there's also a subgroup analysis for three IPI and higher. These events play out and we anticipate they play out in 2026.

Speaker 5

That would mean that the study would meet its statistical defined primary endpoint. I think what you're referring to is the challenge that the FDA had with a lack of oversurvival benefit initially as it relates to the Polariq study. And so obviously it will be whatever the data will be, but based on the Phase two data set that we have generated, a pretty robust Phase two data set, we are quite optimistic actually that the signal in the experimental arm will be significantly stronger than the one I was seeing in PolariX. And so we don't anticipate that it's going to be an issue for us.

Speaker 1

Thanks, Tay. Let's move on to the next question. Thank you, Sian.

Operator

Thank you. And the next question comes from the line of Yaron Weber from TD Securities. Your line is open. Please ask your question.

Speaker 11

Great. Thank you so much. So maybe just, Tavy, just a follow-up. Should we assume that the second line follicular and second line DLBCL that data by year end twenty six, is that fileable assuming positive as well, so you can file both for first and second line or do you need more data from second line? And then just secondly on TIVDAC, so it sounds like from now on, you're going to be the lead commercialization party and you will book sales in The U.

Speaker 11

S, Europe and Japan. And how do we model that? Like how do we is there a royalty, I assume, back to Pfizer? Congrats on getting that. Thank you.

Speaker 1

Thanks, Jaren, for the question. So Tay, you can address the question on the very exciting developments with adcaritumab. And then Brad, why don't you explain the exact contract on TifDAC and commercialization to Jaren after Tay? Tay?

Speaker 5

Well, just to clarify, what Jan also said at the beginning in his prepared remarks, there are three of the five ongoing Phase IIIs that are fully accrued and awaiting a readout based on events, let's say, in third line diffusers B cell in second line, fully driven former, which is in combination with R2 and in front line diffusers B cell. And we were talking about the front line diffuse such PISA study that it finished its core last year and where we anticipate a readout by events earlier than it was initially prognosticated. And that's also true for the second line follicular lymphoma Phase III, which also accrued significantly faster than initially projected and thus because this is event driven studies, we anticipate a readout earlier than initially projected.

Speaker 1

Thanks, Tay. And then maybe move on to Brad for the exact commercial formulation

Speaker 5

of the

Speaker 1

contract for TifTech. Tay, Brad?

Speaker 2

Yes, no, just thank you. And again, we are excited about the opportunity as it provides us the opportunity to expand our commercialization footprint. But the terms of the agreements as mentioned earlier remain that U. S. And China are as is where Pfizer is actually still a lead party in both of those areas as we're still co promoting here in U.

Speaker 2

S. And then Europe and rest of world including Japan, we will be the lead party at that point and there will be a low double digit royalties involved as per the contract that we've already set up. But it's just as a reminder, The U. S. And China remain the same.

Speaker 1

Thanks, Brad. Very clear. Thanks, Jaron, for the questions. Let's move on to the next question.

Operator

Thank you, Jan. And now we're going to take our next question. It comes from the line of Matthew Phipps from William Blair. Your line is open. Please ask your question.

Speaker 12

Hello. Thanks for taking my questions. Are you guys able to disclose if you're going to use a folate receptor alpha expression cutoff for the endometrial cancer Phase III? And then on Mackenzie, given I don't know maybe half a year of launch, maybe a little more than that in follicular lymphoma at this point. Do you see any broader utilization in follicular given no need for hospitalization?

Speaker 12

Just wondering if that is helping get into community settings and if you think that will be a continuing trend. Thank you.

Speaker 1

Thanks, Matt. For the questions, and I think Tay, you can address both, both the follicular septal alpha, a question for enemitreal and then also the APCO question.

Speaker 5

All right. First things first. So this question has come up a couple of times, so I'll try to be very clear. So first, follicular receptor alpha is a validated target in ovarian. In PROC, essentially all patients have some degree of folate receptor alpha expression.

Speaker 5

Second, and this is partially related to the antibody that is the component of VenaS and the internalization rate and partially related to the linker and the stability that comes to the hydrophilic linker. The profile of VenaS is that it has generated and we have this data and we to the degree also in the ASH1 presentation already disclosed it, but there's obviously more data that we have internally that we're not able to disclose yet, has generated robust data across the entire spectrum of photoreceptor alpha expression including patients who are by the technicality of the assay called negative. And I spoke to that before. This is to the degree also a function of the sensitivity. So to be clear, our strategy in the Phase two and our strategy in the Phase three is to not select a fluid alpha receptor expression.

Speaker 5

Now we do stratify in the Phase three by the various cutoffs, which is one hundred and twenty five and seventy five and that's just good practice. And Abkinje, sorry. On APKINI, the question was, whether the lack of hospitalization is going to help us expand into areas outside of the larger academic institutions. And I think that is certainly a general part of our strategy with Epkinje. And that's my understanding also playing out already that the utilization of Epkinje in follicular lymphoma is helping us to get access into institutions that originally were not open to using Abkinje in the diffuse such business setting and that's also how the community is getting more comfortable and that leads also to the discussion on our active efforts to remove hospitalization from the diffuse such visa label.

Speaker 5

But I would actually ask Brad to maybe add from his point of view to this.

Speaker 1

Okay. Do you want to comment on this? Yes.

Speaker 2

Thanks, Ty. And I agree with what you said. I think it's just another validation of physicians reported really strong response to our favorable clinical profile, the dual indication as well as the positive label without hospitalization that's required or not required in FL. So we do feel confident that this FL approval has and will continue to help us deliver innovative bispecifics across multiple histologies across broad and diverse sites of care as well. So it's just reinforcing that from the physician standpoint.

Speaker 1

Thanks, Brad. And Matt, to top it off, as a reminder, there is no requirement for any hospitalization in any of the ongoing Phase III trials. So I think that should clarify that. Let's move to the next question.

Operator

Thank you. The next question comes from the line of Keesa Ding from Redburn Atlas. C. Keesa is open. Please ask your question.

Speaker 10

Hi. Just one quick question on the RHINO S, because you just mentioned about your clinical development plan in ovarian cancer and endometrial mitral cancer. I'm just wonder what is your clinical development plan for other solid tumor indications such as lung and breast? Thank you.

Speaker 1

Very good question, Chris. And we will let Tay comment on that. Tay, or excitement about tumors?

Speaker 5

Yes. So there is indeed, as you were alluding to, for the subtype of expression in non small lung cancer, particularly in patients who have AGR mutation, but not only restricted to that and in triple negative breast. And we already spoke about that there will be activities in that range. We already have a cohort in non small cell lung cancer with patients who have EGFR mutations in second line open and are enrolling patients in that cohort. And so hopefully we'll get validation of what we all believe, which is that this asset will also have efficacy in these two indications and then we're going to inform you about next steps quite timely.

Speaker 1

Thanks, Tay. Thanks, Gise for the question. Let's move on to the next question.

Operator

Thank you. And now we're going to take our next question. And it comes from the line of Justin Smith from Bernstein. Your line is open. Please ask the question.

Speaker 13

Yes. Thanks very much. I've got two. First one just on Dara, if you wanted to possibly share any thoughts about the potential impact from the potential re launch of Glenrep this year? And then the second one, just on the buyback, and sorry if I'm thinking about things the wrong way, but just trying to understand why you've announced that now and not waiting till after the Hexabody decision from J and J?

Speaker 13

Just is it a case of if there's some interesting assets out there or just any thoughts on why the buyback timing now? Thank you.

Speaker 1

Thanks, Justin, for the question. So I think the direct question is definitely more a question for J and J because they are developing daratumumab, but I'll ask Tay to give his perspective because he's an expert in multiple myeloma. Maybe you can say some general things there on the landscape Tay. And then Anthony can absolutely give you more rationale and thinking behind the buyback, which we just announced today, Justin. Tay, maybe some further color on Blenrep and the landscape in multiple myeloma?

Speaker 5

Yes. I would hesitate to comment and so on another company's assets broadly speaking. It's always good for patients that there are a lot of opportunities and I think we should leave it at that.

Speaker 1

All right. I agree with that, Ty. So I'll ask J and J as the feedback, Justin. And then for Anthony, maybe more rationale on the buyback right now?

Speaker 3

Yes. Happy to give you a little bit more context here. Look, our capital allocation priorities are super clear and are aligned with fueling revenue growth and enhancing shareholder value. Our first priorities I highlighted is really accelerate the development of our late stage pipeline and maximizing the success of our commercialized medicine as I highlighted. Second priority is pursuing focused BD and M and A.

Speaker 3

And after we evaluate these opportunities from these first two priorities, we can consider our third priority, which your question is about, which is return of capital. As a reminder, here in 2024, we executed an approximate $500,000,000 buyback of 1,800,000.0 shares. And for 2025, having carefully considered this, looking at all factors, we announced today our plans to buy back an additional 1,900,000.0 shares. And we really think this strikes the right balance of fueling the revenue growth and enhancing shareholder value. So I think this is the appropriate time to really outline for all of our stakeholders, our shareholders, our capital allocation framework and priorities.

Speaker 3

And I think we've stepped through that in a fair amount of detail and very clearly outlined these priorities and also demonstrated how we've executed against that framework in 2024 and how we're set up very well to continue to execute against that in 2025.

Speaker 1

Thanks, Anthony. I think it's crystal clear. Thanks, Justin, for the questions. Let's move on to the next analyst.

Operator

Thank you. And the question comes from the line of Vikram Purohit from Morgan Stanley. Your line is open. Please ask your question.

Speaker 7

Great. Thanks for taking our questions. We had one on BD as a follow-up to the last question and then one on guidance. So on BD, I mean given you noted 2025 is a heavy execution year for the pipeline, I just wanted to see how strong of a priority external BD and M and A could be for the year. And if you decide to go that route, what is the profile of the assets you'd find most interesting and attractive to kind of bring into the pipeline where it stands now?

Speaker 7

And then secondly, on guidance, I was just wondering if you could provide a bit more color about what the drivers are for the bookends for the revenue, gross profit and OpEx guidance that you outlined for the year? Thank you.

Speaker 1

Thanks Vikram for the questions. Let me address the BD one and then Anthony can do the guidance question. So the BD is very, very important for us Vikram. We want to organically and inorganically strengthen the pipeline accelerate it. What we will do is focus on antibody based medicines because that is a field of expertise.

Speaker 1

We did it very well last year with Perform Bio. I can tell you that we did this not this acquisition in record time and actually run into the Chief Medical Officer of a very large pharma and the Head of Oncology of a very large biotech we all know, who set up basically congratulations on the Perform Bio deal and you snapped it away in front of our face because we are simply much quicker than other companies. And what we are looking for, FREECOM is antibody based medicines which are totally differentiated. We can use our expertise in this field for over twenty five years now to really zoom into the right opportunities and that should be Phase three programs or Phase three ready programs ideally for Genmab and that is to complement our own pipeline. We are also filling our own pipeline.

Speaker 1

We are putting more and more new molecules into in the pipeline ourselves from our own platforms. We have several platforms now ADC platforms, which are responsible for over 50% of our pipeline right now. Then we have sorry, 40% of our pipeline and the 50% is about bispecifics at this moment and the rest is hexa body. So we have molecules from our own pipeline, but we also look very actively at companies having interesting assets, which we can then accelerate like we did for Rhino as we described today in the call. I mean within the year of the acquisition already announcing two Phase three and potentially others to come in other tumors.

Speaker 1

I think it's really belonging is fitting very well with our expertise as a developer of differentiated antibody medicines. I think I believe it would adapt, Vikram, so we'll have to see how effectively we can execute that we are looking at multiple opportunities as we speak. So we are very busy with that. And let's now move to Anthony to give a bit more color of the guidance.

Speaker 3

Yes. Vikram, I think the starting point I would really just highlight for you to really kind of frame this out.

Speaker 1

And

Speaker 3

hopefully this is super clear for both 2024 and 2025. From my perspective, we absolutely delivered on our financial commitments. If we zoom in on 2025 and just look at the really the quality of the guidance we put forward, total revenue growth and all my comments will be at the midpoint, total revenue growth at 12%, recurring revenue growth of 18% with $100,000,000 plus non recurring revenue headwind. Looking at the improving quality of our revenue profile, recurring revenues now at 95%. If we look at then the performance of Epkimley and TivDac, we can really see the investments we've made, really focused investments we've made over the last couple of years and building out our commercialization capabilities really paying off.

Speaker 3

You can look at the net product sales collaboration revenue line where we see growth for that line really driven by again, Ep Kinley and Tibdak, primarily Ep Kinley to be clear, projected growth of around 39%, nearly 40% at the midpoint. So it gives you a sense of the quality of the revenue profile. Of course, a big driver of our revenue continues to be DARZALEX. And here, we provided our range of $12,600,000,000 billion dollars to $13,400,000,000 13 billion dollars at the midpoint. So I would say this is probably the primary driver here of the revenue guidance range.

Speaker 3

In terms of our investments, again, we've really delivered on our commitments here, really purposefully reallocating our investments to the late stage pipeline and really investing in a smart way in sales and marketing to really deliver on today's launches, but to continue to build that foundation and platform for upcoming future launches and again delivering on our commitments. In terms of the OpEx range around $2,100,000,000 to $2,200,000,000 this is really driven by the three investment priorities and where these exactly will land. It really has to do with the expansion and acceleration of EPCOR clinical development with the five Phase three trials ongoing and expansion of EPCOR in our key markets. Then we have RINA S with the start of Phase three and second line plus endometrial cancer, as well as the overall trajectory of the Phase III trial in PROC. And of course, we have the ongoing work with GEN1046 or acasumumab with the Phase II start in another indication and also progressing the Phase III Vikram.

Speaker 3

So it's really going to be these three programs, I would say, that are largely driving the variability in OpEx. But again, if we sort of if I finish my comments where I started, really we continue to deliver on our financial commitments, very strong recurring revenue growth and seeing that come through to the bottom line in terms of the 16% operating profit growth at the midpoint we're projecting or more than 1,100,000,000

Speaker 12

Thanks and very helpful.

Speaker 3

Thank you.

Speaker 1

All right. Thanks Vikram for the questions. Let's move on to the next one.

Operator

Thank you. And now we're going to take our last question for today. And it comes from the line of Rajan Sharma from Goldman Sachs. Your line is open. Please ask your question.

Speaker 14

Hi. Thanks for taking my question. So I was just wondering if we could get an update on GEN1042. I know this slide said that there's going to be a decision in 2025, but it's obviously been a decision that's been pending for some time. So just interested in understanding what you're still trying to establish here.

Speaker 14

And if we could just get a little bit more clarity on the timing, is that likely to be first half or second half of the year? And just one for Anthony on clarification on the guidance. Is there anything assumed in guidance for October development? And then a very quick one to wrap up. You previously talked about potential developments in immunology and inflammatory disease either through your own internal pipeline or through external sources.

Speaker 14

Could you just kind of talk to your latest thoughts there and appetite both from an internal and external perspective? Thank you.

Speaker 1

Thanks, Haiyan, for the questions. So I will ask Judith to comment on the timing for ten forty two and Anthony for the what is in the plans for ten forty two in development. Let me start with the INI question. What we already said, right John, is that Abkinli, we believe is an excellent candidate for development also in select INI indications. So we are in discussions now with Abkinli to actually plan and discuss next steps for Abkinli.

Speaker 1

We think it's an excellent molecule, which will likely work really, really well in the INI area, but we also have collaboration with argenx, which is preclinical and a number of internal 100% owned program for Genlox. So we continue to be very focused on creating next generation differentiated antibody based medicine candidates for INI and then we will update you once we are closer to the clinic. But the most advanced candidate is Abkin Li. Then let's move on to Judith to speak a bit about timing for ten forty two units.

Speaker 8

Yes. Thank you, Jan. And thank you for the question. So as we put in the slide is by 2025. I cannot be more precise at this point because as you know, durability is key for IO and we need to assess durability on first line and then undergo the prioritization within our own pipeline and head and neck external is moving as well.

Speaker 8

And we will come with all these data sets more likely by the second half of the year.

Speaker 1

Thanks, Judith. And then Anthony, what is in the budget of the guidance for 2025 for October?

Speaker 3

Yes. Well, look, Rajan, thanks. And good to hear from you. I think as we sort of think about October has the of course the ongoing work that Judith just alluded to. And I'd say the future work is really just not really material one way or the other this year.

Speaker 3

That's primarily based into the function of timing.

Speaker 1

Then finally to top it off, Rael, I can tell you that not only we, but also a part of BioNTech is very excited about what we have seen up to now with October. We need more data as Judith already alluded to, but we also think there was a great potential for Combi combining ten forty two with different ADCs and other concepts with both companies are working on. So I think exciting times, we will need a bit more data to get more a better feeling for durability, but a high level of excitement. All right, operator, this was the last question. So thank you all for calling in today to discuss Genworth's financial results for 2024.

Speaker 1

If you have additional questions, please reach out to our Investor Relations team. They are ready to answer your questions and then we hope that you all stay safe, keep optimistic and we very much look forward to speaking with you all again soon.

Operator

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

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Earnings Conference Call
Genmab A/S Q4 2024
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