Hello, and welcome to the Genmab Q2 2021 Conference Call. Throughout the call, all participants will be in a listen-only mode, and afterwards there still be a question-and-answer session. Just to remind you, 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 delayed or unsuccessful development projects. Genmab is not under any obligation to update statements regarding the future nor to confirm such statements in relation to actual results unless this is required by law. Please also note that Genmab may hold your personal data as indicated by you as part of our Investor Relations outreach activities in order to update you on Genmab going forward. Please refer to our website for more information on Genmab and our privacy policy. Today, I’m pleased to present Jan van de Winkel. Please go ahead with your meeting.

Hello and welcome to the Genmab conference call to discuss the Company’s financial results for the first half of 2021. With me today to present these results is our CFO, Anthony Pagano. For the Q&A, we will be joined by our Chief Development Officer, Judith Klimovsky; our Chief Operating Officer, Anthony Mancini; and our Chief Medical Officer, Tahi Ahmadi. Let’s move to slide 2. As already said, we will be making forward-looking statements. So, please keep that in mind as we go through this call. Let’s move to slide 3. Genmab has a science-focused and innovation-based culture, and collaborations and partnerships have always been part of our DNA. During today’s presentation, we will reference some of the products being developed under the strategic collaborations, and this slide acknowledges those relationships. Let’s move to slide 4. Preferences on this slide are some of the many successes that propelled our growth throughout our 22-year history. One key factor in our future growth is the breadth and depth of our proprietary pipeline, which we anticipate will expand to 9 programs in the clinic by the end of this year. So, now, let’s move to slide 5, and look at some of the recent achievements in our pipeline and beyond. We moved a major step closer to our goal of bringing our al medicines to patients with the FDA’s acceptance of the tisotumab vedotin BLA for priority review. Data from the clinical trial on which the BLA was based, the innovaTV 204 Phase 2 study was also recently published in the Lancet Oncology. As we shared with you last quarter, the PDUFA target date for a potential U.S. FDA approval is October of this year. Along with our partner, Seagen, we look forward to updating you on the progress of tisotumab vedotin in metastatic…

Great. Thanks, Jan. Let’s move to slide 7. As I’ve done in the past, I’d like to start with an overview of our financial framework and the related key drivers. First off, let’s think about our revenue profile. On the left, you can see our current and future recurring revenue streams. There are now four approved products created using our innovation. That’s DARZALEX, Kesimpta, TEPEZZA and most recently, RYBREVANT. Each of these have exceptional growth profiles. Taken together, we expect them to generate significant cash flows for us in the years to come. Then, we have an additional potential revenue stream that could come on line later this year as we submitted the BLA for tisotumab vedotin in Q1. If tiso is approved, that would bring the total number of approved products to five, which for me, is really exciting. Now, on to our focused approach to investment shown on the right. We’ll continue to invest in our business and capabilities to position us for sustained success, and we’ll accelerate and expand the potential winners in our pipeline. And we’ll also ensure we are ready to launch, should tiso and in the future, epcoritamab be approved, as well as investing, we will, of course, remain focused on the bottom line. Now with this context set, let’s take a closer look at an important component of our recurring revenue growth, DARZALEX sales on slide 8. We saw continued strong performance for DARZALEX in the first half of 2021. You can see that in the chart on the left. Overall, DARZALEX sales grew by 52%. That’s net sales of approximately $2.8 billion, which translates to DKK 2.36 billion in royalty revenue. This exceptional growth was driven by continued strong market shares across all lines, and by the strong uptake of the subcu…

Thank you, Anthony. Let’s move to slide 14. Our world-class team continues to work tirelessly to meet the many ambitious goals we set for ourselves for this year. We are especially excited to share updates on our clinical programs, including data from both our DuoBody and our HexaBody-based proprietary programs. As we continue to build our pipeline and evolve into a leading fully integrated biotech innovation powerhouse, we are looking forward to a busy second half. So, let’s now move to our final slide, which is slide 15. That ends our presentation of Genmab’s first half 2021 financial results. Operator, please open the call for questions.

Thank you. [Operator Instructions] Our first question comes from the line of Wimal Kapadia from Bernstein.

Great. Thank you very much for taking my question. So, could I just ask on epco? Just curious how you think about the POLARIX data from earlier this week from Roche, suggesting we have a new standard of care in first-line DLBCL. Just wanted to hear your thoughts on a potential trial for epco with Polivy, how quickly you could begin a pivotal trial in this setting? I’m curious if you actually believe first-line DLBCL is the largest opportunity for epco, at least based on what we know about the molecule today? Thank you.

Thanks, Wimal, for the question. And I’m going to pass the question on the Polivy, trial to Judith Klimovsky and then Anthony Mancini can potentially detail the first line -- diffuse large B-cell lymphoma market opportunity. I can tell you, Wimal, we are going for that, for sure. And Judith can explain how the POLARIX data may potentially impact the route for the diffuse large B-cell. Judith?

Yes. Thank you, Jan. So, we are aware of the result, the same as you. Thank you for the question. So far, we have a high level announcement without details on the data. As soon as the granularity of the data becomes available, we will assess it thoroughly and determine what is the impact or what other steps we need to take to ensure our clinical development plan is aligned with the most current potential standard of care. So, it’s very premature to say, because we don’t know the results in detail.

And, Wimal, just to follow-on on that in terms of the market opportunity, we certainly see the frontline DLBCL opportunity as a significant one for epcoritamab, but we also see a broader lymphoma opportunity as well. So, I think, again, as Judith commented, it’s early -- too early to comment at this point, and we’ll certainly ensure you’re informed as we evolve the strategy.

Thank you, both. Wimal, I think I give it back to you now.

Okay, great. Thank you very much.

Thank you.

And the next question comes from the line of Matthew Weston from Credit Suisse.

Hello. Good afternoon. This is Elizabeth Walton on for Matthew Weston. I’m wondering if you can help us a little bit on costs. We’ve seen you raise your sales guidance, but not your guidance for your operating expenses. Perhaps you can help us think about the cadence of your commercial spending, given the tisotumab Japanese submission is delayed? And then, perhaps on the R&D spending, you’ve underspent versus consensus expectations for this quarter. Can you also help us there in thinking about your cadence with R&D spending going forward? Thank you.

Thanks, Elizabeth for both questions, and I will hand them over to Anthony Pagano. Anthony?

Sure. Thanks, Elizabeth. You’re right. I think overall, H1 costs are a bit on the low side relative to our full year guidance. Maybe starting on the R&D, expenses were impacted by phasing of costs related to the various pipeline programs, and particularly epco and DuoBody-PD-L1x4-1BB. Here, from our perspective, it’s a matter of timing, and we expect costs related to these programs and other programs and sort of R&D activities more broadly to ramp up in the coming quarters. And we also have some chunky CMC investments to come later in the year. And as a reminder, on epco, together with AbbVie, we are still planning some additional late stage trials. So, more to come on that. So overall, from the R&D perspective, it’s primarily timing and phasing, and we expect to make up a lot of it in the second half of the year. On the SG&A side, our focus here really is on the near-term potential launch of tisotumab vedotin. Team is really geared up to make sure we’re ready if that ultimately, the PDUFA date is hit in October. Team is working hard on that, and maybe in a minute, Anthony Mancini, will provide a bit of color on that one. And at the same time, we’re also super excited about epco. In this regard, the team is preparing for epco and potential launch, and overall, making some important investments in building the overall commercialization infrastructure and a lot of exciting prelaunch activities. So, in summary, Elizabeth, we believe our 2021 guidance on OpEx to be at the right level for now. Anthony, anything you want to add as it relates to SG&A and some of the prep going on for T-cell?

Yes. No, I’d just, Anthony, would add just a couple of comments as it relates to tisotumab vedotin. And one of the important things is that we are now, as Jan alluded to earlier, working towards launch readiness for the target PDUFA date of October 10 for tisotumab vedotin in collaboration with our partner, Seagen. We actually are now launch-ready in the U.S. with fully trained field teams in place in anticipation of that PDUFA date. And we’re really looking forward to a robust launch. We have robust launch plans in place, and we’re confident that we can ensure broad awareness and adoption of TV upon approval. So, that’s kind of where I’ll leave it.

Thanks, Anthony and Anthony. Thank you, Elizabeth, for the question.

And the next question comes from the line of Emily Field from Barclays. Please go ahead.

I hope I’m not getting too sloothy here, but it looked like in your internal development chart that the color bar for GEN1042 advanced this quarter from last quarter. So, I was just wondering if you could give us an update on when we may see that dose escalation data, in the back half of this year? And any guidance into what tumor type we may potentially see that in?

Thanks, Emily. I think, what I can say is that we have submitted multiple abstracts to different conferences and also an abstract for GEN1042 at one of the conferences in the coming months. We haven’t yet received feedback on whether that’s accepted, but I can tell you is that we are super, super excited about the data with 1042. And I hope that you will share that sentiment with us once you see the data. It’s a bit too early to comment on the exact tumors, but what I can tell you is that we have seen signals in multiple tumors. So, we have to further explore probably which ones to pursue, but we are very, very excited about 1042.

And the next question comes from the line of James Gordon from JP Morgan. Please go ahead.

This is James Gordon from JP Morgan. Thanks for taking the question. A question on GEN1046, please. The question was that GEN1046 isn’t the only Fc-silent 4-1BB PD-L1 bispecific in the clinic. So just beyond maybe time to market, where you are seeing differentiation versus some other companies that are also following the same approach? And also just in terms of how we might think about what data we’re going to see next, is it logical to think that we’re going to see the data all in one big lump. So potentially, it’s something like SITC in mid-November, or are we going to get the data at various different conferences over the year, for the 9 or 10 cohorts, please?

So, this is a question related to 1046, I think, James. I didn’t catch that in the beginning. Why don’t we pass over that -- yes, why don’t I pass over to Tahi Ahmadi, and Tahi can give you some further color on the type of data you can expect in the coming time, James. Tahi?

Yes. Thank you. If I understood the question correctly, there were two components. One was on the construct in and of itself. And I think we’ve spoken many times about the complicated biology of engaging 4-1BB in this condition and activation that we try to achieve with our model and as it relates to the advantages coming from the DuoBody platform to try to interrogate that complicated biology. So, we feel very comfortable and confident in our asset, because we knew how difficult it was to get actually a construct that would elicit the biology that we were looking for. As it relates to the data, and then it’s probably fair to say that there will be some data readouts as data becomes available. We’re continuously enrolling and obviously, generating data. We will probably provide some updated data at SITC. Again, similar to the comment that was made for 1042, obviously, we have submitted some data, but we have not yet confirmation that this will be presented. And for the other tumor types, as we generate the data, we will present them at an opportune time when the data is mature, any updating conferences, probably more in the first half of next year.

The next question comes from the line of Michael Novod from Nordea. Please go ahead.

So, just a question to epco in CLL. Maybe you can just provide whether some of the data you’ve submitted to conferences also include some of the initial data. I know it’s early, but data in CLL. And then secondly, maybe you can just remind us about the inclacumab royalties and economics with now GBT. And then lastly, in terms of your dara sales guidance, I know it’s, of course, also based on what sort of feedback you get from J&J. But, the midpoint indicates no growth between first half and/or the low point -- no growth between first half and second half. Is that even realistic? And if it is realistic, then what should drive no growth in sales in the second half? Thanks.

Thanks for the questions, Michael. I will handle the first two and then pass the third question over to Anthony Pagano. So definitely, epco, multiple data sets submitted, Michael, and I’m willing to say here, also including the early data for CLL from the first patients. And let’s hope that we can present them near the end of the year. Then economics of inclacumab. This is another program which we started off at rush in the early -- I think, it was around 2003, 2004 time frame. Economics are very similar, I can tell, to the TEPEZZA economics, Michael. I don’t know the exact milestones here, but they’re very, very similar. The contract -- the molecule was made in the same era as teprotumumab. So I probably want to leave it at that and then hand the other question over to Anthony Pagano.

Yes. Thanks, Michael. And I guess, after a strong start to the year, I can see why you asked the question. For me at this stage, our guidance sort of feels at the right level. And let me spend a couple of moments and explain to you why. I mean to start and sort of thinking about the growth rates that we saw in the first half of the year, I think it’s useful to remember that the year-over-year growth rates that we saw were positively impacted by some of the favorable comps, right, due to the softness we experienced in the early parts of 2020 due to COVID. And turning to our guidance, when we think about our revised guidance for dara, we really focused on two main scenarios to kind of bookend it for you, Michael. First, the 5% sequential growth rate we saw in Q2. And this is really the most recent data point we have and reflects the continued very strong fundamentals for dara, where we’ve seen very nice market shares across the board, particularly in frontline where we’ve seen some meaningful gains in the U.S., and this, of course is coupled with ongoing strong uptake of the subcu formulation. So, this level of continued growth gets us towards the top end of our guidance range of DKK 5.9 billion. So, the second scenario and the second sort of point I’d like to make, Michael, is, unfortunately, as you know, we also find ourselves in the midst of a global pandemic. As we’ve heard from a number of the other companies, COVID continues to represent a challenge in diagnosing new cancer patients, and in some cases, getting the needed treatment to existing cancer patients. Now, for sure, so far, this doesn’t seem to have been a significant barrier for dara. But it’s something I think we do need to be mindful of and take into consideration when formulating our guidance. So here, to reflect what I just explained and the fact that we could see some unexpected choppiness in the second half of the year, we assume that H2 sales level that approximates H1, and that gets us to the bottom end of our guidance range of DKK 5.6 billion. So, when you take this all together, we believe that the DKK 5.6 billion to DKK 5.9 billion is the right level for us overall. And maybe just to step back for a second though, overall, we continue to be super pleased with the very, very strong fundamentals of dara, the continued investment that’s being made in terms of continued development of dara as well as the overall growth profile for DARZALEX sort of generally.

The next question comes from the line of Michael Schmidt from Guggenheim Securities. Please go ahead.

I had another one on epcoritamab. I noticed that your broad Phase 1/2 study, the 480-patient study is still enrolling patients. Just curious if you could update us how you’re tracking towards completion of enrollment of some of those cohorts and how you’re thinking about potential time lines for accelerated regulatory submission in some of those indications?

Thanks for the question, Michael. I will hand it over to Tahi Ahmadi, who is on top of the recruitments. Tahi?

Yes, I am on top of the recruitment, but I’m not entirely sure if I will communicate them in detail. But, the study has multiple arms with different B-cell malignancies that are obviously accruing at different speeds because of the different incidence prevalence as it relates to the specific inclusion exclusion criterias for relapsed/refractory diffuse large B-cell, relapsed/refractory follicular lymphoma and relapsed/refractory large B-cell lymphoma. So, it’s a little bit too early to speculate on the time lines. But we are quite happy with where we are in the recruitment, particularly with the COVID challenges that certainly have had implications broadly across the entire landscape. We’ve been enrolling basically on our projections.

Michael, please go ahead.

I was just curious, sorry, Jan, about the data update on epco later this year. Will this be another follow-up on the Phase 1 data, or will this include some of those Phase 2 cohorts as well?

What I can say, Michael, is that we have submitted multiple abstracts, and that will include data. I already said that in my answer, the first answer on CLL, but it will also be potentially some combination data -- combination therapy data, which is new, which you haven’t seen anything from -- and potentially update, of course, on the -- already the Phase 1/2 data, which you have seen already before. So, it will be a combination of data. And I think we’re very excited about, I think, the potential of epco. We believe it will be an absolute transformative therapy in the lymphoma space, and we can’t wait to hear back from the conferences, Michael, that the objects are accepted. And then, we will have an open discussion on that.

And maybe to add to the question, I think that general like registration-enabling -- or potential registration-enabling data sets are usually first submitted to health authorities before they are presented in the public.

And the next question comes from the line of Graig Suvannavejh from Goldman Sachs. Please go ahead.

Hey. Thank you very much. Good afternoon, everyone. Thanks for the update as well. Just two questions. One, in your interim report, you quantified the potential impact of the outstanding DARZALEX litigation at DKK 146 million. I was just wondering if you could provide any color on the math on how you got to that. And then, assuming continued growth in DARZALEX subcu, would you expect that for the second half, it would be somewhere in that neighborhood or slightly greater? So, that’s my first question. And then second, just on DARZALEX subcu. Halozyme reported earlier this week and they shared that they had data to suggest that the conversion from IV to subcu was about 66% in the U.S. So, I was just wondering if you -- if that data matches kind of what you’re seeing in the U.S.? And can you comment on what you think that conversion looks like outside the U.S.? Thanks so much.

Thanks, Graig, for the question. So the first one can probably best be handled by Anthony Pagano, and the second question on the conversion rate and then how it looks in the U.S. versus rest of the world can probably be addressed by Antony Mancini. Maybe Anthony Pagano, you can start.

Yes, Graig. So, we’ll just have some fun, just some maths together here. We provided our original [Technical Difficulty] for 2021, I talked about, call it, the headwind as it relates to what Janssen is doing in terms of withholding some royalty from us [Technical Difficulty] the appropriate thing is [Technical Difficulty] not recognize that revenue. That’s exactly what we’ve done. I highlighted at the beginning of the year that we thought the impact [Technical Difficulty] DKK 150 million. Now with the improved guidance that would be DKK 500 million on a full year basis. How do you get to that number? So effectively, it’s a function of what the total subcu sales are relative to total sales. If you multiply that through and [Technical Difficulty] you referenced here for H1 [Technical Difficulty] million or so. I think on a go-forward basis, as we’ve kind of already seen [Technical Difficulty] total level of sales [Technical Difficulty] to be higher, continue to grow as we move [Technical Difficulty]. So, we do expect that number to increase in the second half of 2021, as total sales [Technical Difficulty] but also as the total amount of subcu sales relative to IV sales also continues to grow up. Hopefully, that helps you get to the math. I can’t give you [Technical Difficulty] royalty rates, et cetera, specific amounts on what Janssen’s withholding. It’s just something we’re not part [Technical Difficulty] contract with [Technical Difficulty].

Thanks, Anthony. Maybe Anthony Mancini, some color on the conversion from IV to subcu?

Thanks, Jan, and thanks, Graig, for the question. On IV and subcu usage, it’s really about data set. So what Halozyme [Technical Difficulty] depend on the data set. But it’s largely in line with what we’re seeing based on IQVIA and Symphony data. And at the end of Q2, what we saw about 64% of U.S. [Technical Difficulty] expressed in terms of [Technical Difficulty]. Your question about outside the [Technical Difficulty] and obviously, Graig, that number continuing to evolve in a positive way with [Technical Difficulty] steady positive trend in [Technical Difficulty] U.S. If you look at more recent [Technical Difficulty] IQVIA and Symphony data. But if you look at outside of the U.S., now that the [Technical Difficulty] formulation is launched in the EU and [Technical Difficulty] achieved public reimbursement in a good majority of countries, in fact, one of the top five EU countries, we can say that it’s about 54% already subcu, and that’s really highly very [Technical Difficulty] on the system [Technical Difficulty] in each of the countries, which, as you know, are very different. So hopefully, that gives you a little bit of color on subcu inside the U.S. and [Technical Difficulty].

That’s great. If I could, just a quick follow-up. What do you think that max conversion could look like? I think there’s a good reason to think that some patients would prefer to stay on IV for a variety of different, whether it’s social factors. But can you help us think about where you think ultimately this conversion could go to?

Anthony, do you want to comment on that?

Yes. I can sort of give you my sense of this. Look, normally, when you have a subcutaneous version and an IV version practice, economics play a factor in sort of determining where it could go. Because in the case of FASPRO, that’s really not a factor, because they continue to both be in Part B. We really don’t see any huge barriers to continued subcu adoption in the U.S. And so, I think because of the -- in fact, it’s quite the opposite. It’s 3 to 5-minute injection versus a multi-hour infusion. So, we actually see more advantages than any disadvantages. And you mentioned kind of the social aspect of the infusion. It’s hard to tell exactly where that would sit, but there’s no other real reasons to not use subcu. Just hopefully, that gives you a little bit of color, Graig.

And the next question comes from the line of Jonathan Chang from SVB Leerink. Please go ahead.

On the Bolt collaboration, can you discuss the rationale behind partnering with Bolt to evaluate bispecific immune stimulating antibody conjugate therapeutics? And how does this platform compare to others, you may have evaluated in the process? I’d also be curious to know how you think about target selection for this approach. Thank you.

Thanks, Jonathan, for the questions. I will happily hand it over to Tahi, but I can tell you that we have had intense discussions with multiple candidates for these type of conjugates. And we’re super excited about the Bolt Biotherapeutics technology and platform. And we have -- we are already working with them now on a very large number of target programs. But, let me ask Tahi to first give a perspective on why we have selected the Bolt technology, and then maybe I can add to that at the end. Tahi?

Well, so -- I mean, let’s start -- first, thank you for the question, that we have -- as Jan was saying, we’re very enthusiastic about the potential of engaging in the immune -- innate immune system and see this very complementary to some of our mechanisms that we are currently having in clinical development or that are going to come in clinical development in the very near future. So, it’s very -- a complementary strategy to the things that we have already been working on, either standalone or collaboration BioNTech. We have looked, of course, at a number of companies that are working on this. We felt at the time that all of these deals that there was a good collaborative spirit and a joint scientific idea and belief with the colleagues at Bolt. So, this was one important part, and we also felt that they were very much leading, or at least on top of the field as it is emerging. And I think it’s -- all that is as to say at this point, as Jan alluded to, as these discussions went on, we had a lot of work that was already done in terms of proof-of-concept. And so, we are quite happy with what we saw, which led to the deal, and I don’t think we would, at this call, give any indications on targets, except that this is a very important cornerstone of our future strategy.

Thanks, Tai. What we should also say is that the approach is, of course, already clinically validated, Jonathan, in the HER2 space. This is very different from some other technology platforms. So, we are very, very excited. We have already, I think, more than several handful of potential targets we are pursuing, both at monospecific and with bispecific. So, I think there’s definitely more to come here, Jonathan. And we’re very, very excited about this new partnership, and we will focus it maximally from here.

[Operator Instructions] We have one more question from the line of Asthika Goonewardene from Truist Securities. Please go ahead.

I hate to dwell on this, but it’s just important for us to understand. So, I appreciate any color you can give here. For SITC, so GEN1042, Jan, you mentioned that there was a single abstract submitted. I’m curious if you can tell me how many abstracts with clinical data were submitted for GEN1046? And then, if I can tag on just another catalyst related question here. Previously, you’ve alluded that you might have epcoritamab NHL expansion data this year. I just want to know if you have any abstracts for that -- the NHL expansion being submitted. Thank you.

I think I can answer you that for 1046, we have submitted any abstracts. And for epcoritamab, we are not commenting on that because we have multiple abstracts data from different studies. So, we are not going to comment on that until we have heard back from the [indiscernible] on whether that’s acceptable or not.

And we have one final question from Kennen MacKay from RBC. Please go ahead.

Hi. Congrats on the quarter and guidance. And thanks for squeezing me in here. Jan, you mentioned epco potentially being a blockbuster therapy. I think another one from your pipeline that could fit that though is Cami, the ADC in development in collaboration with ADC Therapeutics. Just wanted to get your perspective on that asset and whether or not that GBS signal that’s being seen there is something that could improve as that moves forward in standard of care and Hodgkin’s are in solid tumors, or if there’s really any understanding of sort of where that’s coming from? Thanks and congrats again.

Thanks, Kennen, for the kind remarks and for the question. I’m going to hand over the ADC Therapeutics question on to Tahi. I think, he is always on top of that data. And Tahi can maybe give you a bit of perspective on how we look at that on the IL-2 receptor ADC concept. Tahi?

Sure. Yes. So, the challenge with this concept, of course, is the toxicity related to the payload, which is difficult to manage. And I think the team at ADCT is continuously working to optimizing the management of these toxicities. And so, I think there’s still some work to be done in order to fully assess the opportunity for Cami in both, solid as well as in Hodgkin. Because as the data right now, there are some concerns around the tolerability, particularly if you want to go into combination in the future. It’s probably all we can say from our end.

And as there are no further questions, I’ll hand it back for closing remarks.

So, thank you for calling in today to discuss Genmab’s financial results for the first half of 2021. If you have any additional questions, please reach out to our Investor Relations team. We hope that you all stay safe and remain healthy. And very much look forward to speaking with you again soon.

This concludes our conference call. Thank you all for attending. You may now disconnect your lines.