Full Press Release Details
Genmab Announces Financial Results for the First Half of 2019 and Updates 2019 Financial Guidance
August 14, 2019; Copenhagen, Denmark;
Interim Report for the First Half of 2019
The first half of 2019 brought truly transformational change to Genmab as we began the process of becoming a dual-listed company, with the potential to trade shares in both the U.S. (in the form of ADSs) and in Denmark. We also built upon our already successful relationship with Janssen with the signing of an agreement to collaborate exclusively on the next-generation CD38 antibody product candidate, HexaBody-CD38. We have seen encouraging pre-clinical data from HexaBody-CD38 and believe it has the potential to extend the promise of CD38-targeted therapies beyond what is currently available for patients, said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab. In addition to these key events, the first half of 2019 also saw the highly anticipated U.S. FDA approval for DARZALEX, based on the Phase III MAIA data. Now that this indication has been approved many more patients in the U.S. who are newly diagnosed with multiple myeloma will have a DARZALEX containing regimen as a choice for their initial therapy.
Financial Performance First Half of 2019
| Genmab A/S | Tel: +45 7020 2728 | Company Announcement no. 40 |
| Kalvebod Brygge 43 | Fax: +45 7020 2729 | Page 1/40 |
| 1560 Copenhagen V, Denmark | www.genmab.com | CVR no. 2102 3884 |
Genmab Announces Financial Results for the First Half of 2019 and Updates 2019 Financial Guidance
Genmab is updating its 2019 financial guidance published on February 20, 2019 due to increased royalty income related to the sales of DARZALEX and increased operating expenses as a result of the advancement of our product pipeline.
| Revised | Previous | |||
| MDKK | Guidance | Guidance | ||
| Revenue | 4,800 | 4,600 | ||
| Operating expenses | (2,750) | (2,600) | ||
| Operating income | 2,050 | 2,000 |
Genmab will hold a conference call in English to discuss the results for the first half of 2019 today, Wednesday, August 14, at 6:00 pm CEST, 5:00 pm BST or 12:00 pm EDT. To join the call dial +1 631 510 7495 (U.S. participants) or +44 2071 928000 (international participants) and provide conference code 4966139.
A live and archived webcast of the call and relevant slides will be available at www.genmab.com.
Marisol Peron, Corporate Vice President, Communications & Investor Relations
T: +1 609 524 0065; E: mmp@genmab.com
For Investor Relations:
Andrew Carlsen, Senior Director, Investor Relations
T: +45 3377 9558; E: acn@genmab.com
| Genmab A/S | Tel: +45 7020 2728 | Company Announcement no. 40 |
| Kalvebod Brygge 43 | Fax: +45 7020 2729 | Page 2/40 |
| 1560 Copenhagen V, Denmark | www.genmab.com | CVR no. 2102 3884 |
Interim Report for the First Half of 2019
| CONSOLIDATED KEY FIGURES | 4 |
| OUTLOOK | 5 |
| KEY 2019 PRIORITIES | 6 |
| PRODUCT PIPELINE | 7 |
| PRODUCT PIPELINE AND TECHNOLOGY PROGRESS FIRST HALF OF 2019 | 7 |
| SIGNIFICANT RISKS AND UNCERTAINTIES | 16 |
| FINANCIAL REVIEW | 17 |
| STATEMENT OF COMPREHENSIVE INCOME FOR THE 2ND QUARTER OF 2019 | 21 |
| STATEMENT OF COMPREHENSIVE INCOME FOR THE FIRST HALF OF 2019 | 22 |
| BALANCE SHEET | 23 |
| STATEMENT OF CASH FLOWS | 24 |
| STATEMENT OF CHANGES IN EQUITY | 25 |
| NOTES TO THE FINANCIAL STATEMENTS | 26 |
| ABOUT GENMAB | 39 |
| DIRECTORS' AND MANAGEMENT'S STATEMENT ON THE INTERIM REPORT | 40 |
| Genmab A/S | Tel: +45 7020 2728 | Company Announcement no. 40 |
| Kalvebod Brygge 43 | Fax: +45 7020 2729 | Page 3/40 |
| 1560 Copenhagen V, Denmark | www.genmab.com | CVR no. 2102 3884 |
Interim Report for the First Half of 2019
CONSOLIDATED KEY FIGURES
| 2nd Quarter of | 2nd Quarter of | 6 Months Ended | 6 Months Ended | Full Year | |||||||||
| 2019 | 2018* | June 30, 2019 | June 30, 2018* | 2018* | |||||||||
| DKK'000 | DKK'000 | DKK'000 | DKK'000 | DKK'000 | |||||||||
| Income Statement | |||||||||||||
| Revenue | 773,914 | 509,675 | 1,364,923 | 1,190,687 | 3,025,137 | ||||||||
| Research and development expenses | (563,376) | (318,889) | (1,109,456) | (631,440) | (1,431,159) | ||||||||
| General and administrative expenses | (73,371) | (55,742) | (144,224) | (100,158) | (213,695) | ||||||||
| Operating expenses | (636,747) | (374,631) | (1,253,680) | (731,598) | (1,644,854) | ||||||||
| Operating result | 137,167 | 135,044 | 111,243 | 459,089 | 1,380,283 | ||||||||
| Net financial items | (26,639) | 200,271 | 93,307 | 131,791 | 231,688 | ||||||||
| Net result | 84,885 | 260,527 | 157,094 | 459,101 | 1,472,141 | ||||||||
| Balance Sheet | |||||||||||||
| Cash position** | 6,950,953 | 6,070,935 | 6,950,953 | 6,070,935 | 6,106,094 | ||||||||
| Non-current assets | 1,166,449 | 524,090 | 1,166,449 | 524,090 | 1,027,974 | ||||||||
| Assets | 8,977,313 | 7,199,663 | 8,977,313 | 7,199,663 | 8,460,999 | ||||||||
| Shareholders' equity | 8,286,509 | 6,861,225 | 8,286,509 | 6,861,225 | 8,014,360 | ||||||||
| Share capital | 61,690 | 61,437 | 61,690 | 61,437 | 61,498 | ||||||||
| Investments in intangible and tangible assets | 14,210 | 19,019 | 35,574 | 47,791 | 477,366 | ||||||||
| Cash Flow Statement | |||||||||||||
| Cash flow from operating activities | 184,829 | 134,876 | 832,026 | 598,947 | 1,014,786 | ||||||||
| Cash flow from investing activities | (772,548) | (103,924) | (786,082) | (786,691) | (1,777,553) | ||||||||
| Cash flow from financing activities | 26,120 | 42,332 | 15,618 | (85,511) | (70,901) | ||||||||
| Cash and cash equivalents | 582,863 | 1,087,165 | 582,863 | 1,087,165 | 532,907 | ||||||||
| Cash position increase/(decrease) | 120,681 | 369,763 | 844,859 | 648,198 | 683,357 | ||||||||
| Financial Ratios | |||||||||||||
| Basic net result per share | 1.38 | 4.26 | 2.56 | 7.51 | 24.03 | ||||||||
| Diluted net result per share | 1.35 | 4.21 | 2.53 | 7.41 | 23.73 | ||||||||
| Period-end share market price | 1,207.00 | 984.80 | 1,207.00 | 984.80 | 1,067.50 | ||||||||
| Price / book value | 8.99 | 8.82 | 8.99 | 8.82 | 8.19 | ||||||||
| Shareholders' equity per share | 134.32 | 111.68 | 134.32 | 111.68 | 130.32 | ||||||||
| Equity ratio | 92 | % | 95 | % | 92 | % | 95 | % | 95 | % | |||
| Average number of employees (FTE***) | 456 | 293 | 430 | 278 | 313 | ||||||||
| Number of employees at the end of the period | 478 | 309 | 478 | 309 | 377 |
* As disclosed in note 1 of the financial statements, prior period amounts have not been adjusted under the modified retrospective method to adopt IFRS 16 as of January 1, 2019
** Cash, cash equivalents, and marketable securities.
*** Full-time equivalent
The figures and financial ratios have been prepared on a consolidated basis. The financial ratios have been calculated in accordance with the recommendations of the Association of Danish Financial Analysts (2017) and key figures in accordance with IFRS.
| Genmab A/S | Tel: +45 7020 2728 | Company Announcement no. 40 |
| Kalvebod Brygge 43 | Fax: +45 7020 2729 | Page 4/40 |
| 1560 Copenhagen V, Denmark | www.genmab.com | CVR no. 2102 3884 |
Interim Report for the First Half of 2019
| Revised | Previous | |||
| MDKK | Guidance | Guidance | ||
| Revenue | 4,800 | 4,600 | ||
| Operating expenses | (2,750) | (2,600) | ||
| Operating income | 2,050 | 2,000 |
Genmab is updating its 2019 financial guidance published on February 20, 2019 due to increased royalty income related to the sales of DARZALEX and increased operating expenses as a result of the advancement of our product pipeline.
We expect our 2019 revenue to be approximately DKK 4,800 million, an increase of DKK 200 million compared to the previous guidance. Our projected revenue for 2019 primarily consists of DARZALEX royalties of DKK 2,885 million, an increase of DKK 200 million from the previous guidance due to positive impact of USD/DKK exchange rates movements. The DARZALEX royalties are based on estimated net sales of USD 3.0 billion in 2019. We continue to project DARZALEX milestones of approximately DKK 1,500 million related to commercial net-sales based milestones for achieving net-sales in a calendar year of both USD 2.5 billion and USD 3.0 billion respectively. The remainder of the revenue consists of cost reimbursement income, Arzerra royalties, and DuoBody milestones.
We anticipate that our 2019 operating expenses will be approximately DKK 2,750 million, an increase of DKK 150 million compared to the previous guidance. The increase is driven by the advancement of our product pipeline and addition of new projects.
We now expect the operating income to be approximately DKK 2,050 million in 2019, an increase of DKK 50 million compared to the previous guidance.
Outlook: Risks and Assumptions
In addition to factors already mentioned, the estimates above are subject to change due to numerous reasons, including but not limited to the achievement of certain milestones associated with our collaboration agreements; the timing and variation of development activities (including activities carried out by our collaboration partners) and related income and costs; DARZALEX sales and corresponding royalties to Genmab; and currency exchange rates. The financial guidance assumes that no significant agreements are entered during 2019 that could materially affect the results.
| Genmab A/S | Tel: +45 7020 2728 | Company Announcement no. 40 |
| Kalvebod Brygge 43 | Fax: +45 7020 2729 | Page 5/40 |
| 1560 Copenhagen V, Denmark | www.genmab.com | CVR no. 2102 3884 |
Interim Report for the First Half of 2019
| Priority | Targeted Milestones | |
| Daratumumab | U.S. FDA decision on Phase III MAIA multiple myeloma (MM) submission U.S. FDA decision on Phase III CASSIOPEIA MM submission Phase III COLUMBA MM subcutaneous (SubQ) daratumumab safety and efficacy analysis | |
| Ofatumumab | Phase III ASCLEPIOS I & II relapsing multiple sclerosis SubQ ofatumumab study completion and reporting | |
| Tisotumab vedotin | Phase II innovaTV 204 tisotumab vedotin recurrent / metastatic cervical cancer study enrollment complete by mid-year | |
| Innovative pipeline | Phase II enapotamab vedotin expansion cohort efficacy analysis Phase I/II HexaBody -DR5/DR5 initial clinical data Phase I/II DuoBody-CD3xCD20 clinical data dose escalation cohorts File INDs or CTAs for 3 new products |
| Genmab A/S | Tel: +45 7020 2728 | Company Announcement no. 40 |
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| 1560 Copenhagen V, Denmark | www.genmab.com | CVR no. 2102 3884 |
Interim Report for the First Half of 2019
Our own and partnered product pipeline consists of seventeen antibodies in clinical development, including two marketed products, and approximately 20 in-house and partnered pre-clinical programs. An overview of the development status of each of our products is provided in the following sections. Detailed descriptions of dosing, efficacy and safety data from certain clinical trials have been disclosed in company announcements and media releases published via the Nasdaq Copenhagen stock exchange and as of July 18, 2019 may also be found in Genmab's filings with the U.S. Securities and Exchange Commission (SEC). Additional information is available on Genmab's website, www.genmab.com.
PRODUCT PIPELINE AND TECHNOLOGY PROGRESS FIRST HALF OF 2019
DARZALEX (daratumumab) First CD38 Antibody Approved in the World
| Genmab A/S | Tel: +45 7020 2728 | Company Announcement no. 40 |
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Interim Report for the First Half of 2019
DARZALEX (daratumumab) intravenous infusion is indicated for the treatment of adult patients:
| Jurisdiction | Approval | Key Underlying Clinical Trial(s) |
| United States | ||
| Relapsed / Refractory MM | ||
| November 2015 | Monotherapy for patients who have received at least three prior lines of therapy, including a PI and an immunomodulatory agent, or who are double refractory to a PI and an immunomodulatory agent | SIRIUS |
| November 2016 | In combination with Rd or Vd, for patients who have received at least one prior therapy | CASTOR; POLLUX |
| June 2017 | In combination with Pom-d for patients who have received at least two prior therapies, including lenalidomide and a PI | EQUULEUS |
| Frontline MM | ||
| May 2018 | In combination with VMP for newly diagnosed patients ineligible for ASCT | ALCYONE |
| June 2019 | In combination with Rd for newly diagnosed patients ineligible for ASCT | MAIA |
| Split Dosing Regimen | ||
| February 2019 | Option to split first infusion over two consecutive days | EQUULEUS |
| European Union | ||
| Relapsed / Refractory MM | ||
| April 2016 | Monotherapy for patients whose prior therapy included a PI and an immunomodulatory agent and who have demonstrated disease progression on the last therapy | SIRIUS |
| February 2017 | In combination with Rd or Vd for patients who have received at least one prior therapy | CASTOR; POLLUX |
| Frontline MM | ||
| July 2018 | In combination with VMP for newly diagnosed patients ineligible for ASCT | ALCYONE |
| Split Dosing Regimen | ||
| December 2018 | Option to split first infusion over two consecutive days | EQUULEUS |
| Japan | ||
| Relapsed / Refractory MM | ||
| September 2017 | In combination with Rd or Vd | CASTOR; POLLUX |
PI = proteasome inhibitor; Rd = lenalidomide and dexamethasone; Vd = bortezomib and dexamethasone; VMP = bortezomib, melphalan and prednisone; ASCT = autologous stem cell transplant; Pom-d = pomalidomide and dexamethasone
The warnings and precautions for DARZALEX include infusion reactions, interference with serological testing and interference with determination of complete response. The most frequently reported adverse reactions (incidence 20%) in clinical trials were: infusion reactions, neutropenia, thrombocytopenia, fatigue, nausea,
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Interim Report for the First Half of 2019
diarrhea, constipation, vomiting, muscle spasms, arthralgia, back pain, pyrexia, chills, dizziness, insomnia, cough, dyspnea, peripheral edema, peripheral sensory neuropathy and upper respiratory tract infection.
Please consult the full U.S. Prescribing information and the full European Summary of Product Characteristics for all the labeled safety information for DARZALEX.
Second Quarter Update
First Quarter Update
| Genmab A/S | Tel: +45 7020 2728 | Company Announcement no. 40 |
| Kalvebod Brygge 43 | Fax: +45 7020 2729 | Page 9/40 |
| 1560 Copenhagen V, Denmark | www.genmab.com | CVR no. 2102 3884 |
Interim Report for the First Half of 2019
Daratumumab Development Covering All States of Multiple Myeloma Key Ongoing Trials
Daratumumab Development Beyond Multiple Myeloma
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Interim Report for the First Half of 2019
Arzerra (ofatumumab) Our First Marketed Product
In the U.S., Arzerra solution for infusion is approved for use in combination with chlorambucil for the treatment of previously untreated patients with CLL for whom fludarabine-based therapy is considered inappropriate; for use in combination with fludarabine and cyclophosphamide (FC) for the treatment of patients with relapsed CLL; and for extended treatment of patients who are in complete or partial response after at least two lines of therapy for recurrent or progressive CLL. It is also indicated as monotherapy for the treatment of patients with CLL who are refractory to fludarabine and alemtuzumab. In 2018, it was announced that Novartis intended to transition Arzerra from commercial availability to limited availability via managed access programs in markets outside the U.S., where applicable and allowed by local regulations. Accordingly, in 2019, the marketing authorization for Arzerra was withdrawn in the EU and several other territories. We expect that Arzerra will remain commercially available in Japan as well as in the U.S.
The overall safety profile of Arzerra in CLL is based on exposure in clinical trials and the post-marketing setting. The most common side effects for Arzerra include adverse events associated with infusion reactions, cytopenias, and infections (lower respiratory tract infection, including pneumonia, upper respiratory tract infection, sepsis, including neutropenic sepsis and septic shock, herpes viral infection, and urinary tract infection).
Please consult the full U.S. Prescribing information, including Boxed Warning for all the labeled safety information for Arzerra.
First Quarter Update
February: The marketing authorization for Arzerra was withdrawn in the EU pursuant to Novartis' decision to transition Arzerra from commercial availability to limited availability in markets outside the U.S. and Japan.
Proprietary Products in Development*
*Certain products in co-development, partners as indicated
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Interim Report for the First Half of 2019
Tisotumab vedotin A Next Generation Therapeutic
Tisotumab vedotin is an ADC targeted to tissue factor (TF), a protein involved in tumor signaling and angiogenesis. Based on its high expression on many solid tumors and its rapid internalization, TF is a suitable target for an ADC approach. Tisotumab vedotin is in clinical development for solid tumors. Tisotumab vedotin is being co-developed by Genmab and Seattle Genetics, under an agreement in which the companies share all costs and profits for the product on a 50:50 basis.
First Quarter Update
Enapotamab vedotin (HuMax-AXL-ADC) A First-in-Class ADC
Enapotamab vedotin is an ADC targeted to AXL, a signaling molecule expressed on many solid cancers and implicated in tumor biology. Enapotamab vedotin is fully owned by Genmab and the ADC technology used with enapotamab vedotin was licensed from Seattle Genetics. A Phase I/II clinical study of enapotamab vedotin for multiple types of solid tumors is ongoing.
HexaBody-DR5/DR5 (GEN1029) First HexaBody Program in Clinical Development
HexaBody-DR5/DR5 is a product comprising a mixture of two non-competing HexaBody molecules that target two distinct epitopes on death receptor 5 (DR5), a cell surface receptor that mediates a process called programmed cell death. Increased expression of DR5 has been reported in several types of tumors. A Phase I/II clinical trial in solid tumors is ongoing.
DuoBody-CD3xCD20 (GEN3013) A Proprietary Bispecific Antibody
DuoBody-CD3xCD20 is a proprietary bispecific antibody created using Genmab's DuoBody technology. DuoBody-CD3xCD20 targets CD3, which is expressed on T-cells, and CD20, a clinically well-validated target. A Phase I/II clinical study of DuoBody-CD3xCD20 in B-cell malignancies is ongoing.
DuoBody-PD-L1x4-1BB (GEN1046) Potential in Solid Tumors
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Interim Report for the First Half of 2019
DuoBody-PD-L1x4-1BB is a proprietary bispecific antibody, jointly owned by Genmab and BioNTech, created using Genmab's DuoBody technology. It is being co-developed by Genmab and BioNTech under an agreement in which the companies share all future costs and profits for the product on a 50:50 basis. DuoBody-PD-L1x4-1BB targets PD-L1 and 4-1BB, selected to block inhibitory PD-1 / PD-L1 axis and simultaneously activate essential co-stimulatory activity via 4-1BB using inert DuoBody antibody format. Phase I/II clinical study of DuoBody-PD-L1x4-1BB in solid tumors is ongoing.
Second Quarter Update
First Quarter Update
DuoBody-CD40x4-1BB (GEN1042) Potential in Solid Tumors
DuoBody-CD40x4-1BB is a proprietary bispecific antibody, jointly owned by Genmab and BioNTech, created using Genmab's DuoBody technology. It is being co-developed by Genmab and BioNTech under an agreement in which the companies share all future costs and profits for the product on a 50:50 basis. CD40 and 4-1BB were selected as targets to enhance both dendritic cells (DC) and antigen-dependent T-cell activation, using an inert DuoBody format. A Phase I/II clinical study of DuoBody-CD40 x4-1BB in solid tumors is expected to begin in 2019.
First Quarter Update
| Genmab A/S | Tel: +45 7020 2728 | Company Announcement no. 40 |
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| 1560 Copenhagen V, Denmark | www.genmab.com | CVR no. 2102 3884 |
Interim Report for the First Half of 2019
Partner Programs Built on Genmab's Innovation
Ofatumumab is a human IgG1k mAb that targets an epitope on the CD20 molecule encompassing parts of the small and large extracellular loops. A subcutaneous formulation of ofatumumab is being investigated in two Phase III clinical studies in relapsing multiple sclerosis (relapsing MS). The studies compare the efficacy and safety of subcutaneous ofatumumab versus teriflunomide in patients with relapsing MS and are comprised of approximately 900 patients each. A Phase III study examining the long-term safety, tolerability and effectiveness of ofatumumab in patients with relapsing MS who participated in a previous study is also ongoing.
Teprotumumab is a human antibody that targets the Insulin-like Growth Factor 1 Receptor (IGF 1R), which is a well-validated target. Teprotumumab was created by Genmab under our collaboration with Roche. Clinical
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Interim Report for the First Half of 2019
development of teprotumumab is being conducted by Horizon Pharma plc under a license from Roche. Teprotumumab has been granted Fast Track designation, Orphan Drug designation and Breakthrough Therapy Designation for thyroid eye disease, also known as Graves' orbitopathy by the U.S. FDA.
First Quarter Update
JNJ-61186372 is a bispecific antibody that targets EGFR and cMet, two validated cancer targets. JNJ-61186372 was created under a collaboration between Genmab and Janssen using Genmab's DuoBody technology. The two antibodies used to generate JNJ-61186372 were both created by Genmab. Janssen is investigating JNJ-61186372 in a Phase I clinical study to treat NSCLC.