雅虎香港財經 Legend Biotech Corporation (NASDAQ:LEGN) Q4 2023 Earnings Call Transcript
Legend Biotech Corporation (NASDAQ:LEGN) Q4 2023 Earnings Call Transcript March 11, 2024
Legend Biotech Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, and welcome to Legend Biotech Reports Fourth Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. As a reminder, this call is being recorded. I would now like to hand the call over to Jessie Yeung, Head of Investor Relations and Public Relations. You may begin.
Jessie Yeung: Good morning. This is Jessie Yeung, Head of Investor Relations and Public Relations at Legend Biotech. Thank you for joining our Conference Call today to review our Fourth Quarter and Full Year 2023 Performance. Joining me on today's call are Ying Huang, the company's Chief Executive Officer; and Lori Macomber, the company's Chief Financial Officer. Following the prepared remarks, we will open up the call for a Q&A. We have Guowei Fang, Chief Scientific Officer; and Steve Gavel, Head of Commercial Development for the US and Europe, joining the Q&A session. During today's call, we will be making forward-looking statements, which are subject to risks and uncertainties that may cause our actual results to differ materially from those expressed or implied here within.
These forward-looking statements are discussed in greater detail in our SEC filings, which we encourage you to read and can be found under the Investors section of our company website. Thank you. I will now turn the call over to Ying.
Ying Huang: Good morning, everyone. We're glad you could join us today because a lot has happened since our last earnings call. First, we're excited at the prospect of bringing our lead therapy CARVYKTI to more multiple myeloma patients in Europe. As many of you have heard, CARVYKTI received a positive opinion from the Committee for Medicinal Products for Human Use to expand into earlier lines of treatment. CARVYKTI is the first CAR-T therapy to receive a positive CHMP opinion in the second-line setting for patients with relapsed and lenalidomide-refractory multiple myeloma. The formal European Commission decision is expected in April. As for the approval of CARVYKTI in the United States in the second-line, we are scheduled to meet with the FDA's oncologic drugs advisory committee this Friday, the 15th, to answer any outstanding questions they have.
We are preparing for a potential launch in this expanded indication on the PDUFA date of April 5th, and we will, of course, keep you posted. Now I'd like to turn to other achievements and activity since our last earnings call. Our work to bring CARVYKTI to more patients globally resulted in total net sales for the fourth quarter of 2023 of $159 million. For the full year, total sales for CARVYKTI were $0.5 billion. The increase in our fourth quarter performance versus the third quarter was a result of the ongoing launch of CARVYKTI and share gain from capacity expansion and manufacturing efficiencies. We've now been market in for seven full quarters, and we are the fastest launched CAR-T therapy. We anticipate continued quarter-over-quarter growth throughout 2024 as well.
We believe our cash balance of $1.3 billion provides us with financial runway through the end of 2025. In order to serve more patients and meet our revenue targets, we've expanded our supply of lentiviral vectors significantly through a large reactor in Switzerland, operated by our partner Johnson & Johnson. In addition, Johnson & Johnson has another factory under construction in the Netherlands. We also continued to expand our internal manufacturing capacity in partnership with Janssen. Our cell processing side in Ghent, Belgium called Obelisc, produced the first batches of CARVYKTI for clinical use in January 2024. We hope to start commercial production in the second half of the year. Construction progressed on our second manufacturing site [Tech Lane] (ph) in Belgium.
And it is expected to be complete at the end of the year. We have increased capacity at our Raritan, New Jersey facility, doubling cell processing capacity since the beginning of 2023. The increases to our production capacity will help ensure we meet our target of supply in CARVYKTI to 10,000 patients by the end of 2025. I am excited to announce we have the new veteran leader with more than 25 years of experience now overseeing our manufacturing sites. Our own Birk Vanderweeen has been promoted to Senior Vice President, Global Manufacturing and Technical Operations. Our previous Head of Global Tech Op, Liz Gosen, has stepped aside from full-time work for personal reasons and is now serving as a Senior Advisor for us. Birk joined us in 2021 to start our European organization and the manufacturing facilities I just mentioned.
The site in Ghent that has just came online and second one under construction. Before joining Legend, he served that Janssen, Teva and AstraZeneca. Birk has earned the trust and respect of our global manufacturing teams and he's already made a big impact. The increase in production capacity, enabling us to meet growing patient demand comes in parallel with new data we presented at the American Society of Hematology meeting in December. In an oral presentation, we unveiled the data is showing improvements in patient outcomes as early as second-line treatment in our pivotal Phase 3 CARTITUDE-4 study. The results demonstrated clinically meaningful improvements in health-related quality-of-life measures and reductions in symptoms following treatment with CARVYKTI compared to standard-of-care.
In other news from the fourth quarter, we continue to bring more hospitals online and we now have a total of 65 US hospitals certified to treat with CARVYKTI patients. Additionally, about 30% of patients are not administered in an outpatient setting. Turning to the pipeline. We're investigating the potential of our cell therapies in blood cancers beyond multiple myeloma and also in solid tumors. We've started dosing patients in our DLL3-targeted program, the Phase 1 clinical trial LB2102 in lung cancer. The armoring using LB2102 can also be deployed in other pipeline programs if validated in the clinic. After Phase 1, Novartis will takeover and conduct any further development, including manufacturing and commercial activities. To sum up 2023, we closed the year with accomplishments on several fronts.
Now I would like to turn the call over to Lori to walk you through the financials for 2023, Lori?
Lori Macomber: Thank you, Ying, and good morning, everyone. As Ying mentioned, we generated approximately $159 million in total net sales for CARVYKTI during the fourth quarter, an increase of 189% year-over-year, driven by the progress we have made with ongoing market launches, expanding market share, and capacity improvements. As a reminder, we share equally in all profits and losses of CARVYKTI ex-China with our partner Janssen. Turning to our revenue. Total revenues for the fourth quarter were $79.5 million consisting almost entirely of collaboration revenue from the sale of CARVYKTI. Net loss for the quarter ended December 31st, 2023 was $144.8 million or a loss of $0.40 per share compared to a net loss of $135.9 million or a loss of $0.41 per share for the same period last year.
For the year ended December 31st, 2023, net loss was $518.3 million or a loss of $1.47 per share compared to a net loss of $446.3 million or a loss of $1.40 per share for the year ended December 31st, 2022. Moving on to expenses, collaboration cost to revenue for the fourth quarter 2023 was $32.5 million compared to $23 million for the same period last year. These are Legend's portion of collaboration cost-of-sales in connection with the collaboration revenue under the Janssen agreement along with expenditures to support the manufacturing capacity expansion. Research and development expenses for the fourth quarter 2023 were $105.7 million compared to $80.8 million for the same period last year. The increase of $24.9 million for the three months ended December 31st, 2023, compared to three months ended December 31st, 2022 was due to -- primarily due to continuous research and development activities cilta-cel, including higher patient enrollment for Phase 3 clinical trials for cilta-cel and an increase in research and development activities for other pipeline items.
Administrative expenses for three months ended December 31st, 2023 were $28.7 million compared to $26.7 million for the same period last year. The increase of $2 million year-over-year was primarily due to the expansion of administrative functions to facilitate continuous business growth and continuing investment in building Legend Biotech's global information technology infrastructure. Selling and distribution expense for three months ended December 31st, 2023 was $33.7 million compared to $25.8 million for the same period last year. The increase of $7.9 million year-over-year, due to costs associated with the commercialization of CARVYKTI. To summarize, our spending remains on track and we continue to maintain a strong balance sheet. As of December 31st, we had $1.3 billion in cash and equivalents, deposits and investments.
Additionally, as we enter the new year, we received a $100 million upfront payment in early January in connection with our global license agreement with Novartis for certain CAR-T therapies targeting DLL3. Thus, we believe we have sufficient capital to fund our operating and capital expenditures through the end of 2025. Thank you. I now pass it back to Ying for closing remarks.
Ying Huang: Thank you, Lori. 2023 was an impressive year for Legend. CARVYKTI has proven to be the fastest launched CAR-T therapy. The achievements of our global teams have set us up for great success in 2024 and we're poised to provide more therapy to even more patients around the world. I want to thank each of our 1,900 employees for their commitment and dedication to Legend. And with that, we'd like to take your questions. Operator, we're ready for the first question.
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