Genmab A/S Q2 FY2021 Earnings Call

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 will 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 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 all 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 cervical cancer in due course. Data from two of our other pipeline products was also featured at recent medical conferences, including multiple presentations of updated dose escalation data for epcoritamab and a presentation of preclinical data for GEN1042, one of our DuoBody products in co-development with BioNTech. Excitingly, we are anticipating an additional DuoBody product in the clinic by the end of the year, following a recent CTA submission for DuoBody-CD3xB7H4 or GEN1047. This may have potential in solid tumors. We look forward to additional pipeline expansion in the future, including potentially from our oncology research and development collaboration with Bolt Biotherapeutics. In addition to progress in our own pipeline, the power of Genmab’s innovation was reflected in important updates for products being developed by other companies. Inclacumab, formerly in development at Roche, is now in Phase 3 development with Global Blood Therapeutics. The pivotal studies are assessing the safety and efficacy of inclacumab in reducing the frequency of vaso-occlusive crisis or VOC-related hospital readmissions in patients with sickle cell disease. There were also exciting updates for clinical-stage products that incorporate our DuoBody technology. Novo Nordisk published preclinical data on the DuoBody-based Mim8 in the journal Blood, and multiple abstracts evaluating Janssen’s bispecific program, leveraging Genmab’s DuoBody technology platform were presented at this year’s ASCO. In June, Janssen also announced that the FDA granted breakthrough therapy designation for teclistamab in the treatment of relapsed or refractory multiple myeloma. So now, let’s move to slide 6, and look at the most significant milestones to date for Genmab’s DuoBody technology. In May this year, Janssen received FDA approval for RYBREVANT, for patients with metastatic non-small cell lung cancer with epidermal growth factor receptor exon 20 insertion mutations. This is the first regulatory approval for a therapy created using our proprietary DuoBody technology. And we hope this is the first validation of many of the major potential of this innovative technology to create truly differentiated bispecific antibody therapeutics. With the approval of RYBREVANT, there are now four therapies on the market that incorporate Genmab’s innovation. DARZALEX, which has now been part of the treatment regimen for over 200,000 patients, continues to evolve with additional approvals in both Europe and the U.S. The approved indications for multiple myeloma expanded in both territories, based on the Phase 3 APOLLO study and subcutaneous daratumumab is now the only approved therapy for AL amyloidosis in both, the U.S. and in Europe. DARZALEX was also granted an approval in China, based on the Phase 3 LEPUS study, which examines daratumumab in combination with Velcade and dexamethasone in patients that relapsed or refractory multiple myeloma. Sales in the first half of the year were also strong, as we reported $2,798 million in net sales by J&J, an increase of 52% over the first half of 2020, resulting in DKK 2,360 million in royalties to Genmab. We are enthusiastic about the future of all four of these medicines, as they exemplify our commitment to applying a world-class antibody expertise to create differentiated antibody therapeutics with the potential to fundamentally improve patients’ lives. The collaborations for these medicines provide us with recurring revenue from royalties, which we can then use to invest further in our business to deliver on our inspirational vision. I’m now pleased to turn the call over to Anthony, who will discuss our revenue in more detail.

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 has 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 online later this year as we submitted the BLA for tisotumab vedotin in Q1. If tisotumab 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 tisotumab 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 subcutaneous formulation. So, DARZALEX remains a key driver of our revenue, as you can see on slide 9. Looking at the graph on the left, you can see our recurring revenues grew by 49% in the first half of the year, primarily due to higher DARZALEX royalties. We’ve already spoken about DARZALEX and the very strong performance there. Moving to Kesimpta, we’re encouraged by the nice quarter-over-quarter growth seen in the first half of the year. For TEPEZZA, due to the supply chain disruption, we didn’t record any royalties for the first quarter. However, Horizon started to supply the market again in April with strong sales reported in Q2. We’re also enthusiastic about the recent approval of RYBREVANT and look forward to seeing how sales progress. So, our revenue profile continues to get stronger, with increases both in recurring and non-recurring revenue after excluding, of course, the one-time upfront payment from AbbVie in 2020. And we’re taking our strong recurring revenues and investing in a highly focused way, as you can see on the next slide. Total operating expenses grew 26% in the first half of the year. And here, you can see where we invested. We continue to accelerate our investment in our product portfolio, especially the advancement of both epcoritamab and DuoBody-PD-L1x4-1BB. We’ve also continued to strategically spend on expanding our team, hiring key team members to support our growing product pipeline. And we’ve continued to build our commercialization and broader organizational capabilities to support our expansion. Finally, we are leveraging the AbbVie collaboration by utilizing their expertise and significant financial contributions to further expand and accelerate our partnership programs. Now, let’s look at our financials as a whole on slide 11. Here, you can see our summary P&L. For H1, revenue came in at approximately DKK 3.6 billion. That’s up 83% on last year, if we exclude the one-off payment from AbbVie in 2020. Total expenses were about DKK 2.2 billion, with 79% being R&D and 21% G&A. Operating income was DKK 1.3 billion compared to DKK 4.6 billion last year. This was also impacted by the upfront payment from AbbVie. Our net financial items amount to a gain of DKK 527 million, which was primarily driven by the strengthening of the U.S. dollar against the Danish kroner on our U.S. dollar-denominated cash and investments. Then, we have tax expense of DKK 444 million, which equates to an effective tax rate of 24%. And that brings us to our net income of around DKK 1.4 billion. So, as you can see, an extremely strong financial performance for the first half of 2021. Now, let’s look at our guidance on slide 12. Following our strong first half numbers, we are improving certain aspects of our 2021 guidance. We now expect our revenue to be in the range of DKK 7.3 billion to DKK 7.9 billion, driven primarily by the continued strong growth of DARZALEX. Our OpEx guidance will stay in the range of DKK 5.5 billion to DKK 5.8 billion, as we continue to step up our investments in the second half of the year, in line with our overall strategy and our 2021 key priorities. Putting this together, we’re planning for substantial operating income in 2021 in a range of DKK 1.5 billion to DKK 2.4 billion. Now, for my final slide, let me provide a few closing remarks. In summary, we’ve had a very solid first half. We’ve created growing recurring revenue streams based on products with exceptional growth profiles, and that gives us a strong backbone of significant underlying profitability. And we’re investing those revenues in a highly focused way to realize our vision and capitalize on the significant growth opportunities in front of us. And on that note, I’ll hand it back to Jan to discuss our key priorities.

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. Our first question comes from Wimal Kapadia from Bernstein.

Great. Thank you very much for taking my question. So, could I just ask on epcoritamab? 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 epcoritamab 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 epcoritamab, at least based on what we know about the molecule today? Thank you.

Thank you, Wimal, for your question. I will pass the inquiry about the Polivy trial to Judith Klimovsky, and then Anthony Mancini can explain the market opportunity for first-line diffuse large B-cell lymphoma. I can assure you, Wimal, that we are pursuing that. Judith will clarify how the POLARIX data could influence the approach for diffuse large B-cell lymphoma. 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 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 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.

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 epcoritamab 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 epcoritamab, 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. The team is really geared up to make sure we’re ready if that ultimately, the PDUFA date is hit in October. The 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 epcoritamab. In this regard, the team is preparing for epcoritamab 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 tisotumab vedotin 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 sluggish 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 GEN1042. 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 GEN1042.

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 are you 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?

This question pertains to 1046, James. I didn’t catch that part initially. Let’s turn it over to Tahi Ahmadi, who can provide you with more details on the type of data you can expect in the near future, 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, 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 GEN1042, 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 will probably be more in the first half of next year.

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

Can you provide an update on epcoritamab data in CLL, particularly if any submitted data for upcoming conferences includes initial findings? Also, could you remind us about the inclacumab royalties and the financial arrangements with GBT? Lastly, regarding your sales guidance for dara, I understand it depends on feedback from J&J, but the midpoint suggests no growth between the first and second halves. Is this realistic, and if so, what factors could lead to no growth in sales during the latter half? Thank you.

Thanks for the questions, Michael. I will take the first two and then pass the third question to Anthony Pagano. Regarding epcoritamab, we have submitted multiple data sets, including early data for CLL from the first patients, and we hope to present these near the end of the year. As for the economics of inclacumab, this program started at Roche around 2003 or 2004. The economics are very similar to those of TEPEZZA, though I don’t know the exact milestones. The molecule was developed in the same era as teprotumumab. I’ll leave it at that and turn 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 DARZALEX, 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 DARZALEX, 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 subcutaneous 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 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 DARZALEX. 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 DARZALEX, the continued investment that’s being made in terms of continued development of DARZALEX as well as the overall growth profile for DARZALEX generally.

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

I had another question 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 on how you’re tracking towards completion of enrollment of some of those cohorts and how you’re thinking about potential timelines 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 and exclusion criteria for relapsed/refractory diffuse large B-cell lymphoma, relapsed/refractory follicular lymphoma, and relapsed/refractory large B-cell lymphoma. So, it’s a little bit too early to speculate on the timelines. 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 based on our projections.

Michael, please go ahead.

I was just curious, sorry, Jan, about the data update on epcoritamab 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 that will include data. I previously mentioned this in my response about CLL, but it will also potentially include some new combination therapy data, which you haven't seen before, and possibly an update on the Phase 1/2 data that you have already seen. So, it will be a mix of data. We are very excited about the potential of epcoritamab. We believe it will be a transformative therapy in the lymphoma space, and we are eager to receive news from the conferences regarding the acceptance of the abstracts. Then, we will have an open discussion about it.

And to add to the question, I believe that general registration-enabling or potential registration-enabling data sets are typically submitted to health authorities before being shared publicly.

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 subcutaneous, 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 subcutaneous. Halozyme reported earlier this week and they shared that they had data to suggest that the conversion from IV to subcutaneous was about 66% in the U.S. So, I was just wondering 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 the rest of the world can probably be addressed by Anthony Mancini. Maybe Anthony Pagano, you can start.

Yes, Graig. So, we’ll just have some fun, just some math together here. We provided our original guidance 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; the appropriate thing is not to recognize that revenue. That’s exactly what we’ve done. I highlighted at the beginning of the year that we thought the impact to be 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 subcutaneous sales are relative to total sales. If you multiply that through and you referenced here for H1 million or so. I think on a go-forward basis, as we’ve kind of already seen total level of sales to be higher, continue to grow as we move. So, we do expect that number to increase in the second half of 2021, as total sales, but also as the total amount of subcutaneous sales relative to IV sales also continues to grow up. Hopefully, that helps you get to the math. I can’t give you royalty rates, et cetera, specific amounts on what Janssen’s withholding. It’s just something we’re not part of the contract with them.

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 depend on for their 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 is about 64% of U.S. utilization expressed in terms of the subcutaneous formulation. Your question about outside the U.S., and obviously, Graig, that number continues to evolve in a positive way with a steady positive trend in U.S. If you look at more recent IQVIA and Symphony data. But if you look at outside of the U.S., now that the subcutaneous formulation is launched in the EU and has 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 subcutaneous, and that’s highly variable depending on the healthcare system 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 around the world.

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?

Yes, I can share my perspective on this. Typically, when there are both subcutaneous and intravenous options available, economic factors influence the decision on which direction to take. In the case of FASPRO, this doesn't apply since both options are available under Part B. We don't foresee significant obstacles to the continued adoption of subcutaneous methods in the U.S. In fact, it's quite the opposite; a 3 to 5-minute injection is much quicker than a multi-hour infusion. Therefore, we believe there are more advantages than disadvantages. Regarding the social aspects of infusions, it's difficult to determine their exact impact, but there are no substantial reasons not to use the subcutaneous option. I hope this provides some insight, Graig.

We have one more question from 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 that 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 hand it over to Tahi, but I can tell you that we have had intense discussions with multiple candidates for these types of conjugates. We’re very excited about the Bolt Biotherapeutics technology and platform. We are already working with them now on a significant number of target programs. Let me ask Tahi to provide some insight on why we chose the Bolt technology, and then I can add more at the end. Tahi?

Thank you for the question. We're very enthusiastic about the potential of engaging the innate immune system and see this as a complementary strategy to some of our existing mechanisms, whether standalone or in collaboration with BioNTech. We've examined several companies in this area and found a strong collaborative spirit and shared scientific vision with the team at Bolt. They are leading in this emerging field. As these discussions evolved, we had significant proof-of-concept work already completed, which made us pleased with what we found, leading to the deal. We won't discuss specific targets at this time, but this initiative is a crucial part of our future strategy.

Thanks, Tahi. 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 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.

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 epcoritamab 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 or 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 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 ADC Therapeutics is continuously working to optimize 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.

Thanks, Tahi. So, 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.