Earnings Call Transcript - GMAB Q2 2020

Operator, Operator

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 an 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 Relation 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. And now without further delay, I would like to hand the conference over to our speaker today, Jan van de Winkel. Please go ahead, Jan.

Jan van de Winkel, CEO

Hello and welcome to the Genmab conference call to discuss the Company's financial results for the first half of this year. With me today to present these results is our CFO, Anthony Pagano. And we will be joined for the Q&A by our Chief Development Officer, Judith Klimovsky and our Chief Operating Officer, Anthony Mancini. 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. I am proud to say that despite the universal challenges posed by the COVID-19 pandemic, Genmab not only had a strong second quarter but a transformative one. Two key events have occurred since we presented to you with our first-quarter results. We reported very favorable top-line results for tisotumab vedotin in cervical cancer and of course we announced a broad foundational oncology collaboration with AbbVie. Starting with the most recent event, the highly anticipated tisotumab vedotin data in late June, we along with our partner, Seattle Genetics announced that the innovaTV 204 trial of tisotumab vedotin for patients with recurrent or metastatic cervical cancer had met its primary endpoint with a 24% confirmed overall response rate and a median duration of response of 8.3 months. We very much look forward to discussing these results with the FDA and the potential for the first BLA submission for one of our proprietary therapeutic candidates, this would be an important milestone in our Company's history. Our landmark AbbVie collaboration was also one of the most anticipated events of the year for Genmab. Genmab and AbbVie will be equal partners working together to jointly make all strategy, clinical development and commercialization decisions for three Genmab bispecific antibody therapies epcoritamab, DuoHexaBody-CD37 and DuoBody-CD3x5T4 as well as potential novel differentiated cancer therapies created under a discovery research collaboration. So this collaboration sets us on a path to accelerate, broaden and maximize the development of some of our promising bispecific antibody therapies, including epcoritamab with the ultimate goal to bring differentiated new potential therapies much faster to cancer patients. So as you can see on the slide, we have advances to report with two of these potential therapies. As we recently dosed the first patient in an expansion cohort for epcoritamab and initiated a first-in-human trial of DuoBody-CD3x5T4. I would also like to mention that there is now a Phase 3 trial by Janssen for amivantamab as first-line treatment in non-small cell lung cancer listed on clinicaltrials.gov. This represents the first Phase 3 trial for a DuoBody therapy and we very much look forward to this study being initiated. In addition, you may have seen the very impressive results from the two ASCLEPIOS Phase 3 trials of ofatumumab in relapsing MS that were published on August the 6th in the prestigious New England Journal of Medicine. Of course DARZALEX also remains an important factor in our success. Another major milestone was achieved in the second quarter with the subcutaneous formulation of DARZALEX called DARZALEX FASPRO in the U.S., approved in both the U.S. and Europe. This is the first and only subcutaneous CD38 antibody approved in the world and we look forward to potential approval in Japan as well following Janssen's submission of an NDA there in April. As a reminder there is also potential for approvals based on Amgen's CANDOR study of daratumumab in combination with carfilzomib and dexamethasone in relapsed or refractory multiple myeloma and submissions by Janssen to regulatory authorities in the U.S. and Japan in Q1 as well as a submission by Amgen in Europe in the same quarter. And while daratumumab may already be considered an important therapy for multiple myeloma, we continue to see the potential for further expansion and positive top-line datasets. At the end of May, we saw the first Phase 3 results from an indication outside of multiple myeloma with the positive top-line data from the ANDROMEDA study of subcutaneous daratumumab in combination with cyclophosphamide, bortezomib and dexamethasone or in short CyBorDex for patients with newly diagnosed AL amyloidosis. This was followed very recently by positive results of the Phase 3 APOLLO study of daratumumab plus pomalidomide and dexamethasone or pom-dex in relapsed or refractory multiple myeloma. This study was designed to confirm the results from the Phase 1 EQUULEUS trial which investigated the intravenous formulation of daratumumab in the same combination and it was the basis for an approval in the U.S. in 2017. Finally and very excitingly we reported $1,838 million in net sales by J&J during the first half of the year, an increase of 31% over the first half of 2019, resulting in DKK1,652 million in royalties to Genmab. Given the challenging coronavirus situation we are pleased with DARZALEX's performance in the first half of 2020 and we look forward to seeing the further impact of the subcutaneous formulation as it continues to be rolled out by Janssen. I will now turn the call over to Anthony Pagano to present our detailed financial results for the first half of 2020.

Anthony Pagano, CFO

Great. Thanks, Jan. Let's move to Slide 4. Before I get into the results and the guidance, I'm going to spend a moment reiterating our overarching financial framework because I think we have materially strengthened what was already a strong foundation with our AbbVie collaboration. First off, let's look at our revenue profile. On the left, you can see the component parts of our current and future recurring revenue streams. It starts with DARZALEX. And here we are looking forward to continued growth and expansion. And you can also see ofatumumab and TEPEZZA. We're excited about the potential ofatumumab approval in RMS that is expected in September and TEPEZZA is off to an exceptionally strong start. Next onto R&D investment shown on the right. And this is one of the areas where a collaboration with AbbVie is going to make a real difference. We'll continue to be focused and disciplined in our approach. And as we've told you before, we're going to continue to expand and accelerate our potential winners. But clearly the cash from AbbVie and the fact that we're sharing the investment in the existing clinical programs on a 50-50 basis means we'll be able to do more and faster. Stepping back, what continues to stand out for me from this overall framework is that Genmab remains a resilient business with a very high-quality product pipeline and great growth prospects. And these prospects have now been further strengthened by our collaboration with AbbVie. We see this collaboration kind of like a turbocharger toward our 2025 Vision. With that intro, we can turn to Slide 5. If you attended our call on our transformational collaboration with AbbVie, then the information on this slide will look familiar to you. As a reminder, here are its key elements. This is one of the largest oncology partnerships in history with a potential total deal value of up to $3.9 billion. This includes the upfront payment of $750 million and $3.15 billion related to the achievement of additional development, regulatory, and sales milestones and optimum payments. The collaboration includes three existing clinical programs, and it is important to remember that we've got material commercialization rights for these potential products, which will enable us to build and increase our commercial footprint and we'll do that with an initial focus on the U.S. and Japanese markets. We've also agreed to a broad research collaboration combining the R&D capabilities of both companies. This is definitely a situation where the whole is greater than the sum of the parts. And we've got the potential to create four additional differentiated next-generation antibody product candidates. Overall, this is a partnership that further strengthens our financial position and supports our evolution into a fully integrated biotech powerhouse, all working toward our 2025 Vision. Now let's move to DARZALEX on Slide 6. Here we saw continued strong performance with only a modest COVID impact in the second quarter. You can see that in the chart on the left. As noted by J&J during their first half results call, DARZALEX saw continued strong market growth and share gains in the U.S. and overall DARZALEX worldwide sales grew by 31% year-on-year. That's net sales of $1.84 billion, which translates to DKK1.65 billion in royalty income for Genmab. Now calculating the exact impact from COVID-19 is difficult, especially as we have limited insight into sales in countries outside the U.S. But as we highlighted during our first-quarter call, we believe this is a short-term delay and not a fundamental disruption and that's because of the seriousness of the disease and the need for patients to be treated, coupled with DARZALEX's strong product profile. Additionally, we expect to see continued uptake of the subcutaneous formulation, which was approved in the second quarter. So for the second half of 2020 we anticipate that sales will ramp up and we're already seeing early signs of that in the U.S. So DARZALEX continues to be on a clear path to market leadership in multiple myeloma and remains a key driver of our revenue as you can see on Slide 7. Looking at the graph on the left, you can see that there were three significant contributors to the increase in revenue in the first half. First, we recognized nearly 90% of the $750 million upfront payment from AbbVie. Now clearly it's important to remember that that's a one-off contribution. And second, DARZALEX royalties grew more than 40% compared to the first half of 2019. Finally, you see other and most of that DKK97 million comes from TEPEZZA and we've seen a really strong start here. As you may have seen, Horizon has now raised its 2020 sales guidance for TEPEZZA. Of course, it's early days, but we see this as a very promising launch. Now, if we take DARZALEX and TEPEZZA together, we're really pleased to have seen recurring revenues grow by 47% in H1. As well as increasing revenues, we also increased investment in our pipeline, in our team, and in our capabilities, as you can see on the next slide. On the graph on the left, you can see the major drivers of our increased investment in the first half of the year. In total, operating expenses increased by DKK521 million, which was driven by the accelerated investment in our product portfolio, including the advancement of both epcoritamab and DuoBody-PD-L1x4-1BB. We also spent more on expanding our very talented team. We've continued to hire key team members to support our growing product pipeline and we've continued to build our commercial capabilities. With the upfront from the AbbVie collaboration, our revenue growth significantly outpaced the higher investment levels, driving DKK4.57 billion of operating income. Now having looked at the individual parts, let's look at our first half 2020 financials as a whole on Slide 9. Here you will see a P&L summary. In the first six months of the year, revenue came in at DKK6.34 billion, an increase of nearly DKK5 billion compared to the first half of 2019. The increase was primarily driven by the upfront payment from AbbVie and higher DARZALEX royalties. Total expenses in the first half of 2020 were DKK1.78 billion with 84% being R&D and 16% G&A. Operating income, as I noted, was DKK4.57 billion compared to DKK111 million in the first half of 2019, driven by higher revenue. And that brings us to our net income of DKK3.6 billion. So an extremely strong first half of 2020, despite the COVID-19 pandemic, which brings me to our guidance on Slide 10. We are updating certain aspects of our 2020 guidance previously published on June 10th. We now expect our revenue to be in the range of DKK9.1 billion to DKK9.7 billion, an increase of DKK200 million to the top end of the previous guidance. This is still driven by the upfront payment from AbbVie and the continued growth of DARZALEX, complemented by a strong start from TEPEZZA. We continue to anticipate our 2020 opex to be in the range of DKK3.85 billion to DKK3.95 billion. Putting this together, we're planning for substantial operating income in 2020 in a range of DKK5.2 billion to DKK5.8 billion. Now I'll move to my final slide. Clearly COVID-19 continues to affect everyone's lives. I think in times like this, it's useful to take a step back and reflect on our business and financial position. We have a very strong foundation even stronger now with our collaboration with AbbVie. Especially important in today's environment, we've got a robust balance sheet, $1.9 billion of cash at the end of the second quarter and no debt. We have great recurring revenues and they're growing and we're using those revenues to invest in a really focused and disciplined way. We're investing in our highly innovative and differentiated product pipeline as well as in the team and capabilities to deliver it, all driving toward our 2025 Vision. Now, I'll turn it back over to Jan.

Jan van de Winkel, CEO

Thanks, Anthony. Let's move to Slide 12. So looking at this list, we set many ambitious goals for ourselves in 2020. Based on the robust progress we've made year-to-date, our strong financial foundation and our world-class expertise and capabilities, I'm confident that we will continue to be successful in the remainder of this year. Not only will our proprietary clinical pipeline continue to advance, the many regulatory milestone terms on this list and some of it have already been met, including the spectacular launch for TEPEZZA means that there is potential for many more patients to one day have access to and hopefully benefit from novel therapies created by Genmab. Let's move to Slide 13. This ends our presentation of Genmab's first half 2020 financial results. Before we take your questions, I wanted to point out one of the events we have listed on this slide here, our 2020 Capital Markets Day taking place in November. For the safety of our attendees and speakers, the event will be virtual this year, but will still feature a comprehensive update on our business and presentations from many of our talented and passionate team members. We will be sending a save-the-dates for this event soon and details on how you can register and listen to the webcast will be available on our website closer to the event. So now, operator, please open this call for questions.

Operator, Operator

Thank you, Jan. Our first question is from Peter Verdult at Citi. Please go ahead with your question. Your line is now open.

Peter Verdult, Analyst

Thank you. Peter Verdult, Citi. Jan, just one question on the data that we can expect in 2020 and 2021, particularly thinking about a 4-1BB PD-L1 and epco in terms of incremental dates are in Phase 3 plans. So could you just map out for us what we can expect for those two assets data wise and strategy-wise in 2020 and 2021? Thank you.

Jan van de Winkel, CEO

Thanks, Peter, for the question. I will start with that question and then I'll ask Judith to basically add to that. So for PD-L1x4-1BB DuoBody, we expect data in the coming months, Peter, at a conference and that will be data from the dose escalation and maybe limited data also from the expansion cohorts. For epcoritamab, we expect also data in the coming months at a key conference and that will be at the optimal dose level for epco and different B-cell tumors. That is for 2020. For '21 I will ask Judith to give you some further perspective on data from these two compounds, Peter, and potentially others like tisotumab vedotin, daratumumab, etc. Judith, maybe you can step in here.

Judith Klimovsky, Chief Development Officer

Yes. Thank you, Jan. So for 2020, nothing to add, but we are very well on track for those two major milestones. For 2021 we haven't mapped yet, but could be the case that we could present some more data toward the second half of 2021 on PD-L1x4-1BB. That's not yet mapped, so take it with a grain of salt. It's early for the projections, but we are on track for 2020.

Operator, Operator

Thank you. Our next question comes from the line of Wimal Kapadia from Bernstein. Please ask your question. Your line is now open.

Wimal Kapadia, Analyst

Great. Thanks very much for taking the question. Wimal Kapadia from Bernstein. Just following up with Pete's question on the PD-L1x4-1BB, Jan, you previously mentioned six patients were treated with the product and you had seen good responses, including in PDX failures and then you had selected a Phase 2 dose. So I just wonder if you had any incremental color to add. And in particular, I appreciate that the molecule looks relatively potent from what we've seen so far. So any additional color on tolerability would be greatly appreciated. Thank you.

Jan van de Winkel, CEO

Thank you for the question. We need to keep it brief until we present the data. I can share that we have treated a notable number of patients, including those who were previously treated with other checkpoint blockers and those with tumors typically unresponsive to these treatments. You will need to wait for the data presentation, but we are very excited about this compound. As mentioned earlier, we have significantly advanced this program and the epcoritamab program this year. Our goal is to invest in potential winners, and we believe this compound could be one of those in a rapidly growing market where new and differentiated drugs are essential to help cancer patients effectively. However, you'll need to wait for the clinical presentation in the coming months. We are very enthusiastic about it.

Operator, Operator

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

Michael Schmidt, Analyst

Thank you for taking my questions. I have a broader question about epcoritamab. Jan, could you share your vision for the long-term development plan for this antibody? Considering the DLBCL space is becoming more competitive with new antibodies and ADCs entering the market alongside CAR-T, I’m curious about your thoughts on the optimal long-term development strategy for epcoritamab.

Jan van de Winkel, CEO

Thanks, Michael for the question. I will start with that answer and then will also ask Judith to complement me on that. I can tell you that we have very big plans for epcoritamab. We are continuously dosing patients. We have started dosing and the expansion cohorts, Michael. And one of the ways we're seeing is that not only do we think that we have a very competitive molecule in indications like diffuse large B-Cell lymphoma, follicular lymphoma, but we are also having a very active molecule as it now looks in other types of B cancers where other compounds are far less active and potent. So we think that we can actually in one way open up new markets basically with this asset which is given in a subcutaneous formulation, which we think has very distinct advantages, Michael, over the IV delivered antibodies. And we are going to penetrate all other lines of treatments and different B-cell tumors. We are working with our partner AbbVie now to work on a very comprehensive, very aggressive plan. And that's probably where I want to keep it at for the time being. But certainly new insights this year. Certainly data, Michael, at key conferences and, yes, we only get more and more excited about this asset. And also the context of the competitive landscape, we have seen other compounds struggling from other companies recently. And so we think there is going to be opportunity here for a game-changing differentiation novel B-cell targeting antibody therapeutics. So we believe that we have one of the potentially best in our hands here. We have a very strong partner AbbVie. Maybe I can hand over to Judith and see that you can structure without going into too much detail on the development plan, Judith.

Judith Klimovsky, Chief Development Officer

Yes. Thank you, Jan. So division is based on the data and the data so far and the data that you will see and were coming by the end of the year. It speaks to the fact that is epcoritamab can be best-in-class. I mean it's not only the subcutaneous formulation, but also the efficacy and safety. And based on that leveraging on the partnership with AbbVie we have mapped a very thorough comprehensive plan and you will see more in clinicaltrials.gov and when it becomes public in coming months. So stay tuned. Basically I cannot disclose the clinical development plan because we need to understand it's a competitive space. But again the competition encourages us because we truly believe that we have something in hand that is differentiated and better.

Operator, Operator

Thank you. Your next question now from the line of Matthew Harrison from Morgan Stanley. Please, Matt, ask your question.

Matthew Harrison, Analyst

Great. Good afternoon. Thanks for taking the question. I guess two from me that I just wanted to ask. One, can you just talk a little bit about AXL and what you're doing internally to decide how you may move that compound forward or not? And then on Tiso, now that you have the pivotal data in hand, how are you thinking about potential other indications with solid tumors and when might we hear something about that? Thanks.

Jan van de Winkel, CEO

Thanks, Matt, for the questions. I'm going to hand over both to Judith who is having all the development. Judith, maybe you can get to the potential on AXL.

Judith Klimovsky, Chief Development Officer

Thank you. Regarding AXL SM, we announced our findings when we presented the data in September. This year, we are focusing on optimizing the pharmacokinetics and analyzing the biomarkers to guide us on potential next steps. The biomarker analysis involves fresh biopsies, which has made recruitment slower, especially due to the higher dose requirements in the current COVID landscape. However, we are optimistic that by the end of the year, we will have sufficient data to determine our next steps. Concerning tisotumab vedotin, I want to echo the enthusiasm about the data in cervical cancer. The findings are indeed promising. Additionally, this serves as a proof of concept for tissue factor as a target for other tumors, as tissue factor is widely expressed in various tumor types, particularly those with poor prognoses. This is why we initiated the basket study and the ovarian study in collaboration with Seattle Genetics. In the ovarian study, we are observing an interesting signal even in the Phase 1 expansion involving 30 patients. We are closely monitoring the progress of the basket study with Seattle Genetics, where we have enrolled patients in four different tumor types, to determine when we will have enough substantial data to share publicly. We plan to provide data in the future, but I can't commit to a specific timeline at this moment as we continue our close monitoring.

Jan van de Winkel, CEO

Thanks, Judith. Thanks, Matthew for the question.

Operator, Operator

Our following question comes from the line of Trung Huynh from Credit Suisse. Please go ahead.

Trung Huynh, Analyst

Hi everyone. I appreciate your time. I have a couple of questions regarding dara. Can you provide more details about the progress of the subcutaneous formulation? I know it’s early in the launch, but are you observing any increased usage of dara in earlier lines of therapy? Additionally, are you successfully attracting new patients to DARZALEX with this subcutaneous option? Finally, could you give us an update on the penetration of dara across all lines of therapy? Thank you.

Jan van de Winkel, CEO

Thanks Trung for excellent questions. And I am happy to actually hand them over to Anthony Mancini, our Head of Operations and Anthony will give you a good perspective for both of these questions. Anthony?

Anthony Mancini, Chief Operating Officer

Hi. Thanks for the questions. We're very pleased with the robust growth and market share gains for dara in the first half of 2020, as well as the overall FASPRO launch. J&J has executed a strong FASPRO launch with quick early access in the U.S., including a swift NCCN listing, and smooth coordination on details related to access such as P&T and pathways. Customer feedback on FASPRO has been very positive, highlighting significant benefits for both patients and offices due to reduced chair time and shorter in-person visits. With 3 to 5 million injections, compared to several hours for an infusion, this is especially valuable in the COVID-19 context. We're encouraged by the strong uptake so far. In fact, FASPRO's launch uptake is on a similar trajectory to DARZALEX, and we anticipate continued positive effects from the subcutaneous formulation in the second half of the year. Regarding market shares, the latest data shows an overarching market share of 24%, which is the highest patient share that DARZALEX has recorded. This growth is largely due to increasing use in earlier treatment lines. In the frontline setting, we've seen a three-fold increase in uptake: 9% in the latest data compared to 3% last year. A significant portion of the gains is coming from the second-line patient setting, where DARZALEX has reached an overall share of 42%, up from about 34% last year. Overall, the uptake of FASPRO is strong not just in the U.S. but globally, and we expect to see continued growth in the latter half of the year, supporting our guidance of $3.9 billion to $4.2 billion. Anthony, could you please provide additional comments on the guidance?

Anthony Pagano, CFO

Yes. Thanks, Anthony. Overall, as you've heard from us today and I guess taking a step back, right, it does start with that very, very strong product profile for DARZALEX. I think those of you who have heard me say it before, it really is the complete package. I think looking at the seven approved indications, now the SubQ, the approval in 85 countries, reimbursement in 40 countries, now more than 130,000 patients treated. So I think overall, sort of, we're very happy with the first half of the year. Obviously we saw a little bit of softness in April, some stabilization in May. But as we exited Q2 and got into Q3 we really like what we're starting to see here, particularly in the U.S.

Jan van de Winkel, CEO

Thanks, Anthony. Thank you, Trung for the questions.

Operator, Operator

And our following question comes from the line of Ken MacKay from RBC Capital Markets. Please go ahead.

Ken MacKay, Analyst

Hi. Thank you for the question and congratulations to the team. I completely agree with you, Jan, that this has truly been a transformational year despite everything happening with COVID-19.

Jan van de Winkel, CEO

Thanks, Ken.

Ken MacKay, Analyst

So my question is also on the 4-1BB PD-1 DuoBody. You're enrolling a number of different cancers with really varying degrees of immunologic temperature, as we say, lung cancer to triple-negative breast cancer, which is basically the extreme of hot versus not. So from the emerging trial data or biomarker data, really any other distinguishing features of differentiation which tumors are you so far most excited about for the 4-1BB DuoBody?

Jan van de Winkel, CEO

Thanks, Ken for the question.

Judith Klimovsky, Chief Development Officer

Hi. Can I take first?

Jan van de Winkel, CEO

Yes, yes, please do, Judith. Yes.

Judith Klimovsky, Chief Development Officer

Thank you. As you mentioned, the Phase 1 component of this study is intentionally open and includes expansions. Given the unique mechanism of action, which goes beyond simply blocking the PD-1/PD-L1 pathway to include the conditional activation of 4-1BB, we see a broader opportunity with the potential to impact tumors that are typically responsive to PD-1s or checkpoint inhibitors, as well as those that are more challenging or not responsive. Some of this data will be shared at an upcoming meeting, allowing you to see more for yourself. We will present actual data that will inform the selected expansion cohorts based on the biological differences of tumors we can target. Some cohorts will concentrate on sensitive tumors that have relapsed, have not responded, or those in a post-checkpoint scenario, along with tumors that are currently difficult to treat with PD-1s and PD-L1s. These cohorts will provide valuable data for comparison with existing PD-1/PD-L1 inhibitors. By the end of the year, we will have additional insights from the dose escalation that will clarify the basis for the expansions.

Jan van de Winkel, CEO

Thanks, Judith. Thanks, Ken.

Operator, Operator

Thank you. Our next question comes now from the line of James Gordon from J.P. Morgan. Please ask your question. James, your line is now open.

James Gordon, Analyst

Hello. Thanks for taking the question. James Gordon from J.P. Morgan. My question was about CD3xCD20. So Roche's mosunetuzumab they recently got breakthrough designation in FL. Just curious, does that change your view about how far you are in terms of time to market behind them? Are you also seeing an expedited route, did everyone get better or just whoever gets there first? That was the question. If I can also just squeeze in a quick clarification as well. So 4-1BB given the timing of the CMD on November 13th, is it possible that you actually present the data at SITC, so November 9 to 14 so you're actually going to have the data at the CMD and it already been a conference?

Jan van de Winkel, CEO

I want to thank James for joining and for the questions. I believe both questions should be directed to Judith, so Judith, you can begin with epco.

Judith Klimovsky, Chief Development Officer

Yes, so epco, we for sure, I mean we are aware of the data from every other asset in CD3 and CD20. It makes us even more excited that what we have done in two years from first-in-human to recommended Phase 2 dose and expansions and makes us even working harder with our partner AbbVie to try to take any other step to safely accelerate and this is what we are doing. So we know that this space is competitive, but we know the value that it could potentially bring to patients. So it doesn't change the plan but rather encourages us to work harder and better and with more excellence. And with regard to PD-L1x4-1BB, could you repeat the question?

James Gordon, Analyst

Sure. The question is in terms of when exactly we see the data. So I know you're having a Capital Markets Day I believe on the 13th of November and I believe the SITC virtual conference.

Judith Klimovsky, Chief Development Officer

Yes, you will see the date in the medical conference.

James Gordon, Analyst

Got you. And so that could be in time for the CMD as well to be discussed?

Judith Klimovsky, Chief Development Officer

Yes.

Jan van de Winkel, CEO

Thank, Judith. Thanks, James. Very sharp question.

Operator, Operator

Our following question comes from the line of Emily Field from Barclays. Please go ahead.

Emily Field, Analyst

Hi. Thank you. I wanted to clarify the last question because I understand that in previous communications this year, you've mentioned efforts to close the gap with Roche.

Jan van de Winkel, CEO

Are you still there, Emily? I don't think we hear you. Operator, is she still there?

Operator, Operator

I think her line dropped.

Jan van de Winkel, CEO

I think the line dropped. But I think the question was closing the gap between epcoritamab and then Roche's mosunetuzumab. Maybe Judith you can a bit more on how do you think we can actually progress epco.

Judith Klimovsky, Chief Development Officer

Thank you. Since this is what I said, we are actively working hand on hand with AbbVie to try to safely accelerate and close that gap as much as possible. We cannot quantify in months, but the fact that we started expansion cohorts tells you that we have caught up substantially vis-a-vis other CD3 and CD20 and we will continue in that taking this momentum to continue accelerating.

Jan van de Winkel, CEO

Thanks, Judith.

Operator, Operator

Our following question comes from the line of Carsten Lonborg from SEB. Please go ahead.

Carsten Lonborg, Analyst

Thank you very much. Carsten Lonborg from SEB. Another question on your CMD. I was wondering whether you see the CMDs strictly as a science event or there will also be some financial outlook? Maybe what I'm trying to understand is whether you would maybe consider updating your 2025 Vision with maybe some financial targets now that you're a more mature company? Would that be something that you could discuss at the CMD? Thanks.

Jan van de Winkel, CEO

Hey, Carsten. Thanks for the question. What we're thinking about is of course the bulk will be on the science and on the products. We have some very exciting things cooking. Now the gem of the pipeline has never had the quality it has now and we want to give you further insight on that. And then some use of the novel technology platforms, but we will of course also speak about some financial aspects, how we see the future and also about the next phase and basically investing wisely and selectively in the potential winners. But the bulk will be on the scientific and the development angle.

Carsten Lonborg, Analyst

Great. As a follow-up to our discussion on financials, could either Anthony or Jan elaborate on the increase in G&A costs for the quarter? Specifically, how much of this is attributed to commercial costs associated with tisotumab?

Jan van de Winkel, CEO

Oh, I will pass that question over to Anthony Pagano, Carsten. He can handle that for sure.

Anthony Pagano, CFO

Yes. So great. So Carsten, yes, I mean looking about sort of the higher G&A costs, I think there are a couple of moving parts here, right. In terms of R&D versus G&A split, for Q1 this year we were at 87%-13% and for Q2 we are at 81% versus 19%. If I put those two quarters together for the first half of the year, we're at 84%-16%, right. And maybe now sort of talk you through these actual moving parts with that framework. So for the H1 2020, we have higher cost compared to last year and a lot of this is down to some incremental costs following our U.S. IPO in July of 2019. Separately apart from those sort of ongoing recurring costs, separately for Q2 2020 we do have some one-off costs that we incurred in conjunction with the AbbVie collaboration. If we were to exclude these one-off costs, R&D and G&A cost split for Q2 would be more similar to what we saw in Q1. So there are some moving parts here, Carsten, but there certainly is one-off element that I just described which is impacting the numbers.

Carsten Lonborg, Analyst

Okay, it makes sense. Thanks.

Jan van de Winkel, CEO

Thanks, Anthony. Thanks, Carsten for the questions.

Operator, Operator

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

Emily Field, Analyst

Hi. Can you hear me now? Can you hear me now?

Jan van de Winkel, CEO

Yes. Yes, please go ahead.

Emily Field, Analyst

Oh, great. Sorry. I don't know what happened. Thanks for answering my other question. I just had another follow-up. I believe in one of the prior answers you mentioned up current about having a place kind of across all lines of therapy. I just wanted to dig into that in terms of what maybe you see as the ideal place for the drug in terms of the treatment paradigm in DLBCL, whether relapse, refractory second line, if you could just give some more thoughts on that.

Jan van de Winkel, CEO

Thanks, Emily. I will pass the question over to Judith.

Judith Klimovsky, Chief Development Officer

Yes, thank you for the questions. I think it's premature. I think that there are still unmet medical needs in every line of therapy and this is what I like most excited about, because this is where the impact on patients will be more evident and remarkable. But still I think that we are looking at opportunities to improve the whole continuum of treatment given the differential aspects and potential transformative nature of CD3, CD20. So I will stop there.

Jan van de Winkel, CEO

Thanks, Judith.

Operator, Operator

Our following question comes from the line of Laura Sutcliffe from UBS. Please go ahead.

Laura Sutcliffe, Analyst

Hello. Thank you. Just a quick one on DARZALEX please. Could you give us any thoughts on how you're looking at the potential in the amyloidosis market and in particular, any thoughts around duration would we welcome. Thanks.

Jan van de Winkel, CEO

Thanks, Laura for the question. I think I will first hand it over to Judith and then probably Anthony Mancini. Judith?

Judith Klimovsky, Chief Development Officer

Yes, thank you, Jan. I am really excited about the results for amyloidosis because there are currently no approved drugs for this condition. It's gratifying to see something that offers significant benefits regarding organ damage, especially given that many attempts in the past have not succeeded. Regarding the market, it's difficult to predict. In the U.S., we estimate there are around 12,000 patients with amyloidosis. However, due to the lack of effective treatments, this condition often goes unnoticed by physicians, leading to underdiagnosis or late diagnosis. It's challenging to gauge the true patient population for amyloidosis, as many do not receive the Congo Red test necessary for diagnosis because of the general lack of awareness related to the absence of effective treatments. This is from a medical perspective. Now, Anthony M, would you like to add something?

Anthony Mancini, Chief Operating Officer

Thanks, Judith. I don't know that I can add much more except to say that, really this is great news for patients as you mentioned. It's an area of huge unmet medical need and yet another positive data set to add to the many positive DARZALEX datasets. I think once filed and approved, J&J is probably in the best position to provide more color on incremental impact and duration. But it's a great question, Laura. Thank you.

Jan van de Winkel, CEO

Thank you, Laura. Thanks, Anthony.

Operator, Operator

Our following question comes from the line of Graig Suvannavejh from Goldman Sachs. Please go ahead.

Graig Suvannavejh, Analyst

Thank you for taking my questions. Congrats. Hey. Can you hear me? Hello.

Jan van de Winkel, CEO

Yes, we can hear you now. Yes.

Graig Suvannavejh, Analyst

Thank you for taking my question and congratulations on your achievements this year. I have one question regarding capital allocation. You currently have a strong cash balance, and I'm curious about where you are prioritizing investments. Are you focusing on your internal pipeline, commercialization, or exploring strategic business development opportunities? Any insights you could share would be appreciated. Thank you.

Jan van de Winkel, CEO

Thanks, Graig for the question. I will first hand it over to Anthony Pagano and then see whether Anthony Mancini wants to add anything on the commercialization, which is a very important part of the Company now going forward. Anthony Pagano?

Anthony Pagano, CFO

Yes, Graig, it's great to connect with you today. Firstly, regarding our balance sheet, you’re correct that we have a robust position, which has been incredibly helpful during this recent period. Our strong balance sheet allowed us to effectively address challenges related to COVID-19 and played a critical role in our negotiations that led to our fruitful collaboration with AbbVie. Moving forward, this strong balance sheet will remain vital as we pursue our 2025 Vision. The recent T-cell data indicates a promising path to market, and while we will need to navigate the FDA interactions, we are very excited about it. Additionally, as we look at our pipeline’s development, having a solid balance sheet gives us the ability to push those programs ahead and advance our 2025 Vision with confidence. Regarding our operating expenses, we will maintain a focused and disciplined approach as we invest in our business and the growth opportunities available. Discipline means managing risk in our investments and making tough choices, while focus ties back to our strategy that we've been executing since 2013. We are committed to achieving our 2025 Vision. Lastly, concerning external opportunities, we will remain attentive to those as well, especially in areas where we can be effective owners and evaluators of new prospects. In the short term, we expect to continue with the type of deals we've made recently. Anthony Mancini might also want to share some insights on the commercial side.

Anthony Mancini, Chief Operating Officer

Yes, look, I would reiterate what Anthony Pagano mentioned in terms of how the AbbVie collaboration is a critical step toward our 2025 Vision and part of investing behind that thoughtful step is really being thoughtful about our priorities from a commercialization standpoint and we've taken steps now to start to build our commercial organization in the U.S. and Japan recently, making key strategic appointments there and we'll continue to do that. And looking externally we will continue to look for, as Anthony Pagano talked about, opportunities to complement what we have, opportunities to deepen what we have and accelerate our quest to achieve that vision and beyond. So I think I'll leave it there Jan and pass it back to you. But thanks, Graig for the question.

Jan van de Winkel, CEO

Thanks Anthony and Anthony. I think, Graig, I'll leave it with this here.

Operator, Operator

Our last question comes from the line of Sachin Jain from Bank of America. Please go ahead.

Sachin Jain, Analyst

Hi, there. Thanks for letting me onto the call. Just a couple of pipeline questions to wrap up. On epcoritamab for the CMD in November, will you be able to outline the full Phase 3 program at that point? And by then do you expect to have visibility on how you've closed the timeline versus competition on the fast-to-market strategy to be able to give us further color there? Second question is on HexaBody-CD38. Do we still expect some initial data from that through '21? And then the final question, obviously there's a lot of exciting dates coming to year-end, but wonder if you could just flag some earlier-stage assets, which will be giving initial data next year that we can perhaps begin to focus on now. Thank you.

Jan van de Winkel, CEO

Thanks Sachin. Let me start with question two. I will allocate the first one to Judith so that she can think about what will be known at the time of the Capital Markets Day and can't communicate it publicly given the competitive landscape on epcoritamab. So for HexaBody-CD38, we still plan to move it into the clinic this year. So it's fully on schedule, Sachin. And I think at the very earliest end of next year we could see some data, but more likely in '22. And then in the new year, probably some early data from some of the programs, which are now in the clinic. We now have several new programs in the clinic which could be to do HexaBody-CD37 program, but that could be in the second half of '21, I would say, and therefore the DuoBody-CD3x5T4 probably second half of next year, at the very earliest or in '22 more realistically. Maybe Judith you can give some further color to Sachin on the full Phase 3 program for epcoritamab as we are working on and planning with AbbVie.

Judith Klimovsky, Chief Development Officer

We will not share details about our plans during the Capital Market Day, as it wouldn't be prudent. By November, however, there will be some clinical developments laid out like a map, providing two or three key points to guide you through the entire process. We will avoid discussing the full clinical development plan at the Capital Market Day, as that wouldn't be wise.

Jan van de Winkel, CEO

Thanks, Judith. Thanks, Sachin.

Operator, Operator

And there are no further questions at this time, please go ahead.

Jan van de Winkel, CEO

All right. So thank you all for calling in today to discuss Genmab financial results for the first quarter of 2020. If you were not able to give your question or you were unable to get to us with the question, please reach out to the Investor Relations team. We hope that you all stay safe, remain healthy, keep optimistic, very much look forward to speaking with that you again soon, and this concludes the call.

Operator, Operator

That does conclude our conference for today. Thank you for participating. You may all disconnect.