Ladies and gentlemen, thank you for standing by. Welcome to Legend Biotech Second Quarter 2025 Earnings Call. Please be advised that today's conference is being recorded. I would now like to turn your conference over to Caroline Paul, Associate Director of Investor Relations. Please go ahead.

Good morning. This is Caroline Paul, Associate Director of Investor Relations at Legend Biotech. Thank you for joining our conference call today to review our second quarter of 2025 performance. Prior to this call, we issued a press release announcing our financial results for the quarter. You can find a press release on our IR website at legendbiotech.com. Joining me on today's call are Ying Huang, the company's Chief Executive Officer; Alan Bash, the company's President of CARVYKTI and Jessie Yeung, the company's Interim Chief Financial Officer. Following the prepared remarks, we will open up the call for Q&A. We have our President of R&D, Guowei Fang and Chief Medical Officer, Mythili Koneru 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. In addition, adjusted net income or loss is a non-IFRS metric. This non-IFRS financial measure is in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with IFRS. There are a number of limitations related to the use of these non-IFRS financial measures versus their closest IFRS equivalents. However, we believe that providing information concerning adjusted net income or loss and adjusted net income or loss per share enhances investors' understanding of our financial performance. We use adjusted net income or loss as a performance metric that guides management and its operation of and planning for the future of the business. We believe that adjusted net income or loss provides a useful measure of our operating performance from period to period. Our press release includes IFRS to non-IFRS reconciliations for these measures. With that, I will now turn the call over to Ying.

Hello, everyone. Thank you for joining us today. We had quite an eventful second quarter as we made history with our long-term survival data at ASCO and achieved the most CAR-T sales ever during a single quarter. During the second quarter, CARVYKTI net trade sales were approximately $439 million, which is a 136% increase year-over-year. We have now treated over 7,500 patients with CARVYKTI, and our launch remains the strongest CAR-T launch to date. In the U.S., more than half of our utilization is now in the earlier line setting. We continue to anticipate achieving operational breakeven for CARVYKTI by the end of 2025 and company-wide profitability in 2026, excluding unrealized foreign exchange gains or losses. On the regulatory front, we're excited about the FDA's decision to remove risk evaluation and mitigation strategies or REMS for currently approved BCMA- and CD19-directed autologous CAR-T therapies. As a result of this change, CARVYKTI's FDA label was also updated to reduce monitoring requirements, such as instructing patients to remain within proximity of a health care facility for at least 2 weeks instead of 4 weeks and advising patients to avoid driving for at least 2 weeks following product administration compared to 8 weeks previously. We expect this label update to improve the patient experience and enhance access for patients in both the community and academic settings. On another overwhelmingly positive note, we received a lot of great publicity following our presentations at ASCO and EHA in June. Starting with new data presented at ASCO on our pipeline candidates. In the Phase I study, LB1908, our autologous clouding 18.2 targeted CAR-T cell product demonstrated encouraging antitumor activity with manageable safety and tolerability, and CAR-T cell expansion was observed in all patients. Additionally, in the Phase I dose escalating study evaluating LB2102, our DLL3 targeting CAR-T candidate, no dose-limiting toxicity was reported and the preliminary efficacy signal was observed up to four dose levels. As a reminder, we have an exclusive global licensing agreement with Novartis to develop and commercialize LB2102 and other DLL3 targeting CAR-T therapies discovered by Legend. Turning to CARVYKTI, there were two different analyses I'd like to spend some time highlighting from ASCO. First, you'll recall that in the final protocol-specified analysis of CARTITUDE-1, the median PFS was 35 months, and median overall survival had not been reached, which had already established a new benchmark for triple-class exposed patients with relapsed, refractory multiple myeloma. Subsequently, at ASCO this year, in an analysis of remission and survival from CARTITUDE-1, one-third of patients with heavily pretreated relapsed, refractory multiple myeloma remain alive and progression-free for five years or more after being treated with CARVYKTI without further multiple myeloma treatment. Furthermore, patients with high-risk cytogenetics and those with extramedullary plasmacytomas were equally likely to be progression-free. To put this into context, at our ASCO Investor Event, Dr. Sundar Jagannath noted that some of his patients were deciding between hospice and CAR-T therapy. The median overall survival of five years clearly set a new benchmark in this population. As a result of this groundbreaking data, numerous media outlets publicized these results as well as patient stories. A number of clinicians indicated to us that they have noticed increased patient awareness about CARVYKTI following some of these articles and TV news stories. Second, based on analysis of subgroups in the intent to treat population from CARTITUDE-4, CARVYKTI improved progression-free survival and overall survival versus the standard of care in all subgroups, including patients with standard and high-risk cytogenetics, EMD, and one prior line of therapy and beyond. For example, the median PFS for patients with high-risk cytogenetics was 37 months, compared to 10 months for the standard of care. These data continue to support a positive benefit versus risk ratio for CARVYKTI in patients with lenalidomide refractory multiple myeloma as early as after the first relapse. Turning to further improvements in CARVYKTI safety profile, we continue to leverage our learnings on extensive data that's been generated on over 7,500 patients treated with CARVYKTI. We are facilitating best practice sharing on predicting, mitigating, and managing neurologic events, and we continue to highlight new safety data to patients and physicians. Importantly, we do not see a material impact on utilization and expect continued strong performance on CARVYKTI. In a few moments, you'll hear from Alan on how we and our partner, Johnson & Johnson, are trying to bring CARVYKTI to more patients in need of CAR-T therapy with a demonstrated survival benefit. On a final note on CARVYKTI before we turn to our pipeline, we continue to expect to complete enrollment for CARTITUDE-6 this year. We believe CARTITUDE-5 and CARTITUDE-6 trials are key to moving CARVYKTI into the frontline setting. Looking at long-term growth for Legend, in addition to looking towards moving CARVYKTI into the frontline, we remain focused on solidifying our leadership in the field of cell therapy. We're making progress in new indications such as solid tumor programs, as you have seen with the recent ASCO data. Additionally, we remain excited about the new research facility currently being built in Philadelphia, where in vivo delivery will be one of its key focuses, positioning us well to pursue this area of innovation with the right infrastructure and resources. We believe this next-generation approach to off-the-shelf therapy holds a lot of promise for incurable diseases. Our new platform, TaVec, which is short for T-cell activation vector, is being used to target oncology and autoimmune indications. It provides T-cell specificity, activation, and safety through mutations in glycoprotein to block transduction of non-T-cell. We've already dosed a few patients in the IIT study for non-Hodgkin's lymphoma, and we're planning for multiple U.S. IND-enabling studies in the future. We're excited to be embarking on this next frontier of cell therapy innovation, and we look forward to providing additional updates as we make progress on this front. To sum up, Legend is the largest standalone cell therapy company with over 7,500 CARVYKTI patients treated as we forge the path to cure. With a cash position of approximately $1 billion, we are investing in our core differentiators in cell therapy and remain focused on delivering operational efficiency in order to ensure durable long-term growth. And with that, I'll pass it over to Alan to provide an update on CARVYKTI.

Thank you, Ying. As Ying mentioned, CARVYKTI is now the highest selling CAR-T therapy in a single quarter. CARVYKTI net trade sales of $439 million during the second quarter surpassed the previous CAR-T industry record of $414 million in sales in a single quarter, and all of this was achieved in just 12 quarters, which is record-breaking in the industry. Diving deeper into our performance this quarter, CARVYKTI net trade sales grew 136% year-over-year and 19% from the first quarter. Our global growth was driven by continued share gains and capacity expansion. U.S. net trade sales of $358 million grew 114% year-over-year and 13% quarter-over-quarter. Quarter-over-quarter growth in the U.S. was primarily driven by continued strong demand with nearly 60% utilization in earlier line settings. Regarding OUS performance, we had sales of $81 million, which is 4x the amount over the same period a year ago and represents a 59% increase quarter-over-quarter. Our OUS performance was driven by expansion in Germany, Switzerland, Austria, and Brazil, and we continue to be excited about bringing CARVYKTI to more eligible patients in Spain, Denmark, Sweden, Belgium, Portugal, and the private markets of Israel and the U.K. where we recently launched. Turning to tailwinds to build upon our CAR-T market leadership in multiple myeloma. As it relates to manufacturing, we expect to receive approval for our physical expansion in Raritan by the end of the year. Our Tech Lane facility also remains on track to initiate commercial production later this year. This is another critical component of our plans for serving patients in Europe to meet the increasing demand. The progress we've made in executing our manufacturing plan and investments has enabled us to be among the best in class. Our manufacturing success rate remains at 97%, which we believe is the highest in the CAR-T industry, and we are focused on continued reductions in our turnaround time, which stands at 30 days. We believe this turnaround time is more than sufficient based on our conversations with physicians. As we expand manufacturing capacity and enhance our efficiency, we expect to benefit from a number of demand tailwinds as well. First, of course, is the recent unprecedented long-term survival data that we presented at ASCO on CARTITUDE-1. Second is our demonstrated overall survival benefit. The superior efficacy we have compared to other CAR-Ts should be further aided by the recent REMS updates, which are an incremental positive for patients receiving CAR-T therapy and their quality of life post CAR-T administration. Lastly, in the U.S., we have expanded access to CARVYKTI in the community by continuing to activate more treatment sites. The number of authorized treatment centers has quickly increased since launch. We now have 123 sites across the United States. Outside of the U.S., we will continue to benefit from the recent launches I mentioned earlier. I'd like to expand now on our strategy for second line plus adoption in the U.S. and provide an update on our progress outside the U.S. First, the opportunity to offer CARVYKTI to the second-line multiple myeloma patients and beyond remains significant. We estimate that there are about 80,000 patients globally in the second to fourth line who could potentially benefit from our treatment. Combined with the fifth line plus opportunity, this represents over 100,000 patients globally. Aside from targeting specific types of relapse, refractory patients who might benefit most from CAR-T based on their prognosis, we have now implemented strategies to engage treaters, referrers, and patients. In parallel with educating physicians on CARVYKTI's profile in order to increase referrals to CARVYKTI sites, we are also working to increase patient awareness through advocacy efforts and even direct-to-consumer education efforts. In fact, we know that multiple myeloma patients and their caregivers are highly educated and engaged in their care, which is why we think engaging them directly will be impactful. We recently launched an awareness campaign on multiple digital streaming and social platforms about the benefits versus risks of a one-time infusion of CARVYKTI. We are looking forward to building awareness through this ever-patient campaign. While we engage community physicians and patients today, we are also looking ahead to continue to expand treatment into the community as well. Our launch took us from a concentrated set of tertiary care and academic centers to where we are today with an expanded footprint, about one-third of which is made up of regional and community hospitals who have become local experts in CAR-T. As we look to the rest of this year and beyond, we are embarking on bringing CARVYKTI even closer to the community by identifying community practices that can do CAR-T administration. We are pleased to announce that Virginia Oncology Associates, a network of practices serving a large part of the state is one of our first partners in this effort. To sum up, I'm very pleased with our progress to date to reach more patients. Alongside Johnson & Johnson, we have activated 123 treatment sites since launch. While practices in the community setting cannot be activated overnight, we have multiple strategies in place to make CARVYKTI a more readily available treatment option in the future. CARVYKTI has also seen significant international expansion. In 2024, we launched four markets, and we've more than doubled that for 2025, and we are only in August. Our growing footprint in markets outside the U.S. is supported by our manufacturing facility in Obelisc and will be further supported with the Tech Lane site expected to start commercial production for Europe later this year. Globally, with the help of our partner, Johnson & Johnson, we have activated 213 treatment sites. The record-breaking pace at which we have moved to expand access and become the highest selling CAR-T therapy in a single quarter, with a demonstrated overall survival benefit, is a testament to our joint ability to trailblaze in the field of myeloma cell therapy. Now it's time to take a closer look at the financials, so I will turn the call over to Jessie.

Thank you, Alan, and good morning, everyone. During the second quarter, we delivered solid financial results with CARVYKTI net sales up 136% year-over-year. Total revenues were $255 million, driven by collaboration revenue growth of 136% year-over-year. Q2 delivered a net loss of $125 million but $10 million in adjusted net income, after excluding items that are not representative of the company's core business, such as $111 million unrealized foreign exchange loss due to our treasury center based in Ireland. Importantly, our operating loss of $41 million in the same period one year ago was reduced by almost half to an operating loss of $22 million during the second quarter. The meaningful improvement in operating results was driven by our operational efficiency and disciplined expense management. Even though we continue to invest in our robust pipeline and support the second-line indication launch and our manufacturing capacity, our second quarter gross margin on net product sales was 57%. As expected, R&D expenses on an IFRS basis declined slightly to $98 million or 39% of revenue, while SG&A on an IFRS basis grew 23% from the prior year to $81 million in the second quarter or 32% of revenue. Overall, we believe we have been making strides towards positive operating cash flow generation and profitability. Our adjusted diluted earnings per share was $0.03 compared to negative $0.01 for the same period last year. Now turning to capital allocation, we continue to have a strong balance sheet with $1 billion in cash and equivalents and time deposits. We will continue to prioritize disciplined expense management as we fund our operating and capital expenditures, including future innovation until we achieve profitability, which we anticipate in 2026 excluding unrealized foreign exchange gains or losses. In summary, our second quarter results demonstrate strong commercial execution supported by CARVYKTI's differentiated clinical profile, along with increasing operational efficiency. We are also pleased with our progress towards pioneering next-generation cell therapy treatments for intractable and incurable diseases, as we look to maximize our cell therapy platform. And now it's time to take your questions. Operator, we are ready for the first question, please.

The first question comes from Terence Flynn with Morgan Stanley.

Congrats on the progress. Maybe two for me. I was just wondering if you can give us any update on potential timing of interim readouts from CARTITUDE-5 and CARTITUDE-6 recognizing the importance of these studies to moving into the first line setting. And then on the efforts in the community oncology setting, can you provide us any more details about Virginia Oncology, like why they elected to lean in here and how you think about that as a template maybe some other community oncology centers to follow and what the timeline might be?

Thank you for your question. Regarding the interim readouts, we are closely monitoring the events, and our actions will depend on what we observe. We are also in discussions with the FDA about using MRD as a dual primary endpoint. We don't have much more to add at this time, but we will continue those discussions and observe how the data develops.

Terence, it's Alan. Yes, our efforts in Virginia Oncology is, in fact, a template for how we're thinking about community adoption. As we talked about before, it has the following components. We want to make sure that we are expanding our footprint into the community and regional hospital setting. We want to make sure we're driving referrals from community practices. As VOA demonstrated as a key milestone for us, also starting to activate in the network of immuno-oncology practices. VOA is a leader in this space. They previously administered CAR-T, both in lymphoma and the myeloma space. So they're well respected in this area. They're part of the McKesson network, and they were very excited to partner with CARVYKTI.

And the next question will come from Gena Wang with Barclays.

Congratulations on a strong quarter. I would like to follow up on Terence's question about the community expansion effort. Have you seen any percentage of revenue attributed to this effort in the second quarter of 2025? If not, when do you expect this initiative to start reflecting in revenue? Additionally, regarding the 123 treatment centers, what percentage has an outpatient setup? For the second quarter of 2025, what percentage of patients or revenue comes from the outpatient setting?

Gena, it's Alan. I'll share a couple of factors here. First of all, 70% of patients come from the community setting. So that's why the community setting and our continued penetration in that space is very important. As I mentioned, those efforts will include not only expanding the footprint within the community and regional hospitals, driving referrals, but also starting to administer in the community practices. I think it's a little early for us to pin specific numbers on each element or the contribution of each element or any particular site. In terms of outpatient though, I'll also give an update. We continue to see that a little over half of our patients are administered in the outpatient setting. That is both across any of these community sites, as I mentioned, as well as in the academic centers, their ability to use an outpatient setting. And that's important because that frees up capacity from the inpatient constraints and infrastructure constraints and enables us to not only improve the experience for patients but also improve the experience for the centers. The other element that we've talked about before is earlier line treatment. As we go into the community, we expect to be able to see more patients referred into the academic centers and the authorized treatment centers from the earlier lines of therapy.

And the next question will come from John Miller with Evercore.

Congrats on all the progress. Two for me. I would love to hear more about the breakdown of your currently treated patients in these early line settings? I know you talk about the CARTITUDE-4 label from second to fourth line, but what about patients in the second line specifically and the third line specifically where you won't be overlapping at all with competitors? How much of your current revenues are driven by those second and third-line patients specifically? And then just one on J&J's bispecific efforts. How do you expect that their next-gen T-cell engagers are going to interact with CARVYKTI eventually when they're competing on the market? And how do you expect J&J to position them relative to cell therapy?

John, we don't plan to break down any more detail around the various lines of therapy. But what I can say is, as we said before, that nearly 60% of our orders are coming from the second through fourth line population. So those are the earlier line patients who we feel will provide us a significant advantage to any potential competitor who comes in, in later lines and that's from our ordering system. So that is self-reported data from physicians, and we're very excited about that growing each quarter and continuing to grow throughout the course of this year and certainly before any competitor launches. In terms of the bispecifics, I think we've seen that CAR-T is very well regarded as not only a treatment because of its one-time infusion, but also the overall survival benefit and the durability that CAR-T, and specifically CARVYKTI can provide. So in terms of positioning, right now, CARVYKTI is really owning that second through fourth line opportunity within the J&J portfolio. This is an opportunity for us to solidify our position with patients for whom they've already had one relapse. They're looking for overall survival. They're looking for long-term durability and J&J and Legend are combined, very committed to this positioning for CARVYKTI.

And also John, this is Ying. I want to add to Alan's comments. If you notice that you can find natural trials on clinicaltrials.gov, where our partner, J&J, is actually combining and/or sequencing CARVYKTI with some of the devices in their portfolio. So you will see the direction of that development. It is too early and premature to comment on strategy on developing the prices of it because right now it's still at a very early stage in Phase I stage. Although we cannot disclose the breakdown of second, third, fourth, and fifth line and beyond, and plus some of those are coming from actually insurance claims data. It's not necessarily coming from our own data, but I can tell you if you combine second and third line, those are probably the fastest-growing revenue contributors in the mix of CARVYKTI. Also, if you talk to physicians, you will notice that the large majority, probably 70%, to 80% of patients are actually receiving a bridging therapy. So sometimes if you look at insurance claims, you will see a second-line patient who comes in and then received a bridging therapy for one or two cycles would actually be classified as a third-line patient. That is another reason why we should look at second and third lines not combined.

Just one other comment regarding the trispecific from J&J. If the video that was released, a lot of it was in the BCMA naive population, which, as we know, is getting harder and harder to find. As we move CARVYKTI into earlier lines of therapy, it's really going to be in other BCMA products approved, it's going to be hard to find that patient population.

And the next question will come from Jessica Fye with JPMorgan.

This is Adam on for Jess. I really had two. Can you comment on the recent blood paper as it relates to real-world rates of neurotox with CARVYKTI? And my second one, what is your latest perspective on CARVYKTI's penetration into the CARTITUDE-4 indication of second to fourth line?

Sure. Regarding the blood paper that you're referring to by Dr. D. Coral in that large data that 98 patients were treated with cilta-cel at 20 various centers. In those patients, that used TALVEY as bridging therapy to a single infusion of CARVYKTI, it was noted that there were no events of parkinsonism or Guillain-Barré syndrome. There were only two reports of cranial nerve palsy, both of which resolved. It really highlights the opportunity of an improved safety profile with strong bridging like with TALVEY. If you compare that to the real-world data of about 2%, it decreased to 0% in the large data set.

In terms of the CARTITUDE-4 population, second through fourth line, again, as we said before, this is our main growth driver. We're focused on driving earlier lines of therapy. Nearly 60% of our sales are coming from that population. I would say, again, as we talked about before, this is a population that is about 80,000 patients worldwide. You can just based on the number of patients that we treated to date, we still have a lot of opportunities in this space, a very large opportunity for us to continue to capture in the second through fourth line population globally.

Adam. Thanks for this question on the blood paper. We actually think it's a very important paper here because if you compare this dataset from the competing dataset, you're looking at a total of 134 patients receiving TALVEY, out of which 119 per city to get a CAR-T and then 98 patients received commercial CARVYKTI. These are from multicenters, right? 20 centers, including 18 in the U.S. and 2 in Germany. If you also look at patient baseline, they received a median of five prior lines of therapy, 44% had high-risk cranies, 41% had EMD extramedullary disease. So 85% of those patients would not have qualified for CARTITUDE-1. Still, if you look at the safety profile, we did not see any delayed neurotox such as parkinsonism or GBS. There were only 2 cases of mild cranial nerve palsy and both resolved. If you compare this data set to the competing dataset of about 120 patients, I would argue it's a very similar denominator here. If you look at the neurotox, very similar as well. I think that is a very well-documented study, like I said, peer-reviewed on Blood journal. This gives you a sense of the real-world safety.

And the next question will come from Konstantinos Biliouris with BMO Capital Markets.

Congratulations on your progress. We would like to hear your thoughts regarding the recent efficacy data from a competitor, particularly the 18-month progression-free survival, which seems to be comparable to CARTITUDE-1. What are your thoughts on that, even though the follow-up period is shorter than what you have shared? Also, how are you considering the positioning of CARVYKTI moving forward?

Thanks for your question. I'd like to stress that CARVYKTI is really the best-in-class BCMA CAR-T. We've treated over 7,500 patients, as you've just heard earlier. It really demonstrated an overall survival benefit in this early second to fourth line patient population as reported in the CARTITUDE-4 study. In addition to that, the CARTITUDE-1 data from the ASCO has shown that with the one-time infusion of CARVYKTI, one-third of the patients in this very heavily pretreated population actually didn't progress after five years. This is unprecedented data and shows the long follow-up that we have with patients treated with CARVYKTI. I would argue that the patient population in the Arcellx study that you're referring to is really fundamentally a different patient population, particularly regarding the prior lines of therapy. The CARTITUDE-1 study is a much more heavily pretreated patient population. As you have mentioned, their data is immature and still evolving with not sufficient follow-up. So based on some other conversations we've had with physicians, they're really wondering how these patients have done when they reach the 18th month PFS, and how many of them have actually reached that point. Without the evidence of the Kaplan-Meier curve, which actually the CARVYKTI we had reported around the 18-month timeframe, it's really hard to tell the Arcellx study how these patients did overall. That's why I think it's important that we see that data and stress the fact that CARVYKTI has clearly differentiated and has very durable responses with the large amount of data sets that we've provided to date.

And the next question will come from Yaron Werber with TD Cowen.

Congrats on the quarter. You noted on the call that you're on track to finish enrolling CARTITUDE-6 this year. This has incrementally pushed out versus mid-2025 previously. Any reason that rule might be progressing a little more slowly than expected? And does this mean that we're still going to see an impact on Q3 revenues from slots being diverted to CARTITUDE-6? Overall, does that change your expectations that previously on accelerating growth for CARVYKTI in the second half of the year versus the first half?

Our enrollment in CARTITUDE-6 has been progressing quite speedily. In fact, we've completed enrollment totally except for continuing to complete in Japan, which is the last country. So we're very excited about the fact that physicians are enrolling on the study, and it shows the excitement of this patient population with CARVYKTI.

And just to add in terms of your second part of your question, we're very confident in our ability to continue to drive capacity expansion in the second half of this year. Novartis continues to ramp throughout the year. The Tech Lane clinical approval is taking on those patient slots and enabling more commercial capacity across the network as we continue to get efficiencies from our network in terms of out-of-step rates, improved turnaround time, and better manufacturing success rates across the network. As we mentioned before, in the second half of this year, we anticipate the physical expansion for Raritan as well as the commercial approval for Tech Lane.

And maybe I'll just add that if you recall for the CARTITUDE-1 trial for that indication, we actually enrolled also very small, less than 10 patients cohort, just specifically for the Japanese approval because that's a requirement. So we're doing the same for CARTITUDE-6. But like you just heard from our Chief Medical Officer, we have already completed global enrollment for CARTITUDE-6.

And the next question will come from Kelly Shi with Jefferies.

Congrats on another strong quarter. Curious as CARVYKTI has traded now over 7,000 patients, also follow-up on your commentaries on the overall safety profile, including delayed neurotoxicity. Curious if any noticeable difference has been observed in earlier line patients versus late line? If so, what are the factors that drive the difference?

Thank you for your question. As we've shown from the CARTITUDE-1 to CARTITUDE-4 data, the delayed neurologic event has decreased, particularly the parkinsonism from 6% to 1% in CARTITUDE-4. So we do believe that earlier line treatment does improve the safety profile quite significantly. Part of that success is the strong bridging therapy that is provided to these patients, and these patients just have more options for good bridging therapy in the earlier lines. As we discussed earlier in the call, the blood paper by Dr. D. Coral shows that in a large data set, there was no evidence of parkinsonism, further showing the importance of having good bridging therapy to decrease the neurologic events but also improve the efficacy profile ultimately. Both of these things, I think, will be really important. I think as we continue the mitigation strategies that we put in place are important, and treating physicians are using them, and they continue to show improvement in these safety events.

Kelly, I'll just add a little color on what we're seeing from physicians and hearing from the field. The earlier the patients are referred in and treated, the better experience overall. The T-cells were fitter, so that means that we have lower out-of-spec. We have better efficacy. We also, by virtue of what May outlined, have lower rates of any of the rare side effects. We are in a situation where everything is better when you treat earlier, and that message is very much resonating. That's what the thought leaders are talking about from the podium: Get your patients in earlier, and you get the benefit of CAR-T earlier in the treatment paradigm.

And Kelly, this is Ying. Maybe I'll just add to the last point, which is everyone follows the FDA AR database. Again, if you look at the overall incidents, it's increasing, but that's because we're treating more than 7,500 patients. However, if you do the math using the denominator and numerator, we just provided, you will see in fact, I've seen a few sell-side reports saying that the percentage incidence is actually coming down in terms of delayed neurotoxicities.

And the next question will come from Leonid Timashev with RBC.

I wanted to ask where you expect future demand to come from. In the past, you've mentioned your ability to adjust demand. So I'm curious about your thoughts on 2026, specifically regarding how the supply curve will compare to the demand curve. Can you discuss this in terms of geography, specifically the U.S. and EU? Given that CAR-T therapies have historically performed well in Europe, should we anticipate more growth from Europe in 2026, potentially reaching a level similar to that of the U.S.? How are you viewing the relationship between the supply and demand curves for the U.S. versus the EU?

We will be driving both supply and demand simultaneously. They don't grow necessarily on a linear fashion each, but as both grow, we'll be able to support the market with supply. In terms of the breakdown in terms of geography, you saw in this quarter, increasing contribution from Europe with the 11 markets outside of the U.S. now launched. We anticipate that will continue to grow over 2026 and beyond. Additional major markets are planned for 2026. So ex-U.S. contribution will continue to become an increasingly meaningful component of the CARVYKTI sales. In terms of demand, just to provide a little bit more detail on some of the demand dynamics within the U.S., we talked about it in the opening remarks, but the ASCO data and the recognition of the overall survival benefit and the long-term survival are something that's going to continue to grow in terms of awareness. That will translate into not only driving referrals but also increasing utilization in the earlier lines. We also talked about the fact that the REMS removal will be an important component of improving the patient experience. Patients can then be treated in an authorized treatment facility but then monitored, as heard from Ying, closer to home, with a lower number of weeks in terms of monitoring, and fewer weeks in terms of the driving restrictions. These things really do matter to patients and their family and caregivers when they're trying to get back into a normal functioning life. So think about the REMS removal, the overall survival, and the ASCO data. As we talked about as part of the opening remarks, we've also started to directly engage patients. This is our DTC effort in a very targeted way, recognizing the fact that myeloma patients and their caregivers love to hear about CAR-T, want to learn about CAR-T, and want to be able to have the conversation with their physicians, and that's what we've started to do. I expect the demand to come from many of those drivers.

And the next question will come from James Shin with DB.

Appreciate VOA coming online, but what does the partnership actually bring to Legend? And I guess, broader question is what percentage of the smaller community practices like VOA are still pending CARVYKTI slots? Secondly, is the biggest driver for community adoption getting a lighter version of fact accreditation?

We're in the very early stages of having more penetration in the network practices like VOA. So VOA is the first key milestone for us. But as I mentioned, it's the first one in the ones that are planned with J&J and Legend. In terms of fact accreditation, there are several efforts underway both industry groups as well as legislation at the state level to lift the requirements for fact accreditation. We want to make sure that authorized treatment centers for cell therapy and for BCMA CAR-T are, of course, qualified to do so, experts in that area, but not necessarily facing all the significant burdens required with fact accreditation. There are multiple efforts, as you mentioned, to provide some sort of either fact, light or create a fact umbrella from an academic center such as UPenn to other community hospitals that are part of that umbrella. So again, these are all efforts that will continue to bring CAR-T closer to patients; patients don't want to have to travel into the cities or the major centers for their treatment. This enables them to get CAR-T closer to home.

And James, just to supplement what Alan just commented. In fact, Texas is the first state in the U.S. that actually passed a State Legislature recently that in the state of Texas, there's no longer a requirement for fact accreditation for reimbursement by insurance carriers. We do foresee that more and more states will follow suit.

And our next question will come from Mitchell Kapoor with H.C. Wainright.

I have two. The first one, could you just talk about, since we're halfway through the third quarter at this point, can you talk about the important CARVYKTI trends that you're seeing since the end of June that may show up in the third-quarter numbers? And then second, on geography and mix, could you talk about the ex-U.S. mix trend? And if the 30% U.S.-EU pricing delta is likely to hold as access broadens?

Our demand trends are strong. We're very comfortable with where things are headed for the rest of this year. In terms of the mix, as I said before, we believe that the launches in Europe will continue to provide incremental demand. Out of Germany, the largest of the markets ex-U.S., is continuing to grow very nicely, and we continue to see that Europe will be a meaningful and increasing contribution to the overall sales picture for CARVYKTI.

Unfortunately, we cannot comment on pricing, as you can understand. We believe that CARVYKTI offers a very, very strong health economic benefit based on the survival and also the PFS benefits we have seen. In fact, if you follow last month's ODAC held by the FDA to evaluate BARP from GSK, I think one doctor, one KOL, Dr. Paul Richardson from Dana-Farber and Harvard Medical School pointed out in one of the slides that so far in the second-line setting, there's only one trial and one drug that proves survival benefit significantly over standard of care, and that is CARVYKTI in CARTITUDE-4. So we're very well positioned with all these benefits.

Okay. Yes. More specifically on the first question, is there anything since the end of June that you guys are seeing that is different than what we've heard on the call so far that may be a trend in Q2?

The only thing I'll add is, anecdotally, and Ying alluded to this earlier, since the ASCO presentation, we've heard more and more patients coming in and actually either holding up one of the local newspaper articles or the New York Times article or having heard about the data, and it's reaching patients, it started to have those conversations with physicians. We've heard that from the physicians themselves that that's what patients are saying. So anecdotally, this is creating a lot of buzz and excitement both among the prescribing community. If you go to a medical conference, and there was one this past weekend, I think you'll see physicians start their talk by showing the New York Times headlines from ASCO. Again, the anecdotes are showing that there's a lot of interest in the long-term survival benefit that you get from CARVYKTI, and we see that starting to take shape in the marketplace as well.

And the next question will come from Justin Zelin with BTIG.

Congrats on the strong record-breaking quarter here. So with the $1 billion in cash here, you're approaching profitability. Just curious how do you think about approaching reinvestment, with reaching profitability here across manufacturing your pipeline, licensing once you're reaching profitability with your vision and your position in the global cell therapy landscape?

Thank you for your question. We are committed to reaching profitability with $1 billion in cash. We are still very disciplined in funding, but we are committed to the next generation of cell therapy treatment for intractable and incurable diseases.

And then just another question that we get is do you expect any material impacts from the recent tariff changes under manufacturing costs or your supply chain and just any impact on how you're mitigating those?

Our understanding is that the details relating to any potential pharma-related tariffs are still being worked out, but because our U.S. products are predominantly made and sourced in the U.S., at this point, we believe that any potential exposure to tariffs will be immaterial based on our evaluation.

And the next question will come from Ash Verma with UBS.

Can you provide an update on the stability of Novartis commercial supply for the second half of the year? Should we anticipate that most of it will be reflected in third-quarter sales? Also, regarding the first-line data generation for CARTITUDE-5, do you have an expectation of obtaining this data in 2026? I know you've previously mentioned the CARTITUDE-2 cohort ENF, which we are still awaiting. Is that something we might see later this year?

On Novartis, we got the approval earlier this year, as you know, for commercial production, and that has continued to ramp. We expect it to be at full capacity by the end of this year. So that will continue to contribute to our growth over the course of the year.

Regarding your other parts of your question regarding CARTITUDE-5, it will be events driven. We really need to monitor those closely. So we will not be able to provide more details beyond that. Regarding the CARTITUDE-2 E&S cohorts looking at frontline patients, we cannot disclose what is being submitted to conferences later this year at this time.

And this does conclude today's question-and-answer session and also concludes today's conference call. Thank you so much for participating, and you may now disconnect.