Ladies and gentlemen, thank you for standing by. Welcome to Legend Biotech's Third Quarter 2025 Earnings Call. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Jessie Yeung, Vice President of Investor Relations and Finance. Please go ahead.

Good morning. This is Jessie Yeung, Vice President of Investor Relations and Finance at Legend Biotech. Thank you for joining our conference call today to review our third quarter of 2025 performance. Prior to this call, we issued a press release announcing our financing results for the quarter. You can find the 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 Carlos Santos, the company's Chief Financial Officer. Following the prepared remarks, we will open up the call for Q&A. We have our President of R&D, Guowei 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 herein. 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 month, IFRS financial measures 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 new locations related to the use of these non-IFRS financial measures versus the 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 in its operation 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 reconciliation for these measures. With that, I will now turn the call over to Ying.

Hello, everyone. Thank you for joining us today. The third quarter was marked by significant milestones that I will elaborate on momentarily. And we are looking forward to presenting new data at the Annual American Society of Hematology meeting in December. During the third quarter, CARVYKTI net trade sales were approximately $524 million, which is an 84% increase year-over-year. We have now treated over 9,000 patients with CARVYKTI, and our launch remains the strongest CAR-T launch to date. In the U.S., the majority of our utilization is in the earlier line setting. Additionally, we continue to see a lot of excitement about our long-term survival data presented at ASCO on CARTITUDE-1. As a reminder, 1/3 of patients with heavily pretreated relapsed/refractory multiple myeloma remain alive and progression-free for 5 years or more after being treated with CARVYKTI. This is especially impressive considering that today's bridging protocol did not exist at the time of the CARTITUDE-1 trial, and patients in the trial had received a median of 6.5 prior lines of therapy. Ever since our CARTITUDE-1 results were first presented in 2020, we have been setting new standards for efficacy in CAR-T for multiple myeloma. We're now changing that standard to curative potential. In fact, a recent article from Nature stated that 1/3 of the treated individuals had no evidence of detectable myeloma after 5 years without further therapy, an outcome widely thought of as a prerequisite to consider using the term cure. This kind of efficacy for heavily pretreated patients is unprecedented in the field of multiple myeloma. On the regulatory front, the FDA recently approved an update to include CARVYKTI's overall survival benefit in this label. This was based on an analysis from the Phase III CARTITUDE-4 study showing a statistically significant improvement in overall survival for CARVYKTI compared to the standard of care therapy in patients with relapsed refractory multiple myeloma after 1 to 3 prior lines of therapy. Importantly, CARVYKTI is the only approved CAR-T in multiple myeloma with a demonstrated overall survival benefit in this label, which represents another step forward towards educating the physician community on CARVYKTI's unique profile as we work to bring CARVYKTI to more second-line patients in need across the United States. We expect label updates such as these and previous REMS updates will continue to improve the patient experience and enhance access in both community and academic settings. In fact, I want to share findings from a recent survey that was presented at the International Myeloma Society Meeting, where 237 patients and 267 physicians were represented across the U.S., U.K., Spain, France, Germany, Italy, Japan, and Brazil. In terms of what patients value when selecting a new line of treatment, overall survival was clearly the most important attribute for patients. Also on the topic of survival, we are pleased that there will be two oral presentations on CARVYKTI at this year's upcoming ASH meeting. Before we dive deeper into this, I want to highlight that there will be an oral presentation at ASH on LCAR-G39D, our first-in-class allogeneic gamma delta T CAR-T cell therapy targeting both CD19 and CD20 in adults with relapsed/refractory B-cell non-Hodgkin's lymphoma. As you may have seen in the abstract, we are pleased that preliminary efficacy showed an encouraging response rate and sustained durability in patients. Turning to the CARVYKTI oral presentations. Based on the CARTITUDE-4 subgroup analysis, 80% of patients with standard-risk cytogenetics were progression-free and off treatment at 2.5 years. In patients with standard risk disease who achieved MRD-negative CR at 1 year, this rate increased to 100%. The low rate of progression events in CARVYKTI treated patients with standard-risk cytogenetics shows the profound benefit of a single infusion in this population. In the second oral presentation on CARVYKTI, based on correlated biomarker data, longer PFS is associated with better immune fitness at baseline and stronger immune responses post CARVYKTI infusion. As observed in peripheral blood and within the tumor microenvironment of patients with relapsed refractory multiple myeloma in CARTITUDE-1 and CARTITUDE-4 studies. The peripheral immune fitness was more pronounced in patients with one prior line of therapy versus three prior lines of therapy and beyond, where deterioration plateaued. Similarly on this topic, on the next slide, featuring data we presented at ASCO, you can see that while CARVYKTI has a favorable benefit-risk profile across all different subgroups and lines of therapy, its PFS improvement diminishes with each line of therapy, which is why it's important to follow the latest International Myeloma Working Group guidelines on obtaining CAR-T therapy as early as first relapse. This slide also contextualizes the significance of our efficacy data from CARTITUDE-1, where there were 6.5 million prior lines of therapy and CARVYKTI still demonstrated a median PFS of 35 months. As we approach 10,000 annualized dose manufacturing capacity, we continue to extend our leadership in cell therapy through further advancing the field of CAR-T in multiple myeloma. We recently initiated another study called CARTITUDE-10, which is a Phase II multi-cohort trial to further characterize the efficacy and safety of CARVYKTI, which speaks to our commitment to investigating new product goals. Furthermore, a recent blood paper on effective bridging strategies across 20 centers found that among the 119 patients who proceeded to CAR-T therapy after receiving bridging therapy, including 98 patients receiving CARVYKTI. Not only were there deep responses, sustained soluble B-cell maturation energy decline, and consistent CAR-T expansion. There were also no cases of peripheral neuropathy, parkinsonism, or colitis reported. As we focus on educating the physician community on our overall survival benefit based on the extensive CARVYKTI data that's been generated, we're also taking the opportunity to remind physicians about the latest research on bridging therapy and ALC monitoring as well as the most recent IMWG guidelines on CAR-T. In a few moments, you'll hear from Alan on how we and our partner, Johnson & Johnson, are bringing CARVYKTI to more multiple myeloma patients in need. In light of the demand, we continue to see across the U.S. and overseas we are moving full steam ahead on our capacity expansion plans. On a final note on CARVYKTI before we turn to our pipeline, we continue to expect to complete enrollment for CARTITUDE-5 and 6 this year. We believe the CARTITUDE-5 and 6 trials are key to moving CARVYKTI into the frontline setting. Looking ahead at our long-term growth, in addition to looking forward to moving CARVYKTI into the frontline, we remain focused on solidifying our leadership in cell therapy more broadly. We are making progress in new indications such as solid tumor and NHL programs, as you have seen with the data at recent medical conferences. Additionally, we are looking forward to the ribbon-cutting ceremony tomorrow for our new research facility in Philadelphia, where in vivo delivery will be one of its key focuses, positioning us well to pursue this area of innovation. We remain excited about this new frontier of cell therapy. To sum up, Legend is the largest stand-alone cell therapy company with over 9,000 CARVYKTI patients treated as we forged the path to cure. With a cash position of nearly $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. We continue to anticipate achieving profitability for CARVYKTI by the end of 2025 and company-wide profitability in 2026, excluding unrealized foreign exchange gains or losses. And with that, I'll pass it over to Alan to provide an update on CARVYKTI.

Thank you, Ying. CARVYKTI remains the undisputed leader of CAR-T sales in a single quarter with net trade sales of $524 million during the third quarter. In addition to being the highest selling CAR-T ever, CARVYKTI has also achieved a CAGR of 111% since launch, which is unmatched in this class. Despite these record-setting numbers, we continue to believe there is significant opportunity for further market penetration for CARVYKTI, given the magnitude of the addressable multiple myeloma market opportunity for CAR-T. While we are continuing to expand our footprint of authorized treatment centers in the U.S., the next frontiers of growth are also expected to come from expanding our presence in the community setting in the U.S. and expanding our market leadership outside the U.S. Diving deeper into our performance this quarter, CARVYKTI net trade sales grew 84% year-over-year and 19% from the second quarter. Our global growth was driven by continued share gains and site expansion. U.S. net trade sales of $396 million grew 53% year-over-year and 11% quarter-over-quarter. Quarter-over-quarter growth in the U.S. was primarily driven by continued strong demand with 60% utilization in earlier-line settings. Regarding our performance outside the U.S., we had sales of $128 million which is nearly 5x the amount over the same period a year ago and represents a 58% increase quarter-over-quarter. Our performance outside the U.S. was driven not only by continued growth in Germany, but by strong launches in Spain and Belgium. In terms of supply tailwinds to further build upon our CAR-T market leadership in multiple myeloma, I would like to provide some incremental updates since the second quarter. We are proud to announce that our manufacturing network growth and continued efficiencies mean that we are now able to fully supply the demand and there is no longer a wait for patients. We expect both supply and demand will continue to expand together to help ensure a seamless customer experience. In the U.S., we are currently in the final stages of the expansion of the Raritan facility that will significantly expand capacity to support continued U.S. market growth. As it relates to supporting growth outside the U.S., I am pleased to announce that our Tech Lane facility recently initiated commercial production. This is an important milestone for serving patients in Europe to meet the increasing demand. Turning to demand drivers. 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, which has now been added to the U.S. label. We are focused on educating both treating and referring physicians in the academic and community settings on how CARVYKTI is the first and only multiple myeloma cell therapy via a single infusion to significantly extend overall survival versus standard therapies and on our long-term survival data. In the community setting, we continue to raise awareness, drive referrals and educate oncologists and nursing staff on managing patients once they transition back to their offices. And as Ying mentioned, we are also educating them on the IMWG guidelines and the importance of treating eligible patients as early as possible to take advantage of T cell fitness and potentially improve survival outcomes. Lastly, in the U.S., the number of authorized treatment centers now stands at 132 sites across the U.S., with about 1/3 of our sites being community and regional hospitals, which serve an important need in the community setting. We are also pleased with the discussions we've had with many stakeholders about the need to bring CAR-T even closer to the community with adoption by community networks or practices. Our early experience with Virginia Oncology Associates indicates that this is an area of large need and opportunity. Currently, we estimate that 80% of myeloma patients live within 5 miles of a CARVYKTI authorized treatment center. While that is strong coverage, we think we can do even better over the next 1 to 2 years. And outside the U.S., we will continue to benefit from the new launches. And with reference to new markets, we are proud to say that we have currently launched in markets around the world. With the help of our partner, Johnson & Johnson, we have activated 246 treatment sites. We continue to be excited about bringing CARVYKTI to more eligible patients in Denmark, Sweden, Belgium, Luxembourg, Spain, Portugal, Saudi Arabia, and the private markets of Israel and the U.K. With the approval of commercial production at our Tech Lane facility, we are well on our way to being able to treat over 10,000 patients on an annualized basis around the world. Now it's time to take a closer look at the financials. So I'll turn the call over to Ying.

Thank you, Alan. As many of you already know, in August, we announced that Carlos Santos is joining Legend as our new Chief Financial Officer. I'd like to extend my gratitude to Jessie Yeung for her outstanding leadership and significant contributions in guiding our finance organization prior to Carlos' arrival. Carlos joins Legend from AstraZeneca where he held various positions over the last 10 years, including CFO for U.S. oncology, CFO of the Latin America business, and acting Regional VP of the Latin America Commercial unit. His extensive experience in the biotech sector and wealth of financial leadership expertise will be invaluable as we continue to execute on our commercial and clinical plans and seek to attain company-wide profitability in 2026. We are pleased to welcome Carlos to our executive team.

Thank you, Ying. And good morning, everyone. I am very excited to join Legend at this pivotal moment in its global development and growth. After my first 3 months here and visiting our Tech Lane facility, I can confidently say that there is a clear vision and path for Legend to be the global leader in cell therapy. I also see a strong path to profitability through our revenue growth and operational efficiency. First of all, CARVYKTI continues to grow at a strong rate with net sales up 84% year-over-year in the third quarter. And as Alan mentioned, we have a number of tailwinds that should continue to generate demand in the vast multiple myeloma market. I believe there's a significant opportunity for growth in the community setting, especially with our unique outpatient administration advantage, which provides physicians with flexibility. As Ying has mentioned previously, both CARTITUDE-5 and CARTITUDE-6 approvals have the potential to significantly expand the opportunity for our already proven commercial therapy, CARVYKTI. In terms of Legend's operational efficiency, our operating expenses as a percentage of revenue have significantly improved over the last 12 months due to our focus on disciplined expense management and increasing automation throughout our organization, and we continue to look at ways to further unlock efficiencies. Drilling deeper into our third quarter, we delivered solid financial results with CARVYKTI net sales up 84% year-over-year. Total revenues were $272 million, driven by collaboration revenue growth of 84% year-over-year. In Q3, we delivered a $40 million net loss, but it was $19 million on an adjusted net loss basis after excluding items that are not representative of the company's core business, such as $15 million in stock-based compensation. Importantly, our operating loss of $70 million in the same period last year was reduced by 38% to a $43 million operating loss during the third quarter. This 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 supporting the second-line indication launch and our manufacturing capacity, our third quarter gross margin on net product sales remained consistent at 57%. As expected, R&D expense on an IFRS basis grew slightly to $113 million, or 42% of revenue, while SG&A on an IFRS basis grew 10% from the prior year to $87 million in the third quarter, or 32% of revenue. Overall, we have made significant progress on operating cash flow generation, as evidenced by our $29 million in cash flow from operations this quarter, and we are continuing to make strides towards profitability. Our adjusted diluted earnings per share was a negative $0.05 compared to a negative $0.11 for the same period last year. Now turning to capital allocation. We have maintained a strong balance sheet with approximately $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 company-wide profitability, excluding foreign exchange gains and losses, which we anticipate in 2026. In summary, our third quarter results demonstrate continued commercial execution supported by CARVYKTI's unique clinical outcomes along with increased operational efficiency. We are also pleased with our progress towards pioneering next-generation cell therapy treatments as we leverage our unique innovation model to maximize our cell therapy platform. And now it's time to take your questions. Operator, we're ready for the first question, please.

The first question comes from Gena Wang with Barclays.

Carlos, congratulations on your new role. Since you finished your remarks, I wanted to ask you about our expectations for 2026. We anticipate starting to see positive cash flow, and with the potential revenue from CARVYKTI, that could lead to significant cash flow in 2026. Given this increased cash availability, how do you plan to prioritize its use, particularly concerning our pipeline assets? I also have a quick question about the ASH abstract. I understand that both J&J and Legend have withdrawn a presentation comparing IMAGINE-1 and CARTITUDE-1. Ying or Alan, could you provide some insight into the reasoning behind this decision? Lastly, regarding the Raritan site, you mentioned the expansion should be completed in the second half. With less than two months left, can we confirm that everything is on track? I recognize that the final step requires FDA approval, and should we expect that to happen before the end of 2025?

Okay. Thank you, Gena. This is Carlos. In terms of your inquiry about how we're going to allocate cash, given our profitability expected in 2026, I would say that first and foremost, we want to maximize our CARVYKTI franchise. So this is our priority in terms of capital allocation. As you know, we've been making significant capital investments in manufacturing and expanding our network. At the same time, we will also continue to significantly invest in our CAR-T platform. We're going to be looking into every opportunity to accelerate our existing programs that will strengthen our market leadership in CAR-T, including business development.

And yes, let me answer the other two questions. In terms of Raritan, the plan is very much on track to be able to have the facility expansion completed, and we've already started the submission process for that. So everything is on track for us to head into 2026 with the annualized doses for 10,000 doses, and that is complemented by, of course, as you know, the news we announced around the commercial production in Tech Lane. So now we have all four nodes operating on a commercial basis. I did want to just address your question on the abstract. So there was a poster from ASH that was withdrawn due to the limited data available for ANIDA cell in the public domain at this point; the abstract was drawn in alignment with the authors, and we are looking forward to future opportunities to share the data.

And our next question will come from Terence Flynn with Morgan Stanley.

I wanted to ask about the ATC numbers you provided for both the U.S. and the rest of the world. Looking ahead to 2026, what are your realistic expectations for those numbers? Additionally, you've made significant progress in manufacturing capacity, and I noted the mention of the 10,000 unit target. Once you finish all current initiatives, what do you expect that number to be?

So regarding the ATC, as you mentioned, we're at 132. Actually, we have an update. We have 132 sites in the U.S. So combining that with the OUS, we're past the 250 mark for the total number of sites, and that's a recent update. We continue to update this every single day as we watch it. And to your question about where it could go in '26, we have our sights on continuing to expand, for example, making sure that we have full coverage in the 160-plus sites that some of the competition has. So as you hear from competitors around their network, we're very confident that in 2026 by the time they are launched that we'll be able to have coverage in the same vein. I will also add that as we look even ahead, the total number of sites in the U.S. that have either started to do CAR-T or have seriously expressed interest is in the number of sites, and we believe that we are well on track to be able to get there over time and then continue to expand further into the community setting. I will also address your question about the plan beyond 10,000. So with all four nodes in the network, that being in the U.S., obviously, Raritan, the expansion there, Novartis, which continues to ramp for us and deliver and of course, in Europe with the increasing demand in Europe, we have the Tech Lane facility now coming online with full commercial production and Obelisc continuing to drive production as well and gaining efficiencies. This is a network that we believe will enable us to get eventually to 20,000 doses annualized. That's through not only continued ramp in all four of the nodes but also continued efficiencies, lowering the out of spec, and improving the manufacturing success rates.

And our next question will come from Eric Schmidt with Cantor.

As you move from a supply-constrained environment to a demand-constrained environment, what do you think the most important things are that you need to do to mobilize demand to fulfill your new supply and how quickly do you think you can get to essentially near full utilization of the 10,000 doses? Thank you.

This is Alan again. So in terms of accelerating demand, we have a number of plans in place to be able to do that. First of all, it's all about making sure that physicians around the U.S. and around the world really fully appreciate the benefits of treating earlier. And that's something that we have certainly gotten traction on, whether that's data coming out in the real world or some of the app flow-throughs that you see in presentations. There's a broader and greater appreciation for the fact that efficacy is better when you treat in earlier lines, the safety, and the incidence of neurologic events and other adverse events is lower when you have patients treated in the earlier lines. You have improved T cell fitness, which is another aspect to have closer that's going to be at ASH. And as you see from the ASH posters, we also have data that clearly suggests that the out-of-spec rates are lower. So where everything is better earlier, and that's a key message that we'll continue to drive not only with the current authorized treatment centers but also the referred in the community. Just to add one more point. We have a network as we talked about and the footprint today, but our community strategy is really based not only on continuing to leverage the 1/3 of sites that are in the community, the 1/3 of sites in our current network at our community and regional hospitals, but also driving referrals from the physician practices that are not in the network. And then ultimately, we're having conversations with some of the large practices such as the one you saw from our announcement earlier in the year in VOA to enable the community to actually start to administer CAR-T themselves.

And any sense on when you get to full capacity?

Well, I think as we mentioned today, our capacity is now aligned with the market demand. As we work on increasing our capacity, we will also be working to boost the demand.

Eric, this is Ying. Maybe I'll tell you that from where I sit, the latest data suggests that we're really running at nearly 100% capacity utilization at all four nodes right now. So we continue to expect that all four nodes will be utilized at very high capacity next year as well. Thank you.

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

This is Dana filling in for Jess. I have just one question. Could you provide some insight on what to watch for at ASH from a competitive perspective?

I think the lack of information is significant. We are completely ready to compete with a potential CAR-T product that may be released next year. However, we have not yet seen the Kaplan-Meier curve from ANIDA Cell, making it difficult to predict what that data will show. Nevertheless, we will continue to enhance our efficacy, and we have a strong advantage based on the efficacy results from the CARTITUDE-4 population, especially in the earlier treatment lines. Over the next year, we will demonstrate that CARTITUDE-4, like CARTITUDE-1, offers the long-term durability that both physicians and patients seek. We are confident in the efficacy data we will present, and it’s just a matter of when we will receive competitive data.

Yes. On the pipeline side, we are going to release early clinical data for our internal platform. This product has a unique design and a unique CMC process. We see a highly manageable safety profile and good expansion in oncology patients. The preliminary efficacy shows encouraging response rates and, importantly, sustained durability.

And our next question will come from Jon Miller with Evercore.

I would like to focus more on the community progress you've achieved, particularly within the VOA network. Have you started treating patients there? How has the response been in that patient network? Are there plans to expand beyond the Virginia network in the near future? Also, when you mention that one-third of your sites are regional or community centers, I assume most of those are regional centers. Could you provide more details on the adoption expectations in the communities as we approach 2026?

Sure. Yes. So let me unpack that a little bit. We think about the community strategy on a number of paradigms. The first is the fact that we have in our current network, as you mentioned, sites that are already community and regional hospitals. And it's a mix because sometimes a large regional hospital will be servicing a community, and that's what we mean by that group. It's about 1/3 of the 130 or so spaces that we currently have. And we see that this segment of our network is already contributing to surpass the growth that we see. So it's a very healthy, robust part of our network. It's going to continue to grow and serve the community at large. The second part of the strategy is around engaging community physicians who are referred, and we've been doing that over the last many months with our partner, J&J. We have sales teams and medical teams who are engaging fully with the referring network. We're building a lot of good information there for them. We're communicating on the profile, we're communicating on the fact that referring earlier is better, and we're gaining traction there as well. The third leg of the journey, if you will, is then going to the community networks, and you mentioned VOA. So just to answer your question, yes, we have started to treat patients at VOA. The feedback has been positive so far. We're also learning a number of things about just how these community networks will need to be supported throughout their experience of coming online, but there are definitely plans to engage not only with VOA and continue to grow that network but also to engage with other practices throughout the next several months and into 2026.

And when you think about the community-specific practices here, I mean, I guess I'm asking about your ability to dose in settings where your potential competitors absolutely would not be able to dose at least not first, not just referring to academic centers, but folks getting treated in the community where competitors don't have reach. Can you talk about how that will evolve in '26?

Well, I think we're laying the groundwork for having all that presence in the community, but also to your point, we have about half of our current patients are treated in the outpatient setting. By virtue of the fact that we have a median onset of the CRS in the clinical studies at 7 days, that means that increasingly, practices are comfortable with making sure that physicians can dose patients in the outpatient setting, they can be monitored, and then if they need to be readmitted for one reason or the other, they're able to do that afterward. Additionally, as we've discussed before, the removal of the REMS is also an important tailwind because it's been enabling patients to have only 2 weeks of local monitoring before they're able to go back home. And then also it removes the driving restriction of 8 weeks, and that's now down to 2 weeks. So that's another important factor for patients being able to get dosed, infused, and then be able to be monitored more close to home and get back to their lives.

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

This is Dana on for Yaron. It was an impressive quarter. I have a question regarding the ASH abstracts. There were two from Mayo and Moffitt indicating that prophylactic dexamethasone does not appear to lower the risk of delayed neurotoxicity with CARVYKTI. Given these findings, how are you planning to adjust your strategy for addressing delayed neurotoxicity? Are you exploring any alternative treatment regimens or considering modifications to any Phase III protocols?

This is Ying. I'll answer this question. So obviously, if you look at both the presentations at ASH, you see that ALC remains a very predictive marker. However, the dexamethasone prophylaxis may not be sufficient. In fact, recently, you have seen publications from real-world studies, including the blood paper that was published in August. So we think that the most important factor is you need to treat those patients with high tumor burden with effective bridging regimens. And you will see actually quite a few assets coming out in the ASH next month, that various centers are using different recipes or different regimens. But again, all the commonality suggests that you have to use an effective bridging therapy. In fact, one of the PIs from Mayo, Dr. Lin recently said at IMS that you have to switch to a different effective regimen if the first one does not work. So the critical factor here is we have to bring the tumor burden down. And once you do that, you will not see adverse events such as neurotoxicity, colitis, or CRS. That is actually a trend we're seeing. Like I said, you will see more real-world data and also more presentations at ASH about this.

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

I got a couple on CARTITUDE-10. I see fludarabine is being removed, but is there any change to cyclophosphamide dosing? And assuming this looks, I guess, to Legend standards, will this be somehow added to the label or formally, I guess, approved by the FDA and can be adopted broadly?

James, this is Ying. So you're right. We and our partner, Johnson & Johnson, recently initiated a Phase II study called CARTITUDE-10. The first cohort would evaluate the fludarabine-free regimen for lymphodepletion. The reason being that we know fludarabine has been established as a neurotoxic factor here. So we'd like to see whether we can actually achieve a similar level of lymphodepletion without using fludarabine. So that is already up and running. We're enrolling and dosing patients now. On your second question, we have to generate the data first. And of course, if the data is positive, we would potentially take that to the FDA to see if that could be included in the label. But right now, it's premature to say anything about label inclusion.

Can I ask one more on the primary being MRD? Was that any insight from the FDA? And do you have any insight on MRD becoming formally a surrogate?

Yes. So James, regarding MRD as a potential registrational endpoint, we're continuing our discussion with the FDA. We'd like to see under which settings and in which line potentially can margin activity be an endpoint. But you have to stay tuned, and when we have more to say, we'll disclose about that.

Thank you. The next question is going to come from Justin Zelin with BTIG.

I was curious if you could give us an update on outpatient administration, what percentage of patients are you seeing dose in the outpatient setting? And any update on the contribution of revenue from earlier lines versus later lines?

Yes. So I think I mentioned this earlier, outpacing based on claims data is about 50% of the patients currently, and we continue to expect that will be growing over time. Although as we onboard new sites, sometimes they tend to start with patients in the inpatient setting. So the growth of the site network is also a little bit of a drag on the outpatient overall mix, but those sites that have converted into outpatient are doing so with good success, and it's enabling additional capacity at each site and efficiency. To answer your second question, we see about 60% of our overall scripts coming from the second through fourth line population. That does continue to grow, albeit a little bit more slowly than we had anticipated, but we see that evolution continues, and in fact, the fastest-growing part of that mix is in the third line. So what that tells us is that increasingly, there is adoption, there is acceptance, and there's enthusiasm for bringing CAR-T and CARVYKTI specifically into the earlier line setting based on the CARTITUDE-4 data.

And the next question will come from Mitchell Kapoor with H.C. Wainwright.

This is Katie on for Mitchell. Regarding your guidance for profitability by 2026, what milestones and roadblocks are underpinning that? And what should we be keeping an eye on to understand if you're on track to hit that goal?

Yes. Thank you, Katie. Our view on profitability has not changed. We actually expect to have profitability for CARVYKTI this year in 2025 and enterprise-wise or for Legend as a company in 2026. This is underpinned by our significant growth for the multiple factors for CARVYKTI and our management of operating expenses resulting in positive free cash flow in the year of 2026. Again, as we've mentioned, we have significant tailwinds in our revenue growth, and this should serve us well for profitability next year.

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

So just maybe like I'm trying to understand if I mix between the second to fourth line that you commented on. In the third line, you said there's a post comment. Can you give us a sense of how much is that? And just secondly, on the Majestic III data, like top-line is available now, but just curious how that can start to impact the second line opportunity for you in any way?

We cannot provide a detailed breakdown of revenue from each line of therapy. However, it is crucial to note that all therapy lines are growing overall. We are seeing an increase in patients for the second and third lines, among others. Additionally, there is rising demand for CARVYKTI, leading to more patients in later lines as well. The mix between the earlier lines of CARTITUDE-4 and CARTITUDE-1 continues to be approximately 60-40. The most significant growth is observed in the third line, as physicians are increasingly eager to initiate CARVYKTI treatment for patients shortly after their first or second relapse.

Ash, I do want to answer a question about Majestic III. First of all, we're really pleased that there could be potentially another regimen for patients in the second line with multiple myeloma. Secondly, I want to point out that the commercial opportunity for this addressable market is very large. You're looking at about 80,000 to 100,000 patients in that segment. And thirdly, I think we are targeting potentially a different segment here, right? Because if you look at CARVYKTI, we want to emphasize that CARVYKTI has unmatched unprecedented survival data and also durability. It's also a one-time treatment. So there is a certain patient population who really prefer that kind of convenience brought by a one-time infusion without further need for any other medication for myeloma. So that is how I view this market, and we don't really expect the MAJESTIC III data will really impact the uptake for CARVYKTI in second line.

And our next question will come from Clara Dong with Jefferies.

This is Jenna on for Clara. Could you provide some insights on your strong international growth? Could you specify where you are currently experiencing the highest demand and uptake, and where you anticipate greater growth potential following the introduction of Tech Lane? Additionally, looking ahead to 2026 and beyond, how do you expect Tech Lane's capacity to influence market share?

Yes. Outside of the U.S., which is obviously led by our partner, J&J, there's been strong uptake in Germany, Spain, and Belgium, in particular, as well as the other markets that have launched. Many of the European markets really see the value here of a one-time infusion, the durability that you get with the PFS and OS benefit as truly providing a strong value not only to patients but also to the health system. So there's a lot of support for using CARVYKTI earlier in the treatment paradigm, and that's encouraging. We continue to advance the launches that we've already had in the 14 markets around the world, which we listed in the presentation. And we're very excited to have Tech Lane now online from a commercial standpoint to enable the supply both between Tech Lane and Obelisc together, we'll be able to meet the capacity demand for the growing European launches.

And our next question will come from Sean McCutcheon with Raymond James.

A couple of quick ones from us. You noted improving out-of-spec rates. Can you speak to the trend as you see more real-world patients in the earlier line setting and ongoing efforts to push that out-of-spec lower? And any commentary on what you think is a feasible minimum steady state there? And then secondarily, can you speak to any early impact of loosening REMS requirements through auto CAR-T and whether you're seeing an uptick in referrals for earlier line patients?

Yes. There is an abstract at ASH that's reviewing about 3,000 patient records for out-of-spec. The out-of-spec rate is somewhere in the 6% to 9% accorded abstract, and in fact, it's lower in the earlier lines. So it's very consistent with what we're hearing around earlier is better. It's very consistent with the fact that the T cell is stronger in the earlier patients, and that's enabling a better dose and better viability and lower out-of-spec. We'll continue to drive that down over time across all the nodes in the network, and we believe that that's going to be very competitive with other products on the market. In terms of the REMS, it's a little bit early. We're hearing a mix of reactions from sites. One is that this is great news for patients and that it is enabling patients to get back home more quickly. Other sites are taking a little bit more of a wait-and-see approach in saying they're going to decide on a patient-by-patient basis which patients were able to go back and which patients they want to keep more close to home. But it's going to be a consultation. The bottom line is it's a burden lifted, and it's one that is enabling a more robust conversation about the fact that we can extend the benefit and efficacy we see with CARVYKTI to more and more patients.

I show no further questions at this time. I would now like to turn the call back over to Ying for closing remarks.

Thanks, everyone, for joining today's call. As you can see, we had a really strong quarter, and we continue to expect another strong quarter in the fourth quarter, as well as a very strong year in the next year, 2026. I just want to say that we look forward to seeing everyone here at ASH because we and James are very confident about the efficacy of CARVYKTI, and in fact, we will publish the data in an oral presentation of some data. That's not including the ASH abstracts. We strongly believe that the data at ASH will raise the bar even further for efficacy. So we look forward to seeing everyone in Orlando. Thank you.

Thank you. That does conclude today's conference call. Thank you for participating, and you may now disconnect.