Genmab A/S (GMAB) Q1 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to Genmab's First Quarter Report 2020 Conference Call. [Operator Instructions]. During this telephone conference, you may be presented with forward-looking statements that include words such as believes, anticipates, plans or expects. Actual results might 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 Relations 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. I must advise you that this conference is being recorded today. And now I would like to hand the conference over to one of your speakers today, Jan van de Winkel. Please go ahead.

All right. Thank you. Hello, and welcome to the Genmab conference call to discuss the company's financial results for the quarter ended March 31, 2020. Our CFO, Anthony Pagano, is joining me on today's call. And you will also have a brief introduction to our new Chief Operating Officer, Anthony Mancini. Before I discuss the progress that Genmab has already made this year, I would like to address the unique circumstances under which we are presenting our first quarter results. The COVID-19 pandemic continues to post unprecedented challenges in our lives and to companies across the globe. At Genmab, we are closely monitoring the evolving landscape created by this global health crisis and its potential impact on our employees, business and key priorities. 2019 was Genmab's strongest year to date, both with regards to our pipeline and to our financials. This solid foundation continues to position us very well for the future and for future growth despite the uncertainty due to COVID 19. 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 now move to Slide 3. Now let's turn to some of the highlights from the first quarter of 2020. First, I would like to remind you of the recent changes to our executive management team. Anthony Pagano took on his new role as CFO at the end of February, and you will be hearing from him later in today's presentation. At this point, I would like to introduce you to Genmab's Chief Operating Officer, Anthony Mancini, who joined us in March. In this newly created role, Anthony is responsible for ensuring that Genmab will be able to bring its innovative and differentiated medicines to patients around the world with his leadership of our commercial, corporate development, business development and IT functions. I will now please - I now turn the presentation to Anthony Mancini to introduce himself. Anthony, please go ahead.

Thanks, Jan. Good afternoon and good evening, everyone. I'm excited to have joined Genmab, and my first month here has been extremely positive. I'm very pleased to take on the commercial, IT as well as the business and corporate development responsibility as we work together to achieve our vision of bringing our own differentiated medicines to the market. I've been impressed by the highly talented people, the innovative spirit and the relentless drive at Genmab through the COVID-19 challenges and overall. Let me just share a little bit about my background. The vast majority of my career was spent at Bristol-Myers Squibb, where I had the opportunity to launch and lead large teams of over 1,100 people across various functions and therapeutic areas, including oncology, hematology, immunology, transplant and cardiovascular disease. I've also had the privilege of leading several very successful partnership-based brands in the United States and around the world. I believe Genmab is in a unique position. It has a track record of creating highly innovative medicines, a rich and differentiated clinical pipeline, a solid financial position and a fantastic team. I'm really looking forward to continuing to work with the entire Genmab organization and our partners to bring innovative new cancer medicines to patients. And I'm also looking forward to meeting everyone on this call in person. With that, let me pass the call back to Jan.

Thank you, Anthony. We are very pleased that you have joined our leadership team. Let's now turn to our proprietary pipeline. We have maintained the momentum from 2019 with advances including the dosing of the very first patient with the DuoHexabody products as 2 HexaBody-CD37 has now moved into the clinic, and we look forward to an additional product in the clinic with the submission of the IND and the first CTA for DuoBody-CD3x5T4. One of our products in collaboration with BioNTech, DuoBody-PD-L1x4-1BB, also progressed in its development with an expansion cohort initiated in the Phase I/II trial in solid tumors. Finally, I'm pleased to announce that following initial data at last year's ASH, complete dose escalation and efficacy results from the Phase I/II study of epcoritamab was accepted for presentation at this year's ASCO meeting. As a reminder, we expect to have 9 products in the clinic by the end of this year, so we are very well on our way. Recent focus was not limited to our proprietary products. In addition to the approval of Horizon's TEPEZZA, which I discussed during our full year results presentation, both U.S. and European authorities accepted Novartis' submissions for approval of subcutaneous ofatumumab in relapsing MS. At present, we still anticipate a potential U.S. approval in this indication in the first half of this year. Also of note, one of the DuoBody products consisting of 100% Genmab-created antibody building blocks and now in clinical development with Janssen called amivantamab or JNJ-372, received a breakthrough therapy designation from the FDA, and this is the very first of such designation for DuoBody product candidates. For DARZALEX, we reported $937 million in net sales by J&J during the first quarter, and this was an increase of 49% over Q1 last year, resulting in DKK 775 million in royalties to Genmab. Given the challenging coronavirus situation, we are very pleased with DARZALEX' performance in Q1. In addition to its strong sales performance, DARZALEX received an additional approval in Europe in the first quarter based on the CASSIOPEIA study, and Janssen submitted applications for approval of 2 regulatory authorities in the U.S. and Japan based on the CANDOR study. I'm extremely pleased to be able to conclude the exciting U.S. approval of the subcutaneous formulation of daratumumab, now called DARZALEX FASPRO, and this is a landmark approval for patients. As we saw in the pivotal Phase III COLUMBA study, the fixed-dose subcutaneous formulation significantly reduced treatment time from hours to just 3 to 5 minutes while still demonstrating similar efficacy and safety with significantly fewer administration-related reactions compared to IV daratumumab. DARZALEX FASPRO is the first and only subcutaneous CD38 antibody approved in the U.S. for the treatment of multiple myeloma, and we are very much looking forward to its launch, especially during these chaotic times as it could provide patients with a choice for a faster treatment option. And of course, we are also looking forward to a potential approval in Europe following the positive opinion from the CHMP for subcutaneous daratumumab, which occurred just 1 day before the U.S. approval. I will now turn the call over to Anthony Pagano to present our financial results for the first quarter of 2020. Anthony?

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 it provides a useful context against which to consider the impacts of COVID-19. First off, let's think about our revenue profile. On the left, you can see the component parts of our current and future recurring revenue streams. We are looking forward to the continued growth and expansion of DARZALEX. You can also see ofatumumab and TEPEZZA, and there's a lot to be excited about here. As we've heard from our potential partners, these are both potential blockbuster products, and we're really excited about the potential of adding 2 additional recurring revenue streams in the years to come. Next, on to R&D investment shown on the right. We'll continue to be focused and disciplined in our approach, and we're going to expand and accelerate our potential winners. As well as investing, we remain focused on the bottom line. In 2019, we delivered our seventh consecutive year of profitability, and we continue to have a strong balance sheet with a significant cash position and no debt. When we put this all together, we have a robust financial framework and a strong foundation to continue to execute against our 2025 vision. Of course, we're not immune to COVID-19, and I'll return to that shortly. But stepping back, what stands out for me from this overall framework is that at a time when growth may be hard to come by, Genmab is a resilient business with a very high-quality product pipeline and great growth prospects. With this context set, let's now take a closer look at an important component of our recurring revenue growth, DARZALEX sales on Slide 5. As you know, continued strong market growth led DARZALEX to near triple blockbuster status in 2019. For 2020, we anticipate that sales will continue to ramp up significantly. DARZALEX had continued strong market growth and share gains in the first quarter of 2020, with worldwide net sales of $937 million, a 49% increase over sales in the first quarter of 2019. This translates to DKK 775 million in royalty income for Genmab. So DARZALEX is on a clear path to market leadership in multiple myeloma. It's really continuing to deliver for us, and you can see that in the Q1 revenues on Slide 6. A revenue breakdown by category is shown on the left of this slide. The largest contributor to the increase in revenue is a good illustration of our key theme of recurring revenue growth. DARZALEX royalties grew more than 50% compared to the first quarter of 2019. Additional drivers for our Q1 revenue were milestones and reimbursement income related to additional partnership agreements. As well as investing - 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 Q1. In total, operating expenses increased by DKK 204 million, which was driven by the accelerated investment in our product portfolio, including the advancement of both epcoritamab and DuoBody-PD-L1x4-1BB, which together accounted for more than 80% of the increase in Q1. We've also spent more on expanding our very talented team. We have hired key team members to support our growing product pipeline, and we've continued to build our commercial and other capabilities. Our revenue growth outpaced the higher investment levels, driving DKK 71 million of operating income. Overall, this is a great illustration of the robust financial framework that I described earlier. Now having looked at the individual parts, let's look at our Q1 financials as a whole. Here, you will see a P&L summary. In Q1, revenue came in at DKK 892 million, an increase of 51% compared to Q1 2019. The increase was primarily driven by higher DARZALEX royalties. Total expenses in Q1 were DKK 821 million, with 87% being R&D and 13% G&A. Operating income was DKK 71 million compared to an operating loss of DKK 26 million in the first quarter of 2019, primarily driven by higher revenue. That brings us to the net result, where we reported net income of nearly DKK 269 million compared to DKK 72 million in the same period last year. So a strong Q1 both in terms of our overall numbers and DARZALEX sales, but of course, that preceded COVID-19. So let's turn to that on the next slide. As we enter Q2, we've started to see some softness in sales of DARZALEX. Clearly, patient visits have become more difficult, and some newly diagnosed patients are delaying the start of treatment. According to IMS data, U.S. sales of DARZALEX on a gross basis are down around 15% to approximately $40 million per week compared to the 4-week average at the end of March. As you know, sales in the rest of the world are a bit more challenging to unpack as they cover many countries being impacted by COVID-19, and our line of sight here is more limited. However, given the seriousness of multiple myeloma, patients with active disease need treatment to avoid progression or worse. Ultimately, patients who are foregoing treatment now will still need to be treated soon. So on balance, we believe what we're currently seeing is likely to be a temporary delay rather than any fundamental disruption. And based on the very strong clinical data of DARZALEX, supporting the 7 approved indications in the United States as well as the approval of the subcu version last week, we currently expect that sales will recover in H2, which brings me to our guidance on Slide 10. Despite some headwinds, at this stage, the guidance we issued in February remains intact. As a reminder and starting with the summary P&L, we expect our revenue to be in the range of DKK 4.75 billion to DKK 5.15 billion, driven by continued growth of DARZALEX. We anticipate our 2020 operating expenses to be in the range of DKK 3.85 billion to DKK 3.95 billion. This step up in investment reflects our enthusiasm for our pipeline. Our project costs account for more than half of our total investment and are also driving more than half of the growth of our cost base. In fact, 87% of the increase in our project investment relates specifically to epcoritamab and DuoBody-PD-L1x4-1BB, the 2 programs we are looking to expand and accelerate in 2020. Putting all this together, we're planning for substantial operating income in 2020 in a range of DKK 0.85 billion to DKK 1.25 billion. Now let's zoom in on DARZALEX. The key drivers underpinning DARZALEX' growth remain very much in place, notwithstanding COVID-19. As a reminder, the key drivers are: first, following the MAIA and other approvals in 2019, we expect further market share gains in frontline. Second, the recent approval of the subcu formulation. We believe this approval is even more important given the clear advantages of subcu delivery in the current environment. And third, we anticipate continued strong market shares across all lines of therapy and geographies as DARZALEX gains further traction globally. So for 2020, we anticipate that sales will continue to grow somewhere between 30% and 43% and be in the range of $3.9 billion and $4.2 billion. Now I will move to my final slide. Clearly, in the short term, COVID-19 is affecting everyone's lives. But in conclusion, 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. 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 both our highly innovative and differentiated product pipeline as well as the team to deliver it. And especially important in today's environment, we've got a robust balance sheet, $1.9 billion of cash at the end of Q1 and no debt. Now I'll turn it back over to Jan for an update on our 2020 goals.

Thank you, Anthony. Let's move to Slide 12. We continue to anticipate robust progress across all areas of development during 2020. The most significant area of advancement is still expected to be with our own proprietary pipeline of product candidates, where we are responsible for at least 50% of developments. Our extremely solid financial foundation will allow us to maintain the investment in our innovative proprietary products, unique next-generation antibody technologies and capabilities that we laid out for you when we presented our 2020 guidance in February. Genmab remains steadfast and focused on our core competencies, and we will continue to use our world-class expertise and antibody drug developments to create truly differentiated products with the potential to help cancer patients. Let's move to Slide 13. That ends our presentation of Genmab's Q1 2020 financial results. Operator, please open the call for questions.

[Operator Instructions]. And the first question comes from the line of Trung Huynh from Crédit Suisse.

Trung Huynh from Crédit Suisse. So one question. I guess if you can comment on when you expect the launch of the subcu dose and the price that's going to come in at versus the IV formulation?

Trung, first of all, welcome as a covering analyst. We greatly enjoyed your initiation report so we are delighted to have you on the line. Then, let me comment on the launch. It will likely be next week in the United States. It will be available - FASPRO will be available from - probably from Monday of next week. And the price is up to Janssen, and it's very similar actually to the price of the IV dose of daratumumab based on the average rate of U.S. patients.

And the next question comes from the line of Wimal Kapadia from Bernstein.

Wimal Kapadia from Bernstein. Just following on from Trung's question. I just want to get your thoughts on the subcu launch during the pandemic. Is it - is the impact from COVID-19 negative given that it's harder to get new patient starts? Or would you argue that actually the ability to get patients out of the clinic, hospitals quicker will increase the launch trajectory? So I'm just trying to think about the impact in totality. Maybe near term, it's a delay, but longer term, for the rest of 2020, it actually may be beneficial. Just to get some thoughts will be great.

Thanks, Wimal, for the question. I will start off with this answer, and then see whether Anthony Mancini can give further color. Let me start off with the question on the launch. Janssen is, of course, doing a completely virtual launch. In this era, it's impossible to have salespeople on the floor, basically, for launching DARZALEX FASPRO. But we have already heard from bigger medical centers, Wimal, that they are training nurses right now in the United States - or actually, the nurses have been trained to actually visit patients at their homes and actually inject them at home with DARZALEX FASPRO. This is initiated by the major medical centers in the U.S. And that could actually be a very significant positive impact on the use of DARZALEX because, as Anthony Pagano has already said in his introduction remarks, these patients need to be treated. I mean when you don't treat a multiple myeloma patient, Wimal, it doesn't end positively for the patient. I mean they really need to be treated with drugs like daratumumab. And I think by having available a very rapid 3- to 5-minute injection, which can potentially be even given at home to patients, is a huge advantage because one - if one considers that these patients are definitely many times in the risk category or being immunocompromised, they are elderly patients, because that is the population which gets multiple myeloma, Wimal, I think it is a huge advantage to potentially give it in a short time and at home. And as I already said in my introductory remarks, the safety is just excellent of DARZALEX FASPRO. It seems to be better - administration-related reactions are roughly 2x less basically than what they are with IV, so I think this could actually be a benefit in the end. But let me ask Anthony Mancini to see whether he can add further color on the launch of DARZALEX FASPRO in this era with coronavirus and infections threatening us all. Anthony?

Thanks, Jan, and thanks, Wimal, for the question. I think Jan covered it pretty thoroughly. I think we're really enthusiastic about the potential for DARZALEX FASPRO particularly in an environment where infusion centers are - have limitations. So I think Jan covered the key point, which is relative to sitting through a several-hour infusion, being able to give a fixed-dose, 3- to 5-minute injection, we think, present significant advantages in addition to the consistent efficacy that DARZALEX FASPRO has with the IV formulation. So I think those are the key advantages. The couple of things that I would add are related to what Janssen has been able to do in terms of launch readiness and enabled practices across the U.S. to really flexibly learn about DARZALEX FASPRO. And whether they choose to do that through representatives, MSLs or nurse educators or whether they choose to do that through nonpersonal approaches, the team is ready. And the product, as Jan mentioned, will be available as early as next week. And the other thing that Janssen has done is they've amended all company-sponsored clinical studies of daratumumab to allow patients to switch from the IV formulation to the subcutaneous formulation if there is a patient and physician desire to do so. And that will enable the team to collect really important safety data and patient preference data in these studies. So that's, I think, where I'll leave it, Jan.

And the next question comes from the line of Michael Schmidt from Guggenheim.

I had a pipeline question regarding epcoritamab, the CD20 DuoBody. We saw that you have the upcoming ASCO presentation. And I was just wondering if you could help us understand what expectations should be with respect to update, maybe relative to the recent ASH data, and how the profile of this product has evolved in recent months.

Thanks, Michael, for the question. We are delighted to give you some further color. We have actually progressed a few more dose levels, Michael, versus what you saw at ASH. We, of course, also followed up the 12-milligram dose where you only saw very early data in different patients and added further patients at that cohort. So you got a pretty substantial data set there with different dose cohorts we are rapidly moving to know the recommended Phase II dose, Michael, and then start expansion cohorts in the coming times. So we are - remain very, very positive about the profile of epcoritamab. Also, the safety looks very solid, very much in line with what you have seen at ASH. And finally, we are very, very busy finding a partner for epcoritamab, and we are actually very enthusiastic about the level of enthusiasm by pharma and biotech companies. And we are very much on top of that project. And despite the challenges of the COVID-19 era, Michael, we think that we can deliver by mid this year, if not earlier, with a very, very important partnership. And the most important points for Genmab are that we actually hold on to 50% of the product rights, we share 50% of the costs. We actually are booking sales in the U.S. and actually have co-commercialization rights in other territories, which we are interested in. And I think we will get that from the current discussions, and we are super excited about moving epcoritamab further into the B-cell therapy area and remain enthusiastic. And the rest will come at ASCO potentially.

Can I just ask one follow-up? Maybe just how many additional patient relative data you might have at ASCO relative to ASH, just to get a sense of that?

No. We haven't disclosed that, Michael, and we are still in the midst of following up on that data. So I cannot give you the number. But we've added a few more dose cohorts, and we have done backfilling of the cohorts like 12 milligram, where you've seen the initial data off. So I cannot give you the exact number, but it will be a very nice number of patients. And what is also good, Michael, is that despite the challenges, of course, of recruiting patients in this COVID-19 era, I can tell you that the doctors have been very, very enthusiastic about moving patients into this study, this Phase I/II study. And because these patients are very heavily pretreated and they really need new treatments, we have actually treated patients with many, many rounds of prior treatments, and I think the enthusiasm level of the doctors and the willingness of the patients to participate in the trial, I think, make us quite enthusiastic about the potential of that product. And I think I should leave it at that.

And the next question comes from the line of Peter Verdult from Citi.

Pete Verdult, Citi. A somewhat left-field question, if possible, for Anthony. We don't often talk about TEPEZZA in detail on the conference call, but Horizon today raised expectations for the - just for this year alone to in excess of $200 million. I think current consensus is around $30 million. So I just wanted to understand that a 5% royalty is the right way of thinking about Genmab's economic interest in this asset. And am I right to assume that, that sort of level of sales is not built into current guidance for Genmab, i.e., TEPEZZA generating over $200 million in its first year of launch?

Anthony, I think you could take this. Anthony Pagano?

Yes, sure. So thanks for the question, Peter. So I guess, look, first of all, we're very encouraged by what we heard from management of Horizon today about their comments on Q1 and the performance in Q1 as well as their comments around 2020. And I think stepping back, it's also great to see that at least it seems that TEPEZZA is providing a needed treatment option for patients with TED. I think in terms of the financial impact to Genmab, I think - and given also the comments today from Horizon, we'll take that back, we'll digest it. As a reminder, we do have a mid-single-digit royalty here. As it relates to our guidance for 2020, we haven't given specific guidance. And just to orient everyone, we've included royalties from TEPEZZA, any potential royalties from ofatumumab and other income in our guidance for 2020, so have not given specific guidance for TEPEZZA. I guess my last comment, as I mentioned, I was sort of very encouraged of what we heard from Horizon today. I think that does bring us back to our financial framework and one of the key pillars there being the recurring revenue growth. And obviously, we're encouraged about what they said about 2020, but also just more broadly moving forward, we're excited about adding another recurring revenue stream to our overall financial profile. So I think I'll leave it there, Peter.

Thanks, Anthony. And Peter, I can give you something extra that Horizon also said today, which was also new to us, is that they were actually investing in 2 new development programs with TEPEZZA. One is in fibrotic disease, and the second one is in a subcutaneous formulation for Grave's disease patients with Grave's eye disorder. So I think that is potentially a very nice way to further broaden and optimize the market for TEPEZZA. We will - as Anthony Pagano already said, Peter, we will happily enjoy the income and then invest it in our own differentiated product pipeline. So all in all, good news today on TEPEZZA, and this is only the beginning.

And the next question comes from the line of Kennen MacKay from RBC Capital Markets.

Big congrats on the quarter. This was really a very quite strong DARZALEX quarter. I was wondering if you could sort of give us a sense, a little bit more granularity for what drove the quarter-over-quarter growth. Was that increased uptake in first line or deeper penetration in second line? And then hoping maybe you could elaborate a little bit on what your ambitions are for subcutaneous DARZALEX, maybe a portion of total DARZALEX maybe by sort of the end of the year just so we can get a sense of how you are thinking about this product.

Thanks, Kennen. I will hand over this question to Anthony Pagano, and then I can potentially add to that. Anthony?

Yes, sure. So thanks, Kennen, for the question. I mean overall, I think we're very pleased with what we saw in Q1 in terms of DARZALEX performance, the $937 million. As you've seen, looking at the sort of the quarter-over-quarter growth rates, we have very, very strong growth at broadly 13%. On a consolidated basis, looking at the U.S., it came in at 4% and 23% for rest of world. So I think as we look across the different data points, there really isn't anything that jumps off the page at us in the U.S. As I mentioned, some of the weekly sales figures we're seeing in the U.S. prior to COVID-19 were really trending in the right direction. And overall, we have some really strong and nice market shares in the U.S. and are looking forward to gaining further traction in frontline. And also, we feel that DARZALEX FASPRO will be a game changer for both patients and physicians. In terms of the rest of the world, here, as I mentioned, our line of sight is a bit more limited. And of course, it's a mosaic of many different countries with different DARZALEX regimens approved and reimbursed. The only thing I can really kind of point to here is some bits and pieces of some market share data that we are looking at as we exited Q4, where we're really looking pretty strong. So in that respect, we're really pleased with what we saw overall for DARZALEX, but also what we saw in terms of the rest of world performance in Q1 and growth. Jan, do you want to add something there?

Sorry, I was on mute. No, I think we will leave it with that. I mean the second question was, of course, the conversion to the subcu formulation. What we understand is that Janssen believes that many patients will actually be switching to the subcu in time. To give actual numbers is very, very difficult, especially given the coronavirus era, Kennen, but I think that could actually accelerate the conversion rate to subcu DARZALEX. The pricing is roughly similar, as we have heard from Janssen. But I think the convenience and the potential even better safety of the subcu formulation can really, really help, especially in times like this, to really accelerate that conversion rate. But we prefer not to give you percentages here. So you have to do your own modeling, Kennen, and then - and we will happily read that tomorrow.

And the next question comes from the line of Robert Born - Burns from H.C. Wainwright.

Congrats on the quarter again. My question is directed more towards Anthony. In prior quarters, you've sort of given us what the market penetrations were by the end of the quarter. I was curious what you're seeing with regard to those market penetrations towards the end of the first quarter and where they currently sit?

I think Anthony can give you color on that on the basis of the brand impact data. Anthony Pagano?

Yes, sure. Happy to take it. Thanks for the question, Robert. Yes, I mean, overall, as I mentioned, when you sort of step back and think about DARZALEX, really happy with the overall performance. Sort of globally, in terms of the actual - the brand impact data, remember, this is sort of survey data, I'm really encouraged about what we're seeing sort of broadly as we sort of exited Q1. A couple of the key figures I'd kind of highlight for you would be looking at the overall market share being at 22% and overall share of new patients growing to 26% compared to 23% at the end of December. Frontline, we've seen some improvement there, going from 8% in December to 9% in March. New patients in frontline, we did see some improvement from the 12% where we were at in December both in January and February, but we did see a bit of a drop-off back to 12%. So kind of flat there in terms of first-line new patient starts. The rest of it, in terms of second line, third line and fourth line, I think it depends - no matter which number you look at, we've seen very, very strong growth in terms of market shares. But maybe the one I would highlight would be second line growing from 36% in terms of total market share, second-line patients, up to 38%; in terms of new patient starts, going from 45% in December up to 46%. And I think that gives you an overall good picture of what we were seeing. And I think you saw similar trends both in third and fourth line. What was really kind of jumping off the page at us, and I think it's, again, just some data point - one data point, were the new patient starts both in third and fourth line increasing. First of all, in terms of the third-line patients, going from 43% up to 55%; and then fourth line, going from 29% all the way up to 40% in March. So I think we've seen, overall, what I would characterize is continued market share gains and really nice growth.

And the next question comes from the line of Matthew Harrison from Morgan Stanley.

This is Connor on for Matthew. So you touched on both of my questions briefly, but I just wanted to press a little bit more. So could you just provide a little bit more detail on your status of the partnership for CD3/CD20? And you mentioned maybe an update midyear, but I guess, is that all you guys are willing to disclose at this point? And have they progressed at all since earlier in the year? And then just quickly, now that subcu is approved in the U.S. and on track in the EU, how quickly do you expect patients to be transitioned over from the IV drug and, I guess, the impact of COVID to that transition?

Thanks very much for the questions. I cannot give you any - a lot of extra color on the partnership process for epcoritamab apart from telling you that it's going really, really well. It's not impacted by COVID-19 at all. We have lots of video conferences, telephone conferences and also some physical meetings with potential candidate partners. So we are very, very optimistic that we can actually close a very good partnership by mid this year, if not earlier. It's always difficult to estimate, of course, what the timing will be because there's lots of paperwork to be done, but we are very rapidly progressing. And what is important actually to say here is that this will not impact the expansion of epcoritamab because we are really progressing rapidly with the clinical trial. We're going to very soon add expansion cohorts. We are going to start a few more studies, and that could potentially also include one or more Phase III study before the end of the year. And we are already speaking very, very actively with the candidate partners about how to expand those plans. And we will not actually let the coronavirus troubles hinder that because we actually think that we can turn this era into an advantage potentially for Genmab and for the partner for epcoritamab because we know that some of the large Phase III trials from competing programs like the Roche CD20 - CD3/CD20 bispecific programs are on hold right now, whereas we are still recruiting patients and planning new studies. So we are very aggressively and proactively moving into that. That's my first priority project to really get done. That's about all we can say, I think, at this moment on the partnership progress, but we are very, very enthusiastic about progress and reception. Then the conversion from subcu - from IV to subcu, it's very difficult to predict. But we actually believe, and also, I think Janssen believes, that the coronavirus situation will actually help us to go for even more rapid switching from the IV to the subcu formulation because the advantage is so massive, I mean, for patients. That will be at roughly the same out-of-pocket cost for most of the patients, as I understand from Janssen. And to have only a 5-minute injection rather than a 3.5-hour infusion in times that people are worried about getting contaminated with coronavirus and potentially getting into real trouble, especially because these elderly cancer patients are many times immunocompromised because of the treatment with other drugs, I think this is a huge advantage. And I think that could actually accelerate the conversion from the IV to the subcu formulation. But we haven't really publicly spoken about the percentages we use internally, but it could be very rapid, we believe. And coronavirus infections could actually facilitate the switching. That's where I want to leave it at.

And the next question comes from the line of Emily Field from Barclays.

I was just wondering if you'd comment - if your guidance assumes much of a contribution in the transplant population based on the CASSIOPEIA data and if you had an update on sort of the plans with the GRIFFIN data. I know that you talked on the last call about Janssen looking to have that included in the NCCN guidelines. So just any updates there would be great.

Thank you, Emily. I will take the second question. And then the first one, I will pass on to Anthony to speak about contribution of the transplant-eligible population in our modeling and the guidance. The GRIFFIN data have actually been published recently in Blood, Emily, we can give you the link or the exact reference of that paper, and I think has been submitted to the compendia in the United States. And I think Janssen is trying to get it into the compendia listings mid this year. And that is, I think, super important for the VRd-dara combination therapy. And of course, also both of the Phase IIIs, which has dara-VRd, in the transplant eligible and the transplant ineligible populations are also fully recruited. And we expect that, that data from the PERSEUS and SAPPHIRE studies will also be used to actually get it formally in the label for daratumumab. So I think as it relates to GRIFFIN, I think we are progressing towards hopefully a compendia listing very soon. And hopefully, at least the ability of doctors to decide on whether they want to use that, we can - Janssen can promote for that. Maybe then to Anthony Pagano for the CASSIOPEIA data. So far, that was actually in our models for a pickup this year.

Yes. So thanks, Emily, for the question. I mean look, overall, our guidance of $3.9 billion to $4.2 billion for the year covers a number of different sort of positive contributors and key drivers, which I sort of summarized in the call, but just to summarize again here. Q1 is obviously - following MAIA and other approvals in '19, we expect further market share gains in frontline. As I went through some of the market shares, I think we are starting to see some of that and certainly would expect and hope for more as we progress throughout the course of 2020. And we talked a lot today of the second driver, subcu formulation. And then third, I think just more broadly, I think, we sort of just really do believe, as we move forward into 2020 and beyond, that DARZALEX is going to gain further traction globally. And this is going to be continued strong market shares across all lines of therapy and geographies. So Emily, I'd love to give you some more detail, but we really haven't given that level of guidance as it relates to the sort of individual parts of our guidance for $3.9 billion to $4.2 billion. But overall, I think we do expect further gains in frontline.

And the next question comes from the line of Sachin Jain from Bank of America.

Sachin Jain, Bank of America. Just 2 quick questions. I wonder if you can just update on timing for some of pipeline data for some of the other assets. So in particular, AXL-ADC and 4-1BB, just when should we expect updates on those? And then just secondly, sorry, I'd just go back to partnering. I want to make - try and tweak out some more. Are you still running discussions with multiple partners? Or have you singled it down to a single player? And you've been very clear on what's important to you in terms of U.S. co-promotes, et cetera. How important is the upfront payment? And is that still a delta in your mind?

Thanks, Sachin, for the questions. As it relates to timing for other data, I can tell you that the 4-1BB - PD-L1x4-1BB data will be in the second half of this year. Then epco will, of course, be at ASCO, upcoming ASCO data. And then for tisotumab vedotin, we expect the top line data from the potentially pivotal cervical cancer study to be either at the end of Q2 or very early in Q3. And then the other data we haven't given the timings on, but AXL-ADC will very likely be in the second half, Sachin, of this year. Then as it relates to partnering, this is, of course, a key topic of interest for all of you. I can tell you that we are still speaking with multiple parties, but we actually are most aggressively moving forward with one of the parties now to hope to push it towards a close in the coming time. So we are focusing and prioritizing one partner now very, very strongly at this moment. And then as it relates to the upfront payment, I've always said that, well, it's more important to do it as a true 50-50 partnership, Sachin, and to be able to book sales in the U.S. and potentially other territories where we are very interested in. And I flagged up Japan as a territory which is also important for tisotumab vedotin for Genmab, so it makes sense to have a commercial presence. And the upfront in that context is less important. However, since it's such a competitive process and this is a very, very actively searched and looked-after asset, I think the market can also foresee to get a very, very impressive upfront also in this potential deal. And that's where I really need to leave it at, Sachin.

And the next question comes from the line of Peter Welford from Jefferies.

It's really just sort of more general question in terms of you mentioned PD-L1x4-1BB, enapotamab, the AXL as well as, I guess, I'm thinking the DR5/DR5. I'm just wondering with regards to these ongoing Phase I/II studies what you're doing special, if you like, or what measures you put in place to continue patients being enrolled and followed up in these sorts of studies given the current COVID-19 disruption. We've heard from a lot of pharma companies where a lot of trials that are fully enrolled or trials that are late stage are managing to stay on track, but it's a real challenge to enroll patients and follow-up in earlier-stage studies. So I wonder if you could comment on that at all from your perspective.

A very good question and very pertinent as it relates to the coronavirus era, Peter. I can tell you it varies a lot from trial to trial, and I can tell you that the 2 most important studies for Genmab right now are the ones with epcoritamab, which is still recruiting patients as we speak, and I already referred to that earlier on in the Q&A; and also, the DuoBody-PD-L1x4-1BB in solid tumors. We have - I've said in my introductory words and also in the Q1 report that we already started an expansion cohort. So that means that we have already determined the recommended Phase II dose there very rapidly. And remarkably, doctors are still very eager to put patients into that trial, also new patients, and the same holds for epcoritamab. For some other studies, it's more difficult, as you rightly say, because then, in some hospitals, actually, new patients recruitment is very difficult. We still believe that the overall impact on our studies is rather minimal up to now, Peter. But actually, patients on treatment with our experimental drugs are being treated as we speak, but new patients are on some hospitals not allowed to be recruited because priority needs to be given to the coronavirus-infected patients. But the two most important studies are rather unimpacted at this moment. And what we do is a lot of monitoring via the Internet, via digital systems. We cannot visit some of these sites ourselves, and we have actually changed our way of working to actually - made a number of procedural changes in order to be able to follow and document and monitor patients in our clinical trials. So it may not all be bad, Peter, what comes out of this coronavirus crisis. I think we actually can potentially even more effectively work with patients in multicenter trials. For Genmab, we are now speaking about, I think, 11 studies in 15 countries at 150 clinical sites, to give you a feeling for the complexity. And for many of these studies, we actually do a lot more digital monitoring. And also, the regulators both in Europe and in the U.S. are actually quite proactive in allowing you to actually do that. But we all have to see how this in the end pans out, but our way of working may be, I think, forever different after this coronavirus crisis. That's probably where I need to leave it at, at this moment. And during the year, Peter, we'll give you updates, of course. And what we hope is that - in some countries, actually, we began to get control over the situation like Denmark. We have actually, as of end of April, started to repopulate the offices of Genmab again in a very gradual manner because the health authorities and the government there believe that it's safe in Utrecht. We are now going to scale up the lab activities for Genmab personnel in time - in the coming time. We have kept our critical projects running also during the crisis, and we are now trying to bring as many people as possible back to the offices of Genmab in a safe way, also adhering to social distancing and other procedures to keep our employees and collaborators safe. But I think it seems to be moving in the right direction, Peter. And also, as it relates to clinical trials, I think that we'll also then again accelerate some of the clinical studies because don't forget that most of our studies are in cancer patients, and we're trying to help these patients actually with experimental therapeutics. One I want to mention here especially is a BMS program where we actually have an antibody created by Genmab targeting IL-8, HuMax-IL8, which is right now being tested in cancer patients with coronavirus disease to really see whether it can help those poor patients who have double bad luck, one - first, the cancer; and then second, coronavirus infection. And I'm very thrilled to mention that study, and I hope that very much for the patients and for BMS that HuMax-IL8 can actually help those poor patients do better with their disease. So that's probably where I need to leave it at.

And the next question comes from the line of Michael Novod from Nordea.

Just a single question to tisotumab. So the data reads out sort of in early Q3, as guided by Seattle. Then maybe you can just remind us where you stand in terms of scaling up the entire commercialization organization and all that. Now you're also sort of building a strong organization also with the new chief operating officer, so maybe just a reminder of where you're standing when we get the data.

Thanks very much, Michael, for the question. So yes, data, end Q2, early Q3 because data cleaning is actually more challenging now in the coronavirus era. That is basically behind that potential small or minimal delay, but we are very much on track to come with the data. I am actually pleased, Michael, to hand over to Anthony Mancini who has a very robust commercial experience, almost 24 years at BMS with multiple products, also cancer products. So why don't we ask Anthony to give a short peek into how we are building up the commercial organization for TV, epcoritamab and potential other products like DuoBody-PD-L1x4-1BB. As a reminder, Genmab will also lead the worldwide commercialization of that product with some limited co-commercialization rights for BioNTech, our 50-50 partner for that program. Anthony Mancini?

Thanks, Jan, and thanks, Michael, for the question. I think Genmab and Seattle Genetics are really working closely together on launch readiness for tisotumab vedotin and really focused on the first potential indication in the second-line metastatic cervical cancer setting. We're working hard to jointly build launch strategies and plans. And as has been shared previously, obviously, it's a collaboration agreement that's in place, sharing costs and profits 50-50. And we'll - as we advance launch readiness, and as Jan pointed out, we start to see data late in the second quarter. And early in the first quarter, we'll start to share a little bit more about how we'll execute on a country-by-country basis going forward. But our focus is to make tisotumab vedotin a success and from a Genmab perspective, have a presence in the United States and Japan.

Thanks, Anthony. What we will do is to actually update you, Michael, during the year on the expansion and the further structuring of our commercial organization that will come in line with the data for tisotumab vedotin and the further plans for epcoritamab. What I also want to flag up here is that we have a Capital Markets Day on November 13. Let's hope that we can all fly, Michael, or at least log in onto that meeting where we actually want to actually give you far greater color and insight into how we are going to build up and expand our commercial organization in a very clever way. We want to be as innovative here as we are in the rest of our business. And I think this is super exciting times, Michael. I think for Genmab, this is only the start, and the best is yet to come.

And the next question comes from the line of Asthika Goonewardene.

Asthika Goonewardene from SunTrust. Jan, on the last quarter call, you teased this a bit, and you said that the 1046, that you've seen some initial efficacy signals in checkpoint inhibitor failed patients. I'm wondering if you're willing to tease this a little bit more and tell us, now that you've got a few more doses out there, if you've seen more of that. Also, if I can just squeeze in a couple of other quick ones here. For 3013, how important is CLL to the discussion with the partners? And were you hoping to share any first looks of 3013 in CLL with your potential partners before inking the deal? And then lastly, was the rest of world growth of dara in 1Q in any way helped by a onetime - by those onetime large purchase orders? We just noticed that every second quarter, you seem to get a bit of a bump from something like that in the J&J numbers. And I was just wondering if that came in a little bit early this year in Q1?

Thanks, Asthika. You sneaked in a few more questions, and that's, I think, okay with me. So PD-L1x4-1BB, yes, we have definitely treated more patients than at the full year results in February. I cannot give you further data apart from saying that we and BioNTech are super enthusiastic about what we see clinically with early signals in patients, including patients that have already been treated with checkpoint blockers. With solid tumors, we now have started the first expansion cohort at the recommended Phase II dose. So we are very excited. And we have to await, Asthika, data until second half when we present them at a medical conference unless, basically, BioNTech and us decide to release some data in the public domain. But we need to do that in a coordinated manner. But as Anthony Pagano has already said, we are super excited about expanding that program. So from that, you can already infer that we are really quite pleased with what we see there with that program. I need to leave it at that. Then with the epcoritamab program, CLL is very important because we think that actually treatment of C - better treatment of CLL potentially in better and more efficacious regimes, which are without chemotherapy, so combinations of epcoritamab and potential small-molecule drugs, are of high, high interest to us and potential partners. So we are discussing that. We don't have any clinical data there, but we believe that based on the preclinical data and the potential synergies we have seen already in preclinical studies, Asthika, this is a very, very attractive target indication. And yes, we have already, together with potential partners, planned follow-on clinical studies also in CLL, and we believe that's an important area to move into. Then as it relates to the rest of the world data in Q1 for daratumumab, I believe there were no onetime benefits basically. But I will ask Anthony Pagano to give you some further color on the rest of the world data. Because you're right, Asthika, last year, we did benefit in Q2 from a one-off, but I believe that was not the case in Q1 this year. But I will ask Anthony Pagano to comment on that.

Sure, Jan. So thanks, Jan. You're right, I mean, absolutely. I mean first of all, we're really happy with the growth in Q1. Globally, rest of the world, strong performance in the 23% quarter-over-quarter growth. Look, there really wasn't anything of any material nature. I mean just to try to give you a bit of additional color and be helpful. There was a small favorable impact, really some normal timing shifts of tenders in some of the emerging markets. Again, it's really a small contributor. We're talking very low single digits in terms of the growth. So really, again, this is more in the spirit of trying to be full and complete. Overall, nothing material at all in Q1. And it certainly doesn't change the overall picture, and it was not a primary driver of the excellent growth we saw for the quarter. So again, as I said overall during my remarks, we looked at Q1 as being a really strong quarter for DARZALEX but also for our overall financial results.

And the next question comes from the line of Laura Sutcliffe from UBS.

Laura Sutcliffe at UBS. Could you update us on any progress that you've made with the selection of clinical candidates from your HexElect platform? And then maybe just secondly, if I can, I think your press release has some quite general language in it relating to coronavirus and sort of potential risk from that, and I think that there is a point where it says something about impact to regulatory approval time lines. Is that intended as very general? Or is there something specific that you're getting at there?

. Thanks, Laura, for the questions. Let me start with the HexElect question. We have actually a number of potential clinical candidates selected, Laura. They are not at a public domain. We actually decide to actually only give you those candidates from the different platforms when we have formally scheduled an IND filing and a CTA filing because the net effect is that I don't get any credit from you all when I flag up exciting candidates with our new next-generation platforms when the time lines are not concrete. And to make it worse, Laura, once I would stop such programs, I would be punished and beaten up basically at the moment that I give up on a program like that, which is, of course, also part of our business, of only forwarding the best and potentially first-in-class differentiated molecules. So very likely at the November R&D Day, on November 13, Laura, you will get some further insights into HexElect and the type of targets which we have selected to work on going forward. Then as it relates to epcoritamab coronavirus impact, maybe Anthony Pagano can give further color on that.

Yes. Thanks, Jan. Maybe, Laura, if you don't mind, would just repeat the question? I didn't quite get what you're sort of looking to get some more color on there.

So it wasn't an epcoritamab question. It was just a question about the language in your press release. I think one of the things you highlighted around sort of potential coronavirus disruption was the potential for impact to regulatory approval time lines. And I - my question is, is there something specific that you're getting at with that or not?

Yes. I mean - and I certainly would welcome comments from Jan. But no, I think this was sort of just more of a general risk, not anything in particular that's sort of worrying us too much at this point in time. But Jan, anything you'd like to add to Laura's question?

No. Absolutely, I agree with you, Anthony. No, this is a general qualifier, Laura. I think coronavirus can, of course, impact the regulatory time lines of a number of programs. And I think this was just meant as a general indicator, basically, of risk conferred by the era with coronavirus infections. But nothing specific for any of the programs at this time.

Thank you for your participation. We have run out of time. We have to end the Q&A session now. Speakers, please go ahead.

All right. So thank you for calling in today to discuss Genmab's financial results for the first quarter of 2020. We hope that you all stay safe, keep optimistic and remain healthy. And we very much look forward to speaking with you again soon.

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