Legend Biotech Corp (LEGN) Q1 2024 Earnings Call Transcript Highlights: Soaring CARVYKTI Sales ...
CARVYKTI Net Trade Sales: $157 million in Q1 2024, a 100% increase year-over-year.
Total Revenue: $94 million in Q1 2024, including $78.5 million from CARVYKTI and $12.2 million in license revenue.
Net Loss: $59.8 million in Q1 2024, or -$0.16 per share.
Collaboration Cost of Revenue: $49.1 million in Q1 2024.
Cost of License and Other Revenue: $5.6 million in Q1 2024.
Research and Development Expenses: $101 million in Q1 2024.
Administrative Expenses: $31.9 million in Q1 2024.
Selling and Distribution Expenses: $24.2 million in Q1 2024.
Cash Balance: $1.3 billion as of March 31, 2024.
Release Date: May 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
CARVYKTI received FDA and European Commission approval for second-line relapsed or refractory multiple myeloma, significantly expanding its market potential.
CARVYKTI net trade sales for the first quarter were $157 million, marking a 100% increase year-over-year.
Legend Biotech Corp (NASDAQ:LEGN) has a strong cash balance of $1.3 billion, providing financial stability and supporting ongoing production expansion and operational activities.
The company is expanding production capacity, including doubling the processing capacity at the Raritan, New Jersey facility and progressing towards commercial production at the Obelisc facility in Ghent, Belgium.
Legend Biotech Corp (NASDAQ:LEGN) published its first ESG report, enhancing corporate transparency and showcasing its commitment as a responsible corporate citizen.
Negative Points
Sequential CARVYKTI net sales decreased by $2 million from the fourth quarter of the previous year due to phasing and timing of orders.
The company reported a net loss of $59.8 million for the quarter, although this was an improvement from the previous year's net loss of $112.1 million.
Increased expenses in collaboration cost of revenue, research and development, and administrative expenses as the company expands its operations and production capabilities.
The need for substantial ongoing investment in manufacturing capacity to meet growing demand for CARVYKTI, which could strain resources if not managed effectively.
Regulatory and production scale-up challenges that could affect the timely availability of CARVYKTI to meet market demand.
Q & A Highlights
Q: How should we think about the scale of non-revenue batches for comparability work in Q2 and beyond? A: Ying Huang, CEO & Director, explained that the first quarter involved several non-revenue-generating rounds due to upscaling efforts with Novartis and other facilities. He anticipates a reduction in these activities over the next quarters as the work with Novartis completes, expecting them to file an IND soon and start clinical trial production in Q3, followed by commercial production in Q1 next year.
Q: When discussing doubling capacity from the end of '23 to the end of '24, how should we think about revenue year-over-year in '24 relative to '23? A: Ying Huang mentioned that the Obelisc facility is expected to start commercial production late in Q3 or early Q4 this year, contributing to a doubling of capacity from 2023 to 2024. He did not provide specific guidance for product sales but indicated that the capacity expansion aligns with revenue growth expectations.
Q: Should we expect revenue growth in Q2 '24, or should we wait until the second half of '24 when Obelisc commercial production is on board? A: Lori A. Macomber, CFO, stated that some growth is expected in Q2, but more pronounced growth is anticipated in the second half of the year as additional production facilities come online and new country launches occur.
Q: For the launch in the U.S., have you started treating patients in second to fourth line, and do you see a switch from lifeline? A: Steven J. Gavel, SVP of Commercial Development, US & Europe, noted a natural lag in the market with the CARTITUDE-4 launch, especially in getting patients referred to institutions. He emphasized the importance of quick patient identification and apheresis to maintain momentum.
Q: To reach the goal of 10,000 doses by year-end for 2025, would you need to sign up for additional CDMO contracts? What percentage of the patients would need to be treated in outpatient settings to reach this goal? A: Ying Huang clarified that with the existing production nodes, they aim to reach the 10,000 annualized dose capacity by the end of 2025. Steven J. Gavel added that about 1/3 of all patients are currently treated in outpatient settings, a number they expect to double by the end of 2025.
Q: Can you discuss the concept of autologous with the triple CD19, CD20, and CD22 versus with ALLO, it looks like you're doing dual targeting. Why not do triple in both? A: Guowei Fang, Chief Scientific Officer, explained that the design principle for tumor targeting aims to drive deep responses by targeting multiple B-cell biomarkers. For ALLO, different targeting mechanisms are considered based on the clinical data and disease indications.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
