Genmab Announces Financial Results For The First Nine Months Of 2016 And Improves 2016 Financial Guidance

November 2, 2016; Copenhagen, Denmark;

Interim Report for First Nine Months Ended September 30, 2016

Highlights
  • Net Sales of DARZALEX ® (daratumumab) by Janssen for the first nine months of 2016 were USD 372 million, resulting in royalty income of USD 45 million (DKK 298 million)
  • Announced U.S. and European regulatory submissions for daratumumab in relapsed or refractory multiple myeloma, triggering USD 25 million in milestone payments
  • Daratumumab received second Breakthrough Therapy Designation from U.S. Food and Drug Administration (FDA)
  • Announced FDA approval of Arzerra ® (ofatumumab) in combination with fludarabine and cyclophosphamide for relapsed chronic lymphocytic leukemia (CLL)
  • Entered commercial license agreement with Gilead Sciences for DuoBody ® Technology
  • 2016 financial guidance improved

"Throughout the third quarter we continued to see excellent progress in our DARZALEX program with Janssen.  Regulatory applications to expand the label for daratumumab to include relapsed or refractory multiple myeloma were submitted in the U.S. and Europe, triggering USD 25 million in milestone payments.  Daratumumab also received its second Breakthrough Therapy Designation from the FDA.  We continued to see progress with Arzerra too, with another CLL indication approved in the U.S., and we made progress with our DuoBody technology, with a new commercial agreement with Gilead Sciences," said Jan van de Winkel, Ph.D., Chief Executive Officer of Genmab.

Financial Performance First Nine Months of 2016
  • Revenue was DKK 889 million in the first nine months of 2016 compared to DKK 558 million in the first nine months of 2015. The increase of DKK 331 million, or 59%, was mainly driven by higher royalty and milestone revenue under our daratumumab collaboration with Janssen.
  • Operating expenses were DKK 544 million in the first nine months of 2016 compared to DKK 380 million in the first nine months of 2015. The increase of DKK 164 million, or 43%, was due to the additional investment in our pipeline of products, including the advancement of tisotumab vedotin, HuMax ®-AXL-ADC, HexaBody ®-DR5/DR5, DuoBody-CD3xCD20, and our other pre-clinical programs.
  • Operating income was DKK 345 million in the first nine months of 2016 compared to DKK 355 million in the first nine months of 2015.  The decrease of DKK 10 million, or 3%, was driven by the one-time reversal of the ofatumumab funding liability of DKK 176 million in 2015, combined with increased operating expenses in 2016, which were partly offset by higher revenue in 2016.
  • On September 30, 2016, Genmab had a cash position of DKK 3,942 million compared to DKK 3,493 million at December 31, 2015. This represented a net increase of DKK 449 million, which was driven primarily by income from operations and the proceeds from the exercise of warrants of DKK 184 million, partially offset by the purchase of treasury shares for DKK 118 million.

Business Progress Third Quarter

Daratumumab
  • August: Regulatory submission in Europe for daratumumab (DARZALEX) in patients with multiple myeloma who have received at least one prior therapy. In addition, a regulatory application was submitted in the U.S. for the use of daratumumab in combination with lenalidomide and dexamethasone, or bortezomib and dexamethasone, for the treatment of patients with multiple myeloma who received at least one prior therapy. The submissions triggered milestone payments of USD 10 million, and USD 15 million, respectively, to Genmab.
  • July: The FDA granted Breakthrough Therapy Designation for DARZALEX injection in combination with lenalidomide and dexamethasone, or bortezomib and dexamethasone for the treatment of patients with multiple myeloma who have received at least one prior therapy.

Ofatumumab
  • August: The FDA approved ofatumumab (Arzerra) in combination with fludarabine and cyclophosphamide (FC) for the treatment of patients with relapsed CLL.

DuoBody
  • August: Entered an agreement to grant Gilead Sciences, Inc. an exclusive license and an option on a second exclusive license, to use the DuoBody technology platform to create and develop bispecific antibody candidates for a therapeutic program targeting HIV. Under the terms of the agreement, Genmab received an upfront payment of USD 5 million from Gilead Sciences.

Subsequent Event
  • October: The FDA granted Priority Review for the use of daratumumab in combination with lenalidomide and dexamethasone, or bortezomib and dexamethasone, for the treatment of patients with multiple myeloma who have received at least one prior therapy. The FDA assigned a Prescription Drug User Fee Act (PDUFA) target date of February 17, 2017 to take a decision on daratumumab in this indication. In addition, the FDA granted a Standard Review period for the use of daratumumab in combination with pomalidomide and dexamethasone for the treatment of patients with relapsed or refractory multiple myeloma who have received at least two prior therapies, including a proteasome inhibitor (PI) and an immunomodulatory agent. The PDUFA date for the combination of daratumumab with pomalidomide/dexamethasone is June 17, 2017.

Outlook

Genmab is improving its 2016 financial guidance published on August 9, 2016 due to increased royalty and milestone income related to the sales of DARZALEX resulting in increased operating income and cash position.
MDKK Revised Guidance Previous Guidance
Revenue 1,200 - 1,250 975 - 1,025
Operating expenses (800) - (850) (800) - (850)
Operating income 375 - 425 150 - 200
Cash position at end of year* 3,650 - 3,750 3,550 - 3,650
*Cash, cash equivalents, and marketable securities