Legend Biotech(LEGN) - 2022 Q2 - Quarterly Report

First Quarter 2022 Highlights and Recent Events The first quarter of 2022 was marked by significant regulatory milestones, including U.S. FDA and European Commission approvals for CARVYKTI™ for treating multiple myeloma - Received U.S. Food and Drug Administration (FDA) approval for CARVYKTI™ (cilta-cel) for the treatment of adults with relapsed or refractory multiple myeloma, marking the company's first approved product[4][5] - The European Commission (EC) granted conditional marketing authorization for CARVYKTI™ for adults with relapsed and refractory multiple myeloma[4][5] - Achieved a $50 million milestone payment under its collaboration agreement with Janssen Biotech, Inc. for CARVYKTI™[4][5] - The FDA lifted the clinical hold on Legend Biotech's Phase 1 clinical trial of LB1901, an investigational CAR-T therapy for T-cell lymphoma (TCL)[5] - Appointed Lori Macomber as Chief Financial Officer, Guowei Fang as Senior Vice President, Global Head of Research and Early Development, and Marc L. Harrison as Vice President and General Counsel[5] Financial Results for First Quarter 2022 In Q1 2022, Legend Biotech reported revenue of $40.8 million, a significant increase from $13.7 million in Q1 2021, driven by milestone payments, while net loss narrowed to $41.1 million due to a fair value gain on warrant liability Q1 2022 vs Q1 2021 Financial Performance | Metric | Q1 2022 (US$ Million) | Q1 2021 (US$ Million) | Change (US$ Million) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $40.8M | $13.7M | +$27.1M | Milestone achievements | | R&D Expenses | $81.3M | $71.1M | +$10.2M | More clinical trials and R&D activities | | Administrative Expenses | $12.7M | $8.7M | +$4.0M | Expansion of administrative functions | | Selling & Distribution Exp. | $21.3M | $13.4M | +$7.9M | Commercial preparation for cilta-cel | | Net Loss | $41.1M | $80.9M | -$39.8M | Fair value gain on warrant liability | | Loss Per Share | ($0.13) | ($0.30) | +$0.17 | Lower net loss | - As of March 31, 2022, cash, cash equivalents, deposits, and short-term investments totaled approximately $796.0 million[6] - A fair value gain of $34.9 million was recognized on a warrant liability, significantly contributing to the reduced net loss, with the warrant's fair value decreasing from $87.9 million at year-end 2021 to $53.0 million as of March 31, 2022[14] Company and Product Overview Legend Biotech is a global biotechnology company focused on developing advanced cell therapies like CAR-T for life-threatening diseases, particularly multiple myeloma, with its lead product CARVYKTI™ recently gaining U.S. and European approvals About Legend Biotech Legend Biotech is a global biotechnology company headquartered in Somerset, New Jersey, focused on developing advanced cell therapies utilizing various technology platforms with R&D sites globally - The company is dedicated to treating and potentially curing life-threatening diseases through advanced cell therapies[16] - Key technology platforms include autologous and allogenic chimeric antigen receptor T-cell (CAR-T), T-cell receptor (TCR-T), and natural killer (NK) cell-based immunotherapy[16] About CARVYKTI™ (ciltacabtagene autoleucel; cilta-cel) CARVYKTI™ is a BCMA-directed, genetically modified autologous T-cell immunotherapy for treating multiple myeloma, developed in collaboration with Janssen, and recently received FDA and European Commission approvals - CARVYKTI™ is a BCMA-directed autologous T-cell immunotherapy that reprograms a patient's own T-cells to identify and eliminate cells expressing BCMA[18] - Legend Biotech entered an exclusive worldwide license and collaboration agreement with Janssen in December 2017 to develop and commercialize cilta-cel[18] - CARVYKTI™ received U.S. FDA approval in February 2022 and European Commission conditional marketing authorization in May 2022[19] About Multiple Myeloma Multiple myeloma is an incurable blood cancer characterized by excessive plasma cell proliferation in the bone marrow, with patients relapsing after standard therapies facing poor prognoses and limited treatment options - Multiple myeloma is an incurable blood cancer originating in the bone marrow, characterized by excessive plasma cell proliferation[20] - Patients who relapse after treatment with standard therapies, including protease inhibitors, immunomodulatory agents, and an anti-CD38 monoclonal antibody, have poor prognoses and few available treatment options[20] Financial Statements The condensed consolidated financial statements for Q1 2022 show a net loss of $41.1 million, an improvement from $80.9 million in Q1 2021, with total assets at $1.04 billion and total liabilities at $602.0 million Condensed Consolidated Statements of Profit or Loss For the three months ended March 31, 2022, Legend Biotech reported a net loss of $41.1 million, or $0.13 per share, a significant improvement from a net loss of $80.9 million, or $0.30 per share, in the same period of 2021 Condensed Consolidated Statements of Profit or Loss (Unaudited) | (in thousands, US$) | Three months ended March 31, 2022 (US$ thousands) | Three months ended March 31, 2021 (US$ thousands) | | :--- | :--- | :--- | | REVENUE | 40,827 | 13,682 | | Research and development expenses | (81,346) | (71,072) | | Selling and distribution expenses | (21,302) | (13,417) | | Fair value gain of warrant liability | 34,900 | - | | LOSS FOR THE PERIOD | (41,087) | (80,899) | | Loss per share – basic & diluted | (0.13) | (0.30) | Condensed Consolidated Statements of Financial Position As of March 31, 2022, Legend Biotech's total assets were $1.04 billion, down from $1.12 billion at year-end 2021, mainly due to a decrease in cash and cash equivalents, while total liabilities decreased to $602.0 million Condensed Consolidated Statements of Financial Position (Unaudited) | (in thousands, US$) | March 31, 2022 (US$ thousands) | December 31, 2021 (US$ thousands) | | :--- | :--- | :--- | | Total assets | 1,040,516 | 1,118,367 | | Cash and cash equivalents | 377,786 | 688,938 | | Total liabilities | 601,953 | 647,161 | | Warrant liability | 53,000 | 87,900 | | Total equity | 438,563 | 471,206 | Condensed Consolidated Statements of Cash Flows For the first quarter of 2022, the company experienced a net decrease in cash and cash equivalents of $311.2 million, with $78.7 million used in operating activities and $232.5 million in investing activities Condensed Consolidated Statements of Cash Flows (Unaudited) | (in thousands, US$) | Three months ended March 31, 2022 (US$ thousands) | Three months ended March 31, 2021 (US$ thousands) | | :--- | :--- | :--- | | CASH FLOWS USED IN OPERATING ACTIVITIES | (78,687) | (26,787) | | CASH FLOWS USED IN INVESTING ACTIVITIES | (232,500) | (17,150) | | NET DECREASE IN CASH AND CASH EQUIVALENTS | (311,162) | (43,730) | | CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 377,786 | 412,296 | Cautionary Note Regarding Forward-Looking Statements This section contains standard "forward-looking statements" disclaimers, warning that actual results may differ from expectations due to various risks and uncertainties, and the company disclaims any obligation to update these statements - The press release includes forward-looking statements concerning strategies, objectives, and expectations for CARVYKTI™ and other product candidates[21] - Actual results may differ due to factors like unexpected clinical trial results, regulatory delays, patent challenges, competition, and the COVID-19 pandemic[21]