Legend Biotech(LEGN) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total sales for CARVYKTI reached approximately $170 million in Q2 2023, representing a 63% sequential growth and a 388% increase compared to Q2 2022 [14][20] - Net loss for Q2 2023 was $199.1 million, or a loss of $0.57 per share, compared to a net loss of $193.2 million, or $0.62 per share for the same period last year [29] - Research and development expenses for Q2 2023 were $95.8 million, up from $68.8 million in the same period last year [15] Business Line Data and Key Metrics Changes - CARVYKTI's net sales in the US were $140 million, with $3 million in the EU, showing strong market penetration [27] - Collaboration revenue from CARVYKTI sales was $58.2 million, contributing to total revenues of $73.3 million for Q2 2023 [47] Market Data and Key Metrics Changes - The number of active US treatment sites for CARVYKTI increased to 54 as of June 30, 2023 [27] - The company anticipates a step-up in capacity and sales in the second half of 2023, following a ramp-up in Q2 [56] Company Strategy and Development Direction - The company aims to expand CARVYKTI's indication for earlier lines of treatment in multiple myeloma, with a PDUFA date set for April 5, 2024 [12][26] - Ongoing investments are being made to increase manufacturing capacity and improve efficiency [21][50] - The company is also advancing its pipeline for solid tumors, including LB1908 targeting Claudin 18.2 in gastric cancer [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong performance and demand for CARVYKTI, indicating a commitment to making the therapy accessible to more patients [21][31] - The company is focused on capturing the full potential of CARVYKTI while continuing to supply clinical programs [32] - Management noted that the out-of-spec rate has been trending down and is expected to improve further with regulatory approvals [53][108] Other Important Information - The company has a strong cash position of $1.5 billion, providing a runway through 2025 [16][43] - A three-year contract with Novartis was signed to manufacture additional clinical doses of CARVYKTI [42] Q&A Session Summary Question: What is the expectation for the out-of-spec rate with the approval of CARVYKTI for earlier lines? - Management reported that the out-of-spec rate is trending down and is expected to improve further with the FDA's approval of the wider specification [53] Question: What is the expected cadence of slots in the second half of the year? - Management indicated a step-up in capacity and sales in Q3 and Q4, following the ramp-up in Q2 [56] Question: Will the Belgian site be active by year-end for CARTITUDE-6 manufacturing? - Management confirmed that the Ghent facility is expected to be operational by the end of 2023, with plans to start enrollment for CARTITUDE-6 around that time [85] Question: How is the company addressing manufacturing maintenance? - Management stated that they will not shut down facilities for maintenance but will conduct rotations to ensure continuous operation [98] Question: What is the outlook for reimbursement challenges? - Management indicated that reimbursement for CARVYKTI has been favorable and does not foresee any issues moving forward [118]