Hello and welcome to the Genmab Q2 2022 conference call. Throughout the call, all participants will be in listen-only mode, and afterwards there'll be question and answer session. Just to remind you, this conference call is being recorded. During this conference, you may be presented with forward-looking statements that include words such as believes, anticipates, plans, or expects. Actual results may differ materially, for example, as a result of delayed or unsuccessful development projects.
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Today, I'm pleased to present Jan van de Winkel. Please begin your meeting.
Hello, and welcome to the Genmab conference call to discuss the company's financial results for the first half of 2022. With me today to present these results is our CFO, Anthony Pagano, and then for the Q&A, we will be joined by our Chief Development Officer, Judith Klimovsky, our Chief Operating Officer, Anthony Mancini, and our Chief Medical Officer, Tahi Ahmadi.
Let's move to slide two. As already said, we will be making forward-looking statements, so please keep that in mind as we go through this call. Let's move to slide three.
Genmab has an innovation-based culture, and collaborations and partnerships have always been part of our DNA. During today's presentation, we will reference some of the products being developed under these strategic collaborations, and this slide acknowledges those relationships. Let's now move to slide four.
Genmab has experienced significant growth over the past few years in all areas of our business. Based on this progress, our executive committee determined that it was time to look beyond our 2025 vision for the company to see how we can continue to impact the lives of patients and the healthcare community even further into the future.
Working with a broad cross-functional team of Genmab colleagues, we created our updated core purpose and 2030 vision that you see here. The biggest change between our 2025 and our 2030 visions is the expansion in our focus from just cancer to cancer and other diseases. We know that our antibody know-how, assets, and technologies can be applied to diseases outside of cancer. The approvals of Novartis' Kesimpta in relapsing MS and Horizon's TEPEZZA in thyroid eye disease are proof of this.
While we will continue to create and develop new treatment concepts in oncology, we will remain open to other potential indications outside of cancer, with the ultimate goal of improving the lives of as many people as possible through our innovative and differentiated antibody therapeutics.
Now let's take a look at some of the recent events that propelled us closer to our 2025 and our 2030 visions on the next slides. Slide five. Genmab's innovative excellence and the hard work and commitment of our unstoppable team have been on display recently with a number of important events. At the end of June, we announced our intent to submit a BLA to the FDA for epcoritamab for the treatment of patients with relapsed or refractory large B-cell lymphoma in the second half of this year.
Subsequently, in July, we announced that AbbVie will submit a conditional MAA to the EMA in Amsterdam for the treatment of patients with relapsed or refractory diffuse large B-cell lymphoma, also in the second half of this year. As a reminder of our collaboration details, Genmab and AbbVie share commercial responsibilities in the U.S. and in Japan, with AbbVie responsible for further global commercialization. The submissions will be supported by results from the LBCL cohorts of the pivotal EPCORE NHL-1 study. We and AbbVie announced the top-line results from this study in April, with primary results presented in a late-breaking oral presentation as part of the prestigious Presidential Symposium at the EHA conference in Vienna in June.
The results from this study support our belief that epcoritamab has the potential to offer people living with LBCL a new therapeutic option with a manageable safety profile, and we are very much looking forward to next steps. The late-breaking epcoritamab presentation at EHA was one of the many recent data presentations. There were multiple epcoritamab poster presentations at ASCO, with ENCORE at EHA, highlighting data in a variety of treatment settings and hematological malignancies. In addition, we and our partner Seagen were pleased that several abstracts evaluating tisotumab vedotin in various tumor types were presented at ASCO. These included an oral presentation of the innovaTV 205 study evaluating tisotumab vedotin in combination with carboplatin or pembrolizumab in first-line patients with recurrent or metastatic cervical cancer.
The data presented recently for both epcoritamab and tisotumab vedotin are reflective of our commitments and the commitment of our partners to investigating these therapies across different lines and combinations. Turning to our earlier-stage pipeline, as it relates to DuoHexaBody-CD37, one of our assets with AbbVie, we will discontinue the co-development with AbbVie, and Genmab will continue development of this program on its own. As we continue to explore this program, we look forward to providing you with further updates. I'm excited to announce an additional update to our product pipeline, a new antibody in the clinic by the end of this year for solid tumors. HexaBody-CD27, also known as GEN-1053. The development of this HexaBody-based product is part of our broadening partnership with BioNTech. Like GEN-1046 and GEN-1042, we will be co-developing this investigational medicine with BioNTech 50/50.
The foundation of our differentiated product pipeline is our proprietary technologies, and I'm extremely pleased to share with you that our HexElect technology was recently featured in an article in the journal Nature Biotechnology. The HexElect technology is an approach to enhance the functional selectivity of therapeutic antibodies by making their activity dependent on clustering after binding to two different antigens expressed on the same target cell. The potential of this technology is another example of the innovative spirit of our world-class team. I'm also enthusiastic about the fact that Janssen has announced a positive CHMP opinion for TECVAYLI or teclistamab, recommending conditional marketing authorization for the treatment of patients with relapsed and refractory multiple myeloma.
Should TECVAYLI receive approval in either Europe or in the U.S., where Janssen's BLA is currently under review, there would then be six medicines on the market that leverage Genmab's innovation and technology, including two medicines, Janssen's RYBREVANT and TECVAYLI, created using our proprietary DuoBody technology platform. As we look forward to regulatory submissions for epcoritamab, we are hopeful that medicines created with our DuoBody platform will continue to become new treatment options for people with unmet medical needs. DARZALEX continues to redefine the treatment of multiple myeloma, with strong sales for the first half of the year as we reported $3,842 million in net sales by J&J, an increase of 37% over the first half of 2021, resulting in DKK 4,024 million in royalties to Genmab.
This brings me to our new arbitration with Janssen relating to our daratumumab license agreements. As we announced in the beginning of April, in the original arbitration, the tribunal ruled in favor of Janssen on the question as to whether Genmab is required to share in Janssen's royalty payments to Halozyme for its technology used in the subcutaneous formulation of daratumumab. The tribunal based its ruling on the finding that DARZALEX FASPRO constitutes a new licensed product under the license agreement. In the new arbitration, we are seeking an award of $405 million plus interest in accrued milestone payments for DARZALEX FASPRO and a declaration that we are entitled to a new 13-year royalty term from the date of DARZALEX FASPRO 's first commercial sale.
As the arbitration is confidential, outside of our disclosure obligations, we do not intend to comment further, and we look forward to our continued collaborations with Janssen. I'm pleased to now hand over the call to Anthony Pagano to take you through our first half financial results. Anthony, the floor is yours.
Great. Thanks, Jan. Let's move to slide six. We continue to strengthen our foundation during the first half of 2022. To start, we're on track for regulatory submissions for epco in both the U.S. and Europe in the second half of this year. As we'll see, our H1 financials are exceptionally strong. We grew operating profit by 34%, and importantly, we also increased recurring revenues by 86%. This was driven by strong royalties from DARZALEX and other approved medicines. You'll remember, of course, that we didn't have any TEPEZZA revenues in Q1 of last year. Our strong balance sheet, growing recurring revenues, and significant underlying profitability allow us to continue to invest in our business and our pipeline in a very focused and disciplined way. Especially in these volatile times, the strength of our financial profile really stands out.
An important part of this has been to continue to build the team and our capabilities to enable us to succeed. Let's take a look at those revenues in a bit more detail on the next slide. We saw continued strong performance for DARZALEX in the first half of the year. As you can see in the chart, overall, net sales grew by 37%. That's net sales of $3.84 billion which translates to over DKK 4 billion in royalty revenue. This exceptional growth was driven by continued strong market shares across all lines and continued uptake of the subQ formulation. DARZALEX remains a key driver of our revenue as you can see on slide eight. We grew total revenue to almost DKK 5.3 billion in H1.
As I've already highlighted, that included an 86% increase in our recurring revenue. We've already spoken about DARZALEX and the very strong performance there. Turning to Kesimpta and TEPEZZA, we saw an increase of DKK 452 million in royalties compared to last year. Taken together, this growth really illustrates the power of our recurring revenue. In fact, over 90% of our H1 revenue was recurring. Our revenue profile continues to get stronger. We're taking our strong recurring revenue and investing in a highly focused way, as you can see on the next slide. In line with our significant growth opportunities, total operating expenses grew 58% in the first half. In R&D, we've accelerated our investment into our product portfolio, especially the advancement of both epco and DuoBody-CD40x4-1BB.
We've also further strengthened the Genmab team to support our growth in commercialization and our expanding pipeline. That includes supporting TIVDAK and preparing for the filings and potential launch for epco. Finally, we're leveraging the AbbVie collaboration by utilizing their expertise and significant financial contributions to further expand and accelerate our partnership programs. Now, let's take a look at our financials as a whole on slide 10. Here you can see our summary P&L. Revenue for the first half came in at approximately DKK 5.3 billion, and that's up 49% on last year. Total expenses were about DKK 3.5 billion, with 69% being R&D and 31% SG&A. That brings us to our very strong operating profit of nearly DKK 1.8 billion. For me, this result is particularly impressive given the context. Why do I say that?
Last year's H1 makes for a somewhat tough comparator as it included more than DKK 700 million of milestone revenue. This year, we've also increased our total investment in H1 by nearly DKK 1.3 billion. Even considering these items, we still delivered a 34% increase in operating profit in H1. Moving to our net financial items. Here we have income of DKK 1.3 billion, which was primarily driven by the same two partially offsetting items that we highlighted in Q1. First, we've got the strengthening of the US dollar against the Danish kroner, positively impacting the value of our cash and investments. On the other side of the ledger, we have losses on our marketable securities due to rising interest rates and some losses on our public equity investments that we made in conjunction with recent licensing deals.
We have tax expense of DKK 745 million, which equates to an effective tax rate of 24%. That brings us to our net profit of nearly DKK 2.4 billion. As you can see, extremely strong financial performance for H1. Before we take a look at our improved guidance, I want to take just a minute to revisit our robust financial framework on the next slide. First off, let's think about our revenue profile, which you can see on the left. At the beginning of 2020, DARZALEX was our only product on the market. Today, we have five, and that provides us with expected recurring revenue growth of 53% in 2022.
There's a clear path to potentially expand the number of approved products with Janssen's BLA and MAA for teclistamab, and most excitingly, our planned submissions for epco later this year. Taken together, we expect significant cash inflows in the years to come. Moving to the right, we continue to be focused on our investments as we evolve our organization for continued success. Right at the top of the list is accelerating and expanding epco. Based on the work we've done so far and the data we've seen, including the recent top-line data, we're convinced epco is a drug that has the potential to really make a difference for patients. Epco is just one of the exciting opportunities that provide us with a compelling rationale for increasing our investment.
As we told you before, if we want to seize these meaningful opportunities, we've got to invest, and that's exactly what we're doing. With that background, let's look at our improved guidance on slide 12. Driven by continued strong DARZALEX growth and the positive net impact of the strong U.S. dollar, we raised our 2022 guidance earlier in the week. We now expect our revenue to be in a range of DKK 12 billion-DKK 13 billion, an increase of DKK 1 billion to both the bottom and top end of our range. This increase is driven by higher DARZALEX royalties following the strong H1 performance. Here, we've increased our guidance, our guidance for DARZALEX net sales to a range of $7.8 billion-$8.2 billion. Our revenue also continues to be positively impacted by the strong U.S. dollar.
Turning to our investments, we remain focused on executing against our strategy and key priorities and creating long-term value. Here we are increasing our OpEx guidance to a range of DKK 7.6 billion-DKK 8.2 billion. This is driven by pipeline progression and accelerated epcoritamab launch readiness activities, as well as the strong dollar. Putting all this together, we're planning for substantial operating profit in a range of DKK 3.8 billion-DKK 5.4 billion. Now, clearly, we've all seen a material appreciation of the dollar so far this year. Taking this into account, we've updated our guidance rate for the Danish kroner US dollar from 6.4 to 6.8 to reflect the year-to-date average through Q2 as well as consensus.
Overall, our increase in revenue is approximately 40% operational and 60% FX, and the increase in operating costs is roughly evenly split between operational items and FX. Finally, to give you just a bit more color on foreign exchange, every 10-point move in the exchange rate relative to our guidance rate is worth around DKK 50 million in operating income for the balance of the year. Now for my final slide, let me provide just a few closing remarks. In summary, we've had an exceptional first half of 2022. We've created growing recurring revenue streams, and that gives us a strong backbone of significant underlying profitability. We continue to invest those revenues in a highly focused way to realize our vision and capitalize on the very significant growth opportunities in front of us.
Now on that note, I'm gonna hand you back over to Jan to discuss our key priorities for 2022.
Thank you, Anthony. Let's move to slide 14. Our key priorities are essential to our success, and we are making excellent progress. We are especially excited about the recent advancements for epcoritamab. In addition to the recent data and the announcements of our intent to submit a BLA in the U.S. and AbbVie's intent to submit a conditional MAA in Europe, a new phase III study, EPCORE FL-1, is now listed on ClinicalTrials.gov. The study will evaluate safety and efficacy of epcoritamab in combination with rituximab and lenalidomide or R2, compared to R2 alone in patients with relapsed or refractory follicular lymphoma. Together with AbbVie, we anticipate that this study will start in the second half of this year.
We look forward to providing you with further updates on epcoritamab as well as on our other clinical programs as Genmab continues to evolve into a leading fully integrated biotech innovation powerhouse. Let's now move to our final slide 15. That ends our presentation of Genmab's first half 2022 financial results. Operator, please open the call for questions.
Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name has been announced, you can ask your question. If you find it's answered before it's your turn to speak, you can dial at zero two to cancel. Once again, that's zero one to ask a question or zero two if you need to cancel. Our first question comes from the line of Wimal Kapadia of Bernstein. Please go ahead. Your line is open.
Oh, great. Thank you very much for taking my questions. So can I first just ask about the HexaBody-CD38, please? So when can we expect the DARA head-to-head trial to begin? And is it fair to assume we won't really get an update from a data perspective until quite late into 2023? And just tied to that, any update you can provide on what you've seen so far from the current data set that gives you confidence to begin that head-to-head study. Now, my second question really is just in terms of epco and filing. The 2H is quite a broad range. We're in August. So what more is really needed to file with FDA? Are you in the process of putting the package together? Is there more data needed?
Just any update there would be great. Thank you.
Thanks, Wimal, for the questions. I think I can handle both of them myself. HexaBody-CD38, we're very excited about the data. You will see the dose escalation data this year, Wimal, and we hope to start the head-to-head against the subQ DARA near the end of this year. No data will be there this year. Indeed, I think end of 2023 for the head-to-head data is probably the right approximation. For the epcoritamab filing in the second half, we have all the data, and we are now basically working on the filing as we speak, Wimal, and we hope to actually finalize that filing in the coming months, literally. That's probably all we can say on the timing.
Okay, great. Thank you very much.
Thanks, Vimal.
Thank you. Our next question comes from the line of Jonathan Chang at SVB. Please go ahead. Your line is open.
Hi, guys. Thanks for taking my questions. A couple from me. First one, on your updated 2030 vision, can you provide more granularity on your plans outside of oncology? Second question, when could investors see additional clinical data for GEN1046 and GEN1042? Will these be in the second half of this year or not? Thank you.
Thanks, Jonathan, for the questions. I will ask Judith Klimovsky to basically give it a start on both of your questions, and then I can see what I can add. Judith, the floor is yours.
Yeah. To answer the first question, on areas beyond oncology is, you know, in serious diseases where our technologies and antibody expertise can make a difference. We are assessing actively as we speak. There could be low-hanging fruits and as Jan mentioned some examples of TEPEZZA, Casirivimab, even the P-selectin. We are exploring this actively as we speak, so we cannot provide more granularity at this point. With regard to the second question, we are committed to deliver the data to come to a proof of concept for GEN1046 and/or GEN1042. We are actively enrolling. As you know, we are a very data-driven company, so we are committed to gather this data by the end of the year.
The opportunity to present, we are actively assessing vis-à-vis the timelines for the different conventions, but we feel committed to our goal to present this data by the end of the year.
Thanks. Thanks, Judith. I think nothing to add, Jonathan, for now, but thanks for the questions, huh?
Got it. Thank you.
All right.
Thank you. Our next question comes from the line of Sachin Jain at Bank of America. Please go ahead. Your line is open.
Thanks very much. A couple of pipeline and then just one financial. Just to follow up on GEN1042 and GEN1046. I wonder if you could just provide more color where you are with the program. So my interpretation of prior commentary had been that you obviously got multiple combinations ongoing with different sequences, and there have been signs of initial efficacy. You're really trying to work out what combinations are giving you the best durability of response vis-a-vis safety. With that interpretation fair, and just any color you can provide us where you are on the path to finding the right combination and sequence. Second pipeline is the CD37. Just any color as to what AbbVie saw to hand that asset to you. Just one financial for Anthony.
Just given the variability of milestone income, just any color you can give us as to how to think about milestone revenue expectations this year within guidance. Obviously, any color you can give on that would be super helpful. Thank you.
Thanks, Sachin, for the questions. What I will do is I will hand the first questions on GEN 1042 , GEN 1046 to Tahi, and also ask Tahi to basically comment further on the, AbbVie decision if possible, and then Anthony Pagano can pick up on the milestone and epco questions. Tahi, right, the floor is yours, Tahi.
Thank you, Jan. Well, I mean, this is gonna be relatively short. I think, you know, beyond what Judith earlier said around GEN 1042, GEN 1046, I don't think we are in a position to give any more clarity on the data that we're generating. Obviously, you can tell from clinical trials that apart from prior commentary on our end, as you correctly summarized.
The team really supporting the overall progression of our research activities and progression of our clinical development, pipeline and assorted manufacturing activity. As you just probably heard, the two biggest drivers are epco and build out a team. Obviously CD40x4-1BB would rank, you know, behind that. I would say, it ranks behind certainly epcoritamab by a fair margin at that, at this point. Again, you shouldn't read anything into this other than, you know, where we're at in the overall stage of the development of the program.
Thanks, Anthony. Thanks, Jain, for the question, sir.
Thank you. Our next question comes from the line of Michael Schmidt at Guggenheim Securities. Please go ahead. Your line is open.
Hi, this is Paul on for Michael. Thanks for taking our question. Just a few on your recent expanded partnership with BioNTech. I guess first, was there anything that was observed from your ongoing clinical HexaBody programs or partner DuoBody programs that sort of triggered this deal? Are there any preset number of monospecific candidates that you plan to nominate under the collaboration? Lastly, any additional color on how the HexaBody platform might position you to address the CD27 target. Thank you.
Thanks. Thanks, Paul. Good questions. We are very excited about the BioNTech partnership. We are working on a number of programs, so there are already candidates selected for HexaBody approaches beyond CD27. I will ask Tahi, who is actually overseeing part of that work with BioNTech, to give you some further reflection and comments on your questions. Tahi.
Thank you, Jan. I'll try. I would first say that, you know, the collaboration with BioNTech has been one that's been ongoing for now several years and has been an extremely fruitful collaboration. As we have worked together on a multitude of targets and learned more and more about how to better address them, this has led now to the expansion of this collaboration to also include hexamerization as a Genmab developed technology for certain targets that are part of our collaboration. The first one that is going to the clinic, as Jan was saying, is CD27.
Make it very clear, we will show that data and present it to you in the near future. We have preclinical evidence that our HexaBody technology, the ability to hexamerize, leads to a significantly stronger signal than comparative antibodies, including those that are in clinical development already. That's where our conviction comes, that this could be a differentiated approach to this particular target. Obviously that insight also translates to potential other targets. There are, as Jan already said, other programs that are in development in this collaboration with BioNTech, which is an extremely fruitful, efficient and effective collaboration.
Thanks, Tahi. Thank you, Paul, for the questions.
Thank you. Our next question comes from the line of Chris Yu at Morgan Stanley , please go ahead. Your line is open.
Thank you for taking my questions. I'm speaking on behalf of Matthew Harrison. I have two questions. One is on epco. What do you think are the key factors around commercialization? Because we have recently seen a lot of late line DLBCL launches that have plateaued after a few quarters. With that information, what do you think that has told you about the market potential in this particular disease? The second question is about the 4-1BB programs later this year. What bar in the lung cancer expansion cohort is enough in terms of the overall response rate or would you need to see mPFS? Thanks.
Thanks, Chris. I will hand the first question over to Anthony Mancini to talk a bit about market potential of epcoritamab and the potential in commercialization there. Then the second question probably to Judith to speak a bit more about lung cancer and the bar for the 4-1BB programs. Anthony, floor is yours.
Thanks. Thanks, Jan, and thanks, Chris, for the question. Just to provide some context on the commercial potential, the initial addressable patient population in DLBCL across U.S., Europe, and Japan is about 9,000 patients in late lines. It steps up quite significantly in the second line and in the front line. What's really important here is if just I focus on the U.S. market, is the site of care dynamics. Today they're such that LBCL is largely treated in the community in the first and second line setting. In later lines, although more therapies have recently become available, what we're hearing from our customers is that there's quite a large degree of dissatisfaction in that setting.
The patients more often refer to a hospital or academic setting, and it's clearly driven by the fact that more effective options are only available there. What we also hear pretty consistently from treating clinicians is that off-the-shelf therapies that can deliver the right balance of efficacy and safety and also have the accessibility of an off-the-shelf subQ administration, if those types of therapies were available, that they would continue to treat these patients in the later line settings in the community. Frankly, a large portion of potential patients that are referred do not get the therapies that they're hoping to get it in an academic setting. We still think that epcoritamab offers the potential to have.
To be best in class and have the right balance of efficacy and safety. That's certainly what we've observed thus far. You know, with the accessibility of a subQ administration, we still see meaningful potential opportunities in the long term, not just in the late line settings, but particularly as we continue to explore it in earlier lines and across B cell malignancies. I think I'll leave it at that, Chris.
Thanks. Thanks, Anthony. Maybe Judith, maybe you can say a bit more about the brain and lung cancer after checkpoint inhibitors, if you are able to do that for the 4-1BB programs.
Yeah, thank you. I think that the question is alluding to the study of GEN1046, which is a study, as Jan mentioned, in second- and third-line non-small cell lung cancer after patients failed or exhausted checkpoint inhibitors and doublet chemo. Let's start with the unmet medical need. You know, as a checkpoint plus chemo are moving to the first line for most of the patients or sequential on some, there is a huge unmet medical need for patients that exhaust these main options. Durability as well, because what we want is improved survival, and for that should be durable. I won't give you the bar, but you can. I mean, it's huge unmet medical need, very poorly served with the current option with docetaxel.
The bar for other small studies, more current contemporaneous data on docetaxel is in the single-digit order.
Thanks, Judith. Thanks, Chris, for the questions.
Thank you.
Thank you. The next question comes from the line of Yaron Werber at Cowen. Please go ahead. Your line is open.
Hi, this is Jana on for Yaron. Thanks for taking my question. I actually have a few questions on DARZALEX. Given previous CASSIOPEIA data showing that DARZALEX maintenance improves PFS over observation, do you think that DARZALEX is actually going to become a key component of maintenance therapy as well? And also along those lines, what's your expected timeline for initial data from the AURIGA trial? Secondly, I see that you're also testing DARZALEX in newly diagnosed multiple myeloma as part of the VRd quadruplet in transplant-eligible and ineligible myeloma patients. Could you give some guidance as to when we could see that data from CEPHEUS and PERSEUS? Thank you so much.
The trial, which of course is event-driven, that it has an estimated completion date of September 2022. That's probably where we need to leave it at, and then the further information needs to come from our partner, Janssen, as Tahi has already said.
Okay. Thank you very much.
Thank you.
Thanks. The next question comes from the line of Elizabeth Walton at Credit Suisse. Please go ahead. Your line is open.
Thanks so much for squeezing me in. Elizabeth Walton from Credit Suisse. I just have a couple of questions left. Firstly, one on costs. I'm curious if you can provide us any color on the relative spend to SG&A and R&D. We saw a meaningful step up in your SG&A spending this quarter versus expectations. How should we think about that going forward? Is there much more that needs to be done to prep for epco? Secondly, on DARZALEX, curious on your view on the conversion rate from the intravenous to the subcutaneous formulation. J&J told us in their results, it's about 85% subcut use in the U.S. and 80% in Europe. How does that track versus your internal expectations? Thank you.
Thanks, Elizabeth, for the questions. I propose that the cost question goes to Anthony Pagano, and that Anthony Mancini gives us a bit of perspective on how we think about IV to a subQ conversion as we see it, not only in the States but also outside of the States. Maybe Anthony Pagano can start.
Sure. Happy to do so. Thanks for the question, Elizabeth. Yeah, you're right. As our business, you know, evolves, you know, we're grounded in investing, you know, for what makes sense for Genmab, right? Historically, think about it, everything was going into R&D. As we got closer to the filing last year and then the launch of TIVDAK, obviously we ramped up that investment in a very focused way together with our partner. What you're seeing now for TIVDAK in particular, whereas in H1 last year, you wouldn't have had a ton of cost for TIVDAK, in H1, I would say, a fully loaded, let's call it a cost structure for TIVDAK in our H1 P&L. That will continue moving forward in the second half of this year and also into 2023.
Now for epco, I would say, the beginning of last year, getting into H1 this year, we've started, you know, launch readiness activities for epcoritamab in earnest. Now following the positive readout of data, that we saw in April and now with our announcement of the intent to file, particularly in the U.S., we are gonna have to invest for success here. We are starting to ramp up, as you've just alluded to, our investment in SG&A, in H1, and that will continue here in the back half of next year, and also into next year. Again, in a really focused, and a disciplined way here to make sure that we really are well-positioned to let epcoritamab shine in the marketplace, you know, should it be approved.
I think just sort of wrapping this all together, just with the overall expansion of our really exciting clinical pipeline and the two commercial drivers that I just highlighted, there is an increased need to invest in systems, whether it be CRM, ERP, enhanced compliance functions, just really round out and make sure that Genmab as a whole is really well-positioned to support the growth and manage risk appropriately along the way. Hopefully, Elizabeth, that gives you a little bit of color, and I think Anthony Mancini can take on the other question.
Yeah. Thanks. Thanks, Anthony, and thanks Elizabeth for the question on conversion rate. The way we think about it is that really the availability of the subcutaneous formulation around the world really was a clear driver of strong share performance. As J&J outlined on their call, it accounts for, you know, over 80% in terms of usage, in terms of weekly gross sales in the U.S. and around 80% in Europe. What I would say is that it largely in line with our expectations. I think where we continue to applaud Janssen's execution in Europe and rest of world in particular is the rapid availability and access to the subQ formulation has really driven frontline in particular share gains.
If I just contextualize that a little bit, the overall share gains are impressive in both the EU five and in the US. Just looking at IQVIA BrandImpact data, ending at the end of the quarter, there was about a 6% absolute overall share gain in the US, about a 13% absolute share gain in the EU five. When we look at frontline share, we saw an absolute share gain in the US of 12%, which is impressive, but an even more impressive 22% improvement in share points in this new frontline setting in the EU five.
We think that's driven by strong execution, resonance of the overall survival benefit, and the availability of subQ, which, as you know well, you know, facilitates earlier usage due to its convenience, efficacy being the same as IV, and of course, the safety benefits and convenience benefits that exist. Hopefully that covers that question.
Thank you.
Thank you.
Thanks, Anthony. Thanks, Anthony and Elizabeth. Let's go on to the next question.
That's from the line of Zoe Karamanoli of RBC Capital Markets. Please go ahead. Your line is open.
Thank you for taking my questions. I'd like to ask a question on epco commercialization in a different way, if I may. From the discussions you have with physicians so far, how they view the data for epco, and in particular, how it compares versus glofitamab from Roche. The latest data you shared at EHA points to slightly better safety and efficacy for epco. I'm just keen to understand whether this is something you hear from physicians or, you know, at this point in time, or perhaps both drugs at this point are viewed more or less comparable. My second question is, I noticed on ClinicalTrials.gov that you have initiated a phase II safety study for epco. Is this something you need to have in place before you submit to the BLA application?
Is it to support or strengthen the data, or there's a safety concern here? I'm just wondering of the rationale for this. Thank you.
Thanks, Zoe, for the questions. I propose that definitely Judith will speak a bit more about epco versus glofi and also the trial, the safety trial in the context of the filing and the road forward for epco. Maybe Anthony Mancini, you can also give some perspective on commercialization as Zoe wants to hear of epco versus other CD3, CD20 bispecifics. Anthony?
Do you want me to start? Okay. Look, I think in line with what I said earlier in terms of what we're hearing from clinicians is the desire to treat these patients. We believe based on the data that we've seen, the LBCL cohort of the EPCORE NHL-1 study, which were shared at the EHA Presidential Symposium that really epco, epcoritamab offers a balance between efficacy, safety and the accessibility of subQ administration. What we're hearing from clinicians is that that matters. We feel we will have that there are differences between the agents. We're looking forward to having the opportunity to showcase those going forward. Maybe I'll pass it to Judith for the other comparators.
Thanks, Anthony.
Yeah. No, thank you.
Judith.
Thank you, Anthony. I think it, you know, across study comparisons are limited by the different natures of the populations enrolled. Although you might have similar eligibility criteria, there are nuances that can impact the results. As for example, when you see the glofi, it seems the same population. However, the median lines of treatment with epco is 3.5 versus 3. The transformed follicular population, super difficult to treat, is 29% for epco and 17% for glofi, and so on and so forth. You see differences. You cannot compare because you will be doing biased comparisons influenced by factors that you don't control.
Having said that, you know, when we put vis-a-vis the data on epco, vis-a-vis glofi and some other emergent data, we see that numerically there is a trend for a better efficacy, a better safety, and, last but not least, advantage of subcutaneous and there's no need of obinutuzumab or any preparation for the patient. So as the whole package, we see that it's very robust to support the whole value proposition for epco. I mean, I am a development person, but I am telling you when studies enroll fast, it's a good signal of, you know, the believable confidence in an investigational agent.
As you see, as you have seen our program progress, you can guess that enrollment has been, we had the support of the medical community for enrollment. This is with regard to comparative data. With regard to the outpatient study, it's not a request, it's some data that we wanted to generate to give more, to have this data to help the community centers or, you know, every physician that want to have potentially when it's approved, prescribe epco, that we have the whole set of data and information to help, you know. Data helps physicians understand how to use the drug. This is the reason. It's a very nice study which is exploring epco in a fully outpatient basis.
Thank you, Judith.
Mm-hmm.
Thanks, Zoe, for the questions. Excellent questions. Let's move on to the next one.
Thank you. We have time for one further question. That's from the line of Etzer Darout of BMO Capital Markets. Please go ahead. Your line is open.
Hi, this is Luke Shumway on for Etzer Darout. Thanks for taking my question. I guess on the GEN 1053 asset with BioNTech, you said that you're gonna be looking at solid tumors. Do you have any more clarity on that? Like, are there specific indications that you're going for, or are you going for a tumor-agnostic approach?
Thanks. Thanks for the question, Sir Rich. Tahi, are you willing to provide some further color on that?
Sure. What I would say to the question is, the first questions that we need to address in our first human trial will be the biology of CD27. That's essentially a tumor-agnostic biology. We can in the next subsequent steps identify opportunities which may not necessarily be only restricted to solid tumors. If indeed we elicit the biology that we have pre-clinically seen, I want to see the CD27 biology, particularly increase of CAF cells in a tumor microenvironment and the activation there.
Okay. Thank you.
We can have second steps or questions around what is the appropriate setting for interrogating that particular biology is or in what combination.
Thanks, Tahi. Is that okay, Rich? I think, operator, I think we lost him.
His line's still open. He may have muted himself.
No. Sorry. No. Yeah, that's it. Thank you.
All right. Thank you very much for the question. Operator, back to you.
Thank you. As we have run out of time for questions, I'll hand back to the speakers for any closing remarks.
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