Good morning, everybody, thank you so much for joining us for the 46th Annual TD Cowen Healthcare Conference. I'm Yaron Werber from the Biotech team, along with my colleague, Jana Nahon. It's a great pleasure to have today, Anthony Pagano, Chief Financial Officer and Executive Vice President. Unfortunately, Tahi Ahmadi, Chief Medical Officer, is stuck on a plane, the plane has a medical emergency, he literally could not get here as much as he tried. Instead, Anthony's volunteered to answer all our clinical questions. If you have any science questions, please throw them in. Anthony, thank you for joining, maybe let me open up to you with maybe some opening remarks first.
Well, thanks, Yaron, I appreciate the, you know, your confidence in me to answer all of your very detailed and difficult clinical questions. In all seriousness, it's great to be here with you today and have a chance to interact with all of our, you know, investors. Maybe just a couple of opening remarks to set the stage. 2025 was really an important year for Genmab. You think about the financial results, the strong and growing recurring revenues, the disciplined costs and OpEx management, and that profitability discipline. Even more importantly is thinking about our three late-stage programs, EPKINLY, Rina-S, and Petosemtamab, each of these programs having FDA Breakthrough Therapy designations. For each of these programs, we saw meaningful clinical data in 2025 to increase our conviction.
Now, looking forward to 2026, it's more of the same strong revenue growth, very much focused on OpEx management and then that profitability discipline. Coming back to the three programs, for each of these programs, we expect registrational readouts really fueling and underpinning our confidence for each of these programs in the first order to making a meaningful difference for patients, but ultimately drive meaningful revenue growth for Genmab as we get into the middle part of this decade, the back half of this decade. Even more exciting is just thinking about the totality of this oncology franchise we're creating here at Genmab with really these three key programs, these late-stage programs, that foundation for that. Of course, we have our wonderful research and discovery engine to further drive that internal pipeline moving forward.
A lot to look forward here, in 2026 with the readouts, and certainly a lot more to look forward to in 2027 and beyond. With that, maybe Yaron and Jana, we get into your questions.
Yeah. Maybe, as you think about the guidance for the year, what are some of the drivers that got you to where you were?
Yeah.
Maybe we follow the revenues from top-down.
Sure. I mean, obviously, as we think about the overall revenue profile for Genmab, what you see is that over the last couple of years is a improving revenue quality. There are different components of that. One is the percentage of recurring revenue has been increasing over the last couple of years. You can also see the diversification of that revenue profile in terms of the number of products that are contributing to that revenue profile. More importantly, what you start to see is our proprietary products and how that number and that revenue has been increasing here, speaking to EPKINLY and TIVDAK. The first thing I'd leave you all with is that improving revenue quality profile that really has been a year-over-year theme, and certainly we see that continuing into 2026.
Obviously, with the potential new product launches from Rina-S and Petosemtamab in 2027 and a significant line extension for EPKINLY, hopefully into frontline DLBCL, that improving revenue quality should continue to increase, you know, over time. That's what I'd leave it with on the revenue side, Yaron.
With, I'll come back to a second to Rina-S and Pido in terms of the launch timing and some of those timelines. In terms of. TIVDAK has been a little flattish. I think I've kind of was thinking last year, TIVDAK contributed about DKK 20 million to that line, and the rest in that line was EPKINLY. Am I in the ballpark?
Yeah, I mean, the way to think about TIVDAK is it's a very important therapy for patients in the second-line plus cervical cancer setting. We've seen it become, in the United States, a standard of care and really making a meaningful difference. I think we're having some technical difficulties. I don't know if we hear.
Yeah. Maybe I'll shut my mic.
Really a standard of care in that second-line plus setting, cervical cancer in the United States. More recently, we've been able to bring it to patients in Japan and Germany as well. From a financial perspective, TIVDAK is not gonna be a meaningful driver of growth as we move forward, but it's an important foundation for Genmab in terms of, number one, bringing this important therapy to patients, of course, but secondly, also furthering our presence in the gynecologic oncology community in these major markets in advance of a potential launch for Rina-S in 2027. You're kinda getting and touching on some of the growth dynamics in 2026 versus 2025. We kinda guide for the net product sales and collaboration revenue. That's kind of a proxy for TIVDAK and EPKINLY.
Here, that year-over-year increase is almost entirely driven by EPKINLY. Your inference is correct in that TIVDAK is flattish. There were some one-time items that positively benefited TIVDAK in 2025 having to do with some dynamics around let's call it inventory management, as well as some other dynamics that positively influenced 2025. From a pure operational perspective, we do see year-over-year demand growth for TIVDAK once we back out these one-time items. Two things to leave you with. The demand for TIVDAK continues to be robust. EPKINLY is driving the growth on that line item in 2026. The last thing I'd leave you with in terms of TIVDAK, again, is to remind us all to not get it out ahead of ourselves. It's not a driver of growth moving forward.
TIVDAK.
TIVDAK.
Yeah.
Yeah.
Yeah, yeah. When you think of EPKINLY last year did DKK 468, I think, in global sales. If we look at the mid-range of your guidance for this year over last year, it's kind of more flattish, so clearly you're expecting growth at the higher end of the guidance. It is a third-line indication right now. Can you talk about how much growth is left in that segment before you move on upwards?
First point is, what we're seeing with EPKINLY from a product profile perspective is, you know, very, very strong. What we've seen in terms of the third line plus, registrational data, has been really strong and driving that growth. You have seen now the second line follicular lymphoma data, in 2025 that was approved in the United States really speaks to the powerful efficacy, the nice safety profile, as well as the convenience. That was supplemented with the outpatient study, which we, showed last year that really demonstrates that EPKINLY in this clinical study could be administered in the outpatient setting. Also, importantly, a large portion of that trial was conducted in the community.
First thing I wanna leave you with is a very strong profile that we've seen based upon registrational and other readouts so far. That's driven very strong penetration into the third line plus settings, both in DLBCL as well as follicular lymphoma. I would say there's not a lot of growth left in those markets. We're now two plus years into those launches in the major markets. That brings us to the second line, follicular lymphoma. That is probably the primary or is the primary driver of growth in 2026. We've been super careful to point out that while the data is super strong in this setting, remember the hazard ratio of 0.21, 79% risk reduction, the patient segment is, and patient population is rather limited. We're talking in the United States probably around 4,000 patients.
Again, see strong product profile, strong demand in the third line plus setting, seeing that continued into second line follicular lymphoma. Really what's gonna take us to much closer to our peak year sales target of DKK 3 billion+ is gonna be getting into earlier lines in DLBCL. As a reminder here, we expect data in both front line and second line DLBCL in 2026.
Yeah. Great. That was very useful. As you think about Rina-S and Pido launching next year, I think the Rina-S data is I think second half for you, right? Pido is still enrolling. It sounds like you're expecting at least one or both studies to read out by the end of this year. As we think about next year, these are gonna be probably smaller contributors. They're probably gonna launch next year and really contribute in 2028.
That's a good way to think about it. We're very encouraged with the profiles of both Rina-S as well as Petosemtamab. The data so far we've seen is very strong. The progress in the clinical trials also is strong. We remain confident in our guidance to have potentially registrational readouts for Rina-S in the second half, as well as one or both of the Petosemtamab trials also in the second half. Obviously, once you see the data, we're all aware that it takes time to file, then it takes time to work through the regulatory process.
It's not the appropriate time for us to be sort of trying to sort of calibrate when in 2027 we could see a potential launch, and hence to sort of provide financial commentary at this stage, absent data, absent clarity on timing would be, you know, not something that's appropriate or really useful. What's important, certainly once you get into 2028 and beyond, these will be meaningful contributors to our revenue profile. Again, speaking to what I come back to what I said earlier in terms of this improving revenue quality profile and starting to have more of our revenue, not starting, but continuing to have more of our revenue profile be driven by our products like EPKINLY, TIVDAK, and now Rina-S and Petosemtamab.
Yeah. With Peto, it sounds like there's a growing sort of scuttlebutt that you might be, I think you've said that you're reserving the right to expand one or both studies, to potentially accelerate time to events. We're getting a lot of questions whether you're expanding the frontline head and neck and specifically the HPV-positive segment. I don't know if you can comment on that.
Yeah. I mean, what I'd leave you with is what I've already said, and to reiterate, is, prior to the acquisition, Merus had been very clear regarding one or both of the trials to read out in 2026. We did our diligence. We reconfirmed or confirmed that view, at the time of the acquisition, and we're, you know, continuing to stand behind that. I'm not gonna get into the mechanics of clinical trials. It's quite normal to make additions or amendments to clinical trials. I think what's important is that we stand behind the profile that we've seen, number one, and then secondly, around the timing, which I just went through and won't repeat again.
Okay. Understood. Do you wanna ask him about the first question?
You've articulated kind of peak sales potential of around over DKK 2 billion for Rina-S, DKK 3 billion for EPKINLY, and kind of a multi-billion, depending on what happens with Petosemtamab. You had DKK 2.4 billion in DARZALEX royalties last year, and we're kind of modeling maybe DKK 3.5 billion by 2028. How do your three key late-stage assets stand to replace the revenue that might be kind of going away from DARZALEX as we move forward?
Great question. I need a notebook to write down all the math here, but I get your point. DARZALEX is a wonderful product. As you just highlighted, from a financial perspective, it's been a meaningful contributor to our overall financial profile, and it's helping many multiple myeloma patients around the world. It's a wonderful product. As we sit here today, we look at EPKINLY, Rina-S, and Petosemtamab. We have the peak year sales estimates that you had just outlined. We think over time, that positions us to be in a place for meaningful growth as we get into the 2030s.
I think trying to sort of comment on a particular peak year for DARZALEX and forecasting what that peak year number is gonna be and exactly where we're gonna be at in that peak year in terms of revenue replacement is not something where we're gonna comment on today. What's important is that we look at, you know, again, EPKINLY, Rina-S, and Petosemtamab. We fully expect that these programs can deliver on these peak year sales targets and provide a meaningful revenue growth profile for Genmab into the 2030s. I think what's really exciting about these programs, of course, it starts with the product profiles, but is what we're seeing with EPKINLY. We have the 5 phase IIIs to support the peak year sales targets.
What we also see with Rina-S and Petosemtamab is really a lot of conviction in these initial indications. For Rina-S, it's the gynecologic oncology indications with ovarian cancer as well as endometrial cancer. For Petosemtamab, you're seeing head and neck cancer. It's really those indications. Let's give this a shot. Maybe this is better. Apologies for that. I have to tell you maybe as distracting as it was for all of you to hear the reverb. As I was talking, it was even more distracting for me. This is much better. Going back to my comments around Rina-S and Petosemtamab, really let's go one by one.
Rina-S, we have a couple of key indications supporting that DKK 2 billion-plus number, which is really second line plus platinum-sensitive ovarian cancer, and then frontline and second line plus endometrial cancer. We're fully committed to investing to really own these spaces, and those indications that I just outlined underpin the peak year sales targets. We've not gotten down to breaking down the Petosemtimab multi-billion, but what I would say for both of the programs is there is the potential to do more with them. As you know, for Rina-S, we're looking to invest in other indications that express folate receptor alpha, like non-small cell lung cancer. For Petosemtimab, we've started some work or continued some work in colorectal cancer.
I think you look at the totality of the opportunities for these three key assets plus our research and discovery engine, we remain confident around the robustness of the overall profile of the business well into the 2030s.
Right. Can you hear me? Okay. Yeah. As you consider these kind of three key late-stage assets, how, based on what you know so far, do you think that they're going to be in terms of their relative contribution to kind of DARZALEX going away as you exit the decade?
Well, I mean, I think the simple thing was to look at the. I'm not sure if it's a clever way to get me a, give me a peak year number for Petosemtamab . I think that's what they're trying to get me to do, but I'm teasing. I think the simple way to think about it right now is, well, look, we've given a number for Rina-S is DKK 2 billion, and for EPKINLY, we've given a number of DKK 3 billion. To remind everybody for EPKINLY, we only get half of that, so it's DKK one and a half billion. In rank ordering, you have Rina-S at DKK 2 billion and EPKINLY at DKK one and a half billion, and then we'll have to sort of see where we're at with Petosemtamab.
You know, over time, each of these are gonna be meaningful contributors to the overall, you know, what is really emerging now. This is what you should really be focused on. Obviously, we have the royalty business at Genmab, big products like DARZALEX and Kesimpta, and then the five other products. What you should really be focusing on Genmab is this really standalone oncology franchise that we're building, and start to imagine what this is gonna look like as you exit this decade and then get into the early part of the next decade. It's gonna be an oncology business, you know, at scale, with lots of investment and growth opportunities, you know, behind it. I expect them all to be meaningful contributors to our revenue story moving forward.
With respect to PIDO and CRC, can we expect more phase II data this year?
To be clear, I'm just reiterating that we're very encouraged with the data that we saw in CRC for Petosemtamab late last year. Really there, it was early but encouraging data. To be clear, we do expect some and plan to present some follow-up data in the second half of this year. Here, really be looking for looking at the duration of that efficacy signal.
Is the next step potentially phase III, or is it?
If the data. You know, I think, look, we're encouraged with Petosemtamab. You know, our view with Petosemtamab is really it is the best-in-class, next generation EGFR-based product. Here, there are a number of bispecifics that we're aware of. We think looking at the totality of the profile, it has the chance to be best. We're looking to be first where we can be first. Where there's the potential to go broad and be the broadest, we will do that. I think this is part of the story at Genmab, is that focus and that prioritization. We're staying very close to what we know.
These are antibody-based therapies, in oncology, particularly here we're talking about an EGFR-based, bispecific and indications, you know, that we've been really thinking about for some time. That's the way I would be thinking about, that, Yaron.
Okay. The, you mentioned, deleveraging to less than 3x , you know, EBIT levels beforehand. We're getting you doing almost, let's say, a billion and a half, and sort of two, you know, annually to get there. I think some of it is looking at the cadence of when the debt's going away. Look at also your cash flow. Are we sort of in the right ballpark as to where we're thinking about it?
Just to maybe remind everybody, as part of funding the Merus Acquisition, we took on $5.5 billion of debt. We're very pleased with that offering, the demand for the offering, the terms of the offering. As part of that, we committed a couple of things financially. Number one, in 2026 to maintain significant profitability. I think you'd all agree that we delivered on that commitment. We also committed to deleveraging rapidly and getting below 3x gross leverage by the end of 2027. I've not broken down exactly, you know, how we're gonna do that in terms of what the sort of the numerator and the denominator are in that calculation, but we do remain committed to everything that we said when we announced the deal.
We do expect to continue this significant profitability, not only in 2026, but also in 2027. There's obviously two components, as we all know, in profitability. You know, number one is your revenue profile, revenue in absolute terms, but also relative in terms of growth. I'm not breaking any ground here. We do expect revenue growth in 2027. The other element is around the investment side of the equation. Here, we're super clear what our investment priorities are, so prioritization. Secondly, we're super focused on making our investments to be as productive and as efficient as possible. We're gonna pull all of these levers to drive that profitability profile, as well as the deleveraging profile.
Now, in terms of the deleveraging, I wanna be kind of just provide a little bit more for all of you. When I thought about that, we did not over-index in terms of how, what we put in the model in terms of new product launches. Going back to your question, I didn't count on getting too much from line extension for EPKINLY or new product launches from Rina-S and Petosemtamab in 2027. Not saying the number is zero, but we didn't over-index there. Likewise, on the investment side, I wanted to make sure that we had a lot of the capacity, and we were really fulsome. In our modeling, when we thought about what investments we put in to invest particularly in Petosemtamab and Rina-S.
So,
I think that should be helpful.
Yeah. Okay.
To kinda sort of think about not only the specifics, but the mindset that went into providing that forward guidance around our leverage profile.
It was less than 3x gross by the end of 2027.
Correct.
Yeah. And it's gross leverage related to EBITDA.
Correct.
Right?
Yep.
Yeah, we're biotech analysts.
We gotta start getting sharper with our pencils here. I think I need to get you and Jana to start sharpening the pencils just a little bit. As a reminder, some housekeeping, it's all of you to know, not to go down a rabbit hole, the amortization is important as a carve-out because we, as part of the acquisitions, you'll start having some more significant purchase price amortization, most likely on 2027, associated with the product launches. That's just important from a housekeeping note. You would have seen already in our 2026 guidance, we've started to, like, educate everybody on that, how we've broken out some of the earlier less significant amortization associated with these two acquisitions.
Yeah.
Yeah, please start to sharpen the pencils.
Yeah, no, we've, we might have used chat just to remind us how to calculate EBITDA. I'm kidding. My bosses would not be happy. We should strike that from the record. When we looked at your guidance for this year, you know, we took the Merus model from our colleague, Tara, when you bought the company, and we did obviously a pro forma sort of combined, you know, P&L pretty quickly. You know, in our estimates, you sort of did what we sort of expected. You had some leverage in the SG&A line, not insignificant, but not huge. You kept all, essentially all the R&D. Again, there's some leverage there as to, you know, back office, things like that.
More or less, I mean, I think you shaved off about DKK 100 million or DKK 150 million in OpEx sort of roughly from where perhaps we were originally as a standalone on Merus. Maybe give us a little bit sort of the level of synergy you've been able to get. Where is it from, was there some prioritization on the R&D line?
Yeah. I mean, to be clear, this is not like a mid-pharma, large pharma, you know, synergy-driven deal. This deal, of course, as you all know, is driven by Petosemtamab, its profile and what it could do for patients, but also what it was gonna do for Genmab in terms of increasing this oncology business that I spoke of. Now, at the same time, of course, we have to go back to these key themes of prioritization and productivity, and of course, you know, any potential synergies would fall under that productivity, you know, bucket. Of course, we would look to see where we could do that across the entire Genmab business. I guess to further kind of remind ourselves, you know, your ability to realize a synergy target in any deal, you know, you can't just rip it off in, you know, immediately.
It takes time. A lot of those benefits you typically start to see really accrue, in post, you know, year one. What I'd leave you with, as it relates to the synergy question in particular, it's not a synergy driven deal, but of course, we're looking for any and all synergies to really leverage existing investments. Coming back to the overall 2026 OpEx guidance, what I would say is that we're pretty clear when we at Q3 that we thought that looking at Genmab and Merus consensus as being in a reasonable place, we delivered on that, and I think directionally, we are probably around DKK 100 million below consensus, if you like, that combined consensus. That was a function of, I'd say, productivity and prioritization. Yeah.
Okay. By the way, any questions from the audience?
Yeah. I ask. Yeah. I also wanted to know how we should think about royalty in 2026 beyond DARZALEX. I know that there's some more excitement about TECVAYLI. Rivaroxa is doing a little well, even though it's a competitor for Petosemtamab eventually. What kind of contribution should we expect? Do you think there's gonna be any uptick from TECVAYLI a with MajesTEC-3 data?
Yeah. Just to remind everybody, for our royalty business, we provide discrete guidance for DARZALEX and everything else we kinda lump together as a portfolio. If I think about it at least directionally, without providing any specific guidance, you know, we see a lot of positive momentum from Kesimpta, in 2025, we expect that to carry forward into 2026. You're right to point out, Tecfidera, obviously at this point in time, a smaller product and a smaller royalty percentage for us. Based upon what we're seeing it do in later lines in terms of market share, coupled with the recent data in second-line multiple myeloma, this also featured into the overall growth profile in 2026.
It's really driven by DARZALEX and Kesimpta, just given the size of the brands, plus where our royalties are at. Another driver would be, would be Tecvayli, but to a lesser extent.
Thank you.
Great. Well, Anthony, thank you so much. Next time Tahi is gonna be here, we're gonna ask him all the finance questions.
I think that's only more than.
We appreciate it.
More than fair, and should've started with the handheld microphone in the beginning. Thank you all for your patience and...