Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q4 2023 Earnings Call Transcript
Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q4 2023 Earnings Call Transcript March 1, 2024
Y-mAbs Therapeutics, Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning and welcome to the Y-mAbs Therapeutics Earnings Conference Call for the Fourth Quarter and Full Year of 2023. At this time, all participants are in a listen-only mode. Instructions for the question-and-answer session will follow after the prepared remarks. As a reminder, today's conference will be recorded. I'll now turn the call over to Y-mAbs' Head of Investor Relations, Courtney Dugan.
Courtney Dugan: Thank you, operator, and good morning, everyone. Welcome to the Y-mAbs fourth quarter and full year 2023 financial results conference call. We issued a press release with our results yesterday after market close. The press release and accompanying slides are available on the IR section of our website. Let me quickly remind you that the following discussion contains certain statements that are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about our business model and development, commercialization and product distribution plans, expectations with respect to early trial data, current and future clinical and preclinical studies and our research and development programs, expectations related to the timing of the initiation and completion of regulatory submissions, regulatory, marketing, and reimbursement approvals, including statements with respect to future development of other development programs, potential for DANYELZA territory and label expansion and potential of an advancement of SADA, collaborations or strategic partnerships and the potential benefits thereof, expectations related to our anticipated cash runway and the sufficiency of our cash resources and assumptions related thereto, guidance and expectations for 2024 and beyond and our financial performance, including our estimates regarding revenues, expenses, and capital expenditure requirements and other statements that are not historical facts.
Because forward-looking statements involve risks and uncertainties, they are not guarantees of future performance and actual results may differ materially from those expressed or implied by these forward-looking statements due to a variety of factors, including those risk factors discussed in the company's Annual Report on Form 10-K for the year ended December 31st, 2023, as filed with the SEC on February 29th, 2024. With that, I'd like to now turn the call over to our President and CEO, Mike Rossi.
Michael Rossi: Thank you, Courtney. Good morning, everybody, and thank you for joining us. I have with me today our Chief Financial Officer, Bo Kruse; our Chief Commercial Officer, Sue Smith; and our Chief Medical Officer, Dr. Vignesh Rajah. Thomas Gad, our Founder and Chief Business Officer; and Dr. Steen Lisby, our Chief Scientific Officer, will join us for the Q&A portion of this call. On today's call, I will begin by reviewing our fourth quarter and full year 2023 global highlights on DANYELZA sales and updates on our clinical program utilizing our Self-Assembly DisAssembly Pretargeted Radioimmunotherapy or SADA PRIT technology platform. Next, Sue will report further insights into our global DANYELZA sales in the fourth quarter.
Vignesh will then provide updates around our ongoing Naxitamab clinical trials. Bo will then provide an overview of our fourth quarter and full year 2023 financial performance, our cash resources and our full year 2024 guidance before we open the line for Q&A. 2023 was an important year for Y-mAbs with the completion of our restructuring plan earlier last year. Y-mAbs emerged as an innovator in radiopharmaceutical therapy development based on our novel and differentiated Pretargeted Radioimmunotherapy platform SADA PRIT, complemented by our commercial antibody therapy DANYELZA, driving annual revenue growth. In addition to our more focused pipeline, we reduced our cash -- use of cash to only $27.1 million in the full year 2023 as a direct result of our effective capital management strategy in action.
With $78.6 million in cash and cash equivalents as of December 31st, 2023, we believe we have sufficient financial resources to advance the clinical development of our SADA PRIT platform while continuing our efforts to expand our global geographic footprint of DANYELZA and treat more patients impacted by relapsed or refractory high-risk neuroblastoma. I'd be remiss not to mention the incredible hard work and dedication of our Y-mAbs employees. They've made all this progress possible and I'm very proud to work alongside team members who put patients at the forefront of all that they do day-in and day-out. Now let's dive into the key highlights for our fourth quarter and full year 2023, starting with DANYELZA. For anyone who may be newer to Y-mAbs, let me remind you that DANYELZA is approved in US -- approved by the US FDA for the treatment of relapsed or refractory high-risk neuroblastomas in the bone or bone marrow for patients who have demonstrated a partial response, minor response or stable disease with prior therapies.
Neuroblastoma is the most common cancer in infants, the third most common cancer in children. We finished 2023 on a strong note, achieving $23.4 million in net product sales of DANYELZA in the fourth quarter, an increase of 42% from what we recorded in the fourth quarter of 2022 and an increase of 17% versus the third quarter of 2023. Through continued market penetration across high-volume US accounts and in ex-US regions, we are pleased to have achieved an annual 2023 net product revenue for DANYELZA of $84.3 million, which was near the top end of our previously raised guidance range of between $80 million and $85 million. This was an increase of 71% compared to full year 2022. The progress is remarkable and indicates increasing adoption of DANYELZA across approved regions worldwide.
We continue to gain momentum in the US with a number of new accounts. As of December 31st, 2023, we had 58 active sites across the US since DANYELZA's initial launch, with 10 new accounts added in 2023. Our ex-US footprint continues to expand through multiple partnerships. The DANYELZA launch in China is progressing well, and this January we accepted the price for DANYELZA from the Brazilian Medicines Market Regulation Chamber, or CMED. We expect to launch DANYELZA in Brazil and Mexico in the second quarter of this year with our partner Adium, and look forward to providing progress updates on this anticipated launch in the coming quarters. Our European Early Access program with WEP Pharma clinical is continuing to progress as we support the needs of children with high-risk relapse refractory neuroblastoma in Europe.
In addition, we plan to submit a BLA for DANYELZA in Argentina this year and could potentially receive additional approval in Asia and Hong Kong within the next 18 months. In addition to geographic expansion, we continue to see progress among our ongoing ISS-sponsored naxitamab trials in support of our indication expansion strategy. In particular, we look forward to Memorial Sloan Kettering's readout from its multicenter Phase II trial investigating naxitamab in patients with relapsed osteosarcoma in the fourth quarter of this year. You will hear more about the progress of the ongoing naxitamab trials from Vignesh later on this call. Now let me shift to our SADA PRIT platform. Before I provide a brief update on our lead programs, I want to take a moment to set the stage around some of the current challenges related to commercialization, administration, and manufacturing and infrastructure of targeted radiopharmaceutical therapies.
There are four key areas. First, infrastructure and manufacturing. There's an enormous investment currently ongoing into specialized radiopharmaceutical manufacturing facilities where a targeted radiopharmaceutical therapy is made. Once the therapy is made and released, there's a very limited time window which to deliver that therapy to patients before it expires. Second is physician participation which has always been an issue. With current radiopharmaceuticals, the oncologist needs to refer the patient to an authorized physician that can prescribe and administer radiopharmaceuticals, traditionally a nuclear medicine physician. The oncologist is essentially removed from his or her patient's treatment journey at this time. Third, there's a limited number of administration sites capable of handling radiopharmaceuticals.
Right now, we need specialized theranostic suites in order to be able to administer the radiopharmaceutical therapy, and there are a limited number of these across the globe. And fourth, continued drug shortages are an issue as current demand is increasing for radiopharmaceuticals. As manufacturers work to build the infrastructure I just referred to drug shortages have become a reality and patient care is delayed. Our goal at SADA PRIT is to solve all of these challenges and provide a simpler and more efficient solution for physicians that will have a greatly improved impact on patient care. We are leveraging the existing infrastructure within infusion centers, oncologist offices, freestanding infusion centers and outpatient centers. We administer SADA PRIT in a two-step process.
First, the patient can receive the nonradioactive SADA in existing centers. Then for the second step, the isotope infusion can be delivered in a nuclear medicine department or licensed imaging centers. Because we are leveraging the existing infrastructure, we are increasing physician participation and we are able to have more engagement with oncologists, specialists, and nuclear medicine physicians, which we believe will lead to better overall results. Importantly, SADA PRIT can be isotope agnostic. As long as we can create linkers between the isotope and the SADA target that is already painted on the tumor, we will have the ability to utilize a multitude of diagnostic and therapeutic isotopes. As we look at these differentiators around infrastructure and manufacturing, administration and the ability to choose different isotopes in real-time as well as decrease toxicity levels to patient while increasing the targeted activity to tumors, we are very excited about the potential of SADA PRIT to improve patient experience and expand radiopharmaceutical treatment landscape.
Now let's turn to a brief update on our lead programs. Our Phase I GD2-SADA. As a reminder, our Phase I trial evaluating the safety and tolerability of GD2-SADA in the treatment of GD2 positive solid tumors including small cell lung cancer, sarcomas, and malignant melanoma got underway in March of 2023. This Phase I dose escalation single-arm multicenter safety study has three parts. Part A explores dose finding for GD2-SADA molecule and the testing of dose intervals of two days to five days between the protein and the Lutetium-177-DOTA payload. Part B determines the optimal dose of Lutetium-177-DOTA and Part C evaluates the safety and initial signs of efficacy using repeat dosing. Dose escalation is based on two patients in Cohort 1 and Cohort 2 followed by a modified 3+3 design.
It is important to emphasize that in each Cohort, patients will be observed after dosing in a so-called six-week dose limiting toxicity or DLT period. We are currently in Part A and are very pleased with how the trial is progressing. We have advanced through Cohorts 1, 2 and 3 and are now dosing patients at Cohort 4. We have dosed a total of 10 patients to date. We currently have six active sites and plan to continue adding additional sites. Recall that Part A of the trials investigating the safety profile of the protein and determining the optimal time to deliver the radionuclide. We are very encouraged by what we have seen so far. To date, no patients have experienced any dose limiting toxicities. Based on SPECT/CT scans and PK activity we have seen to date, we believe that we have demonstrated proof-of-concept, namely that GD2-SADA can both find and bind to tumors.
It is important to note that this early data are not complete and are not necessarily indicative of a full results or the ultimate success of the trials or the SADA development program. We expect to share data from Part A of this Phase 1 study at a medical meeting in the second half of this year. Our second SADA PRIT program is CD38-SADA, which we plan to first study in patients with non-Hodgkin lymphoma, focusing on B and T cell lymphoma. This is our first SADA program to be studied in blood cancer. Our IND has been approved by the FDA and as you can see here, our planned Phase 1 follows a comparable design to our GD2-SADA program. We are on track to enroll two sites in April and expect to dose the first patients in this Phase 1 trial this year.
We believe the potential of the radiopharmaceutical industry is at a huge inflection point and piquing the interests of physicians and patients alike. We truly believe that SADA PRIT novel and differentiated approach has the potential to become the targeted radiopharmaceutical delivery platform of choice in the treatment of multiple solid tumors and blood cancers. I will now pass the call over to Sue Smith to provide further color on US DANYELZA sales for the fourth quarter and full year 2023. Sue?
Sue Smith: Thank you, Mike, and good morning everybody. Before I discuss some of the key highlights from DANYELZA US sales in the fourth quarter, let me provide a brief review of the enhanced marketing efforts our commercial team launched throughout the fourth quarter of last year. We have successfully rolled out a new DANYELZA campaign aimed to reposition and elaborate on DANYELZA's differentiating characteristics in the treatment of neuroblastoma for patients who have experienced incomplete response to induction therapy in their bone and bone marrow. Utilizing our pivotal study data consistent with our label, the new campaign enables us to share our data for refractory versus relapsed patients separately, providing more detailed data regarding DANYELZA's performance in two different patient populations, those patients with an incomplete response to induction therapy also in addition to patients who are relapsed.
In addition, the new campaign demonstrates DANYELZA's response in children after prior anti-GD2 therapy. While we continue to expect meaningful traction from the new campaign over the coming quarters, I am really pleased with the positive initial feedback in the form of commercial progress of DANYELZA in the US that we saw in just the fourth quarter. Excuse me, for the fourth quarter of 2023, we increased DANYELZA net product revenues by 42% year-over-year to $23.4 million compared to the fourth quarter of 2022. That is a 17% increase compared to the third quarter of 2023. We continue to see an upward trend of sales growth since the initial launch back in 2021 and we believe we have room for continued growth. As Mike mentioned, we recorded $84.3 million in DANYELZA net product revenues for the full year 2023, achieving the high end of our updated net product revenue guidance range of between $80 million and $85 million.
A total of 58 accounts have now used DANYELZA around the US since its initial launch in 2021 with 10 new accounts added in 2023. We believe physicians are getting more comfortable using DANYELZA with 41 HCPs having prescribed DANYELZA in 2023, including eight HCPs starting two or more patients in the year. Since launch, a total of 93 healthcare practitioners have prescribed DANYELZA and 28 HCPs have started treatment in two or more patients as of December 31st, 2023. Our US commercial sales team continues to receive positive HCP feedback on DANYELZA through ongoing customer interactions. In addition, we continue to see institutional adoption of DANYELZA, which has been added to six hospital formularies in 2023, bringing the total since launch to 42 hospital formularies as of December 31st, 2023.
DANYELZA remains a leading therapy in US anti-GD2 market, a highly important area of pediatric cancer in a rare disease market. Our team remains steadfastly focused on further market penetration across high-volume centers to reach more patients and improve outcomes. Let me now pass the call to Vignesh.
Vignesh Rajah: Thank you, Sue, and hello, everyone. I'm pleased to provide a brief update on our ongoing naxitamab clinical trials. We continue to advance potential label expansion opportunities for DANYELZA through our investigator-sponsored clinical studies in collaboration with leading KOLs. In the frontline high-risk neuroblastoma setting, we have partnered with Beat Childhood Cancer Research Consortium, or BCC, in a multicenter Phase 2 trial evaluating naxitamab in combination with standard induction therapy for patients with newly diagnosed high-risk neuroblastoma. As of February 12th, 2024, 13 sites have been initiated and seven patients have been dosed. The study is expected to transition from a single-arm study i.e. with naxitamab added to current standard treatment of induction to a randomized study where the control arm will be the current standard of care for induction therapy, which is chemotherapy plus or minus ALK inhibitor.
Our aim for the randomized trial is to demonstrate superiority in complete response at the end of induction therapy in the naxitamab versus standard of care. We expect to potentially initiate the new randomized study in the second quarter of this year. In osteosarcoma, we are continuing to work with Memorial Sloan Kettering on its multicentered investigator-sponsored trial from naxitamab. We continue to expect MSK to provide data readout from this Phase I/II trial in the fourth quarter of this year, and based on the outcome of this, we will evaluate plans for our randomized trial to be initiated in the second quarter of 2025. In breast cancer, we have partnered with the Ohio State University on a Phase Ib/II trial investigating TGF beta NK cells, gemcitabine plus naxitamab in patients with GD2 positive metastatic breast cancer.
The first patient is expected to be dosed with DANYELZA in the first half of this year. Upon the outcome of this trial, we would consider moving forward with a multicenter Phase II trial. We continue to advance our strategy aimed at unlocking the full potential value of naxitamab for patients beyond those impacted by relapsed or refractory high-risk neuroblastoma. We believe there still remains significant potential in the anti-GD two space in both pediatric and adult cancers. We look forward to updating you on our progress. Let me now hand over the call to Bo Kruse.
Bo Kruse: Thank you, Vignesh, and good morning, everyone. DANYELZA net product revenues of $84.3 million for the year ended December 31st, 2023, represented an increase of 71% from the $49.3 million reported for the year ended December 31st, 2022. The increase of $35 million was primarily driven by an increase in new us patients and an incremental benefit from expanding international revenues. Our global DANYELZA net product revenues of $23.4 million for the fourth quarter 2023 represented a 42% increase compared to the fourth quarter of 2022 and a favorable 17% increase compared to the third quarter of 2023, as we saw increases from US revenues as well as from international revenues. Us revenues increased 19% to $19.1 million in the fourth quarter compared to $16.1 million in the third quarter of 2023, and international revenues increased 11% to $4.3 million in the fourth quarter compared to $3.9 million in the third quarter.
We reported $15 million worth of license revenue in the three months ended December 31st, 2022, and then have license revenue for the three months ended December 31st, 2023. Moving to operating expenses. Our research and development expenses decreased by $6.4 million and $37.4 million to $13.4 million and $54.2 million for the three months and year ended December 31st, 2023, respectively, compared to the same periods of 2022. The net decrease was primarily due to the decreased spending on deprioritized programs in connection with our restructuring plan announced in January 2023, which resulted in decreases in outsourced manufacturing, outsourced research and supplies, clinical trials, and personnel-related costs. The decrease was partially offset by a $4.1 million accrual of time-based clinical milestones related to our SADA technology.
Selling, general and administrative expenses decreased by $0.3 million and $16.1 million to $11.1 million and $44.9 million for the three months and year ended December 31st, 2023, respectively, compared to the same periods in '22. The decrease in SG&A for the year ended December 31st, 2023, was primarily attributable to a $10.9 million charge related to the departure of our former Chief Executive Officer in Q2 2022 and to a lesser extent, a $3.4 million decrease in commercialization expenses compared to expenses incurred in '22 in anticipation of a potential omburtamab launch. We reported net loss for the quarter ended December 31st, 2023 of just $1 million or $0.02 per share basic and diluted compared to net income of $1.2 million or $0.03 per share basic and diluted for the quarter ended December 31st, 2022, which included a regulatory based milestone of $15 million from SciClone Pharmaceuticals for the conditional approval of DANYELZA in China in 2022.
Additionally, we reported a net loss for the year ended December 31st, 2023, of $21.4 million or $0.49 per share basic and diluted compared to a net loss of $95.6 million, or $2.19 per share basic and diluted for the year ended December 31st, 2022. The decrease in net loss was primarily driven by higher product revenues, lower R&D expenses, lower SG&A expenses inclusive of the $10.9 million decrease for the charts related to the departure of the company's former CEO in Q2 2022. As mentioned earlier, we ended the fourth quarter 2023 with cash and cash equivalents of $78.6 million compared to $105.8 million at year-end 2022. The decrease was $27.1 million for the full year. Importantly, we reduced our annual cash used from $75.8 million to $27.1 million, about 64% in '23 compared to 2022.
Now let me turn to our financial guidance for the full year 2024. We expect full year 2024 DANYELZA net product revenues to be in the range of $95 million to $100 million. Based on the midpoint of the guidance, this corresponds to an increase of approximately 16% compared to 2023. We anticipate operating expenses to be in the range from $115 million to $120 million, reflecting a midpoint increase of approximately 6% compared to 2023. And total expected cash burn for the full year 2024 to range from $15 million to $20 million and midpoint decrease of approximately 35% from 2023. We continue to expect our cash and cash equivalents to support our commercial operations and pipeline programs as currently planned into 2027. As we noted in previous quarters, the underlying assumptions for this guidance are important to understand.
For the purpose of this specific analysis of our cash runway only the DANYELZA net product revenues are assumed to increase by 10% each year from 2024 through 2027. We hope to see a higher growth rate for DANYELZA as we execute our refined commercial strategy and work to deliver new clinical data that could potentially lead to expanded indications and greater decision adoption. In terms of development activities, we have assumed that our prioritized programs will be advanced at our own expense and no new programs other than our planned studies and trials are assumed at this point for purposes of the analysis. We believe Y-mAbs is strongly positioned to execute on our strategic mission and our priorities and to support the delivery of multiple milestones.
This concludes the financial update and I'll now turn the call back to Mike.
Michael Rossi: Thank you for that overview, Bo. Let's now open the line for questions. Operator?
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