Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q3 2023 Earnings Call Transcript November 14, 2023
Operator: Good morning and welcome to Y-mAbs Therapeutics Third Quarter 2023 Earnings Conference Call. Please note that today’s event is being recorded. At this time, all participants are in a listen-only mode. Instructions for the question-and-answer session will follow after the prepared remarks. I would now like to turn the conference over to Courtney Dugan, Vice President Investor Relations. Please go ahead.
Courtney Dugan: Thank you, operator. Good morning everyone. Welcome to our third quarter 2023 earnings conference call. We issued a press release with our results yesterday at market close. The press release and accompanying slides are available on the Investor Relations 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 of early trial results, current and future clinical and preclinical studies in 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 expansion and advancement of SADA, collaborations for 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 2023 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 quarterly report on Form 10-Q for the quarter ended September 30, 2023 as filed with the SEC on October 13, 2023. With that, I would now like to turn the call over to our Founder, Vice Chairman of the Board and Director and Chief Business Officer, Thomas Gad.
Thomas Gad: Thank you, Courtney. Good morning, everyone, and thank you for joining us today. Today I have with me our Chief Financial Officer, Bo Kruse; our Chief Commercial Officer, Sue Smith; and our Chief Scientific Officer, Dr. Steen Lisby. And also very excited to welcome newly appointed, Michael Rossi. In today’s call, Mike will begin by reviewing third quarter global highlights on DANYELZA sales, updates on our ongoing naxitamab clinical trials and high level updates around our SADA program. Sue will then report further insights into our U.S. DANYELZA sales in the Q3. Next, Dean will provide further details on our Phase 1 GD2-SADA trial currently underway in addition to updates on our CD38 SADA program for which we recently have received IND clearance by the USFDA.
Then Bo will provide an overview of our third quarter financial performance, our cash resources and our full-year 2023 guidance before we open the line for Q&A. Before we get into the third quarter results, on behalf of the Y-mAb’s Board of Directors and our senior leadership team, I want to extend a very warm welcome to our new President and CEO, Michael Rossi, who officially started on November 6th. Our Board has conducted a careful search for the right dedicated leader of our company with deep commercial and radiopharmaceutical experience, and we are very pleased to have found that in Mike. Michael brings over 30- years of experience in the radiopharmaceutical industry. He joins us from Mirion Technologies, where he served as the President of the Medical Group.
Prior to that, Mike was the Head of Radiolig and Imaging at Advanced Accelerator Applications, better known as AAA, in Novartis’ company. And before that he led the growth of Jubilant Radiopharm into a vertical-integrated radiopharmaceutical leader. Early on his career, Mike spent over a decade at GE Healthcare and he is also a certified nuclear pharmacist. As we continue our efforts to expand the geographic reach of DANYELZA and further our indication expansion initiatives to maximize the utility of this therapy, we are also incredibly excited about our novel two step pre-targeted radioimmunotherapy platform, better known as SADA, and its potential to unlock the value of radiopharmaceuticals in the cancer treatment paradigm. After our re-org in the first quarter of this year, Y-mAbs has been positioned as one of the few independent commercial state biotech companies with sufficient financial resources to advance SADA through proof-of-concept.
Is it the right time for me to transition to a new role of Vice Chairman and Chief Business Officer? And I very much look forward to working closely with Mike and our Board and the entire Y-mAbs team on our continued mission to bring novel therapeutics to cancer patients. And with that, I’m very excited to turn the call over to Mike. Go ahead, Mike.
Michael Rossi: Thank you, Thomas, for that introduction. It is great to be joining you all today for our Y-mAbs third quarter earnings call. As Thomas mentioned, I have built a 30-plus year career in healthcare with a specific focus on radiopharmaceuticals. Y-mAbs is a pioneer in pre-targeted radioimmunetherapy with its SADA technology platform, which is a key driver of my own personal excitement about joining Y-mAbs. SADA stands out as a highly differentiated, pre-targeted, two-step platform that is designed to enable precise radioisotope delivery. I truly believe that SADA has the potential to shift the treatment paradigm in radiotherapy. In addition, we have the promising DANYELZA franchise, where we expect to have a growing stream of revenue with our commercial product [indiscernible] to independently support our clinical development work with SADA in a rapidly expanding radiopharma market.
With our Phase 1 GD2-SADA trial underway, in our Phase 1 CD38 SADA trial anticipated to initiate next year and several additional exciting targets currently in preclinical development, we believe we have a highly promising clinical pipeline ahead. Now, let’s dive into the key highlights for the quarter starting with DANYELZA. As a reminder, DANYELZA is approved by the USFDA for the treatment of relapsed or refractory high-risk neuroblastoma in the bone or bone marrow of patients who have demonstrated a partial response, minor response or stable disease with prior therapies. Neuroblastoma is the most common cancer in infants and the third most common cancer in children. In the third quarter of this year, we achieved $20 million in net product sales of DANYELZA, up 59% from what we recorded in the third quarter of 2022.
We continue to make significant progress in our commercialization efforts for DANYELZA, and we are gaining momentum in the U.S. with a number of new accounts. We now have 57 sites activated across the U.S. since DANYELZA’s launch, with nine new accounts so far in 2023. We continue to expand our global commercial footprint through partnerships and recently received regulatory approval of DANYELZA in Mexico, marking our second regulatory approval in Latin America with our partner, Adium. In addition, or as discussed last quarter, our partner SciClone successfully announced launched DANYELZA in China in June of this year. In terms of the number of vials used, in the first full quarter since the commercial launch in China, usage in China has been approximately with 50% of the vials used in the U.S. during the quarter.
While it is still early, we look forward to seeing the sales progress and trends in the region over the coming months. We see China as a key region for DANYELZA, and we look forward to providing an update in the coming quarters. We continue to be very pleased with the WEP program in Europe, with 19 patients treated with DANYELZA through the end of Q3. The continued geographic expansion of DANYELZA across these regions is an important step in our mission to enable broad, global access for DANYELZA for patients with high-risk relapsed refractory neuroblastoma. We remain encouraged by the expansion of DANYELZA, accumulating global net sales of more than $61 million in the first nine-months of 2023, as we continue to gain further traction with physicians prescribing DANYELZA.
We remain confident in our ability to continue to expand our global commercial market footprint and meet our full-year 2023 DANYELZA net product revenue guidance of between $80 million and $85 million. Sue will provide further color on DANYELZA sales in the quarter shortly. Now, let me briefly comment on our ongoing naxitamab clinical trials. We continue to make progress on our investigator sponsored clinical trials in collaboration with leading KOLs to efficiently advance potential label expansion opportunities for DANYELZA. In the front line high risk neuroblastoma setting, we are partnering with the Beat Childhood Cancer Research Consortium or [BCSCAPE] a multi-center Phase II trial evaluating naxitamab in combination with standard induction therapy for patients with newly diagnosed, high-risk neuroblastoma.
To-date, nine sites have been initiated and six patients have been dosed. The study is expected to transition from a single arm study with naxitamab added to the current standard treatment for 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 an ALK inhibitor for which we plan to file an IND. As a reminder, the patient recruitment for the trial is projected over a span of five years with anticipated total trial sample size of approximately 282 patients. Our aim for the trial is to demonstrate a superiority in naxitamab arm versus standard-of-care. We expect to potentially initiate the new randomized study in the Q2 of next year. In Tecnofarma, we are continuing to work with Memorial Sloan Kettering Cancer Center, or MSK, on its multi-center investigator sponsored trial for naxitamab.
We anticipate MSK to provide a data readout from this Phase 1/2 trial in fourth quarter of 2024. And if positive, we hope to then begin our recruitment for a pivotal randomized Phase 3 trial. In addition, we are pleased with the publication of the study of naxitamab based chemoimmunotherapy HITS trial in patients with chemo-resistant high risk neuroblastoma in the general cancers. In this trial, patients who received HITS immediately after induction had a higher response rates, 47% versus 18% and superior estimated three year overall survival 85% versus 29%, compared with those who received the same combination regimen later in the course of treatment. These results further supported the utilization of naxitamab early during the course of treatment for patients with chemo-resistant, high-risk neuroblastoma.
We are continuing to work to unlock further value of naxitamab and truly believe in its potential to fill a much-needed treatment gaps in both pediatric and adult cancers for patients worldwide. Now, moving on to SADA. Our novel product technology platform is a key driver of my own personal excitement about joining Y-mAbs. Throughout my extensive career in various radiopharma leadership roles, I have had the privilege to witness the development of numerous breakthrough technological platforms. However, SADA, which is licensed by Y-mAbs from MSK and the Massachusetts Institute of Technology in 2020 stands out as a highly differentiated, pre-targeted, two-step platform that is designed to enable precise radioisotope delivery. We truly believe that SADA has the potential to shift the radiotherapy treatment paradigm and potentially be impactful in the fight against a wide variety of cancers.
Sue will provide further color on our specific platforms later in today’s call. But let me provide a high-level overview of where we currently are with our SADA pipeline. Our first program, GD2-SADA, began Phase I development earlier this year. To-date, we have completed dosing cohorts 1 and 2 currently administering doses of cohort 3. Despite the limited patient sample size to date, we are very pleased with the positive progress we have seen so far, and we have decided to share early PK and proof-of-concept for our SADA platform during this call. Due to the progress we are seeing, we have elected to focus on a more mature Phase 1 data readout at a major medical meeting next year in lieu of an R&D Day event in December. Our second program CD38 SADA recently received IND clearance from the USFDA to enter clinical development.
We are particularly excited about the program given our team’s deep CD38 targeted drug development experience. We anticipate exploring potential partnership opportunities, as this program advances. The Phase 1 dose escalation, open label, single-arm, multi-center trial evaluating the safety and tolerability of CD38 SADA in patients with relapsed or refractory non-Hodgkin’s lymphoma is anticipated to begin next year. We believe there remains a significant unmet medical need for these patients of both B-cell and T-cell origin, and we look forward to providing further updates as our program advances. In addition, we are continuing to advance multiple preclinical SADA targets, and have made encouraging progress, especially on our HER2 in B7-H3 constructs.
As we look ahead to the rest of 2023 and beyond, we believe, we are well-positioned with $86.6 million in cash and cash equivalents as of the end of third quarter 2023, which now believe will extend our cash runway to support our business operations, as currently planned into 2027. Of note, our use of cash was only $1.3 million in the third quarter of this year, a direct result of effective capital management strategy and action following our reorganization earlier this year. We believe we have the right strategy in place to drive further DANYELZA’s sales growth, which serves as the financial foundation to propel our SADA technology through clinical development with our two lead programs. We believe we are in a great position to bring forward additional novel therapeutics to cancer patients, who need them, while at the same time delivering long-term value to shareholders.
I’m thrilled to be here at Y-mAbs during this exciting time and look forward to working with this entire team. With that, let me now turn the call over to Sue Smith, who will discuss our U.S. DANYELZA sales in further detail. Sue?
Sue Smith: Thank you, Mike, and good morning, everyone. I’m pleased to be with the commercial - to share the commercial progress of DANYELZA in the U.S. We increased DANYELZA’s sales 59% year-over-year compared to the Q3 of last year. Despite the unevenness from a quarter-over-quarter standpoint, this is not surprising in rare disease indications, particularly considering the ultra rare indication of DANYELZA. We continue to see an upward trend of sales growth, since the initial launch back in 2021. Our percent growth since launch is performing well above where Unituxin was at three year post launch, 45% versus 22% growth, and we believe we have room for continued growth. As Mike mentioned, we have recorded $61 million in DANYELZA’s sales in the first nine-months of 2023.
We expect to meet our full-year 2023 sales guidance of between $80 million and $85 million in DANYELZA sales. Let me review key highlights from DANYELZA’s U.S. sales in the third quarter. At the close of the third quarter of 2023, we had a total of 44 new patient starts year-to-date. This brings the total of new patient starts since launch to 158. We continue to grow outside of MSK, with non-MSK vials sold representing 63% of all DANYELZA demand in the U.S. during the Q3. With 57 accounts now having used DANYELZA around the U.S., we have seen 22 accounts treat two or more patients in the first nine-months of this year. We believe physicians are getting more comfortable using DANYELZA, with 36 healthcare providers having prescribed DANYELZA in the first nine-months of this year, including seven HCPs starting two or more patients in the first nine-months of this year.
Since launch, a total of 88 doctors have prescribed DANYELZA, and 28 of them have started treatment on two or more patients as of September 30, 2023. Our U.S. commercial sales team has received increasingly positive HCP feedback on DANYELZA through over 2,500 customer interactions in the first nine-months of this year and over 6,400 interactions since our launch in 2021. We also continue to see institutional adoption of DANYELZA, which has been added to 5 hospital formularies in the 1st 9 months of this year, bringing the total since launch to 41 hospital formularies. Y-mAbs remains a leader in the U. S. Anti GD2 market, a highly important area of pediatric cancer, and a rare disease market with a flat incidence rate. Looking ahead to the Q4 of this year and beyond, we are intensifying our market efforts, and our commercial team is in the process of rolling out a brand new DANYELZA campaign, which has then added to five hospital formularies in the first nine-months of this year, bringing the total since launch to 41 hospitals formularies.
Y-mAbs remains a leader in the U.S. anti-GD2 market, a highly important area of pediatric cancer and a rare disease market with a flat incident rate. Looking ahead to the Q4 of this year and beyond, we are intensifying our market efforts, and our commercial team is in the process of rolling out a brand new DANYELZA campaign. The new campaign repositions and elaborates on DANYELZA’s differentiating characteristics in the treatment of high-risk neuroblastoma, for patients who have experienced incomplete response to induction therapy in their bone and bone marrow. Utilizing our pre-specified interim analysis data, which was consistent with our label. The campaign enables us to share our data for refractory versus relapsed patients separately, providing more detailed data regarding DANYELZA performance in patients with an incomplete response to induction therapy, and also patients who are relapsed, which are two different patient groups.
In addition, it demonstrates DANYELZA response in children after prior anti GD2 therapy. I’m very proud of this team. They have been hard at work in the preparation and rollout of the new campaign in addition to achieving year over year sales growth. We believe we will begin to see meaningful traction from the new campaign starting next year. Let me now pass the call to Steen who will discuss the latest progress of our SADA platform in further detail.
Steen Lisby: Thank you, Sue, and good morning everyone. I’m pleased to provide you with an update on our SADA programs, beginning with GD2 SADA. Our Phase 1 trial evaluated 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 away in March of this year. This Phase 1 dose escalation single arm multicenter safety study has three parts. Part A explores the dose finding of the SADA molecule itself and testing the dose intervals of two to five days between the protein administration and the lutetium do payload. Part B will determine the optimal dose of Lutetium DOTATATE, and Part C evaluates the safety and initial signs of efficacy using repeat dosing.
Dose escalation is based on two patients in a cohort one and two, followed by modified three plus three design. And it is important to emphasize that in each cohort patient will be observed after dosing in a so-called six weeks dose - toxicity period of DLT period. Currently, we are still in Part A and the trial is progressing very well. We have dosed five patients in the third quarter and at present we have six active sites with three sites expected to be activated during fourth quarter this year. We had advanced through the first two cohorts and are out dosing patients in court. We now have more patients receiving the 200 milligram per dose of lutetium do. I would like to emphasize that we are still in per day, uh, of this trial, which is central to investigate the safety profile of the protein and to determine the optimal timing to administer the rating client.
We are pleased with what we are seeing so far. No patient has experienced any dose limiting toxicities to date. Furthermore, no patients have experienced any related severe adverse events or serious adverse events. And of note, we can dose our protein with no severe or serious pain signals detected. Today, we also can announce that we believe to have demonstrated proof of concept for the GD2 SADA by demonstrating that the SADA molecules can find and bind to tumors and that the radionuclide target SADA is visualized on the spec CT scans performed. It is important to note that these early data are not complete and are not necessarily indicative of the full results or ultimate success of the trials SADA development program. As seen on next slide, we are an opinion that the exposure of the blood - exposed on the patients look as expected.
The data include four patients in each of the two treatment groups. So eight patients in total. The patient dose with a 0.3 milligram per kilogram protein represent here in blue, and the patient dose with a one milligram per protein here represented here in purple, are comparable and supported dose intervals of two to five days as being used so far. On next slide, we for the first time are sharing a spec CT scan demonstrating tumor uptake in one patient. This scan was conducted after an imaging dose of 30 millicurie only. We are very encouraged by the data of so far, and based on this, we investigating the potential clinical expansion of GD2SADA into pediatric development next year. We also pleased how our GD2 SADA problem is progressing and look forward to sharing further clinical updates anticipated next year at a medical meeting of choice.
In addition, as Mike mentioned earlier, we are also excited by the FD clearance of RD for our CD38 SADA program in not Heart lymphoma, focusing on both b and t-cell lymphomas, and expect to dose the first patient in this Phase 1 trial next year. Now with the addition of the CD38 SADA, we have reached the clinical development phase of our SADA platform in both solid and hematological tumors. We do believe in the potential for the novel SADA technology platform to become the targeted radiopharmaceuticals delivery platform of choice in the future, if approved. Potential altering the treatment landscape across the variety of fences. I will now hand the call over to Bo Kruse who review our financials for the third quarter.
Bo Kruse: Thank you, Steve, and good morning, everyone. DANYELZA net product revenues of 61 million for the nine-months ended September 30th, 2023 represented an increase of 86% from the 32.8 million reported for the nine-months ended September 30th, 2022. The increase of 28.2 million was primarily driven by an increase in new U.S. patients and an increase is benefit from expanding international revenues. Our DANYELZA network revenues of 20 million in the third quarter of 2023 represented at 59% increase compared to the third quarter of 2022, and a marginal decline compared to the second quarter of 2023. As we saw some unevenness in international revenues after a series of inventory stocking orders from our international partners as reported in recent quarters.
During the three and nine-months end of September 30, 2023, we recorded half a million of license revenue in accordance with our sub licensing agreement with [Indiscernible] following the achievement of the marketing authorization for DANYELZA in Mexico in September. Now, moving to operating expenses, our R&D expenses decreased by 7.1 million and 31 million to 15.4 and 40.8 million for the three and nine-months ended September 30, 2023, respectively, compared to the same periods in 2022. The net decrease was primarily due to the decrease in spending on deprioritized programs in connection with our restructuring plan announced in January, 2023, which resulted in decreased outsourcing, outsourced manufacturing, outsourced research and supplies, clinical trials, and personnel related costs, the decrease was partially offset by a $4.1 million increase in accrued time-based clinical milestones related to our SADA technology.
Selling, general and administrative expenses decreased by $3.4 million and $16.4 million to $10.2 million and $33.7 million for the three and nine-months ended September 30, 2023 respectively, compared to the same periods in 2022. The decrease in SG&A for the three months ended September 30, 2023 was primarily driven by cost saving connection with our restructuring plan. The decrease percent in SG&A for the nine-months ended September 30, 2023, was primarily attributable to a $10.9 million charge related to the departure of our former CEO in Q2 2022 and to a lesser extent a $2.9 million decrease in commercialization expenses, incurred in 2022 in anticipation of a potential omburtamab launch. Additionally, we recorded a restructuring charge of $1.1 million in SG&A during the nine-months ended September 30, 2023, in connection with the restructuring plan.
However, personnel related costs inclusive of stock-based compensation actually decreased in the three and nine-months ended September 30, 2023 compared to the corresponding period in 2022, due to the impact of the restructuring plan. We reported a net loss for the quarter ended September 30, 2023 of $7.7 million or $0.18 per share, basic and diluted, compared to a net loss of $27.5 million or $0.63 per share, basic and diluted for the third quarter ended September 30, 2022. The improvement in our net loss was primarily driven by the increased revenues and the growth of DANYELZA coupled with decreased operating expenses in the third quarter of 2023. Additionally, we have reported a net loss for the nine-months ended September 30th, 2023 of $20.4 million or $0.47 per share basic and diluted, compared to a net loss of $96.7 million or $2.21 per share basic and diluted for the nine-months ended September 30, 2022.
The decrease in net loss was primarily driven by higher product revenues, lower R&D expenses and lower SG&A expenses, inclusive of the $10.9 million decrease for the charge related to the departure of the former CEO in Q2 2022. As mentioned earlier, we ended the third quarter of 2023 with cash and cash equivalents of $86.6 million compared to $105.8 million at year end 2022. The decrease was $19.2 million year-to-date. Importantly, we have reduced our quarterly cash use from $4.7 million to $1.3 million or about 72% during the third quarter of 2023 compared to the second quarter. We continue to demonstrate responsible cash management along with market expansion for DANYELZA, and we believe we are in position to reduce our projected full-year 2023 operating expenses range from $115 million to $120 million, to $110 million to $115 million, which, together with working capital adjustments, leads to a reduction of the total expected cash burn range for the full-year 2023 from $40 million to $50 million, to $27 million to $32 million.
The consequential impact on our expected cash runway is that we now believe our cash and cash equivalence will sufficiently support our commercial operations and pipeline programs as currently planned in June, 2027. We continue to expect full-year 2023 DANYELZA net product revenues to be in the range of 80 million to 85 million. As we noted in prior quarters, the underlying assumptions for this guidance are important to understand. No new partnerships or other new business development income is included in the assumptions. For the purpose of this analysis of runway only, the DANYELZA product revenues are assumed to increase by 10% each year from 2024 through 2026. We indeed 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 physician adoption.
In terms of development activities, we have assumed that our prioritized programs will be advanced at our own expense, and no new programs are assumed at this point for purposes of the analysis. No further development of the naxitamab program has been assumed for the purpose of this estimate, and we have not assumed any equity or debt offerings or borrowings. We believe Y-mAbs remains well positioned to execute our strategic mission, our priorities, and to support the delivery -. This concludes the financial update, and I will now turn the call back to Mike.
Michael Rossi: Thank you for that overview, Bo. Now let’s open the line for questions. Operator, do you have any questions?
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