Genmab A/S

CSE:GMAB

Earnings Call Transcript 2021-Q1

[Operator]

So hello, and welcome to the Genmab Conference Call to discuss the company's financial results for the period ended March 31, 2021. With me today to present these results is our CFO, Anthony Pagano. Let's move to Slide 2. 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 3. 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 move to Slide 4. Through our 22-year history, we've had a laser-sharp focus on harnessing the power of human antibodies to develop differentiated cancer therapeutics. This slide provides a review of what is behind that focus. Our core purpose, which guides our work, our extremely successful strategy and our ambitious vision for the company. Genmab's evolution into a fully integrated biotechnology power house continued with the events of the first quarter of 2021. So now let's move to Slide 5, and look at some of these recent achievements. We continue on our ambitious path to bring our own medicines to patients and are excited about the recent U.S. FDA's acceptance of the tisotumab vedotin BLA for priority review based on the innovaTV 204 Phase II study. If approved, tisotumab vedotin would be a first-in-class therapy, and we believe that it has the potential to become an important treatment option for patients with recurrent or metastatic cervical cancer. The PDUFA target date for a potential U.S. FDA approval is October of this year. Along with all part of [indiscernible], we continue to assess our regulatory strategy for submission of tisotumab vedotin in metastatic cervical cancer with health authorities, and plan to prepare the most robust regulatory package to support the potential regulatory approval in Japan and Rest of the World. A submission in Japan will take place later than we initially anticipated to ensure we meet the Japan Health Authority requirements. So our pipeline for potential filing in Japan will reflect the inclusions of data from the innovaTV 301 Phase III study. The first patient was dosed in this study during the first quarter of 2021. Additional pipeline progress included the first patient dosed in the first Phase III study of epcoritamab, and the first-ever patient dosed with HexaBody-CD38. The company also expanded our executive management team on March 1. Then, as we discussed during our full year 2020 results presentation, Dr. Tahi Ahmadi was appointed to the position of Chief Medical Officer for Genmab. In addition to focus in our own pipeline, the power of Genmab's innovation was reflected in important updates for therapies created by Genmab that are being developed by other companies. Let's move to Slide 6. As a reminder, there are currently 3 general created therapies on the market, developed and commercialized by other companies, DARZALEX, Kesimpta and TEPEZZA. During the first quarter of 2021, there were significant events for both DARZALEX and Kesimpta. In January, Janssen's DARZALEX FASPRO became the first and only FDA-approved treatment for AL amyloidosis. Sales over the quarter were also strong. And we reported $1,365 million, and net sales by J&J, an increase of 46% over the first quarter of 2020, resulting in DKK 984 million in royalties to Genmab. Turning to Kesimpta. At the end of March, Novartis received approval in Europe for the treatment of relapsing forms of multiple sclerosis, and adults with active disease defined by clinical or imaging features. This approval makes Kesimpta the first B-cell therapy that can be self-administered once a month at home, both in the U.S. and in Europe. We are enthusiastic about the future of all 3 of these medicines as they exemplify our commitment to applying our world-class antibody expertise to create differentiated antibody therapeutics, with the potential to fundamentally improve patients' lives. And as Anthony will discuss in further detail, the collaborations for these 3 medicines provide us with the financial foundation of our current success with recurring revenue from royalties, which we can then use to invest further in our business to deliver our inspirational vision. I'm pleased to now turn over the call to Anthony. Anthony, please go ahead.

[Anthony Pagano, Executive VP & CFO]

Great. Thanks, Jan. Let's move to Slide 7. To start, I'd like to take a moment and highlight our financial framework and the related key drivers. First off, let's think about our revenue profile. On the left, you can see our current and future recurring revenue streams. You're all very familiar with our 3 existing approved products that's DARZALEX, TEPEZZA and Kesimpta. Each of these have exceptional growth profiles and are expected to generate significant cash flow for us for the years to come. Then we have 2 potential revenue streams that could come online later this year. We submitted the BLA for tisotumab vedotin in Q1. And at the end of last year, Janssen submitted a BLA and an MAA for amivantamab. If both are approved, that will bring our total number of approved products to 5, which, for me, is really exciting. Now on to our focused approach to investment shown on the right. We'll continue to invest in our business and capabilities to position us for sustained success, and will accelerate and expand the potential winners in our pipeline. And we'll also ensure we are ready to launch, should tisotumab vedotin and in the future, epcoritamab be approved, as well as investing, we will, of course, remain focused on the bottom line. Let's take a closer look at an important component of our recurring revenue growth, DARZALEX sales on Slide 8. We saw continued strong performance for DARZALEX in Q1, you can see that in the chart on the left. Overall, DARZALEX sales grew by 46%. That's net sales of nearly $1.4 billion, which translates to DKK 984 million in royalty revenue. This exceptional growth was driven by continued strong market shares across all lines and by the strong uptake of the SubQ formulation. So DARZALEX remains a key driver of our revenue, as you can see on Slide 9. Looking at the graph on the left, you can see our revenues grew by 77% in Q1. There were 2 main drivers. First, recurring revenue grew by 30%, and that's primarily due to higher DARZALEX royalties. Second, we recognized milestone payments from AbbVie for epco, and from Janssen for daratumumab. Now coming back to our recurring revenues, it's useful to unpack this a bit. We've already spoken about DARZALEX and the very strong performance there. For Kesimpta, we're encouraged by the nice quarter-over-quarter growth seen in Q1 and the recent approvals in Europe and Japan. Now on to TEPEZZA. Here, due to the supply chain disruption, we didn't record any royalties for the quarter. However, we believe the strong fundamentals of the product are made intact, and we are pleased to hear the positive commentary from Horizon earlier today and that they have started to supply the market again. So our revenue profile continues to get stronger. And we're taking those revenues and investing in a highly focused way, as you can see on the next slide. Total operating expenses grew by 28% in Q1. And here, you can see where we invested. We accelerated our investment into our product portfolio, especially the advancement of both epco and DuoBody-PD-L1x4-1BB. We've also spent more on expanding our team, hiring key team members to support our growing product pipeline. And we've continued to build our commercialization and broader organizational capabilities to support our expansion. Finally, we are leveraging the AbbVie collaboration by utilizing their expertise and significant financial contributions to further expand and accelerate our partnership programs. Now let's look at our financials as a whole, on Slide 11. Here, you can see our summary P&L. For Q1, revenue came in at approximately DKK 1.6 billion, up nearly DKK 700 million. The increase was primarily driven by higher DARZALEX royalties and the milestones related to epco, and dara, I mentioned earlier. Total expenses were slightly north of DKK 1 billion, with 81% being R&D and 19% G&A. Operating income was DKK 532 million compared to DKK 71 million last year. Our net financial items amounts with gain of DKK 892 million, which was primarily driven by unrealized foreign exchange rate gains related to our U.S. dollar-denominated cash and investments, due to the move higher in the dollar during the quarter. Then we have tax of DKK 328 million, which equates to an effective tax rate of 23%, and that brings us to our net income of DKK 1.1 billion. So by any measure, the first quarter of 2021 was extremely strong. Now let's take a look at our guidance on Slide 12. Following our strong Q1 numbers, I want to provide some additional color on where we are headed for the balance of the year. To start, we are confirming our full year guidance. If we look at our revenues, we're unquestionably off to a strong start. First, with our market of products that are generating royalty revenues. We really like what we've seen here in Q1 from dara and Kesimpta, and we're looking forward to TEPEZZA coming back online. For me, moving forward, it will be important to see this momentum continue as we progress into Q2 and Q3. In addition, we have a fairly sizable chunk of revenue to come in order to hit our nonrecurring revenue guidance, which includes both milestones and cost reimbursement. For operating expenses, we expect to step up our investments as the year progresses. This is in line with our overall strategy, and the key priorities I highlighted at our Capital Markets Day in November and reiterated in February. For us, it starts with our focus on progressing epco and the rest of our pipeline, and preparing for the potential launch of tisotumab vedotin later this year. Putting all this together, we're on track to deliver another year of substantial operating income in a range of DKK 1 billion to DKK 2 billion. Now for my final slide, let me provide a few closing remarks. In summary, we've had a very solid start to the year. We've created growing recurring revenue streams based on products with exceptional growth profiles, and that gives us a strong backbone of significant underlying profitability, and we're investing those revenues in a highly focused way to realize our vision and capitalize on the significant growth opportunities in front of us. And on that note, I'll hand you back to Jan to discuss our key priorities.

[Jan G.J. van de Winkel, Co]

Thanks, Anthony. Let's move to Slide 14. As we have discussed, our key priorities are essential to our success in 2021. And with the submission of the tisotumab vedotin on BLA and the subsequent receipt of priority review, we are on track towards reaching these goals, even with the adjustment of our timeline for the tisotumab vedotin regulatory submission in Japan. While other goals remain on track, and thanks to the excellent work and tireless dedication of our team members, we will continue to focus our resources on further progressing, expanding and developing a world-class antibody product pipeline. We very much look forward to providing you with updates on a number of our clinical programs over the course of this year as we evolve into a leading, fully integrated biotech innovation powerhouse. Let's move to our final slide. Slide 15. That ends our presentation of Genmab's first quarter 2021 financial results. Operator, please open the call for questions.

[Operator]

[Operator Instructions] Our first question comes from Wimal Kapadia from Bernstein.

[Wimal Kapadia, Research Analyst]

I'm Wimal Kapadia from Bernstein. So just a first one, a bit of clarity, please, on the Halozyme royalty impact. I see a DKK 64 million impact on 1Q. But can you just confirm what percentage of your sales in the quarter came from the SubQ? And how do we think about -- how does Genmab think about that number by the end of the year? And what do you think will be a steady state? My second question is just on amivantamab, please. I appreciate this is a J&J asset. But I'm curious to hear Genmab's view on the potential of the drug. The initial target is [ FY'20 ] but given J&J are running trials in a broader population and head-to-head versus Tagrisso, the profile of the products may change significantly. So how are you thinking about the contribution for this asset? And what impact does that make for Genmab?

[Jan G.J. van de Winkel, Co]

Thanks, Wimal, for the questions. And I will definitely park the first one for Anthony, so he can think about that one for the Halozyme royalty rates. Let me take the amivantamab one. As we both know, the initial population in lung cancer is quite small. It's a subset of patients and a very small subset, but there is already a trial ongoing in a much larger population with amivantamab, and over 1,000 patient trials, which is representing about 20% of the lung cancer patients. So we think that the contribution of amivantamab to our income stream, Wimal, for this year will be very limited. We assume an approval in the middle of this year for a subset of lung cancer patients. But if actually that larger population would read out positively, then the income profile is quite substantial, especially when we realize that we had get royalties from the high single-digit to the low double-digit percentage range. So that's pretty substantial and potential. So I think I'm going to park it here. I think we will first need to see the data from the Phase III trial, the larger Phase III trial, before we can really project income streams more reliably. I think next year, we will probably guide in our guidance, take into account the amivantamab contribution if the drug is approved, Wimal. But for this year, it will be small, and we will update you, hopefully, in Q3 and Q4 of this year, assuming that we get a mid-2021 approval for amivantamab as the first DuoBody-generated antibody products. And the nice thing is just now 13 DuoBody molecules in the clinic, 5 by Genmab and 7 by Janssen, and 1 by Novo Nordisk. And I think this will be the year that I think DuoBody will become very, very hot on the radar screen as a key technology for driving excellent next-generation antibody products, not only for Genmab, but also for partners of Genmab. We see that list getting longer, for sure, already within 2021. Having said that, I'm going to hand over to Anthony to see what you can say about the Halozyme contribution, now and potentially near the end of the year. Anthony, the floor is yours.

[Anthony Pagano, Executive VP & CFO]

Great. Thanks, Jan. And Wimal, first of all, I certainly appreciate that you want to fine-tune your models, and I'll try to be how helpful as I can, but I think you can also appreciate. I really can't comment on the specific royalty that J&J is paying to Halozyme. That's really a relationship between the 2 of them. But maybe I'll try to walk you through some additional pieces of information, and we can hopefully still be helpful. So overall, the key message I want to leave you with here today is that the guidance that we gave on this back in February remains intact. And here, what I said was that the full year impact would be around DKK 450 million. For Q1, the headwind was DKK 64 million. For 2021, we expect more than 50% of global DARZALEX sales will be SubQ. So far, what we've seen is a rapid uptake of the SubQ in the U.S. and in other parts of the world. To provide a little bit more context, in the U.S. market where we have the best visibility to some data, currently, SubQ accounts for around 60% of DARZALEX gross sales according to IMS, and this compares to give you a sense to around 50% at the beginning of the year. And as a reminder, we do have limited access to timely info in terms of splits to sales between IV and SubQ in markets outside the U.S. I think to get to the other part of your question, if we step back for a moment, we continue to believe the overall growth profile for dara, including the SubQ version, is exceptional. And we expect the trend towards strong SubQ conversion will continue. So hopefully, that gives you some context now in terms of where we're headed for the balance of the year and where we landed in Q1.

[Operator]

Our next question comes from Mike Schmidt from Guggenheim.

[Michael Werner Schmidt, Senior Analyst & Senior MD]

I had a few on epcoritamab. Perhaps, first, I know you have an update coming up here at the ASCO Conference. Could you just help us understand how significant this update will be perhaps relative to what we've seen at ASH last year? Is -- will there be a focus on the Phase II expansion cohorts, perhaps? Or is it a longer-term follow-up still on the dose escalation portion of the study? Secondly, could you remind us what the target size is of the 3 planned-expansion cohorts in this study? And what duration follow-up perhaps is required for potentially filing for accelerated approval in those indications? And lastly, where are you with respect to meeting potential CMC manufacturing requirements for potential approval down the road?

[Jan G.J. van de Winkel, Co]

Thanks, Michael, for the questions. The aspect, you've seen, the title for ASCO will be a follow-up, an update on the dose expansion cohorts in follicular lymphoma, diffuse large B-cell lymphoma and the amount of cell. It will give you more information and clarity on duration of responses, the development of the depth of the responses, et cetera, but no data from the expansion products. It's from the dose escalation part from the Phase I/II, the other data in different tumors, potentially also in CLL, maybe the schedule for the second half of the year, Michael. But that's what I can say right now on epco data at ASCO. And the upsides, I think, will come out, I think, on the 19th of May, as you and I know. The expansion cohorts will be over 100 patients for each of the expansion cohorts. The diffuse life B-cell lymphoma one is the most advanced, followed by follicular lymphoma and then month or so. So hopefully, updates also during this year on how that progresses. And we think that each of these could potentially be used for potential accelerated filing if the data would allow that. And we certainly will have interactions with the regulatory authorities on that. Then finally, your CMC question. That is in full swing and potentially supporting us to assuming that the expansion cohorts will read out positively, Michael. But we can potentially file in 2022 for an accelerated pathway for at least one of these expansion cohorts, perhaps more depending on how recruitment will go in the coming time. And CMC is completely on board and in line with the potential product filing and approval within 2022. But I think certain news probably during this year, Michael. And we'll keep you very firmly updated. What I can tell you also is that the more data we see, the more we become encouraged by the potential of epcoritamab. We think it's a fantastic candidate therapeutic we actually get more and more reassurance that we put a potential real best in class in this category.

[Operator]

Our next question comes from Jonathan Chang from SVB.

[Wei Ji Chang]

First question, when should we expect to see updated GEN1046 data this year?

[Jan G.J. van de Winkel, Co]

We have not yet decided on the exact timing, but it will be in the second half of this year. And we expect you to see data from different expense coming from different expansion cohorts at the right dose, Jonathan. But we're going to pick one of the conferences likely in the second half of this year.

[Wei Ji Chang]

Understood. And second question, I wanted to touch on a topic that we haven't heard much about. I'd love to get your latest thoughts on your partnership with Immatics, and the ongoing efforts there. What's the latest status of those early-stage initiatives? And more broadly, what are your thoughts on the promise and risks associated with PCR bispecifics?

[Jan G.J. van de Winkel, Co]

Thank you, Jonathan, for that question. We haven't had that one for a long time. I can tell you that the partnership is progressing really well. We have generated panels against a number of targets, and we have created bispecifics that we are now comparing to actually select out empirically the most potent molecule. You know that our strategy is by -- with the DuoBody technology platform, is to actually generate lots of candidates and then empirically screened for the most potent one. So we are in that process, Jonathan, with some of the Immatics program. So there's a number of them running in parallel. And we believe that these unique antibodies, which can be made by Immatics technology, which are targeting totally tumor-specific epitopes. In the context of MHC molecules, are very, very promising molecules to allow for a really specific bispecific-mediated tumor cell targeting. So we are very excited about the potential of the technology. I think the partnership is going well. It's progressing. And hopefully, probably within this year, we come to final clinical candidates, and then we can then discuss also in more detail the route towards the clinic, et cetera. So we think the potential is absolutely there, but we are still in the midst of generating really good therapeutic candidates from panels of bispecific antibodies. And I think one of the strengths of Genmab's approach is that we actually have been very good in selecting truly differentiated product candidates because of the robustness of the DuoBody platform. And that, I think, is the basis of us being so successful in actually progressing IND candidates towards the market up to now. With the company, we think that, that hedge rate is going to get better rather than worse going forward because we -- I think we understand better and better what makes a good candidate antibody, a component for a differentiated next-generation antibody drug. And we will see a number of really, really promising candidates from other partnerships and from our own in-house pipeline moving towards the clinic very rapidly. And there will certainly be updates, Jonathan, this year. So we will broaden the pipeline from 8 proprietary clinical programs to a higher number this year, and some of them will be bispecifics, and others may be coming from other technology platforms like our HexaBody platform. That's probably where I need to leave that at this time.

[Operator]

Our next question comes from Emily Field from Barclays.

[Emily Field, Research Analyst]

I was just wondering if you could provide any color on the increase in the expected enrollment in the ongoing GEN1046 study. And whether you think that any of the data from that trial could be registrational?

[Jan G.J. van de Winkel, Co]

Thanks, Emily. We have, I think, right now, 9 expansion cohorts, which are recruiting patients for you. You will see more expansion cohorts with 1046 in the coming time. And I think each of these expansion cohorts can be expanded to a number of patients that could potentially support an accelerated regulatory approval path. I think it's still a bit too early. I don't need to say more about it right now. But I think there's definitely potential that we could find data and some of these expansion cohorts, which would allow us up on discussion with the regulatory authorities to go for a rapid accelerated approval part. And I think more data will be presented this year in the second half of this year, and then more next year. So we are -- we continue to be very, very excited about that molecule. You've already seen a combination between 1046 and take a taxotere, a chemotherapeutic, in one of the cohorts, and there will be other new expansion cohorts added in the coming times. So we look forward to be able to present data to you all within this year at the medical conference.

[Operator]

Our next question comes from Sachin Jain from Bank of America.

[Sachin Jain, Managing Director]

Hello, it's Sachin Jain. A couple of questions, please. Firstly, on epco. Jan, you mentioned the potential CLL data [ 2H ]. So wonder if you could just give us any early comments on times of efficacy you're seeing in that setting? I mean you're aware of any other CD3 CD20s having seen efficacy in that setting. Secondly, on the 4-1BB, just a follow-on to the last question. On the expansion of the recent study size, any comments you can make on what that implies really your comfort on liver tops? And whether you are seeing efficacy signals beyond lung? And then a follow-on your lung -- sorry, I'll follow-on the accelerated finding question. Some of the physician feedback we've had is that, obviously, the lung data in a very refractory population, data, 80 to 100 patients with roughly a 20% response rate. Could be a reasonable basis for an early file. So just any comments you have there as to whether you've had any discussions in that regard?

[Jan G.J. van de Winkel, Co]

Thanks, Sachin, for the questions. CLL, I think it's still early stage. We are recruiting patients in one of the studies with epcoritamab. And so I could tell you, we certainly see that we have an active drug there. I should probably keep it with that session. And I think that is new data, that is a unique data for CD3, CD20 or CD20-targeted antibody. So I think we need to see how the data develops. We're taking 2 different doses of epcoritamab and CLL. Hopefully, in the second half of this year, we can show you the results from that initial set of patients being treated with epco. Then moving to 1046, the PD-L1x4-1BB antibody, liver tox from the fact that I described to Emily, that we are progressing different expansion cohorts. You can draw the conclusion that we actually can manage the toxicity. We think it's actually very manageable. What we see with 1046, this is a unique, very, very potent immune checkpoint targeted bispecific antibody, and you ask for evidence for other tumors than lung cancer. Of course, Janssen's answer is absolutely, yes. And we have already described, I think it's [indiscernible] last year in November, triple-negative breast and ovarian cancer patients responding to this antibody. I think this is actually the very first 4-1BB-targeted antibody, which has shown to induce responses and patient sits are refractory to immune checkpoint targeting antibody before. So I think it's a very, I think, promising concept. It's still early days, and we think that we can -- we need to see more data also on duration of the response before we can draw further conclusions, but we continue to be very, very excited. And that excitement is not only 1046, Sachin. Also 1042, the CD44 4-IBB antibody is also doing very, very well, and we hope to show you also in the second half of this year, dose escalation data from that bispecific antibody. It's a different concept. It's targeting CD40 agonistic antibody arm and then 400B on T cells, clearly the other arm of the bispecific. Also there, we see clear responses, a different dose levels, and we are going to progress that bispecific together with BioNTech as well, and initial clinical data to which we very much look forward to presenting this year, probably also in the second half of this year. And then your third question was -- well, have they already been contact with regulatory authorities about some of the expansion cohorts with 1046. The answer is no, not up to now. But we are following that progressing really, really well. And we will give you updates once these are there likely in the second half of this year, Sachin.

[Operator]

Our next question comes from Trung Huynh from Crédit Suisse.

[Trung Chuong Huynh, Research Analyst]

It's Trung from Crédit Suisse. Just 3 questions for me, please. First one, just following up on Wimal's question on subcutaneous share. Just can you just give us a bit more help or a ballpark of the share of subcutaneous DARZALEX ex U.S. for 1Q that you saw? Then on epco and Roche's POLARIX study in first-line DLBCL, which we'll see later this year. If it becomes the new standard of care, how does that change your thinking on epco's development program? And what's your targeting later lines of therapy? Are you still committed to your multiple line strategy here with combinations? And then finally, earlier this week, we saw Pfizer pause the enrollment of their BCMA CD3 due to new tox. I'm aware, J&J is handling the development of [ daclizumab ] But can you perhaps give us your thoughts on peripheral neuropathy safety? And is there any potential this could be a class effect?

[Jan G.J. van de Winkel, Co]

Trung, thanks for the questions. And I will definitely ask Anthony to speak more about the SubQ share ex U.S. because he already did speak about the share in the U.S., which was over 60% now, Trung. So I'll park that question for Anthony. Let me move into algorithm of development. Yes, the landscape is changing, and we are adapting -- continuously adapting our development plan, Trung. You will see a very rapid expansion of the number of studies for epcoritamab on ct.gov in the coming time. And then we will also speak about that very actively. You will see novel combinations, which has not been shown before for other CD3 CD20 bispecifics. And your question about multiple lines of therapy. For sure, we are now planning Phase IIIs in different lines of therapy for different B-cell cancers. So that [indiscernible] levels goes up and not down, also not despite the landscape changing term. So I think this year will give you a lot more clarity on how we are going to position epcoritamab. And you will get more and more data, hopefully, at ASCO initially, and then probably in the second half of the year, a lot more data on different B-cell cancers, and that will hopefully help you to also build a better appreciation of the potential of epcoritamab. We are, together with that, getting more and more enthusiastic about the potential of this bispecific, which we think it's truly unique and differentiated from the other CD20-targeted antibodies. And then the third question on the Pfizer BCMA CD3 bispecific. I cannot really comment on the daclizumab because I really don't have an oversight of the data, the exact data. But what I can tell you is that there will be an oral presentation on daclizumab at ASCO, and actually also on [ patritumab ], the other bispecific antibody for multiple myeloma by Janssen, GPRC5B, CD3 bispecific. And I think you would probably have heard it when they would have had stops by toxicity, like the toxicity seen that the Pfizer compounds. But I think the technology base term is very, very different. I mean what Janssen did, of 7 bispecifics in the clinic from the DuoBody technology, there are all of 9 clinical candidates for different programs selected. And for each of them, they made hundreds of candidates, which you only can do with a very good and robust technology like DuoBody. And that is very different from what Pfizer did. I mean Pfizer that the initial -- they're very, very simplistic pasting together of arms of antibodies which you can only do with a few antibodies and not a large panel. So I think the chance that daclizumab is a very, very different molecule from the Pfizer antibodies, it's really there. But you need to ask Janssen, I think, for more details on the toxicity profile of [ daclizumab ]. And at the very latest, I think you will see an abstract on May 19 on the oral presentation. And I think there's actually a few more subjects also on poster , supposed presentation for daclizumab at ASCO, I think it's not possible for me to comment on that any further here. Anthony, do you want to speak a bit more on ex-U.S. shares of SubQ dara for Trung?

[Anthony Pagano, Executive VP & CFO]

Sure. Thanks, Jan. And yes, Trung, I'd try to be helpful here. Again, I do appreciate similar to what I said to Wimal, like you want to find your models, but again, just -- I'll talk you through the way I kind of think about this. It starts with that we certainly expect the trend towards strong SubQ conversion will continue to gain. I won't share the specific metrics in the U.S. And again, here's where we actually have access to really what we think is good data by IMS on a real-time basis. For Rest of the World, I mean, we really don't have access to the same quality of information. I guess what I can say, and this is, I think, reiterating what I said probably in the Q4 call, in certain markets, following reimbursement, it almost becomes a little bit binary, not where it goes from 0 to 100, but 0 to a very high number rather quickly. Again, this is on a market-by-market basis. So it comes down to the individual markets in terms of any particular market dynamics there for a particular market or country, and also a function of [indiscernible] reimbursement approval as well. So from this, probably where I got a lease, but ultimately, to conclude here, we see the overall trend towards SubQ adoption to continue.

[Jan G.J. van de Winkel, Co]

Thanks, Anthony. And I can probably share with you, Trung, that in some countries, there's over 90% usage already of SubQ dara like some of the Nordic countries and some other European countries, very large countries. And other countries, it's closer to 30%, but building up rapidly. And I think Janssen can give you further color on that. We are not allowed to share anything further. But I think it's very, very rapidly progressing towards SubQ now in Europe.

[Operator]

Our next question comes from Peter Welford from Jefferies.

[Peter James Welford]

Let me start with tisotumab. Just curious there, if you can talk a little bit about whether you've had discussions yet in other markets outside of the U.S. and Japan with regards to what sort of clinical data is potentially required to consider a conditional accelerated type of pathway in those countries. And whether or not the decision in Japan to wait for 301 data impacts at all your thinking with regards to building your own commercial infrastructure, given the agreement with CGEN? And how that sort of impacts that thinking. If I could then just ask on DARZALEX. Just with regards to the guidance, I don't think J&J made much comments about this, but I'm curious if you have any insights into the first quarter trend ex-U.S. Obviously, you're reiterating your aim, which tepidly at the first quarter sales were flat for the remaining quarters, you'd be above the midpoint of that. So curious as to what you will see with regards to the trend and what we should perhaps infer from the first quarter ex-U.S. number. And then just finally, sorry, a quick point of clarification, just on amivantamab. I think Jan said it was royalties of high single to low double. Is that an equivalent per term or so for the -- all of the J&J DuoBodies? Or does it -- does the royalty rate potentially vary by DuoBody?

[Jan G.J. van de Winkel, Co]

Thanks, Peter, for the questions. Let me take the first one and the third one and then refer the dara guidance one to Anthony. Let's start with tisotumab vedotin. The situation in Japan is not impacting the strategy, Peter, for the other markets. For Europe, we also feel that we need the data from the 301 Phase III study, which is closing rights right now, of TV versus chemo in second and third-line cervical cancer patients. This year, we are expecting data from other cohorts, Peter. So we think that we can broaden the market beyond second and third line. Is this -- basically, this new situation of the delay in Japan which I spoke about in the introduction and which is in the Q1 reports, impacting the buildup of the commercial teams, the answer is no. Definitely, the introduction commercially in Japan will now be later that we originally envisioned. But remember that also under the [indiscernible] agreement for epcoritamab, we need to prepare the team -- commercial team in Japan also for actually moving epcoritamab to patients potentially even already in the next year or the year thereafter. So we need to build up a commercial team. Anyhow, we probably do it a bit more slowly now because of the longer time needed for tisotumab vedotin. But the infrastructure is really needed. We are very, very serious about the 2 priority markets. This will not impact any of the commercial arrangements with CGEN. We are super enthusiastic about working together with CGEN in the states, really getting ready, launch-ready, already immediately after the summer and hopefully get an approval then in the October time frame for tisotumab vedotin in the states, and then start co-promoting the drug and the states together with CGEN. So that is all moving very rapidly in the right direction. So Japan, I think a bit slowdown, Peter, but not very substantially. I can assure you at this time. So we continue to be very motivated to actually build our commercial presence, starting with Japan and the U.S. and later on potentially looking at other markets in the future. Then on amivantamab, the royalty rate is different for the different DuoBody molecules. But you may remember, Peter, is that we have 2 different sets of agreements with Janssen. And I think 2012, and then and then in 2013 for a broader and broader set of DuoBody candidates for projects for Janssen. And the -- actually, amivantamab is the one, where we get the highest loyalty, Peter, from all the DuoBody molecules. And the reason is that Genmab not only allowed access to the DuoBody technology platform [indiscernible] and to create panels of bispecifics. We also created -- physically created the eGFR arm and the CNET arm, the panels, with Janssen then used to build amivantamab from. So because of that reason that we also not only gave access to the technology, Peter, but also created the composing arms of this specific -- bispecific, makes that we get a higher royalty for the other Janssen bispecifics there in the single-digit royalty range, Peter. I cannot be more specific. But we are lucky because amivantamab is still where Janssen needs to potentially pay us the highest royalty rate off because of that unique aspect that we created, also the composing arms of the bispecific. And I think more data at ASCO for the presentations, which is very, very exciting, I think. Then for dara guidance, Anthony?

[Anthony Pagano, Executive VP & CFO]

Yes. Thanks, Jan. And Peter, I mean, certainly, after a strong Q1, I can absolutely see why you'd asked this question. For me, at this stage, and from my perspective, our guidance continues to be appropriate. Let me spend a few moments and explain why. To start, I think it's really useful to drill down into the geographic split in sales. For the U.S., sales of $691 million were up 49% compared to the Q1 in the previous year, but the sequential quarter-over-quarter performance was more muted. So here, it's not uncommon for us to experience lower to modest sequential growth in the U.S. in Q1 compared to Q4. So to take this into account. Now if we look at the Rest of the World, this was the real driver of the strong Q1 performance with sales of $674 million, which was up 20% compared to Q4 and up 42% year-over-year. And we're really encouraged by the strong growth here. However, as we previously highlighted, we do have less visibility as to the individual markets and growth drivers. And also Q1, there were some tailwinds from FX. The other thing I want to highlight, which I think is useful to remind ourselves, and we've heard this from a number of other companies that have been here reporting during earnings season, and that's that COVID continues to represent a challenge in terms of diagnosing new cancer patients and get it a needed treatment to existing cancer patients. Now so far, this doesn't seem to have been a significant barrier for dara, but it's something we need to take into consideration. So overall, if I sort of just start to step back from this, what we really want to see here is the strong momentum that we observed in Q1 really continue here as we move forward here into Q2 and then Q3. So with that, and I take all this together, Peter, I think -- and I hope you can see why we feel our guidance continues to be appropriate.

[Operator]

The next question comes from Peter Verdult from Citi.

[Peter Verdult, Managing Director]

Yes, Peter Verdult, Citi. Jan, take you briefly away from the pipeline, and then we can dive back in. The share price by our calculations, fully pricing in the downside from your spat with J&J. No dara royalties beyond 2030 despite you paying 50% of the Halozyme royalty for the foreseeable future. Just wanted to check in on arbitration. I know you're not going to say much, you can't say much, but is there anything you can say on timelines or even willingness to seek resolution of this through alternative avenues? That's question number one. And then on to the more interesting pipeline questions, just checking in on Mim8. Any sense or feel as to whether the emerging data is strong enough for a move into Phase III? Just interested to hear your views on the asset, realizes your technology in the hands or partner? And then the last question, this will just require yes or no answer. Any chance we will see HexaBody-CD38 data that could lead to an opt-in this year? Or is that very much a 2022 event?

[Jan G.J. van de Winkel, Co]

Thanks, Peter, for the questions. Interesting questions for sure. Let me start with the arbitration. I can tell you that we are feeling very strongly that we are morally and ethically doing the right thing here by defending our position. Timing is uncertain, as I already said before, Peter. But what I can tell you that the process is progressing very rapidly. I mean lots of documents are being exchanged. And I think both parties are working on the case. And we would very much, like you, want that overhang, that perceived overhang to be disappearing as quickly as possible, but it's in the hands of the judges and the process. So I cannot basically comment any further on timelines. But there is a clear activity, I can tell you at all, and to really get that case finished in the shortest possible time frame. And yes, I think we have been hit by the uncertainty here. But sometimes in life, Peter, you have to keep your back straight and you feel that you're doing the right thing. And that -- this is one of those situations. And of course, we will be open to resolve this in any possible way, but we have to defend our opposition here. And we feel that we are doing the right thing here, and feel very strong. And with Mim8. Yes, I'm not so -- I don't know the data that well, but I know the preclinical data actually very well, and this is a super well-differentiated molecule for hemophilia created with the dual body technology platform, where the Novo has seen over 15-fold [ pipeline ] activity [indiscernible] and in vitro study. So I think the clinical data, people will have to give you the guidance for how rapidly this can move to Phase III. But what I can tell you is that Novo is super enthusiastic about what they see clinically. I have not seen that data, and I hope that, that will be presented pretty soon. But that's definitely yes, something we also look forward to quite eagerly. And then the third question I -- escape to me. Maybe you can repeat that very briefly, Peter.

[Peter Verdult, Managing Director]

With your back straight, just a question on HexaBody-CD38, just yes or no, is there any chance we will see data that could trigger an opt-in for that asset this year? Or is that very much a 2022 event?

[Jan G.J. van de Winkel, Co]

Oh, I think it's a full known, yes. And of course, Janssen could potentially wait on data from the comparison between HexaBody-CD38 and dara, SubQ dara, because they are entitled to wait on that data before deciding on the potential opt-in. But I can tell you that we are now treating patients, Peter, and we think that this molecule is potentially 10-fold or more potent than dara. And we could potentially, during the dose escalation, already see that this is a much more potent molecule and with the right safety profile, it is definitely possible that a company like Janssen, who wants to work on a follow-up on maybe an expansion from dara to [indiscernible] could opt in. So there is definitely potential, but I think the likelihood is very low, Peter. I think they will want to see potentially more data. But we hope to show you some data in the second half of this HexaBody and force molecule. I think this will be a good year, as I already said before, of our DuoBody platform, the 13 molecules in the clinic and more to come. We have 3 HexaBody molecules in the clinic. Now this is the third one, HexaBody-CD38. And we are super enthusiastic about what we see with the different molecules. Also, the CD371 is doing really, really well. I can assure you clinically. So I think this could be a good year for Genmab's technology platforms and put them firmly on the radar screen as technologies to allow for generation of truly differentiated excellent antibody therapeutics. So this will be a good year, Peter. And I think this could be one of the Spearhead molecules for HexaBody, but it will still be early days because I think the real comparison with dara will come not this year, but potentially next year in '22.

[Operator]

Our next question comes from Michael Novod from Nordea.

[Michael Novod]

Yes. Just a few follow-up questions. So first of all, on the cash position. So you're accumulating a lot of cash, and you're going to be extremely cash generative in the years to come. So maybe just a brief update on sort of how you intend to deploy it in terms of targeting M&A, et cetera, that would be very interesting. And then just a housekeeping question on the modeling, in terms of net financials for the full year. Maybe Anthony has some comments to how we should expect that to pan out given the major boost we saw in Q1.

[Jan G.J. van de Winkel, Co]

Thanks, Michael, for the questions. And perhaps I can start off with the first one, and then Anthony can step in there, and then follow-on with the modeling on net financials, Michael, for the second question. So Genmab is going to really focus on the creation and development of differentiated antibody therapeutics. And yes, we are getting more and more cash risk -- rates, and we will focus on accelerating the potential [indiscernible], like we're doing now with 1046 and with epcoritamab. And potentially, this year, we will actually identify another potential [indiscernible] from our pipeline of now 8 proprietary clinical programs, Michael. And we will further build the pipeline. And in that process, we already discussed the Immatics collaboration. We will and on new agreements with other companies which can give us access to components, which we can then use together with that partner, Michael, to create differentiated next-generation antibody therapeutic candidates. And that will be an area where we will certainly spend money you could see from the Q1 report that CureVac is a company we work with. We closed a deal a number of years ago. We decided to sell actually 30% of the shares that we accumulated in our deal. And that was to get access to our mRNA-based technology for potential future delivery of antibody therapeutics in the form of mRNA, and we now know how enthusiastic the pharma field is about mRNA-based therapeutics. So you will see Genmab spend money in the coming time proactively in getting access to components, which you can use as building blocks to create truly differentiated next-generation antibody therapeutics, so do expect to spend some money on that. And we could potentially even acquire a technology platform if you think that, that fits well with our portfolio of platforms already in the company, but we will do this in a careful manner and then spend the majority of the cash on accelerating potential [ win off ] and bringing them to the market and then commercializing them. Michael, in the key markets, initially focusing on the U.S. and Japan and potentially later on, also looking at other markets. And that's probably where I want to leave it at this point, and then I'll ask Anthony to chip in here.

[Anthony Pagano, Executive VP & CFO]

Great. Yes. Thanks, Jan. And Michael, maybe see if I could add on to what Jan said. I think the first thing would be that overall, I think historically, this -- having this strong cash position has really served us well. I mean whether I think about a year ago now reflecting on it where we were a year ago, when the pandemic was emerging, the strong cash position, the recurring revenue profile, that, we could really stay focused on executing against our strategy and our key priorities for last year. So I think it's served us well historically. I also think as we sort of think about this growth cycle that we're kind of in the middle of having that a really strong, robust balance sheet is going to continue to serve us well moving forward. So I think overall, this kind of level of cash on our balance sheet continues to be absolutely appropriate for running our business in the way that we have been. So I think that gives you some color on that question, Michael, in terms of our cash position. In terms of the net financial items, I mean, I might ask you if you have a crystal ball as it relates to where the dollar euro is going to go. And that's what this is really about. I mean if you look at the number really for Q1, it was really around the FX movements. The vast majority of the move was to FX, and it was really just a reversal of the FX loss that we saw in Q4. So now the majority of our cash and investment position is held in U.S. dollar-denominated security. So it's really going to be a function of unrealized gains going through that line as the euro-dollar moves. To give you some context, we ended the year. And now I'm not referring to Danish kroner-dollar rates. We were DKK 6.05. We went up to DKK 6.34 at the end of the quarter, and now I believe we're at DKK 6.20 in today. So it's really going to be a function of that, Michael. So I can't give you a precise guidance, but at least, that gives you a sense of what's going through that line. And the other thing is since Jan alluded to it, and you can find this in our interim report, we did take the opportunity to take a little bit of money off the table with our investment in CureVac as we sold down around 30% of the position. And so we're now holding at the end of the quarter, around 1.5 million shares. And that's the other significant item flowing through that line. So that, Michael, hopefully, that gives you a sense just so you have an inside track on where the euro-dollar is going, just you know what reach me, let me know.

[Operator]

Unfortunately, that's all we have questions for -- the time we'll have questions for. So I'm going to hand back to the speakers.

[Jan G.J. van de Winkel, Co]

All right. Thank you all for calling in today to discuss Genmab's financial results for the first quarter of 2021. We will not -- if we are not able to get your question or when you're thinking about a question right now, please reach out to our Investor Relations team. We hope that you all stay safe, and remain healthy and optimistic. And very much look forward to speaking with you all again soon.