Y-mAbs Therapeutics Inc

NASDAQ:YMAB

Earnings Call Transcript 2023-Q1

[Operator]

Good morning, and welcome to the Y-mAbs Therapeutics, Inc.'s Earnings Call for the First Quarter of 2023. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. As reminder, today's conference is being recorded.

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; 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 expansion and 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; 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 year ended March 31, 2023, as filed with the SEC on May 8, 2023.

At this time, I would like to turn the conference over to Thomas Gad, the company's Founder, Interim CEO and President. Please go ahead, sir.

[Thomas Gad]

Thank you and good morning, everybody. And thank you for joining us today. On the call today, we have our Chief Financial Officer, Bo Kruse; our Chief Commercial Officer, Sue Smith; and our Chief Medical Officer, Dr. Vignesh Rajah.

Let me begin by briefly reviewing with you the highlights of our first quarter. First and foremost, DANYELZA sales continued their momentum from second half of 2022, and we are proud to report record quarterly net product revenue in Q1 2023 of 23 point of -- $20.3 million, up 24% compared to Q4 2022.

Product revenues for the quarter are higher than originally anticipated, and even though the results include initial inventory stocking at WEP, which increased international sales relatively significantly, the Q1 sales performance underpinned by positive trends in number of vials sold both in the US and internationally. And the addition of significant new treatment centers allow us to increase full year 2023 DANYELZA revenue guidance from the prior range of $60 million to $65 million to $80 million to $85 million. This expected increase in product revenue will have an accompanied impact on our projected full year 2023 cash burn, which we now expect to be reduced to $40 million to $50 million from the prior guidance of $50 million to $55 million.

In January, we announced a restructuring plan, which focused on expanding commercialization of DANYELZA and developing our solid technology. The plan included a 35% reduction in force and an anticipated 28% reduction of annual operating expenses for 2023. Reflecting implementation of this plan, we expect that our $92.6 million in cash and cash equivalents as of March 31st, 2023, when combined with anticipated DANYELZA revenues should be sufficient to support our business operations as currently planned into 2026. This estimate excludes any further development of omburtamab as well as any potential business development and Bo will talk more about that later.

Lastly, we are thrilled to announce the first couple of patients have been dosed in the Phase 1 GD2-SADA trial. The goal of this dose escalation open label trial is to -- it's to determine the recommended Phase 2 dose and dosing interval of protein and isotope. We believe that the SADA technology has the potential to deliver radiation precisely to a tumor and while minimizing radiation toxicity of healthy tissues potentially resulting in significantly increased therapeutic indices.

We are actively recruiting malignant melanoma, sarcoma and small cell lung cancer patients and are pleased to give you an update on the first couple of patients looking at a half-life or blood clearance which Dr. Rajah will get back to.

Turning to DANYELZA franchise. DANYELZA is approved by the FDA for the treatment of relapse and refractory high-risk neuroblastoma in the bone or bone marrow for patients who have demonstrated a partial response, minor response or stable disease to prior therapies. We are very pleased to see that under the leadership of Sue Smith, our Chief Commercial Officer, our commercialization efforts are gaining momentum in the US landscape, and we are making considerable efforts to expand access to DANYELZA outside of the US where we continue to seek partners to potentially provide access to DANYELZA on a global scale.

As I mentioned, our DANYELZA net revenues in the first quarter of 2023 increased by 24% sequentially from the fourth quarter of 2022, primarily driven by an increase in the number of US -- of new US patients as we are seeing the positive results from a successful execution of our 2022 commercial strategy development plan, as well as an incremental benefit outside of the US where initial inventory is starting at WEP generated revenues of $2.5 million in the first quarter. And we do not anticipate sales under this early access program to be high -- as high in the future quarters. We are confident that we are gaining momentum both in the US and internationally.

I'm very pleased to have Sue with us today on our call to provide more insights on the sources of DANYELZA's growth. Over to you, Sue. Thank you.

[Sue Smith]

Thank you, Thomas and good morning, everyone. I'm pleased to be with you all today and I'm happy to have the opportunity to talk about the progress we've made.

We believe Q1 2023 revenue growth demonstrates that our strategic commercialization plan positions us well for future growth in the marketplace. Now over two years since launch, more and more we believe physicians are gaining experience in seeing the benefits of DANYELZA. First, keeping the patient at the center of everything we do, our team has seized the opportunity to educate the market about the safe and effective use of DANYELZA, a treatment option that has the potential to transform patient's experience in terms of disease control, and a more convenient administration schedule that allows them to go home at night. The first quarter of 2023 continued building upon our work in identifying and supporting new patients, and our foundational rare disease approach and aligned omnichannel mix yielded the highest consistent number of patients in our hub at 30.

Second, focused -- the team is very focused on their accounts and working as a team. With the restructuring that Thomas mentioned, the team adjusted territory alignment against refined target segments to provide laser focus on the greatest potential accounts for DANYELZA for enhanced efficiency and impact. We gained five new accounts in Q1, including several notable centers of excellence. We have 53 accounts using DANYELZA since launch, with 25 of those active in Q1 alone. I am very proud of the team as they have adapted and kept their focus, and it is evidence of the team's professionalism and commitment to keeping patients at the center of everything we do.

Third, we continue to provide ongoing customer support. The team's customer support has resulted in a more confident administration experience, which we believe has led to an upward trend in the number of cycles patients received as well, has also led to a 45% of our accounts having had two or more patients on DANYELZA since the launch in 2021.

By continuing to execute on these initiatives, our mission is to ensure that DANYELZA can reach its full potential and help as many appropriate patients as possible. We are encouraged to see DANYELZA's adoption and market share trending upward in the US anti GD2 market exiting the first quarter of 2023 and based on the number of vials sold, we estimate we now have a 17% market share in the anti GD2 market. I'm proud of the team and we are excited to continue building on the solid foundation that we have in place for DANYELZA.

Thank you for your time. Back to you, Thomas.

[Thomas Gad]

Thank you, Sue. Great. As you know, we also continue to work with MSK on its multicenter investigator sponsored osteosarcoma trial for naxitamab to potentially expand our DANYELZA label to new indications. In addition, we are actively recruiting patients for a new investigator sponsored study. We call the BCC018 beating childhood cancer study sponsored. This multicenter Phase 2 trial evaluates naxitamab in combination with standard induction therapy for patients with newly diagnosed high-risk neuroblastoma. The study has now initiated five sites and we are working to activate additional sites, and we have dosed three patients so far.

We believe that the potential addition of anti GD2 therapy to induction chemotherapy to add anti GD2 therapy to induction chemotherapy early in the treatment process may result in an improved end of induction response and thus overall survival.

Naxitamab's activity in triple negative breast cancer in preclinical study conducted by M.D. Anderson Cancer Center was showcased in a poster presentation at AACR in April this year. The poster showed that GD2 was upregulated in triple-negative breast cancer, and its high expression is associated with poor prognosis. Further, naxitamab targets cancer stem cells and may be able to inhibit tumor growth by enhancing macro phase mediated ADCC and T-cell mediated cytotoxicity.

We will also be providing naxitamab for an investigator sponsored Phase 1b study planned at Ohio State University. This study will evaluate the addition of naxitamab to gemca and NK cells in advanced breast cancer. It is currently awaiting IRB approval. We anticipate patient recruitment to start in Q3 of this year, and we plan to provide an update at our annual R&D Day in December of this year.

I believe our strategy to provide naxitamab to support investigate our sponsored studies to potentially establish proof-of-concept and adult indications is beginning to take shape. This approach allows us to test our drug in a controlled environment before potentially advancing to larger clinical trials.

As you can hear, we are very excited about the possibilities going forward to address additional pediatric and adult unmet medical needs, and thus augment the commercial opportunity of DANYELZA.

I'm also very pleased now to have Dr. Rajah on our call today. Over to you, Vignesh.

[Vignesh Rajah, Senior Vice President and Chief Medical Officer]

Thank you, Thomas. Good morning, everyone. Turning now to our self-assembly, disassembly or SADA, which is a two-step pretargeted radioimmunotherapy technology platform. SADA is a key innovative platform in our portfolio that we believe continues to show great promise in the targeted delivery of radio pharmaceuticals to tumor sites with minimal off-target effects, creating potential opportunities to significantly increase their therapeutic index. As we continue to optimize this technology, we become even more encouraged about the potential scientific advancement it represents for the company and the medical community.

SADA's differentiation stems from our two step infusion. We expect SADA's ability to pretarget the tumor while rapidly clearing unbound protein prior to administering a DOTA-caged radioisotope that can only bind into the protein sitting on the tumor to result in a significantly increased therapeutic index that we have not seen before. Furthermore, the two-step technology makes it possible for our potential partners to use existing major treatment infusion centers because our drug candidate is first infused as a protein only injection, followed by the second step of the radioisotope injection. This unique two-step method facilitates the involvement of the medical oncologist and removes the needs to send patients directly to nuclear medicine departments among other advantages.

Furthermore, we have the ability to collect pharmacokinetic data by imaging. Such imaging may potentially enable us to assess tumor targeting and confirm at an early stage the feasibility of the therapeutic treatment. At this point, a total of five sites in the US are now open, including UPMC, the clinical trial lead site and MSK opened a few weeks ago, and we have started treating patients with GD2 positive solid tumors including small cell lung cancer, sarcoma and melanoma.

I'm pleased to share with you today that we are treated the first couple of patients and we are excited to see that the blood PK profile from these patients appears to match our preclinical models in terms of clearance data. We initially started treating patients with 120 hours or five day interval, but have now cleared the first cohort and the next will be dosed using the 48 hour interval. We intend to share initial PK data later this year from this first in human Phase 1 trial.

Beyond GD2, we're also pursuing a CD38 SADA program against non-Hodgkin's lymphoma with an IND plan to be submitted to the FDA later this year. We aim to address the unmet need in relapsed and refractory non-Hodgkin's lymphoma, and in particular those of T-cell origin. We believe that we are well-positioned to explore potential partnership options to leverage our propriety SADA platform, our team's expertise, and a streamlined process validation. We're very excited to continue building out our SADA franchise and I'm proud of our progress.

Thank you all and back to you Thomas.

[Thomas Gad]

Thank you, Vignesh. We continue to work efficiently to support DANYELZA with a global commercial footprint through regional partnerships in multiple territories. As you know, we establish a partnership with SciClone Pharmaceuticals for DANYELZA expansion in greater China. We especially excited about the regulatory approval for marketing in China that took place in December, 2022, and we look forward to the planned launch in China in Q2 2023. We believe that this market could potentially be an important revenue driver for DANYELZA sales in Asia.

The first quarter of 2023 demonstrated the continued progress among our other partners covering LatAm, Central Eastern Europe and Israel to support DANYELZA's potential and gaining access to global markets subject to regulatory approval in the relevant territories.

In January, 2023, we initiated restructuring in the form of a strategic deprioritization focus on DANYELZA and the SADA platform. It includes deprioritization of omburtamab and other early stage programs, including the CD33 bispecific and the GD2 -- GD3 vaccine programs. Though we continue to consider the future of our omburtamab development program, we are focused on DANYELZA and growing its on-label revenue and label expansion opportunities and the development of SADA constructs, with the goal of making us a commercial state biotech company with a sharper focus on value creation.

As part of this restructuring, we implemented a reduction in our workforce in the first quarter of 2023 of approximately 35%, and we anticipate our revised business plan will result in a reduction in annual operating expenses of 28% for 2023, which we expect when combined with the anticipated DANYELZA revenues to extend our cash runway into 2026 based on our current business plan.

We ended the first quarter of 2023 with $92.6 million in cash and cash equivalents. With a strong cash runway, growing revenues and robust pipeline, we believe we are well-positioned to continue our efforts to deliver further clinical and commercial milestones, support the continued commercialization of DANYELZA and advance our early stage programs with the revolutionary SADA technology construct.

Bo Kruse, our CFO, will now elaborate on these topics in this financial update. Over to you, Bo.

[Bo Kruse]

Thank you, Thomas and good morning, everyone.

DANYELZA net product revenues of $20.3 million in the first quarter of 2023 increased by 24% sequentially compared to the fourth quarter of 2022, which had revenues of $16.4 million. The increase was primarily driven by an increase in new US patients in the fourth quarter of 2022 and the first quarter of 2023 as we are building momentum and an incremental benefit from international net revenues.

Our net product revenues from other countries in the first quarter of 2023 included $2.5 million of revenues from our distribution partner in connection with the early access program for DANYELZA new. The product revenue from this early access program generated an initial inventory stocking order of $2.5 million, which we do not expect to occur in future quarter.

Moving to operating expenses. Our R&D expenses decreased by $9.5 million to $13.4 million for the quarter ended March 31st, 2023. The decrease was primarily due to decrease in spending on deprioritized programs, which resulted in decreased spending for cost for outsourced manufacturing services, outsourced research as supplies and clinical trials, partially offset by an incremental increase of $2 million for the out of period impact for accrued severance related benefits and accelerated stock-based compensation expense associated with our first quarter restructuring charge.

SG&A expenses decreased by $1.2 million to $12.2 million for the three months ended March 31st, 2023 compared to $13.4 million for the three months ended March 31st, 2022. The decrease in SG&A was primarily the result of decreased personnel related costs, inclusive of stock-based compensation and insurance costs. The decrease in personnel related costs is inclusive of an incremental $800,000 accelerated stock-based compensation expense related to our first quarter restructuring charge.

We reported a net loss for the first quarter ended March 31st, 2023 of $6.4 million or $0.15 per share basic and diluted compared to a net loss of $28.1 million or $0.64 per share basic and diluted for the quarter ended March 31st, 2022. The significant improvement in our net loss was primarily driven by the increased DANYELZA revenues and decreased R&D expenses in the first quarter of 2023, partially offset by the restructuring charge.

As Thomas mentioned, we ended the first quarter of 2023 with cash and cash equivalents of $92.6 million. Our first quarter cash burn of $13.1 million was 31% below the 2022 quarterly average. We believe that our cash position is sufficient to fund our operations as currently planned into 2026 and provides a solid financial runway to support our commercial initiatives and our prioritized pipeline programs as currently planned.

As we noted in previous quarters, the underlying assumptions for this guidance important to understand. No new partnerships or other new BD income is included in the assumptions that DANYELZA product revenues are assumed to increase by 10% each year in 2024 and 2025 for the purpose of this analysis of runway. We hope to see a higher growth rate for DANYELZA as we execute our refined commercial strategy and work to deliver 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 and our own expense, and no new programs are assumed at this point for the purpose of the analysis. This financial runway forecast benefits from the fact that most of the expenses related to the pivotal trials post-marketing commitments, regulatory activities, and the restructuring are behind us at this point. For the purpose of the guidance, we have not assumed any equally or debt offerings or the borrowings.

As Thomas mentioned earlier, we are very pleased to announce that we are updating our financial guidance, and we now anticipate full year 2023 DANYELZA net product revenues guidance to be in the range of $80 million to $85 million, and we are now decreasing our protected cash burn to $40 million to $50 million for the full year 2023. As previously disclosed, we continue to expect operating expenses of $115 million to $120 million.

We believe Y-mAbs remains in a healthy financial position to execute our strategic mission, our priorities, and to support the delivery of multiple milestones.

This concludes the financial update, and I'll now turn the call back to Thomas.

[Thomas Gad]

Okay. Thank you very much, Bo. So, this marks the end of today's prepared remarks. At this time, we can turn it over to the operator to open up for Q&A, please.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]

First question comes from Alec Stranahan at Bank of America. Please go ahead.

[Unidentified Analyst]

Hey, guys. Good morning. This is John [indiscernible] for Alec. Congrats on the sales number for DANYELZA, 24% sequential increase. For 2023, are we looking at -- so what are we looking at maybe future inflection point that we can meet, for example, maybe ex-US, China sales adding to top line. Is that a possibility?

Second question on SADA recruitment. In terms of patient recruitment for SADA, you did mention, I think three tumor types, melanoma and small cell lung, any specific metrics you are looking at when you're recruiting patients, mutation you screen for absence of mutations you're screening for. Any color on that would be appreciated. Thanks.

[Thomas Gad]

All right. Thank you. So the first one, yeah, we are very excited about the launch in China to happen this year. And we do think that that will add to our ex-US sales, and they should launch here in the second half, any day now. So we do think that will contribute to our sales.

On the second question, I would leave that over to you, Vignesh.

[Vignesh Rajah, Senior Vice President and Chief Medical Officer]

Yes. Thank you. Well, the tumors that we are looking at is small cell lung cancer, melanoma and sarcoma. So for each of these patient groups, we are looking at those who have failed first line therapy or in second line, third line therapy. I don't have the details of specific types of markers we're looking at in these specific indications, but they're all very much in the relapse refractory setting.

[Unidentified Analyst]

Okay. Thanks.

[Operator]

Thank you. The next question comes from Bill Maughan at Canaccord Genuity. Please go ahead.

[William Maughan, Canaccord Genuity]

Good morning and thanks. So on the DANYELZA growth, I was just looking for any additional commentary on the types of patients that are being enrolled. I know you'd previously talked about if you can get into patients earlier in the treatment paradigm, you could potentially -- that would lead to more vials per patient, more treatments per patient, and I'm just wondering if you have a sense that you're seeing that dynamic happen.

Also on DANYELZA, I know you said $2.5 million in stocking. Is that entirely stocking, or is there any underlying patient demand in Europe that drove that number? And I'll have a follow up after that.

[Thomas Gad]

I think, Sue, you can take the first question.

[Sue Smith]

Okay. Thanks. Yeah. Bill, I think we are seeing a slight trend towards the patient types when you see the patient who has failed induction therapy and they're receiving bridge therapy. So there is a bit of a change. It's very slow, but we're doing more to support that with training our field team around patient identification and working on those conversations with customers. But I think that the main part of the growth has really come from seeing -- it's a combination of having a solid foundation plus growth in breadth and depth. So it's a number of things, but yes, your point, one of the dynamics is a slight trend of seeing some more of those earlier patients.

[Thomas Gad]

Vignesh, do you want to give an update on WEP?

[Vignesh Rajah, Senior Vice President and Chief Medical Officer]

Yes. So this is our main patient program for Europe that we launched earlier this year. We have a number of unrequested patients who are undergoing screening and dissipated treatment with naxitamab primarily, these are going to be in one center in Barcelona. So this is ongoing at the moment. So far we believe there are three to five patients that are about to be treated.

[William Maughan, Canaccord Genuity]

Okay. Thanks. And just looking further out, I know you reiterated 1Q 2026 for cash runway, but that's despite improving DANYELZA growth trajectory. So at only a $6.4 million net loss this quarter, at some point you approach cash flow positivity. So do you -- is that something that's in the horizon? Or as you approach that, do you feel that you could use your cash balance to spend on other programs that might be deprioritized right now. Just trying to balance the financial aspect of cash flow positivity versus growth from the R&D.

[Thomas Gad]

Yeah. Thanks. So I think at this point we are staying disciplined on R&D in order to validate SADA and GD2. And then obviously our strategy is to go out and see potential multi target development partnerships. But of course, if we turn up R&D, breakeven goes on the horizon, but at this point we are staying very disciplined and very focused on our strategy.

[William Maughan, Canaccord Genuity]

Thank you.

[Operator]

Thank you. The next question comes from Mike Ulz at Morgan Stanley. Please go ahead.

[Mike Ulz, Morgan Stanley]

Hey, guys. Thanks for taking the question. Maybe just one on the GD2 SADA program. You mentioned it starting at a dosing interval about five days, I believe, and you've cleared that and now you're at 48 hours. Is the target there for an interval of 48 hours or could you potentially shorten that as well? Thanks.

[Thomas Gad]

So, Vignesh, I'll just -- so the preclinical data shows 48 hours to be the optimal interval, but I'd let you add to that, Vignesh.

[Vignesh Rajah, Senior Vice President and Chief Medical Officer]

Yes. I think as Thomas says, all our murine mass models and the PK data suggests that majority of the GD2 SADA protein is cleared from the plasma at around 48-hour mark, and we expect that to be a similar picture for our human clinical data as well. And that's pretty much what we have seen in the first initial data from the first patient. We're seeing a very similar clearance of 48 hours, 50 hours by which the GD2 SADA serum concentrations are virtually cleared from the blood. So we don't anticipate it to go any lower than that just based on the shape of the curve.

You'll recall that one of the key elements of maintaining a high therapeutic index is to ensure that we minimize the amount of SADA protein, unbound protein in the plasma. So I think that's the trade-off we need to make, is to ensure we maximize on the narrow PK window where we allow for a plasma half-life just long enough to reach the tumor, but short enough to almost completely be removed from the blood before the payload administration.

So short answer to your question is we don't expect it to go below 48 hours in terms of interval, but we believe this will probably be the most optimal interval.

[Mike Ulz, Morgan Stanley]

Got it. And then maybe just one quick follow up. As you dose escalate, will you be starting at the 48-hour interval or do you need to test a longer interval initially as you dose escalate? Thanks.

[Thomas Gad]

We'll then -- move on -- at the 40 -- yeah, go ahead.

[Vignesh Rajah, Senior Vice President and Chief Medical Officer]

No, go ahead.

[Thomas Gad]

We'll remain at the 48 hours. So, at the moment, based on the PK data, we will remain at 48 hours based on this optimal clearance and half-life we've seen from that. So we don't anticipate.

[Mike Ulz, Morgan Stanley]

Got it. Thank you.

[Operator]

Thank you. The next question comes from Charles Zhu at Guggenheim Securities. Please go ahead.

[Charles Zhu, Guggenheim Securities]

Hey, yes. Good morning and thanks for taking the questions. Maybe just a couple more follow up on the GD2 SADA. First of all, sounds encouraged. You've really been speeding up enrollment on that front. But also, just regarding, the -- how are you guys thinking about additional dose escalation on the protein side? And that sounds like you're narrowing down the dosing in interval, but how should we -- how we also think about protein content and how much remains bound on the tumor after that first administration? Thank you.

[Thomas Gad]

Vignesh, [indiscernible].

[Vignesh Rajah, Senior Vice President and Chief Medical Officer]

Yeah.

[Thomas Gad]

So if I understood your question correctly, the SADA protein dose administered for this first cohort was at 0.3 milligrams per kilo for these first two patients. And we have now passed that first cohort, and we are now moved on to the second cohort, which will still remain at the same dose level of 0.3 milligrams per kilo, but with a shortened interval of two days. The next cohort level and the third cohort level will be increased to one milligram per kilo. And the next -- subsequent to that it'll be three milligrams per kilo, and then the final cohort five will be up to 10 milligrams per kilo. So we anticipate, we expect a similar PK picture in all of these situations where the clearance of SADA protein from the plasma will mimic the pattern we've seen earlier, which is 48 hours being the optimal interval. So that's the kind of concentration or dosage we anticipate. Answer your question?

[Charles Zhu, Guggenheim Securities]

Got it. Got it. Great. Yeah. Thanks for that. And maybe just one quick follow up. I'm not so sure if I missed this one earlier in your prepared remarks or on earlier Q&A, but I guess just based on some of your earlier -- your early experience with the first cohort so far, when might you expect to be able to administer the therapeutic dose of lutetium for GD2 SADA? And is this something that could potentially happen, and could we have line of sight in into that data whenever you present your initial clinical update? Thanks.

[Thomas Gad]

So in order for patients to receive that therapeutic dose, of course, we need evidence of tumor targeting through the images. And in these first two patients, we weren't able to get image of tumor targeting, so they would not have received a therapeutic dose, but had they shown tumor targeting on image, they would have received a similar dose of SADA protein on day 15, followed by two days later or five days later with a therapeutic dose of 200 millicuries of lutetium DOTA. So that would've been a logical step if they had evidence of imaging on the scans.

[Charles Zhu, Guggenheim Securities]

Great. Thanks for taking the questions.

[Thomas Gad]

Okay.

[Operator]

Thank you. Next question comes from Tessa Romero at JP Morgan. Please go ahead.

[Tessa Romero, JP Morgan]

Good morning, guys. Thanks so much for taking our questions. So just two commercial ones for me. So the first one is, can you walk us specifically through what metric or dynamic gave you the most conviction to raise your guidance here? And what portion of the net revenues within your updated guidance range do you expect to be international versus the United States? And then I had one quick follow up.

[Thomas Gad]

Bo, do you want to take that?

[Bo Kruse]

Yeah. I would be happy to. So essentially what we are seeing is, is nice growth across the board. We, of course, monitoring the US sales very closely. We've seen more than 20% increase in the number of vials sold from the fourth quarter last year to the first quarter of this year, which is even better than what we sold from the third quarter to the fourth quarter last year. So we are monitoring this development very closely.

Internationally, there's also solid growth, I would say. You saw that for 2022, we had about 6% of the overall revenues coming from international sales, and we do expect this to increase in 2023.

And so from this to the -- sorry.

[Thomas Gad]

No, go ahead, Bo. Sorry.

[Bo Kruse]

So from the fourth quarter last year to the first quarter this year, we've seen an increase of about 6% when we clean up that WEP revenue. So even though none of the countries have really launched. Internationally, it's still a nice ramp up of the revenues. And to answer the first part of your question, we would expect US revenues to be in the mid seventies and internationals to be $5 million to $8 million.

[Tessa Romero, JP Morgan]

Okay. And just a quick follow up. Thanks Bo. That was helpful. I think Sue alluded to this in some of her earlier comments, how are patients treated on average with DANYELZA? And what are you hearing in your market research on any, like, recent dynamics around DANYELZA [indiscernible]?

[Thomas Gad]

Go ahead, Sue.

[Sue Smith]

I can take that, Tessa. So in terms of the dynamics with dinutuximab, we are essentially slowly cannibalizing dinutuximab quarter-over-quarter, with a growth in GD2 market share. And predominantly I think there -- this is really because doctors and caregivers are just seeing that DANYELZA is a good product. Our account is very focused on where the business is, and we're consistently adding new customers from a breadth standpoint with in the first quarterly 19 patients outside of Sloan Kettering. We also, from a depth standpoint, saw a significant increase from Q3 2022 last year to Q1 in this year of nearly half of our new customers with two or more patients. So they're getting more confidence and they're starting to now have multiple patients on. So I think slowly those are what are contributing to our gaining more confidence in the market as a GD2 of choice.

[Tessa Romero, JP Morgan]

Okay. And how long are patients treated on average?

[Sue Smith]

Our average number of cycles is about four with a range from one to eight roughly.

[Tessa Romero, JP Morgan]

Thank you.

[Operator]

Thank you. Your next question comes from David Nierengarten at Wedbush Securities. Please go ahead.

[David Nierengarten, Wedbush Securities]

Hey, thanks for taking the question. I had one on SADA in lymphoma. I was just wondering if there was anything that you saw or could point us to on the blood cancer side that would support use or, scientifically, what's the rationale behind using this construct in a liquid tumor setting? Thanks.

[Thomas Gad]

Go Vignesh

[Vignesh Rajah, Senior Vice President and Chief Medical Officer]

Yes. Well, the rationale is aimed at the fact that number of hematological malignancies express how well known to express CD38. So our focus is on the non-Hodgkin's lymphoma. We know that her B-cell lymphoma has had a number of therapies that says show to be affected, but there's more of an unmet need in T-cell lymphoma. So we are looking at expanding our development in this particular indication. CD38 has obviously expressed another tumor such as multiple myeloma, CLL, et cetera. But this is the initial tumor indication that we want to expand in.

[David Nierengarten, Wedbush Securities]

Sorry, just a follow up. I mean, there's been a lot of challenges developing radiation and therapies and liquid tumors because of side effects, myelosuppression, things like that. Are there, ex, or other characteristics that you've seen that, help you to avoid that? Is it just the fast clear, is it something else about the technology that's important to differentiate and supports its use in a lymphoma setting?

[Thomas Gad]

Yes. I think the -- where we anticipate the CD38 SADA to differentiate itself from other current therapies or investigational therapies is precisely what he just said, is in the safety aspects and the therapeutic index from its clearance profile. And we believe that the uptake from the tumor and removing this CD38 from the circulation because it rapidly disassembles in the serum, therefore allowing -- when we do administer the radioactive payload for minimal systemic circulation or radioisotope and therefore systemic side effects, we think this could potentially be a game changer as far as the therapeutic index. So I think this is where we see this adding to the [indiscernible] of physicians, managing these patients who may not always have the ideal performance status in this group.

[David Nierengarten, Wedbush Securities]

Thanks.

[Operator]

Thank you. And the next question comes from Sebastian S at VLK [ph] . Please go ahead.

[Unidentified Analyst]

Hi, team. Congrats on the excellent sales and thank you for taking my questions. The first question is on DANYELZA. I was just wondering to if you can maybe give a breakdown on the numbers of centers that actually treat patients on a more consistent basis versus those that are sporadically treating based patients. I want just to get some insight onto how the market has been growing for you guys.

[Sue Smith]

Sure, Sebastian. So as you can imagine, as we've seen the growth occurring the -- while our vial sales and our patients are increasing, because the accounts that we have in place are treating more than two patients, the number of accounts it does not need to increase quite so commensurate with the vial sales. So essentially what we look, we are adding an average of about five new accounts per quarter with a range of two to nine. And we currently have 53 customers treating. At any given time in our hub, we are now averaging about 30 active patients who are either in treatment or getting their insurance coverage approved for treatment. And so in the first quarter, we saw that basically half of our current accounts are actively treating patients.

So in the first quarter we had about 27 accounts with new customers, receiving a shipment in the first quarter. And so they're smaller numbers, obviously, because we're looking at an ultra rare indication. But the growth that we're seeing is predominantly ex-MSK where we really grew our volume of sales, quite -- we were over 150% of our internal goal for ex-MSK growth. So that's the -- like I was saying before, I think the growth that we're seeing is a healthy combination of the patient finding work the team is doing. And it's spread out well over the country and growing in the depth in the number of patients per account. So first quarter we have 19 patients outside of MSK in first quarter, that word you start 19 new patients.

[Unidentified Analyst]

Okay. Got it. Thank you so much. And then, on SADA, I just was wondering, you mentioned that you did not see tumor targeting with the first dose cohort. Based on your preclinical work, can you say something on when you do expect to see actually tumor targeting?

[Thomas Gad]

Thanks. I'm not sure if we can -- I mean, definitely 0.3 milligram is obviously expect to be too low, but should it be one or three? I mean, we dose three milligrams with our IgG, so -- but Vignesh, do you want to add to that?

[Vignesh Rajah, Senior Vice President and Chief Medical Officer]

Yes. It's another easy question to answer when would you expected, but I think the like explanation for why we've not seen this is the very low starting dose of either the SADA protein and also potentially the radioactive -- radioactivity of the imaging dose. So there is provision within our study design to increase that from 30 millicuries to 90 millicuries if there are a certain number of patients who are not able to show this imaging capture. So almost certainly it's the dose that's contributing to perhaps not this being picked up at this stage. But we anticipate that obviously as we escalate to higher doses, we anticipate this to sharp much more predictably.

[Unidentified Analyst]

Okay. Got it. Thank you so much.

[Operator]

Thank you. At this point, it seems there are no further questions. I'll turn the call back over to Thomas Gad for closing remarks.

[Thomas Gad]

Thank you. Thank you everyone for your questions. And Sue, Vignesh and Bo, thanks for joining, and have a great day.

[Operator]

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and we ask that you please disconnect your lines.