MorphoSys AG (NASDAQ:MOR) Q2 2023 Earnings Call Transcript

MorphoSys AG (NASDAQ:MOR) Q2 2023 Earnings Call Transcript August 10, 2023

Operator: Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the MorphoSys Second Quarter and First Half 2023 Financial Results. Throughout today’s recorded presentation all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Julia Neugebauer. Please go ahead.

Julia Neugebauer: Ladies and gentlemen, good afternoon or good morning. My name is Julia Neugebauer, Head of Investor Relations at MorphoSys. And it is my pleasure to welcome you to our 2023 half year financial results conference call. With me on the call today are Jean-Paul Kress, our Chief Executive Officer; Tim Demuth, our Chief Research and Development Officer; and Lucy Crabtree, our new Chief Financial Officer. Before we begin, I’d like to remind you on Slide 2 that some of our statements made during the call today are forward-looking statements, including statements regarding our expectations for the commercialization of our products and our development plans and expectations for the compounds in our pipeline as well as the development plans of our collaboration partners.

These forward-looking statements are subject to a number of risks and uncertainties that may cause our actual results to differ materially, including those described in MorphoSys 20-F and annual report all for the year ended December 31, 2022, and from time to time in other SEC documents of MorphoSys. It is important to keep in mind that our statements on this webcast speak as of today. On Slide 3, you will find the agenda for today’s call. Jean-Paul will begin with an overview and give an outlook. After that, Tim will share an update on our clinical development work and then Lucy will provide a summary of our first half 2023 financial results. Following our prepared remarks, we will open the call for your questions. With that, I now hand the call over to Jean-Paul.

Jean-Paul Kress: Thank you, Julia. Good morning and good afternoon, everyone. Thanks for joining us today. We had an extremely productive and strong first half of 2023. We delivered and surpassed expectations on our key priorities, and we will continue to build on this great momentum as we enter an exciting second half of the year. We completed enrollment of two of our pivotal trials ahead of schedule, the MANIFEST-2 study of pelabresib in first-line myelofibrosis and the frontMIND study of Monjuvi in first-line DLBCL. Additionally, our partner Incyte completed enrollment for inMIND, the Phase 3 study of Monjuvi in patients with relapsed/refractory follicular lymphoma or marginal zone lymphoma. Furthermore, we presented updated results from our tulmimetostat Phase 1/2 study, showcasing the therapy’s best-in-class potential in an array of cancer types.

We also took steps to further strengthen our financial position. Today, we are well financed to drive forward our promising mid to late stage clinical programs with more than 12 months of cash available following the top line readout of the MANIFEST-2 study. Also, Lucy Crabtree joined us this month as our new Chief Financial Officer. We are very pleased to officially have her on board. Pelabresib, our investigational BET inhibitor, is a potential best and first-in-class foundational first-line treatment for patients with myelofibrosis. With this therapy we have the opportunity to substantially improve the standard of care for this debilitating and difficult-to-treat disease. Today, JAK inhibitors such as ruxolitinib are the standard of care to treat myelofibrosis.

These medications can reduce spleen size and relieve symptoms of myelofibrosis, but they do not address its codes. Furthermore, with this treatment strategy, only about 50% of patients achieved initial adequate disease control. And for many, that relief fades with time. The results from our Phase 2 MANIFEST study suggest that pelabresib in combination with ruxolitinib offers prolonged improvement in both spleen size and symptom severity at and beyond 24 weeks. Further to this, in the MANIFEST study changes in biomarkers correlated with improvements in clinical measures of treatment success, suggesting a potential disease-modifying effect of pelabresib. We believe this data underscore the strength of this combination therapy and its potential to be the future standard of care in myelofibrosis.

Based on precedent in first-line myelofibrosis, we believe that the results from Phase 2 studies are strong indicators of what can – we can expect to see in Phase 3 trials. As such, based on our strong Phase 2 results, we are very optimistic about the performance of the pelabresib and ruxolitinib combination in our pivotal trials. With top line data from the MANIFEST-2 trial now expected by year’s end, we are hearing increased excitement from physician and patient communities around pelabresib, reflecting the dire need for more effective and well-tolerated therapies to treat myelofibrosis. We will remain laser focused on pelabresib in first-line myelofibrosis delivering the Phase 3 MANIFEST-2 study results and simultaneously preparing our regulatory filings in the U.S. and Europe this year.

That said, we also see great possibilities for pelabresib beyond myelofibrosis. And we will continue to explore its therapeutic potential in other myeloid diseases including lower-risk myelodysplastic syndrome, also known as MDS, and essential thrombocythemia, also known as ET. Tim will share more on this shortly. Moving to Monjuvi now. Monjuvi is our CD19 targeting immunotherapy. It continues to be prescribed to certain adult patients with relapsed or refractory DLBCL. In the second quarter, Monjuvi net sales were US$23.6 million. This represents a 14% quarter-over-quarter growth and is on track with our 2023 guidance. Beyond the currently approved indication, we see the largest potential upside for Monjuvi in the first-line DLBCL setting, which we are investigating in our Phase 3 frontMIND study.

The trial randomized nearly 900 patients with data projected to be available in the second half of 2025. Also, Monjuvi use in relapsed/refractory follicular lymphoma and marginal zone lymphoma is being explored in the Phase 3 inMIND study. This data will be available in 2024. We have a strong U.S. commercial infrastructure in place for Monjuvi. We have encountered a large overlap in treating physicians of DLBCL and myelofibrosis, especially in the community setting where we have established relationships. This would enable us to launch collaborative smoothly. We’ve made exceptional progress with our pipeline. As a result, we have a rich set of catalysts from our pivotal studies over the next two years. Additionally, our key partner programs are progressing very well.

These programs develop via our legacy antibody technology platform include Ianalumab, Abelacimab, Setrusumab, and Bimagrumab. Why not the core focus of our business strategy, these programs offer potential upside and provide us with options for non-dilutive financing. I will now turn the call over to Tim to provide a development update. Tim, over to you, please.

Tim Demuth: Thank you, Jean-Paul. The Phase 3 MANIFEST-2 study is our number one priority. In this trial, patients naïve to JAK inhibitor therapies were randomized one-to-one to pelabresib in combination with ruxolitinib or placebo plus ruxolitinib. Recall that after we acquired Constellation, we optimized the MANIFEST-2 study by increasing our target enrollment from 310 to 400 patients. In the end, we randomized 431 patients. The primary endpoint of the study is the proportion of patients who achieve a 35% or greater reduction in spleen volume at week 24 known as SVR35. The key secondary endpoint of the study is the proportion of patients achieving a 50% or greater improvement in total symptom score known as TSS50. In addition to these two endpoints, we are also measuring the percent change in total symptom score at week 24, progression-free survival, overall survival, duration of splenic and total symptom score response and improvement in bone marrow fibrosis among others.

We’re confident that the comprehensive MANIFEST-2 data package will provide meaningful insights into the potential benefits of pelabresib and ruxolitinib as a first line combination therapy for patients with myelofibrosis. Our Phase 3 MANIFEST-2 study is supported by our Phase 2 MANIFEST trial. These studies are very similar in terms of inclusion and exclusion criteria, endpoints and treatment regimen. Based on this and the overall body of data we have presented thus far, we remain very confident in the pelabresib, ruxolitinib combination and the outcome of the Phase 3 MANIFEST-2 trial. We saw strong efficacy and safety results in the Phase 2 MANIFEST trial data that were presented most recently at the 2023 EHA Annual Meeting in June. At week 24, 68% of JAK inhibitor-naïve patients treated with pelabresib and ruxolitinib combination achieved at least a 35% reduction in spleen volume from baseline.

Furthermore, 56% of patients had at least a 50% reduction in their total symptom score from baseline. These deep and durable responses were maintained at 60 weeks. The most common treatment emergent adverse events were low grade. This data suggests that pelabresib and ruxolitinib is a well-tolerated combination therapy. We compared MANIFEST Arm 3 with three historical JAK inhibitors studied in randomized double-blind Phase 3 trials using a method called Matching-Adjusted Indirect Comparison or MAIC Analysis. MAIC is a robust method that ensures fair and reliable comparisons between trials. It does this by making adjustments for differences and select baseline characteristics across the studies. Our analysis showed that pelabresib in combination with ruxolitinib offers at least 1.4 times better symptom control compared to ruxolitinib monotherapy in JAK inhibitor-naïve patients.

These findings were recently published in blood advances. Also at the 2023 EHA Annual Meeting, we presented new data showing that hemoglobin levels were not only stabilized, but importantly improved over time in JAK inhibitor-naïve patients treated with the pelabresib and ruxolitinib combination. This has not been observed with ruxolitinib monotherapy as treatment of this therapy has been shown to cause a drop in hemoglobin levels. While our focus in 2023 remains on collaborative and first line myelofibrosis, we see opportunities for collaborative beyond this disease. At this year’s ASCO and EHA Annual Meetings, we presented results from Arm 4 of the Phase 2 MANIFEST study. This arm of this study is investigating pelabresib as a monotherapy in patients with high risk ET or refractory or intolerance to hydroxyurea, the chemotherapeutic agent most commonly used to treat the disease.

The primary endpoint of this arm of this study is confirmed complete hematologic response. The secondary endpoint includes confirmed partial hematologic response and symptom improvement. To date, our finding suggests that collaborative monotherapy provides a potential clinical benefit for this ET patient population. 60% of patients treated with pelabresib monotherapy had a confirmed, complete, or partial hematologic response at any time. At the data cutoff, 14 of 20 patients were still undergoing treatment. Importantly, an early normalization of platelet counts was achieved in many patients with white blood cell counts and hemoglobin stable throughout treatment. This suggests that collaborative monotherapy can normalize platelet counts without causing anemia or thrombocytopenia.

Further, the results show that half of the treated ET patients had a 50% reduction in total symptom score from baseline at any time. These proof-of-concept results support pelabresib’s expansion into other myeloid diseases. As such, we will continue our ongoing evaluation of pelabresib in ET in the MANIFEST study. We also plan to initiate a Phase 2 study in lower risk MDS in 2024. We’ll then determine our Phase 3 development strategy following these assessments. Moving on to tulmimetostat, our investigational next-generation dual inhibitor of EZH2 and EZH1. Tulmimetostat was designed to improve on first generation EZH2 inhibitors to increase potency, longer residence time on targets, and a longer half-life offering the potential for enhanced anti-tumor activity.

It is currently being evaluated in the Phase 1/2 trial for advanced solid tumors for lymphomas. Updated results from the Phase 2 portion of the study represented at ASCO 2023. The data suggests responses or disease stabilization across all solid tumor cohorts, including those with heavily pretreated patients. Notably, complete and partial responses were also observed in the lymphoma cohort. Precisions have expressed great excitement about the deep responses seen in these heavily pretreated patients, the majority of whom currently have limited or no treatment options. These preliminary results are very promising and showcase the therapies best-in-class potential in an array of cancer types. As we continue to generate data from the dose finding portion of our Phase 1/2 study, we will continue to evaluate our future development plans for tulmimetostat.

With that, I will now turn the call over to Lucy to review our financials.

Lucy Crabtree: Thank you, Tim, and good morning and good afternoon to, everyone. I’m delighted to finally be with you today having completed my prior role as CFO of Autolus. This is an incredibly exciting time to be joining MorphoSys, and my focus will be to support the business in driving value for shareholders by enabling the successful progression of our oncology portfolio. We’re pleased to share our financial results for the second quarter and first half of 2023. Monjuvi sales were $23.6 million in the second quarter of 2023, reflecting a sequential growth of 14% and a year-over-year growth of 2%. We also recorded €2.2 million or $2.4 million in royalty revenue from Monjuvi sales outside of the U.S. from our partner Incyte in the second quarter of this year.

The sequential increase is mainly driven by a one-time effect coming from previously deferred revenues related to Incyte’s early access program in France. Total revenues in the second quarter of 2023 were €53.2 million compared to €59.4 million in the same period a year ago. The year-over-year decrease resulted primarily from lower expenses related to file sales to our partner Incyte. Recall that MorphoSys provides Incyte with Monjuvi supply for ex-U.S. sales. This supply is recorded as revenue, specifically reflected in the licenses, milestones, and other category under revenue and an equal amount is recorded in cost of sales yielding a zero gross margin. Total cost of sales was €7.7 million in the second quarter of 2023 compared to €17.2 million a year ago.

Cost of sales specific to Monjuvi U.S. product sales was €4.1 million in the second quarter of 2023 compared to €4.3 million on the second quarter of 2022. Turning to operating expenses. R&D expenses in the second quarter of 2023 decreased slightly to €57 million compared to €60.9 million for the second quarter of 2022. Selling expenses decreased to $20 million – €22 million in the second quarter of 2023 compared to €24 million for the same period in 2022. The year-over-year decline was driven by streamlining and focusing of selling efforts. G&A expenses in second quarter of 2023 was €17 million compared to €12.4 million in the second quarter of 2022. The increase mainly results from increased expenses related to stock-based compensation.

For the second quarter of 2023, we reported a consolidated net loss of €74 million compared to a net loss of €235 million in the second quarter of 2022. As a reminder, the results for the second quarter of 2022 was mainly driven by finance expenses resulting from FX effects for the Incyte and Royalty Pharma liabilities. Turning to our balance sheet. We ended the second quarter of 2023 with cash and investments of €672.8 million compared to €907.2 million at the end of 2022. Recall that in the first half of this year, we spent approximately €40 million to repurchase parts of our convertible bonds to reduce our debt and to take advantage of the market dynamics as the bond is trading with a significant discount. Our solid cash position enables us to not only reach the pivotal data milestone for the Phase 3 study of pelabresib, but to also provide a cash runway of at least 12 months beyond the pivotal data readout.

Turning to our guidance for 2023, we are reiterating our guidance that was provided at the beginning of January this year. All aspects of our guidance remain the same. With that, I’ll now turn the call back to Jean-Paul.

Jean-Paul Kress: Before we open up the line for questions, I’d like to conclude with a few words. The first half of 2023 has been marked by exceptional progress at MorphoSys. We have over delivered on our key priorities and are excited to build on this great momentum in the second half of the year. Pelabresib represents a large and unique opportunity to address the critical needs of myelofibrosis patients. We are very optimistic about the potential for pelabresib to improve the standard of care as a foundational first line treatment. Body of data, we have presented thus far along with the size of our Phase 3 MANIFEST-2 study give us high confidence in pelabresib’s clinical success. We very much look forward to sharing the results of the MANIFEST-2 study later this year. With that, I would like to open the call for questions. Operator, please open the line.

Q&A Session

Operator: Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions] The first question is from Xian Deng from UBS. Please go ahead.

Xian Deng: Thank you. Thank you for taking my questions. Two, please. The first one to Lucy, if I may. So just wondering, since you joined MorphoSys, just wondering what are your first impression of the new CEO? What is your strategy? What’s your priority here? Anything you would like to – you could share that would be amazing. And the second question is kind of collaborative. Just wondering, now we have seen the Navitoclax pipeline data. Just wondering, if there’s, I mean, a lot of people have asked that what would happen if pelabresib also reported mixed data in terms of if it has the primary endpoint on this TSS50. So now Navitoclax actually reported like that. Just wondering, have – does it change any of your fault on this and does this makes you more or less relaxed about it? Thank you.

Lucy Crabtree: Hi. So thanks for your question. I mean, look, I am incredibly excited about joining MorphoSys. It’s a really pivotal point in time with the data towards the end of this year. So I just want to sort of stress my excitement around the positioning of MorphoSys and what we’ve got ahead of us. In terms of priorities, I’ll just reiterate what I had in my prepared statements, my focus is on growing shareholder value. It is supporting the business to deliver what we believe is an incredibly exciting future product for myelofibrosis. And obviously as you might expect continue to diligently manage our expenses than our cost base.

Jean-Paul Kress: Thanks, Xian, for the question on the competition event that everyone has seen a couple of weeks ago. Look, we think it is out – this outcome is actually extremely positive from MorphoSys. And for us, AbbVie result is not a surprise as they basically replicated their Phase 2 trial. We have very high confidence in a positive MANIFEST-2 trial outcome for the following reasons. Number one, our study is very well powered. We have upsized the trial after the takeover of Constellation to 400 patients, and we have over-enrolled to 431 patients, which is almost double from the AbbVie’s numbers. The TRANSFORM-1 study is 252 patients. So we are very well powered and much more power than they are. In our Phase 2 trial, remember, we’ve shown a strong efficacy, our data was very strong on both end points.

If we are 35% or 68% and TSS50 of 56%, and our safety results were actually very good. So this puts us apart from the competitor. We really think we have the best asset out there in myelofibrosis. So as we saw recently, Phase 2 first line myelofibrosis trials results are strong proxy for Phase 3 trials. So based on that and are strong Phase 2 results, we think we’ll have a very strong outcome with our Phase 3 trial and we’re very confident in that. So basically we strongly believe in our assets and we think we have the best out there.

Xian Deng: Thank you very much.

Jean-Paul Kress: Thanks.

Operator: Next question is from Derek Archila from Wells Fargo. Please go ahead.

Derek Archila: Hey, good morning and thanks for taking the questions. Just two from us. So maybe just piggybacking on that first set of questions, can you just discuss any specific differences in the enrollment criteria between the AbbVie trial and MANIFEST-2? And then the second question is, so GSKs momelotinib approval is coming up. So I guess, we were wondering, how you view that approval or potential approval in the context of the FDA’s flexibility around efficacy endpoints in myelofibrosis. Because that drug was technically not inferior to ruxolitinib, but it was numerically inferior. So would love to get your comments there. Thanks.

Tim Demuth: Hi, Derek, this is Tim. On the differences between the Navitoclax and our study generally the patient population is very comparable first-line patients with myelofibrosis naive to JAK inhibitors, namely ruxolitinib. As Jean-Paul mentioned, and I will just emphasize that again, and I said it in my prepared remarks already our Phase 2 study showed very strong results on spleen volume response and TSS50 AbbVie shows very clearly that Phase 2 results are very well replicated in Phase 3. If that holds true for us, I think we’re in a very good shape and we continue to be super confident.

Jean-Paul Kress: And now on GSK, maybe I could add that basically, it’s not the same regimen. We are obviously exploring a combination regimen in first line. It’s not the case for them. So the pilot is very difficult to draw. They’re not looking at the same market. So I would stop my comments here and we’ll see what happens in the next couple of months with them.

Derek Archila: Got it. Thanks so much.

Jean-Paul Kress: Thanks.

Operator: The next question is from Jason Butler from JMP. Please go ahead.

Jason Butler: Hi, thanks for taking the question, but I just had two. First of all, can you just reiterate for us your confidence that 24-week data will be sufficient to support approval and you’re not expecting to need longer duration of follow-up to – for approval for pela and myelofibrosis. And then can you just walk us through the landscape in essential thrombocytopenia and just how you think the pela can fit into that treatment landscape? Thank you.

Tim Demuth: Thanks Jason. This is Tim. So we know very well from interactions with agencies on both side of the pond, namely FDA and EMA, what the approval endpoints are, and that’s to your point, is the 24-week landmark for SVR35 and TSS50. On the question regarding the ET landscape, first things first, obviously, we will bring home MANIFEST-2 first. We shared the very exciting and very strong proof-of-concept data in essential thrombocythemia for these patients. It’s, of course, very, very important to have normalization of their platelet count. It’s important for them to have good hematological parameters. And those are two key signs our data is showing. These patients also experience commonly symptoms, which are measured in the total symptom score improvement here in our ARM-4 data from MANIFEST shows very encouraging data. So I think that’s a very strong and comfortable basis for us to develop further steps.

Jason Butler: Great, thank you.

Operator: Next question is from James Quigley from Morgan Stanley. Please go ahead.

James Quigley: Hello. Thank you for taking my questions. So I got a couple here. So just to your point about the approval endpoints of SVR35 and TSS50. Just in thinking about in context of the other secondary endpoints, so you’ve mentioned PFS and OS that you’re looking at. So to what extent is there flexibility around TSS50 if the other end points are hit? So, for example, if it does happen to MANIFEST that if you hit on SVR35 not on TSS50, but you have a PFS benefit and OS benefit. To what extent is there flexibility around that in terms of discussions with the FDA. And secondly, with regard to timing of the data, as we get close to the end of the year, to what extent could an ASH presentation be possible for MANIFEST-2, the late-breaker deadline is towards the end of October. And is there a possibility for a placeholder for MANIFEST 2 at ASH or is that a zero probability scenario? Thank you.

Tim Demuth: Hi, James. It’s Tim again. So yes, in terms of approval endpoints, again, we’re very clear on what we need to show SVR35, TSS50 at week 24. As you pointed out, additional endpoints are, of course, included in the study, a secondaries to provide more coloring and to provide a view on what ultimately matters to patients most, that’s, of course, survival and, of course, safety. Let’s not forget about tolerability for the somewhat chronic treatment, super important for patients to live longer with a very good quality of life, all primaries we’re looking at. Agencies typically evaluate the clinical package based on what they call the totality of the evidence. So all these parameters will be taken into consideration by the agency.

And again, we feel super comfortable and super confident in that Phase 3 design based on increasing sample size, strong Phase 2 data, et cetera. On the timing, we accelerated our top-line readout, as you know, by at least six months. And I think we’ll leave it at that, and we’ll be very excited to share that top line data with the scientific community and, of course, the investor community by the end of the year.

Jean-Paul Kress: And James, I would just add that when we acquired Constellation, we were more than one year behind the other company exploring first-line combination therapy, and now we are probably ahead, so I think already that tells a lot.

James Quigley: Excellent. Thank you very much.

Jean-Paul Kress: Thanks, James.

Operator: The next question is from Manos Mastorakis from Deutsche Bank. Please go ahead.

Manos Mastorakis: Hi. Thank you for taking my question. Manos Mastorakis from Deutsche Bank. So first question for Jean-Paul and Tim. If you could give some color on your partnered programs and more detail on the catalysts involved there as well as your confidence in those and some color on expected royalty size. And perhaps a sub-question on that is what are your thoughts and any impact on the acquisition of your partner Versanis Bio to Lilly for the bimagrumab program. Yes, that’s it. Thank you.

Jean-Paul Kress: Thank you, Manos. Well, we continue to be very excited and impressed by the performance of our partners. In the past, we’ve mainly singled out ianalumab, from now with Novartis. Novartis has said that ianalumab has been explored in a couple of Phase 3 trials in autoimmune diseases. And they mentioned that it’s going to be one of their top blockbusters in the future. So Phase 3 plus size of the opportunity is very promising. Remember what we had with Janssen and Tremfya. So this is great. But the news here that we didn’t really have time to tell you in the prepared remarks is on bimagrumab, which is an obesity treatment that we have in partnership with Versanis Bio. And Lilly, as you know, is going to acquire Versanis Bio and they have a Phase 2b ongoing study.

Everybody knows the excitement around the obesity market right now when there is really a breakthrough coming up. So – and Lilly is obviously a huge name in the space. So we’re superior excited with that as well. So long story short, we have a couple of key opportunities here, which are the legacy pipeline. We don’t really showcase it because it’s not what we are focusing on operationally. But in the equation – in the financing equation, it’s very important because that can mean royalties and our monetization as we’ve shown very handsomely with Royalty Pharma for Tremfya and other assets. So this is great. It doesn’t take any time. It is a pure upside, and I wouldn’t discount that in your models.

Manos Mastorakis: Okay.

Operator: [Operator Instructions] The next question is from Rajan Sharma from Goldman Sachs. Please go ahead.

Rajan Sharma: Hi. Thank you for taking my question. Just to follow up a little bit more on pelabresib and specifically on the TSS50. So could you just maybe talk to the potential differences between MANIFEST-2 and TRANSFORM, which is Navitoclax trial, which gives you confidence that you will hit on TSS50 outside of just the powering? And then secondly, are there any kind of particular symptoms which make up the components of the TSS50, which you’re most confident on given pela’s mechanism relative to other agents that we’ve seen in the field? And then kind of related in ARM 3 MANIFEST, do you know what proportion of patients achieved both SVR35 and the TSS50 endpoint? Thanks.

Jean-Paul Kress: So I’ll start by the first part, Rajan, and Tim will comment on the next one. I’ll come back to my first comments for the first question in the call, I mean the fact that we have both the power, which is way above or bigger than the power from AbbVie and the fact that our Phase 2 trial showed great results on both endpoints is very – it’s very strong and make us very confident in the outcome. That’s really, really the main thing that you have to keep in mind here. I mean the Phase 2 is a very good proxy for the Phase 3. It was demonstrated a couple of weeks ago. Remember that AbbVie had a 42% TSS50 score in the Phase 2 trial, we have 56%. So we’re not surprised again so – and we are extremely confident in the outcome of the Phase 3 trial. Now on the details on the TSS50.

Tim Demuth: Yes. Hi, Rajan. This is Tim. Obviously, we cannot comment too much on the AbbVie trial design. What I think we can assume is that everybody in this day and age is using the same two, to assess TSS, that’s the myelofibrosis symptom assessment form, version 4.0. It’s a validated tool. It’s the tool that the health authorities urge strongly suggest a sponsor to use. So from that perspective, it’s a totally level playing field. And again, our MANIFEST Arm 3 data gives us a very good benchmark, what to expect from the Phase 3 and that obviously is very exciting to us. I think we mentioned it in the prepared remarks, but just to reiterate, having tried to sample size of that other molecule is the level of confidence that makes us feel very good about this.

Operator: The next question is from Ingrid Gafanhao from Bryan Garnier. Please go ahead.

Ingrid Gafanhao: Hi, good afternoon. Thank you for taking my question. I have two, if I may. I have a quick follow-up regarding the secondary endpoint for collaborative Phase 3 trial, more specifically on PFS and OS. Noting that we know these two outcomes can take a little bit more time from myelofibrosis patients, what do you have in mind in terms of how long follow-up would you need to see to be able to comment something on those two endpoints? And my second question is actually for your plans in MDS or risk MDS, have you actually identified any subpopulation of MDS that you preferably target or should we expect a more broader trial next year? Thank you.

Tim Demuth: Thanks, Ingrid. I’ll start with the last question first. On the MDS trial design, we’re currently looking at a proof of concept study. It would be our fourth proof of concepts with pelabresib, so further strengthening the foundation of the program. In terms of subpopulations, we’re looking at low risk patients with MDS and we believe we have a good chance of showing a benefit with pelabresib in monotherapy. On the MANIFEST-2 questions regarding to additional endpoints PFS and OS, as you rightfully mentioned it takes some time for this data to mature. The study will continue collecting this follow-up from patients, duration of treatment is very good as we’re seeing in MANIFEST Arm 2. The symptom control and the spleen control we’ve shown up to 60 weeks giving us a lot of confidence that there will be a change and an improvement in these two very important endpoints.

Jean-Paul Kress: But it suffice to say that we don’t need that for the regulatory approvals. The regulatory approvals is at 24 weeks. And on the two endpoints we mentioned SVR35 and TSS50. So we’ll substantiate data as we’ve always done with our studies with long-term data. But again, in MS, there is no – I mean, always takes a lot of time to come.

Ingrid Gafanhao: Thank you.

Operator: We have a follow-up question from Manos Mastorakis from Deutsche Bank. Please go ahead.

Manos Mastorakis: Hi, thanks, again. So just wanted to check your thoughts on and confidence on collaborative commercial appetite, assuming you have your best case scenario data. Thank you.

Jean-Paul Kress: Yes. So the strengths of the data are paramount here. And from what we have seen on the Phase 2 and what we believe will be on the Phase 3, we think we’ll have the data to establish a new standard of care here. So that being said, we already have a commercial and medical affairs hematology oncology organization as you know with our currently commercialized assets Monjuvi in R DLBCL. So – and there is a lot of overlap between the customers. So we have the engagements already, we have the relationships. We’re not – we will not be a first time launcher for pelabresib, so a huge difference from the days of the launch of Monjuvi.

Operator: [Operator Instructions] The next question is a follow-up from Rajan Sharma from Goldman Sachs. Please go ahead.

Rajan Sharma: Hey, thanks for taking my follow-up. So I’ve actually got one on DLBCL and I was just wondering just kind of if there’s been a change in the competitive dynamics that you’re seeing following kind of the negative clinical update for Zynlonta and then I realize it’s a slightly different label, but just any thoughts on kind of initial competition from the CD20 bispecifics that have now launched. And then just to follow-up on MANIFEST-2 again, sorry. Just in ARM-3 of MANIFEST, I was just wondering, do you have the number of patients that achieved both SVR35 and TSS50? So they hit on both endpoints rather than just hitting on one. Thank you.

Jean-Paul Kress: Rajan, I will take the DLBCL question and Tim will comment on the other one on pela. For DLBCL, we are – we continue to educate on our strong long-term data and most recently the five years data in R DLBCL, very good traction with it. But as you mentioned, there is increasing competition. We think we’re doing pretty well in the context of this intensity in the market. Well, we really see the inflection point that is with new indications and probably mainly with the first line DLBCL. We commented in our prepared remarks on the completion of recruitment for our first line Phase 3 trial frontMIND, we enrolled 900 patients, which in this market is remarkable. There is a lot of interest for first line DLBCL as you know, there are not many therapies out there.

And what we had with the Roche data or an approval a couple of months ago is very encouraging for us because we have made the right choices in terms of clinical trial design for this frontMIND study. So we just have to be patient because it’s a PFS driven study and I mean we think we will have a strong data and it’ll be a very good propeller for Monjuvi. In terms of other assets news on that that you mentioned in first line, I think yes, well, it’s good for us. Tim?

Tim Demuth: Yes. Rajan, on the question percentage of patients who achieve both SVR35 and TSS50 in Arm 3 of MANIFEST, that data has not been published yet, so in the future conference.

Rajan Sharma: Okay. Thank you.

Tim Demuth: Yes.

Operator: There are no further questions at this time. I hand back to Julia Neugebauer for closing comments.

Julia Neugebauer: Ladies and gentlemen, this concludes today’s conference call. If any of you would like to follow-up for this Investor Relations team is available for the remainder of the day. Once again, thank you for joining our call. Have a good day and goodbye.

Operator: Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day. Goodbye.