Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q2 2023 Earnings Call Transcript August 11, 2023
Operator: Good morning, and welcome to the Y-mAbs Therapeutics, Inc.’s Earnings Conference Call for the Second Quarter of 2023. At this time, all participants are in a listen-only mode. Instructions for the question-and-answer session will follow after the prepared remarks. As a reminder, today’s conference will be recorded. I’ll now hand it over to Y-mAbs’ Head of IR, Courtney Dugan.
Courtney Dugan: Thank you. 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, our research and development programs, expectations related to the timing of the initiation and completion of regulatory submissions, regulatory, marketing, and reimbursement approvals, including statements with respect to future development of other development programs, potential for DANYELZA territory expansion and advancement of SADA, collaborations for strategic partnerships and the potential benefits thereof, expectations related to our anticipated cash runway and the sufficiency of our cash resources and assumptions related thereto, guidance and expectations for 2023 and beyond and our financial performance, including our estimates regarding revenues, expenses and capital expenditure requirements and other statements that are not historical facts.
Because forward-looking statements involve risks and uncertainties, they are not guarantees of future performance, and actual results may differ materially from those expressed or implied by these forward-looking statements due to a variety of factors, including those factors discussed in the company’s quarterly report on Form 10-Q for the quarter ended June 30th, 2023 as filed with the SEC on August 10th, 2023. With that, I’d now like to turn the call over to our Founder, President, and Interim CEO, Thomas Gad.
Thomas Gad: Thank you, Courtney, and good morning, everyone, and thank you for joining us today. Today I have with me our Chief Financial Officer, Bo Kruse; our Chief Commercial Officer, Sue Smith; and our Chief Medical Officer, Dr. Vignesh Rajah. In today’s call, I’ll begin by providing a review of our second quarter product sales and DANYELZA highlights, updates on the additional naxitamab research currently underway. I’ll also touch on key clinical highlights from the quarter and an update on our novel pretargeted two-step radiopharmaceutical platform, the SADA Y-PRIT. Vignesh will then discuss further details our ISS programs under DANYELZA as well as our progress on our SADA Phase 1 study, followed by Sue Smith, who will report further insights into our DANYELZA US and ex US sales.
Bo will then provide an overview of our second quarter financial performance, our cash position and reiterate our full year 2023 guidance. And then, we’ll open up the line for Q&A. Let me begin with a high level update on the year so far. As you know, we successfully implemented a strategic deprioritization of our pipeline focusing on DANYELZA and the SADA platform earlier this year. Our execution has been swift as our first half financials demonstrate, allowing us to extend our estimated cash runway into 2026. I’m incredibly proud of our team’s resilience over the past several months and the steadfast dedication to realizing our mission of providing innovative therapeutic options in the fight against cancer, particularly pediatric cancers.
As we look ahead to the rest of 2023 and beyond, we are in a healthy financial position with $87.9 million in cash and cash equivalents at the end of the second quarter of 2023. We have a firm strategy in place that focuses on growing DANYELZA’s net sales, which we believe will enable us to continue to advance our SADA platform through clinical development while being disciplined on our R&D spend and at the same time, deliver long-term value to both patients and investors alike. Let me turn to the highlights on our DANYELZA franchise. As a reminder, DANYELZA is approved by the US FDA for the treatment of relapsed and refractory high-risk neuroblastoma in bone and bone marrow for patients who have demonstrated a partial response, minor response or stable disease to prior therapies.
Neuroblastoma is the most common cancer in infants and the third most common cancer in children. In the second quarter of this year, we achieved $20.8 million in net product sales of DANYELZA, more than double, up 112% from what we recorded in the second quarter of 2022 and up 3% from our previous quarter. Additionally, we made significant progress on our commercialization efforts for DANYELZA, and continue to gain momentum in the US with a number of new accounts. We now have 56 sites activated across the US. We’ve been making significant progress outside the US, marked by the recent regulatory approval of DANYELZA in Brazil. In May, we received approval in Brazil where we have partnered with Adium, also Tecnofarma for marketing in the region.
Additionally, SciClone launched DANYELZA in Greater China, late June, early July, further solidifying our presence in the Asian market. We firmly believe that the Asian market pose a great potential as an important revenue driver for DANYELZA, and we look forward to updating you on the progress of these launches over the coming quarters. We also continue to see progress with our partnerships in Central Eastern Europe through Swixx pharmaceuticals, and Takeda in Israel and our distribution program through WEP in Europe. We continue to seek partnerships to expand our global commercial footprint even further, aiming to enable any patient who may benefit from DANYELZA to access it. This is the backbone of our mission at Y-mAbs, to support children and families in their fight to beat cancer.
We couldn’t be more pleased with our first two quarters of DANYELZA, creating net sales of more than $40 million in 2023 already and gaining market share in the US. We remain confident in our ability to continue to grow our commercial market footprint and meet our full year 2023 DANYELZA net product revenue guidance. Sue will provide further color on DANYELZA sales for the quarter shortly. In addition to our partnering strategy for DANYELZA, we continue to collaborate with leading KOLs on investigator sponsored clinical studies to efficiently advance potential label expansions opportunities for DANYELZA. Vignesh will provide an update on our ongoing clinical trials with forward leaders at the Beat Childhood Cancer Research Consortium, MD Anderson Cancer Center, and Ohio State University and Memorial Sloan Kettering Cancer Center.
Now let’s turn to SADA, on to SADA on novel and highly differentiated pre-targeted two-step radiopharmaceutical platform in development that we licensed from Memorial Sloan Kettering and MIT in April 2020. With SADA, we are working on — we are working to pre-target the tumor with a protein only dose with rapid clearance of any onbound protein from the bloodstream, followed by a radioactive payload. We believe this mechanism offers the potential to substantially increase the amount of radioactive payload delivered to tumors, while simultaneously limiting normal tissue uptake and thus resolving insignificantly higher therapeutic indices by potentially maximizing on-targeted efficacy while minimizing off-target side effects. Further, our two-step dosing separates protein dose from the heart payload DOTATATE-lutetium dose.
This could simplify our supply chain and facilitate the use of SADA in large institution centers if approved. The payload is not patient specific, making it possible to use the same payload for different SADA patients and different SADA constructs, potentially increasing the platform’s accessibility and efficiency. We believe our SADA Y-PRIT Theranostic Platform if approved has the potential to drive significant supply chain improvements. Our first, hopefully, our many SADA constructs targeting GD2 entered the clinic this [Month] (ph). We are pleased to report that we have closed cohorts 1 and 2 and we are currently administering doses in cohort 3 at 1 milligram per kilo. I can further say that we have now administered a 200-milligram therapeutic dose and we have not seen any pain signals when dosing GD2-SADA.
We anticipate sharing PK and imaging data at our annual R&D Day in December. Our second development program derived from this platform is the CD38 construct. We have already contacted our pre-ID meeting with the FDA, and we anticipate submitting an IND application for this program in the third quarter of this year. Additionally, we are advancing a number of free clinical SADA targets, and have made good progress on both our HER2 and B7H3 constructs, on which we plan to provide an update on our R&D Day later this year. Lastly, a short update on our business development activities. As mentioned, we remain dedicated to expanding the global commercial footprint of DANYELZA through potential partnerships and ISS strategies. Regarding SADA Y-PRIT, our current approach is multi-faceted.
We aim to advance internally some of the SADA constructs to at least Phase 2, while in parallel seeking to outlicense other targets. Additionally, we see an important opportunity to collaborate with third party and their targets to introduce to the SADA platform and to explore targets from previously unsuccessful Phase 3s as we seek to maximize the potential of our platform. And with that, I would like to turn this call over to Dr. Vignesh Rajah. Thank you.
Vignesh Rajah: Thank you, Thomas, and good morning, everyone. I’ll first provide an overview of our ongoing naxitamab investigator sponsored studies, ISS, and then I will discuss the latest updates on our SADA platform. So in the frontline high-risk neuroblastoma setting, we are excited about our collaboration with Beat Childhood Cancer Research Consortium for a multicenter Phase 2 trial evaluating naxitamab in combination with standard induction therapy for patients with newly diagnosed high-risk neuroblastoma. Currently, nine sites have been initiated and five patients have been dosed. Study will however transition from a single arm study with naxitamab added to current standard treatment for induction to a randomized study where the control arm will be the current standard of care for induction therapy which is chemotherapy plus or minus ALK inhibitor.
The clinical rationale for this study is based on the fact that patients who have a favorable response at the end of induction treatment have a much better prognosis. By increasing the number of patients who achieve a complete response following induction treatment, we can potentially improve overall survival outcomes. The purpose of this randomization is to compare the end of induction complete response rate between the two arms. Our aim is to show superiority in the naxitamab arm versus standard of care. We intend to engage with the FDA to gain their insights on the study design and endpoints and hopefully get their alignment. We’re also considering an interim analysis and its impact on the sample size. Patient recruitment for the trial is projected to start [Technical Difficulty] there’s an anticipated total trial sample size of approximately 270 patients.
This will include BCC centers in the US, Canada, and Europe. At the moment, we’re in the midst of updating the trial protocol, preparing for IND submission, and working to schedule a regulatory meeting. We anticipate the new study to be initiated in quarter one, 2024. Moving to osteosarcoma. We are continuing to work with Memorial Sloan Kettering Cancer Center on its multicenter investigator sponsored trial from naxitamab. We expect data from this Phase 1/2 trial in quarter three of 2024. And if positive, we hope to then begin recruitment for a pivotal Phase 2 trial. At ASCO in June of this year, we presented a pre-specified interim clinical data on naxitamab in combination with GM-CSF in patients with relapsed or refractory high-risk neuroblastoma with residual disease limited to the bone and/or bone marrow.
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The overall response rate was 50% and complete response rate of 38% percent as per INRC criteria. For the subset of patients with the refractory and relapse disease, the overall response rates were 58% and 42% respectively. There were clinically meaningful reductions in Curie Scores, ranging up to minus 18 in patients regardless of baseline disease status. At the AACR meeting in April of this year, we presented data on preclinical study conducted by MD Anderson Cancer Center showing that GD2 was upregulated in triple-negative breast cancer and its high expression is associated with the poor prognosis. This data led to our ISS study with Ohio State University for advanced breast cancer whereby naxitamab will be post in combination with gemcitabine and NK cells.
Our strategy is to generate proof-of-concept data in humans with the aim to establish a solid tumor and breast cancer franchise that could potentially attract strategic partnerships. We firmly believe in the potential of naxitamab to aid in the treatment of a variety of cancers with significant unmet medical needs, both in pediatric and adult cancers, and we plan to execute and build upon the large commercial opportunity of naxitamab worldwide. Now turning to the latest updates on our SADA Y-PRIT theranostic platform. In June, we presented our Phase 1 clinical study design, evaluating SADA Y-PRIT for the treatment of certain GD2 positive solid tumors, including small cell lung cancer, sarcoma and malignant melanoma at ASCO. To reiterate, the Phase 1 dose escalation single arm open label non-randomized multicenter study had three parts.
Part A explores dose finding for the GD3 SADA molecule and testing of dose intervals between the protein and the 177 lutetium-DOTA payload. Part B determines the optimal dose of 177 lutetium-DOTA. And Part C evaluates safety and initial signs of efficacy using repeat dosing. Dose escalation is based on two patients in cohorts 1 and 2, followed by classic 3+3 design. The study is progressing well. We currently have six active sites and patient recruitment is ongoing. Particularly exciting is the news that we shared today that we have advanced through the cohorts to the point we have now given a 200 millicurie therapeutic dose of 177 lutetium-DOTA using the dosing interval of two to five days based on optimal timing coming from our animal studies.
We are pleased with what we have seen so far noting that we are still in early days, but are looking forward to providing an interim data update at our R&D day later this year. Additionally, we remain on track to file an IND for our CD38 SADA program in non-Hodgkin’s lymphoma focusing on T-cell lymphoma where an unmet medical need exists with the FDA in the third quarter of this year. We believe in the potential for SADA Y-PRIT to become the targeted radiopharmaceuticals delivery platform of choice in the future if approved, potentially altering the treatment landscape across a variety of cancers. I’ll now hand the call over to Sue Smith to provide further color on our continued DANYELZA growth.
Sue Smith: Thank you, Vignesh, and good morning, everyone. I’m pleased to be speaking with you this morning about our commercial progress of DANYELZA. Our revenues in the second quarter reflect the team’s execution on the strategic commercialization plan and action as we further expand our market footprint. The feedback we receive from physicians is truly remarkable. And as Thomas mentioned earlier, we are very pleased to see more and more physicians and new centers gaining experience with and seeing the benefits of DANYELZA for their patients. The strategic commercialization plan we have put in place includes three key initiatives, and I’ll speak to each one. First, we keep the patient at the center of everything we do. Our team has built upon the strong momentum from the first quarter of this year and continued to put initiatives in place to further educate the market about the safe and effective use of DANYELZA.
During the second quarter, we continued to build upon our work to identify and support new patients, and as a result, have had three consecutive months of more than 30 patients in our hub. We added three new accounts using DANYELZA during the second quarter. 12 physicians have prescribed DANYELZA and 12 new patients started treatment in the second quarter. Additionally, we launched a strategic social media initiative to specifically target the average parent age of a child with neuroblastoma, which is typically a parent in their 20s or 30s. The launch of our Instagram in particular has been noteworthy as we roll out a steady stream of new and informative content to caregivers. Second, we demonstrate focused account teamwork. Following our restructuring announced earlier in the year, we’ve really seen what our realigned team can accomplish.
And since the initial launch and as of June 30th this year, we’ve delivered DANYELZA to 56 centers across the US, a sequential increase of 6% in the number of centers versus the last quarter. During the second quarter, 61% of vials sold in the US were sold outside of Memorial Sloan Kettering, consistent with our split in the first quarter of 2023. Our team continues to demonstrate professionalism and commitment to our mission of making DANYELZA accessible to patients. Third is our ongoing commitment to customer support. We believe the increase in physician experience with DANYELZA that I mentioned earlier is in part due to the clear and consistent administration experience our team has put in place. This has led to a 30 — to 30% of our accounts having had two or more patients on DANYELZA since launch.
Consistently executing against our strategy and demonstrating a high level of excellence has led to Y-mAbs being recognized as the most committed pharmaceutical company in the high-risk neuroblastoma space, with 88% of physicians treating pediatric neuroblastoma in the US, associating Y-mAbs with a true commitment to the disease based on a recent survey we conducted among 17 physicians. We are a leader in this highly important area of pediatric cancer, and we have a 17% share of the US anti-GD2 market as of the second quarter of this year. I’m very proud of this commercial team, and I look forward to sharing our continued progress in future quarters. Let me now pass the ball to Bo, who will discuss our second quarter financial results in more detail.
Bo Kruse: Thank you, Sue, and good morning, everyone. Our DANYELZA net product revenues of $20.8 million in the second quarter ’23 increased by 3% sequentially compared to the first quarter of ’23 which has [Technical Difficulty] WEP in the first quarter of this year. DANYELZA net product revenues of $20.8 million and $41 million for the quarter and six months ended June 30, 2023, represented increases of 112% and 102%, respectively, over the $9.8 million and $20.3 million reported in the comparable periods of 2022. The respective increases of $11 million and $20.7 million were primarily driven by an increase in the number of new US patients and an incremental benefit from expanding international markets. Moving to operating expenses.
Our research and development expenses decreased by $14.3 million and $23.8 million to $12.1 million and $25.5 million for the second quarter and six months ended June 30, 2023, respectively, compared to the same periods last year. The net increase was primarily due to the decrease in spending on deprioritized programs in connection with our restructuring plan which resulted in decreased outsourced manufacturing, outsourced research and supplies, clinical trials, and personnel related costs. Selling, general and administrative expenses decreased by $11.8 million and $13 million to $11.3 million and $23.5 million for the six — for the second quarter and the six months ended June 30, 2023 respectively compared to the same periods last year. The decreases in SG&A for the three and six months ended June 30, 2023, were primarily attributable to a $10.9 million charge related to the departure of the company’s former Chief Executive Officer in Q2, 2022.
Additionally, we recorded a restructuring charge of $1.1 million SG&A during the six months ended June 30, 2023 in connection with the restructuring plan. Personnel related costs, inclusive of stock-based compensation, decreased in the three months ended June 30, 2023 compared to the corresponding period in 2022 due to the impact of the restructuring. We reported a net loss for the quarter ended [Technical Difficulty] Additionally, we recorded a net loss for the six months ended June 30, 2023, of $12.7 million or $0.29 per share basic and diluted compared to a net loss of $69.2 million or $1.58 per share basic and diluted for the six months ended June 30, 2022. The decrease in net loss was primarily driven by higher net product revenue, lower R&D expenses, lower SG&A expenses, inclusive of the $10.9 million decrease for the charge related to the departure of our former CEO.
As Thomas mentioned, we ended the second quarter with cash and cash equivalents of $87.9 million compared to $105.8 million at year-end ‘22. The decrease was $17.9 million year-to-date. Importantly, we reduced our cash used from $13 million to $5 million or by 64% during the second quarter of 2023 compared to the first quarter. We continue to demonstrate responsible cash management along with market expansion for DANYELZA. And our total cash burn for the full year ’23 is expected to be between $40 million and $50 million. We believe our cash and cash equivalents will be sufficient to support our commercial operations and pipeline programs that’s currently planned into 2026. As we noted in previous calls, the underlying assumptions for this guidance are important to understand.
No new partnerships or other new business development income are included in the assumptions. For the purpose of this analysis, I guess, runway only, the DANYELZA product revenues are assumed to increase by 10% each year in ’24 and ‘25. We indeed hope to see a higher growth rate for DANYELZA as we execute our refined commercial strategy and work to deliver the new clinical data that could potentially lead to expanded indications and greater physician adoption. In terms of development activities, we have assumed that our prioritized programs would be enhanced at our own expense and no new programs. I assume that this point for purposes of the analysis. No further development of the omburtamab program has been assumed for the purpose of this estimate, and we have not assumed any equity or debt offerings or borrowings.
We continue to expect to achieve the financial guidance announced during our Q1 report, as we anticipate full year DANYELZA net product revenues to be in the range of $80 million to $85 million with a projected cash burn of $40 million to $50 million for the full year, and we continue to expect operating expenses between $115 million and $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. Now this concludes the financial update. And I’ll now turn the call back to Thomas.
Thomas Gad: Thank you, Bo. Thanks for the overview. Let’s open up the line for questions, operator, please.
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Q&A Session
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Operator: At this time, we will be conducting a question-and-answer session. [Operator Instructions] And our first question comes from the line of Alec Stranahan with Bank of America. Please proceed with your question.
Alec Stranahan: Okay, great. Hey guys, thanks for taking our questions. Just a couple from us. Maybe first for Sue, could you give us a sense of the patients coming-on therapy versus coming-off therapy in 2Q? And as we look to the back half of this year, essentially, if you want to meet guidance, you just need to sort of flatline that, $20 million or so per quarter. So is the expectation that the on-off rate will be roughly equal in the second half? And then, just a follow-up on the July Symphony data from Bloomberg, any guidance you can give around that? I noticed it was down sequentially month-over-month. And then I’ve got a follow-up. Thank you.
Sue Smith: Okay. Thanks, Alec, for the questions. In terms of the patients coming on and off treatment, we are looking to drive patients earlier to the induction failure. And so, in terms of the — right now, the majority of our patients are relapsed and we anticipate the on-off rate to shift slightly to a more an earlier patient, based on induction — new induction failure data that we hope to roll out. So that is a new marketing effort that we’re working on, and we hope to roll that out later this year. and pending FDA approval of that. And, secondly, in terms of the July Symphony data, we did see a little softening in the second quarter, I think, really now after being here for a year and a half, we’re — we see a little seasonality in the spring.
I think that truly what we hear from customers is the spring holidays and then the end of school time in June, some people kind of tap the brakes on treatment a little bit to have some normalcy. And I really do think that’s what it is in terms of the softening that we saw. But I remain confident that we have a real stable inflow of 30 plus patients per month in the hub over the past three months and a growing ex-MSK outside where 61% of our sales now are outside of MSK. A year ago, 60% of our sales were at MSK, right? So we’ve done a flip. So I think that’s really the perspective to take that the foundation is strong, but we saw some seasonality.
Alec Stranahan: Okay. That’s helpful. And then, one quick one, if I may, just on the China launch. Could you give us a sense of any of the $3.5 million sales from SciClone, if any part of that was repeatable [Technical Difficulty]
Thomas Gad: [Technical Difficulty] in the second half. And that’s really why we maintain the guidance. Of course, we’re expecting international income during the second half, but I think it would be maybe a little bit too optimistic to say that, that it will continue at 20% of the total product revenues.
Alec Stranahan: Okay.
Thomas Gad: So that’s how it comes about.
Alec Stranahan: Got it. All right. Thanks, and congrats on the progress.
Thomas Gad: Thank you.
Operator: Our next question comes from the line of Charles Zhu with Guggenheim Securities. Please proceed with your question.
Charles Zhu: Hey, good morning, everyone, and thanks for this call and for taking our questions. Regarding GD2 SADA, it — correct me if I misheard, but it sounds like you’ve hit positive imaging data and have subsequently dosed a patient at the therapeutic level of 200 millicuries. One clarifying question on this, are you imaging only at the imaging dose, or are you also reimaging at 200 millicuries? And if you’re not, is there sufficient resolution at the imaging dose to generate clear SPECT images and possibly insights into — on tumor dosimetry? Thank you.
