On November 20, 2023 Legend Biotech Corporation (NASDAQ: LEGN) (Legend Biotech), a global biotechnology company developing, manufacturing and commercializing novel therapies to treat life-threatening diseases, reported its unaudited financial results for the three and nine months ended September 30, 2023 and key corporate highlights (Press release, Legend Biotech, NOV 20, 2023, View Source [SID1234637885]).
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Legend Biotech shared the latest updates from its portfolio and pipeline, alongside its financial performance, including detailing Legend Biotech’s license agreement with Novartis. The license agreement grants Novartis the exclusive, worldwide rights to certain potential CAR-T therapies selectively targeting DLL3.
"We continuously explore the full potential of our products and technologies. The out-license agreement with Novartis affirms that our next-generation therapy, LB2102, has the potential to be a differentiated treatment for eligible patients with small cell lung cancer," said Ying Huang, Chief Executive Officer of Legend Biotech. "We also remain committed to meeting the demand for CARVYKTI, in collaboration with Janssen, and have progressively increased manufacturing capacity, which has led to an incremental increase in sales."
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1 ClinicalTrials.gov. DLL3-Directed Chimeric Antigen Receptor T-cells in Subjects With Extensive Stage Small Cell Lung Cancer. Available at: View Source Last accessed Aug 2023.
2 ClinicalTrials.gov. A Study of Daratumumab, Bortezomib, Lenalidomide and Dexamethasone (DVRd) Followed by Ciltacabtagene Autoleucel Versus Daratumumab, Bortezomib, Lenalidomide and Dexamethasone (DVRd) Followed by Autologous Stem Cell Transplant (ASCT) in Participants With Newly Diagnosed Multiple Myeloma (CARTITUDE-6). Available at: View Source
Financial Results for Quarter Ended September 30, 2023
Cash and Cash Equivalents, Time Deposits, and Short-Term Investments
As of September 30, 2023, Legend Biotech had approximately $1.4 billion of cash and cash equivalents, time deposits, and short-term investments.
Revenue
License Revenue
License revenue for the three months ended September 30, 2023 was $20.1 million compared to no license revenue for the three months ended September 30, 2022. The increase was due to the achievement of a milestone under our collaboration and license agreement (Janssen Agreement) with Janssen Biotech, Inc. (Janssen) during the three months ended September 30, 2023. License revenue for the nine months ended September 30, 2023 was $35.2 million, compared to $50.0 million for the nine months ended September 30, 2022. This decrease of $14.8 million was primarily driven by the nature and timing of milestones achieved as outlined in the Global Development Plan under the Janssen Agreement for cilta-cel.
Collaboration Revenue
Collaboration revenue for the three and nine months ended September 30, 2023 was $75.9 million and $170.4 million, respectively, compared to $27.3 million and $39.2 million for the three and nine months ended September 30, 2022. The increases of $48.6 million and $131.2 million for the three and nine month periods, respectively, were due to an increase in revenue generated from sales of CARVYKTI in connection with the Janssen Agreement.
Operating Expenses
Collaboration Cost of Revenue
Collaboration cost of revenue for the three and nine months ended September 30, 2023 was $43.5 million and $111.8 million, respectively, compared to $25.5 million and $42.4 million for the three and nine months ended September 30, 2022. The increases of $18.0 million and $69.4 million for the three and nine months periods, respectively, were a combination of Legend Biotech’s share of the cost of sales in connection with CARVYKTI sales under the Janssen Agreement and expenditures to support expansion in manufacturing capacity that could not be capitalized.
Research and Development Expenses
Research and development expenses for the three and nine months ended September 30, 2023 were $95.9 million and $276.5 million, respectively, compared to $104.5 million and $254.9 million for the three and nine months ended September 30, 2022, respectively. The decrease of $8.6 million for the three months ended September 30, 2023 compared to three months ended September 30, 2022 was due to timing of expenses incurred in connection with the Global Development Plan under the Janssen Agreement. The increase of $21.6 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily due to continuous research and development activities in cilta-cel, including higher patient enrollment for Phase 3 clinical trials for cilta-cel, and an increase in research and development activities for other pipeline items. The other pipeline expenses include continued investment in Legend Biotech’s solid tumor programs, which include two Investigational New Drug approvals that advanced into Phase 1 development.
Administrative Expenses
Administrative expenses for the three and nine months ended September 30, 2023 were $28.1 million and $78.1 million, respectively, compared to $23.2 million and $54.0 million for the three and nine months ended September 30, 2022, respectively. The increases of $4.9 million and $24.1 million for the three and nine month periods, respectively, were primarily due to the expansion of administrative functions to facilitate continuous business growth and continued investment in building Legend Biotech’s global information technology infrastructure.
Selling and Distribution Expenses
Selling and distribution expenses for the three and nine months ended September 30, 2023 were $21.1 million and $60.5 million, respectively, compared to $18.9 million and $67.6 million for the three and nine months ended September 30, 2022. The increase of $2.2 million for the three months ended September 30, 2023 compared to the three months ended September 30, 2022 was due to costs associated with the commercialization of CARVYKTI. The decrease of $7.1 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022 was primarily due to non-recurring launch expenses incurred during the nine months ended September 30, 2022 to support the commercial launch of CARVYKTI in the U.S market.
Other Income and Gains
Other income and gains for the three and nine months ended September 30, 2023 were $35.8 million and $49.8 million, respectively, compared to $3.9 million and $4.7 million for the three and nine months ended September 30, 2022, respectively. The increases of $31.9 million and $45.1 million for the three and nine month periods, respectively, were primarily attributable to an increase in interest income, fair value gain on financial assets and foreign currency exchange gain.
Other Expenses
Other expenses for the three and nine months ended September 30, 2023 were $0.1 million and $0.2 million, respectively, compared to $2.0 million and $9.5 million for the three and nine months ended September 30, 2022. The decrease in both comparative periods was primarily due to an unrealized foreign currency exchange gain in 2023 and an unrealized foreign currency exchange loss in 2022.
Finance Costs
Finance costs for the three and nine months ended September 30, 2023 were $5.7 million and $16.0 million, respectively, compared to $3.2 million and $5.9 million for the three and nine months ended September 30, 2022. The increase in both comparative periods was primarily due to interest on advance funding, which is interest-bearing borrowings funded by Janssen under the Janssen Agreement and constituted of principal and applicable interests upon such principal.
Fair Value (Loss)/Gain of Warrant Liability
There was no fair value (loss)/gain of warrant liability for the three months ended September 30, 2023 compared to a gain of $61.2 million for the three months ended September 30, 2022, because the warrant was exercised on May 11, 2023. Fair value loss of warrant liability for the nine months ended September 30, 2023 was $85.8 million, compared to a fair value gain of $30.2 million for the nine months ended September 30, 2022. The increase was due to the fair value loss recorded on the full exercise of the warrant, which took place on May 11, 2023.
Loss for the Period
For the three months ended September 30, 2023, net loss was $62.2 million, or $0.17 per share, compared to net loss of $85.0 million, or $0.26 per share, for the three months ended September 30, 2022. For the nine months ended September 30, 2023, net loss was $373.4 million, or $1.07 per share, compared to a net loss of $310.5 million, or $0.99 per share, for the nine months ended September 30, 2022.
Webcast/Conference Call Details:
Legend Biotech will host its quarterly earnings call and webcast today at 8:00am ET. To access the webcast, please visit this weblink.
A replay of the webcast will be available on Legend Biotech’s website at View Source