On February 20, 2019 Genmab A/S (Nasdaq Copenhagen: GEN) reported its Annual Report for 2018 (Press release, Genmab, FEB 20, 2019, View Source [SID1234533481]). Below is a summary of business progress and financial performance for the year, and financial outlook for 2019 from the report. The full report is attached as a PDF file and can be found on the investor section of the company’s website, www.genmab.com. An online summary of the report is available at View Source
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2018 ACHIEVEMENTS
Business Progress
Maximize daratumumab progress
FDA and EMA decision on Phase III ALCYONE multiple myeloma (MM) submission – Achieved
Start new Phase III MM study – Achieved
Report early clinical data in solid tumors – Not achieved
Phase III MAIA MM efficacy analysis in frontline – Achieved
Phase III CASSIOPEIA MM efficacy analysis in frontline – Achieved
Optimize ofatumumab value
Complete recruitment Phase III subcutaneous ofatumumab relapsing MS studies – Achieved
Maximize tisotumab vedotin progress
Start two Phase II studies in cervical cancer (recurrent / metastatic & combination study in frontline) – One Phase II study with tisotumab vedotin in cervical cancer was started in 2018. A Phase I/II study in cervical cancer was posted on www.clinicaltrials.gov in 2018, but had not started before year end.
Start Phase II study in additional solid tumor indications – Achieved
Strengthen differentiated product pipeline and technology partnership portfolio
Start HuMax-AXL-ADC expansion phase in ongoing Phase I/II study – Achieved
Progress HexaBody-DR5/DR5 Phase I/II study – Achieved
Progress DuoBody-CD3xCD20 Phase I/II study – Achieved
Accelerate proprietary Immuno-Oncology DuoBody programs towards clinic – Achieved
Enter new technology or product collaborations – Genmab entered one new technology collaboration, with Immatics, during 2018.
Disciplined financial management and building a commercial footprint
Execute controlled company growth with selective investments in product & technology pipeline – Achieved
Continue investing in building commercialization and launch capabilities
Financial Performance
Revenue was DKK 3,025 million in 2018 compared to DKK 2,365 million in 2017. The increase of DKK 660 million, or 28%, was mainly driven by higher DARZALEX royalties under our daratumumab collaboration with Janssen, the payment from Novartis of USD 50 million (DKK 304 million) and reimbursement income from our collaborations with Seattle Genetics and BioNTech, partly offset by a decrease in DARZALEX milestones.
Operating expenses increased by DKK 624 million, or 61%, from DKK 1,021 million in 2017 to DKK 1,645 million in 2018 driven by the advancement of tisotumab vedotin, additional investments in our product pipeline, and the increase in employees to support the expansion of our pipeline.
Operating income was DKK 1,380 million in 2018 compared to DKK 1,344 million in 2017. The improvement of DKK 36 million, or 3%, was driven by higher revenue, which was mostly offset by increased operating expenses.
2018 year end cash position of DKK 6,106 million, an increase of DKK 683 million, or 13%, from DKK 5,423 million as of December 31, 2017.
We expect our 2019 revenue to be approximately DKK 4,600 million, compared to DKK 3,025 million in 2018, an increase of DKK 1,575 million or 52%. Our projected revenue for 2019 primarily consists of DARZALEX royalties of DKK 2,685 million, based on estimated net sales of USD 3.0 billion. We project DARZALEX milestones of approximately DKK 1,500 million related to commercial net-sales based milestones for achieving net-sales in a calendar year of both USD 2.5 billion and USD 3.0 billion respectively. The remainder of the revenue consists of cost reimbursement income, Arzerra royalties, and DuoBody milestones.
Operating Expenses
We anticipate that our 2019 operating expenses will be approximately DKK 2,600 million, an increase of DKK 955 million or 58% compared to 2018. The increase is driven by the advancement of our clinical programs, particularly tisotumab vedotin and enapotamab vedotin.
Operating Result
We expect the operating income to be approximately DKK 2,000 million in 2019 compared to DKK 1,380 million in 2018, an increase of DKK 620 million or 45%.
More information on the Risks and Assumptions for the 2019 Financial Guidance can be found in the 2018 Annual Report available on our website www.genmab.com.
Conference Call
Genmab will hold a conference call in English to discuss the results for the full year results for 2018 today, February 20, 2019 at 6.00 pm CET, 5.00 pm GMT or noon EST. To join the call dial +1 866 966 1396 (US participants) or +44 2071 928000 (international participants) and provide conference code 8793105.