On March 18, 2022 Legend Biotech Corporation (NASDAQ: LEGN) (Legend Biotech), a global biotechnology company developing, manufacturing and commercializing novel therapies, reported unaudited financial results for the fourth quarter of 2021 (Press release, Legend Biotech, MAR 18, 2022, View Source [SID1234610387]).
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"Legend Biotech ended the fourth quarter with strong data on our lead product candidate and nearly $900 million in cash," said Ying Huang, PhD, Chief Executive Officer and Chief Financial Officer of Legend Biotech. "Both achievements put us in a strong position to commercialize CARVYKTI in 2022 and advance our pipeline."
Dr. Huang added: "As we close another quarter, I continue to be impressed by our incredible teams around the world. Thanks to their dedication, our pipeline candidates have shown tremendous promise across multiple therapeutic areas, including gastric cancer. As I look to the year ahead, I am confident that Legend will continue its work of realizing the promise of CAR-T."
Recent Highlights
The U.S. Food and Drug Administration (U.S. FDA) approved CARVYKTI (ciltacabtagene autoleucel) for the treatment of adults with relapsed or refractory multiple myeloma (MM) who have received four or more prior lines of therapy, including an immunomodulatory agent, a proteasome inhibitor, and an anti-CD38 monoclonal antibody.
Legend Biotech and its collaboration partner Janssen Biotech, Inc. (Janssen) is progressing the CARTITUDE clinical development program in earlier lines across Phase 3 studies, including a collaborative study.
CARTITUDE-4 completed enrollment. The Phase 3, open-label study evaluates cilta-cel in patients with multiple myeloma who have received 1-3 prior lines of therapy, including a proteasome inhibitor and immunomodulatory agent and are refractory to lenalidomide. The purpose of this study is to compare the efficacy of cilta-cel with standard therapy – either pomalidomide, bortezomib and dexamethasone (PVd) or daratumumab, pomalidomide and dexamethasone (DPd).
CARTITUDE-5 initiated enrollment. The Phase 3, randomized, open-label study compares bortezomib, lenalidomide and dexamethasone (VRd) induction followed by cilta-cel vs. VRd induction followed by lenalidomide and dexamethasone (Rd) maintenance in patients with newly diagnosed MM for whom autologous stem cell transplant (ASCT) is not planned as initial therapy (NCT04923893)
CARTITUDE-6 (not yet recruiting; sponsored by the European Myeloma Network). The Phase 3, randomized, open-label study compares daratumumab, bortezomib, lenalidomide and dexamethasone (DVRd) followed by cilta-cel vs. DVRd followed by autologous stem cell transplant (ASCT) in newly diagnosed patients with MM who are transplant eligible (NCT05257083)
New and updated results from the CARTITUDE clinical development program studying cilta-cel in various clinical settings were presented at the 63rd American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting and Exposition in 2021. Two-year follow-up data for CARTITUDE-1 were presented showing continued deep and durable responses of cilta-cel in patients with heavily pretreated MM.
A New Drug Application for cilta-cel was submitted to the Ministry of Health, Labour and Welfare (MHLW) in Japan by Janssen in December 2021.
New, preclinical in vivo data on Legend Biotech’s novel tri-specific, single-domain antibody (VHH) CAR-T (LCAR-AIO) were presented at ASH (Free ASH Whitepaper) 2021 as a poster (Abstract #1700). LCAR-AIO targets three antigens—CD19, CD20 and CD22.
Legend Biotech raised approximately $345 million in gross proceeds in a follow-on public offering of its American depositary shares (ADSs).
Marc L. Harrison was appointed Vice President and General Counsel of Legend Biotech in January 2022. Mr. Harrison brings more than 20 years of experience in healthcare and life sciences to the role. He previously served as Vice President, General Counsel and Head of Compliance at Breckenridge Pharmaceutical, Inc. and has held senior legal and leadership positions at Ipsen Biopharmaceuticals, Medco Health Solutions and WebMD.
A clinical hold was placed by the U.S. FDA in February 2022 on the Phase 1, open-label, multicenter clinical trial to evaluate LB1901, an investigational autologous CD4-targeted CAR-T therapy for the treatment of adults with relapsed or refractory peripheral T-cell lymphoma (PTCL) or cutaneous T-cell lymphoma (CTCL) (NCT04712864). Legend Biotech subsequently received an official clinical hold letter from the FDA dated March 1, 2022. In the letter, FDA stated that the reason for the hold is because the related IND does not contain sufficient information required by 21 CFR 312.23 to assess the risks to subjects.
Legend Biotech achieved two milestone payments amounting to $50 million, under the terms of its collaboration and license agreement with Janssen for the joint development and commercialization of cilta-cel.
Financial Results for the Quarter and Year Ended December 31, 2021
Cash Position
As of December 31, 2021, Legend Biotech had approximately $887.1 million of cash and cash equivalents, deposits and short-term investments.
Revenue
Revenue for the three months ended December 31, 2021 was $39.0 million compared to $40.8 million for the three months ended December 31, 2020. The decrease of $1.8 million was mainly due to the timing of when different milestones were achieved during those quarters.
Revenue for the year ended December 31, 2021 was $89.8 million, compared to $75.7 million for the year ended December 31, 2020. This increase of $14.1 million was primarily driven by revenue recognized from three additional milestones achieved in fiscal year 2021 and an exclusive licensing of certain patents to Nanjing Probio Biotech Co., Ltd and its affiliates during the year ended December 31, 2021. We have not generated any revenue from product sales to date.
Research and Development Expenses
Research and development expenses for the three months ended December 31, 2021 were $86.5 million compared to $66.9 million for the three months ended December 31, 2020. This increase of $19.6 million was primarily due to continuous research and development activities in cilta-cel and for other pipelines in 2021. Research and development expenses in 2021 were $313.3 million, compared to $232.2 million for the year ended December 31, 2020, an increase of $81.1 million.
Administrative Expenses
Administrative expenses for the three months ended December 31, 2021 were $17.1 million compared to $9.2 million for the three months ended December 31, 2020. The increase of $7.9 million was primarily due to Legend Biotech’s expansion of supporting administrative functions to facilitate continuous research and development activities as well as activities to establish elements of a commercialization infrastructure. Due to the consistent business expansion, administrative expenses for the year ended December 31, 2021 increased by $23.8 million, to $46.9 million, compared to $23.1 million for the year ended December 31, 2020.
Selling and Distribution Expenses
Selling and distribution expenses for the three months ended December 31, 2021 were $52.8 million compared to $24.2 million for the three months ended December 31, 2020. This increase of $28.6 million was primarily due to increased costs associated with commercial preparation activities for cilta-cel launch. Due to the consistent business expansion, selling and distribution expenses for the year ended December 31, 2021 increased by $52.9 million, to $102.5 million, compared to $49.6 million for the year ended December 31, 2020.
Other Income and Gains
Other income and gains for the three months ended December 31, 2021 was $0.7 million compared to $2.1 million for the three months ended December 31, 2020. The decrease of $1.4 million was primarily driven by a decrease in foreign exchange gain. Other income and gains for the year ended December 31, 2021 was $3.1 million compared to $6.1 million for the year ended December 31, 2020. The decrease of $3.0 million primarily resulted from less interest income from time deposits of lower average interest rate and less government grants.
Other Expenses
Other expenses for the three months ended December 31, 2021 was $2.2 million compared to $0.3 million for the three months ended December 31, 2020. The increase of $1.9 million was primarily due to higher foreign exchange loss. Other expenses for the year ended December 31, 2021 was $9.1 million compared to $0.3 million for the year ended December 31, 2020. The increase was primarily due to foreign exchange loss and loss from disposal of assets.
Finance Costs
Finance costs for the year ended December 31, 2021 was $0.9 million, mainly composed of interest for advance funding, which is interest-bearing borrowings funded by the collaborator and constituted by a principal and applicable interests upon such principal. Finance costs for the year ended December 31, 2020 was $4.2 million, resulted from the finance costs for the issuance of convertible redeemable preferred shares (Series A Preferred Shares) that were fully converted into ordinary shares upon the completion of Legend Biotech’s initial public offering in June 2020.
Fair Value Loss of Warrant Liability
Fair value loss of warrant liability for the year ended December 31, 2021 was $6.2 million caused by changes in the fair value of a warrant that we issued to an institutional investor through a private placement transaction in May 2021 with initial fair value of $81.7 million at the issuance date. The warrant was assessed as a financial liability with a fair value of $87.9 million as of December 31, 2021.
Fair Value Loss of Convertible Redeemable Preferred Shares
For the year ended December 31, 2020, Legend Biotech reported a one-time non-cash charge of $80.0 million caused by changes of the fair value of its Series A Preferred Shares. Upon Legend Biotech’s listing of its ADSs on the Nasdaq Global Market, all outstanding Series A Preferred Shares were automatically converted into ordinary shares of Legend Biotech and all accrued but unpaid dividends were settled in the form of ordinary shares of Legend Biotech. No such fair value loss in 2021 as the Company has no outstanding preferred shares after the listing.
Loss for the Period
Net loss for the three months ended December 31, 2021 was $88.3 million, or $0.30 per share, compared to $57.8 million, or $0.22 per share, for the three months ended December 31, 2020. Net loss for the year ended December 31, 2021 was $386.2 million, or $1.37 per share, compared to $303.5 million, or $1.28 per share, for the year ended December 31, 2020.