On February 21, 2018 Genmab A/S (Nasdaq Copenhagen: GEN) reported its Annual Report for 2017 (Press release, Genmab, FEB 21, 2018, View Source [SID1234524098]). Below is a summary of business progress and financial performance for the year, and financial outlook for 2018 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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2017 ACHIEVEMENTS
Business Progress
Maximize daratumumab progress
EMA decision & launch in 2nd line + multiple myeloma (MM) relapsed / refractory setting – Achieved
FDA decision 3rd line MM setting (daratumumab + pomalidomide) – Achieved
Phase III MM interim efficacy analysis in frontline (ALCYONE trial) – Achieved
Start Phase III subcutaneous trial – Achieved
Start trials in solid tumors and non-MM blood cancers – Achieved
Report non-MM clinical data — Expected in 2018
Optimize ofatumumab value
Phase III refractory FL headline results — Expected in 2018
Strengthen differentiated product pipeline
Phase I/II tisotumab vedotin data – Achieved
Progress HuMax-AXL-ADC Phase I/II clinical trial – Achieved
IND/CTA submission HexaBody-DR5/DR5 – Achieved
IND/CTA submission DuoBody-CD3xCD20 – Achieved
Progress pre-clinical pipeline — Achieved
Strengthen partnership portfolio with next generation technologies
Enter new technology collaborations — Not achieved
Progress partnered programs — Achieved
Disciplined financial management
Execute controlled company growth with selective investments in product pipeline — Achieved
Financial Performance
Revenue was DKK 2,365 million in 2017 compared to DKK 1,816 million in 2016. The increase of DKK 549 million, or 30%, was mainly driven by higher DARZALEX royalties under our daratumumab collaboration with Janssen.
Operating expenses increased by DKK 258 million, or 34%, from DKK 763 million in 2016 to DKK 1,021 million in 2017 driven by the advancement of tisotumab vedotin, the additional investment in our product pipeline, and the increase in employees to support the expansion of our pipeline.
Operating income was DKK 1,344 million in 2017 compared to DKK 1,053 million in 2016. The improvement of DKK 291 million, or 28%, was driven by higher revenue, which was partly offset by increased operating expenses.
2017 year end cash position of DKK 5,423 million, an increase of DKK 1,501 million, or 38%, from DKK 3,922 million as of December 31, 2016.
2018 OUTLOOK
MDKK 2018 Guidance 2017 Actual Result
Revenue 2,700 — 3,100 2,365
Operating expenses (1,400) — (1,600) (1,021)
Operating income 1,300 — 1,500 1,344
Revenue
We expect our 2018 revenue to be in the range of DKK 2,700 — 3,100 million, compared to DKK 2,365 million in 2017. Our projected revenue for 2018 consists primarily of DARZALEX royalties of approximately DKK 1,750 million that are based on an estimated USD 2.0 — 2.3 billion of DARZALEX net sales in 2018. We project DARZALEX milestones of approximately DKK 550 million in 2018, consisting primarily of a commercial net sales-based milestone, compared to DKK 1,109 million in 2017. In addition, the 2018 guidance includes the one-time payment from Novartis of approximately DKK 300 million related to the transition of Arzerra from commercial availability to compassionate use programs in non-US markets. The remainder of the revenue consists of cost reimbursement income, Arzerra royalties, and DuoBody milestones.
The overall increase in revenue compared to 2017 is primarily due to a one-time payment from Novartis combined with higher DARZALEX royalties which were partly offset by a decrease in DARZALEX milestones.
Operating Result
We anticipate that our 2018 operating expenses will be in the range of DKK 1,400 — 1,600 million, compared to 2017 operating expenses of DKK 1,021 million. The increase is driven by the advancement of tisotumab vedotin, HuMax-AXL-ADC, HexaBody-DR5/DR5, DuoBody-CD3xCD20, and an increase in employees to support the expansion of our product pipeline.
We expect the operating income for 2018 to be approximately DKK 1,300 — 1,500 million compared to DKK 1,344 million reported for 2017.
More information on the Risks and Assumptions for the 2018 Financial Guidance can be found in the 2017 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 2017 today, February 21, 2018 at 6.00 pm CET, 5.00 pm GMT or noon EST. To join the call by phone, dial one of the following numbers and ask for the Genmab conference call:
US: + 1 646 828 8156
UK: + 44 330 336 9411
DK: + 45 35 15 81 21
A live and archived webcast of the call and relevant slides will be available at www.genmab.com.