On August 23, 2021 Legend Biotech Corporation (NASDAQ: LEGN) (Legend Biotech), a global clinical-stage biopharmaceutical company engaged in the discovery and development of novel cell therapies for oncology and other indications, reported its 2021 second quarter unaudited financial results (Press release, Legend Biotech, AUG 23, 2021, View Source [SID1234586817]).
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"We have made exciting progress in advancing our first investigational CAR-T therapy cilta-cel in the past few months, with key regulatory, data and manufacturing updates. This includes the acceptance of our applications for cilta-cel by the U.S. Food and Drug Administration (FDA) and European Medicines Agency (EMA) and the presentation of additional efficacy and safety data from the CARTITUDE cilta-cel clinical development program at ASCO (Free ASCO Whitepaper) and EHA (Free EHA Whitepaper) Annual meetings," said Ying Huang, PhD, CEO and CFO of Legend Biotech. "We look forward to a momentous second half of the year as we work towards bringing cilta-cel to patients living with multiple myeloma and providing their healthcare providers a new therapeutic option, in collaboration with Janssen."
Second Quarter 2021 Highlights
In May 2021, the rolling submission of the Biologics License Application (BLA) was accepted by the U.S. FDA for cilta-cel for the treatment of adults with relapsed or refractory multiple myeloma (RRMM), following the submission by Legend Biotech’s collaborator, Janssen Biotech, Inc. (Janssen). As part of the BLA acceptance, the FDA granted cilta-cel priority review and set the Prescription Drug User Fee Act (PDUFA) target action date for November 29, 2021.
In May 2021, the Marketing Authorisation Application (MAA) submitted by Janssen was accepted by the European Medicines Agency (EMA) for cilta-cel for the treatment of adults with RRMM.
In addition, a submission for cilta-cel was made to the Brazilian Health Regulatory Agency by Janssen in April 2021.
Longer term data from the CARTITUDE-1 trial of cilta-cel in 97 heavily pretreated patients with RRMM, which was presented at the 2021 ASCO (Free ASCO Whitepaper) and EHA (Free EHA Whitepaper) Annual meetings, showed 98 percent overall response rate, 80 percent stringent complete response rate (sCR), progression free survival rate of 66 percent and an overall survival (OS) rate of 81 percent at the 18-month follow-up. A full manuscript containing earlier data from the CARTITUDE-1 trial at 12.4-months of follow up was published in The Lancet in June 2021.
First results from Cohort A of the CARTITUDE-2 study of cilta-cel, which was featured at the 2021 ASCO (Free ASCO Whitepaper) and EHA (Free EHA Whitepaper) Annual meetings, showed early and deep responses in the cohort of 20 patients with progressive MM after 1-3 prior lines of therapy, and who were lenalidomide refractory, with a safety profile consistent with what has been observed in the CARTITUDE clinical development program.
On June 22, 2021, Legend Biotech announced the establishment of a state-of-the-art manufacturing facility in Belgium as part of a joint investment with Janssen, to expand global manufacturing capacity of innovative cellular therapies.
On May 21, 2021, Legend Biotech completed the sale of 20,809,805 ordinary shares in a private placement at a purchase price of $14.41625 per ordinary share (equivalent to $28.8325 per American Depositary Share, or ADS) and the issuance of a warrant exercisable for up to an aggregate of 10,000,000 ordinary shares, exercisable for a two-year period at an exercise price of $20.00 per ordinary share (equivalent to $40.00 per ADS), in each case, pursuant to a subscription agreement dated May 13, 2021, with an institutional investor.
In June 2021, the CARTITUDE clinical program expanded to include the initiation of the CARTITUDE-5 study (NCT04923893), a Phase 3 randomized study evaluating cilta-cel in patients with newly diagnosed MM (NDMM) for whom autologous stem cell transplant (ASCT) is not planned as initial therapy. The CARTITUDE-5 study will evaluate bortezomib, lenalidomide and dexamethasone, known as VRd, followed by cilta-cel versus VRd, followed by lenalidomide and dexamethasone, or Rd, maintenance therapy.
The ongoing Phase 2 CARTITUDE-2 study (NCT04133636) was expanded with the addition of two cohorts: Cohort E (high-risk NDMM, transplant not planned) and Cohort F (standard-risk NDMM).
In May 2021, Legend Biotech achieved a $15 million milestone payment related to a cilta-cel development milestone, according to the terms and conditions of an agreement with Janssen.
*In December 2017, Legend Biotech entered into an exclusive worldwide license and collaboration agreement with Janssen Biotech, Inc. to develop and commercialize cilta-cel.
Key Upcoming Milestones
As part of the acceptance of the BLA for cilta-cel for the treatment of adults with RRMM, the FDA has set the PDUFA target action date for November 29, 2021.
In collaboration with Janssen, Legend Biotech intends to present updated data from the CARTITUDE-1 and the CARTITUDE-2 studies at major medical conferences in 2021.
Legend Biotech anticipates supporting investigators to submit a manuscript on the clinical data update from LEGEND-2 study in 2021.
Legend Biotech intends to use the data from the CARTIFAN-1 study in support of a regulatory submission to the China Center for Drug Evaluation (CDE) in the second half of 2021, seeking approval of cilta-cel for the treatment of adults with RRMM.
Legend Biotech’s collaboration partner, Janssen, anticipates submitting a New Drug Application (NDA) to the Japan Pharmaceuticals and Medical Devices Agency in the second half of 2021, seeking approval of cilta-cel for the treatment of adults with RRMM.
Legend Biotech expects to initiate its Phase 1 clinical trial of LB1901 in RR T-cell lymphoma (TCL) in the United States in 2021.
Financial Results for Three Months and Six Months Ended June 30, 2021
Cash and Cash Equivalents and Time Deposits
As of June 30, 2021, Legend Biotech had approximately $488.2 million of cash and cash equivalents and approximately $174.6 million in time deposits.
Revenue
Revenue for the three months ended June 30, 2021 was $20.2 million compared to $11.6 million for the three months ended June 30, 2020. The increase of $8.6 million was primarily due to two additional milestones achieved pursuant to Legend Biotech’s agreement with Janssen in the fourth quarter of 2020 and in the second quarter of 2021, respectively. Revenue for the six months ended June 30, 2021 was $33.9 million compared to $23.1 million for the six months ended June 30, 2020. The increase of $10.8 million was primarily due to the aforementioned two additional milestones achieved. Milestone payments are constrained as a result of the uncertainty of whether the milestone will be achieved, but included as customer consideration for revenue recognition when the associated milestone is achieved and the uncertainty relieved. In half year of 2021, this resulted in a larger amount of revenue recognized from the contract liabilities. Legend Biotech has not generated any revenue from product sales to date.
Research and Development Expenses
Research and development expenses for the three months ended June 30, 2021 were $83.5 million compared to $53.6 million for the three months ended June 30, 2020. This increase of $29.9 million was primarily due to a higher number of clinical trials with more patients enrolled and a higher number of research and development product candidates. Consistently, research and development expenses for the six months ended June 30, 2021 was $154.5 million compared to $101.6 million for the six months ended June 30, 2020 with an $52.9 million increase.
Administrative Expenses
Administrative expenses for the three months ended June 30, 2021 were $9.2 million compared to $4.5 million for the three months ended June 30, 2020. The increase of $4.7 million was primarily due to Legend Biotech’s expansion of supporting administrative functions to aid continued research and development activities. Due to the consistent business expansion, administrative expenses for the six months ended June 30, 2021 increased by $10.1 million, which was $18.0 million for the six months ended June 30, 2021 compared to $7.9 million for the six months ended June 30, 2020.
Selling and Distribution Expenses
Selling and distribution expenses for the three months ended June 30, 2021 were $16.8 million compared to $9.6 million for the three months ended June 30, 2020. This increase of $7.2 million was primarily due to increased costs associated with commercial preparation activities for cilta-cel. Driven by the same commercial preparation activities, selling and distribution expenses for the six months ended June 30, 2021 was $30.2 million compared to $16.1 million for the six months ended June 30, 2020.
Other Income and Gains
Other income and gains for the three months ended June 30, 2021 was $1.7 million compared to $1.3 million for the three months ended June 30, 2020. Other income and gains for the six months ended June 30, 2021 was $2.4 million compared to $3.8 million for the six months ended June 30, 2020. The decrease of $1.4 million was primarily due to larger government grant and interest income received in the first half of the year in 2020.
Other Expenses
Other expenses for the three months ended June 30, 2021 was $2.3 million compared to $0.04 million for the three months ended June 30, 2020. The increase of $2.26 million was primarily due to higher foreign currency exchange loss, loss from disposal of assets and other expenses in the second quarter of 2021. Consistently, other expenses for the six months ended June 30, 2021 was $4.4 million compared to $0.08 million for the six months ended June 30, 2020, with an increase of $4.32 million.
Finance Costs
Finance costs for the six months ended June 30, 2021 was $0.09 million compared to $4.1 million for the six months ended June 30, 2020. The decrease was primarily due to finance costs related to the issuance of convertible redeemable preferred shares in 2020, which 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 six months ended June 30, 2021 was $1.6 million caused by changes of fair value of a warrant, which was issued to an institutional investor through a private placement in May 2021. Concurrently, 20,809,805 ordinary shares were offered and sold to the institutional investor. The warrant was assessed as a financial liability with a fair value of $83.3 million as of June 30, 2021 and a fair value loss of $1.6 million was recorded for the six months ended June 30, 2021.
Fair Value Loss of Convertible Redeemable Preferred Shares
For the six months ended June 30, 2020, Legend Biotech reported a one-time non-cash charge of $80.0 million caused by changes of fair value of Series A convertible redeemable preferred shares (Series A Preferred Shares). Upon listing on the Nasdaq Global Market, all outstanding Series A Preferred Shares were converted into ordinary shares of Legend Biotech and all accrued but unpaid dividends were settled in the form of ordinary shares of Legend Biotech.
Loss for the Period
For the three months ended June 30, 2021, net loss was $91.6 million, or $0.33 per share, compared to a net loss of $134.9 million, or $0.63 per share, for the three months ended June 30, 2020. Net loss was $172.5 million, or $0.63 per share, for the six months ended June 30, 2021 compared to $179.1 million, or $0.86 per share, for the six months ended June 30, 2020.