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Genmab A/S (NASDAQ:GMAB)
Q2 2020 Earnings Call
Aug 12, 2020, 12:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

[Technical Issues] During this telephone conference, you may be presented with forward-looking statements that include words such as believes, anticipates, plans or expects. Actual results may differ materially. For example, as a result of delayed or unsuccessful development projects. Genmab is not under an obligation to update statements regarding the future nor to confirm such statements in relation to actual results unless this is required by law. Please also note that Genmab may hold your personal data as indicated by you as part of our Investor Relation outreach activities in order to update you on Genmab going forward. Please refer to our website for more information on Genmab and our privacy policy.

And now without further delay, I would like to hand the conference over to our speaker today, Jan van de Winkel. Please go ahead, Jan.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Hello and welcome to the Genmab conference call to discuss the Company's financial results for the first half of this year. With me today to present these results is our CFO, Anthony Pagano. And we will be joined for the Q&A by our Chief Development Officer, Judith Klimovsky and our Chief Operating Officer, Anthony Mancini.

Let's move to Slide 2. As already said, we will be making forward-looking statements. So please keep that in mind as we go through this call. Let's move to Slide 3. I am proud to say that despite the universal challenges posed by the COVID-19 pandemic Genmab not only had a strong second quarter but a transformative one. Two key events have occurred since we presented to you with our first quarter results. We reported very favorable top line results for tisotumab vedotin in cervical cancer and of course we announced a broad foundational oncology collaboration with AbbVie.

Starting with the most recent event. The highly anticipated tisotumab vedotin data in late June, we along with our partner, Seattle Genetics announced that the innovaTV 204 trial of tisotumab vedotin for patients with recurrent or metastatic cervical cancer had met its primary endpoint with a 24% confirmed overall response rate and a median duration of response of 8.3 months. We very much look forward to discussing these results with the FDA and the potential for the first BLA submission for one of our proprietary therapeutic candidates, this would be an important milestone in our Company's history.

Our landmark AbbVie collaboration was also one of the most anticipated events of the year for Genmab. Genmab and AbbVie will be equal partners working together to jointly make all strategy, clinical development and commercialization decisions for three Genmab bispecific antibody therapies epcoritamab, DuoHexaBody-CD37 and DuoBody-CD3x5T4 as well as potential novel differentiated cancer therapies created under a discovery research collaboration. So this collaboration sets us on a path to accelerate, broaden and maximize the development of some of our promising bispecific antibody therapies, including epcoritamab with the ultimate goal to bring differentiated new potential therapies much faster to cancer patients.

So as you can see on the slide, we have advances to report with two of these potential therapies. As we recently dosed the first patient in an expansion cohort for epcoritamab and initiated a first-in-human trial of DuoBody-CD3x5T4. I would also like to mention that there is now a Phase 3 trial by Janssen for amivantamab as first-line treatment in non-small cell lung cancer listed on clinicaltrials.gov. This represents the first Phase 3 trial for a DuoBody therapy and we very much look forward to this study being initiated.

In addition, you may have seen the very impressive results from the two ASCLEPIOS Phase 3 trials of ofatumumab in relapsing MS that were published on August the 6th in the prestigious New England Journal of Medicine. Of course DARZALEX also remains an important factor in our success.

Another major 2020 milestone was achieved in the second quarter with the SubQ formulation of DARZALEX called DARZALEX FASPRO in the US, approval in both the US and the Europe. This is the first and only SubQ CD38 antibody approved in the world and we look forward to potential approval in Japan as well following Janssen's submission of an NDA there in April. As a reminder there is also potential for approvals based on Amgen's CANDOR study of daratumumab in combination with carfilzomib and dexamethasone in relapsed or refractory multiple myeloma and submissions by Janssen to regulatory authorities in the US and Japan in Q1 as well as a submission by Amgen in Europe in the same quarter. And while daratumumab may already be considered an important therapy for multiple myeloma, we continue to see the potential for further expansion and positive top line data sets. At the end of May, we saw the first Phase 3 results from an indication outside of multiple myeloma with the positive top line data from the ANDROMEDA study of SubQ daratumumab in combination with cyclophosphamide, bortezomib and dexamethasone or in short CyBorDex for patients with newly diagnosed AL amyloidosis. This was followed very recently by positive results of the Phase 3 APOLLO study of daratumumab plus pomalidomide and dexamethasone or pom-dex in relapsed or refractory multiple myeloma. This study was designed to confirm the results from the Phase 1 EQUULEUS trial which investigated the IV or intravenous formulation of daratumumab in combination -- in the same combination and it was the basis for an approval in the US in 2017.

Finally and very excitingly we reported $1,838 million in net sales by J&J during the first half of the year, an increase of 31% over the first half of 2019, resulting in DKK1,652 million in royalties to Genmab. Given the challenging coronavirus situation we are pleased with DARZALEX's performance in the first half of 2020 and we look forward to seeing the further impact of the SubQ formulation as it continues to be rolled out by Janssen.

I will now turn the call over to Anthony Pagano to present our detailed financial results for the first half of 2020. Anthony, go ahead.

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Great. Thanks, Jan. Let's move to Slide 4. Before I get into the results and the guidance, I'm going to spend a moment reiterating our overarching financial framework because I think we have materially strengthened what was already a strong foundation with our AbbVie collaboration.

First off, let's look at our revenue profile. On the left, you can see the component parts of our current and future recurring revenue streams. It starts with DARZALEX. And here we are looking forward to continued growth and expansion. And you can also see ofatumumab and TEPEZZA. We're excited about the potential ofatumumab approval in RMS that is expected in September and TEPEZZA is off to an exceptionally strong start.

Next onto R&D investment shown on the right. And this is one of the areas where a collaboration with AbbVie is going to make a real difference. We'll continue to be focused and disciplined in our approach. And as we've told you before, we're going to continue to expand and accelerate our potential winners. But clearly the cash from AbbVie and the fact that we're sharing the investment in the existing clinical programs on a 50-50 basis means we'll be able to do more and faster.

Stepping back, what continues to stand out for me from this overall framework is that Genmab remains a resilient business with a very high quality product pipeline and great growth prospects. And these prospects have now been further strengthened by our collaboration with AbbVie. We see this collaboration kind of like a turbocharger toward our 2025 Vision.

With that intro, we can turn to Slide 5. If you attended our call on our transformational collaboration with AbbVie then the information on this slide will look familiar to you. As a reminder, here are its key elements. This is one of the largest oncology partnerships in history with a potential total deal value of up to $3.9 billion. This includes the upfront payment of $750 million and $3.15 billion related to the achievement of additional development, regulatory and sales milestones and optimum [Phonetic] payments. The collaboration includes three existing clinical programs, and it is important to remember that we've got material commercialization rights for these potential products, which will enable us to build and increase our commercial footprint and we'll do that with an initial focus on the US and Japanese markets.

We've also agreed a broad research collaboration combining the R&D capabilities of both companies. This is definitely a situation where the whole is greater than the sum of the parts. And we've got the potential to create four additional differentiated next-generation antibody product candidates. Overall, this is a partnership that further strengthens our financial position and supports our evolution into a fully integrated biotech powerhouse, all working toward our 2025 Vision.

Now let's move to DARZALEX on Slide 6. Here we saw continued strong performance with only a modest COVID impact in the second quarter. You can see that in the chart on the left. As noted by J&J during their first half results call, DARZALEX saw continued strong market growth and share gains in the US and overall DARZALEX worldwide sales grew by 31% year-on-year. That's net sales of $1.84 billion, which translates to DKK1.65 billion in royalty income for Genmab.

Now calculating the exact impact from COVID-19 is difficult, especially as we have limited insight into sales in countries outside the US. But as we highlighted during our first quarter call, we believe this is a short-term delay and not a fundamental disruption and that's because of the seriousness of the disease and the need for patients to be treated, coupled with DARZALEX's strong product profile. Additionally, we expect to see continued uptake of the SubQ formulation, which was approved in the second quarter. So for the second half of 2020 we anticipate that sales will ramp up and we're already seeing early signs of that in the US. So DARZALEX continues to be on a clear path to market leadership in multiple myeloma and remains a key driver of our revenue as you can see on Slide 7.

Looking at the graph on the left, you can see that there were three significant contributors to the increase in revenue in the first half. First, we recognized nearly 90% of the $750 million upfront payment from AbbVie. Now clearly it's important to remember that that's a one-off contribution. And second, DARZALEX royalties grew more than 40% compared to the first half of 2019. Finally, you see other and most of that DKK97 million comes from TEPEZZA and we've seen a really strong start here. As you may have seen Horizon has now raised its 2020 sales guidance for TEPEZZA. Of course, it's early days, but we see this as a very promising launch.

Now, if we take DARZALEX and TEPEZZA together, we're really pleased to have seen recurring revenues grow by 47% in H1. As well as increasing revenues, we also increased investment in our pipeline, in our team, and in our capabilities, as you can see on the next slide.

On the graph on the left, you can see the major drivers of our increased investment in the first half of the year. In total, operating expenses increased by DKK521 million, which was driven by the accelerated investment in our product portfolio, including the advancement of both epcoritamab and DuoBody-PD-L1x4-1BB. We also spent more on expanding our very talented team. We've continued to hire key team members to support our growing product pipeline and we've continued to build our commercial capabilities. With the upfront from the AbbVie collaboration, our revenue growth significantly outpaced the higher investment levels, driving DKK4.57 billion of operating income.

Now having looked at the individual parts, let's look at our first half 2020 financials as a whole on Slide 9. Here you will see a P&L summary. In the first six months of the year, revenue came in at DKK6.34 billion, an increase of nearly DKK5 billion compared to the first half of 2019. The increase was primarily driven by the upfront payment from AbbVie and higher DARZALEX royalties.

Total expenses in the first half of 2020 were DKK1.78 billion with 84% being R&D and 16% G&A. Operating income, as I noted, was DKK4.57 billion compared to DKK111 million in the first half of 2019, driven by higher revenue. And that brings us to our net income of DKK3.6 billion. So an extremely strong first half of 2020, despite the COVID-19 pandemic, which brings me to our guidance on Slide 10.

We are updating certain aspects of our 2020 guidance previously published on June 10th. We now expect our revenue to be in the range of DKK9.1 billion to DKK9.7 billion an increase of DKK200 million to the top end of the previous guidance. This is still driven by the upfront payment from AbbVie and the continued growth of DARZALEX, complemented by a strong start from TEPEZZA.

We continue to anticipate our 2020 opex to be in the range of DKK3.85 billion to DKK3.95 billion. Putting this together, we're planning for substantial operating income in 2020 in a range of DKK5.2 billion to DKK5.8 billion.

Now I'll move to my final slide. Clearly COVID-19 continues to affect everyone's lives. I think in times like this, it's useful to take a step back and reflect on our business and financial position. We have a very strong foundation even stronger now with our collaboration with AbbVie. Especially important in today's environment, we've got a robust balance sheet, $1.9 billion of cash at the end of the second quarter and no debt. We have great recurring revenues and they're growing and we're using those revenues to invest in a really focused and disciplined way. We're investing in our highly innovative and differentiated product pipeline as well as in the team and capabilities to deliver it, all driving toward our 2025 Vision.

Now, I'll turn it back over to Jan.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks Anthony. Let's move to Slide 12. So looking at this list, we set many ambitious goals for ourselves in 2020. Based on the robust progress we've made year-to-date, our strong financial foundation and our world-class expertise and capabilities, I'm confident that we will continue to be successful in the remainder of this year. Not only will our proprietary clinical pipeline continue to advance, the many regulatory milestone terms on this list and some of it's have already been met, including the spectacular launch for TEPEZZA means that there is potential for many more patients to one day have access to and hopefully benefit from novel therapies created by Genmab.

Let's move to Slide 13. This ends our presentation of Genmab's first half 2020 financial results. Before we take your questions, I wanted to point out one of the events we have listed on this slide here, our 2020 Capital Markets Day taking place in November. For the safety of our attendees and speakers, the event will be virtual this year, but will still feature a comprehensive update on our business and presentations from many of our talented and passionate team members. We will be sending a save the dates for this event soon and details on how you can register and listen to the webcast will be available on our website closer to the event.

So now, operator, please open this call for questions.

Questions and Answers:

Operator

Thank you, Jan. [Operator Instructions] Our first question is coming from the line of Peter Verdult from Citi. Please ask your question. Your line is now open.

Peter Verdult -- Citi -- Analyst

Thank you. Peter Verdult, Citi. Jan, just one question on the data that we can expect in 2020 and 2021, particularly thinking about a 4-1BB PD-L1 and epco in terms of incremental dates are in Phase 3 plans. So could you just map out for us what we can expect for those two assets data wise and strategy-wise in 2020 and 2021? Thank you.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Peter, for the question. I will start with that question and then I'll ask Judith to basically add to that. So for PD-L1x4-1BB DuoBody, we expect data in the coming months, Peter, at a conference and that will be data from the dose escalation and may be limited data also from the expansion cohorts.

For epcoritamab, we expect also data in the coming months at a key conference and that will be at the optimal dose level for epco and different B-cell tumors. That is for 2020. For '21 I will ask Judith to give you some further perspective on data from these two compounds, Peter, and potentially others like tisotumab vedotin, daratumumab etc. Judith, maybe you can step in here.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yes. Thank you, Jan. So for 2020, nothing to add, but we are very well on track for those two major milestones. For 2021 we haven't mapped yet, but could be the case that we could present some more data toward the second half of 2021 on PD-L1x4-1BB. That's not yet mapped, so take it with a grain of salt. It's early for the projections, but we are on track for 2020.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Judith. Thanks, Peter.

Peter Verdult -- Citi -- Analyst

Thank you.

Operator

Thank you. Our next question comes from the line of Wimal Kapadia from Bernstein. Please ask your question. Your line is now open.

Wimal Kapadia -- Bernstein -- Analyst

Great. Thanks very much for taking the question. Wimal Kapadia from Bernstein. Just following up with Pete's question on the PD-L1x4-1BB, Jan, you previously mentioned six patients were treated with the product and you had seen good responses, including in PDX failures and then you had selected a Phase 2 dose. So I just wonder if you had any incremental color to add. And in particular, I appreciate that the molecule looks relatively potent from what we've seen so far. So any additional color on tolerability would be -- will be greatly appreciated. Thank you.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Wimal, for the question. I think we have to keep very brief here until we present the data. And I can tell you we have actually now treated a pretty nice number of patients and that includes patients who either already treated with other checkpoint blockers, Wimal, or patients with tumors which are normally not responsive to checkpoint blockers. And you will probably have to wait until we present the data, but we are super excited about this compound. As Anthony already mentioned in the introductory remarks, Wimal, we have stepped up this program considerably. And so we did for the epcoritamab program this year. And we are really a company who want to invest in the potential winners. So we think this is -- this one is a potential winner in a very exciting, expanding market where we really need new and differentiated drugs, I think, to help cancer patients better. But I think you have to wait the clinical presentation in the coming months. But we are very excited. That's probably where I want to keep it that.

Wimal Kapadia -- Bernstein -- Analyst

Great. Thanks very much.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes now from the line of Michael Schmidt from Guggenheim. Please ask your question. Your line is now open.

Michael Schmidt -- Guggenheim Securities, LLC -- Analyst

Hey, guys. Thanks for taking my questions. I just had a bigger-picture questions on epcoritamab. I was just wondering, Jan, if you could maybe just share your vision for the longer-term development plan for this antibody, just given that in DLBCL, for example, there -- it seems like the -- it's getting a little bit more crowded with novel antibody and ADCs entering the market there in addition to CAR-T. And I was just curious how you think about the optimum development strategy longer term for epcoritamab.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Michael for the question. I will start with that answer and then will also ask Judith to complement me on that. I can tell you that we have very big plans for epcoritamab. We are continuously dosing patients. We have started dosing and the expansion cohorts, Michael. And one of the ways we're seeing is that not only do we think that we have a very competitive molecule in indications like diffuse large B-Cell lymphoma, follicular lymphoma, we are also having a very active molecule as it now looks in other types of B cancers -- B-cell cancers these where other compounds are far less active and potent. So we think that we can actually in one way open up new markets, basically with this asset which is given in a subcutaneous formulation, which we think has very distinct advantages, Michael, over the IV delivered antibodies.

And we are going to penetrate all other lines of treatments and different B-cell tumors. We are working with our partner AbbVie now to work on a very comprehensive, very aggressive plan. And that's probably where I want to keep it at for the time being. But certainly new inside this year. Certainly data, Michael, at key conferences and, yeah, we only get more and more excited about this asset. And also the context of the competitive landscape, we have seen other compounds struggling from other companies recently. And so we think there is going to be opportunity here for a game-changing differentiated novel B-cell targeting antibody therapeutics. So we believe that we have one of the potentially best in our hands here. We have a very strong partner AbbVie.

Maybe I can hand over to Judith and see that you can structure [Phonetic] without going into too much detail on the development plan, Judith.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yes. Thank you, Jan. So division is based on the data and the data so far and the data that you will see and were coming by the end of the year. It speaks to the fact that is epcoritamab can be best-in-class. I mean it's not only the subcutaneous formulation, but also the efficacy and safety. And based on that leveraging on the partnership with AbbVie we have mapped a very thorough comprehensive plan and you will see more in clinicaltrials.gov and when it becomes public in coming months. So stay tuned. Basically I cannot disclose the clinical development plan because four -- you need to understand it's a competitive space. But again the competition encourages us because we truly believe that we have something in hand that is differentiated and better.

Michael Schmidt -- Guggenheim Securities, LLC -- Analyst

Thank you.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Michael, for the question.

Operator

Thank you. Your next question now from the line of Matthew Harrison from Morgan Stanley. Please Matt ask your question.

Matthew Harrison -- Morgan Stanley & Co. LLC -- Analyst

Great. Good afternoon. Thanks for taking the question. I guess two from me that I just wanted to ask. One, can you just talk a little bit about AXL and what you're doing internally to decide how you may move that compound forward or not? And then on tiso, now that you have the pivotal data in hand, how are you thinking about potential other indications with solid tumors and when might we hear something about that? Thanks.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Matt, for the questions. I'm going to hand over both to Judith who is having all the development. Judith, maybe you can get to the potential on AXL.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah, yeah thank you. So for AXL SM, we made it public like when we presented the data in September. This year we head into the process of optimizing the PK and understanding the biomarkers data to guide us further on potential future steps. And the biomarker piece is with fresh biopsies. So it's taking a little bit longer in terms of recruitment, given the higher dose that is imposed on patients in the COVID era. But we still are confident that by the end of the year we will have enough data to guide us on future steps. So this is with regard to AXL.

With regard to tisotumab vedotin, I want to first echo Jan on how excited we are about the data in cervical cancer. And -- so per se the data is exciting. But in addition, we can take it as a proof of concept for tissue factor as a target for potential other tumors, because as we know tissue factor is broadly expressed in other tumor types, I mean, particularly those with a very bad prognosis.

So this is why we started in partnership with Seattle Genetics the basket study and the ovarian study. And in ovarian we have an interesting signal even in the Phase 1 expansion in the 30 patients there. So we are looking -- monitoring very closely with SGEN [Phonetic] the progress of the basket study where we enrolled like four different tumor types and to understand where we gather enough data of substance to present in the public domain. So it will be in the future at certain point. So stay tuned. I cannot provide a commitment because we are monitoring it closely, but we expect to have data in the future.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Judith. Thanks, Matthew for the question.

Operator

Our following question comes from the line of Trung Huynh from Credit Suisse. Please go ahead.

Trung Huynh -- Credit Suisse -- Analyst

Hi guys. Thanks for taking my questions. I've got a couple on dara. Can you just give us a bit more color on the progress of the SubQ dara? I know it's pretty early in the launch, but are you seeing any kind of accelerating use in dara in earlier lines of therapy? And are you seeing you managing to get -- capture new patients, new DARZALEX patients with this SubQ formulation? And then perhaps can you update us where you are on the penetration we have with dara across all the lines of therapy? Thanks very much.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks Trung for excellent questions. And I am happy to actually hand them over to Anthony Mancini, our Head of Operations and Anthony will give you a good perspective for both of these questions. Anthony?

Anthony Mancini -- Executive Vice President and Chief Operating Officer

Hi. Thanks for the questions. I think we're, as Anthony Pagano mentioned earlier, we're really pleased with the strong growth and share gains across dara for the first half of 2020 and the FASPRO launch overall. I think J&J has really done a nice job on the FASPRO launch with early and rapid access in the US with NCCN listing very quickly, as well as all of the details related to access like TNT [Phonetic] and pathways lining up really well and the customer feedback on FASPRO has been very positive to date with them replaying the fact that there is a significant benefit both to patients and offices related to reduced chair time and short duration of in-person visit.

So when you have a 3 million to 5 million injections as Jan mentioned versus a several hour infusion, it's particularly valuable in a COVID-19 environment. So we're very pleased with the overarching uptake. In fact the launch uptake of FASPRO is tracking at a similar pace to DARZALEX overall and we really look forward to seeing the continued positive impact of the SubQ formulation in the second half.

Just to comment a little bit about market shares in terms of your question. Overarching market share and the latest data point was 24%, which is the highest overall patient share that DARZALEX has achieved to date. And it's really being driven by earlier and earlier lines of usage of DARZALEX. So in the frontline setting compared to last year we're seeing a three-fold increase in frontline uptake. So 9% in the latest data point and 3% in last year at the same time. But really what's driving a large part of the gains is the second line patient setting where DARZALEX achieved 42% overall share and that compares to about 34% last year.

So overall I think really strong uptake of the FASPRO, not just in the US but actually around the world and we're looking forward to much more of that in the back half of the year in order to reaffirm our guidance that Anthony referred to earlier of $3.9 billion to $4.2 billion. And maybe Anthony Pagano, you can comment further on that -- on the guidance.

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Yeah. Thanks, Anthony. Overall, as you've heard from us today and I guess taking a step back, right, it does start with that very, very strong product profile for DARZALEX. I think those of you who have heard me said it before, it really is the complete package. I think looking at the seven approved indications, now the SubQ, the approval in 85 countries, reimbursement in 40 countries, now more than 130,000 patients treated. So I think overall, sort of, we're very happy with the first half of the year. Obviously we saw a little bit of softness in April, some stabilization in May. But as we exited Q2 and got into Q3 we really like what we're starting to see here, particularly in the US.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Anthony. Thank you, Trung for the questions.

Trung Huynh -- Credit Suisse -- Analyst

Thank you.

Operator

And our following question comes from the line of Ken MacKay from RBC Capital Markets. Please go ahead.

Kennen MacKay -- RBC Capital Markets, LLC -- Analyst

Hi. Thanks for taking the question and congrats to the team. I certainly agree with you, Jan, that this has really been a -- really a transformational year despite everything going on with COVID-19.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Kennen.

Kennen MacKay -- RBC Capital Markets, LLC -- Analyst

So my question is also on the 4-1BB PD-1 DuoBody. You're enrolling a number of different cancers with really varying degrees of immunologic temperature, as we say, lung cancer to triple-negative breast cancer, which is basically the extreme of hot versus not. So from the emerging trial data or biomarker data, really any other distinguishing features of differentiation which tumors are you so far most excited about for the 4-1BB DuoBody?

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Kennen, for the question.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Hi. Can I take first? [Phonetic]

Jan G. J. van de Winkel -- President and Chief Executive Officer

Yes, yes, please do, Judith. Yeah.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

[Speech Overlap] Yeah. Thank you. So as you alluded to, by design, the Phase 1 component of this study is not restricted and then we have expansions. And because of the mechanism of action, which is totally different, because it's not just the blockage of the PD-1/PD-L1 axis, but the conditional activation of 4-1BB. We see the opportunity broader and the potential to impact tumors that are traditionally sensitive to PD-1s or checkpoint inhibitors like PD-1/PD-L1 and those which are like difficult or non-sensitive. So you -- and part of these data will be presented at a future meeting and you would see more by yourself.

So we will present actual data and based on that the cohorts that were selected for expansion are to be set out biologically what are different tumors that we can go. And there you have some cohorts that focus on these sensitive tumors where they can relapse or [Indecipherable] -- which would be like the post checkpoint scenario or tumors that today cannot be tackled by PD-1 and PD-L1s. So these cohorts will give us these data and benchmark with current PD-1/PD-L1s inhibitors. So by the end of the year we will have these again down the dose escalation that will give you more color and the basis for the expansions.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Judith.

Kennen MacKay -- RBC Capital Markets, LLC -- Analyst

Judith, maybe just a follow-up on that. When these data are presented, I'm just trying to understand, it will have sufficient data to really sort of make a call on efficacy here. Is this going to just sort of be PK/PD or will we also see response rates and even duration of response or will it just be [Speech Overlap]?

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Okay. Yeah, yeah. It's a little bit -- so it's a Phase 1 dose escalation. So the objective of this study is to returning the recommended Phase 2 dose and safety. But we also collective activity. So some activity will be presented. For sure the dose escalation won't give you -- it's not designed per se for efficacy but for safety. But you will see some preliminary activity on the dose escalation. These data will be presented as any additional, if any, other Phase 1.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Judith. Thanks, Kennen.

Operator

Thank you. Our next question comes now from the line of James Gordon from J.P. Morgan. Please ask your question. James your line is now open.

James Gordon -- J.P. Morgan -- Analyst

Hello. Thanks for taking the question. James Gordon from J.P. Morgan. My question was about CD3xCD20. So Roche's mosunetuzumab they recently got breakthrough designation in FL. Just curious, does that change your view about how far you are in terms of time to market behind them? Are you also seeing an expedited route, did everyone get better or just whoever gets there first? That was the question.

If I can also just squeeze in a quick clarification as well. So 4-1BB given the timing of the CMD on November 13th, is it possible that you actually present the data [Indecipherable] so, November 9 to 14 so you're actually going to have the data at the CMD and it already been a conference?

Jan G. J. van de Winkel -- President and Chief Executive Officer

I think I will -- thanks James for joining. Thank you for the questions. I think both questions will go to Judith and maybe you can start with epco, Judith.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah, so epco, we for sure, I mean we are aware of the data from every other asset in Phase 3 [Indecipherable]. It makes us even more excited that what we have done in two years from first-in-human to recommended Phase 2 dose and expansions and makes us even working harder with our partner AbbVie to try to take any other step to safely accelerate and this is what we are doing. So we know that this space is competitive, but we know the value that it could potentially bring to patients. So it doesn't change the plan but rather encourages us to work harder and better and with more excellence.

And with regard to PD-L1x4-1BB, could you repeat the question?

James Gordon -- J.P. Morgan -- Analyst

Sure. The question is in terms of when exactly we see the data. So I know you're having a Capital Markets Day I believe on the 13th of November and I believe the SITC virtual conference.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yes, you will see the date in the medical conference.

James Gordon -- J.P. Morgan -- Analyst

Got you. And so that could be in time for the CMD as well to be discussed?

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yes.

James Gordon -- J.P. Morgan -- Analyst

Okay. Thank you.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thank, Judith. Thanks, James. Very sharp question.

Operator

Our following question comes from the line of Emily Field from Barclays. Please go ahead.

Emily Field -- Barclays -- Analyst

Hi. Thanks. I was just going to try to get a little bit more precise on the last question just because I know in prior communications this year, you've talked about closing the gap with Roche. So I know --

Jan G. J. van de Winkel -- President and Chief Executive Officer

Are you still there, Emily? I don't think we hear you. Operator, is she still there?

Operator

I think her line dropped.

Jan G. J. van de Winkel -- President and Chief Executive Officer

I think the line dropped. But I think the question was closing the gap between epcoritamab and then Roche's mosunetuzumab. Maybe Judith you can a bit more on how do you think we can actually progress epco.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Thank you. Since this is what I said, we are actively working hand on hand with AbbVie to try to safely accelerate and close that gap as much as possible. We cannot quantify in months, but the fact that we started expansion cohorts tells you that we have caught up substantially with [Indecipherable] and we will continue in that taking this momentum to continue accelerating.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Judith. And Emily when you hear the recording, we will definitely follow up with you and see whether you have any other additional questions.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah. And just only one thing, I mean we never said like close the gap, but our goal is to minimize the gap and to shrink the gap as much as possible, in a realistic marker.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Judith.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks. All right, operator, I think we can take the next question.

Operator

Our following question comes from the line of Carsten Lonborg from SEB. Please go ahead.

Carsten Lonborg Madsen -- SEB -- Analyst

Thank you very much. Carsten Lonborg from SEB. Another question on your CMD. I was wondering whether you see the CMDs strictly as a science event or there will also be some financial outlook? Maybe what I'm trying to understand is whether you would maybe consider updating your 2025 Vision with maybe some financial targets now that you're a more mature company? Would that be something that you could discuss at the CMD?Thanks.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Hey, Carsten. Thanks for the question. What we're thinking about is of course the bulk will be on the science and on the products. We have some very exciting things cooking. Now the gem of the pipeline has never had the quality it has now and we want to give you further insight on that.

And then some use of the novel technology platforms, but we will of course also speak about some financial aspects, how we see the future and also about the next phase and basically investing wisely and selectively in the potential winners. But the bulk will be on the scientific and the development angle.

Carsten Lonborg Madsen -- SEB -- Analyst

Great. And then just a follow-up to that because now we're talking about the financials. Could you also -- maybe Anthony or Jan, detail the increase in the G&A costs for the quarter? How much of this was the commercial costs related to tisotumab?

Jan G. J. van de Winkel -- President and Chief Executive Officer

Oh, that's -- I hand that question over to Anthony Pagano, Carsten. He can handle that for sure.

Carsten Lonborg Madsen -- SEB -- Analyst

Thanks.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Anthony?

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Yeah. So great. So Carsten, yeah, I mean looking about sort of the higher G&A costs, I think there are a couple of moving parts here, right. In terms of R&D versus G&A split, for Q1 this year we were at 87%-13% and for Q2 we are at 81% versus 19%. If I put those two quarters together for the first half of the year, we're at 84%-16%, right. And maybe now sort of talk you through these actual moving parts with that framework. So for the H1 2020, we have higher cost compared to last year and a lot of this is down to some incremental costs following our US IPO in July of 2019.

Separately apart from those sort of ongoing recurring costs, separately for Q2 2020 we do have some one-off costs that we incurred in conjunction with the AbbVie collaboration. If we were to exclude these one-off costs, R&D and G&A cost split for Q2 would be more similar to what we saw in Q1. So there are some moving parts here, Carsten, but there certainly is one-off element that I just described which is impacting the numbers.

Carsten Lonborg Madsen -- SEB -- Analyst

Okay, it makes sense. Thanks.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Anthony. Thanks, Carsten for the questions.

Operator

And our following question comes from the line of Emily Field from Barclays. Please go ahead.

Emily Field -- Barclays -- Analyst

Hi. Can you hear me now? Can you hear me now?

Jan G. J. van de Winkel -- President and Chief Executive Officer

Yes. Yes, please go ahead.

Emily Field -- Barclays -- Analyst

Oh, great. Sorry. I don't know what happened. Thanks for answering my other question. I just had another follow-up. I believe in one of the prior answers you mentioned up current about having a place kind of across all lines of therapy. I just wanted to dig into that in terms of what maybe you see as the ideal place for the drug in terms of the treatment paradigm in DLBCL, whether relapse, refractory second line, if you could just give some more thoughts on that.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Emily. I will pass the question over to Judith.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah, thank you for the questions. I think it's premature. I think that there are still unmet medical needs in every line of therapy and this is what I like most excited about, because this is where the impact on patients will be more evident and remarkable. But still I think that we are looking at opportunities to improve the whole continuum of treatment given the differential aspects and potential transformative nature of [Indecipherable]. So I will stop there.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Judith.

Emily Field -- Barclays -- Analyst

Thank you.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Emily.

Operator

Our following question comes from the line of Laura Sutcliffe from UBS. Please go ahead.

Laura Sutcliffe -- UBS -- Analyst

Hello. Thank you. Just a quick one on DARZALEX please. Could you give us any thoughts on how you're looking at the potential in the amyloidosis market and in particular, any thoughts around duration would we welcome. Thanks.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Laura for the question. I think I will first hand it over to Judith and then probably Anthony Mancini. Judith?

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah, so -- yeah, thank you, Jan. So for amyloidosis. I mean I am, personally as an hematologist, super excited to have these results because as you know, there are no drugs approved in amyloidosis. So it's really rewarding as an hematologist like to see something that provides such a benefit in terms of organ damage, because as you know, many tried, but nothing succeeded. So again I mean talking about a full package of DARZALEX.

In terms of market, it is hard to predict because the prevalence, like in the US, for example, we say that it's 12,000 patients dealing with amyloidosis. But as you know when there are no good treatment, diseases are not in the radar screen of physicians and therefore no diagnose, under diagnose or diagnose late.

So part of the -- I mean it's very hard to predict I mean what is underneath the work, let's say, that the patient population that had amyloidosis that they don't get [Indecipherable] test to be diagnosed because there is no awareness, if there is not a good treatment. So, part of the understanding the commercial opportunity is working on really an awareness campaign, not only because this is not a disease that came through hematologists, it comes through cardiologists, through nephrologists, through clinicians because this is the pretty firm symptoms of the disease. So this is from a medical background. Now, Anthony M, if you want to elaborate, a little more on -- yeah.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Judith.

Anthony Mancini -- Executive Vice President and Chief Operating Officer

Thanks, Judith. I don't know that I can add much more except to say that, really this is great news for patients as you mentioned. It's an area of huge unmet medical need and yet another positive data set to add to the many positive DARZALEX datasets. I think once filed and approved J&J is probably in the best position to provide more color on incremental impact and duration. But it's a great question, Laura. Thank you.

Laura Sutcliffe -- UBS -- Analyst

Thanks.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thank you, Laura. Thanks, Anthony.

Operator

Our following question comes from the line of Graig Suvannavejh from Goldman Sachs. Please go ahead.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Graig?

Graig Suvannavejh -- Goldman Sachs International -- Analyst

Thank you for taking my questions. Congrats. Hey. Can you hear me? Hello.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Yes, we can hear you now. Yeah.

Graig Suvannavejh -- Goldman Sachs International -- Analyst

Okay. So, sorry about that. First of all, thanks for taking my question and congrats on all the progress and in your achievements year-to-date. I had just one question. On capital allocation you've got almost -- you've got a very nice cash balance right now. And I'm just wondering, as you think about your business where are you prioritizing investments? Is it in the internal pipeline? Is it around commercialization? Are you thinking strategically around BD opportunities? Any color around how you're thinking about that would be appreciated. Thank you.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Graig for the question. I will first hand it over to Anthony Pagano and then see whether Anthony Mancini wants to add anything on the commercialization, which is a very important part of the Company now going forward. Anthony Pagano?

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Yes. So, Graig, nice to hear your voice and chat with you today. Yeah. So look, I think, first of all just thinking about our balance sheet, your rightly pointing out. We do have a strong balance sheet. I think this has sort of been very useful for us here over the most recent period, right. I think more recently when we sort of think about being able to look through any issues as it relates to COVID-19 from that position of strength that the strong balance sheet also met when we were negotiating and what ultimately resulted in the wonderful collaboration with AbbVie that we were also negotiating from a position of strength for that collaboration. And I think moving forward, the strong balance sheet is going to continue to be super important as we execute toward our 2025 Vision.

And now with the T-cell data, there's potentially a clear path to market there. We will have to wait and see and work our way through the FDA interactions, but we're super excited about that. But also looking at our pipeline and how that's maturing, having that rock solid balance sheet means that we can absolutely execute against moving those programs forward and our 2025 Vision with sort of the absolute confidence and the power of the balance sheet behind us.

Sort of thinking a bit about our maybe opex levels moving forward, we I think continue to be focused and disciplined as we invest in our business and the growth opportunities that are in front of us. I think, as we think about being focused and disciplined there are really two sides to the coin, right. On the one hand, we think about discipline. We can think about derisking investments when we can and making tough decisions along the way. That's really around discipline. And on the other hand, thinking about focus, it starts with our focused strategy that we've alluded to that we've been executing against since 2013 and that's our 2025 Vision, right. So we're really laser sharp focused on delivering against that.

And as it relates to -- final point, Graig -- as it relates to kind of external opportunities, I think we'll continue to be focused there. Right? And the theme I talked about more recently is really where we can be natural owners, right, or we can be good evaluators of what we're bringing in and then ultimately good owners of it once we have it in-house. So I think at least for the shorter term, more of the same in terms of the deals we've done more recently.

Maybe Anthony Mancini want to add some stuff on the commercial side.

Anthony Mancini -- Executive Vice President and Chief Operating Officer

Yeah, look, I would reiterate what Anthony Pagano mentioned in terms of how the AbbVie collaboration is a critical step toward our 2025 Vision and part of investing behind that thoughtful step is really being thoughtful about our priorities from a commercialization standpoint and we've taken steps now to start to build our commercial organization in the US and Japan recently, making key strategic appointments there and we'll continue to do that. And looking externally we will continue to look for, as Anthony Pagano talked about, opportunities to complement what we have, opportunities to deepen what we have and accelerate our quest to achieve that vision and beyond. So I think I'll leave it there Jan and pass it back to you. But thanks Graig for the question.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks Anthony and Anthony. I think, Graig, I'll leave it with this here.

Graig Suvannavejh -- Goldman Sachs International -- Analyst

Okay, thank you.

Operator

Our last question comes from the line of Sachin Jain from Bank of America. Please go ahead.

Sachin Jain -- Bank of America/Merrill Lynch -- Analyst

Hi, there. Thanks for letting me onto the call. Just a couple of pipeline questions to wrap up. On epcoritamab for the CMD in November, will you be able to outline the full Phase 3 program at that point? And by then do you expect to have visibility on how you've closed the timeline versus competition on the fast-to-market strategy to be able to give us further color there?

Second question is on HexaBody-CD38. Do we still expect some initial data from that through '21? And then the final question, obviously there's a lot of exciting dates coming to year-end, but wonder if you could just flag some earlier stage assets, which will be giving initial data next year that we can perhaps begin to focus on now. Thank you.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks Sachin. Let me start with question two. I will allocate the first one Judith so that she can think about what will be known at the time of the Capital Markets Day and can't communicate it publicly given the competitive landscape on epcoritamab. So for HexaBody-CD38, we still plan to move it into the clinic this year. So it's fully on schedule, Sachin.

And I think at the very earliest end of next year we could see some data, but more likely in '22. And then in the new year, probably some early data from some of the programs, which are now in the clinic. We now have several new programs in the clinic which could be to do HexaBody-CD37 program, but that could be in the second half of '21, I would say, and therefore the DuoBody-CD3x5T4 probably second half of next year, at the very earliest or in '22 more realistically.

Maybe Judith you can give some further color to Sachin on the full Phase 3 program for epcoritamab as we are working on and planning the [Speech Overlap].

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah, so we at the Capital Market Day, I mean we won't disclose on our plans because it won't be smart and -- from our part. But by November there will be -- as you know the clinical developments like a map. So you will have two or three points on that map to guide you on the whole journey. But we will never ever discuss at the Capital Market Day, the whole clinical development plan because this could be not wise to do that.

Sachin Jain -- Bank of America/Merrill Lynch -- Analyst

Very clear. Thank you.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Judith.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah.

Jan G. J. van de Winkel -- President and Chief Executive Officer

Thanks, Sachin.

Operator

And there are no further questions at this time, please go ahead.

Jan G. J. van de Winkel -- President and Chief Executive Officer

All right. So thank you all for calling in today to discuss Genmab financial results for the first quarter [Phonetic] of 2020. If you were not able to give your question or you were unable to get to us with the question, please reach out to the Investor Relations team. We hope that you all stay safe, remain healthy, keep optimistic. very much look forward to speaking with that you again soon. And this concludes the call.

Operator

[Operator Closing Remarks]

Duration: 59 minutes

Call participants:

Jan G. J. van de Winkel -- President and Chief Executive Officer

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Anthony Mancini -- Executive Vice President and Chief Operating Officer

Peter Verdult -- Citi -- Analyst

Wimal Kapadia -- Bernstein -- Analyst

Michael Schmidt -- Guggenheim Securities, LLC -- Analyst

Matthew Harrison -- Morgan Stanley & Co. LLC -- Analyst

Trung Huynh -- Credit Suisse -- Analyst

Kennen MacKay -- RBC Capital Markets, LLC -- Analyst

James Gordon -- J.P. Morgan -- Analyst

Emily Field -- Barclays -- Analyst

Carsten Lonborg Madsen -- SEB -- Analyst

Laura Sutcliffe -- UBS -- Analyst

Graig Suvannavejh -- Goldman Sachs International -- Analyst

Sachin Jain -- Bank of America/Merrill Lynch -- Analyst

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