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Genmab A/S (NASDAQ:GMAB)
Q3 2020 Earnings Call
Nov 4, 2020, 12:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by. Welcome to today's Q3 Report 2020 Call. 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 Relations 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.

I now hand you over to first speaker, Jan van de Winkel. Please go ahead.

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

So, hello and welcome to the Genmab conference call to discuss the Company's financial results for the first nine months of 2020. With me today to present these results is our CFO Anthony Pagano. And for the Q&A, we will also welcome 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. We have seen significant advances in all of our and our partners' pipelines throughout 2020 and the third quarter was no exception. On a single day in August, the US FDA granted approvals to Novartis for Kesimpta in relapsing MS and to Janssen for the eighth multiple myeloma indication for DARZALEX. The Kesimpta approval was highly anticipated and we were very pleased that RMS patients in the US have this convenient treatment option approved nearly a month earlier than expected.

I'm also very pleased to note the progress in a proprietary pipeline we have at least 50% ownership of potential therapies. In July we dosed the first patient in an expansion cohort for epcoritamab. As you may have seen this morning epcoritamab will be featured in an oral presentation at ASH.

In August, we saw the start of the first in human trial of DuoBody-CD3x5T4. And as you may recall, we are developing both epcoritamab and CD3x5T4 as part of a broad oncology collaboration with AbbVie. It is also my pleasure to announce that in October, we submitted the IND for HexaBody-CD38, the second IND Genmab submitted this year. We're also very much looking forward to the presentation of the first clinical data for DuoBody-PD-L1x4-1BB, a major milestone in our collaboration with BioNTech at the SITC annual meeting next week.

In September we presented key data for tisotumab vedotin, which we are developing with Seagen from the Phase II innovaTV 204 trial during a late breaking oral presentation at ESMO. Based on these results, we together with Seagen look forward to submitting a BLA to the FDA under the accelerated approval pathway.

Recently we entered into a joint commercialization agreement with Seagen. Genmab will co-promote tisotumab vedotin in the US and we will lead commercial operational activities and book sales in Japan while Seagen will lead operational commercial activities in the US, Europe and China with a 50-50 cost and profit split in those markets.

And in the other markets, Seagen will be responsible for commercializing tisotumab vedotin and Genmab will receive royalties based on a percentage of aggregate net sales, ranging from the mid-teens to the mid DKK20 million. [Phonetic] The companies will continue the practice of joint decision making on the worldwide development and commercialization strategy for tisotumab vedotin. I would also like to highlight recent developments in the very productive DuoBody research and license agreement with Janssen. A seventh DuoBodya molecule has now entered the clinic and there are two Phase III trials by Janssen for amivantamab in non-small cell lung cancer listed on CT.gov.

In late October, ClinicalTrials.gov was updated that it had an expanded access program to provide amivantamab to patients with metastatic non-small cell lung cancer who have epidermal growth factor receptor Exon 20 and search mutations and whose disease has progressed during and after current standard of care platinum-based chemotherapy.

Excitingly Janssen has announced that they are planning a US filing for amivantamab. If this occurs, it will be the first investigational therapy using our proprietary DuoBody technology platform submitted for approval in the US, a major milestone for this technology and for Genmab. And we are very excited that ASH has selected two Janssen products that were created using our DuoBody bispecific platform for oral presentation at the Annual Meeting.

Turning to DARZALEX, as I mentioned the FDA broadened the label for the eighth time with an approval. based on the Phase III CANDOR study. Janssen has now also submitted an sBLA seeking approval in AL amyloidosis and if this is approved it would become the first indication for DARZALEX outside of multiple myeloma.

Recently, we announced data from the second part of the Phase III CASSIOPEIA study, which met the primary endpoint of progression-free survival at a pre-planned interim analysis. Following the positive data from the first part of CASSIOPEIA, we are very pleased to see this benefit in the part two of the study.

Finally, we reported $2,937 million in net sales by J&J during the first nine months of the year, an increase of 35% over the first nine months of 2019, resulting at about DKK2.9 billion and royalties.

On September 22nd Genmab commenced a binding arbitration of two matters under the license agreement with Janssen. We refer you to the details mentioned in the announcement and we cannot provide additional information until the arbitration is concluded. Genmab intends to vigorously protect its rights under the agreement. However, the outcome of any arbitration proceeding is inherently uncertain.

I'm pleased to now turn over the call to Anthony Pagano to present detailed financial results for the first nine months of 2020. Anthony, go ahead.

Anthony Pagano -- Executive Vice President and Chief Financial Officer

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. 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 Kesimpta and TEPEZZA. We're excited about the launch of Kesimpta in RMS that occurred in August and the TEPEZZA launch continues to be strong.

Next onto R&D investment shown on the right. And this is one of the areas where our collaboration with AbbVie makes a real difference. We'll continue to be focused and disciplined in our approach. As we 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.

Now, 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.

Now let's move to DARZALEX on Slide 5. Here we saw continued strong performance in the third quarter with the first single quarter with sales over $1 billion. You can see that in the chart on the left. Overall DARZALEX worldwide sales grew by 35% year-over-year. That's net sales of $2.9 billion, which translates to DKK2.9 billion in royalty income for Genmab. For Q3 we believe this shows a normalizing of the sales following the softness we saw in Q2 due to COVID-19. Additionally, we're pleased that sales include continued uptake of the subcu formulation, which was approved in the second quarter.

As I've just highlighted, Q3 was strong and so far in Q4 we like what we're seeing in the US. But we do need to bear in mind the context of the unfortunate reemergence of COVID-19. Even so, we continue to expect that DARZALEX sales will be in the range of $3.9 billion to $4.2 billion for 2020. 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 6.

Looking at the graph on the left, you can see that there were three significant contributors to the increase in revenue. First, as we noted in Q2, we recognized 90% of the $750 million upfront payment from AbbVie. Now clearly that's a one-off contribution. And second DARZALEX royalties grew 43% compared to the first nine months of 2019. Finally, we see other. Most of that DKK399 million comes from two main items. First TEPEZZA royalties. Here we've seen a really strong start. It's still early days, but we see this is a very promising launch. And second, the payment from Novartis as a result of Novartis' plan to transition Arzerra to an oncology access program for CLL patients in the US.

Now, if we take DARZALEX and TEPEZZA together, we're really pleased to have seen recurring revenues grow by 51% in the first nine months of 2020. 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 nine months of the year. In total operating expenses increased by DKK698 million, which was driven by the accelerated investment in our product portfolio, including the advancement of both epcoritamab and DuoBody-PD-L1x4-1BB. We've 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 DKK5.4 billion of operating income.

Now having looked at the individual parts, let's look at our financials as a whole on Slide 8. Here you will see a P&L summary. In the first fine months of the year, revenue came in at DKK8.1 billion, an increase of nearly DKK5.7 billion compared to the first nine months of 2019. The increase was primarily driven by the upfront payment from AbbVie and higher DARZALEX royalties. Total expenses were DKK2.6 billion with 84% being R&D and 16% G&A.

Operating income, as I noted, was DKK5.4 billion, compared to DKK462 million in the first nine months of 2019, driven by higher revenue and that brings us to our net income of DKK4.2 billion. So an extremely strong 2020 so far despite the COVID-19 pandemic which brings me to our guidance on Slide 9.

We are maintaining our 2020 guidance. In summary, we expect our revenue to be in the range of DKK9.25 billion to DKK9.85 billion. This is still driven by the upfront payment from AbbVie and the continued growth of DARZALEX, complemented by the strong launch of 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 a range of DKK5.35 billion to DKK5.95 billion.

Now I will move to my final slide, Slide 10. In conclusion, I just want to take a moment to reflect on our business and financial position. We have a very strong foundation, even stronger following our collaboration with AbbVie. Especially important in today's environment, we've got a robust balance sheet. $2.7 billion of cash at the end of the 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 11. 2020 has been an incredibly successful year for Genmab. Due to the drive and determination of our team, we have already hit over half of our key goals and I am confident that over the final quarter of this year, we will continue to make progress against our priorities.

That said, the target we set for ourselves for this year were extremely ambitious and as you will have noted here, we are no longer anticipating additional solid tumor data for tisotumab vedotin in 2020.

One goal we will meet very soon is, as I mentioned, the presentation of the preliminary clinical data for DuoBody-PD-L1x4-1BB at SITC next week. We look forward to being able to walk you through that data among other topics during our Capital Markets Day next Friday, November 13.

We are furthermore very excited to inform you that our abstract for DuoBody-PD-L1x4-1BB has been selected to be presented and discussed with selected media outlets at the SITC Virtual Press Conference next Monday on November the 9th. We are also anticipating a very exciting ASH this year. We will hold a virtual 2020 ASH data review meeting following ASH on December 8. At this event we will discuss the data from some of the well over 40 accepted presentations on Genmab created antibody programs including many that were accepted for oral presentation. And details about this event have been released about an hour ago and can be found on our website.

So let's move to Slide 12. That ends our presentation of Genmab's first nine months of 2020 financial results. Now, operator, please open the call for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] We now have your first question. It's coming from the line of Wimal Kapadia from Bernstein. Please go ahead. Your line is now open.

Wimal Kapadia -- Bernstein -- Analyst

Oh, great. Thank you very much for taking my questions. I am Wimal Kapadia Bernstein. So, Jan, I have to ask about the epco substract that has come up. Clearly very strong data, particularly at the high dose. So first, I just wanted to get your thoughts on the extent of the deepening responses with time for a product that you have seen. I am just trying to get a sense of how the complete response could evolve with greater duration given the ORR is already 100% of the high dose.

And then just tied to that, Jan, you previously talked about an earlier filing for the product in select indications. Given the emerging data we are seeing, can you provide any additional color on these indications and timelines?

And then my second question is just on talquetamab and the GPRC5D target. Again the early ASH data looks quite encouraging in a sick population. But I'm interested to hear your thoughts on the IV versus the subcu dosing for the product. And just some of the safety -- your thoughts on safety, given some of the CRS rates look quite high. Does that kind of limit the optionality of the product? Thank you.

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

Thanks, Wimal for the questions. I will definitely turn the first question over to Judith. But let me first take one aspect of that earlier filing. We definitely see possibilities, Wimal. But I think we have to first present to you the detailed data and then give you further color at that moment. So we are going to pause [Phonetic] that.

And as it relates to your second question, Wimal, these are Janssen programs. We are not onto the details of the talquetamab and teclistamab. So I'm not able to comment on the toxicity profile and on the IV versus the subcu profile of these molecules. But I think you need to ask Janssen for that.

But I will ask Judith to maybe give a bit more color on the epco data and I can tell you that we cannot wait, Wimal, to present the data at ASH. I think this will be a fantastic ASH this year for Genmab. And as I said before, the more data we see with epcoritamab, the more happy we get with the data. I think we have really a potential best-in-class molecule here.

And having said that, maybe Judith, over to you to see whether you can say anything further on duration of response.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah. Thank you, Jan. So just to answer the question. The first record [Phonetic] of the abstract is July, but for the actual poster, you will see a little bit more data. And as disclosed in the abstract by the time of the cut the median follow-up was 8.3 months and 25 patients were still ongoing. And I think that with this I gave you a signal that 25 patients were still ongoing. And if you look at the data again at the table in above 48 milligrams for the DLBCL from seven patients, the ORR was 100%; CR, 28%; 72%, PR those patients were ongoing. And [Indecipherable] and the cut is arbitrary that in order to have definite [Phonetic] number of patients within 12, three patients; 100%, ORR; 33%, APR; 63%, CR; 63%, PR. So we expect as patients continue, as you said, the likelihood of deepening these responses.

In terms of duration, again duration of follow-up if eight months. But you need to appreciate that most of the patients were enrolled early in a low dose cohort.

Wimal Kapadia -- Bernstein -- Analyst

Great. Thank you very much.

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

Thanks, Judith. Thanks, Wimal for the questions.

Operator

Thank you. Your next question comes from the line of Peter Verdult from Citi. Please go ahead. Your line is now open.

Peter Verdult -- Citi -- Analyst

Thank you. Peter Verdult, Citi. Jan, you only have ASH abstract. Great to see the epco and the data from the myeloma by specific programs. Just thinking ahead to SITC next week, is it too greedy or early to hope that we might see similar efficacy signals in the PD-L1x4-1BB data to be presented next week? I realize you're not going to say anything in detail, but if you could just sketch in broad terms what we might expect to see over and above the abstract that will be helpful.

And then secondly, Anthony, just to better understand why guidance is unchanged, especially when we can all see how strong the DARZALEX and TEPEZZA trends are. Is it just simply conservatism given the macro backdrop. Is the J&J royalties opex phasing or something else that's driving you to be -- to maintain the guidance?

And if I could just a clarification on this arbitration process. I realize you're going to make no forward-looking statements. Actually J&J have withheld something in Q2 and Q3, I know it relates to the Halozyme royalty, I believe you need to contribute to just 5%. So actually speaking, did they deduct 1% or 2.5% of FASPRO sales from the royalty they pay to in Q2 and Q3. So it's a backward looking question. Thank you.

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

Thanks, Peter. I will definitely leave the last two questions to Anthony. For the first one, I think we can say very minimally because we have in barcodes basically, Peter, as you were on [Indecipherable] SITC. You will definitely see a very nice data set from the dose escalation with the PD-L1x4-1BB bispecific antibody.

And, yeah, I think the fact that it has been selected for presentation and highlighting at the press conference, probably already tells enough at this point. I want to leave it with that, Peter, and then hand over to Anthony for the financial questions on the guidance and on the potential offset for Halozyme royalties by Janssen.

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Yeah. Thanks, Jan. Thanks, Peter. So I think looking at where we're at, so starting with revenue on a year-to-date Q3 basis just sort of summarizing, we're at DKK8.1 billion of revenue which means we touched DKK1.2 billion to get to the lower end of our guidance and DKK1.8 billion to get toward the upper end. Putting this in the context, our total revenue for Q3 was DKK1.7 billion but this still includes around DKK200 million of one-time items, primarily related to the payment from Novartis that I mentioned in my opening remarks.

And, Peter, you put the nail on the head, you hit the nail on the head. It was expected key contributors in Q4 will continue to be DARZALEX and TEPEZZA. Looking at dara after a strong Q1, we did see some softness in Q2 due to COVID-19. As you've seen earlier in October when the numbers came out, this was followed by an exceptionally strong Q3 where as I mentioned earlier, we saw the first single quarter with over $1 billion of sales. In fact sales reached nearly $1.1 billion, which is a 22% quarter-over-quarter growth compared to Q2.

And there are a couple of factors I sort of think about then where we're at. As I mentioned, there is significant quarter-over-quarter growth. So we need to sort of think about any potential intra-quarter patient dynamics. Secondly, you referred to the macro environment. We need to put this in the context of the unfortunate reemergence of COVID-19. And as I mentioned in my opening remarks, I did talk about what we're seeing the US being strong here in the early parts of Q4, but our visibility ex-US is rather limited.

Now in terms of the arbitration, maybe a comment in this regard regarding DARZALEX and the related royalties, given the ongoing arbitration and Janssen starting to make deductions in Q2, we do need to follow the accounting rules and we have started to accrue for this as a reduction to our royalty revenue.

I can't get into the specifics of exactly how we're doing that or exactly as to what Janssen is sort of withholding from us. But put all this together, we're really pleased with the progress of dara and we remain confident in our full year guidance range of $3.9 billion to $4.2 billion, as well as our total revenue range of DKK9.3 billion to DKK9.9 billion. We think that's the right place to be as we sort of execute really and get into Q4.

And I'll be brief in terms of opex. Here we see a number of sort of significant increase items in Q4, primarily related to DuoBody-PD-L1x4-1BB and epco in terms of existing and potentially new trials as well as some significant CMC activities.

Peter Verdult -- Citi -- Analyst

Thank you.

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

Thanks, Peter. Thanks, Anthony.

Operator

Thank you. Your next question comes from the line of Kennen MacKay from RBC Capital Markets. Please go ahead, your line is now open.

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

The question and congrats on the quarter and the stellar 2020 so far. Another question on the PDL1x4-1BB, I think this combination is maybe one of the most exciting within the sort of immunotherapy landscape beyond PD1 to get beyond the initial checkpoint. I was just wondering given evaluating single-arm trial has been a challenge in the past sort of how you're thinking about discriminating the efficacy, the contribution of 4-1BB versus PDL1 here? And really what we should be looking for as we look at this data coming up at GRIFFIN? Thank you and congrats again.

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

Thanks Kennen for the kind words and congratulations PDL1x4-1BB, I'm going to hand that over to Judith and then ask her to give you some color and maybe add to that. Judith?

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah. Thank you Jan. So for CD3 as Jan alluded, we will have ample time to discuss this at the Capital Market Day, and the actual poster the actual data. To give you a hint on how we think about the contribution of each one of the component, as you have seen we are running several expansion cohort in parallel arms and each of the expansion cohorts will teach us where we stand because we chose indications where the benchmark for PD1s, PD-L1s is very clear and consistent such as triple-negative breast cancer or head or neck cancer or [Indecipherable] so as examples. So these opportunities will give us an indirect comparison of what GEN1046 can do vis-a-vis what is very consistently reported for PD1s, PD-L1s. Is it clear?

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

And Judith maybe just to elaborate on that a little bit, that's sort of the -- those indications span both sort of the immunological code as well as how tumors obviously post PD1 treatment in earlier lines of therapy. Just wondering yourself and the team are sort of most excited about the potential for [Indecipherable] turning cold tumors hot, so to speak, or much more so in reactivating tumors that previously were immune responsive? Thanks again.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Okay. I would say all of the above. So as you see in the expansions we are enrolling patients that are naive to checkpoint inhibitors in those tumors where the activity for PD1s or PD-L1s is more or less low. And in addition we are enrolling like tumor types that failed PD1s, PD-L1s. So obviously after PD1s, PD-L1s is kind of low hanging fruit and we will collect those data and the totality of the data will guide us on future steps. With regard to hold or cold, I don't know what definition are you using. But for the conditional activation of 4-1BB there is some level of PD-L1 that we need and we are collecting a very comprehensive biomarkers to understand better how this could or could not play at all for these agent.

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

Thanks Judith. Thanks Kennen. Next week there will be a lot more Kennen. So it will be PDL1x4-1BB week next week. All right, operator, we can move to another question.

Operator

Thank you. Your next question comes from the line of Trung Huynh. Please go ahead. Your line is now open.

Trung Huynh -- Credit Suisse -- Analyst

Hi guys. Thanks for taking my questions. It's Trung from Credit Suisse. So firstly just on to tisotumab vedotin. We saw the pivotal data at ESMO. The efficacy looks really, really good in this population. However we did see over 50% of people who are having ocular adverse events. So they were mild to moderate, but are you putting in your plans an expectation for a REMS program or any type of eye care education program to avoid these ocular events turning severe? And then if you could just confirm when you expect to file? And then secondly, you're on the cusp of transitioning from this R&D company to a commercial comes and that starts with tisotumab. So perhaps can you talk about level of investments that you're going to need for next year? And when does those expenses about to ramp? So any help there would be welcome. Thanks very much.

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

Thanks Trung Huynh. And I'm going to definitely hand over to Judith for the first one. For the filing, I can tell you that you should stay tuned. I mean, we are very busy preparing that and then I will ask Anthony to actually to give you some color on the investments needed to really make the move to a really flat commercial company. But Judith maybe you can start with the ocular events and then on the potential REMS program.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Thank you. So first, we are encouraged by the data, very enthusiastic and actively working on the BLA. At this point, we don't disclose timelines, but stay assured that our commitment to patients with cervical cancer is to file as soon as the BLA. With regard to the ocular toxicity as highlighted by [Indecipherable] in the ESMO discussion with the management plan that we included in the protocol that includes corticotropin and dose modifications is absolutely manageable and what is known from MMA is. As to whether we will go with education event, these are regulatory details that we are not disclosing publicly. So this is the answer.

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

Thanks Judith. And then maybe Anthony Pagano, a bit of color for churn on the steps in the coming time. I don't know how much we are willing to disclose, but maybe you can provide some perspective here for churn.

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Yeah, happy to do so. I mean, for me, it really does start with the financial framework of being focused and disciplined. In this context we've been thoughtful about how we made investments in building out our early commercial capabilities over the last several years. Net growth accelerated here more recently. And also more recently it was done for further build out in leadership position in the U.S. and of course really excited now also have Anthony Mancini on board as well. In terms of this focus -- the U.S., Japan, these are the two markets where we plan. Now following the positive data further capability, all of this [Indecipherable] launch but also thinking about the broader opportunities that are in front of them.

And maybe just quickly thinking about our investment generally will continue to be focused and disciplined as we invest in our business and the growth opportunities that are in front of us. And really I talked about the tax, as we think about being focused and disciplined there are really two sides to this point. On the one hand about discipline, about derisking investments and making tough decisions along the way. The other side of that point, thinking about focus of our focused strategy or even executing against for some time. It's also about how to allocate capital and for 2020 very deliberate in our investment dollars. And our growth around how we think really moving our business forward and we commit to really to move forward will likewise be focused and disciplined and provide relevant sort of thought process as to why we're making good investments. That's probably what will say now.

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

Thanks Anthony. Thanks Trung.

Trung Huynh -- Credit Suisse -- Analyst

Thanks guys.

Operator

Thank you. Your next question comes from the line of Michael Schmidt from Guggenheim. Please go ahead. Your line is now open.

Michael Schmidt -- Guggenheim Securities, LLC -- Analyst

Thanks for taking my questions and congrats on the progress. Maybe another follow-up on epcoritamab. I guess now that you have more clinical data in hand and congrats on the ASH presentation. I guess what is your latest thinking around the development opportunity longer term maybe relative to your competitors primarily Roche and Regeneron? And where do you think the drug may have the strongest value proposition? And another question on GEN1046; again, I know you commented around the update coming up here at SITC. I'm just wondering if you should think about this as a potential monotherapy opportunity in patients progressing or resistant to checkpoint inhibitor therapy or whether there is -- what type of efficacy bar one should think of in those settings potentially and whether there is an opportunity longer term also in earlier stage maybe patients maybe in combination with that with other drugs? Thanks so much.

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

Thanks Michael for the questions. And I'm going to hand over both to Judith units to give some color on epco and the value proposition and the development plan. This is expenses and very rapidly developing, you will see very soon Michael more and more trials appear on sitc.gov. I can assure you and then for the PDL1x4-1BB maybe also a bit more color Judith on how to develop this as monotherapy and in combination with other drugs for different cancers. Judith, over to you.

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yes, thank you Jan and thank you, Michael. So with regard to the question for epco [Indecipherable] but the way we see this asset vis-a-vis versus other is with very, very high efficacy, very acceptable safety and convenience of the subcutaneous formulation. And because of these characteristics we plan to unleash the full potential of epco in the whole spectrum of B-cell malignancies. Of course, we will go to the traditional development paradigm which is start with a low-hanging fruits and expand as we learn more in different combinations. And Jan alluded, you will see more in coming weeks. So this is with regard to epco and really to other assets -- cross trial comparisons are difficult, but we are very pleased with how a debate is consolidating in each card and as we increase the end and the characteristics and attributes of epco becoming more consistent.

And I would like to flag that [Indecipherable] the recommended Phase 2 dose I think was declared last year or you know we started two years ago and we started the expansions already and more to come in coming weeks, months. So this is with regard to epco so fully committed to unleash the full potential and more to come. With regard to GEN1046, I don't think that single agent or combination are mutually exclusive. The way that we are exploring is we start with single agent. We define the safety profile and the efficacy bar and we assess the potential for combination in terms of pain, which combination partner and these will be guided by the data that we see as single agent.

So we are thinking of both strategies and from the expansion cohort will tell us where to combine, and we will explore and there are several agents that we start the discussion that could have any PBT or synergy with GEN1046. So more to come as we learn about the expansions, where do we stand. And in terms of efficacy what is the bar? As with other IO, order is important, but duration like PFS and impact on overall survival is super important. And this is characteristics of IO where you have responses. But you have long lasting stable disease, which really benefit patients. So it's will be time landmark analysis plus the traditional TCR and order.

Michael Schmidt -- Guggenheim Securities, LLC -- Analyst

Okay, great. Thank you so much.

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

Thanks Judith. Thanks Michael.

Operator

Thank you. Your next question comes from the line of Sachin Jain from the Bank of America. Please go ahead. Your line is now open.

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

Hi. Thanks for taking my questions. A couple please; especially kicking off DARZALEX, could you give an update as to where and sub-cut penetration is in the U.S. and how you're thinking about that into '21? And then going back to the arbitration and apologies if you are unable to answer this, but do we expect this to be resolved by the time of full year '21 guide or should we start thinking about '21 on a reduced royalty rate basis however the impact could be more material if sometimes a bigger percentage of DARZALEX sales? So that's topic one. Topic two, is just to go back to 4-1BB, I've seen a lot of comments already, but just to clarify. Are you ready to announce next steps in terms of trial expansion, team, etc at the Investor Day at the end of next week? I just wanted to clarify that. Thank you.

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

Thanks Sachin for the questions. I'm going to hand over the first one to Anthony Mancini give a bit more color on subcu. Then the second question to Anthony Pagano and then 4-1BB I think we should park that question basically till next week Sachin. We have a Capital Markets Day. We have SITC and we are not willing to give you further color on that at this point, but we will definitely be more than pleased to walk you over the data. And I think we need to wait till next week. So maybe I can hand over to Anthony Mancini to give a bit more color on subcu and how this is actually progressing in the U.S. Anthony?

Anthony Mancini -- Executive Vice President and Chief Operating Officer

Thanks, Jan and thanks Sachin for the question. Yeah, overall, we're very pleased with the strong growth in share gains across the line to therapy for DARZALEX specifically as it relates to fast growth in the U.S. It was clearly a driver of some of the share gains that we're seeing in earlier in earlier lines and now to give you some color if you look at IQVIA and Symphony data it accounts for in the latest weekly gross sales data about 40% of U.S. weekly gross sales. And as it relates to market share we're also seeing encouraging performance.

I think in the latest data point and this is brand impact data from IQVIA we saw the highest point in total frontline patient share at 12% and also the highest ever point as it relates to new frontline patient share at 16%. So we continue to believe that earlier use of DARZALEX will be driven by [Indecipherable] and certainly we're continuing to hear that the key difference, the efficacy and the safety benefits are very favorable from a customer perspective. So we continue to believe that that will be, that will continue to gain share heading into '21. Maybe I'll pass it to Anthony Pagano to talk about the second part of your first question.

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

Thanks Anthony. Anthony Pagano, any color on offsets for royalties in '21?

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Yeah, thanks Jan. Thanks Sachin. Sachin I can really appreciate that I wish I could help you out. But I'd just refer you back to the details that you mentioned in the announcement around the arbitration. And really, I can't provide any additional information until the arbitration is concluded. So unfortunately I just have to leave it there.

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

Okay. Thank you very much.

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

Thanks Sachin. Thanks Anthony.

Operator

Thank you. Your next question comes from the line of Emily Field from Barclays. Please go ahead. Your line is now open.

Emily Field -- Barclays -- Analyst

Hi, thanks for taking my question. Just a couple of quick ones. If you could remind us of the FX basis for the current guidance? And then also just in the answer to the last question, you gave the update for frontline penetration for DARZALEX so just if you wouldn't mind giving the full update across the different lines of therapy. Thank you.

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

Thanks Emily for the questions. So first one is for Anthony Pagano. The next one is for Anthony Mancini to give you full color of that because we just got the brand impact data for September, Emily. We will be happy to read them out to. Anthony Pagano?

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Yeah. Hi, Emily. In terms of FX we had an original assumption to begin a year of a U.S. kroner rate of 6.5 and we've left that in place all years kind of our full year assumption as we're all well aware. We started the year off ahead of that. We now find ourselves this morning was I think around 6.25, 6.37. And so we're leaving that assumption of 6.5 unchanged and maybe now over to Anthony Mancini to talk about the market shares.

Anthony Mancini -- Executive Vice President and Chief Operating Officer

Yeah, thanks Anthony and thanks Emily for the questions. Just to give you the update on market shares for total patient share, I gave you the front line total patient share at 12%. Second line is up to 41%, third line is now at 49% and fourth line is 43%.

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

Thanks Anthony.

Emily Field -- Barclays -- Analyst

Great. Thank you.

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

Thanks, Emily. Let's move on to the next because we have still a number of people asking questions, I believe. Next one?

Operator

Yes, sir. Your next question comes from the line of Jonathan Chang from SVB. Please go ahead. Your line is now open.

David Ruch -- SVB Leerink -- Analyst

Hey guys, this is David Ruch on for Jonathan. Congratulations on the progress and we appreciate your taking our questions. First question on tisotumab vedotin, could you talk a little bit about the potential to expand into additional indications beyond cervical cancer and the timing of the disclosure for these additional tumor types?

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

Thanks, Dave for the questions. I will hand it over to Judith. We are now testing tisotumab vedotin out in five other solid tumors. Judith can give you some further color on which tumors they are and potential timing. Judith?

Judith Klimovsky -- Executive Vice President and Chief Development Officer

Yeah, thank you. So as Jan alluded we are testing in ovarian cancer for tumors [Indecipherable] based on the presence that were selected based on the presence of the expression of tissue factor squamous non-small cell lung cancer, pancreas and colorectal cancers. These two studies are operationalized by our partner. We are actively enrolling patients. And at this point, we can commit on a particular timelines and we will see, and we expect by next year we will have more clarity on when this cohort will have enough data to be presented. Now in terms of tisotumab vedotin the way I think about it and if the data on cervical cancer is super favorable, but it can be, if you think about as proof of mechanism of action where other tumor types with that expressed tissue factor might respond as well and this is why we are looking forward as well to have more data on each one of these tumors to understand that the potential.

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

Thanks Judith. Thanks, Dave.

David Ruch -- SVB Leerink -- Analyst

Thank you. I just wanted to follow-up for enapotamab vedotin, could you talk a little bit more about the data disclosure we might get over the remainder of this year and how you're thinking about the next steps for that program? And that's it from me. Thank you.

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

So I can be brief Dave. We haven't updated you on that yet. This year we will have the data to allow for decisions on next steps and that's where I want to leave it at. So busy times ahead in the coming two months.

David Ruch -- SVB Leerink -- Analyst

Got it. Thank you.

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

All right.

Operator

Thank you. Your next question comes from the line of Graig Suvannavejh from Goldman Sachs. Please go ahead. Your line is now open.

Graig Suvannavejh -- Goldman Sachs International -- Analyst

Yeah, hey it's Graig Suvannavejh, Goldman. Thank you for taking my questions and congrats on the progress in the quarter. I've got two please. Just as a follow-up to an earlier question on the litigation. Just wanted to and I might have missed it, any expectations on the timing of that resolution and how we should be thinking about that or whether it's year-end or first half of next year or sometime next year? And then my follow-up just on the uptake of FAST Pro, I'm just curious if you're seeing from a reimbursement or market access perspective, whether there are any hurdles or challenges that might still be in place that is perhaps currently still holding back the potential uptake of that product? Thank you.

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

Thanks Graig for the questions. I will definitely pass the second one over to Anthony Mancini. But let me start with the arbitration. As you and I know when I said in my introductory remarks, we cannot make any further comments and the timing of any arbitration proceedings Graig is inherently uncertain. So we cannot give any further color. We will do that after the arbitration is over, basically, then we can give you all the details, but not now. And then maybe Anthony Mancini on the potential hurdles of FAST Pro.

Anthony Mancini -- Executive Vice President and Chief Operating Officer

Yeah. Thanks, Jan and thanks Graig for the question. At this point in the U.S. the Janssen has done a really, really nice job as far as removing any hurdles the uptake from a -- or the uptake from P&C and pathway perspective on a GPO perspective has been spot on. And so there are no remaining hurdles in the U.S. and certainly in Europe it takes time to get public reimbursement for the subcu formulation and at least a couple of the major markets as is the case that there is public reimbursement achieved for the subcu formulation and some of the EU major markets already. So it's going very, very well.

Graig Suvannavejh -- Goldman Sachs International -- Analyst

Thank you.

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

Thanks Anthony. Thanks Graig.

Operator

Thank you. Your next question comes from the line of Ashtika Goonewardene from Truist Securities. Please go ahead. Your line is now open.

Ashtika Goonewardene -- Trust Securities -- Analyst

Hi guys. Ashtika Goonewardene from Truist Securities. Thank for taking my questions. Jan, I think a couple of quarters ago, you mentioned that the FAST Pro J&J was training hospitals staffs for administration as a work around to the shutdowns that are happening due to COVID wave one. I'm wondering now with COVID wave two under way and has broaden this out to more cost in the U.S. and also maybe into Europe to these kind at-home administration to help them sustain volumes there at FAST Pro? And then on PD1 4-1BB if I may, I'm excited for PD1 4-1BB week next week, but I was wondering if you guys could help me prep with some immunology homework here. You know what you know about your own asset, but we've also seen some of the data for Roche's FAP-4-1BB [Indecipherable] at ESMO where we didn't see activity in PD1 patients and didn't see much activity on TNBC. Reading between the lines in our abstract you seem to have maybe a better profile here, significant at high level in terms of targeting dosing other engineering aspects. Could you maybe walk us through why yours is better than Roche's FAP-4-1BB approach? Thanks.

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

Thanks Ashtika for the questions and I will start with the first one. I can tell you that what we said before is that actually [Indecipherable] in U.S. were training nurses to visit patients at home for FAST Pro treatments and I don't know whether this actually has been broadened in the second wave of coronavirus. So I'm going to ask Anthony Mancini in a sec to give his perspective on that because I'm simply not aware of that Ashtika. But as it relates to PDL1x4-1BB, I would like let Judith give you a bit more color there. But I think the big difference is I think, as I'll dual body platform because we actually can create thousands of candidates by specifics and then empirically select the best one and that is why we are so unusually effective now and then actually creating these very well working by specifics against different targets you've seen at the Opco more data at ASH. You've seen that at [Indecipherable] Janssen also with more data at ASH, and so you will hopefully see it next week with PDL1x4-1BB be at SITC from us Ashtika. So I think the secret is really that we can actually create thousands of candidates that are robots and then actually empirically select one based on very strict criteria, which is working the best and I've given already the example of Novo Nordisk who created more than 30,000 by specifics with the dual body technology to fish out one which is 15-fold better than [Indecipherable] for hemophilia. So I think this is now a recurrent team and I will leave it up to Judith to give you some further color on the specific PDL1-4-1BB combination versus the Roche 4-1BB combination. But let's first start with Anthony Mancini. Anthony knows of any further activities in training nurses or other hospital personnel in actually treating patients with DARZALEX FAST Pro at home, Anthony?

Anthony Mancini -- Executive Vice President and Chief Operating Officer

Thanks Jan and thanks Ashtika for the question. So, as you know the FAST Pro is approved for HCP administration and although some teaching centers did at the onset of COVID initially start to do some at-home administration there aren't any plans for Janssen to do that in the near future. What's really good though that based on the inherent advantages of FAST Pro in that it provides a 3 to 5 million injection [Indecipherable] that are actually two-thirds fewer infusion reaction than IV and that Janssen has trained extensively nursing staff in oncology offices around the U.S., the sense is that they'll be much better positioned here in the second wave to do the in-office administrations quickly without exposure as was potentially a concern in the first time around. So hopefully that answers your question.

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

Thanks Anthony. Let's move over to Judith to see whether you want to give a bit more color to Ashtika on the Roche compound versus the PDL-1-4-1BB, or do want to park that to next week Judith?

Judith Klimovsky -- Executive Vice President and Chief Development Officer

No, I can give like a general answer because the concept is totally different. So for the FAST 4-1BB the first half to globalize therefore when the PDL-1-4-1BB is a different concept is not only to the calcification based on the presence of PDL-1 but you have, it was seasonally the innovation of the PD1 PDL1 4-1BB in the context of the cell synapses that acts [Indecipherable]. So I think that these biologically is different than the concept of the FAST 4-1BB.

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

Thanks. Thanks so much. We need to probably park this here Ashtika but more to come next week for sure.

Ashtika Goonewardene -- Trust Securities -- Analyst

Okay.

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

Thank you.

Operator

Thank you. Your next question comes from the line of Peter Welford from Jefferies. Please go ahead. Your line is now open.

Peter Welford -- Jefferies International Ltd. -- Analyst

Hi, yes. Thanks for squeezing me in. Firstly, and I think I missed in the start, but I wonder if you could just outline the commercial deals for the Seagen that you've agreed to. I got cut off. And I'm afraid of the explanation of the Seagen collaboration? And secondly then just on the arbitration, I appreciate details a scam. But can you confirm whether or not the first arbitration claim is related in any way to the second arbitration claim, i.e., the reduction in royalties and the extension of the patent or are these two completely separate arbitration issues? And then just thirdly curious the amount of time was spent I guess in the slide, I'm not sort of seen before the strong financial position. I mean, it's obviously very clear. Does this reflect increased appetite within Genmab to pursue business development and perhaps bringing in assets, obviously as you shift toward a commercial entity or is there really no change internally in your appetite and desire to perhaps pursue those sorts of deals and the money very much is going to be used for the obviously burgeoning pipeline? Thank you.

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

Thanks Peter for the questions. So the first question I'm going to pass over to Anthony Mancini who can also give you a bit of color because he is heading the BD activities now on the strategy going forward. Let me handle the second question, Peter on the arbitration. These are two related items basically both focused on the subcu formulation of daratumumab. So they are clearly related, but clearly two different questions we have which are both going to be parked now at the arbitration judge has to take a decision on. I think I should leave it with that and then ask Anthony Mancini to explain the Seagen commercial agreement, which we've recently put into place, which I did mention, Peter at the beginning of the remarks but Anthony is happy to repeat them for you, for sure. Anthony?

Anthony Mancini -- Executive Vice President and Chief Operating Officer

Thanks, Jan and thanks, Peter, for the question. Just to recap some of the detail that Jan covered earlier. We are really pleased, by the way, just with the amendments to the joint commercialization agreement with Seagen. We think it's a win-win for both Seagen and Genmab. But from a development and commercialization strategy perspective, we will continue to work together with Seagen. From an operations or economics perspective, in the major markets, which are the U.S., the EU, China and Japan, there will be 50-50 cost and profit split. And as Jan mentioned, in other markets, outside of those, there will be royalty territories, whereby Genmab will receive royalties on net sales in the mid-teens to mid-20s. From an operational perspective, Genmab will be the exclusive commercialization party and book sales in Japan and Seagen will book sales and lead commercial operational activity in other territories.

As it relates to the U.S., Genmab and Seagen will co-promote TV in the U.S. with each party contributing 50% of medical representatives as well as MSLs. And from a clinical operational perspective, Seagen will be the operational development lead for future TV studies. So overall, we really leverage Seagen's experience in drug development and knowledge of ADCs. We continue to share decision-making and gain for Genmab, a presence in one of our key markets with 50% of field resources in the U.S. and continue to lead exclusively in Japan. So we are really pleased with that. Just to answer the other part of your question, Peter, with respect to business development, corporate development, clearly, we're going to continue to look at some opportunities for partnerships in a disciplined and focused way. And we will keep you posted as that evolves, but we are definitely going to continue first, to work toward becoming a fully integrated biotech company, to attract the best talent in order to do that, and also in parallel, move the opportunity partnership or -- and complement their technology.

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

Thanks Anthony. And then Peter, more to come next week at the Capital Markets Day on Friday 13.

Peter Welford -- Jefferies International Ltd. -- Analyst

That's great. Thank you.

Anthony Pagano -- Executive Vice President and Chief Financial Officer

Thanks.

Operator

Thank you. Our last question comes from the line of Matthew Harrison from Morgan Stanley.

Connor Meehan -- Morgan Stanley & Co. LLC -- Analyst

Hi all. This is Connor on for Matthew. So cognizant that a bunch of questions have been asked on 4-1BB, but can you just give us the highlights on your expectations for the program after the data at SITC? And then maybe you mentioned that you are going to discuss the plans at the Capital Markets Day as well. But do you -- across both monotherapy and the other expansion cards, do you see a need for more dose escalation before you maybe move it into the next phases? And then just quickly, this may be similar to the AXL program, but on DR5, do you think you have an active therapeutic window? And what do you see as your expectations for that asset before the end of the year? Thank you.

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

Thank you very much for the question. So I can -- I think be very brief on PD-L1x4-1BB embargo. So we cannot give you any further color on the data. We have to wait until at least Monday, the press meeting from SITC. So -- and then the second question related to that, I think I can handle as well. We know the recommended Phase 2 dose. So we are not going to do further dose escalation. We know exactly which dose we want to use for the expansion cohort and for the further development. And then for DR5/DR5, more updates this year. I cannot give it at this time, but we are definitely still exploring different doses and dose frequencies with a very active program. And even in the coronavirus era, the patients are coming into the trial, so also no further news at this time. And in view of the time, I'm -- I think I'm going to give it back to the operator here.

Operator

We have no further questions.

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

Alright. So thank you all for calling in today to discuss Genmab's financial results for the first nine months of 2020. If you were not able to get to your question, please reach out to our Investor Relations team. They are ready to answer the questions and address the issues that you haven't gotten to. So I hope that you will all stay safe, remain healthy and very much look forward to speaking with you again soon, hopefully, next week, if not before. Thank you.

Operator

[Operator Closing Remarks]

Duration: 97 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

Wimal Kapadia -- Bernstein -- Analyst

Peter Verdult -- Citi -- Analyst

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

Trung Huynh -- Credit Suisse -- Analyst

Michael Schmidt -- Guggenheim Securities, LLC -- Analyst

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

Emily Field -- Barclays -- Analyst

David Ruch -- SVB Leerink -- Analyst

Graig Suvannavejh -- Goldman Sachs International -- Analyst

Ashtika Goonewardene -- Trust Securities -- Analyst

Peter Welford -- Jefferies International Ltd. -- Analyst

Connor Meehan -- Morgan Stanley & Co. LLC -- Analyst

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