Genmab A/S (GMAB) Q4 2021 Earnings Call Transcript

Genmab A/S (GMAB 2.40%)
Q4 2021 Earnings Call
Feb 16, 2022, 12:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Hello, and welcome to the Genmab Q4 2021 conference call. [Operator instructions] And just to remind you, this conference call is being recorded. During this telephone conference, you may be presented with forward-looking statements that include words such as beliefs, anticipates, plans, or expects. Actual results may differ materially, for example, as a result of delayed or unsuccessful development projects.

Genmab is not under any obligation to update statements regarding the future nor to confirm such statements in relation to actual results unless it's required by law. And 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. Today, I'm pleased to present Jan van de Winkel.

Please go ahead with your meeting.

Jan van de Winkel -- Chief Executive Officer

Hello, and welcome to the Genmab conference call to discuss the company's financial results for the period ended December 31, 2021. With me today to present these results is our CFO, Anthony Pagano. For the Q&A, we will be joined by our chief operating officer, Anthony Mancini; and our chief medical officer, Tahamtan Ahmadi. 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. Genmab has a science-focused and innovation-based culture and collaborations and partnerships have always been part of our DNA. During today's presentation, we will reference some of the products being developed under the strategic collaborations, and this slide acknowledges those relationships.

Let's move to Slide 4. Due to our extraordinarily solid foundation, Genmab is extremely well-positioned to achieve our ambitious vision of making a difference for patients by transforming the treatment of cancer. I would like to start today with a reminder of some of the many successes that will fuel our future growth. Beginning with Slide 5.

The 39 INDs created by Genmab or with our technologies have led to a robust and expanding clinical pipeline with five approved medicines, including Tivdak, the first Genmab-owned product on the market, which we are codeveloping and co-promoting in the U.S. with Seagen. Royalties from partner-owned medicines, plus key partnerships with companies like AbbVie has expanded our revenue significantly. Our strong recurring revenue allows us to continue to invest in next-generation technologies and truly differentiated new antibody therapies in our company, where we added commercialization capabilities and are further strengthening our unstoppable world-class team with key talents.

Our growing internal competencies are enabling us to evolve into an integrated end-to-end international biotech led by an experienced and diverse leadership team. We built on this solid track record with the events of 2021. So now let's move to Slide 6 and take a look at some of our recent achievements. 2021 is our ninth year of profitability with an impressive 48% increase in revenue versus 2020, excluding the one-time AbbVie upfront payments.

Our strong balance sheet allows us to strategically invest in our capabilities as a differentiated product pipeline, including our first product launch. While we are evolving into a fully integrated end-to-end biotech, we know that we can accelerate innovation by strategically investing in collaborations with partners across the pharma and biotech ecosystem, which can provide us with building blocks that support our future pipeline expansion, novel targets, novel payloads and technology that complements our own. In 2021, we entered into more than 10 collaborations that will add to the breadth of our suite of technologies and support the rapid growth of our innovative next-generation pipeline of antibody therapeutics. For example, we partnered with Bolt on a immuno-stimulatory antibody drug conjugates, or ADCs, and with Synaffix on its Topoisomerase 1 inhibitor ADCs.

We are seeing the results of our investments in collaboration and capabilities in our expanding and progressively maturing pipeline. Examples of recent investigational medicines entering the clinic are HexaBody CD38 and DuoBody CD3B7H4, both the products of our highly productive R&D engine. In addition to growth, our product pipeline also matured over the past 12 months. The highlight of the year was undoubtedly the FDA's accelerated approval of Tivdak, our first regulatory approval and a much-needed new potential treatment for patients with metastatic cervical cancer.

With our partner in activation, we have a robust development plan for Tivdak, including the first Phase 3 study initiated in 2021, which is intended to confirm Tivdak's benefit in recurrent and/or metastatic cervical cancer and to support global regulatory applications. Epcoritumab also entered Phase 3 development in 2021, the first of multiple Phase 3 studies that we and our partner AbbVie are planning for Epcoritumab. Both of our investigational medicines under development with BioNTech also advanced last year with the first Phase 2 study for DuoBody PDL141BB and multiple expansion cohorts initiated in the Phase 1/2 study of DuoBody CD4041BB. New and updated data from all of these programs and others were presented at a variety of prestigious conferences throughout the year, and we are anticipating additional data presentations this year, including data from the tisotumab vedotin innovative 207 study, which is scheduled to be presented in a plenary session at the upcoming Astro head and neck cancer symposium in Arizona on February 25.

In addition to our own pipeline, Genmab's innovations are applied in the pipelines of multiple global pharmaceutical and biotechnology companies. In particular, our DuoBody technology platform has powered a variety of bispecific antibody therapies and developments. The most advanced of these amivantamab and Teclistamab are the result of our DuoBody collaboration with Janssen. In 2021, Janssen's amivantamab was approved as ribosomes funds in the U.S., Europe, and other markets for the treatment of certain patients with non-small cell lung cancer with EGFR exon 20 insertion mutations.

These are the first regulatory approvals for a therapy that was created using the DuoBody bispecific technology platform. Subsequently, at the end of 2021, Janssen submitted a BLA to the FDA for Teclistamab for the treatment of relapsed or refractory multiple myeloma. Last month, Janssen furthermore, submitted a marketing authorization application, or MAA, for Teclistamab to the European Medicines Agency. These events provided further validation for our DuoBody technology platform, which also powers the majority of our own product pipeline.

Janssen's DARZALEX, which has redefined the treatment of multiple myeloma continues to evolve in 2021 with new approvals, including the approval of the subcutaneous formulation of daratumumab as the first and only approved therapy for AL amyloidosis. Sales of DARZALEX for the year was very strong with NGA reporting $623 million in net sales, an increase of 44% over 2020, resulting in 6,235 million the corner in royalties to Genmab. I will now turn the call over to Anthony. Anthony, please go ahead.

Anthony Pagano -- Chief Financial Officer

Great. Thanks, John. Let's move to Slide 7. We've never been in a better position to achieve our vision of transforming the lives of cancer patients.

My objective today is twofold: first, to explain why 2021 has been another remarkable year for Genmab. And second, to provide our guidance for 2022, which is set to be another very strong year. Overall, we continue to strengthen our foundation and drive toward our 2025 vision. We executed our first commercial launch, bringing Tivdak to cervical cancer patients.

We grew recurring revenue by 48% in 2021. This was driven by strong royalties from DARZALEX and other approved medicines. And as John said, that's ensured our ninth consecutive year of profitability. Our strong balance sheet and growing recurring revenues allowed us to continue to invest in our business and our pipeline in a very focused and disciplined way.

And an important part of this has been to continue to build the team and capabilities to enable us to succeed. So let's look at those revenues in a bit more detail on the next slide. We saw continued strong performance for DARZALEX in 2021. You can see that in the chart on the left.

Overall, DARZALEX sales grew by 44%. That's net sales of over DKK6 billion, which translates to DKK6.1 billion in royalty revenue. This exceptional growth was driven by continued strong market shares across all lines and the continued uptake of the subcu formulation. So DARZALEX remains a key driver of our revenue, as you can see on Slide 9.

Our recurring revenues grew by 48% in 2021. We've already spoken about DARZALEX and the very strong performance there. We are also encouraged by the growth of Kesimpta and TEPEZZA, which generated DKK828 million of royalties for 2021, and that's an increase of more than DKK500 million compared to last year. This growth really illustrates the power of our recurring revenues.

So our revenue profile continues to get stronger with increases both in recurring and nonrecurring revenue after excluding, of course, the AbbVie one-off. And we're taking our strong recurring revenues and investing in a highly focused way, as you can see on the next slide. Total operating expenses grew by 44% in 2021. And here, you can see where we invested.

We accelerated our investment into our product portfolio, especially the advancement of both Epcor and DuoBody CD4041BB. We've also spent more on expanding our team to support our growth in commercialization, enhanced technology and systems, and other areas related to our expanding pipeline. That includes supporting the launch of Tivdak and preparing for the filing and potential launch for Epcor. Finally, we're leveraging the AbbVie collaboration by utilizing their expertise and significant financial contributions to further expand and accelerate our partnership programs.

Now let's take a look at our financials as a whole on Slide 11. Here, you can see our summary P&L. In 2021, revenue came in at approximately DKK8.5 billion. That's up 48% on last year, excluding the AbbVie one-off.

Total expenses were about $5.5 billion with 77% being R&D and 23% SG&A. And we reported a very strong operating profit at around DKK3 billion. Our net financial items amounted to an income of DKK965 million, which was primarily driven by the strengthening of the U.S. dollar against the Danish kroner on our U.S.

dollar-denominated cash and investments. Then we have tax expense of $975 million, which equates to an effective tax rate of 24.5%, and that brings us to our net profit of around DKK3 billion. So as you can see, extremely strong financial performance for 2021. Let's move now to a reminder of our robust financial framework on the next slide.

First off, let's think about our revenue profile, which you can see on the left. At the beginning of 2020, DARZALEX was the only product on the market. And today, we have five, and that provides us with expected recurring revenue growth of 39% in 2022. And there's a clear path to potentially expand the number of approved products with Janssen's recent BLA for Teclistamab and our planned submission for Epcor in 2022.

Taken together, we expect significant cash inflows for us in the years to come. Moving to the right, we continue to be focused on our investments as we evolve our organization for continued success. At the top of the list is accelerating and expanding the development of Epcor. I'll come back to this and some other exciting opportunities, which provide a compelling rationale for increasing investment shortly.

So with that background, let's take a closer look at DARZALEX sales on Slide 13. Here, we're on a clear path to market leadership in multiple myeloma. For 2022, we anticipate that DARZALEX sales will continue to ramp up, and we expect sales to be in the range of DKK7.3 billion to DKK8 billion. There are three drivers underpinning this growth.

First, there is significant opportunity for further market share gains in front line. Second, we expect the continued conversion to the subcu version. And third, with 10 approved indications in the U.S., we anticipate continued strong market shares across all lines of therapy. So DARZALEX is really continuing to deliver.

Now let's take a look at the components of our strong recurring revenue on Slide 14. For 2022, we anticipate another year of strong revenue growth. Looking at our total revenue, we are expecting to be in the range of DKK10.8 billion to DKK12 billion, and the majority of this will come from recurring revenues, which are anticipated to increase 39%. We are projecting DARZALEX royalties to be between DKK7.7 billion and DKK8.5 billion, an increase of 32%.

As a reminder, consistent with how we handled this last year, our guidance reflects around a DKK700 million reduction in royalties due to the ongoing arbitration. Recurring revenues also include a 71% increase in royalties from TEPEZZA and Kesimpta. Turning to nonrecurring revenue. The growth here will be driven by reimbursement revenue from our collaborations and other milestones.

In particular, our 2022 guidance does include a significant milestone associated with the filing and acceptance of a regulatory submission for Epcor. Now I said to come back to our ever-stronger rationale for investment and this next slide shows you why. What you can see here on the left is a powerful combination of both our technologies and our pipeline. And these are what underpinned are imperative to invest.

And then, on the right, you can see the real progress we're making. 2021 was a great year with more than 20 active clinical trials, as well as bringing our first product to market with Tivdak. And then, building on that foundation, 2022 is going to see another real step-up in terms of our opportunity set, with more than 30 active clinical trials anticipated and prepared for a potential Epcor regulatory submission and commercialization in the U.S. And to be clear, based upon the work we've done so far and the data we've seen, we're convinced that Epcor is a drug that has the potential to make a real difference for patients.

And as we've told you before, if we want to seize this meaningful opportunity we've got to invest, and that's exactly what we're going to do. And that, of course, also includes investing in our team, technology, and infrastructure to deliver. So let's take a look at that in a bit more detail on Slide 16. Our total opex is expected to be between DKK7.2 billion and DKK7.8 billion.

This fully reflects the evolution of our pipeline and, indeed, our entire business that I just described. There are four near-term investment priorities for us. First is initiating new Phase 3 Epcor trials to maximize its potential. Second is the filing and standing up our commercial organization for Epcor.

Third is generating the next wave of data for DuoBody PDL141BB and DuoBody CD4041BB. And priority number four is continuing to build our infrastructure, teams, and systems. This is essential to our continued success in realizing our full potential. So these are our immediate priorities.

But we're not just focused on today. In line with our vision, we are also very focused on long-term value creation. So here, we're investing to progress our early stage pipeline and to generate the next wave of IND candidates. We are also investing to ensure that we maximize the value of our current technologies and that we stay right at the forefront of antibody science.

Now having looked at the framework and the constituent parts, let's look at how this all comes together on Slide 17. Here, you can see our 2022 guidance. We expect our revenue to be in the range of DKK10.8 billion to DKK12 billion, and most of this is made up of recurring revenue. For operating expenses, we expect to be in a range of DKK7.2 billion to DKK7.8 billion.

As I previously highlighted, this step-up in investment is fully in line with our strategy and our focus on creating long-term value. Putting all this together, we're planning for substantial operating profit in a range of DKK3 billion to DKK4.8 billion. Now to my final slide, let me provide a few closing remarks. In summary, we have a clear path to reach our 2025 vision.

We've created growing recurring revenue streams, and that gives us a strong backbone of significant underlying profitability, and we're investing those revenues in a highly focused way to realize our vision and capitalize on the very significant growth opportunities in front of us. And on that note, I'll hand you back to Jan to discuss our key priorities for 2022.

Jan van de Winkel -- Chief Executive Officer

Thanks, Anthony. Let's move to Slide 19. Beyond strong revenue, 2021 was an excellent year for Genmab. As we continue to focus on our core purpose, we are preparing for an equally momentous 2022.

Let's start with our most advanced products. For Epcoritumab, as I mentioned, we are very much looking forward to expanding its development. We are excited about the data, and we anticipate filing in the U.S. and/or in Europe this year.

Further, the Genmab and AbbVie teams are hard at work and gearing up to initiate new Phase 3 studies to maximize Epcor's potential. As part of these preparations, we are going to collect more data on Epcor dosing due to the recent FDA guidelines recommending that sponsors perform more formal dose evaluation studies. This means that for some of the Phase 3s, the first patient dose could be pushed beyond 2022. But as Anthony noted, the investment will start this year.

We will work with Seagen to continue to broaden the clinical development program for Tivdak and establish it as a clear choice for patients with metastatic cervical cancer with disease progression on or after chemotherapy. And we very much look forward to data from clinical expansion cohorts and progress to next steps for both of our first-in-class bispecific next-generation immunotherapy candidates in development with BioNTech. Beyond these maturing programs, we anticipate expanding and advancing our other early stage programs, including the potential for additional INDs or CTAs. Finally, we intend to continue to scale our organization based on our planned portfolio development, and as Anthony just discussed, we will use our solid financial base to support our growth.

We have a lot to look forward to in the next 12 months, and we very much look forward to sharing our progress with you. Let's move to our final slides. That ends our presentation of Genmab's 2021 financial results. Operator, please open the call for questions.

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from the line of Kennen MacKay from RBC. Please go ahead.

Kennen MacKay -- RBC Capital Markets -- Analyst

Thanks for the update, and thanks for taking the question. Maybe just a housekeeping question for Jan or Anthony. Wondering if you could help us with updated expectations toward when we might expect resolution of the ongoing arbitration and litigation with J&J around subcu DARZALEX? Thank you.

Jan van de Winkel -- Chief Executive Officer

Thanks, Kennen, for the question. Unfortunately, I cannot give you further color there because the outcome and the duration of these proceedings are heavily uncertain. We hope, however, that we will see a resolution soon. Thanks, Kennen.

I think, we can go to the next analyst.

Operator

The next question comes from the line of Peter Verdult from Citi. Please go ahead.

Peter Verdult -- Citi -- Analyst

Yes, thank you. I am Peter Verdult. Just one clarification and one question. Just wanted to make sure, given your comments about the change in the FDA guidelines, just a clarification that an Epcor filing in DLBCL is still scheduled for 2022? And could there be any other potential upside filings this year? And then, my question, sorry, An to test your patience.

I'm just going to follow on from Kennen. I mean, it's pretty clear from attending ASH and seeing future trends, this is going to be a much bigger drug than everyone thinks and the pipeline is progressing. The problem is when you speak to incoming investors or new investors on Genmab, the fly in the ointment is this arbitration overhang and that puts people off. I realize you can't go into the details, but can you at least frame as to whether you think are hopeful that you say that every quarter.

But I mean, is it really how long is the piece of string could this rumble on into next year? Or do you think that a strong chance we might see resolution sooner than later, sorry if I could push you on that? And sorry for testing a patient, that would be helpful. Thank you.

Jan van de Winkel -- Chief Executive Officer

Thanks, Peter. Let me start with the easy one with the Epcor question. Yes, a filing in the U.S. and Europe is absolutely on the schedule for the large B-cell lymphoma and perhaps even in other indications, but it depends on when the data become available, Peter.

So we continue to be very, very excited about filing this year. So that's fully on schedule. Then the more complex question is the arbitration. We also hear that this is an overhang, and we, of course, understand that.

What I already said before publicly is that all the materials and the positions have been exchanged and now it's up to the three judges to come with a resolution. And I'm actually fairly confident that it will definitely come this year and hopefully soon, Peter. I cannot give you any further indication on timing because it's not under our influence at all.

Peter Verdult -- Citi -- Analyst

Thank you.

Jan van de Winkel -- Chief Executive Officer

Thanks, Peter.

Operator

And the next question comes from the line of Wimal Kapadia from Bernstein. Please go ahead.

Wimal Kapadia -- Sanford C. Bernstein -- Analyst

Oh, great. Thank you very much for taking my questions. Can I just push a little bit on time lines for data, please, particularly the earlier pipeline. So CD38, CD37 and the DuoBody CD4041BB molecules, when exactly in 2022, could we get updates? And is there any conferences you could start to point to where this data is most likely? And then, specifically on the CD38, will we get enough data this year to really begin to have a view that this product could be superior to Dara.

Will we really need to wait longer term, so maybe a 2023 debate? Thank you.

Jan van de Winkel -- Chief Executive Officer

Thanks, Wimal. I think, the time lines will only get clear once we note a bit conferences, we have submitted the data. But we will -- let's ask Tahamtan Ahmadi who is on the line, our chief medical officer to see whether Tah is willing to give a bit more color on CD38, HexaBody CD38, the dual HexaBody CD37. Tah, maybe you can give a bit more color there.

Tah Ahmadi -- Chief Medical Officer

Thank you. I will try. Let's take CD38 first. I think, there were three parts in your question.

The first part is one, will we see any data? I think, Jan pointed that out, that will be a function of an appropriate conference and I think we have before publicly stated that this is probably a second-half '22 event where we will be able to share the dose escalation data and it's worth noting that we only started dosing patients last year. We, I think, already publicly said that we will achieve a recommended Phase 2 dose. I'm very confident in getting the recommended Phase 2 dose in a very timely manner and then we'll engage in the second stage of the data generation where will be comparatively to do subcu. Whether or not that data will be available this year.

I think, this is too premature to comment on because this is really a function of generating the data and then having it in the hands. On CD37, I think is in a very similar time line than C38, I would say, we are very close to determining the recommended Phase 2 dose, I would say that with some of the changing environment, as [Inaudible] also touched on the project Optimus, these things will also probably impact the time by the data that is needed to define the recommended Phase 2 does and some earlier trials. But I think, we're pretty confident we're going to get this within the first half of this year and then share the data in a very similar time of the CD38 per se.

Jan van de Winkel -- Chief Executive Officer

Thanks, Tah. I think, that's all we can say at this time. Maybe more when the timing of the data submissions to conferences are clear. We will, of course, update you right away.

Wimal Kapadia -- Sanford C. Bernstein -- Analyst

Great. Thank you.

Jan van de Winkel -- Chief Executive Officer

OK, thanks.

Operator

The next question comes from the line of James Gordon from J.P. Morgan. Please go ahead.

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

Hello. James Gordon, J.P. Morgan. Thanks for taking the question.

One on the 41BB bispecifics, I saw the line about generating data to determine the potential move to late stage. So the question is, how likely do you now see it that one or both of these bispecifics? Does that actually move to late stage? Which of the two, so PD-L1 or CD40, do you think is more likely to be taken forward? And is it fair to read that you are a bit more cautious on these assets than 18 months ago?

Jan van de Winkel -- Chief Executive Officer

Thanks, James, for the questions. I'll hand over the question first to Tah and see whether I can add on his characterization. Tah, maybe you can share a bit about the two PDL141BB and the CD4410B programs and then give some color on the likelihood of moving them either separately or both of them to late-stage clinical development this year.

Tah Ahmadi -- Chief Medical Officer

OK. Let's take one at a time. So PD-L1 maybe had data in 2020. And then, also, in 2021 at SITC helping us put it now down understanding of the biology, but also the observation of single-agent activity with limited durability in the post-IO space, we have already announced, and this is now in the public space that the next step for us would be the interrogation of the combination of the engagement of form together with a full blockade of the PD-1/PD-L1 access.

And this is happening for PD-L1 for maybe in two distinct experiments. One is a separate study that is actively enrolling, which is interrogating various schedules of either sequential form or concomitant form of PD-1 activation inhibition, respectively, in the post-IO setting, that's the 04 study, as I said, actively enrolling separately as an amendment out of the original Phase 1 study, we have cohorts that are interrogating the combination of PD-1 -- in this case, the [Inaudible] with the PD-L1 1046 in the non-small cell lung cancer treatment naive population. And this product study is also actively onboard. And these are the data sets independent of each other, but then also in conjunction with each other, that will inform the next steps for 1046.

For 1042, very similar, we had shared data for the first time at SITC that showed the dose escalation would also be biology. We had flagged but very early that by mechanism of action of engaging APCs and then engaging formally recorded T cells. We didn't really anticipate a lot of senior agent activity in a meaningful way in the post-IO space, but are very confident based on some of the preclinical models. So we're also shared that you see that the combination with checkpoint inhibition will be very powerful.

These experiments are ongoing in the clinical trials in both non-small cell cancer have made the safety part is already concluded, and we are now in the after the expansion, where then this is again disclosed public in clinical trials go where we are interrogating the combination of 1042-plus pembro in PD-L1 high and PD-L1 low non-small cell lung cancer, in head and neck cancer and then also in Panga combination in [Inaudible] and headed information chemotherapy and all of these courts are typically enrolling as we speak. As it relates to the decision, that is, of course, like always a function of: a, getting the patients in and then; b, getting the data in hand to make those decisions. We will look at this very carefully, and we'll try to make the decision as efficiently as possible when we have to there. So I hope that helps you a little bit to understand where we are in the time line. 

Jan van de Winkel -- Chief Executive Officer

Thanks, Tah. Thanks, James, for the questions.

Operator

And the next question comes from the line of Sachin Jain from Bank of America. Please go ahead.

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

Thanks for taking my questions. I just got a bunch of clarifications, if I may. So if I just follow up on the last 1042 and 1046 question. On 1042, I think, Judith had said on the third quarter call or the ASH call that the combination cohort data may be during the coming months, that was, obviously, a couple of months back.

So is 1042 data possible in the combination cohorts in 1H? Or are we now thinking that data for all of the assets you've referenced, 38, 37, 1046 and 1042 or M28 -- so that's clarification one. Clarification two is on Epcor. You mentioned in filing additional indications possible depend on data. I wonder if you could just clarify that comment as to what other indications may be possible.

And then, my final clarification is on the CD38. Again, you've referenced the data, but I just wanted to be sure, is there enough data in '22 to drive a potential partner position from J&J? Or is some of that data into '23? Thank you.

Jan van de Winkel -- Chief Executive Officer

Thanks, Sachin, for the questions. I'm going to hand over the 1042 question to Tah, but you can think about answering that one Tah. Let me first start with Epcor. I said, well, definitely diffuse large B-cell lymphoma Sachin is the most advanced cohort with treatment, but we also move very rapidly with follicular lymphoma and mantle cell lymphoma and potentially follicular could also be ready for potential filing.

But it depends on how quickly we can get actually to the data. And that is the cohort I was mentioning when I was answering that question. Then for CD38 data, your third question, Sachin, I mean, it depends to Janssen. As I said before, publicly, I mean, how much data do you need to take a decision, I believe, Sachin, that they want to see, for sure, some data on the head-to-head was the subcu data because I think that is, of course, what it is about whether this HexaBody CD38 is actually clinically superior to subcu data, which is setting the benchmark here.

And I don't know whether they want to see all the data from the study, then clearly, that will not be available in '22 Sachin, that is not possible. But when we see a number of patients were already it's very, very clear that potentially the HexaBody CD38 is clinically superior, they could actually exercise their option and then actually develop the program further. What I said to you before, is that basically when we were in licensing discussions on daratumumab, the IV formulation of daratumumab in 2012, we had data less than 26 patients in total worth of clinical data. And what I heard is that Janssen actually took their optimization basically on two patients, which are both triple refractory multiple myeloma, which both went into a stringent complete response.

So they didn't need more data basically to base their decision to partner in 2012. So it depends on Janssen and you need to ask them. But I think, some data could become available this year already, Sachin, but the majority of the data from the head-to-head against subcu will likely move into '23. And then, that's probably where I want to leave at that and then ask Tah to give a bit more color on 1042, the different cohorts and the expansion cohorts, and that data could potentially come or some data could come in the first half or whether we should guide for the second half for the data.

Tah Ahmadi -- Chief Medical Officer

Yeah. Again, I think, this is a little bit of a discussion on data is available and when we are making data public in what form we're going to make it publicly. As I mentioned before, I mean, just think about by the time Judith gave that commentary the safety cohorts that just started. And just to be in response to the earlier question, I already flagged that the expansion cost.

So we will have data in our hands before the end of the first half of this year. Whether that data is going to be sufficient enough for us to then treat the next decision that's going to be a function of that data to some degree. But I don't think there's an anticipation that we will be able to share the data in a public form in the first half of this year.

Jan van de Winkel -- Chief Executive Officer

Thanks, Tah. That's clear. Thanks, Sachin, for the questions.

Operator

And the next question comes from the line of Michael Schmidt from Guggenheim. Please go ahead.

Paul Jeng -- Guggenheim Partners -- Analyst

Hey, guys, this is Paul on for Michael. Thanks for taking the question. Just one for us on Tivdak and the upcoming innovative 207 data. The study has been running for a couple of years now.

So hoping you could set expectations for the scope of the beat out, maybe whether the data will be restricted to head and neck? And if so, if we could potentially see data from other solid tumors at some point down the line? And lastly, maybe how you're thinking about how the data will form next steps for the program beyond cervical.

Jan van de Winkel -- Chief Executive Officer

Thanks, Paul, for the questions. And I will hand over these to you, Tah. I think, we'll make it a busy call for you.

Tah Ahmadi -- Chief Medical Officer

Thank you. And I think, the answer here is like [Inaudible] studies operational or risky. We have said before that we will look forward to some sharing of data on the head-neck space, which we will do in one of the upcoming conferences. And we are very quite excited about the data that we've seen there that will potentially allow us to expand the development of Tivdak also into that space.

Jan van de Winkel -- Chief Executive Officer

Thanks, Tah. And then, further updates, Paul, will come from Seagen because they operationalize in those studies, but we are very confident that we move to earlier lines of treatment with Tivdak and cervical, as well as in several solid cancers. So let's await the date on February 25 and then await further update from Seagen on when to actually present further data on solid cancers.

Paul Jeng -- Guggenheim Partners -- Analyst

Great. Thank you.

Operator

And the next question comes from the line of Elizabeth Walton from Credit Suisse. Please go ahead.

Elizabeth Walton -- Credit Suisse -- Analyst

Hi, thank you. Elizabeth Walton from Credit Suisse. Just a couple of questions left at this point. Firstly, can you update us on the penetration of subcutaneous DARZALEX that you're seeing? I think, the last data point we have was a comment that was made at 2Q that you were seeing about a 64% penetration in the U.S.

Can you update us as to where that got to at the end of the year? And do you have any data of what penetration looks like for the subcutaneous version outside of the U.S. and potentially what you think the ceiling could be for the penetration of the subcutaneous version? And then, just one quick one on Tivdak. We saw DKK6 million of sales reported this year by Seagen. Consensus expectations are around DKK30 million for this year.

Just wondering how comfortable you are with those consensus expectations? And anything you can share on how the launch is tracking versus your internal expectations? Thank you.

Jan van de Winkel -- Chief Executive Officer

Thanks, Elizabeth, for the questions. And these are like perfect questions for Anthony Mancini, who we have on the line. So Anthony, maybe you can basically address both questions. First, the penetration of the subcu data -- and then also the Tivdak question, let's see what you're willing to update on the launch and on the -- how well we -- how comfortable we are with the consensus expectations for Tivdak, Anthony.

Anthony Mancini -- Chief Operating Officer and Executive Vice President

Sounds good, and thanks for the question, Elizabeth. Just on the penetration of subcu DARZALEX. First, as you discussed, the Q3 number was 72%. We ended the year at 77% in the U.S.

in terms of the exit, subcu penetration. That's based on IQVIA data based on weekly gross sales. We are continuing to see strong share gains. And so we're confident that growth will continue.

And because of favorable reimbursement of subcu, what I can tell you around outside of the U.S. is that we've now got confirmation that all five top European countries are reimbursing subcu with Italy just being achieved in December. So we continue to see favorable subcu penetration across European markets. So that is continuing.

I won't give you a specific number around where we think subcu is going to land. But what I can tell you is that the trends are very favorable and really the only places that are going slower than expected are when there's practice economics or system dynamics that make subcu conversion difficult. So that's really the question on subcu DARZALEX. And as it relates to Tivdak, we're really pleased with the Tivdak launch to date and the launch is really going as we planned.

It's important to note that although the population in this initial indication is pretty modest, that we're hearing from providers in this early stage of launch that Tivdak really is an important treatment option for this patient population. It really is also the only non-IO therapy that's achieved a category QA NCCN guideline recommendation in this population. So the feedback we're getting on the launch from the Gynox and Medox in the community has been really positive. And with our partner, Seagen, we're navigating the eye care requirements.

We've implemented a patient support program that helps connect patients to eye care providers in their geographies and in their healthcare plans. And we continue to strengthen our educational efforts and support in this area. So launch is going really, really well.

Jan van de Winkel -- Chief Executive Officer

Thanks, Anthony. Thanks, Elizabeth, for the question. Let's move on.

Operator

The next question comes from the line of Asthika Goonewardene from Truist Securities. Please go ahead.

Asthika Goonewardene -- Truist Securities -- Analyst

Hey, guys, thanks for taking my questions. I got a couple of quick fire ones, if I may. Anthony, Anthony, what proportion of your -- that 2022 nonrecurring revenue is related to the Epcor filing milestone. If you can give a little color on that that would be great.

And Tah, just want to confirm, the two studies that you described in post-IO non-small cell lung and in the treatment-naive non-small cell lung. Are you waiting for those two to complete before you start doing other studies in other tumor types? And then, Jan, very quickly, our arbitration KOL checks pointed to a clause that does allow for an appeal. And I just want to check, do you think that will -- they will go into appeal, and does your expectation for this to be resolved in 2022, take this into account? Thanks, guys.

Jan van de Winkel -- Chief Executive Officer

Thanks, Asthika, for the questions. And I'll let my colleagues think about the questions, Anthony Pagano and Tah. But as it relates to the appeal, the product is binding from the three judges Asthika, but the parties can appeal one more time with one judge and that has a finite time line. And we think that even if that would happen, we -- of course, we cannot predict whether that would happen, that it would still be concluded in 2022.

And that's probably where I need to leave at that for now. And then, maybe ask Anthony Pagano to answer the question on the Epcor milestone.

Anthony Pagano -- Chief Financial Officer

Great. Yeah, thanks, John. As everyone knows, regarding milestones, the timing and outcome are really inherently a little more uncertain. As a reminder, for 2022, our guidance assumes that nonrecurring revenue is expected to be around DKK1.7 billion.

Again, that has two components, the reimbursement revenue and the milestones. And as I highlighted during the call, our guidance does include a significant milestone associated with the filing and acceptance of a regulatory submission for Epcor. Now I'll zoom in on that just a bit. In total, for Epcor in 2022, we have around DKK500 million of Epcor-related milestones, and the majority of that DKK500 million does relate to the filing and acceptance of the regulatory submission.

So hopefully, that gives you a little bit more clarity in terms of the magnitude of this milestone.

Jan van de Winkel -- Chief Executive Officer

Sorry, Tah.

Tah Ahmadi -- Chief Medical Officer

Yes, I'll take a stab in trying to answer the question on what I believe was a question about 1046. And I think, I mean, the short answer is we view these data sets are being generated as biological experiments that answer distinct biological questions. So for 1046, the biological question is, can you enhance durability and increase efficacy by complete blockade of the checkpoint access either by doing this in a sequential manner, first activating form will be then or in a concomitant activated form will be handled check-in. And we do this experiment into settings.

One is the post IO, which we believe is a very different setting. Patients who have failed immunotherapy have a completely different biological makeup in a setting. Depending on what the answer is that we will get, we will -- and of course, it also depends on the strength of the answer. We will then take that answer and apply it biologically to other indications.

So it may not necessarily be that we have to wait for the entire dataset to mature. But that's also a question or a function of the quality of the data that's being generated in these distinct clinical experiments so that being said, I hope that helps you.

Asthika Goonewardene -- Truist Securities -- Analyst

Thanks, Tah.

Jan van de Winkel -- Chief Executive Officer

Thanks, Asthika. Operator?

Operator

The next question comes from the line of Peter Welford from Jefferies. Please go ahead.

Peter Welford -- Jefferies -- Analyst

Hi. Yes, thanks for taking my question. Just going back to Epcoritumab, I just want to point a clarification on the recent FDA guideline changes regarding dose-finding that we're discussing. Just to be clear, do those relate to Phase 3 initiations in combination studies, presumably? And is it the extent of dose-finding that you need to do before you can initiate those combination trials.

And just to understand that perhaps can you give us a bit more color in terms of what the Phase 3 development plan? Obviously, diffuse large B-cell lymphoma is initiated. I mean, presumably, we should think about the other follicular and MCL as other potential indications. But should we also be thinking about potential indications that you've yet to start studies potentially going underway during the course of this year or next? Or perhaps you could just talk a little bit about how broad in terms of the recurrent indications you Epcoritumab could potentially be during the course of this year, by the end. Thank you.

Jan van de Winkel -- Chief Executive Officer

Thanks, Peter, for the questions. I think, these are perfect for Tah. Tah maybe you can give some further color on my remarks on the further dose-finding studies needed and the contact force of Phase 3? And then, also in a bit broader context, the expanding Epcoritumab development program for Peter.

Tah Ahmadi -- Chief Medical Officer

Right. And let's take the step by step. So the first point is we continue to be extremely excited about the data that we are generating, both as a senior agent and in combination in diffuse large B-cell lymphoma and [Inaudible]. But the cohorts on then was around a regulatory shift that asked for a limited generation of data in combination to interrogate whether they are potentially opportunities to lower the dose in combination.

And that's a relatively limited data set and it's a data set that answer for the totality of the program. And that, obviously, has some impact on the ability to sell Phase 3s in combination. We will, obviously, operationalize it as soon as possible. And I think, we have very clear plans and are very active engaged process with the agencies in order to manage and the ability to initiate the Phase 3 that we are having planned with our colleagues and partners at AbbVie.

Jan van de Winkel -- Chief Executive Officer

Thanks, Tah.

Operator

The next question comes from the line of Laura Sutcliffe from UBS. Please go ahead. 

Laura Sutcliffe -- UBS -- Analyst

Hello. Thanks. I'd just like to go back to the HexaBody CD38, please. Given it seems like J&J are quite optimistic about Teclistamab [Inaudible] and the Teclistamab.

It's right for them to be interested in the HexaBody-CD38, wouldn't only have to look better [Inaudible]. It would likely have to play nicely with those two molecules. I realize you can't comment on J&J's intentions, but from a CRS standpoint, is there anything wrong with the potential HexaBody CD38, plus Teclistamab or talquetamab combination?

Jan van de Winkel -- Chief Executive Officer

Thanks, Laura, for the question. That is a perfect question. Yes, no, but I will let Tah give you a bit more color on the potential combination theoretically, of HexaBody-CD38 and Teclistamab and tisotumab targeting BCMA or GPRC5D dye.

Tah Ahmadi -- Chief Medical Officer

Yeah, so these are good questions. I think, that Seagen was saying there is at this point because the HexaBody-CD38 program until the moment that Janssen opts in is a Genmab program that is still in the dose-escalation as a single agent. There are no plans for these combinations, but it's also, I think, fair to say that at this point, we have not seen anything as it relates to the safety that would, in any shape or way, indicate that it would be a lesser support than someone.

Jan van de Winkel -- Chief Executive Officer

Thanks, Tah. Thanks, Laura, for the questions. Let's move on to the next one.

Operator

The next question comes from the line of Xian Deng from Berenberg. Please go ahead.

Xian Deng -- Berenberg -- Analyst

Hi, it's Xian from Berenberg. Thank you for taking my question. So I have a question on the Epcoritumab Phase 3 trial design in front line DLBCL. So really just wondering if there's any color you could give us on the potential trial design for front line DLBCL.

Anything you could share in terms of combination partners or control arm? And actually, logistically, just wondering, can you actually run a front line trial involving Polivy? Or do you have to wait on to FDA approved for use of Polivy in front line DLBCL? Is that by any chance of gating item for you? Thank you. 

Jan van de Winkel -- Chief Executive Officer

Thanks, Xian, for the questions. And the question, I will hand it over to Tah to see what you're willing to say about our plans for front line diffuse large B-cell lymphoma tied with Epcor.

Tah Ahmadi -- Chief Medical Officer

I'm going to make two comments. Number one, if you look into the data that we have generated and actually have already publicly shared. It is sure, and that is what the experimental arm will be. It will be [Inaudible].

And we have been consistent with -- we commented on this post ASH as well that in the near future, and really this is the only relevant future for the start of the Phase 3 that we're talking about, we believe [Inaudible] be the global center of care [Inaudible].

Jan van de Winkel -- Chief Executive Officer

Thanks, Tah. I think, that answers the question, Xian.

Xian Deng -- Berenberg -- Analyst

Yeah. Actually, just wondering, is it possible to actually run the trial, including pulling away before it's actually approved in front line? It is logistically possible?

Jan van de Winkel -- Chief Executive Officer

OK, Tah, do you know whether it's theoretically possible?

Xian Deng -- Berenberg -- Analyst

Yeah, theoretically.

Tah Ahmadi -- Chief Medical Officer

Theoretically, if you wanted to run a study with a non-approved drug, you need a drug supply agreement.

Xian Deng -- Berenberg -- Analyst

Understood. Thank you very much.

Jan van de Winkel -- Chief Executive Officer

Thanks, Xian. Thanks, Tah. Let's move on to the next question.

Operator

The next question comes from the line of Matthew Harrison from Morgan Stanley.

Charlie Yang -- Morgan Stanley -- Analyst

Thanks. This is Charlie on for Matthew. I just want to get maybe a little more clarification on the 41BB and CD40 bistatic data in terms of the timing of potential competitor studies? And maybe a follow-up to that is for that kind of study, what's your kind of expectation in terms of population and whether there will be kind of biomarket-driven subset? Or would be -- the goal is to target a big broader population? Thank you.

Jan van de Winkel -- Chief Executive Officer

I don't know that I caught your name correctly, but I'll hand over the question to Tah. A bit more on 41BB and CD40 Tah and planning of studies.

Tah Ahmadi -- Chief Medical Officer

The current data that's being generated is in essentially five buckets. In non-small cell lung cancer, front line PD-L1 high in combination with pembro in non-small cell lung cancer, PD-L1 low, meaning between one and 49 in combination with pembro, mutation six bucket. So in head and neck and [Inaudible] PD-1 positive in combination with pembro and chemotherapy, and in [Inaudible] cancers in combination with chemotherapy and P1 or in combination with lPD-1chemoterapy and just [Inaudible]. These are the data sets that are being generated, but as we speak right now in expansion cohorts, and they are chosen based on where we thought we would be able to see, obviously, the signal of synergies between checkpoint inhibition and 10.2, 10.6 and/or where we had reasons to believe that the biology of CD4 engagement with [Inaudible] will play a particular role.

And they will, obviously, then be the driver depending what the dealers for follow-up activities, including late-stage activities if the data such supported. It will not be necessary restrictive, but this will, obviously, be the first wave.

Jan van de Winkel -- Chief Executive Officer

Thanks, Tah. Let's move on to the next question.

Operator

And we have one final question from Emily Field from Barclays. Please go ahead.

Emily Field -- Barclays -- Analyst

Hi, thanks for fitting me in. Just two quick ones. One on DARZALEX. I know you don't break this out in the content of the ends, but versus our own estimates, Europe has doing -- been doing consistently better than our expectations.

I was just wondering, is that also the case relative to your own internal expectations? And I know you've given us sort of in the past, the brand impact share across the lines of therapy in the U.S. But I was just wondering if you could compare to kind of how that tracks in Europe across maybe first-line and second-line multiple myeloma? And then also, just a quick one on the SG&A projected increase for 2022. It's almost the same order of magnitude as R&D. Is that primarily the build-out of the commercial sales force or Epcoritumab? And is the bulk of that heavy lifting going to be done in 2022? I know you're not going to talk about 2023, but how should we think about sort of SG&A trending beyond '22? Thanks.

Jan van de Winkel -- Chief Executive Officer

Thanks, Emily. These are perfect questions for the -- for Anthony Mancini and Anthony Pagano. Anthony Mancini, maybe you can start with DARZALEX and the European sales versus COS sales and how to track them and how it fits with our own expectations. Maybe you can give a bit more color there.

Anthony Mancini -- Chief Operating Officer and Executive Vice President

Yeah, thanks, Jan. Thanks, Emily, for the question. I would say that we're -- our thinking is in line with your thinking on this. But just remember that really most of the changes and fluctuations in share relate to reimbursement decisions.

And so one of the ones I highlighted earlier with the major EU5 reimbursement and coverage decisions for some indications and some formulations like subcu really drive sales. And what I can tell you is that the trends look very strong from a share perspective, but there is some variability that system -- that's healthcare system specific there. But I think, that's where I'll probably leave it as it relates to European or rest of world sales relative to U.S. sales on DARZALEX.

And maybe I'll pass the next question over to Anthony Pagano.

Anthony Pagano -- Chief Financial Officer

Great. Thanks, Anthony. Thanks, Emily, for the question. So first of all, talking about and gave some additional color and context around in 2022.

I think, there's three things you should be thinking about. One is we'll have a full year of, let's call it, the TibDAc commercial expenses, so that would be one thing. Second, as you highlighted, really starting to make sure that we're prepared for potential filing and approval of Epcor. So that would be number two.

And then, third, as I mentioned in my remarks, is just sort of making sure from looking at the broader evolution of our business that we have the right technology systems and team in place to really make sure we're well-positioned to support this growth and manage risk along the way. So that's how you should be thinking about 2022. And I think, it's probably premature to talk about 2023, what I would sort of say is just thinking about what I already said, as I kind of talked about our overall opportunity set, I continue to be very, very pleased with the overall progress we're seeing in terms of building out our pipeline. I talked about in 2021, having more than 20 active clinical trials and seeing that expand to potentially more than 30 moving forward and taking more of our medicines toward the market.

So I think, we'll provide you guidance for 2023, Emily. But I think, what the message you should take away from today is that our opportunity set is very strong. But this team will continue to be focused and disciplined as we evaluate where we want to kind of pull the trigger on certain investments.

Emily Field -- Barclays -- Analyst

Thank you.

Jan van de Winkel -- Chief Executive Officer

Thanks, Emily. Thanks, Anthony and Anthony. Let's see whether there are any further questions. Operator?

Operator

There are no further questions at this point.

Jan van de Winkel -- Chief Executive Officer

So thank you for calling in today to discuss Genmab's financial results for 2021. If you have any additional questions, please reach out to our investor relations team. We hope that you all stay safe and remain healthy and optimistic and very much look forward to speaking with you all again soon.

Operator

[Operator signoff]

Duration: 63 minutes

Call participants:

Jan van de Winkel -- Chief Executive Officer

Anthony Pagano -- Chief Financial Officer

Kennen MacKay -- RBC Capital Markets -- Analyst

Peter Verdult -- Citi -- Analyst

Wimal Kapadia -- Sanford C. Bernstein -- Analyst

Tah Ahmadi -- Chief Medical Officer

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

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

Paul Jeng -- Guggenheim Partners -- Analyst

Elizabeth Walton -- Credit Suisse -- Analyst

Anthony Mancini -- Chief Operating Officer and Executive Vice President

Asthika Goonewardene -- Truist Securities -- Analyst

Peter Welford -- Jefferies -- Analyst

Laura Sutcliffe -- UBS -- Analyst

Xian Deng -- Berenberg -- Analyst

Charlie Yang -- Morgan Stanley -- Analyst

Emily Field -- Barclays -- Analyst

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