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DATE

Tuesday, Aug. 11, 2026 at 8:00 a.m. ET

CALL PARTICIPANTS

• Interim Chief Executive Officer - Alan Bash
• Chief Financial Officer - Carlos Santos
• Interim Head of R&D - Yuhong Qiu
• Director of Investor Relations - Caroline LeCates Paul

TAKEAWAYS

• Worldwide Net Trade Sales -- $657 million for CARVYKTI, growing 50% year over year driven by demand and earlier line adoption.
• U.S. CARVYKTI Sales -- $472 million, an increase of 32% year over year reflecting accelerated adoption in second-line and third-line therapies.
• Ex-U.S. CARVYKTI Sales -- $185 million, representing 128% year-over-year growth due to launch uptake across 19 markets.
• Total Revenue -- $387.5 million, growing 52% year over year supported by collaboration revenue and achievement of a $56 million milestone.
• Adjusted Net Income -- $63.1 million, or $0.16 per diluted share, compared to $10.1 million in the second quarter of 2025.
• Operating Margin -- 15%, improving from negative 9% in the prior year period due to operating leverage and higher gross profit.
• Cash Position -- $965 million in cash, cash equivalents, and time deposits as of June 30, 2026.
• Public Offering Proceeds -- $212 million net, following the issuance of 7,700,000 American Depository Shares in June.
• U.S. Line Utilization -- 70% of volume now comes from second-line through fourth-line treatments, up from 41% in the prior quarter.
• Outpatient Mix -- 60% of treatments are now performed in the outpatient setting, which carries different margin dynamics than inpatient care.
• Gross Margin -- 58% on net product sales, an improvement from 41% in the first quarter of 2026 following the unwinding of one-time manufacturing expansion costs.
• Q3 Margin Guidance -- Lower 50% range, with management anticipating a rebound to the mid-50% range in the fourth quarter.
• Research and Development Expenses -- $96 million, a 2% year-over-year decrease as later-stage clinical study costs rolled off.
• Selling and Distribution Expenses -- $63.4 million, up 19% year over year driven by sales force expansion and marketing for BCMA CAR-T.
• Income Tax Expense -- $22.3 million, reflecting increased taxable income and the expected impact of a pending advance pricing agreement in China.
• Treatment Site Network -- 348 global sites across 19 markets, including 150 authorized treatment centers in the United States.
• LB2501 Phase I Data -- 100% objective response rate and 83.3% complete response rate at the second dose level in patients with non-Hodgkin lymphoma.
• LB2102 Phase I Data -- 28.6% objective response rate and 78.6% disease control rate in heavily pretreated small cell lung cancer patients.
• Peak Sales Potential -- Exceeding $4 billion to $5 billion, as management continues to target first-line multiple myeloma settings.
• Estimated Tax Rate -- High 20% range over the next several quarters as the company maintains quarterly profitability.
• J&J Loan Balance -- Approximately $300 million originally, which the company intends to fully settle in 2026 through cash and profit recoupment.

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RISKS

• Santos stated, "an increase in international revenue and/or a significant movement in foreign exchange rates between the euro and the U.S. dollar could result in additional divergence between the revenues reported by our collaboration partner and the revenue that Legend reports," regarding reporting inconsistencies.
• Santos noted, "Q3 gross margin on net product sales to be in the lower 50% range," indicating a sequential decline from the 58% reported in the second quarter.
• Santos reported, "Although a formal agreement has not yet been formally executed, we have now reflected the expected impact of the agreement as a component of income tax expense," referencing the pending advance pricing agreement with Chinese tax authorities.

SUMMARY

Management at Legend Biotech Corporation (LEGN +5.66%) reported the first quarter of company-wide adjusted net income profitability, driven by 50% growth in worldwide net trade sales for its lead cell therapy. The company finalized a leadership transition following the appointment of an interim chief executive officer while maintaining its strategic focus on expanding global market access and advancing its in vivo CAR-T platform. Financial results reflected significant operating leverage as revenue growth outpaced operating expenses, supported by a strengthened balance sheet from a June equity offering. The company continues to target first-line indications for its primary multiple myeloma product and expects to file a new investigational drug application for its lead in vivo candidate by the end of 2026.

• Interim CEO Bash addressed the leadership change stating, "This is a leadership transition, not a strategy transition. Our priorities remain unchanged."
• Management identified a new program, LB2505, an investigational BCMA-targeted in vivo therapy being evaluated in an investigator-initiated study in China.
• Interim CEO Bash emphasized the importance of treatment timing, stating, "the storyline is really about the optimal sequencing... patients will benefit if they can get to CAR-T first before other options in BCMA."
• The company confirmed that 40% of its 150 U.S. treatment centers are now community hospitals, expanding the geographic footprint of its therapy.
• Interim Head of R&D Qiu noted that MRD is becoming a necessary surrogate endpoint in frontline multiple myeloma trials as patient survival times increase.
• CFO Santos projected that manufacturing gross margins could reach 75% over time as all production nodes reach a steady state of utilization.
• Management indicated that fourth-quarter revenue will benefit from an extra selling week and increased international expansion relative to the third quarter.

INDUSTRY GLOSSARY

• APA (Advance Pricing Agreement): A contract between a taxpayer and a tax authority determining the transfer pricing methodology for pricing transactions between related entities.
• BCMA (B-cell Maturation Antigen): A protein highly expressed on malignant plasma cells, making it a primary target for multiple myeloma therapies.
• CAR-T (Chimeric Antigen Receptor T-cell): A type of immunotherapy where a patient's T-cells are genetically modified to recognize and attack cancer cells.
• CARVYKTI (cilta-cel): An autologous CAR-T therapy approved for the treatment of relapsed or refractory multiple myeloma.
• DLL3 (Delta-like Ligand Protein 3): A protein often expressed in small cell lung cancer and neuroendocrine tumors, used as a therapeutic target.
• In Vivo CAR-T: An experimental approach where genetic modification of T-cells occurs directly inside the patient's body rather than in a laboratory.
• MRD (Minimal Residual Disease): The small number of cancer cells that remain in the body after treatment, often used as a measure of treatment efficacy.
• NHL (Non-Hodgkin Lymphoma): A group of blood cancers that includes diffuse large B-cell lymphoma and follicular lymphoma.
• ORR (Objective Response Rate): The proportion of patients with a reduction in tumor size of a predefined amount.

Full Conference Call Transcript

Operator: Good day, everyone, and thank you for standing by. Welcome to Legend Biotech Second Quarter 2026 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. Now it's my pleasure to hand the conference to Caroline Paul, Director of Investor Relations. Please go ahead.

Caroline LeCates Paul: Good morning. This is Caroline Paul, Director of Investor Relations at Legend Biotech. Thank you for joining our conference call today to review our second quarter 2026 performance. Prior to this call, we issued a press release announcing our financial results for the quarter, which can be found on the Legend Biotech Investor Relations website. Joining me on today's call are Alan Bash, the company's Interim Chief Executive Officer; and Carlos Santos, the company's Chief Financial Officer. Following the prepared remarks, we will open up the call for Q&A. We also have our Interim Head of R&D, Yuhong Qiu, joining the Q&A session.

During today's call, we will be making forward-looking statements, which are subject to risks and uncertainties that may cause our actual results to differ materially from those expressed or implied here within. These forward-looking statements are discussed in greater detail in our SEC filings, which we encourage you to read and can be found under the Investors section of our company website. In addition, adjusted net income or loss is a non-IFRS metric. This non-IFRS financial measure is in addition to and not a substitute for or superior to measures of financial performance prepared in accordance with IFRS. There are a number of limitations related to the use of these non-IFRS financial measures versus their closest IFRS equivalents.

However, we believe that providing information concerning adjusted net income or loss and adjusted net income or loss per share enhances an investor's understanding of our financial performance. Our press release includes IFRS to non-IFRS reconciliations for these measures. With that, I will now turn the call over to Alan.

Alan Bash: Thank you, Caroline, and good morning, everyone. I want to start by briefly addressing the leadership transition announced last month. As you all know, Dr. Ying Huang stepped down as Chief Executive Officer and member of the Board, and the Board appointed me to serve as Interim Chief Executive Officer. On behalf of the Board and all our employees, I want to thank Ying for his leadership over many years and his many contributions to Legend Biotech. We want to be very clear. This is a leadership transition, not a strategy transition. Our priorities remain unchanged. We remain focused on 3 main objectives: maximizing CARVYKTI, advancing our next-generation pipeline and strengthening our execution on all fronts.

My commitment is to provide continuity, transparency and disciplined execution, working closely with Carlos, our senior R&D team, the Board and the broader leadership team to maintain momentum across the business. We are operating from a strong foundation with continued CARVYKTI momentum, meaningful progress across our in vivo CAR-T platform and as you are about to see from the Q2 results, the financial flexibility to continue investing in growth, innovation and long-term value creation. Notably, during the second quarter, we generated adjusted net income of $63 million, and we believe we will maintain adjusted net income profitability for the second half of 2026. Now let's turn to our second quarter highlights.

We had a strong second quarter at Legend as CARVYKTI continues to expand globally, maintaining its market leadership in CAR-T. Additionally, we recently presented compelling early efficacy and safety data from our in vivo CAR-T platform and plan to provide meaningful updates to these programs at future medical conferences. During the quarter, CARVYKTI delivered worldwide net trade sales of approximately $657 million, representing 50% year-over-year growth, driven by strong demand globally and increasing adoption in earlier lines of therapy. In the United States, sales increased 32% year-over-year, while ex U.S. sales grew 128% year-over-year.

Beyond commercial execution, we continue to advance our innovative next-generation cell therapy pipeline, particularly in our in vivo CAR-T platform, as highlighted by our participation at the ASCO Annual Meeting and the European Hematology Association Congress. We will turn to these updates in just a moment. Finally, we strengthened our balance sheet through the successful completion of a public equity offering, resulting in approximately $212 million of net proceeds and a cash position of approximately $965 million at the end of the second quarter. Drilling deeper on CARVYKTI's second quarter performance, CARVYKTI global net trade sales increased 50% year-over-year to $657 million, delivering strong global sequential growth of 10% compared to the first quarter.

In the United States, quarter-over-quarter growth of 9% was primarily driven by accelerating adoption in earlier lines of therapy. We continue to increase the usage in second and third lines, up from the 41% we discussed last quarter. We have also been expanding treatment access with more than 150 authorized treatment centers, of which approximately 40% are community hospitals. Outside the United States, quarter-over-quarter growth of 13% was primarily driven by continued launch uptake across 19 markets and expansion of the activated treatment site network. We recently launched CARVYKTI in Ireland, further expanding availability to 348 global treatment sites, reflecting continued geographic expansion with our partner, J&J.

Across geographies, we continue to see encouraging trends in both market penetration and earlier line utilization. These dynamics support our belief that CARVYKTI remains a durable growth opportunity. Turning to our recent clinical data, we shared encouraging updates across both our solid tumor and multiple myeloma programs at ASCO this year. LB2102 is our DLL3 targeted CAR-T therapy being evaluated in small cell lung cancer and large cell neuroendocrine carcinoma. LB2102 demonstrated a manageable safety profile and encouraging clinical activity in a heavily pretreated patient population. Higher dose levels achieved an objective response rate of 28.6% and a disease control rate of 78.6% with durable responses observed. Solid tumors remain difficult to treat with limited therapeutic options.

So this is an encouraging sign. As a reminder, we have an exclusive global licensing agreement with Novartis to develop and commercialize LB2102 and other DLL3 targeting CAR-T therapies discovered by Legend. We also reported additional CARTITUDE program data supporting the durable efficacy and consistent safety profile of CARVYKTI in multiple myeloma. These data included sustained progression-free and overall survival benefit across cytogenetic risk groups, along with a low incidence of immune effector cell-associated enterocolitis. Notably, in the CARTITUDE-4 subgroup analysis, patients who responded to bridging therapy demonstrated 30-month overall survival rates exceeding 85% with no cases of IEC-associated Parkinsonism.

Taken together, these presentations further reinforce both the strength of the CARVYKTI clinical profile and the breadth of our innovation pipeline. The most notable recent pipeline update was our Phase I LB2501 study with data presented at the European Hematology Association Congress in June. LB2501 is a CD19/CD20 dual-targeting in vivo CAR-T therapy for the treatment of relapsed/refractory non-Hodgkin's lymphoma. The new results were the first human data with our in vivo platform and from an ongoing dose escalation Phase I study. The data presented at EHA included 12 patients with 6 patients in each of the 2 dose cohorts as part of an investigator-initiated trial conducted in China.

We had compelling results at dose level 2, achieving a 100% objective response rate and an 83.3% complete response rate across the 6 patients with diffuse large B-cell lymphoma, mantle cell lymphoma and follicular lymphoma. We also observed impressive in vivo CAR T cell persistence in peripheral blood with cells detectable up to 116 days based on these early results. From a safety perspective, LB2501 was well tolerated with no dose-limiting toxicities, no serious adverse events and no deaths reported. We anticipate filing a U.S. IND for LB2501 by the end of the year to initiate a U.S.-based clinical program in NHL and plan to report additional data from the China study in due course.

These results represent an important milestone for our entire in vivo CAR-T platform, which has broad applicability and includes other candidates with other targets in additional indications and supports our continued investment and development of candidates using our in vivo platform. Beyond LB2501, we continue to advance a broad and diversified pipeline spanning autologous, allogeneic and in vivo cell therapies. As it relates to CARVYKTI, multiple frontline multiple myeloma studies remain ongoing, including CARTITUDE-5, CARTITUDE-6 as well as others, which could potentially expand our market opportunity into the first-line setting. Across our autologous portfolio, we continue to develop therapies targeting Claudin 18.2, DLL3, GPRC5D and dual target approaches for multiple myeloma.

We are also advancing several off-the-shelf CAR-T programs ranging from allogeneic programs for autoimmune disease and B-cell malignancies as well as additional in vivo CAR-T candidates beyond LB2501, which I just described for its impressive first human data in a Phase I trial at EHA. Overall, we believe this portfolio reflects a balanced approach to innovation across the different modalities of CAR-T while leveraging our expertise in cell therapy, development and manufacturing. Looking ahead, we believe Legend is well positioned for sustainable long-term growth. We continue to advance our pipeline and are working towards an IND submission for LB2501 by the end of the year. We ended the period with approximately $965 million in cash, cash equivalents and time deposits.

And commercially, CARVYKTI remains a leading franchise in multiple myeloma and continues to demonstrate strong global momentum, expanding into new markets on a regular basis. We also continue to believe CARVYKTI has a peak annual sales potential exceeding $5 billion, and we are making meaningful steps to reach that goal. Supported by a durable commercial business, a deep pipeline and a focus on execution, we remain committed to achieving company-wide profitability in 2026. And with that, I will turn over the call to Carlos.

Carlos Santos: Thank you, Alan. This quarter's financial results continue to demonstrate the operating leverage inherent in our business model. Revenue has scaled at a CAGR of 74% since the second quarter of 2023, supported by growing demand for CARVYKTI and continued commercial execution. At the same time, operating margins have improved significantly from negative 142% in the second quarter of 2023 to a positive 15% in the second quarter of 2026. This now marks a major milestone objective for Legend as the first quarter of company-wide profitability on both an IFRS and an adjusted basis. Going forward, we will continue to focus on adjusted net income as the metric for sustained profitability.

While we remain focused on investing in the future growth of Legend, we are doing so with increasing discipline and operating efficiency. Turning to our quarterly financial performance. Total revenue increased 52% year-over-year, driven by continued CARVYKTI demand and commercial expansion. Given the recent increases in international sales, we wanted to note that we are using Legend's foreign exchange rates for CARVYKTI collaboration revenue, which we also plan to use going forward. Each quarter, Legend receives the collaboration revenue through a profit split analysis in U.S. dollars as constant currency. From an accounting perspective, the revenue is then converted to the appropriate functional currency using Legend's foreign exchange rates, which may differ from our partners.

While we expect the differences each quarter to be small over the near term, we wanted to specifically call it out this quarter as international sales are becoming an increasing percentage of the overall revenue and in any given quarter, an increase in international revenue and/or a significant movement in foreign exchange rates between the euro and the U.S. dollar could result in additional divergence between the revenues reported by our collaboration partner and the revenue that Legend reports. As we look at collaboration revenue growth for the remainder of the year, we wanted to offer some thoughts on quarterly progression in Q3 and Q4.

As we have been consistently saying, we are pleased with the steady increasing rate of CARVYKTI penetration into the second to the fourth lines of treatment, which is our focus and has now grown to be over 70% of our volume. With the increasing penetration into earlier lines has also come increasing usage in the outpatient setting and with a higher percentage of outpatient volume contributing to the revenue mix comes a different set of gross margin dynamics. Additionally, we expect to see an increase in Q4 revenue from an extra selling week in this calendar year and greater international expansion compared to Q3.

Despite these fluctuations, we remain confident in our adjusted net income profitability projections for both Q3 and Q4. Moving down the income statement. Gross margin on net product sales grew 1% year-over-year improving to 58%, which was an improvement of 17% compared with 41% for the first quarter of 2026, which, as you may recall, was artificially low primarily due to onetime costs associated with manufacturing expansion, which we unwound in the second quarter, adding additional onetime favorability of a few percentage points to our Q2 gross margin.

Going forward, gross margin on net product sales will be more reflective of volume as we continue to expect improvements over time by leveraging our investments in manufacturing to scale and increasing utilization across all nodes. However, it is important to realize that there is still likely to be quarter-to-quarter variability in gross margin, and we expect Q3 gross margin on net product sales to be in the lower 50% range with a rebound into the mid-50% range anticipated for Q4. Total operating expenses increased only 7% year-over-year, reflecting our continued focus on disciplined investment and operating leverage. Research and development expenses decreased 2% year-over-year as the costs from the later-stage BCMA frontline clinical studies roll off.

This will be partially offset by increased spending in our in vivo assets as they move into Phase I and later studies. Selling, general and administrative expenses increased 19%, primarily driven by investments supporting sustained leadership in BCMA CAR-T markets. As a result, operating margin improved to a positive 15% compared with negative 9% in the second quarter of 2025. Regarding taxes, we had an income tax expense of $22.3 million during the second quarter compared to an income tax expense of approximately $600,000 for the same quarter last year. The year-over-year increase was primarily driven by an increase in taxable income across our U.S., Belgium and PRC entities.

As we have now achieved company-wide profitability on a quarterly basis for the first time, I wanted to provide more detail on our tax rate and the effect of various tax jurisdictions as you develop your longer-term financial models. We are in the process of negotiating a unilateral advanced pricing agreement with the Chinese tax authorities as part of our proactive tax governance strategy. Although a formal agreement has not yet been formally executed, we have now reflected the expected impact of the agreement as a component of income tax expense in our Q2 numbers. We expect to report income tax in each quarter that we are profitable.

And although we are not yet at a point that we can provide more precise guidance, we anticipate a tax rate in the high 20% range over the next several quarters. In addition, although quarterly adjusted net income may vary from quarter-to-quarter over the near term, primarily driven by some expected fluctuations in gross margins I mentioned earlier, we are increasingly confident in the long-term durability of our profitability profile. With adjusted net income of $650 million in Q2, we feel comfortable in maintaining our projection for adjusted net income profitability on an adjusted basis in 2026.

On a non-IFRS basis, this represents $0.16 per diluted share compared with adjusted net income of $10 million or $0.03 per diluted share in the same period last year. Turning to our balance sheet, which remains a significant strategic asset. As of June 30, 2026, we held approximately $965 million in cash, cash equivalents and time deposits and have no long-term debt. The equity offering in June contributed meaningfully to this strong cash position, allowing for additional flexibility to fund our pipeline programs and pay down our loan to Johnson & Johnson under the terms of our agreement. Our investment priorities have remained consistent, and our strategy has not changed.

We remain committed to delivering sustainable profitability on adjusted net income while still advancing our in vivo CAR-T pipeline and making modest capital investments to support manufacturing capacity expansion. Our key objectives include: first, continued quarter-over-quarter CARVYKTI growth through 2026 with a growing portion of our business coming from second to fourth-line patients. Second, adjusted net income profitability for the second half of 2026. Third, an IND submission for LB2501 in Q4 and lastly, presenting additional in vivo data at future medical conferences. We believe our strong financial position provides the flexibility needed to execute on all of these priorities. Let me end in the same way that Alan started this call.

This is a period of leadership transition and not strategy transition. Our Q2 financial results support this. And you can expect that this leadership team will continue to deliver on the clear objectives that we just laid out and to provide transparency for the investment community as we move into the second half of 2026. With that, I will turn the call back to the operator to open the line for questions.

Operator: [Operator Instructions] It comes from Eric Schmidth with Cantor.

Eric Schmidt: Congrats on achieving the milestone of profitability. My question is on the in vivo CAR-T side and the BCMA program in particular. I think Alan mentioned you're working on a variety of different targets. So I assume that's still one of them. Can you provide for us kind of an update on your strategy with your partner, J&J and when we may hear something in addition on BCMA?

Alan Bash: Thanks, Eric, for the question. Yes, previously, we had said that BCMA CAR-T programs were subject to the terms of Legend Biotech's collaboration agreement with J&J and previously, we cannot say more. We can now share an update that Legend will be conducting an investigator-initiated clinical study in China. Evaluating LB2505, which is an investigational BCMA-targeted in vivo CAR-T therapy for multiple myeloma. This program is subject to terms of Legend Biotech's collaboration agreement with J&J. So we're not able to share additional details at this time, but we do look forward to providing updates on LB2505 when appropriate.

Operator: [Operator Instructions] It comes from Terence Flynn with Morgan Stanley.

Unknown Analyst: Great. This is Chris on for Terence. On LB2501, can you remind us of what the minimum duration of response you think is needed to be confident in the durability of a complete response? And is ASH a reasonable expectation for when you could release the updated Phase I data?

Alan Bash: Yes. Previously, at the EHA conference, we had shared durability as long as 120 days. We would be targeting ultimately to be able to share data at the 6-month CR rate. And we will be able to provide updates at future medical conferences in terms of the 2501 program.

Operator: One moment for our next question that comes from John Miller with Evercore ISI.

Unknown Analyst: This is [indiscernible] on for Jon. I wanted to touch on the recent announcement for the MonumenTAL-6 top line data where we saw a hazard ratio of 0.11. This seems like physicians are gradually getting comfortable with anticipating and managing the tox in the study. And there are also some commentary that on the GPRC5?

Alan Bash: I'm sorry.

Unknown Analyst: Hello? Yes, can you hear me?

Alan Bash: Your line isn't coming in as clearly, if you could just repeat the question, please.

Unknown Analyst: Yes. So I would like to ask a question on the recent announcement for the MonumenTAL-6 top line data. So it seems like physicians are gradually getting comfortable with managing and anticipating the tox in the study. And then there are also some commentary that the combo might be preferentially sequenced for later line usage. So I'd like to ask what kind of feedback have you been hearing from physicians on your end in terms of managing the tox and the sequencing that relative to CAR-T?

Alan Bash: Yes. Thanks for the question. So yes, the MonumenTAL study was looking at the combination of TEC and TAL and as J&J has shared publicly, they intend for that combination to be primarily used in later lines, as you point out. I think more generally, as we've seen the bispecific data and indications emerge, we've been very focused on educating physicians and patients on the key points of differentiation of CARVYKTI relative to other options in myeloma, in particular, other BCMA options. Of course, one is that one and done, right, versus continuous therapy. That's a very important driver of patient preference, of quality of life and of the opportunity for a long-term treatment-free interval and a long-term remission.

The second thing that we've been really emphasizing relative to the landscape is that the data really suggests that earlier is better with CAR-T. You get better efficacy, better safety and improved manufacturing when you get CAR-T earlier and really where the conversation has gone is not really about CARVYKTI versus bispecific. It's really about the sequencing.

And I think if you hear KOLs and the feedback we've been getting from KOLs, the storyline is really about the optimal sequencing and the data, both in the real world as well as additional studies or if you look at the biology, it really does point to the fact that patients will benefit if they can get to CAR-T first before other options in BCMA.

Operator: Our next question is from Leonid Timashev with RBC.

Leonid Timashev: I just wanted to clarify some of the comments on the gross margins. Can you maybe just elaborate on why having more outpatients is going to change the gross margin dynamics? And then looking ahead, I think in the past, you've talked about aiming for large molecule like cost of goods. Is that still the plan here? Any sense of when you might achieve that with some of these CapEx -- modest CapEx spend plans?

Alan Bash: Yes. Thanks for the question. All we would say at this point is that as outpatient grows and outpatient is starting to become approximately 60% of our overall mix. It does come with various dynamics, which could potentially impact gross margin. So that's all we're able to say at this point on that. But let me turn it to Carlos to your second question.

Carlos Santos: Yes. So Leonid, in terms of the path for gross margin, we are still expecting our cost of goods sold to decline over time. We have to get to a certain level of volume to keep up the consistency. But once all of our nodes are at a steady state, our gross margins will be in line with what we believe is industry standards of around 75%. And we actually have -- we see a clear path to 75% over time.

Operator: One moment for our next question that comes from Jessica Fye with JPMorgan.

Jessica Fye: I had 2 kind of on the financial side. First, can you just expand a little bit on the comments you made about how to think about the revenue cadence in 3Q and 4Q? And second, can you just recap the motivation behind the recent equity raise given that the company is still very committed to achieving profitability this year?

Carlos Santos: Let me start with talking about the raise. The follow-on was an opportunistic equity raise following the strong in vivo data that we presented at EHA. This additional capital really gives us greater flexibility to accelerate the development of LB2501 and our broader in vivo platform. This really allows us to be able to take our in vivo platform further in the development process, and this will provide us better BD optionality down the road. We continue to be confident in our profitability goals, and we will be in a stronger position to fund our R&D efforts following the loan repayment to J&J now that we have completed this raise.

Alan Bash: And related to your first question, as we heard earlier in the call from Carlos, we are indicating a global growth on a sequential basis across the balance of the 2 quarters in the second half of 2026.

Operator: Our next question comes from Yaron Werber with TD Cowen.

Yaron Werber: Congrats on moving towards the IIT with in vivo in China. I have maybe just a 2-part question on the tax rate in China. That would be applied, it sounds like to the global profits from now on. Is that actually going to be a cash payment? Or is that an accounting tax rate? And then secondly, just to answer your answer to Jessica's question on the raise, and you said that the payment after the payment to J&J, can you just clarify, is that relating to historical CapEx and how big that is?

Carlos Santos: Sorry, Yaron, could you repeat your second question?

Yaron Werber: I think you mentioned that there was a -- I might have misunderstood a payment to J&J when you were talking about the financing. I just wanted to make sure, is there any historical sort of cell balance sheet cleanup that you need to do as part of CapEx? Or did you never actually borrow capital from J&J for building manufacturing facilities that's still outstanding?

Carlos Santos: Yes. So let me start there. So as part of our collaboration agreement, there was a loan of around $300 million and that accrued interest over time that became a current liability this year. So we have been paying down both principal and interest on that loan this year. And it's a combination of cash repayments to J&J as well as recoupment of profits from our collaboration. We expect to fully settle that liability this year. So with regards to the tax provision, we have reflected the expected impact of an agreement based on the information we have today as a component of our income tax expense in Q2.

So this provision not only includes the China portion, but also profitability that's realized in other legal entities for Legend.

Operator: One moment for our next question that comes from Kostas Biliouris with Oppenheimer.

Konstantinos Biliouris: Maybe a couple of quick questions. One on the CEO search. We are wondering whether the Board is focused on a commercial operator for the CARVYKTI ramp or perhaps a platform CEO for the in vivo CAR-T development? And the second question is on the in vivo CAR-T development and commercialization. You already touched a little bit on the BCMA, but we are wondering how are you thinking about perhaps the lead program in NHL? Are you thinking to develop this by yourself? Or are you still looking for a partnership there? What is the latest status?

Alan Bash: Thanks, Kostas. Yes. So as we previously announced, the Board has initiated a search and is conducting a thorough process for the full-time permanent CEO position. And I don't think the Board wants to put an artificial deadline on that process. They're also looking holistically and looking at various qualities that would provide for the best long-term leader given the stage of the growth of the company. So I don't think there's anything specific that they wanted to share at this point about that. As it relates to your second question, as we mentioned on the call here, we are excited to say that we will be moving towards an IND with 2501 in the second half of 2026.

And our intention is to be able to conduct that Phase I ourselves. We have the capabilities, and we obviously have the financial flexibility and the resources to do that. We continue to remain open to various options around partnership long term across the in vivo platform. We obviously made the announcement this morning with 2505 moving forward in multiple myeloma and BCMA, and we'll continue to assess all of our options to maximize the value, both in terms of maintaining economics, but also ensuring speed and scale to maximize the opportunity with in vivo.

Operator: One moment for our next question that comes from Etzer Darout with Barclays. Please proceed.

Unknown Analyst: This is [indiscernible] on for Etzer. Real quick on the J&J partnership. How does that impact your in vivo development in immune disease? Will that change what you're able to pursue? And then maybe can you highlight any differences between your in vivo CAR-T platform and sales?

Alan Bash: Sure. So yes, the announcement that we're making today is around BCMA CAR-T in multiple myeloma. That's the aspect of the program that is subject to the agreement with J&J. So at this point, now Legend will look and step back and assess our options for autoimmune disease. We remain very interested in autoimmune disease with multiple targets. We obviously have been looking at potentially BCMA, potentially CD19, CD20 and other targets in autoimmune, and we think in vivo can play a meaningful role there. As it relates to the J&J deal that you mentioned with Sail, I'll remind you that Sail has a preclinical platform around circular mRNA and LNP.

And so that's very different from our program, which is LV-based. And we've also already shown clinical data in a very meaningful market, which is non-Hodgkin's lymphoma. So I think these are 2 very different opportunities. And I think it speaks to the excitement across the industry in vivo. Many large pharma companies are looking at multiple platforms, and we're very excited about the platform that we have to offer.

Operator: Our next question comes from Edward Tenthoff with Piper Sandler.

Edward Tenthoff: Thanks for the updates on the in vivo side and all the great progress with CARVYKTI. My question has to do with the rest of the pipeline, sort of the allogeneic approaches. It really sounds like the focus is in vivo going forward. So should we be expecting updates on either some of the other autologous CAR-Ts or some of the allogeneic CAR-Ts in the next year or so? Can you give us a sense for when to expect those updates?

Alan Bash: Let me turn this over to you, Yuhong to answer your question.

Yuhong Qiu: So the in vivo platform and allogeneic platform each have a strength. We prioritize in vivo, but we still believe that allogeneic have a good place. We previously provided our G39D program in ASH last year, and we continue to provide additional updates in future conferences on that program.

Operator: It comes from Mitchell Kapoor with H.C. Wainwright.

Unknown Analyst: This is Ahmed on for Mitchell. Congrats on the strong quarter. Just a couple of questions from us. One on how much of CARVYKTI's current 2L to 4L mix is in 2L and 3L versus fourth line? And how has that shifted Q-over-Q? And if any of these Sail launches in fourth line, what portion of CARVYKTI's current business would face direct overlap at launch? And the second one, I was wondering with Tyvek showing clinical proof of concept and LB2102 validating DLL3 CAR activity in small cell lung cancer, how are you thinking about extending the in vivo platform into solid tumors? And would DLL3 be the logical target? And would that fall within the Novartis agreement?

Alan Bash: Let me answer your second question first and just say that we're looking across a range of potential solid tumor targets. A solid tumor obviously has its own unique characteristics, and I think there are challenges that we and other companies are continuing to try to solve with in vivo in solid tumors. So more to come on that one. We do think that the DLL3 auto CAR T data set was meaningful. And as you know, we have a partnership with Novartis where we will be having Novartis take the asset forward into full clinical development.

As it relates to your question about line of therapy, yes, you did hear us share a report -- an update today that our 2L through 4L now comprises 70% in fact, over 70% of our mix in the U.S. And that's exciting because that means that we are making significant progress in getting CARVYKTI to be used earlier in the treatment paradigm. And as you mentioned, where needle will be potentially indicated in later lines, depending, of course, on what label they do receive, our foothold in second through fourth line, I think, provides a meaningful opportunity for CARVYKTI going forward.

We -- last quarter, we did break down and share an insight that within the 2L and 3L specifically that, that represented 41% of the overall mix. And we did that because we wanted to share a point in time reference to the fact that we've made significant growth and significant progress in early lines, specifically 2L, 3L. And we said at the time, and we maintain today, we don't intend to provide that update on every single quarter. Really, it is an opportunity to share that we are growing in second and third line.

It continues to be the fastest-growing part of our business, and we're excited with the fact that we do continue both from a clinical standpoint and a commercial execution standpoint to focus on the early line opportunities.

Operator: Our next question comes from Ash Verma with UBS.

Ashwani Verma: Congrats on the progress here. So maybe just the first one, can you talk about the potential impact on CARVYKTI from J&J's growing body of clinical data, seen this MonumenTAL-6 data that for TECVAYLI/TALVEY showed a hazard ratio of 0.11 on PFS in second to fifth line patients. So just help us understand. I know you're growing a lot in second to third line, but just if competition catches up to that. And then secondly, I know you commented on the sequential global sales growth, but can you confirm that if it applies to the U.S. sales growth as well going into 3Q and 4Q?

Alan Bash: Yes. At this point, and again, we are -- we stay very close to our partner, J&J here on this. So we wanted to just maintain the comment that we had previously, which is around global sequential growth quarter-on-quarter. But to answer your first question on the bispecifics, again, I pointed this out earlier, but I think it's important to emphasize that the bispecifics do have, I think, very compelling data, but they offer a very different value proposition for patients.

And what we're focused on is the fact that -- and jointly with J&J, and J&J has reiterated the fact that CARVYKTI, even on their recent earnings call that CARVYKTI has the potential to be a $5 billion-plus peak sales asset, and we very much are in lockstep with them on that. Both J&J and Legend are committed to the fact that CARVYKTI provides a very unique value proposition to patients, to physicians and to the market. One and done versus continuous therapy, the opportunity for a long-term remission and really meeting the definition of cure as defined by the IMWG guidelines, really, we have a potential for cure here based on the CARTITUDE-1 long-term 5-year data.

We look forward to presenting updates in earlier lines over the next year or so, and we do believe that this one-and-done opportunity with long-term remissions and the potential for cure is what patients and physicians ultimately want. And I would also add to your question, which is I mentioned earlier, there's really been a very robust conversation now at all the medical conferences and all the follow-on conferences about sequencing.

And I think the real-world evidence that was presented at ASCO, whether it's the Germany registry or whether it's the Mountain West U.S. registry from TriNetX or whether it's other data sets, institution-specific real-world data suggests that when patients get CAR-T first, they have prolonged survival, they have better outcomes and you have less opportunity for antigen escape or antigen mutation. So you really have an opportunity to get CAR-T first, and that's really where the KOLs are on this topic.

Operator: We have a question from the line of Sean McCutcheon, Raymond James.

Sean McCutcheon: And speaking to earlier line, with the iberdomide PDUFA coming up in about a week on the MRD negativity results, how does this inform your calculus on potential for filing on MRD for CARTITUDE-6 and accelerating the time to market for CARVYKTI in the frontline transplant eligible population?

Alan Bash: Let me ask you, Yuhong to comment about MRD as an endpoint.

Yuhong Qiu: As with the advancement of frontline therapies for multiple myeloma patients, the median PFS gets longer, longer, which is very good news for patients. But for the development of new therapies, some of those patients still relapse. So MRD become a necessary surrogate in order for those effective therapies to reach patients earlier. Although in the MRD ODAC, the correlation analysis does not include any of the CAR-T data set. We continue to work with FDA on the probability -- the possibility of MRD as a surrogate for registration purpose for the CAR-T therapy. So CAR-6 will continue on this effort.

Operator: Thank you. And as I see no further questions in the queue, I will conclude the Q&A session and conference for today. We want to thank everyone for participating, and you may now disconnect.