Genmab A/S Q3 FY2025 earnings call

Key Sections

• Accelerated development of high-impact late-stage pipeline: EPKINLY and Rina-S have progressed rapidly; Rina-S initiated additional Phase III clinical trials.
• Proposed acquisition of Merus: Advances evolution into a global biotech leader, accelerates shift to 100% owned model, expands/diversifies revenue. Adds petosemtamab (peto) to portfolio, which has 2 breakthrough therapy designations.
• Commercial performance: EPKINLY sales up 64% y-o-y in Q3, TIVDAK sales at $120 million year-to-date, with strong performance in new and established markets.
• Financials: Total revenue grew 21%, recurring revenue up 26%, operating profit grew 52% over 9 months, ending with ~$3.4 billion in cash.

Total revenue grew by 21% over the past 9 months, fueled by increased recurring revenue. EPKINLY posted $333 million through Q3, a 64% year-over-year increase, accounting for 25% of total revenue growth. TIVDAK had year-to-date sales of $120 million. Recurring revenue from royalty medicines (DARZALEX and Kesimpta) was up 26%, contributing significantly to the revenue growth.

Forward-Looking Statements

• Expect revenue in range of $3.5 billion to $3.7 billion for 2025, a 15% midpoint growth.
• Recurring revenues expected to grow by 22% in 2025.
• Operating expenses expected to be in range of $2.1 billion to $2.2 billion.
• Operating profit expected to be in range of $1.1 billion to $1.4 billion, with midpoint over $1.2 billion and 26% year-over-year growth.
• 2026 guidance to be provided in February, but 2026 consensus expectations for Genmab stand-alone investments and Merus investments are seen as reasonable.

Risks

• Actual results may differ materially from forward-looking statements due to delayed or unsuccessful development projects.
• Development projects for pipeline assets may face delays or fail to meet expectations.

Q: Just wanted to get your thoughts ahead of the EPKINLY PDUFA in November. There's obviously been a bit more of a focus seemingly on U.S. representation in clinical trials. So I just wanted to get your confidence going into that potential approval. And if you could just confirm that efficacy in the EPCORE FL-1 trial is consistent across both U.S. and non-U.S. patients.

A: Tahi Ahmadi stated there's nothing indicating it won't be approved in the U.S. soon, and efficacy in EPCORE FL-1 trial is consistent across U.S. and non-U.S. patients.

Q: Great. Anthony, I got a couple of questions for you more about 2026 and then '27. So you mentioned for next year, the numbers, the stand-alone OpEx for Merus and Genmab are reasonable. For Merus, they're sort of in the $450 million range in terms of OpEx, let's call it, $450 million, maybe some even have as high as $500 million. I think we're imagining there's going to be some synergies as you bring that company in. And I know you're not -- you can't give guidance, but can you give us any -- a little bit of a sense, are we thinking about this correctly? And then secondly, when you're talking about significant profitability next year, there could be as much as like $430 million change between interest income net to noninterest expense net because of the debt liability. So are we thinking about that correctly? Because it would impact profitability next year.

A: Anthony Pagano said there's a disciplined approach to investments, overall investment levels for Genmab stand-alone and Merus are seen as reasonable, and significant profitability in 2026 refers to EBIT, with continued focus on disciplined investments and operational efficiency.