Jose Carmona: On brand profitability, what we expect this year is that the revenues coming out of ZYNLONTA in the US will be able to pay for all the expenses directly related to commercializing ZYNLONTA, which means all the sales force, marketing team, medical science liaison, and all discretionary spending, which would include A&P, cost of goods, IIT, and other related expenses. So, basically, from a capital allocation perspective, commercializing ZYNLONTA is not a usage of fund. It’s more like a source of funds to start funding the pipeline. For modeling purposes, gross to net, if you’ve heard our messages in 2023, from the first half to the second half of the year, our gross to net increased a high single digit percentage point.
We expect that 2024 will have a similar gross-to-net ratio that we had in the second half of 2023. So, we don’t expect further increases, but as you model it in the first half of 2024, we’ll be fighting over a higher gross to net than what we saw in the first half of 2023, like that same percentage points. So, high single digit increase in the first half of 2024 compared to prior year, but it will be more even in the second half of 2024 compared to the second half 2023. From an expenses perspective, we will continue to drive productivity measures. We are not providing exact guidance on all OpEx levels, but we will keep driving productivity across the board. Importantly, this year, the highest investment level that we have is in LOTIS-5, [indiscernible] trial for ZYNLONTA, which we expect full enrollment this year.
So as the full enrollment happens and then the trial winds down into 2025, we expect a decrease of R&D expenses due to LOTIS-5. All that depends obviously on the success of the other trials, but that’s the biggest driver of R&D expenses this year, which will decrease as we launch 2025.
Operator: And our next question comes from the line of Gregory Renza with RBC Capital Markets.
Gregory Renza: Congrats on the progress. Maybe just building on the commercial strategy. Amet, it’s helpful to hear the color of the pull through from the fourth quarter. Just curious if the CD20 bispecific combination was within those expectations and any factors that we should be thinking about going beyond what Kristen and Pepe had indicated on the dynamics of uptake for 2024. And maybe just related to that, if I may, as we think about the longer term opportunity for late line, just curious if you have any updated thoughts on ZYNLONTA’s positioning just relative to ADC based combinations and third line. I certainly saw the ECHELON-3, et cetera, triplet meeting its OS endpoint improvement regardless of CD30 expressions. Just curious if you had any updated thoughts on those evolving dynamics as well.
Ameet Mallik: I’ll start and then I’ll pass it on to Kristen and Mohamed in case they have additional comments. But, yeah, I would say overall bispecifics are definitely gaining ground in that third line setting post CAR-T. You saw there was strong growth. While CAR-Ts are basically kind of flattening out right now when you look at – out of the sales of all the CAR-T [Technical Difficulty] in Q4 versus Q3 is kind of flattening out. Bispecifics continue to grow dynamically and the uptake, particularly in the academic setting, continues to grow. In the community setting, while they’ve been used in more sophisticated centers, the uptake there is much more limited. I think what we found though is that there’s a clear place for ZYNLONTA, either for patients where a bispecific is not suitable, where a patient may need even faster responses for ones that progress post their bispecifics because it doesn’t work for every patient.
So I think academic positions have sort of figured out how to best use ZYNLONTA around a dynamic where there is a new competitor and when bispecifics are growing. So we saw part of that rebound because I think, in Q3, where there was a big push towards just bispecifics, in Q4 we saw that ZYNLONTA continued to be used with those that progressed or those who were not as suitable as doctors sort of figure out the best patients to go to a bispecific post a CAR-T. In terms of the competitive landscape, I think the whole space is moving towards combinations. I think one of the advances we have is that we’re approved as a single agent and we have strong single agent activity. Not many drugs that have been approved as a single agent. In fact, the bispecifics and ZYNLONTA are two of the only drugs [Technical Difficulty] that have been approved as single agents.
And so, I think our combination strategy with both LOTIS-5 and LOTIS-7 position us really well. I think we’ll have competitive profiles with those two combinations that, in spite of an evolving landscape, will position us really well for growth not only in the third line setting where we are today, but also in the second line setting where we will move with those trials. Kristen and Mohamed, is there anything else that I missed that you would add?
Kristen Herrington-Smith: The only thing that I would add, two things. One, just to add on to your evolving landscape, we see already with polatuzumab moving up to the front line that it is creating a need for a different mechanism in the second line and third line. So definitely carving out a space for ZYNLONTA, whether it’s today or in combination once we get LOTIS-5 and LOTIS-7. The other question was around ECHELON-3. We also saw that. We’ve been tracking – we always track our marketplace and the dynamics. And one, it’s nice to see a win for an ADC. It reinforces the efficacy of ADCs. But, two, we haven’t seen any data on that trial other than the headline that Pfizer put out in terms of the overall survival win. R squared is used.
It’s pretty uncommon use, primarily in the community, but still we’d love to see the data that Pfizer has on their triplet versus the doublet and look forward to that, so that we can better put it into context and understand any impact in the market.
