Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q1 2024 Earnings Call Transcript

Y-mAbs Therapeutics, Inc. (NASDAQ:YMAB) Q1 2024 Earnings Call Transcript May 8, 2024

Y-mAbs Therapeutics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, and welcome to Y-mAbs Therapeutics Inc. Earnings Conference Call for the First Quarter of 2024. At this time, all participants are in a listen-only mode. Instructions for the question-and-answer session will follow the prepared remarks. As a reminder, today’s conference will be recorded. I will now hand it over to Y-mAbs’ Head of IR, Courtney Dugan.

Courtney Dugan: Thank you, operator and good morning, everyone. Welcome to the Y-mAbs’ first quarter 2024 financial results conference call. We issued a press release yesterday at market close. The press release and accompanying slides are available on the IR section of our website. Let me quickly remind you that the following discussion contains certain statements that are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about our business model and development, commercialization and product distribution plans, expectations with respect to early trial data, current and future clinical and preclinical studies, and our research and development programs, expectations related to the timing of the initiation and completion of regulatory submissions; regulatory, marketing and reimbursement approvals, including statements with respect to future development of other development programs, potential for DANYELZA territory and label expansion, and potential of and advancement of SADA.

collaborations or strategic partnerships and the potential benefits thereof expectations related to our anticipated cash runway and cash burn, and the sufficiency of our cash resources and assumptions related thereto, guidance and expectations for 2024 and beyond, and our financial performance, including our estimates regarding revenues, expenses and capital expenditure requirements and other statements that are not historical facts. Because forward-looking statements involve risks and uncertainties, they are not guarantees of future performance and actual results may differ materially from those expressed or implied by these forward-looking statements due to a variety of factors, including those Risk Factors discussed in the company’s Quarterly Report on Form 10-Q for the quarter ended March 31st, 2024, as filed with the SEC on May 7th, 2024.

I would now like to turn the call over to our President and Chief Executive Officer, Mike Rossi.

Michael Rossi: Thank you, Courtney. Good morning and thank you for joining us. I have with me today our Chief Financial Officer, Bo Kruse; our Chief Commercial Officer, Sue Smith and our Chief Medical Officer, Dr. Vignesh Rajah. Thomas Gad, our Founder and Chief Business Officer, will join us for the Q&A portion of this call following our prepared remarks. This morning, I will start off by reviewing key financial and operational highlights from the first quarter of 2024, including DANYELZA’s sales performance and the clinical progress of our radiotherapy clinical programs, utilizing our Self-Assembly DisAssembly Pretargeted Radioimmunotherapy or SADA PRIT technology platform. Next, Sue will provide details around our global DANYELZA’s sales in the first quarter.

Vignesh will then provide updates around our ongoing naxitamab ISS clinical trials. Bo will then provide an overview of our first quarter of 2024 financial performance, our cash resources and reiterate our full 2024 guidance before we open the line for Q&A. Let’s begin with key highlights for the first quarter of 2024, starting with DANYELZA. As a reminder, DANYELZA is approved by the U.S. FDA for the treatment of relapsed or refractory high-risk neuroblastoma in bone or bone marrow for patients, who have demonstrated a partial response, minor response or stable disease with prior therapies. Neuroblastoma is the most common cancer in infants and the third most common cancer in children. In the first quarter of 2024, we achieved record U.S. net sales, product sales of DANYELZA of $18.6 million, up 11% from what we recorded in the first quarter of 2023.

We achieved record demand in vials sold of DANYELZA by further penetrating the top high-volume centers across the U.S. We expect this positive momentum to continue throughout the year. From a worldwide standpoint, we achieved global DANYELZA net product sales of $19.4 million in the first quarter of this year, a 4% decrease from the same period in 2023. While the decrease was primarily driven by lower product purchases from international markets in the first quarter of 2024, compared to the prior year as expected. Our first quarter total net product revenue came in ahead of our internal projections. We remain confident in our full-year 2024 revenue guidance, as we continue to grow momentum in the U.S. and with our partners in ex-U.S. markets.

We have 63 sites activated across the U.S. to date with five new accounts added in the first quarter of this year. Our U.S. commercial team has been doing a fantastic job of continuing to penetrate high-volume centers and increasing physician adoption of DANYELZA. In addition to the U.S., our ex-U.S. footprint continues to expand through multiple partnerships. DANYELZA is approved and has been launched in China through our partner, Cyclone, and has been recently launched by our partner, Adium in Brazil and Mexico just a few weeks ago. We look forward to providing further updates on these launches in the coming quarters. Our European Named Patient Program with Web Clinical is continuing to progress as we support the needs of children with high-risk relapsed and refractory neuroblastoma in Europe.

In addition, we plan to submit a BLA for DANYELZA in Argentina this year and could potentially receive an additional approval in Asia and Hong Kong next year. We continue to see progress among our ongoing ISS naxitamab trials in support of our indication expansion strategy. In particular, we look forward to Memorial Sloan Kettering’s readout from its multicenter Phase 2 trial, investigating naxitamab in patients with relapsed osteosarcoma as we anticipate in the fourth quarter of this year. You will hear more about the progress of the ongoing investigator-sponsored trials of naxitamab from Vignesh later during this call. Now, let me shift to the clinical progress for SADA PRIT programs. Phase 1 GD2-SADA. Our first SADA clinical program is our GD2-SADA, which is in Phase 1 evaluating its safety and tolerability.

And that is in the treatment of GD2-positive solid tumors, including small cell lung cancer, sarcomas and malignant melanoma. This Phase 1 dose escalation single-arm multicenter safety study has three parts, which you can see here. Part A explores dose finding for GD2-SADA molecule and the testing of dose intervals of two to five days between the protein and the Lutetium-DOTA payload. Part B determines the optimal dose of Lutetium-DOTA, and Part C evaluates the safety and initial signs of efficacy using repeat dosing. We are currently in Part A and are very pleased with how the trial is progressing. We have advanced through cohorts 1, 2 and 3 and are now dosing patients in Cohort 4. We have dosed a total of 14 patients to date in this trial.

We currently have seven sites open and plan to continue additional sites. Recall the Part As of the trials investigating the safety profile of the protein and determining the optimal timing to administer the radionuclide. The evaluation is still ongoing. We remain very encouraged by what we’ve seen so far. To-date, no patients in the trial have experienced any dose-limiting toxicities and there have been no instances of treatment-related serious adverse events. Based on the spec CT scans and PK activity we have seen to-date, we believe we have demonstrated proof-of-concept that GD2-SADA can both find and bind to tumors. It is important to note that this early data is not complete and are not necessarily indicative of the full results or the ultimate success of the trials or the SADA development program.

We expect to complete Cohort 5 of Part A component of Phase 1 study by the end of this year and look forward to present the full data set from Part A at a medical meeting in late 2024 or 2025. Our second SADA PRIT program is the CD38-SADA, which we plan to first study in the treatment of non-Hodgkin’s lymphoma, focusing on B and T-cell lymphoma. This will be our first SADA program in circulating tumors. Our planned Phase 1 follows a comparable design to our GD2-SADA Phase 1 trial, which you can see here. We’re on track to activate the first two sites in the second quarter of this year and expect recruitment of patients to follow the closing of the contracts. We are incredibly excited by the opportunity of our SADA PRIT platform to potentially shift the treatment paradigm across a variety of cancers and potentially even indications beyond oncology.

We look forward to providing further updates on our SADA PRIT programs and clinical progress throughout the year, including at the ASCO Annual Meeting and the Society of Nuclear Medicine and Molecular Imaging or SNMMI Annual Meeting, which both occur in June. Shifting gears a bit, I want to take a moment to acknowledge Bo Kruse. As you likely saw in March, we announced Bo’s resignation as CFO of Y-mAbs. Bo has served as a CFO for nearly 10 years and has been a valued member of our leadership team throughout his tenure. He has ensured that Y-mAbs is in a strong financial and operational position as he soon transitions out of the role and supports us in search of a new CFO. I want to thank Bo for his dedication to Y-mAbs and his strategic partnership.

We wish him all the best as he embarks on his next career journey. Additionally, in March of this year, we entered into a separation agreement with our Chief Scientific Officer, Steen Lisby. The separation agreement did not result in material impact to our financial statements. We wish Dr. Lisby good luck with future endeavors. Our search for a new Chief Scientific Officer is ongoing with a focus on the continued advancement of our novel radiopharmaceutical platform. I’m incredibly confident on our entire team as we currently have in place here at Y-mAbs and I’m really proud of the commitment to patients that each and every one of our team members demonstrates every day. We remain focused on our mission to improve patient lives and execute on our strategy to advance novel therapies through clinical development.

I will now pass the call over to Sue Smith to provide further color on global DANYELZA’s sales for the first quarter of 2024.

Sue Smith: Thank you, Mike and good morning, everyone. I’m really pleased with the commercial progress of DANYELZA on global scale so far this year. Building on momentum from last quarter, we continued to see the fruits from our enhanced marketing efforts during the first quarter. Let me begin with our commercial progress in the U.S. During the fourth quarter of last year, we rolled out a new DANYELZA campaign in the U.S. Aimed to reposition and elaborate on DANYELZA’s differentiating characteristics in the treatment of high-risk neuroblastoma for patients, who have experienced incomplete response to induction therapy in their bone and bone marrow. This new campaign allows us to share our data for refractory versus relapsed patients separately and provide more detailed data regarding DANYELZA’s performance in two different patient populations.

those patients with an incomplete response to induction therapy and patients, who are relapsed after a prior therapy. The new campaign also demonstrates DANYELZA responses in children rechallenged with DANYELZA after prior GD2 therapy. We continue to expect to see meaningful traction from the new campaign over the coming quarters. Our first quarter 2024 U.S. DANYELZA net product revenues increased 11% year-over-year to $18.6 million. The U.S. accounts for more than 80% of DANYELZA’s sales and first quarter of 2024 marked a record high in terms of U.S. DANYELZA demand and vials sold. In the U.S., we achieved sales well above the first quarter portion of our internal forecast with the highest ever number of vials sold in a quarter since initial launch back in 2011 — 2021, sorry.

In the first quarter of 2024, U.S. sales measured in vials were 9% higher than the fourth quarter of 2023 and March 2024 was the highest month of vial sales in the U.S. ever. Bo will provide further color later during the call. Further, the team is focused on multiple U.S. key activities driving performance in the first quarter and beyond. In the first quarter of 2024, the marketing team launched an accompanying enhanced digital campaign. The field sales team is hard at work educating customers on the new data, contributing to DANYELZA’s continued growth outside of MSK with 16% growth in the first quarter of this year versus fourth quarter of 2023. The commercial team also engaged with our key customers with active presence at meetings such as ASFO, AFON and tandem transplant meeting during the first quarter.

A total of 63 accounts have now used DANYELZA around the U.S. since its initial launch in 2021, with five new accounts added in the first quarter of 2024. February 2024 marked the highest number of active sites in — I’m sorry, my computer just stopped — the highest number of active sites in a single month since initial launch. My apologies. We continue to increase share of sales outside of MSK and now count 60% of ex-MSK sales compared to 55% of sales ex-MSK in the fourth quarter of 2023. In fact, our ex-MSK sales were the best ever in the month of March 2024. Physician utilization of DANYELZA also continues to grow. 18 healthcare practitioners started a patient on DANYELZA in the first quarter of 2024. Since launch, a total of 106 HCPs have prescribed DANYELZA and 31 HCPs have started treatment on two or more patients as of March 31st, 2024.

Our U.S. commercial sales team continues to receive positive HCP feedback on DANYELZA through ongoing customer interactions. In addition, we continue to see institutional adoption of DANYELZA, which was added to three hospital formularies in the first quarter of 2024, bringing the TotalSense launch to 44 hospital formularies as of March 31st, 2024. We continue to see an upward trend of sales growth in the U.S. since initial launch as DANYELZA positively impacts patient lives in a highly-important area of pediatric neuroblastoma. And it remains a leading therapy in the U.S. anti-GD2 market, we believe we have room for continued growth. Now, let’s turn to our global commercial progress. Our first quarter of 2024 total DANYELZA net product revenues decreased 4% to $19.4 million versus the first quarter of 2023, primarily driven by timing in international purchases.

Despite this 4% decrease, total product revenues came in above our internal forecast. This positive start puts a promising tone for upcoming quarters as our team remains steadfastly focused on further market penetration to bring DANYELZA to more pediatric high-risk neuroblastoma patients. We continue to receive positive feedback and physician uptake of DANYELZA in China through our partner, Cyclone. During the first quarter of this year, our South American partner, Adium, came to an agreement with the Drug Market Regulation Chamber or CMED on the price of DANYELZA in Brazil, and launched in both Brazil and Mexico just a few weeks ago. We look forward to updating you on our continued global commercial progress in the coming quarters, and we remain confident in reaching our total DANYELZA net product sales guidance for the full year of 2024 of between $95 million and $100 million.

Let me now pass the call to Vignesh.

Vignesh Rajah: Thank you, Sue. Hello, everyone. I’m pleased to provide a brief update on our ongoing naxitamab clinical trials. We continue to advance potential label expansion opportunities for DANYELZA through our investigator-sponsored clinical studies in collaboration with leading KOLs. In the frontline high-risk neuroblastoma setting, our partner, the Beat Childhood Cancer Research Consortium, or BCC is conducting a multicenter Phase 2 trial evaluating naxitamab in combination with standard induction therapy for patients with newly-diagnosed high-risk neuroblastoma. 16 sites have been opened and recruitment is ongoing. The trial is expected to transition from a single-arm study with naxitamab added to the current standard of treatment for induction to a randomized trial, where the control arm will be the standard of care for induction therapy, which is chemotherapy, for which we plan to file an IND.

Our aim for that randomized trial is to demonstrate superiority incomplete response at the end of induction therapy in the naxitamab arm versus standard of care. The BCC expects to potentially initiate a new randomized study in the second quarter of this year. In osteosarcoma, we are working with Memorial Sloan Kettering Cancer Center on its multicenter investigator-sponsored trial for naxitamab. We continue to expect MSK to provide a data readout from the Phase 1/2 trial in the fourth quarter of this year. And based on the outcome of this, we will evaluate plans for our pivotal randomized trial anticipated to be initiated in the second quarter. In breast cancer, we are partnering with the Ohio State University on a Phase 1b/2 trial, investigating TGF beta NK cells, gemcitabine plus naxitamab in patients with GD2-positive metastatic breast cancer.

The first patient is expected to be dosed with DANYELZA in the second quarter of this year. Upon the outcome of this trial, we will consider moving forward with a multicenter Phase 2 trial. In addition, we have partnered with the Institute of Mother and Child in Poland on a randomized Phase 2 trial evaluating the efficacy and safety of naxitamab in patients with the refractory Ewing sarcoma, which was initiated during the fourth quarter of 2023. Recruitment is ongoing and three patients have been dosed in the naxitamab arm to-date. We expect a total of 16 patients in that arm. The trial is expected to be completed in 2028. A significant treatment gap remains in the anti-GD2 space in both pediatric and adult cancers. We are committed to supporting the advancement of these investigator-sponsored studies through clinical development and working to unlock the full potential value of naxitamab.

We look forward to updating you on our progress at ASCO later this month and in the coming quarters. Let me now hand the call over to Bo Kruse.

Bo Kruse: Thank you, Vignesh and good morning, everyone. As you heard from Mike and Sue, U.S. revenues increased 11% to $18.6 million in the first quarter, compared to $16.8 million in the same quarter of 2023, while international revenues decreased by $2.6 million to $2.8 million in the first quarter, compared to $3.4 million in the first quarter of 2023. The decline in international revenues was driven by our distribution partner with clinical, which generated revenues in the first quarter of 2023 of $2.5 million due to an initial inventory stocking order, compared to no revenues in the first quarter of 2024. Our global DANYELZA net product revenues of $19.4 million in the first quarter 2023, represented a 4% decrease compared to the same quarter of 2023.

U.S. DANYELZA net product revenues increased 3% compared to the quarter ended December 31st, 2023, when excluding the $0.3 million and $1.3 million impact of a Medicaid accrual change in estimate recognized as increases in net product revenues in the quarters ended March 31st, 2024 and December 31st, 2023 respectively. The DANYELZA net product revenues of $19.4 million in the first quarter of 2024 represented a 17% decrease compared to the fourth quarter of 2023 and was primarily driven by the decreased international revenues. We reported $500,000 worth of license revenues in the three months ended March 31st, 2024 and did not have license revenue for the three months ended March 31st, 2023. Moving to operating expenses. our research and development expenses decreased slightly by $0.1 million to $13.3 million for the three months ended March 31st, 2024, compared to the same period in 2023.

The decrease was primarily due to a decrease in personnel costs related to our restructuring charge recorded in the quarter ended March 31st, 2023, partially offset by a $2.5 million increase in clinical trial cost due to our investments in our SADA PRIT programs in 2024. Selling, general and administrative expenses decreased by $0.8 million to $11.4 million for the three months ended March 31st, 2024, compared to the same period in 2023. The decrease in SG&A for the quarter ended March 31st, 2024 was primarily attributable to decreased personnel costs related to the restructuring charge recorded in the quarter ended March 31, 2023. We reported a net loss for the quarter ended March 31st, 2024, of $6.6 million or $0.15 per share, basic and diluted, compared to a net loss of $6.4 or $0.15 per share basic and diluted for the quarter ended March 31st, 2023.

As mentioned earlier, we ended the first quarter with cash and cash equivalents of $75.7 million, compared to $78.6 million at year-end 2023. The decrease was $2.9 million for the quarter. Importantly, we have reduced our quarter cash used from $13.1 million to $2.9 million or by about 78% year-over-year in 2024 compared to 2023. Turning now to our guidance. We are reiterating our full-year 2024 guidance. We continue to expect full-year 2024 total DANYELZA net product revenues to be in the range of $95 million to $100 million. We anticipate operating expenses to be in the range of $115 million to $120 million and we expect a cash burn for the full-year 2024 of between $15 million and $20 million. We continue to expect our cash and cash equivalents to support our commercial operations and pipeline programs as currently planned into 2027.

As we noted in previous quarters, the underlying assumptions for this guidance are important to understand. For the purpose of this specific analysis of cash runway only, the DANYELZA net product revenues are assumed to increase by 10% each year from 2024 through 2027. We hope to see a higher growth rate for DANYELZA as we execute our refined commercial strategy and work to deliver new clinical data that could potentially lead to expanded indications and greater physician adoption. In terms of development activities, we have assumed that all of our programs will be advanced at our own expense. No new programs other than our planned studies and trials are assumed at this point for the purpose of this analysis. With a strong balance sheet and focused strategy, we believe Y-mAbs is well positioned to execute on our strategic mission and priorities, and to support the delivery of multiple anticipated milestones ahead.

Now, this concludes my financial update. and I’ll now turn the call back to Mike.

Michael Rossi: Thank you for that overview, Bo. Now, let’s open the line for questions. operator?

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Q&A Session

Operator: [Operator Instructions] And our first question comes from Alec Stranahan from Bank of America. Please go ahead, Alec.

Alec Stranahan: Hey, guys. Thanks for taking our questions. Just a couple from me, maybe first for Sue, where do you see most of the current and near-term DANYELZA growth coming from? Is it from activating new centers or is it from repeat use from physicians, who have already treated patients previously with DANYELZA? And how are you maybe positioning your new marketing efforts to drive this? And then I’ve got a follow-up.

Sue Smith: Good morning, Alec. Thanks for the question. The marketing mix for us is a combination of both of the things that you said. I think the majority of the sales are coming from driving more use in the high-volume centers, which is a very big focus for us. And as you heard, we’ve been added to several three new formularies in the first quarter, which we’re pulling through. So, we’re very excited about that. The new campaign is also opening up, greater education around that; the partial response to induction patient, which is another important lever for us this year. And the new campaign does a very nice job of demonstrating our data and value in that setting. So, we increased the breadth and the depth, in the treatment with existing and new accounts. And I think, I’m sorry, what was the second part of your question?

Alec Stranahan: I think your answer to this is how you’re positioning the new marketing efforts.

Sue Smith: Yes. Again, it’s demonstrating our value in two different parts of the patient journey, the patients that have incomplete response to induction separate from the later stage, after frontline, where they have a relapse after prior treatment.

Alec Stranahan: Okay, great. That makes sense. And then maybe, one for Mike. You mentioned in your prepared remarks, potential to expand SADA beyond oncology. I wonder what that could sort of look like and whether there’s any example applications you can provide maybe based on your preclinical work? Thanks.

Michael Rossi: Yes, Alec. thank you. As we look at radioactive material and what we do from both the diagnostic and the therapeutic, these opportunities to look at multiple receptor modulated diseases, where we started in Theranostics 80 years ago was in endocrinology and treating hyperthyroidism, so before it went on to thyroid cancer. So, as we look at this, many receptors modulated diseases, where you need to either decrease the receptor response or to just decrease the overall production of hormones, things like that, you have the opportunity to treat with radioactive materials and treat in a very safe and effective way. So, I wouldn’t limit us to just oncology and as we look at the opportunities that lie ahead for these products.

Alec Stranahan: Great. Thank you.

Michael Rossi: Thank you, Alec.

Operator: And our next question comes from Bill Maughan from Canaccord Genuity. Please go ahead, Bill.

Bill Maughan: Hi. Thanks for taking the question. Good morning. I just wanted to take a quick look at ex-U.S. DANYELZA. Understanding that bulk ordering and timing of those orders can affect revenue numbers, do you have visibility into vial sales, underlying demand? And then just kind of going forward, do you expect we appreciate that DANYELZA is being broken out U.S. versus ex-U.S. Now, do you expect U.S to be remained clearly, the main driver going forward or will the rest of the world at some point take some more share of the growth story here?

Michael Rossi: Bill, thank you for that. And I will let Sue answer the majority of it. But what I will say is, as we look at this, we have visibility to some of the bulk orders coming in for the remainder of the year ex-U.S. So, we’re very confident in our forecasting and where we are. Now, there will be additional growth as we move into these launch markets and have some real opportunity to continue the growth. I think as you look at this, we’re in the 80-20 range today with U.S. and ex-U.S. with U.S. being the driver. U.S will continue to be in the driver’s seat — and because as we continue to grow the U.S., we’ll continue to grow the ex-U.S. market. But as a direct market, contributes more to the overall top and bottom lines as compared to ex-U.S. So, I think that 80-20 mix is something that you’ll see without massive spread moving forward.

but we may see some additional contribution from the ex-U.S. market beyond the U.S. as the U.S. does tend to mature over a period of time. And Sue, if there’s anything that you’d like to add?

Sue Smith: I think you said it well. I think we do have meetings regularly with all of our partners. So, we have a very good line of sight in terms of the breakout of their assumptions for their forecasts and also, the activities that they are doing to drive their launches in the case of Adium and their ongoing sales in the case of cyclone and others. So, our company is well aligned to their stakeholders with other partner companies and have an ongoing dialogue in terms of the details behind the numbers, so — and I agree with what Mike said in terms of the breakout of the 80-20. And I think everyone knows the U.S. is the biggest market in terms of top and bottom-line contribution, which probably will not change moving forward.

Bill Maughan: Okay. And then, just in the U.S., obviously, DANYELZA is a more important drug to Y-mAbs than Unituxin as to Unite Therapeutics. So, as you continue to grow market share and more doctors start to write DANYELZA. Do you — are you sensing sort of additional counter detailing or pushback from the other competitor on the market? Or do you feel that your share gains are just kind of being tolerated and you can continue to grow along the plans that you’re implementing?

Sue Smith: Well, I think, our growth speaks for itself. and we do not hear, it’s my understanding that, they do not have a sales force. So, I think our share of voice is the greatest, and from market research, we are recognized as the number one company in the — our commitment to pediatric neuroblastoma among treaters. So, we continue to build those relationships with the key accounts and we’re not hearing a lot of noise from U.S. WorldMeds.

Bill Maughan: Great. Thank you.

Operator: And our next question comes from Etzer Darout from BMO Capital Markets. Please go ahead, Etzer.

Nick Unan: Hi, this is Nick on for Etzer. Thanks for taking my question. A quick one on CD38-SADA. Do you think that the cadence of data disclosures will follow a similar pathway that GD2 SADA has like what we get an initial imaging data drop followed by a complete Phase 1a set? Thanks.