Legend Biotech Reports Fourth Quarter and Full Year 2023 Results and Recent Highlights

2024-03-11

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CARVYKTI® (ciltacabtagene autoleucel; cilta-cel) net trade sales of approximately $159 million and $500 million for the fourth quarter and full year 2023, respectively CHMP recommended CARVYKTI® label expansion in earlier lines of treatment for adult patients with relapsed and lenalidomide-refractory multiple myeloma. FDA ODAC to meet on March 15 to review data from the CARTITUDE-4 study supporting the use of cilta-cel in earlier lines of treatment for adult patients with relapsed and lenalidomide-refractory multiple myeloma On January 3, 2024, Legend received a $100 million upfront payment in connection with its global license agreement with Novartis Pharma AG to develop, manufacture, and commercialize LB2102 and other potential CAR-T therapies selectively targeting DLL-3 Cash and cash equivalents, deposits, and short-term investments of $1.3 billion, as of December 31, 2023, which Legend Biotech believes will provide financial runway through the end of 2025. SOMERSET, N.J.--(BUSINESS WIRE)-- Legend Biotech Corporation (NASDAQ: LEGN) (Legend Biotech), a global leader in cell therapy, today reported its fourth quarter and full year 2023 unaudited financial results and key corporate highlights. “With worldwide sales of half a billion dollars in its first full year of commercialization, our rapid, successful launch of CARVYKTI® reinforces its position as a leading CAR-T therapy for patients with relapsed and refractory multiple myeloma,” said Ying Huang, Ph.D., Chief Executive Officer of Legend Biotech. “Our accomplishments in 2023, through our strategic partnership with Johnson & Johnson*, created the foundation for strong growth and uptake of CARVYKTI®, positioning us to bring CARVYKTI® to more patients in need of treatment going forward.” Regulatory Updates The Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion recommending label expansion for CARVYKTI® to include the treatment of adult patients with relapsed and refractory multiple myeloma who have received at least one prior therapy, including an immunomodulatory agent and a proteasome inhibitor, have demonstrated disease progression on the last therapy, and are refractory to lenalidomide. The U.S. Food and Drug Administration’s (FDA) Oncologic Drugs Advisory Committee (ODAC) intends to meet on March 15 to review data from the CARTITU-cel in earlier lines of treatment for adult patients with relapsed and lenalidomide-refractory multiple myeloma.DE-4 study supporting the use of cilta Key Business Developments On January 3, 2024, Legend received a $100 million upfront payment in connection with its global license agreement with Novartis Pharma AG to develop, manufacture, and commercialize LB2102 and other potential chimeric antigen receptor T-cell (CAR-T) therapies selectively targeting Delta-like Ligand 3 (DLL-3) Promoted Birk Vanderweeën to Senior Vice President of Global Manufacturing & Supply responsible for overseeing the production and delivery of CARVYKTI® for patients across the globe. Previously he was General Manager, Europe. Mr. Vanderweeën brings over 25 years of experience in Operations, Quality, Supply Chain, and Manufacturing at industry leading companies Expanded manufacturing capacity by 100% since the beginning of 2023, including starting clinical production at the new Obelisc site in Ghent Plans to deliver production capacity of 10,000 annual doses by year-end 2025 CARVYKTI® is now available in Germany and Austria, as commercial demand continues with over 2,500 patients treated across 80+ authorized treatment centers globally Presented patient-reported outcome data at the 2023 American Society of Hematology Annual Meeting from the Phase 3 CARTITUDE-4 study demonstrating clinically meaningful improvements in health-related quality of life and reductions in multiple myeloma symptoms following treatment with CARVYKTI® compared to standard of care1 * In December 2017, Legend Biotech entered into an exclusive worldwide license and collaboration agreement with Janssen Biotech, Inc., a Johnson & Johnson company, to develop and commercialize cilta-cel (the Janssen Agreement). Financial Results for Quarter and Year Ended December 31, 2023 Cash and Cash Equivalents, Time Deposits, and Short-Term Investments As of December 31, 2023, Legend Biotech had approximately $1.3 billion of cash and cash equivalents, time deposits, and short-term investments. Revenue License Revenue There was no license revenue for the three months ended December 31, 2023, and December 31, 2022. License revenue for the year ended December 31, 2023, was $35.2 million, compared to $50.0 million for the year ended December 31, 2022. This decrease of $14.8 million was primarily driven by the nature and timing of milestones achieved as outlined in the Global Development Plan under the Janssen Agreement for cilta-cel. Collaboration Revenue Collaboration revenue for the three months and year ended December 31, 2023, was $79.4 million and $249.8 million, respectively, compared to $27.4 million and $66.7 million for the three months and year ended December 31, 2022. The increase of $52.0 million and $183.1 million for the three months and year ended, respectively, were due to an increase in revenue generated from sales of CARVYKTI® in connection with the Janssen Agreement. Other Revenue Other revenue for the three months and year ended December 31, 2023, was $0.03 million and $0.2 million, respectively, compared to $0.2 million and $0.3 million for the three months and year ended December 31, 2022. Other revenue relates to the licensing of certain patents to Nanjing Probio Biotech Co., Ltd., and its affiliates. Operating Expenses Collaboration Cost of Revenue Collaboration cost of revenue for the three months and year ended December 31, 2023, was $32.5 million and $144.2 million, respectively, compared to $23.0 million and $65.4 million for the three months and year ended December 31, 2022. The increase of $9.5 million and $78.8 million for the three months and year ended, respectively, were due to a combination of Legend Biotech’s share of the cost of sales in connection with CARVYKTI® sales under the Janssen Agreement and expenditures to support expansion in manufacturing capacity. Research and Development Expenses Research and development expenses for the three months and year ended December 31, 2023, were $105.7 million and $382.2 million, respectively, compared to $80.8 million and $335.6 million for the three months and year ended December 31, 2022. The increase of $24.9 million and $46.6 million for the three months and year ended, respectively, were primarily due to continuous research and development activities in cilta-cel, including higher patient enrollment for Phase 3 clinical trials, and an increase in research and development activities for other pipeline items. Also, the increase in research and development expenses is due to personnel and startup costs to establish the manufacturing facility in Belgium for initial clinical production. The other pipeline expenses include continued investment in Legend Biotech’s solid tumor programs, which include two Investigational New Drug approvals that advanced into Phase 1 development. Administrative Expenses Administrative expenses for the three months and year ended December 31, 2023, were $28.7 million and $106.8 million, respectively, compared to $26.7 million and $80.6 million for the three months and year ended December 31, 2022. The increase of $2.0 million and $26.2 million for the three months and year ended, respectively, were primarily due to the expansion of administrative functions to facilitate continuous business growth and continued investment in building Legend Biotech’s global information technology infrastructure. Selling and Distribution Expenses Selling and distribution expenses for the three months and year ended December 31, 2023, were $33.7 million and $94.2 million, respectively, compared to $25.8 million and $93.4 million for the three months and year ended December 31, 2022. The increase of $7.9 million and $0.8 million for the three months and year ended, respectively were due to costs associated with commercial activities for cilta-cel. Other Income and Gains Other income and gains for the three months and year ended December 31, 2023, were $18.5 million and $58.1 million, respectively, compared to $7.4 million and $12.0 million for the three months and year ended December 31, 2022. The increase of $11.1 million and $46.1 million for the three months and year ended, respectively, were primarily attributable to an increase in interest income and gain on investments. Other Expenses Other expenses for the three months and year ended December 31, 2023, were $38.4 million and $28.5 million, respectively, compared to $0.3 million and $9.8 million for the three months and year ended December 31, 2022. The increase of $38.1 million and $18.7 million for the three months and year ended, respectively, were primarily due to unrealized foreign currency exchange loss. Finance Costs Finance costs for the three months and year ended December 31, 2023, were $5.8 million and $21.8 million, respectively, compared to $4.9 million and $10.8 million for the three months and year ended December 31, 2022. The increase of $0.9 million and $11.0 million for the three months and year ended, respectively, were primarily due to interest on advance funding, which is interest-bearing borrowings funded by Janssen under the Janssen Agreement and constituted of principal and applicable interests upon such principal. Fair Value (Loss)/Gain of Warrant Liability There was no fair value (loss)/gain of warrant liability for the three months ended December 31, 2023, compared to a loss of $9.3 million for the three months ended December 31, 2022. Fair value loss of warrant liability for the year ended December 31, 2023, was $85.8 million, compared to a fair value gain of $20.9 million for the year ended December 31, 2022. The decrease of $9.3 million for the three months ended, was because the warrant was exercised on May 11, 2023. The increase of $106.7 million for the year ended, was due to the fair value loss recorded on the full exercise of the warrant we issued to an institutional investor in May 2021, which took place on May 11, 2023. Loss for the Period For the three months ended December 31, 2023, net loss was $144.8 million, or $0.40 per share, compared to net loss of $135.9 million, or $0.41 per share, for the three months ended December 31, 2022. For the year ended December 31, 2023, net loss was $518.3 million, or $1.47 per share, compared to a net loss of $446.3 million, or $1.40 per share, for the year ended December 31, 2022. Webcast/Conference Call Details: Legend Biotech will host its quarterly earnings call and webcast today at 8:00am ET. To access the webcast, please visit this weblink. A replay of the webcast will be available on Legend Biotech’s website at . About Legend Biotech Legend Biotech is a global biotechnology company dedicated to treating, and one day curing, life-threatening diseases. Headquartered in Somerset, New Jersey, we are developing advanced cell therapies across a diverse array of technology platforms, including autologous and allogeneic chimeric antigen receptor T-cell, gamma-delta T cell and natural killer (NK) cell-based immunotherapy. From our three R&D sites around the world, we apply these innovative technologies to pursue the discovery of cutting-edge therapeutics for patients worldwide. Learn more at and follow us on X (formerly Twitter) and LinkedIn. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to Legend Biotech’s strategies and objectives; statements relating to CARVYKTI®, including patient population for CARVYKTI®, Legend Biotech’s expectations for CARVYKTI®, including manufacturing expectations for CARVYKTI®; expected results and timing of clinical trials; Legend Biotech’s expectations for LB2102 and its potential benefits; the potential benefits of licensing transactions; Legend Biotech’s expectations on advancing their pipeline and product portfolio; and the potential benefits of Legend Biotech’s product candidates. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward- looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors. Legend Biotech’s expectations could be affected by, among other things, uncertainties involved in the development of new pharmaceutical products; unexpected clinical trial results, including as a result of additional analysis of existing clinical data or unexpected new clinical data; unexpected regulatory actions or delays, including requests for additional safety and/or efficacy data or analysis of data, or government regulation generally; unexpected delays as a result of actions undertaken, or failures to act, by our third party partners; uncertainties arising from challenges to Legend Biotech’s patent or other proprietary intellectual property protection, including the uncertainties involved in the U.S. litigation process; competition in general; government, industry, and general product pricing and other political pressures; the duration and severity of the COVID-19 pandemic and governmental and regulatory measures implemented in response to the evolving situation; as well as the other factors discussed in the “Risk Factors” section of Legend Biotech’s Annual Report on Form 20-F for the year ended December 31, 2022 filed with the Securities and Exchange Commission (SEC) on March 30, 2023 and Legend Biotech’s other filings with the SEC, as well as Legend Biotech’s Annual Report on Form 20-F for the year ended December 31, 2023 to be filed with the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release as anticipated, believed, estimated, or expected. Any forward-looking statements contained in this press release speak only as of the date of this press release. Legend Biotech specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. LEGEND BIOTECH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 US$’000, except share and per share data (unaudited) (unaudited) (unaudited) (audited) REVENUE License revenue — — 35,160 50,000 Collaboration revenue 79,435 27,441 249,804 66,677 Other revenue 29 192 179 328 Total revenue 79,464 27,633 285,143 117,005 Collaboration cost of revenue (32,450) (22,964) (144,214) (65,363) Other income and gains 18,450 7,356 58,126 12,049 Research and development expenses (105,683) (80,756) (382,218) (335,648) Administrative expenses (28,707) (26,681) (106,769) (80,631) Selling and distribution expenses (33,677) (25,823) (94,158) (93,417) Other expenses (38,389) (327) (28,484) (9,823) Fair value (loss)/gain of warrant liability — (9,300) (85,750) 20,900 Finance costs (5,820) (4,861) (21,794) (10,796) LOSS BEFORE TAX (146,812) (135,723) (520,118) (445,724) Income tax benefit/(expense) 1,994 (153) 1,864 (625) LOSS FOR THE PERIOD (144,818) (135,876) (518,254) (446,349) Attributable to: Ordinary equity holders of the parent (144,818) (135,876) (518,254) (446,349) LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT Basic (0.40) (0.41) (1.47) (1.40) Diluted (0.40) (0.41) (1.47) (1.40) ORDINARY SHARES USED IN LOSS PER SHARE COMPUTATION Basic 363,655,317 329,923,489 352,165,418 318,083,913 Diluted 363,655,317 329,923,489 352,165,418 318,083,913 LEGEND BIOTECH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION December 31, 2023 December 31, 2022 US$’000 US$’000 (unaudited) (audited) NON-CURRENT ASSETS Property, plant and equipment 108,725 105,168 Advance payments for property, plant and equipment 451 914 Right-of-use assets 80,502 55,590 Time deposits 4,362 — Intangible assets 4,061 3,409 Collaboration prepaid leases 151,216 65,276 Other non-current assets 1,493 1,487 Total non-current assets 350,810 231,844 CURRENT ASSETS Collaboration inventories 19,433 10,354 Trade receivables 100,041 90 Prepayments, other receivables and other assets 69,251 61,755 Financial assets at fair value through profit or loss 663 185,603 Pledged deposits 357 1,270 Time deposits 30,341 54,016 Cash and cash equivalents 1,277,713 786,031 Total current assets 1,497,799 1,099,119 Total assets 1,848,609 1,330,963 CURRENT LIABILITIES Trade payables 20,160 32,893 Other payables and accruals 132,802 184,109 Government grants 68 451 Lease liabilities 3,175 3,563 Tax payable 7,203 9,772 Contract liabilities 53,010 — Warrant liability — 67,000 Total current liabilities 216,418 297,788 NON-CURRENT LIABILITIES Collaboration interest-bearing advanced funding 281,328 260,932 Lease liabilities long term 44,169 20,039 Government grants 7,305 7,659 Contract liabilities 47,962 — Other non-current liabilities 56 233 Total non-current liabilities 380,820 288,863 Total liabilities 597,238 586,651 EQUITY Share capital 36 33 Reserves 1,251,335 744,279 Total ordinary shareholders’ equity 1,251,371 744,312 Total equity 1,251,371 744,312 Total liabilities and equity 1,848,609 1,330,963 LEGEND BIOTECH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW Three Months Ended December 31, Year Ended December 31, US$’000 2023 2022 2023 2022 (unaudited) (unaudited) (unaudited) (audited) LOSS BEFORE TAX (146,812) (135,723) (520,118) (445,724) CASH FLOWS USED IN OPERATING ACTIVITIES (95,645) (49,742) (393,276) (201,281) CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES 407,509 24,932 92,786 (77,092) CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES 925 (783) 791,490 377,976 NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 312,789 (25,593) 491,000 99,603 Effect of foreign exchange rate changes, net 1,454 (1,109) 682 (2,510) Cash and cash equivalents at beginning of the period 963,470 812,733 786,031 688,938 CASH AND CASH EQUIVALENTS AT END OF THE YEAR 1,277,713 786,031 1,277,713 786,031 ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances 1,312,773 841,317 1,312,773 841,317 Less: Pledged deposits 357 1,270 357 1,270 Time deposits 34,703 54,016 34,703 54,016 Cash and cash equivalents as stated in the statement of financial position 1,277,713 786,031 1,277,713 786,031 Cash and cash equivalents as stated in the statement of cash flows 1,277,713 786,031 1,277,713 786,031 1 Mina, R. Patient-Reported Outcomes in the Phase 3 CARTITUDE-4 Study of Ciltacabtagene Autoleucel Vs Standard of Care in Patients with Lenalidomide-Refractory Multiple Myeloma after 1-3 Lines of Therapy. Abstract #1063 [Oral Presentation]. Presented at the 2023 American Society of Hematology Annual Meeting. View source version on businesswire.com: Contacts INVESTOR CONTACT: Jessie Yeung Tel: (732) 956-8271 jessie.yeung@legendbiotech.com PRESS CONTACT: Alexandra Ventura Tel: (732) 850-5598 media@legendbiotech.com Source: Legend Biotech Corporation View this news release online at: