Genmab A/S (GMAB) Q3 2025 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call highlights strong financial performance, increased revenue and profit guidance, and positive sales momentum for key products. Despite some concerns about specific trial terminations and unclear responses, the overall sentiment remains positive due to optimistic management outlook, strategic product positioning, and upcoming regulatory milestones. The raised guidance and strong product pipeline further support a positive stock price movement.

Key Financial Performance

Total Revenue Growth 21% year-over-year increase, fueled by increased recurring revenue.

Operating Profit Growth 52% year-over-year increase, achieved despite strategic investments.

Cash Position Ended the first half with around $3.4 billion in cash, providing flexibility for growth and expansion.

EPKINLY and TIVDAK Sales 54% year-over-year increase, accounting for 25% of total revenue growth.

EPKINLY Sales $333 million through Q3, representing a 64% year-over-year increase, driven by adoption in diffuse large B-cell lymphoma and follicular lymphoma.

TIVDAK Sales $120 million year-to-date, highlighting strong performance in recurrent or metastatic cervical cancer.

DARZALEX Net Sales $10.4 billion for the first 9 months, a 22% year-over-year increase, driven by share gains and performance in the frontline setting.

Recurring Revenue 26% year-over-year increase, driven by royalties from DARZALEX and Kesimpta, as well as product sales from EPKINLY and TIVDAK.

Operating Expenses $1.5 billion for the first 9 months, a 7% year-over-year increase, excluding the impact of the ProfoundBio acquisition.

Net Profit $932 million for the first 9 months, supported by strong revenue growth and operational discipline.

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Operating Highlights

EPKINLY: Progressed rapidly with encouraging data sets; potential approval in second-line follicular lymphoma expected later this month; strong global performance with $333 million in sales through Q3, a 64% year-over-year increase.

Rina-S: Initiated additional Phase III clinical trials; breakthrough therapy designation by FDA; strong data in endometrial cancer with 100% disease control rate at 100mg/m2 dose; first launch expected in 2027.

TIVDAK: Launched in Germany, marking the first independent European launch; $120 million in sales year-to-date; recognized as the global standard of care in recurrent or metastatic cervical cancer.

Global Expansion: EPKINLY and TIVDAK expanded to new markets, including Japan and Germany; EPKINLY approved in over 65 countries, with dual indication in more than 50 countries.

Proposed Acquisition of Merus: Acquisition to add petosemtamab to portfolio, a high-potential asset with two breakthrough therapy designations; expected to close in Q1 2026.

Revenue Growth: Total revenue grew by 21% in the first 9 months of 2025, driven by recurring revenue and product sales; operating profit increased by 52%.

Financial Guidance: 2025 revenue projected at $3.5-$3.7 billion, with 15% growth at midpoint; operating profit expected to grow by 26%.

Shift to 100% Owned Model: Proposed Merus acquisition accelerates shift to a fully owned model, diversifying revenue and advancing the 2030 vision.

Pipeline Prioritization: Focused investments in high-impact late-stage programs like EPKINLY and Rina-S; discontinued GEN1042 development due to unmet data expectations.

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Risk or Challenges

Delayed or unsuccessful development projects: The company acknowledges that actual results may differ materially due to delayed or unsuccessful development projects, which could impact their strategic objectives and financial performance.

GEN1042 development in head and neck cancer: The data for GEN1042 in frontline head and neck cancer did not meet the company's high bar for continued development, leading to a decision to halt further investment in this program.

Regulatory and clinical trial risks: The company is awaiting regulatory approval for EPKINLY in second-line follicular lymphoma and is conducting multiple Phase III trials for Rina-S. Delays or unfavorable outcomes in these regulatory or clinical processes could adversely impact their operations and strategic plans.

Proposed acquisition of Merus: The acquisition is subject to customary closing conditions. Any failure to meet these conditions or delays in closing could disrupt the company's strategic objectives and financial plans.

Market adoption and competition: The company faces competitive pressures in the market for its products like EPKINLY and TIVDAK. Ensuring adoption across sites of care and expanding into earlier lines of therapy are critical for maintaining growth.

Economic and currency exchange risks: The company is exposed to foreign exchange risks, as highlighted by the impact of exchange rate fluctuations on operating profit.

Operational scaling and investment risks: The company is scaling operations and making significant investments in commercialization and late-stage pipeline development. Mismanagement or inefficiencies in these areas could impact profitability and growth.

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Guidance & Outlook

Revenue Projections: Genmab expects 2025 revenue to be in the range of $3.5 billion to $3.7 billion, representing a 15% growth at the midpoint. Recurring revenues are projected to grow by 22%.

Profitability Outlook: Operating profit for 2025 is expected to range between $1.1 billion and $1.4 billion, with a midpoint growth of 26% year-over-year. Significant profitability is anticipated in 2026, with meaningful EBITDA growth in 2027.

Product Launches and Approvals: The company anticipates the approval of EPKINLY for second-line follicular lymphoma later in 2025. Rina-S is expected to launch in 2027, with data from ongoing Phase III trials anticipated in 2026. Petosemtamab is also expected to launch in 2027, contingent on successful Phase III trial outcomes.

Pipeline Development: Rina-S development includes three ongoing Phase III trials, with two intended for potential accelerated approval in the U.S. The company is also conducting signal-seeking Phase II trials for Rina-S in non-small cell lung cancer.

Market Expansion: EPKINLY is expanding globally, with approvals in over 65 countries. The company is preparing for earlier line therapy launches and anticipates peak sales of over $3 billion for EPKINLY. TIVDAK has launched in Germany and is expanding into additional European markets.

Strategic Acquisitions: The proposed acquisition of Merus is expected to close in early 2026, adding petosemtamab to the portfolio. This acquisition aims to accelerate the shift to a 100% owned model and support long-term growth.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:What are your latest thoughts on how Peto and Rina-S are positioned in the competitive landscape, and what gives you confidence in their potential for growth?

A:Management expressed confidence in Peto and Rina-S as best-in-class assets in their respective indications (head and neck cancer for Peto and gynecological oncology for Rina-S). They highlighted ongoing Phase IIIs for Peto and Phase IIs and IIIs for Rina-S, with potential launches in 2027. They emphasized the competitive landscape but maintained that the data supports their positioning as first-in-class.

Q:Can you comment on the commercial dynamics of EPKINLY, including sales and near-term growth opportunities in second-line follicular lymphoma in the U.S. and Japan?

A:Management is encouraged by EPKINLY's performance and highlighted its dual indication and SubQ administration as beneficial. They estimate approximately 9,000 patients in second-line follicular lymphoma and see significant opportunities in earlier lines of therapy.

Q:What are your thoughts on the near-term performance of EPKINLY, given the recent quarterly miss, and the launch trajectory for second-line follicular lymphoma?

A:Management noted consistent uptake across U.S. care sites and emphasized the potential for acceleration in the community setting. They remain encouraged by year-to-date performance and reiterated the value of EPKINLY in earlier lines of therapy.

Q:Can you elaborate on the decision to terminate the clinical development of 1042 in first-line head and neck cancer and its implications for other indications?

A:Management stated that the data for 1042 in combination with chemo and pembro did not meet their high internal bar for continued development, leading to its termination in first-line head and neck cancer. They did not provide further details on implications for other indications.

Q:What is your confidence level ahead of the EPKINLY PDUFA in November, and is efficacy consistent across U.S. and non-U.S. patients?

A:Management expressed high confidence in EPKINLY's approval and stated there is no indication of inconsistency in efficacy between U.S. and non-U.S. patients.

Q:Can you provide insights into 2026 and 2027 OpEx and profitability expectations, including potential synergies from the Merus acquisition?

A:Management emphasized disciplined investment and stated that consensus OpEx estimates for Genmab and Merus are reasonable. They expect significant profitability in 2026, driven by EBIT, and highlighted their focus on prioritization and discipline.

Q:What are your views on the colorectal cancer opportunity for Peto and the need for a subcutaneous formulation to compete with RYBREVANT?

A:Management described early colorectal cancer data as encouraging but limited. They confirmed that subcutaneous administration is part of their lifecycle management strategy for Peto.

Q:Can you provide an update on the first-line DLBCL trial with EPKINLY, including timing and required PFS benefit to compete with Pola-R-CHP?

A:Management expects the trial to read out in 2026 and expressed confidence in achieving significant improvement over the standard of care. They highlighted EPKINLY's high CR rate and durability in high-risk patients as differentiators.

Q:Can you confirm the timing of Phase III trial readouts as consistent with prior guidance?

A:Management confirmed that all Phase III trial timings remain consistent with prior guidance.

Q:Does the 2026 OpEx guidance include investments in locally advanced head and neck cancer for Peto?

A:Yes, management confirmed that the 2026 OpEx guidance includes investments in locally advanced head and neck cancer for Peto.

Q:How are you viewing the first-line head and neck cancer landscape, and what is your confidence in Rina-S efficacy across folate receptor alpha expressions?

A:Management highlighted Peto's potential to achieve higher response rates without chemotherapy toxicities in head and neck cancer. For Rina-S, they emphasized its ability to generate meaningful responses across the spectrum of folate receptor alpha expression, supporting its use without biomarker selection.

Q:Review of Unclear Management Responses

A:Management avoided providing specific details on the required PFS benefit for EPKINLY to compete with Pola-R-CHP, the implications of 1042's termination for other indications, and the exact timing of certain trial readouts. They also used vague language when discussing early colorectal cancer data and subcutaneous formulation plans for Peto.

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Earnings Word Cloud

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