Legend Biotech Corporation (LEGN) Q3 2025 Earnings Call Transcript

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

Overview

The earnings call highlights operational breakeven for CARVYKTI and company-wide profitability by 2026, which are positive indicators. The removal of REMS by the FDA, expansion plans, and strong demand in international markets further support a positive outlook. However, management's reluctance to provide specific timelines and details in some areas tempers expectations. Overall, the strategic plan and Q&A insights suggest a positive sentiment, likely resulting in a stock price increase of 2% to 8%.

Key Financial Performance

CARVYKTI net trade sales Approximately $524 million, an 84% increase year-over-year. The increase is attributed to strong demand, site expansion, and continued share gains.

U.S. net trade sales of CARVYKTI $396 million, a 53% increase year-over-year and an 11% increase quarter-over-quarter. Growth was driven by strong demand with 60% utilization in earlier line settings.

International net trade sales of CARVYKTI $128 million, nearly 5x the amount over the same period a year ago and a 58% increase quarter-over-quarter. Growth was driven by continued growth in Germany and strong launches in Spain and Belgium.

Total revenues $272 million, driven by collaboration revenue growth of 84% year-over-year.

Operating loss $43 million, reduced by 38% from $70 million in the same period a year ago. The improvement was driven by operational efficiency and disciplined expense management.

Gross margin on net product sales Remained consistent at 57%.

R&D expense $113 million or 42% of revenue, grew slightly from the prior year.

SG&A expense $87 million or 32% of revenue, grew 10% from the prior year.

Cash and equivalents and time deposits Approximately $1 billion, indicating a strong balance sheet.

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Operating Highlights

CARVYKTI net trade sales: Approximately $524 million in Q3 2025, an 84% increase year-over-year. Treated over 9,000 patients, marking the strongest CAR-T launch to date.

CARTITUDE-1 trial results: 1/3 of heavily pretreated relapsed/refractory multiple myeloma patients remain alive and progression-free for 5+ years. Demonstrated curative potential with no detectable myeloma in 1/3 of treated individuals after 5 years.

FDA label update for CARVYKTI: Approved to include overall survival benefit based on Phase III CARTITUDE-4 study, showing significant improvement in overall survival compared to standard care.

CARTITUDE-10 study: Initiated Phase II multi-cohort trial to further characterize CARVYKTI's efficacy and safety.

Global market expansion: CARVYKTI launched in 14 markets globally, including Denmark, Sweden, Belgium, Luxembourg, Spain, Portugal, Saudi Arabia, and private markets in Israel and the U.K. Activated 246 treatment sites worldwide.

U.S. market growth: Net trade sales of $396 million in Q3 2025, a 53% year-over-year increase. Expanded authorized treatment centers to 131 sites, with 1/3 in community and regional hospitals.

European market growth: Strong launches in Spain and Belgium. Tech Lane facility initiated commercial production to meet increasing demand in Europe.

Manufacturing capacity: Expanded capacity at Raritan facility in the U.S. and initiated commercial production at Tech Lane facility in Europe. Achieved ability to treat over 10,000 patients annually.

Operational efficiency: Reduced operating loss by 38% year-over-year to $43 million in Q3 2025. Improved operating expenses as a percentage of revenue through disciplined expense management and automation.

New research facility: Opened a new research facility in Philadelphia focusing on in vivo delivery and innovation in cell therapy.

Profitability goals: Anticipates CARVYKTI profitability by end of 2025 and company-wide profitability by 2026, excluding unrealized foreign exchange gains or losses.

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Risk or Challenges

Regulatory Risks: The company acknowledges that forward-looking statements are subject to risks and uncertainties, which may cause actual results to differ materially. This includes potential regulatory hurdles and the need for FDA approvals for updates and new trials.

Supply Chain and Manufacturing Risks: While the company has expanded its manufacturing capacity, any disruptions in the supply chain or manufacturing processes could impact the ability to meet demand, especially as they scale globally.

Market Penetration Challenges: Despite strong sales growth, the company faces challenges in further market penetration, particularly in community settings and international markets. Educating physicians and expanding treatment centers are critical but resource-intensive.

Economic and Financial Risks: The company reported a net loss of $40 million in Q3, highlighting ongoing financial challenges despite revenue growth. Achieving profitability by 2026 depends on disciplined expense management and operational efficiency.

Competitive Pressures: The CAR-T therapy market is highly competitive, and maintaining leadership requires continuous innovation and effective marketing. Any advancements by competitors could impact market share.

Clinical and Safety Risks: The efficacy of CARVYKTI diminishes with each line of therapy, and there are risks associated with patient outcomes and safety, particularly in heavily pretreated populations.

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Guidance & Outlook

CARVYKTI Expansion Plans: Legend Biotech plans to expand CARVYKTI's presence in the community setting in the U.S. and internationally. The company is increasing its manufacturing capacity, including the expansion of the Raritan facility in the U.S. and the initiation of commercial production at the Tech Lane facility in Europe. These expansions aim to meet the growing demand and ensure a seamless customer experience.

Future Clinical Trials and Approvals: Legend Biotech expects to complete enrollment for CARTITUDE-5 and CARTITUDE-6 trials in 2025, which are key to moving CARVYKTI into the frontline setting. Additionally, the company has initiated the CARTITUDE-10 Phase II trial to further characterize CARVYKTI's efficacy and safety.

Profitability Projections: Legend Biotech anticipates achieving profitability for CARVYKTI by the end of 2025 and company-wide profitability in 2026, excluding unrealized foreign exchange gains or losses.

Market Penetration and Growth: The company sees significant opportunities for further market penetration for CARVYKTI, particularly in the community setting and internationally. It plans to expand its footprint of authorized treatment centers and increase awareness among physicians about CARVYKTI's benefits.

New Research Facility: Legend Biotech is opening a new research facility in Philadelphia, focusing on in vivo delivery and innovation in cell therapy.

Long-Term Growth Strategy: The company is focused on solidifying its leadership in cell therapy, exploring new indications such as solid tumors and NHL programs, and advancing its CAR-T technology.

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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 will be the best way to prioritize cash in terms of pipeline assets given the expected positive cash flow in 2026?

A:The priority will be to maximize the CARVYKTI franchise, with significant capital investments in manufacturing and expanding the network. Additionally, there will be continued investment in the CAR-T platform and exploration of opportunities to accelerate existing programs and strengthen market leadership in CAR-T, including business development.

Q:What is the status of the Raritan site expansion and FDA approval?

A:The Raritan site expansion is on track to be completed, with the submission process already started. The facility is expected to support an annualized production of 10,000 doses by 2026.

Q:Why was the ASH abstract comparing IMAGINE-1 and CARTITUDE-1 withdrawn?

A:The abstract was withdrawn due to limited data available for Anito-cel in the public domain at this point, in alignment with the authors. Future opportunities to share the data are anticipated.

Q:What are the ATC numbers in the U.S. and rest of the world, and what is the target for 2026?

A:There are 132 sites in the U.S. and over 250 sites globally. The target for 2026 is to expand to 160+ sites in the U.S., matching competitors, and eventually reach 180 sites.

Q:What is the manufacturing capacity target beyond 10,000 doses?

A:The target is to reach 20,000 doses annualized through ramping up all four nodes in the network, improving efficiencies, and lowering out-of-spec rates.

Q:What are the plans to mobilize demand to fulfill the new supply and achieve near full utilization of 10,000 doses?

A:Plans include educating physicians on the benefits of treating earlier, leveraging real-world data, and engaging community and regional hospitals. The goal is to achieve full utilization of 10,000 doses by 2026.

Q:What is the competitive outlook at ASH, and how does CARVYKTI compare?

A:CARVYKTI is expected to raise the bar on efficacy with unmatched survival data and durability. The company is prepared to compete with potential BCMA CAR-T products and will present data on its gamma delta platform at ASH.

Q:What progress has been made in community adoption, and what are the expectations for 2026?

A:About one-third of the current network consists of community and regional hospitals, contributing half of the growth. The company is engaging with community physicians and networks like VOA, with plans to expand further into community settings by 2026.

Q:What is the status of outpatient administration and earlier line adoption?

A:Approximately 50% of patients are treated in outpatient settings, and 60% of scripts come from second to fourth-line populations, with the third line being the fastest-growing segment.

Q:What is the strategy for mitigating delayed neurotoxicity with CARVYKTI?

A:The focus is on effective bridging regimens to reduce tumor burden, as high tumor burden is a key factor in adverse events like neurotoxicity. Real-world data and presentations at ASH support this approach.

Q:What is the purpose of the CARTITUDE-10 study, and will it impact the label?

A:The CARTITUDE-10 study evaluates a fludarabine-free regimen for lymphodepletion to reduce neurotoxicity. If successful, the data may be submitted to the FDA for potential label inclusion.

Q:What is the update on international growth and the impact of Tech Lane capacity?

A:Strong uptake is seen in Germany, Spain, and Belgium. Tech Lane's commercial production will support growing demand in Europe and other international markets.

Q:What is the trend in out-of-spec rates, and how does it relate to earlier line settings?

A:Out-of-spec rates are 6-9% and lower in earlier line settings due to better T cell fitness. Efforts are ongoing to further reduce these rates.

Q:What is the impact of loosening REMS requirements for CAR-T?

A:Loosening REMS requirements has reduced patient monitoring burdens, enabling more patients to access treatment and return home sooner, though some sites are cautious in adopting these changes.

Q:What milestones and roadblocks underpin the guidance for profitability by 2026?

A:Profitability is supported by significant revenue growth for CARVYKTI and management of operating expenses, with positive free cash flow expected in 2026.

Q:How will MaJESTIC-3 data impact CARVYKTI's second-line opportunity?

A:MaJESTIC-3 data is not expected to impact CARVYKTI's uptake in the second line, as CARVYKTI offers unmatched survival data, durability, and the convenience of a one-time treatment.

Q:What is the update on international demand and Tech Lane's role in meeting it?

A:Strong demand is seen in Europe, with Tech Lane and OUS facilities meeting capacity needs for growing launches in 14 markets.

Q:What is the update on outpatient administration and earlier line adoption?

A:Approximately 50% of patients are treated in outpatient settings, and 60% of scripts come from second to fourth-line populations, with the third line being the fastest-growing segment.

Q:Review of Unclear Management Responses

A:Management avoided providing specific details on the timeline for achieving full utilization of 10,000 doses, the exact split of patient adoption across different lines of therapy, and the potential label inclusion for CARTITUDE-10's fludarabine-free regimen. Additionally, they did not provide clarity on the FDA's stance on MRD as a registrational endpoint or the exact impact of MaJESTIC-3 data on CARVYKTI's market share.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

LEGN Transcript

Legend Biotech Corporation (LEGN) Q3 2025 Earnings Call Transcript

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The earnings call highlights strong financial performance with a 135% increase in CARVYKTI sales and a robust cash position. While management was vague on some specifics, the overall sentiment is positive due to strong demand trends, strategic partnerships, and promising safety and efficacy profiles for CARVYKTI. The focus on community expansion and operational breakeven by 2025 further supports a positive outlook.

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The earnings call highlights strong sales growth, improved margins, and a solid cash position, indicating financial health. The strategic focus on pipeline expansion and capacity growth, alongside optimistic guidance, supports future profitability. Q&A insights reveal high demand and strategic efforts to meet challenges, though some management responses were vague. Overall, the company's prospects appear positive, with potential for stock price gains.

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