On August 28, 2020 Legend Biotech Corporation (NASDAQ: LEGN) (Legend Biotech), a global clinical-stage biopharmaceutical company engaged in the discovery and development of novel cell therapies for oncology and other indications, reported financial results for the quarter ended June 30, 2020 (Press release, Legend Biotech, AUG 28, 2020, View Source [SID1234564149]).

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"Legend Biotech continues to execute on our corporate strategy, advancing the development of our lead product candidate, ciltacabtagene autoleucel (cilta-cel), in collaboration with Janssen Biotech, Inc. as well as our other pipeline programs," said Frank Zhang, Ph.D., Chief Executive Officer and Chairman of the Board of Legend Biotech. "We look forward to presenting data from the CARTITUDE-1 study at a major medical conference in the second half of 2020."

Second Quarter 2020 & Recent Highlights

Collaborative Research and License Agreement with Noile-Immune Biotech. On April 27, 2020, Legend Biotech entered into a collaborative research and license agreement with Noile-Immune Biotech Inc. pursuant to which Legend Biotech obtained a license to develop and commercialize next-generation CAR-T and/or TCR-T cell therapies incorporating Noile-Immune’s PRIME (proliferation-inducing and migration-enhancing) technology for up to two targets for all indications.
Updated Results from Janssen sponsored Phase 1b/2 CARTITUDE-1 study. On May 13, 2020, Legend Biotech announced positive follow up data (median of 11.5 months) from the Phase 1b portion of the CARTITUDE-1 study evaluating cilta-cel1 (JNJ-4528) in heavily pretreated patients with relapsed or refractory multiple myeloma (RRMM).
Appointment of Three New Directors. In May 2020, Dr. Corazon (Corsee) Dating Sanders, Dr. Darren Ji, and Mr. Philip Yau joined Legend Biotech’s Board of Directors.
Successful Initial Public Offering. On June 9, 2020, Legend Biotech successfully completed its initial public offering for total gross proceeds of approximately $487.3 million.
Appointment of Dr. Frank Zhang as CEO. On August 1, 2020, the Board of Directors of Legend Biotech appointed Dr. Frank Zhang to serve as Chief Executive Officer, succeeding Dr. Yuan Xu upon her resignation.
First Breakthrough Therapy Designation from China CDE. On August 5, 2020, Legend Biotech announced that the China Center for Drug Evaluation ("CDE"), National Medical Products Administration recommended Breakthrough Therapy Designation ("BTD") for cilta-cel for the treatment of adults with relapsed/refractory multiple myeloma. The designation was granted on August 13, 2020, making cilta-cel the first investigational product to obtain BTD in China.
Key Upcoming Milestones

Legend Biotech, in collaboration with Janssen Biotech, Inc., anticipates the presentation of data from the CARTITUDE-1 study at a major medical conference in the second half of 2020.
Janssen Biotech, Inc., Legend Biotech’s collaboration partner, expects to initiate the BLA filing for cilta-cel to the U.S. FDA by the end of 2020 and also expects that a marketing authorization application will be submitted to the European Medicines Agency ("EMA") in early 2021.
Legend Biotech expects to use the data from CARTIFAN-1 in support of a regulatory submission for approval in China in 2021.
Legend Biotech intends to submit an IND application for LB1901 in relapsed or refractory T cell Lymphoma ("TCL") in the second half of 2020.
The extent to which the COVID-19 may impact our business and clinical trials is highly uncertain and cannot be predicted with confidence, such as the ultimate geographic spread of the disease, the duration of the outbreak and social distancing regulations, travel restrictions, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and treat the disease.

Financial Results for the Quarter Ended June 30, 2020

Cash and Cash Equivalents:

As of June 30, 2020, Legend Biotech had approximately $562.4 million of cash and cash equivalents and approximately $75.6 million in time deposits.

Revenue

Revenue for the three months ended June 30, 2020 was $11.6 million compared to $10.1 million for the three months ended June 30, 2019. This increase of $1.5 million was primarily due to additional milestone payments from Janssen Biotech, Inc. that were achieved in late 2019, which resulted in additional consideration being allocated to steering committee service for the three month ended June 30, 2020. Revenue for the three months ended June 30, 2020 and June 30, 2019 consisted of recognition of upfront and milestone payments allocated to steering committee service pursuant to the license and collaboration agreement with Janssen Biotech, Inc. Legend Biotech has not generated any revenue from product sales to date.

Research and Development Expenses

Research and development expenses for the three months ended June 30, 2020 were $53.6 million compared to $32.6 million for the three months ended June 30, 2019. This increase of $21.0 million was primarily due to a higher number of clinical trials, a higher number of patients enrolled in those trials and a higher number of research and development product candidates in the three months ended June 30, 2020.

Administrative Expenses

Administrative expenses for the three months ended June 30, 2020 were $4.5 million compared to $1.6 million for the three months ended June 30, 2019. This increase of $2.9 million was primarily due to Legend Biotech’s expansion of supporting administrative functions to aid continued research and development activities.

Selling and Distribution Expenses

Selling and distribution expenses for the three months ended June 30, 2020 were $9.6 million compared to $5.0 million for the three months ended June 30, 2019. This increase of $4.6 million was primarily due to increased costs associated with commercial preparation activities for cilta-cel.

Other Income and Gains

Other income and gains for the three months ended June 30, 2020 was $1.3 million compared to $1.2 million for the three months ended June 30, 2019.

Fair Value Loss of Convertible Redeemable Preferred Shares

For the three months ended June 30, 2020, Legend Biotech reported a one-time non-cash charge of $80.0 million caused by changes of fair value of Series A convertible redeemable preferred shares (Series A Preferred Shares). Upon listing on the Nasdaq Global Market, all outstanding Series A Preferred Shares were converted into ordinary shares of Legend Biotech and all accrued but unpaid dividends were settled in the form of ordinary shares of Legend Biotech.

Loss for the Period

For the three months ended June 30, 2020, net loss was $134.9 million, or $0.63 per share, compared to a net loss of $28.8 million, or $0.14 per share, for the three months ended June 30, 2019.