On August 10, 2023 Y-mAbs Therapeutics, Inc. (the "Company" or "Y-mAbs") (Nasdaq: YMAB), a commercial-stage biopharmaceutical company focused on the development and commercialization of novel, antibody-based therapeutic products for the treatment of cancer, reported financial results for the second quarter of 2023 (Press release, Y-mAbs Therapeutics, AUG 10, 2023, View Source [SID1234634226]).
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"The second quarter of 2023 marked another period of progress for DANYELZA with continued revenue growth and international expansion with regulatory approval in Brazil," said Thomas Gad, Founder, President, and Interim Chief Executive Officer. "As we continue patient enrollment in the Phase I GD2-SADA study, we are pleased to report that we have closed Cohort 1 and Cohort 2 and are now dosing Cohort 3, and we have administered a 200 mCi dose of 177Lu-DOTA and an interval between dosing of the protein and the payload of between two to five days. We look forward to presenting pk and imaging data from this study later this year at our R&D Day. Upon completion of our reorganization, we estimate our existing cash and cash equivalents to support our business operations as currently planned into 2026, positioning us well to deliver our therapies to more patients both in the U.S. and worldwide."
Second Quarter 2023 and Recent Corporate Developments
· On July 2, 2023, the Company’s partner in China, SciClone Pharmaceuticals, announced that they had officially launched DANYELZA.
· On May 26, 2023, Y-mAbs announced interim clinical data from study 201 with naxitamab in combination with granulocyte-macrophage colony-stimulating factor ("GM-CSF") in patients with relapsed or refractory high-risk neuroblastoma and presented such interim clinical data at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) ("ASCO") Annual Meeting on June 2-6, 2023.
· Also at ASCO (Free ASCO Whitepaper), Y-mAbs presented the design of its Phase I clinical study evaluating the Company’s Self-Assembly DisAssembly Pre-targeted Radioimmunotherapy ("SADA Y-PRIT") Theranostic Platform for the treatment of certain GD2-positive solid tumors, including small cell lung cancer, sarcoma, and malignant melanoma.
· On May 23, 2023, Y-mAbs announced that the Brazilian Health Regulatory Agency, Agência Nacional de Vigilância Sanitária ("ANVISA") granted marketing authorization for DANYELZA (naxitamab-gqgk).
· On April 18, 2023, Y-mAbs announced that positive preclinical data had been presented on naxitamab in triple-negative breast cancer at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) ("AACR") Annual Meeting.
· On April 5, 2023, Y-mAbs announced that the first patient had been dosed in the Phase I clinical study evaluating the Company’s SADA Y-PRIT Theranostic Platform for the treatment of certain GD2-positive solid tumors.
Financial Results
Revenues
Y-mAbs reported DANYELZA net product revenues of $20.8 million and $41.0 million for the quarter and six months ended June 30, 2023, which represented increases of 112% and 102%, respectively, over $9.8 million and $20.3 million in the comparable periods of 2022.
The DANYELZA net product revenues for the quarter ended June 30, 2023 represents an increase of 3% compared to the first quarter of 2023. The $0.5 million sequential increase was driven by international revenues and related royalties, which included $3.5 million of revenues and related royalties for the China commercial launch inventory stocking order from SciClone, which Y-mAbs does not anticipate recurring at this level each quarter. This increase was partly offset by a softening in new U.S. patients in the second quarter and the Company’s $2.5 million inventory stocking order from WEP in the first quarter.
As of June 30, 2023, Y-mAbs has delivered DANYELZA to 56 centers across the U.S., a sequential increase of 6% in the number of centers since the first quarter of 2023. During the second quarter of 2023, approximately 61% of the vials sold in the U.S. were sold outside of Memorial Sloan Kettering Cancer Center ("MSKCC"), which is in line with the first quarter of 2023.
Operating Expenses
Cost of Goods Sold
Cost of goods sold was $4.6 million and $1.1 million for the three months ended June 30, 2023 and 2022, respectively. The increased cost of goods sold was driven by increased product revenue in the three months ended June 30, 2023 and an inventory write-down of $0.5 million in the three months ended June 30, 2023. Cost of goods sold was $6.7 million and $3.0 million for the six months ended June 30, 2023 and 2022, respectively. The increase in cost of goods sold was primarily driven by increased product revenue.
The Company’s gross margin decreased in the three and six months ended June 30, 2023, compared to the same periods in 2022, as a result of increased revenues from geographic areas outside of the United States, which were at a lower gross margin. The Company’s cost of goods sold includes amounts related to materials, third-party contract manufacturing, third-party packaging services, freight, labor costs for personnel involved in the manufacturing process, third-party royalties for approved products, and indirect overhead costs.
Research and Development
Research and development expenses were $12.1 million for the three months ended June 30, 2023, a reduction of 54% compared to $26.4 million for the three months ended June 30, 2022. The $14.3 million decrease was primarily due to decreased spending on deprioritized programs in connection with the Company’s previously announced restructuring plan, resulting in a $6.6 million decrease related to outsourced manufacturing, a $3.2 million decrease in personnel-related costs, and a $2.5 million decrease in outsourced research and supplies.
For the six months ended June 30, 2023, research and development expenses were $25.5 million, a reduction of 48% compared to $49.3 million for the six months ended June 30, 2022. The $23.8 million decrease was primarily due to decreased spending on deprioritized programs as described above, resulting in a $12.3 million decrease related to outsourced manufacturing, a $4.8 million decrease in outsourced research and supplies, a $2.9 million decrease in clinical trials and a $2.1 million decrease in personnel-related costs.
Y-mAbs recorded a restructuring charge of $3.4 million in research and development expenses during the six months ended June 30, 2023, in connection with the restructuring plan.
Selling, General, and Administration
Selling, general, and administrative expenses were $11.3 million for the three months ended June 30, 2023, a reduction of 51.1% compared to $23.1 million for the three months ended June 30, 2022. The $11.8 million decrease in selling, general and administrative expenses was primarily attributable to a $10.9 million charge related to contractual severance related benefits for the Company’s former Chief Executive Officer in connection with his departure in the second quarter of 2022.
For the six months ended June 30, 2023, selling, general, and administrative expenses were $23.5 million, a reduction of 35.6% compared to $36.5 million for the six months ended June 30, 2022. The $13.0 million decrease in SG&A expenses was primarily attributable to the contractual severance-related benefits described above.
Y-mAbs recorded a restructuring charge of $1.1 million in selling, general, and administrative expenses during the six months ended June 30, 2023, in connection with the restructuring plan.
Net Loss
Y-mAbs reported a net loss for the second quarter ended June 30, 2023, of $6.3 million, or ($0.14) per basic and diluted share, compared to a net loss of $41.1 million, or ($0.94) per basic and diluted share, for the quarter ended June 30, 2022. For the six months ended June 30, 2023, the Company reported a net loss of $12.7 million, or $0.29 per basic and diluted share, compared to a net loss of $69.2 million, or $1.58 per basic and diluted share, for the six months ended June 30, 2022. The favorable decrease in net loss was primarily driven by an increase in DANYELZA U.S. product revenues in the second quarter and six months ended June 30, 2023, an incremental benefit from expanding into international markets, decreased research and development cost, and decreased selling, general and administration cost, partially offset by the unfavorable impact of restructuring charges, all as noted above.
Cash and Cash Equivalents
As of June 30, 2023, Y-mAbs had approximately $87.9 million in cash and cash equivalents which, together with anticipated DANYELZA product revenues, is expected to support operations as currently planned into 2026. This estimate reflects the Company’s current business plan that is supported by assumptions that may prove to be inaccurate, such that Y-mAbs could use its available capital resources sooner than it currently expects.
Financial Guidance
Management reiterates its full year 2023 financial guidance, as updated on May 8, 2023:
· Anticipated DANYELZA net product revenues expected to be between $80 million and $85 million;
· Anticipated operating expenses expected to be between $115 million and $120 million;
· Anticipated total annual cash burn expected to be between $40 million and $50 million; and
· Cash and cash equivalents anticipated to support operations as currently planned into 2026.
Webcast and Conference Call
Y-mAbs will host a conference call on Friday, August 11, 2023, at 9:00 a.m. EDT. To participate in the call, please use the following dial-in information.