On March 30, 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 fourth quarter and full year 2022 (Press release, Y-mAbs Therapeutics, MAR 30, 2023, View Source [SID1234629617]).

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"The fourth quarter of 2022 marked another period of significant progress for DANYELZA and set up 2023 to be a very productive year," said Thomas Gad, President and Interim Chief Executive Officer. "We are thrilled to report record DANYELZA net revenues of $16.4 million in the fourth quarter of 2022, a 31% sequential increase compared to the previous quarter. In addition, DANYELZA was conditionally approved in China, with a planned launch in the first half of 2023. We look forward to our partners’ continued efforts to expand DANYELZA globally to offer much-needed treatment for patients with relapsed/refractory high-risk neuroblastoma in the bone or bone marrow."

Mr. Gad continued, "We recently implemented a restructuring plan to prioritize resources on the DANYELZA franchise and development of our SADA technology in the fight against cancer. With a 35% reduction in force and an anticipated 28% reduction in annual operating expenses for 2023, we emerge leaner and supported by a robust balance sheet with $105.8 million in cash and cash equivalents as of December 31, 2022, which we estimate should support our business operations as currently planned into the first quarter of 2026. We achieved a major milestone of getting our first unique SADA IND cleared by the FDA and opening up our first ever SADA Phase I trial late in 2022. We are actively screening patients initially for Small Cell Lung Cancer, Sarcoma and Melanoma and are eventually planning to screen more broadly for GD2 positive solid tumors."

Fourth Quarter 2022 and Recent Corporate Developments

● On February 2, 2023, Y-mAbs announced that the European Medicines Agency agreed to the Company’s Pediatric Investigational Plan for naxitamab

● On January 4, 2023, Y-mAbs announced a restructuring plan including a 35% reduction in workforce and an anticipated 28% reduction in annual operating expenses for 2023

● On December 21, 2022, Y-mAbs announced a partnership with WEP Clinical regarding early access program for DANYELZA (naxitamab-gqgk) in Europe

● On December 14, 2022, Y-mAbs announced a new SADA construct, CD38-SADA against non-Hodgkin’s Lymphoma

● On December 8, 2022, Y-mAbs announced that DANYELZA (naxitamab-gqgk) for the treatment of high-risk neuroblastoma was conditionally approved in China

On December 1, 2022, Y-mAbs announced that the Company had received a complete response letter for omburtamab BLA indicating that the FDA determined that it was unable to approve the BLA in its current form.

● On November 17, 2022, Y-mAbs activated its first ever SADA Phase I trial site and by March 11 Memorial Sloan Kettering was activated as the fourth clinical study site planned to enroll Small Cell Lung Cancer, Sarcoma and Melanoma patients

● On October 28, 2022, Y-mAbs announced the outcome of the FDA Oncologic Drugs Advisory Committee meeting, where the committee voted 16 to 0 that the Company had not provided sufficient evidence to conclude that omburtamab improves overall survival

● On October 3, 2022 Y-mAbs announced pivotal data from Study 101 for omburtamab in CNS/LM metastasis from neuroblastoma at the International Society of Pediatric Oncology ("SIOP") annual congress

Financial Results

Revenues

Y-mAbs reported net revenues of $31.5 million and $65.3 million for the fourth quarter 2022 and year ended December 31, 2022, which represented increases of 228% and 87%, respectively, over $9.6 million and $34.9 million in the comparable periods of 2021. Net revenues in the quarter and year ended December 31, 2022 included license revenue of $15.0 million and $16.0 million, respectively, compared to no license revenue in the fourth quarter ended December 31, 2021, and license revenue of $2.0 million for the year ended December 31, 2021. During the three months and year ended December 31, 2022, we recognized a regulatory-based milestone payment received of $15.0 million from SciClone Pharmaceuticals International Ltd. for the conditional approval of DANYELZA in China.

DANYELZA net product revenue for the fourth quarter of 2022 and year ended December 31, 2022, was $16.4 million and $49.3 million, respectively, which represented increases of 71% and 50%, respectively, over the corresponding periods in 2021 and an increase of 31% compared to the third quarter 2022 DANYELZA net product revenues of $12.5 million. The increase was primarily driven by an increase in the number of new U.S. patients in treatment during the fourth quarter of 2022.

As of December 31, 2022, Y-mAbs has delivered DANYELZA to 48 centers across the United States, corresponding to an increase of 12% in the number of centers since the third quarter of 2022. During the fourth quarter of 2022, approximately 53% of the vials sold in the United States were sold outside Memorial Sloan Kettering ("MSK"), an increase from the prior quarter as a result of the growth of new patients at institutions outside MSK outpacing MSK’s growth of new patients.

Operating Expenses

Research and Development

Research and development expenses were $19.8 million for the three months ended December 31, 2022, compared to $28.7 million for the three months ended December 31, 2021. The $8.9 million decrease reflects decreased spending for clinical trials, outsourced research and supplies, and costs for outsourced manufacturing services due to decreased clinical trial activities in 2022. Having completed the resubmission of the BLA for omburtamab in the first quarter of 2022, we are now focused on pipeline development programs for potential DANYELZA label expansion and advancing SADA constructs into the clinic.

Research and development expenses decreased by $1.6 million to $91.6 million during the year ended December 31, 2022, compared to the prior year period. The decrease mainly reflects decreased clinical trial activities in 2022

Selling, General, and Administration

Selling, general, and administrative expenses decreased by $4.3 million to $10.8 million for the three months ended December 31, 2022, compared to $15.1 million for the three months ended December 31, 2021. The decrease in selling, general and administrative expenses was primarily the result of a $1.8 million decrease in costs related to the commercialization of DANYELZA as there were heavy launch costs in the fourth quarter of 2021.

Selling, general, and administrative expenses increased by $6.3 million to $60.9 million for the year ended December 31, 2022, compared to $54.6 million for the year ended December 31, 2021. The increase in selling, general, and administrative expenses was primarily attributable to a $7.8 million increase in severance and share-based compensation expense related to the termination of our former chief executive officer.

Net Loss

We reported net income for the fourth quarter ended December 31, 2022, of $1.2 million, or $0.03 per basic and diluted share, compared to a net loss of $36.9 million, or $0.85 per basic and diluted share, for the quarter ended December 31, 2021. The favorable change to net income in 2022 was primarily driven by the license revenues of $15.0 million, the positive gross profit impact from increased DANYELZA revenues and the decreased research and development expenses in 2022.

We reported a net loss for the year ended December 31, 2022, of $95.6 million, or $2.19 per basic and diluted share, compared to a net loss of $55.3 million, or $1.28 per basic and diluted share, for the year ended December 31, 2021. Net loss in the year ended December 31, 2021, included a $62.0 million net gain from the sale of our DANYELZA Priority Review Voucher, after sharing 40% of the net proceeds from the sale with MSK, pursuant to the terms of our license agreement with MSK. The increase in net loss for the year ended December 31, 2022, also reflects the impact of contractual severance-related benefits for our former chief executive officer, as noted above, partially offset by the gross profit impact of DANYELZA’s revenue growth and 2022 license revenues.

Cash and Cash Equivalents

We had approximately $105.8 million in cash and cash equivalents as of December 31, 2022, and we expect a full-year 2023 cash burn of $50-55 million. Our existing cash and cash equivalents, when combined with anticipated DANYELZA revenues, which are assumed to increase by 10% each year for the purpose of our analysis of runway, is expected to be sufficient to fund our operations into the first quarter of 2026. In terms of development activities, we have assumed that our prioritized programs will be advanced at our own expense and no new programs are assumed at this point. We assume no new partnerships or other new business development, and no further development of the omburtamab program.

This estimate reflects our current business plan that is supported by assumptions that may prove to be inaccurate, such that we could use our available capital resources sooner than we currently expect.

Financial Guidance

Management reiterated its 2023 financial guidance including:

● Anticipated DANYELZA net product revenues of $60-$65 million;

● Anticipated operating expenses of $115-120 million;

● Anticipated total annual cash burn of $50-55 million; and

● Cash and cash equivalents anticipated to support operations as currently planned into the first quarter of 2026

Webcast and Conference Call

Y-mAbs will host a conference call on Friday, March 31, 2023, at 9 a.m. Eastern Time. To participate in the call, please use the following dial-in information.

Investors (domestic): 877-407-0792
Investors (international): 201-689-8263
Conference ID: 13736579

To access a live webcast of the update, please use this link.