Legend Biotech Reports First Quarter 2023 Results and Recent Highlights

18 May 2023
www.biospace.com
Financial StatementExecutive ChangeImmunotherapyLicense out/inASCO
New and updated data from the CARTITUDE Clinical Development Program and LEGEND-2 study evaluating ciltacabtagene autoleucel (cilta-cel) will be presented at the 2023 American Society of Clinical Oncology (ASCO) Annual Meeting and the European Hematology Association’s (EHA) 2023 Hybrid Congress $350 million in gross proceeds raised in a registered direct offering $212 million in gross proceeds raised from private placements Gross proceeds of $200 million received from the exercise of warrant issued in May 2021 Strategic advisory board established with the appointments of John Maraganore, Ph.D., former CEO of Alnylam Pharmaceuticals and Michel Vounatsos, former CEO of Biogen Inc. as advisors Mythili Koneru, M.D., Ph.D. appointed as Company’s Chief Medical Officer SOMERSET, N.J.--(BUSINESS WIRE)-- Legend Biotech Corporation (NASDAQ: LEGN) (Legend Biotech), a global biotechnology company developing, manufacturing and commercializing novel therapies to treat life-threatening diseases, today reported its first quarter 2023 unaudited financial results. "We are extremely pleased to announce that we have recently raised $762 million in funding. With this substantial capital infusion, we are poised to embark on a critical chapter in our company’s growth to advance CARVYKTI® toward its full potential, and we look forward to presenting the latest data from our CARTITUDE clinical development programs at ASCO and EHA this June," said Ying Huang, Chief Executive Officer of Legend Biotech. Dr. Huang continued, “We would like to extend our deepest gratitude to our investors for their overwhelming support and confidence in our company’s mission and remain committed to creating long-term value for all of our stakeholders.” Financial Results for Quarter Ended March 31, 2023 Cash and Cash Equivalents, Time Deposits, and Short-Term Investments As of March 31, 2023, prior to giving effect to the registered direct offering, private placements or warrant exercise noted above, Legend Biotech had approximately $854 million of cash and cash equivalents, time deposits, and short-term investments. Revenue Total revenue for the three months ended March 31, 2023 was $36.3 million compared to $50.0 million for the three months ended March 31, 2022. Collaboration revenue recognized in the first quarter of 2023 was from CARVYKTI® sales primarily in the U.S. License revenue recognized in first quarter of 2022 was due to the achievement of commercial milestone for FDA approval in the U.S. in connection with the license and collaboration agreement (the “Janssen Agreement”) with Janssen Biotech, Inc. (“Janssen”). Collaboration Cost of Revenue Collaboration cost of revenue for the three months ended March 31, 2023 was $35.6 million. Legend Biotech did not have any collaboration cost of revenue in the three months ended March 31, 2022. The $35.6 million is a combination of Legend’s portion of collaboration cost of sales in connection with collaboration revenue under the Janssen Agreement along with expenditures to support the manufacturing capacity expansion which cannot be capitalized. Research and Development Expenses Research and development expenses for the three months ended March 31, 2023 were $84.9 million compared to $81.5 million for the three months ended March 31, 2022. This increase of $3.4 million was primarily due to higher patient enrollment for Phase 3 clinical trials for cilta-cel in the first quarter of 2023. Administrative Expenses Administrative expenses for the three months ended March 31, 2023 were $22.2 million compared to $12.7 million for the three months ended March 31, 2022. The increase of $9.5 million was primarily due to continued investment in building global information technology infrastructure along with non-recurring financial and legal fees related to Legend Biotech’s restatement of its historical financial statements as reported by Legend Biotech in February 2023. Selling and Distribution Expenses Selling and distribution expenses for the three months ended March 31, 2023 were $18.0 million compared to $21.3 million for the year three months ended March 31, 2022. This decrease of $3.3 million was primarily due to non-recurring launch expenses incurred in the first quarter of 2022 to support the commercialization in the U.S market. Other Income and Gains Other income and gains for the three months ended March 31, 2023 were $8.2 million compared to $1.0 million for the three months ended March 31, 2022. The increase of $7.2 million was primarily due to increase in interest income and gain on investments. Other Expenses Other expenses for the three months ended March 31, 2023 were $10.7 million compared to $1.5 million for the three months ended March 31, 2022. The increase was primarily due to unrealized foreign currency exchange loss in the quarter. Finance Costs Finance costs for the three months ended March 31, 2023 were $5.1 million compared to $1.0 million for the three months ended March 31, 2022. The increase was primarily due to interest on advance funding, which is interest-bearing borrowings funded by Janssen under the Janssen Agreement and constituted by principal and applicable interests upon such principal. Fair Value Gain of Warrant Liability Fair value gain of warrant liability for the three months ended March 31, 2023 was $20.0 million caused by changes in the fair value of a warrant that Legend Biotech issued to an institutional investor through a private placement transaction in May 2021 with an initial fair value of $81.7 million at the issuance date. The warrant was assessed as a financial liability with a fair value of $47.0 million as of March 31, 2023. On May 12, 2023, Legend Biotech announced that the warrant had been exercised in full. Loss for the Period For the three months ended March 31, 2023, net loss was $112.1 million, or $0.34 per share, compared to a net loss of $32.3 million, or $0.10 per share, for the three months ended March 31, 2022. About Legend Biotech Legend Biotech is a global biotechnology company dedicated to treating, and one day curing, life-threatening diseases. Headquartered in Somerset, New Jersey, we are developing advanced cell therapies across a diverse array of technology platforms, including autologous and allogeneic chimeric antigen receptor T-cell and natural killer (NK) cell-based immunotherapy. From our three R&D sites around the world, we apply these innovative technologies to pursue the discovery of cutting-edge therapeutics for patients worldwide. Learn more at and follow us on Twitter and LinkedIn. Cautionary Note Regarding Forward-Looking Statements Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to Legend Biotech’s strategies and objectives; statements relating to CARVYKTI®, including Legend Biotech’s expectations for CARVYKTI®, such as Legend Biotech’s manufacturing and commercialization expectations for CARVYKTI® and the potential effect of treatment with CARVYKTI®; statements about submissions for CARVYKTI® and other product candidates to, and the progress of such submissions with, the U.S. Food and Drug Administration (FDA) and other regulatory authorities; the anticipated timing of, and ability to progress, clinical trials; the ability to generate, analyze and present data from clinical trials; expected results of clinical trials; and the potential benefits of Legend Biotech’s product candidates. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors. Legend Biotech’s expectations could be affected by, among other things, uncertainties involved in the development of new pharmaceutical products; unexpected clinical trial results, including as a result of additional analysis of existing clinical data or unexpected new clinical data; unexpected regulatory actions or delays, including requests for additional safety and/or efficacy data or analysis of data, or government regulation generally; unexpected delays as a result of actions undertaken, or failures to act, by our third party partners; uncertainties arising from challenges to Legend Biotech’s patent or other proprietary intellectual property protection, including the uncertainties involved in the U.S. litigation process; competition in general; government, industry, and general product pricing and other political pressures; the duration and severity of the COVID-19 pandemic and governmental and regulatory measures implemented in response to the evolving situation; as well as the other factors discussed in the “Risk Factors” section of Legend Biotech’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 29, 2023. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release as anticipated, believed, estimated or expected. Any forward-looking statements contained in this press release speak only as of the date of this press release. Legend Biotech specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise. LEGEND BIOTECH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS Three months ended March 31, 2023 Three months ended March 31, 2022 US$’000, except per share data US$’000, except per share data (Unaudited) (Unaudited) REVENUE License revenue — 50,000 Collaboration revenue 36,280 — Other revenue 56 40 Total revenue 36,336 50,040 Collaboration cost of revenue (35,613) — Other income and gains 8,199 1,012 Research and development expenses (84,889) (81,548) Administrative expenses (22,205) (12,657) Selling and distribution expenses (17,954) (21,302) Other expenses (10,734) (1,527) Fair value gain/(loss) of warrant liability 20,000 34,900 Finance costs (5,113) (1,044) LOSS BEFORE TAX (111,973) (32,126) Income tax (expense)/credit (128) (163) LOSS FOR THE PERIOD (112,101) (32,289) Attributable to: Ordinary equity holders of the parent (112,101) (32,289) LOSS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT Basic (0.34) (0.10) Diluted (0.34) (0.10) ORDINARY SHARES USED IN LOSS PER SHARE COMPUTATION Basic 330,497,072 308,699,034 Diluted 330,497,072 308,699,034 LEGEND BIOTECH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION March 31, 2023 December 31, 2022 US$’000 US$’000 (Unaudited) Audited NON-CURRENT ASSETS Property, plant and equipment 110,045 105,168 Advance payments for property, plant and equipment 2,193 914 Right-of-use assets 80,459 55,590 Time deposits 4,366 — Intangible assets 2,289 3,409 Collaboration prepaid leases 93,548 65,276 Other non-current assets 1,062 1,487 Total non-current assets 293,962 231,844 CURRENT ASSETS Collaboration inventories 12,176 10,354 Trade receivables 56 90 Prepayments, other receivables and other assets 51,761 61,755 Financial assets at fair value through profit or loss 185,705 185,603 Pledged deposits 1,283 1,270 Time deposits 4,366 54,016 Cash and cash equivalents 660,050 786,031 Total current assets 915,397 1,099,119 Total assets 1,209,359 1,330,963 CURRENT LIABILITIES Trade payables 29,811 32,893 Other payables and accruals 146,378 184,109 Government grants 457 451 Lease liabilities 4,595 3,563 Tax payable 9,940 9,772 Warrant liability 47,000 67,000 Total current liabilities 238,181 297,788 NON-CURRENT LIABILITIES Collaboration interest-bearing advanced funding 265,864 260,932 Lease liabilities long term 44,302 20,039 Government grants 7,631 7,659 Other non-current liabilities 224 233 Total non-current liabilities 318,021 288,863 Total liabilities 556,202 586,651 EQUITY Share capital 33 33 Reserves 653,124 744,279 Total ordinary shareholders’ equity 653,157 744,312 Total equity 653,157 744,312 Total liabilities and equity 1,209,359 1,330,963 LEGEND BIOTECH CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW Three months ended March 31, 2023 Three months ended March 31, 2022 US$’000 US$’000 (Unaudited) (Unaudited) LOSS BEFORE TAX (111,973) (32,126) CASH FLOWS USED IN OPERATING ACTIVITIES (141,053) (78,687) CASH FLOWS USED IN INVESTING ACTIVITIES 17,930 (232,500) CASH FLOWS FROM FINANCING ACTIVITIES (286) 25 NET DECREASE IN CASH AND CASH EQUIVALENTS (123,409) (311,162) Effect of foreign exchange rate changes, net (2,572) 10 Cash and cash equivalents at beginning of the period 786,031 688,938 CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 660,050 377,786 ANALYSIS OF BALANCES OF CASH AND CASH EQUIVALENTS Cash and bank balances 670,065 667,465 Less: Pledged deposits 1,283 1,448 Time deposits 8,732 288,231 Cash and cash equivalents as stated in the statement of financial position 660,050 378 Cash and cash equivalents as stated in the statement of cash flows 660,050 377,786
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