Legend Biotech Corporation American Depositary Shares 2026 Q2 Earnings Call

This is Caroline Paul, Director of Investor Relations at Legend Biotech. Thank you for joining our conference call today to review our second quarter 2026 performance. Prior to this call, we issued a press release announcing our financial results for the quarter, which can be found on the Legend Biotech Investor Relations website. Joining me on today's call are Alan Bash, the company's Interim Chief Executive Officer, and Carlos Santos, the company's Chief Financial Officer. Following the prepared remarks, we will open up the call for Q&A. We also have our Interim Head of R&D, Yuhong Qiu, joining the Q&A session. During today's call, we will be making forward-looking statements which are subject to risks and uncertainties that may cause our actual results to differ materially from those expressed or implied herewith it.

These forward-looking statements are discussed in greater detail in our SEC filings, which we encourage you to read and can be found under the Investors section of our company website. In addition, adjusted net income or loss is a non-IFRS metric. This non-IFRS financial measure is an addition to and not a substitute for or superior to measures of financial performance prepared in accordance with IFRS. There are a number of limitations related to the use of these non-IFRS financial measures versus their closest IFRS equivalents. However, we believe that providing information concerning adjusted net income or loss and adjusted net income or loss per share enhances an investor's understanding of our financial performance. Our press release includes IFRS to non-IFRS reconciliations for these measures. With that, I will now turn the call over to Alan.

Thank you Caroline, and good morning everyone. I want to start by briefly addressing the leadership transition announced last month. As you all know, Dr. Ying Huang stepped down as Chief Executive Officer and member of the board, and the board appointed me to serve as Interim Chief Executive Officer. On behalf of the board and all our employees, I want to thank Ying for his leadership over many years and his many contributions to Legend Biotech. We want to be very clear, this is a leadership transition, not a strategy transition. Our priorities remain unchanged. We remain focused on three main objectives: maximizing CARVYKTI, advancing our next generation pipeline, and strengthening our execution on all fronts. My commitment is to provide continuity, transparency, and disciplined execution, working closely with Carlos, our senior R&D team, the board, and the broader leadership team to maintain momentum across the business.

We are operating from a strong foundation with continued CARVYKTI momentum, meaningful progress across our in vivo CAR-T platform, and as you are about to see from the Q2 results, the financial flexibility to continue investing in growth, innovation, and long-term value creation. Notably, during the second quarter, we generated adjusted net income of $63 million, and we believe we will maintain adjusted net income profitability for the second half of 2026. Now let's turn to our second quarter highlights. We had a strong second quarter at Legend as CARVYKTI continues to expand globally, maintaining its market leadership in CAR-T. Additionally, we recently presented compelling early efficacy and safety data from our in vivo CAR-T platform and plan to provide meaningful updates to these programs at future medical conferences.

During the quarter, CARVYKTI delivered worldwide net trade sales of approximately $657 million, representing 50% year-over-year growth driven by strong demand globally and increasing adoption in earlier lines of therapy. In the U.S., sales increased 32% year-over-year, while ex-U.S. sales grew 128% year-over-year. Beyond commercial execution, we continue to advance our innovative next generation cell therapy pipeline, particularly in our in vivo CAR-T platform, as highlighted by our participation at the ASCO annual meeting and the European Hematology Association Congress. We will turn to these updates in just a moment. Finally, we strengthened our balance sheet through the successful completion of a public equity offering, resulting in approximately $212 million of net proceeds and a cash position of approximately $965 million at the end of the second quarter.

Drilling deeper on CARVYKTI's second quarter performance, CARVYKTI global net trade sales increased 50% year-over-year to $657 million, delivering strong global sequential growth of 10% compared to the first quarter. In the U.S., quarter-over-quarter growth of 9% was primarily driven by accelerating adoption in earlier lines of therapy. We continue to increase the usage in second and third lines up from the 41% we discussed last quarter. We have also been expanding treatment access with more than 150 authorized treatment centers, of which approximately 40% are community hospitals. Outside the U.S., quarter-over-quarter growth of 13% was primarily driven by continued launch uptake across 19 markets and expansion of the activated treatment site network. We recently launched CARVYKTI in Ireland, further expanding availability to 348 global treatment sites, reflecting continued geographic expansion with our partner J&J.

Across geographies, we continue to see encouraging trends in both market penetration and earlier line utilization. These dynamics support our belief that CARVYKTI remains a durable growth opportunity. Turning to our recent clinical data, we shared encouraging updates across both our solid tumor and multiple myeloma programs at ASCO this year. LB2102 is our DLL3-targeted CAR-T therapy being evaluated in small cell lung cancer and large cell neuroendocrine carcinoma. LB2102 demonstrated a manageable safety profile and encouraging clinical activity in a heavily pretreated patient population. Higher dose levels achieved an objective response rate of 28.6% and a disease control rate of 78.6% with durable responses observed. Solid tumors remain difficult to treat with limited therapeutic options, so this is an encouraging sign. As a reminder, we have an exclusive global licensing agreement with Novartis to develop and commercialize LB2102 and other DLL3-targeting CAR-T therapies discovered by Legend.

We also reported additional CARTITUDE program data supporting the durable efficacy and consistent safety profile of CARVYKTI in multiple myeloma. These data include a sustained progression-free and overall survival benefit across cytogenetic risk groups, along with a low incidence of immune effector cell-associated enterocolitis. Notably, in the CARTITUDE-4 subgroup analysis, patients who responded to bridging therapy demonstrated 30-month overall survival rates exceeding 85% with no cases of IEC-associated Parkinsonism. Taken together, these presentations further reinforce both the strength of the CARVYKTI clinical profile and the breadth of our innovation pipeline. The most notable recent pipeline update was our phase I LB2501 study with data presented at the European Hematology Association Congress in June. LB2501 is a CD19/CD20 dual-targeting in vivo CAR T therapy for the treatment of relapsed/refractory non-Hodgkin's lymphoma.

The new results were the first human data with our in vivo platform and from an ongoing dose escalation phase I study. The data presented at EHA included 12 patients, with six patients in each of the two dose cohorts as part of an investigator-initiated trial conducted in China. We had compelling results at dose level 2, achieving a 100% objective response rate and an 83.3% complete response rate across the six patients with diffuse large B-cell lymphoma, mantle cell lymphoma, and follicular lymphoma. We also observed impressive in vivo CAR T-cell persistence in peripheral blood, with cells detectable up to 116 days based on these early results. From a safety perspective, LB2501 was well-tolerated with no dose-limiting toxicities, no serious adverse events, and no deaths reported.

We anticipate filing a U.S. IND for LB2501 by the end of the year to initiate a U.S.-based clinical program in NHL and plan to report additional data from the China study in due course. These results represent an important milestone for our entire in vivo CAR T platform, which has broad applicability and includes other candidates with other targets in additional indications and supports our continued investment and development of candidates using our in vivo platform. Beyond LB2501, we continue to advance a broad and diversified pipeline spanning autologous, allogeneic, and in vivo cell therapies. As it relates to CARVYKTI, multiple frontline multiple myeloma studies remain ongoing, including CARTITUDE-5, CARTITUDE-6, as well as others, which could potentially expand our market opportunity into the first-line setting. Across our autologous portfolio, we continue to develop therapies targeting Claudin 18.2, DLL3, GPRC5D, and dual target approaches for multiple myeloma.

We are also advancing several off-the-shelf CAR T programs, ranging from allogeneic programs for autoimmune disease and B-cell malignancies, as well as additional in vivo CAR T candidates beyond LB2501, which I just described for its impressive first human data in a phase I trial at EHA. Overall, we believe this portfolio reflects a balanced approach to innovation across the different modalities of CAR T, while leveraging our expertise in cell therapy development and manufacturing. Looking ahead, we believe Legend is well-positioned for sustainable long-term growth. We continue to advance our pipeline and are working towards an IND submission for LB2501 by the end of the year. We ended the period with approximately $965 million in cash equivalents, and time deposits. Commercially, CARVYKTI remains a leading franchise in multiple myeloma and continues to demonstrate strong global momentum, expanding into new markets on a regular basis.

We also continue to believe CARVYKTI has a peak annual sales potential exceeding $5 billion, and we are making meaningful steps to reach that goal. Supported by a durable commercial business, a deep pipeline, and a focus on execution, we remain committed to achieving company-wide profitability in 2026. With that, I will turn over the call to Carlos.

Thank you, Alan. This quarter's financial results continue to demonstrate the operating leverage inherent in our business model. Revenue has scaled at a CAGR of 74% since the second quarter of 2023, supported by growing demand for CARVYKTI and continued commercial execution. At the same time, operating margins have improved significantly from negative 142% in the second quarter of 2023 to a positive 15% in the second quarter of 2026. This now marks a major milestone objective for Legend as the first quarter of company-wide profitability on both an IFRS and an adjusted basis. Going forward, we will continue to focus on adjusted net income as the metric for sustained profitability. While we remain focused on investing in the future growth of Legend, we are doing so with increasing discipline and operating efficiency.