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Legend Biotech Reports Full-Year 2022 Results and Recent Highlights

  • CARTITUDE-4, a Phase 3 study of CARVYKTI® (ciltacabtagene autoleucel) meets primary endpoint at the study’s first pre-specified interim analysis
  • FDA clearance of IND application for LB2102 in Extensive Stage Small Cell Lung Cancer (SCLC)
  • CARVYKTI® (ciltacabtagene autoleucel) receives approval from Japan’s Ministry of Health, Labour and Welfare (MHLW) for the treatment of patients with relapsed or refractory multiple myeloma
  • China’s National Medical Products Administration (NMPA) has formally accepted the New Drug Application (NDA) for ciltacabtagene autoleucel (cilta-cel)

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 full year 2022 audited financial results.

"2022 was a year of significant milestones for Legend Biotech, marked by the regulatory approvals of CARVYKTI® in the U.S., Europe, and Japan. In addition to launching our first commercial product, we advanced our clinical development program for cilta-cel, obtained FDA clearances on two investigational new drug applications targeting solid tumors, and critically, expanded our commercial infrastructure and manufacturing capabilities to support future growth" said Ying Huang, Chief Executive Officer of Legend Biotech.

"Our teams across the entire business delivered exceptionally during an incredibly busy year. Looking forward, we remain focused on the continued expansion of our manufacturing footprint and advancing our clinical program in order to bring CARVYKTI® to more eligible patients."

Second Half 2022 Highlights and Recent Events

  • On January 27, 2023, Legend Biotech announced that CARTITUDE-4, the Phase 3 study evaluating CARVYKTI® (ciltacabtagene autoleucel) for the treatment of adult patients with relapsed and lenalidomide-refractory multiple myeloma, met its primary endpoint of showing a statistically significant improvement in progression-free survival (PFS) compared to standard therapy at the study’s first pre-specified interim analysis



  • On January 2, 2023, Legend Biotech announced that China’s National Medical Products Administration (NMPA) has formally accepted the New Drug Application (NDA) for ciltacabtagene autoleucel (cilta-cel)



  • On November 21, 2022, Legend Biotech announced that the U.S. Food and Drug Administration (FDA) cleared Legend Biotech’s Investigational New Drug (IND) application to proceed with the clinical development of LB2102, an investigational, autologous chimeric antigen receptor T-cell (CAR-T) therapy for the treatment of adult patients with extensive stage small cell lung cancer (SCLC)



  • On September 27, 2022, Legend Biotech announced that Japan’s Ministry of Health, Labour and Welfare (MHLW) approved CARVYKTI® (ciltacabtagene autoleucel) for the treatment of adults with relapsed or refractory multiple myeloma, limited to cases meeting both of the following conditions: patients have no history of CAR-positive T cell infusion therapy targeting BCMA; and patients have received three or more lines of therapies, including an immunomodulatory agent, a proteasome inhibitor and an anti-CD38 monoclonal antibody, and in whom multiple myeloma has not responded to or has relapsed following the most recent therapy

Financial Results for Year Ended December 31, 2022

Cash and Cash Equivalents, Time Deposits, and Short-Term Investments

As of December 31, 2022, Legend Biotech had approximately $1.0 billion of cash and cash equivalents, time deposits, and short-term investments.

Revenue

Revenue for the year ended December 31, 2022 was $117.0 million compared to $68.8 million for the year ended December 31, 2021. The increase of $48.2 million was due to product sales for the commercial launch of CARVYKTI® in the U.S. in connection with Legend Biotech’s collaboration agreement with Janssen Biotech, Inc. (the “Janssen Agreement”).

Research and Development Expenses

Research and development expenses for the year ended December 31, 2022 were $335.6 million compared to $313.3 million for the year ended December 31, 2021. This increase of $22.3 million was primarily due to continued investment in cilta-cel for earlier lines of therapies and increase in Legend Biotech’s pipeline expenditures as it filed two Investigational New Drug applications and began preparation for Phase 1 clinical development in the U.S. in the year ended December 31, 2022.

Administrative Expenses

Administrative expenses for the year ended December 31, 2022 were $80.6 million compared to $47.0 million for the year ended December 31, 2021. The increase of $33.7 million was primarily due to the final phase of separation of certain information technology services from GenScript Biotech Corporation, required enhancements for cybersecurity and privacy, along with the required information technology infrastructure build to support manufacturing facilities.

Selling and Distribution Expenses

Selling and distribution expenses for the year ended December 31, 2022 were $93.4 million compared to $102.5 million for the year ended December 31, 2021. This increase of $9.1 million was primarily due to costs associated with the commercialization of CARVYKTI®.

Other Income and Gains

Other income and gains for the year ended December 31, 2022 were $12.0 million compared to $3.1 million for the year ended December 31, 2021. The increase of $8.9 million was primarily due to increase in interest income, government grants and fair value gain from financial assets.

Other Expenses

Other expenses for the year ended December 31, 2022 were $9.8 million compared to $9.1 million for the year ended December 31, 2021. The increase was primarily due to foreign currency exchange loss in the year.

Finance Costs

Finance costs for the year ended December 31, 2022 were $10.8 million compared to $0.9 million for the year ended December 31, 2021. 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. Legend Biotech elected to borrow an incremental $130.3 million as of December 31, 2022 in accordance with the terms of the Janssen Agreement.

Fair Value Gain of Warrant Liability

Fair value gain of warrant liability for the year ended December 31, 2022 was $20.9 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 $67.0 million as of December 31, 2022.

Loss for the Period

For the year ended December 31, 2022, net loss was $446.3 million, or $1.40 per share, compared to a net loss of $403.6 million, or $1.43 per share, for the year ended December 31, 2021.

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 www.legendbiotech.com 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® and other product candidates, including Legend Biotech’s expectations for CARVYKTI® and other product candidates, such as Legend Biotech’s manufacturing and commercialization expectations for CARVYKTI® and the potential effect of treatment with CARVYKTI® and other product candidates; 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; and the ability to generate, analyze and present data from clinical trials. 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 30, 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

 
Twelve months ended December 31
(in thousands, US$, except share and per share data)

2022

2021

2020

REVENUE
License revenue

50,000

 

65,402

 

75,000

 

Collaboration revenue

66,677

 

-

 

-

 

Other revenue

328

 

3,424

 

0

 

Total revenue

117,005

 

68,826

 

75,000

 

Collaboration cost of revenue

(65,363

)

-

 

-

 

Other income and gains

12,049

 

3,059

 

6,119

 

Research and development expenses

(335,648

)

(313,346

)

(232,160

)

Administrative expenses

(80,631

)

(46,961

)

(23,134

)

Selling and distribution expenses

(93,417

)

(102,542

)

(49,571

)

Other expenses

(9,823

)

(9,132

)

(346

)

Fair value gain/(loss) of warrant liability

20,900

 

(6,200

)

-

 

Fair value loss of convertible redeemable preferred shares

-

 

-

 

(79,984

)

Finance costs

(10,796

)

(900

)

(4,209

)

LOSS BEFORE TAX

(445,724

)

(407,196

)

(308,285

)

Income tax (expense)/credit

(625

)

3,614

 

41,912

 

LOSS FOR THE YEAR

(446,349

)

(403,582

)

(266,373

)

Attributable to:
Ordinary equity holders of the parent

(446,349

)

(403,582

)

(266,373

)

 
Loss per share attributable to ordinary equity holders of the parent:
Ordinary shares - basic

(1.40

)

(1.43

)

(1.13

)

Ordinary shares - diluted

(1.40

)

(1.43

)

(1.13

)

 
Shares used in loss per share computation:
Weighted average number of ordinary shares

318,083,913

 

281,703,291

 

236,305,234

 

LEGEND BIOTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

 
(in thousands, US$)

December 31, 2022

December 31, 2021

NON-CURRENT ASSETS
Property, plant and equipment

105,168

102,506

Advance payments for property, plant and equipment

914

2,168

Right-of-use assets

55,590

38,283

Time deposits

-

4,705

Intangible assets

3,409

4,684

Collaboration prepaid leases

65,276

12,121

Other non-current assets

1,487

5,148

Total non-current assets

231,844

169,615

 
CURRENT ASSETS
Collaboration inventories

10,354

1,749

Trade receivables

90

50,410

Prepayments, other receivables and other assets

61,755

13,852

Financial assets at fair value through profit or loss

185,603

-

Financial assets measured at amortized cost

-

29,937

Pledged deposits

1,270

1,444

Time deposits

54,016

163,520

Cash and cash equivalents

786,031

688,938

Total current assets

1,099,119

949,850

Total assets

1,330,963

1,119,465

 
CURRENT LIABILITIES
Trade payables

32,893

7,043

Other payables and accruals

184,109

123,558

Government grants

451

304

Lease liabilities

3,563

911

Tax payable

9,772

9,488

Warrant liability

67,000

87,900

Total current liabilities

297,788

229,204

 
NON-CURRENT LIABILITIES
Collaboration interest-bearing advanced funding

260,932

120,462

Lease liabilities long term

20,039

1,593

Government grants

7,659

1,866

Other non-current liabilities

233

396

Total non-current liabilities

288,863

124,317

Total liabilities

586,651

353,521

 
EQUITY
Share capital

33

31

Reserves

744,279

765,913

Total ordinary shareholders’ equity

744,312

765,944

Total equity

744,312

765,944

Total liabilities and equity

1,330,963

1,119,465

 

LEGEND BIOTECH CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 
(in thousands, US$)

2022

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax

(445,724

)

(407,196

)

(308,285

)

Adjustments for:
Finance income

(8,182

)

(971

)

(2,930

)

Finance costs

10,796

 

900

 

4,209

 

Depreciation of property, plant and equipment

10,173

 

8,139

 

6,234

 

Loss on disposal of property, plant and equipment

481

 

974

 

55

 

Amortization of intangible assets

2,476

 

1,379

 

192

 

Depreciation of right-of-use assets

5,743

 

4,399

 

3,507

 

Fair value (gain)/ loss of warrant liability

(20,900

)

6,200

 

-

 

Fair value loss of convertible redeemable preferred shares

-

 

-

 

79,984

 

Fair value gains on financial assets measured at fair value change through profit or loss

(593

)

-

 

(47

)

Foreign currency exchange loss/(gain), net

9,159

 

4,867

 

(66

)

Equity-settled share-based compensation expense

34,338

 

20,158

 

4,760

 

Deferred government grant

(307

)

(295

)

(114

)

(402,540

)

(361,446

)

(212,501

)

Decrease/(increase) in trade receivables

50,320

 

24,590

 

(45,000

)

(Increase)/decrease in prepayments, other receivables and other assets

(50,614

)

(2,966

)

3,366

 

Decrease/(increase) in other non-current assets

3,661

 

(1,175

)

(3,973

)

(Increase)/decrease in collaboration inventories

(8,605

)

51

 

(643

)

Government grant received

6,180

 

80

 

2,452

 

Increase/(decrease) in trade payables

25,850

 

1,805

 

(4,348

)

Increase in other payables and accruals

165,883

 

140,747

 

26,932

 

Increase/(decrease) in other non-current liabilities

(163

)

(158

)

554

 

Increase in pledged deposits, net

(15

)

(1,060

)

(128

)

Cash used in operations

(210,043

)

(199,532

)

(233,289

)

Income tax paid

-

 

-

 

(278

)

Finance income received

6,832

 

652

 

3,366

 

Income tax received

3,709

 

557

 

7,391

 

Interest on lease payments

(527

)

(142

)

(195

)

Net cash used in operating activities

(200,029

)

(198,465

)

(223,005

)

 

2022

2021

2020

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment

(20,927

)

(42,197

)

(26,254

)

Purchase of intangible assets

(1,348

)

(3,207

)

(4,029

)

Prepayment to collaborator for collaboration assets

(14,810

)

(1,708

)

(19,493

)

Purchase of financial assets measured at fair value through profit or loss

(285,000

)

(50,000

)

(22,682

)

Cash received from withdrawal of financial assets measured at fair value through profit or loss

99,990

 

50,081

 

22,682

 

Cash received from withdrawal of financial assets measured at amortized cost

30,000

 

-

 

-

 

Cash receipts of investment income

-

 

-

 

47

 

Proceeds from disposal of property, plant and equipment

-

 

4

 

1

 

Addition in time deposits

(369,971

)

(298,107

)

(50,000

)

Decrease in time deposits

483,617

 

180,000

 

75,559

 

Decrease in pledged deposits

105

 

-

 

-

 

Purchase of financial assets measured at amortized cost

-

 

(29,849

)

-

 

Net cash used in investing activities

(78,344

)

(194,983

)

(24,169

)

 
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of cash advances from related parties

-

 

-

 

(4

)

Proceeds from convertible redeemable preferred shares

-

 

-

 

160,450

 

Proceeds from issuance of ordinary shares for initial public offering, net of issuance costs

-

 

-

 

450,085

 

Proceeds from issuance of ordinary shares relating to private placement by GenScript

-

 

-

 

12,000

 

Proceeds from issuance of ordinary shares for follow on public offering, net of issuance costs

377,643

 

323,440

 

-

 

Proceeds from issuance of ordinary shares and warrant relating to private placement for an institutional investor

-

 

300,000

 

-

 

Proceeds from exercise of share options

2,929

 

4,642

 

1,464

 

Payments of expenses for issuance of convertible redeemable preferred shares

-

 

-

 

(2,514

)

Principal portion of lease payments

(2,596

)

(1,419

)

(2,602

)

Net cash provided by financing activities

377,976

 

626,663

 

618,879

 

 

2022

2021

2020

 
NET INCREASE IN CASH AND CASH EQUIVALENTS

99,603

 

233,215

 

371,705

 

Effect of foreign exchange rate changes, net

(2,510

)

34

 

620

 

Cash and cash equivalents at beginning of year

688,938

 

455,689

 

83,364

 

CASH AND CASH EQUIVALENTS AT END OF YEAR

786,031

 

688,938

 

455,689

 

 

 

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