Y-mAbs Therapeutics Inc. (NASDAQ: YMAB) reported its financial results for the third quarter of 2024 on October 30, with net revenue at $18.5 million, marking a 10% decrease from the same quarter the previous year. The company attributed the decline to reduced product revenues and prior licensing revenue. Despite the decrease, the company's net revenue for the first nine months of 2024 remained stable at $61.2 million.
The FDA-approved therapy DANYELZA saw a 5% drop in U.S. product revenues, influenced by Medicaid claim adjustments and increased competition. Y-mAbs reiterated its full-year revenue guidance, expecting to fall in the lower half of the $87-95 million range, and maintained its operating expense forecast. The company also emphasized its strategic focus on drug development, with advancements in its SADA PRIT technology platform and a new licensing agreement for potential commercialization in Japan.
Key Takeaways
- Total (EPA:TTEF) net revenue for Q3 2024 was $18.5 million, a 10% decrease from Q3 2023.
- U.S. product revenues for DANYELZA were $15.3 million, down 5% year-over-year.
- 68 total accounts are now utilizing DANYELZA, with the therapy maintaining a 15% market share.
- The company has extended DANYELZA's patent until February 2034 and entered a licensing agreement with Nobelpharma for Japan.
- A Phase 1 trial for GD2 SADA is in progress, and a CD38-SADA program for non-Hodgkin's lymphoma is set to begin.
- Y-mAbs reported a Q3 net loss of $7 million or $0.16 per share, an improvement from the previous year's $7.7 million loss.
- The company has a strong cash position of $68.1 million and expects to maintain a cash runway into 2027.
Company Outlook
- Y-mAbs maintains its full-year 2024 net revenue guidance of $87 to $95 million.
- Operating expenses are projected to be between $115 million and $120 million for 2024.
- The company plans to invest $15 million to $20 million in cash for the year.
- Y-mAbs is focused on expanding its market presence and advancing its therapies to improve patient outcomes.
Bearish Highlights
- The company experienced a decline in total net revenue and U.S. product revenues for DANYELZA.
- International revenues dropped by 19% due to reduced volumes in Europe.
- The net loss for the first nine months of 2024 increased to $22.9 million from the previous year.
Bullish Highlights
- The company added three new U.S. accounts for DANYELZA in Q3.
- The Phase 1 trial for GD2 SADA is progressing without reported dose-limiting toxicities.
- Y-mAbs entered a licensing agreement for DANYELZA's potential commercialization in Japan.
Misses
- Y-mAbs reported a decrease in net revenue compared to Q3 2023.
- DANYELZA's market share was impacted by competition and Medicaid claim adjustments.
- The company expects to land in the lower half of its full-year revenue guidance.
Q&A Highlights
- Michael Rossi discussed the importance of optimizing dosing for the SADA platform to ensure effective tumor targeting with minimal off-target effects.
- The company is developing criteria for prioritizing future targets based on medical needs and commercial potential.
- Y-mAbs is confident in its financial position and the advancement of its SADA PRIT technology platform.
In summary, Y-mAbs Therapeutics Inc. is navigating a challenging market with a focus on strategic drug development and technological advancements, while maintaining a solid financial foundation and continuing to invest in its pipeline. The company's efforts in expanding the market presence of DANYELZA and advancing its SADA PRIT technology platform reflect its commitment to improving patient outcomes in the face of increased competition and market pressures.
InvestingPro Insights
Y-mAbs Therapeutics Inc. (NASDAQ: YMAB) presents a mixed financial picture that aligns with the company's recent earnings report. According to InvestingPro data, Y-mAbs boasts impressive gross profit margins, with the latest figures showing a robust 88.62% for the last twelve months as of Q2 2024. This strength in profitability at the gross level underscores the company's ability to maintain efficient production and pricing strategies for DANYELZA, despite the reported decrease in revenue.
However, the company's profitability challenges are evident in its negative operating income margin of -31.94% for the same period. This aligns with the reported net loss and the InvestingPro Tip indicating that Y-mAbs is not expected to be profitable this year. The company's focus on investment in research and development, particularly in its SADA PRIT technology platform, likely contributes to these ongoing losses.
On a positive note, Y-mAbs' strong financial position is reflected in another InvestingPro Tip, which highlights that the company holds more cash than debt on its balance sheet. This supports the management's assertion of a cash runway extending into 2027 and provides flexibility for continued investment in pipeline development.
The market appears to be optimistic about Y-mAbs' future prospects, as evidenced by the impressive year-to-date price total return of 126.98% and a one-year return of 189.35%. This market sentiment suggests that investors are valuing the company's potential in oncology therapeutics and its SADA technology platform, despite current profitability challenges.
For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and metrics that could provide deeper insights into Y-mAbs' financial health and market position. Currently, there are 8 additional InvestingPro Tips available for Y-mAbs Therapeutics, which could offer valuable perspective for those considering an investment in this biotech company.
Full transcript - Y mAbs Therapeutics (NASDAQ:YMAB) Q3 2024:
Operator: Good morning, and welcome to Y-mAbs Therapeutics Inc. Third Quarter Conference Call for 2024. At this time, all participants are in a listen-only mode. Instruction for the question-and-answer session will follow the prepared remarks. As a reminder, today's conference will be recorded. I will now hand it over to Y-mAbs's Head of IR, Courtney Dugan.
Courtney Dugan: Thank you, operator, and good morning, everyone. Welcome to the Y-mAbs third quarter 2024 financial results conference call. We issued a press release with our results this morning before market opened. The press release and accompanying slides are available on the IR section of our website. Let me quickly remind you that the following discussion contains certain statements that are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about our business model, commercialization and product distribution plans, expectations with respect to clinical trial data, expectations related to current and future clinical and preclinical studies, and our research and development programs and regulatory submissions, potential regulatory, marketing and reimbursement approvals, collaborations or strategic partnerships and the potential benefits thereof, expectations related to our anticipated cash runway and cash investments and the sufficiency of our cash resources and assumptions related thereto, financial guidance and estimates for 2024 and beyond, and other statements that are not historical facts. Because forward-looking statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by such statements due to a variety of factors, including those risk factors in the company's previously filed Annual report on Form 10-K for the year ended, December 31st, 2023, and its quarterly report on Form 10-Q for the quarters ended March 31st and June 30th, 2024, and the company's quarterly report on Form 10-Q for the quarter ended September 30th, 2024, to be filed with the SEC today. I would now like to turn the call over to our President and CEO, Mike Rossi.
Michael Rossi: Thank you, Courtney. Good morning, and thank you for joining us. I have with me today our Chief Commercial Officer, Sue Smith; our Chief Medical (TASE:PMCN) Officer, Dr. Vignesh Rajah; and our Chief Financial Officer, Peter Pfreundschuh. This morning, I will begin by reviewing key financial and operational highlights from the third quarter of 2024, including DANYELZA's sales performance and the clinical progress of our radiotherapy clinical programs, utilizing our self-assembly, disassembly, pre-targeted radioimmunotherapy therapy or SADA PRIT technology platform. Next (LON:NXT), Sue will provide details on our global DANYELZA sales in the third quarter. Vignesh will then provide updates around our ongoing Naxitamab ISS clinical trials. Then Pete will review our third quarter 2024 financial performance, our cash resources, and reiterate our full 2024 guidance before we open the line for Q&A. Let's begin with the key highlights for the third quarter of 2024, starting with DANYELZA. DANYELZA, the brand name for a humanized anti-GD2 therapy, Naxitamab, is FDA-approved for the treatment of children aged one year and older with relapsed-refractory high-risk neuroblastoma in the bone or bone marrow. Neuroblastoma continues to be the most common cancer in infants and the third most common cancer in children. DANYELZA specifically designed for children who have had an incomplete response to induction or relapsed therapy and also have disease in the bone and/or bone marrow. While designated as an outpatient therapy, DANYELZA can also be administered in the inpatient setting depending on the specific needs of the child. We are nearing the four-year mark since the commercial launch of DANYELZA in the U.S. Despite some of the headwinds around competition we saw from the second quarter carry into the third quarter this year, our overall commercial progress since launch back in 2021 shows encouraging continued progress in terms of the number of sites we are able to reach and the patients we are able to treat with DANYELZA. In the third quarter, we added three new US DANYELZA accounts and saw a 5% increase in DANYELZA demand compared to the second quarter of this year. This signals to us increasing physician adoption of DANYELZA across both new and existing accounts and more patients having access to this important anti-GD2 therapy. Our team continues to drive important initiatives around direct-to-parent education and patient advocacy efforts with the goal of thoroughly understanding the current gaps in patient care and increasing awareness of DANYELZA as an important treatment option for children with relapsed-refractory high-risk neuroblastoma to achieve a complete response and remission. You will hear more from Sue on specifics around DANYELZA's performance across our U.S. and ex-U.S. markets shortly. In the third quarter, we achieved total net revenue of $18.5 million, down 10% from the same period in 2023. The decrease was due to a decline in net product revenues in both the U.S. and our ex-U.S. markets in the quarter, in addition to a $0.5 million in licensing revenue recorded in the third quarter of 2023. For the first nine months of the year, we achieved total net revenue of $61.2 million, relatively consistent with the same period in 2023. We had several corporate updates in the quarter that support our continued global commercial and indication expansion efforts. We are thrilled to have received notification of the accepted patent extension for DANYELZA, US 9,315,585 last month. Our US patent will now expire on February 5th, 2034, extended from June 20th, 2031. In the third quarter, we entered into a lease agreement for a future Y-mAbs headquarters in Princeton, New Jersey. We expect the construction of the premises will be completed in the first half of 2025 and the lease will run for 10 years and nine months from the completion date. Earlier this week, we announced that we have entered an exclusive license agreement and distribution agreement with Nobelpharma for the development and commercialization of DANYELZA in Japan, if approved in the region. We received an upfront payment of $2 million, which will be recorded in the fourth quarter of this year. Under the terms of the agreement, we are entitled to receive up to $31 million in product and commercial milestone payments in addition to profit-sharing on the commercial sales of DANYELZA, if successfully approved and commercialized in Japan. Japan represents an important Asia region for DANYELZA, and we look forward to partnering with Nobelpharma and expanding access to DANYELZA to the region if approved there. Our partner TRPharm launched the DANYELZA named patient program in Turkey in the third quarter of 2024. We are very pleased with how the launch is progressing and look forward to providing further updates in future quarters. In addition, with our Latin-American partner Adium, we plan to submit a regulatory filing for marketing approval of DANYELZA in Argentina later this year. Overall, we remain confident in our US commercial strategy and trajectory in the continued ex-US expansion of DANYELZA to fill important gaps in the treatment of children with relapsed and refractory high-risk neuroblastoma. Let's now shift to our SADA PRIT programs. Starting with our Phase 1 trial evaluating the safety and tolerability of GD2 SADA for the treatment of GD2-positive solid tumors. This is a basket trial looking at small cell lung cancer, sarcomas, and malignant melanomas. In the fourth quarter, we opened Cohort 6 to include adult patients 16 years of age or above with high-risk neuroblastoma. As a reminder, this Phase 1 dose escalation single-arm multicentered safety study has three parts. Part A, which we are currently in is structured to demonstrate the safety profile of the protein while explores dose finding for the GD2-SADA molecule and testing of the dose intervals of two to five days between the protein and the Lutetium DOTA payload. Part B aims to determine the optimal dose of Lutetium-177 DOTA and Part C will evaluate the safety and initial signs of efficacy using repeat dosing. Today, we have six sites open, have a total of 20 patients in Part A of this trial. We have completed cohorts one through five using a radioactive payload of up to 200 millicuries of Lutetium and two-day to five-day interval between SADA protein and payload. The initial blood pharmacokinetic profile of the construct in these patients dosed with 0.3 milligram per kilogram, 1 milligram per kilogram, and 3 milligram per kilogram of protein appears to match our preclinical models in the terms of clearance data and blood PK profiles from patients are comparable and supportive of the current dose interval between two and five days. We continue to be encouraged by what we have seen so far. To date, no patients in the trial have experienced any dose-limiting toxicities and there have been no instances of treatment-related serious adverse events. Based on the SPECT/CT scans and PK activity we have seen to date, we believe we have demonstrated proof of concept in humans that GD2-SADA can both find and bind to tumors. It is important to note that these early data are not complete and not necessarily indicative of full results or ultimate success of the trial or the SADA development program. We are on track to complete Part A of this Phase 1 study by the end of this year and we'll look to present a full dataset from Part A in the first quarter of 2025. In the anticipated data readout from Part A of the trial, our objective is to demonstrate the safety profile of the protein and determine the optimal timing to administer the radionuclide, all of which will inform Part B. We also plan to show additional scan images and PK data. Because we elected to open a sixth cohort to include adults with neuroblastoma, we are awaiting the full data from Part A before filing an IND for our GD2-SADA Phase 1 trial in pediatric neuroblastoma. Our second SADA PRIT program is CD38-SADA, which we are first studying in the treatment of non-Hodgkin's lymphoma focusing on B-cell and T-cell lymphoma. This is our first SADA program in circulating tumors. Our planned Phase 1 follows the design comparable to our GD2-SADA Phase 1 trial, which you can see here. We have selected the first six sites and activated two sites and expect to dose the first patient by the end of 2024. In addition, we look forward to highlighting preclinical CD38 SADA data in a poster presentation at the American Society of Hematology Annual Meeting on December 7th in San Diego. The abstract titled CD38 SADA, a self-assembling and disassembling bispecific fusion protein for two-step free targeted radioimmunotherapy of non-Hodgkin's lymphoma is available on the ASH website. We are very excited for the potential of SADA PRIT to fill much-needed gaps for patients across a range of cancers and potentially other serious diseases, and we continue to believe in its potential advantages in manufacturing, administration, and logistics with traditional radiopharmaceuticals. We look forward to providing further updates on our SADA PRIT programs going forward. Across both our DANYELZA and SADA PRIT platforms, we are committed to advancing a potential generation -- new generation of therapies through clinical development aimed at improving outcomes and long-term quality-of-life for patients and their families. I will now pass the call over to Sue Smith, to provide further color on global DANYELZA sales for the third quarter of 2024.
Sue Smith: Thank you, Mike, and good morning, everyone. Despite seeing some of the same headwinds we saw in the second quarter carrying to the third quarter, we're pleased with the overall commercial progress of DANYELZA since the initial commercial launch in the US and across our ex-US markets. DANYELZA is an important anti-GD2 therapy for the physician toolbox in the treatment of patients with relapsed-refractory high-risk neuroblastoma in the bone or bone marrow. Its key unique features, including outpatient administration and response in bone and/or bone marrow makes DANYELZA an important treatment option for patients and caregivers alike. In the third quarter of 2024, total US DANYELZA net product revenues were $15.3 million, representing a 5% decrease compared to the same period in 2023, primarily driven by a change in estimate from Medicaid claims. While we encountered continued competition from the launch of a new market entrant for maintenance therapy in addition to ongoing clinical trial activity, we still saw increases in key performance indicators. A total of 68 accounts have now used DANYELZA around the US since its initial launch in 2021 with three new accounts added in the third quarter of 2024. DANYELZA's estimated total share of the US anti-GD2 market remained steady at approximately 15% as of September 30, 2024. We're excited to see physician utilization of DANYELZA continue to grow. 34 health practitioners started patients on DANYELZA in the nine months ended September 30, 2024, with seven physicians starting treatment on two or more patients. Since launch, a total of 113 healthcare providers have prescribed DANYELZA and 34 of those have started treatment on two or more patients. Our dedicated US commercial sales team continues to receive positive healthcare provider feedback on DANYELZA through ongoing customer interactions. In addition, we continue to see institutional adoption of DANYELZA, which has been added to two hospital formularies in the third quarter of 2024, bringing the total since launch to 48 hospital formularies as of September 30th, 2024. Now turning to our ex-US commercial progress. Ex-US, our third quarter 2024 DANYELZA net product revenues were $3.1 million, a decrease of 19% compared to the third quarter of 2023. The decrease was primarily driven by a decline in volume from our WEP patient access program in Europe, which had an initial stocking order in the third quarter of 2023. The third quarter marked the first recorded sales in Turkey with our partner TRPharm and the second consecutive quarter of DANYELZA sales in Brazil and Mexico, led by our Latin American partner Adium. We expect to see additional adoption over the coming quarters and look forward to providing further updates as we learn more about market dynamics in these regions. In Asia, our partner, SciClone continues to expand use of DANYELZA in China and is gearing up to launch DANYELZA in Hong Kong following its approval in the region last quarter. Our team is committed to finishing the year with strong fourth-quarter performance of DANYELZA in the US and continuing to support our ex-US partners as they expand access to DANYELZA across their respective regions. We are confident in the potential to position DANYELZA as the anti-GD2 therapy of choice in relapsed-refractory high-risk neuroblastoma in the bone and/or bone marrow to both physicians and caregivers and expect to see a continued overall upward trend of sales growth over the long term. We look forward to providing further updates throughout the coming year. I will now pass the call to Vignesh.
Vignesh Rajah: Thank you, Sue, and hello, everyone. I'm pleased to provide a brief update on our ongoing investigator-sponsored naxitamab clinical trials. Let's start with Memorial Sloan Kettering Cancer Center's Phase 2 clinical trial evaluating naxitamab in patients with second-line relapsed osteosarcoma. As we shared during our second quarter earnings call, based on a draft abstract our team received from MSK back in June, the trial did not meet its primary endpoint of 16 event-free patients at 12 months and instead stated that there were 14 event-free patients at 12 months. MSK is expected to present this data at a medical meeting by the end of this year, after which time our team plans to analyze the full study results and evaluate next steps. In the frontline high-risk neuroblastoma setting, our partner, the Beat Childhood Cancer Research Consortium or BCC, is leading a multicenter Phase 2 trial evaluating naxitamab in combination with standard induction therapy for patients with newly diagnosed high-risk neuroblastoma. As of the end of the third quarter, the BCC had 22 active sites and treated 11 patients with recruitment ongoing. The amended protocol for the transition to a comparison with an external control is currently being developed. We expect the trial to transition from a single-arm trial design to a comparative trial with an external control arm that reflects current standard of care for induction therapy with a comparable patient population that is carefully selected and propensity score matched. Our aim for the trial is to demonstrate superiority in complete response rates at the end of induction therapy in the naxitamab arm compared to the standard of care. In advanced breast cancer, we are partnering with the Ohio State University of a Phase 1b trial investigating TGF-beta NK cells, gemcitabine and naxitamab, in patients with GD2-positive metastatic breast cancer. Patient recruitment for the trial was initiated in the third quarter of 2024. As per the study design, follow-up for dose-limiting toxicities with a combination of gemcitabine and NK cells need to be completed and the persistence of NK cells in the blood needs to be confirmed before the addition of naxitamab. Upon the outcome of this trial, we would consider moving forward with this multicenter Phase 2 trial. In patients with refractory Ewing sarcoma, the Institute of Mother and Child in Poland is leading a randomized Phase 2 trial evaluating the efficacy and safety of naxitamab. This trial was initiated during the fourth quarter of 2023. Three patients have been dosed in the naxitamab arm to date and recruitment is ongoing. We expect a total of 16 patients in that arm. The trial is expected to be completed in 2028. In addition, we are in discussions with the MD Anderson Cancer Center to initiate a multicenter Phase 1 study to evaluate the addition of naxitamab to current standard of care in the treatment of metastatic triple-negative breast cancer. The study is expected to assess the safety of this combination as well as provide an early indication of objective response rate in patients with metastatic triple-negative breast cancer who have received at least one prior line of systemic therapy for metastatic disease. The study, which is anticipated to start in the first quarter in 2026 will further inform us on a future Phase 2 program in triple-negative breast cancer. We believe a significant treatment gap remains in the anti-GD2 space in both pediatric and adult cancers. We're committed to supporting the advancement of these investigator-sponsored studies through clinical development and working to unlock the untapped potential of naxitamab. Let me now hand the call over to Peter Pfreundschuh.
Peter Pfreundschuh: Thank you, Vignesh, and good morning, everyone. As you heard earlier, we recorded total DANYELZA net product revenues of $18.5 million in the third quarter of 2024, representing a 7% decrease compared to $20.0 million total DANYELZA net product revenues in the third quarter of 2023. Primarily driven by decreased international and US revenues from a decline in US and ex-US order volumes. US DANYELZA net product revenues were $15.3 million and $16.1 million for the three months ended September 30th, 2024, and 2023 respectively, representing a 5% decline. The decline was primarily due to an unfavorable price mix partially offset by increased US volume of 5% during the third quarter of 2024 compared to the third quarter of 2023. Ex-US net product revenues were $3.1 million and $3.9 million for the three months ended September 30th, 2024 and 2023, respectively, representing a 19% decline. The decline was primarily driven by decreased volume from Western Europe in the quarter. We received an inventory order from SciClone of $1.7 million in the third quarter. But the revenue was recorded in the fourth quarter due to cutoff timing issues. Our total DANYELZA net product revenues of $60.7 million for the nine months ended September 30th, 2024, were relatively flat compared to $61 million for the nine months ended September 30th in 2023. We did not have licensing revenue for the three months ended September 30, 2024. We did report $0.5 million of licensing revenue in the nine months ended September 30, 2024. We also reported $0.5 million of licensing revenue for the three months and nine months ended September 30, 2023. Moving to operating expenses. Our research and development expenses were $11.2 million and $36.8 million for the quarter and nine months ended September 30, 2024, representing decreases of $4.2 million and $4 million from $15.4 million and $40.8 million for the quarter and nine months ended September 30, 2023. Selling, general, and administrative expenses increased by $3.4 million and $8.5 million to $13.6 million and $42.3 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. The increase in selling, general, and administrative expenses for the three months ended September 30, 2024, was primarily attributable to a $1.2 million increase related to our former Chief Financial Officer separation and consulting agreements and a $1.1 million increase in personnel costs inclusive of stock-based compensation and $0.5 million in professional and consulting fees. The increase to selling, general, and administrative expenses for the nine months ended September 30, 2024, was primarily attributable to a net impact of $3.8 million related to two legal settlements that were finalized in the nine months ended September 30, 2024. As previously mentioned, the increase also includes a $1.2 million increase related to our former Chief Financial Officer's separation agreement and consulting agreement. A $1.1 million increase in personnel costs inclusive of stock-based compensation and $0.8 million in professional and consulting fees. We reported a net loss for the quarter ended September 30, 2024, of $7 million or negative $0.16 per basic and diluted share, compared to a net loss of $7.7 million or a negative $0.18 per basic and diluted share for the quarter ended September 30, 2023. In addition, we have reported a net loss for the nine months ended September 30, 2024, of $22.9 million or negative $0.52 per basic and diluted share, as compared to a net loss of $20.4 million or a negative $0.47 per basic and diluted share for the nine months ended September 30, 2023. The decrease in net loss for the three months ended September 30, 2024, was primarily driven by decreased operating expenses and a favorable impact from foreign currency transactions, partially offset by decreased product revenues net. The increase in the net loss for the nine months ended September 30, 2024, was primarily driven by the previously mentioned two legal settlements with a net $3.8 million impact. As mentioned earlier, we ended the third quarter of 2024 with cash and cash equivalents of $68.1 million as compared to $78.6 million at year end 2023, representing a decrease of $10.5 million year-to-date. Importantly, we continue to maintain a strong balance sheet, reporting $9.7 million in cash outflows for the third quarter of 2024, primarily driven by cash payments on the two previously mentioned legal settlements paid within the quarter. Turning now to our full year 2024 guidance, we reiterate our full year 2024 total net revenue guidance to be in the range between $87 million and $95 million, but we expect the revenues will come in in the bottom half of that range. We continue to anticipate our operating expenses will remain in the range of between $115 million and $120 million for the full year 2024, which is consistent with our prior guidance, and we expect our cash investment for the full year of 2024 to remain in the range of between $15 million and $20 million, which is consistent with our prior guidance. With a strong balance sheet and focused strategy, we believe Y-mAbs is well-positioned to execute on our strategic missions and priorities and to support the delivery of multiple anticipated near-term milestones. This concludes the financial update, and I will turn the call back over to Mike.
Michael Rossi: Thank you for that overview, Pete. Now let's open the line for questions. Operator?
Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] The first question is from Etzer Darout from BMO Capital Markets. Please go ahead.
Etzer Darout: Great. Thanks for taking the questions. One on DANYELZA and another on the GD2 SADA. So for DANYELZA, if you could talk a little bit more about the price mix dynamic in the quarter, and is this something you expect to continue moving forward? And what are the potential offsets in the fourth quarter? And then on GD2 SADA, you have no dose-limiting COGs dose correlating to preclinical data. If you could talk through maybe the key criteria for dose selection for, sort of, the Part B of the study? Thanks -- for the antibody specifically, the dose for the antibody specifically. Thanks.
Michael Rossi: Sure, Etzer. Thank you very much for that. I'll pass the first question on regarding the price mix to Sue and then bring it back for the protein. Sue.
Sue Smith: Thanks, Mike. Thanks for the question. So we took an approximate $1.5 million charge in Q3 for Medicaid-related claims for both period and out of the period. And so due to that price mix, we saw a 5% decline in net revenues even in spite of having a 5% increase in vials. And so with the adjustment, the sales would have been up 4% for both year-over-year and quarter-over-quarter.
Michael Rossi: Thank you, Sue. So the second question you had was around the protein, the optimal protein dose on our GD2 SADA. So what we've done so far through the first six cohorts is we started at the 0.3 milligram per kilogram, escalated up to 3 milligram per kilogram and have since backed that down to 1 milligram per kilogram, shortening the window and looking at an optimized window. So to move that into Part B, for us, it was mirroring more of the preclinical PK data that we saw looking at the blood levels, understanding we want to dose near the native. And what we've seen so far with that is allowing us to then focus on the 1 milligram per kilogram and feel very confident that we're narrowing that down. So Vinesh, anything additional to that?
Vignesh Rajah: Just to build on that, obviously, we need to evaluate the dissymmetry in the tumor as well as in normal tissues. And of course, the safety in all of this will contribute to the evaluation of the optimal dose and the dose interval.
Etzer Darout: Great. Thank you.
Michael Rossi: Thank you, Etzer.
Operator: The next question is from Li Watsek from Cantor. Please go ahead.
Li Watsek: Hi, good morning. Thanks for taking our questions. I guess if you can comment on some of the swing factors for Q4 revenues as we're heading into the holidays, your confidence level of hitting that -- the lower end of the guide. And the second question is just for GD2 SADA, you're looking at a number of histology, so wondering if you can comment on the radiosensitivity of these tumor types.
Michael Rossi: All right. Thank you, Li. For the fourth quarter guidance, I'll pass you to Pete, and allow Pete to expand on that.
Peter Pfreundschuh: Well, Li, thanks for the question. With regards to the guidance, we feel very confident that we should land within the range of $87 million to $95 million. We did highlight for you as part of the earnings call that we should most probably land in the lower half of that range. If you look at the third quarter results, although they were $18.5 million as reported, we did highlight for you that the SciClone sales did land in the fourth quarter. So with the SciClone sales adjustment, with the Medicaid adjustment and then also the Nobel or the timing of the Nobel licensing deal, we most probably would have landed actually based upon the consensus numbers just about where the consensus numbers were for the third quarter. So for the fourth quarter, we still anticipate a very strong quarter and we anticipate to land somewhere in the lower half of basically the guidance range as we laid out for you guys between $87 million and $95 million. Hopefully, that helps you, Li.
Michael Rossi: And Li, your second question around the GD2 SADA and the radio sensitivity, I'll pass that on to Vignesh.
Vignesh Rajah: Thank you. So just to remind everybody that the cancer that we have included in the 1001 study include osteosarcoma, melanoma, soft tissue sarcoma, small-cell lung cancer, and in the latest cohort we added adult neuroblastoma. It's too soon to say what we've seen in terms of early indicators of sensitivity to the radiation. As you know, the GD2 expression levels is quite heterogeneous in the solid tumors, the variations within the tumor, as well as antigen density, and so rationale to include SADA on neuroblastoma patients. So as we get more data on the evaluation of dissymmetries and responses, we'll update the group here in terms of what we've seen in terms of radiation sensitivity.
Li Watsek: Okay, great. Thank you.
Operator: The next question is from Alec Stranahan from Bank of America. Please go ahead.
Alec Stranahan: Hey, guys. Thanks for taking our questions. Just two from us. First, with moving your headquarters early next year, curious to hear the latest on your approach to manufacturing and whether you'll be making additional investments here as your SADA assets progress through the clinic. And then on the new deal in Japan, maybe outline how you see the commercial rollout going there and sort of the incremental TAM that Japan represents for DANYELZA? Thank you.
Michael Rossi: Sure. Thanks, Alex. Our philosophy on manufacturing hasn't changed. We're in a unique position with both DANYELZA and our SADA platform that the way our current structure is, we're able to use contract manufacturing for our proteins, which allow us to rather than invest in brick-and-mortar, allows us to invest in the drugs themselves, and similar on the SADA platform, we're able to use the same network that we have for our SADA protein constructs and contract directly with isotope manufacturers for the production and caging of isotopes. So we're doing additional work with our proprietary key laters as we're looking to expand of within the alpha and beta space, as well as the PET, that allow us then rather than, again, investing in manufacturing really invest in drug development. I think on the second point, as we look at Japan, we've got a small clinical trial to do within Japan and it will be limited to six patients to confirm similar to what we've done in the U.S. in order to get that rolled out. So we expect to kick that off rather shortly and increase the overall ability to launch that product hopefully in the second half of 2025 to early 2026. So, as we move forward on that, as we look at the total addressable market, Japan is a significant healthcare market, but overall, it's -- it is a much smaller market than the U.S. and we'd expect to see incremental from that, but not necessarily a very large expansion of our total addressable market.
Alec Stranahan: Got it. Thanks.
Michael Rossi: Thanks, Alec.
Michael Rossi: Thanks, Alec.
Operator: The next question is from Justin Walsh from JonesTrading. Please go ahead.
Justin Walsh: Hi, thanks for taking the question. I'm curious what your thoughts are on the increasing numbers of players testing pre-targeting approaches. And I'm specifically thinking about some preclinical data on another approach being tested by Roche and Aranamed that was at EANM adding to the groups that we're already following. So do you think that this like provides additional validation for or confidence in what you're already trying to accomplish with SADA?
Michael Rossi: Yes, it's a good question, Justin. I think as we look at this, anytime you see more and more companies coming into it, it does validate what the theory is around providing maximum dose of the tumor, minimum off-target, and more importantly, providing better logistics to get into shorter-lived isotopes. So, we welcome this from an intellectual point of view as well, the more smart people and smart companies you have working on this, the more likelihood you'll get more and more pre-targeting products out to the patients and into the clinic. And again, what's extremely important about that as well is leveraging the existing infrastructure to get more patients treated without having to go to specific paranostic suites. So we welcome that opportunity. I think there's a variety of methods in which to do this and time will tell which is optimal, which is right and there are always more than one right answer. So, we wish see others much success as they move forward. And it really allows us then to focus on what's -- what we can do well and what we will do well for the patients and practitioners.
Justin Walsh: Great. Thanks for taking the question.
Michael Rossi: Thanks, Justin.
Operator: The next question is from Mike Ulz from Morgan Stanley (NYSE:MS). Please go ahead.
Unidentified Analyst: Hi, good morning. This is Rohit on for Mike. Thanks for taking our questions. Just going back to 3Q DANYELZA sales, how much of the decline would you contribute to seasonality, competitors, and the ongoing clinical trials? And I think you mentioned something on a change in estimate for Medicaid claims for the quarter. Can you just elaborate on that? Thank you.
Michael Rossi: Sure. Thank you. Thank you very much. I guess we'll start backwards on this and I'll push -- pass it over to Pete to talk a little bit about what the Medicare looks like and what the changes are there and then we'll move over to Sue to talk a little bit about the volume and what we see as impacting that as well as potentially what the good news is in the way of volume.
Peter Pfreundschuh: So the question, with regards to the Medicaid element of the sales mix for the US, the reality is the number of sites that we're selling into that have Medicaid 340K is continuing to increase a bit more relative to sites that have less of that presence in those sites. And so as we got into the third quarter, we had an adjustment that was associated with both in-quarter as well as previous quarter coming into this. And so to that note, there was about a $1.5 million push-down that we had to take in the quarter relative to that. So overall, we did report about $15.3 million. I think Sue alluded to this earlier, with the $1.5 million, we're at about $16.8 million. One thing that we did not really get into was, there was also some timing-related issues, specifically in shipments also within quarter that slipped into the fourth quarter, that was about another $700,000. And so when you actually compare kind of where we were a year-ago, third quarter at $16.1 million with those adjustments, we would have landed somewhere around $17.5 million and so actually, our sales overall is kind of up. And that kind of correlates as you saw we did have volume increases for the quarter. So again, there were some timing-related things that fell in-quarter that impacted us, but for the most part, it continues to reinforce our confidence with regards to kind of where the markets are where DANYELZA is. So then I'll pass it over to Sue for a little bit more color here.
Sue Smith: Thanks, Pete. Thanks, Mike, for the question. Yes, I think obviously our mix continues to be about 80-20 with US being about 80% of our volume. And we have on all indicators, key performance indicators, grown quarter-over-quarter in terms of the number of physicians treating, the number of patients starts, the number of physicians with two or more patients. And notably, the majority of our sales is coming from high-volume centers where our market share is higher than if you look at all centers together. And that we believe is really coming because of our new competitive campaign, which is enabling us to really talk about differentiating our core value in being able to still attain a complete response even in heavily treated patients and even in patients who are no longer responding to -- or have developed antibodies to prior anti-GD2 therapy. So that is certainly how we're going after market share of Unituxin and we also -- as we've mentioned, see volume in the fourth quarter coming from China due to the timing of that large shipment that Pete talked about.
Unidentified Analyst: Thanks, Sue. Thanks, Pete.
Operator: The next question is -- and pardon me [Operator Instructions] The next question is from Jeff Jones from Oppenheimer. Please go ahead.
Jeff Jones: Good morning, guys, and thanks for taking the question. Two from us, one on DANYELZA, and one on SADA. With respect to cash runway, which you projected into 2027, can you highlight what studies and work is included in there amongst DANYELZA and SADA? And then for the SADA platform specifically, when might we hear more detail around future plans, targets, target selection, and indication? Thanks.
Michael Rossi: Thank you, Jeff. I'll pass the first part of your question on to Pete for cash runway and what we have planned and kind of how we're looking at that.
Peter Pfreundschuh: Yes, Jeff, good question. So previous quarters, we communicated that we have runway into 2027. We've reiterated that as part of this quarter as well. Again, I would first start with our cash investment or burn for this year on a net basis relative to kind of what we -- where we set our guidance. So our guidance is $15 million to $20 million of investment this year, over and above the proceeds cash inflows from DANYELZA, what we're seeing to date and we issued that as part of this earnings release is, we're slightly over $10 million year-to-date on that number. We do have some favorable things coming in. Now as part of the fourth quarter, we mentioned the Nobel licensing deal that $2 million is coming in, alongside some other things. So we're well on track to the lower end of that $15 million to $20 million range is kind of what we're anticipating for this year. That should land us kind of in the low 60s, most probably somewhere 60 to 65, I would skew more to the 65 number. And then kind of as we go forward, what our anticipated views around both investment and return on DANYELZA was, that DANYELZA would continue to see some mild growth, call it, single-digit to maybe a low double-digit number. In other view, we get good cash flows off of DANYELZA moving forward over the next number of years. And then on the investment side of the equation, we anticipated that we would be investing in new SADA programs at least one or two every year. So that was kind of the thought process as we laid it out. As is the case, Jeff, most companies are going through kind of a revised operating plan cycle at this time of the year, when we issue our 10-K in March, we'll issue new guidance for not only 2025, but also give you guys an update as to our thoughts around investment moving forward. So hopefully, that helps you.
Michael Rossi: Yes. And Jeff, as a follow-up to the second part of the question, we're actually right now in that process of evaluating a multitude of targets and narrowing them down to targets that really fit what we're doing here at Y-mAbs. So we're in that process and I would say in the early part of 2025, most likely, first quarter, you'll see revised priority list as well as specific timelines and what exactly we are going targeting moving forward. And as Pete discussed, we have plans to invest in several targets and bring several programs per year into the clinic. So stay tuned for that, but that will happen in early 2025.
Jeff Jones: Great. Appreciate that. Thanks, guys.
Michael Rossi: Absolutely. Thanks, Jeff.
Operator: The next question is from David Nierengarten from Wedbush Securities. Please go ahead.
David Nierengarten: Hey, thanks for taking my question. I was just wondering if you could tell us on your dose-escalation and kind of push -- pullback on what we, call it, back to 1 milligram. Is there any the SADA -- sorry, is there any differences in tumor types that drove that or tumor burden or was it just timing and PK like, I don't know if you could walk us through without giving us the data too early on kind of what was -- what you were seeing that drove you to decide or look at the dose level. Thanks.
Michael Rossi: Yes, David, that was a great question. We'll give you much more of that detail once we release it, but I'll give you the top-line on this. So we've talked about this in the past. What we need to do with the radiopharmaceuticals in a pre-targeting is paint the tumor and to cover those receptors without putting so much in the blood that were taking a long time to clear it out. So we know the disassembly of SADA is concentration-dependent. So when we model the preclinical data based on the mouse model, 1 milligram was the target based on that. We had the flexibility to go up to 10 times higher than that and started at one-third of that. But the reality was we started at one-third looking at it from a safety perspective, brought it through the 1 milligram and then 3x that up to 3 milligrams. And the PK was modeling what we saw and the preclinical. So, it made sense for us to bring it back to that target level rather than go higher and extend the time in which we would wait for the isotope, so now it's just fine-tuning that back, and it had nothing to do with tumor types, it had nothing to do with uptake, it had nothing to do with any of that, it was more of -- we felt that the -- being at the PK levels were modeling that of the preclinical data that -- we narrow that down as a variable and bring it back into that range and start shortening the window, again, changing one variable at a time. So we feel very good about where that is. And again, it had nothing to do with any toxicity or anything else. It was really feeling that we had enough protein to paint the tumor and clear quickly enough from the bloodstream.
David Nierengarten: Got it. Thanks.
Michael Rossi: Thanks, David.
Operator: The next question is from Nicole Germino from Truist Securities. Please go ahead.
Nicole Germino: Good morning. Thanks for taking my question. Can -- I have two on SADA. The first one, can you just talk a little bit more about the dissymmetry in which organs do you expect the drug to accumulate and more, and what's the exact -- what are the acceptable lutetium levels in kidney and liver?
Michael Rossi: Yes, Nicole, that's a great question. I think when we look at this and understanding that both the SADA as well as the Lutetium-DOTA are renally eliminated, we would expect to see as far as off-tumor for the kidneys and the bladder to be the highest -- the organ -- the highest impact to any organ. The second would be any kind of liver uptake or bone marrow. We're evaluating all of that as part of the clinical trial, since, again, this is the first in human, but I'm not -- right now, don't have any data to share on those and what they look like. And Vignesh, I don't know if there's anything from your side that you want to discuss as what our -- limits we're looking at as far as what we're trying to maintain below?
Vignesh Rajah: Yes. In addition to what you said, what we're expecting, dissymmetry absorbed us in tumor, and of course, off-tumor tissues. I think we can -- and we've already shared this with you in terms of the safety margins, so far we've not seen any early indications of any safety issues, no dose-limiting toxicities or treatment-related serious adverse events. But further evaluation will go and we'll share with you more results as we get through soon.
Nicole Germino: Okay, great. And then one quick question on your targets. Can you elaborate more on your target selection strategy and what are the parameters for how you're choosing your target priorities?
Michael Rossi: Yes. We're working through that right now. We'll lay that out as part of the total strategy. It's not something we're ready to disclose at this point as we're walking through the list, but we are looking at many receptor-modulated diseases, we're looking at unmet need as well as commercial potential. So, there is a significant amount of criteria we're putting into this and this will be a living document for us. As we move forward and bring targets into the clinic, we'll be looking at the next five to 10 targets, how they are positioned both clinically and commercially at that point in time and can reprioritize as we move forward. So there are several criteria and we'll outline that as we bring this entire strategy forward.
Nicole Germino: Great. Thank you.
Michael Rossi: Thank you, Nicole.
Operator: This concludes the question-and-answer session. I would like to turn the floor back over to Mike Rossi for closing comments.
Michael Rossi: Great. Thank you, everyone, for joining us today to discuss our third quarter results and continued progress. We have a strong financial foundation and continue to believe we are uniquely positioned for future growth while advancing the clinical development of our differentiated radioimmunotherapy platform, SADA PRIT, to potentially deliver better and safer therapeutic options in the treatment of a number of serious diseases with unmet needs. We look forward to seeing many of you at upcoming investor meetings and medical meetings throughout the winter. If we didn't get to your question and you have additional questions, we're happy to schedule time with individual investors and answer those questions at that point in time. Thank you and have a great day.
Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.