Analyst Conference Summary

biotechnology

conference date: November 12, 2024
for quarter ending: September 30, 2024 (third quarter, Q3)

Forward-looking statements

Overview: Revenue growing, hoping for cash flow break even before too long.

Basic data (GAAP):

Revenue was $13.5 million, up 50% sequentially from $9.0 million, and up 13% from from $12.0 million year-earlier.

Net income was negative $10 million, up sequentially from negative $25 million, and up from negative $72 million year-earlier.

Earning per share (EPS), diluted were negative $0.19, up sequentially from negative $0.45, and up from negative $1.40 year-earlier.

Guidance:

For full year 2024 Abecma revenue (by BMS) expected range is $240 to $250 million. The cash runway should extend beyond 2027.

Conference Highlights:

Chip Baird, incoming CEO, said "We are very pleased to report 42% sequential growth in quarterly Abecma sales, which was part of a continued expansion of the CAR-T class into earlier lines for multiple myeloma. When combined with the significant progress our team has made in streamlining our cost structure, 2seventy continues to make meaningful progress on our goal of achieving breakeven operations. Abecma has a differentiated safety profile, as further supported by recent real-world evidence. Physicians familiar with Abecma understand that with effective use of bridging, they can achieve deep and durable responses. With more than 16,000 patients diagnosed annually in the U.S., we believe Abecma will continue to hold a meaningful place in a growing but highly competitive multiple myeloma market, and we remain committed to expanding the reach of Abecma to as many patients as possible." Continues to work to reduce costs, including joint costs with BMS.

Could potentially reach break-even in 2025. Q4 2024 could be seasonally weak.

Revenue by type: service $2.9 million; Abecma collaboration $410.7 million; royalty and other $0 million.

On April 4, 2024 Abecma received third line approval from the FDA for multiple myeloma. This is a much larger addressable population, but does not expect meaningful growth until H2. Abecma has received third-line approvals in Japan and Switzerland. It gained a positive CHMP opinion in the EU. Approval in the U.S. would signal a return to growth. Manufacturing capability is being prepared. In Q1 2024 the FDA approved suspension lentiviral vector (sLVV) for manufacturing Abecma. The transition to sLVV manufacturing will support anticipated increased demand in earlier lines.

2seventy bio and Bristol Myers (BMY) share equally in all profits and losses related to development, manufacturing, and commercialization of Abecma in the U.S. 2seventy reported collaborative arrangement revenue of $10.7 million in Q3, up sequentially from $4.3 million for Q2, and up From $5.9 million year-earlier. That is based on Bristol Myers Q1 Abecma revenue of $77 million, up 42% sequentially from $na million.

In September decided to discontinue the Abecma KarMMa-9 study, which should save $80 million over the next few years.

At the end of the quarter the balance of cash and equivalents (including marketable securities) was $192 million, down sequentially from $202 million.

Operating expenses of $24.5 million consisted of: R&D $8.3 million; cost of manufacturing $5.8 million; SG&A $12.9 million; share of collaboration $0 million; restructuring $0.5 million. Loss from operations $13.9 million. Interest income $2.9 million. Other income $1.2 million.

Analyst Q&A, selective:

Earlier line sales color? Third line demand is about what we expected. There was no bolus, it has been a steady build. The CAR-T class is gaining share v. T cell engagers. Within the CAR-T class we are competing for share with our differentiated safety profile. We believe we have only penetrated about 25% of the third-line setting. So room to grow.

Better Abecma margin? Made steady progress this year, mainly from increased demand v. fixed costs, though we are making some improvement in manufacturing costs.

Sales needed to break even? Past we said $400 million, but now we think it is perhaps closer to $300 million, but we may revise that.

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