SOMERSET, N.J. / Mar 30, 2023 / 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 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
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 | |||||||||
| 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 | ||||
| (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 | |||||||||
| (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 |
| |||
| Last Trade: | US$43.13 |
| Daily Change: | 0.55 1.29 |
| Daily Volume: | 1,310,067 |
| Market Cap: | US$7.950B |
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