On Thursday, Leerink Partners adjusted its price target for Genmab (CSE:GMAB) A/S (NASDAQ:GMAB) shares, reducing it to $27 from the previous $29 while maintaining a Market Perform rating. The biotech company reported its third-quarter financial results, which showed a revenue of DKK 5,540 million, a figure that aligns closely with the consensus estimate of DKK 5,599 million. This represents an approximate 2.6% quarter-over-quarter growth.
Genmab's revenue increase is primarily attributed to higher royalties from its partnerships on drugs such as Darzalex, Kesimpta, and Epkinly, as well as improved sales from Epkinly. Notably, Darzalex sales reached $3,016 million in the third quarter, surpassing the consensus estimate of $2,944 million and marking a 4.8% quarter-over-quarter growth.
The company also announced strategic changes to its pipeline, including the termination of three early-stage programs and the decision not to proceed with a planned Phase III study for Tivdak in second-line or higher head and neck cancer. This move is aimed at focusing resources on advancing key late-stage programs like Epkinly, Rina-S, and acasunlimab, with new Phase III studies expected to launch within the year.
Furthermore, Genmab provided an update on its GEN3014 program, revealing plans to submit data to Johnson & Johnson by the end of December. J&J's decision on this program is anticipated within 60 days of receiving the data, with an official announcement expected by the end of the first quarter of 2025.
The company is preparing for multiple presentations of Epkinly at the American Society of Hematology annual meeting in December. Despite these developments, Leerink suggests that investor attention is likely to remain on the upcoming GEN3014 update in the first quarter of 2025, due to its potential impact on the treatment of multiple myeloma and its ability to possibly replace Darzalex. Leerink reaffirmed its view of Genmab as a high-quality entity with a solid track record but considers the current stock valuation to be fair.
In other recent news, Genmab A/S reported Q3 global net sales surpassing USD 3 billion for its leading product, DARZALEX. The sales figures, disclosed by Johnson & Johnson, were generated through an exclusive licensing agreement with Janssen Biotech. In the same period, Genmab also disclosed a capital increase due to the exercise of employee warrants and issued restricted stock units and warrants to employees as part of its incentive program.
The company also secured FDA approval for RYBREVANT, a lung cancer treatment developed in partnership with Janssen, and obtained European Commission approval for TEPKINLY®, a treatment for adults with relapsed or refractory follicular lymphoma.
In terms of analyst notes, H.C. Wainwright maintained a Buy rating for Genmab, while Truist Securities reduced its price target from $53 to $50. Morgan Stanley (NYSE:MS) resumed coverage on Genmab, assigning an Equalweight rating. These are some of the recent developments shaping the course of Genmab A/S.
InvestingPro Insights
Genmab A/S (NASDAQ:GMAB) presents an intriguing investment profile, as highlighted by recent InvestingPro data and tips. The company's market cap stands at $14.23 billion, with a P/E ratio of 18.21, suggesting a relatively modest valuation for a biotech firm. This aligns with Leerink Partners' assessment of fair valuation.
InvestingPro Tips reveal that Genmab holds more cash than debt on its balance sheet, indicating financial stability crucial for funding ongoing research and development. This is particularly relevant given the company's strategic pipeline changes and focus on advancing key late-stage programs.
Additionally, Genmab's revenue growth of 17.34% over the last twelve months, coupled with a strong gross profit margin of 96.2%, underscores its financial health and efficient operations. These metrics support the company's ability to invest in promising programs like Epkinly and GEN3014.
It's worth noting that InvestingPro offers 12 additional tips for Genmab, providing investors with a comprehensive view of the company's prospects. These insights could be valuable for those looking to delve deeper into Genmab's investment potential amidst its evolving pipeline and upcoming data presentations.
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