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On Tuesday, William Blair analysts revised their stance on Genmab (CSE:GMAB) A/S (NASDAQ:GMAB), upgrading the stock from Market Perform to Outperform. The upgrade followed Genmab’s announcement on Monday that Johnson & Johnson (NYSE:JNJ), priced at $167.70, will not proceed with the development of GEN3014 (HexaBody-CD38). Genmab hosted an investor call to discuss this update, which included initial results from a comparative study of GEN3014 against Darzalex. The study indicated potentially deeper responses from GEN3014, providing some validation for Genmab’s HexaBody platform. However, the results were not compelling enough for Johnson & Johnson or Genmab to further pursue GEN3014’s development for other indications.
The decision by Johnson & Johnson not to opt into GEN3014’s development was significant for Genmab, as analysts had been cautious about the drug’s prospects in surpassing Darzalex in direct comparisons. With this uncertainty now resolved and the anticipated decline in share value accounted for, investors can redirect their attention to Genmab’s pipeline. The company has several potential blockbuster treatments in the works, including Epkinly, Rina-S, and acasulimab.
Genmab’s pipeline is robust, with a series of Phase III results expected to start being reported in 2026. Analysts project that Genmab could generate nearly $6 billion in revenues in 2032, which would be the first full year after the expiration of Darzalex royalties. The company’s current financial trajectory is already impressive, with revenue growing 30.67% over the last twelve months to $2.99 billion, while maintaining strong cash flows that exceed debt obligations. This potential for substantial future earnings contributed to the analyst’s decision to upgrade the stock rating.
The upgrade by William Blair reflects a positive outlook for Genmab’s future, as the company focuses on its promising pipeline of treatments. With the market’s anticipation of the Johnson & Johnson decision now in the past, Genmab’s shares have been given a vote of confidence by analysts, who see a clear path ahead for the biotech firm’s growth and revenue generation.
In other recent news, Genmab A/S disclosed that Johnson & Johnson has decided not to continue with the development of the HexaBody-CD38 program, as noted in a recent SEC filing. This decision follows Genmab’s presentation of clinical data, which showed a promising 55% overall response rate for HexaBody-CD38, but J&J opted not to pursue further development. Despite this setback, Genmab’s CEO emphasized the strength of the company’s late-stage clinical pipeline, including EPKINLY® and other assets in Phase 3 development. Truist Securities responded to these developments by adjusting Genmab’s stock price target from $50 to $45, while maintaining a Buy rating. The firm believes the market has undervalued Genmab’s strong fundamentals and pipeline, despite the recent J&J decision. Additionally, Genmab has reported recent managerial share transactions, which are closely monitored by investors as indicators of internal confidence in the company’s prospects. The company also announced the grant of restricted stock units and warrants to employees, aligning their interests with shareholders and incentivizing staff. These recent developments highlight Genmab’s focus on transparency and strategic alignment with its workforce, as it continues to navigate its partnerships and product pipeline.
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