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On Monday, Piper Sandler confirmed its Overweight rating on Legend Biotech Corp. (NASDAQ:LEGN) shares, maintaining a $78.00 price target. The stock currently trades at $32.42, near its 52-week low of $32.08, having declined 46% year-to-date.
According to InvestingPro data, this significant pullback may present an opportunity, with analysts setting price targets ranging from $60 to $95. The firm's analysts have revised their revenue projections for CARVYKTI, anticipating a decrease to $290 million in the fourth quarter of 2024, down from the previously estimated $335 million.
The forecast for 2025 was also adjusted to $1.63 billion from $1.75 billion. Despite the lowered revenue expectations, the analysts view CARVYKTI as the leading product in its class, with demand significantly exceeding the current supply.
The reduction in revenue forecast comes as Legend Biotech and Johnson & Johnson, which is not covered by Piper Sandler, strive to enhance the production capacity of CARVYKTI. The companies aim to scale up the supply to approximately 10,000 autologous doses, estimated to be worth around $5 billion, by the end of 2025.
Several initiatives are underway to achieve this goal, including reaching full capacity at the Obelisc facility in Belgium by the first quarter of 2025 and expecting CARVYKTI production at Novartis (SIX:NOVN)' Morris Plains, New Jersey facility in the first half of the same year.
Further developments include the completion of Johnson & Johnson's Raritan facility expansion in the fourth quarter of 2025 and the launch of a new Tech Lane facility in Belgium during the same quarter. These efforts are part of a long-term strategy to produce between 20,000 to 24,000 CARVYKTI doses, which could potentially generate revenues exceeding $10 billion by the end of 2027.
As of the third quarter of 2024, Legend Biotech reported a strong cash position with $1.2 billion on hand, while also carrying a debt of $297 million owed to Johnson & Johnson. Piper Sandler's reiteration of the Overweight rating and $78 price target reflects their confidence in Legend Biotech's strategy and the anticipated growth in CARVYKTI's production and demand.
In other recent news, Regeneron (NASDAQ:REGN) Pharmaceuticals and Legend Biotech have made notable strides in the biotech sector. RBC Capital Markets released its "Biotech Outlook" report, identifying both companies as top picks with promising prospects for 2025.
Regeneron received an "Outperform" rating, with RBC Capital highlighting the firm's solid fundamentals despite competition. Legend Biotech, on the other hand, was rated "Outperform" with an $86 price target, with RBC Capital expressing optimism about the company's potential sales growth.
Legend Biotech recently reported robust financial results for Q3 2024, showcasing significant growth in sales of their leading CAR T cell therapy, CARVICTI. Despite a net loss of $125 million for the quarter, the company maintains a strong financial position, with substantial cash reserves to support future pipeline development.
Meanwhile, Regeneron Pharmaceuticals has been the subject of several analyst notes. Piper Sandler reiterated its Overweight rating on the stock, while Citi initiated coverage with a Neutral rating. TD Cowen maintained a Buy rating, emphasizing the potential of Eylea HD and Dupixent.
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