On Tuesday, Redburn-Atlantic initiated coverage on Genmab (NASDAQ:GMAB) A/S (GEN:DC) (NASDAQ: GMAB) stock with a Buy rating, setting a price target of DKK2,899.00.
The biotechnology firm, recognized for developing the successful cancer medicine Darzalex, has been forecasted to achieve peak end-user sales for the drug of approximately $15.7 billion by 2029.
Genmab's Darzalex, a treatment for multiple myeloma (MM) patients, is currently licensed to Johnson & Johnson (J&J) for its development, manufacturing, and commercialization.
The agreement entitles Genmab to receive tiered royalties ranging from 12% to 20%. However, these royalties will discontinue post-2029 in the United States and post-2031 in other international markets due to patent expirations.
In the interim, Genmab is expected to maintain robust sales growth, with projections ranging from 14% to 28%, and earnings per share (EPS) growth estimated between 20% to 34% from 2024 through 2028. This growth is anticipated to be driven primarily by Darzalex and another product, Epkinly.
The company, however, is preparing to confront a significant revenue gap post-patent expiration. Analyst projections indicate that the cessation of Darzalex royalties will result in a revenue shortfall of around DKK18 billion, which equates to 44% of Genmab's total revenue in 2028. The company's future beyond this point will likely depend on its ability to innovate and fill the impending revenue gap.
In other recent news, Genmab A/S has made significant strides in the biotech industry. The company has reported a capital increase, a common practice to incentivize and retain talent, though the specific details were not disclosed.
Genmab has also been making significant advancements in the pharmaceutical field with the FDA approving RYBREVANT, a lung cancer treatment developed in partnership with Janssen, and the European Commission approving Genmab's TEPKINLY® for the treatment of adults with relapsed or refractory follicular lymphoma.
In the realm of financial analysis, H.C. Wainwright maintained a Buy rating for Genmab following these developments, while Truist Securities reduced its price target for Genmab from $53 to $50, maintaining a Buy rating. However, Morgan Stanley resumed coverage on Genmab, assigning an Equalweight rating and setting a price target of $31.00.
These recent developments reflect Genmab's ongoing strategy to invest in its workforce, maintain a competitive edge in the market, and deliver innovative cancer therapies.
Genmab has also issued restricted stock units and warrants to employees as part of its incentive program. The specifics of the increase, such as the number of shares or the financial impact, were not disclosed.
Genmab has been the focus of several significant developments, including the presentation of promising data at the World Conference on Lung Cancer on its acasunlimab + Keytruda treatment regimen.
The findings suggest less frequent dosing might enhance T-cell functionality, potentially improving the tolerability and durability of clinical responses.
InvestingPro Insights
Genmab A/S (NASDAQ: GMAB) presents an intriguing investment opportunity, as highlighted by recent InvestingPro data and tips. The company's market capitalization stands at $15.11 billion, with a P/E ratio of 18.95, suggesting a reasonable valuation relative to its earnings. This is further supported by an InvestingPro Tip indicating that GMAB is trading at a low P/E ratio relative to its near-term earnings growth, which aligns with the article's projection of robust sales and EPS growth through 2028.
The company's strong financial position is evident from its revenue growth, with the latest data showing a 29.58% increase in quarterly revenue. This robust growth supports the article's forecast of 14% to 28% sales growth in the coming years, driven by Darzalex and Epkinly.
An InvestingPro Tip reveals that Genmab holds more cash than debt on its balance sheet, which could be crucial as the company prepares to navigate the potential revenue gap post-Darzalex patent expiration. This financial stability may provide Genmab with the resources needed to invest in innovation and develop new revenue streams.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for Genmab, providing a deeper understanding of the company's financial health and market position.
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