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On Tuesday, Barclays reaffirmed its confidence in Legend Biotech Corp. (NASDAQ:LEGN), maintaining an Overweight rating and a $94.00 price target on the stock. The positive stance comes after Johnson & Johnson (JNJ), which is covered by a different analyst, reported third-quarter 2024 sales of Carvykti amounting to $286 million, surpassing the consensus estimate of $249 million. This represents a robust quarter-over-quarter growth of 54%.
The impressive sales figures were attributed primarily to the expansion of manufacturing capacity, which also led to market share gains in earlier line multiple myeloma patients. Despite this, there were some concerns raised regarding the potential non-linear progression of manufacturing capacity, which could impact revenues for the fourth quarter of 2024. Nevertheless, Barclays anticipates a modest quarter-over-quarter growth for Q4 2024, which is still expected to significantly exceed the consensus estimate of $905 million.
Legend Biotech, in collaboration with JNJ, has been successfully expanding manufacturing capacity, with the goal of reaching the capacity to support 20,000 patients by the end of 2025. This expansion is on schedule, according to the analyst's conversation with Legend Biotech management. Additionally, the analyst noted that while Parkinsonism may be associated with CAR T therapies, further follow-up is needed to definitively determine the safety and efficacy profiles.
Barclays highlighted Carvykti's strong efficacy, improved safety profile, and unique suitability for outpatient settings as key factors underpinning its commercial success. With a large target patient population in the United States, no impact from IRA, and the challenge for biosimilars to enter the market, Barclays anticipates a multi-billion dollar market opportunity for Carvykti and reiterated their Overweight rating on Legend Biotech shares.
In other recent news, Legend Biotech experienced robust growth in the third quarter, with projections of a 32% rise in Carvykti sales, as reported by TD Cowen. The firm also anticipates $246 million in global sales for Carvykti. However, growth is expected to moderate in the fourth quarter as production at the new Ghent facility is not expected to contribute to revenue until the first quarter of 2025.
BMO Capital, Redburn-Atlantic, and H.C. Wainwright have all given positive ratings to Legend Biotech, with the latter citing the company's plans to establish a new research and development facility in Philadelphia as a positive move for its cell therapy portfolio. Scotiabank reiterated a Sector Outperform rating on Legend Biotech, following the announcement of positive clinical trial results for Carvykti.
Piper Sandler maintained its Overweight rating on Legend Biotech, following the presentation of Phase III CARTITUDE-4 data, which showed that Carvykti reduced the risk of death by 45% compared to alternative treatments. The company's recent revenues of $186 million, primarily driven by Carvykti, exceeded estimates. These developments highlight the potential growth and success of Legend Biotech in the biotechnology sector.
InvestingPro Insights
Recent InvestingPro data provides additional context to Legend Biotech's financial position and market performance. The company's market capitalization stands at $8.34 billion, reflecting investor confidence in its potential. Legend Biotech has demonstrated impressive revenue growth, with a 176.93% increase over the last twelve months as of Q2 2024, aligning with the strong Carvykti sales reported by Johnson & Johnson.
InvestingPro Tips highlight that Legend Biotech holds more cash than debt on its balance sheet, indicating a strong liquidity position. This financial stability is crucial as the company continues to expand its manufacturing capacity for Carvykti. Additionally, analysts anticipate sales growth in the current year, which supports Barclays' optimistic outlook on the company's market opportunity.
It's worth noting that Legend Biotech is currently trading at a high Price / Book multiple of 7.24, suggesting that investors are placing a premium on the company's future growth prospects. For investors seeking more comprehensive analysis, InvestingPro offers 8 additional tips for Legend Biotech, providing a deeper understanding of the company's financial health and market position.
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