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On Thursday, Scotiabank adjusted its outlook on Legend Biotech Corp. (NASDAQ: LEGN) shares, raising the price target to $70.00 from the previous $65.00. The firm maintained its Sector Outperform rating on the biotechnology company's stock. The revision follows what the bank identifies as a significant sales beat by Legend Biotech's Carvykti, which is used in the treatment of multiple myeloma.
The analyst noted that the recent sales performance could signal the start of a sales increase in the second-line and beyond (2L+) multiple myeloma treatment market. Despite previous assertions that sales in the first half of 2024 would not be crucial, the unexpected growth has led to an upward revision of the total sales forecast for 2024, consequently boosting the price target.
The continued Sector Outperform rating echoes Scotiabank's optimism regarding Legend Biotech's future growth prospects. The analyst anticipates that the company's growth will accelerate following the planned expansion of its commercial manufacturing capabilities. The first expansion is expected in the fourth quarter of 2024, with additional growth anticipated in 2025.
Legend Biotech's recent performance in Carvykti sales has been a key factor in the revised sales estimates and price target. The company's progress has been closely monitored by investors seeking to gauge the potential of its pipeline and commercial strategies.
The new price target of $70.00 reflects a positive outlook on Legend Biotech's ability to capitalize on its current momentum and expand its market presence in the coming years. This development is particularly significant as the company prepares to enhance its manufacturing capacity, which is seen as a critical step in meeting the growing demand for its treatments.
In other recent news, Legend Biotech has been the subject of various analyst reports following significant developments in its cancer treatment, Carvykti. TD Cowen revised its price target for Legend Biotech, expecting a slower growth for Carvykti, while maintaining its Buy rating.
H.C. Wainwright and BMO Capital, however, have maintained their Buy and Outperform ratings respectively, with H.C. Wainwright setting a price target of $73.00 and BMO Capital at $90.00. RBC Capital also reiterated its Outperform rating, citing strong demand for Carvykti and improved manufacturing metrics.
Legend Biotech's Carvykti demonstrated a significant survival benefit in a multiple myeloma study, according to recent trial results. This finding comes from the second interim analysis of the CARTITUDE-4 study, a Phase 3 trial involving patients with relapsed and lenalidomide-refractory multiple myeloma. The safety outcomes were consistent with the known safety profile of Carvykti, and no new safety concerns were identified.
Piper Sandler projects that Carvykti's revenues will reach $900 million this year, with a substantial increase to $1.75 billion by 2025. These projections reflect the analysts' confidence in Legend Biotech's strategic direction and the commercial prospects of Carvykti. Legend Biotech has also initiated IND-enabling studies for two allogeneic therapies and ended the first quarter of 2024 with approximately $1.3 billion in cash reserves.
InvestingPro Insights
As Legend Biotech Corp. (NASDAQ: LEGN) garners attention with its recent sales performance, insights from InvestingPro provide a deeper look into the company's financial health and market position. With a significant revenue growth of 206.05% in the last twelve months as of Q1 2024, the company demonstrates a strong upward trajectory in sales. Moreover, Legend Biotech holds more cash than debt on its balance sheet, indicating a solid liquidity position that can support its planned expansions.
InvestingPro Tips suggest that while analysts are optimistic about sales growth in the current year, they do not anticipate the company will be profitable this year. Additionally, despite the strong sales growth, the company suffers from weak gross profit margins. These factors are essential for investors to consider when evaluating the company's long-term profitability.
For those interested in further analysis, there are an additional 10 InvestingPro Tips available, which can be accessed at: https://www.investing.com/pro/LEGN. To enhance your investment research, use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
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