Genmab shares drop over 3% on J&J’s amivantamab head and neck cancer data

Investing.com -- Genmab A/S (CSE:GMAB) shares fell more than 3% on Monday after new data from Johnson & Johnson’s amivantamab suggested the drug could rival Genmab and Merus N.V.’s petosemtamab in head and neck cancer treatment.

Truist Securities said results from J&J’s Phase 1 OrigAMI-4 trial showed amivantamab achieved an overall response rate of 44.7%, a duration of response of 7.2 months, and a median progression-free survival of 6.8 months in patients with second-line or later recurrent or metastatic HPV-negative head and neck squamous cell carcinoma. 

Petosemtamab reported a 36% response rate, 6.2-month duration of response, and 4.9-month median progression-free survival in its corresponding study.

Amivantamab was administered as a subcutaneous injection and showed lower rates of EGFR-related toxicities compared with petosemtamab, which is delivered through an intravenous infusion lasting more than four hours. 

According to Truist, 7% of patients treated with amivantamab experienced administration-related reactions, none of which were grade 3 or higher. No new safety signals were reported in the trial.

Truist noted that the OrigAMI-4 study excluded HPV-positive patients, while about 20% of those in the petosemtamab study were HPV-positive, a group that typically shows limited response to EGFR-targeted therapies. 

When adjusted for similar patient populations, Truist said both therapies demonstrated comparable efficacy.

Following the results, Janssen, the pharmaceutical arm of Johnson & Johnson, announced plans to initiate the Phase 3 OrigAMI-5 trial. 

The study will test a combination of amivantamab, pembrolizumab, and carboplatin in first-line HPV-unrelated recurrent or metastatic head and neck squamous cell carcinoma.

Truist described the new amivantamab data as a potential competitive challenge to petosemtamab but said Genmab’s drug is still on track to be first to market, with a 12- to 18-month lead over amivantamab. 

The brokerage maintained its “buy” rating on Genmab with a price target of $49, unchanged from prior coverage.

Genmab, based in Denmark, is in the process of acquiring Netherlands-based Merus and also receives royalties from Johnson & Johnson on amivantamab.

Truist last closed Genmab’s stock at $33.17 on Oct. 17. Merus was last quoted at $94.89, and Johnson & Johnson is not rated by Truist Securities.

Truist said the company’s $49 target for Genmab is based on a probability-adjusted discounted cash flow analysis, factoring in cash flow projections through 2035 from key products including Darzalex, Epkinly, Tivdak, Rina-S, Petosemtamab, Acasun, and GEN1042. The valuation applies an 11% discount rate and a 2% terminal growth rate.

Truist Securities reiterated that Genmab’s key risks include clinical or regulatory setbacks for its core products, potential delays in commercial expansion, and competition in multiple myeloma that could affect sales of Darzalex.