Legend Biotech’s SWOT analysis: carvykti success drives stock potential amid challenges

Legend Biotech Corporation (NASDAQ:LEGN), a commercial-stage biotechnology company valued at $6.41 billion, has been making waves in the oncology space with its flagship product Carvykti. As the company continues to expand its market presence and advance its pipeline, delivering impressive revenue growth of 74.75% over the last twelve months, investors and analysts are closely watching its progress. According to InvestingPro data, the company maintains strong financial health with more cash than debt on its balance sheet. This comprehensive analysis examines Legend Biotech’s current position, future prospects, and the factors that could influence its stock performance.

Company Overview and Carvykti’s Market Dominance

Legend Biotech has established itself as a key player in the multiple myeloma (MM) treatment landscape, primarily due to the success of Carvykti, a BCMA-targeted autologous CAR T-cell therapy. Developed in collaboration with Janssen, a subsidiary of Johnson & Johnson, Carvykti has demonstrated impressive clinical results and strong commercial performance since its launch in 2022.

The therapy has shown significant efficacy in treating relapsed or refractory multiple myeloma (r/rMM), with long-term follow-up data from the CARTITUDE-1 study suggesting a median overall survival of 60.6 months. Even more promising is the indication that 33% of late-line r/rMM patients may potentially be cured, a remarkable achievement in this difficult-to-treat patient population.

Carvykti’s commercial success has been equally impressive. In the first quarter of 2025, sales reached $369 million, exceeding consensus estimates by approximately 5% and showing quarter-over-quarter growth of over 10%. This strong performance has been attributed to increased market share in the second-line and beyond multiple myeloma (2L+ MM) setting, rising worldwide patient demand, and expansion of global manufacturing capacity.

Manufacturing and Supply Chain Expansion

One of the key challenges for cell therapies like Carvykti is ensuring adequate manufacturing capacity to meet demand. Legend Biotech has been proactive in addressing this issue, with management reiterating confidence in the second half expansion at their Raritan facility. The company expects to match patient demand by year-end 2025, with a target of reaching 10,000 treatment slots per year.

This expansion is crucial, as supply bottlenecks have constrained Carvykti’s commercial uptake since its launch. However, analysts expect these issues to be largely resolved by the end of 2025, which should allow for a clearer picture of the true demand for the therapy.

Pipeline and Future Prospects

While Carvykti remains the primary focus for Legend Biotech, the company is also advancing a diverse pipeline that provides optionality for future growth. Promising data has been presented from ongoing Phase I studies of LB1908 in gastric and esophageal cancer, as well as LB2102 in small cell lung cancer (SCLC) and large cell neuroendocrine carcinoma (LCNEC).

Upcoming data readouts from DLL3 and CLAUDIN 18.2-targeting CARTs at scientific conferences are eagerly anticipated, as they could reveal additional growth opportunities for the company. This pipeline diversity is seen as a key strength, providing multiple avenues for expansion beyond Carvykti.

Financial Performance and Outlook

Legend Biotech’s financial trajectory is closely tied to Carvykti’s performance. Analysts project continued strong revenue growth, with estimates of $1,007 million for the full year 2025. InvestingPro analysis indicates the company maintains robust liquidity with a current ratio of 4.71, though it remains unprofitable with a negative EBITDA of $209 million. Based on InvestingPro’s Fair Value analysis, LEGN currently appears undervalued. For a deeper understanding of LEGN’s valuation, explore our comprehensive undervalued stocks list. The company is expected to reach profitability by the second quarter of 2026, a significant milestone that would demonstrate the commercial viability of its cell therapy platform.

Despite current negative earnings per share (EPS) estimates for the near term (-$0.25 for FY1), the outlook improves significantly, with projections of $1.34 EPS for FY2. This transition to profitability is a key factor in the bullish outlook many analysts maintain for Legend Biotech.

Bear Case

How might competition from other BCMA-targeted therapies impact Carvykti’s market share?

While Carvykti has established a strong position in the multiple myeloma market, it faces competition from other BCMA-targeted therapies, including bispecific antibodies and allogeneic CAR-T cells. Anito-cel, in particular, has been cited as a potential threat to Carvykti’s market dominance.

The competitive landscape is evolving rapidly, with new therapies entering clinical trials and potentially reaching the market in the coming years. This could lead to pricing pressures and market share erosion for Carvykti, especially if competing therapies demonstrate comparable efficacy with more favorable safety profiles or easier administration.

What risks does LEGN face in terms of manufacturing and supply chain management?

Despite ongoing efforts to expand manufacturing capacity, Legend Biotech still faces risks related to production and supply chain management. The complex nature of autologous CAR-T cell production means that any disruptions in the manufacturing process could lead to treatment delays and potential loss of market share.

Additionally, as the company expands into new geographic markets and treatment settings, it will need to ensure consistent quality and timely delivery of its therapies. Any failures in this regard could damage the company’s reputation and hinder Carvykti’s adoption in community oncology centers, a key area for future growth.

Bull Case

How could expansion into earlier treatment lines boost Carvykti’s market potential?

Carvykti’s initial success has been in later lines of treatment for multiple myeloma. However, the therapy’s potential in earlier lines of treatment represents a significant opportunity for market expansion. Data from the CARTITUDE-4 study has demonstrated improved overall survival and progression-free survival in earlier treatment settings compared to standard therapies.

Moving into second-line treatment could dramatically increase the eligible patient population for Carvykti, potentially driving substantial revenue growth. Additionally, treating patients earlier in their disease course may lead to better outcomes, further solidifying Carvykti’s position as a best-in-class therapy for multiple myeloma.

What impact could positive clinical data have on LEGN’s valuation?

Legend Biotech’s pipeline extends beyond Carvykti, with several promising candidates in early-stage clinical trials. Positive data readouts from these studies, particularly in solid tumors, could significantly boost the company’s valuation by demonstrating the broader applicability of its cell therapy platform.

For instance, encouraging results from LB1908 in gastric and esophageal cancers or LB2102 in small cell lung cancer could open up new market opportunities and reduce the company’s reliance on Carvykti. This diversification would likely be viewed favorably by investors, potentially leading to a re-rating of the stock.

SWOT Analysis

Strengths:

• Strong commercial performance of Carvykti
• Expanding manufacturing capacity
• Robust clinical data supporting Carvykti’s efficacy
• Strategic partnership with Janssen/Johnson & Johnson

Weaknesses:

• Current negative earnings per share
• Heavy reliance on a single product (Carvykti)
• Ongoing supply chain and manufacturing challenges

Opportunities:

• Expansion into earlier lines of treatment for multiple myeloma
• Geographic expansion, particularly in ex-U.S. markets
• Potential for label expansions and new indications
• Promising early-stage pipeline in solid tumors

Threats:

• Increasing competition in the BCMA-targeted therapy space
• Potential regulatory hurdles for new indications or geographic expansions
• Pricing pressures and reimbursement challenges
• Macroeconomic factors affecting biotech valuations

Analysts Targets

• Cantor Fitzgerald: $66.00 (August 27, 2025)
• Barclays: $94.00 (August 12, 2025)
• BMO Capital Markets: $90.00 (June 2, 2025)
• RBC Capital Markets: $78.00 (June 2, 2025)
• Piper Sandler: $78.00 (May 23, 2025)
• Truist Securities: $71.00 (May 14, 2025)

Legend Biotech continues to attract positive attention from analysts, with price targets ranging from $66 to $94, reflecting optimism about the company’s growth prospects and the potential of Carvykti. The majority of analysts maintain bullish ratings on the stock, citing strong commercial execution, expanding market opportunities, and a promising pipeline as key drivers of future value.

In conclusion, Legend Biotech stands at a crucial juncture in its development. With Carvykti’s strong performance and potential for expansion, coupled with a diverse early-stage pipeline, the company appears well-positioned for future growth. Analyst targets range from $54 to $94, reflecting significant upside potential. Want deeper insights? InvestingPro offers exclusive analysis, including 7 additional ProTips and a comprehensive Pro Research Report that transforms complex Wall Street data into actionable intelligence for smarter investing decisions. However, it must navigate challenges such as manufacturing scale-up, increasing competition, and the transition to profitability. As the cell therapy landscape continues to evolve, Legend Biotech’s ability to execute on its strategic initiatives will be critical in determining its long-term success and stock performance.

This analysis is based on information available up to September 2, 2025, and does not include any subsequent developments or market changes.

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