BMO Capital Markets maintained its positive stance on Legend Biotech Corp (NASDAQ:LEGN) by reaffirming an Outperform rating and a price target of $90.00. The endorsement follows Legend Biotech's announcement of its third-quarter sales for Carvykti, which amounted to $286 million. This figure represents an approximate 54% growth quarter-over-quarter, surpassing the consensus estimate among LEGN analysts by 15%, which had forecasted sales of $249 million.
The reported revenue for Carvykti aligns with BMO Capital's projection, which was based on an analysis of IQVIA data and estimated the sales to be between $280 million and $295 million. With year-to-date sales reaching $629 million, BMO Capital anticipates that Carvykti is on track to meet or exceed the consensus sales target of $905 million for the year 2024. This expectation is bolstered by the ongoing manufacturing expansion for the product.
In addition to the current sales performance, BMO Capital highlighted the potential impact of the upcoming Phase III readout for Anito-cel, another Legend Biotech product. The firm noted that the Parkinsonism rate from the Anito-cel trial could potentially influence Legend Biotech's stock by more than 10% by the end of 2024. However, BMO Capital does not view Anito-cel as an immediate or medium-term threat to Carvykti's market position.
The analyst's commentary underscores the significance of the third-quarter sales figures for Carvykti and the potential market movements that could arise from the forthcoming clinical trial results for Anito-cel. The firm's continued Outperform rating indicates confidence in Legend Biotech's market performance and growth prospects.
Legend Biotech Corp. has been experiencing robust growth, particularly in the sales of its cancer treatment drug, CARVYKTI. The third-quarter 2024 revenues for the drug, disclosed by Legend's partner, Janssen, reached a significant $286 million, exceeding both analyst expectations and the Street consensus. Analyst firms such as H.C. Wainwright, BTIG, Barclays, and TD Cowen have maintained their positive ratings on the company, citing strong sales growth.
Legend Biotech is planning to establish a new research and development facility in Philadelphia, a move that is expected to strengthen its cell therapy portfolio. Meanwhile, the company's full-year 2024 revenue forecast for CARVYKTI has been raised from $425 million to $480 million by H.C. Wainwright.
However, it's worth noting that the company's fourth-quarter growth is expected to be more moderate, as production at the new Ghent facility is not anticipated to contribute to revenue until the first quarter of 2025.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on Legend Biotech's financial position and market performance. The company's revenue growth has been impressive, with a 176.93% increase over the last twelve months as of Q2 2024, aligning with BMO Capital's positive outlook on Carvykti sales. This growth trajectory supports the InvestingPro Tip that analysts anticipate sales growth in the current year.
Despite the strong revenue growth, Legend Biotech faces some financial challenges. The company is not currently profitable, with a negative gross profit margin of -30.76% over the last twelve months. This aligns with the InvestingPro Tip indicating that analysts do not anticipate the company will be profitable this year. However, it's worth noting that Legend Biotech holds more cash than debt on its balance sheet, which could provide financial flexibility as it continues to invest in product development and manufacturing expansion.
The stock's recent performance has been volatile, with a -8.05% return over the past week, reflecting the InvestingPro Tip that the stock has taken a big hit recently. Despite this short-term setback, the fair value based on analyst targets stands at $86, suggesting potential upside from the current price levels.
For investors seeking a more comprehensive analysis, InvestingPro offers 5 additional tips for Legend Biotech, providing a deeper understanding of the company's financial health and market position.
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