On Thursday, H.C. Wainwright maintained a positive outlook on Legend Biotech Corp. (NASDAQ:LEGN), reaffirming a Buy rating and a $73.00 price target for the company's shares. The endorsement follows Legend Biotech's announcement of its plans to establish a new research and development (R&D) facility in Philadelphia, PA, which is expected to enhance its cell therapy portfolio.
The new R&D center, which is projected to span 31,000 square feet, is part of Legend's strategic expansion to bolster its global R&D capabilities that currently include more than 350 employees worldwide. The facility is anticipated to be operational by the third quarter of 2025. Approximately 55 of Legend's staff, out of more than 1,200 employees, are expected to be stationed at the Philadelphia location.
This development is an extension of Legend's current R&D presence in the United States, which includes an existing site in Piscataway, NJ. The expansion is not only aimed at strengthening the company's research efforts but also at freeing up commercial manufacturing slots. This is particularly significant for increasing the long-term manufacturing capacity of CARVYKTI, Legend's cell therapy product which has faced supply constraints.
The firm underscored the importance of enhancing CARVYKTI's commercial supply, especially after the therapy's recent approval for second-line (2L) treatment earlier this year. The approval is likely to drive increased demand for the product, making the expansion of manufacturing capabilities a critical move for Legend Biotech.
In light of the recent developments, H.C. Wainwright reiterated its confidence in Legend Biotech's stock performance, upholding the 12-month price target of $73 per share. The company's strategic initiatives appear to be aligned with its growth trajectory and efforts to meet the rising demand for its innovative therapies.
In other recent news, Legend Biotech has been in the spotlight due to compelling data on Carvykti and robust revenue results. The company's cancer treatment, Carvykti, has shown promising results in recent clinical trials, reducing the risk of death by 45% in patients with relapsed or refractory multiple myeloma. Scotiabank, BMO Capital, Piper Sandler, and H.C. Wainwright have all maintained positive ratings on Legend Biotech, citing the strong potential for Carvykti's sales growth.
Legend Biotech's recent revenues of $186 million, primarily driven by Carvykti, exceeded estimates. Analysts from Piper Sandler expect Carvykti's revenue to reach $918 million this year and potentially double by 2025.
In addition, Legend Biotech received approval from China's National Medical Products Administration for Carvykti, further strengthening its market position. Despite speculation around potential mergers and acquisitions, Legend Biotech has reassured investors that the Biosecure Act is not expected to significantly impact its operations.
Analyst firms Scotiabank, TD Cowen, and BTIG have revised their price targets for Legend Biotech, maintaining a positive outlook.
InvestingPro Insights
Legend Biotech's strategic expansion aligns with its robust revenue growth, as reflected in InvestingPro data. The company's revenue grew by an impressive 176.93% over the last twelve months as of Q2 2024, with quarterly revenue growth of 154.36% in Q2 2024. This significant growth trajectory supports the company's decision to invest in a new R&D facility.
However, investors should note that Legend Biotech is currently not profitable, with a negative operating income margin of -81.89% over the last twelve months. This aligns with an InvestingPro Tip indicating that analysts do not anticipate the company to be profitable this year.
Despite these challenges, another InvestingPro Tip highlights that Legend Biotech holds more cash than debt on its balance sheet, suggesting financial stability as it pursues expansion. This strong cash position could be crucial in supporting the company's growth initiatives, including the new Philadelphia R&D center.
For investors seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Legend Biotech, providing deeper insights into the company's financial health and market position.
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