With U.S. President Donald Trump’s tariffs, HC Wainwright analyst writes that investors are looking for companies with macroeconomic moats that protect against tariff exposure and regulatory uncertainty.Legend Biotech Corporation LEGN has no material exposure to tariffs, the analyst stated.The cell therapy company’s lead product, Carvykti, is a one-time treatment for relapsed or refractory multiple myeloma, which it develops and markets with collaborator Johnson & Johnson JNJ.Also Read: Johnson & Johnson/ L ...

Investment Rating - The report assigns a "Buy" rating for the company with a target price of $56.0, indicating a potential upside of 47.2% from the current stock price of $38.05 [4][3]. Core Insights - The company is experiencing rapid growth in its CAR-T therapy, CARVYKTI, with a projected revenue increase of 93% in 2024, reaching $963 million. The total revenue for the company is expected to grow significantly, with estimates of $1.07 billion, $1.70 billion, and $2.35 billion for the years 2025 to 2027 respectively [1][3][5]. - The company is expanding its production capacity, with new facilities in New Jersey and Belgium, and plans to reach an annual production of 10,000 doses by the end of 2025, increasing to 20,000 doses by 2027 [2]. - CARVYKTI is the first CAR-T therapy to demonstrate improved overall survival compared to standard treatment in multiple myeloma, with label updates expected in Europe and the U.S. in 2025 [3]. Financial Summary - The company reported a total revenue of $285 million for 2023, with projections of $627 million for 2024 and $1.068 billion for 2025, reflecting a growth rate of 143.7% and 70.2% respectively [5][6]. - The net profit is expected to improve from a loss of $518 million in 2023 to a profit of $392 million by 2027, indicating a significant turnaround in profitability [5][6]. - The gross margin is projected to improve from 49% in 2023 to 60% by 2027, while the SG&A expense ratio is expected to decrease from 70% to 23% over the same period [6].

交银国际研究 财务模型更新 | 医药 | 收盘价 | | 目标价 | 潜在涨幅 | 2025 年 3 月 12 日 | | --- | --- | --- | --- | --- | --- | | 美元 | | 37.19 | 美元 72.00↓ | +93.6% | | | 传奇生物 (LEGN US) | | | | | | Carvykti 逐季放量能见度高，指引 2Q26 经营层面盈亏平衡，维持买入 公司 4Q24 净利润转正，达到 0.26 亿美元，扣除 1.1 亿美元汇兑收益后与我们 此前的预期基本一致。管理层指引，账上现金 11 亿美元足以支持公司运营至 2Q26，届时公司有望在经营层面实现盈亏平衡。我们认为公司当前股价远未 反映 Carvykti 长期市场潜力，且基本已完全反映对竞争格局变化的预期，重申 买入评级，略微下调目标价至 72 美元。 1 年股价表现 买入 资料来源 : FactSet 3/24 7/24 11/24 3/25 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% LEGN US 恒生指数 股份资料 | 52周高位 ...

Investment Rating - The report maintains a "Buy" rating for the company, Legend Biotech (LEGN US), with a target price of $72.00, indicating a potential upside of 93.6% from the current price of $37.19 [1][2][10]. Core Insights - The company is expected to achieve positive net profit in Q4 2024, reaching $26 million, aligning with previous expectations after accounting for a $111 million foreign exchange gain. Management indicates that the cash on hand of $1.1 billion is sufficient to support operations until Q2 2026, when the company anticipates reaching operational breakeven [2][6]. - The sales of Carvykti are projected to continue growing, with Q4 2024 sales increasing by 17% and 15% in the U.S. and internationally, respectively. The product has already treated over 5,000 patients, and the number of hospitals offering Carvykti treatment has increased to 104 [6][11]. - The report suggests that the current stock price does not fully reflect the long-term market potential of Carvykti, and the target price has been slightly adjusted downwards to $72 [2][6]. Financial Forecasts - Revenue projections for 2025 are set at $1.061 billion, with a slight increase from the previous forecast of $1.051 billion, representing a 0.9% change. For 2026, revenue is expected to rise to $1.48 billion, up 7.1% from the prior estimate of $1.382 billion [5][11]. - The gross profit for 2025 is forecasted at $676 million, with a gross margin of 63.8%. By 2026, gross profit is expected to increase to $951 million, maintaining a gross margin of 64.2% [5][11]. - The net profit for 2025 is projected to be a loss of $55 million, improving to a profit of $131 million in 2026, reflecting a significant turnaround [5][11]. Market Performance - The stock has shown a year-to-date increase of 14.29%, with a 52-week high of $68.01 and a low of $31.53 [5][10]. - The report highlights the importance of new production capacity and market penetration strategies, particularly in the 2L+ multiple myeloma market, which is expected to drive sales growth significantly [6][11].

Financial Performance and Funding - For the year ended December 31, 2023, Legend Biotech transferred $1.27 billion through capital contributions or intercompany loans to its subsidiaries [51]. - Legend Biotech has not declared or paid any cash dividends and has no plans to do so in the near future, intending to apply future earnings to fund clinical development and expansion [50]. - The company has incurred net losses and negative cash flow from operations historically, relying on various funding sources including milestone payments and equity securities [51]. - The company reported net losses of $518.3 million for the year ended December 31, 2023, and an accumulated deficit of $1,661.7 million as of the same date [94]. - The company expects to continue incurring significant losses in the foreseeable future due to ongoing research and development, manufacturing investments, and commercialization efforts [95]. - The company anticipates needing substantial additional funding to complete the development of its product candidates and to sustain operations [97]. - The company relies on additional financing to achieve business objectives, which may not be available on acceptable terms [99]. Regulatory and Compliance Risks - The company faces significant legal and operational risks due to the evolving PRC laws and regulations, which could adversely affect its operations and the value of its ADSs [37]. - The PRC government has indicated an intent to exert more oversight over offerings conducted outside of the PRC, which could limit the company's ability to offer securities to investors [40]. - The company is subject to potential penalties and operational restrictions if deemed non-compliant with PRC regulations, which could materially affect its business [51]. - The Holding Foreign Companies Accountable Act may lead to trading prohibitions if the PCAOB cannot inspect the company's auditor for three consecutive years [42]. - The company has not received or been denied permissions from PRC authorities for its operations, but regulatory developments are being closely monitored [49]. - The company is subject to significant regulatory challenges and risks due to the genetic modification of patient cells in its therapies [113]. - Future regulatory changes could impose additional restrictions, creating uncertainties that may materially affect the company's business and results of operations [191]. Product Development and Clinical Trials - The company is substantially dependent on the commercial success of CARVYKTI for sustaining its business [62]. - The company has established manufacturing facilities in the United States and Belgium to support CARVYKTI production for the U.S. and European markets [67]. - The company is expanding manufacturing capacity at current sites and engaging third-party contract manufacturing organizations to meet anticipated demand for CARVYKTI globally [68]. - The company plans to establish additional manufacturing capacity in the United States and Europe, which involves significant risks and complexities [70]. - The company faces challenges in scaling and validating production processes for cell therapy products, which could impact product availability [72]. - The company initiated the Phase 3 CARTITUDE-5 clinical trial in August 2021, targeting enrollment of approximately 650 patients [105]. - A Phase 3 CARTITUDE-6 clinical trial was initiated in October 2023, targeting enrollment of approximately 750 patients [105]. - The company has a broad portfolio of earlier-stage autologous CAR-T product candidates targeting various cancers, currently in clinical trials [106]. - The company may encounter difficulties in patient enrollment for clinical trials, which could delay development and adversely affect regulatory approval timelines [128]. Market and Competitive Landscape - The commercial success of CARVYKTI will depend on market acceptance by physicians and payors, which is uncertain and may require significant resources for education and marketing [78]. - The potential market for CARVYKTI may be smaller than anticipated, affecting revenue generation and business sustainability [80]. - The company faces significant competition from established pharmaceutical and biotechnology companies, which may impact its market position and profitability [86]. - The company has limited marketing and market access capabilities and plans to invest significantly to enhance these capabilities [84]. - The addressable market for certain product candidates may be limited, as projections regarding the size of the patient population could be incorrect [139]. Manufacturing and Operational Challenges - The manufacturing process for CAR-T cell therapies is complex and costly, with higher production costs compared to traditional small molecule drugs [158]. - The "vein-to-vein" cycle for autologous T cell therapy typically takes approximately four to six weeks, involving multiple steps and human participants [162]. - The company is increasing its facilities and development capabilities, which requires significant capital expenditures and may affect financial condition if costs exceed expectations [171]. - The company is susceptible to product loss or failure due to logistical issues in the manufacturing process, which could impact clinical trial timelines [158]. - Manufacturing facilities are subject to government inspections, and failure to meet regulatory standards could delay product approvals and commercialization efforts [160]. Data Privacy and Security Risks - The company faces a variety of evolving threats, including social-engineering attacks, malware, and denial-of-service attacks, which have increased in number and sophistication [177]. - Increased operating expenses and cash requirements may arise from security incidents, along with potential additional indebtedness or contingent liabilities [178]. - Disruptions or security breaches could result in significant delays in regulatory approval efforts and increase costs to recover or reproduce lost data [179]. - The company may incur material costs related to significant security breaches, and there is uncertainty regarding the adequacy of insurance coverage for such events [180]. - Compliance with stringent data privacy and security laws could lead to government enforcement actions, including fines or penalties, which may adversely affect the company's operations [183]. Internal Controls and Financial Reporting - The company identified material weaknesses in internal control over financial reporting for the fiscal years ended December 31, 2021, and December 31, 2022 [209]. - Affected audited financial statements for the years ended December 31, 2021, 2020, and 2019 were restated, leading to a conclusion of material weakness in internal controls [210]. - The company remediated previously identified material weaknesses by implementing additional review and monitoring controls, hiring new personnel, and engaging external resources [214]. - As of December 31, 2023, the company concluded that the material weaknesses were fully remediated [214]. - The company is subject to reporting obligations under U.S. securities laws, including the Sarbanes-Oxley Act, which requires annual assessment of internal controls [215].

Financial Data and Key Metrics Changes - In Q4 2024, Legend Biotech reported total net sales of CARVYKTI at approximately $334 million, representing a 110% increase year-over-year and a 17% increase from Q3 2024 [13][23] - Total revenues for Q4 were $187 million, consisting of $168 million from collaboration revenue and $18 million from license revenue, with a net profit of $26 million or $0.07 per share compared to a net loss of $145 million or $0.40 per share in the same period last year [24][25] - The adjusted net loss for Q4 was $59 million or $0.16 per share, an improvement from an adjusted net loss of $89 million or $0.24 per share for the same period last year [32] Business Line Data and Key Metrics Changes - CARVYKTI's sales trajectory has been strong, with a significant increase in demand and capacity expansion contributing to the sales growth [11][14] - The collaboration cost of revenue for Q4 was $69 million, up from $32 million year-over-year, reflecting increased manufacturing capacity expansion [26] - Selling and distribution expenses rose to $49 million in Q4 from $34 million in the same period last year, driven by commercial activities for CARVYKTI [29] Market Data and Key Metrics Changes - In the U.S., the number of certified hospitals to treat with CARVYKTI has increased to 104, with outpatient administration expected to account for a majority of the volume by the end of the year [15][112] - Internationally, sales outside the U.S. reached $31 million, a 138% increase year-over-year, attributed to capacity increases and launches in several countries [14] Company Strategy and Development Direction - The company aims to achieve operational breakeven for CARVYKTI by the end of 2025 and anticipates company-wide profitability in 2026, excluding unrealized foreign exchange gains or losses [8][33] - Legend Biotech is expanding its pipeline programs to include blood cancers, next-generation multiple myeloma therapies, solid tumor programs, and autoimmune diseases [20][21] - The company is also building a new research facility in Philadelphia to support its pipeline investments [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory of CARVYKTI, highlighting its unique profile and the strong demand in the market [11][12] - The management team noted that the FDA's recent recommendations regarding MRD negativity as a potential surrogate endpoint could open up further opportunities for CARVYKTI [9] - The company is optimistic about its ability to meet increasing demand through capacity expansions in both the U.S. and Europe [19][100] Other Important Information - The company has treated over 5,000 patients with CARVYKTI, creating a comprehensive patient dataset that continues to generate new data on its benefit-risk profile [17] - The company has received reimbursement approval for CARVYKTI in Spain, enhancing its market presence in Europe [13] Q&A Session Summary Question: Inquiry about safety profile and trial plans for managing ICANS and neurotoxicity - Management discussed ongoing efforts to harmonize ALC cut-offs for risk mitigation strategies and plans for future investigator-initiated trials [36][40] Question: Plans for ASCO updates - Management indicated excitement about data to be presented at ASCO but could not disclose specifics until abstracts are accepted [46] Question: Commercial revenue breakdown and demand for CAR-T therapy - Management reported strong receptivity to CARTITUDE-4 data and noted nearly 60% of usage has shifted to earlier lines of therapy [53][54] Question: Share count and pipeline data expectations - Management clarified the increase in share count and provided insights into upcoming data from early pipeline programs [58][62] Question: Revenue growth cadence and capacity expectations - Management expects modest growth in Q1 due to seasonal factors but anticipates significant growth in Q2 and Q3 as manufacturing capacity increases [68][70] Question: Positioning of CAR-T therapies in solid tumor treatment - Management discussed ongoing dose escalation studies for DLL-3 and Claudin18.2% CAR-T therapies, with plans for data presentation later this year [75][78] Question: Demand fulfillment in Europe - Management acknowledged challenges in meeting demand in Europe but emphasized ongoing efforts to ramp up supply from their facilities [145]

Core Insights - Legend Biotech Corporation reported strong financial results for 2024, with total revenue nearing blockbuster status, driven by the success of CARVYKTI in treating multiple myeloma patients [2][6][22] Financial Performance - As of December 31, 2024, Legend Biotech had approximately $1.1 billion in cash and cash equivalents and time deposits, providing a financial runway into the second quarter of fiscal year 2026 [4][6] - Total revenue for the fourth quarter of 2024 was $186.5 million, compared to $79.5 million for the same period in 2023, marking a significant increase [5][9] - License revenue for the year ended December 31, 2024, was $138.4 million, a substantial increase from $35.2 million in 2023, primarily due to the Novartis License Agreement [5][8] - Collaboration revenue for the year was $482.6 million, up from $249.8 million in 2023, reflecting increased sales of CARVYKTI [9] Operational Highlights - CARVYKTI net trade sales reached approximately $334 million in the fourth quarter and $963 million for the full year 2024, with over 5,000 patients treated to date [6][7] - Spain's national health system approved reimbursement for CARVYKTI in second-line plus settings for multiple myeloma patients, expanding its market access [6][7] Expenses and Losses - Research and development expenses for the year were $413.5 million, compared to $382.2 million in 2023, driven by activities related to cilta-cel and solid tumor programs [13] - Administrative expenses increased to $136.8 million for the year, reflecting the expansion of administrative functions and headcount [14] - Selling and distribution expenses rose to $147.5 million, primarily due to costs associated with commercial activities for cilta-cel [15] Net Income and Adjusted Loss - For the fourth quarter of 2024, net income was $26.3 million, or $0.07 per share, a significant improvement from a net loss of $144.8 million, or $0.40 per share, in the same quarter of 2023 [19] - The adjusted net loss for the fourth quarter was $59.1 million, or an adjusted net loss of $0.16 per share, compared to an adjusted net loss of $88.5 million, or $0.24 per share, in the prior year [20][35]

Core Insights - Legend Biotech Corporation will host a conference call on March 11, 2025, to discuss its fourth-quarter and full-year 2024 results [1] - The company is a leader in cell therapy, particularly known for its CAR-T cell therapy product, CARVYKTI, for treating multiple myeloma [3] Company Overview - Legend Biotech employs over 2,500 individuals and is recognized as the largest standalone cell therapy company [3] - The company collaborates with Johnson & Johnson to develop and market CARVYKTI, which is a one-time treatment for relapsed or refractory multiple myeloma [3] - Legend Biotech aims to enhance patient access and therapeutic potential of CARVYKTI while driving future innovations in its cell therapy pipeline [3]

Investment Rating - The report maintains a "Buy" rating for Legend Biotech (LEGN US) with a target price of $76, indicating a potential upside of 119.2% from the current price of $34.67 [2][3]. Core Insights - Legend Biotech's CARVYKTI® sales in Q4 2024 exceeded expectations, with a year-over-year increase of 110% to $334 million, slightly above the forecast of $322 million. The sales also showed a 17% quarter-over-quarter growth, driven by capacity expansion and market penetration in the 2L+ treatment segment [1]. - The company has treated a total of 5,000 patients with CARVYKTI® across commercial sales and clinical studies, showcasing effective commercialization efforts [1]. - For the full year of 2024, CARVYKTI® sales reached $960 million, and the report anticipates sales to double to $1.9 billion in 2025 due to new capacity coming online and the product's approval in mainland China and more European countries [1]. Summary by Sections Sales Performance - Q4 2024 CARVYKTI® sales were $334 million, a 110% increase year-over-year and a 17% increase quarter-over-quarter [1]. - The sales growth in Q4 2024 improved from 88% in Q3 2024, indicating strong market demand and effective sales strategies [1]. Future Projections - The report projects that CARVYKTI® sales will double to $1.9 billion in 2025, supported by new production capacities and market expansions [1]. - The anticipated approval of CARVYKTI® in China and further commercialization in Europe are key drivers for this growth [1]. Market Position - The report highlights that Legend Biotech's current stock price is undervalued, with market concerns over competitive products being deemed excessive [1]. - The company is positioned as a key recommendation in the pharmaceutical sector, reflecting confidence in its growth trajectory and market strategy [1].

Company Overview - The Fortune Teller is a team of two analysts with over 30 years of combined market experience [1] - One of the principals is a formerly licensed investment advisor with a background in asset management [1] - The team holds BAs in Accounting & Economics and Computer Sciences, as well as MBAs, which they use to inform their stock selections [1] Service Offerings - The Fortune Teller leads the investing group Wheel of Fortune, which provides actionable trading ideas across all asset classes, sectors, and industries [1] - The service aims to be a one-stop-shop for investment and portfolio ideas while educating subscribers [1] - Features include the Funds Macro Portfolio (ETFs and CEFs) for less active investors and the Single Macro Portfolio (single equity focused) for more active investors [1] - The service also offers educational content and a live chat room for discussions with like-minded investors and The Fortune Teller team [1]