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]

Company Updates - Legend Biotech Corporation will present the latest company updates at the 43rd Annual J.P. Morgan Healthcare Conference on January 14, 2025, at 3:45 p.m. PT [1] - The presentation will be led by Ying Huang, Ph.D., the Chief Executive Officer of the company [1] Access Information - Investors and interested parties can access the live audio webcast through the Investor Relations section of Legend's website, with a replay available approximately 48 hours after the event [2] Company Overview - Legend Biotech is a global biotechnology company focused on treating and potentially curing life-threatening diseases, headquartered in Somerset, New Jersey [3] - The company is developing advanced cell therapies utilizing various technology platforms, including autologous and allogeneic chimeric antigen receptor T-cell, gammadelta T cell, and natural killer (NK) cell-based immunotherapy [3] - Legend Biotech operates three R&D sites globally to discover innovative therapeutics for patients [3]

Group 1 - The discussion in the biotech forum has focused on profitable buy-write or covered call strategies for selected biotech stocks over recent months [1] - Legend Biotech Corporation (NASDAQ: LEGN) is highlighted for the first time since January 2024, indicating a renewed interest in the company's commercialization efforts [2] - The investing group associated with the biotech forum offers a model portfolio featuring 12-20 high upside biotech stocks, along with live chat discussions and weekly research updates [2]

Investment Rating - The report assigns a "Buy" rating for the company with a target price of $56.29, indicating a potential upside of 32.9% from the current share price of $42.58 [1][3]. Core Insights - The company has shown significant revenue growth, with CARVYKTI revenue increasing by 88% year-over-year to $286 million in Q3 2024, and a total revenue of $160 million for the quarter, representing a 67% increase [1]. - CARVYKTI is the only therapy clinically proven to significantly extend overall survival in multiple myeloma (MM) patients compared to standard therapies, with a median overall survival (mOS) not reached versus 37.75 months, reducing the risk of death by 45% [1]. - The company has a strong cash position of $1.2 billion, which is expected to support operations until 2026, with plans to reach an annual production target of 10,000 doses by the end of 2025 [1]. Financial Summary - The company reported a revenue of $117 million for 2023, with projections of $285 million for 2024 and $632 million for 2025, reflecting a growth rate of 143.7% and 119.1% respectively [2][4]. - Gross margin is expected to improve, with projections of 59% in 2024 and 54% in 2025 [4]. - The company is projected to achieve a net profit of $62 million by 2026, with a significant reduction in losses expected in the coming years [4].

Investment Rating - Maintains a **Buy** rating with a target price of $76.00, implying a potential upside of 89.1% from the current price of $40.18 [1][3][5] Core Views - **3Q24 Performance Exceeds Expectations**: Revenue grew 67% YoY to $160 million, driven by a 88% increase in collaboration revenue to $143 million Carvykti sales surged 54% QoQ and 88% YoY to $286 million, with expectations of continued growth in 4Q24 due to strong demand for second-line treatment, market share expansion, and capacity ramp-up [1] - **Competition Concerns Overblown**: Despite Arcellx's anito-cel data at ASH, Carvykti's competitive position remains strong due to differences in patient baseline characteristics, higher sCR rates (83% vs anito-cel), and reduced neurotoxicity risks with extended follow-up in CARTITUDE-1 and CARTITUDE-4 studies [2] - **Operational Improvements**: Outpatient administration rate increased to 48% (vs 45% in 2Q24 and 35% in 1Q24), reflecting better safety profile Gross margin improved to 63% (vs 37% in 2Q24 and 51% in 1Q24) [1] Financial Model Updates - **Revenue Forecasts**: 2024E revenue remains unchanged at $630 million, with 2025E and 2026E forecasts also steady at $1,051 million and $1,382 million respectively [4] - **Profitability Adjustments**: Gross margin assumptions raised to 58.0% for 2024E (vs 48.0% previously), 60.0% for 2025E (vs 53.0%), and 63.0% for 2026E (vs 60.0%) Net loss for 2024E revised to $276 million (vs $264 million previously), with breakeven expected in 2026E [4] - **Sales Expense Increase**: Sales expenses surged 110% YoY in 3Q24 due to expanded marketing efforts and team growth following 2-4L MM approval [1] Industry Context - **CAR-T Market Dynamics**: Carvykti's rapid adoption in frontline therapy is expected to limit opportunities for competitors in later-line treatments, reinforcing its market leadership [2] - **Peer Comparisons**: Among covered biotech companies, Legend Biotech (LEGN US) has the highest potential upside at 89.1%, followed by Genscript Biotech (1548 HK) at 163.3% and Novotech (6996 HK) at 487.2% [8]

Financial Data and Key Metrics - CARVYKTI net trade sales in Q3 2024 were approximately $286 million, representing an 87.6% year-over-year increase and a 53.2% quarter-over-quarter increase [13] - Total revenues for Q3 2024 were $160 million, consisting of $143 million in collaboration revenue and $17 million in license revenue [23] - Net loss for Q3 2024 was $125 million, or $0.34 per share, compared to a net loss of $62 million, or $0.17 per share, in the same period last year [24] - Unrealized foreign exchange losses of $63 million were incurred in Q3 2024, primarily due to intercompany transactions between U S and non-U S legal entities [24] Business Line Data and Key Metrics - CARVYKTI achieved a 45% reduction in the risk of death compared to standard therapies after a three-year follow-up period, marking a significant milestone in multiple myeloma treatment [8] - CARVYKTI maintained significant improvement in progression-free survival compared to standard of care [9] - Over 4,000 patients have been treated with CARVYKTI, with a very low incidence of parkinsonism [10] - CARVYKTI received approval from China's National Medical Products Administration for fourth-line plus treatment [11] Market Data and Key Metrics - CARVYKTI is commercially available in Switzerland, the United States, Germany, Austria, and Brazil [15] - Outpatient treatment now comprises up to 48% of CARVYKTI volume, representing a significant growth opportunity [16] - CARVYKTI has achieved nearly 90% market share in the BCMA CAR-T class of sales in the U S and Germany [16] - OUS sales increased over 100% year-over-year and 35% quarter-over-quarter, driven by capacity expansion and launch efforts [14] Company Strategy and Industry Competition - The company is focusing on expanding CARVYKTI's market share in earlier lines of treatment, with expectations that the majority of patients will be treated in the CARTITUDE-4 population by next year [51] - A new research facility in Philadelphia is being built to expedite innovative cell therapy research, with operations expected to begin in summer 2025 [20] - The company is prioritizing markets such as the U S and Europe over China due to supply constraints and availability of lentiviral vector [103] - CARVYKTI's delayed CRS onset profile allows for extensive outpatient administration, providing a competitive advantage [16][73] Management Commentary on Operating Environment and Future Outlook - Management expects sequential growth in Q4 2024, driven by continued demand and manufacturing efficiencies [14] - The company plans to submit CARTITUDE-4 overall survival results to regulatory authorities in the U S and Europe to update the label [10] - Management highlighted the importance of outpatient treatment as a key differentiator for CARVYKTI, especially as the number of patients increases [16] - The company believes it has sufficient capital to fund operating and capital expenditures into 2026, when it expects to achieve operating profitability [31] Other Important Information - The company appointed Alan Bash as President of the CARVYKTI business unit to oversee its continued growth [17] - Enrollment for the CARTITUDE-5 trial is complete, and enrollment for CARTITUDE-6 is expected to be completed next year [19] - The company is exploring the use of MRD negativity as a potential endpoint for CARTITUDE-6, with plans to discuss this with the FDA [91] - The company is actively engaging with patient advocacy groups and community DPOs to expand CARVYKTI's reach in the outpatient setting [121] Q&A Session Summary Question: What are the key data points to focus on for the upcoming ASH update? - The company emphasized the importance of durability and progression-free survival (PFS) in evaluating CARVYKTI's efficacy, with nearly three years of PFS demonstrated in the CARTITUDE-1 trial [38] - Safety data, particularly the low incidence of neurotoxicity and parkinsonism, was highlighted as a key focus area [39] Question: How should we think about quarter-over-quarter growth in Q4 2024? - Management confirmed expectations of sequential growth in Q4 2024, driven by continued demand and manufacturing efficiencies [46] Question: What are the drivers of outpatient adoption for CARVYKTI? - Outpatient adoption is driven by the delayed CRS onset profile of CARVYKTI, which allows for remote monitoring and reduces hospital burden [55][73] Question: What are the expectations for Europe following the approval of commercial production in Belgium? - Europe's adoption of CAR-T therapies has been slower due to pricing negotiations, but the company expects growth in key markets like Germany [83][84] Question: What is the timeline for updates on CARTITUDE-2 cohorts E and F? - Longer follow-up is needed for CARTITUDE-2 cohorts E and F, as these patients typically have prolonged courses, including extensive PFS [90][111] Question: How is the company managing neurotoxicity concerns in earlier lines of treatment? - The company is exploring the use of steroids and ALC monitoring to mitigate neurotoxicity, with plans to incorporate these strategies into future trials [94][99] Question: What are the company's plans for the China launch? - The company is prioritizing U S and European markets due to supply constraints, with ongoing discussions with Johnson & Johnson regarding the China launch [103] Question: What are the implications of the FDA reconsidering black box warnings on CAR-T products? - The company has not had specific discussions with the FDA regarding secondary primary malignancies but noted that the incidence rate is similar to standard therapies [107][108] Question: What are the drivers of the accelerated approval for commercial production in Belgium? - The approval was driven by the quality of the manufacturing operation at the Obelisc facility, with no additional regulatory requirements needed for commercial production in Europe [116][117]

Core Insights - Legend Biotech Corporation reported $160.21 million in revenue for Q3 2024, a year-over-year increase of 66.9% [1] - The EPS for the same period was -$0.34, compared to -$0.17 a year ago, indicating a decline in profitability [1] - The revenue exceeded the Zacks Consensus Estimate of $144.7 million by 10.72%, while the EPS surprise was +39.29% against the consensus estimate of -$0.56 [1] Revenue Breakdown - Collaboration revenues were $142.83 million, surpassing the average estimate of $132.16 million from seven analysts [3] - License revenues reached $17.10 million, exceeding the average estimate of $13.90 million from five analysts [3] - Other revenues were $0.28 million, falling short of the estimated $2.46 million from two analysts [3] Stock Performance - Over the past month, Legend Biotech's shares have returned -19.4%, contrasting with the Zacks S&P 500 composite's +3.3% change [4] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [4]

Revenue Performance - Total revenue for the nine months ended September 30, 2024, was $440.72 million, a 114% increase from $205.68 million in the same period of 2023[14] - License revenue reached $120.12 million, up from $35.17 million year-over-year, representing a 241% increase[14] - Collaboration revenue increased to $314.56 million, compared to $170.37 million in the prior year, marking an 84% growth[14] - Total revenue for the nine months ended September 30, 2024, was $440.7 million, a significant increase of $235.0 million compared to $205.7 million for the same period in 2023[69] - License revenue increased to $120.1 million for the nine months ended September 30, 2024, up from $35.2 million in 2023, driven by $40.0 million from milestones under the Janssen Agreement and $45.0 million from the Novartis License Agreement[70][71] - Collaboration revenue rose to $314.6 million in 2024, compared to $170.4 million in 2023, primarily due to increased sales of CARVYKTI under the Janssen Agreement[72] Financial Loss and Improvement - The loss for the period was $203.31 million, a significant improvement from a loss of $373.44 million in the same period of 2023[14] - Basic and diluted loss per share improved to $0.56 from $1.07 year-over-year[14] - The loss for the nine months ended September 30, 2024, is $203.3 million, compared to a loss of $373.4 million for the same period in 2023, representing a 45.6% improvement[23] - Net loss for the period was $203.3 million, or ($0.56) per share, compared to a net loss of $373.4 million, or ($1.07) per share, for the same period in 2023, indicating improved financial performance[84] Assets and Liabilities - Total assets as of September 30, 2024, were $1.74 billion, down from $1.85 billion at the end of 2023[16] - Total liabilities increased to $619.72 million from $597.24 million at the end of 2023[16] - Total equity as of September 30, 2024, is $1,116.1 million, a decrease from $1,339.6 million as of September 30, 2023[19] - Cash and cash equivalents decreased to $459.28 million from $1.28 billion at the end of 2023[16] - Cash and cash equivalents as of September 30, 2024, totaled approximately $0.46 billion, with time deposits of approximately $0.76 billion, providing liquidity to fund operations into 2026[87][85] Cash Flow and Investment Activities - Cash used in operating activities for the nine months ended September 30, 2024, is $61.96 million, significantly reduced from $297.63 million in 2023[25] - Net cash used in investing activities for the nine months ended September 30, 2024, is $762.70 million, compared to $314.72 million in 2023, indicating increased investment activity[25] - Net cash provided by financing activities for the nine months ended September 30, 2024, was $6.0 million, a decrease from $790.6 million in 2023, reflecting reduced capital raising activities[95][96] Expenses - Research and development expenses rose to $309.11 million, compared to $276.54 million in the prior year, reflecting a 12% increase[14] - Administrative expenses increased to $102.58 million from $78.06 million year-over-year, a 31% rise[14] - The company recognized equity-settled share-based compensation expense of $55.55 million for the nine months ended September 30, 2024, compared to $35.09 million in 2023, reflecting increased compensation costs[25] - Research and development expenses for the nine months ended September 30, 2024, were $309.1 million, an increase of $32.6 million from $276.5 million in 2023, reflecting ongoing investment in cilta-cel and solid tumor programs[76] Inventory and Receivables - The company experienced a decrease in trade receivables of $99.34 million in the nine months ended September 30, 2024, compared to a minimal change in 2023[23] - The company reported a provision for inventory reserve of $6.83 million for the nine months ended September 30, 2024, compared to $1.34 million in 2023, indicating increased inventory risk management[23] - The reserve for inventory increased to $15.8 million as of September 30, 2024, compared to $8.9 million at the end of 2023, indicating higher expired materials[47] Shareholder and Financing Activities - The company issued ordinary shares resulting in a total increase in equity of $234.41 million from private placements and $349.28 million from registered direct offerings during the nine months ended September 30, 2023[19] - The weighted average number of ordinary shares in issue increased to 365,268,372 for the nine months ended September 30, 2024, from 348,293,363 in the prior year[40] - The company issued and fully paid 366,901,007 ordinary shares as of September 30, 2024, an increase from 363,822,069 shares as of December 31, 2023[55] Future Outlook and Plans - The company expects to incur significant capital expenditures in the coming years to ramp up manufacturing capabilities for CARVYKTI and advance clinical development programs[85] - The company expects expenses to increase due to ongoing research and development, clinical trials, and commercialization efforts for CARVYKTI, necessitating substantial additional funding[97] - Existing cash and cash equivalents are projected to fund operating expenses and capital expenditures for at least the next 12 months, despite potential fluctuations in cash requirements[98] - The company has a broad portfolio of earlier-stage product candidates, but may not generate necessary data for marketing approval, requiring continued reliance on additional financing[99] - Financing needs will be met through equity offerings, debt financings, collaborations, and licensing arrangements, which may dilute existing shareholders[100] Regulatory and Market Developments - The company received China's NMPA approval for CARVYKTI for the treatment of fourth-line plus multiple myeloma[66] - The company initiated commercial production at the Obelisc facility in Ghent, Belgium, and launched CARVYKTI in Switzerland during the third quarter[66] - The Novartis License Agreement, effective December 28, 2023, includes an upfront payment of $100 million and potential milestone payments of up to $1.01 billion[36] Economic and Risk Factors - The company has not experienced material impacts on its supply chain due to inflation and rising interest rates, maintaining robust sourcing strategies[67] - Inflation has not materially affected the company's financial condition or results of operations during the nine months ended September 30, 2024 and 2023[105] - The company does not believe it is exposed to any material foreign currency exchange rate risk[106]

Core Viewpoint - Shares of Legend Biotech Corporation (LEGN) have recently declined by 9.8% over the past week, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging to counteract selling pressure [1] Group 1: Technical Analysis - The hammer chart pattern indicates that the stock may have found support, signaling a possible bottom and a reversal in trend [1] - A hammer pattern forms when there is a small candle body with a long lower wick, suggesting that bears may be losing control over the price during a downtrend [2] - This pattern can occur across various timeframes and is utilized by both short-term and long-term investors, although it should be used alongside other bullish indicators for confirmation [2] Group 2: Fundamental Analysis - Recent upward revisions in earnings estimates for LEGN serve as a bullish indicator, with the consensus EPS estimate increasing by 1.9% over the last 30 days, reflecting analysts' agreement on the company's improved earnings potential [3] - LEGN holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [3] - The Zacks Rank is recognized as an effective timing indicator, suggesting that LEGN's prospects are beginning to improve, further supporting the case for a potential turnaround [3]

New data will showcase significantly increased and sustained minimal residual disease (MRD) negativity rates, reinforcing the potential of CARVYKTI to transform outcomes in refractory multiple myeloma MRD data to be featured in oral presentation at the 66th Annual American Society of Hematology (ASH) Annual Meeting SOMERSET, N.J., Nov. 05, 2024 (GLOBE NEWSWIRE) -- Legend Biotech Corporation (NASDAQ: LEGN) (Legend Biotech), a global leader in cell therapy, will present new data on minimal residual disease (M ...