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]

现在回头看，人口老龄化在长尺度上确实带来了持续的超额动力，和科技突破以及支付能力提升一起，推动卫 生支出占中国GDP的比重从以前的3%提高到现在的超过7%，预计10年内会进一步提升到10%以上。但医药的 需求优势是个相对优势，随着中国名义GDP的持续减速，过去几年医药行业的整体营收增速也在不可避免地趋 势性放缓。 反而是 国内医药的供给端，凭借成功的转型升级释放工程师红利优势，开始出现越来越明显的加速突破迹象 。当前阶段，中国医药行业相比海外的供给优势明显强化，而需求优势明显弱化，这对我们的投资方向选择可 能有着较为重要的影响。 青侨阳光医药投资 - 月度思考 几年前，当大家谈起投资医药的逻辑时，最常听到的理由是人口老龄化，因为老龄人口占比提升会给医药带来 源源不断的需求增强。 以下图统计的公司为例，用2023年的研发开支去除以在研管线数量得出的每10亿美元支撑的研发管线数，欧美 头部药企普遍是15-16款左右，日本药企典型是30+款，而中国药企平均有100+款，超过欧美MNC(跨国公司)的 6倍！考虑国际多中心临床的规模和占比等，日本药企或许更具可比性，但就算跟日本企业比，中国药企的成 本效率优势依然十分巨 ...

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]

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]