Positive Outlook On Johnson & Johnson's Partner Legend Biotech: Analyst Confident On Blood Cancer Drug

Legend Biotech Corporation's LEGN partner, Johnson & Johnson JNJ, reported Q3 Carvykti revenues of $152 million, up 30% sequentially.

Accordingly, HC Wainwright is upwardly revising near-term revenue estimates to reflect the faster-than-expected uptake of Carvykti, with updated FY23 projections for Carvykti revenue (to be reported by Legend) at $262 million vs. the prior $248 million. 

The analyst reiterates the Buy rating, modestly modifying the price target to $86 from $85 per share, and expects strong Carvykti growth in 4Q23 and beyond. 

HC Wainwright notes that Legend has been facing a significant supply constraint overhang, and gradual alleviation of this limitation will continue to drive growth in 4Q23 and beyond. 

Ultimately, J&J and Legend aim to have 10K doses' worth of annual capacity available by 2025. 

Legend expects meaningful sales impact related to positive CARTITUDE-4 data slated to occur in 2024. 

In June, Legend submitted an FDA supplemental Biologics License Application for expanded use of Carvykti to include adult patients with relapsed and lenalidomide-refractory multiple myeloma.

The analysts Mitchell Kapoor and Raghuram Selvaraju see a very high likelihood of approval.

They note that the advantages of Carvykti therapy have consistently held across various treatment stages. This consistency is the primary confirmation of the theory that the product might have its most significant influence even earlier in the treatment process.

Price Action: LEGN shares are down 1.05% at $67.01 on the last check Wednesday.