What's Going On With Danish Healthcare Firm Genmab Stock?

Monday, in a significant legal update for Genmab A/S GMAB, an appeal arbitrator has dismissed the biotech company’s bid for additional milestone and royalty payments related to Darzalex (daratumumab). 

In an SEC filing, Genmab announced that the appeal arbitrator in its second arbitration arising under its license agreement with Janssen Biotech Inc, Johnson & Johnson’s JNJ unit, for daratumumab had denied Genmab’s appeal. 

As a result, the dismissal of Genmab’s claims in the second arbitration is now concluded. Genmab had appealed the tribunal’s two-to-one decision dismissing Genmab’s claims because the claims should have been brought in the prior arbitration between Genmab and Janssen.  

Genmab’s claims were based upon its position that the subcutaneous formulation of daratumumab (SC daratumumab), marketed as Darzalex Faspro in the U.S., is a new licensed product under the license agreement.

The claims included a claim for milestone payments concerning SC daratumumab and a new 13-year royalty term on a country-by-country basis from the date of the first commercial sale of SC daratumumab in each such country.

The decision in the arbitration appeal will not affect Genmab’s upcoming financial guidance for 2024.

William Blair writes that it did not have any expectations for the original decision to be overturned, so this does not change its view that investors remain focused on Genmab’s pipeline opportunities.

Genmab’s diverse revenue sources, such as royalty agreements for drugs like Darzalex and Kesimpta, are expected to contribute to strong growth and support the company’s current valuation. 

However, the limited commercial potential of Tivdak and epcoritamab suggests that their impact on revenue may be restrained initially. Despite these programs having long-term potential in larger indications, their success will take time. 

Genmab’s successful DuoBody platform will likely sustain a robust research and development pipeline, incorporating new antibody platforms. Nevertheless, considering the current valuation and short-term prospects, William Blair keeps a Market Perform rating.

Price Action: GMAB shares are down 3.28% at $27.74 on the last check Tuesday.

Image by Okan Caliskan from Pixabay