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TICKERS: GMAB

Two Approvals Underscore Biotech's Pipeline Quality
Research Report

Source:

The green lights and their implications are discussed in an H.C. Wainwright & Co. report.

In a Jan. 22 research note, H.C. Wainwright & Co. analyst Ram Selvaraju reported that the European Commission approved the regimen consisting of Genmab A/S' (GMAB:NASDAQ) Darzalex (daratumumab) along with Velcade (bortezomib), thalidomide and dexamethasone for newly diagnosed, transplant-eligible multiple myeloma patients.

Approval, which was expected and based on the Phase 3 CASSIOPEIA clinical trial results, was for the marketing of Darzalex in the European Union as a frontline treatment for this indication. "We believe this further supports our recently increased European Union sales multiple (0.8 from 0.75)," Selvaraju commented. This regimen already previously received approval in the U.S.

The analyst also reported that another anticipated approval that affects Genmab occurred ahead of schedule. That approval consisted of priority review, orphan drug, fast track and breakthrough therapy designations by the U.S. Food and Drug Administration (FDA) for Horizon Pharma's Tepezza (teprotumumab) for adult thyroid eye disease. Because Genmab created the molecule decades ago, it is entitled to high single-digit percent royalties on net Tepezza sales.

Taking into account new pricing and market penetration assumptions by Horizon, H.C. Wainwright now projects peak Tepezza global sales of about $1.6 billion versus its previous forecast of $800 million, noted Selvaraju.

He concluded that "the higher sales potential for teprotumumab and faster-than-anticipated FDA approval only underscore the quality of Genmab's pipeline and may portend further upside from other programs, which we believe are currently being overlooked by the Street."

H.C. has a Buy rating and a $25 per share price target on Genmab, whose stock is trading today at around $23.04 per share.

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Disclosures from H.C. Wainwright & Co., Genmab A/S, Company Update, January 22, 2020

Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.

I, Raghuram Selvaraju, Ph.D., certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst's household has a financial interest in the securities of Genmab A/S (including, without limitation, any option, right, warrant, future, long or short position).

As of December 31, 2019 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Genmab A/S.

Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.

The Firm or its affiliates did receive compensation from Genmab A/S for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Genmab A/S during the past 12 months.

The Firm does not make a market in Genmab A/S as of the date of this research report.

H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.




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