Morningstar | GEN Updated Forecasts and Estimates from 09 May 2019
We are maintaining our fair value estimate of DKK 1,160 for no-moat Genmab. The Danish pharmaceutical firm started off the year with strong Darzalex sales in multiple myeloma but softer Arzerra royalties, resulting in DKK 591 million, down 13% from last year, largely due to a one-time payment last year of DKK 304 million related to Arzerra's transition to limited availability. We believe the firm is on track to meet our expectations for the full year.Arzerra, which treats a rare form of leukemia, is being transitioned from commercial availability to limited availability by seller Novartis. We model steady declines for Arzerra royalties, which contribute about 1% of Genmab's total sales. Darzalex royalties make up the bulk of the firm's revenue and contributed DKK 502 million in the first quarter. We expect Darzalex royalties to contribute over DKK 2.6 billion in 2019, up nearly 60% from the prior year.
Operating expenses were mostly in line with our expectations. We expect pipeline cancer therapies tisotumab vedotin and enapotamab vedotin to require significant investment this year. Both are being developed in collaboration with Seattle Genetics, but on the call, management estimated that these projects would account for over half of the company's full-year project spend.
Genmab is a biotechnology company specializing in the creation and development of differentiated human antibody therapeutics focused on the treatment of cancer. Co.'s product pipeline includes one marketed product, Arzerra, daratumumab in late stage clinical development, four antibodies in clinical development, and over 20 in-house and partnered pre-clinical programs. Co.'s Arzerra (ofatumumab) is a human monoclonal antibody which targets an epitope on the CD20 molecule. Co.'s proprietary technologies include the DuoBody technology, which creates antibodies that can target two molecules at once, and the HexaBody technology, which allows for the creation of more potent antibodies.
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