Morningstar | Genmab Reports Solid 3Q With Darzalex Growth; Maintaining FVE of DKK 1,160
No-moat Genmab's third-quarter results were mostly in line with our expectations, posting DKK 599 million in total revenue, an 85% increase from last year due to strong uptake of Darzalex globally. Operating expenses have increased from last year as well, with third-quarter expenses reaching DKK 398 million, up 50% from last year. The firm maintained full-year guidance, and after some minor near-term adjustments, we are maintaining our fair value estimate of DKK 1160 per share.On Aug. 31, Genmab announced that Darzalex was approved in combination with Velcade, melphalan, and prednisone, or VMP, in Europe for front-line multiple myeloma in patients ineligible for stem-cell transplant, following U.S. approval in May. As we've written before, the VMP combination regimen is used more broadly in Europe than the U.S., so we expect this label expansion to have a positive impact on sales in the fourth quarter. In the first nine months of 2018, Genmab reported Darzalex royalty income of DKK 1.1 billion, and with this label expansion, we estimate 2018 royalty income can reach DKK 1.8 billion. The company anticipates additional label expansions in 2019 and beyond after reporting positive top-line results from the Phase 3 studies of Darzalex and Velcade, thalidomide and dexamethasone or Revlimid and dexamethasone in front-line multiple myeloma in October. Both trials met their respective primary endpoints and both data sets have been submitted for presentation at the American Society of Hematology meeting in early December. If approved, the eligible patient population for Darzalex would expand considerably because the VTD combination would be for patients eligible for transplant and the DRd combination would be for patients ineligible for transplant. We expect the combination with Revlimid and dexamethasone to be a significant driver to capture front-line patients in the U.S., if approved.
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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