Morningstar | We're Expecting Robust Darzalex Sales, but Genmab Needs Diversification to Earn a Moat
Genmab uses its expertise in antibody technology to develop cancer drugs, including the highly promising first-in-class multiple myeloma treatment Darzalex (daratumumab). Its DuoBody and HexaBody technology platforms have attracted a number of biopharma partners. Darzalex is currently on the market for fourth-line relapsed/refractory patients, second-line treatment (in combination with dexamethasone and Velcade/Revlimid), and was recently approved in the U.S. for front-line therapy (with Velcade, melphalan, and prednisone, or VMP). Most significantly, the drug has the potential to be a cornerstone in a front-line combination drug regimen with dexamethasone and Revlimid in the U.S. and VMP in Europe. The company and its partner Johnson & Johnson have a slew of trials evaluating Darzalex in combination with other drugs in front-line multiple myeloma. Approval will unlock a larger patient population and commercial opportunity.Genmab also markets Arzerra (ofatumumab) in chronic lymphocytic leukemia, or CLL, but we have low expectations for the drug, especially after its partner Novartis decided to phase out commercialization of the drug in the United States in late 2017. Arzerra faces steep competition against Johnson & Johnson/AbbVie’s more effective BTK inhibitor Imbruvica, as well as Roche’s entrenched CD20 antibody platform, which includes Rituxan and second-generation drug Gazyva. Genmab receives midteen royalties from J&J on Darzalex sales, which is supplemented by milestones from the company’s robust technology platform partnerships and progressing pipeline in other oncology and autoimmune indications.The company has transitioned out of the cash-burning stage and is now on its way toward becoming a more mature biotech firm, with a plan to retain more product ownership in its pipeline in exchange for more developmental risk and cost. With its robust partnered pipeline and growing contribution of Darzalex royalties, we believe Genmab is well positioned to pave a way toward greater product ownership and commercial success.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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