Legend Breaks Out After Leaked Documents Show Promise In $9.6 Billion Market

Legend Biotech's stock soars on positive cancer test results, with an opportunity for a $9.6 billion market.

Blog

Apr 26, 2023 • 2 min read

An analyst stated Wednesday that Legend Biotech (LEGN), which is a blood cancer drug, faces a $9.6-billion opportunity. The stock of LEGN soared after reportedly positive results from tests for Carvykti.

Stat News reported that the results of the study were published online on Tuesday evening. Legend and its partner Johnson & Johnson tested Carvykti on patients with second-to-fourth-line multiple lymphoma - meaning that they had undergone one to three prior treatments. In the Phase 3 Cartitude-4 study, Carvykti reduced the risk of relapse by 74%.

RBC Capital Markets' analyst Leonid Timothy says that the leaked data adds to the growing evidence suggesting Carvykti may be the best CAR-T treatment for multiple myeloma. CAR-T drugs work through reprogramming the patient's immune cells to hunt down and destroy cancer cells.

In a client note, he stated that the results of Cartitude-4 showed "unambiguously meaningful benefits over standard care." This, he added, could help to position the drug as not only the preferred CAR T, but also as the preferred option for treating patients with multiple myeloma.

Today, LEGN's stock closed at 62.50 after a 19.6% increase. J&J's stock rose 0.9% to close the regular session of trading at 162.53.

In the final phase of their study, Legend & J&J compared Carvykti to standard drugs for myeloma. The standard treatment lasted about a year for patients before the cancer progressed. Timashev stated that Carvykti patients are close to two years free of cancer. Timashev says that these patients may eventually reach four years without cancer recurrence.

He said that this treatment is numerically superior than Abecma (a CAR-T rival from Bristol Myers Squibb BMY and 2Seventy Bio TSVT), a competing CAR T treatment. According to a study conducted recently, patients with multiple myeloma who were treated with Abecma survived for an average of 13.3 months before the cancer progressed.

Timashev maintained his Outperform rating on LEGN and 74-price target.

Bristol and 2Seventy stated in a press release that Abecma also led to a 51% lower risk of relapse, or death.

Timashev stated that the data "solidify Carvykti's position as the best in class cell therapy option for myeloma multiplex." He said that these results represent a $9.6 billion potential treatment opportunity, which is not fully reflected by LEGN's stock.

Ashwani Verma, UBS analyst, says that analysts expect patients to survive 35-40 months before their cancer gets worse.

Verma stated in a client report that "we believe these results give Legend an easy path to add the second-to-fourth-line multiple myeloma patient to (the drug's) label before year-end, which could inflect revenue in 2024."

Carvykti showed positive results in 2 studies involving 79,000 patients.

He said that J&J's peak sales guidance of $5 billion is only achievable if the drug has a 15% market share. He forecasts Legend sales of $3.6 billion by 2030 and reiterates his buy rating for LEGN.

Investor's Business Daily received an email from a representative of Legend Bio that declined to comment.

The news caused LEGN to break out. According to MarketSmith.com, shares topped the buy point at 57.82 from a cup-base.

Follow Allison Gatlin at URL.