Legend Biotech is staring down a $9.6 billion opportunity, an analyst said Wednesday, as LEGN stock soared on reportedly positive test results for its blood cancer drug Carvykti.
The results were leaked online late Tuesday, according to Stat News. Legend and partner Johnson & Johnson tested Carvykti in patients with second- to fourth-line multiple myeloma — meaning they had already undergone at least one to three previous treatments. Carvykti led to a 74% reduction in the risk of relapse in the Phase 3 study called Cartitude-4.
RBC Capital Markets analyst Leonid Timashev says the leaked results add to a growing body of evidence that suggests Carvykti could be the best in its CAR-T class for treating multiple myeloma. CAR-T drugs work by reprogramming a patient's own immune cells to track down and kill cancer cells.
The results from Cartitude-4 show "unequivocally meaningful benefits over the standard of care, which we believe may work to ultimately position the drug not just as the preferred CAR-T, but as the preferred treatment option among physicians treating multiple myeloma patients," he said in a note to clients.
On today's stock market, LEGN stock surged 19.6% to close at 62.50. J&J stock added 0.9% and end the regular session at 162.53.
LEGN Stock: Rivaling Bristol, 2Seventy
In the final-phase study, Legend and J&J pitted Carvykti against standard drugs for multiple myeloma. Patients who received the standard treatment lived for about a year before their cancer worsened. By comparison, Carvykti recipients are nearing two years without a cancer resurgence, Timashev said. He says these patients could eventually hit four years without their cancer returning.
This is numerically superior to Abecma, a rival CAR-T treatment from Bristol Myers Squibb and 2Seventy Bio, he said. In a recent study, multiple myeloma patients who received Abecma lived for 13.3 months before their cancer worsened.
Timashev kept his outperform rating and 74 price target on LEGN stock.
Further, Abecma led to a lower 51% reduction in the risk of relapse or death, Bristol and 2Seventy said in a news release.
The data "solidify Carvykti as the best-in-class cell therapy option for multiple myeloma," Timashev said. These results offer a potential $9.6 billion treatment opportunity not fully reflected in LEGN stock, he said.
Results Outperform Analysts' Expectations
UBS analyst Ashwani Verma says analysts expected patients in Legend's study to live 35-40 months without their cancer worsening.
"We believe that these results give Legend a clear path to get to the second- to fourth-line multiple myeloma patients added to the (drug's) label by year end, which can inflect 2024 revenue," Verma said in a report to clients.
Carvykti has had positive results in two studies of about 79,000 patients.
"The drug only needs to take 15% share to cross the $5 billion" peak sales guidance provided by J&J, he said. He predicts $3.6 billion in 2030 sales for Legend and reiterated his buy rating on LEGN stock.
A representative of Legend Bio declined to comment in an email to Investor's Business Daily.
The news pushed LEGN stock into a breakout. Shares topped a buy point at 57.82 out of a cup base, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
