Genmab: Genmab: From now on, courage to the most patient

Genmab is active in the field of oncology, with seven treatments on the market to date. These include Darzalex, for multiple myeloma, a bone marrow cancer affecting plasma cells. This treatment, which was initially developed with Johnson & Johnson's subsidiary Janssen, accounts for around 65% of Genmab's revenues. Like any pharmaceutical company wishing to keep its head above water - especially in Europe, where successful companies are few and far between, unlike in the United States - the group has a substantial pipeline for future growth. Up until now, investors' hopes have mainly rested on HexaBody CD38, considered to be the successor to Darzalex. But therein lies the rub: earlier this month, Johnson & Johnson announced that it would not exercise its option to license the drug candidate. The announcement of the American giant's decision was eagerly awaited, as HexaBody CD38 is this year's only major breakthrough. As such, JPMorgan analysts in charge of the file recently mentioned "... that JNJ's binary decision on HexaBody CD38 will determine Genmab's share performance in 2025. Refusal could lead to a sharp deterioration in the share price this year." Genmab will not pursue the asset's development on its own. From now on, it's what happens next that raises questions. The Darzalex patent expires in 2029 in the United States, 2030 in Japan and the following year in its main European markets. And for the moment, visibility on the "post-Darzalex" future is rather limited. However, there are grounds for hope concerning this company, which has historically been well managed with a net cash position, and whose reputation in the sector is well established. The group has a promising pipeline. Leading the way is Epkinly, which reported sales of close to $300m last year. The drug is co-owned with AbbVie, and the results of several studies will be announced by the end of next year. Rina-S is another drug that has high expectations. It stems from last year's acquisition of ProfoundBio and targets ovarian and endometrial cancers. It follows a Fast Track procedure from the FDA, the regulator of drugs, food and medical devices in the USA. Another future revenue driver could well be Acasunlimab in lung cancer, although this one is still at an early stage and is being developed exclusively by Genmab, without a partnership, since the American BioNTech withdrew from the partnership after refocusing its portfolio strategy. The pipeline contains other early-stage candidates. Of course, it will take a long time to bring them to market, and the risk of clinical failure is not to be overlooked. Finally, there is the possibility of acquisitions. The company has stated that it is ready to get its checkbook out for phase 3 oncology assets: around $2bn could be used for this purpose. The current valuation does not reflect these hopes and possible catalysts. Genmab has certainly failed. JPMorgan estimates that, without additional catalysts, Genmab will face a significant drop in revenues from 2029 onwards, and before that, a 6% annual decline in EBITDA between 2025 and 2030. From 2032 onwards, the company could find itself in difficulty... However, Genmab is well aware of these risks. There are plenty of drugs being developed, and the future may well hold some pleasant surprises, even though in the short term the stock is unlikely to surprise many people. Trading at just 12x earnings for this year and 10x for 2026, the stock's P/E is well below what it has been in previous years, when it remained firmly anchored above 30x. Since its highs, the stock has shed 60% of its value, having lost 11.5% since the beginning of the year. In the coming months and quarters, a piece of good news could give the stock a fresh boost.