Genmab (NASDAQ: GMAB) is a biotechnology company founded in 1999 by Florian Schönharting. The company specializes in monoclonal antibody systems, which can be used in various treatments. Most notably, the company has seen its antibody technology transform into five approved treatments on the market to date. These products include Tivdak, Darzalex, Rybrevant, Kesimpta and Tepazza. Although it already has successful products on the market, the company is not just resting on its laurels. Genmab has several other exciting new treatments in the research and development pipeline between them and an array of partnerships with other companies they have formed.
In this article, I will show that Genmab is quite a valued, up-and-coming company with huge upside potential. Unlike many of its competitors, Genmab has the advantage of having its proprietary antibody treatments on the market in the form of several other drug therapies sold by themselves or through other companies as part of ‘partnership. This allows Genmab to continue its research and development efforts while generating profits. Another factor to consider is the status of the oncology drug market; as one of the largest and most diverse spaces in the healthcare industry, there is a huge opportunity for companies to develop therapies for thousands of potential targets, all of which could potentially save lives. Therefore, any company capable of producing a viable drug for a variety of previously incurable cancers has a great deal of freedom in pricing their drugs. For these reasons, I believe Genmab’s current market portfolio and future pipeline supports strong growth in the coming quarters.
In addition to being a leader in the development of antibody-drug technology, Genmab also owns the rights to several drugs that are already on the market. These drugs treat a number of diseases, ranging from specific cancers to autoimmune diseases, and have been a stable source of revenue for the company. Indeed, it continually pushes the boundaries in terms of research and development to get even more products to market.
Antibody-drug conjugate, Tivdak is a prescription drug used to treat adults with cervical cancer. Tivdak is sold by Seagen, which pays Genmab a percentage based on inclusion in Genmab’s monoclonal antibody technology. In the third quarter of 2021, it was reported that Tivdak had recorded $366.5 million in sales and over $1 billion in total sales since its market launch.
This medicine is a prescription medicine used to treat non-small cell lung cancer. The drug is a target-specific antibody that searches for cancer-causing receptors and blocks them in order to stop growth. The drug has performed well and is expected to generate over $4 billion in revenue by 2028.
This drug breaks away from the more lucrative cancer treatment market and was instead developed to treat relapsing forms of multiple sclerosis. Kesimpta uses Genmab’s antibody technology to deplete MS-causing B cells, effectively treating the disease. Sales of this drug reached $147 million in 2021.
Another departure from the more lucrative oncology market, Tepazza is a drug for people with thyroid eye disease (TED). The drug works by activating the eye receptor switch when the disease goes wrong, causing swelling. As the only FDA-approved treatment for TED, Tepezza raked in an astonishing $1.5 billion in 2021.
This drug is a breakthrough treatment for a specific type of blood cancer called multiple myeloma. As a monoclonal antibody, Darzalex treats cancer by binding to cancer cells and either eradicating the disease itself or triggering the body’s immune system to do the job. In Q3 2021, the drug was reported to have generated nearly $1.6 billion in sales.
Partnership with Synaffix
In 2022, Genmab entered into an agreement with Synaffix, which gave them access to its antibody-drug conjugates (NYSE: ADC) technologies. The partnership grants Genmab the right to use ADC technologies for the development of a specific drug. However, the deal also gives them the ability to develop and market ADCs resulting from this development globally, which would be very profitable. Genmab is responsible for all subsequent R&D costs. What partnership offers is enormous potential. Synaffix brings a state-of-the-art ADC technology platform, and Genmab leverages it with its own antibody development capabilities.
To secure the rights to Synaffix’s ADC platforms, Genmab paid the company $4.5 million upfront. Additionally, on a targeted basis, Synaffix has the right to demand additional payments based on certain milestones achieved during the development of its treatments. The whole deal could be worth up to $415 million. That’s a drop in the bucket compared to what developing a breakthrough cancer treatment might be worth. By combining the two technologies, Genmab has a real chance of developing a blockbuster drug.
As of 2019, the company recorded revenue of $805.5 million. In 2020, that number more than doubled to $1.66 billion In the prior year of 2021, revenue decreased slightly to $1.3 billion, while maintaining the significant growth we’ve seen during the tumultuous 2020. As all of this revenue comes from payments from other companies using Genmab’s technology, almost every dollar of revenue mentioned above counts as profit for the company, making it a very lucrative. In 2019, Genmab had total liabilities of $164.5 million which more than doubled in 2020 to $331.9 million. Last year in 2021, Genmab was able to keep long-term debt largely under control with only a slight increase to $371.9 million.
Genmab was also successful in increasing the company’s cash and cash equivalents. In 2019, the company closed the year with $533.2 million. In 2020, that number doubled to $1.19 billion. In 2021, it has steadily increased to an impressive $1.37 billion. The importance of cash cannot be understated when it comes to biotechs where increased access to capital allows them to support both the development and commercialization of pipeline products. Between 2020 and 2021, Genmab recorded a percentage change in liabilities of 11.4% against an increase in cash of 14%, demonstrating that the growth in cash exceeded the increase in liabilities over the course of the year. past year. This does not even take into account the actual change in cash and liabilities, with cash increasing by over $180 million and liabilities by only $40 million, more than 4 times less. All of these numbers point to a company that has a strong balance sheet with the capital to drive future growth.
Genmab is a biopharmaceutical company with big dreams. He strived to find a cure for as many variants of cancers as possible. It has a very positive track record for developing effective treatments for oncological diseases, as well as a host of others. Their monoclonal antibody platform is one of the best on the market, as evidenced by the number of proven treatments already on the market using their technology. From a business perspective, the numbers tell the story of a company that has defined success and increased its metrics year after year. With savvy partnerships and aggressive research and development, they could very well be on the fast track to even more breakthrough treatment technologies. This will only make them more lucrative in years to come. For these reasons, I believe the company represents a buy for biotech investors looking to expand their exposure to the growing oncology space.