Next Generation Cell Therapy Will Expand Global Patient Access

Key Takeaways

• Solid pipeline and regulatory tailwinds drive expanded patient access, wider adoption, and long-term revenue growth in multiple myeloma therapies.
  
• Global roll-out and scaling production enhance operating leverage, broaden market reach, and improve margins while maintaining competitive advantage with innovative CAR-T technologies.
  
• Overdependence on a single product, emerging competition, costly pipeline investments, and reliance on major partnerships threaten long-term revenue growth, margins, and profitability.

Catalysts

Through its subsidiaries, operates as a biopharmaceutical company that discovers, develops, manufactures, and commercializes novel cell therapies for oncology and other indications in the United States, China, and Europe.

• Significant expansion potential in both earlier lines of therapy and frontline settings for multiple myeloma, driven by strong survival data, ongoing clinical trials (CARTITUDE-5 and -6), and label updates that increase patient access-setting up long-term revenue acceleration as the patient pool widens.
  
• Increasing international penetration with recent launches in multiple European and global markets, supported by ongoing manufacturing expansion and supply chain optimization, is expected to materially broaden Legend's total addressable market and improve gross and net margins as production scales.
  
• Streamlined regulatory environment, including the FDA's removal of REMS requirements and new policy changes facilitating outpatient administration, is reducing logistical obstacles for community and regional centers-enabling wider treatment adoption, faster patient throughput, and improved operating leverage.
  
• Robust innovation pipeline, including next-generation CAR-Ts and in vivo/off-the-shelf cell therapy technologies (e.g., TaVec platform), positions Legend to capitalize on rising demand for advanced, personalized therapies amid secular increases in cancer incidence and sustained healthcare investment, supporting future revenue streams and risk diversification.
  
• Durable first-mover and efficacy advantage of CARVYKTI-reinforced by unprecedented long-term survival data and growing market awareness-provides differentiation from current and emerging competitors, supporting continued gross sales growth and potential for margin expansion as Legend scales operationally and enters new patient segments.

Legend Biotech Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Legend Biotech's revenue will grow by 43.2% annually over the next 3 years.
• Analysts assume that profit margins will increase from -40.8% today to 26.7% in 3 years time.
• Analysts expect earnings to reach $624.6 million (and earnings per share of $1.23) by about August 2028, up from $-325.3 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $186 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 28.0x on those 2028 earnings, up from -21.4x today. This future PE is greater than the current PE for the US Biotechs industry at 15.6x.
• Analysts expect the number of shares outstanding to grow by 0.76% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.78%, as per the Simply Wall St company report.

Legend Biotech Future Earnings Per Share Growth

Risks

• Legend Biotech remains highly dependent on a single commercial product, CARVYKTI, exposing its financials to significant product concentration risk; setbacks (e.g., competition, adverse safety signals, manufacturing issues, or regulatory changes) could sharply impact ongoing revenues and earnings.
  
• Rapid emergence of next-generation therapies (such as allogeneic/off-the-shelf CAR-T products and bispecific antibodies, including efforts from Legend's own partner, Janssen/J&J) could displace or cannibalize demand for autologous products like CARVYKTI, leading to long-term market share erosion and potential revenue declines.
  
• Sustained high R&D and SG&A expenses alongside the investment in a robust pipeline and manufacturing scale-up may continue to outweigh revenue growth for years; failure to bring additional products to commercialization or unforeseen delays in pipeline progress could further compress net margins and delay overall profitability.
  
• Heavy reliance on large partnerships (e.g., Johnson & Johnson for CARVYKTI commercialization and manufacturing) introduces risks around profit-sharing, strategic priorities, and future milestone payments; changes in partner focus, competitive launches (bispecifics/trispecifics), or unfavorable renegotiations could weaken Legend's share of future cash flows and overall earnings power.
  
• Increasing competition, price pressures (including international pricing deltas), and evolving governmental drug pricing reforms, particularly in the U.S. and Europe, may limit Legend's pricing power for high-cost cell therapies, impeding long-term revenue growth and compressing gross and net margins.

Valuation

• The analysts have a consensus price target of $76.545 for Legend Biotech based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $94.0, and the most bearish reporting a price target of just $54.0.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.3 billion, earnings will come to $624.6 million, and it would be trading on a PE ratio of 28.0x, assuming you use a discount rate of 6.8%.
  
• Given the current share price of $37.71, the analyst price target of $76.54 is 50.7% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.