DANYELZA And Radiopharmaceuticals Realignment Will Energize Global Opportunities

Key Takeaways

• Strategic realignment into DANYELZA and Radiopharmaceuticals could enhance revenue growth and operational efficiency through focused business units.
  
• Expanding U.S. and international sales and exploring new indications could significantly boost future revenue and pipeline growth drivers.
  
• Y-mAbs Therapeutics faces financial pressure from increased net loss, revenue challenges, competition, rising expenses, and market share threats.

Catalysts

A commercial-stage biopharmaceutical company, focuses on the development and commercialization of radioimmunotherapy and antibody based therapeutic products for the treatment of cancer in the United States and internationally.

• Y-mAbs has initiated a strategic realignment into two distinct business units: DANYELZA and Radiopharmaceuticals, which could streamline operations and focus efforts on maximizing the potential of both units, impacting revenue growth and operational efficiency.
  
• The company is intensifying efforts to penetrate the U.S. market further with DANYELZA for high-risk relapsed/refractory neuroblastoma and exploring potential new indications through investigator-sponsored trials, which could drive future revenue increases.
  
• Y-mAbs has demonstrated positive preliminary data for its GD2-SADA platform, with plans for a data readout in the second quarter of 2025 and expansion into new targets, suggesting potential future revenue and pipeline growth drivers.
  
• The company is leveraging global partnerships to expand ex-U.S. sales for DANYELZA, notably in Asia and Latin America, which could significantly boost international revenue streams.
  
• Y-mAbs is maintaining a strong cash position with $67.7 million in cash and cash equivalents, projected to support operations into 2027, potentially allowing for sustained investment in R&D and operational activities to support earnings stability.

Y-mAbs Therapeutics Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Y-mAbs Therapeutics's revenue will grow by 8.5% annually over the next 3 years.
• Analysts are not forecasting that Y-mAbs Therapeutics will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Y-mAbs Therapeutics's profit margin will increase from -33.8% to the average US Biotechs industry of 16.8% in 3 years.
• If Y-mAbs Therapeutics's profit margin were to converge on the industry average, you could expect earnings to reach $18.8 million (and earnings per share of $0.38) by about April 2028, up from $-29.7 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 53.4x on those 2028 earnings, up from -6.5x today. This future PE is greater than the current PE for the US Biotechs industry at 19.6x.
• Analysts expect the number of shares outstanding to grow by 3.04% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.37%, as per the Simply Wall St company report.

Y-mAbs Therapeutics Future Earnings Per Share Growth

Risks

• Y-mAbs Therapeutics reported a net loss of $29.7 million for the year-ended 2024, compared to a net loss of $21.4 million in 2023, indicating financial pressure that could affect their earnings performance.
  
• The company anticipates total net revenue of $75 million to $90 million for 2025, which could reflect challenges in maintaining or growing revenue, especially with guidance suggesting potential revenue decline or flatness.
  
• U.S. DANYELZA net product revenues were down 12% in the fourth quarter of 2024 compared to the previous year, due to competition and an unfavorable price mix, which could impact future revenues.
  
• Y-mAbs reported increased SG&A expenses, driven by legal settlements and separation agreements, leading to higher operational costs that could further pressure net margins.
  
• The competitive landscape, exemplified by new market entrants for maintenance therapy and ongoing competition for DANYELZA, presents challenges in maintaining market share that could directly impact future revenues.

Valuation

• The analysts have a consensus price target of $17.0 for Y-mAbs Therapeutics 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 $26.0, and the most bearish reporting a price target of just $7.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $111.8 million, earnings will come to $18.8 million, and it would be trading on a PE ratio of 53.4x, assuming you use a discount rate of 6.4%.
• Given the current share price of $4.26, the analyst price target of $17.0 is 74.9% 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.