Last Update 11 Dec 25
Fair value Decreased 0.53%LEGN: Late Stage Pipeline Execution Will Drive Future Market Expansion
Analysts trimmed their price target on Legend Biotech by $4, to $90 from $94. This reflects slightly higher discount rate assumptions and marginally softer long term revenue growth expectations, while profit margin and valuation forecasts remain stable.
Analyst Commentary
Bullish analysts view the modest target reduction as largely technical, driven by updated discount rate assumptions rather than a fundamental deterioration in Legend Biotech's long term outlook.
They continue to see upside supported by the company's Overweight rating. This indicates confidence in execution on its late stage pipeline and potential for earnings expansion as key programs advance toward commercialization.
At the same time, more cautious voices highlight that softer long term revenue growth assumptions introduce a slightly more conservative risk reward profile, particularly if competitive dynamics or pricing pressures intensify over time.
Overall, the revised target still embeds meaningful growth expectations. However, it underscores that near flawless operational execution and timely regulatory milestones will be critical to sustaining the current premium valuation.
Bullish Takeaways
- Maintaining an Overweight stance despite the lower target suggests analysts still view the current pullback as an opportunity rather than a structural downgrade to the growth story.
- Core assumptions around margins and valuation multiples remain intact, which implies confidence that Legend Biotech can scale efficiently as revenues ramp.
- Long term growth remains robust in the base case, with the target price reduction framed as a fine tuning of the model rather than a shift in conviction.
- Successful execution on pivotal programs could support additional upside to the new target, particularly if timelines or uptake trends outperform conservative projections.
Bearish Takeaways
- Higher discount rate assumptions indicate a rising perceived risk profile, which could cap near term multiple expansion even if fundamentals remain solid.
- Slightly softer long term revenue growth expectations reflect caution around competitive intensity and potential market share pressures in key indications.
- Any delays in regulatory decisions or commercialization efforts would have a magnified impact under the updated, more conservative modeling assumptions.
- With less valuation headroom after the target cut, execution missteps or negative trial updates could trigger outsized downside relative to prior expectations.
What's in the News
- Opened a new Philadelphia, Pennsylvania R&D facility featuring advanced labs and collaborative spaces. This expands its U.S. footprint and supports oncology and immunology research alongside existing New Jersey operations (Company announcement).
- Received FDA approval for a CARVYKTI label update to include overall survival data from the Phase 3 CARTITUDE-4 trial. The data showed statistically significant OS improvement versus standard of care in relapsed or refractory multiple myeloma patients after one to three prior lines of therapy (Regulatory update).
- Updated CARVYKTI safety information to add immune effector cell associated enterocolitis to Boxed Warnings and Warnings and Precautions. The update also includes progressive multifocal leukoencephalopathy under Infections and Postmarketing Experience, reflecting serious but manageable risks with appropriate monitoring (Regulatory update).
- Entered a comprehensive Component and Product Supply Agreement with Janssen. Under this agreement, Legend will manufacture and supply CARVYKTI from its Raritan, New Jersey GMP facility for global clinical and commercial use outside Greater China, with costs shared and structured markups on both product and key raw materials (Company filing).
Valuation Changes
- Fair Value: edged down slightly to $74.51 from $74.91 per share, reflecting a modestly more conservative intrinsic value estimate.
- Discount Rate: risen slightly to 7.20 percent from 7.16 percent, implying a marginally higher required return and risk perception.
- Revenue Growth: eased slightly to 38.76 percent from 38.86 percent, signaling a small downward adjustment to long term top line expectations.
- Net Profit Margin: improved modestly to 29.40 percent from 29.33 percent, indicating a minor uplift in anticipated long term profitability.
- Future P/E: dipped slightly to 24.0x from 24.1x, suggesting a negligible reduction in the forward valuation multiple applied to earnings.
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
About Legend Biotech- 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
How have these above catalysts been quantified?- Analysts are assuming Legend Biotech's revenue will grow by 42.3% annually over the next 3 years.
- Analysts assume that profit margins will increase from -40.8% today to 27.6% in 3 years time.
- Analysts expect earnings to reach $632.7 million (and earnings per share of $1.49) by about September 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 27.8x on those 2028 earnings, up from -20.4x today. This future PE is greater than the current PE for the US Biotechs industry at 15.5x.
- Analysts expect the number of shares outstanding to grow by 0.61% 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
What could happen that would invalidate this narrative?- 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
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of $77.267 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 $632.7 million, and it would be trading on a PE ratio of 27.8x, assuming you use a discount rate of 6.8%.
- Given the current share price of $35.95, the analyst price target of $77.27 is 53.5% 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.
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AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
