AnaptysBio (ANAB): Assessing Valuation After Legal Battle Over Jemperli Royalties and Future Cash Flows Escalates

AnaptysBio (ANAB) just turned its long running Jemperli partnership with Tesaro and GSK into a full blown legal battle, and that tug of war over royalties and rights is exactly what the stock is now trading on.

See our latest analysis for AnaptysBio.

The lawsuit has lit a fire under the stock, with a 1 month share price return of 24.64% and a year to date share price return of 224.10%, signaling powerful, litigation driven momentum, even though the 1 year total shareholder return of 83.01% shows a bumpier journey over the longer haul.

If this kind of legal risk reward setup interests you, it might be a good moment to explore other specialist names across healthcare stocks for fresh ideas beyond AnaptysBio.

With AnaptysBio trading at a steep discount to analyst targets despite triple digit year to date gains, is the market overreacting to lawsuit upside, or is it still underpricing Jemperli linked cash flows and future growth?

Price-to-Sales of 7.1x: Is it justified?

At a last close of $43.30, AnaptysBio trades on a 7.1x price to sales ratio, which screens as expensive versus its own fair ratio but still cheaper than many biotech peers.

The price to sales multiple links what investors are willing to pay today to the company’s current revenue base. This can be a useful yardstick for loss making or early stage biotech names where profits are still years away.

For AnaptysBio, the market is assigning a richer tag than the estimated fair price to sales ratio of 2.4x. This implies investors may be overpaying for today’s revenue runway and baking in meaningful upside from the pipeline, partnerships and the Jemperli dispute even though profitability is not expected in the near term.

Yet on a relative basis the same 7.1x price to sales ratio actually undercuts both the broader US biotech industry average of 11.6x and a 13.2x peer group average. This suggests the market is pricing in less upside than for many comparable drug developers and that any shift toward the lower fair ratio could be balanced by room for catch up versus rivals if sentiment holds.

Explore the SWS fair ratio for AnaptysBio

Result: Price-to-Sales of 7.1x (ABOUT RIGHT)

However, investors still face key risks, including an unfavorable Jemperli ruling or clinical setbacks across AnaptysBio’s early stage immunology pipeline.

Find out about the key risks to this AnaptysBio narrative.

Build Your Own AnaptysBio Narrative

If this narrative does not fully align with your view, or you would rather dig into the numbers yourself, you can shape your own story in just a few minutes, Do it your way.

A great starting point for your AnaptysBio research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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