Genmab: A Quick View

Genmab’s daratumumab has the potential to be a game changer. Activity of the anti-CD38 antibody in myeloma represents a new and complementary mechanism of action, meeting a major unmet medical need. Heavily pre-treated multiple myeloma patients extraordinarily achieved a partial response after short single-agent exposure. Although early stage, the data is sufficiently impressive for J&J and Genmab to communicate an ambitious clinical trial programme this year across a variety of haematological cancers, targeting a market opportunity of c $9bn.

Limited Toxicity Easily Managed With Steroids
In a dose-escalating Phase I/II study, the safety and toxicity of daratumumab (a fully human IgG anti-CD38 monoclonal antibody) were assessed in 32 patients with relapsed and relapsed-refractory multiple myeloma (MM). Daratumumab monotherapy in patients already exposed to two to 11 therapies caused limited toxicity easily managed with steroids. The most common adverse events were infusion-related reactions. It is particularly impressive, the study met its primary safety end point, given the widespread expression of CD38 in normal human tissue.

Extraordinary Efficacy Signal With Single-Agent Exposure
At the higher doses (4-24mg/kg), daratumumab induced a dose-related reduction in the M-component, paraprotein, a marker of disease activity. A disappearance of tumour cells from bone marrow samples was also detected. Moreover, at doses of ≥4mg/kg, a third of patients achieved a partial response and two-thirds achieved at least a minor response. This is an exceptional finding after short single-agent exposure and has never been seen before with a monoclonal antibody. Data on extended exposure (up to 24 months) and combined with Revlimid are expected from 2014.

Massive Market Potential
Genmab estimates the MM market at $3.9bn pa. Daratumumab was partnered with Janssen Biotech (a subsidiary of J&J) in August 2012 in a deal worth up to $1.1bn. This includes potential development in six disclosed haematological cancers, for which the companies estimate a total market potential (including MM) of $9bn pa.

Valuation: Daratumumab Springboard
As well as exciting daratumumab data, albeit early stage, the $55m upfront received from J&J via its out-licensing and an equity investment of $80m, has extended the cash runway to beyond 2016e, sufficient to see Phase III data read-outs of ofatumumab, which, if positive, would significantly expand its label and allow Genmab to develop certain of its antibody-drug conjugates alone to retain more value for shareholders.

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