On Wednesday, BMO Capital maintained a positive outlook on Legend Biotech Corp. (NASDAQ:LEGN), reiterating an Outperform rating with a steady stock price target of $90.00. This affirmation comes despite Legend Biotech's recent announcement of first-quarter sales for Carvykti, which totaled $157 million.
The figure falls short of the consensus estimate by approximately 8%, with analysts previously expecting around $171 million.
The sales for Carvykti, a cancer treatment, remained nearly unchanged quarter-over-quarter, sparking queries among investors regarding potential manufacturing challenges. Still, BMO Capital notes that the first-quarter performance was not entirely unexpected. The firm pointed out that the use of commercial slots for comparability tests during the quarter was a contributing factor to the sales outcome.
Looking forward, BMO Capital anticipates a significant increase in demand for Carvykti, following the expected second-line (2L) approval. This approval is projected to considerably broaden the treatment's addressable patient population.
Moreover, the firm expects that scaling up manufacturing capabilities will be a key driver in enabling Carvykti's sales to reach or even surpass the consensus forecast for the full year 2024, which is estimated to be around $1 billion.
The focus on Legend Biotech's near-term potential appears to hinge on these strategic developments, with BMO Capital's analysis suggesting confidence in the company's ability to overcome the recent sales hiccup. The firm's maintained stock price target and rating reflect a belief in Legend Biotech's growth trajectory and the anticipated success of Carvykti in the market.
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