Ailsa Craig, co-portfolio manager of the International Biotechnology Trust (IBT), outlines the appeal of antibody platform Genmab.
Genmab (DK:GMAB) is an exciting Danish company with a cutting-edge antibody platform that has seen the successful launch of three drugs to date – Darzalex, Kesimpta and Tepezza. This unique platform has gained attention from major pharmaceutical companies that want to explore lucrative partnership deals with the likes of Johnson & Johnson, Novartis and, more recently, Abbvie.
Their lead asset Darzalex was approved early by the the United States Food and Drug Administration in 2015. Darzalex is partnered with Johnson & Johnson, which pays Genmab a royalty on sales. The drug treats an incurable cancer indication called multiple myeloma and its global sales reached $3bn (£2.3bn) in 2019. Johnson & Johnson has since developed a Darzalex 2.0, allowing patients a treatment in three to five minutes in contrast to the current four-hour stay at a treatment centre.
In August 2020, Novartis announced the approval of a second antibody generated by the Genmab platform, Kesimpta. This antibody is intended to treat the relapsing and remitting form of multiple sclerosis. And finally, Tepezza (partnered with Horizon Therapeutics) was approved in January 2020. Both drugs are expected to reach multi-billion dollars in peak sales. Furthermore, Genmab’s innovation engine is equally impressive as it has generated many interesting projects and hopefully new products in the coming years.
Our strategy is to look for well managed companies preferably with a monopoly and ideally a de-risked asset, which means they have an approved drug selling on the market. We also like companies that produce drugs for an unmet medical need, which allows higher pricing power. Genmab ticks all of these boxes, and moreover the company has a proven platform technology to generate new drugs for the next leg of growth, so it’s not a ‘one trick pony’. Finally, while acquisitions of companies with already partnered assets is not straightforward, we believe Genmab stands solid on fundamentals and an acquisition would only crown its success. So, we believe it may be picked up by a larger pharma name for its platform.
