Genmab Plots $500m Nasdaq IPO
Executive Summary
Some 20 years after its birth, the Danish biotech has decided the time is right to go west and raise cash through a US listing to drive its pipeline forward.
Genmab AS's coffers, which are already well-lined with its share of revenues from Johnson & Johnson's blockbuster Darzalex, are set to be filled further with the proceeds of a planned initial public offering on the Nasdaq that could net the Danish antibody specialist up to $500m.
The company, which is already listed in Copenhagen, has filed a registration statement with the US Securities and Exchange Commission and applied for listing on the Nasdaq. Genmab’s board of directors noted that it had not yet finally decided whether to proceed with the offering and if it did, the timing and price remained to be determined, but it was highly likely the firm will be on a major US exchange some 20 years after it was founded.
The US listing and the cash raised will serve as a staging point for Genmab to drive its partnered and wholly-owned pipeline. In the filing with the SEC, the company noted that its goal is to retain at least 50% of product rights in selected programs for indications and in geographic areas "where we believe we will be able to maximize their value; we consider such products to be 'our own' proprietary products."
Genmab has five such proprietary candidates in clinical development, headed by tisotumab vedotin, its Seattle Genetics Inc.-partnered antibody-drug conjugate (ADC) targeted to tissue factor, a protein involved in tumor signaling and angiogenesis. Pivotal Phase II results from a trial looking at the ADC in cervical cancer are expected by the end of 2019/ early 2020, while data from a solid tumor basket study are due in the second half of this year.
The company noted that "we are currently in the early stages of building and expanding our commercial capabilities to allow us to market our own products in the future" and this will require "significant investment of time and money." The initial focus is on achieving launch readiness in western Europe and Japan for tisotumab vedotin for cervical cancer.
Next in line is enapotamab vedotin, Genmab's AXL inhibitor which is being evaluated in solid tumor indications. The IPO cash will also be used to fund the ongoing Phase I/II trials of HexaBody-DR5/DR5 which the company says has potential in a variety of solid tumors including colorectal, non-small cell lung and triple negative breast cancers, and the bispecific antibody DuoBody-CD3xCD20 for the treatment of B-cell malignancies.
Darzalex Still The Cash Cow
The pipeline will continue to benefit from the royalties that Genmab is raking in from Darzalex (daratumumab), J&J's CD38-directed antibody for multiple myeloma (MM). In the first quarter, the company posted revenues of DKK 591m ($88m) and DKK 502m of that came from Darzalex, a drug that looks likely to maintain its stellar sales trajectory.
The triplet combination – and chemotherapy-free option - of Darzalex, Celgene Corp.'s Revlimid (lenalidomide) and dexamethasone is expected to be approved soon by the US FDA as first-line therapy for patients with MM, based on the results of the Phase III MAIA study. In a recent investor note, Deutsche Bank analysts wrote that expanded approval based on MAIA "is likely key for the US sales inflection required to meet Genmab's $3bn 2019 sales target" for the drug in total, adding that "this regimen could become the new standard of care in our view." (Also see "Darzalex Excites As Potential Grows In Multiple Myeloma" - Scrip, 30 Oct, 2018.)
Genmab would also be in line for yet more money from the cash cow that is Darzalex if regulators give the thumbs-up to a subcutaneous form of daratumumab that is being developed for relapsed or refractory multiple myeloma. Topline results from the Phase III COLUMBA study have demonstrated non-inferiority for subcutaneous versus intravenous Darzalex alongside a significantly lower rate of infusion-related reactions (13% SC vs 35% IV). On top of that, the results confirm the drastically shorter time of injection (five minutes) compared with seven hours for the first IV infusion.
The Deutsche Bank team noted that "infusions are manageable but the subcutaneous formulation may be a game-changer from 2020."