Core product sales once again validated by performance, when will Legend Biotech Corp. Sponsored ADR (LEGN.US) reverse the stock price's "strong short-term, weak medium-term" structure?

On October 13, Johnson & Johnson disclosed its 26Q3 quarterly financial report. During the reporting period, Johnson & Johnson achieved quarterly revenue of $25.4 billion, up 5.9% year-over-year; among this, CARVYKTI, a BMCA CAR-T drug co-developed with Legend Biotech Corp. Sponsored ADR, recorded Q3 single-quarter sales of $710 million, up 35.5% year-over-year; the drug's cumulative sales for the first three quarters of this year reached $1.964 billion, up 47.4% year-over-year. However, the above strong sales data did not bring a significant rebound in Legend Biotech Corp. Sponsored ADR's (LEGN.US) stock price. It has been observed that since July 28 of this year, Legend Biotech Corp. Sponsored ADR's stock price has been consolidating sideways at low levels for nearly 3 months. Although it closed up 6.49% on October 14 under the disclosure of this CARVYKTI sales data, the final closing price of $19.04 merely returned to the origin of July 28. Rebound and repair after bottoming out In Johnson & Johnson's financial report, although CARVYKTI's U.S. sales were flat quarter-over-quarter, looking at the entire BCMA CAR-T track, BMS's same-track product Abecma, after disclosing 26Q1 quarterly sales down 21% year-over-year to $81 million, ceased separately disclosing quarterly sales data from 26Q2 onward. Its under-pressure product competitiveness also indirectly reflects that CARVYKTI's leading advantage as the track leader has further expanded. In addition, Johnson & Johnson also stated in the financial report that as of the end of June this year, CARVYKTI has been launched in more than 20 countries and regions worldwide, thereby bringing it nearly 60% of sales increment in Q3 this year. The drug's global sales proportion outside the U.S. also increased from 24.4% in the same period last year to 33.5%. This directly indicates that the drug's sales geographic structure has undergone certain optimization, and international commercialization is providing greater growth contribution. Returning to Legend Biotech Corp. Sponsored ADR's trading action, after Johnson & Johnson disclosed its Q3 quarterly report, Legend Biotech Corp. Sponsored ADR's stock price showed a single-day volume-expanded long bullish candle on October 14. At the same time, the company's stock price on that day simultaneously stood above the 5-day, 10-day and 20-day moving averages, and MACD and KDJ indicators formed golden crosses. Especially on the MACD indicator, previously during the nearly one month from September 18 to October 12, although Legend Biotech Corp. Sponsored ADR's stock price only slightly recovered from $17.61 to $17.80, MACD's DIF indicator rose significantly from -1.08 to -0.39, indicating that short-term bearish momentum had significantly weakened. The company's volume-expanded long bullish candle on October 14 was the technical confirmation of this bottom divergence. At this point, Legend Biotech Corp. Sponsored ADR's short-term strengthening at the daily level was already very clear. In terms of volume performance, on October 14, Legend Biotech Corp. Sponsored ADR's single-day trading volume reached 3.5358 million shares, reaching 1.61 times the company's previous nearly 20-day average volume; the OBV indicator stood above its own 10-day moving average for the first time, which was also the first time since the September panic that the company's stock price showed resonance between short-term capital flows and technicals. However, the single-day capital return under news-driven stimulation is still difficult to support a subsequent trend reversal in Legend Biotech Corp. Sponsored ADR's stock price. Returning to the trading action, Legend Biotech Corp. Sponsored ADR's October 14 K-line showed an obvious high-level upper shadow, and the length of the upper shadow corresponded to a stock price amplitude of about 3.86%. This means that when Legend Biotech Corp. Sponsored ADR surged to a high of $19.73 during the day, selling pressure in the market completed turnover of more than 3 million shares within an amplitude of about 4%, and a considerable portion of this was high-level selling rather than one-sided position building. The upper shadow on that day accounted for 34.8% of Legend Biotech Corp. Sponsored ADR's full-day stock price amplitude, which also indirectly shows that there may be institution-level concentrated selling pressure in the $20 pressure zone. On the other hand, although it was mentioned earlier that the company's stock price showed obvious daily-level strengthening on the 14th, from a multi-timeframe perspective, at this time Legend Biotech Corp. Sponsored ADR's weekly-level MACD indicator was still below the zero axis, the corresponding weekly RSI remained in the oversold zone at 32, and the ADX momentum indicator was in the "no trend" zone at 17.6, thus forming the current company stock price structure of "strong short-term, weak medium-term," making it difficult to support the current trend reversal logic. Is the market waiting for a "second growth curve" or "competitor launch"? As competitor Abecma falls behind in sales, CARVYKTI's own treatment line continues to move earlier, and long-term efficacy continues to accumulate, the global commercialization logic of this product is already quite clear. However, for Legend Biotech Corp. Sponsored ADR, the reason the market suppresses its valuation is no longer CARVYKTI's production and sales situation, but rather concerns about Legend Biotech Corp. Sponsored ADR's "royalty ratio, profit margin and long-term exclusivity" for this therapy's sales. Then, on the basis of multiple structural discounts, it was given a 2.91x PS valuation, not only significantly lower than the industry average of 9.09x PS, but also 29% lower than its average PS valuation over the past 3 months. BOCOM INTL lowered its sales forecast for CARVYKTI in a recently updated research report: among this, the therapy's 2026 sales were lowered by 7% from the previous estimate to $2.57 billion, while the peak sales forecast was lowered by 3% to $6 billion1. The institution's reason for this was that "as Carvykti's outpatient treatment scenarios increase (accounting for about 60% of overall treatment), the gross-to-net discount will expand significantly." In terms of market exclusivity, the potential erosion of CARVYKTI's market exclusivity by Johnson & Johnson's own Tecvayli + Darzalex combination and Gilead's anito-cel is obviously also an important reason for the market's downward revision of expectations. It is understood that Johnson & Johnson executives previously stated on a conference call that Johnson & Johnson's wholly owned bispecific combination Tecvayli + Darzalex has "potential for cure" in second-line multiple myeloma. The market interpreted this as meaning that in Johnson & Johnson's second-line multiple myeloma market map, the Tecvayli + Darzalex combination and Carvykti are in the same position, which clearly weakened the market's expectation for Carvykti's exclusive position. As for another BCMA-targeted CAR-T product, Gilead's anito-cel, its marketing application for fourth-line relapsed/refractory multiple myeloma has now been accepted by the FDA, and its PDUFA review deadline is December 23 of this year. If this product is successfully approved, the global BCMA CAR-T track will formally form a three-way competitive landscape of CARVYKTI, Abecma and anito-cel. Previously, institutions predicted anito-cel's fourth-line MM peak sales at about $1.6 billion, and if expanded to second-line treatment, peak sales could reach $3.8 billion. When CARVYKTI's sales expectations are difficult to satisfy the market's valuation demands for Legend Biotech Corp. Sponsored ADR, a "new story" will become a "necessity." And this new story may be the in vivo CAR-T that previously drove a sharp rebound in the company's stock price. On April 20 of this year, Eli Lilly announced the acquisition of Kelonia for a total consideration of up to $7 billion, buying the company's core technology iGPS, an in vivo CAR-T platform based on a modified lentiviral vector. Under the positive stimulus, Legend Biotech Corp. Sponsored ADR's stock price directly surged 18.42% that day; on June 2, when Legend Biotech Corp. Sponsored ADR announced that it would present preliminary clinical data for its investigational in vivo CD19/CD20 dual-targeted CAR-T cell therapy LB2501 for the first time in a late-breaking oral presentation at the EHA annual meeting, the company's stock price surged 42.22% in a single day. In fact, this was only the disclosure of early clinical data for LB2501, but this move broke the market's stereotype that Legend Biotech Corp. Sponsored ADR could support its valuation solely with the large single product Carvykti, thereby triggering the market's subsequent value revaluation of it. And at a time when market pricing is extremely pessimistic, if more data on new pipelines can be disclosed subsequently, it may open a good valuation repair window for Legend Biotech Corp. Sponsored ADR.