Promising clinical data for anticancer drug acts as a "booster"! Genmab (GMAB.US) market cap soars over $10 billion in a single week.

For Danish biotech company Genmab (GMAB.US), this week has been a breakthrough moment. Positive late-stage clinical trial progress announced for two potential anticancer drugs has driven the company's share prices listed in both Denmark and the United States to record highs. Data shows that Genmab's Denmark-listed shares rose 44% this week, marking the largest weekly gain since 2008, adding more than $10 billion in market value in a single week and expanding its year-to-date gain to nearly 90%. Meanwhile, Genmab's US-listed shares rose 29% this week through Thursday's close, with the stock hitting an all-time intraday high of $59.97 on Wednesday. On Wednesday, Genmab announced positive topline results from its global Phase III LiGeR-HN1 clinical trial. The trial evaluated petosemtamab in combination with pembrolizumab (Keytruda, the blockbuster anticancer drug under Merck & Co., Inc.) versus pembrolizumab monotherapy for the first-line treatment of patients with PD-L1-positive recurrent or metastatic head and neck squamous cell carcinoma (HNSCC). Based on the first interim analysis assessed by the independent data monitoring committee (IDMC), compared with pembrolizumab monotherapy, the combination therapy achieved statistically significant and clinically meaningful improvements in both overall survival (OS) and objective response rate (ORR), reducing the risk of death by 50% and meeting the study's dual primary endpoints, regardless of patients' HPV status. petosemtamab is particularly important to Genmab because the company holds full rights to the drug, which is expected to open up new revenue streams and reduce its reliance on royalty income from drugs developed and sold by partners. Last week, Genmab said its experimental drug Rinatabart Sesutecan (Rina-S) for ovarian cancer met its primary endpoint and key secondary endpoints in a late-stage clinical trial. Trial results showed that Rina-S delivered "statistically significant and clinically meaningful improvements in progression-free survival (PFS) and overall survival (OS)" in patients with platinum-resistant ovarian cancer. In the intent-to-treat (ITT) population, Rina-S reduced the risk of disease progression or death by 71%. In the primary analysis set (PAS) population, Rina-S reduced the risk of disease progression or death by 67%. The trial also met its key secondary endpoint of overall survival (OS), showing statistically significant and clinically meaningful improvements in both the ITT and PAS populations. The recent string of positive trial results has driven a significant upward revision of the stock's valuation and eased investor concerns about whether the company can cultivate new growth sources, convincing investors that the company has found new growth engines beyond its blockbuster blood cancer drug. Previously, the market was concerned that royalty income from the company's blockbuster multiple myeloma drug Darzalex would begin to decline. Benjamin Jackson, an analyst at Jefferies Financial Group Inc., said: "Biotech companies often face this dilemma: if you develop a very successful drug and earn a lot of revenue from it, finding the next innovation can be difficult. Genmab is one of the few companies that can now say it has achieved this." Benjamin Jackson added: "Currently, the company already has three assets that are not just capable of generating royalties, but are actually the company's own commercial assets, and the company will be committed to bringing these drugs to market and advancing their development on its own." How will the stock price move going forward? Analysts are divided Analysts quickly factored the potential future revenue from these drugs into valuations. This week, Van Lanschot Kempen raised its price target on Genmab to DKK4,900, the highest among analysts. This implies nearly 30% potential upside from the current share price. The Van Lanschot Kempen analyst team led by Romy O'Connor said: "petosemtamab is now clearly on its way to building a multibillion-dollar franchise." The team added that the therapy has the potential to become the next-generation standard of care. According to an October 27 report from JPMorgan analysts, petosemtamab's peak sales potential is approximately $5 billion, of which $3.5 billion comes from the head and neck cancer indication and the remainder from the colorectal cancer indication. However, the pace of Genmab's stock rally has led some analysts to turn cautious. On Thursday, both Jyske Bank and AL Sydbank downgraded the stock. Sydbank analyst Sren Lntoft Hansen said the stock is about to enter a relatively quiet period as investors wait for evidence of commercial success for the new drugs. After the recent sharp share price rise, Jyske Bank analyst Henrik Hallengreen Laustsen downgraded the stock to "sell." He said he expects fewer news catalysts for the company in the period ahead, though he acknowledged that the recent clinical trial results "significantly de-risked the company's pipeline and strengthened the growth outlook beyond Darzalex."