Investment idea: Genmab
Dutch tinted Genmab builds further on pipeline
Genmab was founded in 1999 in Denmark and has become an important player in the world of biotechnology. The headquarter is located in Copenhagen and the shares are being traded since 2000 on the stock market of Copenhagen as part of the OMXC20.
Genmab has a strong connection with The Netherlands. There are a number of research and development laboratories in the Netherlands and Jan van de Winkel is one of the founders of the biotechnology company. Since 2010 the Dutchman is actually the CEO of Genmab.
The first antibody to be introduced on the market by Genmab, ofatumumab (Arzerra), has been approved for the treatment of patients with chronic lymphocytic leukemia. The medicine is used in combination with chlorambucil or bendamustine.
Also Genmab’s second product, Daratumumab (Darzalex), has been approved in the United States in combination with lenalidomide and dexamethasone. This medicine is used for the treatment of patients with cancer in plasma cells.
On May 17, Genmab announced that their partner Janssen Biotech will perform phase III studies on dratumumab during the second half of 2017 and the first quarter of 2018. Janssen is a division of Johnson & Johnson. The results of the studies could influence the stock price.
Besides daratumumab and ofatumumab, Genmab also builds on a pipeline of clinical and preclinical antibody products for the treatment of cancer and other diseases.
First quarter results
On May 10, Genmab presented their results of the first quarter of 2017. The turnover rose on an annual basis with 48% to DKK 251 million (EUR 33.75 million), which is mainly due to royalties of Darzalex. The operational expenses of the company rose within the same period with 33% to DKK 205 million (EUR 27 million) as a result of investments in new products which are in the pipeline. This resulted in a growth of the net profit with 188% to DKK 16 million (EUR 2.15 million) over the first quarter on an annual basis.
At the end of the first quarter the company had a cash position of DKK 4,751 million (638.84 million), which was DKK 3,922 million (527.37 million) at the end of December last year. This is mainly due to positive adjustments in the work capital and achieving the so called ‘milestones’ during the fourth quarter of 2016, which were paid out in the first quarter of this year.
The stock price of Genmab is 15,3% higher compared to a year ago, while the stock price rose 17,05% since the beginning of this year. Therefore the stock value of Genmab at this moment is DKK 83,49 billion (EUR 11.23 billion). The share is traded at a price/earnings ratio of 66.8.
It remains to be seen if Genmab will achieve milestones in the coming period and how the study results about several medicines in the pipeline plan out.
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