Summary
- Johnson & Johnson teams up again with Genmab, this time to bring a potential successor to Darzalex known as HexaBody-CD38.
- The reasoning for developing HexaBody-CD38 is to not only go after multiple myeloma but also be used for many other types of indications including other types of cancer.
- Darzalex is a top-selling drug producing as much as $2.02 billion in sales in 2018, and the expectation to possibly earn $3 billion in 2019.
- The total payout amount from Johnson & Johnson to Genmab for the partnership could end up being over $1.1 billion when all is said and done with all milestone payments.
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Johnson & Johnson (JNJ) teamed up again with Genmab to produce another cancer drug. This would be a drug that would be a successor to Darzalex, which was developed to treat patients with multiple myeloma. This is a good deal to attempt to keep the blockbuster alive for treating patients with this type of cancer. The downside is that this is an early-stage program, so it will take some time to get it through to the clinic. On the flip side, it has the potential to become a blockbuster in the coming years.
A Deal With Reduced Risk
Johnson & Johnson had struck a deal with Genmab yet again. This time around the two hope to get another product from pre-clinical work all the way up to potential approvals in multiple territories. The deal is about a next-generation CD38 monoclonal antibody that utilizes a tech known as HexaBody. The goal is to have Genmab start out the partnership by establishing multiple proof of concept studies to prove that the drug works. These proof of concept studies will be for multiple myeloma (MM) and diffuse large B-cell lymphoma (DLBCL). Considering that Darzalex was developed for multiple myeloma, this next-generation drug HexaBody-CD38, should be an ideal clinical product for development. Why is this a good deal for Johnson & Johnson? The bottom line is that it loses nothing in monetary value until it chooses to exercise its license on worldwide rights for the drug. This is only contingent upon if it chooses to do so. That means it will be able to see if Genmab comes out with strong proof of concept data first before making a decision on whether or not it wants to move forward. Then, if Johnson & Johnson sees that the data is strong, it could possibly take the option to license HexaBody-CD38. The deal made could end up costing Johnson & Johnson over $1.1 billion. One key item being that after 2031, there will be a tiered royalty between 13% and 20%. This is a good partnership, and I believe that there could be a lot of value for Johnson & Johnson here. Especially, since HexaBody-CD38 was able to achieve good pre-clinical results in multiple myeloma, lymphoma, and leukemia.
