Monday brought significant legal news for Genmab A/S (NASDAQ: GMAB) as an appeal arbitrator dismissed the biotech company’s bid for additional milestone and royalty payments related to Darzalex (daratumumab).
In an SEC filing, Genmab revealed that the appeal arbitrator in its second arbitration under the license agreement with Janssen Biotech Inc, Johnson & Johnson’s (NYSE: JNJ) unit, for daratumumab had denied Genmab’s appeal.
The decision marked the conclusion of the dismissal of Genmab’s claims in the second arbitration. Genmab had appealed the tribunal’s two-to-one decision dismissing its claims, arguing that the claims should have been brought in the prior arbitration between Genmab and Janssen.
Genmab’s claims were rooted in its position that the subcutaneous formulation of daratumumab (SC daratumumab), marketed as Darzalex Faspro in the U.S., is a new licensed product under the license agreement.
The claims included a demand for milestone payments concerning SC daratumumab and a new 13-year royalty term on a country-by-country basis from the date of the first commercial sale of SC daratumumab in each such country.
The decision in the arbitration appeal will not impact Genmab’s forthcoming financial guidance for 2024.
William Blair opines that it did not anticipate the original decision to be overturned; thus, this outcome does not alter its view that investors are attentive to Genmab’s pipeline opportunities.
Genmab’s diverse revenue sources, including royalty agreements for drugs like Darzalex and Kesimpta, are anticipated to contribute to strong growth and bolster the company’s current valuation.
However, the limited commercial potential of Tivdak and epcoritamab suggests that their impact on revenue may be initially restrained. Despite the long-term potential in more extensive indications, their success will be a gradual process.
Genmab’s highly successful DuoBody platform is likely to sustain a robust research and development pipeline, incorporating new antibody platforms. Nonetheless, in light of the current valuation and short-term prospects, William Blair maintains a Market Perform rating.
Price Action: GMAB shares are down 3.28% at $27.74 on the last check Tuesday.
Image by Okan Caliskan from Pixabay
