Genmab with 52 percent revenue increase year-over-year

Genmab with 52 percent revenue increase year-over-year

05 December 2017

On November 8, Genmab published their results over the first nine months of this year. The turnover of the Danish biotechnology company rose on an annual basis with 52% to DKK 1,348 million (EUR 181.14 million). This increase was especially due to the sale and received royalties of Darzalex. The revenue of Darzalex was USD 871 million, which resulted in a royalty income of DKK 707 million (EUR 95.01 million).

The operational expenditures of Genmab over the first nine months rose on an annual basis with 30% to DKK 707 million (EUR 95 million). This was due to the extra investments in new products which are in development. The operational income rose on an annual basis with 86% to DKK 641 million (EUR 86 million). Since December 31 2016, the cash flow of Genmab increased from DKK 3,922 million (EUR 527.04 million) to DKK 5,184 million (EUR 696.63 million), especially thanks to the milestone payments.

 

Shortly after the presentation of the results it became aware that the American asset manager BlackRock has built up an indirect ownership of 5.03% in Genmab. Other shareholders of Genmab are among others Vanguard, Fidelity and Comgest. Earlier this year Comgest gained an ownership in Genmab after the announcement that Darzalex could be sold on the American market. The asset manager also claims that Genmab distinguishes itself from other biotechnology companies by their strong balance sheet, profitability and positive cash flow.

In September this year, Darzalex was also approved in Japan and by now the first commercial sale has taken place. Therefor Genmab could look forward to a milestone payment of USD 25 million from Janssen Biotech. The milestone payments related to Darzalex will reach between DKK 930-1,100 million (EUR 125-148 million) over 2017 according to Genmab. Partly because of the recent milestone payment, the biotechnology company has increased their estimated turnover for 2017 with DKK 160 million (EUR 21.5 million) to DKK 2,110-2,310 million (EUR 282-310 million). Also Genmab increased the estimation for the operational income from DKK 900-1,100 million (EUR 121-148 million) to DKK 1,060-1,260 million (EUR 142-169 million).

Recently Genmab also issued 22,532 new shares due to the implementation of employee warrants. The biotechnology company has raised approximately DKK 6,68 million (EUR 0.9 million) and the issue comes down to approximately 0.04% of the total stock capital. Genmab expects that their cash flow will be above DKK 4,900 million (EUR 658 million) by the end of this year. Speculators might think that Genmab could be acquired in the long run. It so happens that the biotechnology company has a partnership with Janssen Biotech, which is part of Johnson & Johnson. For now there are no known conversations between both companies over a possible acquisition. However, the future development remains to be seen.

The stock price has plummeted during the last months to the lowest level of this year and is now more than 13% lower compared to the begin of 2017. The share is traded at a price earnings ratio of 58,1. It remains to be seen if Genmab can restore the trust of investors in the coming period and how the study results of medicines which are currently in development will turnout. This could have a large impact on the stock price.

The future share performance will depend on various corporate-, industry- and economic factors. Investors should consider the risks before taking any investment decisions. The performance of the underlying might differ from investors’ expectations and lead to a potential capital loss

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20/08/2019 11:41:06

 

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