Forecasts

Genmab outlines a megablockbuster future for itself and J&J as Darzalex gains market traction

Genmab CEO Jan van de Winkel

J&J tends to be a cautious player when it comes to projecting peak sales for a top drug prospect. But its partners at Genmab clearly believe that the sky’s the limit on their myeloma drug Darzalex (daratumumab).

Initially pushed back to the last line of defense after multiple drug failures, the FDA approved several combinations using Darzalex as a second-line therapy late last year. And Genmab CEO Jan van de Winkel expects to see its end of the deal swell into the billions as more studies help expand the market for their partnered therapy.

It’s early days for this blockbuster, but the royalty split for Genmab starts at 12% and ends up at 20%. The CEO told analysts on Wednesday that the 20% split occurs on sales over $3 billion a year. He added:

So hopefully that will give everybody a bit more clue now, especially where some of your models go out further with sales numbers getting up into the US$8 billion or US$10 billion you’ll see a substantial amount of the sales will come through that 20% royalty rate and sales exceed US$3 billion.

But Van de Winkel thinks the average peak sales estimate is all wrong. He told Reuters that his own estimates peg peak potential sales at $13 billion, qualifying as a megablockbuster rivaling the biggest earners in the industry.

“It could work in other blood cancers as well as in solid tumours. So that means $13 billion potential if it would work in all the indications,” Van de Winkel told Reuters.

To put that in perspective, Genmab expects up to $2 billion for its split just at the 20% royalty rate — provided the drug achieves its full set of ambitions.

Genmab also has a ways to go in collecting the full set of its $1 billion in milestones that the company arranged with J&J in 2012. But these “biobucks” — sometimes mocked as an illusion — are flowing.

Genmab CFO David Eatwell:

As you know at the end of 2016, we’ve collected $310 million of milestones in to date. So in terms of the total milestones that will be the potential they were paying through of $690 million of milestones to come. So daratumumab milestones for development and regulatory events there will be milestones for non-multiple myeloma events and also there will be the commercial of sales total milestones as well.

Also when we talked about the original $1 billion of milestones, we said that slightly more than half of those were development regulatory including up to the point of first commercial sale and that’s therefore less than half of it, or slightly less than half was the sales or commercial milestones and of course we’ve only received the one commercial milestone to date and that was the $25 million which precluded late in 2016 for the sales exceeding $500 million in one calendar year.



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