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Genmab's (GMAB) Epcoritamab BLA Application a Positive for AbbVie (ABBV) - Morgan Stanley

July 1, 2022 4:02 PM EDT
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Morgan Stanley analyst Terence Flynn told investors in a note Friday that Genmab's (NASDAQ: GMAB) announcement of its intent to submit a biologics license application (BLA) to the U.S. Food and Drug Administration (FDA) for its bispecific antibody, Epcoritamab (partnered with ABBV) is as an incremental positive for AbbVie (NYSE: ABBV).

"At ASCO we hosted a meeting with an academic lymphoma specialist. In his view the Epco Ph2 data (below) should support FDA approval and compare favorably to prior data for CAR-Ts," said Flynn. "The physician believes the current Ph2 data should support FDA approval in late stage DLBCL."

Flynn added that the specialist "expects bispecifics to move upstream into the 1L setting."

"We project Epco revenue to ABBV (85% POS) of $84mn at launch in 2023 and $1.7bn in 2030. FDA approval of Epco would represent a positive for ABBV shares in our view as it would derisk Epco revenues and bolster confidence in ABBV's mid-stage pipeline," explained the analyst.

Morgan Stanley's price target of $188 per share on AbbVie is based on "a 15.5x P/E multiple applied to our 3Q23-2Q24 EPS estimate of $12.16. This multiple is above ABBV's 9-year average (11.5x) and the industry (14x) but deserved given the company's growth profile and pipeline optionality," concluded Flynn.

By Sam Boughedda



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