Legend Biotech’s shares tumbled 16% Tuesday following the CAR-T company’s third-quarter earnings report, marking a rocky debut for newly installed CEO Ingrid Zhang.
On the revenue side, sales from Carvykti, disclosed by partner Johnson & Johnson almost a month ago, reached $710 million in the third quarter, up from $657 million in Q2.
On the bottom line, Legend remained in the black after posting its first profit in Q2, recording an adjusted net income of $56 million in Q3, slightly down from $63 million in the three months ending in June.
Despite Carvykti’s growth momentum, Legend’s CFO Carlos Santos warned investors on a conference call Tuesday that Wall Street’s current sales consensus for 2027 sits “at the higher end of the scenarios that we’re currently anticipating.” Even though he said that double-digit year-over-year growth is still expected for the BCMA CAR-T next year, the more conservative projection likely put a damper on investor sentiment.
Santos attributed Legend’s reservation to launch delays outside the U.S. and, perhaps more alarming to investors, “a slower earlier-line share growth in the U.S.”
Investors have been concerned about Carvykti’s prospects in earlier multiple myeloma treatment settings because of competition from off-the-shelf bispecifics, including the BCMAxCD3 T-cell engager Tecvayli made by J&J.
Back in the second quarter, Legend’s stock price fell 10% after J&J’s then-innovative medicine chief, Jennifer Taubert, described the Tecvayli-Darzalex combo as having “the potential for cure” in second-line multiple myeloma.
The market’s harsh reactions to Carvykti’s near-term projection put new CEO Zhang to an immediate test. On her inaugural earnings call, Zhang, who arrived in September following a long career at Novartis, attempted to project a sense of stability, emphasizing that the cell therapy developer is operating from a position of “financial and commercial strength.”
Legend is still educating doctors to refer patients to CAR-T in second- and third-line patients, Alan Bash, who leads Carvykti commercialization, said on Tuesday’s call.
“It’s a long-term selling cycle. It’s more education,” Bash said. “We have to do more work to make sure that the broad spectrum of physicians understand this data, that patients understand this data, and that will take a bit of a longer time for patients to get in, get their consultation to be evaluated.”
Despite a competitive BCMA landscape, only between 15% and 20% of patients in the second and third lines have been treated with a BCMA agent, he added. The commercial chief also pointed to NCCN guidelines, which suggest that using CAR-T before bispecifics provides better outcomes than the other way around.
Zhang outlined three priorities as Legend’s CEO: maximize Carvykti, advance the company’s next-generation pipeline, and execution to sustain profitability.
The most urgent challenge in front of Zhang will be to overcome those rollout hurdles to support Legend and J&J’s lofty, $5 billion peak sales estimate for Carvykti.
Striving to move Carvykti into first-line treatment, Legend expects topline results from the phase 3 Cartitude-5 trial in 2027 “the soonest,” Bash said.
For the other first-line study, Cartitude-6, Legend is exploring the potential for leveraging minimal residual disease negativity as an early read before long-time progression-free survival and overall survival data, he said.