Genmab's multiple myeloma drug gets FDA approval, boosts EU biotech sector
- The recent approval of Darzalex (daratumumab) for multiple myeloma bodes well for Genmab, which will enjoy royalties from Johnson & Johnson after the FDA approved the drug Tuesday.
- J&J licensed Darzalex from Genmab in 2012. Shares of Genmab, the second largest biotech company in the EU, were up 12% on news of the approval after a 130% run-up so far this year.
- Based on the agreement, Genmab will receive tiered royalty payments of 12% to 20%.
After Actelion, which has a market value of roughly $16 billion, Denmark-based Genmab is the second-largest biotech company in the EU, with a market value of roughly $7 billion.
However, unlike Actelion, Genmab has not been able to retain all of the rights to the products it has developed. Instead it has licensed products in deals, such as its deal with J&J for Darzalex. On the upside, Genmab stands to earn million of dollars in royalties from J&J on Darzalex. This should allow the company to start retaining rights to its products in development, according to Genmab's CEO, Jan van de Winkel.
Although the European biotech industry is considerably smaller than the U.S. biotech industry, with total revenues of $24 billion versus $93 billion in 2014, van de Winkel thinks it is just a matter of time before the European biotech market matures. And if Genmab is any example, he's right.