Legend Biotech, widely recognized for its collaboration with Johnson & Johnson (J&J) on the BCMA CAR-T therapy Carvykti, has found itself at the center of buyout speculation, which has reverberated across biotech markets. Reports of an acquisition bid prompted the company to engage Centerview Partners as a financial adviser, resulting in a dramatic rise in Legend Biotech’s stock prices on the Nasdaq. This speculative buzz also positively impacted shares of its former parent and largest stakeholder, GenScript, with a 25% surge in Hong Kong. GenScript, which owned 48% of Legend Biotech at the end of 2023, stated it had no inside information necessitating disclosure under Hong Kong securities laws, while Legend Biotech refrained from commenting on the market rumors.
Collaboration with J&J and Carvykti’s Market Potential
The collaboration between Legend Biotech and J&J, which began in 2017, has been pivotal in enhancing Legend’s market position. Their joint effort in developing Carvykti, a promising therapy for multiple myeloma, is projected by J&J to achieve peak sales surpassing $5 billion. This partnership structure was unique; instead of the typical scenario where the larger company takes over, Legend and J&J opted for an equal split in development, commercialization responsibilities, and profit sharing outside of China. This arrangement reflected Legend Biotech’s ambition to remain an independent biopharma entity, nurturing its growth and innovation in the competitive CAR-T space.
The potential for J&J to fully acquire Legend Biotech is fueled by past acquisition trends in the industry. For instance, Sanofi’s acquisition of Provention Bio for $2.9 billion in 2023 and Pfizer’s $11.6 billion takeover of Biohaven Pharma in 2022 illustrate the ongoing consolidation within the biotech sector. Despite no official statement from J&J regarding the speculation, the historical precedents lend considerable weight to the possibility. Furthermore, J&J’s existing collaboration with Legend could simplify transition processes, making integration smoother and potentially more lucrative in the long term.
Strategic Interest from Novartis
Novartis also emerges as a notable contender in the speculation surrounding Legend Biotech. Known for its strategic investments and existing deal with Legend, which involved a $100 million upfront payment for DLL3-directed CAR-T candidates and collaborative efforts in manufacturing Carvykti, Novartis has the strategic and financial capacity for such an acquisition. Although typically focusing on deals below $5 billion, Novartis’ acquisition history, including the $9.7 billion deal for The Medicines Company in 2020, highlights its ability to undertake significant investments when necessary. With a current market cap nearing $10 billion, Novartis is well-positioned to consider this buyout seriously.
In contrast, the likelihood of AstraZeneca stepping into the fray appears slim. Its recent $1.2 billion acquisition of Gracell Biotechnologies, a competitor in the BCMA and CD19 CAR-T space, reduces the probability of pursuing Legend Biotech. The overlap in therapeutic focus areas and recent financial commitment to Gracell suggests that AstraZeneca might direct its resources towards integrating and optimizing its new acquisition rather than engaging in another substantial buyout.
Implications of Biosecurity Scrutiny
Legend Biotech, prominently known for its partnership with Johnson & Johnson (J&J) on the BCMA CAR-T therapy Carvykti, has sparked buyout speculation, stirring excitement in biotech markets. Rumors of an acquisition offer led the company to hire Centerview Partners as financial advisers, causing a significant surge in Legend Biotech’s stock prices on the Nasdaq. This speculation also had a favorable impact on the shares of its biggest stakeholder and former parent company, GenScript, which saw a 25% increase in Hong Kong. By the end of 2023, GenScript owned a notable 48% of Legend Biotech. However, GenScript clarified it didn’t possess any insider information that would require disclosure under Hong Kong securities laws. Meanwhile, Legend Biotech chose not to comment on the market rumors. This blend of speculation and official statements has created a wave of interest and movement in the biotech stock markets, illustrating the potential impact of mergers and acquisitions in this dynamic sector.
