Genmab’s 2024 Earnings Report: Potential Turning Point for Stock?

In its recently released 2024 annual report, Danish biotech company Genmab (CSE:GMAB) has exceeded investor expectations with a 31% increase in revenue to DKK 21.5 billion. The operating profit of DKK 6.7 billion also surpassed expectations and sits at the top of the company’s revised guidance range.

The primary driver of Genmab’s revenue growth remains the royalties received from Darzalex, a drug marketed by Johnson & Johnson (NYSE:JNJ), which saw a 24% increase and now constitutes 65% of the company’s total revenue. Notably, Kesimpta experienced substantial growth with royalty payments surging by 49% to over DKK 2 billion. This growth trend is contrasted by a reduction in one-off payments from milestones and research and development (R&D) reimbursements, now expected to represent only 5% of total revenue in 2025, down from nearly 20% in 2022. This shift is anticipated to bring stability to Genmab’s share price, historically impacted by erratic payments.

The earnings per share for the year reached DKK 122, offering a more reasonable valuation at the current share price level of around DKK 1,375 compared to the peak levels observed in 2021-2022.

Despite not offering dividends this year, Genmab announced a share buyback program targeting approximately 1.9 million shares, equating to nearly 3% of the share capital. This move, costing around DKK 2.6 billion at current share prices, conveys management’s confidence in the stock’s attractiveness. Additionally, ongoing buybacks can provide support to the share price.

Looking ahead to 2025, the company’s guidance is optimistic, anticipating an operating profit ranging from DKK 6.2 billion to 9.4 billion. The upper end of this range suggests a potential growth of up to 40%, which, if realized, could generate positive momentum for the share that has experienced a 30% decline over the past year.

Overall, Genmab’s 2024 annual report has impressed investors after a challenging period and is expected to offer much-needed support to the share. Nordic Market Analyst, Jakob Christensen, views this as a positive development for the company and its investors.