Raymond James reiterated its Outperform recommendation and held to an $86.00 price objective on Legend Biotech Corporation (NASDAQ: LEGN) after Gilead Sciences announced an agreement to acquire Arcellx for an implied equity value of $7.8 billion. The bank framed the transaction as a development that highlights a notable disconnect between Legend's current market price and the underlying sales momentum of its CARVYKTI therapy.
Legend's shares have traded at roughly $20.18 and have declined about 49% over the last six months. Despite the pullback, analysts' price targets span a wide range, from $24 to $91, suggesting divergent views within the brokerage community on the stock's upside potential.
Gilead already held an equity stake of approximately 11.5% in Arcellx and is working with the company to co-develop anito-cel, Arcellx's lead cell therapy candidate for multiple myeloma. The acquisition is intended to consolidate Gilead's involvement with the anito-cel program prior to what the company expects will be a full commercial launch in 2027. For regulatory timing, the PDUFA date for the later-line multiple myeloma indication is listed as December 23, 2026.
Raymond James flagged anito-cel as a direct competitor to Legend's CARVYKTI and interpreted Gilead's move as evidence that the market may be undervaluing Legend relative to its present sales trajectory. Citing analysis from InvestingPro, the firm noted that Legend appears undervalued at current price levels and that the company carries more cash than debt on its balance sheet - a factor that Raymond James views as a sign of financial resilience as Legend grows CARVYKTI revenue. According to the same analysis, CARVYKTI revenue expanded 75% to $909 million over the last twelve months.
Recent company reporting added nuance to the picture. In its fourth-quarter disclosure, Legend said CARVYKTI delivered $555 million in net trade sales, which missed the consensus estimate of $582 million. The $555 million, however, represented a 5.9% increase from the prior quarter's $524 million.
The earnings release prompted a range of analyst reactions. H.C. Wainwright lowered its price target to $50.00 from $60.00 but kept a Buy rating. TD Cowen downgraded its recommendation from Buy to Hold and cut its price target sharply to $21.00 from $62.00, citing the revenue shortfall. Rothschild Redburn also moved from Buy to Neutral, reducing its price target to $24.00 from $83.00 and pointing to competitive risks for CARVYKTI.
By contrast, Raymond James reiterated its Outperform stance and $86.00 price target in the wake of the U.S. Food and Drug Administration's draft guidance on accelerated approval endpoints for multiple myeloma therapies. Raymond James suggested the regulatory guidance could be favorable to Legend's Phase 3 CARTITUDE-6 trial and has the potential to accelerate approval timelines. The firm also suggested the FDA guidance may broaden market access for CARVYKTI beyond current relapsed settings.
The interplay of competitive dynamics, recent sales results, and regulatory developments has produced a range of analyst valuations and recommendations. Investors looking for further detail on the company's financials and outlook can consult Legend's cited Pro Research Report, which InvestingPro makes available for this company and a broad set of other U.S. equities.
What to watch next
- Execution on CARVYKTI revenue growth versus consensus expectations.
- Regulatory progress for both anito-cel and Legend's CARTITUDE-6 trial relative to FDA guidance on accelerated approval endpoints.
- How the market reconciles diverse analyst price targets and recent downgrades with Raymond James' view of an undervaluation.