Breaking Down Legend Biotech Corporation (LEGN) Financial Health: Key Insights for Investors

Are you keeping a close watch on Legend Biotech Corporation (LEGN) and wondering about its financial stability? With Carvykti's sales reaching $334 million in Q4 2024 and $963 million for the entire year, the company has swung to a net income of $26.284 million, or $0.07 per share. But is this success sustainable? Does Legend Biotech have enough cash to fuel its operations, especially with a cash burn of roughly $27 million per month in Q4? Dive in to explore Legend Biotech's financial metrics, including its impressive cash reserves of $286.749 million, time deposits totaling $835.934 million as of December 2024, and a solid current ratio of approximately 5, ensuring liquidity into mid-2028, to determine if it's a promising investment or a ticking time bomb.

Legend Biotech Corporation (LEGN) Revenue Analysis

Understanding the revenue streams of Legend Biotech Corporation (LEGN) is crucial for investors seeking to assess the company's financial health and growth potential. The company's revenue is primarily derived from its flagship product, CARVYKTI, and related collaborations.

Here's a breakdown of Legend Biotech Corporation's revenue streams:

• Primary Revenue Source: CARVYKTI (ciltacabtagene autoleucel), a BCMA-directed CAR-T cell therapy approved for the treatment of adult patients with relapsed or refractory multiple myeloma.
• Geographic Revenue: Primarily from the United States and Europe, where CARVYKTI has been approved and launched.

Analyzing year-over-year revenue growth provides insights into Legend Biotech Corporation's performance and market penetration. In 2024, Legend Biotech Corporation experienced substantial revenue growth driven by increased sales of CARVYKTI.

Key observations on Legend Biotech Corporation's revenue trends include:

• Strong Growth Trajectory: A significant increase in revenue attributed to the growing adoption of CARVYKTI in the market.
• Market Expansion: Revenue growth is tied to the expansion of CARVYKTI's availability in different geographic regions.

A detailed look at the contribution of different business segments to Legend Biotech Corporation's overall revenue highlights the significance of CARVYKTI. Collaboration revenue plays a crucial role, especially through partnerships with companies like Janssen Biotech.

Here's an overview of Legend Biotech Corporation's revenue composition:

Any significant changes in Legend Biotech Corporation's revenue streams warrant careful consideration. Factors such as regulatory approvals, market competition, and shifts in treatment paradigms can influence revenue performance. Investors should monitor these developments to assess their potential impact on Legend Biotech Corporation's financial outlook.

For more in-depth analysis, you can explore: Breaking Down Legend Biotech Corporation (LEGN) Financial Health: Key Insights for Investors

Legend Biotech Corporation (LEGN) Profitability Metrics

Understanding Legend Biotech Corporation's (LEGN) financial health requires a close examination of its profitability metrics. Profitability, in essence, reveals how efficiently a company generates profit from its revenue. Key indicators include gross profit, operating profit, and net profit margins, all of which provide insights into LEGN's financial performance.

Here's an overview of LEGN's profitability, based on available data:

• Gross Profit: As of fiscal year 2024, LEGN reported a gross profit of $274.1 million.
• Operating Profit: For the same period, the company's operating profit stood at -$273.2 million.
• Net Profit: LEGN's net profit was recorded at -$297.8 million for fiscal year 2024.

The trends in profitability over time are crucial for investors. For instance, comparing current margins with those of previous years can reveal whether LEGN's profitability is improving, declining, or remaining stable. However, based on recent data, LEGN's operating margin is -72.7%, and its net profit margin is -79.2%.

Comparing LEGN's profitability ratios with industry averages provides context. If LEGN's gross margin is higher than the industry average, it suggests LEGN has a competitive advantage in cost management or pricing. The current gross profit margin for LEGN is 73.1%.

Analysis of operational efficiency involves evaluating how well LEGN manages its costs and generates revenue. Gross margin trends can indicate whether the company is becoming more or less efficient in its production processes. For the fiscal year 2024, LEGN's research and development expenses totaled $439.1 million, while selling, general, and administrative expenses amounted to $108.2 million.

To gain more insight into Legend Biotech Corporation's core values, explore: Mission Statement, Vision, & Core Values of Legend Biotech Corporation (LEGN).

Legend Biotech Corporation (LEGN) Debt vs. Equity Structure

Understanding Legend Biotech Corporation (LEGN)'s financial strategy requires a close look at its approach to debt and equity. This involves analyzing its debt levels, key financial ratios, and any recent financing activities. This balance is crucial for funding growth and maintaining financial stability. For more insights, read the full analysis here: Breaking Down Legend Biotech Corporation (LEGN) Financial Health: Key Insights for Investors

Here's a detailed breakdown:

Overview of Debt Levels:

• Long-term Debt: As of December 31, 2023, Legend Biotech Corporation (LEGN) had $649.9 million in long-term debt.
• Short-term Debt: The company’s short-term debt stood at $27.7 million as of December 31, 2023.

Debt-to-Equity Ratio:

The debt-to-equity ratio is a key metric for assessing financial leverage. For Legend Biotech Corporation (LEGN), this ratio can provide insights into how much the company relies on debt versus equity to finance its assets. As of December 31, 2023:

• Debt-to-Equity Ratio: The debt-to-equity ratio was 0.16.

Recent Financing Activities:

Keeping track of Legend Biotech Corporation (LEGN)'s recent financing activities, such as debt issuances or refinancing, helps understand the company's strategic financial decisions.

• In July 2023, Legend Biotech Corporation (LEGN) issued $690 million aggregate principal amount of 2.875% convertible senior notes due 2028 in a private offering to qualified institutional buyers. The company used approximately $62.1 million of the net proceeds to pay costs related to the capped call transactions.

Balancing Debt and Equity:

Legend Biotech Corporation (LEGN) strategically uses both debt and equity to fund its operations and growth. The company’s approach involves:

• Leveraging debt financing to capitalize on opportunities while maintaining a reasonable debt-to-equity ratio.
• Utilizing equity funding to support long-term projects and research and development activities.

Legend Biotech Corporation (LEGN) Liquidity and Solvency

Analyzing Legend Biotech Corporation's (LEGN) liquidity involves examining key financial metrics and statements to understand its ability to meet short-term obligations. This assessment includes looking at current and quick ratios, working capital trends, and cash flow statements.

Current and Quick Ratios:

These ratios provide a snapshot of Legend Biotech's ability to cover its short-term liabilities with its short-term assets. The current ratio is calculated by dividing current assets by current liabilities, while the quick ratio excludes inventory from current assets to provide a more conservative view. Here’s a general overview:

• Current Ratio: A current ratio of greater than 1 indicates that a company's assets are capable of covering its liabilities.
• Quick Ratio: The quick ratio offers a more conservative look at liquidity.

Analysis of Working Capital Trends:

Working capital, which is the difference between a company’s current assets and current liabilities, is a measure of its operational liquidity. Monitoring the trends in working capital can reveal whether Legend Biotech is efficiently managing its short-term resources. A positive working capital balance indicates that a company has enough liquid assets to cover its short-term liabilities.

Cash Flow Statements Overview:

The cash flow statement is crucial for understanding the movement of cash both into and out of Legend Biotech. It is typically divided into three sections:

• Operating Activities: Cash flow from the normal day-to-day business activities.
• Investing Activities: Cash flow from the purchase and sale of long-term assets.
• Financing Activities: Cash flow from debt, equity, and dividends.

Here's what to look for in each section:

• Operating Cash Flow: A positive and growing operating cash flow is generally a sign of financial health.
• Investing Cash Flow: Investing activities often involve significant cash outflows, especially in the biotech industry where research and development are critical.
• Financing Cash Flow: Financing activities can show how the company raises capital.

Potential Liquidity Concerns or Strengths:

Several factors could highlight potential liquidity concerns or strengths for Legend Biotech:

• High Debt Levels: Significant debt obligations that are due in the short term could strain liquidity.
• Negative Cash Flow: Consistently negative operating cash flow might indicate underlying issues with the business model or operational efficiency.
• Strong Cash Reserves: A large cash balance and marketable securities can provide a buffer against unforeseen financial challenges.

For more in-depth insights, you can explore: Breaking Down Legend Biotech Corporation (LEGN) Financial Health: Key Insights for Investors

Legend Biotech Corporation (LEGN) Valuation Analysis

Assessing whether Legend Biotech Corporation (LEGN) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. These metrics provide a comprehensive view of the company's current market position relative to its intrinsic value. For additional insights, you might find this resource helpful: Breaking Down Legend Biotech Corporation (LEGN) Financial Health: Key Insights for Investors.

Here's a breakdown of essential valuation indicators:

• Price-to-Earnings (P/E) Ratio: As LEGN does not have positive earnings, the P/E ratio is not applicable.
• Price-to-Book (P/B) Ratio: The Price/Book ratio for LEGN is currently at 3.89. This means the market values the company at almost 3.89 times its book value.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: As of the latest data, LEGN's EV/EBITDA ratio is unavailable, suggesting challenges in using this metric for valuation due to negative or inconsistent EBITDA.

Analyzing Legend Biotech Corporation's (LEGN) stock performance over the past year provides context on market sentiment and investor confidence:

• Over the last year, the stock has shown price variations, reflecting broader market trends and company-specific developments. Investors should examine the stock's high and low points to understand its volatility and potential risk.
• As of April 18, 2025, LEGN is trading at $60.81.

Dividend yield and payout ratios are not applicable for Legend Biotech Corporation (LEGN), as the company does not currently offer dividends.

Analyst consensus is a crucial indicator of market sentiment. Recent analyst ratings offer a snapshot of professional opinions on Legend Biotech Corporation's (LEGN) stock:

• The consensus among analysts is to buy LEGN stock, suggesting a positive outlook on its future performance.
• An analyst set a price target of $86.00 for LEGN.

Here's a summary table of Legend Biotech Corporation's (LEGN) valuation metrics:

Legend Biotech Corporation (LEGN) Risk Factors

Legend Biotech Corporation (LEGN) faces a variety of risks that could significantly impact its financial health. These risks span internal operational challenges, external market pressures, regulatory hurdles, and strategic considerations.

Overview of Internal and External Risks:

Legend Biotech's risk landscape includes:

• Competition: Increasing competition from other CAR-T therapies, particularly Anito-cel.
• Regulatory Challenges: Potential policy changes affecting cell therapies.
• Manufacturing and Supply Chain: Risks associated with scaling up production.
• Market Conditions: Macroeconomic factors affecting biotech investment and funding.
• Safety Concerns: Potential safety concerns, particularly regarding neurotoxicity.
• Reliance on Single Product: Current reliance on a single product (Carvykti) for revenue generation.
• Complexity and Cost: Complexity and cost of CAR-T manufacturing process.
• Limited Geographic Presence: Focus primarily on U.S. and select European markets.

Discussion of Operational, Financial, or Strategic Risks:

Several factors highlight the specific operational, financial, and strategic risks confronting Legend Biotech:

• Operational Risks:
• Scaling up manufacturing to meet demand presents challenges in maintaining consistent product quality across multiple manufacturing sites.
• The complexity of CAR-T therapies requires personalized manufacturing processes that are difficult to scale.
• Financial Risks:
• Operating with negative gross profit margins of -3.33%, although the company holds more cash than debt.
• The company aims to achieve operational breakeven for CARVYKTI by the end of 2025 and company-wide profitability by 2026.
• Strategic Risks:
• Reliance on Carvykti makes the company vulnerable to setbacks in a single program.
• Uncertainties in healthcare reimbursement policies for personalized therapies.
• Potential intellectual property challenges and patent expiration risks, especially for BCMA CAR-T technology (2030-2035) with a potential revenue impact of $500-750 million.

Legend Biotech's pipeline offers diversification, with candidates like LB1908 targeting solid tumors, which mitigates the risk of relying solely on Carvykti.

A SWOT analysis indicates the following threats:

Mitigation Strategies or Plans:

Legend Biotech is actively implementing several mitigation strategies to address these risks:

• Expanding Manufacturing Capacity: Increasing production capabilities to meet the robust market demand for Carvykti, with a goal to supply 10,000 autologous doses by the end of 2025.
• Diversifying Pipeline: Developing multiple therapies to reduce reliance on Carvykti and mitigate the risk of setbacks in any single program.
• Addressing Neurotoxicity: Implementing new studies and mitigation strategies to manage neurotoxicity issues associated with CARVYKTI.
• Strategic Partnerships: Collaborating with Johnson & Johnson for Carvykti commercialization and expanding manufacturing capabilities through partnerships with Novartis.
• Geographic Expansion: Targeting international market expansion, particularly in Europe and potentially China.
• Quality Control: Maintaining consistent product quality across multiple manufacturing sites and increased production volumes.

Legend Biotech is also focused on ESG (Environmental, Social, and Governance) initiatives, aligning with the Sustainable Accounting Standards Board (SASB) standards to enhance corporate governance and sustainability.

See also: Mission Statement, Vision, & Core Values of Legend Biotech Corporation (LEGN).

Legend Biotech Corporation (LEGN) Growth Opportunities

Legend Biotech Corporation is poised for future growth, driven by several key factors. These include product innovations, strategic market expansions, and potentially, future acquisitions.

One of the primary drivers of Legend Biotech's growth is its focus on innovative products. The company's pipeline and research efforts are geared toward developing new therapies. For example, the company’s strategic partnerships enhance its research and development capabilities, potentially leading to breakthroughs and new product launches.

Future revenue growth projections and earnings estimates are critical for assessing Legend Biotech's potential. Analysts' estimates often provide a roadmap for where the company is headed, based on current market conditions and anticipated developments. Keep in mind that these projections can change based on various factors, including clinical trial outcomes, regulatory approvals, and market dynamics.

Strategic initiatives and partnerships play a significant role in Legend Biotech’s growth trajectory. Collaborations with other companies can expand its market reach and accelerate the development and commercialization of new products. These partnerships can also provide access to new technologies and expertise, further enhancing the company's competitive position.

Legend Biotech's competitive advantages also support its growth prospects. These advantages may include:

• Proprietary Technology Platforms: Innovative platforms that enable the development of novel therapies.
• Strong Intellectual Property Portfolio: Patents and exclusive rights that protect its products and technologies.
• Strategic Partnerships: Collaborations that enhance its research, development, and commercialization capabilities.
• Experienced Management Team: Leadership with a proven track record in the biotechnology industry.

These advantages help Legend Biotech maintain a competitive edge and capitalize on growth opportunities in the biopharmaceutical market.

For more detailed insights into Legend Biotech Corporation's financial health, you can check: Breaking Down Legend Biotech Corporation (LEGN) Financial Health: Key Insights for Investors