Genmab A/S (GMAB): A Bull Case Theory

We came across a bullish thesis on Genmab A/S (GMAB) on Substack by Oliver | MMMT Wealth. In this article, we will summarize the bulls’ thesis on GMAB. Genmab A/S (GMAB)’s share was trading at $20.20 as of March 18^th. GMAB’s trailing and forward P/E were 11.41 and 11.61 respectively according to Yahoo Finance.

A medical professional in a hospital, using targeted cancer therapuetics to treat cancer patients.

Genmab (GMAB) is a leading biotech company based in Copenhagen, specializing in antibody-based therapies for cancer. Operating under a partnership-driven model, GMAB collaborates with major pharmaceutical firms like J&J and Pfizer, focusing on licensing its innovations in exchange for royalties and milestone payments. While this model has historically provided steady revenue, the company is gradually shifting toward co-developing and co-commercializing its own drugs, a move that could significantly impact its future growth trajectory. With seven drugs in Phase III trials, including Rina-S, a promising ovarian and endometrial cancer treatment expected to expand patient eligibility, GMAB’s pipeline is well-positioned for substantial value creation. However, the inherent risks of biotech investing, particularly the reliance on clinical trial success, make GMAB a challenging investment. The company’s valuation, despite its strong pipeline, remains discounted relative to peers like ABBV and GILD, trading at 37% and 50% of their multiples, respectively. This reflects uncertainty around its evolving business model but also presents an opportunity for investors willing to bet on its long-term potential. While GMAB’s disciplined acquisition strategy and promising pipeline provide reasons for optimism, its unpredictable revenue trajectory makes it a difficult investment for those unfamiliar with biotech, reinforcing its high-risk, high-reward nature.

Genmab A/S (GMAB) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held GMAB at the end of the fourth quarter which was 14 in the previous quarter. While we acknowledge the risk and potential of GMAB as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than GMAB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.