Legend Biotech Files IPO Prospectus as Carvykti Nears $1 Billion Milestone, Poised to Become China's Second $1B Innovative Drug

In the first quarter, Johnson & Johnson reported revenue of $21.4 billion, a year-over-year increase of 2.3%. Among this, sales of the BCMA CAR-T therapy Carvykti (Ciltacabtagene Autoleucel), developed in collaboration with Legend Biotech, reached $157 million, marking a 118% year-over-year growth.

To put things into perspective, last year's total revenue from Carvykti surpassed $500 million (approximately 3.6 billion yuan), which brought Legend Biotech’s external income to $285 million, marking a 144.2% year-on-year increase. With another significant rise in the first quarter this year, following this growth trend, Carvykti’s sales are highly likely to exceed $1 billion this year, making it the second Chinese-produced drug to reach the billion-dollar mark after BeiGene's Zanubrutinib.

As early as 2017, when the clinical data of Carvykti was unveiled, it was astonishing — 100% "cure" was achieved in 9 patients. Afterwards, Legend Biotech chose to collaborate with Johnson & Johnson to go global, signing an exclusive global license and cooperation agreement to jointly develop and commercialize the product. Johnson & Johnson has significant advantages in internationalization, product development, submission, registration, and commercialization.

In March 2022, Carvykti was officially approved in the United States for the end-line treatment of patients with relapsed or refractory multiple myeloma. This is the first CAR-T cell therapy produced in China to be approved by the U.S. Food and Drug Administration (FDA), and the second CAR-T therapy targeting BCMA available in the U.S. market.

Legend Biotech's Carvykti Approval Success Attributed to Excellent Clinical Trial Design. In the United States, clinical trial data for drug approval applications must be applicable; relying solely on data from 100% Asian populations or trials conducted exclusively in China would pose significant challenges for new drug applications. However, the clinical trial led by Johnson & Johnson skillfully circumvented issues of concern to the FDA.

Last week, on April 6, Carvykti achieved another breakthrough. Legend Biotech announced that it had been approved for use in the United States as a second-line treatment for patients with relapsed or refractory multiple myeloma. Among all CAR-T, bispecific antibodies, and antibody-drug conjugates (ADCs), Carvykti is the world's first and only B-cell maturation antigen (BCMA)-targeted therapy approved for second-line treatment of multiple myeloma patients. This means that Carvykti can capture a larger market share compared to other BCMA-targeted drugs.

The journal *Nature* once published an article predicting that Carvykti would become the world's best-selling cell therapy by 2027, with future peak sales exceeding $5 billion. Consequently, Johnson & Johnson confidently forecasted that it could achieve $1 billion in sales this year, which might be a logical outcome.

In December 2022, Legend Biotech submitted the marketing application for Cilta-cel (Carvykti) to the National Medical Products Administration, but failed to "take the lead."

In June 2023, the CAR-T therapy targeting BCMA, Ixazomib Celgene, developed by IASO Bio and Innovent Biologics, was approved for marketing. In March 2024, Zevor-cel, targeting BCMA and developed by CARsgen Therapeutics, was also approved.

Legend Biotech stated that Cilta-cel is expected to be launched in China by the middle of this year. If launched in China, Cilta-cel will become the sixth CAR-T product in the country and the third BCMA-targeted CAR-T. Its price in the United States is $465,000, while the pricing of the five existing CAR-T therapies in China ranges from 999,000 to 1.29 million yuan. The drug's pricing in China may also be relatively high.

According to the agreement signed at that time, Johnson & Johnson and Legend Biotech will share costs and profits in a 3:7 ratio in Greater China; in other global regions, the agreed ratio is 5:5.

If approved in the Chinese market, the sales of Cilta-cel (Carvykti), which has lost its first-mover advantage, may struggle to match those in the U.S. However, under the profit-sharing agreement with Johnson & Johnson, the Chinese market could offer Legend Biotech greater profit potential.

For Carvykti, the biggest limiting factor lies in its extremely slow production process.

Autologous CAR-T products require the extraction of autologous T cells from the body, which are then modified and processed ex vivo, expanded, and infused back into the body for treatment. Typically, the entire manufacturing cycle for CAR-T takes 2 to 4 weeks, with a normal process for manufacturing steps requiring 9 days. The long preparation cycle and complex process result in excessively high costs.

In summary, CAR-T, unlike biologics such as PD-1, cannot achieve large-scale commercial production through the amplification of identical starting materials. Instead, it requires small-batch, multi-lot production, resulting in "patients waiting for the drug."

Last year, due to supply constraints, Legend Biotech paused its efforts to advance the sale of Carvykti in the UK. Subsequently, Legend Biotech signed an agreement with Novartis for the technology transfer, production, and clinical supply services of the BCMA CAR-T product. By utilizing Novartis' existing facilities for production, the manufacturing scale was significantly expanded. Following this, sales of Carvykti began to grow rapidly.

Moreover, the commercialization requirements for Carvykti are stricter than those for clinical trials, with a higher manufacturing failure rate. The FDA's release specifications for commercial Carvykti products are more stringent than those used in clinical studies. Additionally, in clinical trials, researchers screen patients to determine eligibility. However, in the real world, patient baseline characteristics are more diverse. The health status of patients can affect the vitality and quantity of collected T cells, which may have an impact on the production of Carvykti.