FAST NEWS: Legend Biotech Plans $250 Million ADS Public Offering

The latest: Genscript Biotech Corp. (1548.HK) announced its New York-listed subsidiary, Legend Biotech Corp. (LEGN.US), plans to conduct a public offering of $250 million worth of American Depository Shares (ADS). In addition, Legend Biotech has granted underwriters options to purchase up to $37.5 million in additional ADS in a subsequent public offering.

Looking up: The proceeds received by Legend Biotech in the public offering are expected to be used to invest in the clinical development of CAR-T cell therapy product cilta-cel, the commercialization of myeloma treatment drug CARVYKTI, the construction and expansion of manufacturing facilities and other general corporate purposes.

Take Note: Assuming full exercise of the underwriters’ options, Genscript’s shareholding in Legend Biotech will be diluted to 54.17% from 56.2%.

Digging Deeper: Legend Biotech has been “burning money” on R&D projects in recent years, dragging down the parent company’s earnings performance, but with the new product Cilta-cel approved by the U.S. Food and Drug Administration (FDA) for marketing in the first quarter of this year, it is expected to make significant revenue contributions in the future. According to Legend Biotech’s results for the first three months in 2022, its revenue jumped 198% year-on-year to $40.83 million, mainly from a single U.S. customer. Although R&D and selling expenses rose 14.4% and 58.5%, respectively, the loss for the period was halved to $41.09 million.

Market Reaction: Legend Biotech rose 1.81% to $50.50 in New York on Monday, but the stock plunged 6% to $47.45 in after-hours trading, at the middle range of the last 52 weeks.

Translation by Jony Ho

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