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Business News/ News / Blockbuster Cancer Treatment Stymied by Supply Chain—for Now
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Blockbuster Cancer Treatment Stymied by Supply Chain—for Now


A cell therapy for multiple myeloma promises to be a major blockbuster for J&J and partner Legend, if they can increase manufacturing.

Johnson & Johnson and its partner can’t keep up with demand for its cell therapy Carvykti. Premium
Johnson & Johnson and its partner can’t keep up with demand for its cell therapy Carvykti.

A multiple myeloma diagnosis can be devastating. Encouragingly, though, the market is getting increasingly crowded with powerful new therapies that can extend patients’ lives.

Cell therapy is one particular area of great hope, with clinical data from Johnson & Johnson’s Carvykti driving excitement in the medical field and on Wall Street. A late-stage study released earlier this year showed the treatment cut the risk of relapse by 74% compared with the standard of care—a level of efficacy seen as game-changing by experts, though with potentially serious side effects.

There is a major hitch, though: J&J and its partner, Legend Biotech, can’t keep up with demand, which means some patients die on wait lists. The companies have vowed to scale up manufacturing as quickly as possible, but it won’t be easy. The issue isn’t limited to J&J: A similar therapy from competitor Bristol-Myers Squibb, Abecma, also faces manufacturing hurdles.

Making these engineered human cell products known as CAR-Ts is a complex and individualized process. The treatment involves removing T cells from a patient’s blood, modifying them in a lab to fight cancer and then infusing them back into the patient. It takes several weeks for the cells to be shipped back and forth between the medical centers and the labs—an agonizing process for very sick patients.

While J&J and Legend say they are doing everything they can to increase manufacturing, the process is basically bespoke, which means economies of scale don’t apply.

“Intrinsically, it’s very, very different from the typical manufacturing methodology for pharmaceuticals," explains Legend Chief Executive Officer Ying Huang.

J&J and Legend received U.S. Food and Drug Administration approval last year to treat later stage, sicker patients, and are now seeking approval to expand use of the treatment for earlier stage patients. Regulatory approval is likely to come next year. Whether they will be able to quickly, and smoothly, increase capacity from about 1,000 shots annually to their stated goal of 10,000 shots by 2026 is the bigger question.

Wall Street is betting they can. Legend’s stock is up 55% over the past 12 months. At a cost of about $500,000 for the one-time therapy, the 10,000 shots would translate into about $5 billion in annual revenue, split evenly between the partners.

While that is arguably already close to being priced into Legend’s stock, encouraging signs that they can meet that goal and eventually expand beyond that would drive the shares higher. For J&J, while incremental moves on Carvykti might not be equally material, its expansion will go a long way in cementing the company’s position as a leader in multiple myeloma while helping to replace revenue from blockbuster drugs going off patent.

RBC Capital analyst Leonid Timashev sees the joint opportunity eventually reaching more than $10 billion annually. But he says that getting the manufacturing part down quickly is especially important because competitors such as Gilead Sciences, which already has cell therapy experience and is jointly developing a competing CAR-T asset for multiple myeloma, are racing to catch up.

The companies’ most recent earnings report helped fuel bets that things might be on the right track after a difficult rollout. In July, J&J reported $117 million in Carvykti sales in the second quarter, a 63% increase from the previous quarter.

“That shows investors that they are ramping up and could continue to surprise on the upside," said Kostas Biliouris, an analyst at BMO Capital Markets, who is also upbeat on Legend’s prospects.

Huang, the CEO, attributed the bump in sales to FDA approval to increase capacity at its New Jersey site. He added the companies are currently working on receiving a second FDA capacity approval this year, which would affect results in the first quarter of 2024.

The companies are also building additional facilities in Belgium and bringing the production of a key component known as lentivirus, which was in shortage during the pandemic, in-house. Altogether, the partners are spending about $1 billion to build out their capacity, Huang says.

Carvykti’s commercial success ultimately will depend on how well the product does with physicians and patients in earlier stages of the disease in an increasingly crowded market. First, the companies will have to find a way to make a lot more of the therapy, and quickly.

Write to David Wainer at

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