Genmab Faces Profit Squeeze as R&D for ADC Pipeline Weighs on 2026 Outlook
Genmab A/S reported full-year 2025 revenue of $3.72 billion, missing analyst estimates despite strong growth in its core oncology portfolio. The company is prioritizing long-term growth through its $1.8 billion ProfoundBio acquisition and the global rollout of Epkinly, leading to a temporary contraction in net profit margins.
Mentioned
Key Intelligence
Key Facts
- 1Full-year 2025 revenue reached $3.72 billion, missing analyst consensus by $50 million.
- 2GAAP earnings per share (EPS) for the fiscal year stood at $15.37.
- 3Net profit declined year-over-year due to the $1.8 billion ProfoundBio acquisition and commercialization costs.
- 4Epkinly (epcoritamab) sales growth remains the primary driver of non-royalty revenue.
- 5Management's 2026 guidance prioritizes R&D investment over immediate margin expansion.
- 6The 'Genmab 2030' strategy aims for 50% of revenue to come from wholly-owned products.
| Metric | ||
|---|---|---|
| Total Revenue | $3.72 Billion | ~$2.85 Billion |
| GAAP EPS | $15.37 | ~$12.40 |
| R&D Focus | ADC & Bispecifics | Bispecifics |
| Operating Margin | Contracting | Expanding |
Who's Affected
Analysis
Genmab A/S (GMAB) reported its fourth-quarter and full-year 2025 financial results, revealing a complex transition period for the Danish biotechnology leader. While the company continues to benefit from the massive success of Darzalex, its flagship multiple myeloma treatment partnered with Johnson & Johnson, the latest figures underscore the financial friction inherent in Genmab’s evolution into a fully integrated commercial entity. Total revenue for the year reached $3.72 billion, a figure that narrowly missed consensus estimates by approximately $50 million. This slight top-line miss, coupled with a reported drop in full-year net profit, suggests that the heavy investments in its proprietary pipeline and commercial infrastructure are beginning to weigh on the bottom line even as royalty streams remain robust.
The core of Genmab’s current strategy lies in diversifying its revenue away from passive royalties toward owned or co-owned assets. Epkinly (epcoritamab), the bispecific antibody co-developed with AbbVie, remains the primary growth engine in this regard. During the earnings call, CEO Jan van de Winkel highlighted the continued uptake of Epkinly in diffuse large B-cell lymphoma (DLBCL) and its potential expansion into follicular lymphoma. However, the costs associated with these global launches, alongside the integration of ProfoundBio—the antibody-drug conjugate (ADC) specialist acquired in 2024 for $1.8 billion—have significantly increased operating expenses. The ProfoundBio acquisition was a strategic bet on the next generation of cancer therapies, but the R&D requirements for its mid-to-late-stage ADC candidates are substantial, contributing to the profit contraction observed in the 2025 fiscal year.
Total revenue for the year reached $3.72 billion, a figure that narrowly missed consensus estimates by approximately $50 million.
A significant portion of the analyst discussion focused on the "Genmab 2030" vision, which aims to have multiple wholly-owned products on the market by the end of the decade. This transition requires a fundamental shift in the company's financial profile. Historically, Genmab operated as a high-margin R&D engine, collecting royalties with minimal overhead. Now, as it builds out global commercial teams for products like Tivdak (partnered with Pfizer) and its emerging ADC portfolio, the company is absorbing the full weight of marketing and distribution costs. The integration of ProfoundBio’s Rina-S, a promising ADC targeting folate receptor alpha (FR̡), is a prime example. While Rina-S offers a potential multi-billion dollar opportunity in ovarian cancer, the clinical trial costs for Phase 2 and Phase 3 studies are expected to peak in 2026 and 2027, creating a short-term headwind for earnings per share.
Market reaction to the FY26 outlook appears cautious as management signaled that 2026 will be a year of "investment and execution" rather than immediate margin expansion. Analysts are particularly focused on the potential tapering of Darzalex payments in the coming years as patents expire or transition to subcutaneous formulations with different royalty structures. To mitigate this, Genmab is accelerating its internal pipeline, but the success of these efforts is not guaranteed. The company's GAAP EPS of $15.37 for the fiscal year reflects a solid foundation, but the year-over-year decline in net profit highlights the cost of this independence. CFO Brad Pagano emphasized that the company's balance sheet remains strong enough to support these investments without the need for dilutive financing, a key differentiator for Genmab in a volatile biotech market.
Looking forward, Genmab faces the dual challenge of maintaining its industry-leading R&D productivity while proving it can execute commercially on a global scale without relying solely on larger pharmaceutical partners. The miss in Q4 revenue, though relatively minor in the context of its multi-billion dollar scale, serves as a reminder that the path to becoming a top-tier independent biotech is capital-intensive. Investors should watch for upcoming data readouts from the ADC pipeline, specifically the Rina-S data expected in late 2026, and any shifts in the competitive landscape for bispecific antibodies. These milestones will dictate whether Genmab can regain its profit momentum and successfully pivot from a royalty-dependent firm to a diversified oncology powerhouse.