Darzalex's EU Approval for Early-Stage Myeloma: A Paradigm Shift and Catalyst for J&J's Oncology Growth

The European Medicines Agency's recent approval of Janssen-Cilag's Darzalex® (daratumumab) for high-risk smoldering multiple myeloma (SMM) marks a pivotal moment in oncology. This first-ever treatment indication for asymptomatic, high-risk SMM transforms the management of a disease that previously had no therapeutic options beyond “watchful waiting.” For Johnson & Johnson (JNJ), this approval not only expands its oncology franchise but also opens a new revenue stream in a previously untapped patient population. Investors should pay close attention to this milestone, as it underscores Darzalex's potential to redefine early-stage cancer intervention and bolster J&J's valuation in a competitive therapeutic landscape.

Clinical Breakthrough: Stopping Myeloma Before It Progresses

Smoldering multiple myeloma (SMM) is a precursor to active multiple myeloma, affecting approximately 15% of newly diagnosed cases. While most SMM patients remain asymptomatic, those classified as “high-risk” face a 50% chance of progressing to active myeloma or experiencing end-organ damage within two years. Until now, these patients received no treatment—only periodic monitoring.

The Phase 3 AQUILA trial, pivotal to Darzalex's approval, demonstrated that early intervention with the drug reduced the risk of disease progression or death by 51% compared to active monitoring. With progression-free survival as the primary endpoint, Darzalex's efficacy in delaying the onset of active myeloma represents a paradigm shift. By intercepting the disease before it becomes symptomatic, this approval could significantly improve long-term outcomes and reduce healthcare costs associated with late-stage treatment.

Market Potential: A $1 Billion Opportunity in the Making

The commercial implications are profound. With roughly 15,000 new SMM cases diagnosed annually in Europe and the U.S., and half of these classified as high-risk, Darzalex stands to capture a substantial patient population. Assuming a treatment cost of $20,000–$30,000 per patient annually, this cohort alone could generate $300–$450 million in annual revenue for J&J.

However, the true opportunity extends beyond SMM. The FDA accepted J&J's supplemental Biologics License Application for the same indication in November 2024, with a decision expected by early 2026. If approved, the U.S. market—which accounts for ~40% of global multiple myeloma drug sales—could add another $500–$700 million in peak sales. Combined with Darzalex's existing dominance in multiple myeloma (nine indications, including five frontline therapies), this new approval positions the drug as a lifelong therapy for patients across all disease stages.

Strategic Impact on J&J's Oncology Portfolio

Darzalex is already J&J's third-largest oncology asset, with $4.2 billion in 2024 sales. Its approval for SMM expands its addressable market into early-stage disease, a segment J&J had previously not targeted. This move aligns with the company's strategy to leverage its immuno-oncology pipeline and capitalize on “disease interception” opportunities—preventing progression rather than treating advanced disease.

The subcutaneous formulation, co-developed with recombinant hyaluronidase, further strengthens Darzalex's appeal. Administered in 5–8 minutes versus hours for intravenous infusions, this convenience factor could drive adoption over competitors like Takeda's Ninlaro® or AbbVie's Venetoclax.

Risks and Considerations

While the approval is a win, challenges remain. Pricing negotiations in European markets could temper revenue growth, and competition from emerging therapies (e.g., bispecific antibodies) may pressure Darzalex's long-term dominance. Additionally, the FDA's stance on the SMM indication—expected within months—will be critical for U.S. adoption.

Investment Thesis: J&J's Oncology Engine Gains Momentum

For investors, Darzalex's SMM approval is a catalyst for J&J's oncology portfolio valuation. The drug's expansion into early-stage myeloma adds years to its commercial lifecycle and reduces reliance on near-term patent expirations. With J&J trading at a forward P/E of 16.5x, below its five-year average of 18.2x, the stock appears undervalued relative to its oncology growth prospects.

Recommendation: Investors bullish on J&J's oncology pipeline should consider a long position in JNJ, particularly if the FDA follows the EU's lead. The stock's dividend yield of 2.8% provides downside protection, while the SMM indication offers a near-term earnings tailwind.

Conclusion

Darzalex's EU approval for high-risk SMM is more than a regulatory win—it's a testament to J&J's vision for intercepting cancer before it strikes. By capturing a previously untreatable population, the drug reinforces its position as a cornerstone therapy in multiple myeloma. With further approvals looming and a robust pipeline, J&J's oncology business is poised to deliver outsized returns, making this a compelling story for both healthcare investors and patients alike.