Genmab's 2025 Earnings Surge and Strategic Pipeline Momentum Position It as a High-Growth Biotech Play

Genmab A/S has emerged as a standout performer in the biotechnology sector in 2025, driven by a combination of robust royalty income, strategic pipeline advancements, and disciplined capital allocation. With a 19% year-over-year revenue increase in the first half of 2025, the company has demonstrated its ability to scale profitably while maintaining a sharp focus on long-term innovation. For investors seeking exposure to a high-growth biotech play, Genmab's current trajectory offers compelling upside potential.

Earnings Surge: Royalty Income as a Growth Engine

Genmab's financial performance in 2025 has been anchored by its royalty revenue, which surged 24% to $1.378 billion in the first half of the year. This growth was primarily fueled by the commercial success of DARZALEX (daratumumab), co-developed with Johnson & Johnson, and Kesimpta (ofatumumab), partnered with Novartis. DARZALEX net sales alone reached $6.776 billion for the period, reflecting a 22% year-over-year increase. The drug's dominance in the multiple myeloma market, coupled with the approval of its subcutaneous formulation (DARZALEX FASPRO®), has solidified its role as a cash-flow generator for Genmab. The company's operating margin also improved significantly, rising from 30.3% in Q2 2024 to 38.9% in Q2 2025, highlighting its efficient cost structure and strong pricing power. With royalty revenue now accounting for over 80% of total revenue, Genmab has effectively transformed into a high-margin royalty engine, insulated from the operational risks of manufacturing and commercialization. Historically, Genmab's stock has shown positive momentum following earnings beats, with notable price increases in the days following reports exceeding expectations.

Pipeline Momentum: Late-Stage Catalysts and Global Expansion

Beyond its royalty-driven model, Genmab's pipeline is a critical growth lever. The company has made significant strides in advancing epcoritamab (EPKINLY®), its CD3/CD20 bispecific antibody, into earlier-line therapy for lymphoma. A supplemental Biologics License Application (sBLA) for epcoritamab in combination with rituximab and lenalidomide for relapsed or refractory follicular lymphoma was submitted to the FDA in 2025, with a potential approval expected to expand its market reach.

Equally promising is Rina-S (Rinatabart sesutecan), a novel antibody-drug conjugate (ADC) showing encouraging antitumor activity in endometrial cancer. Positive Phase 2 data presented at the 2025 ASCO Annual Meeting have paved the way for Phase 3 trials, which could position Rina-S as a best-in-class therapy in a high-unmet-need oncology segment. Additionally, Genmab's recent launch of Tivdak (tisotumab vedotin) in Japan underscores its commitment to global commercial expansion, diversifying its revenue streams beyond the U.S. and Europe.

Disciplined Capital Allocation: Fueling Growth and Shareholder Value

Genmab's capital allocation strategy in 2025 reflects a balanced approach to sustaining growth while rewarding shareholders. The company has allocated $548 million to R&D in the first half of the year, prioritizing late-stage programs with multibillion-dollar potential. This investment is justified by its strong cash position—$2.9 billion in liquidity—as of June 2025, providing ample flexibility for strategic opportunities.

Shareholder returns have also been a focus, with Genmab repurchasing approximately $459 million worth of shares under its buyback program. These repurchases, executed at an average price of DKK 1,436, have enhanced earnings per share (EPS) and signaled management's confidence in the company's intrinsic value. Furthermore, Genmab's updated 2025 guidance—revenue of $3.5–$3.7 billion and operating profit of $1.06–$1.41 billion—underscores its ability to scale profitably while maintaining a conservative balance sheet.

Investment Case: A High-Conviction Play

Genmab's combination of royalty-driven cash flow, a high-impact pipeline, and disciplined capital allocation positions it as a rare biotech investment with both near-term visibility and long-term growth potential. The company's updated guidance, coupled with its strong operating margin and expanding therapeutic portfolio, suggests a compound annual growth rate (CAGR) of 20%+ for the next three years.

For investors, the key risks include regulatory delays for epcoritamab or Rina-S and potential competition in the ADC space. However, Genmab's first-mover advantage in bispecific antibodies and its proprietary technology platforms mitigate these risks. Given its current valuation—trading at a price-to-sales (P/S) ratio of 12x compared to the industry average of 18x—Genmab offers a compelling risk-reward profile.

Conclusion: A Biotech Powerhouse with Long-Term Appeal

Genmab's 2025 earnings surge and strategic momentum validate its status as a high-growth biotech play. With a robust royalty base, a pipeline rich in late-stage catalysts, and a disciplined capital allocation framework, the company is well-positioned to deliver outsized returns for investors. For those seeking exposure to innovation-driven growth in oncology and immunology, Genmab represents a high-conviction opportunity with a clear path to sustained value creation.

Investment Recommendation: Buy. Target price of $1,800 (DKK) based on 15x 2026 revenue estimates.