Johnson & Johnson (J&J) and Legend Biotech are embarking on a significant initiative to enhance their cell therapy manufacturing capabilities. In a significant move, the two companies have sanctioned an extra $150 million investment aimed at expanding production capabilities at their newly established facility in Ghent, Belgium. The recent decision came about because more people wanted their CAR-T therapy, Carvykti. In April 2024, the FDA gave it more approval so that it could be used as a second-line treatment for multiple myeloma.

A new investment initiative is poised to enhance production capacity at the Tech Lane facility, which is scheduled to commence clinical production of Carvykti in the upcoming weeks. Legend's CEO, Dr. Ying Huang, has announced that they anticipate regulatory approval for commercial supply by the end of 2025.

Jessie Yeung, the interim Chief Financial Officer of Legend, provided a detailed timeline for the company's expansion, noting that engineering and design work is currently underway. Construction is set to commence in the latter half of 2025, with an anticipated completion date in 2028. A company spokesperson has announced that the expansion will concentrate on catering to the European market. 

This initiative is a component of a comprehensive strategy aimed at addressing previous supply constraints. Following Carvykti's initial approval by the FDA in 2022, supply shortages have posed significant challenges to revenue growth. The expansion of the 2024 label has markedly broadened the pool of eligible patients, thereby amplifying the demand for increased production capacity.

Johnson & Johnson and Legend are increasing their production efforts at various locations. In New Jersey, contract manufacturer Novartis has secured FDA approval to commence the commercial production of Carvykti at its facility in Morris Plains. In a significant development, Johnson & Johnson and Legend's Raritan facility, which benefitted from a substantial $500 million investment in 2022, is anticipated to secure regulatory approval for an expansion later this year.

Furthermore, Legend’s Obelisc facility, located in Ghent, which commenced commercial production in late 2024, is currently operating at full capacity. Johnson & Johnson and Legend are poised to achieve their goal of producing 10,000 doses of Carvykti each year, thanks to these recent expansions.

In light of heightened production initiatives, Wall Street analysts continue to express caution regarding the market trajectory of Carvykti beyond the year 2026. The increasing outpatient use of Carvykti signifies a significant opportunity. As of now, there are 104 certified treatment centres across the United States that provide therapy. Notably, the proportion of outpatient administration has risen significantly, climbing from 30% to over 50% within the last year, as reported by industry analyst Geoff Meacham.

Johnson & Johnson and Legend Biotech have initiated a comprehensive three-stage strategy aimed at enhancing the adoption of Carvykti within community oncology environments. This year, more than 8,000 community oncologists are being educated to enhance the process of patient referrals. In the upcoming phase, plans are underway to roll out Carvykti to regional hospitals that maintain close affiliations with larger medical centres. By the year 2026, the organisation plans to implement direct administration in community oncology practices.

One significant challenge on the horizon is the competition posed by Gilead Sciences and Arcellx’s BCMA CAR-T therapy, anito-cel. A pivotal phase 2 trial has revealed that the drug demonstrates promising efficacy and safety, prompting analysts to raise questions about Carvykti's market dominance. Huang addressed the concerns, asserting that Anito-Cel is set to primarily compete in the late-line setting, whereas Carvykti will redirect its focus towards second- to fourth-line treatment options.

One significant concern is the potential for delayed neurotoxicities linked to Carvykti, which may include symptoms of Parkinsonism. A new study from the Colorado Blood Cancer Institute suggests that an unchecked rise in the absolute lymphocyte count (ALC) could be a sign of neurotoxicities. In a significant development, researchers are investigating the use of prophylactic steroid treatment as a possible strategy for mitigation. Legend is partnering with various centres to conduct further investigations into this matter during forthcoming clinical trials.

Through significant financial backing and a well-crafted expansion strategy, J&J and Legend are setting the stage for Carvykti's enduring success. Despite ongoing competition and safety concerns, the potential for enhanced production capacity and community adoption initiatives may bolster Carvykti's market presence in the years ahead.