AnaptysBio earnings on deck: Can Jemperli offset revenue slide?

AnaptysBio is set to release its second-quarter earnings on Monday, with analysts closely examining whether the company's strong royalty growth from its licensed cancer drug Jemperli can counter a projected sequential revenue decline and confirm its shift towards a pure royalty management entity. Analysts anticipate a loss of 13 cents per share on $20.2 million in revenue, representing a significant improvement from the $1.84 loss in the previous quarter but still indicating a 21% decrease in revenue from $25.6 million.

Following the spin-off of its drug-development operations, AnaptysBio's shares have risen from a 52-week low of $17.11. With all 11 analysts covering the stock recommending a Strong Buy, the average price target stands at $86.64, suggesting a 54% upside potential. However, earnings per share (EPS) estimates have dropped by 53% over the past two months, while revenue estimates have declined by 14% over the same period.

TD Cowen analyst Joseph Thome has maintained a Buy rating but reduced his price target from $75 to $70. The report's focus will be on whether Jemperli royalties, which increased by 44% to $24.7 million in the first quarter, can sustain their momentum after the FDA's acceptance of Jemperli's application for priority review in rectal cancer, with a decision expected in February 2027.

This potential regulatory milestone may unlock substantial value, with TD Cowen estimating peak U.S. sales of approximately $290 million for the indication. Investors will closely monitor management's outlook for imsidolimab, the company's other licensed asset being developed by Vanda Pharmaceuticals, which awaits a decision on generalized pustular psoriasis by December.

The company's market capitalization of $1.67 billion is questioned, especially given its negative forward price-to-earnings ratio of 59.6. AnaptysBio recently announced a $100 million stock repurchase plan after completing its biopharma spin-off, and investors will be keen to understand how the company intends to utilize its cash reserves and execute the buyback.

The earnings report will reveal whether AnaptysBio can achieve consistent profitability improvements as a streamlined royalty company or if quarterly volatility will continue as drug sales ramp up and collaboration economics evolve. With year-over-year revenue expected to decline by 9%, the path to sustainable growth will depend on the success of GSK in expanding Jemperli's label and market penetration.