Legend Biotech enters the post-earnings week with shorts in rapid retreat and the Street scrambling to reprice a CARVYKTI royalty story that just posted its best quarterly revenue growth in two years.
The catalyst is clear. Q1 2026 revenue came in at $305.1 million, up 56% from $195 million in the same quarter last year. The net loss narrowed sharply to $54.3 million from $101 million a year ago — a loss-per-share of $0.30 versus $0.54. That kind of loss-compression in a CAR-T name that still carries meaningful manufacturing and commercial-scale costs caught the market offside. The stock jumped more than 10% on May 12 alone, recovering almost all of a modest week-to-date loss to close at $28.26. The one-month gain is now 56%.
Short sellers have been the most visible losers. Short interest has dropped by roughly 13% over the past month and shed another 13% just in the past week, falling to 8.6% of the free float — a level that was 20.4 million shares as recently as mid-April and is now closer to 15.9 million. That is a meaningful unwind, not a rounding error. The ORTEX short score eased to 72.0 from a peak of 77.1 earlier in May, and the score rank sits in just the 8th percentile of its universe, reflecting the speed of the short-side retreat. Borrow conditions have loosened alongside: the cost to borrow has fallen 16% over the week to 0.41% annualised, its lowest level in the 30-day window, and availability remains comfortable, keeping any squeeze thesis at bay for now.
Options positioning is notably relaxed given the earnings swing. The put/call ratio is 0.46 — barely above its 20-day mean of 0.45 and only 0.4 standard deviations elevated. The 52-week high on the PCR was 1.66, so by that benchmark the current reading is firmly in call-dominant territory. That tells a story of investors leaning into the recovery rather than hedging defensively against a reversal.
The analyst reaction has been telling in both direction and magnitude. TD Cowen, which downgraded to Hold back in January when the stock was under pressure, raised its price target from $21 to $29 — still cautious, but catching up to where the stock now trades. Morgan Stanley held its Overweight rating but trimmed its target fractionally from $49 to $48. RBC Capital, maintaining Outperform, moved its target up to $64 from $62. The pattern: bulls are still bullish, the cautious are quietly repricing upward. The mean analyst target across the board is $57.25 — roughly double the current share price. Bulls point to CARVYKTI's $2 billion-plus annual sales run rate, the Janssen partnership structure, and a pipeline with potential in gastric cancer and small cell lung cancer. Bears flag the 2.9x sales multiple, payor-pushback risks, and manufacturing constraints. EPS momentum over 30 days ranks in the 95th percentile of the universe, reflecting the sharp upward revisions that followed today's print.
Ownership is tightly anchored. Genscript Biotech holds 47% of shares outstanding and has not moved its position, anchoring the float in a way that keeps the tradeable base narrow. FMR (Fidelity) holds another 13%, essentially flat. That concentration means the 15.9 million shares short are competing for borrow against a float that is structurally constrained — even with availability comfortable at current levels, any renewed short-building would face a tighter supply base than headline numbers suggest.
The next scheduled earnings event is August 21. Between now and then, the key variable is the pace of CARVYKTI revenue growth quarter-on-quarter, and whether the loss-narrowing trajectory holds as manufacturing costs evolve.
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