Anaptys (ANAB) Q1 2027 earnings review
Anaptys's drug royalties grow, but its cash keeps falling
Anaptys, which collects royalties on GSK's cancer drug Jemperli, earned more from the drug but kept losing cash. Royalty revenue rose about 22% by our math, though total revenue dropped against a one-time $50 million GSK payment last year. Sagard, an investor that bought the royalties in advance, still takes most of that money, so Anaptys's cash shrank again.
| Royalty revenue | $30.3M about +22% from a year ago, by our math |
|---|---|
| GSK's Jemperli sales | $365M +20% from a year ago |
| Cash and investments | $153.0M $164.1M in June |
| Plan to repay Sagard | Unchanged second half of 2027 |
⚖️ Verdict: ⚪ Neutral
The story is unchanged, because an early US approval in rectal cancer offsets a third straight quarter of slower Jemperli growth. Sales now grow at about the pace the long-term royalty goal needs, with little room to spare. One caution: lawsuit costs kept operating profit far below the company's goal of a margin above 95%.
The question now is whether Anaptys finishes repaying Sagard in the second half of 2027 and starts keeping the royalties. A higher royalty rate from October could speed payments, or slower sales could push the date into 2028. The royalty figure for October to December will tell.
🐂 Bull Case
Anaptys's Royalty Rate Rises to 12% Next Quarter
Anaptys collects royalties on Jemperli, a cancer immunotherapy that GSK sells. The rate climbs in steps through each calendar year. GSK's Jemperli sales for 2026 reached $1.0 billion by September, so its sales from October to December earn the higher rate.
- First $1 billion of yearly sales: 8% royalty
- Sales from $1 billion to $1.5 billion: 12% royalty
- Royalty as a share of sales this quarter: 8.3%, by our math
This matters because the step lifts income even if sales stop growing. By our math, a repeat of this quarter's $365 million in sales would earn about $44 million. But the rate resets each January.
What to watch: royalty revenue for October to December, due in early 2027. A figure near 12% of GSK's sales would show the higher rate at work.
Rectal Cancer Approval Arrived Four Months Early
Jemperli is a GSK cancer immunotherapy. Chief executive Daniel Faga said its growth in endometrial cancer and a new US approval "reinforce our confidence in its long-term potential in monotherapy indications", meaning uses of the drug on its own.
In October, US regulators approved Jemperli as "the first and only immunotherapy for adults with stage II and III" rectal cancer of one genetic type. Anaptys had listed a February 2027 decision date, so approval came four months early.
This matters because Anaptys's long-term royalty goal rests on GSK's sales ambition for such single-drug uses. Early sales will come from the US, because GSK plans filings in Europe and China only in late 2027.
What to watch: GSK's Jemperli sales for early 2027, the first full quarter with the rectal use. Faster quarterly growth than this quarter's would show rectal patients adding sales.
🐻 Bear Case
Costs Keep Profit Far Below the 95% Goal
Since spinning off its drug research arm in April, Anaptys only manages royalty deals. Earlier this year it set a goal of an operating margin above 95%. Collecting royalties needs few staff, so the goal looked reachable.
This quarter Anaptys kept about 66 cents of operating profit per dollar of revenue, by our math. Administrative costs took 38% of revenue, against 1% a year ago, when the research arm carried most overhead.
- Lawsuit legal costs: $4.8 million, or 16% of revenue
- Stock-based pay in administration: $3.2 million, up from $0.5 million
- Contractors, other legal work and public-company costs: $2.2 million
- Operating margin without the lawsuit costs: about 82%, by our math
The company blamed "legal costs for the GSK and Tesaro lawsuit", but they explain only about half of the gap to 95%. Stock pay and recurring costs took about 18% of revenue. A research credit from "adjustments related to the closeout of clinical contracts" also added about 4 points.
What to watch: administrative costs after the court rules, which Anaptys expects by early 2027. If they stay near this level without legal fees, the margin goal will depend on much higher royalties.
Jemperli Sales Growth Slowed for a Third Quarter
Jemperli, the GSK cancer immunotherapy behind almost all of Anaptys's revenue, keeps adding sales, but its yearly growth rate has narrowed for three quarters. Part of that is arithmetic: GSK now compares against bigger 2025 quarters.
- Growth in the first quarter of 2026: about 43%, by our math
- Growth in the second quarter: 26%
- Growth in the third quarter: 20%
This matters because Anaptys expects more than $390 million in yearly royalties as early as 2029, once Jemperli sells over $2.7 billion a year. By our math, that needs about 21% growth a year from this quarter's pace.
What to watch: GSK's Jemperli sales for October to December, which GSK publishes in early 2027. Growth that keeps slipping below about 21% would move the royalty goal past 2029.
Anaptys Spends Cash While Sagard Collects Royalties
Anaptys sold part of its future royalties on Jemperli, GSK's cancer immunotherapy, to Sagard, an investor, for $300 million. Sagard collects them until it has received $600 million, so Anaptys books revenue but gets little cash.
This quarter Anaptys used $15.5 million of cash in its operations. It now expects to repay the remaining ~$270 million in the second half of 2027, later than the mid-2027 it once pointed to.
Sagard accrued about $29 million this quarter, by our math, while repaying the rest by the end of 2027 needs about $54 million a quarter. The higher royalty rate from October helps, but it resets each January.
What to watch: Sagard's accrued total in the next quarterly report. A step toward $50 million in a quarter would show the 2027 date can hold.
👓 Other Themes
Vanda's Quimilza Faces a US Decision December 12
Anaptys also earns from Quimilza, Vanda's treatment for generalized pustular psoriasis, a form of psoriasis. US regulators set December 12 as their decision date. If they approve, Anaptys receives $5 million and then a 10% royalty on sales, under terms from an earlier report. No sales exist yet, so the drug added nothing to revenue this quarter.
Ruling in GSK Lawsuit Expected by Early 2027
Anaptys is suing GSK and Tesaro, the GSK company that holds the licence to Jemperli, in a Delaware court. Its main demand is "reversion of Jemperli rights", meaning the drug's rights would return to Anaptys. The court held a post-trial hearing on October 20, and Anaptys expects a ruling in late 2026 or early 2027.
A Stronger Pound Lifted Jemperli Sales in Dollars
GSK reports Jemperli, its cancer immunotherapy, in pounds, but Anaptys's royalty steps use dollar thresholds. By our math, quarterly sales rose about 19% from a year ago in pounds and about 20% in dollars. A stronger pound therefore helped GSK reach the $1 billion step sooner. A weaker pound in 2027 would delay that step.
💲 Other KPIs
The diluted share count rose 21% from a year ago, while basic shares grew about 7%. Options and other awards account for most of that gap, about 5 million shares. Anaptys reported no buybacks through June under its $100 million plan, which expires December 31.
The interest Anaptys books on its royalty sale to Sagard fell 17% from a year ago, the lowest in five quarters. This charge uses no cash, yet it absorbs most operating profit. After it, income before tax came to $3.3 million.
Money that partners owe Anaptys, mostly GSK royalties not yet paid, rose 19% from June. That tracks royalty revenue, which climbed 11% from last quarter. The balance still equals about one quarter's revenue, so partners show no sign of paying more slowly.
🔮 Guidance
Unchanged. Anaptys still plans to finish repaying Sagard, the investor that bought part of its royalties, in the second half of 2027. The balance has dropped by $26 million and then $29 million over the last two updates. The date has slipped once: until last quarter, the plan pointed to mid-2027.
Unchanged. The plan still has yearly royalties above $390 million from 2029 at the earliest. It rests on GSK's ambition for more than $2.7 billion in yearly sales of Jemperli used on its own. GSK's chief executive stated that ambition in pounds, and Anaptys converted it at 1.35 dollars per pound.
Unchanged. Anaptys still expects the Delaware court to rule by early 2027, after a post-trial hearing on October 20. Its demand is the return of Jemperli's rights. The company has not said how royalties would change if it wins.
Unchanged. US regulators still have December 12 as the decision date for Vanda's psoriasis drug. An approval would bring Anaptys a $5 million payment and start its 10% royalty, according to an earlier report.
New. GSK plans to file the rectal cancer use in Japan in the first half of 2027, then in Europe and China in the second half. It also expects a European decision in the second half of 2027. An earlier report tied about $15 million of European payments to this use, money that counts toward repaying Sagard.
Unchanged. AZUR-4, a trial of Jemperli plus chemotherapy in operable colon cancer, finishes its main phase in late 2026. AZUR-2 in colon cancer and JADE in head and neck cancer report data in 2028. Anaptys now describes AZUR-4 as reaching completion rather than reporting data, so results may come later.
❓ Key Questions
Will Anaptys use its $100 million buyback before December?
The authorization expires December 31, and Anaptys reported no repurchases through June. Meanwhile, the diluted share count rose 21%. Readers need to know whether the company plans to return cash now or wait for the Sagard repayment.
What sales growth does the 2027 Sagard date assume?
Earlier plans assumed about 10% Jemperli growth from one quarter to the next. Repaying ~$270 million by late 2027 needs far larger quarterly accruals than this quarter's, so the assumption behind the date matters.
How would a court win change Anaptys's royalties?
Anaptys seeks the return of Jemperli's rights. It has not said what that would mean for its royalty income, the Sagard deal or its costs. A ruling may arrive before the next quarterly report.
What will administrative costs be once the lawsuit ends?
Lawsuit fees took about 16% of revenue this quarter. Without them, the operating margin was about 82%, still short of the 95% goal. A cost figure without the lawsuit would show how Anaptys plans to close that gap.
When will Vanda launch Quimilza if regulators approve it?
Anaptys earns a 10% royalty on Quimilza sales. A further $25 million comes when yearly sales reach $100 million, an earlier report said. Vanda's launch timing decides when that income starts.