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    Is AnaptysBio (ANAB) Cheap On Its Royalty Story Despite Tax Driven Earnings?

    Simply Wall St·09/27/2026 01:27:00
    語音播報

    AnaptysBio (ANAB) drew attention after reporting fourth quarter net income of US$183.88 million, reversing a prior loss. The company also reported a US$176.4 million income figure that was driven mainly by a US$181.5 million income tax benefit.

    Recent trading tells a mixed story. The share price has pulled back, with 1-day, 7-day, 30-day and 90-day share price returns all declining. However, AnaptysBio still shows a positive year-to-date share price return and very strong multi-year total shareholder returns.

    Scan how AnaptysBio compares with other royalty driven biopharma plays by reviewing our curated list of 16 high quality undiscovered gems before the next wave of earnings reshapes the opportunity set.

    AnaptysBio now pairs a sharp pullback with very strong multi year returns and a tax driven earnings surge that does not translate into cash. Does that setup still leave the risk reward tilted toward buyers?

    Most Popular Narrative: 43.3% Undervalued

    AnaptysBio last closed at $51. The most followed valuation story around the stock argues for a fair value of $90, which frames the recent pullback very differently to the headline earnings print.

    ANAB has a scaling and rising royalty stream, one up and coming new royalty, a loan that dies in 2027 which will result in a doubling of revenue, and a lawsuit that could soon double the value of the stock.

    See why 3 investors see AnaptysBio as 43% undervalued.

    According to TripleS, the heart of the AnaptysBio thesis is less about quarterly income and more about how Jemperli and imsidolimab royalties, the Sagard royalty financing and the ongoing litigation with GSK intersect. The argument is that a lean royalty vehicle with fewer than 10 full time employees, roughly $140 million of net cash and under $10 million of annualised operating costs can convert a high margin royalty stream into substantial excess cash once the Sagard structure runs off.

    In that framing, the sharp disconnect between reported net income and cash generation in the latest quarter reflects timing and accounting rather than the underlying royalty engine. The narrative leans on the idea that Sagard absorbing a slice of Jemperli payments depresses near term cash receipts, while the non cash tax benefit inflates earnings, which helps explain why AnaptysBio screens as having high non cash earnings and interest that is not well covered by current profits.

    TripleS also flags the lawsuit archetype as a swing factor on top of the royalty base. The complaint in Delaware focuses on alleged undisclosed Jemperli trials with competitors and the use of Tesaro as an effective shell for GSK, with remedies that range from damages to the extreme case of Jemperli reverting back to AnaptysBio. That legal overhang cuts both ways for investors who are weighing the risk of an adverse ruling against the possibility of another settlement after the court already dismissed an attempt to cut the existing royalty rate.

    Layered on top is the valuation gap. AnaptysBio trades at what screens as a low P/E multiple relative to both the US biotech industry and a fair P/E estimate, and it is flagged as trading at a large discount to a DCF fair value of $1,276.20 using the SWS DCF model. The narrative fair value of $90 is far lower than that model output, which suggests the author is baking in legal uncertainty, forecasts for declining earnings over the next three years and the drag from higher risk funding sources even as revenue is projected to rise 28.2% per year.

    For readers, the key question is whether this combination of a royalty driven model, heavy use of non cash items in current earnings, forecast revenue growth and a live court case justifies AnaptysBio trading where it does today. The most followed storyline argues that it does not, but it is anchored in specific assumptions about royalty trajectories, loan amortisation and legal outcomes that each carry their own risks.

    Result: Fair Value of $90 (UNDERVALUED)

    Still, the AnaptysBio story depends heavily on royalty performance and a favourable outcome in the GSK dispute, so weaker Jemperli uptake or an adverse ruling could quickly puncture the bullish case.

    Find out about the key risks to this AnaptysBio narrative.

    Next Steps

    If the AnaptysBio story feels finely balanced between potential upside and clear hazards, quickly stress test the thesis against your own checklist, and then weigh the 4 key rewards and 3 important warning signs.

    Looking for more AnaptysBio sized ideas?

    If AnaptysBio has sharpened your focus on risk, reward and timing, do not stop here. Broaden your watchlist now using the Simply Wall Street Screener.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.