Clarification of Genmab's Epcoritamab Phase 3 Trial Results and Analysis of Biopharmaceutical Portfolio Risk Management

Based on the information I have gathered, I have identified an important clarification point. Let me provide you with a detailed analysis.

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According to the latest official announcement (January 16, 2026), Genmab’s epcoritamab Phase 3 EPCORE DLBCL-1 trial actually achieved

, rather than “failure” [1][2]:

Metric	Result	Statistical Significance
Progression-Free Survival (PFS)	HR: 0.74 [95% CI 0.60-0.92]	✓ Primary endpoint met
Complete Response Rate (CRR)	Improved	✓ Improvement observed
Duration of Response (DoR)	Improved	✓ Improvement observed
Time to Next Treatment	Improved	✓ Improvement observed
Overall Survival (OS)	HR: 0.96 [95% CI 0.77-1.20]	No statistical significance achieved

Despite the trial’s success in meeting the primary PFS endpoint, Genmab’s stock price still fell

on the day [3]. This phenomenon itself has important implications for biopharmaceutical portfolio risk management.

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The core risk of biopharmaceutical investment lies in the “all-or-nothing” nature of clinical trials. As the CEO of BridgeBio stated: “When you develop a drug, it either gets approved or it doesn’t. If it doesn’t get approved, what you’ve developed becomes worthless” [4].

• Portfolio Investment Approach
  : Invest in a portfolio of assets with different mechanisms of action targeting different rare diseases
• Stage Diversification Approach
  : Allocate to both early-stage (Phase I/II) and late-stage (Phase III) assets simultaneously
• Hub-and-Spoke Model
  : Adopt a diversified portfolio structure similar to BridgeBio’s [4]

The Genmab case shows that even if a trial is successful (significant PFS improvement), the stock price may still decline due to overly high market expectations or profit-taking by investors. This highlights the typical market behavior of “buy the rumor, sell the fact” [3].

• Establish Risk Hedging Mechanisms
  : Limit downside risk through option strategies or position reduction ahead of major catalyst events [5]
• Probability-Weighted Valuation Model
  : Adjust target positions based on trial success probability, rather than simply holding positions
• Set Triggered Exit Rules
  : Predefine stock price decline thresholds as stop-loss points

If an investment portfolio is overly concentrated on a single pipeline or a single company, any negative news may lead to significant volatility in the portfolio.

Risk Type	Response Measures
Single-asset risk	Limit the allocation of any single company to 10-15% of the portfolio
Single therapeutic area risk	Diversify across multiple therapeutic areas (oncology, immunology, rare diseases, etc.)
Single-stage risk	Balance allocation to assets in early discovery, clinical development, and commercialization stages

According to industry best practices, leading biopharmaceutical companies adopt the following risk management frameworks [6]:

• Supply Chain Diversification
  : Achieve multi-source supply of key raw materials and APIs, and geographically dispersed production facilities
• Financial Resilience
  : Large pharmaceutical companies maintain sufficient cash reserves to cope with R&D downturns, while small biotechs control cash burn rates
• Pipeline Diversification
  : Balance high-risk breakthrough projects with low-risk incremental improvement projects

• Adaptive Trial Design
  : Adopt flexible protocols such as Bayesian design and platform trials
• Strict Stage Gatekeeping
  : Establish clear “go/no-go” criteria to cut losses in a timely manner [6]
• Early Regulatory Communication
  : Align trial design with regulatory expectations through FDA pre-IND/pre-NDA meetings

• Risk Register
  : Identify, assess, and prioritize all major risks
• Scenario Planning
  : Simulate high-impact events (such as supply disruptions, regulatory safety warnings) for stress testing
• Risk Culture
  : Establish a psychologically safe culture that encourages employees to report risks early [6]

Evaluation Dimension	Key Checkpoints
Scientific Credibility	Reproducibility of key data, independent laboratory validation
Clinical Trial Design	Clinical significance of endpoints, rationality of patient population, trial size
Regulatory Pathway	Accelerated approval eligibility, breakthrough therapy designation
Intellectual Property	Breadth of patents, freedom-to-operate analysis
Cash Runway	Whether funds can support operations until key catalyst events
Management Team	Track record, industry experience, board composition [7]

Strategy Type	Holding Period	Applicable Scenario
Catalyst Trading	3-6 months	Capitalize on price fluctuations before and after trial data releases
Core Allocation	2-5 years	Confident in long-term scientific and commercial prospects
Hedging Strategy	Event-driven	Use options to limit downside risk of binary events [5]

• Option Strategies
  : Buy put options or construct collar strategies to limit downside risk
• Correlation Hedging
  : Allocate to asset classes with low correlation to biotechs
• Capital Management
  : Adjust position sizes based on success probability, as biotech investments are inherently binary [7]

Genmab’s stock price still fell 4.73% after the release of positive trial results, providing the following important insights:

1. Market Expectation Management
   : Stock prices often reflect expectations in advance, so trial success does not necessarily lead to stock price increases
2. Multi-Dimensional Evaluation
   : Should not only focus on whether the primary endpoint is met, but also evaluate:
   • Performance of secondary endpoints
   • Safety data
   • Regulatory approval pathway
   • Commercial potential
3. Profit-Taking Pressure
   : Large institutional investors often choose to take profits after good news is released
4. Long-Term Perspective
   : Despite short-term volatility, epcoritamab, as the first CD3xCD20 bispecific antibody to demonstrate PFS improvement in relapsed/refractory diffuse large B-cell lymphoma (R/R DLBCL), still warrants attention for its long-term commercial value [1][2]

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Biopharmaceutical investment features high risk and high return. Effective risk management requires:

1. Portfolio Diversification
   : Diversify investments across assets, therapeutic areas, and development stages
2. Event Risk Management
   : Establish hedges or adjust positions ahead of major catalysts
3. Continuous Due Diligence
   : Regularly evaluate pipeline progress, changes in the regulatory environment, and competitive landscape
4. Psychological Discipline
   : Accept the inherent volatility of biotech investments and avoid emotional decision-making

Even for companies with successful trial results (such as Genmab), investors need to be vigilant against the “buy the rumor, sell the fact” effect and establish a systematic risk management mechanism [5][7].

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[1] Genmab Announces Topline Results for Epcoritamab from Phase 3 EPCORE DLBCL-1 Trial (https://ir.genmab.com/news-releases/news-release-details/genmab-announces-topline-results-epcoritamab-duobodyr-cd3xcd20)

[2] AbbVie and Genmab Report Positive PFS Results from Phase 3 EPCORE DLBCL-1 Trial (https://www.biopharmaboardroom.com/news/15/4254/abbvie-and-genmab-report-positive-pfs-results-from-phase-3-epcore-dlbcl-1-trial-of-epcoritamab-in-relapsed-refractory-dlbcl.html)

[3] Genmab reports positive phase 3 trial results for epcoritamab - Investing.com (https://www.investing.com/news/company-news/genmab-reports-positive-phase-3-trial-results-for-epcoritamab-93CH-4452575)

[4] Bridging the “risk gap” in biotech investing - Pharmaphorum (https://pharmaphorum.com/deep-dive/bridging-risk-gap-biotech-investing)

[5] The Retail Investor’s Blueprint for Biotech - BioStock Info (https://www.biostockinfo.com/the-retail-investors-blueprint/)

[6] The CEO Playbook For Biopharma In An Age Of Regulatory And Market Volatility (https://www.biopharmaboardroom.com/analysis/1/4129/the-ceo-playbook-for-biopharma-in-an-age-of-regulatory-and-market-volatility.html)

[7] Biotech IPO Analysis: Risk, Reward & Due Diligence (https://crypto-investments-ltd.com/biotech-ipo-analysis-a-high-risk-high-reward-investors-guide/)