Johnson & Johnson (JNJ -1.41%) partner Legend Biotech is planning for a U.S. initial public offering. The company, which is owned by the Hong Kong-listed GenScript Biotech, has submitted a draft registration proposal to the U.S. Securities Exchange Commission (SEC), laying down the groundwork for an eventual IPO.

Legend Biotech was a relatively obscure company until its chimeric antigen receptor T cell (CAR-T) candidate showed impressive results in patients with multiple myeloma, a rare type of blood and bone marrow cancer. Back in 2017, when Legend first published its findings, its CAR-T candidate demonstrated a 100% response rate with a 94% clinical remission rate in a population of 35 drug-resistant patients.

A businessman holding a red arrow moving upwards with the letters IPO on stocks of coins.

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The results were so impressive that Johnson & Johnson decided to partner with Legend, paying $350 million in cash to help develop the program. Under the agreement, the pharmaceutical giant paid half of Legend's development costs in return for a 50% cut of all profits from international sales -- except in China, where GenScript Biotech would keep 70% of all profits. Legend's IPO filing is still confidential, so key details such as how much the biotech company intends to raise are anyone's guess at this point.

Understanding CAR-T Therapies

CAR-T therapies are a new type of cancer treatment, and they have shown promising results so far. Patients' T cells (an important type of cell in the immune system) are extracted from their blood and modified in a laboratory to better target cancer cells, then reinfused into the patient. Unfortunately, CAR-T therapies tend to be extremely expensive, costing as much as $475,000 for a round of treatment depending on the type of cancer.