With its shares up by 49% in one month and 80% in one year, shareholders of Legend Biotech (LEGN -1.53%) are bound to be feeling pretty smart right about now. After commercializing an oncology medicine last year and seeing its stock skyrocket after a very positive set of data leaked from one of its late-stage clinical trials in April, it looks like the company's future is bright.

But is there still time to get in on this stock's ascent, or is it about to lose a bit of steam in the face of overly high expectations? Let's take a look at the arguments for each position.

Why it's reasonable to wonder if it might be too late

In 2022, Legend Biotech launched its first medicine, Carvykti, which is a genetically engineered cell therapy designed to treat treatment-resistant relapsed or refractory multiple myeloma. As per the terms of its agreement with its development collaborator, Johnson & Johnson, the biotech will be entitled to 50% of the revenue and costs in most international jurisdictions and 70% in Greater China. In 2022, it brought in $117 million, though that wasn't enough to make it profitable. Furthermore, it also has the possibility of earning an additional $770 million in milestone payments if things go according to plan. With a significant amount of success in the rearview mirror, it's no surprise that investors are wondering whether there's any upside left in this stock. 

Since all investor-centric developments at Legend Biotech so far are public information and most likely factored into its share price, future investors need to be cautious since prospects for its future growth are far less certain. Legend Biotech needs to first demonstrate that its therapy on the market is deliverable at a profitable price point, and second, commercialize new medicines, a process that is risky. TAs mentioned above, Legend is yet to be profitable, and Wall Street analysts aren't expecting it to happen this year, either. By the time it reports profits, the market will no doubt bid its shares up even more.

It'll also need to live up to the market's expectations for revenue from Carvykti. Wall Street analysts are calling for the company to bring in $239 million in 2023, which implies more than doubling 2022's sales.​​ It wouldn't take too much going awry to fall short of that ambitious target, which would damage its share price. And even if Legend meets Wall Street's estimates, the growth is most likely already priced into the stock. Its price-to-sales (P/S) multiple is a sky-high 68.7, so it'll need to expand its revenue by quite a bit to meet par, which is the core reason one might suspect it's too late to buy the stock.

There's likely more growth on the way, but it isn't risk free 

It probably isn't too late to buy this company's stock because regardless of what happens this year or next year, it has plenty of chances to secure growth. 

In its pipeline, Legend has a trio of cell therapy programs in phase 3 clinical trials, all of which aim to treat different manifestations of multiple myeloma. Per recently leaked data about one of those programs, patients are experiencing good benefits from the treatment, which is obviously a positive sign of the medicine's chances of being commercialized.

But that potential upside is accompanied by a risk. Prior clinical trials by the company with the same therapeutic modality and in similar patient populations have shown that, despite high efficacy against myelomas, serious side effects are quite common, and unfortunately, a couple of treatment-related deaths in the study cohort are to be expected. That's a tremendously difficult context to continue developing drugs in, but so far, regulators have agreed with the company's assertion that the benefits of treatment outweigh the risks for the patients enrolled in the clinical trials. But it might not take very much for regulators to change their minds and halt the trials if the therapies in development are revealed to be riskier than what is currently known. And that would do some serious damage to the stock price.

At the same time, it has $1 billion of cash and equivalents on hand, and it only spent nearly $336 million in research and development (R&D) expenses in 2022. Even if it fails a couple of times with its late-stage pipeline, it'll have enough money to advance its other programs and try again. That means, at this point, it's reasonable to assume that it'll survive long enough to realize profits from both its product on the market as well as at least one or two of its mid- to late-stage pipeline programs. 

In other words, people who buy the stock now are showing up a bit late to the party for the initial growth stemming from the Carvykti approval but plenty early for the rest of the company's future. If you can tolerate holding a risky biotech stock, it might even be a good fit for your portfolio.