Analyst Conference Summary


Seattle Genetics

conference date: February 7, 2019 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2018 (fourth quarter, Q4)

Forward-looking statements

Overview: Ramping revenue and making pipeline progress, but did not meet expectations. Net loss widened.

Basic data (GAAP):

Revenue was $174.5 million up 35% from $129.6 million in the year-earlier quarter.

Net income was negative $119.8 million up from negative $59.2 million year-earlier.

EPS (earnings per share, diluted) were negative $0.75 down from negative $0.41 year-earlier.


Full year 2019 revenue is expected between $790 and $840 million. R&D expense $600 to $650 milion, SG&A expense $280 to $310 million, Cost of sales 5% to 5% of revenue, royalty expense low sing digit percent of ex-US sales. Non-cash cost, mainly share based comp, $135 to $145 million. [WPM: So both GAAP and non-GAAP losses for the year]

Also stated has the potential to have over $1 billion in global sales, but not all of that goes directly to SGEN.

Conference Highlights:

Clay Siegall, CEO said " We expect to report top-line data in the first quarter of 2019 from the pivotal trial of enfortumab vedotin in metastatic urothelial cancer and to report top-line data later in the year from the pivotal trial of tucatinib in HER2-positive metastatic breast cancer. Taken together, we are positioned to establish Adcetris as the standard of care in the frontline setting in both advanced Hodgkin lymphoma and CD30-expressing PTCL, and realize our vision of becoming a company with multiple oncology products addressing unmet medical needs."

"During 2018 we received FDA approval for two Adcetris frontline indications, a major accomplishment that significantly expands the number of patients eligible to benefit from treatment. These approvals for frontline advanced Hodgkin lymphoma and CD30-expressing peripheral T-cell lymphoma (PTCL) were based on phase 3 data showing superior efficacy of the ADCETRIS-containing regimens compared to combination chemotherapy agents that have been used for decades."

Adcetris (brentuximab vedotin) sales for CD30-positive malignancies (Hodgkin Lymphoma and relapsed systemic ALCL) in the quarter were $132.1 million, up 8% sequentially from $122.4 million, and up 58% from $8.37 million year-earlier.

Collaboration and license revenue was $17.8 million down from $25.9 million year-earlier.

Royalty revenue was $24.6 million, up sequentially from $20.6 million, and up from $20.0 million year-earlier. Royalties mainly reflect Adcetris sales by Takeda in 67 non-U.S. nations.

For the full year 2018 revenue was $654.7 million, up 36% from $482.3 million in 2017.

In November 2018, the U.S. Food and Drug Administration (FDA) approved Adcetris in combination with chemotherapy for adults with previously untreated systemic anaplastic large cell lymphoma (sALCL) or other CD30-expressing peripheral T-cell lymphomas (PTCL), including angioimmunoblastic T-cell lymphoma based on the successful outcome of the ECHELON-2 phase 3 clinical trial.

In collaboration with Bristol-Myers Squibb, a Phase 3 trial to test Adcetris with checkpoint inhibitor Opdivo (nivolumab) in relapsed or refractory HL (Hodgkin lymphoma) was ongoing. Earlier data announced was very positive.

Enfortumab Vedotin (ASG-22ME or EV): Seattle Genetics and Astellas expect to report top-line data in the first quarter of 2019 from the ongoing EV-201 pivotal trial evaluating EV in patients with locally advanced or metastatic urothelial cancer who previously received both platinum chemotherapy and a checkpoint inhibitor (PD-1 or PD-L1). Data from this trial could serve as the basis for a BLA submission under the FDA’s accelerated approval pathway.

Seattle Genetics is developing tisotumab vedotin (TV) with Genmab, on a 50:50 basis. Complete enrollment is expected by mid-2019 in the pivotal innovaTV 204 trial evaluating TV in patients with recurrent and/or metastatic cervical cancer who have relapsed or progressed after standard of care treatment.

Tucatinib, an oral tyrosine kinase inhibitor, is in a global pivotal trial (HER2CLIMB) for HER2+ metastatic breast cancer. Seattle Genetics achieved enrollment of 480 patients with top-line data expected to be reported in 2019. Enrollment is continuing up to 600 patients, to support the analyses of key secondary endpoints, including overall survival as well as progression-free survival in patients with brain metastases. The company anticipates completing enrollment of the additional patients in mid-2019.

GlaxoSmithKline (GSK) is partnered on a broad development effort based on Seattle Genetics technology. GSK2857916 for multiple myeloma plans for regulatory submissions in 2H 2019.

A Phase 1 trial of SEA-CD40 for solid tumors continues.

SGN-CD19A or Denintuzumab Mafodotin was discontinued, as were certain similar programs, to focus on more promising programs.

SGN-CD19B continued a Phase 1 trial for relapsed or refractory B-cell non-Hodgkin lymphoma.

SGN-LIV1A Phase 1 data was presented in December showing antitumor activity for heavily pretreated triple-negative breast cancer. An expansion cohort is enrolling, with data to be presented in December. Plans a combination with tecentriq for triple-negative breast cancer, conducted by Roche. Added an agreement with Merck to try with Keytruda.

Collaboration with Genentech/Roche continued of polatuzumab vedotin for patients with diffuse large B-cell lymphoma (DLBCL), with data submitted for regulatory approval in both the US and EU.

Tisotumab Vedotin or TV started a pivotal Phase 2 trial for recurrent or metastatic cervical cancer in Q2 2018, as well as a second Phase 2 trial against several types of solid cancers. Could support accelerated approval by FDA. It is being co-developed with Genmab.

Ladiratuzumab Vedotin or LV began a 1b/2 trial for first-line metastatic triple negative breast cancer.

SGN-CD352A continued a Phase 1 trail for multiple myeloma.

SEA-CD40 is a novel immuno-oncology agent targeted to CD40 utilizing Seattle Genetics proprietary sugar-engineered antibody (SEA) technology to produce a non-fucosylated antibody. Planning a trial in combination with a checkpoint inhibitor.

SGN-CD123A continued a Phase 1 trial for relapsed/refractory AML. CD123 is expressed on leukemic stem cells, which have proven difficult to kill.

SGN-2FF continued a Phase 1 trial for relapsed or refractory solid tumors.

SGN-CD48A started a Phase 1 trial in for refractory multiple myeloma in Q1.

SGN-BCMA program should enter phase 1 in 2018.

Abbvie's ADC for glioblastoma is now in a Phase 3 trial.

See also Seattle Genetics pipeline.

Cash ended at $460 million.. An additonal $114 million was held as stock of Immunomedics (IMMU) and Unum. There was no debt.

Total costs and expenses were $265 million, consisting of: cost of sales $30 million; cost of royalty revenue $5 million, R&D $150 million; selling, general and administrative expense $79 million. Resulting in a loss from operations of $90 million. Other expense $53 million. Income tax benefit $24 million.


Guidance, where will the new revenue come from? Includes E2 launch and further penetration into the E1 population. The E2 uses less cycles of drugs than E1. It will take time and persistence to build the market.

PD1 inhibitors in Hodgkin's? Adcetris has a role to play at every stage of the disease.

Bladder cancer data upcoming? It is Phase 1 study, it is premature to talk about survival.

Adcetris in E1 among community doctors? More community doctors are using it, but we don't have a number. We are increasing our market share. Some doctors are still sticking with the old regimen.

PTCL adoption so far? It is sold different that Hodgkin. It is sold for patients with good but not great results from chemo. There is more upside there, we are getting good feedback. Average patient on E1 is $125,000. With E2 it is $90,000 due to fewer cycles.

Does not believe that single agenst are as favorable as combinations in relapse settings.

Seattle Genetics main Openicon page

OpenIcon Analyst Conference Summaries Main Page



More Analyst Conference Pages:



Disclaimer: My analyst call summaries may include both our condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. This is journalism, not financial advice.

Copyright 2019 William P. Meyers