Analyst Conference Summary

Biotechnology

conference date: February 6, 2020 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2019 (fourth quarter, Q4)

Forward-looking statements

Overview:

Basic data (GAAP):

Revenue was $290 million up 36% sequentially from $213 million and up 66% from $175 million in the year-earlier quarter.

Net income was $26 million, up sequentially from negative $91.9 million and up from negative $120 million year-earlier.

EPS (earnings per share, diluted) were $0.14, up sequentially from negative $0.55, and up from negative $0.75 year-earlier.

Guidance:

Conference Highlights:

Clay Siegall, CEO said "Across PADCEV, tucatinib and ADCETRIS, we are advancing broad clinical development programs intended to fully explore their potential."

In September 2019, the FDA accepted the BLA for enfortumab vedotin and granted priority review for patients with locally advanced or metastatic urothelial cancer who have received a PD-1/L1 inhibitor and who have received a platinum-containing chemotherapy . The FDA has set a target action (PDUFA) date of March 15, 2020. The US sales force is in place. Enfortumab vedotin is partnered with Astellas. Trials to expand the label are planned.

Adcetris (brentuximab vedotin) sales in the quarter were $ million, up % sequentially from $167.6 million, and up % from $ million year-earlier. PTCL launch is going well in the US, seeking approvals in other nations. Adcetris sales increase mainly due to the addition of the PTCL label.

Collaboration and license revenue was $ million, down sequentially from $18.4 million, and down from $ million year-earlier.

Royalty revenue was $ million, up sequentially from $27.3 million, and from $ million year-earlier. Royalties mainly reflect Adcetris sales by Takeda in 67 non-U.S. nations.

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.

Seattle Genetics is developing tisotumab vedotin (TV) with Genmab, on a 50:50 basis. Completed enrollment 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. Topline data is expected in the first half of 2020.

Tucatinib, an oral tyrosine kinase inhibitor, had positive results in a global pivotal trial (HER2CLIMB) for HER2+ metastatic breast cancer. The trial met the primary endpoint of progression-free survival (PFS). The trial also met two key secondary endpoints at the prespecified interim analysis demonstrating improvement in overall survival and for patients with brain metastases at baseline, the tucatinib arm demonstrated superior PFS. NDA planned for early 2020. Also has reported positive Phase 2 data in colorectal cancer.

Depatuxizumab mafodotin (ABT-414) for glioblastoma Phase 3 data expected soon; collaboration with AbbVie.

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

Belantamib mafodotin (GSK2857916)for multiple myeloma, collaboration with GSK, regulatory submission is planned.

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 2019 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.

In June 2019, the FDA approved Polivy (polatuzumab vedotin-piiq) an antibody-drug conjugate (ADC) targeting CD79b that utilizes Seattle Genetics’ technology. Polivy was developed and will be commercialized by Genentech, a member of the Roche Group. As a result, Seattle Genetics will receive a $5.0 million milestone payment and is eligible to receive royalties on worldwide net sales.

Ladiratuzumab Vedotin or LV continued 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-CD228A Phase 1 trials in solid tumors should start in 2019.

See also Seattle Genetics pipeline.

Cash ended at $868 million, down sequentially from $870 million. There was no debt.

Total costs and expenses were $328 million, consisting of: cost of sales $10 million; cost of royalty revenue $2 million, R&D $201 million; selling, general and administrative expense $115 million. Resulting in a loss from operations of $38 million. Other income $64 million. Income tax benefit $0 million.

Q&A:

not available at this time

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