Analyst Conference Summary

Biotechnology

conference date: July 28, 2022 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2022 (second quarter, Q2)

Forward-looking statements

Overview: Continues rapid revenue ramp and positive trial results, but still deep in the red.

Basic data (GAAP):

Revenue was $498 million, up 17% sequentially from $426 million and up 28% from $388 million in the year-earlier quarter.

Net income was negative $135 million, up sequentially from negative $136 million and down from $85 million year-earlier.

EPS (earnings per share, diluted) were negative $0.73, up sequentially from negative $0.74, and down from $0.47 year-earlier.

Guidance:

Increased 2022 total revenue guidance slightly to $1.71 to 41.795 billion.

Conference Highlights:

Roger Dansey, interim CEO said "Seagen once again delivered strong commercial performance with record quarterly net product sales, in addition to accomplishing a number of important clinical milestones across our pipeline. We are pleased to have recently reported positive clinical trial results that could potentially support additional labels for Adcetris, Padcev and Tukysa and we have obtained approval of Padcev in the EU. At the same time, we are progressing our deep pipeline of targeted cancer therapies and we are well-positioned for the future." Seagen now has 17 cancer programs using its ADC and immuno-oncology platforms, though most are in early stages.

In July 2022, Seagen and Astellas announced positive topline results from the phase 1b/2 EV-103 clinical trial (KEYNOTE-869) Cohort K evaluating Padcev (enfortumab vedotin) in combination with Merck's anti-PD-1 therapy Keytruda as first-line treatment in patients with unresectable locally advanced or metastatic urothelial cancer who are ineligible to receive cisplatin-based chemotherapy. In patients treated with enfortumab vedotin and pembrolizumab, results demonstrated a 64.5% confirmed objective response rate (95% CI: 52.7 to 75.1). Seagen plans to submit a BLA to the FDA for accelerated approval later in 2022.

In April 2022, Seagen and Astellas announced the EU approval of Padcev as a monotherapy for advanced or metastatic urothelial cancer who have previously received a platinum-containing chemotherapy and a PD-1/L1 inhibitor. Additionally, in the second quarter of 2022, Padcev was approved for la/mUC in Australia, Brazil, Great Britain and Singapore.

In April 2022, a pivotal phase 2 trial of disitamab vedotin in patients with HER2-expressing metastatic urothelial cancer began enrolling. The trial is designed to support registration under the FDA accelerated approval pathway.

In March 2022 the CHMP recommended the EU approve Polivy for DLBCL. Sold by Roche, it uses Seagen technology.

In March 2022 nnounced a collaboration using Sanofi proprietary monoclonal antibody technology and Seagen proprietary ADC technology for up to three cancer targets. Seagen and Sanofi will co-fund global development activities and share equally in any future profits. Sanofi will make an undisclosed payment to Seagen for each of the three targets as they are selected. The first target has been designated and an undisclosed payment was made in Q1 2022.

Tidvak for cervical cancer was approved in September 2021 and had first revenue in Q4 2021. In partnership with Genmab, on a 50:50 basis.

In July the patent office denies Daiichi's request for a patent review. A US District Court had found that the patent was willfully infringed and had awareded damages of $41.8 million to Seagen, which is now requesting a royalty on future sales.

Tukysa is still ramping in new nations. In July 2022 Tukysa plus Trastuzumab reported positive Phase 2 results in HER2-positive metastatic colon cancer at ESMO. The FDA granted breakthrough therapy designation in July. And the Tuksya plus Kadcyla Phase 2 HER2+ breast cancer trial completed enrollment.

Adcetris for newly diagnosed advanced hodgkin lymphoma reported postive Phase 3 data in February 2022 and published full results in July. In June 2022 reported positive Phase 3 retuls for children for Hodgkin lymphoma, when combined with chemo..

In February 2022, initial data from the ongoing innovaTV 207 phase 2 trial of Tivdak in solid tumors were presented at the Multidisciplinary Head and Neck Cancers Symposium, demonstrating a manageable safety profile and promising preliminary antitumor activity in patients with squamous cell carcinoma of the head and neck.

Tivdak combined with Keytruda for cervical cancer reported positive interim data in June 2022.

Padcev regulatory process was paused in EU in Q1 2022 due to severe skin reactions. But that is a known, so working with regulators.

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

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

See also Seagen pipeline.

Cash ended at $1.9 billion, down sequentially from $2.0 billion.

Total costs and expenses were $631 million, consisting of: cost of sales $106 million; R&D $304 million; selling, general and administrative expense $220 million. Resulting in income from operations of negative $133 million. Other expense $2 million. $0 million income tax.

Q&A selective summary:

Royalty infringement timeline? Controlled by arbitration judge, but expect result midyear, which is a separate matter about ownership.

Padcev 202 cohorts? Head and neck, lung, breast, gastric, some others.

Cohort K talks with regulators? Cohort A got us breakthrough designation. K just read out, intent is to look for accelerated approval.

Adcetris after PD-1 progression? Adcetris could allow PD-1 sensitivity recovery. Looking at melanoma and lung cancer.

EV-302 cohort K confirmatory study? The two data sets we have are consistent with each other. Question is about the control arm. EV-302 should be adequately powered, 800 to 900 patients.

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