[October 26, 2017] |
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Seattle Genetics Reports Third Quarter 2017 Financial Results
Seattle
Genetics, Inc. (NASDAQ: SGEN) today reported financial results for
the third quarter and nine months ended September 30, 2017. The company
also highlighted ADCETRIS (brentuximab vedotin) commercialization and
clinical development accomplishments, enfortumab vedotin (ASG-22ME) and
tisotumab vedotin clinical activities, as well as progress with its
pipeline of antibody-drug conjugates (ADCs) and other proprietary
programs.
"We have recently delivered on several important goals that continue to
strengthen the ADCETRIS brand and advance our portfolio of pipeline
programs. The FDA granted Breakthrough Therapy Designation to ADCETRIS
in combination with chemotherapy in frontline advanced classical Hodgkin
lymphoma based on data from the phase 3 ECHELON-1 clinical trial, and we
are on track to submit a supplemental Biologics License Application
(BLA) for this indication soon. And, the supplemental BLA for ADCETRIS
in cutaneous T-cell lymphoma was filed by the FDA with priority review
and a PDUFA date of December 16, 2017," said Clay Siegall, Ph.D.,
President and Chief Executive Officer of Seattle Genetics. "We have also
made significant progress with our pipeline, which now includes two ADCs
for which we are pursuing rapid development pathways based on positive
FDA feedback. We and our partner Astellas have initiated a pivotal phase
2 trial of enfortumab vedotin in metastatic urothelial cancer, and we
and our partner Genmab plan to advance tisotumab vedotin into a pivotal
phase 2 trial for recurrent or metastatic cervical cancer in the first
half of 2018. We anticipate several additional milestones before the end
of 2017, including a strong presence at the American Society of
Hematology annual meeting in December highlighted by a presentation of
our full ECHELON-1 data in frontline Hodgkin lymphoma."
ADCETRIS Program Highlights
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ALCANZA Approval Application: The U.S. Food and Drug
Administration (FDA) accepted for filing an ADCETRIS supplemental
Biologics License Application (BLA) based primarily on data from the
phase 3 ALCANZA trial in patients with CD30-expressing mycosis
fungoides and primary cutaneous anaplastic large cell lymphoma, the
most common subtypes of cutaneous T-cell lymphoma (CTCL). The FDA
granted Priority Review to the application and the Prescription Drug
User Fee Act (PDUFA) target action date is December 16, 2017. ADCETRIS
previously received FDA Breakthrough Therapy Designation in this
setting.
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Frontline Hodgkin Lymphoma Breakthrough Therapy Designation: The
FDA granted Breakthrough Therapy Designation to ADCETRIS in
combination with chemotherapy for the frontline treatment of patients
with advanced classical Hodgkin lymphoma. The designation is based on
positive results from the phase 3 ECHELON-1 clinical trial.
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ECHELON-1 Approval Application: Seattle Genetics expects to
submit in the fourth quarter of 2017 a supplemental BLA to the FDA for
approval of ADCETRIS in frontline advanced classical Hodgkin lymphoma.
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ECHELON-1 Phase 3 Data at ASH: Data from the ECHELON-1 phase 3
trial were accepted for presentation at the American Society of
Hematology (ASH) annual meeting being held December 9-12, 2017 in
Atlanta, GA. In addition, more than a dozen other ADCETRIS data sets
will be featured during the meeting.
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ECHELON-2 Phase 3 Trial: ECHELON-2 is a phase 3 trial in
frontline CD30-expressing mature T-cell lymphoma (MTCL), also known as
peripheral T-cell lymphoma (PTCL). Data from the trial are expected in
2018.
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Long-term Follow-up Data in Systemic ALCL: Seattle Genetics and
its partner Takeda announced that final data from an ADCETRIS pivotal
phase 2 clinical trial in relapsed or refractory systemic anaplastic
large cell lymphoma (sALCL) were published in the journal Blood.
The manuscript, which summarizes the five-year, end-of-study results,
highlights durable, long-term remissions in sALCL patients treated
with ADCETRIS monotherapy.
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ADCETRIS Approval: Takeda continues to receive additional
marketing approvals for ADCETRIS, which is now commercially available
in 68 countries worldwide following the recent approval in South
Africa.
ADCETRIS is not currently approved for use in CTCL, frontline Hodgkin
lymphoma or frontline MTCL.
Enfortumab Vedotin Program Highlights
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Pivotal Trial Initiated: Seattle Genetics and its collaborator
Astellas initiated a pivotal phase 2 trial of single-agent enfortumab
vedotin for locally advanced or metastatic urothelial cancer patients
who received prior checkpoint inhibitor (CPI) therapy. The single-arm
trial is designed to enroll approximately 120 patients and the primary
endpoint is confirmed objective response rate per independent review.
The trial may support regulatory submission under the FDA's
accelerated approval regulations.
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Combination Clinical Trial Planned: Seattle Genetics and
Astellas plan to initiate a phase 1b trial of enfortumab vedotin in
combination CPI therapies, including pembrolizumab, for first- or
second-line treatment of patients with locally advanced or metastatic
urothelial cancer.
Tisotumab Vedotin Program Highlights
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Co-development Option Exercised: Seattle Genetics exercised its
option to co-develop tisotumab vedotin with Genmab, adding an
additional ADC (News - Alert) for solid tumors to its pipeline. The decision was
based on promising data from a phase 1/2 trial conducted by Genmab in
solid tumors, including cervical cancer. Going forward, Genmab and
Seattle Genetics will co-develop and share all future costs and
profits for tisotumab vedotin on a 50:50 basis.
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Phase 1/2 Data in Cervical Cancer: Phase 1/2 data were featured
in an oral presentation at the European Society for Medical Oncology
annual meeting showing that of 34 relapsed, recurrent and/or
metastatic cervical cancer patients evaluable for response, 11
patients (32 percent) achieved a response. Median duration of
confirmed responses was 8.3 months. The most common adverse events of
any grade were conjunctivitis (50 percent), epistaxis, fatigue and
alopecia (47 percent each) and nausea (44 percent).
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Planned Pivotal Trial: Seattle Genetics and Genmab announced
plans to advance tisotumab vedotin into a pivotal phase 2 trial for
recurrent or metastatic cervical cancer that relapses or progresses
after standard of care treatment for cervical cancer. The single-arm
trial is designed to enroll approximately 100 women and potentially
could support registration under the FDA's accelerated approval
regulations.
Other Recent Activities
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SGN (News - Alert)-LIV1A Combination Clinical Trials: Seattle Genetics entered
into collaboration agreements to expand the clinical evaluation of
SGN-LIV1A in patients with breast cancer. The ADC will be evaluated in
combination with pembrolizumab (KEYTRUDA) under an agreement with
Merck and as part of a neoadjuvant treatment in the QuantumLeap
Healthcare Collaborative's phase 2 I-SPY 2 trial. Previously, Seattle
Genetics entered into a collaboration with Roche for the evaluation of
SGN-LIV1A in combination with atezolizumab (TECENTRIQ) as part of the
MORPHEUS trial.
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SGN-LIV1A Clinical Data: Data from a phase 1 trial of SGN-LIV1A
monotherapy were accepted for presentation at the San Antonio Breast
Cancer Symposium taking place December 4-9, 2017.
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SGN-CD48A IND: An investigational new drug (IND) application
was accepted by the FDA for the novel ADC SGN-CD48A. A phase 1 trial
is planned in early 2018 for patients with relapsed multiple myeloma.
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Manufacturing Facility: In October 2017, Seattle Genetics
closed on its transaction to purchase Bristol-Myers Squibb's
state-of-the-art biologics manufacturing facility in Bothell,
Washington. Seattle Genetics plans to utilize the facility primarily
for antibody production for current and future pipeline programs.
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ADC Collaborator Milestone: Seattle Genetics achieved a $12
million milestone payment under its ongoing ADC collaboration with
AbbVie triggered by AbbVie's clinical progress with depatuxizumab
mafodotin (ABT-414) for patients with glioblastoma. Depatuxizumab
mafodotin is an ADC targeting EGFR utilizing Seattle Genetics'
proprietary technology.
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ADC Collaborator Progress: Roche announced that polatuzumab
vedotin, an ADC utilizing Seattle Genetics' technology, received
Breakthrough Therapy Designation from the FDA and that a phase 3 trial
in diffuse large B-cell lymphoma is planned for the fourth quarter of
2017. The ADC was previously granted PRIME (PRIority MEdicines)
designation by the European Medicines Agency.
Third Quarter and Nine Months 2017 Financial Results
Total revenues in the third quarter and nine month periods ended
September 30, 2017 increased to $135.3 million and $352.6 million,
respectively, compared to $106.3 million and $312.9 million from the
same periods in 2016. Revenues included:
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ADCETRIS net sales in the third quarter of $79.2 million, a 13 percent
increase from net sales of $70.1 million in the third quarter of 2016.
For the year-to-date, ADCETRIS sales were $223.8 million, compared to
$195.0 million for the year-to-date period in 2016, a 15 percent
increase.
-
Royalty revenues in the third quarter of 2017 of $16.7 million,
compared to $12.2 million in the third quarter of 2016. For the
year-to-date in 2017, royalty revenues were $46.0 million, compared to
$53.7 million for the first nine months of 2016. Royalty revenues are
primarily driven by international sales of ADCETRIS by Takeda. Royalty
revenues in 2016 included a $20.0 million sales milestone payment from
Takeda earned in the first quarter of 2016.
-
Amounts earned under the company's ADCETRIS and ADC collaborations
totaling $39.4 million in the third quarter and $82.8 million for the
first nine months of 2017, compared to $24.0 million and $64.1
million, respectively, for the same periods in 2016.
Total costs and expenses for the third quarter of 2017 were $167.5
million, compared to $138.7 million for the third quarter of 2016. For
the first nine months of 2017, total costs and expenses were $503.4
million, compared to $399.7 million in the first nine months of 2016.
The increase in 2017 costs and expenses was primarily driven by ADCETRIS
drug supply provided to Takeda as well as investment in enfortumab
vedotin, SGN-LIV1A and the company's pipeline programs.
Non-cash, share-based compensation cost for the first nine months of
2017 was $47.9 million, compared to $37.0 million for the same period in
2016.
As part of a previously terminated license transaction with
Immunomedics, Seattle Genetics holds 3.0 million shares of Immunomedics
common stock and a warrant to purchase an additional 8.7 million shares.
In September 2017, Immunomedics' resale registration statement covering
the shares issuable upon exercise of the warrant was declared effective
by the SEC (News - Alert). As a result, the warrant is accounted for as a derivative
security and marked-to-market. This led to a gain of $78.7 million
reflected in investment and other income, net, recorded in the quarter
ended September 30, 2017.
Due to the gain on the Immunomedics warrant, Seattle Genetics reported
net income in the third quarter of 2017 of $50.0 million, or $0.34 per
fully diluted share, compared to a net loss of $31.8 million, or $0.23
per share, for the third quarter of 2016. For the nine months ended
September 30, 2017, net loss was $66.3 million, or $0.46 per share,
compared to a net loss of $85.0 million, or $0.61 per share, for the
nine months period ended September 30, 2016.
As of September 30, 2017, Seattle Genetics had $470.4 million in cash,
cash equivalents and investments.
2017 Financial Outlook
Seattle Genetics updated its full year 2017 financial guidance as
follows:
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Current
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Previous
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Revenues from collaboration and license agreements
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$90 million to $100 million
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$75 million to $90 million
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Royalty revenues
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$60 million to $65 million
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$50 million to $55 million
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Research and development expenses
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$460 million to $480 million
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$460 million to $500 million
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Conference Call Details
Seattle Genetics' management will host a conference call and webcast to
discuss its third quarter 2017 financial results and provide an update
on business activities. The event will be held today at 1:30 p.m.
Pacific Time (PT); 4:30 p.m. Eastern Time (ET). The live event will be
available from the Seattle Genetics website at www.seattlegenetics.com,
under the Investors section, or by calling 877-830-2649 (domestic) or
785-424-1824 (international). The conference ID is 4819463. A replay of
the discussion will be available beginning at approximately 4:30 p.m. PT
today from the Seattle Genetics website or by calling 888-203-1112
(domestic) or 719-457-0820 (international), using conference ID 4819463.
The telephone replay will be available until 5:00 p.m. PT on Monday,
October 30, 2017.
About Seattle Genetics
Seattle Genetics is an innovative biotechnology company dedicated to
improving the lives of people with cancer through novel antibody-based
therapies. The company's industry-leading antibody-drug conjugate (ADC)
technology harnesses the targeting ability of antibodies to deliver
cell-killing agents directly to cancer cells. Seattle Genetics
commercializes ADCETRIS® (brentuximab vedotin) for the
treatment of several types of CD30-expressing lymphomas. The company is
also advancing a robust pipeline of novel therapies for solid tumors and
blood-related cancers designed to address significant unmet medical
needs and improve treatment outcomes for patients. More information can
be found at www.seattlegenetics.com
and follow @SeattleGenetics on Twitter (News - Alert).
Forward-Looking Statements
Certain of the statements made in this press release are forward
looking, such as those, among others, relating to the company's 2017
outlook, including anticipated 2017 revenues, costs and expenses; the
company's potential to achieve a series of regulatory and commercial
milestones in 2017 and 2018; anticipated regulatory events and clinical
activities, including data availability from ECHELON-2, as well as other
planned and ongoing clinical trials, including clinical trials of
enfortumab vedotin and tisotumab vedotin, the timing of these clinical
trials, and their possible utility to support regulatory approval of the
respective product candidates; the anticipated submission of a
supplemental BLA for label expansion of ADCETRIS in frontline Hodgkin
lymphoma and the timing thereof and other anticipated regulatory
milestones, including any action by the FDA with respect to the
supplemental BLA submitted for label expansion of ADCETRIS based on the
ALCANZA trial; the opportunities for, and the therapeutic and commercial
potential of, ADCETRIS, enfortumab vedotin, tisotumab vedotin, SGN-LIV1A
and the company's other product candidates; as well as other statements
that are not historical facts. Actual results or developments may differ
materially from those projected or implied in these forward-looking
statements. Factors that may cause such a difference include the risks
that the company's 2017 ADCETRIS net sales and financial guidance may
not be as expected. The company may also be delayed in its planned
clinical trial initiations, the enrollment in and conduct of its
clinical trials, obtaining data from clinical trials, planned regulatory
submissions, and regulatory approvals in each case for a variety of
reasons including the difficulty and uncertainty of pharmaceutical
product development, unexpected adverse events or regulatory discussions
or actions, including with respect to special protocol assessment
agreements defining trial endpoints and the inherent uncertainty
associated with the regulatory approval process. The company may also be
unable to expand ADCETRIS' labeled indications due to unexpected or
delayed data from its ongoing phase 3 trials or regulatory action,
including the risks that the company's supplemental BLA submissions may
not be accepted for filing by, or ultimately approved by, the FDA in a
timely manner or at all or with the requested label, and may be unable
to complete the development of, and obtain regulatory approval for, its
product candidates. More information about the risks and uncertainties
faced by Seattle Genetics is contained under the caption "Risk Factors"
included in the company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2017 filed with the Securities and Exchange Commission.
Seattle Genetics disclaims any intention or obligation to update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
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Seattle Genetics, Inc.
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Condensed Consolidated Balance Sheets
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(Unaudited)
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(In thousands)
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September 30,
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December 31,
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2017
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2016
|
Assets
|
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|
|
|
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Cash, cash equivalents and investments
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$
|
470,365
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|
$
|
618,974
|
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Other assets
|
|
|
|
382,718
|
|
|
219,422
|
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Total assets
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$
|
853,083
|
|
$
|
838,396
|
|
|
|
|
|
|
|
|
|
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Liabilities and Stockholders' Equity
|
|
|
|
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Accounts payable and accrued liabilities
|
|
$
|
119,978
|
|
$
|
120,669
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Deferred revenue and long-term liabilities
|
|
|
73,397
|
|
|
83,640
|
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Stockholders' equity
|
|
|
659,708
|
|
|
634,087
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|
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Total liabilities and stockholders' equity
|
|
$
|
853,083
|
|
$
|
838,396
|
|
|
|
|
|
|
|
Seattle Genetics, Inc.
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Condensed Consolidated Statements of Operations
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(Unaudited)
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(In thousands, except per share amounts)
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|
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|
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Three months ended
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Nine months ended
|
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|
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|
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September 30,
|
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September 30,
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
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2016
|
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Revenues
|
|
|
|
|
|
|
|
|
|
|
|
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Net product sales
|
|
|
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$
|
79,177
|
|
|
$
|
70,117
|
|
|
$
|
223,841
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|
|
$
|
194,981
|
|
|
Collaboration and license agreement revenues
|
|
|
39,444
|
|
|
|
23,974
|
|
|
|
82,779
|
|
|
|
64,148
|
|
|
Royalty revenues
|
|
|
|
|
16,670
|
|
|
|
12,224
|
|
|
|
46,025
|
|
|
|
53,743
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|
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Total revenues
|
|
|
|
|
135,291
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|
|
|
106,315
|
|
|
|
352,645
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|
|
|
312,872
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Costs and expenses
|
|
|
|
|
|
|
|
|
|
|
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Cost of sales
|
|
|
|
|
9,019
|
|
|
|
7,427
|
|
|
|
24,555
|
|
|
|
20,272
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Cost of royalty revenues
|
|
|
|
|
5,196
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|
|
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3,748
|
|
|
|
13,900
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|
|
|
10,470
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|
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Research and development
|
|
|
|
|
113,606
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|
|
|
92,711
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|
|
|
346,196
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|
|
|
271,136
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Selling, general and administrative
|
|
|
|
|
39,667
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|
|
|
34,841
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|
|
|
118,783
|
|
|
|
97,870
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|
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Total costs and expenses
|
|
|
|
|
167,488
|
|
|
|
138,727
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|
|
|
503,434
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|
|
|
399,748
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Loss from operations
|
|
|
|
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(32,197
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)
|
|
|
(32,412
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)
|
|
|
(150,789
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)
|
|
|
(86,876
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)
|
Investment and other income, net
|
|
|
|
|
82,218
|
|
|
|
660
|
|
|
|
84,460
|
|
|
|
1,903
|
|
Net income (loss)
|
|
|
|
$
|
50,021
|
|
|
$
|
(31,752
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)
|
|
$
|
(66,329
|
)
|
|
$
|
(84,973
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income (loss) per share
|
|
|
|
$
|
0.35
|
|
|
$
|
(0.23
|
)
|
|
$
|
(0.46
|
)
|
|
$
|
(0.61
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)
|
Diluted net income (loss) per share
|
|
|
|
$
|
0.34
|
|
|
$
|
(0.23
|
)
|
|
$
|
(0.46
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)
|
|
$
|
(0.61
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used in computing
|
|
|
|
|
|
|
|
|
|
basic net income (loss) per share
|
|
|
|
|
143,357
|
|
|
|
140,928
|
|
|
|
142,876
|
|
|
|
140,369
|
|
Weighted-average shares used in computing
|
|
|
|
|
|
|
|
|
|
diluted net income (loss) per share
|
|
|
|
|
148,068
|
|
|
|
140,928
|
|
|
|
142,876
|
|
|
|
140,369
|
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