Despite Financial Losses, Seattle Genetics CEO Banks on Assets to Drive a Strong 2019
Despite having achieved a record net sales of $477 million driven by the success of its powerhouse medication Adcetris in 2018, as well as a 58 percent increase in sales during the fourth quarter in comparison to the previous year, Seattle Genetics' stock fell as the results did not meet analysts’ expectations.
Adcetris, which gained two additional approvals from the U.S. Food and Drug Administration (FDA) this year for previously untreated Stage III or IV classical Hodgkin lymphoma and as a frontline treatment for CD30-expressing peripheral T-cell lymphoma, generated net revenue of $476.9 Million in 2018 in the U.S. and Canada. In the fourth quarter, Adcetris generated $132.1 million, the company said.
Clay Siegall, chief executive officer of Seattle Genetics, said the company expects the momentum for Adcetris will continue through 2019 and will be a primary driver of commercial growth for the company. Siegall said the company anticipates revenue from Adcetris sales in the U.S. and Canada will be between $610 and $640 million, which is an increase of 28 percent to 34 percent over 2018 sales. When looking at global sales, Siegall said Adectris has the potential to hit blockbuster status, sales of more than $1 billion. This year, Adcetris was approved as a frontline treatment for Hodgkin lymphoma in Japan and approval is pending in Europe. According to a transcript of the conference call, Siegall said the company will submit new data to the European Medicines Agency in support of its application for approval later this year.
In addition to Adcetris, Siegall pointed to some coming milestones for the company. It anticipates topline data from a pivotal trial in metastatic urothelial cancer this quarter from enfortumab vedotin (EV), an asset Seattle Genetics is developing with Astellas. Siegall said the data, if it’s positive, could support regulatory submission in 2019 under the FDA's accelerated approval regulations.
Additionally, later this year, Seattle Genetics is anticipating topline data from its HER2-targeting treatment, tucatinib, an oral tyrosine kinase inhibitor. Siegall said if the HER2ClIMB trial with tucatinib is successful, the company’s intention is to build that drug into a broad development program into earlier lines of breast cancer and other HER2-expressing tumor types.
The company’s third program is tisotumab vedotin or TV, which is being developed in partnership with Genmab. The initial focus of this asset is metastatic cervical cancer. Siegall said the company is conducting an ongoing pivotal trial designed to support a regulatory submission under the FDA's accelerated approval path. Enrollment in that trial is expected to be complete by the mid-part of this year. Additionally, Siegall said the company is developing TV in other lines of cervical cancer and other solid tumors that express tissue factor.
Over the course of this year, Siegall said the company anticipates submitting Investigational New Drug Applications for additional cancer treatments.
While Siegall was high on the company’s future, Seattle Genetics did report a net loss of $119.8 million for the fourth quarter or 0.75 cents per share. That was in comparison to a net loss of $59.2 million, or $0.41 per share, for the fourth quarter of 2017. For the full year in 2018, net loss was $222.7 million, or $1.41 per share, compared to a net loss of $125.5 million, or $0.88 per share, for the year in 2017. It was this financial point that disappointed analysts. That sent the stock down nearly 10 percent in premarket trading. The more-than-expected losses are continuing to drive share prices down this morning. Since the market opened, shares are down more than 2.5 percent.
Seattle Genetics said the fourth quarter loss includes a net investment loss of $53.2 million primarily associated with Seattle Genetics’ common stock holdings in Immunomedics.