February 14, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Seattle Genetics , headquartered in Bothell, Wash., presented its fourth-quarter and 2016 annual financial results last Thursday. The company, which has been busy the last year, made an effort to direct investors’ attention to the bigger picture, however.
By most standards, the company seems to be doing reasonably well. It grew its revenue from the fourth quarter of 2015 from $93 million to $105 million in the fourth quarter of 2016, an increase of 12.6 percent. The largest quarterly loss was related to increased research and development costs.
The company plans to submit an application to the U.S. Food and Drug Administration (FDA) to market Adcetris for cutaneous T-cell lymphoma (CTCL) sometime mid-2017. That’s slightly delayed from previous guidance of “first half of 2017,” but, writes Brian Orelli for The Motley Fool, “the delay could pay off in the long run because the company will be able to include two investigator-sponsored trials of Adcetris in CTCL in addition to its own ALCANZA trial, which could result in a broader label and more Adcetris sales for CTCL patients.”
That doesn’t sound like much of a delay, and Clay Siegall, Seattle Genetics’ president and chief executive officer, at the conference call, said, “To me it’s not a delay. To me it’s taking advantage of an opportunity. I think we have a really good opportunity to end up with a bigger market if we can get a bigger label.”
So much of the focus is on additional ongoing clinical trials.
“What is really important with Adcetris,” Siegall said, “is not the sales we have now. What’s really important is going toward the big items of [ECHELON-1] and [ECHELON-2}, and you can even include ALCANZA in there.”
The company’s guidance for this year had Adcetris sales at $280 million to $300 million, which is 5.3 percent to 12.9 percent higher than last year. Revenue from royalties is projected to be $50 to $55 million, which is down from 2016’s $67.5 million, although 2016 included a $20 million milestone payment.
On Friday, February 10, the company announced a development and license agreement with Immunomedics . As part of the deal, Seattle Genetics receives exclusive worldwide rights to develop, manufacture and commercialize sacituzumab govitecan (IMMU-132). The compound is an antibody-drug conjugate (ADC) that targets TROP-2, which is expressed in various solid tumors, including breast, lung and bladder. It is currently in a Phase I/II trial for triple negative breast cancer (TNBC), in addition to other solid tumors. The FDA granted it Breakthrough Therapy Designation in patients with TNBC who failed prior therapies for metastatic disease.
Immunomedics receives an upfront payment of $250 million, and Seattle Genetics will pay various milestone payments up to a total of $1.7 billion, in addition to tiered double-digit royalties. Seattle Genetics is also buying about $15 million of common stock, or a 2.8 percent stake in Immunomedics. Seattle Genetics also has the option to buy an additional 8,655,804 shares of common stock at a price of $4.90 per share over a specific period.
“This agreement would add a promising late-stage ADC to our pipeline as we continue making progress towards our goal of becoming a global, multi-product oncology company,” Siegall said in a statement. “Sacituzumab govitecan would complement our existing pipeline by providing a potential near-term opportunity to commercialize a second drug in the United States, expand our international capabilities in Europe and elsewhere and extend our efforts in solid tumors. In addition, we believe our expertise in ADCs, including demonstrated success in clinical development, regulatory, manufacturing and commercialization, ideally positions Seattle Genetics to advance this program globally. We look forward to working with Immunomedics to advance this program for patients in need, including those with triple negative breast cancer and other solid tumors.”
Seattle Genetics is currently trading at $61.59.
