On October 26, 2017 Seattle Genetics, Inc. (NASDAQ: SGEN) reported financial results for the third quarter and nine months ended September 30, 2017 (Press release, Seattle Genetics, OCT 26, 2017, View Source [SID1234521217]).
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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 (ASH) (Free ASH Whitepaper) annual meeting in December highlighted by a presentation of our full ECHELON-1 data in frontline Hodgkin lymphoma.”
ADCETRIS Program Highlights
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.
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.
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.
ECHELON-1 Phase 3 Data at ASH (Free ASH Whitepaper): Data from the ECHELON-1 phase 3 trial were accepted for presentation at the American Society of Hematology (ASH) (Free ASH Whitepaper) 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.
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.
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.
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
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.
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
Co-development Option Exercised: Seattle Genetics exercised its option to co-develop tisotumab vedotin with Genmab, adding an additional ADC 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.
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).
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
SGN-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.
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.
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.
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.
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.
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:
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. 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:
Current Previous
Revenues from collaboration and license agreements $90 million to $100 million $75 million to $90 million
Royalty revenues $60 million to $65 million $50 million to $55 million
Research and development expenses $460 million to $480 million $460 million to $500 million
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.