On April 26, 2018 Seattle Genetics, Inc. (Nasdaq: SGEN) reported financial results for the first quarter ended March 31, 2018 (Press release, Seattle Genetics, APR 26, 2018, View Source;p=RssLanding&cat=news&id=2345077 [SID1234525748]). The company also highlighted ADCETRIS (brentuximab vedotin) commercialization and clinical development accomplishments, and progress with its late-stage clinical programs and pipeline of targeted therapies for cancer.
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"The first quarter of 2018 marked several significant milestones across our business," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "We delivered record ADCETRIS sales that were up 36 percent from the first quarter of 2017, received FDA approval for ADCETRIS in frontline advanced Hodgkin lymphoma, completed the acquisition of Cascadian Therapeutics and were granted FDA Breakthrough Therapy Designation for our late-stage program enfortumab vedotin in metastatic urothelial cancer. Looking ahead, we are on track to achieve several additional milestones this year, which include reporting data from our phase 3 ECHELON-2 trial of ADCETRIS, completing enrollment of urothelial cancer patients who have received both a platinum-based therapy and a CPI in the pivotal trial of enfortumab vedotin, and initiating a pivotal trial of tisotumab vedotin in cervical cancer. We are striving to build a global oncology company with multiple transformative therapies, and we believe our recent progress illustrates our dedication to making a meaningful difference in patients’ lives."
ADCETRIS Program Activities
Label Expansion in Frontline Hodgkin Lymphoma: The U.S. Food and Drug Administration (FDA) approved ADCETRIS in combination with chemotherapy in adult patients with previously untreated Stage III or IV classical Hodgkin lymphoma. The approval is based on the successful outcome of the phase 3 ECHELON-1 clinical trial. In addition, data from the ECHELON-1 trial converted the U.S. accelerated approval of ADCETRIS for the treatment of adults with systemic anaplastic large cell lymphoma (sALCL) after failure of at least one multi-agent chemotherapy regimen to regular approval.
ECHELON-2 Phase 3 Trial: Data are expected in 2018 from the ECHELON-2 phase 3 trial in frontline CD30-expressing peripheral T-cell lymphoma (PTCL), also known as mature T-cell lymphoma (MTCL). Approximately 4,000 people are diagnosed annually with CD30-expressing PTCL.
ADCETRIS is not currently approved for use in frontline PTCL.
Enfortumab Vedotin (EV) Program Activities
Breakthrough Therapy Designation Granted: The FDA granted Breakthrough Therapy Designation to EV for patients with locally advanced or metastatic urothelial cancer who were previously treated with checkpoint inhibitors (CPI) based on data from a phase 1 trial.
EV-201 Pivotal Trial Enrollment Update: By the end of the third quarter of 2018, Seattle Genetics and Astellas expect to complete enrollment in the ongoing EV-201 pivotal trial of patients with locally advanced or metastatic urothelial cancer who previously received both a platinum-based chemotherapy and a CPI therapy. Positive data in this subgroup could serve as the basis for a Biologics License Application (BLA) submission under the FDA’s accelerated approval regulations. In addition, the companies plan to continue enrollment in EV-201 for patients who previously received a CPI but not a platinum agent. The additional data could potentially serve as the basis for a second labeled indication.
EV-301 Phase 3 Trial Planned: Seattle Genetics and Astellas plan to initiate in 2018 a phase 3 trial called EV-301 in patients with metastatic urothelial cancer who received prior CPI. The phase 3 trial is intended to support global regulatory submissions for approval and serve as a confirmatory trial in the United States to support conversion of a potential accelerated approval to regular approval.
Tucatinib Program Activities
Cascadian Therapeutics Acquisition Complete: In March 2018, Seattle Genetics completed its acquisition of Cascadian Therapeutics for $10.00 per share in cash, or approximately $614 million. The most advanced program in the Cascadian pipeline is tucatinib, an oral tyrosine kinase inhibitor that is highly selective for HER2.
HER2CLIMB Pivotal Trial: Enrollment is ongoing in the tucatinib HER2CLIMB trial, a global randomized pivotal trial for patients with HER2-positive (HER2+) metastatic breast cancer, including patients with or without brain metastases. The HER2CLIMB trial is expected to be fully enrolled in 2019.
Tisotumab Vedotin (TV) Program Activities
Planned Pivotal Trial Initiation: Seattle Genetics and Genmab plan to advance TV 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 could potentially support registration under the FDA’s accelerated approval regulations. The trial is expected to begin in the first half of 2018.
Expanding Clinical Development Program: Seattle Genetics and Genmab plan to initiate in 2018 a phase 2 trial of TV as part of a combination regimen in women with first-line metastatic cervical cancer. In addition, a phase 2 trial is expected to begin in 2018 to evaluate TV monotherapy in a range of other solid tumors.
Other Recent Activities
Initiated Ladiratuzumab Vedotin (LV) Combination Trial: The first patient was treated in a phase 1b/2 clinical trial of LV in combination with the CPI pembrolizumab for first-line metastatic triple negative breast cancer. The trial is part of a broad clinical development program evaluating LV both as monotherapy and in combination regimens.
Initiated SGN-CD48A Trial: The first patient was dosed in a phase 1 clinical trial of SGN-CD48A for patients with relapsed or refractory multiple myeloma. SGN-CD48A is an investigational antibody-drug conjugate (ADC) targeted to CD48 that employs the company’s latest ADC technology.
Pipeline Updates: Based on portfolio and resource prioritization, Seattle Genetics is no longer planning to develop denintuzumab mafodotin and its clinical-stage PBD-based ADC programs.
AACR Presence: Data from multiple research and early clinical abstracts were presented at the 2018 American Association for Cancer Research (AACR) (Free AACR Whitepaper) annual meeting. These data presentations illustrated the company’s novel antibody and ADC technologies, rationale for combining ADCs with CPIs, and its proprietary immuno-oncology programs. Additionally, Seattle Genetics reported preclinical data describing novel empowered antibody SEA-BCMA for multiple myeloma, which is expected to enter a phase 1 clinical trial during 2018.
ADC Collaborator Milestone: Seattle Genetics achieved a milestone payment under its ongoing collaboration with AbbVie triggered by a phase 2 trial initiation of an ADC for cancer. As of March 31, 2018, the company had generated approximately $400 million from its ADC collaborations, primarily from upfront and milestone payments.
Pieris Collaboration: Seattle Genetics entered into a collaboration and license agreement with Pieris Pharmaceuticals to develop targeted bispecific immuno-oncology treatments.
PharmaMar Collaboration: Seattle Genetics licensed exclusive worldwide rights to certain PharmaMar molecules for use in the development of ADCs.
First Quarter 2018 Financial Results
Total revenues in the first quarter ended March 31, 2018 increased to $140.6 million, compared to $109.1 million for the same period in 2017. Revenues in the first quarter of 2018 included:
ADCETRIS net sales of $95.4 million, a 36 percent increase from net sales of $70.3 million in the first quarter of 2017.
Royalty revenues of $15.7 million, compared to $17.0 million in the first quarter of 2017. Royalty revenues are primarily driven by international sales of ADCETRIS by Takeda. The decrease was a result of the company adopting the new accounting standards for revenue recognition.
Amounts earned under the company’s ADCETRIS and ADC collaborations totaling $29.6 million, compared to $21.8 million in the first quarter of 2017.
Total costs and expenses for the first quarter of 2018 were $234.4 million, compared to $168.4 million for the first quarter of 2017. Costs and expenses in the first quarter of 2018 included:
Research and development expenses of $152.5 million, compared to $118.2 million for the same period in 2017. The increase in 2018 reflects tucatinib development activities and $35.0 million in upfront costs related to technology licensing with Pieris and PharmaMar. In addition, 2018 expenses reflect increased activities for tisotumab vedotin, ladiratuzumab vedotin and the company’s pipeline programs.
Selling, general and administrative expenses of $66.2 million, compared to $38.4 million for the same period in 2017. The increase reflects transaction costs associated with the acquisition of Cascadian Therapeutics and increased commercial costs to support the launch of ADCETRIS in frontline Hodgkin lymphoma.
Non-cash, share-based compensation cost for the first quarter of 2018 was $16.8 million, compared to $14.5 million for the first quarter of 2017.
Net loss for the first quarter of 2018 was $111.7 million, or $0.73 per share, compared to a net loss of $60.0 million, or $0.42 per share, for the first quarter of 2017. Net loss for the quarter includes a non-cash charge of $18.8 million associated with Seattle Genetics’ common stock holdings in Immunomedics and Unum Therapeutics.
As of March 31, 2018, Seattle Genetics had $399.9 million in cash and investments, excluding its Immunomedics and Unum common stock investments, which were valued at $179.5 million. The cash and investments balance reflects net proceeds of $658.2 million from the company’s equity financing completed in February 2018, which was primarily used to fund the March 2018 acquisition of Cascadian Therapeutics for approximately $614.1 million.
2018 Financial Outlook
As a result of the recent approval of ADCETRIS in combination with chemotherapy in adult patients with previously untreated Stage III or IV classical Hodgkin lymphoma, the company’s full year 2018 ADCETRIS sales guidance provided in February 2018 no longer reflects management’s expectations and is being withdrawn. For the second quarter of 2018, Seattle Genetics expects sales of ADCETRIS will be in the range of $105 million to $110 million.
As a result of expenses totaling approximately $50 million in the first quarter of 2018 related to the acquisition of Cascadian and upfront technology in-licensing costs, as well as additional forecasted operating costs attributed to the tucatinib program, the company increased its expectations for 2018 operating expenses and other costs as follows:
Conference Call Details
Seattle Genetics’ management will host a conference call and webcast to discuss its first quarter 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 800-263-0877 (domestic) or 646-828-8143 (international). The conference ID is 9171561. A replay of the discussion will be available on April 26, 2018 from the Seattle Genetics website or by calling 888-203-1112 (domestic) or 719-457-0820 (international), using conference ID 9171561. The telephone replay will be available until 5:00 p.m. PT on Monday, April 30, 2018.