Seattle Genetics, Inc. (SGEN - Analyst Report) reported third quarter 2013 net loss per share of 19 cents, narrower than the Zacks Consensus Estimate of a loss of 22 cents but wider than the year-ago loss of 12 cents per share.
Third quarter revenues were $71 million, compared with $49.8 million in the year-ago quarter. Revenues surpassed the Zacks Consensus Estimate of $58 million.
Net revenues for the third quarter included Adcetris revenues (up 8.4% to $36.5 million), collaboration and license agreement revenues (up 101.9% to $29.2 million) and royalty revenues (up 209.2% to $5.3 million).
Research and development expenses increased 63.9% year over year to $67.8 million due to Adcetris development activities and higher investment in other antibody-drug conjugate (ADC) programs. Selling, general and administrative (SG&A) expenses rose 13.8% year over year to $21.5 million.
Adcetris is approved for the treatment of relapsed or refractory Hodgkin lymphoma (HL) and systemic anaplastic large cell lymphoma (sALCL).
Seattle Genetics is working on expanding Adcetris’ label. In May 2013, Seattle Genetics submitted a supplemental biologics license application (sBLA) for the use of Adcetris in the retreatment of patients and for extended duration of use beyond 16 cycles of therapy. The U.S. Food and Drug Administration (FDA) did not approve Adcetris in this retreatment setting. The FDA has asked to remove the limitation of the 16-cycle timeframe from the label.
Seattle Genetics completed treatment of all patients in a phase III study, AETHERA. The study is evaluating Hodgkin lymphoma patients.
The company commenced a phase II study on Adcetris in combination with standard therapy (R-CHOP) in newly diagnosed diffuse large B-cell lymphoma patients.
For Adcetris, the company gained orphan drug designation for angioimmunoblastic T-cell lymphoma (AITL), an aggressive type of mature T-cell lymphoma (MTCL) in the U.S.
Meanwhile, Seattle Genetics discontinued the development of SGN-75 (phase I) for renal cell carcinoma.
Seattle Genetics increased its 2013 collaboration and license agreement revenue guidance from $85–$95 million to $95–$100 million. The company also increased its net Adcetris sales forecast from $130–$140 million to $140–$145 million.
Seattle Genetics currently carries a Zacks Rank #3 (Hold). We expect investor focus to remain on the sales ramp up of the drug. Adcetris’ label expansion, pipeline advancement and ADC collaborations will drive future growth. Right now, companies like Actelion Ltd. (ALIOF - Snapshot Report), Actavis plc and AMAG Pharmaceuticals, Inc. (AMAG - Snapshot Report) look more attractive with a Zacks Rank #1 (Strong Buy).