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Seagen's (SGEN) Q1 Earnings and Revenues Miss Expectations
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Seagen Inc. reported a loss of 93 cents per share in the first quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 82 cents. The company reported a loss of 74 cents per share in the year-ago quarter.
Total revenues in the first quarter of 2023 were $520 million, increasing 21.89% year over year. The top line missed the Zacks Consensus Estimate of $523 million. Net product revenues in the year-ago quarter were $469 million, up 22.33% year over year, driven by the strong uptake of Seagen’s portfolio of marketed cancer drugs.
In the past year, shares of Seagen have rallied 53.3% against the industry’s 6.8% decline.
Image Source: Zacks Investment Research
Quarter in Detail
Seagen’s top line mainly comprises product revenues, collaboration and license agreement revenues and royalties. The company currently markets four drugs, Adcetris, Padcev, Tukysa and the newly approved Tivdak.
Adcetris generated net sales of $243 million in the United States and Canada, up 34% year over year. The drug, which is the major contributor to SGEN’s revenues, is being evaluated in several label expansion studies.
Padcev sales in the reported quarter totaled $119 million. Sales of the drug rose 18% on a year-over-year basis.
Tukysa’s first-quarter net sales were $87 million, down 3% on a year-over-year basis.
The newly launched Tivdak generated sales worth $19 million in the first quarter of 2023, reflecting a sequential increase of 5.6%. Seagen commercializes Tivdak in collaboration with Zai Lab Limited (ZLAB - Free Report) .
In September 2022, Seagen entered into an exclusive collaboration and license agreement with Zai Lab for the development and commercialization of Tivdak in mainland China, Hong Kong, Macau and Taiwan. ZLAB obtained exclusive rights to develop and commercialize Tivdak in the given territory.
Collaboration and license agreement revenues were $21 million in the first quarter, marking a significant increase over the year-ago quarter. The uptick was primarily driven by higher royalties from Seagen’s partner, Astellas, for the sales of Padcev in the latter’s territory.
Royalty revenues of $30 million rose by 7% from the year-ago quarter’s $28 million. Seagen records royalty revenues on the sales of Adcetris from Takeda Pharmaceutical in the ex-U.S. markets as well as from Polivy’s sales under its collaboration with Roche (RHHBY - Free Report) .
Polivy is an antibody-drug conjugate that uses Seagen’s technology and commercialized by Roche.
Research and development expenses of $356 million increased 19.6% year over year, primarily driven by continued investment in the development of approved drugs and pipeline programs.
Selling, general and administrative expenses increased 35.7% year over year to $236 million, mainly on account of higher costs related to the recent commercialization activities as well as costs incurred on other corporate activities, including $30 million in expenses associated with the pending acquisition by pharma goliath, Pfizer (PFE - Free Report) .
Seagen entered into a definitive agreement in March 2023 to be acquired by Pfizer for $229 per share, bringing the valuation of the company to a whopping $43 billion. The acquisition, if followed through, will add Seagen’s portfolio of antibody-drug conjugates (ADCs) and technology to Pfizer’s already robust portfolio of oncology drugs. Seagen will gain access to Pfizer’s resources to continue the development of its ADC technology. Pfizer should be able to bring new innovative cancer treatment options to patients by combining Seagen’s prowess in ADCs with Pfizer’s existing portfolio across both solid tumors and hematologic malignancies, bolstering its position in the market and driving growth.
Cash, cash equivalents and investments amounted to $1.5 billion for Seagen at the end of the first quarter of 2023.
In April 2023, Seagen and partners, Astellas Pharma and Merck (MRK - Free Report) announced that the FDA has granted accelerated approval to the combination therapy of Padcev with Merck’s Keytruda for the treatment of adult patients with first- and second-line metastatic urothelial cancer who are not eligible to receive cisplatin-containing chemotherapy. The continued approval for this indication is subject to the results of the companies’ confirmatory phase III EV-302 study. Keytruda, a PD-1 inhibitor, is Merck's blockbuster oncology drug approved for several indications.
Image: Bigstock
Seagen's (SGEN) Q1 Earnings and Revenues Miss Expectations
Seagen Inc. reported a loss of 93 cents per share in the first quarter of 2023, wider than the Zacks Consensus Estimate of a loss of 82 cents. The company reported a loss of 74 cents per share in the year-ago quarter.
Total revenues in the first quarter of 2023 were $520 million, increasing 21.89% year over year. The top line missed the Zacks Consensus Estimate of $523 million. Net product revenues in the year-ago quarter were $469 million, up 22.33% year over year, driven by the strong uptake of Seagen’s portfolio of marketed cancer drugs.
In the past year, shares of Seagen have rallied 53.3% against the industry’s 6.8% decline.
Image Source: Zacks Investment Research
Quarter in Detail
Seagen’s top line mainly comprises product revenues, collaboration and license agreement revenues and royalties. The company currently markets four drugs, Adcetris, Padcev, Tukysa and the newly approved Tivdak.
Adcetris generated net sales of $243 million in the United States and Canada, up 34% year over year. The drug, which is the major contributor to SGEN’s revenues, is being evaluated in several label expansion studies.
Padcev sales in the reported quarter totaled $119 million. Sales of the drug rose 18% on a year-over-year basis.
Tukysa’s first-quarter net sales were $87 million, down 3% on a year-over-year basis.
The newly launched Tivdak generated sales worth $19 million in the first quarter of 2023, reflecting a sequential increase of 5.6%. Seagen commercializes Tivdak in collaboration with Zai Lab Limited (ZLAB - Free Report) .
In September 2022, Seagen entered into an exclusive collaboration and license agreement with Zai Lab for the development and commercialization of Tivdak in mainland China, Hong Kong, Macau and Taiwan. ZLAB obtained exclusive rights to develop and commercialize Tivdak in the given territory.
Collaboration and license agreement revenues were $21 million in the first quarter, marking a significant increase over the year-ago quarter. The uptick was primarily driven by higher royalties from Seagen’s partner, Astellas, for the sales of Padcev in the latter’s territory.
Royalty revenues of $30 million rose by 7% from the year-ago quarter’s $28 million. Seagen records royalty revenues on the sales of Adcetris from Takeda Pharmaceutical in the ex-U.S. markets as well as from Polivy’s sales under its collaboration with Roche (RHHBY - Free Report) .
Polivy is an antibody-drug conjugate that uses Seagen’s technology and commercialized by Roche.
Research and development expenses of $356 million increased 19.6% year over year, primarily driven by continued investment in the development of approved drugs and pipeline programs.
Selling, general and administrative expenses increased 35.7% year over year to $236 million, mainly on account of higher costs related to the recent commercialization activities as well as costs incurred on other corporate activities, including $30 million in expenses associated with the pending acquisition by pharma goliath, Pfizer (PFE - Free Report) .
Seagen entered into a definitive agreement in March 2023 to be acquired by Pfizer for $229 per share, bringing the valuation of the company to a whopping $43 billion. The acquisition, if followed through, will add Seagen’s portfolio of antibody-drug conjugates (ADCs) and technology to Pfizer’s already robust portfolio of oncology drugs. Seagen will gain access to Pfizer’s resources to continue the development of its ADC technology. Pfizer should be able to bring new innovative cancer treatment options to patients by combining Seagen’s prowess in ADCs with Pfizer’s existing portfolio across both solid tumors and hematologic malignancies, bolstering its position in the market and driving growth.
Cash, cash equivalents and investments amounted to $1.5 billion for Seagen at the end of the first quarter of 2023.
Seagen Inc. Price, Consensus and EPS Surprise
Seagen Inc. price-consensus-eps-surprise-chart | Seagen Inc. Quote
Recent Updates
In April 2023, Seagen and partners, Astellas Pharma and Merck (MRK - Free Report) announced that the FDA has granted accelerated approval to the combination therapy of Padcev with Merck’s Keytruda for the treatment of adult patients with first- and second-line metastatic urothelial cancer who are not eligible to receive cisplatin-containing chemotherapy. The continued approval for this indication is subject to the results of the companies’ confirmatory phase III EV-302 study. Keytruda, a PD-1 inhibitor, is Merck's blockbuster oncology drug approved for several indications.
Zacks Rank
Seagen currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.