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Seattle Genetics' (SGEN) Loss Narrower than Expected in Q2
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Seattle Genetics, Inc. reported a loss of 23 cents per share, narrower than both the Zacks Consensus Estimate of a loss of 33 cents and the year-ago loss of 38 cents.
Revenues came in at $95.4 million, up 23.7% year over year, primarily due to strong sales of Adcetris. Revenues were also above the Zacks Consensus Estimate of $93.2 million.
Quarter in Detail
Seattle Genetics’ top line comprises product revenues, collaboration and license agreement revenues, and royalties.
The company’s only marketed product, Adcetris, generated revenues of $66.2 million, up 20.2% year over year.
Collaboration and license agreement revenues increased 39% to almost $20 million. Collaboration revenues include fees earned from the company’s agreement with Takeda Pharmaceutical Company Ltd. for Adcetris and other ADC collaborations.
Royalty revenues surged 20.7% to $9.2 million driven by royalties from Takeda for international sales of Adcetris.
Research and development (R&D) expenses were $85.6 million, down 0.2% year over year. On the other hand, selling, general and administrative (SG&A) expenses increased 9.7% to $33.3 million.
Seattle Genetics continues to progress with the candidates in its pipeline. The company expects to report data from a phase III study (ALCANZA) on Adcetris for relapsed CD30-expressing cutaneous T-cell lymphoma in the third quarter of 2016.
In addition, the company has initiated a phase III study on vadastuximab talirine to evaluate 33A in combination with hypomethylating agents Vidaza (azacitidine) or Dacogen (decitabine) in older patients with newly diagnosed acute myeloid leukemia.
Our Take
Seattle Genetics’ second-quarter 2016 results were impressive with the company reporting a narrow-than-expected loss and revenues beating estimates. We are also impressed by robust sales of Adcetris in the U.S. and Canada. The company’s efforts on expanding the products label are also encouraging. We note that earlier this month, Adcetris was approved in the EU for the treatment of adult patients with CD30+ Hodgkin lymphoma at increased risk of relapse or progression following autologous stem cell transplant (ASCT). However, the company’s sole dependence on Adcetris for growth remains a major concern.
Going forward, we expect investor focus to remain on Adcetris' performance and pipeline updates at the company.
Seattle Genetics currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector are Bristol-Myers Squibb Company (BMY - Free Report) and Actelion Ltd. . Both stocks sport a Zack Rank #1 (Strong Buy).
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Seattle Genetics' (SGEN) Loss Narrower than Expected in Q2
Seattle Genetics, Inc. reported a loss of 23 cents per share, narrower than both the Zacks Consensus Estimate of a loss of 33 cents and the year-ago loss of 38 cents.
Revenues came in at $95.4 million, up 23.7% year over year, primarily due to strong sales of Adcetris. Revenues were also above the Zacks Consensus Estimate of $93.2 million.
Quarter in Detail
Seattle Genetics’ top line comprises product revenues, collaboration and license agreement revenues, and royalties.
The company’s only marketed product, Adcetris, generated revenues of $66.2 million, up 20.2% year over year.
Collaboration and license agreement revenues increased 39% to almost $20 million. Collaboration revenues include fees earned from the company’s agreement with Takeda Pharmaceutical Company Ltd. for Adcetris and other ADC collaborations.
Royalty revenues surged 20.7% to $9.2 million driven by royalties from Takeda for international sales of Adcetris.
Research and development (R&D) expenses were $85.6 million, down 0.2% year over year. On the other hand, selling, general and administrative (SG&A) expenses increased 9.7% to $33.3 million.
SEATTLE GENETIC Price and EPS Surprise
SEATTLE GENETIC Price and EPS Surprise | SEATTLE GENETIC Quote
Pipeline Update
Seattle Genetics continues to progress with the candidates in its pipeline. The company expects to report data from a phase III study (ALCANZA) on Adcetris for relapsed CD30-expressing cutaneous T-cell lymphoma in the third quarter of 2016.
In addition, the company has initiated a phase III study on vadastuximab talirine to evaluate 33A in combination with hypomethylating agents Vidaza (azacitidine) or Dacogen (decitabine) in older patients with newly diagnosed acute myeloid leukemia.
Our Take
Seattle Genetics’ second-quarter 2016 results were impressive with the company reporting a narrow-than-expected loss and revenues beating estimates. We are also impressed by robust sales of Adcetris in the U.S. and Canada. The company’s efforts on expanding the products label are also encouraging. We note that earlier this month, Adcetris was approved in the EU for the treatment of adult patients with CD30+ Hodgkin lymphoma at increased risk of relapse or progression following autologous stem cell transplant (ASCT). However, the company’s sole dependence on Adcetris for growth remains a major concern.
Going forward, we expect investor focus to remain on Adcetris' performance and pipeline updates at the company.
Seattle Genetics currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector are Bristol-Myers Squibb Company (BMY - Free Report) and Actelion Ltd. . Both stocks sport a Zack Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>