It has been about a month since the last earnings report for Seattle Genetics, Inc. . Shares have added about 8.2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Seattle Genetics Loss Wider than Expected in Q4, Revenues Miss
Seattle Genetics reported a loss of $0.39 per share, wider than the Zacks Consensus Estimate of a loss of $0.34 and wider than the year-ago loss of $0.18.
Revenues came in at $105.3 million, up 12.6% year over year, primarily on the back of strong sales of Adcetris. Revenues, however, missed the Zacks Consensus Estimate of $106.6 million.
Quarter in Details
Seattle Genetics’ top line comprises product revenues, collaboration and license agreement revenues and royalties.
The company’s only marketed product, Adcetris, generated revenues of $70.8 million, up 12% year over year.
Collaboration and license agreement revenues increased 16.4% to almost $20.8 million. Collaboration revenues included fees earned from the company’s agreement with Takeda Pharmaceutical Company Ltd. for Adcetris and other ADC collaborations.
Royalty revenues surged 8.7% to $13.7 million driven by royalties from Takeda on international sales of Adcetris.
Research and development (R&D) expenses were $108.2 million, up 45% year over year. Also, selling, general and administrative (SG&A) expenses increased 23% to $41.4 million. Costs were high primarily due to investment in vadastuximab talirine, Adcetris collaboration activities for product supply to Takeda and pipeline development.
2016 Results
For the full year net loss came in at $1 per share compared with a loss of 93 cents in 2015 and wider than the Zacks Consensus Estimate of 94 cents.
For 2016, revenues came in at $418.1 million, up 24.2% year over year but missed the Zacks Consensus Estimate of $419.69 million.
2017 Outlook
Seattle Genetics expects total revenues in 2017 to be in the range of $405 million to $445 million. Net sales of Adectris is expected to be in the range of $280 million to $300 million. R&D expenses are expected to be in the range of $460 million to $500 million. SG&A expenses are expected to be in the range of $160 million to $170 million.
Pipeline Update
Seattle Genetics continues to work on expanding Adcetris’ label further. The company.Takeda released full data from the ALCANZA phase III study in patients with CD30-expressing cutaneous T-cell lymphoma (CTCL) in Dec 2016. The study met its primary endpoint demonstrating that treatment with Adcetris resulted in a highly statistically significant improvement in the rate of objective response lasting at least four months (ORR4) versus the control arm as assessed by an independent review committee.
Seattle Genetics plans to submit a supplemental biologics license application to the FDA for Adcetris in CTCL indication in mid-2017.
The company expects top-line data from the phase III ECHELON-1 study (frontline classical Hodgkin lymphoma) during 2017 while top-line data from the ECHELON-2 study (frontline CD30-expressing mature T-cell lymphoma) should be out in 2018 (previously expected in the 2017 to 2018 timeframe).
In addition, the company continues to enroll patients in the phase III study on vadastuximab talirine in combination with hypomethylating agents in older patients with newly diagnosed acute myeloid leukemia.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 53.66% due to these changes.
VGM Scores
At this time, Seattle Genetics' stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'C'. However, the stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #5 (Strong Sell). We are expecting a below average return from the stock in the next few months.
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Seattle Genetics (SGEN) Up 8.2% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Seattle Genetics, Inc. . Shares have added about 8.2% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Seattle Genetics Loss Wider than Expected in Q4, Revenues Miss
Seattle Genetics reported a loss of $0.39 per share, wider than the Zacks Consensus Estimate of a loss of $0.34 and wider than the year-ago loss of $0.18.
Revenues came in at $105.3 million, up 12.6% year over year, primarily on the back of strong sales of Adcetris. Revenues, however, missed the Zacks Consensus Estimate of $106.6 million.
Quarter in Details
Seattle Genetics’ top line comprises product revenues, collaboration and license agreement revenues and royalties.
The company’s only marketed product, Adcetris, generated revenues of $70.8 million, up 12% year over year.
Collaboration and license agreement revenues increased 16.4% to almost $20.8 million. Collaboration revenues included fees earned from the company’s agreement with Takeda Pharmaceutical Company Ltd. for Adcetris and other ADC collaborations.
Royalty revenues surged 8.7% to $13.7 million driven by royalties from Takeda on international sales of Adcetris.
Research and development (R&D) expenses were $108.2 million, up 45% year over year. Also, selling, general and administrative (SG&A) expenses increased 23% to $41.4 million. Costs were high primarily due to investment in vadastuximab talirine, Adcetris collaboration activities for product supply to Takeda and pipeline development.
2016 Results
For the full year net loss came in at $1 per share compared with a loss of 93 cents in 2015 and wider than the Zacks Consensus Estimate of 94 cents.
For 2016, revenues came in at $418.1 million, up 24.2% year over year but missed the Zacks Consensus Estimate of $419.69 million.
2017 Outlook
Seattle Genetics expects total revenues in 2017 to be in the range of $405 million to $445 million. Net sales of Adectris is expected to be in the range of $280 million to $300 million. R&D expenses are expected to be in the range of $460 million to $500 million. SG&A expenses are expected to be in the range of $160 million to $170 million.
Pipeline Update
Seattle Genetics continues to work on expanding Adcetris’ label further. The company.Takeda released full data from the ALCANZA phase III study in patients with CD30-expressing cutaneous T-cell lymphoma (CTCL) in Dec 2016. The study met its primary endpoint demonstrating that treatment with Adcetris resulted in a highly statistically significant improvement in the rate of objective response lasting at least four months (ORR4) versus the control arm as assessed by an independent review committee.
Seattle Genetics plans to submit a supplemental biologics license application to the FDA for Adcetris in CTCL indication in mid-2017.
The company expects top-line data from the phase III ECHELON-1 study (frontline classical Hodgkin lymphoma) during 2017 while top-line data from the ECHELON-2 study (frontline CD30-expressing mature T-cell lymphoma) should be out in 2018 (previously expected in the 2017 to 2018 timeframe).
In addition, the company continues to enroll patients in the phase III study on vadastuximab talirine in combination with hypomethylating agents in older patients with newly diagnosed acute myeloid leukemia.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There have been three revisions lower for the current quarter. In the past month, the consensus estimate has shifted lower by 53.66% due to these changes.
Seattle Genetics, Inc. Price and Consensus
Seattle Genetics, Inc. Price and Consensus | Seattle Genetics, Inc. Quote
VGM Scores
At this time, Seattle Genetics' stock has a poor Growth Score of 'F', however its Momentum is doing a bit better with a 'C'. However, the stock was allocated a grade of 'F' on the value side, putting it in the fifth quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'F'. If you aren't focused on one strategy, this score is the one you should be interested in.
The company's stock is suitable solely for momentum based on our styles scores.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. It's no surprise that the stock has a Zacks Rank #5 (Strong Sell). We are expecting a below average return from the stock in the next few months.