A month has gone by since the last earnings report for Seattle Genetics . Shares have lost about 2.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Seattle Genetics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Seattle Genetics Q1 Loss Narrows, Revenues Top Mark
Seattle Genetics incurred adjusted loss of 32 cents per share in the first quarter of 2019, narrower than the Zacks Consensus Estimate of 33 cents and also the year-ago quarter’s loss of 61 cents.
Adjusted loss in the quarter included a market-to-market net investment gain related to Seattle Genetics’ common stock holdings in Immunomedics, Inc.
Revenues came in at $195.2 million in the reported quarter, up 38.8% year over year, primarily driven by strong sales and the recent label expansion of Adcetris (brentuximab vedotin) for frontline stage III/IV Hodgkin lymphoma as well as the frontline CD30-expressing peripheral T-cell lymphomas (PTCL). The top line comprehensively beat the Zacks Consensus Estimate of $184.07 million.
Quarter in Detail
Seattle Genetics’ top line mainly comprises product revenues, collaboration and license agreement revenues plus royalties.
The company’s only marketed product, Adcetris, generated net sales of $135 million in the United States and Canada, up 42% year over year. The improved sales of the drug were owing to its recent label expansions for frontline CD30-expressing PTCL and the frontline Hodgkin's lymphoma, leading to higher patient population.
Collaboration and license agreement revenues soared 50.6% year over year to $44.6 million. This included the amounts earned under the ADC collaboration in the ex-U.S. markets and a $30-million milestone payment from Takeda on the approval of Adcetris for frontline Hodgkin lymphoma in Europe.
Royalty revenues were $15.6 million as compared to the year-ago quarter’s $15.7 million.
Research and development (R&D) expenses were $158.3 million, up 3.8% year over year, primarily driven by higher investment in the late-stage pipeline consisting of the enfortumab vedotin (EV), tucatinib and tisotumab vedotin (TV) programs.
Selling, general and administrative (SG&A) expenses rose 21.3% year over year to $80.3 million, mainly on costs pertaining to the launch of Adcetris in frontline setting and other infrastructure costs.
2019 Outlook
Seattle Genetics projects Adcetris’ full-year net sales in the range of $610-$640 million.
The company expects collaboration and license revenues in the band of $95-$110 million, backed by milestones received from Takeda. Royalty revenues are anticipated within $85-$90 million.
Seattle Genetics lifted its guidance for R&D and SG&A expenses. The company now expects R&D expenses in the range of $650-$700 million and SG&A expenses within $300-$335 million.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -40% due to these changes.
VGM Scores
At this time, Seattle Genetics has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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.
Outlook
Seattle Genetics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Seattle Genetics (SGEN) Down 2.7% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Seattle Genetics . Shares have lost about 2.7% in that time frame, outperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Seattle Genetics due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Seattle Genetics Q1 Loss Narrows, Revenues Top Mark
Seattle Genetics incurred adjusted loss of 32 cents per share in the first quarter of 2019, narrower than the Zacks Consensus Estimate of 33 cents and also the year-ago quarter’s loss of 61 cents.
Adjusted loss in the quarter included a market-to-market net investment gain related to Seattle Genetics’ common stock holdings in Immunomedics, Inc.
Revenues came in at $195.2 million in the reported quarter, up 38.8% year over year, primarily driven by strong sales and the recent label expansion of Adcetris (brentuximab vedotin) for frontline stage III/IV Hodgkin lymphoma as well as the frontline CD30-expressing peripheral T-cell lymphomas (PTCL). The top line comprehensively beat the Zacks Consensus Estimate of $184.07 million.
Quarter in Detail
Seattle Genetics’ top line mainly comprises product revenues, collaboration and license agreement revenues plus royalties.
The company’s only marketed product, Adcetris, generated net sales of $135 million in the United States and Canada, up 42% year over year. The improved sales of the drug were owing to its recent label expansions for frontline CD30-expressing PTCL and the frontline Hodgkin's lymphoma, leading to higher patient population.
Collaboration and license agreement revenues soared 50.6% year over year to $44.6 million. This included the amounts earned under the ADC collaboration in the ex-U.S. markets and a $30-million milestone payment from Takeda on the approval of Adcetris for frontline Hodgkin lymphoma in Europe.
Royalty revenues were $15.6 million as compared to the year-ago quarter’s $15.7 million.
Research and development (R&D) expenses were $158.3 million, up 3.8% year over year, primarily driven by higher investment in the late-stage pipeline consisting of the enfortumab vedotin (EV), tucatinib and tisotumab vedotin (TV) programs.
Selling, general and administrative (SG&A) expenses rose 21.3% year over year to $80.3 million, mainly on costs pertaining to the launch of Adcetris in frontline setting and other infrastructure costs.
2019 Outlook
Seattle Genetics projects Adcetris’ full-year net sales in the range of $610-$640 million.
The company expects collaboration and license revenues in the band of $95-$110 million, backed by milestones received from Takeda. Royalty revenues are anticipated within $85-$90 million.
Seattle Genetics lifted its guidance for R&D and SG&A expenses. The company now expects R&D expenses in the range of $650-$700 million and SG&A expenses within $300-$335 million.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -40% due to these changes.
VGM Scores
At this time, Seattle Genetics has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Following the exact same course, the stock was allocated a grade of F on the value side, putting it in the bottom 20% 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.
Outlook
Seattle Genetics has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.