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Seattle Genetics Inc. (SGEN - Snapshot Report) and Takeda Pharmaceutical Company Limited (TKPYY) recently announced the commencement of a global phase III study (ECHELON-2) on their oncology treatment, Adcetris (brentuximab vedotin). Adcetris (brentuximab vedotin) plus chemotherapy will be evaluated for the front-line treatment of CD30-positive mature T-cell lymphoma (MTCL) including in patients with systemic anaplastic large cell lymphoma (sALCL) and other types of peripheral T-cell lymphomas.

We note that study is being conducted under the U.S. Food and Drug Administration’s (FDA) Special Protocol Assessment (SPA) program. Seattle Genetics said that the European Medicines Agency (EMA) also provided scientific advice for the study. The randomized, double-blind, controlled study will enroll roughly 300 patients and will be conducted in North America, Europe and Asia.

Seattle Genetics and Takeda had presented encouraging phase I data on Adcetris at the American Society of Hematology (ASH) annual meeting in Dec 2012. Adcetris is currently approved in the US for the treatment of patients with Hodgkin lymphoma after failure of autologous stem cell transplant (ASCT) or after failure of at least two prior multi-agent chemotherapy regimens in patients who are not suitable for ASCT and the treatment of sALCL in treatment-experienced patients. Adcetris is approved in the EU as well.

Our Take

We are positive on Seattle Genetics’ efforts to expand Adcetris’ label. Approval in the front-line setting will boost Adcetris’ sales signifcantly. Adcetris net revenue in the third quarter of 2012 was $33.7 million and for the nine months ending Sep 30, 2012 was $102.8 million.

Seattle Genetics carries a Zacks Rank #3 (Hold). Right now Agenus Inc. (AGEN - Snapshot Report), Valeant Pharmaceuticals International, Inc. (VRX) and Targacept, Inc. (TRGT - Snapshot Report) look more attractive with a Zacks Rank #1 (Strong Buy).

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