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Seagen Inc. delivered adjusted earnings of 90 cents per share for the fourth quarter of 2020, which beat the Zacks Consensus Estimate of 81 cents. The figure also surpassed the year-ago quarter’s earnings of 14 cents.
Revenues of $601.3 million were significantly up year over year, primarily driven by the oncology collaborations with pharma giant Merck (MRK - Free Report) as well as the strong uptake of Padcev and Tukysa. The top line also beat the Zacks Consensus Estimate of $584 million.
Notably, in October 2020, Seattle Genetics decided to switch over to its new corporate name, Seagen Inc.
Despite favorable results, shares of Seagen were down 4.4% in after-hours trading on Thursday. In fact, the stock has declined 1.8% so far this year against the industry’s increase of 11.9%.
Quarter in Detail
Seagen’s top line mainly comprises product revenues, collaboration and license agreement revenues, and royalties.
Adcetris generated net sales of $163.7 million in the United States and Canada, down 2% year over year. On the fourth-quarter conference call, management stated that Adcetris sales are being hurt by the adverse effects of the COVID-19 pandemic as the diagnosis trends for new Hodgkin lymphoma indication continue to be approximately 15% lower than previous levels. Meanwhile, the drug is being evaluated in several label expansion studies. A successful development and a potential approval should boost sales in the future quarters.
Padcev’s sales in the fourth quarter were $69 million, increasing 11.6% sequentially.
Tukysa’s fourth-quarter net sales were $61.4 million, increasing 44.8% sequentially. The drug received the FDA’s approval in mid-April 2020.
Collaboration and license agreement revenues were $267.9 million, reflecting a significant increase year over year. Seagen received $250.1 million in revenue related to the premium over market price paid by Merck under a $1 billion stock purchase that closed in October 2020.
Royalty revenues of $39.2 million decreased from the year-ago quarter’s $72.3 million. The company records royalty revenues on the sales of Adcetris from Takeda (TAK - Free Report) in the ex-U.S. markets and to a lesser extent, include sales of Polivy under its collaboration with Roche (RHHBY - Free Report) .
Research and development (R&D) expenses of $216.2 million escalated 7.5% year over year, primarily due to increased investments in developing the late-stage pipeline candidates.
Selling, general and administrative (SG&A) expenses shot up 37.5% year over year to $158.4 million, mainly on account of higher costs related to the recent launch of Padcev and Tukysa as well as higher infrastructure costs for international expansion.
Full-Year Results
For 2020, Seagen generated revenues of $2.2 billion, reflecting significant growth year over year owing to higher sales of the company’s three approved drugs and collaboration revenues received from Merck.
For the same period, the company reported earnings of $3.37 per share, against the year-ago loss of 96 cents per share.
2021 Guidance
Seagen projects Adcetris’ full-year net sales in the range of $675-$700 million. Padcev full-year net sales are expected in the range of $310-$325 million, while Tukysa sales are anticipated in the band of $300-$315 million.
The company expects collaboration and license revenues to be less than $20 million in 2021 while royalty revenues are anticipated within $125-$135 million.
Seagen expects SG&A expenses within $650-$725 million. R&D is estimated in the bracket of $900 million to $1billion.
Pipeline Updates
In December 2020, the Committee for Medicinal Products for Human Use of the European Medicines Agency adopted a positive opinion, recommending the approval of Tukysa in combination with Roche Herceptin (trastuzumab) and Xeloda (capecitabine) for the treatment of adult patients with HER2-positive locally advanced or metastatic breast cancer, who have received at least two prior anti-HER2 treatment regimens. A potential nod in Europe will boost the drug’s sales in the future quarters.
Earlier this week, Seagen submitted a biologics license application to the FDA seeking accelerated approval of tisotumab vedotin in patients with recurrent/metastatic cervical cancer, whose disease has progressed on or after chemotherapy.
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Seagen (SGEN) Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Seagen Inc. delivered adjusted earnings of 90 cents per share for the fourth quarter of 2020, which beat the Zacks Consensus Estimate of 81 cents. The figure also surpassed the year-ago quarter’s earnings of 14 cents.
Revenues of $601.3 million were significantly up year over year, primarily driven by the oncology collaborations with pharma giant Merck (MRK - Free Report) as well as the strong uptake of Padcev and Tukysa. The top line also beat the Zacks Consensus Estimate of $584 million.
Notably, in October 2020, Seattle Genetics decided to switch over to its new corporate name, Seagen Inc.
Despite favorable results, shares of Seagen were down 4.4% in after-hours trading on Thursday. In fact, the stock has declined 1.8% so far this year against the industry’s increase of 11.9%.
Quarter in Detail
Seagen’s top line mainly comprises product revenues, collaboration and license agreement revenues, and royalties.
Adcetris generated net sales of $163.7 million in the United States and Canada, down 2% year over year. On the fourth-quarter conference call, management stated that Adcetris sales are being hurt by the adverse effects of the COVID-19 pandemic as the diagnosis trends for new Hodgkin lymphoma indication continue to be approximately 15% lower than previous levels. Meanwhile, the drug is being evaluated in several label expansion studies. A successful development and a potential approval should boost sales in the future quarters.
Padcev’s sales in the fourth quarter were $69 million, increasing 11.6% sequentially.
Tukysa’s fourth-quarter net sales were $61.4 million, increasing 44.8% sequentially. The drug received the FDA’s approval in mid-April 2020.
Collaboration and license agreement revenues were $267.9 million, reflecting a significant increase year over year. Seagen received $250.1 million in revenue related to the premium over market price paid by Merck under a $1 billion stock purchase that closed in October 2020.
Royalty revenues of $39.2 million decreased from the year-ago quarter’s $72.3 million. The company records royalty revenues on the sales of Adcetris from Takeda (TAK - Free Report) in the ex-U.S. markets and to a lesser extent, include sales of Polivy under its collaboration with Roche (RHHBY - Free Report) .
Research and development (R&D) expenses of $216.2 million escalated 7.5% year over year, primarily due to increased investments in developing the late-stage pipeline candidates.
Selling, general and administrative (SG&A) expenses shot up 37.5% year over year to $158.4 million, mainly on account of higher costs related to the recent launch of Padcev and Tukysa as well as higher infrastructure costs for international expansion.
Full-Year Results
For 2020, Seagen generated revenues of $2.2 billion, reflecting significant growth year over year owing to higher sales of the company’s three approved drugs and collaboration revenues received from Merck.
For the same period, the company reported earnings of $3.37 per share, against the year-ago loss of 96 cents per share.
2021 Guidance
Seagen projects Adcetris’ full-year net sales in the range of $675-$700 million. Padcev full-year net sales are expected in the range of $310-$325 million, while Tukysa sales are anticipated in the band of $300-$315 million.
The company expects collaboration and license revenues to be less than $20 million in 2021 while royalty revenues are anticipated within $125-$135 million.
Seagen expects SG&A expenses within $650-$725 million. R&D is estimated in the bracket of $900 million to $1billion.
Pipeline Updates
In December 2020, the Committee for Medicinal Products for Human Use of the European Medicines Agency adopted a positive opinion, recommending the approval of Tukysa in combination with Roche Herceptin (trastuzumab) and Xeloda (capecitabine) for the treatment of adult patients with HER2-positive locally advanced or metastatic breast cancer, who have received at least two prior anti-HER2 treatment regimens. A potential nod in Europe will boost the drug’s sales in the future quarters.
Earlier this week, Seagen submitted a biologics license application to the FDA seeking accelerated approval of tisotumab vedotin in patients with recurrent/metastatic cervical cancer, whose disease has progressed on or after chemotherapy.
Seagen Inc. Price, Consensus and EPS Surprise
Seagen Inc. price-consensus-eps-surprise-chart | Seagen Inc. Quote
Zacks Rank
Seagen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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