A month has gone by since the last earnings report for Seattle Genetics . Shares have lost about 12.4% in that time frame, underperforming 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 drivers.
Seagen Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Seagen 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 Merckas well as the strong uptake of Padcev and Tukysa. The top line also beat the Zacks Consensus Estimate of $584 million.
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.
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.
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 Takedain the ex-U.S. markets and to a lesser extent, include sales of Polivy under its collaboration with Roche.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -35.97% due to these changes.
VGM Scores
At this time, Seattle Genetics has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Seattle Genetics has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Seattle Genetics (SGEN) Down 12.4% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Seattle Genetics . Shares have lost about 12.4% in that time frame, underperforming 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 drivers.
Seagen Q4 Earnings Beat Estimates, Revenues Rise Y/Y
Seagen 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 Merckas well as the strong uptake of Padcev and Tukysa. The top line also beat the Zacks Consensus Estimate of $584 million.
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.
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.
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 Takedain the ex-U.S. markets and to a lesser extent, include sales of Polivy under its collaboration with Roche.
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.
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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -35.97% due to these changes.
VGM Scores
At this time, Seattle Genetics has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Seattle Genetics has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.