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Seagen (SGEN) Q4 Earnings Miss, Revenues Top Mark, Stock Down
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Seagen Inc. incurred a loss of 95 cents per share in the fourth quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 79 cents. The company had reported earnings of 90 cents per share in the year-ago quarter.
Net loss during this time was impacted by an upfront payment of $200 million owed to RemeGen. Net income in 2020 was driven by the revenues recognized under Seagen’s collaboration with pharma giant Merck (MRK - Free Report) .
Total revenues in the fourth quarter of 2021 were $430 million, declining 28.5% year over year. The top line, however, beat the Zacks Consensus Estimate of $403 million. Net product revenues in the fourth quarter were $369.2 million, up 26% year over year, driven by the strong uptake of Seagen’s marketed cancer drugs, Tukysa and Padcev.
Shares of Seagen were down 16.2% in after-hours trading on Wednesday following the earnings announcement. The stock has declined 27.9% in the past year compared with the industry’s decrease of 39.8%.
Image Source: Zacks Investment Research
Full-Year Results
For 2021, Seagen generated total revenues of $1.57 billion compared with $2.17 billion recorded in 2020.
For full-year 2021, the company reported a loss of $3.70 per share against its net income of $3.37 per share reported in 2020.
Quarter in Detail
Seagen’s top line mainly comprises of product revenues, collaboration and license agreement revenues, and royalties. The company currently markets four drugs, namely, Adcetris, Padcev, Tukysa and the newly approved Tivdak.
Adcetris generated net sales of $176.3 million in the United States and Canada, up 8% year over year. The drug, sales of which reflected modest growth, is being evaluated in several label-expansion studies. A successful development and potential approval should boost its sales in the future.
Padcev sales in the fourth quarter totaled $92.7 million, up 15.3% sequentially. Sale of the drug rose 34% on a year-over-year basis.
Tukysa’s fourth-quarter net sales were $94.1 million, up 8.7% sequentially. Tukysa sales increased 53% on a year-over-year basis.
The newly launched Tivdak generated sales worth $6.1 million in the first full quarter since its approval in September 2021.
Collaboration and license agreement revenues were $14.7 million, reflecting a significant decrease year over year. Royalty revenues of $46 million rose from the year-ago quarter’s $39.2 million. Seagen records royalty revenues on the sales of Adcetris from Takeda Pharmaceutical Company (TAK - Free Report) in ex-U.S. markets as well as from its collaboration with GlaxoSmithKline for Blenrep, and to a lesser extent, from Polivy’s sales under its collaboration with Roche.
Seagen has an agreement with Japan’s Takeda for the development and commercialization of Adcetris. The company records royalty revenues on the sales of Adcetris from Takeda in ex-U.S. markets.
Research and development (R&D) expenses of $304.3 million increased 40.7% year over year, primarily owing to the upfront payment due under the RemeGen collaboration agreement for disitamab vedotin.
Selling, general and administrative (SG&A) expenses shot up 33.1% year over year to $210.9 million, mainly on account of higher costs related to the recent launch of Tukysa in Europe as well as the commercial launch of Tivdak in the United States.
2022 Guidance
Total revenues are expected in the range of $1.48-$1.54 billion. The Zacks Consensus Estimate currently stands at $2.17 billion for the metric.
The sales outlook falling substantially short of expectations might have hurt investors’ sentiments as shares of Seagen fell sharply in after-hours trading on Wednesday.
Seagen expects Adcetris’ full-year 2022 net sales in the range of $730-$755 million. Padcev’s full-year net sales are expected in the range of $435-$455 million while Tukysa’s sales are anticipated in the band of $315-$335 million.
Seagen did not provide any sales guidance for its newest drug, Tivdak. The drug is seeing a slow launch uptake and its sales fell below market expectations.
The company expects collaboration and license revenues in the band of $25-$30 million while royalty revenues are anticipated within $160-$170 million.
Recent Updates
In December 2021, the European Medicines Agency’s Committee for Medicinal Products for Human Use (“CHMP”) rendered a positive opinion on and recommended marketing authorization to Padcev. The CHMP recommended approval of Padcev as a monotherapy for the treatment of locally advanced or metastatic urothelial cancer in adult patients who have previously received platinum-containing chemotherapy and a PD-1/L1 inhibitor.
On the fourth-quarter earnings call, management stated that the European Commission decision-making process related to Padcev was recently paused for additional CHMP questions due to severe skin reactions in a French compassionate access program. The company remains focused on and is working with European authorities to get Padcev approved in Europe.
Seagen is also investigating Padcev in combination with Merck’s PD-L1 inhibitor, Keytruda, in several mid-stage studies in first- and second-line metastatic urothelial cancer, as well as muscle-invasive bladder cancer.
Merck’s biggest revenue generator, Keytruda, is approved for treating several types of cancer indications.
Vertex’s earnings estimates have been revised 7.6% upward for 2022 and 10.5% upward for 2023 over the past 60 days. The stock has rallied 14.9% in the past year.
Earnings of Vertex’s have surpassed estimates in each of the trailing four quarters.
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Seagen (SGEN) Q4 Earnings Miss, Revenues Top Mark, Stock Down
Seagen Inc. incurred a loss of 95 cents per share in the fourth quarter of 2021, wider than the Zacks Consensus Estimate of a loss of 79 cents. The company had reported earnings of 90 cents per share in the year-ago quarter.
Net loss during this time was impacted by an upfront payment of $200 million owed to RemeGen. Net income in 2020 was driven by the revenues recognized under Seagen’s collaboration with pharma giant Merck (MRK - Free Report) .
Total revenues in the fourth quarter of 2021 were $430 million, declining 28.5% year over year. The top line, however, beat the Zacks Consensus Estimate of $403 million. Net product revenues in the fourth quarter were $369.2 million, up 26% year over year, driven by the strong uptake of Seagen’s marketed cancer drugs, Tukysa and Padcev.
Shares of Seagen were down 16.2% in after-hours trading on Wednesday following the earnings announcement. The stock has declined 27.9% in the past year compared with the industry’s decrease of 39.8%.
Full-Year Results
For 2021, Seagen generated total revenues of $1.57 billion compared with $2.17 billion recorded in 2020.
For full-year 2021, the company reported a loss of $3.70 per share against its net income of $3.37 per share reported in 2020.
Quarter in Detail
Seagen’s top line mainly comprises of product revenues, collaboration and license agreement revenues, and royalties. The company currently markets four drugs, namely, Adcetris, Padcev, Tukysa and the newly approved Tivdak.
Adcetris generated net sales of $176.3 million in the United States and Canada, up 8% year over year. The drug, sales of which reflected modest growth, is being evaluated in several label-expansion studies. A successful development and potential approval should boost its sales in the future.
Padcev sales in the fourth quarter totaled $92.7 million, up 15.3% sequentially. Sale of the drug rose 34% on a year-over-year basis.
Tukysa’s fourth-quarter net sales were $94.1 million, up 8.7% sequentially. Tukysa sales increased 53% on a year-over-year basis.
The newly launched Tivdak generated sales worth $6.1 million in the first full quarter since its approval in September 2021.
Collaboration and license agreement revenues were $14.7 million, reflecting a significant decrease year over year. Royalty revenues of $46 million rose from the year-ago quarter’s $39.2 million. Seagen records royalty revenues on the sales of Adcetris from Takeda Pharmaceutical Company (TAK - Free Report) in ex-U.S. markets as well as from its collaboration with GlaxoSmithKline for Blenrep, and to a lesser extent, from Polivy’s sales under its collaboration with Roche.
Seagen has an agreement with Japan’s Takeda for the development and commercialization of Adcetris. The company records royalty revenues on the sales of Adcetris from Takeda in ex-U.S. markets.
Research and development (R&D) expenses of $304.3 million increased 40.7% year over year, primarily owing to the upfront payment due under the RemeGen collaboration agreement for disitamab vedotin.
Selling, general and administrative (SG&A) expenses shot up 33.1% year over year to $210.9 million, mainly on account of higher costs related to the recent launch of Tukysa in Europe as well as the commercial launch of Tivdak in the United States.
2022 Guidance
Total revenues are expected in the range of $1.48-$1.54 billion. The Zacks Consensus Estimate currently stands at $2.17 billion for the metric.
The sales outlook falling substantially short of expectations might have hurt investors’ sentiments as shares of Seagen fell sharply in after-hours trading on Wednesday.
Seagen expects Adcetris’ full-year 2022 net sales in the range of $730-$755 million. Padcev’s full-year net sales are expected in the range of $435-$455 million while Tukysa’s sales are anticipated in the band of $315-$335 million.
Seagen did not provide any sales guidance for its newest drug, Tivdak. The drug is seeing a slow launch uptake and its sales fell below market expectations.
The company expects collaboration and license revenues in the band of $25-$30 million while royalty revenues are anticipated within $160-$170 million.
Recent Updates
In December 2021, the European Medicines Agency’s Committee for Medicinal Products for Human Use (“CHMP”) rendered a positive opinion on and recommended marketing authorization to Padcev. The CHMP recommended approval of Padcev as a monotherapy for the treatment of locally advanced or metastatic urothelial cancer in adult patients who have previously received platinum-containing chemotherapy and a PD-1/L1 inhibitor.
On the fourth-quarter earnings call, management stated that the European Commission decision-making process related to Padcev was recently paused for additional CHMP questions due to severe skin reactions in a French compassionate access program. The company remains focused on and is working with European authorities to get Padcev approved in Europe.
Seagen is also investigating Padcev in combination with Merck’s PD-L1 inhibitor, Keytruda, in several mid-stage studies in first- and second-line metastatic urothelial cancer, as well as muscle-invasive bladder cancer.
Merck’s biggest revenue generator, Keytruda, is approved for treating several types of cancer indications.
Seagen Inc. Price, Consensus and EPS Surprise
Seagen Inc. price-consensus-eps-surprise-chart | Seagen Inc. Quote
Zacks Rank & Stock to Consider
Seagen currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the biotech sector is Vertex Pharmaceuticals Incorporated (VRTX - Free Report) , which has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vertex’s earnings estimates have been revised 7.6% upward for 2022 and 10.5% upward for 2023 over the past 60 days. The stock has rallied 14.9% in the past year.
Earnings of Vertex’s have surpassed estimates in each of the trailing four quarters.