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Seagen's (SGEN) Earnings & Revenues Surpass Estimates in Q2

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Seagen Inc. (SGEN - Free Report) reported a loss of 73 cents per share in the second quarter of 2022, narrower than the Zacks Consensus Estimate of a loss of 82 cents. The company had reported a loss of 47 cents per share in the year-ago quarter.

Total revenues in the second quarter of 2022 were $498 million, increasing 28.2% year over year. The top line also beat the Zacks Consensus Estimate of $443 million. Net product revenues in the second quarter were $431.7 million, up 24% year over year, driven by the strong uptake of Seagen’s portfolio of marketed cancer drugs.

Shares of Seagen have rallied 14.7% in the year so far against the industry’s decline of 18.9%.

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Quarter in Detail

Seagen’s top line mainly comprises product revenues, collaboration and license agreement revenues, and royalties. The company currently markets four drugs — Adcetris, Padcev, Tukysa and the newly approved Tivdak.

Adcetris generated net sales of $201.9 million in the United States and Canada, up 11% year over year. The drug, which is the majority contributor to SGEN’s revenues, is being evaluated in several label-expansion studies. Successful development and potential approval should boost its sales in the future.

Padcev sales in the second quarter totaled $123.6 million, up 23.3% sequentially. The sale of the drug rose 50% on a year-over-year basis.

Tukysa’s second-quarter net sales were $89 million, down 1.6% sequentially. Tukysa sales increased 7% on a year-over-year basis.

The newly launched Tivdak generated sales worth $17.2 million in the second quarter of 2022, reflecting a sequential increase of 50.8%.

Collaboration and license agreement revenues were $26.6 million, reflecting a significant increase year over year. The significant increase was primarily due to a milestone payment of $12 million received from AbbVie.

Royalty revenues of $39.1 million rose from the year-ago quarter’s $36.2 million. Seagen records royalty revenues on the sales of Adcetris from Takeda Pharmaceutical 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 (RHHBY - Free Report) .

Polivy is an antibody-drug conjugate (“ADC”) that uses Seagen’s technology and is commercialized by Roche.

In March 2022, Roche announced that the European Medicines Agency’s Committee for Medicinal Products for Human Use had recommended approval of Polivy in combination with chemotherapy for addressing previously untreated diffuse large B-cell lymphoma.

Research and development (R&D) expenses of $304.3 million increased 29.5% year over year, primarily owing to higher investment in clinical development.

Selling, general and administrative (SG&A) expenses increased 33.4% year over year to $220.3 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

Seagen raised the financial guidance for 2022. Total revenues are now expected in the range of $1.71-$1.79 billion compared with the earlier projection of $1.66-$1.74 billion. The Zacks Consensus Estimate for the metric stands at -$1.81 billion.

Total net product revenues are now expected in the range of $1.50-$1.56 billion compared with the earlier projection of $1.48-$1.54 billion.

Seagen expects Adcetris’ full-year 2022 net sales in the band of $750-$775 million compared with the earlier projection of $730-$755 million. The company expects collaboration and license revenues in the band of $50-$60 million compared with the earlier projection of $25-$30 million.

Padcev’s full-year net sales are expected to be in the range of $435-$455 million while Tukysa’s sales are anticipated in the band of $315-$335 million. Royalty revenues are anticipated within $160-$170 million. All these are unchanged from previous expectations.

Recent Updates

Shares of the company surged significantly following rumors of a potential acquisition by pharma giant Merck & Co., Inc. (MRK - Free Report) .

Merck has been engaged in advanced talks with Seagen for potentially buying out the latter, per a Wall Street Journal (“WSJ”) article.

Both Seagen and Merck are yet to confirm the validity of the news through a formal statement. There is no guarantee that Merck would make a potential buyout offer.

Seagen Inc. Price, Consensus and EPS Surprise

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 Precision BioSciences, Inc. (DTIL - Free Report) , sporting a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Precision BioSciences’ loss per share estimates narrowed 5.8% for 2022 and 16.2% for 2023 in the past 60 days.

Earnings of Precision BioSciences have surpassed estimates in each of the trailing four quarters. DTIL delivered an earnings surprise of 76.15%, on average.