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Seattle Genetics Adcetris Performs Well Despite Competition

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Seattle Genetics, Inc. is a biopharmaceutical company focused on the development and commercialization of therapies targeted for the treatment of cancer. The company has only one marketed product, Adcetris, approved for several indications.

In the past year, Seattle Genetics’ share price has been trading below the industry. The stock has lost 9.8% against an increase of 9.6% for the broader industry.

Adcetris has been performing well since the beginning of 2017, which prompted the company to raise the guidance for the drug’s sales in the year. Moreover, the prospect of the drug received a boost with line extension in primary cutaneous anaplastic large cell lymphoma (pcALCL) and CD30-expressing mycosis fungoides (“MF”) in November 2017.

Moreover, the collaboration with Takeda Pharmaceutical for global development and commercialization of Adcetris is also encouraging as Seattle Genetics earns royalty payments and is entitled to milestone payments of up to $165 million.

In June 2017, the company announced encouraging data from a phase III study, ECHELON-1, evaluating Adcetris in front-line classical Hodgkin lymphoma. Data from the study showed that Adcetris achieved statistically significant improvement in modified progression free survival versus standard of care. A supplemental Biologics License Application was submitted to the FDA based on this data in November 2017.

Another phase III study, ECHELON-2, is evaluating the drug in front-line CD30-expressing mature T-cell lymphoma. Data is expected from the study this year.

Apart from Adcetris, the company has six ADC candidates and one novel immuno-oncology candidate, which are being evaluated in early to mid-stage studies. A phase Ib study is evaluating pipeline candidate, enfortumab vedotin, in combination with Bristol-Myers’ (BMY - Free Report) Opdivo and Roche Holding AG’s (RHHBY - Free Report) Tecentriq.

However, dependence on a single product is a concern for the company. Any decline in sales or unfavorable response in label expansion studies will affect the stock.

Moreover, label expansion of Merck & Co., Inc.’s (MRK - Free Report) Keytruda in the lymphoma indication in March 2017 has increased competition for Adcetris.

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