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Seattle Genetics Up More Than 40% in the Past Year: Here's Why

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Shares of Seattle Genetics, Inc. SGEN have surged 48% in the past year against the industry’s decline of 3.5%.

Solid performance of its lead marketed drug Adcetris and the recent approval of Padcev (enfortumab vedotin-ejfv) might have been driving the stock price of late. Other pipeline candidates are also making good progress.

Adcetris is approved for relapsed Hodgkin lymphoma and relapsed systemic anaplastic large cell lymphoma (sALCL) in the United States, the EU and Japan. The drug generated sales of $461.5 million in the first nine months of 2019, reflecting a year-over-year surge of 34%.

Improved sales of the drug were owing to its label expansions for frontline CD30-expressing PTCL and frontline HL.

In December 2019, the FDA granted accelerated approval to Padcev for the treatment of patients with advanced/metastatic urothelial cancer, who had received treatment with both a checkpoint inhibitor (PD-1/PD-L1) and platinum-based chemotherapy.

Following this nod, Padcev became the first FDA approved drug for treating the given patient population.

Notably, the nod came much before the scheduled Prescription Drug User Fee Act (PDUFA) action date of Mar 15, 2020. The company is developing Padcev in collaboration with Japanese partner Astellas Pharma, Inc.

The approval for Padcev should reduce Seattle Genetics’ heavy dependence on Adcetris and significantly boost its top line in the future quarters.

Apart from Adcetris and Padcev, the company’s other antibody-drug conjugate (ADC) candidates including tucatinib, tisotumab vedotin, ladiratuzumab vedotin and SEA-BCMA are progressing well.

Notably, last month, Seattle Genetics and Astellas signed a collaboration agreement with pharma giant Merck (MRK - Free Report) to begin a phase III study on the combination of Padcev and the latter’s PD-1/L1 inhibitor Keytruda (pembrolizumab) to address patients with previously untreated metastatic urothelial cancer.

Also, in the same period, Seattle Genetics submitted a new drug application (NDA) to the FDA for its oral tyrosine kinase inhibitor tucatinib in combination with Roche's RHHBY Herceptin (trastuzumab) and Xeloda (capecitabine). The company is seeking approval for tucatinib combo to treat patients with locally advanced/metastatic HER2-positive breast cancer including those with brain metastases who have received at least three prior HER2-directed agents separately or in combination in the neoadjuvant, adjuvant or metastatic setting.

However, sole reliance on Adcetris, which constitutes majority of the company's top line, remains a concern. It is also to be seen whether the newly-approved Padcev is able to make an impact and drive revenues in the long run.

Seattle Genetics, Inc. Price

Zacks Rank & Key Pick

Seattle Genetics currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the biotech sector is Epizyme, Inc. EPZM, which sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Epizyme’s loss per share estimates have narrowed 2.5% for 2020 over the past 60 days. The stock has skyrocketed 179.5% in the past year.

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