conference date: July 30, 2015 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2015 (second quarter, Q2)
Overview: Quarter numbers are off sequentially on lower collaboration revenue and higher R&D costs. Increased Adcetris sales guidance for 2015.
Basic data (GAAP):
Revenue was $77.1 million, down 6% sequentially from $82.2 million, but up 13% from $68.3 million in the year-earlier quarter.
Net income was negative $47.5 million, down sequentially from negative $21.7 million, and down from negative $17.6 year-earlier.
EPS (earnings per share, diluted) were negative $0.38, down sequentially from negative $0.17 and down from negative $0.14 year-earlier.
"ADCETRIS net product sales in the U.S. and Canada will be slightly higher than previously anticipated, and are now expected to be in the range of $210 million to $220 million. The company also now anticipates that 2015 research and development expenses will be in the range of $275 million to $300 million, primarily due to the $25 million upfront payment under the recent collaboration with Unum Therapeutics."
Working on building Adcetris into a blockbuster for CD30 positive cancers. There are 4 Phase 3 trials that could expand the Adcetris label; one has data in and an FDA PDUFA date set to August 18.
Adcetris (brentuximab vedotin) sales for CD30-positive malignancies (relapsed HL and relapsed systemic ALCL) in the quarter were a record $55.1 million, up 13% sequentially from $48.9 million, and up 23% from $44.8 million year-earlier.
Collaboration and license revenue was $14.4 million, down 35% sequentially from $22.2 million, and down 11% from $16.2 million year-earlier.
Royalty revenue was $7.6 million, down 32% sequentially from $11.1 million, but up 4% from $7.3 million year-earlier. Royalties mainly reflect Adcetris sales by Takeda in 55 non-U.S. nations.
Adcetris for Hodgkin Lymphoma (HL) in consolidation settings data (AETHERA trial) has a decision date (PDUFA) of August 18, 2015.
ECHELON-1 (frontline HL) and ECHELON-2 (mature T-cell lymphoma) Phase 3 trials are now under an amended SPA from the FDA, with enrollment completion in E-1 expected this year and in E-2 in 2016, with data readouts in 2017 and 2018.
ALCANZA trial expected to complete enrollment this year.
A Phase 2 trial of Adcetris for systemic lupus erythematosus was initiated.
Paid $25 million to Unum Therapeutics to collaborate on ACTR (antibody coupled T-cell receptor) technology. Also invested $5 million in equity.
In collaboration with Bristol-Myers Squibb, SGEN is planning Phase 1 / 2 trials to test Adcetris with checkpoint inhibitor Opdivo (nivolumab) in relapsed or refractory HL and in B-cell and T-cell non-Hodgkin lymphomas.
AbbVie initiated a Phase 1 trial of an SGEN ADC for hematological malignancies, triggering a milestone payment.
A Phase 1 trial of SEA-CD40 for solid tumors continues.
SGN-CD33A for AML (acute myeloid leukemia) continued a phase 1b trial for newly diagnosed AML, with additional data due out later this year.
SGN-CD19A for second line DLBCL Phase 2 trial started, using Rituxan with or without CD19A.
Other trials to extend the Adcetris label are underway. Other ADCs (antibody-drug conjugates) are also under development, including SGN-LIV1A for breast cancer.
A combination trial with Opdivo (nivolumab) in HL and non-Hodgkin lymphoma is planned.
Seattle Genetics is now developing ADCs for immunological diseases and is also looking for further ways to expand the ADC platform.
More data will be presented in Q2 and later this year.
See also Seattle Genetics pipeline.
Cash ended at $250.0 million, down sequentially from $296.0 million. There was no debt.
Total costs and expenses were $124.7 million, consisting of: cost of sales $5.9 million; cost of royalty revenue $2.6 million, R&D $85.7 million; selling, general and administrative expense $30.3 million. Resulting in a loss from operations of $47.6 million. Other income near zero.
Expense of $9.9 million is attributable to non-cash share based compensation.
AETHERA label expansion impact on sales? Our new guidance says our business is strong. Almost all sales are on label.
SGN-CD33A AML pathway, gating factors? Single agent data showed activity. There are fit and unfit AML patients. Fit patients get 7+3, which is very toxic. Unfit patients get hypomethylating agents. We think 33A can be combined with standard of care in both indications. Meeting with FDA goal would be to get it into a registrational trial as soon as possible, but it is too early to predict the meeting outcome.
CD33A with hypomethylators would go to the place with the most unmet medical need. Response to current therapies is not that good, with 8 to 10 months overall survival. Almost every patient with AML expresses CD33A as a target.
CD30 testing in DLBCL? Our single agent data in relapsed refractory patients was strong. We also have strong data in combination with chemotherapy. We looked at multiple ways to measure CD30 positive cells, and the cutoff was "any positive cells" vs. "no positive cells."
Consolidation after transplant setting (AETHERA) is a new setting, in the past it has been watchful waiting.
We will fund 2 products with Unum, we have started preclinical work.
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