Many posters are excited about the 10 patients that responded in the front line study with ABVD or AVD + Adcetris. This is exciting news - however, the devil may be in the details on this one. Read the abstract closely. 31 patients were enrolled in the study so far - and 6 (~20%) have needed to discontinue due to an AE. If the cure rate of ABVD is 80-90% - this suggests a major problem. How do you beat 80-90% if you have a dropout rate of 20%.
I know that these are small numbers - and there may need to be some changes to the regimen/protocol, but this may be an early warning sign. Trouble ahead. If Adcetris cannot leap into the front-line setting, I am not sure that this drug can exceed anything more than $400M at peak. This also may suggest that SGEN is wildly overvalued.....
It's safe to consider brentuximab's use pre-SCT as "off-label" or otherwise not supported by data. However, I can certainly understand why MDs might be very tempted to use it for this indication, and why patients would be willing to accept the potential risk of toxicity (and the lack of evidence on long-term outcome benefit) for a chance at CR pre-SCT.
I don't have sense of whether this is a trend or not, unfortunately.
I have heard about a couple of patients who had been placed on Adcetris to help reduce tumor burden prior to planned stem cell transplantation.
My understanding at this time ( please correct me if I am wrong ) is that this is presently a technically "off label" usage of this medication. I believe that there was an early data presentation at the recent ASH along these lines.
If you or anyone knows if this appears to be ( or hints at ) a growing trend, please chime in here and give a report..... or, perhaps, even some reasonable speculations if you have any insight or other information.
IMO, it is helpful to keep enrjrr's cautions in mind. In the past, I wish I had given more weight to similar approaches to stocks that I thought were can't-miss sure shots.
However, his analysis only goes so far. You'll note that he gives short shrift to the rest of the pipeline, one that holds much promise for long-term investors and, possibly, some real attraction to potential takeover partners.
Moreover, he gives no weight whatsoever to SGEN's now-proven ADC technology and the many ADC-related partnerships that have been forged. This, alone, could prove instrumental to a rapid - and sudden - growth of value, both on its merits and, again, as potential bait for Big Pharmas.
(Note: I am not necessarily advocating a takeover attempt or competitive takeover battle. I am simply acknowledging the obvious possibility of one -- and the sudden appreciation in value it would produce.)
Bottom line: His "scientific" analysis is useful, imo, but it is hardly the full story or the last word.
What you're saying is true, but other than the direction of the sentiment it's no different from what the "cheerleaders" are saying. Neither you nor they have a crystal ball.
I don't have a crystal ball either, by the way. But I do think the front-line trial will accrue rapidly, and as a result, the ORR at least will become evident fairly rapidly. Even if the overall long-term remission rate with ABVD is 70-80%, that still leaves a relapse rate of 20-30%. An absolute reduction in relapse of 10% may be adequate to bring the drug to first line (or even an absolute improvement in interim PET-negativity (ie, CR at 3 cycles) of 10%, as a surrogate). No, these numbers weren't chosen scientifically, but that would be a clinically relevant difference.
The true value of brentuximab may be in unfavorable or advanced disease, but I doubt it would be withheld from favorable prognosis patients IF the phase III trial is positive and IF subgroup analyses show less benefit for the FP group (yes, there are many ifs, just as there are in your perspective).
You're a bit stuck on delayed bleo pulmonary toxicity. There are more immediate disadvantages as well--treatment interruptions and compromised dose intensity, for example. Even if a patient doesn't develop bleo toxicity, there is a cost to using the drug in the way of PFT and surveillance. Patients who do develop BPT also have poorer overall outcomes. So there is a value to eliminating bleo from the mix which extends beyond "delayed pulmonary toxicity".
ENR <<<SGEN will need to show that adding Adcetris to AVD can improve upon this very high cure rate (among the highest in all cancers). Second, being more well tolerated will not be good enough. Many drugs and regimens are better tolerated today - however, cost is a major component of analysis as to which drugs physicians will choose. >>>“Becoming part of first-line treatment would significantly increase the target population by a factor of four to five,” said Jason Kantor, an analyst at RBC Capital Markets in San Francisco, in an interview. “Most doctors we talk to believe Adcetris will ultimately become part of standard of care.”<<<<Third, there will be no new catalysts for this company until this data comes due. >>>During the first half 2012 the complete results of the 52 patient / 26 patients ABVD+Adcetris & 26 patients AVD+ Adcetris will be presented. <<<All partnered or pipeline drugs have yet to show even a similar level of efficacy as Adcetris.>>>>According to Clinical Trials.Com SGN75 initial trial will be completed June 2012 and we should see those results next year granted results so far unknown Bottom line you may be right ( lots of shorts who agree with you) but you also may be wrong ( Institutional ownership led by very savy Bio investor Baker Brothers).
I wouold think that with the 800+ patient global study, statistically significant results will be available much sooner than with a small sample. The tremendous cost associated with a large sample means SGEN is very confident in blockbuster results and will be seeking FDA approval sooner. IMHO
Is this the reason behind over 30% of the float for being shorted? Even without front-line adcetris is expected to reach 200M per year. Should there be any value associated with potential for some frontline treatment and potential revenues from other drugs in the pipeline and partnerships?
If one purely invests in biotechs, only after proven revenues rather than some speculation based on potential revenues, what will the returns be? Just sounds like more "intelligent" sounding but "short" talk...
70-80% cure rate is remarkable but of the 20-30% refractory, Adcetris has as remarkable an outcome anyone can expect. Yes it is true that powering the study to demonstrate superiority of AVD+Adcetris over ABVD will require larger patient sample, but there should be little doubt that Adcetris alone or in combination with AVD has a scientifically better than 50-50 chance to be superior.
This board is full of non-scientific cheerleaders. I have no position in SGEN - either short or long - but enjoy following the company as a former investor. I follow many cancer company stocks including this one. Based on current valuation, the stock is already pricing in a major success for Adcetris in the R/R HD market. Clearly, Adcetris will play a major role in the management of this disease - and is a GREAT advance.
Now, let's talk some reality. To move into the front line setting, it will require that Adcetris displace Bleomycin - possibly the least effective agent (and the most toxic) in the ABVD regimen. However, this is no easy task. First, ABVD cures between 70-80% of front-line patients. It is a very good regimen that has stood the test of time. Yes, there is delayed pulmonary toxicity associated with the "B" (bleomycin) but the risk/reward ration favors ABVD by a long shot. SGEN will need to show that adding Adcetris to AVD can improve upon this very high cure rate (among the highest in all cancers). Second, being more well tolerated will not be good enough. Many drugs and regimens are better tolerated today - however, cost is a major component of analysis as to which drugs physicians will choose. Cost/benefit will have to show that Adcetris adds a significant benefit (not just clinical significance). See the recent Avastin withdrawal of MBC indication for more color here. Remember, ABVD is pennies. Adcetris is nearly $100k/year (albeit, less for a front-line regimen). Third, there will be no new catalysts for this company until this data comes due. All partnered or pipeline drugs have yet to show even a similar level of efficacy as Adcetris. Cheerleaders can talk about the promising pipeline, but there is little evidence that their drugs will compete in their future markets. GLTA
You say without FL penetration, the peak sales will be $400M. Now the market cap is 2B, and it is overvalued?? That my friend is some funny math. Would you care to include anything in the pipeline and royalties from partnered drugs?
This is an attempt to confuse the investors. For frontline, since Adcetris cannot be used alone (which I think will be pretty effective by itself!!), they need to combine with already toxic mix of chemos. If they remove the most toxic component and use adcetris with similar or better efficacy, then that's the end of story. That's what the rials are designed to show and will prove. But with such efficacy,Drs will be using it in earlier stages "off label" and that's how the sales are going to always beat expectations..