Here are some highlights (and impressions) of today's conference call. Comments within quotation marks are verbatim or near-verbatim:
- CEO Clay Siegall: There have been no insurance denials for on-label prescriptions for Adcetris.
- Asked about off-label use, Siegall responds very carefully: "Physicians are becoming more and more familiar and comfortable in looking for CD-30 expression [on other tumors.] As far as speculating anything specific about spontaneous adoption, obviously we are not able to do that. Yes, we have heard of some docs who are experimenting with Adcetris...."
- Siegall maintains eventual $1 billion per year guidance for Adcetris sales in U.S. and Canada. (Later, he hints to analysts that retreatment data and other lymphoma data planned for release later this year are going to be clearly supportive of this, through eventual new label indications. He actually thumps the table as he speaks about eventual frontline approval and efficacy.)
- Answering a question raised often on this board, the company is now guiding toward 2nd half 2012 EMA approval of Adcetris. Approval in Canada is expected in late 2012 or early 2013.
- About 750 accounts have ordered Adcetris since FDA approval, including more than 200 new accounts in the last quarter. Eventual U.S. Adcetris accounts are likely to number around 1,500.
- CFO Todd Simpson: "Significant amounts of cash flow are now coming in from Adcetris sales."
- In their initial greetings, most analysts are notably not congratulating the company on its quarterly results (though they are thanking SGEN for finally providing Adcetris guidance).
- Responding to an analyst question about the company's apparent 'anemic' guidance for Adcetris, Siegall: "We think this shows solid progress for the first full year of sales." He seems shaky in his response. (SGEN is now a sales company - its executives must be ready for questions like this and they must answer them smoothly.)
That's all I have, but there's every chance that I missed something important. If interested, you should listen to the replay.
SCR, agreed. It's the penalty they pay - and we pay - for their failure to manage Adcetris expectations.
Not issuing 2012 guidance earlier this year was a huge mistake - one that any professional corporate public relations expert would have pointed out. It not only angered analysts, it also led to artificially high predictions, but by analysts and some on this board.
The company could have and should have issued conservative guidance and then, when it beat that conservative guidance, just honestly say, 'Hey, listen. We told you we were being conservative until we could get a better handle on the sales and pricing environment.' Now, we have more experience and so we are elevating our guidance.'
Instead, the path they took led, once again, to management turning a triumph into an apparent - but not really real - disappointment. This management team does this a little too often. They really need a better feel for public and market perception.