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Edited Transcript of SGEN earnings conference call or presentation 16-Jul-19 8:30pm GMT

Q2 2019 Seattle Genetics Inc Earnings Call

Bothell Jul 18, 2019 (Thomson StreetEvents) -- Edited Transcript of Seattle Genetics Inc earnings conference call or presentation Tuesday, July 16, 2019 at 8:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Clay B. Siegall

Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO

* Peggy Pinkston

Seattle Genetics, Inc. - VP of IR & Executive Director of Corporate Communications

* Robin G. Taylor

Seattle Genetics, Inc. - Chief Commercial Officer

* Roger D. Dansey

Seattle Genetics, Inc. - Chief Medical Officer

* Todd E. Simpson

Seattle Genetics, Inc. - CFO

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Conference Call Participants

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* Andrew Scott Berens

SVB Leerink LLC, Research Division - MD of Targeted Oncology & Senior Research Analyst

* Huidong Wang

Barclays Bank PLC, Research Division - Research Analyst

* Kennen B. MacKay

RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research

* Maryana Ilya Breitman

Goldman Sachs Group Inc., Research Division - Research Analyst

* Matthew Thomas Holt

JP Morgan Chase & Co, Research Division - Analyst

* Michael Werner Schmidt

Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD

* Shanshan Xu

Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst

* Silvan Can Tuerkcan

Oppenheimer & Co. Inc., Research Division - Associate

* Stephen Douglas Willey

Stifel, Nicolaus & Company, Incorporated, Research Division - Director

* Tazeen Ahmad

BofA Merrill Lynch, Research Division - VP

* Tsan-Yu Hsieh

William Blair & Company L.L.C., Research Division - Senior Research Analyst

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and welcome to today's Seattle Genetics Second Quarter 2019 Financial Results Conference Call. Today's conference is being recorded. For opening remarks, I'd like to turn the call over to Peggy Pinkston, Vice President of Investor Relations. Please go ahead.

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Peggy Pinkston, Seattle Genetics, Inc. - VP of IR & Executive Director of Corporate Communications [2]

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Thank you, operator, and good afternoon, everyone. I'd like to welcome all of you to Seattle Genetics' Second Quarter 2019 Conference Call. With me today are Clay Siegall, President and Chief Executive Officer; Robin Taylor, Chief Commercial Officer; Todd Simpson, Chief Financial Officer; and Roger Dansey, Chief Medical Officer.

Accompanying today's conference call are supporting slides, which are available on our website in the Investors section Events and Presentations page. And following our prepared remarks today, we'll open the line for questions. (Operator Instructions)

Today's conference call will include forward-looking statements regarding future events or the future financial and operating performance of the company such as those, among others, relating to the company's 2019 financial outlook, including anticipated 2019 ADCETRIS sales and future revenues, cost and expenses; and the company's potential and anticipated timing to achieve future clinical and regulatory milestones, including data readouts, regulatory submissions and approvals.

Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Among the factors that may cause such a difference include the difficulty in forecasting sales, revenues and expenses and the uncertainty associated with the pharmaceutical development and regulatory approval process.

More information about the risks and uncertainties faced by Seattle Genetics is contained under the caption Risk Factors, included in the company's periodic reports filed with the Securities and Exchange Commission, including the company's quarterly report on Form 10-Q for the quarter ended March 31, 2019.

Now I'll turn the call over to Clay.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [3]

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Thanks, Peg, and good afternoon, everyone.

In the past few months, we've delivered on several important goals focused on growing our flagship brand ADCETRIS and continuing our evolution into a multiproduct oncology company. Our late-stage portfolio includes enfortumab vedotin, which has been submitted to FDA for approval in metastatic urothelial cancer based on the positive outcome of the EV-201 trial. In addition, we're advancing 2 other programs in pivotal trials, tucatinib in HER2-positive metastatic breast cancer and tisotumab vedotin in metastatic cervical cancer.

I'll begin with some comments on ADCETRIS, which is an important global product for the treatment of lymphoma. Under our collaboration with Takeda, it is now available in 73 countries. In the U.S. and Canada, we reported record ADCETRIS net sales of $159 million in the second quarter, up 18% from the first quarter of the year. This growth was mainly driven by increased utilization in frontline peripheral T-cell lymphoma. There were -- was also increased use in frontline Hodgkin lymphoma. In addition, these results reflect second quarter strength that we had previously seen with ADCETRIS. We will provide more detail on our commercial progress later in the call.

Outside the U.S., we and our partner Takeda are continuing to expand the approved indication for ADCETRIS. In frontline Hodgkin lymphoma, we received Canadian approval in May, and Takeda recently received approval in a third key country outside of Europe and Japan. This triggered a milestone payment to us of $7.5 million. To date, we've achieved a total of $118 million in milestones under our collaboration, including $47.5 million related to frontline Hodgkin lymphoma approvals in Europe, Japan and key countries.

For frontline PTCL, we submitted our approval application to Health Canada in May, and Takeda also plans to submit frontline PTCL for approval to the EMA and other health authorities this year.

Next is enfortumab vedotin, or EV, which we're developing in collaboration with Astellas. Today, we announced the BLA submission to the FDA for accelerated approval of EV in metastatic urothelial cancer based on results from the EV-201 study. The data were featured in an oral presentation at ASCO and selected for an ASCO press briefing. We are encouraged with the positive reception to these data by the physician community. In anticipation of potential approval, our launch preparation is rapidly advancing. EV is positioned to become our next marketed drug and, if approved, will expand our commercial portfolio beyond hematologic malignancies into solid tumors. We are working closely with Astellas to advance and expand the clinical development program for EV, including in first-line metastatic urothelial cancer. Roger will recap the EV-201 results as well as the clinical development plan during his remarks.

We're also advancing 2 other solid tumor candidates in late-stage development. These include tucatinib in HER2-positive metastatic breast cancer and tisotumab vedotin, or TV, in metastatic surgical cancer. We expect to report top line data from the tucatinib pivotal trial called HER2CLIMB later this year and from the TV pivotal trial called innovaTV 204 in the first half of 2020.

Lastly, I want to highlight the first FDA approval from one of our technology licensees. Polivy, or polatuzumab vedotin, is an ADC developed by Genentech that targets CD79b. It was approved more than 2 months ahead of the PDUFA date for patients with relapsed diffuse large B-cell lymphoma. Genentech is conducting several additional trials of Polivy including in frontline DLBCL. Among several other collaborators that use our technology, GSK is advancing in ADC in late-stage development, targeting BCMA. This ADC has climbed in BTD designations, and GSK has stated that they are planning a regulatory submission of the second half of this year.

At this point, I'd like to introduce our Chief Commercial Officer, Robin Taylor, who joined Seattle Genetics in May. Robin was most recently at AstraZeneca, and before that, he spent more than 17 years at Genentech. He's contributed to the global commercial development and strategic marketing of several successful oncology drugs. His skills are well suited to driving our global commercial presence, including the planned launch of EV, as well as other potential drugs emerging from our pipeline such as tucatinib. We are pleased that he has joined the team. Robin?

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Robin G. Taylor, Seattle Genetics, Inc. - Chief Commercial Officer [4]

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Thank you, Clay. I'm tremendously excited to have joined Seattle Genetics at this transformational time. I was drawn to the company based on the strong leadership team, the innovative science and the clear focus on patients as demonstrated by the continued investment in new indications for ADCETRIS and the exceptional late-stage pipeline. This is an important time for the commercial organization with the planned launch of EV and pivotal data anticipated for tucatinib later this year.

Let me turn now to our second quarter results. ADCETRIS net sales in the U.S. and Canada were $159 million in the second quarter, an increase of 30% compared to the same quarter in 2018. For the first half of 2019, ADCETRIS sales were $294 million, a growth rate of 35% for the first half of the year compared to the first half of 2018.

We attribute the growth in Q2 to 3 main drivers. First, we've observed continued strong uptake of ADCETRIS plus CHP in CD30 expressing PTCL following the U.S. approval of this indication in November 2018. This is driven by the positive ECHELON-2 data including the overall survival advantage that showed a 34% reduction in the risk of death compared to CHOP. Second, we have seen continued growth of ADCETRIS in Stage III and IV frontline Hodgkin lymphoma. This reflects a positive reception to the 3-year PFS data from ECHELON-1 trial reported at ASCO. In addition, there has been an increase in patient engagement with growth in unique visitors to our online resources and downloads of the ask-your-doctor brochures. This encourages patients to ask their physicians about all available options for frontline treatment of Hodgkin lymphoma.

The update to the NCCN Guidelines in April 2019 may also have contributed.

And third, we have historically observed the strongest sequential growth between Q1 and Q2 for ADCETRIS with continued but more moderate growth in other quarters of the year. Based on these historical patterns, we are maintaining our guidance of full year 2019 ADCETRIS net sales in the range of $610 million to $640 million.

Finally, we're actively preparing for the commercial launch of enfortumab vedotin with our partner Astellas. Sales force hiring is very close to complete, and we are beginning training activities to ensure that we're fully prepared for launch. Having participated in multiple successful oncology drug launches over my career, I have been pleased with the depth and rigor of the preparations of the commercial team at Seattle Genetics to date. I'm confident that we will be ready for the EV launch upon FDA approval.

Let me turn now to Todd to provide the finance update.

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Todd E. Simpson, Seattle Genetics, Inc. - CFO [5]

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Great. Thanks, Robin, and thanks, everyone, for joining us in the call this afternoon.

So today, I'll summarize our financial results for the second quarter and year-to-date as well as provide 2 updates to our financial outlook for the year. Total revenues were $218 million in the second quarter and $414 million for the year-to-date in 2019. This included record ADCETRIS net sales in the U.S. and Canada of $159 million in the second quarter and $294 million for the first half of the year. Growth in 2019 primarily reflects the frontline label expansions in Hodgkin lymphoma and PTCL and the other dynamics that Robin described.

Royalty revenues in the second quarter of 2019 were $23 million compared to $21 million in the second quarter of last year. For the first half of 2019, royalty revenues were $39 million compared to $36 million in the first half of last year. We expect ADCETRIS royalties to increase throughout the year as Takeda sales grow and as increasing sales trigger higher royalty rates. As a reminder, royalty revenues in 2018 included Takeda's portion of third-party royalty obligations paid on ADCETRIS, some of which expired in 2018. Therefore, despite the increases in sales by Takeda, royalty revenues grew at a lower rate while cost of royalty revenues decreased. Going forward, royalty revenues will also reflect amounts earned on net sales of collaborator ADCs, such as Polivy. However, this did not contribute to second quarter results and is not included in our guidance.

Collaboration revenues, which includes amounts earned under our ADCETRIS collaboration with Takeda and our ADC deals, were $36 million in the second quarter and $81 million for the first half of 2019. This included the earned portion of $13 million in milestones achieved in the second quarter and $43 million in the first half of 2019, most notably by Genentech's recent approval of Polivy and Takeda's approvals of ADCETRIS in frontline Hodgkin lymphoma.

R&D expenses were $164 million in the second quarter and $322 million for the first half of 2019. The increases over 2018 primarily reflect investment across our pipeline primarily on our late-stage programs, EV, tucatinib and TV.

SG&A expenses were $82 million in the second quarter and $163 million in the first half of 2019. These increases reflect commercial efforts to support ADCETRIS in frontline indications as well as costs related to our late-stage pipeline programs. We ended the second quarter with $376 million in cash and investments. This is in addition to $107 million in Immunomedics at the end of the second quarter. These shares are mark-to-market, which causes variability in our financial results and is not core to our business. These results -- this resulted in a noncash investment loss of $43 million for the second quarter, which was slightly higher than a similar noncash gain in the first quarter.

Lastly, I want to highlight 2 updates to our 2019 financial guidance. First on revenues, given the recent milestones under the Takeda and Genentech deals, we are increasing our guidance for collaboration revenues to a range of $110 million to $125 million. And secondly on SG&A expenses, in anticipation of the EV BLA submission announced this morning, we proceeded with hiring substantially all the enfortumab vedotin U.S. sales organization. As a result of this, we are increasing and narrowing our guidance for SG&A expenses to a range of $335 million to $360 million. Our other guidance remains unchanged.

Now I'll turn the call over to Roger.

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [6]

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Thanks, Todd, and good afternoon, everyone.

As Clay mentioned, the positive EV-201 pivotal trial results were featured as an oral session at ASCO in early June and are also part of the subsequent Best of ASCO program. Among metastatic urothelial cancer patients who've received both the platinum regimen and the PD-1 or PD-L1 inhibitor, the confirmed response rate was 44% by blinded independent central review, including a 12% complete response rate. For context, single-agent chemotherapy, which is the current standard of care in the setting, shows limited activity with a response rate of approximately 10% with complete responses rarely obtained. Responses in EV-201 were observed across all patient subgroups, including those with liver metastases, have particularly poor outcomes. The median duration response was clinically meaningful at 7.6 months.

EV was tolerable with a manageable safety profile. The most common treatment-related adverse events included fatigue, alopecia, decreased appetite, rash and peripheral neuropathy. Notably, the results are consistent with earlier the Phase I experience in the same heavily pretreated patient population. Based on these results, we and Astellas have submitted a BLA to the FDA seeking accelerated approval of EV. As a reminder, we have Breakthrough Therapy designation in this patient population.

The remarkable activity of EV monotherapy in patients with multiply treated metastatic urothelial cancer provides substantial development opportunities for EV to address a wide array of unmet medical needs. Our EV development plans is focused on 4 key areas. First, enrollment is ongoing in the second cohort of the EV-201 trial of metastatic urothelial cancer patients who proceed to PD-1 or PD-L1 1 treatment but are ineligible for cisplatin and are platinum-naïve. Second, the ongoing confirmatory randomized trial EV-301, which is intended to support global regulatory submission continues to enroll well. Third, the ongoing EV-103 trial, which combines EV with pembrolizumab and/or platinum chemotherapy in the first-line metastatic setting. This is the precursor to a frontline randomized trial, and we expect to report data from the EV plus pembrolizumab cohort later this year. And fourth, trials are being planned in earlier stages of urothelial cancer such as muscle invasive bladder cancer as well as other Nectin-4 expressing tumors.

I'll move on now to ADCETRIS, which was subject to numerous presentations at ASCO as well as the European Hematology Association and the International Conference on Malignant Lymphoma meetings. Across these 3 congresses, we reported on several important data sets. First, we showed that with an extended follow-up in the ECHELON-1 trial, the PFS benefits for ADCETRIS plus AVD determined by investigators was maintained. The 3-year PFS was 83.1% compared to 76% in the ABVD arm, a difference of 7.1%. Importantly, consistent improvements in PFS was observed among patients treated with the ADCETRIS regimen across the majority of prespecified subgroups, including disease stage and prognostic score. Second, analyses of several trials, including ECHELON-2, showed responses in non-Hodgkin lymphoma patients across all levels of CD30 expression. These data supports the notion that there may be no specific expression level required for efficacy. And third, multiple abstracts highlighting the activity of ADCETRIS in combination with nivolumab, including in Hodgkin lymphoma and primary mediastinal B-cell lymphoma. Importantly, ADCETRIS plus nivolumab was recently added to NCCN treatment guidelines for second-line Hodgkin lymphoma.

Lastly, we are now initiating additional trials of ADCETRIS that may result in label expansion, 2 of which I'll mention today. One trial will evaluate retreatment with ADCETRIS in Hodgkin and T-cell lymphoma patients who progress after a prior response, including in patients who received ADCETRIS in the first-line setting. Encouraging data with retreatment in the relapsed/refractory setting have been previously published. We are also initiating a trial of ADCETRIS in Hodgkin lymphoma and PTCL patients who are unfit for combination chemotherapy either due to older age or comorbidities. This is an area of high unmet need. We believe that generating data for a labeled indication is important for physicians and patients. We also expect to initiate additional label-enabling and practice-informing trials, and we'll keep you posted as our plans progress.

Next, I'd like to briefly highlight the status of our late-stage programs tucatinib and tisotumab vedotin, both of which are in registration trials. Tucatinib is a potentially best-in-class oral tyrosine kinase inhibitor that targets HER2. We are conducting a randomized pivotal trial called HER2CLIMB in heavily pretreated HER2-positive metastatic breast cancer, including patients with brain metastases. Patients in this setting have a poor outcome with standard of care treatments. HER2CLIMB enrollment is complete, and we continue to expect to report the top line results for the primary endpoint of PFS later this year.

We are also initiating this year a Phase II randomized trial of tucatinib in combination with TDM-1 compared to TDM-1 alone in the second-line metastatic HER2-positive breast cancer setting. The primary endpoint is PFS with a key secondary endpoint of OS. With this trial, we aim to ensure -- to show improved outcomes combining tucatinib with a HER2 ADC, which is a well-established standard of care in earlier lines of breast cancer. Data from a published Phase I trial support evaluating this combination.

Tisotumab vedotin, or TV, is an ADC targeting tissue factor that we are developing in partnership with Genmab. We are conducting a pivotal Phase II single-arm, single-agent trial in women with recurrent or metastatic cervical cancer where there is no standard of care and outcomes are poor. The primary endpoint of the trial is confirmed objective response. Enrollment is complete, and we are following patients for response assessment and, importantly, durability of response. We estimate reporting top line data in the first half of 2020. If positive, the trial could support a regulatory submission under the FDA accelerated approval mechanism.

Now I'll turn the call over to Clay.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [7]

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Thanks, Roger. We've accomplished much in the first half of 2019, and the second half of the year is poised for many additional activities that are important to our goal of bringing drugs to patients in need. These include, first, continuing to establish ADCETRIS as the standard of care in frontline Hodgkin lymphoma and frontline PTCL and initiate clinical trials to further expand the ADCETRIS label; second, work with FDA on our EV submission in collaboration with Astellas, report initial results from the first-line EV-103 trial and expand the EV development program with several new trials; and third, report top line data from the tucatinib pivotal trial HER2CLIMB later in 2019 and advance the TV pivotal trial in cervical cancer towards top line data in the first half of next year. I'm excited by the progress we're making with ADCETRIS, enfortumab vedotin and the rest of our product pipeline. We'll keep you updated on our progress.

At this point, we'll open the line for Q&A. Operator, please open the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We'll take our first question from Kennen MacKay with RBC Capital Markets.

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Kennen B. MacKay, RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research [2]

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For the team, first off, big congrats on the quarter. I was just wondering if you could help us understand the decision not to increase guidance here. I ask because given the recent price hike in ADCETRIS, it seems you'll squarely be within your guidance with 0 growth. And with only 3% sequential quarter-over-quarter growth in Q3 and 4, you'll hit the upper end of guidance, which seems quite doable. Is there anything we should be reading into here? And also on that topic, I was just wondering if you could help us understand the ADCETRIS inventory in Q2. Could there maybe be a week or 2 of stocking here given the June 28 price hike?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [3]

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Thanks, Kennen. Thanks for the questions. So when we think about ADCETRIS, it's a really important brand. It's growing as a brand in U.S., growing international, and we're pleased with what we're seeing. We reiterated the guidance, and please note we're giving annual guidance. We're not giving quarterly guidance that we did while we were in the middle of getting frontline approvals, and so we reiterated $610 million to $640 million, which is 30% over 2018. And so it's a strong guidance, and we're trying to be as accurate as we can. We have a range there, and we have good connection with docs, and our 3-year PFS data with E1 was particularly important, and E2 data was spectacular. You know that, not only with PFS but with OS. But Q2 is typically strong.

Now looking out into the future, it's really hard to know exactly what we're going to get. It's hard work out there. We're continuing to displace decades-old standard of care that are entrenched at the marketplace, and we're working hard at it. We like what we see a lot. We still feel that our products are growing and that our guidance indicates that. And I would just say to stay tuned, and we're out there in full force. Our commercial teams are doing well, and we're really connecting with docs.

Your second question, Kennen, we have really no evidence that there's really any stocking, as you call it, the inventory. We really don't see that. We know that there are some big cancer centers that hold more vials than the small cancer centers because they treat more patients, but that's not really stocking. So we don't see any evidence for stocking of ADCETRIS. We deliver in real time, people order it, they get it quickly. And so we feel really good about where we are, and we just don't see sites accumulating inventory.

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Todd E. Simpson, Seattle Genetics, Inc. - CFO [4]

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And Kennen, this is Todd. I want to add just one more comment. You talked about the price increase. We did have a 3.9% price increase in July, but keep in mind that we only see about half of that come through our net sales because of the discounting and the gross to net, particularly around PHS share of our business, which is pretty significant.

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Kennen B. MacKay, RBC Capital Markets, LLC, Research Division - Co-Head of Biotechnology Research [5]

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That's really quite helpful context, especially given the current environment and I think important to remember. Maybe just one follow-up for Clay and maybe also for Robin, just wondering if you can help us understand the changes that you've been making with the ADCETRIS sales force here. It seems like, tracking the website, there's been quite a bit of hiring going on here. Is that also sort of pulling into the increased ADCETRIS sales that we saw in Q2? And is that responsible for the SG&A guidance increase? Or is that more the EV sales force?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [6]

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First of all, thanks for mentioning we had a good quarter, and we're very proud of that. It is really more related to the last thing you said, the EV sales force. We thought it would be important to have some of our salespeople from ADCETRIS go to the EV program for continuity and connection, and so we replaced some of the people on the ADCETRIS sales force. Robin, do you want to talk about the folks that we're getting, the type of people that are looking to come work with us both on ADCETRIS and EV?

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Robin G. Taylor, Seattle Genetics, Inc. - Chief Commercial Officer [7]

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Yes. No, what I'd say is we are seeing very strong interest in Seattle Genetics. The hiring on the EV sales force, as I mentioned, is almost fully complete, and we have a lot of interest in those rules. We did have a few folks come over from the ADCETRIS sales force over EV and, of course, you -- what you saw online with some of the backfills for those positions. But I would say that we've got a really high-performance group with great depth of oncology experience for the EV sales force.

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Operator [8]

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Our next question is from Cory Kasimov with JPMorgan.

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Matthew Thomas Holt, JP Morgan Chase & Co, Research Division - Analyst [9]

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This is Matthew on for Cory. So for my first question, I'm trying to understand the potential impact of the international pricing index proposal on ADCETRIS pricing, and I was wondering if you could provide any qualitative or quantitative commentary in that regard should this policy be implemented.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [10]

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Thanks, Matt. Look, we're aware of the issues and closely track them. It's certainly dynamic. There's changes literally daily or frequently. We're paying attention like any biotech or pharma company is. Ultimately, we believe fully that innovative medicines that provide meaningful benefits will continue to be valued by patients and physicians and payers. ADCETRIS is a first-in-class drug. EV, another drug that we believe will be first in class, and these are drugs that really have an impact on patients, and they're valuable. And so we're watching, not sure what will happen exactly. I think you're as sure of it as we are.

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Matthew Thomas Holt, JP Morgan Chase & Co, Research Division - Analyst [11]

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Got it. And then my second question is on tucatinib and the initial data expected this year for the HER2CLIMB. Just curious what you're hearing from KOLs in terms of what PFS value or hazard ratio would be clinically meaningful in the context of all the other available treatments in the space.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [12]

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Sure. We're really excited about HER2CLIMB and coming forward with data later this year. Roger, do you want to talk a little bit about the context of what's out there in the world?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [13]

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Sure. Yes. It's a good question. So the HER2CLIMB trial has some unique aspects to it, particularly the patient population that's been enrolled with a very high frequency of patients with brain metastases, so there's an extremely high unmet need of the population. The trial design is a triplet versus a doublet with tucatinib added on to trastuzumab and capecitabine, we think is a thoughtful design that may result in positive outcomes. In terms of what is a meaningful delta, I think it's very hard without seeing the data to make any specific comments on that. Again, there isn't really a historical control that you can absolutely map to, and the unmet need is very high. So everything is a relative decision, and I think that's about where we can go at this point.

But we're excited as Clay said. The trial enrolled well. We're hoping to get the readout by the end of the year, and of course, we'll know at that time.

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Operator [14]

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We'll take our next question from Michael Schmidt with Guggenheim.

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [15]

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Congrats on a good quarter from me as well. I had a question again on the ADCETRIS sales number for this quarter. It sounds like -- and correct me if I'm wrong, but it sounds like much of the ADCETRIS sales growth was driven by increased use in PTCL, and I was just wondering if you could comment a little bit more about what do you see in terms of market dynamics in PTCL right now, for example. What market share do you have in frontline treatment at the moment? And are those rates comparable in the different subtypes of TCL?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [16]

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Thank you for your questions, Michael. So first of all, as we said in the prepared remarks, we think that as we track this, our growth in revenue was attributed to both the E2 regimen, which is in PTCL growth, as well as in the E1. Now in the E2, we're not going to report the different subtypes. We can tell you that they are being used in all the subtypes as far as what we can find, but we're not going to report specifics about that. We also don't report the specific market share. What we can say is that we predicted that it would take a number of quarters to get bigger and bigger market share because this was a regimen that we were displacing, CHOP specifically in PTCL, that was around for almost 3.5 decades. So this is -- it's not that easy to displace these entrenched therapies. Now the good news with the E2 regimen is we had not only PFS data but OS data.

And so now let's switch to E1, the E1 regimen for frontline Hodgkin lymphoma, and there, as you know, we experienced a little headwind in the past. We had 2. We got a lot of early adopters, and then we had some docs that said, "Look, I know how to treat frontline Hodgkin lymphoma. I've been doing it for decades well, and you're showing us data that's only of limited duration of follow-up. We'd like to see some more." So this year, for instance, we have shown now 37 months of follow-up data, and the data actually improved with time. So now if you just look at PFS, good old-fashioned PFS, and you look at 37 months, we are now 7.1% better in PFS. And that's important because while you can't yet call these cures, these are long-term disease survival, and once you get past 5 years or the definition of a cure for oncologists, we can start calling it that. But it is likely that a lot of these patients will go out long, and hopefully, within the not-too-distant future, we can really look at what could be a cure rate increase in Hodgkin lymphoma.

And going from the 2-year data that we produced when we first got approval to the 37-month data that came out with PFS, I think that caught a lot of doctors' attentions. And so they looked at this, they saw it, and they were more comforted by that because we don't yet have OS, which in E1, in the E1 regimen of frontline Hodgkin lymphoma, was not contemplated to have yet. So there was nothing wrong. It just takes a while. With E2 in PTCL, the standard of care wasn't nearly as good as it was with E1, the Hodgkin regimen. So I really understand what doctors are saying. I understand that they wanted to see a little bit more aging of our data, and the data improved with age so I think that's a big deal, too.

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Michael Werner Schmidt, Guggenheim Securities, LLC, Research Division - Senior Analyst & Senior MD [17]

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Okay. Then I had a pipeline question regarding tisotumab vedotin. I know the initial indications, obviously cervical cancer, but I was just wondering when we might learn about the potential of that agent in other solid tumors.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [18]

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Yes, we're definitely looking at cervical cancer. Roger, can touch on a little bit of generally what we're looking at with TV?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [19]

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Sure. So the program is configured to evaluate cervical cancer, as you mentioned, in a pivotal trial with data readouts hopefully in early -- or in 2020. The -- but we have other efforts going on. So we in fact have a basket trial, which is looking at tumors that express tissue factor where TV potentially has a role, and that's an ongoing trial at the moment. We haven't read out data yet. But obviously, when we do, we'll present that. We also have an asset going on specifically in ovarian cancer. So we have a number of different trials outside of cervical cancer exploring the potential for TV in other diseases.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [20]

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And what I would add also is we actively speak with our partner Genmab often about trying to maximize TV. So just so that you know, we're excited about the product and working hard on it.

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [21]

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And maybe one piece to add is we in fact do have the beginnings of combination trial with TV and pembrolizumab as well. So that's up and running.

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Operator [22]

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We'll take our next question from Andrew Berens with SVB Leerink.

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Andrew Scott Berens, SVB Leerink LLC, Research Division - MD of Targeted Oncology & Senior Research Analyst [23]

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Congrats on the quarter, guys. I also had 2 questions, one on PTCL given the prepared comments. And I know you said you wouldn't talk about different subgroups, but is this a disease or opportunity that we should think off as a prevalent opportunity? Or is it really new patients that are driving what you're seeing? Is there a possibility patients are going to get ADCETRIS through multiple lines of therapy when they relapse since it's more of a prevalent disease?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [24]

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So on PTCL, look, we're out there talking about the data on -- for incident patients, and so that's what we're looking at, newly diagnosed incident patients. So we don't have a lot of data on prevalent. I mean we still have approval to treat relapse patients, and that's one of our labels, especially in ALCL and some other, in CTCL. But we are really focused on the newly diagnosed patients and working with our commercial team and doctors to get newly diagnosed patients ADCETRIS CHP because the data is so clearly positive. And not just on PFS but on OS and you look at the Kaplan-Meier curves and you'd be hard-pressed to find bigger whitespace between Kaplan-Meier curves in clinical trials. This is a really positive data set that I feel that patients and doctors should really look at this before jumping into a different therapy because they can really be benefited.

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Andrew Scott Berens, SVB Leerink LLC, Research Division - MD of Targeted Oncology & Senior Research Analyst [25]

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Okay. And then one of the things we've heard from some of the community docs is that buying and billing the patient is a real concern for some of the docs with private practices. I was wondering if you guys have heard that. And if so, what efforts could be done to kind of waylay some of those fears and financial concerns of the clinicians?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [26]

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We haven't really heard much about it at all, I have to say. As far as physicians getting reimbursement in PTCL, which is I think what you're looking at, we really have not heard that there's issues out there. We think that our market share is growing in this space as we predicted. We think it was going to take some time to grow and entrench a previously entrenched therapy, and it's -- we're pretty much on track for what we thought the growth rate would be on a quarter-to-quarter basis with the E2 regimen in PTCL. So I don't view what you said, this buying and billing thing, as an issue.

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Andrew Scott Berens, SVB Leerink LLC, Research Division - MD of Targeted Oncology & Senior Research Analyst [27]

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It wasn't limited to E2. I was talking about ADCETRIS and really Hodgkin's lymphoma is, I think, where these comments originated.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [28]

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We -- I have to say we're just aren't hearing it in the way you are, so I don't know where this information comes. I'll certainly explore this with the commercial team, but I don't think we are seeing this. Todd, you have a comment?

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Todd E. Simpson, Seattle Genetics, Inc. - CFO [29]

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Well, I was just going to say, the other thing to keep in mind is we have an incredibly efficient model, where a site can order drug today and they'll have it tomorrow. So there isn't this need to buy ADCETRIS and hold it because of a concern or a fear that it's going to take weeks and weeks and weeks for your drug to show up. We're literally overnight shipping.

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Operator [30]

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We'll take our next question from Salveen Richter with Goldman Sachs.

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Maryana Ilya Breitman, Goldman Sachs Group Inc., Research Division - Research Analyst [31]

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This is Maryana Breitman for Salveen. We had a couple. One, we were wondering, with the NCCN updates for Hodgkin lymphoma, do you have any color on changes to prescriber activity due to updated guidelines? And we were also wondering about tucatinib opportunity in metastatic breast cancer, especially in patients with brain metastases, how you're thinking about that opportunity, how you're thinking about going into that market.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [32]

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Thank you for the 2 questions. Concerning the NCCN that you asked, we think that certainly we like the new wording with NCCN, but it's not really -- it's hard to know what that impact will be or what that impact was. We think that the 3-year PFS data that we showed at ASCO and we think that the response from doctors, we think is the most valuable thing that we have because we could tell that they look at that closely.

With NCCN, that also connects with how pathways are and how doctors prescribe it, and those are things that evolve slowly. Pathways don't meet very often at all, and that's -- it takes its own life, and we're not really part of that. But the data and the way doctors respond to this aged data that's improved and really give benefit to the patient, that's really what we think is the most important thing for the increased E1 regimen sales that we're seeing.

Now you asked about tucatinib and the opportunity. Tucatinib is something that -- is a drug that we think could be a best-in-class drug. It's clearly not the first of the HER2 TKIs out there. There are a few of them, so it's a validated pathway. But our goal is to really raise the bar and get to that next level with helping patients with a very potent drug but one that doesn't buy into EGF receptor and cause all that toxicity that you would have with some of the other HER2 TKIs.

As far as the specific benefit in talking about the size of the population, it's a little early for us to do that. We're still doing -- working on our pivotal trial, and it's an event-driven trial. We have guided to later this year for data to come out. And then let's just see what the data -- what happens with the data. And there's plenty of time in the future to talk about the specific opportunity. And I really think it depends on the data.

We have -- the primary endpoint is all the patients put together. And then the secondary endpoint includes importantly brain metastases. So this is a unique trial design with a couple of different data sets that will result from the data. And I think that looking at the opportunity for this will really depend on whether this works on all patients, including brain met patients, what works most on one or another set of patients. Then we could adequately start addressing your question. But until then, we'll hold off on it and are excited to address this question in the hopefully not-too-distant future later this year.

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Operator [33]

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We'll take our next question from Gena Wang with Barclays.

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [34]

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Also a follow-up with tucatinib, maybe I will ask. Wondering if you can remind us the event rate of a PFS, and also if the trial designs do -- designed to detect 50% PFS improvement. And another related question regarding the brain met patient, what is the percentage of patients you plan to enroll?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [35]

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Okay. So I got your 3 points there. So the event range for the PFS we have not reported, and that's something that we keep confidential. The amount to detect a 50% improvement also is internal information, and that's not something we'd be reporting.

We had said that we are planning to enroll, and I know it has, this is true because all the patients are enrolled, that we have roughly half the patients have pre-existing measurable brain mets. And that makes -- that's one of the uniqueness of this trial. We're really addressing a major unmet medical need.

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Huidong Wang, Barclays Bank PLC, Research Division - Research Analyst [36]

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Great. And I have one quick follow-up regarding ADCETRIS' quarter revenue. So you mentioned that the majority -- the growth is driven by frontline PTCL. Is it fair to say out of $24 million quarter-over-quarter growth close to $20 million would be from frontline PTCL? And should we expect the future growth mainly driven by the PTCL revenue?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [37]

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I think our prepared remarks said that we're really pleased with the growth in frontline PTCL but we also have growth in frontline Hodgkin lymphoma. We did not look at breaking that apart nor do we plan on breaking apart.

I think looking forward, we continue to see that we are getting increased market penetration, and that goes for PTCL, which was approved like almost a year later than Hodgkin lymphoma. Maybe it was early in 2018 to late in 2018. So maybe a little less than a year but -- so frontline Hodgkin lymphoma has been out there a little longer, and its growth rate is probably a little slower at this point just because it's out there a little longer than frontline PTCL. But both are growing, and we're really pleased with what we're hearing from docs out there.

And I know we had a bunch of questions on guidance. It's hard to really give guidance on this. We are in uncharted territory in frontline Hodgkin, frontline PTCL. And the data we have is great. The aged data is great. Doctors are rallying to this. And we're out there trying to do the best we can by patients. And what I would say is stay tuned on this, and we'll provide you with whatever data and follow up that we can when it's appropriate.

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Operator [38]

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We'll take our next question from Tazeen Ahmad with Bank of America.

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Tazeen Ahmad, BofA Merrill Lynch, Research Division - VP [39]

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Clay, I just wanted to get a sense on the sales force that Todd had talked about you guys have hired. How big of a sales force do you anticipate you'll need for EV in the U.S.? And do you plan on hiring all of the salespeople at once?

And then secondly for tucatinib, as that data reads out, I guess, what kind of data should we expect at the top line? What level of efficacy would you consider to be clinically meaningful? And how important is it for you to show a better safety profile than currently approved treatments vis-à-vis especially diarrhea rates?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [40]

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So let's -- those are 2 different questions. Let's start talking about the sales force for EV, and I'd like to turn it over to Robin to kind of explain our thoughts here. Robin?

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Robin G. Taylor, Seattle Genetics, Inc. - Chief Commercial Officer [41]

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Sure. Thanks, Clay. So we've worked really closely with Astellas to size the sales force to ensure that we have a broad reach to health care practitioners who treat metastatic bladder cancer. We'll have, with Astellas, an equal number of reps in the field. We will utilize our existing commercial infrastructure for activities such as mass market distribution, but we will also have some brand-specific roles such as the dedicated EV marketing team. And that's really sort of where we stand, which is an equal partnership with Astellas here.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [42]

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So the second question is on tucatinib and talking about efficacy and the safety profile. And for sure the reason we acquired Cascadian to largely get this drug is that we saw a really exciting drug from a safety standpoint because it didn't bind to a EGF receptor, and a really exciting drug from an efficacy standpoint in single-arm studies. I'll repeat that, single-arm studies. And the onus is on us to perform in a randomized study in order to get registration. So Rog, can talk about some of what -- give context to where we are?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [43]

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Sure. So as you know, HER2CLIMB is fully enrolled. Just to reiterate some of the points, this is a high unmet need population with a substantial proportion of patients with brain metastases. There is really no historical precedent that we can actually define what the potential for the control arm would be. Based on the profile of tucatinib, its highly selective HER2 addition, its lack of inhibition of EGFR. That is a potential best-in-class molecule. Those characteristics are key to both its efficacy and its safety and its tolerability.

So as Clay said, the data that's been generated with single-arm trials are obviously very encouraging, including with tucatinib and TDM-1, which is why we've proceeded to start another Phase III trial. But until we see the data, it's really -- we can't really make any statements about what the potential treatments will look like.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [44]

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What I can say, Tazeen, one thing I can add is that you've seen a lot of data sets come out from other trials. And when you look at PFS in this type of population, it's always measured in terms of months. So the first thing I could tell you from that, whenever I see that in my decades of doing cancer work, it says to me loudly, unmet medical need.

So we're in an area where patients need something. They don't just walk away saying, "Yay, there's drug X or drug Y. I'm cured." It's not where it is. We're talking a lot of these patients, they get a drug and respond for -- measured in months. So we have a really big important area to go into.

And when you have brain metastasis, which literally half the patients get, there's not anything really out there. So it's a grim prognosis, and we're trying to really do a good job and help patients and work on this drug. So data, it's coming soon sometime this year. We are incredibly excited.

And I'll remind you, we really loved all the data from single-arm trials. We just thought they were outstanding, and this was the right drug. But we do not yet have the randomized data and FDA rightly wants in this setting with all the other drugs. They want to see randomized data. And we're up to that challenge, and we're looking forward to reporting it.

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Tazeen Ahmad, BofA Merrill Lynch, Research Division - VP [45]

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Okay. And then just on safety, Clay, to wrap that up, how are you thinking about diarrhea rates? Do you think that's an important differentiator in this population? Or is it, as you said, when you have PFS in the months that this is a high unmet medical need area, and any improvement is a good improvement?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [46]

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I would go back to our early data on this drug because obviously we've not reported data from this pivotal trial. And early data shows a dramatic difference in any GI toxicity. You just don't bind EGF receptor.

I'll remind you that both the first 2 HER2 tyrosine kinase inhibitors that were approved both bind to HER2 and inhibit the tyrosine kinase but both of them bind to EGF receptor. And I don't believe that they were screened to not bind to EGF receptor. I think they were screened specifically for the HER2 TKI activity. Whereas tucatinib was screened with not only getting something potent for HER2 TKI but screened that it didn't bind to EGF receptor. So this is what's unique about this drug.

And if you look at the safety profile for literally hundreds of patients that were treated in single-arm trials, it's -- from a standpoint of comparison to the others that are out there, it's pretty dramatically different. So I think that I feel very confident about safety profile. We're -- we just didn't know is in a randomized trial versus active competitor, how would you -- how would it come out? And Roger, do you have anything? Do you want to add anything to that?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [47]

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No, I do. So I think just as a case in point around the safety profile, I'll just remind you that HER2CLIMB is a blinded -- is a placebo-controlled trial. And in general, placebo-controlled trials can only be done if you're unable to tell which drug you're on, placebo or the active agent. So that's an important point to remember.

And secondly, in a disease like breast cancer, which is a chronic disease, tolerability is key. If you're taking a drug twice a day and you can't take it for too long, it's not just is it a safety issue. It can potentially feed into efficacy as well. So I think those 2 points are really of some consideration.

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Operator [48]

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We'll take our next question from Stephen Willey with Stifel.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [49]

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Congrats on a really good quarter. Just a quick question on PTCL and one on tucatinib. So just curious to what extent screening for CD30 expression may or may not represent a rate-limiting step for ADCETRIS right now in PTCL, either from just the utilization or reimbursement perspective. And I guess how does the recent data demonstrating that the ADCETRIS benefit is agnostic to CD30 expression potentially change that?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [50]

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So certainly, at ASCO you saw the presentation from the docs that said that they had responses whether patients were CD30 high or CD30 low or even CD30 without even being able to -- through histology be able to see it. Now when you -- historically, we've looked at all these patients, and you can look them with histology.

Histology has a very big gray area background noise. So when you get down to lower levels of CD30, it's impossible to know whether it's positive or negative. You can just say, histology and negative, but that doesn't mean negative. And you look at molecularly and -- we are hard-pressed to find a lymphoma that's -- a T-cell lymphoma that's CD30 negative when you look at it molecularly. And also, CD30 is an activation antigen, and it kind of goes up and down. And when you look at different nodules, you can even find different amounts of CD30 within the same patient. So it is a very complicated scenario where the prediction would be that all patients respond because CD30 is there in all and can go up and down. And in fact, that is exactly what the doctors showed in their presentation at ASCO.

So I think to the utility of it in different subtypes and based on all our data and everything we know, I think we have a really good case there that doctors should use this and it could benefit patients. So I certainly don't think that hurts. And you had a second question on tucatinib?

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [51]

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Yes, just a quick follow-up on that then. I guess if there were a mechanism by which you could remove that CD30 expression requirement from the label, would that change the narrative of uptake, do you think?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [52]

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Our requirement on there is if -- I mean in Hodgkin lymphoma, it's not there at all. And in T-cell lymphoma, it's just says CD30 positive. So it's not like -- I mean it could be a trace of it and be positive. So we don't find it as an impediment at all, quite frankly.

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Stephen Douglas Willey, Stifel, Nicolaus & Company, Incorporated, Research Division - Director [53]

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Okay. And then just for clarification on tucatinib, I know that you're talking about another study here in combination with TDM-1 in the second line. Just want to clarify if the initiation of that trial is contingent upon HER2CLIMB data.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [54]

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Roger, do you want to comment on that?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [55]

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No, it's not. It's the -- we believe it's the right time, tucatinib, all the properties we've described. This is again a validated pathway, and we've generated the Phase I data which supports the combination. And we think it's the right time to proceed in that direction.

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Operator [56]

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We'll take our next question from Shanshan Xu with Berenberg Capital Markets.

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Shanshan Xu, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [57]

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I have one question for Roger. If the upcoming readout of HER2CLIMB is positive, how should we think about expanding indications beyond breast cancer for tucatinib? And I have one follow up for EV.

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [58]

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Sure. Thanks for the question. So as we all know, we have tucatinib being incorporated into us by looking at neoadjuvant applications. You see HER2CLIMB in the multiple-treated population. We're now moving into second-line metastatic breast cancer. We have an investigator-initiated trial called MOUNTAINEER, which has data combining tucatinib together with Herceptin in a third-line-plus colorectal cancer population. We hope to have that data out later this year.

I think, again, if tucatinib turns out to be the potential best-in-class, it realizes its potential than anywhere that a TKI can have a role in a HER2 expressing tumor is where we will want to go. So that includes CRC. It includes other stages of breast cancer, potentially gastric cancer. There are other cancers that are HER2 expressing that could be of interest as well. So I think if we have a real molecule here we will flesh out the development plan as appropriately, fully as we can.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [59]

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I think it's a good proposition for a breast cancer oncologist if our data turns out the way we think it could with HER2 clients to have a tablet that's well tolerated and really works. I think would be -- this would be a really important drug and will get a lot of use in -- and will be in many different line and -- of therapy, in breast cancer and outside of it. So go ahead, you had an EV question?

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Shanshan Xu, Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst [60]

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Yes, I absolutely agree with your commentary on tucatinib. One follow up on EV. So we witnessed a very impressive data of EV-201, which is a third-line trial. In EV-201 the median OS is only 2 to 3 months shorter than the standard of care in frontline urothelial carcinoma. So I believe this is actually in everyone's interest to move EV into the pivotal trial of the frontline urothelial carcinoma. In the past ASCO, we saw that it took CALGB-90601 almost 5 years to achieve its full enrollment. So Roger and Clay, what are potential drivers to accelerate enrollment for frontline urothelial carcinoma trial for EV?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [61]

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First of all, I want to make a commentary before getting to your question on EV. We have not had a single question from many analyst or comment from any analyst to the speed with which we submitted EV. We busted our back and submitted this much faster. We guided that it will be submitted sometime this year, and it's July. And we submitted it in the middle of July, so this is months ahead of where most if you had in your models. I think most of you had sometime in the middle of fall in your models. So I would like the analysts to notice that, which I think will translate into getting this product on the market faster.

And it's an important product that doctors are screaming for. So this is part and parcel into we're trying to make a difference in patients' lives, and we, together with Astellas, worked like morning, noon and night on getting this to a submission because it's important, okay? This isn't just a Wall Street thing. It's a patient thing. And so I want everyone to notice how fast we worked on this.

Secondly, we are excited about the potential of EV in frontline, and there's a lot of different approaches. Roger, do you want to give context to that?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [62]

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Sure. So if you look -- you can look back into the EV 103 trial, and you can understand what our potential choices are. It's EV is the backbone, with a PD-1 inhibitor, plus/minus chemotherapy. Those are the types of choices that we're facing.

I must say I agree with you. This frontline metastatic urothelial cancer is still a high unmet need. I think personally if we come up with a very thoughtful, considerate, acceptable trial design, the excitement around the combination of EV with other drugs, once we have that data presented that would support that will drive a lot of the enrollment. Bladder cancer has changed because all of the immunotherapies that come in, and there's a lot of interest now. And bladder cancer doctors are focused on moving trials ahead, whereas in past times where there was really just chemotherapy versus chemotherapy, not an interesting question, not an exciting question to answer. That's possibly why the CALGB trial was so slow. I would hope that we would be way quicker than anything like that.

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Operator [63]

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We'll take our next question from Andy Hsieh with William Blair.

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Tsan-Yu Hsieh, William Blair & Company L.L.C., Research Division - Senior Research Analyst [64]

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Congratulations to the Seattle Genetics team. It's nice to see that inflection point commercially. So I have 2 questions. One is probably for Roger. So could you remind us the specificity and potency of tucatinib, specifically pertaining to HER2 mutants, and if that is potential differentiator versus other oral TKIs?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [65]

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Thanks for the question, Andy. We are interested in the mutant population. We haven't studied it, so that's something that we need to potentially move forward on.

Tucatinib is very similar to neratinib in terms of its HER2 selectivity and potency. They are very close. So the ability to inhibit the target with tucatinib is as good as any other sort of the most potent inhibitor currently available, which is neratinib.

Again, coming back to the HER2 mutants, we're interested. Again, anywhere where there's a potential role for tucatinib, we need signal sign. So that's for our future efforts.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [66]

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Andy, we believe that -- and this is based on data like with Herceptin, for instance, in HER2 TKIs when you keep pressure on the tumor in a patient, the patient does better. And that's what you see with other agents. And one of the things about these HER2 TKIs is if they're really toxic you can't keep pressure on the tumor. You have to discontinue and not enable the patient to get therapy.

So it's not -- as Roger said before, it's not just a safety issue, it also relates to efficacy. And that's what we saw when we did a lot of diligence on this. We saw that this could change the paradigm and raise the bar and allow for a TKI to keep pressure on the tumor for a substantive period of time, and that's really what's important.

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Tsan-Yu Hsieh, William Blair & Company L.L.C., Research Division - Senior Research Analyst [67]

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Just as a follow-up, and this pertains to EV. So most of the time when you go from early Phase Ib to Phase III of any pivotal studies, you take sort of a response rate PFS duration penalty. Just curious, have you identified kind of any factors that contribute to just the impressive consistency across these -- the early-stage pooled analysis and the 201 top line results?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [68]

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I will tell you that the clinical team at Seattle Genetics and certainly had been the case prior to Roger joining, but even emphasized more with Roger is we don't want to get too overexcited about Phase I data unless we do blinded third-party reviews and things like that. So we want to look at not just responses. We look at confirmed responses.

So when you see Seattle Genetics' data for Phase I and it says confirmed responses, the chance that, that will repeat in a bigger study is pretty high because these have already been stared at, where I see a lot of times companies put out data, and they're unconfirmed responses. And then you see that later, and it's a much smaller response rate and much less duration, and all these things. And that's because they weren't as fastidious as we are. We're more interested at this point -- or at all points in Seattle Gen's history, we've been interested in actually making substantive improvements in patients lives with unmet medical needs and not just getting a little bit of hype on some drugs. So we want the real data out there, and I think that's what contributes to our early-stage data matching pretty closely to the pivotal because we do it the same way, with the same rigor. Roger, any addition?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [69]

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Two other comments. So firstly, good drugs really work, and when they really work, they really work again and again. That's certainly one part of this. The other is just bear in mind the sample sizes are not 10 patients or 20 patients. We're talking 100 plus. And so the variability around those contrast intervals is much smaller than a very small sample size where you can potentially get yourself in a misled. So it's great that the data is reproducible. You're right. Many times, the Phase I experiences that Clay described degrade over time, and that's obviously not something that anyone likes to see. But certainly, with EV, we have not had that experience. And so it does bode well for the future of the drug.

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Tsan-Yu Hsieh, William Blair & Company L.L.C., Research Division - Senior Research Analyst [70]

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Super helpful context.

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Operator [71]

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We'll take our final question from Silvan Tuerkcan with Oppenheimer.

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Silvan Can Tuerkcan, Oppenheimer & Co. Inc., Research Division - Associate [72]

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Congrats on the quarter and the submission. Could you please give us a little bit more color on your prelaunch activities for EV outside of the sales force, such as maybe interactions with payers you have? And also is there any strategy that leaps out at you in terms of how you can roll this out quickly in terms of what centers to target?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [73]

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First of all, I will thank you for the question. I mean we are putting in a very large amount of effort on our prelaunch activities for EV, and it's across the board in lots of different areas. I mean this is -- this drug's the real deal. So we're not going in for a soft launch. We're going in for the full launch. No soft, light share in EV for sure. Robin, you want to put this in context?

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Robin G. Taylor, Seattle Genetics, Inc. - Chief Commercial Officer [74]

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Yes, certainly, Clay. Like any new product launch, you need to be prepared for everything that you're going to be doing at approval. And as you say, that's not just preparing the sales force in terms of the training materials, it's also understanding the payer environment. It's preparing the rest of the organization, and also outside of commercial. So on the medical side, our medical affairs organization will be prepared. And of course, we've been preparing for months already, even more than a year in terms of thinking through the brand strategy and how we're actually going to position this product in the market. And so all of these elements -- and I think what I said is that my experience in oncology launches, what I saw coming into Seattle Genetics is the team that is very prepared. I was really impressed.

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Silvan Can Tuerkcan, Oppenheimer & Co. Inc., Research Division - Associate [75]

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Great. And do you expect an AdCom?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [76]

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We can never make a comment on whether there's an AdCom or not. It's not our decision. But we do have breakthrough therapy designation, and I think that -- I don't want to handicap this, actually. But we're thinking pretty positively about this drug. Roger, any addition?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [77]

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Agree. I agree.

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Silvan Can Tuerkcan, Oppenheimer & Co. Inc., Research Division - Associate [78]

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Maybe just quickly for tucatinib, I think that brain metastases will be very important, and it's great that you're studying it. What -- do we have seen any data on activity in brain metastases to date in earlier trials? And will this data be top line at the same time you may put top line to PFS of the entire trial? Will it be mature enough at that point?

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [79]

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So there has been data early on in looking in single-arm trials, not in a randomized setting, at brain metastasis, and it was relatively really nice data. That was something that stuck out at us as we reviewed this, that we were surprised with -- not surprised but we were pleased, I should say, with seeing the data in brain mets that we did with a single-arm trial. Yes, you have to do this in a randomized trial to prove it, but the data in brain mets was well -- was better, considerably better, than you would've expected to see in populations of brain met patients based on looking at other drugs in historic studies. But you have to do the randomized study. So that's that. Roger, any other comments on this?

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Roger D. Dansey, Seattle Genetics, Inc. - Chief Medical Officer [80]

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I agree. For the data that we've generated, clearly tucatinib is active in brain metastasis. I think there's no doubt. And so it's a matter of how active in the combination that we're testing. With regard to what we'll release top line, I don't think we'll get into any specifics about what data would be obtained in that release.

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Clay B. Siegall, Seattle Genetics, Inc. - Co-Founder, Chairman, President & CEO [81]

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Yes, that's too premature to say what we'll exactly release. Now our goal would be to release everything that we possibly can while retaining the ability for doctors to present this at an appropriate peer-reviewed large conference.

And I mean breast cancer work is normally presented at conferences such as the San Antonio meeting, which specializes in breast cancer, but also it is at ASCO and ESMO and some other cancers. But the San Antonio conference is clearly the premier breast cancer conference. Or it's evolved to being the premier breast cancer conference. It didn't use to be that way, but it is now.

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Operator [82]

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Ladies and gentlemen, this concludes today's question-and-answer session. I would like to turn the conference back to your speakers for any additional or closing remarks.

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Peggy Pinkston, Seattle Genetics, Inc. - VP of IR & Executive Director of Corporate Communications [83]

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Okay. Thank you, operator, and thanks, everybody for joining us this afternoon. Have a good night.

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Operator [84]

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Ladies and gentlemen, this concludes today's conference. We appreciate your participation.