Seattle Genetics, Inc. (SGEN) reported fourth quarter 2013 net loss per share of 13 cents, narrower than the Zacks Consensus Estimate of a loss of 24 cents but wider than the year-ago loss of 9 cents per share.
Fourth quarter revenues were $67.4 million, compared with $63.9 million in the year-ago quarter. Revenues surpassed the Zacks Consensus Estimate of $59 million.
Net revenues for the fourth quarter included Adcetris revenues (up 9% to $38.5 million), collaboration and license agreement revenues (up 15.8% to $22.3 million) and royalty revenues (up 211.4% to $6.6 million).
Research and development (R&D) expenses increased 6.5% year over year to $50.8 million due to Adcetris development activities and higher investment in other antibody-drug conjugate (ADC) programs. Selling, general and administrative (SG&A) expenses rose 8.8% year over year to $25.5 million.
Seattle Genetics reported 2013 loss of 51 cents, narrower than the Zacks Consensus Estimate of a loss of 62 cents but wider than the 2012 loss of 46 cents per share.
Full year revenues were $269.3 million, beating the Zacks Consensus Estimate of $260 million. Revenues in 2012 were $210.8 million. Revenues grew in 2013 due to good performances in markets of U.S. and Canada along with product launches by Takeda, the company’s partner for Adcetris, in the rest of the world.
Adcetris is approved for the treatment of relapsed or refractory Hodgkin lymphoma (HL) and systemic anaplastic large cell lymphoma (sALCL).
Seattle Genetics is working on expanding Adcetris’ label. Seattle Genetics completed treatment of all patients in a phase III study, AETHERA. The study is evaluating Hodgkin lymphoma patients. Results will be out in the second half of 2014.
Adcetris also obtained orphan drug designation for diffuse large B-cell lymphoma (:DLBCL).
Seattle Genetics expects Adcetris revenues in the range of $155–$165 million and revenues from collaboration and license agreements in the range of $55–$65 million.
R&D expenses are expected in the range of $245 million to $265 million and SG&A expenses are expected in the range $100 million to $110 million.
Seattle Genetics currently carries a Zacks Rank #3 (Hold). Adcetris is at present approved in 39 countries. We expect investor focus to remain on the sales ramp up of the drug and further label expansion.
ADC collaborators are also making substantial progress. Seattle Genetics has alliances with many companies for the development of ADCs. The ADC deals generated around $59 million in 2013 for Seattle Genetics. Adcetris’ label expansion, pipeline advancement and ADC collaborations will drive future growth.