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Seattle Genetics' Adcetris Progresses Well Amid Competition

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Zacks Equity Research
·3 min read
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On Jul 3, we issued an updated research report on Seattle Genetics, Inc. SGEN. The company’s top line mainly comprises product revenues and collaboration and license agreement revenues plus royalties.

Seattle Genetics’ lead product is Adcetris (brentuximab vedotin). The drug is approved for relapsed Hodgkin lymphoma (HL) and relapsed systemic anaplastic large cell lymphoma (sALCL) in the United States, the EU and Japan. The drug's label expansion in additional indications is generating incremental revenues.

Adcetris is approved for six different indications. The drug is also approved for several diseases in ex-U.S. markets.

Notably, Seattle Genetics has an agreement with Takeda Pharmaceutical for the development and commercialization of Adcetris. The company retains all the rights to sell Adcetris in the United States and Canada, while Takeda has commercial rights to the drug in the rest of the world.

Seattle Genetics is studying the drug in combination with Bristol-Myers’ BMY Opdivo for treating Hodgkin and non-Hodgkin lymphoma. Successful development of the same and its potential approval will lend a major boost to the company.

Shares of Seattle Genetics have surged 48% so far this year against the industry’s growth of 10.3%.

In December 2019, the FDA granted accelerated approval to Padcev for the treatment of patients with advanced/metastatic urothelial cancer, who had received treatment with both a checkpoint inhibitor (PD-1/PD-L1) and platinum-based chemotherapy.

Following this nod, Padcev became the first FDA-approved drug for treating the given patient population. The company is developing Padcev in collaboration with Japanese partner, Astellas Pharma, Inc.

Also, in December 2019, Seattle Genetics and Astellas signed a collaboration agreement with pharma giant Merck MRK to begin a phase III study on the combination of Padcev and Merck’s PD-1/L1 inhibitor, Keytruda (pembrolizumab), to address patients with previously untreated metastatic urothelial cancer.

Meanwhile, in April 2020, the FDA approved Seattle Genetics’ oral tyrosine kinase inhibitor (TKI) Tukysa (tucatinib) in combination with Roche's RHHBY Herceptin (trastuzumab) and Xeloda (capecitabine). The drug combo is now approved to treat adult patients with locally advanced/metastatic HER2-positive breast cancer, including those with brain metastases, having received one or more prior anti-HER2-based regimens in the metastatic setting.

Tukysa is Seattle Genetics’ third FDA- approved drug, while Padcev is its second drug approved by the regulatory body.

Notably, the approval of Padcev and Tukysa should reduce Seattle Genetics’ heavy dependence on Adcetris and significantly boost the top line in the future quarters. However, heavy reliance on Adcetris, which constitutes the majority of the company's top line, is concerning. It also remains to be seen whether the newly-approved drugs can make an impact and drive revenues in the long run.

Seattle Genetics, Inc. Price and Consensus

Seattle Genetics, Inc. Price and Consensus
Seattle Genetics, Inc. Price and Consensus

Seattle Genetics, Inc. price-consensus-chart | Seattle Genetics, Inc. Quote

Zacks Rank

Seattle Genetics currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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