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Seattle Genetics (SGEN) Reports Positive Data for Adcetris

Zacks Equity Research

Seattle Genetics, Inc. SGEN and partner Takeda Pharmaceutical Company Limited announced positive results from phase III study, ECHLEON 1 study evaluating Adcetris (brentuximab vedotin) as part of a frontline combination chemotherapy regimen in patients with previously untreated advanced classical Hodgkin lymphoma (HL).

Notably, the ECHLEON 1 study met its primary endpoint. Patients in the study were randomized to receive either ABVD (Adriamycin, bleomycin, vinblastine, dacarbazine), a recognized standard of care for frontline HL, or a novel combination consisting of Adcetris+AVD (Adriamycin, vinblastine, dacarbazine), which removes bleomycin from the regimen.  The results showed that combination treatment with Adcetris resulted in a statistically significant improvement in modified progression-free survival (PFS) versus the control arm. The two-year modified PFS rate for patients in the Adcetris arm was 82.1% compared to 77.2% in the control arm. The study also met the secondary endpoint.

Despite the positive results, the share price of the company went down by about 8%. This could be due the investors’ reactions as an increased incidence of febrile neutropenia and peripheral neuropathy in the Adcetris+AVD arm was observed. The stock underperformed the Zacks classified Medical-Biomedical/Genetics industry year to date. The stock was up almost 6.2%, while the industry gained 11.5%.

Adcetris is the only marketed product at Seattle Genetics. The drug is approved for relapsed Hodgkin lymphoma and relapsed systemic anaplastic large cell lymphoma (sALCL) in the U.S., the EU and Japan. It is also approved in the U.S. for the treatment of patients suffering from classical Hodgkin lymphoma who are at high risk of relapse or progression as post-autologous hematopoietic stem cell transplantation (auto-HSCT) consolidation. Adcetris is currently not approved as a frontline therapy for Hodgkin lymphoma.

Moving ahead, Seattle Genetics and Takeda plan to submit these results to regulatory authorities for approval in their respective territories.

Few days ago, Seattle Genetics, also submitted a supplemental Biologics License Application (sBLA) to the FDA for Adcetris (brentuximab vedotin) in patients with cutaneous T-cell lymphoma (CTCL). The submission of the supplemental BLA was mainly based on positive data from the phase III trial, ALCANZA in patients with CTCL.

Adcetris generated revenues of $70.3 million in the first quarter of 2017, up 20% year over year and is expected to generate sale in the range of $280–$300 million in the U.S. and Canada in 2017. Seattle Genetics is also working on expanding the drug’s label which will be a further boost for the company’s revenues.

Seattle Genetics, Inc. Price and Consensus

 

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

Zacks Rank & Stocks to Consider

Seattle Genetics currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in health care sector include VIVUS, Inc. VVUS, MEI Pharma, Inc. MEIP and Sanofi SNY. While VIVUS and MEI Pharma sport a Zacks Rank #1 (Strong Buy), Sanofi carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

VIVUS’ loss per share estimates narrowed from 50 cents to 39 cents for 2017 over the last 60 days. The company delivered positive earnings surprises in all four trailing quarters, with an average beat of 233.69%. The share price of the company has increased 1.8% year to date.

MEI Pharma’s estimates moved up from loss per share of 1 cent to gain per share of the same for 2017, over the last 60 days. The company came up with positive earnings surprises in three of the four trailing quarters, with an average beat of 66.56%. The share price of the company has increased 62.5% year to date.

Sanofi’s earnings per share estimates increased from $3.08 to $3.18 for 2017 and from $3.26 to $3.30 for 2018, over last 30 days. The company pulled off positive earnings surprises in three of four trailing quarters, with an average beat of 5.10%. The share price of the company has increased 22.8% year to date.

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