Seattle Genetics, Inc. (Nasdaq:SGEN) today reported financial results for the first quarter ended March 31, 2020. The Company also highlighted ADCETRIS (brentuximab vedotin) and PADCEV (enfortumab vedotin-ejfv) commercial and development accomplishments, TUKYSA (tucatinib) U.S. Food and Drug Administration (FDA) approval and launch as well as progress with its lead programs to treat cancer.
“We have had a remarkable start to 2020, delivering record product sales in the first quarter that are now coming from both ADCETRIS and PADCEV. Notably, strong PADCEV sales in the first full quarter of launch reflect the unmet need among patients with metastatic bladder cancer,” said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. “With the recent approval of TUKYSA for patients with metastatic HER2-positive breast cancer, we have now launched our third product just four months after our second. In addition, we are investing in potential label expansions in all three products to maximize their use to patients in need. We are also preparing for European commercial operations and have hired general managers in major European markets ahead of potential ex-U.S. approvals of TUKYSA. With two new products, growing revenues, and an advancing pipeline of novel cancer programs, we have exciting prospects for future growth.”
Lead Program Highlights
ADCETRIS
PADCEV
TUKYSA
Tisotumab Vedotin
For additional information on Seattle Genetics’ pipeline, visit www.seattlegenetics.com/pipeline.
Legal Dispute with Daiichi Sankyo Co. Ltd.
FIRST QUARTER 2020 FINANCIAL RESULTS
Revenues: Total revenues in the first quarter ended March 31, 2020 increased to $234.5 million, compared to $195.2 million for the same period in 2019. Revenues are comprised of the following three components:
|
Three months ended March 31, |
||||||||||
(dollars in millions) |
|
2020 |
|
2019 |
% Change |
||||||
Total Net Product Sales |
$ |
198.5 |
$ |
135.0 |
47 |
% |
|||||
ADCETRIS |
$ |
164.1 |
$ |
135.0 |
22 |
% |
|||||
PADCEV |
$ |
34.5 |
|
— |
— |
|
|||||
Note: Sum of product sales may not equal total product sales due to rounding. |
Research and Development (R&D) Expenses: R&D expenses in the first quarter were $195.2 million, compared to $158.3 million in the first quarter of 2019. The increase in 2020 primarily reflects increased investment in the Company's pipeline.
Selling, General and Administrative (SG&A) Expenses: SG&A expenses in the first quarter were $122.2 million, compared to $80.3 million in the first quarter of 2019. The increase was primarily attributed to increased field sales personnel for Seattle Genetics' recently commercialized products, PADCEV and TUKYSA, as well as higher infrastructure costs to support the Company's continued growth.
Cost of Sales: Cost of sales in the first quarter were $29.4 million, compared to $10.3 million in the first quarter of 2019. The increase in 2020 is primarily due to the gross profit share with Astellas based on PADCEV sales, which was $16.4 million in the first quarter of 2020, as well as higher ADCETRIS sales volumes.
Non-cash, share-based compensation cost for the first three months of 2020 was $33.6 million, compared to $25.7 million for the same period in 2019.
Net Loss: Net loss for the first quarter of 2020 was $168.4 million, or $0.98 per diluted share, compared to net loss of $13.3 million, or $0.08 per diluted share, for the first quarter of 2019. Net loss in the first quarter of 2020 included a net investment loss of $59.1 million primarily associated with Seattle Genetics’ common stock holdings in Immunomedics, which are marked-to-market, compared to a net investment gain of $38.1 million in the first quarter of 2019.
Cash and Investments: As of March 31, 2020, Seattle Genetics had $799.6 million in cash and investments and holdings of Immunomedics common stock valued at $104.1 million.
2020 FINANCIAL OUTLOOK
The Company continues to monitor the impact of the COVID-19 global pandemic on its business and is taking appropriate steps to protect the safety of employees, healthcare professionals and patients. Seattle Genetics’ 2020 financial guidance remains unchanged from that provided on February 6, 2020 and is detailed below.
|
Current |
Previous |
||
Revenues |
||||
ADCETRIS net product sales |
$675 million to $700 million |
Unchanged |
||
Royalty revenues |
$105 million to $115 million |
Unchanged |
||
Collaboration and license agreement revenues |
$30 million to $50 million |
Unchanged |
||
Operating expenses and other costs |
||||
R&D expenses |
$860 million to $950 million |
Unchanged |
||
SG&A expenses |
$475 million to $525 million |
Unchanged |
||
ADCETRIS cost of sales |
5 percent to 6 percent |
Unchanged |
||
Non-cash costs (primarily attributable to share based compensation) |
$180 million to $200 million |
Unchanged |
Conference Call Details
Seattle Genetics’ management will host a conference call and webcast with supporting slides to discuss its first quarter 2020 financial results and provide an update on business activities. The event will be held today at 1:30 p.m. Pacific Time (PT); 4:30 p.m. Eastern Time (ET). The live event and supporting slides will be simultaneously webcast and available for replay from the Seattle Genetics website at www.seattlegenetics.com, under the Investors section. Investors may also participate in the conference call by calling 888-220-8474 (domestic) or 720-452-9217 (international). The conference ID is 7835915. A replay of the audio only will be available by calling 888-203-1112 (domestic) or 719-457-0820 (international), using conference ID 7835915. The telephone replay will be available until 5:00 p.m. PT on May 3, 2020.
About Seattle Genetics
Seattle Genetics, Inc. is a global biotechnology company that discovers, develops and commercializes transformative cancer medicines to make a meaningful difference in people’s lives. ADCETRIS® (brentuximab vedotin) and PADCEVTM (enfortumab vedotin-ejfv) use the company’s industry-leading antibody-drug conjugate (ADC) technology. ADCETRIS is approved in certain CD30-expressing lymphomas, and PADCEV is approved in certain metastatic urothelial cancers. TUKYSATM (tucatinib), a small molecule tyrosine kinase inhibitor, is approved in certain HER2-positive metastatic breast cancers. The company is headquartered in Bothell, Washington, and with locations in California, Switzerland and the European Union. For more information on our robust pipeline, visit www.seattlegenetics.com and follow @SeattleGenetics on Twitter.
Forward-Looking Statements
Certain of the statements made in this press release are forward looking, such as those, among others, relating to the Company’s 2020 outlook, including anticipated 2020 revenues, costs and expenses; the Company’s potential to achieve the noted development and regulatory milestones in 2020 and in future periods; the anticipated reporting of topline data for tisotumab vedotin for the innovaTV 204 trial late in the second or into the third quarter of 2020; anticipated activities related to the Company’s planned and ongoing clinical trials; the potential for the Company’s clinical trials to support further development, regulatory submissions and potential marketing approvals in the U.S. and in other countries; the opportunities for, and the therapeutic and commercial potential of ADCETRIS, PADCEV, TUKYSA and tisotumab vedotin and the Company’s other product candidates and those of its licensees and collaborators; the potential for data from the EV-103 trial to potentially support registration under accelerated approval regulations in the U.S.; intended expansion of commercial operations into Europe; as well as other statements that are not historical facts. Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Factors that may cause such a difference include the risks that the Company’s ADCETRIS, PADCEV and TUKYSA net sales, revenues, expenses, costs, and other financial guidance may not be as expected, as well as risks and uncertainties associated with maintaining or increasing sales of ADCETRIS, PADCEV and TUKYSA due to competition, unexpected adverse events, regulatory action, reimbursement, market adoption by physicians, impacts associated with COVID-19 or other factors. The Company may also be delayed or unsuccessful in its planned clinical trial initiations, the enrollment in and conduct of its clinical trials, obtaining data from clinical trials, planned regulatory submissions, and regulatory approvals in each case for a variety of reasons including the difficulty and uncertainty of pharmaceutical product development, negative or disappointing clinical trial results, unexpected adverse events or regulatory discussions or actions and the inherent uncertainty associated with the 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 Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission (SEC), and the Company’s subsequent periodic and current reports filed with the SEC. Seattle Genetics disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise except as required by applicable law.
Seattle Genetics, Inc. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share amounts) |
|||||||||
|
Three Months Ended March 31, |
||||||||
|
2020 |
|
2019 |
||||||
Revenues: |
|
|
|
||||||
Net product sales |
$ |
|
198,514 |
|
|
$ |
|
135,001 |
|
Royalty revenues |
|
20,360 |
|
|
|
15,620 |
|
||
Collaboration and license agreement revenues |
|
15,640 |
|
|
|
44,578 |
|
||
Total revenues |
|
234,514 |
|
|
|
195,199 |
|
||
Costs and expenses: |
|
|
|
||||||
Cost of sales |
|
29,421 |
|
|
|
10,300 |
|
||
Research and development |
|
195,199 |
|
|
|
158,265 |
|
||
Selling, general and administrative |
|
122,249 |
|
|
|
80,271 |
|
||
Total costs and expenses |
|
346,869 |
|
|
|
248,836 |
|
||
Loss from operations |
|
(112,355 |
) |
|
|
(53,637 |
) |
||
Investment and other income (loss), net |
|
(56,047 |
) |
|
|
40,308 |
|
||
Net loss |
$ |
|
(168,402 |
) |
|
$ |
|
(13,329 |
) |
Net loss per share - basic and diluted |
$ |
|
(0.98 |
) |
|
$ |
|
(0.08 |
) |
Shares used in computation of per share amounts - basic and diluted |
|
172,350 |
|
|
|
160,657 |
|
Seattle Genetics, Inc. Condensed Consolidated Balance Sheets (Unaudited) (In thousands) |
|||||||||
|
March 31, 2020 |
|
December 31, 2019 |
||||||
Assets |
|
|
|
||||||
Cash, cash equivalents and investments |
$ |
|
799,594 |
|
|
$ |
|
868,338 |
|
Other assets |
|
1,291,869 |
|
|
|
1,337,528 |
|
||
Total assets |
$ |
|
2,091,463 |
|
|
$ |
|
2,205,866 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||||
Accounts payable and accrued liabilities |
$ |
|
257,219 |
|
|
$ |
|
259,357 |
|
Long-term liabilities |
|
68,626 |
|
|
|
70,222 |
|
||
Stockholders’ equity |
|
1,765,618 |
|
|
|
1,876,287 |
|
||
Total liabilities and stockholders’ equity |
$ |
|
2,091,463 |
|
|
$ |
|
2,205,866 |
|
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Investors:
Peggy Pinkston
425-527-4160
[email protected]
Media:
Monique Greer
425-527-4641
[email protected]