Seattle Genetics, Inc. (Nasdaq:SGEN) today reported financial results for the third quarter and nine months ended September 30, 2019. The Company also highlighted ADCETRIS (brentuximab vedotin) commercialization and clinical development activities and progress with its late-stage oncology portfolio.
“We are executing on our vision of becoming a multi-product global oncology company, recently achieving several important milestones across our late-stage pipeline,” said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. “The FDA granted Priority Review to the enfortumab vedotin Biologics License Application for patients with locally advanced or metastatic urothelial cancer, and we recently announced positive topline results from the pivotal HER2CLIMB trial of tucatinib in metastatic HER2-positive breast cancer. This progress is in addition to continued sales growth of ADCETRIS, driven by further adoption in frontline CD30-expressing peripheral T-cell lymphomas as well as frontline advanced Hodgkin lymphoma. We anticipate global sales of ADCETRIS to exceed $1.0 billion in 2019.”
Program Highlights
ADCETRIS
Enfortumab Vedotin
Tucatinib
Tisotumab Vedotin
Ladiratuzumab Vedotin
THIRD QUARTER AND NINE-MONTHS 2019 FINANCIAL RESULTS
Revenues: Total revenues in the third quarter and nine-month periods ended September 30, 2019 increased to $213.3 million and $626.9 million, respectively, compared to $169.4 million and $480.2 million for the same periods in 2018. Revenues are comprised of the following three components:
Research and Development (R&D) Expenses: R&D expenses in the third quarter were $196.1 million, compared to $140.2 million in the third quarter of 2018. R&D expenses were $518.3 million for the year-to-date in 2019, compared to $415.5 million for the same period in 2018. The increases reflect additional investment in the Company’s late-stage pipeline, including tucatinib, enfortumab vedotin and tisotumab vedotin, as well as an upfront payment to acquire the rights to a preclinical asset in the third quarter of 2019.
Selling, General and Administrative (SG&A) Expenses: SG&A expenses in the third quarter were $96.1 million, compared to $57.2 million in the third quarter of 2018. SG&A expenses were $258.7 million for the year-to-date in 2019, compared to $181.6 million for the same period in 2018. The increases were primarily attributed to costs to support commercialization efforts related to frontline ADCETRIS indications, launch preparation activities for enfortumab vedotin and the Company's other late-stage programs as well as higher infrastructure costs to support the Company's continued growth.
Non-cash, share-based compensation cost for the first nine months of 2019 was $79.7 million, compared to $53.2 million for the same period in 2018.
Net Loss
Net loss for the third quarter of 2019 was $91.9 million, or $0.55 per diluted share, compared to net loss of $67.4 million, or $0.42 per diluted share, for the third quarter of 2018. Net loss in the third quarter of 2019 included a net investment loss of $2.1 million primarily associated with Seattle Genetics’ common stock holdings, which are marked-to-market, compared to a net investment loss of $21.9 million in the third quarter of 2018. For the nine months ended September 30, 2019, net loss was $184.5 million, or $1.13 per share, compared to a net loss of $102.9 million, or $0.66 per share, for the nine months ended September 30, 2018. Net loss for the nine months ended September 30, 2018 included an investment gain of $66.8 million.
Cash and Investments
As of September 30, 2019, cash and investments were $870.3 million, which included net proceeds of approximately $549 million from the Company's common stock offering in July 2019. In addition, the Company held stock investments valued at $103.6 million.
2019 FINANCIAL OUTLOOK
The Company’s updated financial guidance is detailed below, including updates to its expectations for royalty revenues as well as narrowing its expectations for ADCETRIS net product sales. The Company also updated its R&D expense guidance, primarily due to the acquisition of a preclinical asset in the third quarter and development activities for enfortumab vedotin and tucatinib. Finally, following the positive HER2CLIMB pivotal trial results for tucatinib, the Company expects to initiate launch preparation activities and is updating its guidance for SG&A expenses.
|
Current |
Previous |
||||||
Revenues |
||||||||
ADCETRIS net product sales |
$625 million to $640 million |
$610 million to $640 million |
||||||
Collaboration and license agreement revenues |
$110 million to $125 million |
Unchanged |
||||||
Royalty revenues |
$90 million to $95 million |
$85 million to $90 million |
||||||
Operating expenses and other costs |
||||||||
R&D expenses |
$690 million to $715 million |
$650 million to $700 million |
||||||
SG&A expenses |
$355 million to $370 million |
$335 million to $360 million |
||||||
Cost of sales |
5 percent to 6 percent |
Unchanged |
||||||
Cost of royalty revenues |
Low single-digit percent on
|
Unchanged |
||||||
Non-cash costs (primarily attributable to
|
$135 million to $145 million |
Unchanged |
Conference Call Details
Seattle Genetics’ management will host a conference call and webcast with supporting slides to discuss its third quarter 2019 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 800-353-6461 (domestic) or 334-323-0501 (international). The conference ID is 9057897. A replay of the audio only will be available by calling 888-203-1112 (domestic) or 719-457-0820 (international), using conference ID 9057897. The telephone replay will be available until 5:00 p.m. PT on November 1, 2019.
About Seattle Genetics
Seattle Genetics, Inc. is an emerging multi-product, global biotechnology company that develops and commercializes transformative therapies targeting cancer to make a meaningful difference in people’s lives. ADCETRIS® (brentuximab vedotin) utilizes the Company’s industry-leading antibody-drug conjugate (ADC) technology and is currently approved for the treatment of multiple CD30-expressing lymphomas. Beyond ADCETRIS, the Company has established a pipeline of novel targeted therapies at various stages of clinical testing, including three in ongoing pivotal trials for solid tumors. Enfortumab vedotin for metastatic urothelial cancer, that is currently being reviewed for approval by the FDA, and tisotumab vedotin for metastatic cervical cancer utilize our proprietary ADC technology. Tucatinib, a small molecule tyrosine kinase inhibitor, is in clinical trials for HER2-positive metastatic breast cancer and metastatic colorectal cancer. In addition, we are leveraging our expertise in empowered antibodies to build a portfolio of proprietary immuno-oncology agents in clinical trials targeting hematologic malignancies and solid tumors. The Company is headquartered in Bothell, Washington, and has a European office in Switzerland. 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 2019 outlook, including anticipated 2019 revenues, costs and expenses; the Company’s potential to achieve the noted development and regulatory milestones in 2019 and in future periods including the potential approval by the FDA of the BLA for enfortumab vedotin to treat patients with locally advanced or metastatic urothelial cancer who have received a PD-1/L1 inhibitor and who have received a platinum-containing chemotherapy in the neoadjuvant/adjuvant, locally advanced or metastatic setting; the Company’s plan to submit an NDA for tucatinib to the FDA in the first quarter of 2020 and to potentially submit global regulatory authorization applications relating to tucatinib; the anticipated reporting of topline data for tisotumab vedotin for the innovaTV 204 trial in the first half 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; the opportunities for, and the therapeutic and commercial potential of ADCETRIS, enfortumab vedotin, tucatinib, and tisotumab vedotin and the Company’s other product candidates and those of its licensees and collaborators; the Company’s aspiration to become a multi-product oncology Company; 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 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 due to competition, unexpected adverse events, regulatory action, reimbursement, market adoption by physicians 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 Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 filed with the Securities and Exchange Commission. 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. |
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Condensed Consolidated Statements of Operations |
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(Unaudited) |
||||||||||||||||
(In thousands, except per share amounts) |
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|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
Revenues: |
|
|
|
|
|
|
|
|||||||||
Net product sales |
$ |
167,582 |
|
|
$ |
126,976 |
|
|
$ |
461,563 |
|
|
$ |
344,776 |
|
|
Collaboration and license agreement revenues |
18,420 |
|
|
19,786 |
|
|
99,128 |
|
|
76,524 |
|
|||||
Royalty revenues |
27,261 |
|
|
22,662 |
|
|
66,218 |
|
|
58,887 |
|
|||||
Total revenues |
213,263 |
|
|
169,424 |
|
|
626,909 |
|
|
480,187 |
|
|||||
Costs and expenses: |
|
|
|
|
|
|
|
|||||||||
Cost of sales |
8,723 |
|
|
12,348 |
|
|
25,243 |
|
|
35,863 |
|
|||||
Cost of royalty revenues |
2,104 |
|
|
5,320 |
|
|
6,781 |
|
|
16,845 |
|
|||||
Research and development |
196,119 |
|
|
140,175 |
|
|
518,313 |
|
|
415,537 |
|
|||||
Selling, general and administrative |
96,101 |
|
|
57,155 |
|
|
258,703 |
|
|
181,629 |
|
|||||
Total costs and expenses |
303,047 |
|
|
214,998 |
|
|
809,040 |
|
|
649,874 |
|
|||||
Loss from operations |
(89,784 |
) |
|
(45,574 |
) |
|
(182,131 |
) |
|
(169,687 |
) |
|||||
Investment and other income (loss), net |
(2,129 |
) |
|
(21,872 |
) |
|
(2,349 |
) |
|
66,799 |
|
|||||
Net loss |
$ |
(91,913 |
) |
|
$ |
(67,446 |
) |
|
$ |
(184,480 |
) |
|
$ |
(102,888 |
) |
|
Net loss per share - basic and diluted |
$ |
(0.55 |
) |
|
$ |
(0.42 |
) |
|
$ |
(1.13 |
) |
|
$ |
(0.66 |
) |
|
Shares used in computation of per share amounts - basic and diluted |
168,109 |
|
|
159,304 |
|
|
163,428 |
|
|
156,799 |
|
Seattle Genetics, Inc. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(Unaudited) |
||||||||
(In thousands) |
||||||||
|
September 30, 2019 |
|
December 31, 2018 |
|||||
Assets |
|
|
|
|||||
Cash, cash equivalents and investments |
$ |
870,313 |
|
|
$ |
459,866 |
|
|
Other assets |
1,227,224 |
|
|
1,043,463 |
|
|||
Total assets |
$ |
2,097,537 |
|
|
$ |
1,503,329 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|||||
Accounts payable and accrued liabilities |
$ |
239,183 |
|
|
$ |
191,472 |
|
|
Deferred revenue and long-term liabilities |
78,753 |
|
|
37,914 |
|
|||
Stockholders’ equity |
1,779,601 |
|
|
1,273,943 |
|
|||
Total liabilities and stockholders’ equity |
$ |
2,097,537 |
|
|
$ |
1,503,329 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20191029005960/en/
Investors:
Peggy Pinkston
425-527-4160
[email protected]
Media:
Monique Greer
425-527-4641
[email protected]