On February 9, 2017 Seattle Genetics, Inc. (NASDAQ:SGEN), a global biotechnology company, reported financial results for the fourth quarter and year ended December 31, 2016 (Press release, Seattle Genetics, FEB 9, 2017, View Source [SID1234517676]).

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The company also highlighted ADCETRIS (brentuximab vedotin) commercialization and clinical development accomplishments, vadastuximab talirine (SGN-CD33A) and enfortumab vedotin (ASG-22ME) activities, as well as progress with its pipeline of antibody-drug conjugates (ADCs) and other proprietary programs.

“Our accomplishments in 2016 were substantial, highlighted by strong progress with our ADCETRIS phase 3 trials: ALCANZA, ECHELON-1 and ECHELON-2. This progress positions us to potentially achieve a series of regulatory and commercial milestones in 2017 and 2018,” said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. “Also during 2016 we initiated the phase 3 CASCADE clinical trial of vadastuximab talirine (SGN-CD33A; 33A) and reported phase 1 data from enfortumab vedotin (ASG-22ME) that we believe support advancement of this program into registrational trials. As we evolve into a global, multi-product oncology company, we are focused on continuing to deliver on our goals of advancing our pipeline and establishing ADCs as a key component of the future of cancer care.”

ADCETRIS Program Updates

ALCANZA Phase 3 Trial: Seattle Genetics and its collaborator Takeda highlighted full data from the ALCANZA phase 3 clinical trial in patients with CD30-expressing cutaneous T-cell lymphoma (CTCL) during the American Society of Hematology (ASH) (Free ASH Whitepaper) annual meeting in December 2016. The trial met its primary endpoint demonstrating that treatment with ADCETRIS resulted in a highly statistically significant improvement in the rate of objective response lasting at least four months (ORR4) versus the control arm as assessed by an independent review committee (p-value <0.0001). ALCANZA Breakthrough Therapy Designation: In November 2016, the U.S. Food and Drug Administration (FDA) granted ADCETRIS Breakthrough Therapy Designation (BTD) for the treatment of patients with CD30-expressing mycosis fungoides and primary cutaneous anaplastic large cell lymphoma who require systemic therapy and have received one prior systemic therapy. These represent the most common subtypes of CTCL. Based on discussions with the FDA following the BTD, the company now plans to incorporate additional data from investigator-sponsored trials into the planned supplemental Biologics License Application (BLA) to support the potential for a broader label in CTCL. As a result, submission of the supplemental BLA is now planned for mid-2017. ECHELON-1 Phase 3 Trial: Top-line data from the ECHELON-1 phase 3 trial in frontline classical Hodgkin lymphoma are anticipated during 2017. ECHELON-1 is evaluating ADCETRIS as part of a combination regimen in newly diagnosed patients with advanced Hodgkin lymphoma. ECHELON-2 Phase 3 Trial: In November 2016, Seattle Genetics and Takeda completed enrollment of 452 patients in the ongoing phase 3 ECHELON-2 clinical trial in patients with frontline CD30-expressing mature T-cell lymphoma, also known as peripheral T-cell lymphoma (PTCL). The companies anticipate reporting top-line data in 2018 (previously expected in the 2017 to 2018 timeframe). ASH Annual Meeting: Data from multiple ADCETRIS clinical trials were featured at the ASH (Free ASH Whitepaper) annual meeting. These included durability of response data from long-term follow-up of the pivotal trial in systemic anaplastic large cell lymphoma and a phase 1 trial of ADCETRIS in combination with chemotherapy in frontline PTCL. In addition, data from a phase 1/2 trial of ADCETRIS and nivolumab (Opdivo) in pre-transplant relapsed or refractory classical Hodgkin lymphoma patients showed a 90 percent objective response rate and 62 percent complete remission rate, and was generally well tolerated. ADCETRIS is not currently approved for use in CTCL, frontline Hodgkin lymphoma, frontline MTCL or pre-transplant Hodgkin lymphoma patients eligible for an autologous transplant. Vadastuximab Talirine (SGN-CD33A; 33A) Program Updates CASCADE Phase 3 Trial: Seattle Genetics is continuing enrollment in the 500-patient, global, randomized pivotal phase 3 CASCADE clinical trial evaluating vadastuximab talirine in combination with hypomethylating agents (HMAs) in older patients with newly diagnosed acute myeloid leukemia (AML). Clinical Hold: In December 2016, the FDA placed a full or partial clinical hold on several early-stage trials of vadastuximab talirine in AML. The clinical hold was initiated to evaluate the potential risk of hepatotoxicity in patients who were treated with vadastuximab talirine and received an allogeneic stem cell transplant. The company is working with the FDA to determine whether there is any association between hepatotoxicity and treatment with vadastuximab talirine and to resolve the clinical hold. ASH Annual Meeting: Data from vadastuximab talirine abstracts were featured in four oral presentations at the ASH (Free ASH Whitepaper) annual meeting. These included activity and tolerability of vadastuximab talirine in AML, both as monotherapy as well as in combination with standard-of-care agents for newly diagnosed patients. Enfortumab Vedotin (ASG-22ME) Program Update Advancing Clinical Program: Based on data from an ongoing phase 1 clinical trial, Seattle Genetics and its collaborator Astellas are planning discussions with regulatory agencies to advance the program into potential registrational trials for metastatic urothelial cancer patients, including patients who have been previously treated with a checkpoint inhibitor therapy. Additional Pipeline Updates Seattle Genetics is advancing a broad pipeline of nine additional clinical and late-stage preclinical programs for the treatment of hematologic malignancies and solid tumors. Data from several programs are expected during 2017. Recent pipeline activities include the following: SGN-LIV1A: Interim data from a phase 1, dose-escalation trial of SGN-LIV1A were presented at the San Antonio Breast Cancer Symposium in December 2016 showing antitumor activity in patients with triple negative metastatic breast cancer. Enrollment to an expansion cohort is ongoing to further characterize the activity and safety profile of single-agent SGN-LIV1A. In addition, enrollment is ongoing to evaluate SGN-LIV1A in combination with trastuzumab (Herceptin). SGN-CD352A: Seattle Genetics initiated a phase 1 trial of SGN-CD352A for multiple myeloma. SGN-CD352A is a novel ADC targeting CD352 composed of an engineered cysteine antibody (EC-mAb) stably linked to a highly potent DNA binding agent called a pyrrolobenzodiazepine (PBD) dimer via proprietary site-specific linker technology. SGN-2FF: Seattle Genetics initiated a phase 1 trial of SGN-2FF, a novel small molecule immuno-oncology agent. SGN-2FF is an oral agent that has been shown in preclinical models to inhibit fucosylation of proteins, which is intended to stimulate the immune system and slow the growth and spread of cancer cells. The phase 1 trial will be conducted in relapsed or refractory solid tumors, including non-small cell lung cancer. ADC Collaborations: Seattle Genetics recognized a milestone under its ongoing ADC collaboration with Genmab based on its initiation of a phase 1/2 trial of its HuMax-AXL ADC utilizing Seattle Genetics’ technology. In addition, Seattle Genetics received a milestone under its ongoing ADC collaboration with AbbVie. Fourth Quarter and Year 2016 Financial Results Total revenues in the quarter and twelve month period ended December 31, 2016 increased to $105.3 million and $418.1 million, respectively, compared to $93.5 million and $336.8 million from the same periods in 2015. Revenues included: ADCETRIS net sales in the fourth quarter were $70.8 million, a 12 percent increase from net sales of $63.0 million in the fourth quarter of 2015. For the year in 2016, ADCETRIS sales were $265.8 million, compared to $226.1 million for the year in 2015, an 18 percent increase. Royalty revenues in the fourth quarter of 2016 were $13.7 million, compared to $12.6 million in the fourth quarter of 2015. For the year in 2016, royalty revenues were $67.5 million, compared to $41.0 million for the year in 2015. Royalty revenues are primarily driven by international sales of ADCETRIS by Takeda. Royalty revenues for the year in 2016 also included a $20.0 million sales milestone payment from Takeda earned in the first quarter of 2016. Amounts earned under the company’s ADCETRIS and ADC collaborations totaled $20.8 million in the fourth quarter and $84.9 million for the year in 2016, compared to $17.9 million and $69.8 million for the same periods in 2015. Total costs and expenses for the fourth quarter of 2016 were $161.1 million, compared to $118.6 million for the fourth quarter of 2015. For the year in 2016, total costs and expenses were $560.9 million, compared to $457.8 million for the year in 2015. The increase in 2016 costs and expenses was primarily driven by investment in vadastuximab talirine, ADCETRIS product supply to Takeda and the company’s pipeline programs. Non-cash, share-based compensation cost for the year in 2016 was $52.5 million, compared to $41.8 million for the year in 2015. Net loss for the fourth quarter of 2016 was $55.1 million, or $0.39 per share, compared to a net loss of $24.9 million, or $0.18 per share, for the fourth quarter of 2015. For the year ended December 31, 2016, net loss was $140.1 million, or $1.00 per share, compared to a net loss of $120.5 million, or $0.93 per share, for the year in 2015. As of December 31, 2016, Seattle Genetics had $619.0 million in cash, cash equivalents and investments. 2017 Financial Outlook Seattle Genetics anticipates 2017 total revenues to be in the range of $405 million to $445 million, comprised of the following components: ADCETRIS net product sales $280 million to $300 million Revenues from collaboration and license agreements $75 million to $90 million Royalty revenues $50 million to $55 million Operating expenses and other costs are expected to be within the following ranges for the year in 2017: Research and development (R&D) $460 million to $500 million Selling, general and administration (SG&A) $160 million to $170 million Cost of sales 10 percent to 12 percent of ADCETRIS net product sales Non-cash costs $80 million to $90 million, primarily attributable to share-based compensation distributed approximately evenly between SG&A and R&D