On October 27, 2016 Seattle Genetics, Inc. (NASDAQ: SGEN) reported financial results for the third quarter and nine months ended September 30, 2016 (Press release, Seattle Genetics, OCT 27, 2016, View Source [SID1234516058]). Schedule your 30 min Free 1stOncology Demo! The company also highlighted ADCETRIS (brentuximab vedotin) commercialization and clinical development accomplishments, vadastuximab talirine (SGN-CD33A) activities and progress with its pipeline of antibody-drug conjugates (ADCs) and other proprietary programs.
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"Seattle Genetics is transitioning into a global, multi-product oncology company, demonstrated by our substantial progress with ADCETRIS both commercially and clinically, our advancing vadastuximab talirine phase 3 CASCADE pivotal trial and the promising data recently presented on enfortumab vedotin for urothelial cancer," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "Looking forward, key upcoming activities include a strong presence at the ASH (Free ASH Whitepaper) Annual Meeting in December, reporting top-line data in 2017 from the ECHELON-1 phase 3 trial of ADCETRIS in frontline Hodgkin lymphoma and initiating discussions with regulatory agencies about advancing enfortumab vedotin. In addition, we are generating data from multiple other phase 1 programs and anticipate moving several novel programs into the clinic within the next year."
ADCETRIS Program Updates
ALCANZA Phase 3 Trial: Seattle Genetics and its collaborator Takeda reported top-line data in August 2016 from the phase 3 ALCANZA clinical trial in 131 patients with CD30-expressing cutaneous T-cell lymphoma (CTCL). 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). Full data from the ALCANZA clinical trial will be featured in an oral presentation at the ASH (Free ASH Whitepaper) Annual Meeting in December 2016, and Seattle Genetics plans to submit a supplemental Biologics License Application in the U.S. for label expansion in CTCL during the first half of 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 (previously expected in the 2017 to mid-2018 timeframe). ECHELON-1 is designed to redefine the way newly diagnosed patients with advanced Hodgkin lymphoma are treated.
ECHELON-2 Phase 3 Trial: Enrollment of 450 patients is ongoing in the phase 3 ECHELON-2 clinical trial in patients with frontline CD30-expressing mature T-cell lymphoma (MTCL). Seattle Genetics and Takeda anticipate completing enrollment during 2016 with top-line data expected in the 2017 to 2018 timeframe.
Leadership in Hodgkin Lymphoma: ADCETRIS was recently highlighted in several data presentations at the 10th International Symposium on Hodgkin Lymphoma (ISHL) in October 2016. The data included an update from the phase 3 AETHERA trial showing a sustained progression-free survival (PFS) benefit approximately four years after the last patient was enrolled.
Collaboration with Bristol-Myers Squibb: Seattle Genetics and Bristol-Myers Squibb recently expanded the companies’ clinical development collaboration to add cohorts to ongoing trials evaluating ADCETRIS combined with Opdivo (nivolumab). In addition to the current trials in second-line Hodgkin lymphoma and relapsed/refractory non-Hodgkin lymphoma, the companies will evaluate the combination of the two agents as frontline treatment for older Hodgkin lymphoma patients, as well as in relapsed/refractory primary mediastinal B-cell lymphoma and mediastinal gray zone lymphoma.
Upcoming ASH (Free ASH Whitepaper) Presentations: In addition to the ALCANZA oral presentation, more than 10 abstracts on ADCETRIS will be featured at the ASH (Free ASH Whitepaper) Annual Meeting. These include preliminary results from a phase 1 trial evaluating ADCETRIS in combination with Opdivo in second-line Hodgkin lymphoma, four-year follow-up from a phase 1 trial in frontline MTCL and five-year follow-up from a pivotal trial in systemic ALCL.
ADCETRIS is not currently approved for use in CTCL, frontline Hodgkin lymphoma, frontline MTCL or in combination with nivolumab.
Vadastuximab Talirine (SGN-CD33A) 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).
Upcoming ASH (Free ASH Whitepaper) Presentations: Data from several ongoing phase 1 trials of vadastuximab talirine will be featured in four oral presentations at the ASH (Free ASH Whitepaper) Annual Meeting. Included are data from a phase 1b trial of vadastuximab talirine in combination with cytarabine and daunorubicin ("7+3") for frontline, younger AML patients as well as follow-up data from a phase 1 trial of vadastuximab talirine plus HMAs in older AML patients.
More information about vadastuximab talirine and ongoing clinical trials can be found at www.ADC-CD33.com.
Pipeline Updates
Enfortumab Vedotin (ASG-22ME) and ASG-15ME: Seattle Genetics and its collaborator Agensys, an affiliate of Astellas, reported data at the European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) Congress in October 2016 from phase 1 trials of enfortumab vedotin and ASG-15ME in patients with previously treated metastatic urothelial cancer, including those who had received prior checkpoint inhibitors. At the recommended phase 2 dose, enfortumab vedotin demonstrated a 59 percent objective response rate. While both phase 1 studies will continue to enroll patients, Seattle Genetics is working closely with its partner Astellas to define next steps for enfortumab vedotin, including potential later-stage trials and discussions with regulatory agencies.
Denintuzumab Mafodotin (SGN-CD19A): Seattle Genetics recently initiated a phase 2 trial of denintuzumab mafodotin in frontline diffuse large B-cell lymphoma (DLBCL). The trial will assess the activity and tolerability of adding denintuzumab mafodotin to the standard frontline regimen, R-CHOP, as well as a modified regimen, R-CHP. Denintuzumab mafodotin is also being evaluated in an ongoing phase 2 trial in relapsed DLBCL.
SGN-LIV1A: Data from a phase 1 trial of SGN-LIV1A will be presented at the San Antonio Breast Cancer Symposium taking place in December 2016. SGN-LIV1A is in development for metastatic breast cancer, with a focus on triple negative disease.
SEA-CD40: The first clinical data from an ongoing phase 1 trial of SEA-CD40 will be presented at the Society for Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) 2016 Annual Meeting in November. SEA-CD40 is a novel immuno-oncology agent targeted to CD40 utilizing Seattle Genetics’ proprietary sugar-engineered antibody (SEA) technology to produce a non-fucosylated antibody.
SGN-CD123A: The first patient was treated in a multicenter phase 1 clinical trial of SGN-CD123A for relapsed/refractory AML. SGN-CD123A is an ADC, comprising an engineered cysteine antibody (EC-mAb) stably linked to a highly potent DNA binding agent called a pyrrolobenzodiazepine (PBD) dimer. CD123 is expressed across AML subtypes and is particularly prominent on leukemic stem cells.
SGN-CD70A: Based on a portfolio review and evaluation of phase 1 clinical data of SGN-CD70A in renal cell carcinoma and CD70-positive non-Hodgkin lymphoma, Seattle Genetics is discontinuing further clinical development of the program.
Lead Preclinical Programs:
SGN-CD352A is a novel ADC targeting CD352 that utilizes the company’s PBD dimer and EC-mAb technologies. Seattle Genetics plans to initiate a phase 1 clinical trial of SGN-CD352A for multiple myeloma by early 2017.
SGN-2FF is a small molecule immuno-oncology agent that is expected to advance into a phase 1 trial for solid tumors during 2017. Preclinical data from SGN-2FF will be presented in a poster presentation at the SITC (Free SITC Whitepaper) 2016 Annual Meeting.
SGN-CD48A is a novel ADC utilizing Seattle Genetics’ latest technology advances. Preclinical data will be described in a poster presentation at the ASH (Free ASH Whitepaper) Annual Meeting and the company plans to submit an investigational new drug (IND) application during 2017 for a phase 1 clinical trial in multiple myeloma.
ADC Collaborations: Seattle Genetics generated fees and milestones under its ongoing ADC collaboration with AbbVie based on AbbVie’s progress with programs utilizing Seattle Genetics technology.
Third Quarter and Nine Months 2016 Financial Results
Total revenues in the quarter and nine month periods ended September 30, 2016 increased to $106.3 million and $312.9 million, respectively, compared to $84.1 million and $243.3 million from the same periods in 2015. Revenues included:
ADCETRIS net sales in the third quarter were $70.1 million, a 19 percent increase from net sales of $59.1 million in the third quarter of 2015. For the year-to-date, ADCETRIS sales were $195.0 million, compared to $163.0 million for the year-to-date period in 2015, a 20 percent increase.
Royalty revenues in the third quarter of 2016 were $12.2 million, compared to $9.7 million in the third quarter of 2015. For the year-to-date in 2016, royalty revenues were $53.7 million, compared to $28.4 million for the first nine months of 2015. Royalty revenues are primarily driven by international sales of ADCETRIS by Takeda. Royalty revenues for the year-to-date 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 $24.0 million in the third quarter and $64.1 million for the first nine months of 2016, compared to $15.3 million and $51.9 million for the same periods in 2015.
Total costs and expenses for the third quarter of 2016 were $138.7 million, compared to $110.6 million for the third quarter of 2015. For the first nine months of 2016, total costs and expenses were $399.7 million, compared to $339.1 million in the first nine months of 2015. The increase in 2016 costs and expenses was primarily driven by investment in vadastuximab talirine, ADCETRIS collaboration activities for product supply to Takeda, and the company’s pipeline programs.
Non-cash, share-based compensation cost for the first nine months of 2016 was $37.0 million, compared to $28.7 million for the same period in 2015.
Net loss for the third quarter of 2016 was $31.8 million, or $0.23 per share, compared to a net loss of $26.4 million, or $0.21 per share, for the third quarter of 2015. For the nine months ended September 30, 2016, net loss was $85.0 million, or $0.61 per share, compared to a net loss of $95.6 million, or $0.76 per share, for the same period in 2015.
As of September 30, 2016, Seattle Genetics had $631.9 million in cash, cash equivalents and investments.
2016 Financial Outlook
Seattle Genetics tightened its 2016 financial outlook within previously provided ranges as follows:
ADCETRIS net product sales in the U.S. and Canada are expected to be in the range of $260 million to $270 million.
Research and development expenses are expected to be in the range of $370 million to $390 million.