Seattle Genetics reports revenues of $46.5M for first-quarter 2010

Apr 28 2010

Seattle Genetics, Inc. (Nasdaq: SGEN) today reported financial results for the first quarter ended March 31, 2010. The company also highlighted recent product development activities and planned milestones.

“We are also advancing several earlier-stage programs, including SGN-75, an antibody-drug conjugate (ADC) that is in phase I for non-Hodgkin lymphoma and renal cell carcinoma, and ASG-5ME, an ADC that is on track to begin phase I testing in prostate and pancreatic cancers this year.”

"We ended the first quarter in a strong financial position, and we remain on target to achieve several key milestones in the remainder of the year, including data from our pivotal brentuximab vedotin (SGN-35) trial in Hodgkin lymphoma and data from our phase IIb lintuzumab (SGN-33) trial in acute myeloid leukemia," said Clay B. Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "We are also advancing several earlier-stage programs, including SGN-75, an antibody-drug conjugate (ADC) that is in phase I for non-Hodgkin lymphoma and renal cell carcinoma, and ASG-5ME, an ADC that is on track to begin phase I testing in prostate and pancreatic cancers this year."

Recent Highlights and Upcoming Milestones

Brentuximab Vedotin

• Expect to report data from a pivotal trial in relapsed and refractory Hodgkin lymphoma being conducted under a Special Protocol Assessment (SPA) in the second half of 2010 and submit a New Drug Application to the U.S. Food and Drug Administration (FDA) in the first half of 2011 under the accelerated approval regulations
• Initiated the AETHERA phase III clinical trial for post-transplant Hodgkin lymphoma patients designed to fulfill regulatory requirements for full approval in the United States and Europe
• Expect to complete enrollment in a phase II systemic anaplastic large cell lymphoma (ALCL) clinical trial in the second quarter of 2010 and report data in the second half of 2010
• Plan to report data at the American Society of Clinical Oncology annual meeting describing clinical experience in the retreatment of patients with Hodgkin lymphoma and systemic ALCL
• Initiated a phase I clinical trial to evaluate safety of brentuximab vedotin in combination with a commonly used chemotherapy for front-line treatment of patients with Hodgkin lymphoma
• Received a U.S. patent covering cleavable linkers and potent auristatin drug payloads used in certain of Seattle Genetics' ADC programs, including brentuximab vedotin, as well as many ADC programs in development by its collaborators

Lintuzumab (SGN-33)

• Continued patient treatment and follow-up in a randomized phase IIb trial of lintuzumab plus low-dose chemotherapy for patients 60 years and older with acute myeloid leukemia to evaluate whether the combination extends overall survival; data from this trial are expected between late-second quarter and mid-third quarter of 2010

SGN-75

• Advanced a phase I clinical trial for CD70-positive relapsed and refractory non-Hodgkin lymphoma and metastatic renal cell carcinoma patients

ASG-5ME

• In collaboration with Agensys, an affiliate of Astellas Pharma, advanced towards planned initiation of clinical trials for prostate and pancreatic cancer patients during 2010

ADC Collaborations

• Generated $9.5 million from Genentech to renew exclusive licenses to specific targets and extend the research term under the parties' existing ADC collaboration
• Achieved milestones under ADC collaboration with Genentech, including a milestone triggered by its submission of an Investigational New Drug (IND) application with the FDA for an ADC utilizing Seattle Genetics' technology for the treatment of cancer

First Quarter 2010 Financial Results

As of March 31, 2010, Seattle Genetics had $331.1 million in cash and investments, compared to $287.7 million as of December 31, 2009. The increase reflects a $60 million upfront payment from the company's brentuximab vedotin collaboration with Millennium: The Takeda Oncology Company and a $12 million upfront payment from the company's ADC collaboration with GlaxoSmithKline.

Revenues in the first quarter of 2010 were $46.5 million, up from $9.1 million in the first quarter of 2009. The increase in revenues was driven by the earned portion of payments received under the company's dacetuzumab (SGN-40) collaboration with Genentech, which will end in June 2010. As previously disclosed, revenues in the first half of 2010 are expected to reflect an estimated $70 million related to the dacetuzumab collaboration, approximately $40 million of which was recognized in the first quarter of 2010. These revenues are mostly attributable to cash amounts already received under the collaboration.

Total operating expenses for the first quarter of 2010 were $35.5 million, compared to $37.4 million for the first quarter of 2009. Brentuximab vedotin development costs incurred by Seattle Genetics are included in research and development expense, but joint activities are reimbursed by Millennium on a 50:50 basis under the collaboration. Non-cash, share-based compensation expense for the first quarter of 2010 was $3.2 million, compared to $2.7 million for the same period in 2009.

Net income for the first quarter of 2010 was $11.5 million, or $0.11 per share, compared to a net loss of $27.3 million, or $0.33 per share, for the first quarter of 2009.