Seattle Genetics is up in after-hours trading after posting record sales for its blood cancer drug Adcetris, and raising guidance for the year. The biotech sold $48 million worth of Adcetris in the U.S. and Canada, a 32% year-over-year increase.
Seattle Genetics also booked $8 million worth of royalty revenue from sales of Adcetris by its overseas partner Takeda . The drug is now approved in 47 countries, including 11 new approvals in the last 12 months.
In the U.S., the big driver of sales is coming from off-label use treating Hodgkin lymphomato knock back the lymphoma so patients can get a stem cell transplant. Adcetris is currently only approved to treat Hodgkin lymphomapatients that have failed a stem cell transplant, so Seattle Genetics can't promote it for use before stem cell transplants, even if doctors are choosing to use it then.
On the back of a strong third quarter, Seattle Genetics raised its guidance for sales of Adcetris this year to between $172 million and $177 million. That guidance implies fourth-quarter sales of $40 million to $45 million.
If you're playing along at home, you'll notice that's less than the $48 million in the third quarter. The holiday season will result in less shipping days, which will affect sales; but it doesn't necessarily mean that demand is down. The aforementioned off-label sales could also diminish -- they tend to be lumpy as doctors explore what's working. And, of course, there's a good chance that management is just sandbagging its guidance.
Looking forward, Adcetris sales growth should come fromconsolidation therapy immediately following an autologous stem cell transplant in patients with Hodgkin lymphoma. Using it on all patients -- not just those who have failed a stem cell transplant -- will obviously increase sales.
Seattle Genetics recently presented top-line data for a trial in that indication, which showed Adcetris significantly extended survival without the lymphoma progressing, referred to as progression-free survival. We'll get more data on the trial at the American Society of Hematology meeting in December, where Seattle Genetics expects to have data presented at eight oral presentations. The company plans to submit an application to the FDA in the first half of 2015 for using Adcetris as a consolidation therapy, which would put it on track for an approval toward the end of next year or in early 2016.
Of course, Seattle Genetics is more than just Adcetris. The drug is built on its antibody drug conjugate technology, which the biotech has licensed to 12 different companies, including Genmab , which signed up for a second collaboration in September. During the quarter, three of the collaborators -- GlaxoSmithKline , Takeda , and Bayer -- moved drugs along in the clinic, triggering milestone payments.
Seattle Genetics isn't profitable yet; but with $340 million in cash and investments, solid growth in sales of Adcetris, and potential for future royalties from collaborators' drugs, the biotech looks like it's in good shape for now.
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Seattle Genetics, Inc. Posts Record Adcetris Sales
