Seattle Genetics, Inc. (Nasdaq:SGEN) today reported financial results for the fourth quarter and year ended December 31, 2019. The Company also highlighted ADCETRIS (brentuximab vedotin) and PADCEV (enfortumab vedotin-ejfv) commercial, regulatory and clinical development accomplishments and progress with its clinical programs for cancer, including tucatinib.
"At the end of 2019, we became a multi-product oncology company following the rapid FDA approval of PADCEV for previously treated metastatic urothelial cancer patients, expanding our commercial portfolio into solid tumors," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "In addition, in collaboration with Takeda, global sales of ADCETRIS exceeded $1 billion in 2019, underscoring its importance in the treatment of multiple lymphomas. As we look ahead, subject to regulatory reviews, we are well positioned to bring a third product to market with the tucatinib marketing applications in the United States, Europe and other countries for patients with metastatic HER2-positive breast cancer. Importantly, across PADCEV, tucatinib and ADCETRIS, we are advancing broad clinical development programs intended to fully explore their potential. We are executing on our mission to develop transformative cancer therapies that make a meaningful difference in people's lives."
ADCETRIS Program Highlights
PADCEV Program Highlights
Tucatinib Program Highlights
Tisotumab Vedotin Program Highlights
Other Recent Activities
FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS
Revenues: Total revenues in the fourth quarter and year ended December 31, 2019 increased to $289.8 million and $916.7 million, respectively, compared to $174.5 million and $654.7 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 fourth quarter were $201.1 million, compared to $149.8 million in the fourth quarter of 2018. R&D expenses were $719.4 million for the full year in 2019, compared to $565.3 million in 2018. The increase in 2019 primarily reflected increased investment in the Company's late-stage pipeline.
Selling, general and administrative (SG&A) Expenses: SG&A expenses in the fourth quarter were $115.2 million, compared to $79.5 million in the fourth quarter of 2018. SG&A expenses were $373.9 million for the full year in 2019, compared to $261.1 million for the same period in 2018. The increases were primarily attributed to costs to support commercialization efforts related to ADCETRIS frontline indications, launch preparation for PADCEV and tucatinib, as well as higher infrastructure costs to support the Company's continued growth.
Cost of Sales: Cost of sales in the fourth quarter were $9.6 million, compared to $30.2 million in the fourth quarter of 2018. Cost of sales were $34.9 million for the full year in 2019, compared to $66.1 million for the same period in 2018. The 2018 periods reflected an inventory write-off of $18.1 million recorded in the fourth quarter of 2018 related to ADCETRIS in-process production that did not meet manufacturing specifications, as well as a reduction in amounts owed to certain third-party technology licensors.
Non-cash, share-based compensation cost for the full year in 2019 was $127.3 million, compared to $78.9 million for the same period in 2018.
Net Income / Loss: Net income for the fourth quarter of 2019 was $25.8 million, or $0.14 per diluted share, compared to a net loss of $119.8 million, or $0.75 per diluted share, for the fourth quarter of 2018. Net income in the fourth quarter of 2019 included net investment income of $64.2 million primarily associated with Seattle Genetics' common stock holdings in Immunomedics, which are marked-to-market. For the full year in 2019, net loss was $158.7 million, or $0.96 per share, compared to a net loss of $222.7 million, or $1.41 per share, for the year in 2018. Net loss for the full year in 2019 included net investment income of $61.9 million primarily associated with Seattle Genetics' common stock holdings in Immunomedics. Net loss for both the fourth quarter and the full year in 2018 included a non-cash income tax benefit of $23.7 million related to acquired intangible assets as part of the acquisition of Cascadian Therapeutics.
Cash and Investments: As of December 31, 2019, Seattle Genetics had $868.3 million in cash and investments. In addition, the Company held stock investments, primarily in Immunomedics common stock, valued at $163.9 million.
2020 FINANCIAL OUTLOOK
Seattle Genetics anticipates 2020 revenues, operating expenses and other costs to be in the ranges shown in the table below.
ADCETRIS net product sales |
$675 million to $700 million |
|
Royalty revenues |
$105 million to $115 million |
|
Collaboration and license agreement revenues |
$30 million to $50 million |
|
|
|
|
R&D expenses |
$860 million to $950 million |
|
SG&A expenses |
$475 million to $525 million |
|
ADCETRIS cost of sales |
5 percent to 6 percent |
|
Cost of royalty revenues |
Low single digit percent on
|
|
Non-cash costs (primarily attributable to share based compensation) |
$180 million to $200 million |
Conference Call Details
Seattle Genetics' management will host a conference call and webcast with supporting slides to discuss its fourth quarter and full year 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 on 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 7290215. A replay of the live event and supporting slides will be available starting on February 6, 2020 on the Seattle Genetics website at www.seattlegenetics.com, under the Investors section, for at least 30 days. A replay of the audio only will be available by calling 888-203-1112 (domestic) or 719-457-0820 (international), using conference ID 7290215. The telephone replay will be available until 5:00 p.m. PT on February 9, 2020.
About Seattle Genetics
Seattle Genetics, Inc. is a global biotechnology company that discovers, develops and commercializes transformative medicines targeting cancer to make a meaningful difference in people's lives. ADCETRIS® (brentuximab vedotin) and PADCEVtm (enfortumab vedotin-ejfv) use the company's industry-leading antibody-drug conjugate (ADC) technology. ADCETRIS is approved in certain CD30-expressing lymphomas, and PADCEV is approved in certain metastatic urothelial cancers. In addition, investigational agent tucatinib, a small molecule tyrosine kinase inhibitor, is in late-stage development for HER2-positive metastatic breast cancer, and in clinical development for metastatic colorectal cancer. The company is headquartered in Bothell, Washington, and has offices in California, Switzerland and the European Union. 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 2020 outlook, including anticipated 2020 revenues, costs and expenses; the Company's potential to achieve the noted development and regulatory milestones in 2020 and future periods and to bring a third product to market in the United States and other countries; anticipated activities related to the Company's planned and ongoing clinical trials, including clinical trial enrollment and data availability and the expected timing thereof, including with respect to innovaTV 204, EV-301, EV-302, EV-202, HER2CLIMB-02, MOUNTAINEER and other 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, PADCEV, tucatinib, and tisotumab vedotin and the Company's other product candidates and those of its licensees and collaborators; 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 net sales, revenue, expense, and other financial guidance may not be as expected, as well as risks and uncertainties associated with maintaining or increasing sales of ADCETRIS and PADCEV due to competition, unexpected adverse events, regulatory action, reimbursement, market adoption by physicians or other factors. The Company may also be delayed in its planned clinical trial initiations, enrollment in and conduct of its clinical trials, obtaining data from clinical trials, planned regulatory submissions, regulatory approvals and launch 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 and the pricing and reimbursement process when applicable. More information about the risks and uncertainties faced by Seattle Genetics is contained under the caption "Risk Factors" included in the Company's periodic reports filed with the Securities and Exchange Commission, including the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 and future periodic reports filed by the Company, including the Company's Annual Report on Form 10-K for the year ended December 31, 2019. 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. |
||||||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||||||
(Unaudited) |
||||||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||
|
Three Months Ended December 31, |
|
Years Ended December 31, |
|||||||||||||
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||||||
Revenues: |
|
|
|
|
|
|
|
|||||||||
Net product sales |
$ |
166,414 |
|
|
$ |
132,127 |
|
|
$ |
627,977 |
|
|
$ |
476,903 |
|
|
Collaboration and license agreement revenues |
51,117 |
|
|
17,833 |
|
|
150,245 |
|
|
94,357 |
|
|||||
Royalty revenues |
72,273 |
|
|
24,553 |
|
|
138,491 |
|
|
83,440 |
|
|||||
Total revenues |
289,804 |
|
|
174,513 |
|
|
916,713 |
|
|
654,700 |
|
|||||
Costs and expenses: |
|
|
|
|
|
|
|
|||||||||
Cost of sales |
9,639 |
|
|
30,222 |
|
|
34,882 |
|
|
66,085 |
|
|||||
Cost of royalty revenues |
2,289 |
|
|
5,363 |
|
|
9,070 |
|
|
22,208 |
|
|||||
Research and development |
201,061 |
|
|
149,772 |
|
|
719,374 |
|
|
565,309 |
|
|||||
Selling, general and administrative |
115,229 |
|
|
79,467 |
|
|
373,932 |
|
|
261,096 |
|
|||||
Total costs and expenses |
328,218 |
|
|
264,824 |
|
|
1,137,258 |
|
|
914,698 |
|
|||||
Loss from operations |
(38,414 |
) |
|
(90,311 |
) |
|
(220,545 |
) |
|
(259,998 |
) |
|||||
Investment and other income (loss), net |
64,244 |
|
|
(53,180 |
) |
|
61,895 |
|
|
13,652 |
|
|||||
Income (loss) before income taxes |
25,830 |
|
|
(143,491 |
) |
|
(158,650 |
) |
|
(246,346 |
) |
|||||
Income tax benefit |
? |
|
|
23,686 |
|
|
? |
|
|
23,653 |
|
|||||
Net income (loss) |
$ |
25,830 |
|
|
$ |
(119,805 |
) |
|
$ |
(158,650 |
) |
|
$ |
(222,693 |
) |
|
Net income (loss) per share - basic |
$ |
0.15 |
|
|
$ |
(0.75 |
) |
|
$ |
(0.96 |
) |
|
$ |
(1.41 |
) |
|
Net income (loss) per share - diluted |
$ |
0.14 |
|
|
$ |
(0.75 |
) |
|
$ |
(0.96 |
) |
|
$ |
(1.41 |
) |
|
Shares used in computation of per share amounts - basic |
171,638 |
|
|
160,197 |
|
|
165,498 |
|
|
157,655 |
|
|||||
Shares used in computation of per share amounts - diluted |
178,501 |
|
|
160,197 |
|
|
165,498 |
|
|
157,655 |
|
Seattle Genetics, Inc. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(Unaudited) |
||||||||
(In thousands) |
||||||||
|
December 31, |
|||||||
|
2019 |
|
2018 |
|||||
Assets |
|
|
|
|||||
Cash, cash equivalents and investments |
$ |
868,338 |
|
|
$ |
459,866 |
|
|
Other assets |
1,337,528 |
|
|
1,043,463 |
|
|||
Total assets |
$ |
2,205,866 |
|
|
$ |
1,503,329 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
|||||
Accounts payable and accrued liabilities |
$ |
259,357 |
|
|
$ |
191,472 |
|
|
Deferred revenue and long-term liabilities |
70,222 |
|
|
37,914 |
|
|||
Stockholders' equity |
1,876,287 |
|
|
1,273,943 |
|
|||
Total liabilities and stockholders' equity |
$ |
2,205,866 |
|
|
$ |
1,503,329 |
|
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