Seattle Genetics, Inc. (Nasdaq:SGEN) today reported financial results for the second quarter and six months ended June 30, 2020. The Company also highlighted ADCETRIS (brentuximab vedotin), PADCEV (enfortumab vedotin-ejfv) and TUKYSA (tucatinib) commercial and development accomplishments, as well as progress with its lead pipeline programs to treat cancer.
"We generated record product sales of $240.5 million in the second quarter driven by ADCETRIS, PADCEV and now a third commercial product, TUKYSA, following the FDA approval in mid-April for metastatic HER2-positive breast cancer," said Clay Siegall, Ph.D., President and Chief Executive Officer of Seattle Genetics. "We successfully launched TUKYSA in the United States and are building our international capabilities to support global launches. In addition, we reported another quarter of strong PADCEV sales with revenues of $91.6 million in its first two full quarters on the market. Our total revenues are on track to exceed $1 billion in 2020."
PRODUCT SALES SUMMARY
Dr. Siegall continued, "We also made substantial progress in the second quarter across our pipeline of more than a dozen programs. We reported positive results from the innovaTV 204 trial of tisotumab vedotin in recurrent or metastatic cervical cancer and plan to discuss with the FDA the potential submission of a Biologics License Application to support an accelerated approval. In addition, we advanced two novel drug candidates into phase 1 trials. We plan to host an investor R&D day later in 2020 to highlight the breadth of opportunities across our programs."
COMMERCIAL PRODUCT HIGHLIGHTS
ADCETRIS
PADCEV
TUKYSA
PIPELINE HIGHLIGHTS
For additional information on Seattle Genetics' pipeline, visit www.seattlegenetics.com/pipeline.
CORPORATE HIGHLIGHTS
SECOND QUARTER AND SIX-MONTHS 2020 FINANCIAL RESULTS
Revenues: Total revenues for the second quarter and six months ended June 30, 2020 increased to $278.0 million and $512.5 million, respectively, compared to $218.4 million and $413.6 million for the same periods in 2019. Revenues are composed of the following three components:
|
Three months ended June 30, |
|
Six months ended June 30, |
|||||||||||||||||
(dollars in millions) |
2020 |
|
2019 |
% Change |
|
2020 |
|
2019 |
% Change |
|||||||||||
Total Net Product Sales |
$ |
240.5 |
|
|
$ |
159.0 |
|
51% |
|
$ |
439.0 |
|
|
$ |
294.0 |
|
49% |
|||
ADCETRIS |
167.5 |
|
|
159.0 |
|
5% |
|
331.6 |
|
|
294.0 |
|
13% |
|||||||
PADCEV |
57.2 |
|
|
? |
N/A |
|
91.6 |
|
|
? |
N/A |
|||||||||
TUKYSA |
15.8 |
|
|
? |
N/A |
|
15.8 |
|
|
? |
N/A |
Research and Development (R&D) Expenses: R&D expenses for the second quarter and year-to-date in 2020 were $198.1 million and $393.3 million, respectively, compared to $163.9 million and $322.2 million for the same periods in 2019. The increase in 2020 primarily reflected increased investment in the Company's pipeline.
Selling, General and Administrative (SG&A) Expenses: SG&A expenses for the second quarter and year-to-date in 2020 were $125.6 million and $247.9 million, respectively, compared to $82.3 million and $162.6 million for the same periods in 2019. The increase was primarily attributed to increased field sales personnel for Seattle Genetics' recently commercialized products, PADCEV and TUKYSA, as well as higher infrastructure costs to support the Company's continued growth and international expansion.
Cost of Sales: Cost of sales for the second quarter and year-to-date in 2020 were $48.2 million and $77.7 million, respectively, compared to $10.9 million and $21.2 million for the same periods in 2019. The increase in 2020 was primarily due to the gross profit share with Astellas based on PADCEV sales, which were $27.1 million and $43.5 million in the 2020 second quarter and year-to-date, respectively. Cost of sales also increased due to amortization of acquired in-process technology costs that began with the approval of TUKYSA in April 2020, as well as royalties owed for PADCEV and TUKYSA net product sales.
Non-cash, share-based compensation cost for the first six months of 2020 was $68.4 million, compared to $51.9 million for the same period in 2019.
Net Loss: Net loss for the second quarter of 2020 was $21.2 million, or $0.12 per diluted share, compared to net loss of $79.2 million, or $0.49 per diluted share, for the second quarter of 2019. Net loss for the six months ended June 30, 2020 was $189.6 million, or $1.10 per diluted share, compared to net loss of $92.6 million, or $0.57 per diluted share, for the same period in 2019. Net loss in the second quarter and the year-to-date in 2020 included a net investment gain of $72.8 million and $16.7 million, respectively, primarily associated with Seattle Genetics' common stock holdings in Immunomedics, which was sold in April 2020 for $174.7 million.
Cash and Investments: As of June 30, 2020, Seattle Genetics had $895.7 million in cash and investments.
2020 FINANCIAL OUTLOOK
The Company's 2020 financial guidance is shown below, including PADCEV net sales guidance.
|
Current |
Previous |
|||
Revenues |
|||||
ADCETRIS net product sales |
$675 million to $700 million |
Unchanged |
|||
PADCEV net product sales |
$215 million to $235 million |
N/A |
|||
Royalty revenues |
$105 million to $115 million |
Unchanged |
|||
Collaboration and license agreement revenues |
$30 million to $50 million |
Unchanged |
|||
Operating expenses and other costs |
|||||
R&D expenses |
$820 million to $870 million |
$860 million to $950 million |
|||
SG&A expenses |
$475 million to $525 million |
Unchanged |
|||
Cost of Sales |
$185 million to $205 million |
N/A |
|||
Non-cash costs1 (primarily attributable to share-based compensation) |
$180 million to $200 million |
Unchanged |
|||
|
Conference Call Details
Seattle Genetics' management will host a conference call and webcast with supporting slides to discuss its second quarter 2020 and year-to-date 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 and available for replay from the Seattle Genetics website at www.seattlegenetics.com, under the Investors section. Investors may also participate in the conference call by calling 866-248-8441 (domestic) or 720-452-9102 (international). The conference ID is 1128188. A webcast replay will be archived on the Company's website www.seattlegenetics.com, under the Investors section.
About Seattle Genetics
Seattle Genetics, Inc. is a global biotechnology company that discovers, develops and commercializes transformative cancer medicines to make a meaningful difference in people's lives. ADCETRIS® (brentuximab vedotin) and PADCEV® (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. TUKYSATM (tucatinib), a small molecule tyrosine kinase inhibitor, is approved in certain HER2-positive metastatic breast cancers. The Company is headquartered in the Seattle, Washington area, with locations 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 in future periods; the potential to submit a BLA for accelerated approval of tisotumab vedotin; anticipated activities related to the Company's planned and ongoing clinical trials; the potential for the Company's clinical trials to support further development, regulatory submissions and potential marketing approvals in the U.S. and in other countries; the opportunities for, and the therapeutic and commercial potential of ADCETRIS, PADCEV, TUKYSA and tisotumab vedotin and the Company's other product candidates and those of its licensees and collaborators; the potential for data from the EV-103 trial to potentially support registration under accelerated approval regulations in the U.S.; intended expansion of commercial operations in Europe; 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 ADCETRIS, PADCEV and TUKYSA net sales, revenues, expenses, costs, and other financial guidance may not be as expected, as well as risks and uncertainties associated with maintaining or increasing sales of ADCETRIS, PADCEV and TUKYSA due to competition, unexpected adverse events, regulatory action, reimbursement, market adoption by physicians, impacts associated with COVID-19 or other factors. The Company may also be delayed or unsuccessful in its planned clinical trial initiations, the enrollment in and conduct of its clinical trials, obtaining data from clinical trials, planned regulatory submissions, and regulatory approvals 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. More information about the risks and uncertainties faced by Seattle Genetics is contained under the caption "Risk Factors" included in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 filed with the Securities and Exchange Commission (SEC), and the Company's subsequent periodic and current reports filed with the SEC. 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 June 30, |
|
Six Months Ended June 30, |
|||||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||||
Revenues: |
|
|
|
|
|
|
|
|||||||||
Net product sales |
$ |
240,465 |
|
|
$ |
158,980 |
|
|
$ |
438,979 |
|
|
$ |
293,981 |
|
|
Royalty revenues |
31,235 |
|
|
23,337 |
|
|
51,595 |
|
|
38,957 |
|
|||||
Collaboration and license agreement revenues |
6,298 |
|
|
36,130 |
|
|
21,938 |
|
|
80,708 |
|
|||||
Total revenues |
277,998 |
|
|
218,447 |
|
|
512,512 |
|
|
413,646 |
|
|||||
Costs and expenses: |
|
|
|
|
|
|
|
|||||||||
Cost of sales |
48,244 |
|
|
10,897 |
|
|
77,665 |
|
|
21,197 |
|
|||||
Research and development |
198,077 |
|
|
163,929 |
|
|
393,276 |
|
|
322,194 |
|
|||||
Selling, general and administrative |
125,642 |
|
|
82,331 |
|
|
247,891 |
|
|
162,602 |
|
|||||
Total costs and expenses |
371,963 |
|
|
257,157 |
|
|
718,832 |
|
|
505,993 |
|
|||||
Loss from operations |
(93,965) |
|
|
(38,710) |
|
|
(206,320) |
|
|
(92,347) |
|
|||||
Investment and other income (loss), net |
72,775 |
|
|
(40,528) |
|
|
16,728 |
|
|
(220) |
|
|||||
Net loss |
$ |
(21,190) |
|
|
$ |
(79,238) |
|
|
$ |
(189,592) |
|
|
$ |
(92,567) |
|
|
Net loss per share - basic and diluted |
$ |
(0.12) |
|
|
$ |
(0.49) |
|
|
$ |
(1.10) |
|
|
$ |
(0.57) |
|
|
Shares used in computation of per share amounts - basic and diluted |
173,406 |
|
|
161,436 |
|
|
172,878 |
|
|
161,049 |
|
|||||
Seattle Genetics, Inc. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(Unaudited) |
||||||||
(In thousands) |
||||||||
|
June 30, 2020 |
|
December 31, 2019 |
|||||
Assets |
|
|
|
|||||
Cash, cash equivalents and investments |
$ |
895,668 |
|
|
$ |
868,338 |
|
|
Other assets |
1,268,888 |
|
|
1,337,528 |
|
|||
Total assets |
$ |
2,164,556 |
|
|
$ |
2,205,866 |
|
|
Liabilities and Stockholders' Equity |
|
|
|
|||||
Accounts payable and accrued liabilities |
$ |
282,615 |
|
|
$ |
259,357 |
|
|
Long-term liabilities |
67,864 |
|
|
70,222 |
|
|||
Stockholders' equity |
1,814,077 |
|
|
1,876,287 |
|
|||
Total liabilities and stockholders' equity |
$ |
2,164,556 |
|
|
$ |
2,205,866 |
|
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