Seattle Genetics has been upgraded to ‘outperform’ by an analyst based on its antibody-drug conjugate (ADC) technology platforms, pipeline and the potential of Adcetris to become a blockbuster.
John Sonnier, a biotech analyst from equity research company William Blair said in a note today “Seattle Genetics [SeaGen] is positioned to advance into the elite ranks of large-cap biotechnology, driven by the expansion of flagship drug Adcetris.”
The drug – which was developed in partnership with Takeda - combines the brentuximab monoclonal antibody with a cytotoxic small molecule, connected by SeaGen’s linker technology, and received approval from the US Food and Drug Administration in 2011 to treat Hodgkin lymphoma (HL).
According to the company’s end of year figures, net sales of Adcetris were over $269m (€189m) across 39 countries. However, Sonnier projected North American sales to be roughly $170m this year and, on top of ongoing trials, there is “the potential to make Adcetris a blockbuster drug.”
The company set the cost of Adcetris at $13,500 per dose which could, if the maximum of 16 doses as prescribed on FDA label information is reached, cost a patient $216,000.
Another industry expert told Biopharma-Reporter.com Adcetris is “clearly a therapeutically effective drug and has carved a small commercial niche for itself,” but it would have to be successful in completing some label broadening studies with other B and T cell lymphomas and also break into frontline treatment in already approved indications, if it stood a chance to reach the pivotal $1bn sales mark.
Technology & Pipeline
Sonnier’s upgrade was also driven by SeaGen’s expanding proprietary and partnered pipeline, and its proprietary ADC technology platform.
The company says the key components of its technology are the stable linkers – which the firm says showed up ten times more stable in blood than conventional means of attaching drugs to antibodies in preclinical studies - and the synthetic cytotoxic agents.
In a recent conference call to discuss end of year results, CEO Clay Siegall spoke of ramping up its pipeline using the platform. “The time is right now to invest in trying to find additional drugs with our exciting technology,” he told investors (see Seeking Alpha transcript ). “And so we are doing that now and certainly will increase our R&D spend.”
Seagen have five ADC molecules in its pipeline, though this will soon be seven, CFO Todd Simpson added on the call.
SeaGen is also investigating in a new ADC technology which uses a highly potent cytotoxic agent called a pyrrolobenzodiazepine (PBD) dimer.
The firm has one compound (a CD33 targeted ADC known as SGN-CD33A)undergoing Phase I testing for acute myeloid leukemia which consists of the PBD dimer, as well as a new linker and a site-specific conjugation technology known as EC-mAb.
The ADC technology is also licensed to a number of other firms, including Pfizer, AbbVie, Daiichi-Sankyo, Genentech and GSK, and SeaGen was therefore asked during the conference call if these new technologies would be passed on to its partners.
“It still is a little bit different but in general term, our collaborators would need to expand their deals to get PBD access for the majority of the partnership,” said Jonathan Drachman, Chief Medical Officer.
“The ADC deals are structured so we receive these milestones and royalties and our partners are responsible for all the development work, at on their own time but we generally have meetings with them periodically, quarterly or annually to talk about how the programs are going and talk about if there are new technology improvements that they might be interested in.”
He added: “We are very aware with what they're doing but again the programs are there and of course, that our main focus is on our own pipeline.”