Seattle Genetics (NASDAQ: SGEN) announced third quarter results on Thursday, updating investors on the Adcetris launch and plans for confirmatory trials and label expansion studies. On August 19th, Adcetris received accelerated approval for relapsed or refractory Hodgkin’s lymphoma (HL) and anaplastic large-cell lymphoma (ALCL), marking a major milestone for Seattle Genetics with its first product on the market. Per the FDA’s rules for accelerated approval, Seattle Genetics must complete confirmatory trials to secure full approval. The company has designed frontline trials for Adcetris in HL and ALCL that can also serve as confirmatory studies. In the final six weeks of the third quarter, Adcetris sales were $10MM, but some of management’s comments on the conference call raise questions about how quickly sales will grow. Moving forward, management provided guidance on label expansion studies for Adcetris in other CD30+ malignancies.
In order to secure full approval for Adcetris in HL and ALCL, Seattle Genetics must perform proper confirmatory trials. Before the ODAC meeting in July, the company’s AETHERA trial in post-transplant HL patients was planned to be a confirmatory study, but the FDA did not agree that the trial was properly designed to serve in this capacity. As a result, the ongoing AETHERA trial will simply be used to gather safety data, which may be useful but could have turned into a sink with little return. Safety data is gathered in every other trial of Adcetris. In any event, Seattle Genetics has designed two trials of Adcetris as frontline therapy in combination with other commonly used chemotherapy regimens for HL and ALCL which can also serve as confirmatory studies.
In the HL trial, Adcetris is being tested in combination with ABVD (HL four-drug standard of care) and AVD, removing the drug bleomycin. In the Adcetris + ABVD arm, 40% of patients experienced pulmonary toxicity, prompting the conclusion that Adcetris and bleomycin should not be used together. ABVD alone can cause pulmonary toxicity in 10-25% of patients, and the Adcetris + AVD arm has experienced no pulmonary toxicity. For ALCL frontline therapy, Adcetris is being tested in combination with standard of care CHOP vs. CHOP alone. Both of these studies’ primary endpoints are progression free survival with overall survival as a key secondary endpoint.
Management commented that there was pent up demand leading into the launch of Adcetris as patients and physicians were aware of the upcoming PDUFA date. It sounded as though they do not believe that demand for the drug can keep up but would not provide much comment on the matter as the conference call continued, despite many analysts looking for sales or prescription rate guidance. It is unclear whether management was just being cautious or is actually worried about continued demand for the drug, and this uncertainty is probably what caused the sell-off of SGEN in trading Friday. On a positive note, Seattle Genetics has many clinical programs investigating Adcetris in other CD30+ malignancies, including non-Hodgkin lymphomas, multiple myeloma, leukemia, and solid tumors. If these indications pan out, the patient population for Adcetris could significantly expand. Full guidance at the end of the year will be more indicative of how the trend for Adcetris sales will continue in the near-term, and clinical trials will report as they conclude into 2012.
Disclosure: No position
