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What Can We Expect from Seattle Genetics’s Adcetris in 1Q16?

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Apr. 27 2016, Updated 8:05 a.m. ET

Adcetris

Brentuximab vedotin, the international non-proprietary name of Seattle Genetics’ (SGEN) Adcetris, is an antibody-drug conjugate. Adcetris is a monoclonal antibody that targets CD30, which is a marker for lymphoma. Adcetris is already approved for the treatment of relapsed Hodgkin’s lymphoma and relapsed systemic anaplastic large-cell lymphoma in over 60 countries.

The company has entered into a collaborative agreement with Takeda Pharmaceutical (TKPYY), which grants Takeda the commercial rights for sales of Adcetris outside the United States and Canada.

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Revenues from Adcetris

There are two revenue streams for Adcetris:

  • product revenues for sales of Adcetris by SGEN in the United States and Canada
  • royalty revenues for sales of Adcetris by Takeda Pharmaceutical outside the United States and Canada

Product revenues

Adcetris revenues are estimated to rise by over 15% to $56.5 million in 1Q16, compared with $48.9 million in 1Q15. This is due to the increased demand for the drug in the United States and Canada.

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Royalty revenues

Royalty revenues include the sales-based royalties of Adcetris from Takeda Pharmaceutical. Royalty revenues also include revenues from the royalties received from antibody-drug conjugate collaborations.

Adcetris developments

There are several ongoing and upcoming developments for Adcetris.

  • Alcanza, a phase 3 trial for relapsed CD30-expressing cutaneous t-cell lymphoma patients, has completed enrolments and SGEN expects to report data in the second half of 2016.
  • Echelon-1, a phase 3 trial for patients with newly diagnosed classical Hodgkin’s lymphoma, compares the Adcetris-AVD chemotherapy combination with other chemotherapies. The enrolment was completed in October 2015 and SGEN expects to report its data in late 2017 or the first half of 2018.
  • Echelon-2, a phase 3 trial for patients with newly diagnosed CD30-expressing mature t-cell lymphoma, compares the CHP (cyclophosphamide, doxorubicin, and prednisone) plus Adcetris combination with other chemotherapies. Although the enrolments are not yet completed, the company expects to report its data between 2017 and 2018.
  • There are some ongoing phase 1 and phase 2 Adcetris trials for various forms of cancer.

To divest risk, investors could consider ETFs such as the iShares NASDAQ Biotech ETF (IBB), which holds 0.9% of its total assets in Seattle Genetics, or the PowerShares Dynamic Biotechnology ETF (PBE), which holds 2.8% of its total assets in Seattle Genetics. IBB also holds 8.2% of its total assets in Amgen (AMGN), 8.2% in Gilead Sciences (GILD), 7.7% in Celgene (CELG), and 7.8% in Biogen (BIIB).

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