Stephen Simpson, CFA
Long only, growth at reasonable price, value, research analyst

Weighing Out The Seattle Genetics Barbell

Looking at Seattle Genetics' (NASDAQ:SGEN) value makes me think of a barbell, as the valuation is split between the near-term potential of the approved oncology drug Adcetris in maintenance and salvage indications in Hodgkins, anaplastic large cell, and cutaneous T cell lymphomas, and the longer-term potential of extending Adcetris into front-line therapy and the company's pipeline. As is, I think there's enough value in the existing Adcetris business to support a price in the mid-$20's, but it is clear that the real value lies in the longer-term opportunities.

I think Seattle Genetics deserves to trade in the mid-$40's today, but this could well be a frustrating stock to own. With most of the company's pipeline in early...

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