Seattle Turns To Buying In Growth

| About: Seattle Genetics, (SGEN)

Seattle Genetics (NASDAQ:SGEN), facing slowing growth for its big earner Adcetris and a wait before new indications bolster sales, has looked elsewhere for expansion. A licensing deal for Immunomedics’ (NASDAQ:IMMU) antibody-drug conjugate sacituzumab govitecan could give it another marketed product by 2018 if all goes to plan.

Caution is warranted over sacituzumab, which has yielded promising results but only in a relatively small number of patients in its initial indication of triple-negative breast cancer. The project will need to show a benefit in a larger group to support accelerated approval, with a filing expected mid-year on the back of phase I/II data. Seattle has obviously seen enough to fork out a hefty $250m up front, plus up to $1.7bn in milestones, but it is taking an early-stage gamble.

The development of sacituzumab has not been without its problems. Immunomedics had hoped to announce an update from 60 triple-negative breast cancer (TNBC) patients in its phase I/II trial at Asco last year, but the presentation was pulled after an embargo mix-up (Asco 2016 – Embargo snafu tarnishes otherwise promising breast cancer update, June 5, 2016).

This does not seem to have affected the agent’s route to approval, however, and the data the company released were encouraging: 60 heavily pretreated metastatic TNBC patients in the phase II portion of the trial had a median overall survival of 14.3 months. Third-line or later TNBC typically has an overall survival of just a few months, with few options available.

Immunomedics will need to confirm this promise in the full complement of 100 TNBC patients and in a confirmatory phase III study, which had previously been slated to begin at the end of 2016 but has now been delayed until the start of this year.

Both groups will also be keeping an eye on safety, as sacituzumab has been dogged by visual side effects. The project's targeting moiety hits Trop-2/EGP-1, which is also present on normal tissues, and it is possible that sacituzumab causes on-target/off-tumour effects.

Sacituzumab could end up competing with the likes of Merck & Co.'s (NYSE:MRK) Keytruda and Roche’s (OTCQX:RHHBY) Tecentriq, which are also in phase III in TNBC. Sacituzumab might also have utility in other cancers, including lung and bladder.

Investors were cautious about Seattle’s latest move, which also involved it buying a 2.8% stake in its partner, sending its stock down 4% on Friday, the day after it also reported disappointing financial results and guidance. Immunomedics, meanwhile, closed up 22%.

Beyond Adcetris

It is probably not a coincidence that Seattle announced the deal just as it is facing a slowdown with Adcetris. The company now forecasts 2017 product sales of $280-300m, representing year-on-year growth of around 9% – about half the rate seen last year and well short of analyst consensus of around 30%.

Expansion into new indications should help Adcetris revenues pick up again. The most important of these is front-line Hodgkin lymphoma, and results from the Echelon-1 study in this setting are due this year; success would more than triple the eligible patient population and could transform Adcetris into a blockbuster.

While hopes are high for Echelon-1, the timelines for other planned label expansions have slipped. Seattle has delayed its filing in cutaneous T-cell lymphoma to include additional data, pushing approval in this indication back to 2018. And the Echelon-2 trial in first-line mature T-cell lymphoma is now not expected to read out until 2018, versus 2017-18 previously.

Meanwhile, Seattle’s pipeline hit a snag in December with the clinical hold of several phase I trials of its acute myeloid leukemia candidate vadastuximab talirine after reports of hepatotoxicity. Other studies of the project are continuing, including the phase III Cascade trial in front-line AML.

With the problems Seattle is facing it is not surprising that it has chosen to spread its bets.



Trial ID

Sacituzumab govitecan

Phase I/II trial in various cancers


Sacituzumab govitecan

Phase III trial in TNBC








Vadastuximab talirine



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