This Biotech Stock Topped ‘Best-Case’ Views And Is Nearing A Record
Seattle Genetics (SGEN) stock surged Monday after the biotech company’s cancer treatment topped even the most bullish expectations.
In afternoon trading on the stock market today, Seattle stock jumped 5.5%, near 81.40, in higher-than-average volume. The biotech company’s stock touched a record high last week. Meanwhile, shares of other biotech companies sank a fraction.
The biotech company tested a combination using its cancer treatment, Adcetris, against the standard of care to treat peripheral T-cell lymphoma. The standard cancer treatment here includes three different types of chemotherapy and a steroid.
In the study, researchers used Adcetris in place of vincristine, a chemotherapy sold under the brand name Oncovin. Adcetris was used along with two other drugs and a steroid.
Seattle said the Adcetris regimen staved off cancer progression longer than the standard of care for never-before-treated patients. The Adcetris cancer treatment also had a statistically significant improvement on overall survival — the first to do so for this patient population.
“We view today’s top-line release as even more impressive than our ‘best-care’ scenario where we noted ‘statistically significant overall survival benefit is upside to even our most bullish estimates,'” RBC Capital Markets analyst Kennen MacKay said in a report to clients.
Rivaling Standard Cancer Treatment
Patients in the study received either the Adcetris regimen or the standard cancer treatment. The study showed the Adcetris regimen improved progression-free survival vs. the standard of care. Further, it showed an overall survival benefit and cut the risk of death by 34%.
RBC’s MacKay says the mortality benefit warrants an expedited filing and review period with the Food and Drug Administration. He sees “immediate widespread adoption of Adcetris plus (two forms of chemotherapy and a steroid) in front-line (peripheral T-cell lymphoma).”
MacKay calls for the Adcetris regimen to gain approval in 2019, vs. prior expectations for 2020. He boosted his price target on Seattle stock to 98 from 90, and kept his outperform rating.
Adcetris Data In December
Adcetris targets CD30, a cell membrane protein that appears on the surface of some tumor cells. In the study, a group of patients had systemic anaplastic large cell lymphoma, a particularly aggressive form of Non-Hodgkin lymphoma.
Seattle didn’t break out the specifics regarding patients in that group. However, the biotech company did say the Adcetris cancer treatment met all its secondary goals, including staving off progression, in this subset of patients.
Further, the safety profile was in line with expectations for the standard cancer treatment. The biotech company plans to present additional data in December during the American Society of Hematology annual meeting in San Diego.
Other Uses For Adcetris
Needham analyst Chad Messer notes the biotech company’s Adcetris is already approved for five other uses. This study could help add on 4,000 potential patients each year “and continue to fuel uptake,” he said in a note to clients.
“Despite somewhat lower overall patient numbers (peripheral T-cell lymphoma) treatment may present an even greater unmet need than Hodgkin lymphoma as the current standard of care is far less effective in comparison,” he said.
He raised his price target on Seattle stock to 86 from 79, and reiterated his buy rating.
Leerink analyst Andrew Behrens estimates Adcetris in peripheral T-cell lymphoma could add on $ 500 million in the U.S. He estimates there are 5,000 patients in the U.S. annually with about 40% of them having CD30-expressing tumors.
“We see an (FDA submission) leading to label expansion possible in the second half of 2019, followed by relatively rapid uptake in this setting, leading to peak sales of about $ 540 million by 2030,” he said in a note to clients.
Behrens has an outperform rating on Seattle stock.
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