Seattle Genetics CEO Says Drug Growth Path Means No Sale

Posted: July 13, 2012 at 8:13 pm

By Ryan Flinn - 2012-07-13T14:02:10Z

Seattle Genetics Inc. (SGEN) Chief Executive Officer Clay Siegall says he has a model for growth of the biotechnology companys only drug, cancer treatment Adcetris: Roche Holding AG (ROG)s $6.7 billion-seller Rituxan.

Adcetris received U.S. clearance in August for use by Hodgkins lymphoma patients who failed on other therapies, a smaller market than the front-line treatment the company aims for after added trials are completed in the next few years. Rituxan, approved as an initial treatment for lymphoma in 1997, took a similar path, Siegall said in a telephone interview.

Analysts expect Adcetris to reach $437 million in sales in 2015, the average of three estimates in a Bloomberg survey. The drugs prospects have boosted the companys shares by 52 percent this year through yesterday, giving the company a market value of almost $3 billion. That potential also makes Seattle Genetics less likely to seek a merger or be acquired now, Siegall said.

Adcetris is a very important brand, and can become a $1 billion brand in a number of years, Siegall said. The drugmaker has great trajectory going forward, so its not a time where we feel that its right for the company to get sold or flipped.

Seattle Genetics fell less than 1 percent to $25.30 at 9:58 a.m. New York time.

Adcetris combines a cancer-targeting antibody with the cell-killing effects of chemotherapy. The drug, known chemically as brentuximab, is Seattle Genetics first product, and was also cleared by regulators to treat patients with a rarer cancer known as systemic anaplastic large cell lymphoma or ALCL, who had also failed previous treatments.

Hodgkins lymphoma will be diagnosed in an estimated 9,060 U.S. patients this year and will cause the death of about 1,190 people, according to the National Cancer Institute in Bethesda, Maryland. The disease begins in the white-blood cells and most commonly strikes people from ages 15 to 35 and older than 55.

Roches Genentech unit also initially got approved in one type of low-grade lymphoma, and then got approved in a variety of different aggressive and high grade lymphomas, and even some other non-lymphomas, Siegall said.

Half of the 14 analysts in a Bloomberg survey recommend purchasing Seattle Genetics shares, with three rating them a sell.

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Seattle Genetics CEO Says Drug Growth Path Means No Sale

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