- Seattle Genetics's stock fell 5% Friday after the biotech reported sales that once again fell below Wall Street forecasts.
- While the company's sole marketed product, the cancer drug Adcetris, is still growing, quarterly sales have missed Wall Street forecasts for three consecutive quarters, noted SVB Leerink analyst Andrew Berens. For the first three months of 2019, the drug posted $135 million in sales, up just 2% from the three month period ending in December.
- In response, investment banks Stifel, RBC Capital Markets and SVB Leerink all lowered their price targets on the large-cap biotech after first quarter results were released Thursday afternoon.
Despite slow quarter-over-quarter growth, Seattle Genetics CEO Clay Siegall reiterated confidence in the biotech's ability to meet its financial expectations this year.
In particular, Siegall cited seasonal market factors as well as the biotech's battle to drive uptake in frontline Hodgkin lymphoma given "entrenched standards of care that have been around for 40 years."
Adcetris (brentuximab vedotin) last March won approval in combination with chemotherapy for previously untreated patients with Stage 3 or Stage 4 classical Hodgkin lymphoma. The antibody-drug conjugate, first approved in 2011, was also approved for first-line treatment of peripheral T-cell lymphoma.
The key challenge has been driving uptake in that first-line setting. Prescription growth there is essential for the company to meet its forecasts for 2019 sales to total between $610 million and $640 million
"We provided an annual guidance that we feel that we can hit and we feel that the growth is tracking well," Siegall said on the earnings call, adding that monthly sales have increased from January to February to March.
The biotech also emphasized changes to the National Comprehensive Cancer Network's guidelines as supportive of Adcetris' future growth. Those guidelines were updated several weeks ago and are now less restrictive toward use of Seattle Genetics' drug.
"The committee of doctors has, literally a couple of weeks ago, made changes that can open the previous limitations that were there for some doctors and some pathways to write prescriptions because it now more closely matches the label," Siegall said.
However, sell-side analysts appeared largely unconvinced, with several lowering price targets while voicing skepticism.
Stifel analyst Stephen Willey doubted whether the company could reach the low-end of that range, which would require roughly 8% sequential sales growth, he wrote in a note to clients.
RBC Capital Markets' Kennen MacKay, meanwhile, called first quarter growth "anemic," adding that he increasingly sees Adcetris' commercial progress as a "show me story" going forward.
Outside of Adcetris, the biotech has progressed some of its experimental drugs closer to market. Positive data earlier this year for its bladder cancer treatment enfortumab vedotin could set up a submission for accelerated approval this year.
Additionally, Seattle Genetics has completed enrollment in pivotal studies for two other cancer drugs. One of those trials, testing tucatinib in breast cancer, is expected to produce topline data this year.
Correction: A previous version of this article incorrectly cited the percent increase between the fourth quarter of last year and the first quarter of this year.