Thursday, February 6, 2020
FOURTH QUARTER AND FULL YEAR 2019 FINANCIAL RESULTS AND BUSINESS UPDATE
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Today’s Speakers
Overview and Key Highlights
Research & Development
Clay Siegall, Ph.D., President & CEO
Roger Dansey, M.D., CMO
Todd Simpson, CFOFinancial
Robin Taylor, Ph.D., CCOCommercial
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Certain of the statements made in this presentation are forward looking, such as those, among others, relating to the company’s 2020
outlook, including anticipated 2020 revenues, costs and expenses; the company’s potential to achieve the noted development and
regulatory milestones in 2020 and future periods and to bring a third product to market in the United States and other countries;
anticipated activities related to the company’s planned and ongoing clinical trials, including clinical trial enrollment and data availability
and the expected timing thereof, including with respect to innovaTV 204, EV-301, EV-302, EV-202, HER2CLIMB-02,
MOUNTAINEER and other clinical trials; the potential for the company’s clinical trials to support further development, regulatory
submissions and potential marketing approvals; the opportunities for, and the therapeutic and commercial potential of ADCETRIS,
PADCEV, tucatinib, and tisotumab vedotin and the company’s other product candidates and those of its licensees and collaborators; as
well as other statements that are not historical facts. Actual results or developments may differ materially from those projected or implied
in these forward-looking statements. Factors that may cause such a difference include the risks that the company’s net sales, revenues,
expense, and other financial guidance may not be as expected, as well as risks and uncertainties associated with maintaining or
increasing sales of ADCETRIS and PADCEV due to competition, unexpected adverse events, regulatory action, reimbursement, market
adoption by physicians or other factors. The company may also be delayed in its planned clinical trial initiations, enrollment in and
conduct of its clinical trials, obtaining data from clinical trials, planned regulatory submissions, and regulatory approvals in each case for a
variety of reasons including the difficulty and uncertainty of pharmaceutical product development, negative or disappointing clinical trial
results, unexpected adverse events or regulatory discussions or actions and the inherent uncertainty associated with the regulatory
approval process in the United States and in other countries. More information about the risks and uncertainties faced by Seattle Genetics
is contained under the caption “Risk Factors” included in the company’s periodic reports filed with the Securities and Exchange
Commission, including the company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 and future periodic
reports filed by the company, including the company's Annual Report on Form 10-K for the year ended December 31, 2019. Seattle
Genetics disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise except as required by applicable law.
Forward-Looking Statements
President and CEO
CLAY SIEGALL, Ph.D.
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Diversifying Commercial Portfolio and Revenue Drivers, with Investment Across Our Portfolio to Fuel Future Growth
• Global sales exceed $1B in 2019
• Record 2019 revenues in U.S. and Canada of $628M, up 32% from 2018
• Ongoing and planned trials provide opportunities for additional growth
Tucatinib
Pipeline
• Approved in late December 2019, approximately 3 months ahead of PDUFA
• Early launch phase exceeding internal expectations
• Initiated phase 3 trial in first-line metastatic UC, key to global development strategy
• HER2CLIMB results presented at SABCS, published in NEJM and supported BTD
• NDA submitted under RTOR; MAA validated by EMA; other applications submitted under Project Orbis (Australia, Singapore, Canada and Switzerland)
• Expanding European capabilities to support potential launch
• Expect topline tisotumab vedotin data in 1H20
• Four INDs planned in 2020 and another four in 2021
• Progress by ADC collaborators Roche and GSK, triggering milestone payments
Chief Commercial Officer
ROBIN TAYLOR, Ph.D.
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2020 Product Sales to Include PADCEV and Potentially Tucatinib, Building on ADCETRIS Base
ADCETRIS U.S. / Canada Net Sales*ADCETRIS Y/Y Growth Driven by
Frontline Indications
• Continuing to promote clear advantage of A+AVD
in frontline HL with 4-year PFS update
• A+CHP standard of care in ALCL; focused on
increasing use in other PTCL subtypes
PADCEV Launch Underway
• Number of ordering accounts exceeded our
expectations for January, first full month of launch
• Rapid inclusion in NCCN guidelines
Preparing for Potential Tucatinib Approval
• Sales leadership in place
• Hiring experienced U.S. sales forceGlobal ADCETRIS Sales Exceeded $1B in 2019
$ in millions
*2019 revenues also included $0.2 million of
PADCEV net sales following approval in late
December 2019
$-
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
$600
$650
2015 2016 2017 2018 2019
FY19 +32% over FY18
Chief Financial Officer
TODD SIMPSON
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Financial Results: Revenue Summary
In millions
(unaudited) 4Q18 3Q19 4Q19 FY18 FY19
Net product
sales1 $132.1 $167.6 $166.4 $476.9 $628.0
Royalty
revenues24.6 27.3 72.3 83.4 138.5
Collaboration
& license
agreement
revenues
17.8 18.4 51.1 94.4 150.2
Total
Revenues$174.5 $213.3 $289.8 $654.7 $916.7
1. Fourth quarter 2019 included $0.2 million of PADCEV net sales following
approval in late December 2019.
Note: Amounts may not total due to rounding.
$0
$50
$100
$150
$200
$250
$300
4Q18 1Q19 2Q19 3Q19 4Q19
Net Product Sales Royalty Collaboration & License Revenue
Total Quarterly Revenues
Record Total Revenues of $917M in 2019
$ in millions
• Royalty revenues included one-time $40M milestone
triggered by Takeda achieving sales >$400M; royalty
rate reached mid-twenty percent
• Collaboration revenues included $75M in payments
under Takeda, Roche, GSK and BeiGene deals
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Financial Results: Expense Summary
In millions
(unaudited) 4Q18 3Q19 4Q19 FY18 FY19
Cost of sales $30.2 $8.7 $9.6 $66.1 $34.9
Cost of royalty
revenues5.4 2.1 2.3 22.2 9.1
R&D 149.8 196.1 201.1 565.3 719.4
SG&A 79.5 96.1 115.2 261.1 373.9
Total costs and
expenses$264.8 $303.0 $328.2 914.7 1,137.3
Investment and
other income (loss)1 (53.2) (2.1) 64.2 13.7 61.9
Income tax benefit2 23.7 - - 23.7 -
Net income (loss) (119.8) (91.9) 25.8 (222.7) (158.7)
Net income (loss)
per share(0.75) (0.55) 0.14 (1.41) (0.96)
R&D expenses driven by continued investment in pipeline
• PADCEV and tucatinib life cycle
development, including registrational trials
• Investment in earlier clinical-stage
portfolio and planned IND submissions
SG&A expenses reflect commercialization efforts of multi-product company
• ADCETRIS frontline indications
• PADCEV commercial launch activities
• Tucatinib launch preparation
• Infrastructure costs to support growth1. Primarily attributable to non-cash investment gain/loss associated with common stock
holdings, which are marked-to-market.
2. Related to intangible assets acquired as part of acquisition of Cascadian Therapeutics.
Note: Amounts may not total due to rounding.
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2020 Financial Outlook Reflects a Year of Transformational Growth
*Financial guidance provided as of October 26, 2017
Revenues
ADCETRIS U.S. and Canada
net product sales$675 to $700 million
Royalty revenues $105 to $115 million
Collaboration revenues $30 to $50 million
Expenses
R&D expenses $860 to $950 million
SG&A expenses $475 to $525 million
ADCETRIS cost of sales 5% to 6%
Cost of royalty revenues Low single-digit percent
on ex-US sales
Non-cash costs1 $180 to $200 million
1. Primarily attributable to share-based compensation distributed
approximately evenly between SG&A and R&D.
Revenues
• Product sales to come from ADCETRIS,
PADCEV and tucatinib (if approved)
• Royalty revenues based on Takeda’s sales of
ADCETRIS in ROW
• Collaboration revenues event-driven based
on collaborator progress
R&D expenses
• Broad investment in ADCETRIS, PADCEV
and tucatinib
SG&A expenses
• PADCEV US launch
• Tucatinib launch preparation
• European expansion activities
Chief Medical Officer
ROGER DANSEY, M.D.
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Broad PADCEV Clinical Development Program
Approved
indication
PADCEV monotherapy
in mUC following
platinum and PD(L)-1
Expand
globally
EV-301: phase 3
randomized,
confirmatory trial
Enrollment completed for
608 mUC patients
following platinum and
PD(L)-1
Primary endpoint OS
Pursue
first-line mUC
Combination with
KEYTRUDA and/or
other agents (cisplatin
or carboplatin)
Initiating 1,095-patient
EV-302 phase 3
randomized trial
Extend across
bladder cancer
Early-stage disease
PADCEV +/-
KEYTRUDA
in muscle-invasive
bladder cancer
Developing strategy in
non-muscle invasive
bladder cancer
✓
Exploring PADCEV in other Nectin-4 expressing solid tumors in EV-202 clinical trial
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Phase 3 Trial Initiated in First-line mUC (EV-302)
• Collaboration between Seattle Genetics, Astellas and Merck
• Three companies jointly funding a global, registrational phase 3 clinical trial to be led by Seattle Genetics
• Enrolling first-line mUC patients regardless of platinum eligibility, PD(L)-1 expression or Nectin-4 expression
• First patient expected to be treated in the first half of 2020
Patient Population
• Previously untreated mUC
• N=1,095
PADCEV + KEYTRUDA®
PLATINUM + GEMCITABINE
PADCEV + KEYTRUDA + PLATINUM
R
1:1:1
Dual Primary Endpoints: PFS and OS
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Broad PADCEV Clinical Development Program
Approved
indication
PADCEV monotherapy
in mUC following
platinum and PD(L)-1
Expand
globally
EV-301: phase 3
randomized,
confirmatory trial
Enrollment completed for
608 mUC patients
following platinum and
PD(L)-1
Primary endpoint OS
Pursue
first-line mUC
Combination with
KEYTRUDA and/or
other agents (cisplatin
or carboplatin)
Initiating 1,095-patient
EV-302 phase 3
randomized trial
Extend across
bladder cancer
Early-stage disease
PADCEV +/-
KEYTRUDA
in muscle-invasive
bladder cancer
Developing strategy in
non-muscle invasive
bladder cancer
✓
Exploring PADCEV in other Nectin-4 expressing solid tumors in EV-202 clinical trial
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Broad Tucatinib Clinical Development Program in HER2+ Diseases
Other HER2+ solid tumors
Planning further trials in
colorectal, gastric and other
solid tumors
Metastatic colorectal cancer
Encouraging interim data
reported from ongoing
MOUNTAINEER trial of
tucatinib + trastuzumab
MOUNTAINEER expanded to
potentially support accelerated
approval
Move into earlier
lines of BC
Metastatic breast cancer;
prior taxane and trastuzumab
Ongoing 460-patient phase 3
trial of tucatinib + T-DM1 vs
T-DM1 + placebo
Neoadjuvant I-SPY2 trial
ongoing and adjuvant trial
under consideration
Metastatic breast cancer;
prior trastuzumab,
pertuzumab and T-DM1
Positive PFS and OS results in
randomized trial in 612 patients
NDA submitted under RTOR;
MAA validated by EMA, other
submissions under Project Orbis
Initial Opportunity Extend across
HER2+ diseasesExpand to
colorectal cancer
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ECHELON-1: Changing the Treatment Paradigm for Patients with Frontline Stage 3/4 Hodgkin Lymphoma
PFS at 4 years of follow up (ITT)
With longer follow up, ECHELON-1
data continue to demonstrate superior
efficacy of ADCETRIS + AVD over
ABVD in frontline advanced HL
• Data reported at ASH 2019 with median
follow-up of 48.4 months
• PFS rates at 4 years:
A + AVD 81.7% vs. ABVD 75.1%
• HR 0.691, p=0.003
• Peripheral neuropathy continued to improve
over time, with most patients experiencing
complete resolution
• 5-year follow-up data expected in 2020
Data presented at ASH 2019
Bartlett, et.al.; Abstract #4026
N=1,334
Median Follow-up
48.4 monthsA + AVD
ABVD
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Future Opportunities Through Ongoing and Planned Registrationaland/or Practice-Informing Trials
Hodgkin Lymphoma
Frontline
STAGE 3/4: ADCETRIS + OPDIVO + AD
STAGE 1/2: ADCETRIS + PD-1 + AD
Unfit for chemotherapy: ADCETRIS monotherapy
Relapsed/Refractory Age 5-30: ADCETRIS + OPDIVO
Retreatment ADCETRIS monotherapy
CD30-Expressing Non-Hodgkin lymphoma
Frontline Unfit for chemotherapy: ADCETRIS monotherapy
Relapsed/Refractory DLBCL: ADCETRIS + RITUXAN + REVLIMID
Retreatment ADCETRIS monotherapy
President and CEO
CLAY SIEGALL, Ph.D.
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Our Bold Vision for the Future of Seattle Genetics
• Continue to establish as standard of care in frontline HL and PTCL
• Initiate additional clinical trialsADCETRIS
PADCEV
• Continue strong launch in U.S. with Astellas
• Advance and expand clinical development program, including phase 3 trial in
first-line mUC
Tucatinib
• Work with FDA, EMA and other regulatory agencies on approval applications
• Advance robust development program, including in earlier lines of HER2+
BC and other HER2+ malignancies such as colorectal cancer
Pipeline
• Report topline tisotumab vedotin data in 1H20 from pivotal trial in
metastatic/recurrent cervical cancer
• Advance earlier-stage programs and file INDs for many other programs
QUESTION & ANSWER PERIOD
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