Seagen(US:SGEN)2023-08-02 12:30Financial Performance - Seagen reported a 26% growth in net product sales for Q2 2023 compared to the same period in the prior year[82]. - For the six months ended June 30, 2023, total revenues increased to $1,123.6 million, a 22% increase from $924.0 million in the same period of 2022, primarily driven by a 24% increase in net product sales[147]. - Net product sales for the three months ended June 30, 2023, were $543.974 million, a 26% increase compared to $431.714 million in 2022, with ADCETRIS and PADCEV showing significant growth[149]. - Royalty revenues for the six months ended June 30, 2023, increased by 21% to $81.367 million from $67.290 million in 2022, driven by higher net product sales by licensees[154]. - Total costs and expenses for the same period rose to $1,528.8 million, up from $1,190.1 million in 2022, mainly due to higher research and development expenses and increased sales, general, and administrative expenses[148]. - Selling, general and administrative expenses increased by 11% to $243.9 million for the three months ended June 30, 2023, and by 22% to $480.4 million for the six months ended June 30, 2023, driven by higher commercialization efforts and acquisition-related expenses[186]. - Investment and other income, net increased by 461% to $15.1 million for the three months ended June 30, 2023, and by 807% to $29.7 million for the six months ended June 30, 2023[188]. - The provision for income taxes increased to $2.9 million and $7.5 million for the three and six months ended June 30, 2023, respectively, compared to $0.1 million and $1.4 million in the same periods of 2022[191]. - Cash, cash equivalents, and investments totaled $1.3 billion as of June 30, 2023, down from $1.7 billion at the end of 2022[192]. - The company had $1.3 billion in cash, cash equivalents, and investments as of June 30, 2023, alongside total stockholders' equity of $2.6 billion[148]. Drug Approvals and Clinical Trials - PADCEV received accelerated approval from the FDA as a combination therapy for locally advanced or metastatic urothelial cancer, contingent on verification of clinical benefit in the EV-302 trial[85]. - ADCETRIS showed a statistically significant 41% reduction in risk of death in patients with frontline advanced classical Hodgkin lymphoma compared to previous standard care[91]. - TUKYSA demonstrated a confirmed objective response rate of 46.7% in a phase 2 study for HER2-positive metastatic biliary tract cancer[84]. - TUKYSA received FDA approval in January 2023 for use in combination with trastuzumab for adult patients with RAS wild-type, HER2-positive unresectable or metastatic colorectal cancer[101]. - TIVDAK was granted accelerated approval by the FDA in September 2021 for recurrent or metastatic cervical cancer, supported by the innovaTV 204 trial[103]. - ADCETRIS demonstrated a 98% overall response rate and a 93% complete response rate in a phase 2 trial for early-stage classical Hodgkin lymphoma[107]. - The EV-302 trial for PADCEV and pembrolizumab is expected to report topline data by the end of 2023, following completion of enrollment in November 2022[111]. - TUKYSA is undergoing a broad clinical development program, including the HER2CLIMB-02 trial, with topline data expected in Q3 2023[116]. - The phase 3 trial of TIVDAK, called innovaTV 301, completed enrollment in February 2023 and aims to support global regulatory applications[123]. - Interim data from the innovaTV 205 trial indicated a confirmed objective response rate of 41% in patients with recurrent or metastatic cervical cancer who had not received prior systemic therapy, with 16% achieving complete responses[124]. - The phase 2 study of TIVDAK in patients with recurrent or metastatic squamous cell carcinoma of the head and neck demonstrated a confirmed overall response rate of 40%[125]. Mergers and Acquisitions - The Pfizer Merger is set at $229 per share in cash, with over 99% of voted shares in favor, representing approximately 88% of Seagen's outstanding shares[82]. - The company expects the Pfizer Merger to be completed in late 2023 or early 2024, pending regulatory approvals[82]. - The definitive merger agreement with Pfizer involves an acquisition price of $229 per share in cash, with various operational covenants in place[199]. - The Federal Trade Commission issued a Second Request for additional information regarding the Pfizer Merger, extending the waiting period under the Hart-Scott-Rodino Act[82]. - The company expects to incur non-recurring acquisition and transaction fees related to the pending acquisition by Pfizer, including legal and advisory fees[143]. Research and Development - The company plans to submit additional Investigational New Drug applications to the FDA in 2023 for early-stage clinical candidates[128]. - The company is conducting multiple trials for PADCEV across various cancer types, including ongoing trials in frontline metastatic urothelial cancer and muscle invasive bladder cancer[109]. - Research and development expenses rose by 31% to $399.9 million for the three months ended June 30, 2023, compared to $304.3 million in the same period of 2022, driven by higher employee-related and clinical trial costs[175]. - Total research and development expenses for the six months ended June 30, 2023, were $755.9 million, up 26% from $601.9 million in the same period of 2022[175]. - Research and development expenses for the six months ended June 30, 2023 were $755.9 million, with an expected increase in 2023 compared to 2022[202]. - The company has entered into a collaboration with Sanofi to develop multiple novel ADCs, with initial preclinical data showing potent antitumor activity[133]. Market and Economic Factors - The Inflation Reduction Act of 2022 may significantly impact the pharmaceutical industry, including potential price negotiations and penalties for drug manufacturers[140]. - The company is monitoring the ongoing impact of the COVID-19 pandemic on its operations and the ability of collaborators to market and distribute products effectively[144]. - The company expects gross-to-net deductions to increase in 2023 compared to 2022, driven by anticipated growth in gross product sales[152]. - The company expects cost of sales to increase in 2023 compared to 2022 due to net product sales growth and higher anticipated gross profit sharing with collaborators[174]. - Cost of sales increased by 70% to $180.8 million for the three months ended June 30, 2023, compared to $106.1 million in the same period of 2022, primarily due to higher sales and a $47 million inventory write-off[173]. - Third-party costs for disitamab vedotin increased due to higher clinical trial expenses, impacting both the three and six months ended June 30, 2023 compared to 2022[181]. - Net cost-sharing reimbursements from collaborators were $25.7 million and $21.1 million for the three months ended June 30, 2023 and 2022, respectively, and $45.1 million and $44.3 million for the six months ended June 30, 2023 and 2022, respectively[182]. - The company made a $200 million upfront payment to RemeGen for exclusive license rights to disitamab vedotin, with potential milestone payments of up to $2.2 billion based on regulatory and commercialization goals[169]. - The company received an upfront payment of $30 million from Zai Lab in October 2022 for the exclusive collaboration and license agreement for TIVDAK in mainland China, Hong Kong, Macau, and Taiwan[163]. - The company has other collaboration agreements that typically involve upfront cash payments and milestone payments, but it does not control the commercialization of the products generating these milestones[171].