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Is Seattle Genetics the Next Big Thing?


Dendreon is not the only company working on prostate cancer immunotherapy; Seattle Genetics is working on a different type, using a different approach.

Few biotech stories have generated as many page views over the last three years as the ups and downs of Seattle's Dendreon (DNDN) as it has tried to move its prostate cancer immunotherapy Provenge from clinical trial to approval to payor reimbursement. But Dendreon is not the only company from the foggy forests of the Pacific Northwest taking this journey.

A few miles north of Seattle in the suburb of Bothell, Seattle Genetics (SGEN) has been working on a different type of immunotherapy. Whereas Dendreon's Provenge is a first-in-class drug to stimulate the immune system to recognize cancer, Seattle Genetics took the more proven route of using monoclonal antibodies (hereafter, MAbs) to seek out a specific marker on cancer cells. This approach has been validated with billions of dollars in approved drugs across multiple indications.

So why is Seattle Genetics special? It is at the forefront of an effort to make MAbs better by "linking" or attaching powerful cell-killing drugs to them. These "powered" MAbs, also called antibody drug conjugates or ADCs, are indeed the next big thing -- especially in cancer therapy.

At the American Society of Hematology (ASH) meeting starting this weekend, Seattle Genetics will present data on its drug "brentuximab vedotin" (formerly SGN-35) for the treatment of the blood cancers Hodgkin's Lymphoma and systemic anaplastic large cell lymphoma (ALCL). Investors already know the top-line data, with an astonishing 75% of Hodgkin's Lymphoma patients seeing their tumors shrink at least 50%. In ALCL, 87% of patients saw their tumors shrink at least 50% and 97% of patients saw their tumors shrink at least some. In both cases, patients receiving brentuximab vedotin had already failed multiple other treatments.

These data represent a major advance in these diseases -- arguably as important an advance as Rituxan (2009 sales $5.6 billion) in CD20-positive blood cancers and Velcade (2009 sales of $1.4 billion) in multiple myeloma. But brentuximab vedotin's importance to MAb therapy is not confined to the CD30-positive tumors it treats. It is one of the best examples of the power of ADCs.
Brentuximab vedotin is not Seattle Genetics' first attempt at treating CD30-positive blood cancers like Hodgkin's Lymphoma. A previous drug, SGN-30, was tried. The difference between SGN-30 and brentuximab vedotin is SGN-30 did not use Seattle Genetics' ADC technology.

While the patient populations are not 100% directly comparable, the table below shows the dramatic difference in efficacy between the "unpowered" SGN-30 and the "powered" brentuximab vedotin.

Application of Seattle Genetics' proprietary ADC technology raised the response rate of the CD30-targeted MAb from 3.3% to 75% in these patients. This is an astonishing outcome demonstrating how revolutionary the ADC concept can be for drug efficacy.

In the short term, investors will be watching presentations before market open on Monday and Tuesday to see the proportion of complete and partial responses. Abstracts released ahead of the full presentations suggest investors are unlikely to see anything negative in the data.
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Positions in SGEN and IMGN.

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