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Seattle Genetics' Cancer Drug Highlighted at Medical Meeting

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CEO Siegall says study data makes a case for additional Adcetris use. The company's shares have jumped 55% this year.

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MINYANVILLE ORIGINAL Researchers are about to lift the lid on some important study results for Seattle Genetics' (NASDAQ:SGEN) cancer drug Adcetris, data that should add more clarity regarding the drug's potential for wider use.

Adcetris, already approved as a secondary drug for two types of cancer, is the focus of several scientific presentations beginning this Sunday at a major medical meeting held by the American Society of Hematology in Atlanta. One study that is particularly important will cast light on the drug as a first treatment for patients with Hodgkin's lymphoma. On Monday, updated data for Adcetris as a front-line therapy will include complete remission rates, something investors will want to note.

Seattle Genetics expects to report as much as $137 million in Adcetris sales this year. But investors know that if this product is ever going to reach blockbuster status, it will need approvals for additional uses. The biggest opportunity is selling Adcetris as a first treatment for patients with Hodgkin's, a potentially $1 billion per year opportunity. Seattle Genetics is enrolling patients in a large clinical trial that will be used to support possible approval in the next few years.

"This could be a very substantial product just based on frontline Hodgkin lymphoma," CEO Clay Siegall says in an interview with Minyanville. "We think this could be globally the standard of care."

Shares of Seattle Genetics have jumped 55% this year, trading at $25.93 Thursday afternoon. Investors expect Adcetris will become a widely used cancer drug as Siegall predicts. There are more than 20 studies testing Adcetris for expanded uses but a first treatment for Hodgkin's remains the big target.

Adcetris was approved in the US in August 2011 as a secondary treatment for Hodgkin's lymphoma and another rare cancer known as anaplastic large cell lymphoma, or ALCL. The drug is given to patients who still need treatment after using other cancer therapies. Adcetris was a breakthrough for patients because it was the first new drug for Hodgkin's in the US since 1977 and the first approved for ALCL. It's effectiveness and toxicity profile for its target patients are far better than older drugs that have been the standard of care for these patients. The treatment is known as an antibody-drug conjugate, a therapy that combines chemical and biological drugs to target cancer cells.

Results from other company studies will be presented at the medical conference, including data from testing Adcetris as a treatment for cutaneous T-cell lymphoma. The company also hopes to broaden the label for use among previously treated patients. Seattle Genetics has a partnership with Takeda to sell Adcetris outside the US.

Even though Seattle Genetics has an approved product, the clinical trials are the key to the company's future success. The investment thesis has transformed into a "pipeline story, with an ongoing revenue base and an outstanding technology platform," Leerink Swann analyst Howard Liang says in a recent note.

In addition to the Adcetris data, pre-clinical results for another experimental antibody-drug conjugate being developed by Seattle Genetics will be presented.

Seattle Genetics is one among a number of companies presenting at the medical conference in Atlanta. Investors are awaiting key study results from Celgene (NASDAQ:CELG), Gilead Sciences (NASDAQ:GILD), and others. Search for scientific abstracts here.

Twitter: @brettchase

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No positions in stocks mentioned.
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