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Seattle Genetics CEO Siegall Sees Many Uses for Cancer Drug

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The biotech executive plans more than 20 studies analyzing lymphoma treatment Adcetris. Shares of the company hit an all-time high Thursday.

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MINYANVILLE ORIGINAL Investors who stuck with Seattle Genetics (SGEN) since late last year are seeing a nice payoff.

The shares are up by more than half since the beginning of 2012, closing at an all-time high of $25.23 Thursday. The run-up follows a big dip in the stock price last November after investors interpreted company executives' cautious comments about sales of the new cancer drug Adcetris as negative. (See Seattle Genetics Is Oversold, Analyst Says.)

CEO Clay Siegall is unapologetic. He says he doesn't want to be a biotechnology executive who pumps his company's stock.

"What we're after is making a big impact on patients and building an important biotech company," he says in an interview with Minyanville. "We're not looking at our share price."

Nonetheless, commentary around the drug has been decidedly more upbeat since. For the first quarter, Adcetris sales were reported to be $34.5 million, a 4% increase from fourth-quarter revenue. But excitement over the stock really relates to possible expanded use of Adcetris and the overall potential of so-called antibody-drug conjugates in cancer. Adcetris is a therapy that combines chemical and biological drugs to target cancer cells.

The drug was approved in the US last year as a secondary treatment for two types of cancer -- Hodgkin lymphoma and the rare disease anaplastic large cell lymphoma, or ALCL. It was the first new treatment for Hodgkin approved in this country since 1977 and the first drug approved specifically for ALCL.

If approved for other uses, Adcetris will eventually reach more than $1 billion in annual sales, Siegall says. He points to the effectiveness of the drug and fewer side effects than what has been the standard of care.

The company is running more than a dozen studies to examine additional uses for Adcetris, a number that will rise above 20 in the next year and half, Siegall says. The company wants to broaden the use among Hodgkin and ALCL patients and treat other types of cancer.

"We are aggressively trying to find how many patients we can help," Siegall adds.

Among the new indications being tested, Seattle Genetics is studying Adcetris for another rare cancer, cutaneous T-cell lymphoma. However, the biggest market opportunity for Seattle Genetics will be winning approval to sell Adcetris as the first treatment doctors prescribe for Hodgkin lymphoma patients. The company is still in the early stages of testing the drug for that use.

The company is presenting at a conference of the European Hematology Association now going on in Amsterdam, showing data that confirms benefits of Adcetris. Wall Street analysts are circling annual meeting dates for the American Society of Hematology in December and the American Society of Clinical Oncology next June as events to watch for new data. At a recent meeting of the oncology group in Chicago, Seattle Genetics showed Adcetris worked effectively in follow-up treatments for lymphoma patients.

The company also awaits word on possible initial approval of Adcetris in Europe in the second half of the year. Development partner Takeda (TKPYY) of Japan has sales rights to Adcetris outside of the US and Canada where Seattle Genetics sells the drug. Takeda would pay a royalty based on sales.


Twitter: @brettchase

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No positions in stocks mentioned.
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