Seagen inc. SGEN reported a loss of 73 cents per share in the second quarter of 2022, narrower than Zacks’ consensus estimate of an 82-cent loss. The company had reported a loss of 47 cents per share in the prior year quarter.
Total revenue in the second quarter of 2022 was $498 million, up 28.2% year-over-year. The top line also beat Zacks’ consensus estimate of $443 million. Net product revenue in the second quarter was $431.7 million, up 24% year-over-year, driven by strong adoption of Seagen’s marketed cancer drug portfolio.
Shares of Seagen are up 14.7% in the year so far, compared to an 18.9% decline in the sector.
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Quarter in detail
Seagen’s revenue primarily includes product revenue, revenue from collaboration and licensing agreements, and royalties. The company currently markets four drugs – Adcetris, Padcev, Tukysa and the newly approved Tivdak.
Adcetris generated net sales of $201.9 million in the United States and Canada, up 11% year-over-year. The drug, which is the majority contributor to SGEN’s revenue, is being evaluated in several label expansion studies. Successful development and potential approval should boost its sales in the future.
Second-quarter Padcev sales totaled $123.6 million, up 23.3% sequentially. The sale of the drug has increased by 50% year-on-year.
Tukysa’s second-quarter net sales were $89 million, down 1.6% sequentially. Tukysa sales increased 7% year-on-year.
The newly launched Tivdak generated sales worth $17.2 million in the second quarter of 2022, reflecting a 50.8% sequential increase.
Revenue from collaboration and licensing agreements was $26.6 million, reflecting a significant year-over-year increase. The significant increase is mainly due to a $12 million milestone payment received from AbbVie.
Royalty revenue of $39.1 million increased from $36.2 million in the prior year quarter. Seagen records royalties on sales of Takeda Pharmaceutical’s Adcetris in non-US markets as well as on its collaboration with GlaxoSmithKline for Blenrep and, to a lesser extent, on sales of Polivy as part of its collaboration with rock RHHBY.
Polivy is an antibody-drug conjugate (“ADC”) that uses technology from Seagen and is marketed by Roche.
In March 2022, Roche announced that the European Medicines Agency’s Committee for Medicinal Products for Human Use had recommended approval of Polivy in combination with chemotherapy to treat previously untreated diffuse large B-cell lymphoma.
Research and development (R&D) expenses of $304.3 million increased 29.5% year over year, mainly due to higher investments in clinical development.
Selling, general and administrative (SG&A) expenses increased 33.4% year-over-year to $220.3 million, primarily due to higher costs related to the recent launch of Tukysa in Europe as well as the commercial launch of Tivdak in the United States.
Seagen raised its financial guidance for 2022. Total revenue is now expected to be between $1.71 billion and $1.79 billion, up from the previous projection of $1.66 billion to $1.74 billion. The Zacks consensus estimate for the metric stands at -1.81 billion.
Total product net revenue is now expected to be between $1.50 billion and $1.56 billion, compared to the previous projection of $1.48 billion to $1.54 billion.
Seagen expects Adcetris full-year 2022 net sales to be between $750 million and $775 million, down from the previous projection of $730 million to $755 million. The company expects collaboration and licensing revenue in the $50-60 million range compared to the previous projection of $25-30 million.
Padcev’s full-year net sales are expected to be between $435 million and $455 million, while Tukysa’s sales are expected to be between $315 and $335 million. Royalty revenues are expected to be between $160 and $170 million. All of this is unchanged from previous expectations.
Shares of the company have risen significantly following rumors of a potential acquisition by the pharmaceutical giant Merck & Co., Inc. M.R.K.
Merck has entered advanced talks with Seagen to potentially acquire the latter, according to a the wall street journal (“WSJ”).
Seagen and Merck have yet to confirm the validity of the news through an official statement. There is no guarantee that Merck would make a potential buyout offer.
Seagen Inc. Price, Consensus and EPS Surprise
Seagen Inc. price-consensus-eps-surprise-chart | Quote Seagen Inc.
Zacks Ranking and Stocks to Consider
Seagen currently wears a Zacks Rank #3 (Hold). A higher-ranked stock in the biotechnology sector is Precision BioSciences, Inc. DTIL, sporting a Zacks Rank #2 (Buy) at present. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Precision BioSciences’ per-share loss estimates have declined 5.8% for 2022 and 16.2% for 2023 over the past 60 days.
Precision BioSciences’ earnings have exceeded estimates in each of the past four quarters. DTIL delivered a surprise profit of 76.15% on average.
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