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Seattle Genetics (NASDAQ:SGEN)
Q2 2020 Earnings Call
Jul 30, 2020, 4:30 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Good day, and welcome to the Seattle Genetics second-quarter 2020 financial results conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Peggy Pinkston, vice president, investor relations.

Please go ahead.

Peggy Pinkston -- Vice President, Investor Relations

Thank you operator, and good afternoon everyone. I'd like to welcome all of you to Seattle Genetics' second-quarter 2020 financial results conference call. With me today are Clay Siegall, president and chief executive officer; Chip Romp, executive vice president, commercial, U.S.; Todd Simpson, chief financial officer; and Roger Dansey, chief medical officer. Accompanying today's conference call are supporting slides which you'll find on our website in the investors section, Events and Presentations page.

Following our prepared remarks, we'll open the line for questions. We aim to keep this call to one hour and so ask that you limit yourself to one question to give everyone an opportunity to participate in Q&A during our call today. Today's conference call will include forward-looking statements regarding future or anticipated events and results including the company's 2020 financial outlook, anticipated product sales, revenues, costs and expenses and potential clinical and regulatory milestones including data readouts, regulatory submissions and approvals. Actual results or developments may differ materially from those projected or implied in these forward-looking statements.

Factors that may cause such a difference include the difficulty in forecasting sales, revenues and expenses, impacts related to the COVID-19 pandemic and the uncertainty associated with the pharmaceutical development and regulatory approval process. More information about the risks and uncertainties faced by Seattle Genetics is contained under the caption Risk Factors included in the company's periodic reports filed with the Securities and Exchange Commission including the company's quarterly report on Form 10-Q for the quarter ended March 31, 2020. And now I'll turn the call over to Clay.

Clay Siegall -- President and Chief Executive Officer

Thank you Peg, and good afternoon everyone. The past few quarters have been a period of remarkable growth for Seattle Genetics across the business. We have now extended our commercial portfolio to three drugs with the approval of Padcev in December, followed by the approval of Tukysa in April. In the second quarter, we reported total revenues of $278 million driven by record product sales comprising Adcetris and these two new marketed products.

In addition, we announced positive top-line data from a fourth program, tisotumab vedotin and made strong progress across our pipeline with significant clinical development accomplishments. I'm proud of the dedication of our team and the important advances we're making to address the unmet medical needs of cancer patients even in this time of a global pandemic. Starting with Adcetris. We reported net sales of $168 million in the second quarter and $332 million for the first half of 2020.

Based on progress to date, we're maintaining our guidance of full year 2020 Adcetris net sales in the range of $675 million to $700 million. Tukysa continues to secure additional approvals for Adcetris, expanding its availability to patients globally. Most recently, Adcetris plus chemotherapy was approved in the EU for frontline systemic anaplastic large cell lymphoma, and Adcetris was approved in China for relapsed or refractory Hodgkin lymphoma and systemic ALCL. We believe several Adcetris label expansion opportunities lie ahead which Roger will outline during his comments.

Turning now to Padcev. Net sales in the U.S. were $57 million in the second quarter, an increase of 66% from Q1. We and our partner, Astellas, continue to be pleased with the strong U.S.

launch of Padcev and its robust adoption for treatment of patients with metastatic urothelial cancer who previously received a PD-1 or PD-L1 inhibitor and a platinum-containing chemotherapy. We're now providing full year 2020 guidance of $215 million to $235 million. This reflects our current expectations following the strong initial launch of Padcev. Our vision is that Padcev becomes a foundation of treatment across the spectrum of urothelial cancer.

To this end, we're advancing trials in first-line metastatic urothelial cancer and muscle-invasive bladder cancer primarily paired with Keytruda in collaboration with both Astellas and Merck. We're also exploring Padcev in a range of Nectin-4 expressing solid tumors and believe that Padcev is well positioned to become an important global brand. Our third and newest commercial product is to Tukysa which was rapidly approved by FDA in mid-April for metastatic HER2-positive breast cancer including patients with brain metastasis. We're very pleased to report second-quarter Tukysa revenues of $16 million, following our launch that employed virtual communication methods.

Under the FDA's project or this program, Tukysa is now also approved in Switzerland, Singapore and Canada. And our submission for approval is under review in Australia. More broadly, the EMA is currently reviewing our EU marketing authorization application. As we look forward to bringing Tukysa to patients throughout the world, we're continuing to build our international infrastructure and capabilities.

Tuomo Patsi recently joined us as executive vice president, commercial, international. Tuomo has deep experience in this area including from Celgene, where he was president, Worldwide Markets, and joins us most recently from Bristol-Myers Squibb. He will lead our commercial organization in Europe and ROW, working together with Chip Romp, who will continue to oversee the U.S. commercial organization.

Both Tuomo and Chip serve on the company's executive committee. In addition to our commercial and regulatory progress, we've advanced a broad development program across HER2-positive cancers which Roger will cover during his remarks. Turning now to our pipeline. In late Q2, we reported positive top-line results from the pivotal trial of tisotumab vedotin or TV in women with recurrent or metastatic cervical cancer.

We're developing TV in collaboration with Genmab, and together, we plan to discuss these results with the FDA. We've received positive feedback from KOLs on our top-line results in which they emphasize the significant unmet medical need. Standard therapies for previously treated metastatic cervical cancer generally result in low response rates and overall survival is measured in months. We plan to present full data from the trial later this year.

Beyond the approved drugs, Adcetris, Padcev and Roche's Polivy, our TV data additionally illustrate the growing importance of our vedotin-based antibody-drug conjugates in the treatment of cancer. There is also now GSK's belantamab mafodotin which uses our ADC technology that is closely related to vedotin and recently received a positive 12 to nothing ODAC vote. Our growth plans for the company are broad. We're working to expand the indications for each of our commercial brands to help patients in need.

To fuel our future growth, Seattle Genetics is advancing more than a dozen early stage assets in clinical and preclinical development. These include novel ADCs as well as immunotherapy agents and other targeted approaches to treating cancer. With much to share regarding our pipeline, we plan to hold a virtual R&D Day later in 2020, during which we'll provide more details on our expansive pipeline and our commitment to bring additional first-in-class or best-in-class therapies to patients in need. Stay tuned for more information.

Yet, I'll turn the call over to Chip to discuss our commercial activities. Then Todd will comment on our financial results and guidance. After that, Roger will discuss our clinical development activities. Chip?

Chip Romp -- Executive Vice President, Commercial, U.S.

Thanks Clay. We delivered strong results in the second quarter across the commercial portfolio. We adapted our strategy for working remotely, and our reps work diligently to access and support our customers. Marketing teams effectively adjusted the marketing mix to increase digital and peer-to-peer speaker program.

Launching two new drugs and driving growth with an established brand, a virtual world is a challenge that the commercial team has met head on with creativity and flexibility. For Adcetris, we continue to focus on frontline HL and PTCL, and look forward to the five-year follow-up data from both the Echelon 1 and Echelon 2 trials later this year. Five-year follow-up data is an established standard, and we expect that the durable advantage of Adcetris in both of these front line settings will drive incremental share. We are pleased with the continued strong uptake in our labeled indication for Padcev, used as strong in both academic and community accounts and breadth of ordering was robust.

We are focused on continuing to grow market share in our labeled indication by increasing the number of patients who are treated after progressing on a platinum-containing chemotherapy and PD-1 or PD-L1 inhibitor. We believe that patients are truly benefiting from this first-in-class product. And along with our sales partners, we look forward to building upon the early success of Padcev. And finally, our latest product Tukysa.

In the first partial quarter of launch, Tukysa sales were $16 million. We are pleased with the label which includes second and later-line metastatic patients with or without brain mets. We are also pleased with the adoption of Tukysa among both community and academic physicians. In this virtual environment, we have driven high awareness of Tukysa and our field-based staff are experiencing good access to customers.

We attribute the uptake of Tukysa to favorable guideline placement, rapid inclusion in the treatment pathways and strong KOL and patient advocacy. Lastly, I look forward to partnering with Tuomo as we prepare for the ex U.S. launch of Tukysa. It is an exciting time for the company and for the commercial team as we make this important product available to patients.

Now, I'll turn the call over to Todd.

Todd Simpson -- Chief Financial Officer

Great. Thanks Chip, and thanks everyone for joining us on the call this afternoon. Today, I'll summarize our financial results for the second quarter and year to date and then comment on our outlook for the remainder of 2020. Total revenue news were $278 million in the second quarter and $513 million for the year to date in 2020.

Revenues were driven by product sales from our three oncology franchises which totaled $240 million, up 51% from last year. Royalty revenues were $31 million in the second quarter and $52 million for the year to date in 2020. Growth over 2019 primarily reflects sales of Adcetris by Takeda and to a lesser degree, royalties on sales of Polivy by Roche. Collaboration revenues were $6 million in the second quarter and $22 million for the year to date in 2020.

This compares to $36 million and $81 million, respectively, for the same periods in 2019. Results in 2019 reflected $38 million in milestones achieved by Takeda that were triggered by EU and other ROW approvals of Adcetris for frontline Hodgkin lymphoma. Cost of sales increased to $48 million in the second quarter and $78 million for the first six months of the year. Cost of sales includes the passive profit share to Astellas which was $27 million in the second quarter and $43 million for the year to date.

In addition, beginning in the second quarter, cost of sales now include the amortization of acquired technology related to the Cascadian acquisition. This is a noncash component of cost of sales that going forward will amount to approximately $6 million per quarter. R&D expenses were $198 million in the second quarter and $393 million for the first half of 2020. These are increases over 2019 and primarily reflect increased investment across our pipeline that now includes 12 programs in clinical development.

SG&A expenses were $126 million in the second quarter and $248 million for the first half of 2020. These are increases over 2019 reflecting commercialization of Padcev and Tukysa and our European expansion. We ended the second quarter with $896 million in cash and investments. This includes $175 million from the sale in April of the remaining portion of our Immunomedics shares which contributed to investment income of $73 million in the second quarter.

I'll now turn to our financial outlook for 2020. With respect to product sales, as Clay mentioned, we are maintaining our Adcetris guidance of $675 million to $700 million and we are providing Padcev guidance for the full year 2020 in the range of $215 million to $235 million. Moving on to expenses. We expect 2020 cost of sales to be in a range of $185 million to $205 million.

As mentioned, this now includes product cost of sales from profit share payment to Astellas for Padcev and amortization of acquired technology related to Tukysa. Now that we are halfway through the year, we are refining our guidance for R&D expenses to a range of $820 million to $870 million, and our guidance for SG&A expense remains unchanged. So with that, I'll turn the call over to Roger.

Roger Dansey -- Chief Medical Officer -- Analyst

Thanks Todd and good afternoon everyone. Today, I'll focus on our approved products, Padcev, Tukysa and Adcetris as well as our late stage asset, tisotumab vedotin. I'll start with Padcev, the ADC directed against Nectin-4. Given the ubiquitous expression of Nectin-4 in urothelial cancer, this continues to be the focus of our development program.

We completed enrollment of two pivotal trials in previously treated metastatic urothelial cancer earlier this year. First, a second cohort of the EV-201 trial in patients who have received a PD-1 or PD-L1 inhibitor and were not eligible for treatment with cisplatin in the first-line setting. A positive outcome could support a second indication for Padcev. And second, the randomized Phase 3 EV-301 trial in patients who have received both a platinum-containing regimen and a PD-1 or PD-L1 inhibitor.

The primary endpoint is overall survival, and EV-301 is intended to serve as a confirmatory trial in the United States and supports global regulatory approvals. Switching to first-line metastatic urothelial cancer, we have previously reported promising data combining Padcev and Keytruda which received FDA breakthrough therapy designation. Based on these findings, we are pursuing two pathways to address the unmet need in frontline disease. First, we are enrolling 150 patients randomized to receive either Padcev plus Keytruda or Padcev alone in cohort K of the EV-103 trial.

The primary endpoint is objective response rate, supported by the key secondary endpoint of duration of response. This represents a potential accelerated approval opportunity in cisplatin-ineligible patients. Second, we are enrolling the randomized Phase 3 EV-302 trial that is intended to support global registrations and now also serves as a potential confirmatory trial in the United States. Together with our Astellas and Merck partners, we are reevaluating the need for two experimental arms in the EV-302 trial.

This is due to the strength of the Padcev Keytruda data and the evolving first-line metastatic urothelial cancer landscape. The amended trial would focus on evaluating Padcev plus Keytruda compared to a platinum-containing chemotherapy regimen. The dual primary endpoints are progression free and overall survival. We'll keep you posted as our planning evolves.

In non-metastatic muscle-invasive bladder cancer, Merck recently added Padcev to the ongoing randomized Phase 3 Keynote-905 trial. This trial is in cisplatin-ineligible patients and will assist Padcev plus Keytruda given neoadjuvantly prior to cystectomy and then postoperatively as adjuvant therapy. This study is being conducted under a clinical trial agreement where Seattle Genetics and Astellas are providing Padcev and Merck continues to fund and operationalize the study. This meaningfully expedites development of the Padcev Keytruda combination in this setting.

I'll now move on to Tukysa. As Clay described, we have made rapid regulatory progress in securing several approvals based on a remarkable data from the HER2CLIMB trial. To further develop Tukysa, we are initially focused in three HER2-positive therapeutic areas: breast cancer, colorectal cancer and other gastrointestinal cancers. In HER2-positive breast cancer, we are conducting a blinded, randomized Phase 3 trial called HER2CLIMB-02.

The study is evaluating Tukysa in combination with Kadcyla or T-DM1 versus Kadcyla alone in first and second-line metastatic breast cancer including patients with brain metastases. In addition, Tukysa plus Kadcyla will be compared to Kadcyla alone in the adjuvant breast cancer setting for patients with high-risk of relapse. The Phase 3 double-blind randomized trial called CompassHER2 RD will enroll approximately 1,000 patients and is being conducted by a U.S. cooperative group with support from Seattle Genetics.

In colorectal cancer, the Mountaineer trial is evaluating Tukysa in combination with trastuzumab in third-line patients with HER2-positive relapsed metastatic disease. This is intended to support a potential accelerated approval. And in other GI cancers, our trial is now under way, evaluating Tukysa plus trastuzumab and oxaliplatin-based chemotherapy in first-line HER2-positive colorectal, gastric, esophageal and gallbladder cancer. In addition, we plan to initiate a trial in the second-line gastric cancer setting later this year.

Beyond these three areas, we are also planning to evaluate Tukysa in HER2 mutant to amplified cancers. We presented compelling preclinical data at AACR last month, showing that Tukysa selectively inhibited tumor growth in HER2 mutant models. Additional novel combination trials of Tukysa with other anti-cancer agents are also in planning. Moving on now to Adcetris, we are studying several additional opportunities.

We recently initiated a randomized Phase 3 trial in relapsed/refractory diffuse large B-cell lymphoma. The trial will evaluate the combination of Adcetris, Rituxan and Revlimid versus Rituxan and Revlimid alone in 400 patients. While Adcetris monotherapy is listed in NCCN treatment guidelines for relapsed CD30-positive DLBCL, this Phase 3 trial is intended to support potential label expansion and will enroll patients regardless of CD30 expression levels. We are also enrolling patients in a trial evaluating Adcetris plus Opdivo and chemotherapy in frontline Hodgkin lymphoma.

We have added a cohort of patients of Stage 1 or 2 Hodgkin lymphoma under a clinical collaboration with Bristol-Myers Squibb. Our goal is to improve efficacy and reduce toxicity by limiting the number of chemotherapy components in the regimen. Lastly, I'll turn to tisotumab vedotin. In late June, we reported positive top-line results from the innovaTV 204 trial, evaluating single-agent TV in women with recurrent or metastatic cervical cancer who had experienced disease progression on or after chemotherapy.

The data showed a 24% objective response rate with 8.3 months median duration of response. The most common treatment-related adverse events included alopecia, epistaxis, nausea, conjunctivitis, fatigue and dry eye. We will be discussing these results with the FDA in consideration of a potential BLA submission to support accelerated approval. We and our partners at Genmab are also advancing clinical trials of TV in other solid tumors including ovarian, lung and head and neck cancers and in combination with other agents used in the treatment of cervical cancer.

We believe there may be several opportunities for TV in tissue factor expressing solid tumors, and we are encouraged by the results from the innovaTV 204 study. Now, I'll turn the call back over to Clay.

Clay Siegall -- President and Chief Executive Officer

Thank you Roger. I'm very pleased with our significant accomplishments this year and how our teams have adapted to working in a difficult environment. We look forward to continued great progress. At this point, we'll open the line for Q&A.

Operator, please open the call for questions.

Questions & Answers:


Operator

[Operator instructions] We'll take our first question from Michael Schmidt with Guggenheim. Please go ahead.

Michael Schmidt -- Guggenheim Partners-- Analyst

Hey guys. Good afternoon and congrats to a very successful second quarter. I just had one for Chip regarding Tukysa. Chip, I was just wondering if you could provide a little bit more insights on how the initial launch is going? And what you're seeing on the marketplace in terms of its initial uptake? Obviously, some very favorable feedback from physicians, for example, around the second-line label, are you seeing use there? And how is the drug being positioned relative to some other novel agents, such as, for example, in HER2?

Clay Siegall -- President and Chief Executive Officer

Yeah. Michael, thank you for the question. Chip can provide some color that he can. Please keep in mind that it is very early and -- in the launch.

And very pleased with uptake. Chip, would you like to make some comments?

Chip Romp -- Executive Vice President, Commercial, U.S.

Absolutely. Thank you for the question. It really is too early in the launch to provide specifics, but we are happy with the level of awareness that we're seeing along with the uptake in both the academic and community settings. We're working hard to promote the full label that we have which includes second and later-line metastatic patients with or without brain mets.

And again, we're pleased with what we're seeing with regards to uptake and awareness.

Michael Schmidt -- Guggenheim Partners-- Analyst

OK. Thank you.

Operator

Thank you. We'll take our next question from Salveen Richter with Goldman Sachs.

Salveen Richter -- Goldman Sachs -- Analyst

Good afternoon. Thanks for taking my question. With regard to Padcev, when you look at the run rate so far, the guidance would appear conservative. Could you just comment on the factors that are at play in the second half of the year versus what you saw in the first half?

Clay Siegall -- President and Chief Executive Officer

Sure. So thank you for the question. And by the way, we have heard from the operator that there might have been some people that were get dropped -- that got dropped off from the call, so I apologize for any communication error that's been going on. And please note, we'll have the whole call replay at our website.

So I apologize for that. So going to your question on guidance. So it's early in the launch of Padcev, but we did want to provide some level of guidance. So far, it's been a very strong uptake.

We work really hard at getting this drug to every patient in need, working with the doctors and making sure that we can help patients. This is an important drug. Our guidance shows somewhere between a 35% and a 55% growth rate in the second half over the first half. So a strong growth rate.

Yes, just reported 66% growth from the first quarter to second quarter. But that was the first launch to the second quarter. And it's certainly not unusual to see the rate of growth begin to slow as launch progresses. We're not going to be able to see a 66% growth quarter to quarter.

But our guidance still shows for a very strong healthy growth of 33% to 50% over the first half of the year. And we're really pleased with what's going on.

Salveen Richter -- Goldman Sachs -- Analyst

Thank you.

Operator

Thank you. We'll take our next question from Cory Kasimov with JP Morgan.

Cory Kasimov -- J.P. Morgan -- Analyst

Hey. Good afternoon guys. Thanks for taking the question. Clay I guess I just wanted to ask about your latest positive data with TV.

And I'm curious at this point now that you have that in-house, what are the gating factors to a BLA filing? And can you remind us of how you're thinking about kind of the commercial evolution here in terms of the initial opportunity? And what you see this potentially growing into? Thank you.

Clay Siegall -- President and Chief Executive Officer

Sure. So as far as BLA, once we have our data, we're really pleased with our data. This is a collaboration with Genmab, and we're excited to be able to really help patients. And some of our data has yet to be put out there.

But we're very proud of what we're doing in patients that have very little other [Inaudible] response rates that are incredibly low. And so I think when folks get a chance to see our waterfall plots, it would really be a big positive. So we are actively working along and trying to make sure that we connect with regulators and go toward a BLA submission. But we don't have -- I don't have information today for you because it would be not appropriate to provide that level of confidential information until I had a discrete thing to say.

But you could certainly be encouraged by our positive data. And you certainly need to know that we are working very hard on this with all the appropriate regulators. Now you asked another question about the commercial evolution -- sorry, I'm looking at my notes here. And this is something that we think that the relapsed/refractory cervical cancer market is the beginning for TV.

TV is something that can absolutely be used as a single agent, but also can be combined with other agents. It is our goal to really impact as many patients as we can with relapsed metastatic cervical cancer. And we think the best way will be initially through a single agent, but then into combination approaches. And so we are certainly working on that as we speak.

In addition, we're working very hard on other cancer types. We have a basket trial that we have a substantial amount of data for. We will be reporting that at some point in the future. And we're expanding some of the cohorts as we speak.

So stay tuned for more data and tumor types.

Cory Kasimov -- J.P. Morgan -- Analyst

OK. Thank you.

Operator

Thank you. We'll hear now from Kennen MacKay with RBC Capital Markets.

Kennen MacKay -- RBC Capital Markets -- Analyst

Thanks so much for taking the question and congrats to the whole team on the really excellent operational quarter. So one question on Tukysa. The breast cancer ASCO session really highlighted Tukysa. In fact it's the only HER2-positive drug that was highlighted.

And the KOL was really advocated in usage in earlier lines of breast cancer to prevent, not to treat, but to prevent the occurrence of brain mets. I wanted to understand what the initial launch feedback has been? And if the drug is getting used at all in sort of second-line metastatic, which is allowable by the label. Thanks so much and congrats again.

Clay Siegall -- President and Chief Executive Officer

So you asked a couple of questions within your one question, so congratulations. So I will...

Kennen MacKay -- RBC Capital Markets -- Analyst

I'm sorry.

Clay Siegall -- President and Chief Executive Officer

No worries. As far as the uptake, that's fantastic. And maybe, Chip, can you give a little bit of color to the market dynamics and make some comments? And then can you turn it over to Roger to talk about treating and how we're looking at the treatment paradigms, etc So Chip, can you go ahead?

Chip Romp -- Executive Vice President, Commercial, U.S.

Yeah, absolutely, Clay. Thanks. So yeah, we've seen a significant enthusiasm regarding Tukysa. Doctors have needed a valuable addition to the treatment tool that they have for these patients.

And again, we're only promoting to the label, which does include second and later-line patients with and without brain mets. But again, we've been happy with the adoption that we're seeing.

Roger Dansey -- Chief Medical Officer -- Analyst

And I'll add some commentary here. It's Roger. So the data that was presented at ASCO is remarkable. This is probably the largest data set looking at patients with brain metastases in a prospective fashion.

And so Tukysa's direct treatment effect on brain metastases and really what represents a secondary prevention outcome which is people who do not progress any further having had brain metastases compared to control. So I think we've shown convincingly that Tukysa is a very relevant treatment for patients with brain metastases. As you pointed out, the label does allow you in the same place that one would expect a drug like Kadcyla to be used. We think we have comparative data.

Again, the HER2CLIMB data set is as strong as I think we would ever expect it to be with overall survival and various other endpoints strongly hit. So we have a good value proposition to bring forward to physicians and patients as they think about what treatment they should consider in the metastatic spread.

Operator

Thank you. We'll take our next question from Chad Messer with Needham & Company. Please go ahead.

Chad Messer -- Needham and Company -- Analyst

Great. Congratulations on a good quarter and thanks for taking my question. I was hoping you could take us through innovaTV 205 in maybe a little bit more detail. I know you -- it's kind of a multi-arm trial and you have a lot of different combos as well as single agent you're looking at, and I believe, as the slides flashed by, I caught that that was relapsed as well as treatment naive.

Can you kind of just sort of confirm what you're trying to get out of that trial? And is this one that we might be able to think of as confirmatory, assuming you're allowed to file accelerate it? Thank you.

Clay Siegall -- President and Chief Executive Officer

Thanks, Chad. Roger, would you take that question?

Roger Dansey -- Chief Medical Officer -- Analyst

Sure. So it's a test essentially around cervical cancer, and we are evaluating. We are looking obviously to understand where tisotumab vedotin may have a role, whether it's as a single agent or in combinations, for example, with pembrolizumab and/or other chemotherapies. The trial is not set up as a confirmatory trial, I would say.

It's still a signal finding trial to work out both on a combination basis and a line of therapy basis and also a scheduled basis as to whether there's -- what a path forward beyond the single-agent TV data that we've shown as TV 204 represents for cervical cancer.

Operator

Thank you. We'll now take our next question from Gena Wang with Barclays.

Unknown speaker

Hi. This is Peter for Gena Wang. Congratulations on another strong quarter. I had a question regarding muscle and metastatic -- the muscle-invasive bladder cancer.

So you mentioned about the Keynote-905 study. Could you remind us what will the core H&J area on the EV-103 plays a role in context of -- in relevant to Keynote-905? Thank you very much.

Clay Siegall -- President and Chief Executive Officer

Sure. Thank you for the question on muscle-invasive bladder cancer. It's something a very big interest to us. Roger, can you make a specific comment?

Roger Dansey -- Chief Medical Officer -- Analyst

Yeah. Thanks for the question. So we -- the original designs or the cohorts set up in EV-103 were signal-finding cohorts. So we needed to understand what EV monotherapy would look like in a muscle-invasive bladder population and have focused on cis-ineligible.

And we also needed to try and understand what Padcev contributor combination could look like. However, we have such strong activity with Padcev in later lines. Plus, we have very strong data in metastatic disease with a combination of Padcev and Keytruda. It really was no difficult leap of faith for us to actually move that combination into a randomized trial.

So as part of my remarks, I made the comment that this has really leapfrogged us into a rapid development path for Padcev in muscle-invasive bladder cancer in cis-ineligible space. So those two cohorts will still run. We will generate the data. But we've already basically moved into a Phase 3 trial.

Unknown speaker

Great. Thank you very much.

Operator

Thank you. We will hear now from Andrew Berens with SVB Leerink. Please go ahead.

Andrew Berens -- SVB Leerink -- Analyst

Thanks. Congrats on the commercial execution across the board. I was wondering if you guys could give some color on the Padcev usage. We're hearing some docs are using it with Keytruda in the front line.

I was wondering how expensive that is? And whether you think that NCCN endorsement would be imminent to remove the potential reimbursement concerns? And then just one other one. Just -- I know it's early in the launch or just to get some sense of how long patients are staying on the drug?

Clay Siegall -- President and Chief Executive Officer

So thank you Andy for the questions. So first of all, on the frontline plus Keytruda. Obviously, we can't make comments about off-label use and spontaneous adoption in that regard. Clearly, our data with Keytruda were very powerful.

And that enabled us to speak with regulators. And we were able to negotiate not only a large confirmatory trial that's global, but an accelerated trial that's for -- with 150 patients, with 75 patients with Padcev and 75 patients with Padcev plus Keytruda which is well under way. And we're excited with that as an opportunity in frontline. So -- and maybe, Roger, before we go further on this question, do you want to make any comments about Padcev in frontline and how we're looking at this?

Roger Dansey -- Chief Medical Officer -- Analyst

Sure. The frontline space is dynamic. It's complex. There are biomarkers involved.

There's the issue of cis-ineligible versus cis-eligible patients. But we have a two-pronged plan. And we think we really are covering the waterfront very carefully. So the first cohort that Clay outlined is our fastest path because it's a single-arm trial.

We're enrolling and that cohort has been open since January. And its primary outcome is overall objective response rate together with duration of response. So that's an outcome that we look forward to obviously as soon as we have the available data we've enrolled everyone. The second piece which is this much larger randomized global trial which basically takes on all patients, whether they're cis-eligible or not, is also a very important component.

And really, what we plan to do now is to simplify our approach. So this is now going to be a Padcev Keytruda plan for frontline bladder cancer metastatic disease regardless really of eligibility for platinum or not, regardless of PD-L1 status and so on.

Clay Siegall -- President and Chief Executive Officer

Your second part of your question Andy is about staying on drug and all that. It's a little early to be really making specific comments on that. I think it behooves us to look at the duration of therapy for a longer period of time to start making specific things. But I will say that our goal with Padcev is to be the standard of care within our label and we are well on the way to that.

And that's a big -- it's a big statement. It's hard to quantify that. But with what we've done with a 66% increase in sales from the first quarter which were very strong. We're very proud of this.

We're getting it out there. We're helping patients. Doctors are relying on, and we're hearing more and more of them call this the standard of care. So that's something that's important for this.

And we're just so that as we think about patients staying on drug, we have had no pushback from payer, OK? And that's a very strong acknowledgment toward the value proposition that Padcev brings. And it is something that we're really proud of. And Chip, do you have any other market dynamic comments you would want to make about Padcev and how it's being used?

Chip Romp -- Executive Vice President, Commercial, U.S.

No, Clay. We're promoting the full breadth of the label that we have. And again, the only thing I would echo is your commentary on the payers. We've seen no payer pushback whatsoever, but we have very strong reimbursement in place.

Andrew Berens -- SVB Leerink -- Analyst

OK. I appreciate it. What about the NCCN process? Any color on how that's going?

Clay Siegall -- President and Chief Executive Officer

We work obviously with NCCN. We have many, many different NCCN listings for our different products. And sometimes we get favorable guidelines and pathways placements, and that's important. And we certainly have heard of some oncologists who want to use Padcev in different ways, such as in those who have received PD-1s or PD-L1s in the frontline setting, but they aren't eligible for platinum, but that's a little different.

And you've heard about some of those. It's not a common practice. But we feel we have our ears blue to talking to oncologists. We're trying to figure out everything that we possibly can.

As far as the NCCN, that is really up to them. We don't really have a say in this matter, but we provide lots of information for NCCN on any of our products all the time. So that's something we look for.

Andrew Berens -- SVB Leerink -- Analyst

OK. Thanks a lot. Appreciate the questions, Roger.

Operator

We'll take our next question from Jay Olson with Oppenheimer.

Jay Olson -- Oppenheimer and Company Inc. -- Analyst

Hey. Congrats on all the success and thank you for taking my question. The TV top-line data were extremely impressive. And I was curious about what we should look for when you present the detailed results from 204 later this year? And then for the basket trial, can you comment on which tumor types beyond cervical you're most optimistic about?

Clay Siegall -- President and Chief Executive Officer

Sure. So I mentioned before that I was really proud of the TV top-line data. Historically, with metastatic cervical cancer, you have drugs that are 8% to 12% objective response rate in these -- in the setting. So really poor.

The most recent drug that got approval in metastatic cervical cancer was Keytruda, and it's an only in PD-1-high, not in all patients, and it was 14%, 1 4 percent, response rate. And so you could just see from that how difficult it is to treat this very tough disease. And so we're excited about that. And maybe, Roger, you could talk a little bit about what's exciting about the top-line data? I mentioned earlier the waterfall plot, but what they can look for in the trial? And maybe you could talk about the main types in the basket trial we're looking at.

Roger Dansey -- Chief Medical Officer -- Analyst

Sure. Sure. So as Clay pointed out, the historical benchmark that we would be measured against obviously there are different data sets that you can use. But the results of existing therapies are not great.

So low double digits or thereabout would be an expected outcome, probably quite a good outcome. So being able to generate data in the close to mid-20% response rate, we think is an important advance. And as important is durability. We're really very excited by the median duration of response that we've been able to show.

Obviously, when we present the data, we'll provide other endpoints, other time-dependent endpoints and the entire safety profile. But we think we have a good case to make. It's the agency's determination as to whether they agree with that, but we'll certainly put our best foot forward because this is such an area of high unmet need. We do see that TV 204 is sort of validating for the tissue factor targets.

And so obviously, when we're working in other tumors, the possibility exists as it does with an ADP platform in general, that we might find another tumor or two that are -- that is potentially responsive, so in that basket trial, we have pancreatic cancer, we have colorectal cancer. We have non-small cell lung cancer, and we have head and neck cancer. I think we're particularly interested in the latter too. We find -- and obviously, we haven't presented any data.

But that would be those two cohorts of interest. And then we've already shown TV already is active in ovarian cancer. So we have a whole ovarian cancer effort going on. And obviously, we haven't disclosed any of the information for the current data, but we are prosecuting TV in a broad fashion, not only to determine its role in cervical cancer, but also a potential role in those other tumors.

Jay Olson -- Oppenheimer and Company Inc. -- Analyst

Super helpful. Congrats again and thanks for taking the question.

Operator

Thank you. We'll take our next question from Geoff Meacham with Bank of America.

Greg Harrison -- Bank of America Merrill Lynch -- Analyst

This is Greg Harrison on for Geoff. Thanks for taking the question. So you raised your R&D expense guidance about $60 million while keeping everything else the same. Can you provide more color on which programs in the pipeline this is reflecting? And if we should think about this increase moving into next year as well? Just trying to think through prioritization of the pipeline and profitability moving forward as you grow the pipeline?

Todd Simpson -- Chief Financial Officer

Yeah, Greg. This is Todd. Thanks for the question. So I just want to be clear, we reduced our guidance just a little bit.

We brought it down a little bit, and we narrowed it. It's a bit of a midyear refinement. But we are -- despite the incredible progress that we're making with expanding clinical trials and bringing new drugs in the clinic, the guidance update is reflecting some lower clinical costs related to COVID particularly in some of the harder hit areas. We also are seeing decreases in travel and congresses and scientific meetings that have, as I think everyone knows, has gone virtual.

We've had a very strong presence at these events, but obviously, no one is traveling. And just we didn't change SG&A guidance, but we're seeing some similar length SG&A but sort of counterbalancing that was the earlier than the planned launch of Tukysa, we were about four months ahead of our PDUFA and we're now really building out our European capabilities launch of the drug starting next year.

Greg Harrison -- Bank of America Merrill Lynch -- Analyst

Got it. Thank you.

Operator

Thank you. We'll take our next question from Matthew Harrison with Morgan Stanley.

Connor Meehan -- Morgan Stanley -- Analyst

Hi all. This is Connor Meehan for Matthew. Thanks for taking the question. So you highlighted the SEA-TGT antibody in your press release.

But just on that, what do you think differentiates that versus other late-stage TIGITs and do you expect to need a collaboration partner for PD-1 or similar combinations? And do you see a future there with combinations with your pipeline? And then just quickly on Tukysa. We hope to hear a little bit more about what kind of patient feedback has been most positive to date thus far? And what maybe initial thoughts from KOLs or physicians have been in the brain met versus no met population? Thank you.

Clay Siegall -- President and Chief Executive Officer

Sure. I think I heard your first question, and it was -- you were talking about combinations in the TV setting. Was that the correct? You said TV?

Connor Meehan -- Morgan Stanley -- Analyst

I think it was -- yeah, correct.

Clay Siegall -- President and Chief Executive Officer

All right TV. So we're excited about TV and going forward. Roger, would you like to discuss a little bit about the combinations we're thinking of?

Roger Dansey -- Chief Medical Officer -- Analyst

Sure. So for TV, we're generating data. We do think -- just to come back to sort of general vedotin platform, we have pretty strong scientific rationale of combining a vedotin ADC together with a PD-1 or PD-L1 inhibitor. It's based on the vedotin payload essentially inducing immunogenic cell death which we think is an important mechanism which one can increase the sort of the immune profile of the tumor.

But not only killing the cancer cells, but adding a sort of adjuvant boost as it were to the immune system, you think is the plus. So a lot of our focus is combining with PD-1, but we're also interested obviously if there are reasons to combine with chemotherapy, we need to test that. So that is what we are testing.

Clay Siegall -- President and Chief Executive Officer

So as far as Tukysa and patient populations, we are definitely treating both patients that have brain metastasis and those that do not. So both are being treated. And we're out there in the community. We're out there in major medical centers, universities.

So it's been getting broad uptick. And I'm sure you're hearing that as you talk to docs out there. But we're really pleased with what happened with Tukysa so far. And we look forward to having a great future with this exciting product and really helping patients.

Connor Meehan -- Morgan Stanley -- Analyst

Understood. Thank you. And sorry, just to -- on the first question, would it also be possible to touch base on your SEA-TGT antibody, but you mentioned that just -- that you guys just initiated the Phase 1?

Clay Siegall -- President and Chief Executive Officer

Oh I thought sorry TIGIT, -- I'm sorry, TGT. Sorry, I wasn't sure. It's kind of hard and little muffled. Absolutely.

So OK. Yes, so our TIGIT antibody utilizes our SEA technology. And what that does is that results in a non-fucosylated human IgG1 antibody. OK.

And that's really important. Now the preclinical data says that SEA TIGIT or SEA-TGT has potential differentiated profile versus other TIGITs. And there -- I can get into that if you want to. But it's very -- we're very excited with it.

The preclinical data is incredibly strong package. And the Phase 1 data has already started, and it's in a variety of different tumors. So we think this compares very well with the leaders now which are Roche and Merck and the work that they're doing in clinic with TIGIT. But we think ours could come in and be a very exciting product with differentiated activity.

Connor Meehan -- Morgan Stanley -- Analyst

Understood. Thank you.

Operator

Thank you. We'll now take our next question from Andy Hsieh with William Blair.

Andy Hsieh -- William Blair and Company -- Analyst

Great. Congratulations on another spectacular quarter and hope everybody is well at Seattle Genetics. So my question has to do with the Phase 3 relapsed/refractory DLBCL trial. Could you remind us the Adcetris' activity in that setting? Is there any sort of significant difference between the ADC and JCV subtype? I remember that lenalidomide appears to be more active in an ADC subtype.

So kind of in the context of combination, is there an enrollment strategy to enrich for the ADC population that you can optimally capture that effect? Thank you.

Clay Siegall -- President and Chief Executive Officer

Andy, thank you for, first of all, saying that our quarter was spectacular. I think we have a 66% increase in Padcev and a big first quarter with Tukysa way past where Wall Street had thought we'd be. We were very proud of that. So thank you for using the word spectacular.

As far as treating with Adcetris and DLBCL and subtypes and whatever, I'll turn it over to Roger.

Roger Dansey -- Chief Medical Officer -- Analyst

Sure. Thanks, Andy. So we are -- we do have compendia listing entity enlisting for use of Adcetris with DLBCL. And you are right, there is a suggestion that perhaps Revlimid is focused on subtype versus the other, but we are enrolling all patients.

And this is -- it's not only all subtypes of lymphomas, but also from a CD30 expression level perspective. We believe that we have a good shot at showing activity for Adcetris in CD30-negative populations by standard IHC, and there's lots of discussion one can have around why that may be so. So the trial is designed really as an all-comers in relapsed/refractory DLBCL combining Revlimid together with Adcetris and Rituxan. And we expect that the population obviously from a subgroup perspective we'll evaluate as the trial reads out if there are any potential subgroups that are better than others.

But I think our expectation is we should see a treatment effect of this combination sort of across the different types of DLBCL.

Andy Hsieh -- William Blair and Company -- Analyst

Great. Thank you so much for answering my question.

Operator

Thank you. We'll hear next from George Farmer with BMO Capital Markets.

George Farmer -- BMO Capital Markets -- Analyst

Hi. Thanks for taking my question and congratulations on a great quarter. I was wondering if you could give us some insight into what's going on with Tukysa. I mean you guys -- this is probably one of the first virtual launches ever.

Granted, yes, there was pretty great awareness among the physician community, but what do you think is really kind of behind this process? What have you guys been doing that's making this one stand out from all the others?

Clay Siegall -- President and Chief Executive Officer

We are incredibly pleased with our label. It's a very, very strong label that we got. And maybe we could start out with -- Roger, you could talk a little bit about the label. And then maybe, Chip, you could talk about how we're doing this virtually.

Roger Dansey -- Chief Medical Officer -- Analyst

Sure. So the -- essentially, Tukysa represents a best-in-class TKI. So it doesn't arrive at clinician desks and for patients in the absence of other class molecules. But it does deliver on the promise of what a small molecule inhibitor can do.

And I think we've had the good fortune of having a very prominent presentation at San Antonio in December, where I think the data was well appreciated. We then followed that up with a second presentation at ASCO again incredibly strong data, plus a favorable label. So from the point of view of sharing information at a public fora and in terms of what the label would recommend for potential use for Tukysa, I think we couldn't honestly have woken to a better place than we have now.

Clay Siegall -- President and Chief Executive Officer

Chip, you'd like to touch base on market dynamics?

Chip Romp -- Executive Vice President, Commercial, U.S.

Absolutely, Clay. So I think the team has done a great job adapting to the virtual communication. Our customers have been receptive to that. We also rapidly grew from one product to 3.

So there's been some synergies on the commercial team working to collaborate together across the brands, and our customers have appreciated that as well. We've also begun a phased reintroduction, a face-to-face interaction. We sell to customers. We've been working hard to make sure there's high awareness across all critical brands.

George Farmer -- BMO Capital Markets -- Analyst

Great. Thanks again and congratulations.

Chip Romp -- Executive Vice President, Commercial, U.S.

Thanks George.

Operator

Thank you. We'll hear next from Reni Benjamin with JMP Securities.

Reni Benjamin -- JMP Securities -- Analyst

Hi. Good afternoon and thanks for taking the questions. And congratulations on an awesome quarter. I guess my question is maybe regarding Tukysa being reviewed in the EU.

Can you give us some color as to how that's going? When we might hear regarding an EU approval. And I guess importantly, this new international sales force, can you talk a little bit about that? How it looks over time? And how we should be thinking about the rest of the world, ex U.S. and ex EU?

Clay Siegall -- President and Chief Executive Officer

So thanks for the question very much. So we -- first of all, we have submitted in the Project Orbis countries. And that was the first thing that we did through the FDA program, and that includes Switzerland and Singapore and Australia, U.S. and Canada.

So we are launched in one of the Project Orbis countries today which is the U.S. But the others are coming. We are approved in many of them and launch is on its way in these. And so we're really excited about Project Orbis that has -- we're preparing for launches there.

As far as in the EU, we are working very closely with regulators there. It is something we're right on top of it. We announced the hiring of Tuomo Patsi, who will lead our ex U.S. commercial organization.

And Tuomo will report directly to me and is on the executive committee; and Chip, who is on this call will report directly to me as well and cover the U.S. So Tuomo and Chip will basically cover the globe for a commercial team and both reporting and both on our executive committee, both have tremendous experience. So we're really excited to integrate our thinking to make it global in our future plans. And so when we look at Europe, we're well on our way with the EMA with what we're doing.

We've hired country managers all over the place, Germany, France, everywhere. We're getting ready for European launch for sure. As far as Asia goes, we have met with many countries in Asia, especially the big countries, the China, Japan and some others. And in Asia, generally, you need to have small bridging studies.

And we've heard from these regulators in the Asian countries. And what we need exactly and we -- so we've already negotiated the exact bridging studies, and we're well on our way to initiating those. So we've made great progress in Europe, great progress in Asia. And with Project Orbis actually have gotten quite a few approval in getting ready to do those launches.

So we're really thinking about Tukysa in a strong way internationally.

Reni Benjamin -- JMP Securities -- Analyst

Great. And just if I could just follow up, is there a significant expansion in terms of the international sales force for the sales? How should we be thinking about the numbers of salespeople?

Clay Siegall -- President and Chief Executive Officer

We haven't given the specifics of how many salespeople, but we certainly are building a sales force in the greater Europe region at this point. And so we just haven't given specifics yet. As we get closer to things, we'll give more specifics and Todd will give some financial guidance to that. But stay tuned for that.

That's coming.

Reni Benjamin -- JMP Securities -- Analyst

Perfect. Thanks again and congratulations.

Operator

Thank you. We'll take our final question from Joe Catanzaro from Piper Sandler.

Joe Catanzaro -- Piper Sandler -- Analyst

Hey guys. Thanks for squeezing me in here and congrats on yet another solid quarter. Just a question on EV-202. I know that trial just kicked off this past March.

But wondering if you could speak to the pace of enrollment you're seeing, whether that's aided by the strength of EV and data in bladder cancer? And then along these lines, is there any degree of dose-binding in that trial? And any consideration of looking at EV pembro and at the basket tumor setting?

Clay Siegall -- President and Chief Executive Officer

Sure. Roger -- I think Roger should address this. We don't normally talk about enrollment. I could tell you, we are enrolling and it's going well.

But Roger could talk a little bit about the trial and what we're thinking.

Roger Dansey -- Chief Medical Officer -- Analyst

Sure. So sort of on first principles because EV or Padcev is so active in bladder cancer and Nectin-4 expression is high on other tumors. There's a real chance, but obviously, we have to generate the data, but the basket trial could potentially give us another tumor. And that work is ongoing.

And so obviously, we can't talk in detail. But from a -- again, from a sort of first principles of drug development, ADCs are greatest monotherapies, particularly in later line. But once you move into earlier lines, one generally needs combinations, and we think we've actually found a really strong combination partner with a PD-1 inhibitor. So one could imagine that the basket trial does in fact find a signal in a particular tumor that we would develop it as a monotherapy, and we would also look for combinations and the most obvious one to go to will be a combination of, for example, a PD-1 inhibitor.

Joe Catanzaro -- Piper Sandler -- Analyst

OK. Great. Thanks.

Operator

Thank you. And that does conclude our question-and-answer session. I'd like to turn the conference back over to Ms. Pinkston for any additional or closing remarks.

Peggy Pinkston -- Vice President, Investor Relations

OK. Thank you operator and thank everybody for joining us this afternoon. Stay healthy and safe. Good night.

Operator

[Operator signoff]

Duration: 66 minutes

Call participants:

Peggy Pinkston -- Vice President, Investor Relations

Clay Siegall -- President and Chief Executive Officer

Chip Romp -- Executive Vice President, Commercial, U.S.

Todd Simpson -- Chief Financial Officer

Roger Dansey -- Chief Medical Officer -- Analyst

Michael Schmidt -- Guggenheim Partners-- Analyst

Salveen Richter -- Goldman Sachs -- Analyst

Cory Kasimov -- J.P. Morgan -- Analyst

Kennen MacKay -- RBC Capital Markets -- Analyst

Chad Messer -- Needham and Company -- Analyst

Unknown speaker

Andrew Berens -- SVB Leerink -- Analyst

Jay Olson -- Oppenheimer and Company Inc. -- Analyst

Greg Harrison -- Bank of America Merrill Lynch -- Analyst

Connor Meehan -- Morgan Stanley -- Analyst

Andy Hsieh -- William Blair and Company -- Analyst

George Farmer -- BMO Capital Markets -- Analyst

Reni Benjamin -- JMP Securities -- Analyst

Joe Catanzaro -- Piper Sandler -- Analyst

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