Seattle Genetics (NASDAQ:SGEN) is up 16% at 11:57 a.m. EDT following the release of second-quarter earnings after the closing bell yesterday; U.S. and Canadian sales of the company's blood cancer drug Adcetris came in at $159 million, up 30% year over year and 18% quarter over quarter.
A slow start to the year likely lowered investors' expectations for the most recent quarter, setting up the opportunity for the double-digit gain.
Increased use of Adcetris in peripheral T-cell lymphoma and front-line Hodgkin lymphoma drove sales higher. Management has cautioned that it would take some time to unseat the decade-old chemotherapy regimens -- even though Adcetris was proven better in clinical trials -- and that theory is starting to play out.
At this point, it seems likely that Seattle Genetics will be able to hit management's 2019 Adcetris sales guidance of $610 million to $640 million. The first half of the year brought in $294 million, and even if there's no growth for the rest of the year, sales would reach the low end of guidance: $294 + $159 + $159 = $612 million.
Clearly Seattle Genetics needs to keep its foot on the gas, pushing sales of Adcetris higher. But the next growth opportunity is around the corner, with a second drug, enfortumab vedotin, currently under review at the Food and Drug Administration for the treatment of urothelial cancer.
Given the strong data and unmet need, an approval for enfortumab vedotin seems likely -- so likely that Seattle Genetics and its partner Astellas have already started preparing for the commercial launch, including hiring a sales force so they'll be trained by the time the drug is approved.