What happened

Shares of Seattle Genetics (NASDAQ:SGEN) jumped 17.6% in September, according to data provided by S&P Global Market Intelligence, as the biotech rounded out the month with positive data from a pair of clinical trials presented at the 2019 European Society for Medical Oncology (ESMO) Congress.

So what

In a phase 2 clinical trial, Seattle Genetics' tucatinib combined with Roche's Herceptin produced a response in 52.2% of patients with a specific type of late-stage colorectal cancer. There wasn't a control group that received placebo or an alternative drug, but these patients had already failed two treatments, so over half of the 23 patients responding was quite impressive.

Doctor talking to a patient in front of a window.

Image source: Getty Images.

The second ESMO presentation was for an early stage study testing Seattle Genetics' enfortumab vedotin (EV) with Merck's (NYSE:MRK) Keytruda in patients with previously untreated, locally advanced, or metastatic urothelial cancer who can't take a chemotherapy called cisplatin. The combination produced a response in 71% of the patients, including 13% with a complete response and 58% with a partial response.

The second study didn't have a control, either, but a clinical trial run by Merck testing Keytruda as a monotherapy in similar patients produced a response rate of 29%. Even in patients with high expression of PD-L1, the pathway that Keytruda targets, the response rate was only 47%, so adding EV seems to be substantially increasing the efficacy.

Now what

Seattle Genetics will likely have to test EV plus Keytruda in an additional clinical trial before gaining regulatory approval in newly diagnosed urothelial cancer patients, but EV is already under FDA review for patients with late-stage urothelial cancer who have received a PD-1/L1 inhibitor, such as Keytruda. Assuming the drug is approved, which seems likely, some doctors may use it off-label for previously untreated patients, or, at the very least, the ESMO data offer additional efficacy evidence that should persuade doctors to use the drug on late-stage patients.

Tucatinib is also being tested in patients with metastatic breast cancer in the Her2Climb clinical trial that should be sufficient to gain regulatory approval if the data are positive. In addition to expanding the potential market, the colorectal cancer data provide additional evidence that tucatinib is working, which should give biotech investors increased confidence in a positive outcome for the Her2Climb study.