Even though Seagen (NASDAQ:SGEN) reported top-line and bottom-line third-quarter financial results that were better than analysts' forecast, its shares were falling 12.5% at 11:40 a.m. EDT on Friday.
The launch of new cancer treatments this year continue to drive significant revenue growth for the biotech company.
Seagen's revenue totaled $1.06 billion, up 397% year over year. Demand for Padcev, which won approval for use in advanced urothelial cancer, helped Seagen's total product sales increase to $268 million last quarter, up 60% from the same quarter last year. The company also benefited from $758 million in licensing and collaboration revenue, plus $35.9 million in royalty payments in the quarter.
In September, Merck (NYSE:MRK) licensed Asia, Middle East, and Latin America commercial rights to Tukysa -- a treatment for some forms of advanced HER2-positive breast cancer -- for $125 million up front, plus $65 million in potential milestones, and tiered royalties. Merck also secured global co-development and co-commercial rights to ladiratuzumab vedotin, a clinical-stage treatment for solid tumors, for $600 million up front. Additionally, Merck acquired a $1 billion, 5% equity ownership stake in Seagen at $200 per share in October.
In terms of Seagen's products, Adcetris sales were $163 million, down 3% from one year ago. Padcev and Tukysa contributed sales of $62 million and $42 million, respectively, in the quarter.
Altogether, sales and licenses significantly exceeded expenses, resulting in third-quarter net income of $636.2 million, or $3.50 per share. In the year-ago period, the company's net loss was $91.9 million, or $0.55 per diluted share.
Seagen is guiding for fiscal full-year revenue of nearly $2 billion, up from $1.03 billion, largely because of Merck's licensing deal last quarter. Product revenue should total at least $990 million, down slightly from $995 million previously because of $25 million less in Adcetris sales, which was mostly offset by higher than expected Padcev sales and royalty revenue.
Looking ahead, recent trial data supports Padcev applications for approval outside the U.S. and, potentially, an expanded label in the United States. Additionally, a successful trial for tisotumab vedotin, a treatment targeting relapsing or recurrent metastatic cervical cancer, has management planning to file for Food and Drug Administration approval soon, and a decision is forthcoming in the EU on Tukysa.