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Seattle Genetics' Loss Widens Despite Higher Adcetris Sales

By Sean Williams – Feb 11, 2014 at 5:28PM

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Higher expenses and weaker collaborative revenue more than offsets solid worldwide gains in Adcetris sales.

Antibody-drug conjugate powerhouse Seattle Genetics (SGEN 3.42%) reported its fourth-quarter results after the bell this evening, delivering steady improvement in its top-line results while also reporting a wider loss.

For the quarter, Seattle Genetics saw its total revenue climb 5.5% to $67.4 million as it recognized higher sales of cancer drug Adcetris that were partially offset by lower year-over-year collaborative revenue. The company's net loss widened by $5.1 million to $15.7 million despite higher Adcetris sales to $0.13 per share from $0.09 in the year-ago period.

Actual Adcetris revenue within the U.S. climbed 9% to $38.5 million, as royalty revenue received from licensing partner Takeda Pharmaceutical tripled to $6.6 million. However, collaborative revenue, which includes revenue earned under its Adcetris collaboration with Takeda, as well as other ADC collaborations, such as with Bayer and AbbVie, shrank to $22.3 million from $26.4 million in the year-ago period.

Total expenses for the quarter increased 11.4% to $83.1 million as the exploration of further indications for Adcetris and ongoing research and development expenses for its remaining pipeline pushed costs higher. Seattle Genetics ended the quarter with $374.3 million in cash, which is $10 million higher than the comparable quarter last year.

Looking ahead, the company is forecasting Adcetris net product sales of $155 million to $165 million in 2014, a nearly 11% increase at the midpoint over 2013's net sales, with collaborative and licensing revenue anticipated to be in a range of $55 million to $65 million, a steep drop-off from the $106.8 million in collaborative revenue reported for the full-year tonight. Furthermore, Seattle Genetics is projecting research and development expenses of $245 million to $265 million and selling, general, and administrative expenses of $100 million to $110 million.

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool recommends Seattle Genetics. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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