Seattle Genetics gets a PhIII win for Adcetris, but shares slide as frets linger
Seattle Genetics $SGEN has had a rough Q2 as its lead experimental therapy was put back on hold, forcing investigators to scrap Phase III shortly after the biotech had to drop a deal with Immunomedics. But it’s winding up the quarter with a major win in its favor, posting a hit in its closely-watched Echelon-1 study for frontline Hodgkin lymphoma.
The big biotech says that its flagship therapy, Adcetris, combined with a trio of standard drugs beat a 4-drug mainstay cocktail therapy in frontline Hodgkin disease for modified progression-free survival over a lengthy two-year stretch. The Adcetris package excluded bleomycin, which has been linked to a higher rate of lung toxicity and was used in the 4-drug combo control.
Company execs tell me that they’re prepping an FDA application anticipated for later this year. Seattle Genetics controls the US and Canadian markets for Adcetris, with its partner Takeda taking on the rest of the world.
Analysts have been watching this key catalyst closely, looking to see if Seattle Genetics has a good chance of significantly expanding its revenue from Adcetris. The answer to that would appear to be a conditional yes, based on the biotech’s top-line data.
The Adcetris combo hit a two-year modified PFS rate of 82.1% compared to 77.2% in the control arm — a 4.9 point, or 6%, improvement. That’s statistically significant, but not the wider, double-digit margin that the bulls have been looking for, according to a recent deep dive on this subject from Leerink.
Analysts there have noted that without a 10%-plus margin in its favor, payers may just stick with the cheaper standard. The difference could amount to hundreds of millions of dollars for Seattle Genetics by 2025.
Investors weren’t happy with the numbers. Seattle Genetics’ shares dropped 11% as the data sank in on Wall Street. Some of the early reactions on Twitter were also critical.
82.1% vs 77.2% (hazard ratio=0.770; p-value=0.035) looks more marginal than meaningful.
— Brad Loncar (@bradloncar) June 26, 2017
You always prefer a better response, Seattle Genetics CEO Clay Siegall told me in a preview of the announcement. But this marks a clear win for patients and a plus for the company as Siegall remains determined to make Adcetris a billion dollar-plus blockbuster.
“We did a pretty audacious trial,” Siegall says. “People said you’re trying to build on something that already looks pretty good…There wasn’t a lot of headroom.”
Adcetris and the combo delivered a 23% reduction in risk of progression, he says, building the number of durable responses among patients who are often diagnosed in their twenties and thirties. In addition, he says, doctors clearly want to eliminate bleomycin and the risk of lung toxicity, offering another advantage for Adcetris.
Seattle Genetics added that an interim look at overall survival rates — the secondary to watch — appeared to be “trending” in its favor at the interim point. That’s not unexpected. It will probably take 4 years to reach a conclusion on OS, says the CEO, in this population.
There’s also likely to be continued chatter about investigators’ use of “modified” PFS in the study.
Rather than stick with tracking the time until disease progression, researchers modified the endpoint to include the use of an additional therapy for patients who had a “certain lack of response,” says the CEO, who added that that is a simplistic definition. If approved, says Siegall, this would be Adcetris’ 5th OK, with earlier expansions helping to continue to widen the market for their drug.
Siegall also says that the pipeline at Seattle Genetics continues to offer some stellar prospects for beefing up its portfolio of marketed drugs. The biotech remains ready to do new deals, he says, but only on an ‘as wanted’ basis as opposed to an ‘as needed’ basis.
“We think Adcetris has an excellent chance of being a billion-dollar drug in the US,” says the CEO. The next year will provide some insights into just how likely that is.