Sell Seattle Genetics' Latest Good News: Piper Jaffray

In a report published Tuesday, Piper Jaffray analyst Edward A. Tenthoff maintained an Underweight rating and price target of $30 on Seattle Genetics, Inc. SGEN. The company's ADCETRIS candidate has received approval for use in post-transplant consolidation Hodgkin's Lymphoma (HL).

According to the Piper Jaffray report, "The approval is based on positive data from the Phase III AETHERA trial. As a positive surprise, the FDA also converted the accelerated approval for ADCETRIS in relapsed HL to standard approval."

Although the approval is good news, the analyst mentioned that this is already factored into the $220 sales estimate for 2015 and $250 million sales estimate for 2016. The company has an expanding pipeline of partnered and wholly-owned ADCs.

"ECHELON 1 in front-line HL should complete enrollment this year, and ECHELON 2 in front-line mature T-cell lymphoma is expected to complete enrollment in 2016," Tenthoff said, while adding that "the Phase III ALCANZA trial in cutaneous T-cell lymphoma (cTCL) is scheduled to complete enrollment this year."

Seattle Genetics also intends to run two combo studies for Opdivo and ADCETRIS in relapsed CD30+nHL and relapsed HL, along with Phase II trial of Rituxan and bendamustine, with and without ADCETRIS, in CD30+ relapsed/refractory DLBCL. The company has also initiated a trial for the use of ADCETRIS in the treatment of lupus.

According to the analyst, "SGEN has seven wholly-owned clinical stage ADC candidates in the clinic including SEA-CD40, a novel immuno-oncology drug."

Seattle Genetics is scheduled to meet with regulators in order to identify the way forward for the Phase 1b trial of SGN-CD33A in AML and Phase II trial of SGN-CD19A in NHL.

"Phase I studies examining SGN-CD70A in renal cell carcinoma and NHL and SGN-LIV1A in breast cancer are also underway. Data is expected in 2H:15 for the CD19A, CD33 and LIV1A programs," Tenthoff added.