Seattle Genetics No Longer On Goldman Sachs' Sell List

Seattle Genetics, Inc. SGEN received a ratings bump from Goldman Sachs to Neutral from Sell after the brokerage revised its Adcetris U.S. sales estimates in 1L Hodgkin's lymphoma (HL) "to reflect greater market penetration per physician diligence."

"We model 40 percent penetration (vs. 19 percent prior) in 1L HL, which reflects significant uptake in Stage III–IV patients (~50 percent of the incident pool). This translates to $754 million in US peak sales (vs. $358 million prior) and may be conservative depending on the magnitude of treatment benefit (a large benefit may drive use in Stage I/II patients)," analyst Salveen Richter wrote in a note.

Related Link: Here's Why Seattle Genetics' Adcetris Is A $2 Billion Product

Adcetris' base business in Hodgkin's lymphoma (HL) faces competition from anti-PD-1s Bristol-Myers Squibb Co BMY's Opdivo and Merck & Co., Inc. MRK's Keytruda.

"The restrictive Opdivo label in HL mitigated the near-term threat from PD-1s and Adcetris/Opdivo combo data in 2L HL at the American Society of Hematology (ASH) meeting could serve as an incremental positive for SGEN," Richter added.

Richter also raised the price target to $47 from $30, while the shares closed Wednesday's trading at $54.06.