Here's Why Seattle Genetics' Adcetris Is A $2 Billion Product
Morgan Stanley’s Andrew S. Berens believes Seattle Genetics, Inc. (NASDAQ: SGEN)'s Adcetris is a $2 billion products, with growth primarily being driven by higher usage in transplant settings, as well as a move to front-line lymphoma treatment.
Berens initiated coverage of the company with an Overweight rating and price target of $60.
The analyst expects Adcetris to grow 16 percent annually from its current sales levels, to reach a peak of $2.5 billion by 2030.
“We think Seattle Genetics is likely to move Adcetris to the frontline in Hodgkin's Lymphoma, based on our high level of conviction that an ongoing Phase trial, ECHELON-1 is likely to be favorable in 2017-18,” Berens mentioned.
The analyst believes this could be a $1 billion opportunity, which would allow the company to avoid competition by establishing Adcetris as the standard of care, ahead of its competitors.
However, Berens also pointed out that the Street “does not appear to recognize this growth or the durability of this revenue stream afforded by this first mover advantage.”
According to the Morgan Stanley report, “Adcetris is well-entrenched in currently approved indications, with growth emanating from recent transplant approval. Adcetris is approved for usage in Hodgkin's Lymphoma (HL), as well as another rare lymphoma (sALCL).”
The analyst also believes the threat from newer interventions was being overstated by the Street.
At time of writing, Seattle Genetics was up 4.33 percent on the day, trading at $48.16.
Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email email@example.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Latest Ratings for SGEN
|Feb 2017||Bank of America||Downgrades||Neutral||Underperform|
|Dec 2016||Credit Suisse||Downgrades||Outperform||Neutral|
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.