With Meaningful Upside, This Cancer Stock Earns Analyst Upgrade

  • BMO Capital Markets upgraded Seagen Inc SGEN from Market Perform to Outperform with a price target of $178 from $177, saying the core business is undervalued.
  • BMO forecasts SGEN's commercial portfolio to deliver $1.6 billion in product sales in 2022, relatively in line with consensus, and estimates sales of ~$5.3 billion in 2026, above the consensus of ~$4.9 billion. 
  • The main longer-term revenue driver is Padcev (enfortumab vedotin), expected to deliver sales of ~$2.1 billion in 2026 vs. a consensus of $1.9 billion.
  • Padcev expansion into tumors beyond bladder cancer would represent an upside to the analyst estimates.
  • Recently announced Padcev data in bladder cancer showed a 64.5% confirmed objective response rate (ORR), the primary endpoint of Cohort K
  • The analyst also notes that a permanent replacement of the CEO may provide clarity to SGEN's longer-term strategy in the wake of cooling discussions with Merck & Co Inc MRK on a potential buyout.
  • Price Action: SGEN shares are up 2.19% at $133.81 on the last check Tuesday.
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