Jefferies Boosts PT on Seattle Genetics (SGEN) Following FDA Panel Vote; Is Buyer on Weakness

Jefferies increased its price target on Seattle Genetics (Nasdaq: SGEN) from $22 to $25, while maintaining a Buy rating on the stock following an FDA panel recommending approval of Adcetris.

Why is Jefferies bullish on SGEN? Despite the landslide vote (10-0!) recommending accelerated approval of Adcetris, "the controversy over the design of a post-marketing confirmatory study, with many panelists and the FDA recommending a different design than the ongoing AETHERA study in HL, has caused concerns around a delay in the timing of approval." Jefferies says that the issue will be resolved in the timely fashion, and is a buyer on weakness.

Further color: "While some investors may be disappointed the FDA did not consider a broader indication including second-line pre-transplant HL, we note that panelists were very positive on the clinical profile, and we continue to expect significant off-label use of Adcetris in second-line HL pretransplant therapy. We are maintaining our sales assumptions of $320m in U.S. HL sales alone by 2016. On a positive note, there was unanimous support for accelerated approval of the ALCL indication, despite some Street concerns following the briefing document commentary on the lack of a confirmatory study proposal."

For more analyst coverage on SGEN, click here. For a ratings history for SGEN, click here.

SGEN is down over 10 percent on the session Friday.

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