Seattle Genetics (SGEN) Delivers at ASH - Needham & Company

Needham & Company analyst, Chad Messer attended ASH and noted a big presence from Seattle Genetics (NASDAQ: SGEN) with an increased contribution from its advancing pipeline programs beyond Adcetris. Most significant was the announcement that SGN-CD33A (vadastuximab talirine) will enter pivotal studies in 2016 in AML.

First ever Phase I data of a CD33A+HMA therapy combination study showed an impressive 65% response rate. Other highlights included updated Phase I results with CD19A which recently advanced into Phase II in DLBCL. Adcetris was of course featured in numerous presentations across multiple disease states/settings, most notably Hodgkin's lymphoma (HL). Data from the front line ECHELON trials in 2017 remain important drivers for SGEN, but the advancement of a second program into pivotal phase as a key milestone for the company.

More than 4 years after the initial approval of its first product, Adcetris, SGEN announced the planned initiation of pivotal studies for a follow-on program. SGEN-CD33A (vadastuximab talirine) will skip Phase II and enter Phase III in elderly AML patients in 2016. Four abstracts were presented on CD33A at ASH. (#454, #324, #3785, #330). Most exciting in our view was data from a Phase I trial in combination with hypomethylating agents (HMAs) as frontline therapy for elderly AML patients, the same population as the planned Phase III trial. The prognosis is typically poor for these patients since they can't tolerate chemotherapy followed by stem cell transplant.

Complete remission rates with gentler HMA therapy range from 17.8 - 27.8%. The addition of CD33A to HMA therapy resulted in a 65% (15/23) CR/CRi rate at a median follow-up of 7.7 months. Median OS had not been reached. Based on these results, a Phase III trial of CD33A with HMAs as frontline therapy in older AML patients is planned to begin in 2016. Data from a monotherapy Phase I AML trial were also presented. Across all dose groups, 27% achieved CR/CRi (n=85). At the highest (40ug) dose, CR/CRi was recorded for 41% of pts (n=27).

No change to Buy rating or $60 PT.

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Shares of Seattle Genetics closed at $38.90 yesterday.

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