Leerink Says Seattle Genetics' (SGEN) Pipeline Value Drivers Still Underappreciated

Leerink reiterates Seattle Genetics, Inc. (Nasdaq: SGEN) at Outperform with a price target of $62 following the presentation of updated clinical data for enfortumab vedotin (ASG-22ME) and ASG-15ME at ESMO 2016.

The firm commented today, The updated dose-escalation data indicates impressive single agent response rates (up to 59% ORR [objective response rate]) in relapsed/refractory urothelial cancer patients, in particular for ASG-22ME (enfortumab vedotin) with some durable responses while progression free survival (PFS) data is still evolving. Mgmt expanded both Phase I trials to include additional cohorts of patients who previously received checkpoint inhibitors to further understand safety and activity in this population. Given the strong single-agent activity at the recommended Phase II dose, we think SGEN could potentially pursue an accelerated approval strategy for enfortumab vedotin post-PD1 inhibitors, or a randomized strategy in urothelial cancers. Discussions with regulatory agencies are planned next. We remain OP-rated on the stock based on our thesis that Adcetris has a high probability of success in becoming the standard of care in front-line treatment of Hodgkin Lymphoma (r/rHL) while addl. value drivers in SGEN's pipeline including ASG-15ME/22ME are still underappreciated.

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