Seattle Genetics (SGEN) Volatile on ASH Headlines

Shares of Seattle Genetics (NASDAQ: SGEN) declined Monday, falling over 7%. Earlier analyst Navdeep Singh of Goldman Sachs said ASH was turning into a balancing act of competition and pipeline.

"ASH is turning out to be a major catalyst for SGEN with (1) potential competitive data from BMY’s nivolumab in Hodgkin lymphoma (HL) and (2) phase 1 data of SGN CD33A in AML. Recall that the FDA granted breakthrough designation to nivolumab (nivo, PD-1 antibody) in post Adcetris HL, indicating promising results. To help address the competitive concern from nivolumab, SGEN indicated interest in evaluating Adcetris in combo with PD-1 antibodies. Interestingly, the NCI is evaluating Adcetris + ipilimumab in r/r HL," said Singh.

"In our opinion, the scientific rationale for combining Adcetris (antibody linked to chemo) with a PD-1 antibody remains unclear as nivo does not appear to be synergistic with chemo. More so, if nivo monotherapy provides compelling data, combination with Adcetris might not be ideal given potential for added toxicity. Last week nivo showed impressive efficacy in squamous lung cancer, showing its strength as a monotherapy," continued the analyst.

"Recall Adcetris provided a 32% complete response rate with a median duration of 20.5 months in r/r HL, which is setting up as the bar. Shifting to the pipeline, SGEN plans to initiate a phase 1b frontline combo trial of SGN-CD33A and standard drugs used in AML who can tolerate intensive chemo. This may indicate early SGN-CD33A data are promising," he added.

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Shares of Seattle Genetics closed at $36.10 yesterday.

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