[Update: 2:55 pm PT] Seattle Genetics handily beat Wall Street expectations by selling $10 million worth of its new lymphoma drug in its first 30 business days on the market.
The Bothell, WA-based company (NASDAQ: SGEN) said today it generated $10 million in net product sales in the quarter ended Sept. 30, according to its quarterly financial report. The sales came from the company’s first FDA-approved product, brentuximab vedotin (Adcetris) for patients with a couple rare blood cancers—Hodgkin’s lymphoma and anaplastic large cell lymphoma. The drug was first cleared for sale in the U.S. on Aug. 19.
Seattle Genetics is going after a small group of patients with this new drug, and expectations on the street were low in recent weeks, although they have been building. Analyst Thomas Wei of Jefferies & Co. said in mid-October that he pegged Seattle Genetics’ third quarter sales at $5.7 million, which was way above Wall Street consensus at the time of just $1.9 million. In an updated report on Nov. 2, Wei said that expectations among buyside funds had climbed to $7 million. The drug, which has shown strong effectiveness in this narrow population in clinical trials, costs $13,500 a dose, and is given via an intravenous infusion every three weeks.
The company’s expenses naturally climbed in its debut quarter of being a marketing organization. Total expenses grew to $61.6 million in the quarter, up from $51.3 million in the same quarter a year earlier. Seattle Genetics reported a net loss of $40.7 million in the most recent period.
Seattle Genetics didn’t release any sales forecast for the rest of 2011, or for 2012, in its quarterly report today. It did, however, offer some explanation for its bang-up commercial debut.
[Updated with info from conference call] About 200 patients were getting the Seattle Genetics drug free on a “compassionate use” basis from January through August during the FDA review process, and more than 80 percent of those patients converted into paying customers once the Seattle Genetics product was cleared for sale Aug. 19, said Bruce Seeley, the company’s executive vice president of commercial operations. Quite a few doctors were aware of the company’s FDA deadline at the end of August, and also lined up additional patients in the queue, Seeley said.
Partly because Seattle Genetics isn’t sure how many of those $13,500 per dose infusions patients will get in real-world use, and partly because there have been some delays on insurance reimbursement, Seattle Genetics declined to offer a sales forecast for the fourth quarter or beyond. The company has also gone out of its way to ask its distributors to stop disclosing order reports to prescription tracking services like IMS Health, which many investors count on to provide transparency on commercial progress.
The lack of information clearly annoyed analysts on today’s conference call.
Seattle Genetics CEO Clay Siegall’s response was that the company is still trying to better understand the dynamics of its market before it makes forecasts, and that it is trying to block third-party information services because it wants to keep competitors in the dark about its strategies to broaden use of the drug to additional patient groups.
“We’re not trying to hide anything. We’re trying to understand our launch,” Siegall said on the conference call. He added: “We have a very exciting product with Adcetris. For competitive reasons, we are working with distributors to prevent the release of information.”