Seattle Genetics, Inc. (NASDAQ:SGEN) is a biotechnology company involved in developing antibody-based therapies for the treatment of cancer. As the company’s name would suggest, it is headquartered just outside of Seattle in Bothell, Washington.
Seattle Genetics has nearly 20 collaborations for its monoclonal antibody-drug conjugate (ADC) technology designed to harness the targeting ability of antibodies to deliver cell-killing agents directly to cancer cells. Companies it is collaborating with include big pharma names like: AbbVie, Bayer, Genentech, GlaxoSmithKline, and Pfizer.
Primary Mechanism of Action of ADCs: Targeted Delivery of a Potent Cytotoxic Agent
The company’s flagship product is ADCETRIS (brentuximab vedotin) which is commercially available intravenous drug approved in 2011 for two lymphoma indications and used in 50 countries. Seattle Genetics jointly developed ADCETRIS in collaboration with Takeda Pharmaceutical. Seattle Genetics has exclusive commercialization rights in the U.S. and Canada and Japan-based Takeda has the right to produce the drug in other countries.
On June 8th, the company announced an agreement to team up with Cambridge, MA-based Unum Therapeutics. SeaGen made a $25 million upfront cash payment and agreed to put up another $5 million in Unum’s next round of financing. Unum is part of the fast-moving field of T-cell therapy. Other companies in this field (aka CAR-T) include multi-billion-dollar companies Juno Therapeutics and Kite Pharma who have produced strong results on certain blood cancers in their clinical trials.
Unum’s technology is slightly different, engineering T-cells with a surface protein which helps them attach to a wide array of antibodies. The technology is referred to as “antibody-coupled T-cell receptor” technology, or ACTR. The concept of combining ADC and ACTR technologies is an approach that SeaGen hopes will have “broad applicability across a range of cancer targets,” according to SeaGen’s CEO Clay Siegall.
The market seemed less than enthusiastic about the partnership, with the stock trading down 4% on the news, but Seattle Genetics’ expansion into immuno-oncology is probably a good long-term strategic investment. SeaGen is revising its guidance for 2015 to account for the effects of the collaboration.
Seattle Genetics’ largest shareholder, owning 24% of its stock, is Dr. Felix Baker, the Managing Partner of the Baker Brothers Capital Hedge Fund. The Baker Brothers is banking on SeaGen’s success, and it has a pretty good track record of picking winners such as Pharmacyclics and Incyte, and YTD it has been a pretty good investment, up almost 45%.
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