Pharma stock under pressure: Seattle Genetics, Inc. (NASDAQ: SGEN)

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Seattle Genetics, Inc. (NASDAQ: SGEN) stock plunged 11.84% on Feb 8th, 2019 (Source: Google finance) after the company missed the earnings estimate for the fourth quarter of FY 18. SGEN has reported the net loss for the fourth quarter of 2018 of $119.8 million, compared to a net loss of $59.2 million, for the fourth quarter of 2017. Net loss in the fourth quarter of 2018 had included a net investment loss of $53.2 million primarily associated with Seattle Genetics’ common stock holdings in Immunomedics, which are marked-to-market. As of December 31, 2018, Seattle Genetics had $459.9 million in cash and investments. The company has held stock investments, primarily in Immunomedics common stock, valued at $113.8 million.

Pharma stock under pressure: Seattle Genetics, Inc. (NASDAQ: SGEN)

Meanwhile, SGEN has recently announced the dosing of the first patient in a phase 1 trial evaluating the safety and tolerability of SEA-BCMA in relapsed or refractory multiple myeloma. SEA-BCMA is an empowered antibody using the company’s proprietary Sugar Engineered Antibody (SEA) technology designed to enhance antibody dependent cellular cytotoxicity. Further, in December 2018, Roche had submitted regulatory applications in the U.S. and the European Union for approval of polatuzumab vedotin to treat patients with relapsed or refractory diffuse large B-cell lymphoma. Polatuzumab vedotin utilizes Seattle Genetics’ proprietary antibody-drug conjugate (ADC) technology.

SGEN in the fourth quarter of FY 18 has reported the adjusted loss per share of 57 cents, missing the analysts’ estimates for the adjusted loss per share of 39 cents, as per Zacks Investment Research. The company had reported the adjusted revenue of $174.5 million in the fourth quarter of FY 18, beating the analysts’ estimates for revenue of $165.8 million. ADCETRIS net sales were $132 million in the quarter and were $477 million for the full year in 2018, a 55% increase over 2017. The frontline approvals significantly expanded the addressable patient opportunity for ADCETRIS the company are confident that ADCETRIS based frontline regiment could become the preferred treatment of choice. Royalty revenues in the fourth quarter increased to $25 million compared to $20 million in the fourth quarter of.  Collaboration revenues were $18 million in the fourth quarter and $94 million for the full year in 2018. These revenues are primarily driven by amounts earned under the ADCETRIS collaboration with Takeda and the ADC deals.

For FY 19, SGEN expect total revenues to increase to a range of $790 million to $840 million. The royalty revenues is expected to be in the range of $85 million to $90 million. The revenues from collaboration and license agreements is expected to be in the range of $95 million to $110 million.

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