Almost exactly four years after partnering with Genmab A/S on an antibody-drug conjugate (ADC) that targets tissue factor antigen, Seattle Genetics Inc. (Seagen) has inked another deal with its Danish partner, this time worth as much as $200 million in milestone payments and bringing a $11 million payment up front.

Bothell, Wash.-based Seagen this time around is collaborating to use its auristatin-based ADC technology with Genmab's Humax-AXL, an antibody targeting Axl, which is expressed on various solid cancers. Earlier this year, Bergenbio AS, of Bergen, Norway, raised NOK75 million (then US$12 million) to develop its first-in-class Axl-targeting BGB324. The firm is exploring the drug's potential in patients with acute myeloid leukemia (AML) in combination with cytarabine, and in patients with non-small-cell lung cancer in combination with Tarceva (erlotinib, Roche AG). Bergenbio in-licensed BGB324 (formerly R428) from South San Francisco-based Rigel Pharmaceuticals Inc. in 2011, and the drug entered phase I trials last year. (See BioWorld Today, Feb. 6, 2014.)

The terms of Seagen's new deal with Genmab call for mid-to-high, single-digit royalties, which could go higher if, before Genmab starts a phase III trial, Seagen exercises an option to raise royalties to double-digit in exchange for lowering the milestone payments owed by Genmab. The earlier collaboration has reached phase I trials in solid tumors, after which Seagen could exercise a co-development option to share all future costs and profits for the product.

Seagen investors, though, are more focused on phase III data due next month from the trial known as AETHERA, which completed enrollment in September 2012. The study is trying out a new indication for Adcetris (brentuximab vedotin), approved in 2011 for Hodgkin lymphoma (HL) after the failure of either autologous stem cell transplant or at least two multi-agent chemotherapy regimens in transplant-ineligible patients, and for systemic anaplastic large cell lymphoma after the failure of at least one multi-agent chemo round. (See BioWorld Today, Aug. 22, 2011.)

Randomized and double-blind, AETHERA compares Adcetris to placebo in patients at high risk of residual HL after autologous stem cell transplant. The primary endpoint is progression-free survival (PFS) with secondary endpoints of overall survival, safety and tolerability. Adcetris is an ADC directed to CD30, a defining marker of HL.

"While patients coming out of transplant can be clinically segregated into several groups based on their number of risk factors for residual HL (one, two and three or more), AETHERA is designed to enroll patients in one bucket, and potentially stratify them later," noted H.C. Wainwright & Co. analyst Andrew Fein. "Naturally, a win on the full cohort would be significant, though subsequent analyses based on risk stratification could fine-tune efficacy and potential use."

Earlier this week, Seagen reported Adcetris revenue of $44.8 million, a 16 percent hike quarter over quarter, plus $7.3 million in royalty income from Takeda Pharmaceutical Co. Ltd. and collaboration payments of $16.2 million, making the total $68.3 million, above the consensus estimate of $65.2 million.

"Management noted that during the quarter they have continue[d] to see more off label sales, which in conjunction with deeper on-label penetration" led to the strong quarter, Fein wrote in a research report.

SHINY NEW 'DIMER'?

Christopher Boerner, Seagen's vice president of commercial operations, said during a conference call on earnings that the company "saw continued interest in utilizing Adcetris in earlier lines of therapy," with growth in the salvage-HL setting.

"If you actually look one year back, we have a 25 percent increase from the same quarter a year before," said CEO Clay Siegall. "And because of that, we've increased our guidance."

Specifically, the firm raised revenue targets for the U.S. and Canada to $160 million to $170 million, over the previous $155 million to $165 million, while lowering estimates for 2014 R&D costs to $235 million to $250 million from a range of $245 million to $265 million. The first half of this year's revenues total $83.5 million, about at the midpoint of the new guidance, and the previously mentioned $44.8 million for the quarter just ended is about 27 percent of the new guidance numbers.

Although Seagen said during the conference call that Adcetris sales likely will fluctuate, Fein "highlight[ed] that Adcetris sales have seen positive growth for five consecutive quarters, and even flat sales in the next two quarters would be sufficient for Seagen to outperform the upper limit of the new guidance."

Another possibly stock-boosting event this year will be interim data from the phase I trial with SGN-CD33A, a CD33-targeted ADC for AML. It's the first clinical experiment with Seagen's cell-killing pyrrolobenzodiazepine (PBD) dimer, a toxin with a different mechanism than auristatin and uniform antibody loading by way of site-specific cysteine linkage, which could mean even greater potency.

Chief medical officer Jonathan Drachman said Seagen is "going to be learning a lot about a new chemo type in this trial [with] the PBD dimer, learning about tolerability, activity and toxicities. As far as AML goes, it's a terrible disease. There really haven't been any successful advances for decades. And in the two populations that we're looking at, nothing really works there. You've got older patients who can't get intensive therapy with curative intent at all. So they get palliative therapies at best, and then you've got patients who have failed their best chance of cure in frontline [therapy, and then] relapse. So it's hard to say what the benchmarks are in a phase I population. I think you'll have to judge from the data when you see [them]."

The company's stock (NASDAQ:SGEN) closed Wednesday at $41.98, up $1.86.