Seagen Inc (SGEN) 2008 Q3 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome to the Seattle Genetics third quarter 2008 financial results conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be opened for questions.

(Operator instructions.)

This conference is being recorded today, Thursday, October 23rd, 2008. I'd now like to turn the conference over to Peggy Pinkston, Director of Corporate Communications. Please go ahead, ma'am.

Okay, thank you very much, operator. I'd like to welcome you all to Seattle Genetics' third quarter 2008 conference call. With me today are Clay Siegall, President and Chief Executive Officer; Todd Simpson, Chief Financial Officer; Eric Dobmeier, Chief Business Officer; and Tom Reynolds, Chief Medical Officer.

Today's conference call will include forward-looking statements based on current expectations. Such statements are only predictions and actual results may vary materially from those projected. Please refer to the documents that we file from time to time with the SEC and which are available on our website for information concerning the factors that could affect the Company.

I'll now turn the call over to Clay.

Thanks, Peg, and thank you all for joining us this afternoon. I'm pleased to say that Seattle Genetics is well-positioned and continues to make excellent progress. Our product portfolio is diverse, with four programs in 12 clinical trials, compelling clinical data from our three lead product candidates and multiple promising pre-clinical agents.

We have eight collaborations that provide financial and strategic benefit, and our balance sheet is strong. We ended the third quarter with more than $187 million in cash and investments, and we have no debt.

Today, I'll provide a brief update on our programs and collaborations; then I'll turn the call over to Todd to discuss our financial results, after which we'll open the call for your questions.

I'll start with SGN-40, which we'll refer to from now on as Dacetuzumab, the USAN name we recently secured. In collaboration with Genentech, Dacetuzumab is currently in six clinical trials for non-Hodgkin lymphoma and multiple myeloma. Accrual to the phase II single agent trial in diffuse large B-cell lymphoma is complete, and we plan to report data during the annual meeting of the American Society of Hematology, or ASH, being held in San Francisco in early December.

In addition, two pre-clinical presentations on Dacetuzumab are planned for ASH, one of which will describe its activity when combined with Rituxan, and the other regarding a diagnostic gene signature.

Based on pre-clinical research conducted by Genentech and presented at the AACR Molecular Diagnostics Conference in September, a gene signature they identified may be predictive of anti-tumor activity in patients with non-Hodgkin lymphoma. We are correlating this novel tool with clinical findings from our studies of Dacetuzumab for lymphoma.

The biggest of our ongoing Dacetuzumab clinical trials is a phase IIb randomized placebo controlled study of Rituxan ICE plus or minus Dacetuzumab in 220 second-line diffuse large B-cell lymphoma patients. Data from this trial, which is assessing the therapeutic benefit of adding Dacetuzumab to standard second-line therapy, are expected in 2010.

We are also executing on four combination phase Ib clinical trials of Dacetuzumab that will generate data starting in 2009. Our Dacetuzumab program continues to progress well and provides us with multiple opportunities for success. Through our collaboration with Genentech we have broadened the scope of this program towards our goal of reaching patients in need of new and better therapies to treat their disease.

The second program I'd like to talk about is Lintuzumab, or SGN-33, which is moving forward at a strong pace. We have three clinical trials underway for acute myeloid leukemia and myelodysplastic syndrome. Data are expected from the phase Ib trial in AML and MDS patients during 2009, and our phase I trial of Lintuzumab plus Revlimid in patients with MDS is ongoing.

The largest of our Lintuzumab is the phase IIb trial in older patients with AML. This is a randomized trial comparing overall survival in patients receiving low-dose cytarbine, plus or minus Lintuzumab. If we can demonstrate that the addition of Lintuzumab leads to a meaningful survival advantage for these older patients who have limited alternative therapies, we believe there may be a rapid path to approval. Accrual is robust and the trial is on track to yield data, likely in the first half of 2010.

Our third clinical program is SGN-35, our antibody drug conjugate, or ADC, targeted to CD30. We are developing this product candidate for Hodgkin lymphoma and CD30-positive T-cell lymphoma, including systemic anaplastic large-cell lymphoma, or ALCL. We reported positive interim phase I data at ASCO in June that supports an aggressive development pathway for this program.

In particular, at doses at or above 1.2 milligrams per kilogram, administered every three weeks, 45% of patients had objective responses, including 23% with complete responses. Moreover, 81% of patients across all dose levels had reductions in tumor volumes. Accrual to this trial is complete and we plan to present additional data, including updated response rate and durability at ASH in December.

Another phase I trial is also ongoing to assess weekly administration of SGN-35. This study is designed to enhance our understanding of the therapeutic application of our ADC technology and to further explore the efficacy and safety profile of SGN-35. Accrual to the trial is going very well, with new patient cohorts often being filled on the same day they are opened. As with our first phase I trial, this indicates to us a high level of patient and physician interest in SGN-35.

SGN-35 has the potential to address a significant unmet medical need for patients with relapsed or refractory Hodgkin lymphoma and CD30-positive T-cell lymphomas. We are collaborating with the FDA to finalize our pivotal trial design. Specifically, we have submitted two special protocol assessments, or SPAs, for parallel pivotal clinical trials in patients with relapsed or refractory Hodgkin lymphoma and systemic ALCL.

We plan to lay out a more detailed U.S. registration strategy within the next few months as we complete our discussions with the agency and anticipate initiating pivotal trials in the first half of 2009. We are also working with the regulatory agencies in Europe to develop our registration pathway in the EU.

The rationale for our rapid registration strategy is our impressive phase I data, including response rates, durability and tolerability profile as well as the fact that there is no standard of care and limited therapeutic alternatives in the relapsed and refractory lymphoma setting. Although front-line therapies for Hodgkin and T-cell lymphomas often achieve long-term remissions, a significant number of patients require additional treatment, including stem cell transplants and chemotherapy regimens.

Based on our market research, we believe there is a substantial commercial opportunity for SGN-35. We project worldwide sales potential for SGN-35 in relapsed or refractory Hodgkin lymphoma and ALCL of $300 million to $400 million annually. Beyond that, we believe there is substantial upside, including the use of SGN-35 in front-line lymphoma and relapse prevention settings in combination with or as an alternative to chemotherapy.

Pre-clinical data are being presented this week at the EORTC-NCI-AACR meeting taking place in Geneva, Switzerland, demonstrating enhanced activity of SGN-35 when combined with chemotherapy, including the standard front-line regimen ADDD and with Gemzar.

SGN-35 may also have application in the treatment of autoimmune indications in graph versus host disease through its potential to deplete activated but not resting T-cells. Development activities in these additional areas of unmet patient need are underway.

SGN-35 is a high priority, exciting program for all of us at Seattle Genetics, and we expect to update you on specifics as they relate to our U.S. registration strategy within the next few months.

During the third quarter we also initiated a phase I trial of SGN-70, a humanized antibody targeting CD70 that we are developing as a novel therapy for autoimmune diseases. Because of its ability to specifically target activated T and B cells but not resting lymphocytes, SGN-70 may reduce the damaging effects of autoimmune disease without globally suppressing the immune system.

In the ongoing clinical trial, we are assessing the safety and pharmacokinetics of SGN-70 in healthy volunteers to provide the data necessary to define future clinical trials in patients with autoimmune disease.

We are also advancing multiple pre-clinical ADCs, including two propriety programs for cancer--SGN-75 and SGN-19A. We are completing pre-clinical studies of SGN-75 to support a planned IND filing in 2009. This program has therapeutic potential in both hematologic malignancies and solid tumors.

Pre-clinical data from our SGN-19A program and ADC-targeting CD19 will be presented tomorrow at the EORTC-NCI-AACR meeting. The data demonstrate that SGN-19A induces anti-tumor activity in multiple types of hematologic malignancies, including complete regressions in models of non-Hodgkin lymphoma, and acute lymphocytic leukemia.

In addition to our internal ADC programs, we are co-developing AGS-5 ADC with Agensys, a subsidiary of Astellas, for solid tumors. We also have collaborations with six companies that have licensed our ADC technology to empower their own antibodies. Three of these collaborators -- CuraGen, Progenics, and Genentech -- are conducting clinical trials with ADCs utilizing our technology.

We've recently achieved a milestone triggered by Progenics' initiation of a phase I trial of their PSMA ADC for prostate cancer. CuraGen is in phase II trials with CRO-11 ADC for melanoma and breast cancer, and Genentech is conducting a phase I trial of an ADC in cancer.

We also recently achieved a pre-clinical milestone under our collaboration with Genentech, reflecting progress with another ADC. This is the sixth milestone achieved under our ADC collaboration with Genentech. So far in 2008 our ADC collaborations have generated more than $9 million for Seattle Genetics.

In addition to these highlights, our ADC collaborations with Bayer, MedImmune, and Daiichi Sankyo are also making strong progress. We expect additional ADCs utilizing our technology to advance into the clinic in 2009 and beyond.

Our key goals over the remainder of 2008 and into 2009 include the following: for Dacetuzumab, reporting data from our phase II single-agent trial in DLBCL as well as pre-clinical findings at ASH, advancing our five other ongoing clinical trials and reporting additional data in 2009; for Lintuzumab, completing our phase Ib single-agent trial and moving our global phase IIb trial in older AML patients towards completion in the first half of 2010; for SGN-35, presenting additional data at ASH, finalizing our development and regulatory strategy in the next several months, and initiating pivotal trials in the first half of 2009; for SGN-70, completing the phase I trial in healthy volunteers and positioning the program for further investigation in patients with autoimmune disease; and for SGN-75, filing an IND for a phase I trial in CD70-positive malignancies.

Seattle Genetics is executing well its position for success. We have a deep product pipeline, clinically validated ADC technology, the financial resources to invest in advancing our programs, and substantial momentum for the remainder of 2008 and heading into 2009. I look forward to sharing our future progress.

I'd now like to turn the call over to Todd to discuss financial results.

All right, thanks, Clay, and thanks to everyone for joining in on the call this afternoon. Our third quarter 2008 financial results were in line with our expectations and continue to reflect year-over-year increases in both our revenues and expenses, resulting from the expanded activities in our pipeline that Clay just described.

For the third quarter of 2008, revenues increased 74% over 2007 to $8.1 million, and revenues increased 73% for the year-to-date 2008, to $25.2 million. These revenues primarily reflect amounts earned under our Dacetuzumab collaboration with Genentech, which increased both in the quarter and year-over-year in 2008.

Our ADC collaborations also contributed to revenues. Year-to-date revenues in 2008 reflect multiple clinical and pre-clinical milestones and other payments received under our collaborations with Genentech, Bayer and CuraGen, as each of these collaborators advanced products utilizing our technology.

ADC revenues in 2008 also reflect the earned portion of the $4 million up-front payment received in July from Daiichi Sankyo, which is being amortized into revenue over the research term of the agreement.

Operating expenses in the third quarter of 2008 increased to $31.4 million and to $85.1 million for the year to date. This compares to $21 million for the third quarter and $53.7 million for the year to date in 2007. The planned increases in 2008 expenses continue to reflect higher R&D expenses, which were $73.4 million for the year to date in 2008 compared to $44.7 million for the year to date in 2007.

The principal drivers of these increases are as follows. First, increased clinical development expenses reflecting our 12 open clinical trials, primarily for Dacetuzumab, Lintuzumab, and SGN-35. Second, higher manufacturing costs for Dacetuzumab, Lintuzumab and SGN-35 to enable continued supply of drug for our trials, and lastly, increased employee costs, primarily driven by growth in our clinical and development groups.

I will also note that total operating expenses include non-cash share-based compensation expense of $7.4 million for the year to date in 2008 compared to $5.4 million for the same period in 2007.

And as a reminder, Dacetuzumab collaboration costs, including all of the manufacturing and clinical costs that I described, are included in our operating expenses but are fully reimbursed by Genentech under the collaboration.

We ended the third quarter of 2008 with approximately $187 million in cash and investments. Given the current global financial climate, we continue to monitor our investment portfolio carefully. Our portfolio is made up of investment-grade securities with maturities aligned with our operating requirements, giving us good liquidity to meet our needs. Over $100 million is currently held in U.S. Treasury money market accounts or investment-grade paper, maturing within the next year.

Previously we've guided that our year-end cash balance would be more than $140 million. However, so far in 2008 we have generated higher than expected cash from ADC collaboration payments and proceeds from stock option exercises, and as a result we now expect to end 2008 with closer to $150 million in cash and investments, and to be at or below the low end of our guidance range of $75 million to $85 million of cash used to fund our operating activities.

So with that, I'll turn the call back over to Clay.

Thanks, Todd. Operator, at this point we'd like to open the call to questions.

Thank you. We will now begin the question-and-answer session.

(Operator instructions.)

Our first question comes from the line of Mark Monane with Needham and Company. Please go ahead.

Good afternoon, greetings from New York City, and thanks for reviewing a very busy third quarter.

A couple of questions, I'm going to start with some very concrete questions to begin. Let's start with 35. Is it the experience--can you describe the experience so far, Clay, in terms of thinking about patients who've already been treated with front-line therapy? In the refractory setting, do these patients respond equally well, depending on what therapy they get in the first line?

And then second question is, do you see any inherent effects of the anti-CD30 in these patients, or do you believe the clinical effect is due to the payload and the ADC technology?

Thank you for the questions, Mark. First of all, I'll address the second question and then I'll turn it over to Tom to address the first question.

The second question, I think that we had already done a pretty detailed clinical analysis through testing of SGN-30, the naked antibody that's present -- that's part of the major component of SGN-35, which is the antibody carrying the orastatin payload.

And SGN-30 on its own, with that agent we saw no objective responses in phase II in Hodgkin lymphoma, and we saw a modest level of responses in ALCL. I think it was about 17% or so response with ALCL. And so we know those data. Now we have the data that we reported at ASCO, and we'll be updating at ASH with the newest data with duration, response rate, etc.

But when we reported it at ASCO, it was 45% response rate--clearly way above where the naked antibody comes from. In our opinion, based on our pre-clinical data and our clinical data, it clearly comes from binding to the target, but the major source of the efficacy is the delivery of the payload. So we believe that really is the key here, that delivery of the payload utilizing our ADC technology.

Now I'll turn it over to Tom to talk about the patients.

Right, so Mark, I think you kind of have a two-parter for me. One is what's the kind of mix in terms of what patients get front-line, and then how do they respond, and is there any difference? The majority of our patients are treated with ABBD up front; that's currently the standard of care in the U.S., which is where the trial's being run.

So nearly all of our patients have had that, with the exception of the few ALCL patients that we have had on the initial phase I, which typically get a CHOP-type regimen. So almost everybody's either had ABBD or CHOP, and there doesn't appear to be any difference depending on that.

What happens next, then, is for patients that relapse is a large fraction of those go on to autologous stem cell transplant. And we've done an analysis to look at patients that have received 35 prior to transplant or post-transplant. The majority of patients have already received an autologous transplant and there does not appear to be a difference in terms of their ability to respond to 35 as to whether they've had -- what they've had second line, either pre- or post-transplant, or how many prior therapies they've had of any sort.

That was helpful. If we could move to 33--oh, sorry, it's no longer 33; it's Lintuzumab--Lintuzumab, right. Can you talk about what you plan to learn from the Ib single-agent trial, given the fact you're already in the pivotal trials? And if you learn anything really important, is it too late to modify the protocol?

Sure. Briefly, we had reported--and I look back at what--was that ASH 2007, I believe? We reported single-agent activity with this antibody in a small population of patients, and so we are most interested--and even at that point, we were most interested--in progressing to our international phase IIb study. Lintuzumab plus--with ARA-C versus ARA-C.

And that study is our key, most important study. But what we wanted to do while we were progressing and organizing and opening up the ARA-C study, which is a combination with Lintuzumab study, which is going very well and accrual is robust in that study. But while we were opening that we decided to expand the number of patients we were treating in the phase Ia study, calling it a phase Ib, and just to get more signals from the patient efficacy on safety and pharmacokinetics, and we were really studying this drug in a somewhat larger patient population--we were going to add another 50 patients to the initial study we did.

But make no bones about it, our lead, our most exciting SGN-33 or Lintuzumab program is our very large, for Seattle Genetics' size, it's simply the largest study that we've ever undertaken in 220 patients, looking for I believe it's 186 events.

And Tom, you can talk about that a little bit more.

Sure--just a little bit more color on the Ib. It's enrolling both AML and MDS patients, and we'll have a much better idea of how well tolerated that is in a larger population, as well as responses in longevity in both MDS and AML, so we think that's important in terms of planning what we do in addition to the phase IIb.

Phase IIb is going well, it's a survival study. We've already told you on prior calls that should we hit a meaningful difference in survival end point, that we think that that could be sufficient to take to registration. So we're actively moving forward, the study has picked up a lot of speed, and it's cranking through and we're very optimistic about how this is going at this point.

And then on the partnering aspects, we know that Dacetuzumab is already partnered. Is there Genentech interest in Lintuzumab or have other companies approached you, and what kind of qualities in a partner are you looking for for the other clinical programs that are underway?

That would be an appropriate question for Eric Dobmeier as he's running traction on all our business strategy and relationships. Eric?

Hey, Mark. Yes, so I guess on the specific part of your question about Genentech, I think we've said on previous calls that our main focus for our other programs, in particular Lintuzumab and SGN-35, is to pursue ex-U.S. partnering deals, and that's not a deal structure that Genentech in its current form can do.

So they wouldn't be our first choice for partnering those programs, but we do have quite a number of other companies that we're talking to, and the goal here would be for us to be able to build our own commercial infrastructure in the HEMOC space in the United States, but to have a partner who can help us with regulatory and clinical and commercialization activities outside the U.S.

So in terms of what kind of partner we'd be looking for, it's all the standard stuff -- somebody who's got late-stage experience, an oncology franchise, particularly in HEMOC a company that can really supplement our resources and expertise outside the U.S.

In a broader sense, when you look at our pipeline, we have seven programs. Dacetuzumab, as you said, is partnered with Genentech, and then we have a pre-clinical program, AGS-5 ADC, that's partnered with Agensys or Astellas. The other five programs in our pipeline, which are Lintuzumab, SGN-35, SGN-70 and 75 and SGN-19A, are all moving forward well and we have the resources to keep progressing them, but we do have a lot on our plate. So there are other potential deal structures we're considering, where for some of the earlier assets we could potentially do a deal that brings them some conditional capital and supplements what we can do.

So there's a lot going on on the partnering front. It's definitely something we look forward to sharing with you in the future.

Thanks, Eric. I'll step back in the queue so my colleagues can proceed. We appreciate the added information.

Our next question comes from the line of Jason Kantor with RBC Capital Markets. Please go ahead.

Thank you for taking the question; I have several. So on your regulatory strategy for SGN-35, you say you want to have two different SPAs. First, why do you feel the need for an SPA in this case? What is the aspect of the trial that you're trying to nail down with the SPA? And then with regards to having two SPAs, is it a separate one for Hodgkin's disease and ALCL, or is it a separate one for later stage versus earlier stage disease?

Jason, thanks for the questions. They are two separate SPAs, one for Hodgkin lymphoma and one for ALCL is the way they're breaking down -- separate indications. But your specific questions I'll turn over to Tom.

Right. So Jason, as I'm sure you're aware of, for a special protocol assessment our goal really is to have the FDA buy into the entire protocol structure, including end points, patient population, how we're going to do certain assessments, all the pieces so that when we come to them at the end of the day, our expectations and their expectations are aligned and that this becomes an easy process for them to evaluate this in the setting of unmet needs for both of these diseases. So it's really to seek closure with them on all of these parts of the protocol.

Okay, and then with regard to the conjugate deals, you're starting to book a lot more revenue as these companies hit these milestones, and clearly partners are willing to pay more for these deals, with all the clinical validation. Is this going to become an increasing part of your partnering efforts, to do more of these deals at higher valuations?

Hey, Jason, it's Eric. It's certainly been -- I think it's been a pretty consistent aspect of our business over the years. We did one deal this year with Daiichi Sankyo which, as you mentioned, had some higher financial terms in it than previously. We did one deal in '07 with Agensys that gave us product rights, actually, through co-dev and options to the ADC programs.

So I think you'll see us continue to do deals. It's not our main focus, but a deal or two a year is a reasonable expectation, and you're right, as the ADCs become more validated, I think we're going to see a lot more interest from larger pharmaceutical and biotech companies in getting into this space and being involved with ADCs.

And then you mentioned Agensys. Can you give us an update as to where those programs stand since it's something you're co-developing?

Yes, so AGS-5 ADCs in pre-clinical development, we haven't laid out a specific timeline for when it would move into the clinic. It's a solid tumor antigen. The collaboration's going well, and I don't think we have anything too specific to say about it at this point.

Yes. The collaboration is going well, and I think that in the future, we'll talk about that.

Thanks.

Thank you. Our next question comes from the line of Bret Holley with Oppenheimer & Co. Please go ahead.

Yes, hi, thanks for taking the question. I was just wondering what the appropriate historical data for us to use for putting the SGN-35 data in context when we -- especially the duration of response data, once we get that data at ASH. Is there good historical data that we could be comparing to, other than transplant?

Yes, so this is Tom, Bret. So there's a couple issues -- one is that there were no approved agents for relapse refractory Hodgkin lymphoma, so there's no label you can go to to kind of see what people have done in controlled studies.

For patients in that setting right now, there are a number of agents that can be used. There's vinca alkaloids therapies, Gemcitabine, which is used off-label, and there are high-dose combo chemo regimens that are also being explored right now, as well as experimental therapies. So those are the options.

What people have been able to see is that there's a minority of patients, especially following stem cell transplant, that can tolerate high-dose chemo. Most of the other regimens--either the vinca alkaloids or GEM--have only--we've only seen published data on essentially single-center or small studies. Most of them are less than 30 patients, most of them are single-arm, and most of them have response rates not defined by current criteria that we use to stringently evaluate response that are in that maybe 20%, 30%, 40% range. So we feel we're kind of at the upper end of that range.

Durabilities are all over the map, but in brief, most of them are in the two to four-month range. There's at least one study that might suggest the median duration might be around six months. But those are typically now done in a mix of pre- and post-transplant patients.

So it's hard to get comparative data. Our belief, after looking at all the data, is that we are clearly better than what is out there, and our investigators really are putting patients now on SGN-35 rather than things like Gemzar when they come back failing transplant.

And the data at ASH, what is the longest patient follow-up we're going to have from that data--in that data, sorry?

Yes, so we've--the protocol is written so that patients can receive drug for up to a year, and we have patients that have indeed received drug for that period of time. The only way they can receive drug for that length of time is if they're experiencing clinical benefit.

Okay, that's very helpful. And then my other question was on front-line Hodgkin's and what your clinical plans were there. I think you referred to some pre-clinical data that's highly suggestive; I'm just wondering how you move forward in the clinic in earlier line Hodgkin's (inaudible - multiple speakers).

So we have been very pleased that there has been a lot of interest from key opinion leaders and investigators all over the world about how to move this drug faster up in the front line. We have a number of things that we're evaluating right now with thought leaders and others in the field, and as we roll out our strategy later this year for our first approvals, we hope to be able to start telegraphing some color about how to do that.

We think there is a pathway forward to move this earlier. We'd like to see SGN-35 evaluated as a way to show great responses in younger patients, front-line, without causing the late toxicities that we see with the current regimen--secondary malignancies, cardiac disease, and other co-morbidities that are as a result of either radiation and/or high-dose chemo.

So we think there is a nice path forward, and we're pursuing that and hope to give you a lot more color about that in the coming months.

Okay, thanks very much.

Ladies and gentlemen, if there are any additional questions at this time, please press the star, followed by the one. If you're using speaker equipment, you will need to lift your handset before making your selection.

And our next question comes from the line of David Miller with Biotech Stock Research. Please go ahead.

Hi, great, thanks for taking my question. Most of them have been answered, but I was just trying to get a sense as if you had a guess as to what year the SGN-35 pivotal trial data or the BLA filing would be, so we get some sense about how long these trials might take.

Sure. Well, we--as far as the pivotal studies, we look to start them, as we said on the call, as early as we can in '09. And those studies take some time to run and follow up with the data, but I think that based on that, I could see a clear vision toward filing for approval in 2011, and trying to get approval for 2012. And we're trying to market it for 2012.

Okay, great. That's all I got, thank you.

Thank you. Once again, ladies and gentlemen, if you wish to ask a question, please press the star, followed by the one, at this time. And we have a follow-up question from the line of Jason Kantor with RBC Capital Market. Please go ahead.

Thank you. Eric, you talked about looking for ex-U.S. partners for some of your clinical or perhaps pre-clinical programs. Can you give me a sense of how many of your programs you're actively looking to partner currently, and can you help set any kind of expectation for when we might see the first such deal?

Well, our main focus, our highest priority, would be looking for ex-U.S. partners for Lintuzumab and SGN-35. So those deals are probably the furthest along, those deal discussions.

We're obviously not going to partner all of our programs in one massive deal; we want to maintain a lot of upside thrust as an independent company. I could see partnering one or two programs, and it's a reasonable timeframe. Some time next year we would expect to be able to update you on this.

When we look at our partnering strategy, it has to be considered in connection with financing as well. We're in a strong financial position now to move our programs forward, but we want to make sure we stay that way. So we look at this from a cost benefit perspective, and we look at what strategically that keeps us moving forward through a combination of the right kind of either partnering deals, technology licenses or other equity (technical difficulty).

We look at it holistically, and the best way to get a good deal is also to be strong and have alternatives.

Thanks.

Thank you. Our next question is a follow-up question from the line of Mark Monane with Needham and Company; please go ahead.

Thank you. Can you comment on the opportunity of introducing an antibody in a multiple myeloma, specifically the trial with -- I believe a trial with Revlimid that you have underway, as well as the trial with Velcade in multiple myeloma, partnered with--in combination with Dacetuzumab? How are those studies progressing?

We have trials with Dacetuzumab or SGN-40 in myeloma, and those are--we have two trials. One is in combination with Revlimid and one is in combination with Velcade. And those are the trials, and I think that's probably what you were referring to. And those trials are accruing and going along very well, and we look to putting out data on those trials in 2009. And we're excited with the myeloma opportunity, and we think that myeloma is a type of disease that ultimately will be treated with a combination of an antibody and an effective cytotoxic agent, and so we see there's a big up side there for antibody therapy.

Thank you.

Thank you. Our next question comes from the line of Katherine Kim from Banc of America Securities. Please go ahead.

Hi. My question has to do with your interactions with the FDA. What we've been seeing is there's been a lot of push-back in terms of timing on PDUFA dates and just meetings with the FDA. So can you just talk about, as it relates to your interactions regarding the SP process for SGN-35, and if your timelines include kind of a slight push-back, just from a regulatory perspective? Thank you.

Sure. I have to say that so far we've had an excellent relationship with the FDA, and we call it a collaboration, actually, because they've been very helpful and worked with us closely on a lot of our programs, including SGN-35.

Specifically for SGN-35, having filed two SPAs with them, there is a defined clock on that of 45 days for their response to come. And clearly, as you've indicated, the FDA is somewhat understaffed, and there are some times where they're not able to meet their strict deadlines because they're understaffed and trying to fill staff right now, as they've publicly stated many times.

But we are definitely optimistic that the FDA will give us their feedback as close to the schedule as possible and move from there. So we're -- so far, we're pretty excited with the way they've been interactive with us, I have to say.

Okay, thank you.

Thank you. And at this time, I'm showing no further questions in the queue. I'd like to turn the call back over to Ms. Pinkston.

Thank you, operator, and thanks to everybody for joining us this afternoon. Have a good evening.

Ladies and gentlemen, this concludes Seattle Genetics' third quarter 2008 financial results conference call. If you'd like to listen to a replay of today's conference, please dial 303-590-3000, or 800-405-2236, with an access code of 11120729. Thank you for your participation. You may now disconnect.