Seagen Inc (SGEN) 2011 Q1 法說會逐字稿

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Seattle Genetics first quarter 2011 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, May 5, 2011. I would now like to turn the conference over to Peggy Pinkston, Director of Corporate Communications. Go ahead, ma'am.

Thank you, operator. I would like to welcome all of you to Seattle Genetics first quarter 2011 conference call. With me today are Clay Siegall, President and Chief Executive Officer; Todd Simpson, Chief Financial Officer; Eric Dobmeier, Chief Business Officer; Tom Reynolds, Chief Medical Officer; and Bruce Seeley, Executive Vice President, Commercial.

This afternoon, Clay will provide an update on our programs, including recent highlights and upcoming activities. Bruce will give an overview of our pre-commercialization activities and Todd will discuss our first quarter financial results. After that we will open the call for your questions.

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 will now turn the call over to Clay.

Thanks, Peg, and thank you all for joining us this afternoon. 2011 is off to a strong start for Seattle Genetics, highlighted by the FDA's recent acceptance of our BLAs and our Receipt of Priority Review designations for brentuximab vedotin in relapsed refractory Hodgkin lymphoma and Systemic ALCL. Both BLAs have been granted a PDUFA date of August 30, 2011.

We are focused on continuing our interactions with the FDA to facilitate the review process while also preparing for the planned commercial launch of b-vedotin later this year. In addition, our other clinical stage ADCs, SGN-75 and ASG-5ME are advancing in Phase One trials. Beyond our internal pipeline there are now 11 ADCs in clinical development by our collaborators. The significant progress with ADCs utilizing Seattle Genetics technology is driving substantial value and further demonstrates the potential role of ADCs in the treatment of cancer.

Our three main corporate priorities are; 1. To obtain approval and successfully launch brentuximab vedotin for relapsed refractory Hodgkin lymphoma and relapsed refractory systemic ALCL. 2. To evaluate the broader potential of b-vedotin through ongoing and planned clinical trials in earlier lines of therapy in other CD30+ malignancies. 3. To aggressively advance our clinical and pre-clinical pipeline of ADCs.

We are well positioned financially and operationally to execute on these goals. Today I will highlight our recent accomplishments and upcoming activities. Our lead program is brentuximab vedotin, also known as SGN-35 or b-vedotin. This is an antibody drug conjugate or ADC targeting CD30, the defining marker for Hodgkin lymphoma and a target also expressed on a number of other cancers including anaplastic large cell lymphoma or ALCL.

In February, we submitted a Biologics License Application (BLA) to the FDA seeking approval for brentuximab vedotin in the treatment of relapsed or refractory Hodgkin lymphoma and relapsed or refractory systemic ALCL. The FDA administratively separated the application by indication, and this week we announced that the agency has accepted both submissions for filing. In addition, both BLAs have been granted Priority Review with the same PDUFA date of August 30. The filings and priority reviews are a key step in the regulatory process for bringing b-vedotin to the many relapsed refractory Hodgkin lymphoma and systemic ALCL patients in need.

As a reminder, our BLAs are based principally on data from a pivotal trial in relapsed or refractory Hodgkin lymphoma that was conducted under a Special Protocol assessment and from a Phase 2 trial in relapse refractory systemic ALCL. In both trials, more than 90% of patients experienced tumor reduction. Overall response rates were 75% and 86% respectively. More than one-third of Hodgkin lymphoma patients and more than half of ALCL patients achieved a complete remission, meaning they had no evidence of disease following treatment with b-vedotin.

Most patients in both trials were either refractory to or had not achieved a durable remission following standard front-line treatments. Brentuximab vedotin was associated with a manageable side effect profile with the most common adverse events being peripheral sensory neuropathy, fatigue, nausea, upper respiratory tract infection, diarrhea and fever. These data will also serve as the basis for a Marketing Authorization Application in Europe. We are collaborating with Millennium, the Takeda Oncology Company, on the global development of brentuximab vedotin, and they are responsible for commercialization outside of the US and Canada. Millennium is on-track to submit an MAA to the EMA this quarter.

Additional data from the pivotal Hodgkin lymphoma and Phase 2 ALCL trials including updated duration of responses and progression-free survival will be reported at several medical meetings in the US and Europe during June. These include presentations at both the American Society of Clinical Oncology Annual Meeting in Chicago and the International Conference on Malignant Lymphoma meeting in Lugano, Switzerland.

Last month we reported new data from a case series of Hodgkin lymphoma patients receiving b-vedotin following allogeneic stem cell transplant. These patients were treated in our clinical pharmacology studies that were included as part of our BLAs. In this case series, 76% of patients had received an autologous transplant prior to their allogeneic transplant, representing a particularly difficult to treat patient population. We reported that of 24 evaluable patients 50% achieved an objective response, including 38% complete remissions. Again, brentuximab vedotin administration when associated with manageable adverse events similar to our previous trials.

In parallel with the regulatory activities associated with our BLAs we are also conducting a significant amount of pre-commercialization work to position the organization for successfully introducing b-vedotin to physicians and their patients. At this point I would like to turn the call over to Bruce to discuss these initiatives.

Thanks, Clay. I am delighted to share with all of you today some of the activities underway by the commercial team to prepare for a successful launch of brentuximab vedotin. Our leadership team, with major functional groups within commercial is now onboard including heads of marketing, sales, managed markets and reimbursements and market planning. We have assembled a strong team of individuals who have extensive backgrounds in commercialization activities for many highly successful brands including Avastin, Receptin, Retuxan, Soliris and Paxetir.

The team's primary goal is ensuring that we are launch-ready prior to the August 30th PDUFA date. Our present marketing focus is on disease awareness activities, communicating Seattle Genetics' leadership position in ADC development and preparing promotional materials and programs to rollout upon approval. B-vedotin has the potential to be the first new drug approved for relapse refractory Hodgkin lymphoma and the first significant advancement for relapse refractory systemic ALCL patients in several decades.

We will shortly be launching marketing efforts on the unmet need in these diseases as well as on the important role of targeting CD30 in lymphoma. One key part of its successful launch will be educating our customers on b-vedotin. We are defining our customer base broadly to include academic oncologists, community based oncologists, as well as transplanters, pathologists and nurses. We continue to see from our market research that there is a strong excitement about the clinical profile of brentuximab vedotin and physicians are eager to integrate it into their practices.

Our research also suggests that patients play an important role in determining the course of their treatment in these diseases and we are therefore developing patient education materials to be available upon approval. We have also made significant progress in staffing our sales organization and I am happy to say that we have completed hiring our regional and division level sales managers.

We are now in the process of hiring field representatives with demonstrated success in oncology product sales. The recruiting process is going extremely well and we have been successful in attracting high quality, scientifically focused sales representatives that can represent a primary point of contact for the customer. We will be poised to launch later this year with a fully staffed and trained sales organization that will be prepared to start selling b-vedotin right away.

Our managed markets and reimbursement team is currently working with distributors, insurers and oncology purchasing networks to facilitate the introduction of brentuximab vedotin into the market. We are building the infrastructure to provide reimbursement support to patients and providers upon approval.

In addition, we recognize the importance of treatment guidelines and are preparing for the review and inclusion of b-vedotin into payor and provider guidelines. A component of our strategy also includes filing for a J code, the billing designation used by US payors. As with any newly launched product, the J code, as well as coverage status with payors, will take time to obtain post-approval. It will be a priority for us to execute on these reimbursement programs at launch.

We are pleased to announce for the first time that our new trade name for brentuximab vedotin is ADCETRIS. Spelled A-D-C-E-T-R-I-S. We look forward to introducing this new name to the oncology community at the upcoming ASCO annual meeting in Chicago.

Brentuximab vedotin represents a potentially paradigm changing new treatment for patients with relapse or refractory Hodgkin lymphoma and systemic ALCL. We are excited by the potential to bring this CD30 directed ADC to patients who are in need of new and better therapies. I look forward to keeping you updated on our progress.

With that I will turn the call back over to Clay.

Thanks, Bruce. Another area of significant effort for us is the evaluation of brentuximab vedotin in earlier lines of Hodgkin lymphoma and ALCL treatment as well as in other CD30+ malignancies.

A Phase 3 AETHERA trial is ongoing in post-autologous transplant Hodgkin lymphoma patients who are at high risk for residual disease. This is a randomized, double-blind, placebo controlled study comparing progression-free survival in approximately 325 patients. We continue to open sites in the US and Europe and enrollment is progressing well. We expect to complete patient enrollment next year and anticipate reporting data from this event-driven trial in 2013 or 2014.

We are also conducting a Phase 2 Re-treatment trial designed to assess the therapeutic potential of brentuximab vedotin administration in patients who have relapsed after previously responding to b-vedotin. We reported interim data from this trail at ASCO last year showing that the use of b-vedotin in the retreatment setting resulted in an additional objective responses in relapse or refractory Hodgkin lymphoma and systemic ALCL patients.

In addition, we are evaluating brentuximab vedotin in front-line patients with Hodgkin lymphoma or systemic ALCL. Although standard front-line combination chemotherapy can result in durable response rates, these regimens and radiation therapy are associated with significant side effects including cardiac and pulmonary toxicities, infertility and increased risk of secondary malignancy. There is a need for new approaches to reducing these toxicities while maintaining or increasing the overall response rate and reducing relapses.

In February 2010, we initiated a Phase One clinical trial of b-vedotin in combination with ABVD for front-line Hodgkin lymphoma. The trial is designed to evaluate the safety of b-vedotin when combined with this standard chemotherapy regimen. In addition to continuing with ABVD plus brentuximab vedotin, we opened an additional arm to this trial to assess b-vedotin in combination with AVD, which removes bleomycin from the regimen.

Bleomycin is associated with significant pulmonary toxicities and oncologists are eager for alternatives that would mitigate its significant negative effect on their patients. This second arm will assess the safety of AVD in combination with b-vedotin. Following dose escalation, we expect to expand the number of patients in one or both of these two ongoing study arms to collect additional data to support the design of a registrational front-line study. We expect to report data from this trial in late 2011 or the first half of 2012.

During the first quarter of 2011 we also initiated a Phase One trial in front-line systemic ALCL. The standard of care for front-line treatment is CHOP, or C-H-O-P. The use of CHOP was carried over from B-cell lymphomas into T-cell lymphomas such as ALCL and there have been few significant advances in the treatment paradigm for ALCL in decades. Our front-line ALCL trial is designed to evaluate the safety of brentuximab vedotin as part of regimens for newly diagnosed systemic ALCL patients. This includes sequential administration with CHOP, as well as in combination with CHP, which removes Vincristine from the regimen. We believe the clinical profile of single agent brentuximab vedotin when contrasted with the historical activity and tolerability data of any of the individual components of either ABVD or CHOP chemotherapy allows us to consider new approaches that could redefine front-line regimens. Our ongoing Phase One trials will form our next steps for evaluating b-vedotin in front-line patients.

We are also actively pursuing evaluation of brentuximab vedotin in other CD30+ malignancies. There are three clinical trials planned for b-vedotin in these settings. First, a trial in CD30+ non-Hodgkin lymphomas such as peripheral T-cell lymphomas and diffuse large B-cell lymphomas. According to published literature, approximately 30% of PTCL cases and up to 20% of DLBCL cases express CD30. We are on track to have this trial underway later this year.

Second, a trial on cutaneous T-cell lymphoma, or CTCL, in our Phase 2 systemic ALCL trial, 14 out of 15 patients with cutaneous involvement experienced complete regression of their cutaneous lesions. We believe this illustrates that CTCL could be an exciting development opportunity for the evaluation of brentuximab vedotin.

Based on pre-clinical data, we estimate CD30 is expressed in up to 50% of CTCL cases. There are two planned investigator sponsored trials for cutaneous lymphoma patients that we will expect to start this year. We also expect to start initiating a corporate sponsored trial on CTCL under our collaboration with Millennium.

Third, a trial on CD30+ non-lymphoma indications including leukemia, multiple myeloma and solid tumors such as sarcomas or melanoma. We are on track to initiate this trial in the second half of 2011.

Through both corporate sponsored and investigator sponsored clinical trials, we are committed to exploring the potential of b-vedotin in new therapeutic settings. Our aspiration is that ultimately all patients with a CD30 expressing malignancy will be eligible to receive brentuximab vedotin. Our initial regulatory pathway plus our broad clinical development plans are designed to support this goal.

The next ADC in our pipeline is SGN-75, which targets CD70. CD70 is expressed on several types of solid tumors and hematologic malignancies. We are conducting a Phase One clinical trial with SGN-75 in renal cell carcinoma and non-Hodgkin lymphoma. In 2010, we reported that in the first 16 patients treated SGN-75 was generally well tolerated and demonstrated anti-tumor activity including two objective responses. At the ASCO annual meeting in June, we will be reporting additional data from this trial.

ASG-5ME, an ADC that we are co-developing with Agensys, an affiliate of Astellas, is also in Phase One. ASG-5ME is targeted to the SLC44A4 antigen, which is highly expressed in many solid tumors. There are two clinical trials underway with ASG-5ME; a Phase One study in metastatic pancreatic cancer and a Phase One trial in advanced prostate cancer. These single agent trials are evaluating the safety, tolerability, pharmacokinetic profile and anti-tumor activity of escalating doses of ASG-5ME. We expect to report clinical data from the ASG-5ME program in 2012.

Our pre-clinical pipeline also reflects the strong focus we have on ADCs. At the recent American Association for Cancer Research annual meeting, we reported data on SGN-19A, an ADC targeted to CD19. We demonstrated that SGN-19A induces anti-tumor activity in models of non-Hodgkin lymphoma and acute lymphoblastic leukemia. SGN-19A is a 2012 IND candidate for B-cell hematologic malignancies.

We also reported data at AACR on an ADC targeted to LIV1, which is expressed at high levels in breast and prostate cancers. The LIV1 ADC is one of several earlier stage programs that we are evaluating for potential future clinical trials.

In addition to our own pipeline, our ADC technology is generating increasing value through licensing and co-development deals. There is a growing number of collaborators utilizing our technology that have advanced into clinical development for the treatment of many types of cancer. In total, we have 11 ongoing ADC collaborations and there are now 11 collaborator ADCs in clinical development using our technology.

This includes a recent IND submission by Genentech, bringing the count to seven from Genentech and one each from Agensys, Bayer, Celldex and Progenics. Our strategy for ADC deals is focused on transactions that reflect either higher financial terms or product rights for Seattle Genetics through opt-in or co-development structures that can expand our pipeline. To date, we have generated more than $155 million from ADC licensing activities.

In March, we completed a new single target ADC collaboration with Abbott under which we received an up-front fee of $8 million and are entitled to receive approximately $200 million in potential milestones as well as royalties on product sales.

We also recently expanded our ADC collaboration with Genmab. Under the expansion, Genmab has rights to utilize our technology to develop ADCs to CD74, which is expressed in multiple types of hematologic malignancies and solid tumors. Importantly, as part of this collaboration, we have the right to exercise a co-development option for any resulting ADCs after the completion of Phase One. Under the expanded collaboration we now have two end of Phase One options on ADCs developed by Genmab. Genmab made an undisclosed up-front payment and has agreed to pay milestones and royalties on any resulting products that we don't opt into.

At this point, I would like to turn the call over to Todd to discuss our financials.

Thanks, Clay, and thank you everyone for joining us on the call this afternoon. During the first quarter of 2011, we significantly strengthened our financial position through our public offering in February and from cash generated under both new and existing ADC collaborations.

In total we have brought in over $200 million in cash already this year, and we ended the quarter with more than $455 million in cash and investments. This substantial cash position allows us to continue executing on our aggressive research, development and commercial plans and we are excited about the rest of 2011.

Revenues were $12.2 million in the first quarter of 2011 compared to $46.5 million in the first quarter of 2010. As discussed last year, first quarter 2010 revenues included approximately $40 million related to the dacetuzumab collaboration with Genentech that ended in June of last year. Excluding dacetuzumab revenues, collaboration revenues nearly doubled in the first quarter of 2011, reflecting increased revenues from both our b-vedotin collaboration with Millennium and our ADC collaborations.

As a result of our new ADC collaboration with Abbott announced in March, we now expect 2011 collaboration revenues will be at the high end of our previous guidance range, which was $40 million to $45 million.

Operating expenses were $45.1 million in the first quarter of 2011 compared to $35.5 million in the first quarter of 2010. This planned increase was driven by the pre-commercialization activities that Bruce described and by clinical and regulatory activities in support of the BLAs for brentuximab vedotin. As a reminder, 50% of joint brentuximab vedotin development costs are funded by Millennium under the collaboration. Development activities performed by us are charged to R&D expense as incurred. Development funding along with the up-front payment and other payments are recognized into revenue over the development period of the collaboration. Under the collaboration, we conduct and fund commercial costs for b-vedotin in the United States and Canada while Millennium is responsible for commercial activities in the rest of the world.

Non-cash share based compensation expense for the first quarter 2011 was $4.3 million compared to $3.2 million in 2010.

So, in closing, we ended the first quarter of 2011 with $455.9 million in cash and investments, an increase of just over $161 million from December. The increase reflects $168 million in net proceeds from our public offering in February, $16 million in up-front payments received under our new ADC collaborations with Pfizer and Abbott, and Millennium reimbursement payment. We remain on track to end 2011 with more than $280 million in cash and investments.

With that I will stop and turn the call back over to Clay.

Thanks, Todd. Before we open for questions, I will quickly recap our key upcoming activities. For brentuximab vedotin, which now has a brand name of ADCETRIS, we will continue our regulatory interactions with the FDA on our BLAs both with a PDUFA date of August 30, 2011. We are collaborating with Millennium on their planned MAA submission this quarter. We will report clinical data at several upcoming medical meetings. We will continue executing on our pre-commercialization activities to ensure we are launch-ready by August 30th and we will initiate several planned clinical trials this year in additional CD30+ malignancies.

For SGN-75 we will report additional data from our ongoing Phase One trial in renal cell carcinoma and non-Hodgkin lymphoma at ASCO. For ASG-5ME, we and Agensys are advancing Phase One clinical trials for pancreatic and prostate cancer. And we will advance our earlier stage programs towards future clinical trials including SGN-19A, which is a 2012 IND candidate.

We believe there are tremendous opportunities in front of us and that 2011 has the potential to be a transformative year for the company. I look forward to keeping you posted on our progress.

Okay, thanks Clay. At this point we will begin the Q&A portion of our call. We ask that each person limits themselves to one or two questions and then re-queue with any additional questions. Operator, please open the call for questions.

Thank you, Ma'am. (Operator Instructions). Our first question comes from the line of Matt Roden with UBS. Go ahead, Sir.

Hi, thank you. This is actually [Andrew] on behalf of Matt. Looking ahead to the launch, saying you are going to be launch-ready by August 30th, do you expect that you will start capitalizing inventory ahead of that launch, and to what degree should we expect to see the impact on the--

Okay, that was a little broken up, but I think Todd captured that. Todd?

So your question was when will be begin to capitalize inventory? The answer to that is we will begin to capitalize inventory when we have approval and assuming we get approval. One of the things that we talked about in earlier calls with respect to our spending this year is we do envision quite a bit of pre-commercial manufacturing activities. Those activities obviously will be expensed up until the time of approval and then we will capitalize the cost after that.

At the time of launch we expect we will have fairly good quantities of inventory to support not only our launch but for the needs of our partner, Millennium, for at least the initial period of the launch.

Okay, thank you.

Thank you very much. Our next question comes from the line of Mark Monane with Needham & Company. Go ahead, please.

Thank you very much. Good afternoon from New York City. The temperature is 64 and it is partly cloudy or maybe mostly sunny depending on which way you look at it. So, that is my first question then. Which way are you looking at the split decision or the split of the application? Is it mostly sunny because you have a chance to win-win on two different indications with lots of discussion at the FDA on both indications? Or is it partly cloudy because maybe one of the applications, even though you might love them, might be less stronger than the other?

Mark, first of all thank you once again for the New York weather report. We expect it every quarter.

My pleasure.

Now, we look at this as sunny. The FDA advised us that they would administratively separate these applications by indication. Now separating them allows the FDA to act individually for each indication. That has been their standard practice when reviewing new drug approvals. But the important thing is that both applications have been filed, both have received Priority Review and both have a PDUFA date of August 30, 2011. That is what is key.

Now there is precedent for what the FDA did and I just wanted to give you an example. Pfizer's SUTENT was submitted as an NDA for both GIST and RCC. The FDA administratively separated these and then approvals were received for both indications at the same time. Now, lastly, we believe that our data and our regulatory package are strong in both relapse refractory Hodgkin lymphoma and relapse refractory systemic ALCL and we believe that it is a sunny outlook.

That was helpful, thank you. Peggy said we have a follow-up question. So the follow-up question has to do with patient follow-up. Maybe you and Bruce, or any combination there, could talk about what is the follow-up with patients in terms of long-term durability? You have given us some really good data so far on the response rates but if you will talk to us a little bit about long-term durability and then the other piece of that is what is the duration of therapy when you have a drug that is relatively well tolerated?

Mark, thanks for the question. I'm going to turn that question over to Tom Reynolds, our Chief Medical Officer.

So, Mark, we continue to follow the patients through both of the registrational studies. Clay mentioned earlier in the call that we do plan to have presentations at both ASCO and Lugano surrounding both of these trials. The key focus there is the update on durability, especially the update on (background noise). We think the data are exciting and we think people will find them exciting so we are looking forward to sharing that coming very soon.

In terms of how long patients are treated, just to kind of recap from the pivotal study on Hodgkin, there was a median of nine cycles and a mean of 10 cycles per patient and roughly 20% of the patients went a full 16 cycles, or close to a year of therapy. So quite a number of patients have gotten significant amounts of drug for a long time and have done quite well.

Thanks for the added information. Again, congrats on the filing.

Thank you very much. Our next question comes from the line of Cory Kasimov of JP Morgan. Go ahead, please.

Hi, it's actually Matt Lowe in for Cory today. Just a couple of questions. The first one being, can you anticipate how long it might take to get the J code issued assuming approval is granted by August 30th? Secondly, an additional market research you can share with us? Thanks very much.

Sure, I will turn this over to Bruce Seeley.

We have already constructed our plan to address the J code. As you know, there is a process for application of a J code. We anticipate the launch with a generic J code which is common for new product launches and we will apply for a J code as soon as possible. Realistically we would anticipate that it would take somewhere on the order of 12 to 18 months to secure a J code.

As far as recent market research, we have quite a bit of market research ongoing. The one thing I can tell you that is coming out loud and clear is research done with both physicians, payors, transplanters and others is that universally the product profile and the clinical profile of this product amazes people. They are very eager to see it introduced and make it available for their patients. The market research has all been very, very favorable.

Okay, that's great. Thank you.

Thank you very much. Our next question comes from the line of Marco Kozul with ThinkEquity. Go ahead, please.

Hi, good afternoon and congrats on your progress. I wanted to ask you a quick question about patient awareness and how you currently view its importance to the upcoming launch?

Sure. Bruce will take that again.

So, as I mentioned in my comments, one of the areas that we feel is very important to prepare for the launch is patient education. We have a variety of different programs and materials that we are developing to rollout at the time of launch to be able to help educate patients not just about the disease but about the product.

Patients with Hodgkin lymphoma are actually somewhat unique to your average oncology product because the median age being so young. The median age in our trial was 31. We are tuning the communication we have to patients to be sure that they understand and can relate to the product and we are making sure the channels we use to communicate with this population are appropriate as well.

Great. Thanks for taking my question.

Thank you. Our next question comes from the line of Rachael McMinn, Bank of America/Merrill Lynch. Go ahead, please.

Thanks very much. You basically answered this but I want to ask the question in a little bit of a different way. In the press release you talk about Hodgkin's as a pivotal trial but ALCL as Phase Two. Is there anything to read into that from a regulatory perspective?

That has been how we have been calling this for forever. This pivotal trial, we called it a pivotal trial just because it was under a [spa] but it was designed as a Phase Two as well. So the ALCL trial is a Phase Two study. It was not designed under a [spa] but the data were so compelling we chose to submit a BLA based on both, now split into two BLAs and now filed.

So we are very confident with our package. Our data was amazingly striking. We have had great feedback from patients and doctors and we are really excited with this. So really zero change from what we had been saying as to that for probably the last two years in our discussions about this. Just no change.

Okay. Has the FDA verbally communicated to you any sense of a panel? I am assuming we should expect one but any sense of timing on that?

Because brentuximab vedotin, now ADCETRIS, is a new molecular entity, we expect to be asked to present at ODAC. But this decision is not up to us. It is up to the FDA. We can't speculate if you were going to ask whether there will be one ODAC or two ODACs or whatever, it is really up to the FDA but I can guarantee you we are preparing hard, working hard internally in the event that an ODAC is held and we believe that our data and our regulatory package are strong in both indications. So a sunny report.

Okay, I'm not giving you the weather in Paris. Last question is just brentuximab vedotin at ASCO you said there is additional data. Should we be focused on PFS? I guess what is going to change because they already have the response rate data?

Tom?

As Mark had asked earlier, how are you following up on durability? So we have followed them. We have more durability data and so I think looking at both PFS, durability of response and I think what is really important in lymphoma is focusing on complete remission. Those are the things that typically have correlated long-term clinical benefit and overall survival and from a regulatory perspective complete remission is often viewed as clinical benefit; where the patient has no evidence of disease and is just going about their activities of daily living.

So I think looking at what happens with [CRs] for both diseases when you are at ASCO or Lugano, would be something of interest.

Thanks.

Thank you very much. Our next question comes from the line of Thomas Wei with Jefferies. Go ahead, please.

Thanks. I just wanted to get an update on how many patients have enrolled in the expanded access program in the U.S.? Maybe you could share with us how many are not from the placebo arm of the AETHERA trial?

Thomas, thank you for the question. Tom would you like to take that?

We are not disclosing data about enrollment into the EAP and especially from the AETHERA trial. In fact, those data we don't really have much access to because we want to ensure the blind is being maintained and we really are conducting a well-controlled, potentially confirmatory study. For the expanded access program I can tell you it is going well. There are a number of U.S. centers that are open. Patients are actively enrolling and we are very pleased to be able to provide access to this drug in the number of months before it comes to market.

As Clay has mentioned multiple times in the past, we are focused here on providing this drug to patients who really have no other options at this point and who may not live long enough otherwise past launch to get it then. So we haven't been really providing any metrics but we have been very pleased with the way it is going.

Okay. Then maybe a separate question. I was a little bit confused on your commentary about the ABVD combination trial. Where exactly are you with the first arm of the trial where brentuximab is being added on top of ABVD. Can you share with us what dose you dosed to in that first arm? Then are you actually putting that arm on hold in terms of dose escalation so that you can do the expansion in the second arm with the bleomycin substitution?

I will start with a short answer and turn it over to Tom. I can assure you that we have put nothing on hold first of all. We have an ongoing study with ABVD in combination with brentuximab vedotin. That is ongoing. We also have a separate arm. So two arms both ongoing and the separate arm has dropped out the bleomycin due to the intense toxicity and modest efficacy of bleomycin to replace that with brentuximab vedotin in an attempt to look at redefining what is a three-decade old regimen. Three decades without any changes, any advances at all in ABVD.

So we are evaluating both side by side. Tom do you want to give any other color?

The only other color is what we are trying to find here is what is the best dose with each of these regimens. ABVD is still dose escalating. Obviously we are just opening the AVD arm. It is an every-other-week dosing regimen which we have not previously explored but we can model from our two Phase One studies from q.week and q3.week. So we are trying to find the best dose that works with these regimens and use those data to help us design an appropriate, potentially registrational study to really explore this both from a safety and [audio interference] perspective in front-line.

But you can share with us what dose you have reached in the combo arm?

Not at this time. That is something we will do obviously when we present our data at an appropriate conference.

Great, thanks.

Thank you very much. Our next question comes from the line of Brett Holly with Oppenheimer. Go ahead, please.

Hi, this is Eric Cheung in for Brett. I guess building on the prior question will we see data from both arms of the front-line combo ABVD trial this year? Do you intend to open additional arms in the future exploring combinations of other components of ABVD?

Thanks for the question. Tom do you want to address this?

We would very much like to present these data as soon as they are mature and available. We are hoping that would be the end of this year, but it could be the first half of 2012. So we are just being clear about that. It depends on enrollment, follow-up and ensuring we have a mature data set. We also have an interest from physicians in running additional studies in front-line as investigator-sponsored studies and some of those could involve alternative front-line regimens with brentuximab vedotin playing a role. When those are open obviously then we will be able to discuss them.

We currently are not planning on amending this trial further to open another alternative arm but we are open to potentially expanding one or both arms once we have completed dose escalation and that is already built into the protocol.

Great, thanks.

Thank you very much. Our next question comes from the line of David Miller with Biotech Stock Research. Go ahead, please.

Good afternoon and thanks for taking my call. I have a question about how soon you are going to be ready to market ADCETRIS? You mentioned in the comments about the PDUFA date being August 30th and you being ready then, but could you be ready earlier if there was an earlier approval and if not what would be the rate limiting step?

Thanks for the question, David. I think in our prepared remarks we said we would be ready on or prior to. So I want to make sure you heard that. I also hope that everyone likes the name ADCETRIS. It is a very easy to sound name, starts with ADC, I hope everyone noticed that. It is much easier than brentuximab vedotin. So we really like the name and are looking forward to really talking about this at ASCO.

It is shorter to Tweet, that's for sure.

There you go. Bruce, do you want to comment on anything David asked?

You know, the only thing that I can add is that our commercial preparations, all of them, are either on track or ahead of schedule. I am confident we are well positioned to have a strong launch of the product.

Mark sort of asked this question but I want to make sure that I understand it. So the median time on drug for the Phase Two trial for Hodgkin lymphoma was nine months and ALCL was 10 months. Is that correct?

I may have miscommunicated. Median time was nine cycles for Hodgkin, ten cycles was the mean for Hodgkin's. So there is a tail of patients getting longer that pulls out the mean. ALCL was slightly shorter than that. I think it was seven cycles at the time we reported but at that point in time about one-third of the patient were still on-drug. So that number has moved out and will be part of our presentations at ASCO and Lugano.

Perfect. That helps. That's it for my questions.

Thank you. Our next question comes from the line of Jason Kantor with RBC Capital Markets. Go ahead, please.

Thanks for taking the question and congrats on getting the BLA filed. I wanted to talk to you about the first-line studies. The question is can you walk through what you think the development plan might look like and unfold over time in terms of when could you potentially run Phase 3? Do you have to do a robust Phase 2 program? Given what you know and what is an established safety. Then what kind of end points would you be required to look at either in combination with ABVD or potentially in combination with AVD in a front-line, Phase 3 trial?

Jason, thanks for the question. Right now we are in the middle of Phase One studies in both Hodgkin and in ALCL and we really need to from these Phase One studies look at the dose, the regimen and look at everything we can. It is our intention to go from these studies, and we believe they are robust studies, to go into registrational studies. Now, we have not outlined the exact timing of that or how long that will take. I think you can assume that it will take a number of years to conduct those studies because it will be substantial patient population with follow-up. So I don't think we are not proposing a very short timeframe here.

Until we complete our Phase One trials it is very hard for us to give timelines on when those will initiate and when those will be complete. You can be assured that we are working as absolutely as fast as we can to complete appropriate Phase One studies to get the kind of data we need to immediately go into registration type trials. It is a very active drug. It really helps patients and we think it is important to get this drug into front-line trials, registration type trials. So we believe it is important. It is not just something we want to do for the Company. We believe it is important for patients. Tom, do you want to add to that?

I think the only color that I would add is in terms of design I think you can look at some of the larger studies that have been run, especially by the German Hodgkin's Study Group which have been practice changing. Most of those use PFS as an endpoint. Obviously we would need to discuss this with regulatory authorities both here as well as in Europe and other jurisdictions in collaboration with our partner, Millennium. We want to make sure we do the right study that will support approval, but we are pretty confident we can design good studies once we have our Phase One data.

Then if I could ask a financial question, looking at your expense guidance it seems to be that Q1 came in fairly low on the R&D side. I would think you would be pretty deep into manufacturing and things like that. So I am just wondering how we should think about the expense ramp through the year and whether it is going to be a major inflection at some point?

Sure, good question. Except for the slight modification we made to our revenue guidance no changes to our expense guidance. One of the things, as I think I mentioned in an earlier question, we are fully expecting is quite a bit of manufacturing activity prior to approval and launch. Those activities will really start to kick in earnest here over the next second and third quarter. So we are expecting quite a bit of a ramp now heading into the second and third quarter that would likely tail off towards the back end of the year.

The other thing we expect, and Bruce spent a lot of time talking about this in his remarks, is the substantial efforts we have underway in the commercial areas of the Company. As a result of those activities, we will expect to see the G&A line run up through the remainder of the year probably in a pretty even, steady ramp. I think as a result of really those few things we saw a little bit lower expenses in Q1 than perhaps we will see in the rest of the year.

Thank you.

Thank you very much. Our next question comes from the line of Howard Liang with Leerink Swann. Go ahead, please.

Thank you very much. I do have a question on separating the two indications for ADCETRIS. I assume they will make you have separate reviewers and I would assume they will also come to the same physician [makers] the oncology division. So my question is what does it mean approximately to have two separate applications?

Tom, do you want to comment on the ODAC panels, etc.?

From the FDA perspective, often what can happen with these multiple indications or split is it is actually the same review team looking at the data for both indications. Not often different if they are closely in line. These are both CD30+ lymphomas. It is both the hematology division so we might expect the reviewers will be the same or very similar.

We would expect the same thing if this were to go to an ODAC panel that those two panels might be identical or at least very similar with few different outside experts. So our feeling is the review teams and potential ODAC will be the same or very similar. So we would not expect divergent standards to be applied to the application.

Okay, that was helpful. Another question is a follow-up on the front-line combination trial, the new cohort with AVD. My question is when you have the data from both cohorts how will you make a decision which one to take forward? What is your physician treat going to be like at that point?

That is a very good question and I will turn it over to Tom for more color, but it is not 100% clear that we would take one forward. I just want to emphasize we are doing this study and it doesn't necessarily mean we couldn't take both forward and evaluate them in larger studies. It may be that we take one forward but I wouldn't have a preconceived notion that it had to be that way. Tom?

I echo what Clay is saying. Obviously a big driver is going to be how well tolerated both of these regimens are. Is one able to give more cycles all the way through to the end or are patients getting all six months of ABVD or AVD with brentuximab vedotin. That is one point. Another is if there is any obvious difference after the expansion cohorts in the responses that we see either qualitatively or quantitatively. This is not a large study.

It will be very difficult to make hard choices based on efficacy only but I think the combination of efficacy, safety and the [Gestault] of our investigators will help us decide what to do next and I very much support what Clay said, which is it is quite possible that we will need additional data that could be gotten from bringing multiple regimens forward, at least for an initial evaluation period. There are a variety of study design techniques that we could apply to do that.

Thanks very much.

Thank you. We do have a follow-up question from the line of Thomas Wei. Go ahead, please.

Thanks for taking my follow-up. Just back on the expanded access program, did I hear you correctly that the types of patients who are going in right now are maybe potentially even more advanced than those who were enrolled in the original Phase 3 trial or your pivotal trial for Hodgkin's?

You heard correctly. It is not that is only what we will take, but the whole rationale for the EAP for us was to make this product available for patients who may not make it to approval. The EAP was not open to treat every patient on the planet that just asks for the drug. That is not the intention of our EAP. That is not really fair to the Company. What we are trying to do is be a patient-first company and address the needs of patients.

That's why as a lot of analysts over time and investor groups especially have been asking us, "Well, how many patients do you treat per month on your EAP? Or how much this? Or how much that?" We are now answering any of that because our intention with this EAP is not as a proxy to how we will be selling the product. That is not it. It is really to help patients at our cost, really, providing drug, working with doctors that come to us.

What Tom indicated with that EAP is actually going well and by going well it means that we are helping a lot of patients get through a time period where they wouldn't have had access to this product. How much is a lot is not something we are going to report. But I am really pleased and the staff here and the clinical staff is really pleased with how much effort the Company is making to help patients in need. That is what we are about.

Would you say that the demand at least within that type of patient has been consistent with maybe what some of your market research has indicated would be the size of the population?

You know, you are very good at asking a question in very interesting ways. What I can say, Thomas, is that when we opened our trials for our pivotal trial in Hodgkin lymphoma and ALCL we had heard from a lot of people these diseases this will take you two years to enroll for Hodgkin lymphoma and we enrolled in six months 100 patients. We heard with ALCL you will never be able to enroll 58 patients. Well, that took I think six or seven months. We really cranked forward and had to actually start turning away patients the enrollment was so strong.

I can tell you that we then did compassionate use, one-off, as the FDA calls these single patient INDs. We had entirely too robust number of single patient INDs. Now we are in EAP trying to treat the patients that absolutely desperately need this product and it is going very strongly in a robust way but I'm not going to try to correlate does this match any of our expectations because that is impossible to do.

Our expectations, we are looking at big groups of patients and not just patients that wouldn't make it for the next X number of months. So there really is no way to correlate it.

Thanks. That's helpful. Thanks for bearing with me.

Thank you very much. Our last question comes from the line of Ling Wang with Brean, Murray & Company. Go ahead, please.

Good afternoon. Thank you for taking my questions and congratulations on acceptance of the BLA. I wanted to follow-up on the front-line study. My first question is I was wondering whether you can comment on historically how the efficacy might be impacted when bleomycin was removed from the regimen? Secondly, can you expand a little bit what has been driving the physicians at the new arm at this time? Is it just proactively to reduce the toxicity or is it because you have seen [audio interference] the ABVD in combination with SGN-35? Thank you.

Sure. Tom, would you like to take these?

Sure. So, I think the first question revolved around what are the data about bleo and what would be the impact of bleo removal on efficacy? There are a number of studies actually ongoing right now trying to address that question. What has become clear is in early stage Hodgkin lymphoma you can dispense with the bleomycin. That is not the kind of Hodgkin we are treating. We are treating advance stage but it doesn't add materially to that regimen from an efficacy perspective. There is a study ongoing now the Germans are doing a study to ask whether bleo really adds. We don't have data yet but it is thought to have a very modest, single agent activity and it comes with a pretty high toxicity price. So we believe this is the right thing to do.

I think your second question was why are we adding the new arm now? Tell us about the timing. Is it driven by safety or something else? To be honest, what it is really driven by are the data we presented from the pivotal study at ASH last year where our investigators came to us and said, "This is a potentially transformative therapy. We would like to make better front-line therapy. Would you consider dropping the bleo and going with this with AVD because we think it will be better for our patients potentially?"

So, given their enthusiasm and our interest in making better therapies for patients we thought this was the right time to start.

Thank you.

Thank you very much. At this time there are no further questions in the queue. You may continue.

Okay, thanks operator and thanks everybody for joining us this afternoon and have a good evening.

Ladies and gentlemen this concludes Seattle Genetics' first quarter 2011 financial results conference call. If you would like to listen to a replay of today's conference please dial 1-303-590-3030 or 1-800-406-7325 with the access code of 4435537. AT&T would like to thank you for your participation. You may now disconnect.