Seagen Inc (SGEN) 2014 Q4 法說會逐字稿

Good day and welcome to the Seattle Genetics fourth-quarter and year 2014 financial results conference call. (Operator Instructions). As a reminder, today's conference is being recorded.

At this time, I would like to turn the conference over to Peggy Pinkston, Executive Director Corporate Communications. Please go ahead.

Thank you, operator, and good afternoon, everyone. I'd like to welcome all of you to Seattle Genetics' fourth-quarter 2014 conference call. With me today are Clay Siegall, President and Chief Executive Officer; Todd Simpson, Chief Financial Officer; Eric Dobmeier, Chief Operating Officer; Jonathan Drachman, Chief Medical Officer and Executive Vice President Research and Development; and Darren Cline, Senior Vice President Commercial.

Following our prepared remarks today, we will open the line for questions. If we are unable to get to all of your questions, we will be available after the conclusion of the call.

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 results.

At this point, I'll turn the call over to Clay.

Thanks, Peg, and good afternoon everyone. Thank you for joining us today.

In 2014, we continued to make substantial progress on all fronts, including commercial, clinical and research. We reported strong year-over-year ADCETRIS net sales growth and generated data from multiple trials investigating the use of ADCETRIS in a range of CD30-positive malignancies. We also advanced and expanded our product pipeline and continue to develop novel technologies to empower antibodies for the treatment of cancer.

ADCETRIS net sales in the US and Canada were $178.2 million during 2014. This represents a 23% increase compared to 2013. Looking forward, we expect 2015 ADCETRIS net sales in the US and Canada to be in the range of $200 million to $210 million. Our expectations reflect modest growth of the brand while we pursue future label expansions in other CD30-positive malignancies and earlier lines of therapy supported by data from our four Phase III trials.

Globally, ADCETRIS net sales in 2014 approached $400 million. Our partner, Takeda, continues to make progress in securing additional approvals for ADCETRIS in its territories. ADCETRIS is now approved in 50 countries worldwide, including many major markets that have been added in the past year such as Japan and Brazil. This is an increase from 39 countries a year ago.

Through our broad ADCETRIS clinical development program, we have continued to generate data reflecting its potential both as monotherapy and in combination with other agents. We have substantial efforts in Hodgkin lymphoma, T-cell non-Hodgkin lymphoma, and B-cell non-Hodgkin lymphoma.

I will now review each of these three areas. In Hodgkin lymphoma, our goal is to move ADCETRIS into earlier lines of therapy. To this end, we reported positive data from our Phase III AETHERA clinical trial evaluating the use of ADCETRIS as consolidation for Hodgkin lymphoma patients at high risk of relapse post-autologous transplant. The trial met its primary endpoint of improving progression free survival with a hazard ratio of 0.57 and a P value of 0.001.

The safety profile of ADCETRIS was generally consistent with existing prescribing information. Based on a recent meeting with the FDA, we intend to submit a supplemental BLA this quarter to seek approval for ADCETRIS in this setting.

In front-line Hodgkin lymphoma, our Phase III ECHELON-1 trial is ongoing. Our goal with the ECHELON-1 trial is to redefine the way front-line Hodgkin lymphoma patients are treated by adding ADCETRIS into the standard regimen while dropping bleomycin, a drug associated with significant pulmonary toxicity.

As reported at ASH, data from our lead-in Phase I trial for patients who received ADCETRIS plus AVD showed a three-year failure free survival rate of 92% and an overall survival rate of 100%. We believe these data underscore the opportunity for ADCETRIS to potentially change the front-line treatment regimen for the first time in 40 years.

In addition to our efforts with AETHERA and ECHELON-1, there are numerous other corporate and investigator sponsored trials of ADCETRIS underway in Hodgkin lymphoma. Encouraging data were reported at ASH from trials in front-line older Hodgkin lymphoma patients and in Hodgkin lymphoma patients in the salvage setting where we reported an 83% complete remission rate for the novel combination of ADCETRIS and Bendamustine.

And we recently announced a clinical collaboration with Bristol-Myers Squibb under which we will evaluate the combination of ADCETRIS and Opdivo or nivolumab. There are two initial trials planned to start later this year, one in salvage Hodgkin lymphoma and one in relapsed non-Hodgkin lymphoma. Both trials will explore whether ADCETRIS combined with a checkpoint inhibitor can result in improved outcome for patients.

Turning now to T-cell lymphomas, our ongoing Phase III ECHELON-2 trial is designed to redefine the way newly diagnosed patients with CD30-positive mature T-cell lymphoma are treated. In this trial, we are comparing ADCETRIS plus CHP to CHOP, the standard of care for the last few decades.

In CD30-positive cutaneous T-cell lymphoma, we are conducting the Phase III ALCANZA trial. This study is building upon strong data reported from two separate investigator sponsored trials. Our goal is to report data in 2016.

Finally, we have substantial efforts ongoing with ADCETRIS in B-cell non-Hodgkin's lymphoma, in particular diffuse large B-cell lymphoma, or DLBCL. We reported data at ASH illustrating that the activity of ADCETRIS in relapsed refractory DLBCL was higher among patients whose tumors tested positive for CD30 compared to patients with undetectable CD30 by standard techniques. These data provide the rationale for a planned Phase II randomized trial in CD30 positive DLBCL patients who have failed autologous transplant and for patients who fail front-line therapy and are ineligible for transplant. The trial will evaluate the combination of Rituxan and bendamustine, plus or minus ADCETRIS. We intend to initiate the trial this year.

At ASH, we reported encouraging data for front-line DLBCL patients with advanced disease when combining ADCETRIS with the standard R-CHOP regimen. The CR rate for all patients was more than 75%. Interestingly, for patients with CD30-positive DLBCL, the CR rate was 91%. We are expanding the trial to evaluate ADCETRIS plus R-CHP, which excludes vincristine from the standard regimen. We look forward to data from this novel combination, which will inform our next steps in ADCETRIS in front-line DLBCL.

The data generated to date have resulted in the addition of ADCETRIS to NCCN treatment guidelines and compendia listings. ADCETRIS was recently added to listings for CTCL and for relapsed CD30-positive DLBCL. This is in addition to CD30-positive PTCL, which was previously included.

Regarding ECHELON-1 and ECHELON-2, as previously mentioned, we are in discussions with regulatory agencies about potential modifications to these Phase III studies based on emerging data from other trials. We have had discussions with the FDA and EMA, and anticipate aligning with the agencies by mid-2015 on both trials.

Beyond ADCETRIS, we made substantial progress in 2014 with our product pipeline, which now has seven clinical stage programs targeting a range of hematologic malignancies and solid tumors. Jonathan will cover our pipeline programs in his remarks.

At this point, I would like to discuss our ADCETRIS commercial efforts. Our former head of Commercial, Chris Boerner, recently took a position leading the US commercial efforts at Bristol-Myers Squibb. We are fortunate to have strong commercial leadership with Darren Cline, Senior Vice President Commercial, who succeeds Chris Boerner, and Chip Romp, Senior Vice President Sales and Managed Markets. Darren and Chip are leading a talented commercial organization that will continue to execute on our goals and ensure a smooth transition. Both have significant commercial leadership experience at a variety of biotech companies, including Amgen, Alexion, and Genentech, and were keys to our success in launching ADCETRIS and building a high-performing commercial team.

Darren will discuss commercial results of the quarter. After Darren's remarks, Todd Simpson will discuss our fourth-quarter and 2014 financial results. Then Jonathan Drachman will provide updates on our pipeline. Afterwards, we will open the line for questions. Darren?

Thanks Clay. ADCETRIS fourth-quarter net sales were $46.5 million, a 21% increase over fourth quarter 2013. These results reflect both effective commercial execution and continued physician identification of patients who may benefit from ADCETRIS treatment.

2014 marked the third year of ADCETRIS commercial availability. Our commercial efforts have established ADCETRIS as a standard of care with a market share of roughly 70% across on-label segments, including relapse, post-transplant Hodgkin's lymphoma, transplant ineligible Hodgkin's lymphoma, and relapsed systemic anaplastic large cell lymphoma. ADCETRIS duration of therapy in our on-label settings remains consistent with prior periods at an average of roughly six cycles per patient.

While we do not promote outside of our label, a growing proportion of ADCETRIS sales in 2014 came from spontaneous adoption by physicians in earlier lines of Hodgkin's lymphoma and other CD30-positive lymphomas. Spontaneous use makes it challenging to forecast near-term sales growth of ADCETRIS, and we rely on trend lines supplemented by market research to provide our financial guidelines. In the longer term, we expect labels from AETHERA, ALCANZA, ECHELON-1 and ECHELON-2 to generate significant additional growth of ADCETRIS.

Looking ahead to 2015, our commercial efforts will continue to focus on assisting physicians with identifying appropriate on-label patients for ADCETRIS and increasing duration of therapy. Additionally, commercial preparations are now well underway for a potential label expansion, upon approval, for the post autologous stem cell transplant consolidation setting based on the results of the AETHERA Phase III trial.

Now I'd like to turn the call over to Todd.

Great. Thanks, Darren, and thanks, everyone, for joining us on the call this afternoon.

We ended 2014 in a strong financial position with more than $313 million in cash and investments. Today, I'll highlight our financial results for the fourth quarter and year-end 2014 and then I'll provide our financial outlook for 2015.

Total revenues in the fourth quarter of 2014 were $74.3 million, which included ADCETRIS net sales of $46.5 million. Total revenues for the year in 2014 were $286.8 million, including ADCETRIS net sales of $178.2 million. ADCETRIS sales in 2014 increased 23% over 2013, in line with our growth vision for the ADCETRIS franchise as we drive to expand the label. Revenues in 2014 included royalties of $11.9 million in the fourth quarter and $40 million for the year, primarily reflecting royalties on ADCETRIS net sales by Takeda in its territory.

As a reminder, royalties in the first quarter of 2014 included a $5 million sales milestone triggered by Takeda surpassing $100 million in annual ADCETRIS net sales in 2013. Takeda sales surpassed $100 million once again in 2014, which increases the royalty rate we receive above that level from the midteens to the high teens.

Collaboration revenues were $16 million in the fourth quarter and $68.6 million for the year in 2014.

During 2014, we generated cash inflows in excess of $250 million, which came primarily from ADCETRIS sales, collaborations, and royalties. This enables us to continue investing in activities intended to broaden the ADCETRIS label and in advancing our growing product pipeline.

R&D expenses were $64 million in the fourth quarter and $230.7 million for the year in 2014, both increases over the same periods in 2013, reflecting ADCETRIS development activities and increased investment in our pipeline.

SG&A expenses were up modestly year-over-year and within our expectations. Non-cash share-based compensation costs for the year in 2014 was $40.6 million compared to $31.4 million for the year in 2013.

Regarding financial guidance for 2015, we anticipate ADCETRIS net sales in the US and Canada will be in the range of $200 million to $210 million. We expect 2015 revenues from collaboration and license agreements to be in the range of $60 million to $70 million driven by amounts earned under our existing ADC collaborations and the ADCETRIS collaboration with Takeda.

We expect R&D expenses to be in the range of $250 million to $275 million and SG&A expenses to be in the range of $105 million to $115 million.

ADCETRIS related activities will continue to be the primary driver of our expenses, including clinical trials and commercial initiatives. The planned increase in R&D expenses also reflects investment in our clinical pipeline as well as two new programs entering the clinic this year.

We expect the cost of sales as a percentage of sales during 2015 will be in the range of 10% to 12%. Expenses include non-cash amounts projected to be in the range of $55 million to $60 million, approximately $40 million which relates to share-based compensation expense.

We ended 2014 in a strong financial position. With ADCETRIS sales and royalties as well as payments under our ADC collaborations, we expect to end 2015 with more than $180 million in cash and investments. We continue to be well positioned to execute on our growth plans.

With that, I will now turn the call over to Jonathan.

Thanks Todd. Our clinical, regulatory and research teams have been productive and focused on conducting a broad clinical development program for ADCETRIS and our product pipeline. Clay highlighted our ongoing and planned activities with ADCETRIS. Now I will focus on our pipeline progress.

We are advancing seven clinical stage programs, six ADCs and one novel immuno oncology agent. Our two lead proprietary clinical stage ADCs are SGN-CD33A and SGN-CD19A. SGN-CD33A is an ADC targeted to CD33, a validated target that is expressed across acute myeloid leukemia regardless of subtype, cytogenetic abnormality, or underlying mutational heterogeneity. Our Phase I clinical program with SGN-CD33A is designed to evaluate both fit and unfit AML patients.

First, we are conducting a Phase I trial of SGN-CD33A as both monotherapy and in combination with hypomethylating agents. This trial includes relapsed patients and front-line patients who are unfit for intensive chemotherapy.

In addition, we recently initiated a second trial to evaluate SGN-CD33A in combination with the standard front-line regimen of daunorubicin and cytarabine, known as 7+3, for fit patients. This trial will also evaluate SGN-CD33A in the consolidation and maintenance settings for AML.

At ASH, we presented the first clinical data from our Phase I trial with SGN-CD33A. The data were encouraging and showed that single agent SGN-CD33A induced bone marrow blast clearance in 44% of evaluable patients treated across all dose levels, including 21% with a CR or CR with incomplete hematopoietic recovery. Adverse events were generally manageable and associated with underlying leukemia. Importantly, the 30-day mortality was quite low and there was no pattern of concerning off-target adverse events.

AML patient outcomes have not meaningfully changed in more than 30 years. We are excited about the potential for SGN-CD33A to provide an important new therapeutic option. We have expanded our development program and look forward to presenting additional data during 2015 that may support future registration enabling trials.

Data from our two trials with SGN-CD19A were also presented at ASH. In relapsed and refractory non-Hodgkin lymphoma, specifically DLBCL, we reported marked single agent activity across multiple dose levels. The objective response rate was 35% with 20% complete remissions. In relapsed patients, the monotherapy response rate was 55%. The manageable safety profile, including lack of significant hematologic toxicity or neuropathy, enables us to test this ADC with standard combination regimens.

During 2015, we plan to initiate a randomized Phase II trial in second-line salvage DLBCL patients. The study will evaluate the standard second-line regimen of Rituxan-ICE plus or minus SGN-CD19A. Our goal in this trial is to increase the CR rate, enabling patients to receive potentially curative hematopoietic stem cell transplants.

Beyond these two programs, our robust product pipeline continues to mature. SGN-LIV1A is an ADC targeted to LIV1 which is expressed on more than 90% of breast cancers. Our ongoing Phase I trial is in several subtypes of metastatic breast cancer, including triple negative disease. We anticipate data from this program late in 2015.

SGN-CD70A is an anti-CD70 ADC using our newest ADC technology. This program is in a Phase I trial for CD70-positive non-Hodgkin lymphoma and renal cell cancer. We initiated a Phase I trial with SGN-CD70A in the second half of 2014.

ASG-22ME and ASG-15ME are in Phase I trials for solid tumors under our collaboration with Astellas. And SEA-CD40 is a new immuno oncology program that we recently advanced into the clinic. This agent utilizes our novel SEA technology to produce a non-fucosylated engineered antibody targeting CD40. Our preclinical studies show that SEA-CD40 is a potent stimulator of immune cells that may be able to harness the power of a patient's own immune system to fight their cancer. We plan to present our preclinical findings with SEA-CD40 at the upcoming American Association for Cancer research meeting in April. The Phase I trial for SEA-CD40 is for solid tumors.

The breadth of these programs showcases one of our corporate priorities, which is to advance and expand our pipeline. We anticipate submitting two more INDs during 2015, one for an ADC and the other for an additional immuno oncology program.

At this point, I'll turn the call back over to Clay.

Thanks Jonathan. Before we open the call to questions, I'd like to summarize our key near-term milestones to expand ADCETRIS and advance our pipeline. They include submitting the AETHERA supplemental BLA this quarter, finalizing negotiations with regulatory agencies for modifications to the ECHELON-1 and ECHELON-2 Phase III trials, broadening the clinical investigation of ADCETRIS in front-line and relapsed DLBCL, initiating two combination trials of ADCETRIS and nivolumab under our collaboration with Bristol-Myers Squibb, reporting emerging data on SGN-CD33A and AML and discussing registration strategies, initiating a Phase II trial of SGN-CD19A in second-line DLBCL, initiating a Phase I trial of SEA-CD40 for solid tumors, reporting data from our pipeline programs and submitting INDs for two additional programs.

We look forward to keeping you updated on our progress. At this point, we will open the line for Q&A. Operator, please open the call for questions.

(Operator Instructions). Adnan Butt, RBC Capital Markets.

Hey everybody. Thanks for taking the question. Two questions please, first on compendia listing. Clay, or perhaps someone there, could you help us understand how compendia listings could help in the reimbursement process, especially for any use for patients that might not be responding to therapy even for off-label indication?

And then secondly, the Company has mentioned a number of Phase II studies. The particular focus here is on DLBCL. But the classification is Phase II, but could any of these end up being registration-focused -- registration-enabling? Thanks.

Thanks for the two questions. First of all, let's talk a little bit about compendia, and you asked about the reimbursement process. But you know, compendia is, as we said, it gives us spontaneous use and it makes it challenging to look at the sales figures. And so but as far as helping us on reimbursement, Darren, would you like to make any comments on that?

Sure Clay. Compendia are experts in a specific disease state that evaluate the evolving data, in our case ADCETRIS and DLBCL, CTCL. And they look at that level of evidence. Payors, Medicare and private payors, use that as a proxy to provide physicians an opportunity to use it in that particular setting. So, it's hard for us to predict in the marketplace how it will ultimately play out other than the different payors having their policies, which is really driven by Medicare. But in the end, it's the best for patients and provides a potential opportunity to get the best treatment available.

And then your second question is on our Phase II focused on DLBCL that we've discussed and whether any of these trials could potentially be registrational type trials. And Jonathan, would you like to comment on that?

Sure. So, first of all, I want to say that, in both of the Phase II DLBCL trials, I think we are asking very important and good scientific questions. In the case of ADCETRIS, we are looking in a situation where we have now shown that monotherapy, CD30-positive DLBCL, does better than CD30-negative patients. So the monotherapy is good.

We are also looking in a situation where we know that bendamustine combines very nicely with ADCETRIS. So, the opportunity to combine with Rituxan, bendamustine and ADCETRIS is very exciting.

We will be doing a Phase II trial and based on the results, we will decide on the next steps. And really the same thing for SGN-CD19A. We are impressed by the monotherapy data in relapsed patients, 55% monotherapy objective response rate, across all lymphoma, across all DLBCL regardless of sub type. So it's an opportunity here because it doesn't cause marrow suppression or neuropathy to combine with pretty intense therapy with RICE, to see if we can get these relapsed patients who have failed front-line R-CHOP into a really good CR to go to transplant. So I think we are doing the right studies to answer the questions of how important these therapies are, and then we will use that to determine the next steps.

Okay, thank you.

Jason Kantor, Credit Suisse.

Hi there. A couple of questions. What is your expected regulatory timeline for AETHERA? Would this be a six-month type of review or longer? How should we think about that?

And then as you build out the guidance, I guess I'm just wondering how have you incorporated the compendia listing in that analysis? Is all of that built into your guidance, or is there upside around that? And then if you just give us any anecdotal information as to what your sales force is seeing in the field since the compendia listing, if usage is changing in real-time.

Okay, Jason. As far as AETHERA goes and regulatory timelines, I can't really comment on the specifics of the interactions we are having with the FDA, the EMA. As you know, the trial met its primary endpoint with a strong, statistically significant advantage in PFS on the ADCETRIS arm. And we plan to submit the supplemental BLA this quarter. We believe the magnitude of PFS advantage on the ADCETRIS arm is meaningful for these patients.

But regarding the review type that you ask, it's really up to the FDA, and we'll keep you posted as we have more information.

Now, as far as your question on guidance for compendia and what part, I would say that a small portion of our 2015 financial guidelines assumes the use of ADCETRIS outside of Hodgkin lymphoma and ALCL. And it is challenging to forecast near-term sales growth with spontaneous use, so we rely on trendlines supplemented by market research to provide the best financial guidance that we can.

But in the longer term, we expect that we could get new labels from AETHERA and other trials like ALCANZA and ECHELON-1 and ECHELON-2, and those labels will generate significant additional growth of ADCETRIS.

As far as anecdotes on compendia and use and anything, Darren, do you have any comments from the field as to any anecdotes for things that are really hard to track?

We really don't. We focus on the on-label business, and we just focus on that area. When we get questions they go to our medical affairs and clinical colleagues. So it's hard to track at this point. It's something we are not tracking.

Okay, thank you.

Thomas Wei, Jefferies.

Thanks. Maybe just I'll try and ask on this recent meeting that you had with the FDA on AETHERA. Is that the sort of meeting where you can ask regulators questions like, you know, the lack of maturity in the overall survival data, or is that always going to be a question that's left for review? I guess I'm just curious. Can you actually engage the FDA in a dialogue on those sorts of topics during a pre-submission meeting?

As I said to Jason's question, I can't and it's not really appropriate to comment on the specifics of interaction with whether it's the FDA or the EMA. What I could say is we have an open dialogue with them. We feel strongly about our data, and we plan to submit an SBLA this quarter. And I think that we are saying that we plan to submit an SBLA this quarter following a meeting with regulators I think is a strong statement.

And I had a question just on the AETHERA presentation I forgot to ask at ASH. There was a slide on subsequent antitumor therapy after progression, and there were eight patients in the ADCETRIS arm who actually got ADCETRIS again. Do you have any information on what was seen in those patients on re-treatment?

I do remember something like that. Jonathan, do you have any specifics on that?

We haven't presented data on that. And it's such a small number that it would be essentially anecdotal.

Okay.

That was specifically on the patients that had previously received ADCETRIS because the majority of the patients who progressed after receiving placebo did get ADCETRIS.

Thanks. Then just on the first-line trial, am I remembering correctly? Did you have anybody relapse after the two-year mark in your pilot trial? And can you remind me of that same sort of pattern or what sort of pattern is seen there with ABVD as a front-line regimen?

With the front-line Hodgkin lymphoma trial, what we reported was a 92% failure free survival rate at three years, not at two years, and then we reported 100% OS at three years. And Jonathan, do you have any other comments or color on this?

You know, I don't remember. I think you're asking exactly what the timing was of the progression events, and I don't remember. There were only two I believe. And in general, with the types of advanced patients that go on to the ECHELON-1 trial, progression would generally occur early, so within the first two years is when you would see the majority of all events.

And that would be with a standard ABVD type therapy.

That's very helpful. Thank you.

Matt Roden, UBS. I'm so sorry, Cory Kasimov, JPMorgan.

Hey. Sorry Matt. Thanks guys. Good afternoon. First of all, sorry about the Super Bowl, although I'm sure it's not lost on you that it seems like it hasn't stopped snowing in New England since that game, so maybe one thing has to do with the other.

I guess I have two early-stage questions for you. First of all, with the PD1 combo, can you provide any insight or would you be able to talk at all about the trial design you expect to use here for the two studies? After presumably testing for proper doses, is there going to be any sort of randomization used in these initial studies? And then I have one other.

Okay. First of all, to comment on your initial comments about the Super Bowl, if I need to give a question to anyone in the room, I'll certainly hand it off and not pass it to them.

Second of all, we will talk about the PD1 combo. And let me just make a couple of comments. First of all, we are really excited to work with and perform combination trials with nivolumab, or Opdivo as it's called. Right now, as you know, nivolumab or any PD1s are not approved in HL, but we are excited to be doing some combinations. And the trial designs we have not laid out yet between the two companies, and we're working on that and we intend to start both of the trials this year.

But our focus with PD1 is making sure -- and with PD1 with ADCETRIS and these trials is really helping patients. But ADCETRIS is -- we are focusing on front-line and the foundation of care for CD30 malignancies and moving ADCETRIS into earlier lines, redefining front-line therapy for the first time in 40 years. And we expect that our data in front-line therapy with Hodgkin lymphoma ultimately with ADCETRIS and AVD will establish a very high bar. But that said, we are excited to be working with Bristol on Opdivo combinations with ADCETRIS.

Okay. And then to follow up on that, I was interested in your new immuno oncology agent that you plan to move into the clinic this year. Is there anything you can say with regard to the type of solid tumors you're going after or is it pretty broad-based to begin with? And were there any particularly noteworthy synergies you may have seen in your preclinical work? Thanks.

I'm glad you asked about our new immuno oncology agent, SEA-CD40. Jonathan, could you tell Cory a little bit about the agent, and how we are initially thinking of testing it?

Sure. Let me just quickly comment on your questions. One is we haven't said exactly which solid tumors we will be looking at, but these would be solid tumors that you might expect to respond to immune therapies. And we haven't presented our preclinical data yet, but we will be presenting preclinical data later this year. And so we have thought about the opportunity for this novel agent, both as a monotherapy and in combination where it might show synergy potentially with other immuno oncology agents or other therapies. So this does act primarily on antigen presenting cells, which is a different arm of the immune system than the checkpoint inhibitors, which are T cells. Those could be interesting combinations down the road if this agent looks active, and we are excited about getting it into patients and seeing how it works as a single agent.

Great. Thanks guys.

Matt Roden, UBS.

Great. Thanks very much for taking the questions. And Cory, I'll get you next time! And I also would like to add I hope you guys don't feel too deflated following the Super Bowl.

So, I have a question on -- maybe diminishing returns for asking this question but I'm going to give it a shot anyway on the AETHERA filing. You mentioned it is based on FDA feedback. I'm assuming that they saw the same data that we saw at ASH, and just trying to get a sense for whether or not you feel that there's any ambiguity whatsoever as to whether or not the right thing to do is to file and whether or not you have actual minutes from that FDA meeting. And then related, is there anything you can say on behalf of your partner with respect to OUS filings on AETHERA?

So, first of all, not to sound like I'm just repeating an answer, but it's really not appropriate to comment on the specifics as far as the exact data that we submitted. I think you're asking whether we submitted data that we presented at ASH versus other data, but it's not appropriate to comment on those. You can assume that the FDA is seeing all of the important data that we have.

And as far as the ambiguity of whether or not it makes sense to submit an SBLA, we feel very strongly that it makes sense to submit an SBLA this quarter. And that's why we are really hustling and our team is working very hard to do that. Initially I think that the team said they were going to -- we could get it together in the first half of the year. And as a company, we have pulled out all the stops to get it done this quarter. So we are moving very fast.

And as far as what's in the minutes with the FDA, that's also confidential with us and the FDA, and really is not appropriate for me to comment on the specific minutes between us and the FDA.

And then as far as the outside US filing that our partner Takeda can do, I think that's really something that is best answered by Takeda. And I don't think it's appropriate also for me to comment on their specifics. If and when they file and all that, we will be certainly able to talk about it at that point.

Okay, that make sense. I do appreciate the additional color.

And then lastly from me, just a question on ECHELON-1 in front-line Hodgkins. Is it realistic for us to think that, with the protocol amendment, that a protocol amendment can be arranged such that you can maintain or improve the robustness of the analysis and keep it on the same timelines as you previously communicated?

The short answer is yes. We definitely -- it's important to keep the integrity of the study and make sure that -- this is a game changer of a trial. I mean this is the first time in 40 years someone is trying to change front-line therapy for these patients that have Hodgkin lymphoma that also as part of the four-drug cocktail get bleomycin with all the pulmonary toxicity. And what we're trying to do is get rid of bleomycin, add ADCETRIS in there and not only increase the efficacy but decrease the pulmonary toxicity. So we are really excited about that.

Okay, great. Thanks very much for taking the questions.

Howard Liang, Leerink.

Thanks very much. Regarding CD33A, can you talk about what options that are on the table for the pivotal study? Do you see them Mylortarg's regulatory status, whether it comes back to the market or not, whether that affects the design?

Sure. I think I could start and address some things, and then I can turn it over to Jonathan for some or comments on this. But one of the things that we are really excited about with 33A -- and I'm glad you asked the question and brought this up -- but the target is expressed CD33, that is on all subtypes of AML and MDS for that matter. So that really differentiates this product from almost all AML products that are out being tested for the different subpopulations. And I think those products are very exciting as well. But there needs to be a central molecule for all AML, and maybe a workhorse for treating AML. And maybe in the future you could see something target to all AML, and then if you have a subtype you combine that drug with it to help these patients that are afflicted with a horrible disease.

Jonathan, do you want to comment some more on Howard's question?

Sure. So, I guess I'll just start by saying I think that our data on the anti-leukemic activity and tolerability thus far are impressive. And I'll also say that most of our data so far are in unfit patients which also represents an area of tremendous unmet need. So if you're looking for some of the potential areas that we are looking at for registration, unfit patients have a very poor prognosis and need. But we are also focusing on the fit patients. And you may recall that by combining with standard 7+3, that's where Mylortarg showed a benefit in randomized trials. And we believe that we have a tremendous drug and that that's another area that we should look closely at, and we are with our Phase Ib combination trial. So, we are pursuing multiple avenues for AML, and we really believe, as Clay said, that all of AML and potentially myelodysplasia are areas where this drug may be an important new therapy.

Thanks. Do you have visibility when the combination of AVD plus ADCETRIS in Hodgkins lymphoma, when that data might become available?

That is being done as part of an investigator IND, and so it's not really our data, so it's really hard for us to know that. We know that it's an active program and accruing patients, but I don't want to make a specific comment on when the investigator will present the data.

Jonathan, do you have any more information?

Yes. I think, as Clay mentioned, that trial is not under our control. It's being run by ECOG Investigators. And we are also excited to see the data of combining checkpoint inhibitors with ADCETRIS.

Thank you.

Steve Byrne, Bank of America.

Hey Darren, I was wondering if you had a view on what do you think the penetration rates are right now for ADCETRIS in the salvage setting in HL and ALCL. And do you see more room to penetrate those further, or is the primary driver of revenue growth from here more in earlier lines of therapy or in the compendia listings?

Thanks for the question, Steve. In the salvage setting, that's not on our label and nothing we promote to. We do from time to time do market research and look at the different settings within Hodgkin's lymphoma and anaplastic large cell. We do see with the emerging data that more and more physicians are interested in using, and we are seeing a bit more use according to the market research. We are focused as a commercial group still on the on label business, identifying patients, increasing duration of therapy, and then we are well underway for the AETHERA preparation for the latter half of 2015.

Okay. And Jonathan, can you give me your view on what you see as the biological rationale behind combining ADCETRIS with a PD1 inhibitor?

I guess I'll go to also talk a little bit about the fact that these are tremendous monotherapy agents in the same disease and in Hodgkins lymphoma where ADCETRIS is becoming a cornerstone of therapy, and it looks like the PD1 inhibitors also work. It makes a lot of sense to look at them together. We've looked at combinations of ADCETRIS with lots of things, with CHP, AVD, Rituxan containing regimens, bendamustine, and everywhere we've looked, we've been really impressed with what those combinations look like. So it's an obvious combination that makes a lot of sense to pursue.

Okay, thank you.

(Operator Instructions). Mara Goldstein, Cantor Fitzgerald.

Thanks very much. I had a housekeeping question and then a question on LIV1. On the housekeeping item, the guidance, the revenue guidance for 2015, the $200 million to $210 million for ADCETRIS, that's exclusive of royalties, correct?

Yes, correct.

Okay. Great. And I was hoping just to get a little bit more color on the development program for LIV1 and the approach around if it's around hormone resistant cancers or through all-comes and given the distribution of the transporter protein that's associated with that and breast tissue versus the rest of the body.

Yes, LIV1 is a very interesting target. It's on the vast majority of breast cancer patient samples, and so that's one of the reasons we are very interested in that. It gives us the opportunity to potentially help patients.

Jonathan, do you want to talk about what we can at this early stage of our development of LIV1?

I have to say we are looking at multiple types of metastatic (technical difficulty) cancer, including the ERPR positive and the triple negative breast cancer patients. I don't think that's a limitation of where LIV1 is expressed or where it might be used in the future. And like our other early-stage Phase I programs, we haven't presented any further data on that at this time.

Okay, thank you.

At this time, there are no further questions over the phone lines.

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

This does conclude the presentation. Thank you for your participation.