Seagen Inc (SGEN) 2017 Q2 法說會逐字稿

Good day, everyone, and welcome to today's Seattle Genetics Second Quarter Financial Results Conference Call. Just as a reminder, today's call is being recorded. At this time, I would like to turn the conference over to Peggy Pinkston, Vice President, Investor Relations. Please go ahead, ma'am.

Thank you, operator, and good afternoon, everyone. I'd like to welcome all of you to Seattle Genetics' Second Quarter 2017 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, Executive 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 regarding future events or the future financial and operating performance of the company. Such forward-looking statements are only predictions based on current expectations, and actual results may vary materially from those projected. Please refer to the documents that we file from time to time with the SEC, including the company's Form 10-Q for the quarter ended March 31, 2017, for information concerning the risk factors that could cause actual results to differ materially from those contained in any forward-looking statements. With that, I'll turn the call over to Clay.

Thanks, Peg, and good afternoon, everyone. The second quarter marked several important milestones for Seattle Genetics. We reported record ADCETRIS revenue of $74.3 million. Based on year-to-date results, we are increasing our total 2017 guidance for ADCETRIS net sales in the U.S. and Canada to a range of $290 million to $310 million. The most notable milestone in the second quarter was the results from the ECHELON-1 Phase III trial. We are very pleased that the trial met its primary endpoint of a statistically significant improvement in modified progression-free survival versus the control arm. The hazard ratio was 0.77 with a p-value of 0.035. At 2 years, the percentage of Hodgkin lymphoma patient in continued remission was 5% higher in the ADCETRIS-containing arm than in the control arm. The goal in frontline Hodgkin lymphoma is to obtain the highest number of long-term, durable remissions, which often translate to cures in this typically young patient population. For the ADCETRIS regimen to deliver a statistically significant improvement is an important outcome to the newly diagnosed Hodgkin lymphoma patient communities. The interim analysis of overall survival, a key secondary endpoint, also trended in favor of the ADCETRIS regimen. Adverse events were consistent with what is known for the single agent components of the regimens. Our goal is to present the complete E1 data at the ASH annual meeting in December, at which time, we look forward to describing the results in more detail.

The positive E1 outcome positions us to deliver on our goal of redefining the way newly diagnosed Hodgkin lymphoma patients are treated and is an important step towards ADCETRIS becoming a blockbuster drug. Approval in frontline Hodgkin lymphoma would open up a substantial opportunity for ADCETRIS and we believe would establish a new standard-of-care in this patient population. With data now in hand, we are focused on preparing our supplemental BLA submission for potential label expansion in frontline, advanced Hodgkin lymphoma. We expect to make this submission to the FDA before the end of 2017. Outside the U.S., we plan to submit for approval in Canada, and our partner Takeda is planning regulatory submissions in its territories.

Another important milestone in the second quarter was submitting a supplemental BLA to the FDA for approval of ADCETRIS in cutaneous T-cell lymphoma. The submission is based on the remarkable outcome of our Phase III ALCANZA trial, which was recently published in The Lancet as well as strong data from 2 investigator-sponsored trials in CTCL. We compiled a robust data package based on discussions with the FDA under our breakthrough therapy designation towards our goal of obtaining a broad label. PTCL would represent the fourth labeled indication for ADCETRIS in the U.S., and our commercial team is poised to maximize this opportunity upon approval, which could occur before the end of this year.

The next Phase III to read out will be ECHELON-2 in frontline mature T-cell lymphoma, often referred to as peripheral T-cell lymphoma. We are evaluating progression-free survival of ADCETRIS plus CHP compared to standard-of-care CHOP chemotherapy in newly diagnosed patients. Our goal is to improve outcomes in frontline T-cell lymphoma, a disease for which therapy has not changed in decades.

Based on our review of pooled, blinded PFS events in the E2 trial, we have observed a lower rate of progression events compared with our projections. We plan to interact with FDA about the potential to unblind the trial prior to reaching the prespecified number of events. Based on the length of patient follow-up, we believe the trial data will be mature in 2018 and continue to expect to report E2 data next year.

The unmet need in T-cell lymphoma is significant as these are generally aggressive cancer types. We estimate that approximately 4,000 patients are diagnosed annually in the U.S. with CD30-expressing mature T-cell lymphoma. Combined, across both E1 and E2, there are more than 12,000 patients diagnosed annually in the United States who could potentially be eligible for treatment with an ADCETRIS-containing regimen in the front line setting.

Beyond ADCETRIS, we're advancing several other programs in our pipeline, notably, enfortumab vedotin, or EV, which was formerly known as ASG-22ME. We are codeveloping EV with Astellas. This antibody-drug conjugate is in clinical development for metastatic urothelial cancer consisting primarily of bladder cancer but also including ureter and renal pelvis carcinoma. We estimate that approximately 80,000 people are diagnosed annually in the U.S. with urothelial cancer, including approximately 15,000 patients who develop metastatic disease.

At ASCO, we reported additional data from an ongoing Phase I trial of EV in urothelial cancer. In 30 evaluable patients, the response rate was 53% at the recommended Phase II dose. Importantly, the response rate was above 40% in hard-to-treat patients, including those who had previously received checkpoint inhibitors or prior taxanes and/or those with liver metastasis.

Based on these data and following discussions and positive input from the FDA earlier this year, we and Astellas are initiating a pivotal monotherapy Phase II trial in patients previously treated with a checkpoint inhibitor. This is a single arm trial with a target enrollment of 120 patients. The primary endpoint is objective response rate per an Independent Review Facility. We expect to begin enrolling patients later this year and intend to submit the data for potential registration under the FDA's accelerated approval regulations.

The majority of patients treated with checkpoint inhibitors fail to respond and require further treatment options, making this a therapeutic area of substantial unmet medical need. We are also planning to combine EV with checkpoint inhibitors for metastatic urothelial cancer in a trial that we expect to begin late this year. This has the potential to move EV into earlier lines of therapy, thereby expanding the clinical and commercial opportunity.

Lastly, on vadastuximab talirine, or SGN-CD33A, we are reviewing the data to determine future plans for the program, with patient safety being our highest priority. AML is a devastating disease with a poor prognosis in most cases, and new treatments are urgently needed for these patients. We will provide an update later in the year.

At this point, I will turn the call over to Darren to discuss our commercial activities. After that, Todd will discuss our second quarter financial results, and then Jonathan will highlight our research and development progress. Darren?

Thanks, Clay. As Clay noted, ADCETRIS second quarter sales were $74.3 million. This was a record quarter, with net sales up 6% versus the first quarter of this year and 12% over the second quarter of last year. As the ADCETRIS brand approaches its 6th year since approval, physicians have treated roughly 40,000 patients globally, and the business is strong and growing. Market research continues to show that ADCETRIS is the preferred therapy for patients in our approved settings. The robust long-term data confirm physicians believe in the benefit ADCETRIS offers to patients and its labeled indications. We are pleased with the strength of the brand and the foundation it provides for future opportunities to serve patients.

One of these potential indications is cutaneous T-cell lymphoma. As mentioned earlier, we submitted the supplemental BLA in June, and the commercial team is prepared to support this label expansion. ALCANZA is the first Phase III trial to generate data in CTCL versus an active competitor. Market research indicates the strength of these data has overwhelmingly impressed physicians. We expect rapid adoption of ADCETRIS in this setting in the event of approval in CTCL; CTCL as a contributor to near-term sales growth.

The potential approval on frontline Hodgkin lymphoma provides a significant opportunity for ADCETRIS. The average age of a newly diagnosed Hodgkin lymphoma patient is in their early 30s. Market research continues to show physician dissatisfaction, with a 4-decade old ABVD regimen, specifically, the bleomycin-related pulmonary toxicity. Our recent E1 top line data indicate the potential for long-term durable remissions and a bleomycin-free treatment option for physicians and their patients. Physicians continually provide stories of bleomycin-related short- and long-term toxicity in this predominately young patient population. The commercial team has eagerly awaited the E1 data, and we continue our preparation for this potential frontline indication.

The potential CTCL approval and future frontline approvals in the E1 and E2 settings will provide a significant increase in the ADCETRIS addressable patient population. To meet the needs of this additional opportunity, we have begun expanding our commercial field team to ensure appropriate support for these larger opportunities. I look forward to updating you on our ongoing progress.

I will now turn the call over to Todd to discuss our financial results.

Great. Thanks, Darren, and thanks to everyone for joining us on the call this afternoon. In addition to providing positive top line data from the ECHELON-1 trial, we had a strong financial quarter with record ADCETRIS sales and have increased our sales guidance for the year. Total revenues in the second quarter were $108 million. This included ADCETRIS net sales in the U.S. and Canada of $74 million.

For the first half of 2017, total revenues were $217 million, including ADCETRIS sales of $145 million. Royalty revenues in the second quarter increased $12 million compared to $9 million in the second quarter of 2016. And for the first 6 months of 2017, royalty revenues were $29 million compared to $42 million in the first half of last year. Royalties in the first quarter of 2016 included a onetime $20 million sales milestone from Takeda. Excluding that amount, royalties in 2017 have increased by 36% over last year, reflecting higher sales by Takeda and sales reaching a higher royalty rate in the fourth quarter of last year.

Collaboration revenues were $22 million in the second quarter, driven by amounts earned under our ADCETRIS collaboration with Takeda and our ADC deals. R&D expenses were $114 million in the second quarter and $233 million for the year-to-date. ADCETRIS continues to be the primary driver of R&D expense, and the increases over 2016 primarily reflect investment in enfortumab vedotin and our broad pipeline.

In terms of R&D guidance for 2017, as Clay mentioned, we continue to review the 33A clinical data. While this program has been an area of focus, we have a broad portfolio and are investing in a number of other programs, including ADCETRIS, EV and SGN-LIV1A. We remain comfortable with our R&D expense guidance of $460 million to $500 million for the year. SG&A expenses were $41 million in the second quarter and $79 million in the first 6 months of 2017, in line with our expectations. We ended the second quarter with $473 million in cash and investments. This, along with our strong ADCETRIS sales and our collaborations, enables us to continue executing on our strategy of expanding the ADCETRIS label, advancing EV and investing in the rest of our pipeline.

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

Thanks, Todd. I'll start today with some clinical perspective on ECHELON-1, adding to Clay's remarks on the positive outcome and next steps with these important data. Since reporting top line data in late June, we've been pleased by its reception among the oncology community. Many oncologists have told us they're encouraged by the top line data and the opportunity to improve PFS while also removing bleomycin and look forward to seeing the full data at ASH. Given the young age of most patients with Hodgkin lymphoma, we believe the ECHELON-1 results represent a meaningful step towards improving outcomes and reducing the risk of pulmonary toxicity, which is unpredictable and can have lifelong consequences.

We recently initiated the seventh corporate-sponsored pivotal trial of ADCETRIS, the Phase III CheckMate 812 trial, under our clinical collaboration with Bristol-Myers Squibb. This trial, which will enroll 340 patients, is comparing ADCETRIS to ADCETRIS plus nivolumab in relapsed or refractory Hodgkin lymphoma patients. The primary endpoint is progression-free survival. The CheckMate 812 trial design is an effort to build on ADCETRIS as the standard-of-care for relapse/refractory Hodgkin lymphoma and supports our strategy to continue to improve clinical benefit, especially long-term remissions, through novel combinations. We and Bristol-Myers Squibb are also studying this combination for newly diagnosed older Hodgkin lymphoma patients and certain types of CD30-expressing non-Hodgkin lymphoma in earlier-stage trials. Importantly, the ADCETRIS plus nivolumab combination studies reflect our vision for how cancer will be traded in the future. We believe that through targeted killing of tumor cells and immunogenic cell death, ADCs could become the preferred partner for immuno-oncology agents, inducing deep and durable remissions in a high percentage of patients. In the near future, we'll be testing this hypothesis with our 2 most advanced solid tumor ADCs, enfortumab vedotin and SGN-LIV1A, each of which utilize the same payload at ADCETRIS MMAE. We plan to conduct the clinical trials of these ADCs with both PD-1 and PD-L1 inhibitors.

As Clay mentioned, before the end of the year, we expect to initiate a corporate-sponsored Phase Ib study of enfortumab vedotin in combination with checkpoint inhibitors. And this week, we announced the clinical collaboration with Genentech to evaluate SGN-LIV1A with atezolizumab in a Phase I/II trial for patients with second-line metastatic triple-negative breast cancer. This will build on our Phase I monotherapy clinical data. We continue to explore our proprietary CD40-activating I-O agent SEA-CD40 as monotherapy to build on the early clinical and biomarker data reported at SITC last year. We will also be studying SEA-CD40 in combination with the PD-1 inhibitor pembrolizumab in solid tumors. This is based on preclinical findings that we reported at AACR, showing that SEA-CD40 and checkpoint inhibitors combine well to induce potent immune activation.

Lastly, I'd like to highlight 2 programs in our pipeline that are advancing into clinical trials for multiple myeloma. The first is SGN-CD48A, an ADC targeted to CD48 that we will be evaluating in a Phase I dose escalation trial expected to start by early 2018.

We've presented data at AACR on the novel linker technology used in SGN-CD48A and look forward to moving this program into the clinic. And under our collaboration with Unum, we plan to initiate a Phase I trial with a BCMA-targeted program utilizing our sugar-engineered antibody technology in combination with their engineered antibody coupled T-cell receptor. The ACTR technology is a novel way of programming a patient's T cells to attack tumor cells when co-administered with tumor-specific therapeutic antibodies. The Phase I study should begin enrolling by the end of the year.

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

Thanks, Jonathan. The remainder of 2017 includes several important activities for the company. For ADCETRIS, the potential approval and commercial launch in CTCL, which would represent our fourth indication; reporting the full E1 data set at ASH in December; and submitting a supplemental BLA for approval of ADCETRIS in frontline Hodgkin lymphoma. Across our pipeline, key highlights over the remainder of the year include advancing EV into the pivotal trial for urothelial cancer; initiating a trial of EV in combination with checkpoint inhibitors; and reporting additional Phase I data from SGN-LIV1A in triple-negative breast cancer.

We will keep you updated on these and other activities across our pipeline programs. At this point, we will open the line for Q&A. Operator, please open the call for questions.

(Operator Instructions) We'll go first today to Michael Schmidt of Leerink Partners.

I had a couple of questions regarding the pipeline, maybe first on the update you provided regarding the ECHELON-2 trial. And I was wondering if you could share some information regarding the powering assumptions on the study and specifically, I guess, what gives you confidence that you can achieve still a statistically significant result despite the lower event rate, potentially, next year?

Okay. Thanks, Michael, for the question. So what we said was we've seen a low rate of events and that we would be connecting with FDA. Now we had a great relationship with FDA on ADCETRIS for many years now. We have ongoing discussions in many aspects on ADCETRIS, including ALCANZA in CTCL. I'll remind you that a few years ago, AETHERA ran into the same low rate of events. And we met with the FDA, and we came up with a great solution in that case with a landmark, a specific date. I'm not saying that, that's what will happen here. But at the end of the day, when we unblinded with that landmark, our data was very strong, and we now have label for AETHERA in consolidation in Hodgkin lymphoma. So this is not that uncommon in cancer trials, and we still expect that the data will come out. Our guidance is still for 2018 when we think the data will be mature. And importantly, enrollment for E2 started in 2013 and finished in late 2016. So a large percentage of the patients that have been treated will have been out a significant amount of time, and that's a very good lens for a follow-up.

Okay. Clay, a second question was regarding the opportunity for ADCETRIS in CTCL. In the past, you've always guided to potentially a modest uptick in ADCETRIS sales, given that the drug already has a compendia listing in CTCL. But I was just wondering not, following the sBLA submission and including some additional data from other trials, just wondering if your view has changed slightly regarding the potential of ADCETRIS in CTCL starting next year once the drug is on label?

Sure, Michael, we'll give you this question. But I think we should probably just move it along after this and let some other folks ask questions rather than just continuing. So first of all, we -- when we look at ALCANZA in CTCL in general, during the trial, we had a median duration of 12 cycles. Now we know from the past that in the commercial setting, we historically have seen somewhat shorter duration in the real world. So we don't know exactly what it will be, it's difficult to predict. We'll know more after launch. And we certainly will update just like we have in the relapse/refractory setting and other settings. Now your question about market opportunity and what this could mean for us include a little bit of discussion of the number of cycles. Certainly, CTCL is a relatively small market opportunity compared to some of the frontline studies we're looking at. And as you know, we are already selling to it through our listing in compendia through guidelines. So we're not going to see an increase that is starting at point 0 since we're already selling to it. So it won't be a huge increase. The U.S. incidence of CTCL is about 2,000 patients a year. There's a prevalence of a little over 20,000 patients, but that also includes patients with lower disease burden that are probably treated with nonsystemic therapy, so there's no way we're trying to suggest that we would be getting all those. But some of them, certainly, will need other treatments.

We'll go next to Cory Kasimov of JPMorgan.

First, I wanted to ask you a little bit more about your collaboration with Roche in triple-negative breast, so the LIV1A plus atezo. Just any more details you can provide on the plan there? And then, with regard to this asset, the monotherapy indication, I know you said we'll get some more Phase I data later this year. But assuming this continues to show some promising activity, is the realistic next step here to go straight to a registrational trial? Or would there likely be additional steps in between? I'm just trying to think of the sequence for LIV1.

Cory, I'll start the answer and then turn it over to Jonathan to give a lot more color on it. But I just want you to know, we are interested and remain interested both in the monotherapy moving forward, potentially, as you suggest, as well as combination approaches like we're doing with Roche in the MORPHEUS study. Jonathan, would you like to say...

Sure, yes. So I think there's multiple opportunities for LIV1A in triple-negative breast cancer as we move forward. I'll remind you that at San Antonio last year, we reported a 37% response rate across all dose levels, which was quite exciting. And clinical benefit rate, that was 47%. So we think that there is real potential with the monotherapy. And then the checkpoint inhibitors have shown some benefit in triple-negative breast cancer. I don't think it's been a very high percentage of responders, but the opportunity to convert the responses to very durable responses is something that we're really excited about. I'll just remind you that the early data that we've reported in our second-line Hodgkin lymphoma trial combining ADCETRIS with nivolumab has been quite promising with a 63% CR rate as we recently reported at ICML. So I think that both of these opportunities are quite exciting for LIV1A.

And Cory, just to complete the triple-negative; story. There's about 5,000 patients in this third-line triple-negative, which is really what we've been focused on in the U.S.

Moving on to Barclays, Geoff Meacham.

Can you hear me?

Yes.

Yes, okay. So a couple of quick ones. Clay, I'm wondering, now that you have ECHELON-1 data, obviously, in hand and are filed, what, if any, further payer discussions need to be had and what sort of work needs to be done on that? And the second question, bigger picture, is just that, obviously, you're going to be treating a lot more patients, the share is going to go up. I'm just curious how you think about the business overall, adding assets, subtracting assets, adding infrastructure, things of that nature like bigger-picture operational questions as you look to the next stage, 12 to 18 months of the ECHELON-1 impact?

Sure. Well, first of all, thanks for the question on E1. And we view this as a really important opportunity for us from a standpoint of healthy patients and revenue. Darren, can you talk a little bit about what the revenue impact could be and what we're thinking about?

Yes. Well, Geoff, regarding the payer perspective on that, just to clarify, we haven't filed -- we don't have that label yet. But in discussions with payers that we've had, talking about this Hodgkin lymphoma patient population, and remind you, ADCETRIS approval, almost 6 years ago, we've had an ongoing dialogue. And then our subsequent label expansions and the consolidation, they know the ADCETRIS pretty well. And in the -- again, this young patient population diagnosed in their early 30s, they still see a clinical benefit in anything that can raise the bar around efficacy. So -- and again, the targeted nature of the therapy are the smaller patient population and impacts the plan. So we feel really good about the value proposition in which we'll be able to engage with payers once we're fortunate enough to get approval. Regarding back -- also the question around the opportunity. There's 8,500, 9,000 patients, the trial's in advance. And if you cut that, it's a little bit more than half the patients. So we look forward to determining what label we have, and we'll be ready to go out and educate physicians and provide this option to them and their patients.

Geoff, you had a second part of your question about the bigger picture with E1, I think you were referring to? So as far as E1, we think we're going to change, really, how Hodgkin lymphoma are treated, especially, in the advanced Hodgkin lymphoma patients. But it's something that we feel is really important. We -- this is the first trial where anyone's taken out bleomycin and actually been able to get a better efficacy without bleomycin. In the past, doctors, they've been very dissatisfied with ABVD and wanted to get rid of bleomycin, especially due to the young patient population and the pulmonary toxicity. So we have to not only recover the loss activity of bleomycin but then get better, and we did that in a statistically significant fashion. So we're very pleased with that. And there's a lot of importance to this. And Jonathan, can you talk a little bit about what doctors think about E1 and their patients?

Well, we look forward to sharing more of the data at ASH and being able to have full discussions. I think what we've been hearing is that people are excited about the potential to be able to offer their patients both the potential for a better outcome, longer -- or 5% better chance of having a long-term remission as well as not having that unpredictable or idiosyncratic potential for pulmonary toxicity. You just can't predict when that happens.

So Geoff, maybe one more comment, you asked strategically. We just think that the way Hodgkin lymphoma will be treated, patients will get ADCETRIS AVD, there'll be less patients that relapse. And so -- and those patients could go to one of a number of different therapies. But most notably, we salvage therapy with ADCETRIS, potential combination therapy with ADCETRIS plus nivolumab as we're doing in the trial. If they need consolidation, we have a label for consolidation post-transplant. And with ADCETRIS, we're also excited about working with FDA on ALCANZA for cutaneous T-cell lymphoma. And then we have E2 that would be coming out for T-cell lymphoma. So we think ADCETRIS, from a strategic standpoint, is going very well, with E1 leading the way with frontline Hodgkin lymphoma.

We'll go next to Andrew Berens of Morgan Stanley.

Just a couple of questions on ECHELON-1. I appreciate the color you guys had given on the commercial diligence you've done with the data. But I was wondering, can you talk a little bit -- I know, Clay, you originally were hopeful that you would get some usage in earlier stages. What do you think, now that we've seen at least a modified PFS, about the earlier stages, the [non-3, 4s]?

So I think that it's a good question. I think that one possible label that we can get would be advanced Hodgkin lymphoma. And I think that, that's something that certainly we'll be bringing up with FDA. And that covers Stage III and IV and Stage IIb, which is bulky. So I think that, that is a -- one of the potential outcomes here. Now for the Stage I and IIa, I think that, that's going to be something that -- those type of patients that don't really have bulky disease were not really included in our trial per se I think there's a lot of work that goes on in academic settings with investigator-sponsored trials and looking at early stage. And I think it'll be -- once docs get used to this and started working with ADCETRIS AVD, it's going to be complicated to treat a young patient with a regimen that gives you 5% less long-term durable remissions which, in this disease, most often lead to cures, and with the chance that you have the small but probably 1%-or-so chance of dying from bleomycin toxicity and maybe a 15%-or-so chance of having lung scarring. So it is the type of regimen that's going to be hard to look away from. Now we will work with FDA, and we don't know what our label will be, but we still feel that there's a good chance that docs will really get used to and knowing this regimen. Let me add that docs have had decades to perfect and manage ABVD, decades, 4 decades to be exact. And during that time, they got better and better and better at managing this, at using ABVD, and especially managing and using bleomycin, which is really difficult. And so now we have data with ADCETRIS plus AVD. I mean it's our first data, it was statistically successful, we hit our endpoint. And I think once this gets out, once ADCETRIS AVD gets out there and gets approval through FDA, we'll work very closely with the, I think docs will use this and get better at it with time. It's hard when you take something and compare it to something docs have been working on 4 decades to something brand-new that they don't fully know everything and all the different ways of how to use it and maximize it. I'll point out that when we did a lead-in trial. Now this lead-in trial was only 25 patients or so, and it was done at the best institutes in the world with the best, most experienced docs. We had a 92%, 5-year failure-free survival. And it was just published in Blood, I mean just very recently, within the last, I think, week. And so this is showing you that when you're at the most prestigious sites with the best docs, A plus AVD can work tremendously well. And once you go into over 230 sites all over the globe, it's hard to control exactly and provide the level of training needed. But once we gets ADCETRIS plus AVD out there, we feel very good that just like with ABVD years ago, and docs first learned it and then had to learn how to continue to get better with it, they'll do the same thing with ADCETRIS AVD. And we're already starting at a new [VAR] of an 82% VAR with statistical significance. So we look to work with doctors to go higher than that with time.

Okay. And then as we look at the full presentation at ASH, obviously, people will be focused on some of the secondary endpoints. The one I've been getting questions about, and I know, obviously, you're not going to tell us the date on the call, but conceptually, can you tell us how we should think about the nonmodified PFS versus what we may see for the PFS endpoint conceptually?

Yes, Jonathan, you want to address that from a conceptual standpoint because we clearly cannot provide the data. And to me also, Andrew, that's one piece of data. There is tons of data that we'll be able to put out there. So I'm not sure why you're focused on this one. But there's a lot of really interesting and exciting data we'll put out. Jonathan?

Well, I'll just remind you of what the definition of modified PFS is. So this is really just patients who, at the end of the completion of frontline therapy, do not have a CR and require additional therapy. Now that tends to be a relatively small number of patients, and it tends to be patients who would normally progress quite quickly. And the goal of frontline therapy is to induce durable remissions. So really, that's the only difference. There's lots of different subgroups and secondary endpoints that we'll be talking about and are available as part of the study, and we'll be able to analyze them over quite a long time during -- and follow up.

Okay. Is it -- but I think people are focused on it because there may be a KOL that is saying that patients that have gotten ADCETRIS were less likely to get radiation after progressing. And so that may make the PFS number less, the delta less than what we saw with the modified PFS. Is there any reason to think that a patient that had gotten ADCETRIS may not get radiation?

Yes, all those data will be coming out of ASH. I mean it's just something that we cannot address at all at this point. I could just tell you that we're excited to go forward to ASH and put out all the data. I mean we'll have data on the key secondary endpoint, which is OS. And we did not expect to have statistically significant data at this point. In fact, that's going to take years to have that. But the data is already trended -- trending in our fashion -- in our favor. And so that's a really good thing, and we'll put out a lot of data and forest plots and Kaplan-Meier curve and all sorts of things. I think there'll be a lot there to look at. And so we just can't answer specifics right now, you just have to wait for ASH. And you've had 3 questions, so we should move on to the next questions.

From Needham & Company, we'll hear from Chad Messer.

So on the safety benefit in ECHELON-1 on the pulmonary tox, is it reasonable or necessary to think about that being called out in the label? Or it's just the fact that the bleomycin is not there to kind of speak for itself? And if I could just put in a sort of related one upfront so we can move the queue along, what do you think the relative importance of the safety benefit versus the PFS benefit is to docs?

Okay. Well, first of all, I think that the label would obviously not have bleo, it would be ADCETRIS plus AVD. So I don't know, I mean we'd have to work with the FDA, I don't want to presume anything. But since bleo is not in the label, I don't think we'd spend a lot of time talking about bleo. Now as far as relative importance, I think that, first and foremost, we've always looked at this and said, "Can we increase the long-term durable remissions," which is a challenge that when we started this trial, a lot of people said to us, "You're trying to climb a hill that's too big, Hodgkin lymphoma is well treated with ABVD. Yes, we hate bleomycin, but everybody who has tried to take out bleomycin can't get any better. So you're trying something that's a big hill to climb." And so the first thing we had to do with the efficacy, the long-term durable remissions, was recover from the loss that you have with bleomycin and then go past it, which we did. And so I think that, that's first and foremost. And when you look at the type of data we have, 5% more is talking about not 5% more of a 2-month survival. This is 5% more of long-term durable remissions which, in this disease, often become cures. So we just don't have that much data where you have cancers that have the potential for cure and improving it by a substantive amount in a statistically significant fashion. So I think that the data we have on the efficacy side is of importance. Now the relative importance, it's hard, it depends on docs. And we hear stories from docs that if a doc treats with ABVD and they see some lung toxicity is one thing, but a lot of docs you talk about have seen this 1 patient here or 1 patient here that had a pretty horrific response and patients have trouble with respiration and breathing and some people die from this here and there. And once doctors see that, they get it. And so we hear about these stories. And so I think that for a doctor that's seen this, it's going to have a higher relative importance. But I think for most doctors, the efficacy and the added potential for cure has a higher relative importance.

(Operator Instructions) We'll move next to Tony Butler from Guggenheim Securities.

Clay, in enfortumab vedotin, the single arm study in urothelial cancer you talked about before, and it really makes a lot of sense with respect to PD-1 refractory patients. But I want to just parse this out a little bit more. Are you actually going to combine it with nivo despite the fact that those are now refractory but there may be a logical reason why you would want to move forward with that combination, even in those refractory patients? And then second, is PFS -- would that be considered the appropriate endpoint? And then one separate question, if I may, if 33A turns out, in your mind, to -- or the company's mind to just -- to be a no-go moving forward, I think ADCs will be really useful in AML, but are there other ADC-like assets that you could grab or acquire or develop in an AML setting or for an AML setting?

Okay. So you asked a whole bunch of different things. I'll try to address a little bit, and then Jonathan will help me with these. But first of all, thank you for the questions on enfortumab vedotin, or EV, as we've been calling it. We are really excited about this 120-patient trial that we're -- will begin enrollment later this year. We're doing it in collaboration with our partner Astellas. And it's a relatively small trial, and the endpoint will be ORR. I think you brought up something about PFS, and I'm not sure if you were referring to that trial. But it's a single -- keep in mind, it's a single arm stimulated trial of EV. You mentioned something about a combination, and it was hard to follow exactly, but the combination trial that we referred to is a separate trial, completely separate. So we're going to be looking at patients that have had prior checkpoints with a single agent. And then maybe, Jonathan, you could talk a little bit more about the different trials we'll be looking at and then maybe if you want to address 33A and AML market?

Yes, okay. So first of all, in that -- the second trial that Clay referred to, that's an early-stage trial, a Phase Ib trial, where we will be combining enfortumab vedotin with checkpoint inhibitors. And that would not be in refractory patients or post-checkpoint inhibitors, it would be a combination in checkpoint inhibitors-eligible patients. So it's really designed to move us earlier in the line of therapy either to first- or second-line patients. Okay, does that make sense?

It does. But I really see -- I mean there's actually evidence, not exactly in urothelial cancer, where patients who have been taken off of PD-1, put back on a PD-1 because they've been shown to be refractory, if you will, or let's just say that progression no longer -- or diminution in the scans no longer exists. What actually transpires is that there is activity again, and so it may actually even work better in the presence of EV than it would in single agent. So I'm really asking kind of 2 questions, but you're saying you're going to use single agent alone regardless of whether it were to work better or not.

I think that's another setting. So that's really a retreatment in patients who have failed checkpoint inhibitors where you're now combining with an ADC to see if you can make the checkpoint inhibitor work better. That's a very interesting question, one that we may address in the future.

Okay. And maybe I'll jump in on 33A. Like we said, we're evaluating 33A, but your question was more of are there other assets, perhaps ADCs or other assets for AML. We -- our business development group constantly scours the world of cancer, and we look at lot of assets. And we're really very interested in AML and helping patients. But let me also remind you that we do have an asset that we are developing in clinical trials, and it's in a Phase I trial, and it targets CD-123. And we call it SGN-CD123A. And so that one is in clinical trials. We have not reported data on it yet. So we are working in the AML space, and we are keeping our antennas up around the globe on what other people are doing.

We'll go next to Mara Goldstein of Cantor Fitzgerald.

Actually, more of a commercial question on EV. Can you just remind us if there are any future decision points regarding marketing rights and economics with Astellas? And my understanding is that Astellas is lining down the Agensys unit. And I'm wondering if there's an expectation of a change in how that relationship will move forward given that corporate decision.

Yes, thanks for the question. I'm going to turn it over to Eric Dobmeier who really have been running a lot of that relationship. Eric?

Yes. So our collaboration with Astellas is a 50-50 codevelopment and profit share globally. So we're sharing all the costs, joint decision-making for the program. We haven't defined yet the territories for commercialization. So who leads the sales force and that sort of thing isn't defined, but the economics would stay the same, we'd still share costs and profits equally. And then regarding the announcement from Astellas about the Agensys unit, that does not affect EV. EV has been transferred into Astellas corporate. So anything that's beyond a certain point, generally Phase II, has been moved into the Astellas organization. So it really only affects the early-stage research assets that were under development at Agensys.

Okay. And with respect to the decision points around marketing and whatnot, you would make those, at some point, I assume, prior to commercialization?

Yes. We're in discussions with Astellas, and we will make those decisions well in advance of when we'd be on the market.

(Operator Instructions) We have Yatin Suneja of SunTrust.

On EV, could you tell us how quickly you might be able to enroll this trial and maybe help us frame the market opportunity in a refractory setting for us? And then I have one more question for you.

Sure. Well, the trial, it's really very modest in size, it's 120 patients. It's not that dissimilar if you look back to our approval trial for ADCETRIS. That was 102 patients. And so the EV trial will begin enrolling later this year. We estimate 2 to 3 years to enroll and generate data. And we're moving rapidly. I think that as we've been meeting with our partner Astellas but with key opinion leaders and doctors involved, I think there's a lot of excitement that's building with EV. So I look to trying to get a pretty robust accrual once we start that. So we're happy with that. Jonathan, you want to add something.

Yes, so I won't comment on the commercial opportunity but the unmet medical need. And really, unfortunately, only a small percentage of the patients are really benefiting from the checkpoint inhibitors. And those that do may have pretty good long responses. But still, about 80% of the patients don't respond to checkpoint inhibitors. So there is a very large need for a new, good, tolerated therapy for patients with urothelial cancer.

Yes. And it's a substantive market opportunity. I think you asked a little bit about that. It's about -- while there's about 80,000 patients with urothelial cancer diagnosed, we think that the wheelhouse for a drug like this will be the metastatic patients first. And we're not saying it wouldn't work on other patients, but on the metastatic patients, that's around 50,000 of these patients. And I can't predict right now whether we'd do anything in the nonmetastatic state, and we'll focus right now on those patients further along with metastasis, but 50,000 patients is a substantive population.

Great. Maybe just one more question on ADCETRIS use in frontline. Clay, I think you touched on it a little bit, but let's say if you get ADCETRIS in frontline, is there a reason that you cannot retreat the same patient in a later line setting? Do you develop resistance to ADCETRIS at some point?

We've done a lot of work in retreatment, and it's looked really good so far. Jonathan, you want to comment on any of that?

I'll say that patients who have responded to ADCETRIS once and go off therapy and then progressed at some point in the future and get retreated do quite well. The response rate is over 70% in those patients. So I see no reason that, that wouldn't happen in earlier lines of therapy, that is people who get really good responses but relapse at some time later could potentially benefit. And that's data that -- hopefully, we'll have a lot more patients treated in frontline, and we'll be able to test that objectively.

From William Blair, we'll go next to Andy Hsieh.

This is a commercial question. I'm just wondering how leverageable is the current sales force in detailing if E1 is positive, the MTCL market?

I'm going to turn that over to Darren who's -- we're expanding the sales force, and Darren can address that.

Yes. Thanks, Andy. We are expanding the field footprint. As you know, we've been on the market now for 6 years, and our current ADCETRIS sales force has done a fine job executing to standard-of-care market shares. With the ALCANZA opportunity, the E1 opportunity and also the E2 opportunity, we feel that the expansion will give us the greatest opportunity to capitalize on these opportunities. If you think about those 3 different settings, the physician base, particularly, in the frontline with E1 and E2, are the same treaters that treat those patients. So we feel we're going to get the right number to maximize the reach and frequency for our talented sales force to execute on all of these potential launches.

And it appears there are no further questions at this time. I would like to turn the conference back over to Peggy Pinkston for any additional or closing remarks.

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

And again, that does conclude today's conference. We thank you all for joining.