We heard them all. We heard all they said, we mean the pessimist and the optimist following the approval of Seattle Genetics’ drug Adcentris™ (brentuximab vedotin) for Hodgkin lymphoma and for systemic anaplastic large cell lymphoma (ALCL).
So, what do we think? Some asked.
Most naysayers talked about hurdles that other companies have faced marketing their products. We believe they meant to say that marketing is no joke and is not easy. So beware of getting euphoric about drug approvals because they are not the end of the road, but the beginning of a harder road.
We promise we will not get euphoric. Yet, we really don’t know why we should sell a stock of a small firm that was granted FDA approval for a life-saving drug that will generate revenues. Would it have been better for the company if the FDA had rejected the drug? What about if it did reject the drug? Of course it would have been as bad as losing 80% of the money invested in it. That’s what the pessimist waited for, but unfortunately for them, it did not happen.
Let’s forget about the pessimists’ motives and consider them fair evaluators. What do they want us to do? You know what? They want us to be afraid to buy the stock before the FDA verdict because the agency might reject the drug. They want us to sell the stock if the agency approves it because another company, Dendreon, didn’t know how to market its drug, as it should have. So, what do they want us to do? Stop investing in the biotech industry?!
The fact is that Adcentris™ is the first drug to be approved by the FDA for Hodgkin lymphoma in three decades. The FDA approved it ahead of schedule and for two cancers, not only one. Additionally and more importantly, Adcentris is the first proven successful monoclonal antibody conjugate that the FDA was willing to approve, not only because of its robust investigational results but also because the monoclonal antibody conjugate technology behind the development of Adcentris represents a breakthrough approach that can increase, by far, the safety and efficacy of new and marketed drugs. That’s what motivates large pharmaceutical companies to license the technology - a source of revenue for SGEN in the form of upfront payments and royalty payments. Two biotech companies have succeeded in developing safe and effective conjugated monoclonal antibody drugs, Seattle Genetics and ImmunoGen (IMGN). Both are yet to be fully appreciated by investors, but eventually they will.
The marketing and reimbursement problems cited by the pessimists are, in fact, negative speculations, and not mere realities. One should weigh them against positive speculations that use Vertex, Gilead, Cephalon, Alexion, Amgen, Genentech and many other successful biotech companies as examples, rather than using Dendreon, Savient, or other troubled firms that the naysayers keep mentioning.
As a matter of fact, Clay Siegall, chief executive officer of Seattle Genetics said his company is prepared for a successful launch. The drug is ready to be shipped right away backed by a marketing and logistics teams that are hitting the ground. Seattle Genetics had announced a while ago that it would aggressively market the drug and target the oncology specialists expected to prescribe Adcentris™. Seattle Genetics hired more than 60 sales people. It is important to remind that Takeda Pharmaceutical Co. is a partner on Adcentris™ and will market the drug outside the U.S.
Clay Siegall also said, “A number of years ago, I heard Wall Street saying, ‘I don’t think you’ll be able to have a drug that works any good with your new technology.’ Well we’ve proved that it works. Now what we’re hearing is, ‘Gee, we don’t think you’re going to be able to sell much of it.’ It’s not my goal every day to prove the naysayers wrong. It’s my goal to make a difference in the lives of patients with cancer.”
We agree. We also long SGEN