Seattle Genetics, Inc. (Seattle Genetics) has reported revenues of $35.2 million for the full year of 2008, compared with the revenues of $22.4 million in the previous year-end. It reported a net loss of $85.5 million, or $1.09 per share, for the full year of 2008, compared with the net loss of $48.9 million, or $0.80 per share, in the previous year-end.
“Our 2008 accomplishments were marked by substantial progress across our product pipeline, in particular by successfully demonstrating the therapeutic potential of SGN-35 and the promise of our antibody-drug conjugate (ADC) technology for patients with cancer,” said Clay B. Siegall, president and chief executive officer of Seattle Genetics.
“As a result, during the first quarter of 2009 we plan to initiate a pivotal trial of SGN-35 for Hodgkin lymphoma under a special protocol assessment (SPA), which will be a major milestone for the company. We were also careful with our resources in 2008, using approximately $63 million in net cash to fund our operating activities while still advancing our programs significantly. Combined with proceeds from our recent successful public offering, we are strongly positioned to further invest in advancing our promising product pipeline.”
Fourth quarter and year 2008 financial results
Revenues in the fourth quarter of 2008 were $10.1 million, up from $7.8 million in the fourth quarter of 2007. For the full year 2008, revenues were $35.2 million, compared to $22.4 million for the year 2007. Revenues increased in 2008 primarily as a result of the earned portion of reimbursements, upfront and milestone payments received under the company’s dacetuzumab collaboration with Genentech. In addition, 2008 revenues include the earned portion of milestone and other payments received under the company’s ADC collaborations.
Total operating expenses for the fourth quarter of 2008 were $41.9 million, compared to $24.4 million for the fourth quarter of 2007. For the full year 2008, total operating expenses were $127.0 million, compared to $78.1 million for the year 2007. The planned increases in 2008 were primarily driven by clinical development activities for SGN-35 and lintuzumab, manufacturing campaigns for SGN-35 and dacetuzumab and higher employee costs, principally related to growth in the company’s clinical and development staff. For the year 2008, the increase in operating expenses also reflects expanded clinical trial activities for dacetuzumab. Dacetuzumab development costs incurred by Seattle Genetics are included in research and development expense, but are fully reimbursed by Genentech under the collaboration. Non-cash, share-based compensation expense for the year 2008 was $10.4 million, compared to $7.9 million for the year 2007.
Net loss for the fourth quarter of 2008 was $30.6 million, or $0.38 per share, compared to $14.9 million, or $0.22 per share, for the fourth quarter of 2007.
As of December 31, 2008, Seattle Genetics had $160.7 million in cash and investments, compared to $187.1 million as of September 30, 2008. Cash and investments as of December 31, 2008 do not reflect net proceeds of approximately $52.6 million from the company’s public offering of common stock that closed on February 2, 2009. In addition, the company has agreed to sell 1,178,163 shares of common stock in a private placement to Baker Brothers Life Sciences, L.P. (BBLS), at the same price per share paid by investors in the public offering, subject to stockholder approval. If approved, the transaction with BBLS will generate approximately $11.5 million in gross proceeds.
2009 financial guidance
Seattle Genetics projects 2009 revenues will be in the range of $35 million to $40 million. These revenues are generated from fees, milestones and reimbursements earned through the company’s dacetuzumab and ADC collaborations.
Total 2009 operating expenses are expected to be in the range of $125 million to $140 million. Operating expenses will be primarily directed towards SGN-35 pivotal development activities, as well as clinical trials of dacetuzumab, lintuzumab and SGN-70. Dacetuzumab development expenses are reimbursed by Genentech under the companies’ collaboration agreement. Included in projected operating expenses are non-cash amounts ranging from $15 million to $17 million, primarily attributable to share-based compensation expense.
The company projects that its net cash used in operating activities will range from $80 million to $90 million for 2009, and that it will end the year with more than $120 million in cash and investments. This excludes about $11.5 million in gross proceeds from the proposed sale of common stock to BBLS.