Seattle Genetics reported financial results for the second quarter and six months ended June 30.
The company also highlighted Adcetris ommercialization and clinical development accomplishments, progress with its antibody- drug conjugate pipeline, collaborator updates and upcoming activities.
"We reported record Adcetris net sales in the second quarter, up 16 percent from the first quarter of 2014, while also generating clinical data to support our vision of establishing Adcetris as the foundation of care for a broad array of CD30-expressing hematologic malignancies," said Clay B. Siegall, Ph.D., President and Chief Executive Officer at Seattle Genetics. "In addition, we are advancing our proprietary pipeline programs, highlighted recently with encouraging interim data from our phase 1 trial of SGN-CD19A and continued progress by our ADC collaborators. Across the industry, more than 60 percent of the roughly 40 clinical-stage ADCs utilize Seattle Genetics technology, illustrating our leadership position in the field and the potential impact ADCs may have on the future of cancer treatment."
Second Quarter and Six Months 2014 Financial Results
According to its release on July 31, the Company noted that the net sales for the second quarter and year-to-date periods ended June 30, increased to $44.8 million and $83.5 million, respectively, from $35.7 million and $69.7 million for the same periods in 2013. Royalty revenues increased to $7.3 million and $20.0 million in the second quarter and year to date in 2014 from $3.5 million and $5.9 million in 2013, driven by Takeda's sales of ADCETRIS in its territory as well as a sales-based milestone in the first quarter of 2014. Collaboration revenues for the second quarter and year-to- date in 2014 were $16.2 million and $33.1 million, respectively, which reflect decreases from the comparable periods in 2013. Second quarter 2013 collaboration revenues included substantial amounts related to ADC agreements, including the earned portion of an upfront payment under a new ADC collaboration with Bayer. Total revenues were $68.3 million and $136.6 million for the second quarter and year-to-date in 2014 compared to $73.6 million and $130.9 million for the same periods in 2013.
Total costs and expenses for the second quarter of 2014 were $86.0 million, compared to $80.6 million for the second quarter of 2013. For the first six months of 2014, total costs and expenses were $170.6 million, compared to $154.3 million in the first six months of 2013. The increase in 2014 costs and expenses was primarily driven by investment in the company's ADC pipeline and expanded Adcetris clinical development costs.
Under the Adcetris collaboration with Takeda, development costs incurred by Seattle Genetics are included in research and development expense. Joint development costs are co-funded by Takeda and Seattle Genetics on a 50:50 basis. Net reimbursement funding received from or paid to Takeda is included as a component of collaboration revenue and recognized over the development period of the collaboration along with other development payments received, including the upfront payment and development milestone payments.
Non-cash, share-based compensation cost for the first six months of 2014 was $18.7 million, compared to $13.4 million for the first six months of 2013.
Net loss for the second quarter of 2014 was $17.6 million, or $0.14 per share, compared to a net loss of $6.9 million, or $0.06 per share, for the second quarter of 2013. For the six months ended June 30, net loss was $33.9 million, or $0.28 per share, compared to a net loss of $23.2 million, or $0.19 per share, for the same period in 2013.
As of June 30, Seattle Genetics had $349.2 million in cash, cash equivalents and investments, compared to $355.4 million as of March 31, and compared to $374.3 million as of December 31, 2013.
2014 Financial Outlook
Seattle Genetics anticipates that 2014 revenues from Adcetris net product sales in the U.S. and Canada will be slightly higher than previously anticipated, and are now expected to be in the range of $160 million to $170 million. The company also anticipates that 2014 research and development expenses will be slightly lower than previously anticipated, and are now expected to be in the range of $235 million to $250 million.
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