Seagen Inc

F:SGT

Earnings Call Transcript 2018-Q2

[Operator]

Good day, and welcome to the Seattle Genetics Second Quarter 2018 Financial Results Conference Call. Today's conference is being recorded. At this time, I'd like to turn today's call over to Ms. Peggy Pinkston, Vice President, Investor Relations. Please go ahead, ma'am.

[Peggy Pinkston, Seattle Genetics, Inc.]

Thank you, operator; and good afternoon, everyone. I'd like to welcome all of you to Seattle Genetics' second quarter and first half 2018 conference call. With me today are Clay Siegall, President and Chief Executive Officer; Todd Simpson, Chief Financial Officer; Roger Dansey, Chief Medical Officer; and Darren Cline, Executive Vice President, Commercial.

Following our prepared remarks today, we'll open the line for questions. If we're 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 as those, among others, relating to the company's 2018 financial outlook, including anticipated third quarter ADCETRIS sales and future revenues, costs and expenses, the company's potential to achieve anticipated clinical and regulatory milestones and expected timing thereof, including data availability from ECHELON-2, as well as other planned and ongoing clinical trials, including enfortumab vedotin, tucatinib and ladiratuzumab vedotin.

Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Among the factors that may cause such a difference include the inherent difficulties in forecasting sales particularly approximate to a new launch that the company may be delayed or encounter challenges in its planned clinical trial initiations, the enrollment in and conduct of its clinical trials, obtaining data from clinical trials, planned regulatory submissions and regulatory approvals in each case for a variety of reasons, including unexpected adverse events, or regulatory discussions, or actions, and the inherent uncertainty associated with the pharmaceutical development and regulatory approval process.

More information about the risks and uncertainties faced by Seattle Genetics is contained under the caption Risk Factors, included in the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, filed with the Securities and Exchange Commission.

And with that, I'll turn the call over to Clay.

[Clay B. Siegall, Seattle Genetics, Inc.]

Thanks, Peg; and good afternoon, everyone. We're approaching the seven-year anniversary of the first FDA approval of ADCETRIS for two relapsed lymphoma indications. That milestone transformed Seattle Genetics into a commercial organization, bringing ADCETRIS to patients in need. Since then, we've expanded into Canada and in collaboration with Takeda, ADCETRIS is now available in 71 countries.

We've grown the ADCETRIS franchise with three additional indications in the U.S., most recently frontline Hodgkin lymphoma based on results from the Phase 3 ECHELON-1 trial. The approval in late March for frontline Stage III and IV Hodgkin lymphoma drove a record quarter of ADCETRIS sales, up 28% from the first quarter of the year. We're still early in the launch, but project third quarter ADCETRIS sales in the U.S. and Canada to be $130 million to $135 million. I'm pleased by the strong uptake of ADCETRIS in the first full quarter since ECHELON-1 approval.

This highlights the reception of our data among the oncology community and our ability to bring the first new treatment option to frontline Hodgkin lymphoma patients after more than 40 years. Outside the U.S., our E-1 submission to Health Canada was recently accepted, positioning us for a regulatory decision in the first half of 2019. In addition, Takeda completed its submission of the E-1 data for proposed approval in the EU and anticipates an EMA decision by the first quarter of 2019.

Looking ahead, we have an opportunity to further grow the ADCETRIS brand with the ECHELON-2 trial in CD30 expressing matured T-cell lymphomas, also referred to as peripheral T-cell lymphoma or PTCL. We now expect these results early in the fourth quarter. Patients with newly diagnosed PTCL fare poorly with standard-of-care CHOP chemotherapy, and there's a significant opportunity for ADCETRIS combination to improve upon the decade's old regimen.

Approximately 4,000 patients are diagnosed annually in the U.S. with CD30-expressing PTCL representing a substantial unmet medical need and opportunity for ADCETRIS. We believe E-2 has the potential to further solidify ADCETRIS as the foundation of care for CD30-expressing lymphomas. ADCETRIS is an important drug, and it's becoming a mainstay for lymphoma physicians and patients worldwide. Beyond the growing ADCETRIS franchise, our late-stage pipeline has significant potential with three programs in ongoing pivotal trials. The most advanced, enfortumab vedotin is in a pivotal trial for metastatic urothelial cancer patients who previously received a PD-1 or PD-L1 inhibitor.

Earlier this month, we and our partner Astellas completed enrollment of a cohort of patients in the pivotal trial who received a platinum-based chemotherapy agent and a checkpoint inhibitor. This positions us for top line data in the first half of next year, which could support a potential regulatory submission later in 2019 in the U.S. under the FDA's accelerated approval pathway. We also recently treated the first patient in a Phase 3 trial of enfortumab vedotin intended to support global regulatory approvals and to serve as a confirmatory trial in the U.S. More than 45,000 people are diagnosed annually in the U.S. and the EU5 with metastatic urothelial cancer.

Up to 80% of patients treated with checkpoint inhibitors failed to respond and require further treatment options, making this a substantial unmet medical need. We're also evaluating EV in combination with pembrolizumab in first-line patients and look forward to presenting data, when it's available at an appropriate medical conference.

Tucatinib is another exciting late-stage program in our portfolio with worldwide rights. Our primary focus is on the global Phase 2 HER2CLIMB trial in HER2-positive metastatic breast cancer, which is enrolling very well. As we work with tucatinib, we see several opportunities beyond HER2CLIMB for this differentiated HER2 tyrosine kinase inhibitor. We believe tucatinib has potential in earlier lines of metastatic breast cancer as well as in other HER2-expressing solid tumors. We plan to invest in expanding the potential of tucatinib with the goal of building it beyond the single HER2CLIMB trial and into a broad development program including multiple tumor types.

Our third late-stage program is tisotumab vedotin. which we're developing with Genmab. We've achieved two recent milestones. We've dosed the first patient in a pivotal trial for women with recurrent or metastatic cervical cancer. And we started a Phase 2 basket trial evaluating tisotumab vedotin in other solid tumors. These trials are intended to support an initial accelerated approval pathway in cervical cancer and inform opportunities to broaden the program.

Our ADC collaborators are also making substantial progress with programs using our technology, underscoring the growing importance of ADCs in the treatment of cancer. An example of this was yesterday during the GSK Q2 results and R&D update where they highlighted their BCMA ADC in multiple myeloma, which utilizes our technology. GSK presented a broad development strategy, including several pivotal trials with this ADC as monotherapy and in combination regimens. They project an initial launch in 2020.

Seattle Genetics is on the path to becoming an important global multi-product oncology company by executing on the potential of ADCETRIS, advancing our late-stage programs and delivering novel molecules and technologies we can further transform Seattle Genetics.

With that in mind, I'd like to welcome our new Chief Medical Officer, Dr. Roger Dansey. Roger has extensive drug development expertise. He joins Seattle Genetics in May most recently from Merck where he was responsible for late-stage oncology development. He led KEYTRUDA development and registration activities across multiple tumor types, including many regulatory submissions to the FDA and other regulatory authorities worldwide. We're pleased to have Roger on the team.

Next I'm going to turn the call over to Darren to discuss our commercial activities. Then Roger will provide an update on our clinical programs; and lastly Todd will discuss our second quarter financial results. Darren?

[Darren S. Cline, Seattle Genetics, Inc.]

Thanks, Clay. ADCETRIS net sales were $122 million in the second quarter, up 28% over the first quarter of 2018. This is the highest sequential quarter-to-quarter growth rate since the product was launched. Growth was driven by increased volume and reflects strong adoption of ADCETRIS combination therapy in frontline Hodgkin lymphoma. The second quarter was the first full quarter of sales for our ADCETRIS frontline indication.

Our expanded sales force has reached over 85% of our targeted physicians, most of which are in the community setting. These community oncologists are the primary treaters of frontline Hodgkin lymphoma. They have been receptive to the superior efficacy that is offered by ADCETRIS plus AVD chemotherapy for Stage III and IV patients, while removing the unpredictable and sometimes severe pulmonary toxicity associated with bleomycin.

In addition to our expanded field-based efforts, we've launched a multi-channel marketing campaign aimed at educating healthcare providers, patients and caregivers. From our market research, we know that newly diagnosed Hodgkin lymphoma patients and caregivers spend a significant amount of time online researching the disease and treatment options before their initial therapy begin. We've received several reports of patients asking their physicians to be treated with the ADCETRIS plus AVD regimen. We've had a strong start to the frontline launch and remain confident in our believe that ADCETRIS plus AVD chemotherapy or with the standard of care in Stage III and IV HL.

Looking ahead, we started launch preparation for ECHELON-2 and potential approval in CD30-expressing PTCL. This could represent the sixth indication for the brand and a significant additional commercial opportunity for ADCETRIS. In addition to our efforts with ADCETRIS, we're actively preparing for the potential launch of enfortumab vedotin. Working with Astellas, we're building out a brand team and collaborating on commercial plans. We're pleased with our progress during the quarter and I look forward to keeping you updated.

I'll now turn the call over to Roger to discuss our clinical activities.

[Roger D. Dansey, Seattle Genetics, Inc.]

Thanks, Darren; and good afternoon, everyone. I'm pleased and excited to join the Seattle Genetics team and to participate in today's call. I've been with the company for two months now, and I'm impressed by the strength of both the late and early stage pipelines, the science-driven culture and the dedication the company has to improving the lives of cancer patients.

To patients, every day matters. So my focus will be to ensure that we move all our clinical stage programs forward as efficiently and as rapidly as possible, including our registration trials. Today I'll primarily address ADCETRIS and our late-stage programs. ADCETRIS had a strong showing at ASCO in June where we highlighted several additional analyses from the ECHELON-1 clinical trial in frontline Stage III and IV Hodgkin lymphoma. Notably, we reported data from a pre-specified analysis of patients treated in North America, which showed a relative reduction of 40% in the risk of a progression event or death compared to standard bleomycin containing chemotherapy with a hazard ratio of 0.6.

This translates to a 10.6% absolute improvement in two-year modified progression-free survival in the ADCETRIS-containing arm over the ABVD arm. We believe that these data likely reflect the impact that this can have in patient care when treatment is consistent with medical practice in the United States.

Looking ahead, in the ECHELON-2 trial, we are evaluating ADCETRIS plus CHP compared to standard of care of CHOP chemotherapy in newly diagnosed peripheral T-cell lymphomas. The primary endpoint of E-2 which enrolled 452 patients is progression-free survival. As we've previously commented, PFS events in the E-2 trial have occurred at a slower rate than expected. As a result and based on discussions we've had with the FDA regarding timing of the primary analysis, we are now planning to report top line data from the E-2 trial early in the fourth quarter.

Moving on now to our late-stage pipeline, I'll start with recent highlights and upcoming activities including enfortumab vedotin or EV, which we are co-developing with Astellas. At ASCO updated data from a Phase 1 trial of EV and metastatic urothelial cancer were featured in an oral session. In a 112 patients, the majority of whom had received at least two prior therapies in the metastatic setting and who were treated at the recommended Phase 2 dose, we reported a 41% confirmed objective response rate.

We also observed an encouraging similar response rate of 39% in the subgroup of patients who had liver metastases a particularly poor prognostic factor. EV was generally well-tolerated in the trial with a manageable safety profile. These Phase 1 data formed the basis of the breakthrough therapy designation granted by the FDA for EV in patients with locally advanced or metastatic urothelial cancer who had previously been treated with a checkpoint inhibitor.

Importantly, we recently also completed enrollment in the first cohort of the EV pivotal trial called EV-201, which is evaluating single agent EV in metastatic urothelial cancer patients who previously received both platinum-based chemotherapy and the PD-1 or PD-L1 inhibitor. The primary endpoint of this trial is confirmed ORR and we expect to report top line data from this cohort in the first half of 2019.

These data could potentially support registration on the FDA's accelerated approval mechanism. We achieved another recent clinical milestone in the EV program with treatment of the first patient in a Phase 3 single agent randomized trail called EV-301. We expected to enroll 550 patients with metastatic urothelial cancer who have been previously treated with the platinum-containing regimen or a PD-1 or PD-L1 inhibitor. The primary endpoint in this trial is overall survival. This is an important trial, because it is intended to support global regulatory submissions for EV, as well as serve as the confirmatory trial to EV-201 in the United States.

I'll turn now to our tucatinib program, which we're developing in HER2-positive metastatic breast cancer. Tucatinib is an oral small molecule TKI that's highly selective for HER2 and has the potential to be best-in-class. One key attributor of tucatinib is that it does not significantly inhibit EGFR, which reduces the rate of clinically meaningful toxicities such as rash and diarrhea. Based on this profile, we believe there is broad potential for tucatinib in metastatic breast cancer, as well as other HER2 expressing malignancies.

The Phase 1b trial results with tucatinib are recently published in The Lancet Oncology and the triplet regimen of tucatinib, capecitabine and trastuzumab was well-tolerated, with most patients being able to continue on the full dose of tucatinib. The safety and tolerability of a tucatinib regimen compares favorably to that reported with other HER2 targeted TKI-containing regimens and supports the rationale for the pivotal trial HER2CLIMB.

HER2CLIMB is an ongoing randomized trial of tucatinib versus placebo in combination with capecitabine and trastuzumab. Four patients with HER2-positive metastatic breast cancer with or without brain metastasis who've previously received trastuzumab, pertuzumab, and T-DM1. The primary endpoint of this trial is progression-free survival and key secondary endpoints include PFS in patients with brain metastases and overall survival. We expect to complete enrollment of HER2CLIMB in 2019. This trial is intended to support regulatory submissions of tucatinib in the U.S. and globally.

In the coming months, we plan to expand the tucatinib program with new studies in earlier lines of metastatic breast cancer. Data from the Phase 1b study of tucatinib in combination with T-DM1 that were recently published in JAMA Oncology support this plan to consider a combination as a potential registration approach. We are also interested in pursuing tucatinib in other HER2-expressing solid tumors such as colorectal cancer and gastric cancer.

Our third late-stage clinical program in our pipeline is tisotumab vedotin, or TV, which we are co-developing with Genmab. We recently treated the first patient with TV in the pivotal Phase 2 single-arm monotherapy trial called innovaTV 204 in women with second or third line cervical cancer. Target enrollment is approximately 100 patients and the primary endpoint is ORR. The trial is intended to support regulatory submission under the FDA's accelerated approval pathway.

We and Genmab are also planning a trial of TV in combination with other agents with a goal of understanding TV's potential in earlier lines of cervical cancer. This study will likely start in 2019, initially in the second line setting with the goal of moving into first line. Lastly, another recent accomplishment with the TV program is that we treated the first patient in a Phase 2 basket trial. This trial is enrolling four solid tumor types that highly expressed tissue factor including pancreatic, head and neck, colorectal, and head and neck, colorectal and non-small cell lung cancer. This study is designed to inform a potentially expanded development program of TV.

Now I'll turn the call over to Todd who will review our financial results. Todd?

[Todd E. Simpson, Seattle Genetics, Inc.]

Thanks, Roger; and thanks to everyone for joining us on the call this afternoon. In addition to substantial progress with ADCETRIS and across our pipeline, we had a strong quarter financially. Today I'll summarize our financial results for the second quarter and year-to-date as well as provide some updates to our financial outlook for the year. I'll also comment on our net income in the second quarter.

Total revenues in the second quarter were $170 million and were $311 million for the year-to-date in 2018. This included record ADCETRIS net sales in the U.S. and Canada of $122 million and $218 million in the second quarter and year-to-date. Growth in 2018 reflects the recent label expansions. And as Clay mentioned, we are guiding for third quarter ADCETRIS net sales in the U.S. and Canada of $130 million to $135 million.

As we continue to gain experience with utilization of ADCETRIS in the frontline setting and monitor market dynamics, we'll provide further updates. Royalty revenues in the second quarter increased to $21 million compared to $12 million in the second quarter of 2017. And for the first six months of 2018, royalty revenues were $36 million compared to $29 million in the first half of last year. We expect royalties to increase throughout the year as Takeda sales grow and as those increasing sales trigger higher royalty rates.

Collaboration revenues were $27 million in the second quarter, which include amounts earned under our ADCETRIS collaboration with Takeda and our ADC deals. This included clinical milestones totaling $17 million under our collaborations with Genmab, GSK and AbbVie. The first half of the year included items that result in us increasing our expectations for 2018 collaboration revenues to a range of $65 million to $75 million. Also bear in mind that collaborator milestones are progress-dependent, and therefore, result in quarterly variability.

To-date, we've generated more than $400 million under our ADC deals. In addition, we're entitled to receive single-digit royalties on sales of ADCs that use our technology and three collaborator ADCs are now in registrational trials.

R&D expenses were $123 million in the second quarter of 2018 and $275 million for the year-to-date. The increases over 2017 reflect higher investment across our late-stage and earlier stage pipeline programs. As discussed during our last call, year-to-date expenses includes $35 million in upfront payments related to technology licensing agreements entered into in the first quarter of 2018. SG&A expenses were $58 million in the second quarter and $124 million in the first six months of 2018.

Expenses in 2018 reflect transition costs associated with the acquisition of Cascadian last quarter, and cost to support the commercial launch of ADCETRIS in frontline Hodgkin lymphoma. We ended the second quarter with $458 million in cash and investments. This is in addition to more than $200 million in common stockholdings in Immunomedics and Unum. These shares are mark-to-market, which resulted in a gain of $105 million for the second quarter and that resulted in us reporting net income as you saw in our press release this afternoon.

I will mention one last corporate housekeeping matter. As you may remember, we have a registration rights agreement with Baker Brothers Investments, our largest shareholder who has participated in our financing since 2003. We filed a registration statement several years ago that will expire soon. As a result, we will be filing a prospective supplement later today to keep those shares registered.

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

[Clay B. Siegall, Seattle Genetics, Inc.]

Thanks, Todd. I'll close with a short summary of key milestones expected over the remainder of 2018. They include first, reporting data from the ADCETRIS Stage III ECHELON-2 trial in early Q4. Second, executing upon EV pivotal trial, EV-201 in urothelial cancer positioning it for top line data in the first half of 2019. Third, continuing enrollment in the HER2CLIMB pivotal trial of tucatinib and HER2-positive metastatic breast cancer and lastly advancing the pivotal trial of TV and cervical cancer.

I'm excited by the substantial progress we are making and the opportunities in front of us to bring additional drugs to patients in need. At this point, we'll open the line for Q&A.

Operator, please open the call for questions.

[Operator]

Thank you. And our first question will come from Cory Kasimov with JPMorgan.

[Cory W. Kasimov, JPMorgan Securities LLC]

Hey. Good afternoon, guys. Thanks for taking the questions, and a nice impressive quarter there. So I guess two questions for you. One, on ECHELON-1 opportunity and one on E-2. It's another year. During your (25:45) first full quarter sales in frontline Hodgkin, I guess, I'm wondering a little bit more specifically any feedback from physicians regarding their early experience and uptake, and really wondering how many moving parts there are still, potential impediments at this point in the launch and maybe what's preventing you from issuing full year guidance at this point?

And then, the second question is with regard to the ECHELON-2 opportunity. And you've talked in the past how you think this matches up with the patient population on E-1 in terms of overall size. And I'm wondering if that's based on literature, your own market research, and does this take into account the percentage of CD30-expressers? Thanks.

[Clay B. Siegall, Seattle Genetics, Inc.]

Well, first of all, thank you for the nice comment on our quarter. Yeah, I think we did a great job in the quarter. So on EV-1 opportunity, we've had great feedback from docs. It's been really good. Docs are using ADCETRIS AVD in the Stage III and IV. And we expected the community docs to really bring – use this more initially, and take it into how they treat patients faster than the academic docs. And we've talked about that on a number of conference calls. It's been over 40 years since there's been a change in frontline Hodgkin lymphoma. And we expect that there'll be a little bit of time for the academic docs who focus on this a lot to take it up. But we're doing a great job out there in the field. We're talking to docs. And I think we're making great progress. And I think you'll see that quarter-to-quarter.

As far as the first quarter sales, we were a little bit surprised pleasantly with the 28% rise that we had. We didn't expect it to be that fast quite frankly. We thought it would be a little less. We got a lot early adopters moving right onto it. But we think that going forward, it will be more gradual. We'll have good quarter-to-quarter growth.

And as far as full year guidance goes, we will do this, go back to full year guidance. We did this for many years. And we will go back to this at our earliest possible convenience once we feel confident with what's going to happen in the quarter. And we're working on that. We're looking at it really closely. We're not doing it yet. But stay tuned. And we certainly – we want to get back to, but we want to make sure we provide to the analysts and the investors out there some guidance that we really feel strongly about. And we don't want to go through and provide a whole year guidance until we feel really strongly about that. So at our earliest possible convenience, we'll do it.

And as far as E-2, it does – the opportunity does match the E-1 size of the Stage III and IV. And they're both about 4,000 or so – a little bit more than 4,000 for Stage III and IV Hodgkin lymphoma. If you look at the entire Hodgkin lymphoma group, that's obviously bigger than T-cell lymphoma. But when you look at the CD30 positive T-cell lymphoma and just Stage III and IV Hodgkin, it is about the same size. And that's been – we have studied that, we have market research on and demographics and everything. So we're pretty confident with that type of population.

[Cory W. Kasimov, JPMorgan Securities LLC]

And they're all CD30-expressers?

[Clay B. Siegall, Seattle Genetics, Inc.]

We're focusing on those 4,000 are the CD30-expressers exactly.

[Cory W. Kasimov, JPMorgan Securities LLC]

Okay, perfect. That's really helpful. Thanks for taking the question.

[Operator]

Thank you. Your next question will be from Kennen MacKay with RBC.

[Kennen MacKay, RBC Capital Markets LLC]

Hey, thank you for taking the question and congrats on the quarter. Wondering, just housekeeping a little bit upfront. Wondering if there was any inventory build associated with the expansion in sales or ahead of the June 28 price increase that we saw for ADCETRIS. Or even if there was sort of pull forward of some orders ahead of the July 4 holiday in the U.S. And then, I was wondering, Clay, in regards to your comment maybe about the percentage of providers and physicians that you are targeting that haven't been detailed yet, just wondering how you have prioritized these clinicians and what population this represents that remain to be detailed?

[Clay B. Siegall, Seattle Genetics, Inc.]

Yeah, Kennen, thanks for both of the questions and thanks for the nice commentary on the quarter. So typically, we don't really see this inventory build. We don't see the accumulating inventory/. But, Darren, can you give a little bit of a color on that and what we do?

[Darren S. Cline, Seattle Genetics, Inc.]

Yeah. Hi, Kennen. When we launched ADCETRIS seven years ago, we built a very efficient distribution model just in time access to the product for physicians. And we typically don't see that. And particularly, if you think about the frontline indication where 75% of the patients are diagnosed in the community, this is not a drug that typically gets stocked or has a lot of inventory. Some academics settings that just for ease of scheduling and treatment based on the volume of their patients may stock a week or so. But again, we don't see it. We haven't seen it traditionally and don't see it here with the E-1 uptake.

[Clay B. Siegall, Seattle Genetics, Inc.]

Yeah. And then, the second part of the question, also turn it over to Darren. It's about the percentage of providers that we're targeting and what we're detailing. And we're doing a really great job. I'm really proud of our commercial team. Darren, can you talk a little about that?

[Darren S. Cline, Seattle Genetics, Inc.]

Yeah. Sure. So Kennen, if you recall, we expanded the sales force,

we completed in the fourth quarter of last year. And that allowed us to really focus in on where we saw the opportunity in the frontline setting was, was in the community. And the whole entire universe of oncologists in the United States is about 7,500, to 8,000. But based on volume, geography, and a couple of other factors, we're able to really narrow and target to about 3,000 or so in which we know that the majority of Hodgkin will be presented and treated there. Now, we've reached about 85% of those physicians, but with our model obviously will be to continue to call on those docs and continue to educate about the benefits on the data in the frontline indication.

[Kennen MacKay, RBC Capital Markets LLC]

Got you. Thanks so much for taking the question.

[Operator]

Thank you. Our next question will be from Salveen Richter with Goldman Sachs.

[Salveen Richter, Goldman Sachs & Co. LLC]

Thanks for taking my questions, and congrats on the quarter as well. Just three questions for me. One around the quarter. So given that 28% quarterly growth in Q2 and your guidance, I think, at the high end looks like 10% for quarterly growth in Q3. I recognize that there's a bit of conservatism if you watched this early launch. But is there anything that you're seeing that make you think this would be more gradual? Or is this truly just conservatism as you look out over the rest of the year?

Secondly, with regard to ECHELON-2, could you just walk us through how this population differs from the population you studied in the earlier trial? And is it just stratified for ALK positive? And I'll come back with my last question.

[Clay B. Siegall, Seattle Genetics, Inc.]

Okay. So first of all, in the first quarter, we were up – first full quarter I should say, we were up 28%. And our guidance at 5% to 10% up this quarter going forward. We don't believe that's conservative. Remember, this is just quarter-to-quarter. This isn't annual guidance. And I'd be delighted if each quarter that we go looking forward were 5% to 10% in every quarter. I don't know where we'll be, and we're not giving annual guidance yet. But it takes time to build market share in a setting where the standard of care hasn't changed in 40 years. It just takes time. And we are off to a good start. And our commercial team was ready. They were ready. They jumped on this and we got the rapid adopters in. But the rest of the time, we're going to be making stepwise moves up there.

So I don't want you and the other analysts to believe we're just giving you a very conservative number and go way past. That's not what we believe based on our market assessment of what's going on. And I'll repeat this just because it's important. We were a little surprised initially with our uptake of how much it was. And we're pleased by it. And I think that's a reflection of how poised we were and positioned we were to jump on this. And we expanded our sales force. And we were really ready to get this out there on to the market.

But we think it's going to be a uphill climb to keep on taking docs and transitioning to them to the new ADCETRIS AVD. As Darren mentioned, some patients come in now, they go to the Internet when they're trying to figure out what to do about their disease to learn about this. They learn about ADCETRIS AVD and they're asking for it. So we're really excited with that aspect.

Going on to your second question with E-2, the population that we have treated, our lead-in study is very similar to what we're treating now. It's a smaller number, a much smaller number than what we're treating now, 452 patients in E-2. We're really excited to come out with that data. We have had discussions with regulators. And the event number was slower than we predicted. So we spoke with regulators and came up with a good time to where the trial was mature and the data was mature. And that's really the most important thing, this is under a SPA. And so early in the fourth quarter – and that's new for this call. Early in the fourth quarter, we will be unwinding this and reporting top line data.

[Salveen Richter, Goldman Sachs & Co. LLC]

Okay. And then just the last question, just on tucatinib, maybe you can just give us a sense of how you're thinking about moving into earlier lines in HER2 breast cancer and then timelines around moving into the other HER2 cancers?

[Clay B. Siegall, Seattle Genetics, Inc.]

Yes. So you – say that again, the two questions of moving earlier?

[Salveen Richter, Goldman Sachs & Co. LLC]

So moving into earlier lines of breast cancer, which you talked about, just how you're thinking about that and then timelines around moving into the colorectal and gastric cancer studies.

[Clay B. Siegall, Seattle Genetics, Inc.]

Got you. Okay. Well, let me take the second one first. So when you look at colorectal, if you go to ClinicalTrial.gov, there already is a clinical trial in colorectal cancer. And it's an investigator-sponsored trial. And it's ongoing. And we're very happy with how that is going in colorectal cancer.

In gastric cancer, we have not announced anything specifically. Clearly, HER2 is expressed in pretty high density in gastric cancer. It's an important cancer. And we're excited with the possibility outside of breast and colon cancer to go forward. We've made no commitments yet. But I think you're spot-on with your question in gastric cancer. We noticed it. We are thinking about it. So I would say, stay tuned on that.

And then, Roger, perhaps you would like to talk a little bit about how we're thinking about tucatinib, and in general, we're going from HER2CLIMB as a trial that we brought from Cascadian to making this into a program. And Roger, maybe you can talk a little about that.

[Roger D. Dansey, Seattle Genetics, Inc.]

Sure. Thanks, Clay. So as Clay has articulated, we do see tucatinib as really representing a program rather than a trial in breast cancer. So, for example, the data that was reported out on TDM-1 plus tucatinib is quite encouraging. Response rates are interesting. And there's an example of a potential combination that we could consider in an earlier line of therapy as a potential registration approach.

But we're also interested – and we are thinking through what possibility could exist in the adjuvant treatment. The profile of tucatinib is such that it's favorable for very early use based on its safety profile. So those are two examples of where our thinking is.

[Salveen Richter, Goldman Sachs & Co. LLC]

Thank you very much.

[Operator]

Thank you. Our next question will be from Tazeen Ahmad with Bank of America.

[Tazeen Ahmad, Bank of America Merrill Lynch]

Hey, good afternoon, guys. Thanks for taking my questions. First one, Clay, can you give us a sense on what you're expecting for the average cycles of use in the frontline HL setting? And secondly, do you have a sense of whether the label is preventing physicians from adopting use across all of frontline, meaning, are you seeing patients that are potentially Stage I or Stage II also getting treated in the frontline setting? I realize that you're early in the launch, but just wanted to get some color on that.

[Clay B. Siegall, Seattle Genetics, Inc.]

All right. Well, I'll answer second question. I'll turn the first one over to Darren. Our label is in Stage III and IV. And so we promote to Stage III and IV. And I think that that's something that we really stick with very much in our commercial team. Now, we do hear a little bit from docs about earlier stage, especially in patients where you have like pulmonary insufficiency and they really can't get bleomycin. Or a patient that starts on ABVD and then they have some pulmonary toxicity. And they're looking for an alternative. I think there are cases where you can see it there. But I think by and large, it's not part of the label. And so we're not really getting substantive sales there despite hearing a few anecdotes here and there.

And then I'll turn it over to Darren to talk about the average cycles. The average number of cycles in frontline Hodgkin lymphoma, what we're seeing in our clinical – what we did in our clinical trials to what we're seeing out there, and it's a little early to give you something that's solid on this. But, Darren, any thoughts on this?

[Darren S. Cline, Seattle Genetics, Inc.]

Yeah. The trial – ECHELON-1 was for 12 cycles. That was the intent. And I think when you think about this disease – and if you look at just across just about all oncology trials and then utilization in the academic centers and community, there is a little bit of discordance there typically for various reasons. But I think in this frontline curative setting, our physicians aim to give planned dose on time for the full 12 cycles. And we're seeing physicians embrace this approach also with ensuring that growth factor is onboard right out of the gate to ensure that these patients again can get the planned dose on time.

So to your point, it is early. We will be monitoring this and studying it and understanding what the utilization, how it's shaking out. But that's the absolute intent for these physicians.

[Clay B. Siegall, Seattle Genetics, Inc.]

Yeah. I think that when you have curative intent like frontline and Hodgkin lymphoma, which is not the same with all tumors. As you know, a lot of tumors there's -unfortunately, it is not curative-intent even in frontline, because it's just a matter of getting longer survival or PFS, or even a response, depending on the cancer.

But in this, since there is curative intent in a fairly high percentage of patients, patients really want to stay on and get their full cycle. So I think that we'll probably see something pretty close to the 12 that we had in our trials. That was different. And perhaps you're asking the question, because in our relapsed refractory setting, which is a very different thing, these were patients that had two prior cycles in our first approval. We did that each cycles in our clinical trial. And then we averaged about 6.5% out in the real world. And so I understand that question. I think it's a fair question. And I think with the curative intent upfront and with the healthier patients, and I think that will probably see something pretty close. But it's a little early to say, but a fair question.

[Tazeen Ahmad, Bank of America Merrill Lynch]

Okay. Thanks for that color. And then, related – one last question related for the E-2 population, would you expect to see average number of cycles to be closer to real world setting that you just mentioned of around 6.5 cycles?

[Clay B. Siegall, Seattle Genetics, Inc.]

With E-2, I think it depends on the data. We don't have the data yet. And if our data come out and they're strong and you see a ton of white space between the two Kaplan-Meier curves like we did with ALCANZA, you'll have patients wanting to stay on this, absolutely and try to see if there's some – with curative intent. And so I think that's different.

I think when you look at CHOP chemotherapy, there are some long-term disease-free responses there. But it's substantively less than 50%. And when you start looking over years, and there's an initial CR rate of about 45% or so, but though some of those patients relapse. And so I think it depends on our data. And if our data are strong, you bet patients will stay on it. You bet.

[Tazeen Ahmad, Bank of America Merrill Lynch]

Okay. Thank you.

[Operator]

Thank you. Our next question will be from Adnan Butt with Guggenheim Securities.

[Adnan Butt, Guggenheim Securities LLC]

Hey. Thanks and congrats on the strong ADCETRIS results. One on ADCETRIS and one on enfortumab. For ADCETRIS, are there any plans to conduct a Phase 3/4 type of study in a similar or maybe broader patient population with growth factor support?

[Clay B. Siegall, Seattle Genetics, Inc.]

First of all, it's a good question. I think that it is – there are a lot of possibilities we're discussing. I don't want to commit to anything. If you're asking about are we going to do a registry study and just include all growth factors support and try to see what kind of data that we really get, if we do this, what we think is something that we learned from our 1,334 patients. Trials are also learning experiences. And we went in this, and knowing some details, but now we know a lot of details. I think we know more about treating frontline Hodgkin lymphoma patients than probably any other company. And I think that you're going at this in a way that is we've learned that is the most appropriate way in which FDA has advised in their label the way to do this.

And so we think that they did. The label is great. But if we do a registry study, I think, we're going to get potentially in the high 80% and pushing close to 90% in cure rate. We could potentially get there. It is reasonably possible when you look at all our data. We have our North American data that we talked about and presented at the ASCO trial. We're writing it up and we're looking forward to putting it into a major medical journal and trying to get this published soon. But if you look at with docs that were experienced in ADCETRIS and using prophylactic growth factors and doing all the things, the data are very exciting and we're really excited. So if you're asking, are we considering a registry study. The answer is yes.

[Adnan Butt, Guggenheim Securities LLC]

Okay. I would look forward to that. Then, on enfortumab, are there any differences in the patient populations between the Phase 1 lead-in and the pivotal Phase 2 that could lead to differences in either response or duration?

[Clay B. Siegall, Seattle Genetics, Inc.]

So in the Phase 1 population, we had – most all the patients had prior platinum and a checkpoint, okay? But there were a couple of patients that couldn't get platinum. But a very few patients that just had a checkpoint. So the vast majority of them had two prior cycles. And when you look at what we did in the pivotal study, we really have both. There's two different cohorts, if you will. And what we talked about on our last conference call was that we're going forward with the cohort both of the platinum and the checkpoint is what we're – we've just completed the patient enrollment for. And that's the one that's going to go forward first.

And the treatment of urothelial cancer has been changing a little bit. There's been some things going on with – whether they're high or low PD-1s in frontline. So that's a little different. That has not touched at all. Patients that get platinum and then checkpoint inhibitor. So in that regard, I would say, by and large, we're using almost identical patient population, to answer your question.

[Adnan Butt, Guggenheim Securities LLC]

Okay. Great. Thank you.

[Operator]

Thank you. And our next question will be from Yatin Suneja with SunTrust Bank.

[Yatin Suneja, SunTrust Robinson Humphrey, Inc.]

Hey, guys. Thanks for taking my questions, and let me add my congratulations on a good quarter. Maybe I'll start with E-1 (sic) [E-2] (00:47:23), could you guys go on a little bit more detail on the feedback you have received from the regulators? Are you making any changes in the trial resumption to enable an early 4Q readout, and also talk about what the bar is for approval, and also maybe the bar for uptake in that setting. And I do have another question after that.

[Clay B. Siegall, Seattle Genetics, Inc.]

Okay. Just to clarify, you asked about E-1, and I think, you meant E-2.

[Yatin Suneja, SunTrust Robinson Humphrey, Inc.]

E-2. E-2, yeah, sorry.

[Clay B. Siegall, Seattle Genetics, Inc.]

Yes. You were just testing me and I am listening to you. So as far as feedback from regulators, we did meet with regulators. We had said at earlier conference calls, we were going to meet with regulators. We have met with regulators. We've talked to them. The most important thing, Yatin, here is that we have a mature data set, how many patients are out, 18 months, two years, two-and-a-half years, three years, what are the events and how are the events. We said the events are coming slower. That's what we've talked about.

So FDA got to see a lot of different information we had. We had great discussion on it, very collegial, very positive. When you look back at ADCETRIS is five-for-five with registration studies and approvals. So this is number six up and we have number seven behind it in CHECKMATE 812, and then maybe more in the future. But right now, we're working on number six on E-2. We feel really good about our interaction with regulators. And you asked about the bar for approval. I don't have a line in the sand. The FDA doesn't make lines in the sand like that.

But the endpoint that we have with PFS, and we're – you have to see a difference. When we get that – the control arm is CHOP chemotherapy. The CHOP has been out there for about 35 years. And as you know, it was standard of care for T-cell and B-cell lymphoma. And in B-cell lymphoma, I mean we had a transformation with our CHOP. And that was great for patients. But unfortunately, after three-and-a-half decades there's been no such a transformation in T-cell lymphomas. Nothing, it's still just chemotherapy four-drug regimen.

So we're sitting here, we're saying, look, we want to drop out one of letters we got on Ocovan (49:59) because we don't want to add neurotoxicity on top of this. And with CHP ADCETRIS, we have some – our lead-in trial spectacular. We haven't had an event in years. We keep on reporting that by the way. Over and over, we're out five years now. And it's like the event line is flat. And yes, that's a single arm trial. But if we haven't hit median after five years, our OS after five years is 80%. These are unprecedented numbers granted for a very small lead-in trial.

And you have to prove it on a bigger stage. And that's what we're doing. We're putting our money where our mouth is. We put it 452 patients. And the data – this has been a five-year track through doing this. It's been a long track, try to do this and change frontline T-cell lymphoma. And we're now not years away, we're months away. And we're guiding to early fourth quarter. So I think that we just need to see statistically significant data. I think if it's not statistically significant and we have the hazard ratios bad and the two lines and the Kaplan-Meier parts are so close, no one is going to care. But we'll just have to see our data.

[Yatin Suneja, SunTrust Robinson Humphrey, Inc.]

And just to clarify, so the only 4Q guidance is based on the assumption that you will reach the pre-specified number of events naturally, or was this trial – or is there any change to go for a landmark analysis to enable that readout?

[Clay B. Siegall, Seattle Genetics, Inc.]

We haven't come up and said the specifics of what we're doing. But we have a date. And so we're going to be pulling this out on a date. So we know – we feel very confident when this will come out. It'll be coming out early fourth quarter.

[Yatin Suneja, SunTrust Robinson Humphrey, Inc.]

Got it. And then, just a question on ADCETRIS in frontline Hodgkin, can you maybe comment a little bit on the patient mix Stage III versus IV? And also, I think on the last quarter call, you did give an update on the new accounts that you added in the first two months. I think it was about 150. Could you give us an update there? What happened in Q2? Thanks.

[Clay B. Siegall, Seattle Genetics, Inc.]

Sure. As far as frontline of Stage III or IV, when you look at the entire data set counting all the international sites, there was a little difference. But when you start getting down into the North American data with docs that have experience, there really wasn't a difference. And so I don't think that – I don't believe that there's much of a difference there for you to be looking at. And I don't think docs look at it that way. So I think it's a fair question. But I just don't see that there's a difference there and we'll leave it.

And the other question, Darren?

[Darren S. Cline, Seattle Genetics, Inc.]

New accounts?

[Clay B. Siegall, Seattle Genetics, Inc.]

Yeah. New accounts.

[Darren S. Cline, Seattle Genetics, Inc.]

Yeah. We continue to see new accounts. And I again go back to 75% of these patients frontline Stage III, IV patients present in the community. So we've seen nice breadth and depth during the quarter. We anticipate that trend to continue.

[Yatin Suneja, SunTrust Robinson Humphrey, Inc.]

All right. Thank you so much and congrats again.

[Clay B. Siegall, Seattle Genetics, Inc.]

Thanks.

[Operator]

Thank you. Our next question will be from Boris Peaker with Cowen.

[Boris Peaker, Cowen & Co. LLC]

Great. Thanks for squeezing me in and let me just add my congratulations on a great financial results.

[Peggy Pinkston, Seattle Genetics, Inc.]

Thanks, Boris.

[Boris Peaker, Cowen & Co. LLC]

So my first question is ADCETRIS in the frontline, just follow up to prior question. Is there maybe a subgroup of patients that's responsible for the early adopters specifically maybe younger versus elderly patients or any other kind of a subgroup division?

[Clay B. Siegall, Seattle Genetics, Inc.]

I really think there's not; I think it's really the community setting. And maybe, Darren, do you want to expand on that?

[Darren S. Cline, Seattle Genetics, Inc.]

Yeah. I think it's too early to really parse out the type of patient, Boris. I think what we do know though is they come from the community, these patients again – the average age of diagnosis is 35 and they present right in the community. And now doctors are treating with ABVD. And I think we've seen in the community some of these earlier doctors that have replaced bleomycin with ADCETRIS. And they're off to the races. And so we'll see as we move forward. But we're pleased with the start.

[Boris Peaker, Cowen & Co. LLC]

Great. And my second question is on EV in urothelial. Just curious what is the overall response rate or duration response rate that you think you'd need to meet to support accelerated approval certainly in a post-checkpoint inhibitor failure setting?

[Clay B. Siegall, Seattle Genetics, Inc.]

There is no real line in the sand. We have BTD as you know in EV. So we have had some pretty hefty discussions with FDA and other regulars and there is a lot going on with this drug, a lot, it's a whole program. We had in our lead-in trial, we had a 41% objective response. And I would point out importantly 39% objective response in patients with liver met. And so that's really, I think, eye-opening. And you mentioned the PD-1 to PD-L1s got approval in the setting or in a similar setting. That was based on ORR of 14% to 21%, depending. 14% with atezo, 19% was nivo, 21% with pembro. And then there was a couple of others. It was five of them approved. But all between 14% and 21%.

So we're sitting back with our lead-in trial with substantial data with 41% objective response. And these are patients that have seen checkpoints. So we're afterwards, which is why it's a single agent model. It's a monotherapy trial, single-arm because we're looking at getting a strong durable response rate in those patients. So I don't know the line in the sand. FDA doesn't give us that. But I think we don't need data as good as we have I believe to get approval.

[Boris Peaker, Cowen & Co. LLC]

Got you. Okay. Well, great. Thank you very much for taking my questions

[Operator]

Thank you. Our next question will be from Andy Hsieh with William Blair.

[Andy Tsan-Yu Hsieh, William Blair & Co. LLC]

Hi. Thank you for taking my question, and congratulations on a spectacular quarter to you and the team. So this has to do with – back in 2015 at ASCO, I believe, Clay, you and I talked about the frontline DLBCL opportunity. And I think the company decided to forego that opportunity, because that field has become crowded. And given the fact that, I believe, ibrutinib kind of failed in that setting, maybe the market has opened up. Has that changed your calculation in that particular setting?

[Clay B. Siegall, Seattle Genetics, Inc.]

First of all, thank you for the comments, and thank you for the – coming back with the question on DLBCL for ADCETRIS. When we look at ADCETRIS in DLBCL, we are in guidelines. So we're in the NCCN Guidelines. And we get used there. We hear from doctors all the time. There is use and growing use in that setting. And while it's not in our label, it is in guidelines. So doctors are pretty confident they'll get reimbursed and they use it. And I'm not in the commercial group out in the field every day. But I've even gone out in the field and talked to some doctors periodically. And they use it for DLBCL.

And it is – screening for CD30 at these clinical centers when you have lymphoma, it's kind of standard now. This is not like an outlier that may be 10 years ago, they didn't. But now you come in with lymphoma, they screen you for a series of different things like CD20, CD30 and all these others. And so they know that ADCETRIS is there. And if you're CD30-positive and you've gone through the Rituxan CHOP and Rituxan this and Rituxan that regimen. And they need some – a drug to use.

They know they can use it. And I've talked to docs who say, they like it a lot. And they see 40% to 50% objective response in the setting. So I think the question comes down to economics a little bit. And doing a trial that we would need to do in a setting – in a randomized setting probably is a four-year pretty big very expensive trial. And so the question is, is it financially worth it. So since we are getting a lot of use there under the NCCN Guidelines. And that's what's something we talk about strategically internally. But I can't give you set answers and I'm not promising anything. But it's really a financial consideration at this point.

[Andy Tsan-Yu Hsieh, William Blair & Co. LLC]

Great. Thank you so much.

[Operator]

Thank you. Our next question will be from Chad Messer with Needham & Company.

[Gil Blum, Needham & Company]

Hello. This is Gil Blum for Chad Messer. And again, congratulations for a spectacular quarter. My question relates to the potential E-2 expansion. Do you guys think there might be any overlap with the physicians that you currently have using ADCETRIS moving forward with the E-2 expansion?

[Clay B. Siegall, Seattle Genetics, Inc.]

Did you say E-2 expansion?

[Roger D. Dansey, Seattle Genetics, Inc.]

E-2. Yeah. Expansion of the label. Yeah.

[Roger D. Dansey, Seattle Genetics, Inc.]

Okay. Roger, you want to take it?

[Clay B. Siegall, Seattle Genetics, Inc.]

Well, I think lymphoma docs are lymphoma docs. And so the likelihood is that there isn't particular overlay. Darren, do you want to make...

[Darren S. Cline, Seattle Genetics, Inc.]

Yeah. No. I can add some color on that. I think that there will be particularly in the academic setting, we see current frontline T-cell about 60%, 65% of patients are treated in the academic, the others being community. And I think in the academic center, there's a little bit of an overlap. But I think, much like E-1, I think, with really good data, we could see a transition to the community setting. And again, in some of these big clinics, you'll have lymphoma focused docs that will treat those patients. So that's how we're thinking about the opportunity.

[Gil Blum, Needham & Company]

So you're expecting that the commercial expansion can continue with the docs you already – that are already using ADCETRIS?

[Darren S. Cline, Seattle Genetics, Inc.]

Yeah. So I'll comment on that a little bit further. When we did the expansion, we actually took into account for the ECHELON-2 label expansion in our geographies and territory sizing. So we can absolutely accommodate for it.

[Clay B. Siegall, Seattle Genetics, Inc.]

Right. Yeah. So I guess, I'm understanding more about – I thought you're talking about the market opportunity. You're talking about the number of sales reps and our expansion in sales reps and our ability to do this. I mean we feel we are in great shape to do this. We know the docs. We call on the docs. We are absolutely on top of this. And since we now know when this is going to come out and then, we're going to hop on submission to regulators based on our data, of course. We're going to be ready to go. And I actually think that if our data are strong, there is a bigger unmet medical need in a way in T-cell lymphoma than it was in Hodgkin lymphoma only because the standard of care doesn't work as well.

In Hodgkin lymphoma the 4-drug cytotoxic cocktail had a higher CR rate, although toxic and we're very pleased with bleomycin. But it's a higher CR rate than you see through the 4-drug cocktail CHOP in T-cell lymphoma. So I think there's a bigger opportunity to get a very fast uptake into the market because of that need. So it all depends on our data. And we're getting close to it. We're all very excited about trying to get there. And I think this is a real big upside opportunity for Seattle Genetics.

[Gil Blum, Needham & Company]

Thank you very much for the clarification.

[Operator]

Thank you. Our next question will be from Geoff Meacham with Barclays.

[Jason Zemansky, Barclays Capital, Inc.]

Hey, guys. Thanks so much for fitting us in. This is Jason Zemansky on the call for Geoff. Real quickly, just owing off an earlier comment, but to what extent, do you think with regards to the E-1 adoption your community docs are kind of bimodal distribution where you have early adopters versus late adopters? And I know it might be difficult to anticipate or predict. But do you have a sense of when guidelines will be updated to include both the data and the North American cohort? Thanks so much.

[Clay B. Siegall, Seattle Genetics, Inc.]

Thank you for that question. We have – ADCETRIS has been in many different types of NCCN Guidelines. And we'll continue to rethink going forward as we have more dataset. So that's something that it's hard to give you a predicted timeframe. This is not the FDA, these are NCCN Guidelines. And so historically, we haven't given guidance to say, here's when that will happen because I don't think it's the right thing to do. This is from doctors and doctor assessed and doctor groups making the vote – providing the votes of going forward. So I think though that overall you're asking a really good question. We have our eye on this. We're working on seeing how we can get the right data into guidelines and doing the best we can on that. So thanks for the question.

[Jason Zemansky, Barclays Capital, Inc.]

Great. And just again out of – do you think that's an issue that's either limiting or driving uptick the lack of guidelines with regards to the E-1? Or is it something else or?

[Clay B. Siegall, Seattle Genetics, Inc.]

I think that we're very happy with the uptick so far. We look forward to a day, but we have a bigger – more commentary on NCCN Guidelines and more data such as the North American data. We'd love to have those data there. I don't want to give you guidance of when. But we would love to have the data there. And I do not think in what – in any way that this will hurt us. I think it will help us pretty dramatically. Darren, do you want to comment?

[Darren S. Cline, Seattle Genetics, Inc.]

Yeah, no, I don't think it's been a barrier. I think that was your question, the early adopter versus late and what that transformation. I think that over time as we continue to reach more of our physicians on a more frequent basis, our ability to articulate the full data set within the E-1 trial. We'll get past the early. And we'll get to the folks that are just a little bit later adopters. And that will take time. And I think there'll be external things like the North American data that they'll take into consideration, when they got you to look at the U.S. experience with ADCETRIS. And so I think this will – as we've stated, this is a marathon, not a sprint. And we couldn't be more pleased with our start. And we look forward to executing the remainder of the year.

[Jason Zemansky, Barclays Capital, Inc.]

Wonderful. Thank you so much for the color, really appreciate it.

[Darren S. Cline, Seattle Genetics, Inc.]

You're welcome.

[Operator]

And I am showing no further questions in the queue at this time.

[Peggy Pinkston, Seattle Genetics, Inc.]

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

[Operator]

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may now disconnect.