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Good day and welcome to the Seattle Genetics Second Quarter 2020 Financial Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Peggy Pinkston, Vice President, Investor Relations. Please go ahead.
Thank you, operator and good afternoon everyone. I would like to welcome all of you to Seattle Genetics’ second quarter 2020 financial results conference call. With me today are Clay Siegall, President and Chief Executive Officer; Chip Romp, Executive Vice President, Commercial, U.S.; Todd Simpson, Chief Financial Officer; and Roger Dansey, Chief Medical Officer. Accompanying today’s conference call are supporting slides, which you will find on our website in the Investors section, Events and Presentations page. Following our prepared remarks, we will open the line for questions. We aim to keep this call to 1 hour and so ask that you limit yourself to one question to give everyone an opportunity to participate in Q&A during our call today.
Today’s conference call will include forward-looking statements regarding future or anticipated events and results, including the company’s 2020 financial outlook, anticipated product sales, revenues, costs and expenses and potential clinical and regulatory milestones, including data readouts, regulatory submissions and approvals.
Actual results or developments may differ materially from those projected or implied in these forward-looking statements. Factors that may cause such a difference include the difficulty in forecasting sales, revenues and expenses, impacts related to the COVID-19 pandemic and the 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 periodic reports filed with the Securities and Exchange Commission, including the company’s quarterly report on Form 10-Q for the quarter ended March 31, 2020.
And now, I will turn the call over to Clay.
Thank you, Peg and good afternoon everyone. The past few quarters have been a period of remarkable growth for Seattle Genetics across the business. We have now extended our commercial portfolio to three drugs with the approval of PADCEV in December, followed by the approval of TUKYSA in April. In the second quarter, we reported total revenues of $278 million driven by record product sales comprising ADCETRIS and these two new marketed products. In addition, we announced positive top line data from a fourth program, tisotumab vedotin and made strong progress across our pipeline with significant clinical development accomplishments. I am proud of the dedication of our team and the important advances we are making to address the unmet medical needs of cancer patients even in this time of a global pandemic.
Starting with ADCETRIS, we reported net sales of $168 million in the second quarter and $332 million for the first half of 2020. Based on progress to-date, we are maintaining our guidance of full year 2020 ADCETRIS net sales in the range of $675 million to $700 million. TUKYSA continues to secure additional approvals for ADCETRIS, expanding its availability to patients globally. Most recently, ADCETRIS Plus chemotherapy was approved in the EU for frontline systemic anaplastic large cell lymphoma, and ADCETRIS was approved in China for relapsed or refractory Hodgkin lymphoma and systemic ALCL. We believe several ADCETRIS label expansion opportunities lie ahead, which Roger will outline during his comments.
Turning now to PADCEV, net sales in the U.S. were $57 million in the second quarter, an increase of 66% from Q1. We and our partner, Astellas, continue to be pleased with the strong U.S. launch of PADCEV and its robust adoption for treatment of patients with metastatic urothelial cancer who previously received a PD-1 or PD-L1 inhibitor and a platinum-containing chemotherapy. We are now providing full year 2020 guidance of $215 million to $235 million. This reflects our current expectations following the strong initial launch of PADCEV. Our vision is that PADCEV becomes a foundation of treatment across the spectrum of urothelial cancer. To this end, we are advancing trials in first-line metastatic urothelial cancer and muscle-invasive bladder cancer, primarily paired with KEYTRUDA in collaboration with both Astellas and Merck. We are also exploring PADCEV in a range of nectin-4 expressing solid tumors and believe that PADCEV is well positioned to become an important global brand.
Our third and newest commercial product is to TUKYSA, which was rapidly approved by FDA in mid-April for metastatic HER2-positive breast cancer, including patients with brain metastasis. We are very pleased to report second quarter TUKYSA revenues of $16 million, following our launch that employed virtual communication methods. Under the FDA’s project or this program, TUKYSA is now also approved in Switzerland, Singapore and Canada. And our submission for approval is under review in Australia. More broadly, the EMA is currently reviewing our EU marketing authorization application. As we look forward to bringing TUKYSA to patients throughout the world, we are continuing to build our international infrastructure and capabilities.
Tuomo Patsi recently joined us as Executive Vice President, Commercial, International. Tuomo has deep experience in this area, including from Celgene, where he was President, Worldwide Markets and joins us most recently from Bristol-Myers Squibb. He will lead our commercial organization in Europe and ROW, working together with Chip Romp, who will continue to oversee the U.S. commercial organization. Both Tuomo and Chip serve on the company’s Executive committee. In addition to our commercial and regulatory progress, we have invested a broad development program across HER2-positive cancers, which Roger will cover during his remarks.
Turning now to our pipeline, in late Q2, we reported positive top line results from the pivotal trial of tisotumab vedotin or TV in women with recurrent or metastatic cervical cancer. We’re developing TV in collaboration with Genmab, and together, we plan to discuss these results with the FDA. We’ve received positive feedback from KOLs on our top line results in which they emphasize the significant unmet medical need. Standard therapies for previously treated metastatic cervical cancer generally result in low response rates and overall survival is measured in months. We plan to present full data from the trial later this year.
Beyond the approved drugs, ADCETRIS, PADCEV and Roche’s Polivy, our TV data additionally illustrate the growing importance of our vedotin based antibody-drug conjugates in the treatment of cancer. There is also now GSK’s which uses our ADC technology that is closely related to vedotin and recently received a positive 12 to nothing ODAC vote. Our growth plans for the company are broad. We’re working to expand the indications for each of our commercial brands to help patients in need. To fuel our future growth, Seattle Genetics is advancing more than a dozen early-stage assets in clinical and preclinical development. These include novel ADCs as well as immunotherapy agents and other targeted approaches to treating cancer. With much to share regarding our pipeline, we plan to hold a virtual R&D Day later in 2020, during which we will provide more details on our expansive pipeline and our commitment to bring additional first-in-class or best-in-class therapies to patients in need. Stay tuned for more information.
Yet, I will turn the call over to Chip to discuss our commercial activities, then Todd will comment on our financial results and guidance, after that, Roger will discuss our clinical development activities. Chip?
Thanks, Clay. We delivered strong results in the second quarter across the commercial portfolio. We adapted our strategy for working remotely, and our reps work diligently to access and support our customers. Marketing teams effectively adjusted the marketing mix to increase digital and peer-to-peer speaker program. Launching 2 new drugs and driving growth with an established brand, a virtual world is a challenge that the commercial team has met head on with creativity and flexibility.
For ADCETRIS, we continue to focus on frontline HL and PTCL. And look forward to the 5-year follow-up data from both the ECHELON 1 and ECHELON 2 trials later this year. 5-year follow-up data is an established standard, and we expect that the durable advantage of ADCETRIS in both of these front line settings will drive incremental share. We are pleased with the continued strong uptake in our labeled indication for PADCEV, use is strong in both academic and community accounts and breadth of ordering was robust. We are focused on continuing to grow market share in our labeled indication by increasing the number of patients who are treated after progressing on a platinum-containing chemotherapy and PD-1 or PD-L1 inhibitor. We believe that patients are really benefiting from this first-in-class product. And along with our sales partners, we look forward to building on the early success of PADCEV.
And finally, our latest product, TUKYSA in the first partial quarter of launch, TUKYSA sales were $16 million. We are pleased with the label, which includes second and later line metastatic patients with or without brain mets. We are also pleased with the adoption of TUKYSA among both community and academic physicians. In this virtual environment, we have driven high awareness of TUKYSA and our field-based staff, are experiencing good access to customers. We attribute the uptake of TUKYSA to favorable guideline placement, rapid inclusion in the treatment pathways and strong KOL and patient advocacy. Lastly, I look forward to partnering with Tomo as we prepare for the ex-U.S. launch of TUKYSA. It is an exciting time for the company and for the commercial team as we make this important product available to patients.
Now, I will turn the call over to Todd.
Great. Thanks, Chip and thanks everyone for joining us on the call this afternoon. We today, I will summarize our financial results for the second quarter and year-to-date and then comment on our outlook for the remainder of 2020.
Total revenues were $278 million in the second quarter and $513 million for the year-to-date in 2020. Revenues were driven by product sales from our three oncology franchises, which totaled $240 million, up 51% from last year. Royalty revenues were $31 million in the second quarter and $52 million for the year-to-date in 2020. Growth over 2019 primarily reflects sales of ADCETRIS by Takeda and to a lesser degree, royalties on sales of Polivy by Roche. Collaboration revenues were $6 million in the second quarter and $22 million for the year-to-date in 2020. This compares to $36 million and $81 million respectively for the same periods in 2019.
Results in 2019 reflected $38 million in milestones achieved by Takeda that were triggered by EU and other ROW approvals of ADCETRIS for frontline Hodgkin lymphoma. Cost of sales increased to $48 million in the second quarter and $78 million for the first 6 months of the year. Cost of sales, includes the passive profit share to Astellas, which was $27 million in the second quarter and $43 million for the year-to-date. In addition, beginning in the second quarter, cost of sales now includes the amortization of acquired technology-related to the Cascadian acquisition. This is a non-cash component of cost of sales that going forward will amount to approximately $6 million per quarter.
R&D expenses were $198 million in the second quarter and $393 million for the first half of 2020. These are increases over 2019 and primarily reflect increased investment across our pipeline that now includes 12 programs in clinical development. SG&A expenses were $126 million in the second quarter and $248 million for the first half of 2020. These are increases over 2019 reflecting the commercialization of PADCEV and TUKYSA and our European expansion. We ended the second quarter with $896 million in cash and investments. This includes $175 million from the sale in April of the remaining portion of our Immunomedics shares, which contributed to investment income of $73 million in the second quarter.
I will now turn to our financial outlook for 2020. With respect to product sales, as Clay mentioned, we are maintaining our ADCETRIS guidance of $675 million to $700 million and we are providing passive guidance for the full year 2020 in the range of $215 million to $235 million. Moving on to expenses, we expect 2020 cost of sales to be in the range of $185 million to $205 million. As mentioned, this now includes product cost of sales, profit share payment to Astellas for PADCEV, and amortization of acquired technology related to TUKYSA. Now that we are halfway through the year, we are refining our guidance for R&D expenses to a range of $820 million to $870 million and our guidance for SG&A expense remains unchanged.
So with that, I will turn the call over to Roger.
Thanks, Todd and good afternoon everyone. Today, I will focus on our approved products, PADCEV, TUKYSA and ADCETRIS as well as our late stage asset, tisotumab vedotin. I will start with PADCEV, the ADC directed against Nectin-4. Given the ubiquitous expression of Nectin-4 in urothelial cancer, this continues to be the focus of our development program. We completed enrollments of two pivotal trials in previously treated metastatic urothelial cancer earlier this year.
First, a second cohort of the EV-201 trial in patients who have received the PD-1 or PD-L1 inhibitor and were not eligible for treatment with cisplatin in the first-line setting. A positive outcome could support a second indication for PADCEV. And second, the randomized Phase 3 EV-301 trial in patients who have received both a platinum-containing regimen and a PD-1 or PD-L1 inhibitor. The primary endpoint is overall survival and EV-301 is intended to serve as a confirmatory trial in the United States and supports global regulatory approvals.
Switching to first line metastatic urothelial cancer, we have previously reported promising data combining PADCEV and KEYTRUDA, which received FDA breakthrough therapy designation. Based on these findings, we are pursuing two pathways to address the unmet need in frontline disease. First, we are enrolling 150 patients randomized to receive either PADCEV plus KEYTRUDA or PADCEV alone in cohort K of the EV-103 trial. The primary endpoint is objective response rate supported by the key secondary endpoints of duration of response. This represents a potential accelerated approval opportunity in cisplatin-ineligible patients.
Second, we are enrolling the randomized Phase 3 EV-302 trial that is intended to support global registrations and now also serves as a potential confirmatory trial in the United States. Together with our Astellas and Merck Partners, we are reevaluating the need for two experimental arms in the EV-302 trial. This is due to the strength of the PADCEV KEYTRUDA data and the evolving first-line metastatic urothelial cancer landscape. The amended trial would focus on evaluating PADCEV plus KEYTRUDA compared to a platinum-containing chemotherapy regimen. The dual primary endpoints are progression-free and overall survival. We will keep you posted as our planning evolves.
In non-metastatic muscle-invasive bladder cancer, Merck recently added PADCEV to the ongoing randomized Phase 3 KEYNOTE-905 trial. This trial is in cisplatin-ineligible patients and will assist PADCEV plus KEYTRUDA given neoadjuvantly prior to cystectomy and then postoperatively as adjuvant therapy. This study is being conducted under a clinical trial agreement where Seattle Genetics and Astellas are providing PADCEV and Merck continues to fund and operationalize the study. This meaningfully expedites development of the PADCEV KEYTRUDA combination in this setting.
I will now move on to TUKYSA. As Clay described, we have made rapid regulatory progress in securing several approvals based on a remarkable data from the HER2 claim trial. To further develop TUKYSA, we are initially focused in three HER2-positive therapeutic areas: breast cancer, colorectal cancer and other gastrointestinal cancers. In HER2-positive breast cancer, we are conducting a blinded, randomized Phase 3 trial called HER2CLIMB-02. The study is evaluating TUKYSA in combination with KADCYLA or T-DM1 versus KADCYLA alone in first and second line metastatic breast cancer, including patients with brain metastases.
In addition, TUKYSA plus KADCYLA will be compared to KADCYLA alone in the adjuvant breast cancer setting for patients with high risk of relapse. The Phase 3 double-blind randomized trial called Compass HER2 RD will enroll approximately 1,000 patients and is being conducted by a U.S. cooperative group with support from Seattle Genetics. In colorectal cancer, the MOUNTAINEER trial is evaluating TUKYSA in combination with trastuzumab in third-line patients with HER2-positive relapsed metastatic disease. This is intended to support a potential accelerated approval. And in other GI cancers, a trial is now underway, evaluating TUKYSA plus trastuzumab and oxaliplatin-based chemotherapy in first-line HER2-positive colorectal, gastric, esophageal, and gallbladder cancer. In addition, we plan to initiate a trial in the second line gastric cancer setting later this year. Beyond these three areas, we are also planning to evaluate TUKYSA in HER2 mutant to amplified cancers. We presented compelling preclinical data at AACR last month showing that TUKYSA selectively inhibited its tumor growth in HER2 mutant models. Additional novel combination trials of TUKYSA with other anticancer agents are also in planning.
Moving on now to ADCETRIS, we are studying several additional opportunities. We recently initiated a randomized Phase 3 trial in relapsed/refractory diffuse large B-cell lymphoma. The trial will evaluate combination of ADCETRIS, Rituxan and REVLIMID versus Rituxan and REVLIMID alone in 400 patients. While ADCETRIS monotherapy is listed in NCCN treatment guidelines for relapsed CD30-positive DLBCL, this Phase 3 trial is intended to support potential label expansion and will enroll patients regardless of CD30 expression levels. We are also enrolling patients in a trial evaluating ADCETRIS plus Opdivo and chemotherapy in frontline Hodgkin lymphoma. We have added a cohort of patients with Stage 1 or 2 Hodgkin lymphoma under a clinical collaboration with Bristol-Myers Squibb. Our goal is to improve efficacy and reduce toxicity by limiting the number of chemotherapy components in the regimen.
Lastly, I will turn to tisotumab vedotin. In late June, we reported positive top line results from the innovative 204 trial, evaluating single agent TV in women with recurrent or metastatic cervical cancer who had experienced disease progression on or after chemotherapy. The data showed a 24% objective response rate with 8.3 months median duration of response. The most common treatment-related adverse events included alopecia, epistaxis, nausea, conjunctivitis, fatigue and dry eye. We will be discussing these results with the FDA in consideration of a potential BLA submission to support accelerated approval. We and our partners at Genmab are also advancing clinical trials of TV in other solid tumors, including ovarian, lung and head and neck cancers and in combination with other agents used in the treatment of cervical cancer. We believe there maybe several opportunities for TV in tissue factor expressing solid tumors and we are encouraged by the results from the Innovative 204 study.
Now, I will turn the call back over to Clay.
Thank you, Roger. I am very pleased with our significant accomplishments this year and how our teams have adapted to working in a difficult environment. We look forward to continued great progress. At this point, we will open the line for Q&A. Operator, please open the call for questions.
Thank you. [Operator Instructions] And we will take our first question from Michael Schmidt with Guggenheim. Please go ahead.
Hey, guys. Good afternoon and congrats to a very successful second quarter. I just had one for Chip, regarding TUKYSA. Chip, I was just wondering if you could provide a little bit more insight on how the initial launch is going and what you are seeing on the marketplace in terms of its initial uptake? We received some very favorable feedback from physicians for example around the second-line label. Are you seeing use there? And how is the drug being positioned relative to some other novel agents, such as, for example, in HER2?
Yes, Michael, thank you for the question. Chip can provide some color that you can’t. Please keep in mind that it is very early and in the launch. And very pleased Chip, would you like to make some comments?
Absolutely. Thank you for the question. It really is too early in the launch to provide specifics, but we are happy with the level of awareness that we are seeing, along with the uptake in both the academic and new settings. We are working hard to [indiscernible] label that we have, which includes second and later line metastatic patients with or without brain mets. And again, we are pleased with what we are seeing with regards to uptake and awareness.
Okay, thank you.
Thank you. We will take our next question from Salveen Richter with Goldman Sachs.
Good afternoon. Thanks for taking my questions. With regard to PADCEV, when you look at the run-rate so far, the guidance would appear conservative, could you just comment on the factors that are at play in the second half of the year versus what you saw in the first half?
Sure. So thank you for the question. And by the way, we have heard from the operator that there might have been some people that were get dropped – that got dropped off and change at so I apologize for any communication error that’s been going on. And please note, we will have the whole call only on our website. So I apologize for that. So, going to your question on guidance. So it’s early in the launch of PADCEV, but we did want to provide some level of guidance. So far, it’s been a very strong uptake. We work really hard at getting this drug to every patient in need, working with the doctors and making sure that we can help patients. This is important our guidance shows somewhere between a 35% and a 55% growth rate in the second half over the first half, so, a strong growth rate. Yes, just reported 66% growth from the first quarter to second quarter. But that was the first launch to the second quarter. And it’s certainly not unusual to see the rate of growth begin to slow as launch progression. We are not going to be able to see a 66% growth quarter-to-quarter. But our guide is still show for a very strong healthy growth of 33% to 50% over the first half of the year. And we are really pleased with what’s going on.
Thank you.
Thank you. We will take our next question from Cory Kasimov with JPMorgan.
Hey, good afternoon guys, thanks for taking my question. Clay, I guess, I just wanted to just but your latest positive data with TV. And I am curious at this point, now that you have that in-house. What are the gating factors to a BLA filing? And can you remind us of how you are thinking about kind of the commercial evolution here in terms of the initial opportunity? And what you see this potentially growing into? Thank you.
Sure. So as far as BLA, once we have our data, we are really pleased with our data. This is a collaboration with Genmab and we are excited to be able to really help patients. And some of our data has yet to be put out there. But we are very proud of what we are doing in patients that have very little other [indiscernible] response rates that are incredibly low. And so I think when folks get a chance to see our plot and our impact on mistaken going to be a really big positive. So, we are actively working along and trying to make sure that we connected regulators and go toward a BLA submission. But we don’t have – I don’t have information today for you because it would be not appropriate to provide that level of confidential information until I had a discrete thing to say. But you could certainly encouraged by our positive data. And you certainly need to know that we are working very hard on this with all the appropriate regulators. Now you asked another question about the commercial evolution – sorry, I am looking at my notes here. And this is something that we think that the relapse/refractory cervical cancer market is the beginning for TV. TV is something that can absolutely be using a single agent, but also can be combined with other agents. It is our goal to really impact as many patients as we can with relapsed metastatic cervical cancer. And we think the best way will be initially through a single agent, but then in combination approaches. And so we are certainly working on that as we speak. In addition, we are working very hard on other anther types. We have a basket trial that we have a substantial amount of data for. We will be reporting that at some point in the future and we are expanding some of the cohorts as we speak. So stay tuned for [indiscernible]
Alright, great. Thank you.
Thank you. We are now from Kennen MacKay with RBC Capital Markets.
Hey, thanks so much for taking the question and congrats to the whole team on the excellent operational quarter. So, one question on TUKYSA, the breast cancer ASCO session really highlighted TUKYSA impact is the only HER2 positive drug that was highlighted and [indiscernible] was really certainly advocating usage in earlier lines of breast cancer to prevent, not to treat, but to prevent the occurrence of brain mets. And I wanted to understand what the initial launch feedback has been? And if the drug is getting used at all in sort of second line metastatic, which is allowable by the label? Thanks so much and congrats again.
So you asked a couple of questions within your one question, so congratulations. So, I will – no worries. As far as the uptake, that’s fantastic. And maybe, Chip, can you give a little bit of color to the market dynamics and make some comments? And then can you turn it over to Roger to talk about treating and how we are looking at the treatment paradigms, etcetera. So Chip, can you go ahead?
Yes, absolutely. Thanks. So yes, we have seen a significant easy even regarding TUKYSA. Doctors have used as a valuable addition to the treatment tool that they have for these patients. And again, we are only promoting two new label, which does include second and later line patients with and without brain mets, but again, we have been happy with the adoption that we are seeing.
And I will add some commentary here. It’s Roger. So, the data that was presented at ASCO is remarkable. This is probably the largest dataset looking at patients with brain metastases in this prospective fashion. And so TUKYSA direct treatment effect on brain metastases and really what represents a secondary prevention outcome, which is people who do not progress any further having had brain metastases compared to control. So I think we have shown convincingly that TUKYSA is a very relevant treatment for patients with brain metastases. And as you pointed out, the label does allow you in the same place that one would expect a drug like Kadcyla to be used. We think we have competitive data. Again, the HER2CLIMB dataset is as strong as I think we would ever expect it to be with overall survival and various other endpoints strongly hit. So, we have a good value proposition to bring forward to physicians and patients as they think about what treatments they should consider in the metastatic space.
Thank you. We will take our next question from Chad Messer with Needham & Company. Please go ahead.
Great. Congratulations on a good quarter and thanks for taking my question. I was hoping you could take us through Innovative 205 in maybe a little bit more detail. I know you – it’s kind of a multi-arm try, you have a lot of combos as well as single agent you are looking at and I believe is the Slide #5, I caught that, that was relapsed as well as treatment naïve. Can you kind of just sort of confirm what you are trying to get out of that trial? And is this one that we might be able to think of as confirmatory assuming you are allowed to file accelerated? Thank you.
Thanks, Chad. Roger, would you take that question?
Sure. So it’s a test essentially around cervical cancer and we are evaluating. We are looking obviously to understand where tisotumab vedotin may have a role whether it’s as a single agent or in combination for example with pembrolizumab and/or other chemotherapies. The trial is not setup as a [indiscernible] trial, I would say. It’s still a signal finding trial to work out both on a combination basis and a line of therapy basis and also a scheduled basis as to whether there is what a path forward beyond the single-agent TV data that we have shown is TV 204 represents for cervical cancer.
Thank you. We will now take our next question from Gena Wang with Barclays.
Hi. This is Peter for Gena Wang. Congratulations on another strong quarter. I had a question regarding metastatic – the muscle-invasive bladder cancer. So you mentioned about the KEYNOTE 905 study. Could you remind us what will the Cohorts H and J on the EV-103 plays a role in context of in relevant to KEYNOTE 905? Thank you very much.
Sure. Thank you for the question on muscle invasive bladder cancer. It’s something a very big interest to us. Roger, can you make a specific comment?
Yes, thanks for the question. So, the original designs or – for the cohorts was set up in EV-103 were signal finding cohorts. So, we needed to understand what EV monitored would look like in a muscle-invasive bladder population and have focused on system eligible and we also needed to try and understand what a PADCEV, KEYTRUDA combination could look like. However, we have such strong activity with PADCEV in later lines plus we have very strong data metastatic disease with a combination of PADCEV and KEYTRUDA. It really was no difficult leap of faith for us to actually move that combination into a randomized trial. So as part of my remarks, I made the comment that this was really leapfrogged us into a rapid development path for PADCEV in muscle-invasive bladder cancer and system eligible space. So those two cohorts will still run. We will generate the data. But we have already basically moved into a Phase 3 trial.
Great. Thank you very much.
Thank you. We will hear now from Andrew Berens with SVB Leerink. Please go ahead.
Thanks. Congrats on the commercial execution across the board. I was wondering if you guys could give some color on the PADCEV usage. We are hearing some docs are using with KEYTRUDA in the frontline. I was wondering how expensive that is and whether you think that NCCN endorsement would be imminent that could remove the potential reimbursement concerns? And then just one other one, just – I know it’s early in the launch or just to get some sense of how long patients are staying on the drug?
So thank you, Andy, for the questions. So, first of all, on the frontline plus KEYTRUDA, obviously, we can’t make comments about off-label use and spontaneous adoption in that regard. Clearly, our data with KEYTRUDA were very powerful and that enabled us to speak with regulators. And we were able to negotiate not only a large confirmatory trial that’s global, but an accelerated trial that’s with 150 patients with 75 patients with PADCEV and 75 patients with PADCEV plus KEYTRUDA, which is well underway. And we are excited with that as an opportunity in frontline. So – and maybe, Roger, before we go further on this question, do you want to make any comments about PADCEV and frontline and how we are looking at this?
Sure. So, the frontline space is dynamic. It’s complex. There are biomarkers involved. There is the issue of system eligible versus system-eligible patients. But we have a two-pronged plan. And we think we really are covering the waterfront very carefully. So the first cohort that Clay outlined is our fastest path, because it’s a single arm trial. We are enrolling that cohort has been open since January and it’s primary outcome is overall objective response rate together with duration of response. So, that’s an outcome that we look forward to obviously as soon as we have the available data we have enrolled everyone. The second piece which is there is much larger randomized global trial, which it basically takes on all patients, whether they are system eligible or not is also a very important component. And really, what we plan to do now is to simplify our approach. So this is now going to be a PADCEV KEYTRUDA plan for frontline bladder cancer metastatic disease regardless really of eligibility for platinum or not, regardless of PD-L1 status and so on.
Your second part of your question, Andy, is about staying on drug and all that. It’s a little early to be really making specific comments on that. I think it behooves us to look at the duration of therapy for a longer period of time to start making specific things. But I would say that our goal with PADCEV is to be the standard of care within our label and we are well on the way to that. And that’s a big – it’s a big statement. It’s hard to quantify that. But with what we have done with a 66% increase in sales from the first quarter, which were very strong, we are very proud of this. We are getting it out there. We are helping patients. Doctors are relying on and we are hearing more of them to all this to standard of care. So that’s something that’s important for this. And we are just so that you know as we think about patients staying on drug we have had no pushback from payers, okay. And that’s a very strong acknowledgment towards the value proposition that PADCEV brings and it is something that we are really proud of. And Chip, do you have any other market dynamic comments, you want to think about PADCEV and how it’s being used?
No, Clay. We are promoting the full breadth of the label that we have. And again, I think the only thing I would echo is your commentary on the payers. We have seen no payer pushback whatsoever. We have very strong reimbursement in place.
Okay, I appreciate it. What about the NCCN process? Any color on how that’s going?
We work obviously with NCCN. We have many, many different NCCN listings for our different products. And sometimes we get favorable guidelines and pathways placements and that’s important. And we certainly have heard of some oncologists who want to use PADCEV in different ways such as in those who have received PD-1 or PD-L1s in the current line setting, but they aren’t eligible for platinum. So that’s a little different. And we have heard about some of those. It’s not a common practice. But we feel we have our ears blue to talking to oncologists. We are trying to figure out everything that we possibly can. As far as the NCCN, that is really up to them. We don’t really have a say in this matter, but we provide lots of information for NCCN on any of our products all the time. So, that’s something we look for.
Okay, thanks a lot. I appreciate the questions, Clay, Roger.
We will take our next question from Jay Olson with Oppenheimer.
Hey, congrats on all the success and thank you for taking my question. The TV top line data were extremely impressive. And I was curious about what we should look for when you present the detailed results from 204 later this year? And then for the basket trial, can you comment on which tumor types beyond cervical you are most optimistic about?
Sure. So I mentioned before that I was really proud of the TV top line data. Historically, with metastatic cervical cancer, you have drugs that are 8% to 12% objective response rate in the setting, so really poor. The most recent drug that got approval with metastatic cervical cancer was KEYTRUDA and it’s an only in PD-1 high, not in all patients and it was 14% response rate. And so you could just see from that how difficult it is to treat this very tough disease. And so we are excited about that. And maybe, Roger, you could talk a little bit about what’s exciting about the top line data? I mentioned earlier the waterfall plot, but what they can look for in the trial and maybe you could talk about the main types in the basket trial we are looking at?
Sure. So, as Clay pointed out, the historical benchmark that we would be measured against obviously, there are different datasets that you can use. But the results of existing therapies are not great. So, low double-digits or thereabouts would be an expected outcome, probably quite a good outcome. So, being able to generate data in the close to mid 20% response rate we think is an important event and as important is durability. We are really very excited by the median duration of response that we have been able to show. Obviously when we present the data, we will provide other endpoints, other time-dependent endpoints and the entire safety profile. But we think we have a good case to make. It’s the agency’s determination as to whether they agree with that, but we will certainly put our best foot forward, because this is such an area of high unmet need. We do see that TV 204 is sort of validating for the tissue factor targets. And so obviously, when we are working in other tumors, the possibility exists as it does with an ADP platform in general that we may find another tumor or two that is potentially responsive. So in that basket trial, we have pancreatic cancer, we have colorectal cancer, we have non-small cell lung cancer and we have head and neck cancer, I think we are particularly interested in the latter too. We find – and obviously, we haven’t presented any data, but that would be those two cohorts of interest. And then we have already shown – TV already is active in ovarian cancer. So we have a whole ovarian cancer effort going on. And obviously, we have not disclosed any of the information for the current data, but we are prosecuting TV in a broad fashion, not only to determine its role in cervical cancer, but also a potential role in those other tumors.
Super helpful. Congrats again. Thanks again for taking the question.
Thanks. We will take our next question from Geoff Meacham with Bank of America.
Hi, this is Greg Harrison on for Geoff. Thanks for taking the question. So you raised your R&D expense guidance, about $60 million, while keeping everything else the same. Can you provide more color on which programs in the pipeline this is reflecting? And if we should think about this increase moving into next year as well, just trying to think through prioritization of the pipeline and profitability moving forward as you grow the pipeline?
Yes, great. This is Todd. Thanks for the question. So I just want to be clear, we reduced our guidance just a little bit. We brought it down a little bit, and we narrowed it. It’s a bit of a midyear refinement. But we are – despite the incredible progress that we’re making with expanding clinical trials and bringing new drugs in the clinic, the guidance update is reflecting some lower clinical costs related to COVID particularly in some of the harder hit areas. We also are seeing decreases in travel and congresses and scientific meetings that have, as I think everyone knows, has gone virtual. We’ve had a very strong presence at these events, but obviously, no one is traveling. And just we didn’t change SG&A guidance, but we’re seeing some similar SG&A but sort of counterbalancing that was the earlier than and launch of TUKYSA, we were about 4.1% of and we are now really building out our European capabilities launch of the drug starting next year
Got it, thank you.
Thank you we will take our next question from Matthew Harrison with Morgan Stanley.
This is Carlin on for Matthew. So you highlighted the CTGT antibody in your press release. But just on that, what do you think differentiates that versus other late-stage and do you expect to need a collaboration partner for PD-1 or similar combinations? And do you see a future there with combinations with your pipeline? And then just quickly on TUKYSA. We hope to hear a little bit more about what kind of patient feedback has been most positive to date thus far? And what maybe initial thoughts on KOLs or physicians have been in the brain net versus no med population?
Sure. I think I heard your first question, and it was – you were talking about combinations in the TV setting. Is that the correct TV?
I think it was – yes, [indiscernible]
Yes, TV. So we are excited about TV and going forward. Roger, would you like to discuss a little bit about the combinations we are thinking of?
Sure. So for TV, we are generating data. We do think – just to come back to sort of general vedotin platform, we have pretty strong scientific rationale of combining vedotin ADC together with a PD-1 or PD-L1 inhibitor. It’s based on the vedotin vedotin payload essentially inducing immunogenic cell death, which we think is an important mechanism which one can increase the sort of the immune profile of the tumor. But not only killing the cancer cells, but adding a sort of adjuvant boost as it were to the immune system, you think is the plus. So a lot of our focus is combining with PD-1, but we’re also interested, obviously, if there are reasons to combine with chemotherapy, we need to test that. So that is what we are testing.
So as far as TUKYSA and patient populations, we are definitely treating both patients that have brain metastasis and those that do not. So both are being treated. And we’re out there in the community. We’re out there in major medical centers, university. So it’s been getting broad uptick. And I’m sure you’re hearing that as you talk to docs out there. But we’re really pleased with what happened with TUKYSA so far. And we look forward to having a great future with this exciting product and really helping patients.
Understood. Thank you. And sorry, just to – on the first question, would it also be possible to touch base on your CTGT antibody, but you mentioned that just that you guys just initiated the Phase 1?
Oh sorry, – I’m sorry, TIGIT. Sorry, I was not sure. It’s kind of hard, a little muffled, but yes, absolutely, so okay. Yes, so our TIGIT antibody utilizes our SEA technology. And what that does is that results in a non-fucosylated human IGG1 antibody. Okay. And that’s really important. Now the preclinical data says that SEA TIGIT or SEA TGT has potential differentiated profile versus other TIGITs. And there – I can get into that if you want to. But it’s very – we’re very excited with it. The preclinical data is incredibly strong package. And the Phase 1 data has already started, and it’s in a variety of different tumors. So we think this compares very well with the leaders now, which are Roche and Merck and the work that they are doing in clinic with TIGIT. But we think ours could come in and be a very exciting product with differentiated activity.
Understood. Thank you.
Thank you. And now we will now take our next question from Andy Hsieh with William Blair.
Great. Congratulations on another spectacular quarter and hope everybody as well at Seattle Genetics. So my question has to do with the Phase III relapsed/refractory DLBCL trial. Could you remind the effective activity in that setting? Is there any sort of significant difference between the ABC and DCB subtype? I remember that lenalidomide PSC more active in the ADC subtype of kind of in the context of combination, is there an enrollment strategy to enrich for the ADC population that you can optimally capture that effect? Thank you.
Andy, thank you for, first of all, saying that the quarter was spectacular. I think we have a 66% increase in PADCEV and a big first quarter with TUKYSA way past where Wall Street had thought we would be. We were very proud of that. So thank you for you the word spectacular. As far as treating with ADCETRIS and DLBCL and subtypes and whatever, I will turn it over to Roger.
Sure. Thanks, Andy. So, we are – we do have content or listing entity and listing for use of ADCETRIS with DLBCL. And you are right, there is a suggestion that perhaps REVLIMID is focused on top 1 type versus the other, but we are enrolling all patients. And this is – it’s not only all subtypes of lymphomas, but also from ACD 30 expression level perspective. We believe that we have a good shot of showing activity for ADCETRIS in CD30 negative populations by standard IHC, and there’s lots of discussion 1 can have around why that may be so. So the trial is designed really as an all-comers in relapsed/refractory DLBCL combining REVLIMID together with ADCETRIS and Rituxan. And we expect that the population, obviously, from a sub group perspective, really evaluate as the trial reads out, if there are any potential pub groups that are better than others. But I think our expectation is we should see a treatment effect of this combination sort of across the different types of DLBCL.
Great. Thank you so much for answering my questions.
Thank you. We will hear next from George Farmer with BMO Capital Markets.
Hi, thanks for taking my question and congratulations on a great quarter. I was wondering if you could give us some insight to what’s going on with PADCEV. I mean you guys – this is probably one of the first virtual launches ever. Granted, yes, there was pretty great awareness among the physician community, but what do you think is really kind of behind this process what have you guys been doing that’s in making this one stand out from all the others?
We are incredibly pleased with our label. It’s a very, very strong label that we got. And maybe we could start it out with Roger, you could talk a little bit about the label. And then maybe, Chip, you could talk about how we are doing this virtually.
Sure. So the – essentially, TUKYSA represents a best-in-class TKI. So it doesn’t arrive at clinician desks and for patients in the absence of other class molecules. But it does deliver on the promise of what a small molecule inhibitor can do. And I think we’ve had the good fortune of having a very prominent presentation at San Antonio in December, where I think the data was well appreciated. We then follow that up with a second presentation at ASCO, again, incredibly strong data, plus a favorable label. So from the point of view of sharing information at a public foray and in terms of what the label would recommend for potential use for TUKYSA, I think we couldn’t honestly have woken to a better place than we have now.
Chip, you would like to touch base on market dynamics?
Absolutely, Clay. So I think the team has done a great job adapting to the virtual communication. Our customers have been receptive to that. You also rapidly grew from 1 product to 3. So there’s been some synergies on the commercial team working to collaborate together across the brands, and our customers have appreciated that as well. We have also begun a phased reintroduction in face to face interaction. We sell to customers. We have been working hard to make sure there’s high awareness across all critical brands.
Great thanks again and congratulations.
Thanks George
Thank you. We will hear next from Reni Benjamin with JMP Securities.
Hi, good afternoon and thanks for taking the questions and congratulations on an awesome quarter. I guess my question is maybe regarding to CISA being reviewed in the EU. Can you give us some color as to how that’s going, when we might hear regarding the EU approval? And I guess importantly, this new international sales force can you talk a little bit about that? How it looks over time? And how we should be thinking about the rest of the world, ex-U.S. and ex-EU?
So thanks for the question very much. So we – first of all, we have submitted in the project Orbis countries. And that was the first thing that we did through the FDA program, and that includes Switzerland and Singapore and Australia, U.S. and Canada. So we are launched in one of the project Orbis countries today, which is the U.S. But the others are coming. We are approved in many of them and launches on its way in these. And so we are really excited about project Orbis that has – we are preparing for launches there. As far as in the EU, we are working very closely with regulators there. It is something we are right on top of it. We announced the hiring of Tuomo Patsi, who will lead our ex U.S. commercial organizations and Tuomo will report directly to the incident, the Executive Committee and Chip, who is on this call will report directly to me as well and cover the U.S. So Tuomo and Chip will basically cover the globe for a commercial team and both reporting and both on our Executive committee, both have tremendous experience. So we are really excited to integrate our thinking to make it global in our future plans. And so when you look at Europe, we are well on our way with the with what we’re doing. We have hired country managers all over the place, Germany, France, everywhere. We are getting ready for European launch for sure. As far as Asia goes, we have met with many countries in Asia, especially the big countries, the China, Japan and some others. And in Asia, generally, you need to have small bridging studies. And we’ve heard from these regulators in the Asian countries. And what we need exactly. And we – so we’ve already negotiated the exact bridging studies, and we’re well on our way to initiating those. So we’ve made great progress in Europe, great progress in Asia. And with project Orbis actually have gotten quite a few approval in getting ready to do those launches. So we’re really thinking about TUKYSA in a strong way internationally.
Great. And just if I could just follow-up, is there a significant expansion in terms of the international sales force for the sales, how should we be thinking about the numbers of sales people?
We haven’t given the specifics of how many salespeople, but we certainly are building a sales force in the greater Europe region at this point. And so we just haven’t given specifics yet. As we get closer to things, we will give more specifics and Todd will give some financial guidance to that. But stay tuned for that. That’s coming.
Terrific. Thanks again and congratulations
Thank you we will take our final question from Joe Catanzaro from Piper Sandler.
Hey, guys. Thanks for sneaking me in. Congrats on yet another solid quarter. Just a question on EV-202, I know that Roger just kicked off this past March. But wondering if you could speak to the pace of enrollment you’re seeing, whether that’s aided by the strength of EV and data in bladder cancer? And then along these lines, is there any degree of dose-finding in that trial and any consideration of looking at EV pembro a basket tumor setting?
Sure. Roger – I think Roger should address this. We don’t normally talk about enrollment. I could tell you, we are enrolling and low But Roger could talk a little bit about the trial and what we’re thinking.
Sure. So sort of on first principles because EV or passive is so active in data cancer and Nectin-4 expression is high on other tumors. There is a real chance, but obviously, we have to generate the data, but the basket trial could potentially give us another tumor. And that work is ongoing. And so obviously, we can’t talk in detail. But from a – again, from a sort of first principles of drug development, ADCs are greatest monotherapies, particularly in later line. Once you move into earlier lines, one generally needs combinations, and we think we’ve actually found a really strong combination partner with a PD-1 inhibitor. So one would imagine that the basket trial does in fact find a signal in a particular tumor that we would develop it as a monotherapy, and we would also look for combinations and the most obvious one to go to will be a combination of, for example, a PD-1 inhibitor.
Perfect. Great, thanks.
Thank you. And that does conclude our question-and-answer session. I’d like to turn the conference back over to Ms. Pinkston for any additional or closing remarks.
Okay. Thank you, operator and thanks everybody for joining us this afternoon. Stay healthy and safe. Good night.
Thank you. And that does conclude today’s conference. Thank you for your participation. You may now disconnect.