Thursday, December 26, 2013

Seeking Alpha: Weighing Out The Seattle Genetics Barbell

Looking at Seattle Genetics' (SGEN) value makes me think of a barbell, as the valuation is split between the near-term potential of the approved oncology drug Adcetris in maintenance and salvage indications in Hodgkins, anaplastic large cell, and cutaneous T cell lymphomas, and the longer-term potential of extending Adcetris into front-line therapy and the company's pipeline. As is, I think there's enough value in the existing Adcetris business to support a price in the mid-$20's, but it is clear that the real value lies in the longer-term opportunities.

I think Seattle Genetics deserves to trade in the mid-$40's today, but this could well be a frustrating stock to own. With most of the company's pipeline in early stages of development and partnered programs offering only modest royalties, I suspect investors may get impatient with the years-long wait for data from the front-line ECHELON trials and the Street's fixation on the quarter-to-quarter wobbles in Adcetris sales.

Please continue here:
Weighing Out The Seattle Genetics Barbell

No comments: