Oppenheimer Turns Bullish On Seattle Genetics, Says Optimism Fueled By Pipeline Readouts

While recent pullback in Seattle Genetics, Inc’s SGEN shares presents an attractive entry point, there are several pipeline catalysts ahead, according to Oppenheimer.

The Analyst

Oppenheimer’s Silvan Tuerkcan upgraded the rating on Seattle Genetics to Outperform while raising the price target from $77 to $82.

The Thesis

Two of Seattle Genetics’ pipeline assets, enfortumab vedotin and tucatinib, have readouts in the near term and both could deliver value, Tuerkcan said in the note.

Following a review of these two pipeline assets, the probability of success of tucatinib has been increased to 60% and the 2030 forecast for enfortumab vedotin (EV) has been raised to $1.2 billion, the analyst mentioned.

He added that pivotal tucatinib data from HER2CLIMB could add $4 per share and upcoming EV data could indicate a larger opportunity in the treatment of bladder cancer.

Seattle Genetics had reported $159 million in Adcetris sales and $23 million in royalties for the second quarter of 2019.

The figures were ahead of the consensus estimates of $149 million and $20 million, respectively. Analyst Tuerkcan expects continued growth in Adcetris sales and estimates the fiscal 2019 results at $634 million.

He added, however, that the readouts for EV and tucatinib through the remainder of the year would be the near-term catalysts for the stock.

Price Action

Shares of Seattle Genetics were down 1.1% at time of publishing Thursday.

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