Hammer Stock Blog

SGN-35, which is Seattle Genetics’ lead ADC, is comprised of SGN-30 and Seattle Genetics’ highly toxic chemo drug – MMAE. SGN-35 is, in fact, the company’s flagship ADC candidate, since it was its first wholly owned ADC to utilize the company’s new ADC technology, including its peptide-based linker and auristatin-based drug. Having both a naked antibody and an ADC based on the same antibody simultaneously in the clinic is quite unusual, but more than anything, this situation is fascinating because it can clearly exhibit the advantages ADCs have over naked antibodies. In that sense, SGN-35 is similar to Genentech’s Herceptin-DM1, which is currently being developed with Immunogen (IMGN). Herceptin-DM1 served as a validation for Immunogen’s ADC technology since it showed very encouraging results among breast cancer patients, who do not respond to naked Herceptin. Hence, if Seattle Genetics can show that SGN-35 succeeds where SGN-30 fails (hint- Hodgkin’s Lymphoma), without causing substantial side-effects, it should be a very strong proof-of-concept.

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SGN-30 entered phase I in 2002, for the treatment of HL and ALCL. In addition to a good safety profile, SGN-30 managed to show clinical activity, mainly among ALCL patients. The antibody was advanced to a phase II trial which later turned into 2 phase II trials, one for the evaluation in HL and the other in ALCL. Results from the two phase II trials emphasized the trend that had been observed in the phase I trial, as SGN-30 demonstrated great activity among ALCL patients but very modest activity in HL. Of the 35 evaluable HL patients, there was no objective response (decrease of 30% in the tumor load), whereas, 14 out of 46 evaluable ALCL patients (30%) had a response, three of which were durable complete responses. This is quite impressive considering the poor prognosis of these heavily pretreated patients. Although SGN-30 could not beat HL, Seattle Genetics still had several options at its disposal, including an armed version of SGN-30, in which the antibody is conjugated to a drug payload.

Although it is very important to get data about an antibody as a single agent, the activity it shows in combination with existing treatments is where most of the potential lies. A typical strategy with antibodies for cancer includes initial evaluation as a single agent in patients who have no other alternatives, followed by multiple trials in combination with existing treatments and/or in early stage patients, who have better prognosis. Ideally, any drug company would like to see its drug being administered as early and in as many combinations as possible, in order to achieve maximal market share. This is indeed the case with SGN-30, which is currently being evaluated in 3 phase II combination trials.

The first study was initiated in 2006 and is evaluating SGN-30 in combination with chemotherapy for the treatment of recurrent HL. This is a relatively large, comparative trial aimed at discovering whether SGN-30 can enhance chemo’s efficacy. The second study, also initiated in 2006, is evaluating SGN-30 in combination with chemotherapy among ALCL patients. A third study of SGN-30 combined with chemotherapy is recruiting pediatric ALCL patients. These trials are financed by the NCI, which enables Seattle Genetics allocating resources to other clinical programs. Despite the promising clinical activity among ALCL patients, the addressable market for ALCL is rather limited, making its clinical development attractive but not too exciting. Obviously, as long as someone else is paying the bills, Seattle Genetics will be more than happy to see SGN-30 advance towards commercial availability, but unless there are stellar results from the HL combination trial, we expect SGN-30 to remain on the backburner, as far as Seattle Genetics is concerned. The real star in the company’s CD30 program is SGN-35.

Author is long SGEN

As we previously explained, the market for lymphomas, targeted by Rituxan is huge, and attracts many companies. There are, however, several lymphomas for which Rituxan is not effective since Rituxan’s target, the CD20 receptor, is not expressed by these cancers. These conditions, expected to be diagnosed in more than 15,000 Americans in 2007, can be divided into two groups: Hodgkin’s lymphoma [HL] and T-cell NHL [T-NHL]. Patients diagnosed with such conditions are treated with similar regimens that are used for NHL, however, Rituxan is omitted because it has no effect. Combining chemotherapy and radiotherapy with antibodies is a well validated concept, since antibodies can increase a regimen’s efficacy without substantial side effects. As there are currently no approved antibodies for the treatment of non CD-20 lymphomas, there is a great rational behind developing such antibodies that can be co administered with existing treatments. Although market opportunity for treatments for these “non Rituxan” lymphomas is substantially smaller than the Rituxan opportunity, it is still a viable niche which is poorly addressed by most players in the field. Seattle Genetics’ CD30 program is aimed specifically at that niche.

CD30 is a well known marker for Hodgkin’s Lymphoma [HL], expressed by certain malignant cells that are present in the patient’s lymph nodes. Interestingly, these cells (Reed-Sternberg cells), represent only a small portion of the tumor but are considered to be the driving force in the creation and development of the disease. In addition, CD30’s expression in normal tissues is very limited, making it ideal for antibody-based therapy. HL is one of the most curable cancers, as historical data shows that patients have a 75% chance of achieving complete remission with a combination of several chemo drugs. However, up to 40% of patients will relapse, some of which will develop chemo-resistant tumors. The most viable option for patients whose disease has relapsed is bone marrow transplant, an aggressive treatment that is associated with high incidence of mortality and low success rates in this type of patients. Interestingly, CD30 presence has been associated with aggressive disease, making anti-CD30 antibodies a very reasonable path for treating advanced stage patients. The market for HL will never become as gigantic as the NHL market, with “only” 8190 cases of HL and 1,070 HL-related deaths are expected in 2007 in the US.

CD30 is also expressed on 30% of T-NHL, most consistently on a subtype of T-cell lymphoma called anaplastic large cell lymphoma [ALCL]. Many T-NHL lymphomas, in contrast to HL, are characterized by very poor prognosis and new treatments are desperately needed. It is hard to estimate the market opportunity on this front, but it seems like it is in the scale of several thousand cases per year in the US. Seattle Genetics is currently evaluating 2 anti-CD30 platforms: SGN-30, which is a naked antibody and SGN-35 which is an antibody-drug conjugate [ADC].