Seagen Chief Executive Clay Siegall was placed on leave after a domestic abuse allegation, the biotech company said Monday as SGEN stock dropped.
The alleged incident occurred at Siegall's home. Siegall, who is going through a divorce, has denied the claim. But the company's board of directors formed a committee to investigate, with help from an independent law firm.
In the meantime, the board appointed Chief Medical Officer Roger Dansey as interim CEO. Dansey has been Seagen's CMO since 2018. Nancy Simonian, chair of the Seagen nominating and corporate governance committee, says the board's next steps depend on the results of the investigation. She is also the CEO of biotech company Syros Pharmaceuticals.
"We have high standards for employee conduct, we condemn domestic violence in all forms and we are treating these allegations with the utmost seriousness," she said in a written statement. "At this time, the facts are still uncertain and our decisions will be guided by the outcome of our investigation."
On the stock market today, SGEN stock toppled 11.9% to 108.81.
SGEN Stock: Catalyst-Rich 2022
The news comes at a delicate time for Seagen, which is facing a catalyst-heavy back half to 2022. The company makes antibody drug conjugates, a type of cancer treatment.
SVB Leerink analyst Andrew Berens says Seagen will soon have the results of a study testing its drug, Padcev, in patients with a form of bladder cancer. It's also testing a drug called Tukysa in patients with a type of colon cancer, and another drug called Adcetris in solid tumors.
All three drugs are already approved for other uses. In the first quarter, Padcev sales of $100.2 million beat expectations by 4%. Tukysa and Adcetris generated a respective $90.5 million and $181 million. The two drugs beat SGEN stock analyst calls by 9% and 3%, respectively.
Seagen's fourth drug, Tivdak, squashed expectations by 35% at $11.4 million, Berens said in a report to clients.
"Altogether, net product sales were $383.1 million," he said. "Despite this beat, the company maintained previous 2022 revenue guidance."
For the year, Seagen expects $1.48 billion to $1.545 billion in sales. At the midpoint, sales would topple about 4%.
Executive Team Remains Upbeat
Despite Siegall's leave, executives were upbeat on Seagen's efforts. Siegall helped found Seagen, then known as Seattle Genetics, in 1998. Before that, he held positions with Bristol Myers Squibb and the National Cancer Institute, a part of the National Institutes of Health.
"The board has full confidence in Dr. Dansey, the executive committee and the entire Seagen team, which has demonstrated outstanding performance over the past several years with four approved drugs, a robust pipeline, leadership in antibody-drug conjugates and an international footprint," Felix Baker, a Seagen independent lead director, said in a written statement.
Still, SGEN stock remains under pressure. Shares crossed below their 200-day moving average in early April and undercut their 50-day line later that month. They have yet to come back up, MarketSmith.com shows.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
