Seagen offered a disappointing outlook for 2022 as competition from drug giant AstraZeneca pressures its new breast cancer treatment, leading SGEN stock to crumble on Thursday.
The biotech company posted strong fourth-quarter sales for its three key products. But guidance for its breast cancer treatment, Tukysa, to generate $315 million to $335 million in sales lagged forecasts. The outlook assumes sales will be flat to down year over year.
"This was compounded by management commentary suggesting that competition from Enhertu was the genesis for the disappointing guidance," SVB Leerink analyst Andrew Berens said in a report to clients. Enhertu is AstraZeneca and Daiichi-Sankyo's breast cancer treatment.
On today's stock market, SGEN stock toppled 11.6% to 125.01.
SGEN Stock: Earnings Mixed
During the fourth quarter, Seagen lost 95 cents per share and reported $430 million in sales. Losses were deeper than expected. SGEN stock analysts called for an 83-cent per-share loss, according to FactSet. Sales easily topped forecasts for $402.2 million.
Losses reversed from a 90-cent gain in the year-earlier period, while sales declined 28.5%.
Seagen's biggest moneymaker, a blood cancer treatment called Adcetris, generated $176.3 million in sales, growing 8%. The best growth came from Tukysa. Sales surged 53% to $94.1 million. Padcev, a bladder cancer drug, brought in $92.7 million in sales, soaring 34% year over year.
But the company's own forecast for all three products was shaky, SVB Leerink's Berens said. Seagen also predicted $730 million to $755 million in Adcetris sales and $435 million to $455 million in sales of Padcev. Berens kept his outperform rating on SGEN stock — with a caveat.
"While we remain outperform on Seagen in the longer term, we believe these concerns and uncertainties are likely to remain an overhand for shares in the near term, creating volatility that could potentially test the 52-week low of 121 earlier this year," he said.
In response, SGEN stock tumbled to the lowest point seen since April 2020.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
