SGEN stock has popped after reports that Seattle Genetics stole the show at ESMO.
Stifel analyst Stephen Willey, said in a note called “EV-103 Data Steals the ESMO Spotlight,” that he is more-positive on SGEN stock after the first presentation of Phase 1 EV-103 data, calling it “one of the more-impressive data sets observed at this ESMO meeting.” Management seems ready and eager to leverage this preliminary data into a Phase 3 trial intended to establish EV as a first-line standard-of-care therapy, said Willey, who believes EV is an important part of the longer-term diversification thesis for Seattle Genetics. He keeps a Hold rating on the stock, but raised his price target for Seattle Genetics shares to $74 from $69.
Piper Jaffray was even more bullish than Stifel.
Piper Jaffray analyst Joseph Catanzaro raised his price target for Seattle Genetics to $95 from $75 after the company presented a “compelling” initial response rate of 71% for the combination of EV and pembrolizumab in 1st-line cisplatin-ineligible urothelial bladder cancer. He said that while incoming data is admittedly early, results so far compare very favorably to current standard of care and emerging IO combos. As such, the analyst believes it is reasonable to layer in this opportunity into his EV model, which he previously excluded. Catanzaro reiterates an Overweight rating on the shares and sees potential for further upside from additional UBC opportunities and possibly tucatinib in HER2+ mCRC.
Seattle Genetics and Astellas Pharma announced initial results from the phase 1 clinical trial EV-103. 45 patients were evaluated for safety with the combination of the investigational agent enfortumab vedotin and the immune therapy pembrolizumab in previously untreated patients with locally advanced or metastatic urothelial cancer who were ineligible for treatment with cisplatin-based chemotherapy. The study met outcome measures for safety and exhibited encouraging clinical activity for this platinum-free combination in a first-line setting. Enfortumab vedotin is a first-in-class antibody drug conjugate that targets Nectin-4, a protein present on almost all urothelial tumor cells and associated with cancer formation. 51% of patients had an adverse event greater than or equal to Grade 3. Among these events, an increase in lipase was the most frequent. Four patients discontinued treatment due to treatment-related adverse events, most commonly peripheral sensory neuropathy. There was one death deemed to be treatment-related by the investigator attributed to multiple organ dysfunction syndrome. 11% of patients had treatment-related immune-mediated adverse events of clinical interest greater than or equal to Grade 3 that required the use of systemic steroids. None of the adverse events of clinical interest were Grade 5 events. The data demonstrated the combination of enfortumab vedotin plus pembrolizumab shrank tumors in the majority of patients, resulting in a confirmed objective response rate of 71%. The complete response rate was 13%. 58% of patients had a partial response and 22% had stable disease. 91% of responses were observed at the first assessment. Enfortumab vedotin is currently under review by the U.S. Food and Drug Administration for the treatment of patients with locally advanced or metastatic urothelial cancer who have received a PD-1/L1 inhibitor and who have received a platinum-containing chemotherapy in a neoadjuvant/adjuvant, locally advanced or metastatic setting.
On the 30-minute chart, as long as SGEN stock stays above $83.48 we could get a continuation of the consolidation and next leg up pattern. A break down below $83.48 would single profit taking and a loss of bullish momentum.
The daily time frame’s MACD cross looks great but notice the long upper-shadow on the candlestick on September 30, 2019. This is why it’s so important to look at the 30-minute time frame instead of chasing SGEN higher.
We are not adding SGEN stock to the long-term GST Portfolio at this time mainly due to valuation concerns. The company did $757.6 million in sales last year, but it’s trading at a market valuation of $13.78 billion. That’s an insane P/S ratio of 18.18! I know the market is expecting big things from Seattle Genetics but come on! That’s way to expensive valuation IMO.
Disclosure: We do not hold any position in SGEN stock.