Seattle Genetics' 2006 cash operating expenses expected at $35 million to $40 million

By Jennifer Lanning Drey

Portland, Ore., Oct. 24 - Seattle Genetics, Inc.'s cash operating expenses for 2006 will be between $35 million and $40 million, as the company previously expected, chief financial officer Todd Simpson said during the company's quarterly earnings conference call on Tuesday.

The company reported a third-quarter net loss of $8.6 million, or $0.17 per share, compared with $6.2 million, or $0.15 per share, for the same period of 2005.

Seattle Genetics ended the third quarter with cash and investments of $96.4 million, which Simpson said puts the company in a solid position to drive forward its pipeline.

Simpson also told investors to expect that the company's investments in SGN-40 and SGN-33 will push expenses higher in 2007, as it expands clinical activities in both programs.

"SGN-40 is [our] highest priority program and we are dedicating significant resources to advancing it as rapidly as possible in multiple indications," chief executive officer Clay B. Siegall said during Tuesday's call.

SGN-40 is a humanized monoclonal antibody that targets the CD40 antigen, which is expressed on most B-cell lineage hematologic malignancies.

"This antibody addresses large markets that exceed $1 billion," Siegall said.

The company has tested SGN-40 in a phase 1 clinical trial in patients with non-Hodgkins lymphoma and is planning to report updated data from the trial at the American Society of Hematology's annual meeting in December.

Seattle Genetics is also preparing to advance SGN-40 into a phase 2, single-agent clinical trial in patients with relapsed or refractory diffuse large B cell lymphoma before the end of the year, Siegall said.

"Our strategy is to expand the investigation of SGM-40 in non-Hodgkins lymphoma beyond the monotherapy trial with combination studies planned to begin in 2007," Siegall added.

In addition to the non-Hodgkins lymphoma trials, Seattle Genetics is conducting single-agent phase 1 studies of SGN-40 in relapse or refractory multiple myeloma and chronic lymphocytic leukemia.

The company plans to report data from the multiple myeloma study at the American Society of Hematology's annual meeting in December and data from the chronic lymphocytic leukemia study next year, possibly at the American Society of Clinical Oncology's annual meeting in June.

"SGM-40 is an exciting opportunity for the company with very meaningful therapeutic potential for patients and we will continue to focus on aggressively advancing this program."

SGN-33 advancing

Seattle Genetics also expects to complete dose escalation in early 2007 in an ongoing phase 1, single-agent study of SGN-33 in patients with acute myeloid leukemia and myelodysplastic syndromes.

Clinical trials of the compound will focus on optimizing the dosing, administration schedule and target patient population for the compound.

Seattle Genetics is a Bothell, Wash.-based biotechnology company focused on the development of monoclonal antibody-based therapies for the treatment of cancer and immunologic diseases.

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