Seattle Genetics Reports Fourth Quarter and Year 2012 Financial Results

  Seattle Genetics Reports Fourth Quarter and Year 2012 Financial Results

 -ADCETRIS^® (Brentuximab Vedotin) Net Product Sales of $35.4 Million in the
           Fourth Quarter and $138.2 Million for the Year in 2012-

   -Strong Financial Position with Year-end Cash and Investments of $364.3
 Million Enables Company to Continue Broad Expansion of ADCETRIS and Advance
       Pipeline of Six Other Clinical and Late-Stage Preclinical ADCs-

                   -Conference call today at 4:30 p.m. ET-

Business Wire

BOTHELL, Wash. -- February 12, 2013

Seattle Genetics, Inc. (Nasdaq:SGEN) today reported financial results for the
fourth quarter and twelve months ended December 31, 2012. The company also
highlighted ADCETRIS (brentuximab vedotin) commercialization and clinical
development activities, its antibody-drug conjugate (ADC) pipeline and
collaborator progress as well as upcoming milestones.

“We are strongly positioned to continue delivering on our goal of bringing
ADCETRIS to patients through commercial execution. Additionally, we are
building upon encouraging data in earlier lines of therapy and a range of
CD30-positive malignancies through our clinical development and regulatory
activities,” said Clay B. Siegall, Ph.D., President and Chief Executive
Officer at Seattle Genetics. “There are more than 20 ongoing ADCETRIS clinical
trials, including four phase III trials, designed to broadly explore its
therapeutic potential. In addition, we have made important progress in
advancing six other ADCs in clinical and preclinical development, and our ADC
technology is being broadly applied in more than a dozen clinical development
programs by our collaborators. Our strong financial position and cash flow
from product sales and collaborations enable us to continue building value in
the company.”

Recent ADCETRIS Highlights

  *Announced that Health Canada has granted a Notice of Compliance with
    conditions (NOC/c), approving ADCETRIS for relapsed or refractory Hodgkin
    lymphoma (HL) and systemic anaplastic large cell lymphoma (sALCL).
  *Announced that Takeda Pharmaceutical Company Limited and Millennium: The
    Takeda Oncology Company received European Commission conditional marketing
    authorization for ADCETRIS for relapsed or refractory CD30-positive HL and
    relapsed or refractory sALCL. The approvals triggered milestone payments
    to Seattle Genetics totaling $25 million.
  *Reported data from more than a dozen abstracts at the American Society of
    Hematology (ASH) annual meeting on the investigation of ADCETRIS in a
    range of CD30-positive malignancies, including front-line HL, front-line
    mature T-cell lymphoma (MTCL), cutaneous T-cell lymphoma (CTCL) and
    relapsed diffuse large B-cell lymphoma (DLBCL).
  *In collaboration with Millennium, initiated a global phase III clinical
    trial of ADCETRIS in combination with chemotherapy for front-line advanced
    HL (the ECHELON-1 trial). The trial is being conducted under a Special
    Protocol Assessment (SPA) agreement with the U.S. Food and Drug
    Administration (FDA) and the European Medicines Agency (EMA) provided
    scientific advice.
  *In collaboration with Millennium, initiated a global phase III clinical
    trial of ADCETRIS in combination with chemotherapy for front-line MTCL
    (the ECHELON-2 trial). The trial is being conducted under a SPA agreement
    with the FDA and the EMA provided scientific advice.
  *Initiated a phase II trial in front-line HL patients age 60 or older. The
    trial is designed to assess the efficacy and tolerability of single-agent
    ADCETRIS for patients who have received no prior treatment.

ADCETRIS is not approved in front-line HL, front-line MTCL or in DLBCL.

Other Recent Highlights

  *Initiated two phase I trials of SGN-CD19A, a CD19-targeted ADC. One trial
    is in B-cell acute lymphocytic leukemia and one is in B-cell non-Hodgkin
    lymphomas.
  *Reported interim data from a phase I clinical trial of ASG-5ME in patients
    with metastatic pancreatic cancer demonstrating tolerability and
    preliminary evidence of antitumor activity. Phase I trials of ASG-5ME in
    prostate and gastric cancer are ongoing.
  *Reported preclinical data on SGN-CD33A, a novel ADC using the company’s
    next generation technology, and clinical data from collaborator programs
    at the ASH annual meeting.
  *Expanded the company’s ADC relationship with AbbVie (formerly part of
    Abbott), generating an upfront payment to Seattle Genetics of $25 million.
  *Received a milestone payment under an ADC collaboration with AbbVie
    triggered by AbbVie’s initiation of a phase I clinical trial of an ADC
    utilizing Seattle Genetics’ technology for patients with squamous cell
    tumors.
  *Received milestone payments under an ADC collaboration with Genentech, a
    member of the Roche Group, triggered by Genentech’s advancement of two
    ADCs utilizing Seattle Genetics’ technology into phase II clinical
    development.
  *Achieved a milestone payment under an ADC collaboration with
    GlaxoSmithKline triggered by preclinical progress with an ADC utilizing
    Seattle Genetics’ technology.

Upcoming Milestones

  *Initiate a phase I/II clinical trial of ADCETRIS in combination with
    bendamustine for second-line HL patients during the first quarter of 2013.
  *Submit a supplemental biologics license application (sBLA) for ADCETRIS
    for its use in the retreatment of patients and for extended duration of
    use beyond 16 cycles of therapy in the first half of 2013.
  *Submit an investigational new drug (IND) application to the FDA for
    SGN-CD33A, a CD33-targeted ADC utilizing the company’s next generation
    technology. A phase I trial in acute myeloid leukemia is expected to begin
    during 2013.
  *Submit an IND application to the FDA for SGN-LIV1A, a LIV-1-targeted ADC.
    A phase I trial in breast cancer is expected to begin during 2013.

Fourth Quarter and Year 2012 Financial Results

Total revenues in the fourth quarter of 2012 were $63.9 million, compared to
$48.9 million in the fourth quarter of 2011. Total revenues for the year ended
December 31, 2012 were $210.8 million, compared to $94.8 million in 2011.
Revenues in 2012 include ADCETRIS net product sales of $35.4 million in the
fourth quarter and $138.2 million for the year. Revenues in 2012 reflect $2.6
million in ADCETRIS net sales to patients in Canada under a Special Access
Program that were recognized in the fourth quarter. Revenues also reflect
amounts earned under the company’s ADCETRIS and ADC collaborations totaling
$26.4 million in the fourth quarter of 2012 and $67.5 million for the year.

Research and development expenses for the fourth quarter of 2012 were $47.7
million, compared to $40.2 million for the fourth quarter of 2011. For 2012,
total research and development expenses were $170.3 million, compared to
$163.4 million in 2011. Selling, general and administrative expenses for the
fourth quarter of 2012 were $23.4 million, compared to $25.0 million for the
fourth quarter of 2011. For 2012, total selling, general and administrative
expenses were $84.3 million, compared to $72.7 million in 2011. The planned
increases in 2012 expenses were primarily driven by ADCETRIS commercialization
activities and research and development of the company’s ADC pipeline
programs.

Under the ADCETRIS collaboration with Millennium, development costs incurred
by Seattle Genetics are included in research and development expense. Joint
development costs are co-funded by Millennium on a 50:50 basis. Net
reimbursement funding received from Millennium is recognized as revenue over
the development period of the collaboration along with other development
payments received, including the upfront payment and milestone payments.
Seattle Genetics co-funds development activities performed by Millennium under
the collaboration, which reduces the amount of reimbursement funding received
from Millennium.

Non-cash, share-based compensation expense for the year in 2012 was $25.3
million, compared to $20.0 million for the year in 2011.

Net loss for the fourth quarter of 2012 was $10.6 million, or $0.09 per share,
compared to a net loss of $27.2 million, or $0.24 per share, for the fourth
quarter of 2011. For the year ended December 31, 2012, net loss was $53.8
million, or $0.46 per share, compared to a net loss of $152.0 million, or
$1.34 per share, for the year ended December 31, 2011.

As of December 31, 2012, Seattle Genetics had $364.3 million in cash, cash
equivalents and investments, compared to $330.7 million as of December 31,
2011.

2013 Financial Outlook

Seattle Genetics anticipates that revenues from ADCETRIS net product sales
will be in the range of $130 million to $140 million in 2013 and that revenues
from collaboration and license agreements in 2013 will be in the range of $65
million to $75 million. These revenues will be generated from fees, milestones
and reimbursements earned through the company’s ADCETRIS and ADC
collaborations.

Research and development expenses are expected to be in the range of $210
million to $230 million. Selling, general and administration expenses are
expected to be in the range of $85 million to $95 million. Operating expenses
will be directed primarily towards commercialization and clinical trials of
ADCETRIS, development and clinical activities for SGN-75, ASG-5ME, ASG-22ME
and SGN-CD19A, and IND-enabling activities for SGN-CD33A and SGN-LIV1A. Cost
of sales is expected to be approximately $15 million for the year in 2013,
representing a range of 10 percent to 12 percent of net sales. Non-cash
expenses are expected to be approximately $40 million in 2013, primarily
attributable to share-based compensation expense.

Conference Call Details

Seattle Genetics’ management will host a conference call and webcast to
discuss the financial results and provide an update on business activities.
The event will be held today at 1:30 p.m. Pacific Time (PT); 4:30 p.m. Eastern
Time (ET). The live event will be available from Seattle Genetics’ website at
www.seattlegenetics.com, under the Investors and News section, or by calling
(877) 941-6009 (domestic) or (480) 629-9818 (international). The access code
is 4594357. A replay of the discussion will be available beginning at
approximately 3:30 p.m. PT today from Seattle Genetics’ website or by calling
(800) 406-7325 (domestic) or (303) 590-3030 (international), using access code
4594357. The telephone replay will be available until 4:00 p.m. PT on Friday,
February 15, 2013.

About Seattle Genetics

Seattle Genetics is a biotechnology company focused on the development and
commercialization of monoclonal antibody-based therapies for the treatment of
cancer. The company’s lead program, ADCETRIS (brentuximab vedotin), received
accelerated approval from the U.S. Food and Drug Administration in August 2011
and approval with conditions from Health Canada in February 2013 for two
indications. In addition, under a collaboration with Millennium: The Takeda
Oncology Company, ADCETRIS received conditional approval from the European
Commission in October 2012. Seattle Genetics also has four other
clinical-stage ADC programs: SGN-75, ASG-5ME, ASG-22ME and SGN-CD19A. Seattle
Genetics has collaborations for its ADC technology with a number of leading
biotechnology and pharmaceutical companies, including Abbott, Agensys (an
affiliate of Astellas), Bayer, Celldex Therapeutics, Daiichi Sankyo,
Genentech, GlaxoSmithKline, Millennium, Pfizer and Progenics, as well as ADC
co-development agreements with Agensys and Genmab. More information can be
found at www.seattlegenetics.com.

Certain of the statements made in this press release are forward looking, such
as those, among others, relating to the company’s expectations for initiation
of future clinical trials, data availability from ongoing clinical trials,
expectations for additional regulatory approvals and expectations for revenue
and expenses for the year 2013. Actual results or developments may differ
materially from those projected or implied in these forward-looking
statements. Factors that may cause such a difference include sales of ADCETRIS
may not be as expected or expenses may exceed current projections. We may also
be delayed in our planned trial initiations and regulatory submissions and
approvals for reasons outside of our control. We may also fail to receive
milestone payments under our collaborations. In addition, if we do not meet
our financial guidance or the expectations of analysts or investors, our stock
price may be adversely impacted. More information about the risks and
uncertainties faced by Seattle Genetics is contained in the company’s
Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 filed
with the Securities and Exchange Commission. Seattle Genetics disclaims any
intention or obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.


Seattle Genetics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
                                                               
                                                   December 31,   December 31,
                                                   2012           2011
Assets
Cash, cash equivalents and short term              $   364,258    $   330,696
investments
Other assets                                          107,164       94,520
Total assets                                       $   471,422    $   425,216
                                                                  
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities           $   56,130     $   53,048
Deferred revenue and long-term liabilities             189,144        153,319
Stockholders' equity                                  226,148       218,849
Total liabilities and stockholders' equity         $   471,422    $   425,216



Seattle Genetics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

                       Three months ended         Years ended
                        December 31,                December 31,
                        2012         2011          2012         2011
Revenues
Net product sales       $ 35,355      $ 33,194      $ 138,200     $ 43,241
Collaboration and
license agreement         26,428        15,693        67,547        51,537
revenues
Royalty Revenues         2,129       -           5,065       -        
Total revenues           63,912      48,887      210,812     94,778   
Costs and expenses
Cost of sales             2,738         2,391         11,546        3,115
Cost of royalty           808           -             1,923         -
revenues
Research and              47,663        40,239        170,297       163,396
development
Selling, general and     23,411      24,954      84,300      72,659   
administrative
Total costs and          74,620      67,584      268,066     239,170  
expenses
Loss from operations      (10,708 )     (18,697 )     (57,254 )     (144,392 )
Investment and other     112         (8,468  )    3,472       (7,638   )
income (loss), net
Net loss                $ (10,596 )   $ (27,165 )   $ (53,782 )   $ (152,030 )
                                                                  
Basic and diluted net   $ (0.09   )   $ (0.24   )   $ (0.46   )   $ (1.34    )
loss per share
                                                                  
Weighted-average
shares used in
computing basic and      119,310     115,064     117,851     113,098  
diluted net loss per
share


Contact:

Seattle Genetics, Inc.
Investors:
Peggy Pinkston, 425-527-4160
ppinkston@seagen.com
or
Media:
Tricia Larson, 425-527-4180
tlarson@seagen.com