Seattle Genetics Reports Second Quarter 2008 Financial Results

-- Conference call today at 5:00 p.m. ET --
BOTHELL, Wash.--(Business Wire)--
Seattle Genetics, Inc. (Nasdaq:SGEN) today reported financial
results for the second quarter and six months ended June 30, 2008.

"We made strong progress across our product pipeline during the
second quarter, highlighted by positive data with SGN-35, an
antibody-drug conjugate (ADC), presented at the American Society of
Clinical Oncology (ASCO) annual meeting in June," said Clay B.
Siegall, Ph.D., President and Chief Executive Officer of Seattle
Genetics. "We are currently designing pivotal trials of SGN-35 and
expect to finalize our development plans, including registration
pathway, in the second half of 2008. Our ADC collaborators are also
making substantial progress in advancing programs toward clinical
trials, and our recent collaboration with Daiichi Sankyo further
demonstrates the growing interest in our ADC technology to empower
antibodies."

Recent Highlights

SGN-40

-- Announced the initiation by Genentech of a phase Ib clinical
trial of SGN-40 in combination with Velcade(R) for the
treatment of relapsed or refractory multiple myeloma, the
sixth ongoing clinical trial under the collaboration

-- Reported final phase I single-agent data with SGN-40 for
non-Hodgkin lymphoma, demonstrating multiple objective
responses in heavily pretreated patients

-- Completed accrual in the phase II single-agent trial of SGN-40
for diffuse large B-cell lymphoma

SGN-35

-- Reported data at ASCO and the International Conference on
Malignant Lymphoma demonstrating multiple complete and partial
responses at well-tolerated doses of SGN-35; at doses of 1.2
milligrams per kilogram and higher, 45 percent of evaluable
patients achieved an objective response and 23 percent
achieved a complete response; 81 percent of the patients who
had at least one post-baseline assessment achieved reductions
in tumor volume

SGN-70

-- Completed preclinical studies and regulatory filings to enable
planned initiation of a phase I clinical trial during the
second half of 2008

ADC Collaborations

-- Entered into an ADC collaboration with Daiichi Sankyo, one of
the largest Japanese pharmaceutical companies, under which
Seattle Genetics received a $4 million upfront payment and is
entitled to receive annual maintenance and research support
fees, progress-dependent milestones and mid-single digit
royalties on net sales of resulting ADC products

-- Received milestone payments under the ADC collaboration with
Genentech, including one triggered by Genentech's filing of an
Investigational New Drug application with the U.S. Food and
Drug Administration for an ADC utilizing Seattle Genetics'
technology

-- Received a milestone payment under the ADC collaboration with
CuraGen, triggered by CuraGen's initiation of a phase II
clinical trial with its CR011 ADC utilizing Seattle Genetics'
technology

-- Extended the research term of the ADC collaboration with
Bayer, triggering a $1 million payment to Seattle Genetics

Financial Results

Revenues in the second quarter of 2008 were $10.0 million, up from
$5.6 million in the second quarter of 2007. For the first six months
of 2008, revenues were $17.1 million, compared to $9.9 million for the
same period in 2007. Revenues increased in 2008 primarily as a result
of the earned portion of reimbursements, upfront and milestone
payments received under the company's SGN-40 collaboration with
Genentech, including a $4 million milestone payment received during
the first quarter. In addition, 2008 revenues include the earned
portion of milestone and other payments received under the company's
ADC collaborations, primarily from Genentech, CuraGen and Bayer.

Total operating expenses for the second quarter of 2008 were $27.6
million, compared to $18.0 million for the second quarter of 2007. For
the first six months of 2008, total operating expenses were $53.7
million, compared to $32.6 million in the first six months of 2007.
The planned increases in 2008 were primarily driven by clinical
development activities for SGN-40, SGN-33 and SGN-35 and higher
employee costs, principally related to growth in the company's
clinical and development staff. Research and development expenses for
the year to date in 2008 also reflect manufacturing activities for
additional SGN-40 clinical supply in the first quarter and SGN-35
clinical supply in the second quarter. SGN-40 development costs
incurred by Seattle Genetics are included in research and development
expense, but are fully reimbursed by Genentech under the
collaboration. Non-cash, share-based compensation expense for the
first six months of 2008 was $5.0 million, compared to $3.4 million
for the same period in 2007.

Net loss for the second quarter of 2008 was $16.0 million, or
$0.20 per share, compared to $10.6 million, or $0.18 per share, for
the second quarter of 2007. For the six months ended June 30, 2008,
net loss was $33.1 million, or $0.43 per share, compared to $19.4
million, or $0.35 per share, for the same period in 2007.

As of June 30, 2008, Seattle Genetics had $197.9 million in cash
and investments, compared to $216.1 million as of March 31, 2008. The
company projects that it will end 2008 with more than $140 million in
cash and investments.

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 2:00 p.m. Pacific
Time (PT); 5:00 p.m. Eastern Time (ET). The live event will be
available from the Seattle Genetics website at
www.seattlegenetics.com, under the News and Investor Information
section, or by calling 800-218-0204 (domestic) or 303-262-2139. A
replay of the discussion will be available beginning at approximately
5:00 p.m. PT today from Seattle Genetics' website or by calling
800-405-2236 (domestic) or 303-590-3000, using passcode 11116583. The
telephone replay will be available until 5:00 p.m. PT on July 24,
2008.

About Seattle Genetics

Seattle Genetics is a clinical stage biotechnology company focused
on the development and commercialization of monoclonal antibody-based
therapies for the treatment of cancer and autoimmune disease. The
company has a worldwide collaboration with Genentech for SGN-40.
Seattle Genetics also has two other product candidates in ongoing
clinical trials: SGN-33 and SGN-35. In addition, the company has
developed proprietary antibody-drug conjugate (ADC) technology
comprising highly potent synthetic drugs and stable linkers for
attaching the drugs to monoclonal antibodies. Seattle Genetics has
collaborations for its ADC technology with a number of leading
biotechnology and pharmaceutical companies, including Genentech,
Bayer, CuraGen, Progenics, Daiichi Sankyo and MedImmune, a
wholly-owned subsidiary of AstraZeneca, as well as an ADC
co-development agreement with Agensys, a wholly-owned subsidiary of
Astellas Pharma.

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, generation of
clinical data and future pipeline growth. 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 risks related to adverse clinical results as our
product candidates move into and advance in clinical trials, failure
to achieve milestones under our collaborations and unforeseen
increased expenses or unexpected reductions in revenues. More
information about the risks and uncertainties faced by Seattle
Genetics is contained in the Company's filings 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.

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Seattle Genetics, Inc.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)

June 30, December
31,
2008 2007
-------- --------
Assets
Current assets
Cash, cash equivalents and short-term investments $113,511 $111,361
Other current assets 16,475 7,990
-------- --------
Total current assets 129,986 119,351
Property and equipment, net 10,674 10,294
Long-term investments 84,348 18,223
Other non-current assets 667 662
-------- --------
Total assets $225,675 $148,530
======== ========

Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities $ 11,150 $ 10,475
Deferred revenue 21,312 18,873
-------- --------
Total current liabilities 32,462 29,348
-------- --------
Deferred revenue, net of current portion 67,882 64,786
Deferred rent and other long-term liabilities 1,210 410
-------- --------
Total long-term liabilities 69,092 65,196
-------- --------
Stockholders' equity 124,121 53,986
-------- --------
Total liabilities and stockholders' equity $225,675 $148,530
======== ========

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Summary Balance Sheet Information:
Cash, cash equivalents and investment securities $197,859 $129,584
Working Capital $ 97,524 $ 90,003
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Seattle Genetics, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)

Three months ended Six months ended
June 30, June 30,
------------------- -------------------
2008 2007 2008 2007
--------- --------- --------- ---------

Revenues $ 10,004 $ 5,611 $ 17,089 $ 9,947
--------- --------- --------- ---------

Operating expenses
Research and development 23,499 15,179 45,651 26,984
General and
administrative 4,094 2,814 8,029 5,634
--------- --------- --------- ---------

Total operating expenses 27,593 17,993 53,680 32,618
--------- --------- --------- ---------

Loss from operations (17,589) (12,382) (36,591) (22,671)

Investment income, net 1,561 1,832 3,451 3,293
--------- --------- --------- ---------

Net loss $(16,028) $(10,550) $(33,140) $(19,378)
========= ========= ========= =========

Basic and diluted net loss
per share $ (0.20) $ (0.18) $ (0.43) $ (0.35)
========= ========= ========= =========

Weighted-average shares
used in computing
basic and diluted net
loss per share 79,277 57,064 77,768 55,808
========= ========= ========= =========
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Seattle Genetics, Inc.
Peggy Pinkston, 425-527-4160
ppinkston@seagen.com

Copyright Business Wire 2008