Narrow-Moat Seagen Reports Healthy Q4 Results and Continued Strong Demand; Shares Fairly Valued

Narrow-moat Seagen reported fourth-quarter results largely within our expectations. Total revenue for 2022 was $2 billion, representing 25% growth from the prior year. We plan to maintain our fair value estimate of $150 per share, and we view shares as currently fairly valued. We reaffirm our narrow economic moat and positive moat trend ratings.

Continued strong performance from Adcetris, Padcev, and Tukysa contributed to net product revenue growth of 23% from the prior year. Investors reacted positively to Seagen’s results and sent the shares up nearly 15%. We forecast nearly $2.2 billion in 2023 total revenue, representing growth of about 12%. The continued progression of Seagen’s pipeline supports our positive moat trend rating. Late-stage trials for additional indications of Padcev and Tukysa have shown positive results. Padcev has a PDUFA date in April 2023 for use in combination with Keytruda in first-line advanced or metastatic urothelial cancer, which we assign a 75% probability of approval. Tukysa, which received approval in the EU at the beginning of 2021, received FDA accelerated approval in January 2023. This is the first FDA-approved treatment specifically for HER2-positive metastatic colorectal cancer. These additional indications could further expand Seagen’s patient reach.

In additional to potential regulatory approvals, Seagen has multiple other key milestones anticipated in 2023, including data readouts and additional international launches for its already approved products. Seagen’s narrow moat rating is based on the intangible assets from its development of antibody-drug conjugates (ADCs) for various cancer indications. We believe Seagen will likely be able to earn excess returns over the next 10 years thanks to its highly effective technology in lucrative indications protected by patents that last until 2036.