The region’s largest biotechnology company, poised to reach 1,000 employees, is hopeful its approved drug for Hodgkin lymphoma can enter the first tier of treatments. It’s also studying a pipeline full of other candidates.

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Seattle Genetics hides its big ambitions in a modest-looking set of beige Bothell office-park buildings, while some of its cousins in the local biotech world crowd together in the brainy-hood of Seattle’s South Lake Union. But there is nothing modest about this 18-year-old company, which is plowing forward patiently and aims to make a major splash in the cancer-drug market in 2017.

Investors have driven SGEN stock up more than 50 percent this year, largely on the strength of its flagship drug known as Adcetris, which treats Hodgkin lymphoma, a cancer of the lymphatic system that can spread to the lungs, liver or bone marrow. The company employs around 900 full-time staff and will add perhaps 200 next year, said CEO Clay Siegall, who co-founded Seattle Genetics in 1998.

Adcetris, formally brentuximab vendotin, was approved by the Food and Drug Administration 13 years later. Adcetris targets an antigen (protein molecule) on the outside of cancer cells in Hodgkin lymphoma (and a few other diseases) and delivers a toxin inside those cells to kill them.

Drugs like Adcetris are called antibody-drug conjugates or ADCs. Some liken them to “smart bombs” because they are targeted to specific antigens on the cell surface, but then deliver their toxic load further inside the cell. A key part of what makes this category of drugs work is the linker — the chemical that holds the toxin tightly but releases it just inside the right cell at the right time. One of the company’s strengths is the linkers it develops for each conjugate.

In a tribute to those molecules, the main lobby of one of its buildings features a giant, bright-blue sculpture of an antibody that appears built out of a child’s Lego bricks.

Seattle Genetics has had about $400 million in sales and licensing revenue in 2016. Right now, Adcetris is among treatments considered second or third choices for Hodgkin lymphoma, for patients where other drugs have failed. Estimates are that about 30 percent of patients do not experience complete remission from their first treatment.

Siegall says the market for Adcetris could widen to $1 billion in 2017, if it can advance to being considered a front-line therapy, meaning patients would receive it upon first being diagnosed.

This crucial decision about whether Adcetris moves up is made by each treating physician.

“I’ve heard people say, ‘You are brave,’ about our work to become a front-line treatment,” Siegall said. He thinks the data from the clinical trials will be persuasive — no matter his company’s size.

The company, like so many biotechs, is not yet profitable, but that could be on the horizon. Market analyst Adnan Butt of RBC Capital Markets says his firm thinks Seattle Genetics may cross the profit line in 2019. The consensus estimate, according to S&P Global IQ data, projects that the company’s loss will narrow from an estimated $132 million this year to $20 million in 2018.

Butt says he is eager to see the results from a clinical trial on newly diagnosed patients with Hodgkin lymphoma that is comparing Adcetris, used together with accepted front-line agents, to the existing standard slate of therapies.

If those results are strong enough in 2017, he thinks SGEN and its investors will win big. If they are not, oncologists may not alter what they consider to be the best first attack against the disease.

“Physicians ultimately make that determination [front line] and if the difference is incremental they may not choose a change,” Butt said.

Siegall expects both an improvement in patient outcomes and a decrease in any risk of negative side effects for patients on the regimen that includes Adcetris. The shorthand for this combination is “higher efficacy with lower toxicity.”

Because ADCs are “targeted” to certain cells, they don’t usually kill as many normal cells as traditional chemotherapy agents.

Veteran Seattle biotech journalist Luke Timmerman, who writes the Timmerman Report and has watched the company for years, sees Seattle Genetics as perpetually underrated. He calls it a leader among Seattle biotechs in terms of employees, market valuation and proven technology, and he thinks it is poised to grow into the top tier nationally if its pipeline of other drugs pans out in research trials.

Siegall’s leadership is all about the science, Timmerman said, including a boyish enthusiasm undimmed by almost two decades — he’s known to delight in giving exhaustive detail about every drug under study.

Clay Siegall, left, president and CEO of Seattle Genetics. At right is Todd Simpson, CFO of the company. (Ken Lambert/The Seattle Times)
Clay Siegall, left, president and CEO of Seattle Genetics. At right is Todd Simpson, CFO of the company. (Ken Lambert/The Seattle Times)

Siegall first began working with antibody-based compounds at the drug giant Bristol-Myers Squibb, after earning his doctorate in genetics from George Washington University. When Bristol-Myers Squibb decided to close its Seattle office, he jumped into life as an entrepreneur, keeping some of his team from the company together to work on antibody science. He worked for Bristol-Myers Squibb for six years, and before that for the National Cancer Institute and National Institutes of Health.

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The time at Bristol-Myers Squibb gave him important training in the drug-development industry, said Siegall. “I studied how you should run a company. I could not have had a better experience to prepare me,” he said.

Some stumbles along the way also provided valuable lessons.

“Scientists learn from mistakes,” Siegall said. Failures “taught us something that we could apply to new designs.”

Those new designs include a pipeline of 12 other ADCdrug candidates. If SGEN was a football team, you would say it has a deep bench. The star player may be Adcetris, but other players jostle for attention ready to leap on the field.

This pipeline is a point of pride for Siegall. Besides wider uses of Adcetris for other lymphomas, and for earlier use in Hodgkin lymphoma, he is also very excited about a compound called SGN-CD33A, now in Phase 3 trials for acute myelogenous leukemia, or AML. Another pipeline candidate, called enfortumab vedotin, is in early trials for potential use to treat urothelial cancers, which include bladder cancer.

Rory Rohm, a senior research associate at Seattle Genetics, explains some results on data at the Bothell lab.  (Mike Siegel/The Seattle Times)
Rory Rohm, a senior research associate at Seattle Genetics, explains some results on data at the Bothell lab. (Mike Siegel/The Seattle Times)

The price of some of those drugs may be an issue, as national policy debates have erupted this past year over prices. A typical year’s worth of treatment with Adcetris costs between $230,000 and $330,000, according to the Association of Health Insurance Plans report from April 2016.

But Timmerman points out patients and doctors factor potential life extension into their equation for the value of a drug, not just the price. If a drug can reliably provide an added five-year survival for a patient, many will not question the exact price.

One way that Seattle Genetics has financed its long journey is by partnering with other pharmaceutical companies, including Takeda Pharmaceutical Co. of Japan. Takeda bought the rights to market Adcetris globally outside of the U.S. and Canada, and now markets it in 63 countries.

A Seattle Genetics spokesperson said the company’s royalties on product sales in Takeda territories range from the midteens to mid-20 percent of net sales.

Butt, the biotech analyst, speculates that Seattle Genetics may look appealing for a takeover by a large company in 2017. He says the biggest drug companies like to acquire smaller firms right when the smaller firms approach profitability.

But Siegall says the company intends to remain independent and keep growing. “Our trajectory is strong.”

Newer immunotherapies are now getting lots of attention in the landscape for cancer treatments — among them checkpoint inhibitors and another known as CAR-T cell immunotherapy, where Seattle-based Juno Therapeutics is a prominent player.

Siegall said he doesn’t worry these potential therapies are going to cure so many patients that there isn’t a market for his pipeline of drugs.

Checkpoint inhibitors are not working in all patients, just a subset, he said. In fact, one clinical trial by Seattle Genetics is combining its drug with a checkpoint inhibitor to see if that would be more effective than other treatments.

Siegall said the CAR-T idea, which takes a patient’s immune cells and reprograms them to fight the patient’s cancer, is exciting. But he sees it as somewhat cumbersome and expensive, and so far only effective in some patients — not the vast majority.

“We are just learning how to control our own immune system,” Siegall said. Medicine needs many further advances to really change the lives of a majority of cancer patients, he said.

This story has been updated to correct what an antibody-drug conjugate targets: It is an antigen, not an antibody, on the cell surface.