NEW YORK (TheStreet) -- Analysts were divided on the outlook for drug maker Seattle Genetics (SGEN) after the company yesterday reported positive top-line results for a trial of its Hodgkin lymphoma treatment Adcetris, but noted that the drug did not demonstrate a statistically significant increase in overall survival rates.
BULLISH TAKE: The overall survival data may have been confounded because a majority of the patients in the control group received Adcetris, RBC Capital analyst Adnan Butt wrote in a note to investors today. Moreover, the company said that the safety profile of the drug was consistent with current prescribing information, Butt stated. Although there may have been several reasons why the stock sank yesterday after the data was unveiled, none of these reasons was "overly convincing," the analyst contended. He continues to expect the stock to advance ahead of the release of abstracts for the American Society of Hematology conference. The abstracts are slated to be unveiled on November 6, according to the analyst, who kept a $48 price target and Outperform rating on the shares.
BEARISH TAKE: Bank of America Merrill Lynch analyst Steven Byrne responded to the news by downgrading Seattle Genetics to Underperform from Neutral. Byrne agreed that the overall survival data may have been distorted by the dissemination of Adcetris to patients in the control group, and he now thinks the drug has a 70% chance of being approved as a treatment for Hodgkin lymphoma, up from his previous estimate of 60%. However, the drug is now unlikely to be approved before new overall survival data is obtained in 2016, the analyst believes. He lowered his price target on the shares to $34 from $40.
PRICE ACTION: In early afternoon trading, Seattle Genetics fell 4% to $36.90. On Friday, the last trading day before the data was announced, the stock closed at $41.37.
Reporting by Larry Ramer.