SGEN Seattle Genetics, Inc.

Risks

• Risks Related to Our Business
• Our near-term prospects are substantially dependent on ADCETRIS. If we and/or Takeda are unable to effectively commercialize ADCETRIS for the treatment of patients in its approved indications and to continue to expand its labeled indications of use, our ability to generate significant revenue and our prospects for profitability will be adversely affected.
• Our success also depends on our ability to obtain regulatory approvals of our product candidates and, if approved, to successfully launch and commercialize those product candidates. Our inability to do so could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
• Reports of adverse events or safety concerns involving ADCETRIS or our product candidates could delay or prevent us from obtaining or maintaining regulatory approvals or could negatively impact sales of ADCETRIS or the prospects for our product candidates.
• Even if we and our collaborators obtain regulatory approvals to market our current and potential future products, we and our collaborators will remain subject to extensive ongoing regulatory obligations and oversight, including post-approval requirements, that could result in significant additional expense and could negatively impact our and our collaborators' ability to commercialize our current and potential future products.
• Clinical trials are expensive and time consuming, may take longer than we expect or may not be completed at all, and their outcome is uncertain.
• Our product candidates are in various stages of development, and it is possible that none of our product candidates will ever become commercial products.
• If we or our collaborators are not able to obtain or maintain required regulatory approvals, we or our collaborators will not be able to successfully commercialize ADCETRIS or our product candidates.
• The successful commercialization of ADCETRIS and our product candidates will depend on a variety of factors, including the extent to which governmental authorities and health insurers establish adequate coverage and reimbursement levels and pricing policies, and the acceptance of our products by the medical community and patients.
• Healthcare law and policy changes may have a material adverse effect on us.
• Enhanced governmental and private scrutiny over, or investigations or litigation involving, pharmaceutical manufacturer donations to patient assistance programs offered by charitable foundations may require us to modify our programs and could negatively impact our business practices, harm our reputation, divert the attention of management and increase our expenses.
• We depend on collaborative relationships with other companies to assist in the development and commercialization of ADCETRIS and for the development and commercialization of product candidates utilizing or incorporating our technologies. If we are not able to locate suitable collaborators or if our collaborators do not perform as expected, this may negatively affect our ability to commercialize ADCETRIS, develop and commercialize other product candidates and/or generate revenues through technology licensing, or may otherwise negatively affect our business.
• We face intense competition and rapid technological change, which may result in others discovering, developing or commercializing competing products before or more successfully than we do.
• Our operating results are difficult to predict and may fluctuate. If our operating results are below the expectations of securities analysts or investors, the trading price of our stock could decline.
• We have a history of net losses. We expect to continue to incur net losses and may not achieve future profitability for some time, if at all.
• We have engaged in, and may in the future engage in strategic transactions that increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other risks.
• To date, we have depended on a small number of collaborators for a substantial portion of our revenue. The loss of any one of these collaborators or changes in their product development or business strategy could result in a material decline in our revenue.
• We are dependent upon a small number of distributors for a significant portion of our net sales, and the loss of, or significant reduction or cancellation in sales to, any one of these distributors could adversely affect our operations and financial condition.
• We currently rely on third-party manufacturers and other third parties for production of our drug products and our dependence on these manufacturers may impair the continued development and commercialization of ADCETRIS and our product candidates.
• We are using our own manufacturing facility to support our clinical-stage pipeline. As an organization, we have limited experience operating a manufacturing facility.
• We are subject to various state and federal and foreign laws and regulations, including healthcare, privacy and data security laws and regulations, that may impact our business and could subject us to significant fines and penalties or other negative consequences.
• Changes in funding for the FDA, the SEC and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal functions on which the operation of our business may rely, which could negatively impact our business.
• As we continue to expand our operations internationally, we are subject to an increased risk of conducting activities in a manner that violates applicable anti-bribery or anti-corruption laws. We are also subject to foreign laws and regulations covering data privacy and the protection of health-related and other personal information. These laws and regulations could create liability for us or increase our cost of doing business, any of which could have a material adverse effect on our business, results of operations and growth prospects.
• Any failures or further setbacks in our ADC development program would negatively affect our business and financial position.
• We have been and may in the future be subject to litigation, including securities-related litigation, litigation pertaining to the conduct of our business, and litigation in connection with the Cascadian Acquisition and potential future strategic transactions. Such litigation could result in substantial damages and may divert management’s time and attention from our business.
• We may need to raise significant amounts of additional capital that may not be available to us.
• We rely on license agreements for certain aspects of ADCETRIS, our product candidates and technologies such as our ADC technology. Failure to maintain these license agreements or to secure any required new licenses could prevent us from continuing to develop and commercialize ADCETRIS and our product candidates.
• If we are unable to enforce our intellectual property rights or if we fail to sustain and further build our intellectual property rights, we may not be able to successfully commercialize ADCETRIS or future products and competitors may be able to develop competing therapies.
• We may incur substantial costs and lose important rights or may not be able to continue to commercialize ADCETRIS or to commercialize any of our product candidates that may be approved for commercial sale as a result of litigation or other proceedings relating to patent and other intellectual property rights, and we may be required to obtain patent and other intellectual property rights from others.
• If we lose our key personnel or are unable to attract and retain additional qualified personnel, our future growth and ability to compete would suffer.
• If we are unable to manage our growth, our business, financial condition, results of operations and prospects may be adversely affected.
• Product liability and product recalls could harm our business, and we may not be able to obtain adequate insurance to protect us against product liability losses.
• Risks associated with our expanding operations in foreign countries could materially adversely affect our business.
• Our operations involve hazardous materials and are subject to environmental, health and safety controls and regulations.
• If any of our facilities are damaged or our clinical, research and development or other business processes are interrupted, our business could be seriously harmed.
• If we experience a significant disruption in our information technology systems or breaches of data security, our business could be adversely affected.
• Increasing use of social media could give rise to liability.
• Legislative actions and new accounting pronouncements are likely to impact our future financial position or results of operations.
• The potential future impairment of in-process research and development and goodwill related to the Cascadian Acquisition may negatively affect our results of operations and financial position.
• Risks Related to Our Common Stock
• Our stock price is volatile and our shares may suffer a decline in value.
• Substantial future sales of shares of our common stock or equity-related securities could cause the market price of our common stock to decline.
• Our existing stockholders have significant control of our management and affairs.
• The U.S. comprehensive tax reform bill passed in 2017 could adversely affect our business and financial condition.
• Anti-takeover provisions could make it more difficult for a third party to acquire us.