In the late 1990s, Clay Siegall heard one "no" after another.
He was on the road, pitching his idea for a new biotechnology company to venture capitalists. Siegall wanted funding to develop cancer drugs that targeted tumors like a heat-seeking missile, rather than kill off healthy and malignant tissues alike, as chemotherapy does.
At the time, antibody drugs like Rituxan were just emerging. Siegall was selling an approach meant to harness that progress by attaching cell-destroying chemicals to antibodies capable of discerning tumors.
His persistence was personal. When he was 19, Siegall's father was diagnosed with brain cancer. A battery of treatments — surgery, then chemotherapy and radiation — were unable to keep him alive.
The devastating experience spurred Siegall to pursue cancer research, first with the National Institutes of Health and then with the large drugmaker Bristol Myers Squibb. In 1997, he founded Seattle Genetics.
"This has been a mission of mine," said Siegall. "It's not just my career."
Once a tiny, cash-strapped startup, his company, now called Seagen, is the largest biotech in the Pacific Northwest and a widely recognized pioneer of a fast-growing class of targeted cancer medicines. Over the past year, Seagen won Food and Drug Administration approval for its second and third cancer drugs, sending its share price to record highs. Worth $33 billion, Seagen is on the cusp of joining the industry's top ranks.
"The thinking is that Seagen could emerge as the next sustainable large cap biotech company," said Kennan MacKay, an analyst at RBC Capital Markets. "And there aren't a lot of large caps out there."
Seagen still isn't consistently profitable. Questions remain about whether sales of its first drug, a lymphoma treatment called Adcetris, can still grow, or whether Seagen can keep churning out new, effective medicines. Much of the company's growth may hinge on how well Seagen's drugs work together with immunotherapy, which has fast changed cancer care.
"We're not a startup anymore, but we're not a success story," Siegall said in an interview. "We're somewhere in between."
Finding the right balance
When Siegall started Seagen, there wasn't an accepted name for the type of drugs he had in mind. Empowered antibodies, tumor-activated pro-drugs and immuno-conjugates were a few of the descriptions he recalled being used.
What investors agreed on, according to Siegall, was the drugs' potential. "What I heard from investors was: 'these don't work,'" he said.
Their skepticism was justified. Antibody-drug conjugates, as they are now called, proved very complex to make. There are three components: an antibody, a toxic chemical and a molecule that links the two. Ensuring all three do their job in concert, while balancing drug efficacy with safety is an enormous challenge, as Seagen's two decades of R&D has proved.
Mackay likens their development to an "art," a knife's-edge balancing act. "It's a very narrow therapeutic window," he said, which is why "the class has taken a lot longer than others" to emerge.
Seagen spent years testing better ways to link antibodies to toxins before it succeeded. Early efforts fell short but, as the technology improved, so did the results.
In an early study of what would become Adcetris, the drug kept working in patients desperately sick with lymphoma. Doctors were "fighting over" slots to put their patients in, Siegall said.
First approved in 2011, Adcetris is now used for six different types of blood cancer. Annual sales recently topped $1 billion, making Seagen's drug the second blockbuster antibody-drug conjugate on the market after Roche's breast cancer medicine Kadcyla. (Seagen splits Adcetris sales with Takeda).
A breakout year
Eight more years passed, however, before Seagen won approval for its second antibody-drug conjugate, Padcev, to treat bladder cancer. Study results also showed the drug might boost the effectiveness of Merck & Co.'s leading immunotherapy Keytruda.
A few months later, in April, Seagen also secured an FDA OK for Tukysa, a breast cancer medicine using a different technology.
Drawn by Tukysa's potential and that of another antibody-drug conjugate earlier in development, Merck in September invested $1 billion in Seagen as part of a wide-ranging alliance between the two companies.
Shares of Seagen now trade at about $185 apiece, more than double their value in mid-2019. The increase widely outpaced gains from other, larger biotech companies and Seagen is worth much more than mid-cap biotechs like Alexion, Alnylam and BioMarin.
The company's grown in size, too, with more than 1,700 employees as of March. Seagen is Seattle's "anchor tenant," said Stewart Lyman, a biotech veteran, industry consultant, and longtime resident of the city.
Lyman, who worked at Immunex before it was acquired by Amgen, has seen several hometown biotech companies rise, only for larger companies to snap them up. Seagen remained independent, pouring its resources into a pipeline that's only now bearing fruit.
"I very much appreciate the fact that they're still around and still hiring," Lyman said. "It has been fabulous for the local biotech community."
Seagen's climb has paralleled advances in antibody-drug conjugate, or ADC, technology, particularly the "linker" molecules that hold the drugs together. That momentum has resulted in new approvals and dealmaking.
In 2019, the FDA cleared three ADCs, the most ever in a single year. Over the past two years, AstraZeneca has inked two high-dollar deals with Daiichi Sankyo to gain access to two ADCs for breast cancer. This September, Gilead paid $21 billion for Immunomedics, another ADC developer.
There's a sense, MacKay said, that ADCs could be a "potent partner" for immuno-oncology drugs and one of the "next steps" for the immunotherapy field.
That's changed the expectations, and pressure, Seagen now faces from investors. It's attention, however, that Siegall welcomes.
"It used to be, 'Gee, I don't even know if you have anything that will ever get approved,'" he said. "Now it's, where's drug four, five and six? How fast will you grow in the future?"
