Seagen

INSPIRED BY PATIENTS 
DRIVEN BY SCIENCE

20 21  ANNUAL R EPORT

Seagen 2021 Highlights

COLLABORATION WITH

COLLABORATION WITH

4 Approved 
First- or Best-in-Class 
Medicines Reaching 
Patients Globally

COLLABORATION WITH

COLLABORATION WITH

Net Product Sales of  
$1.4 Billion in 2021

Dollars in Millions

$1,386

$1,001

38% 
growth

$628

$477

2021 Total Revenues of 
$1.6 Billion*

Advancing 17+ Programs 
across our approved products and  
pipeline targeting solid tumors and  
hematologic malignancies

2018 

2019 

2020 

2021

No Debt

On the Cover: Maggie, a member of our Quality Control team    *Includes net product sales, royalty revenues and collaboration and license agreement revenues

 
Dear Shareholders,

2021 was an exceptional year for Seagen, during which we achieved important 

business, regulatory and development milestones. Today, Seagen is a multi-prod-

uct biotechnology company with an expanded infrastructure, a rich pipeline and 

multiple strategic partnerships. This allows us to better meet the needs of a 

wider range of people living with cancer around the world.

We  are  focused  on  maximizing  the  potential  of  our 
approved  portfolio  through  exceptional  commercial 
execution and strategic partnerships, while robust clin-
ical development programs are designed to support 
future label expansions. ADCETRIS® forms the founda-
tion of our core business, and more than a decade after 
its first launch it has been approved in over 75 countries 
under our collaboration with Takeda. ADCETRIS is an 
antibody-drug conjugate (ADC) which is now a U.S. stan-
dard of care treatment in frontline Hodgkin lymphoma 
and peripheral T-cell lymphoma (PTCL). Recent data 
from the ECHELON-1 phase 3 clinical trial demonstrated 
a statistically significant improvement in overall survival 
in advanced Hodgkin lymphoma patients treated with 
ADCETRIS in combination with chemotherapy, compared 
to those who received chemotherapy in the frontline set-
ting. These groundbreaking results further demonstrate 
the therapeutic value of ADCETRIS and its importance for 
patients with this disease.

PADCEV® is a first-in-class ADC that has become a U.S. 
standard of care for previously treated metastatic urothelial 
cancer. In 2021, PADCEV received regular U.S. approval, 
enabling us to promote to the impressive overall survival 
benefit. We and our partner Astellas also secured approv-
als for PADCEV in Canada, Switzerland, Israel, and Japan 
and we are progressing regulatory submissions across 
the European Union, Asia-Pacific and the Americas. We 
are advancing a robust clinical development program 
with PADCEV as monotherapy and in combination with 
Keytruda® in earlier lines of therapy. Data from EV-103 
Cohort K that is anticipated in the second half of 2022, 
along with results from the EV-103 trial, could poten-
tially support U.S. FDA accelerated approval for first-line 

metastatic urothelial cancer in 2023. We are also explor-
ing earlier stages of disease, including muscle-invasive 
and non-muscle invasive bladder cancer, which represent 
areas of significant unmet need across a broader patient 
population. Finally, we are conducting a basket trial eval-
uating PADCEV in other Nectin-4-expressing solid tumors.

TUKYSA® is a best-in-class HER2 tyrosine kinase inhibi-
tor (TKI) with broad potential in HER2 positive cancers. In 
combination with trastuzumab and capecitabine, TUKYSA 
demonstrated an overall survival benefit versus placebo in 
HER2-positive metastatic breast cancer following first-line 
progression. Approved in 36 countries, we have launched 
TUKYSA commercially in multiple countries including the 
U.S., Germany, France, Switzerland, Austria and Canada. 
We are working towards potential additional European 
launches in 2022, and our strategic collaboration with 
Merck is intended to expand TUKYSA’s reach outside 
of the Americas and Europe. TUKYSA’s broad develop-
ment program includes clinical trials in HER2-positive 
breast cancer, colorectal cancer, gastric cancer and other 
HER2-amplified or mutant tumors. Data from the phase 2 
MOUNTAINEER trial expected in the second half of 2022 
could potentially support U.S. FDA accelerated approval 
as a treatment for colorectal cancer in 2023.

Seagen’s fourth approved product, TIVDAK®, is a tissue 
factor-targeted ADC for recurrent or metastatic cervical 
cancer patients. It represents an important new medi-
cine in a disease that has historically been treated with 
drugs resulting in low objective response rates and poor 
outcomes. TIVDAK’s clinical development program is 
designed to support global regulatory applications and 
maximize its future potential in cervical cancer and other 
solid tumors. 

PAGE 1    S E A G E N   2 0 2 1   A N N U A L   R E P O R T

We continue to advance our deep and diverse pipeline 
as we look to bring additional medicines to market in the 
coming years. We believe our ADC leadership and R&D 
expertise in empowered antibodies provides us with a 
competitive advantage when it comes to expanding and 
progressing our pipeline. Last year, we in-licensed rights 
from RemeGen Co. Ltd. (RemeGen) to develop and com-
mercialize the late-stage novel ADC disitamab vedotin 
outside of RemeGen’s territory of Asia, excluding Japan 
and Singapore. Disitamab vedotin utilizes a high-affinity 
HER2 antibody with enhanced internalization. We have 
planned an extensive clinical development program that 
prioritizes monotherapy and combination approaches in 
breast, bladder, gastric and other cancers. 

Turning to our earlier-stage pipeline work, we are advanc-
ing several ADCs in the clinic with novel and validated 
targets. In addition, we have four programs that use our 
proprietary sugar-engineered antibody (SEA) technology. 
Overall, we are advancing more than 17 programs across 
our pipeline and approved products in a range of solid 
tumors and hematologic malignancies.

Our communities, employees, partners and 
patients have been affected by the ongo-
ing COVID-19 pandemic, and we stand 
side-by-side with them. Such challenges 
highlight human resilience, adaptation and 
the importance of healthcare innovation. 
Seagen’s passion and unwavering commit-
ment to developing transformative cancer 
therapies, while protecting our people, has 
never been stronger.

We have worked to prioritize the safety, health and well-
being of our employees, communities, suppliers and 
partners during the pandemic. Seagen launched three 
transformational new cancer therapies over a two-year 
period while delivering a continuous supply of our med-
icines to patients who needed them around the world. 
We also remained focused on progressing our pipeline of 
tomorrow’s potential oncology medicines.

Seagen is committed to delivering its mission in a com-
pliant, ethical and accountable manner, while having 
a positive impact on our communities, society and the 
planet. Last year, we launched our inaugural Corporate 
Responsibility Report, providing an overview of our envi-
ronment, social, and governance (ESG) priorities, perfor-
mance, milestones, and future commitments. It highlights 
the ways we are working to create and maintain sustain-
able operations across our business. We believe these 
efforts will enable us to best deliver upon our fundamen-
tal objective of developing oncology medicines both 
today and in the future.

Our recent achievements have helped to 
bolster our resilient core business and 
the solid foundation we continue to build 
upon. We expect to achieve multiple mile-
stones in 2022, including clinical data read-
outs, global regulatory and commercial 
progress, and advances across our pipe-
line. We have set the stage for Seagen’s 
future and growth potential. 

We believe our multi-product portfolio, commercial 
engine, robust development, expanded geographic foot-
print and over 50 strategic partnerships help to maxi-
mize the value of our medicines and our ability to reach 
patients worldwide. Coupled with our financial strength, 
innovative research and active corporate development, 
the Company is well-positioned to continue making a 
positive impact today and tomorrow on the lives of peo-
ple with cancer.

Clay B. Siegall, Ph.D.

President, Chief Executive Officer, 

and Chairman of the Board

PAGE 2    S E A G E N   2 0 2 1   A N N U A L   R E P O R T

2021 Form 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K 

For the fiscal year ended December 31, 2021 

OR

(Mark One)

☒

☐

  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                       to                                       

Commission file number: 0-32405 

Delaware

91-1874389

(State or other Jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

SEAGEN INC.

(Exact name of registrant as specified in its charter)

21823 30th Drive SE, Bothell, WA 98021 

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (425) 527-4000 

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

SGEN

None

Title of class

Common Stock, par value $0.001

Trading Symbol(s)

Name of each exchange on which registered

The Nasdaq Stock Market LLC

days.  Yes  ☒    No  ☐

Act.

Large accelerated filer

Non-accelerated filer

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 

12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T 

during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth 

company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange 

  ☒   Accelerated filer

  ☐   Smaller reporting company

  ☐

  ☐

  Emerging growth company

  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised 

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial 

reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐    No  ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $21.0 billion as of the last business day 

of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price on The Nasdaq Global Select Market reported for such date. Excludes an 

aggregate of 48,842,953 shares of the registrant’s Common Stock held as of such date by officers, directors and stockholders that the registrant has concluded are or were 

affiliates of the registrant. Exclusion of such shares should not be construed to indicate that the holder of any such shares possesses the power, direct or indirect, to direct or 

cause the direction of the management or policies of the registrant or that such person is controlled by or under common control with the registrant.

There were 183,626,064 shares of the registrant’s Common Stock issued and outstanding as of February 4, 2022.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates information by reference from the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to 

Regulation 14A, not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, in connection with the registrant’s 2022 Annual 

Meeting of Stockholders.

 
 
 
 
 
 
 
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K 

☒

☐

(Mark One)

  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021 

OR

  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                       to                                       
Commission file number: 0-32405 

SEAGEN INC.

(Exact name of registrant as specified in its charter)

Delaware

91-1874389

(State or other Jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

21823 30th Drive SE, Bothell, WA 98021 
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (425) 527-4000 

Securities registered pursuant to Section 12(b) of the Act:

Title of class
Common Stock, par value $0.001

Trading Symbol(s)
SGEN

Name of each exchange on which registered
The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:
None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ☒    No  ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ☐    No  ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 
days.  Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T 
during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth 
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange 
Act.

Large accelerated filer

Non-accelerated filer

  ☒   Accelerated filer

  ☐   Smaller reporting company

  ☐

  ☐

  Emerging growth company

  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised 
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial 
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐    No  ☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant was approximately $21.0 billion as of the last business day 
of the registrant’s most recently completed second fiscal quarter, based upon the closing sale price on The Nasdaq Global Select Market reported for such date. Excludes an 
aggregate of 48,842,953 shares of the registrant’s Common Stock held as of such date by officers, directors and stockholders that the registrant has concluded are or were 
affiliates of the registrant. Exclusion of such shares should not be construed to indicate that the holder of any such shares possesses the power, direct or indirect, to direct or 
cause the direction of the management or policies of the registrant or that such person is controlled by or under common control with the registrant.

There were 183,626,064 shares of the registrant’s Common Stock issued and outstanding as of February 4, 2022.

DOCUMENTS INCORPORATED BY REFERENCE

Part III incorporates information by reference from the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to 
Regulation 14A, not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, in connection with the registrant’s 2022 Annual 
Meeting of Stockholders.

 
 
 
 
 
 
 
 
 
 
TABLE OF CONTENTS

PART I

Business

Item 1.
Item 1A. Risk Factors
Item 1B. Unresolved Staff Comments
Item 2.

Properties

Item 3.

Item 4.

Legal Proceedings

Mine Safety Disclosures

Item 5.

Item 6.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

PART II

[Reserved]

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8.
Financial Statements and Supplementary Data

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9.
Item 9A. Controls and Procedures
Item 9B. Other Information
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 10. Directors, Executive Officers and Corporate Governance
Item 11.

Executive Compensation

PART III

Item 12.

Item 13.

Item 14.

Item 15.

Item 16.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accounting Fees and Services

PART IV

Exhibits, Financial Statement Schedules

Form 10-K Summary

Signatures

Page

3

36

68

68

68

68

69

70

70

87

88

120

120

120

121

122

122

122

122

122

123

131

132

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of 

the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are 

based on our management’s beliefs and assumptions and on information currently available to our management. All 

statements other than statements of historical facts are “forward-looking statements” for purposes of these provisions, 

including those relating to future events or our future financial performance and financial guidance. In some cases, 

you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “should,” "could", 

“expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “potential,” “intend” or “continue,” the 

negative of terms like these or other comparable terminology, and other words or terms of similar meaning in 

connection with any discussion of future operating or financial performance. These statements are only predictions. 

All forward-looking statements included in this Annual Report on Form 10-K are based on information available to 

us on the date hereof, and we assume no obligation to update any such forward-looking statements, except as 

required by law. Any or all of our forward-looking statements in this document may turn out to be incorrect. Actual 

events or results may differ materially. Our forward-looking statements can be affected by inaccurate assumptions we 

might make or by known or unknown risks, uncertainties and other factors. We discuss many of these risks, 

uncertainties and other factors in this Annual Report on Form 10-K in greater detail under the heading “Item 1A—

Risk Factors.” We caution investors that our business and financial performance are subject to substantial risks and 

uncertainties.

RISK FACTOR SUMMARY

Investing in our securities involves a high degree of risk. Below is a summary of material factors that make an 

investment in our securities speculative or risky. Importantly, this summary does not address all of the risks that we face. 

Additional discussion of the risks summarized in this risk factor summary, as well as other risks that we face, can be 

found under the heading “Item 1A—Risk Factors”, below.

•

•

•

•

•

•

•

Our success depends on our ability to effectively commercialize our products. If we and our collaborators are 

unable to effectively commercialize our products and to expand their utilization, 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 for our product candidates and for our 

current products in additional territories, as well as our ability to expand the labeled indications of use for our 

current products. Our inability to do so could have a material adverse effect on our business, results of 

operations, financial condition and growth prospects.

Reports of adverse events or safety concerns involving our products or product candidates could delay or 

prevent us from obtaining or maintaining regulatory approvals or could negatively impact sales of our 

products or the prospects for our product candidates.

Clinical trials and product development are expensive, time consuming and uncertain, may take longer than 

we expect and may not be successful. Our failure to effectively advance our development programs in a 

timely manner or at all could have a material adverse effect on our business, results of operations, financial 

condition and growth prospects.

The successful commercialization of our products will depend, in part, on the extent to which governmental 

authorities and health insurers establish adequate coverage and reimbursement levels and pricing policies.

The successful commercialization of our products will also depend in part on the acceptance of our products 

by the medical community, patients and third-party payors.

Any failures or setbacks in our antibody-drug conjugate, or ADC, development program or our other platform 

technologies could negatively affect our business and financial position.

• 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.

2

1

 
 
TABLE OF CONTENTS

PART I

Item 1.

Business

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

Properties

Legal Proceedings

Mine Safety Disclosures

Item 2.

Item 3.

Item 4.

Item 5.

Item 6.

Item 7.

Item 8.

Item 9.

Item 11.

Item 12.

Item 13.

Item 14.

Item 15.

Item 16.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

PART II

[Reserved]

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Financial Statements and Supplementary Data

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 10. Directors, Executive Officers and Corporate Governance

Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accounting Fees and Services

PART III

PART IV

Exhibits, Financial Statement Schedules

Form 10-K Summary

Signatures

Page

3

36

68

68

68

68

69

70

70

87

88

120

120

120

121

122

122

122

122

122

123

131

132

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of 
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are 
based on our management’s beliefs and assumptions and on information currently available to our management. All 
statements other than statements of historical facts are “forward-looking statements” for purposes of these provisions, 
including those relating to future events or our future financial performance and financial guidance. In some cases, 
you can identify forward-looking statements by terminology such as “may,” “might,” “will,” “should,” "could", 
“expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “potential,” “intend” or “continue,” the 
negative of terms like these or other comparable terminology, and other words or terms of similar meaning in 
connection with any discussion of future operating or financial performance. These statements are only predictions. 
All forward-looking statements included in this Annual Report on Form 10-K are based on information available to 
us on the date hereof, and we assume no obligation to update any such forward-looking statements, except as 
required by law. Any or all of our forward-looking statements in this document may turn out to be incorrect. Actual 
events or results may differ materially. Our forward-looking statements can be affected by inaccurate assumptions we 
might make or by known or unknown risks, uncertainties and other factors. We discuss many of these risks, 
uncertainties and other factors in this Annual Report on Form 10-K in greater detail under the heading “Item 1A—
Risk Factors.” We caution investors that our business and financial performance are subject to substantial risks and 
uncertainties.

RISK FACTOR SUMMARY

Investing in our securities involves a high degree of risk. Below is a summary of material factors that make an 
investment in our securities speculative or risky. Importantly, this summary does not address all of the risks that we face. 
Additional discussion of the risks summarized in this risk factor summary, as well as other risks that we face, can be 
found under the heading “Item 1A—Risk Factors”, below.

•

•

•

•

•

•

•

Our success depends on our ability to effectively commercialize our products. If we and our collaborators are 
unable to effectively commercialize our products and to expand their utilization, 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 for our product candidates and for our 
current products in additional territories, as well as our ability to expand the labeled indications of use for our 
current products. Our inability to do so could have a material adverse effect on our business, results of 
operations, financial condition and growth prospects.

Reports of adverse events or safety concerns involving our products or product candidates could delay or 
prevent us from obtaining or maintaining regulatory approvals or could negatively impact sales of our 
products or the prospects for our product candidates.

Clinical trials and product development are expensive, time consuming and uncertain, may take longer than 
we expect and may not be successful. Our failure to effectively advance our development programs in a 
timely manner or at all could have a material adverse effect on our business, results of operations, financial 
condition and growth prospects.

The successful commercialization of our products will depend, in part, on the extent to which governmental 
authorities and health insurers establish adequate coverage and reimbursement levels and pricing policies.

The successful commercialization of our products will also depend in part on the acceptance of our products 
by the medical community, patients and third-party payors.

Any failures or setbacks in our antibody-drug conjugate, or ADC, development program or our other platform 
technologies could negatively affect our business and financial position.

• 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.

2

1

 
 
•

•

Our products and any future approved products remain subject to extensive ongoing regulatory obligations 
and oversight, including post-approval requirements, that could result in penalties and significant additional 
expense and could negatively impact our and our collaborators’ ability to commercialize our current and any 
future approved products.

Healthcare law and policy changes may negatively impact our business, including by decreasing the prices 
that we and our collaborators receive for our products.

• We are subject to various state, federal and international laws and regulations, including healthcare, data 

privacy and information security laws and regulations, that may impact our business and could subject us to 
significant fines and penalties or other negative consequences.

•

Our collaborators and licensees may not perform as expected, which may negatively affect our ability to 
develop and commercialize our products and product candidates and/or generate revenues through technology 
licensing, and may otherwise negatively affect our business.

• We currently rely on third-party manufacturers and other third parties for production of our drug products, 
and our dependence on these third parties may impair the continued development and commercialization of 
our products and product candidates.

•

If we are unable to enforce our intellectual property rights or if we fail to sustain and further procure 
additional intellectual property rights, we may not be able to successfully commercialize our products or any 
future products and competitors may be able to develop competing therapies.

• We and our collaborators rely on license agreements for certain aspects of our products and 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 our 
products and product candidates.

• We have been and may in the future be subject to litigation, which could result in substantial expenses and 

damages and may divert management’s time and attention from our business.

•

•

•

•

The evolving effects of the COVID-19 pandemic and associated global economic instability could have 
further adverse effects on our business, including our commercialization efforts, supply chain, regulatory 
activities, clinical development activities and other business operations.

If we are unable to manage our growth, our business, results of operations, financial condition and growth 
prospects may be adversely affected.

Risks associated with our expanding operations in countries outside the U.S. could materially adversely affect 
our business.

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 

sustained profitability for some time, if at all.

•

•

Our stock price is volatile and our shares may suffer a decline in value.

Our existing stockholders have significant control of our management and affairs.

Item 1. Business

Overview

PART I

Seagen is a biotechnology company that develops and commercializes targeted therapies to treat cancer. We are 

commercializing ADCETRIS®, or brentuximab vedotin, for the treatment of certain CD30-expressing lymphomas, 

PADCEV®, or enfortumab vedotin-ejfv, for the treatment of certain metastatic urothelial cancers, TUKYSA®, or 

tucatinib, for the treatment of certain metastatic HER2-positive breast cancers, and TIVDAK®, or tisotumab vedotin-tftv, 

for the treatment of certain metastatic cervical cancers. We are also advancing a pipeline of novel therapies for solid 

tumors and blood-related cancers designed to address unmet medical needs and improve treatment outcomes for patients. 

Many of our programs, including ADCETRIS, PADCEV and TIVDAK, are based on our ADC technology that utilizes 

the targeting ability of monoclonal antibodies to deliver cell-killing agents directly to cancer cells.

Our strategy is to become a leading global oncology company developing and marketing targeted therapies for 

cancer. Key elements of our strategy are to maximize the potential of our approved medicines through successful 

commercial execution, expand the number of patients eligible to receive our medicines by securing approvals of our 

commercial products in other countries, conduct clinical trials designed to support additional labels for our products, and 

develop new first-in-class or best-in-class medicines. We seek to commercialize our products either on our own as we 

expand our operations globally or through commercial partnerships. We are deploying our internal research, clinical, 

development, regulatory and manufacturing expertise to advance and expand our deep pipeline of drug candidates aimed 

at gaining new product approvals. We conduct internal research directed at identifying novel antigen targets, monoclonal 

antibodies and other targeting molecules, creating new antibody engineering techniques and developing new classes of 

stable linkers and cell-killing agents in support of our continued ADC innovation. In addition, we supplement these 

internal efforts by acquiring or in-licensing products, product candidates and technologies from biotechnology and 

pharmaceutical companies and academic institutions.

COVID-19

We are continuing to closely monitor the impact of the evolving effects of the COVID-19 pandemic on our 

business. We are continuing to take proactive steps designed to protect the health and safety of our workforce, patients 

and healthcare professionals, to continue our business operations and to advance our goal of bringing important 

medicines to patients as rapidly as possible. For information regarding the impacts of the evolving effects of the 

COVID-19 pandemic on our ability and the ability of our collaborators to effectively market, sell and distribute our 

products and to develop our products and product candidates, see “Management’s Discussion and Analysis of Financial 

Condition and Results of Operations—Overview—Outlook” in Part II Item 7 of this Annual Report on Form 10-K. 

2

3

•

Our products and any future approved products remain subject to extensive ongoing regulatory obligations 

and oversight, including post-approval requirements, that could result in penalties and significant additional 

expense and could negatively impact our and our collaborators’ ability to commercialize our current and any 

future approved products.

•

Healthcare law and policy changes may negatively impact our business, including by decreasing the prices 

that we and our collaborators receive for our products.

• We are subject to various state, federal and international laws and regulations, including healthcare, data 

privacy and information security laws and regulations, that may impact our business and could subject us to 

significant fines and penalties or other negative consequences.

•

Our collaborators and licensees may not perform as expected, which may negatively affect our ability to 

develop and commercialize our products and product candidates and/or generate revenues through technology 

licensing, and may otherwise negatively affect our business.

• We currently rely on third-party manufacturers and other third parties for production of our drug products, 

and our dependence on these third parties may impair the continued development and commercialization of 

our products and product candidates.

•

If we are unable to enforce our intellectual property rights or if we fail to sustain and further procure 

additional intellectual property rights, we may not be able to successfully commercialize our products or any 

future products and competitors may be able to develop competing therapies.

• We and our collaborators rely on license agreements for certain aspects of our products and 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 our 

products and product candidates.

• We have been and may in the future be subject to litigation, which could result in substantial expenses and 

damages and may divert management’s time and attention from our business.

The evolving effects of the COVID-19 pandemic and associated global economic instability could have 

further adverse effects on our business, including our commercialization efforts, supply chain, regulatory 

activities, clinical development activities and other business operations.

If we are unable to manage our growth, our business, results of operations, financial condition and growth 

prospects may be adversely affected.

Risks associated with our expanding operations in countries outside the U.S. could materially adversely affect 

our business.

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 

sustained profitability for some time, if at all.

Our stock price is volatile and our shares may suffer a decline in value.

Our existing stockholders have significant control of our management and affairs.

•

•

•

•

•

•

Item 1. Business

Overview

PART I

Seagen is a biotechnology company that develops and commercializes targeted therapies to treat cancer. We are 

commercializing ADCETRIS®, or brentuximab vedotin, for the treatment of certain CD30-expressing lymphomas, 
PADCEV®, or enfortumab vedotin-ejfv, for the treatment of certain metastatic urothelial cancers, TUKYSA®, or 
tucatinib, for the treatment of certain metastatic HER2-positive breast cancers, and TIVDAK®, or tisotumab vedotin-tftv, 
for the treatment of certain metastatic cervical cancers. We are also advancing a pipeline of novel therapies for solid 
tumors and blood-related cancers designed to address unmet medical needs and improve treatment outcomes for patients. 
Many of our programs, including ADCETRIS, PADCEV and TIVDAK, are based on our ADC technology that utilizes 
the targeting ability of monoclonal antibodies to deliver cell-killing agents directly to cancer cells.

Our strategy is to become a leading global oncology company developing and marketing targeted therapies for 

cancer. Key elements of our strategy are to maximize the potential of our approved medicines through successful 
commercial execution, expand the number of patients eligible to receive our medicines by securing approvals of our 
commercial products in other countries, conduct clinical trials designed to support additional labels for our products, and 
develop new first-in-class or best-in-class medicines. We seek to commercialize our products either on our own as we 
expand our operations globally or through commercial partnerships. We are deploying our internal research, clinical, 
development, regulatory and manufacturing expertise to advance and expand our deep pipeline of drug candidates aimed 
at gaining new product approvals. We conduct internal research directed at identifying novel antigen targets, monoclonal 
antibodies and other targeting molecules, creating new antibody engineering techniques and developing new classes of 
stable linkers and cell-killing agents in support of our continued ADC innovation. In addition, we supplement these 
internal efforts by acquiring or in-licensing products, product candidates and technologies from biotechnology and 
pharmaceutical companies and academic institutions.

COVID-19

We are continuing to closely monitor the impact of the evolving effects of the COVID-19 pandemic on our 
business. We are continuing to take proactive steps designed to protect the health and safety of our workforce, patients 
and healthcare professionals, to continue our business operations and to advance our goal of bringing important 
medicines to patients as rapidly as possible. For information regarding the impacts of the evolving effects of the 
COVID-19 pandemic on our ability and the ability of our collaborators to effectively market, sell and distribute our 
products and to develop our products and product candidates, see “Management’s Discussion and Analysis of Financial 
Condition and Results of Operations—Overview—Outlook” in Part II Item 7 of this Annual Report on Form 10-K. 

2

3

Our Medicines

Our approved medicines include the following:

Product*

Therapeutic Area

U.S. Approved Indication
Previously untreated Stage III/IV classical Hodgkin lymphoma, or cHL, 
in combination with doxorubicin, vinblastine and dacarbazine

Hodgkin Lymphoma

cHL at high risk of relapse or progression as post-autologous 
hematopoietic stem cell transplantation, or auto-HSCT, consolidation

cHL after failure of auto-HSCT or after failure of at least two prior 
multi-agent chemotherapy regimens in patients who are not auto-HSCT 
candidates

Previously untreated systemic anaplastic large cell lymphoma, or 
sALCL, or other CD30-expressing peripheral T-cell lymphoma, or 
PTCL, including angioimmunoblastic T-cell lymphoma and PTCL not 
otherwise specified, in combination with cyclophosphamide, 
doxorubicin and prednisone

T-cell Lymphoma

sALCL after failure of at least one prior multi-agent chemotherapy 
regimen

Primary cutaneous anaplastic large cell lymphoma, or pcALCL, or 
CD30-expressing mycosis fungoides who have received prior systemic 
therapy

Urothelial Cancer

•

Locally advanced or metastatic urothelial cancer for patients who:
have previously received a programmed death receptor-1
(PD-1) or programmed death-ligand 1 (PD-L1) inhibitor and 
platinum-containing chemotherapy, or
are ineligible for cisplatin-containing chemotherapy and have
previously received one or more prior lines of therapy.

•

Breast Cancer

In combination with trastuzumab and capecitabine for the treatment of 
adult patients with advanced unresectable or metastatic HER2-positive 
breast cancer, including patients with brain metastases, who have 
received one or more prior anti-HER2-based regimens in the metastatic 
setting.

Recurrent or metastatic cervical cancer with disease progression on or 
after chemotherapy. 

Cervical Cancer

*ADCETRIS, PADCEV, TUKYSA and TIVDAK are only indicated for use in adults.

4

5

ADCETRIS is an ADC targeting CD30, which is a protein located on the surface of cells and highly expressed in 

Hodgkin lymphoma, certain T-cell lymphomas as well as other cancers. ADCETRIS first received U.S. Food and Drug 

Administration, or FDA, approval in 2011 and is now approved in a total of six indications to treat Hodgkin lymphoma 

and certain T-cell lymphomas in various settings including as frontline therapy.

 ADCETRIS has received approval in more than 75 countries worldwide. We commercialize ADCETRIS in the 

U.S. and its territories and in Canada, and we collaborate with Takeda Pharmaceutical Company Limited, or Takeda, to 

develop and commercialize ADCETRIS on a global basis. Under this collaboration, Takeda has commercial rights in the 

rest of the world and pays us a royalty. Takeda has received regulatory approvals for ADCETRIS as monotherapy or in 

combination with other agents in various settings for the treatment of patients with Hodgkin lymphoma or CD30-positive 

T-cell lymphomas in Europe and many countries throughout the rest of the world and is pursuing additional regulatory 

ADCETRIS®

approvals.

PADCEV®

PADCEV is an ADC targeting Nectin-4, a protein expressed on the surface of cells and highly expressed in 

bladder cancer as well as other cancers. PADCEV was granted accelerated approval by the FDA in December 2019 for 

the treatment of adult patients with locally advanced or metastatic urothelial cancer who have previously received a PD-1 

or PD-L1 inhibitor and a platinum-containing chemotherapy before (neoadjuvant) or after (adjuvant) surgery in the 

locally advanced or metastatic setting. FDA approval of PADCEV was supported by data from a single-arm pivotal 

phase 2 clinical trial called EV-201. 

In July 2021, the FDA converted PADCEV's accelerated approval to regular approval in the U.S., in addition to 

granting regular approval for a new indication for adult patients with locally advanced or metastatic urothelial cancer 

who are ineligible for cisplatin-containing chemotherapy and have previously received one or more prior lines of 

therapy. The conversion to regular approval was supported by the pivotal phase 3 clinical trial called EV-301 and the 

expanded indication was supported by data from the second cohort in the EV-201 trial. The FDA reviewed the 

application for regular approval under the Oncology Center of Excellence's, or OCE's, Real Time Oncology Review, or 

RTOR, pilot program.

cancer. 

PADCEV is also approved in Canada, Israel, Japan, and Switzerland in previously treated metastatic urothelial 

PADCEV is being co-developed and jointly commercialized with Astellas Pharma, Inc., or Astellas. In the U.S., 

we and Astellas are jointly promoting PADCEV. We record net sales of PADCEV in the U.S. and are responsible for all 

U.S. distribution activities. We and Astellas each bear the costs of our own sales organizations in the U.S., equally share 

certain other costs associated with commercializing PADCEV in the U.S., and equally share in any profits realized in the 

U.S. Outside the U.S., we have commercialization rights in all other countries in North and South America, and Astellas 

has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa. The agreement is 

intended to provide that we and Astellas will effectively equally share in costs incurred and any profits realized in all of 

these markets. Cost and profit sharing in Canada, the United Kingdom, Germany, France, Spain and Italy will be based 

on product sales and costs of commercialization. In the remaining markets, the commercializing party will bear costs and 

will pay the other party a royalty rate applied to net sales of the product based on a rate intended to approximate an equal 

profit share for both parties.

TUKYSA®

TUKYSA is an oral, small molecule tyrosine kinase inhibitor, or TKI, that is highly selective for HER2, a growth 

factor receptor overexpressed in certain cancers. HER2 mediates cell growth, differentiation and survival. Tumors that 

over-express HER2 are generally more aggressive and historically have been associated with poor overall survival, 

compared with HER2-negative cancers. In April 2020, TUKYSA received approval from the FDA in combination with 

trastuzumab and capecitabine for the treatment of adult patients with advanced unresectable or metastatic HER2-positive 

breast cancer, including patients with brain metastases, who have received one or more prior anti-HER2-based regimens 

in the metastatic setting. FDA approval of TUKYSA was supported by data from the HER2CLIMB trial.

Our Medicines

Our approved medicines include the following:

Product*

Therapeutic Area

U.S. Approved Indication

Previously untreated Stage III/IV classical Hodgkin lymphoma, or cHL, 

in combination with doxorubicin, vinblastine and dacarbazine

Hodgkin Lymphoma

cHL at high risk of relapse or progression as post-autologous 

hematopoietic stem cell transplantation, or auto-HSCT, consolidation

T-cell Lymphoma

sALCL after failure of at least one prior multi-agent chemotherapy 

cHL after failure of auto-HSCT or after failure of at least two prior 

multi-agent chemotherapy regimens in patients who are not auto-HSCT 

candidates

Previously untreated systemic anaplastic large cell lymphoma, or 

sALCL, or other CD30-expressing peripheral T-cell lymphoma, or 

PTCL, including angioimmunoblastic T-cell lymphoma and PTCL not 

otherwise specified, in combination with cyclophosphamide, 

doxorubicin and prednisone

regimen

therapy

Primary cutaneous anaplastic large cell lymphoma, or pcALCL, or 

CD30-expressing mycosis fungoides who have received prior systemic 

Locally advanced or metastatic urothelial cancer for patients who:

have previously received a programmed death receptor-1

(PD-1) or programmed death-ligand 1 (PD-L1) inhibitor and 

platinum-containing chemotherapy, or

are ineligible for cisplatin-containing chemotherapy and have

previously received one or more prior lines of therapy.

•

•

In combination with trastuzumab and capecitabine for the treatment of 

adult patients with advanced unresectable or metastatic HER2-positive 

breast cancer, including patients with brain metastases, who have 

received one or more prior anti-HER2-based regimens in the metastatic 

Recurrent or metastatic cervical cancer with disease progression on or 

after chemotherapy. 

Urothelial Cancer

Breast Cancer

setting.

Cervical Cancer

*ADCETRIS, PADCEV, TUKYSA and TIVDAK are only indicated for use in adults.

ADCETRIS®

ADCETRIS is an ADC targeting CD30, which is a protein located on the surface of cells and highly expressed in 
Hodgkin lymphoma, certain T-cell lymphomas as well as other cancers. ADCETRIS first received U.S. Food and Drug 
Administration, or FDA, approval in 2011 and is now approved in a total of six indications to treat Hodgkin lymphoma 
and certain T-cell lymphomas in various settings including as frontline therapy.

 ADCETRIS has received approval in more than 75 countries worldwide. We commercialize ADCETRIS in the 
U.S. and its territories and in Canada, and we collaborate with Takeda Pharmaceutical Company Limited, or Takeda, to 
develop and commercialize ADCETRIS on a global basis. Under this collaboration, Takeda has commercial rights in the 
rest of the world and pays us a royalty. Takeda has received regulatory approvals for ADCETRIS as monotherapy or in 
combination with other agents in various settings for the treatment of patients with Hodgkin lymphoma or CD30-positive 
T-cell lymphomas in Europe and many countries throughout the rest of the world and is pursuing additional regulatory 
approvals.

PADCEV®

PADCEV is an ADC targeting Nectin-4, a protein expressed on the surface of cells and highly expressed in 
bladder cancer as well as other cancers. PADCEV was granted accelerated approval by the FDA in December 2019 for 
the treatment of adult patients with locally advanced or metastatic urothelial cancer who have previously received a PD-1 
or PD-L1 inhibitor and a platinum-containing chemotherapy before (neoadjuvant) or after (adjuvant) surgery in the 
locally advanced or metastatic setting. FDA approval of PADCEV was supported by data from a single-arm pivotal 
phase 2 clinical trial called EV-201. 

In July 2021, the FDA converted PADCEV's accelerated approval to regular approval in the U.S., in addition to 

granting regular approval for a new indication for adult patients with locally advanced or metastatic urothelial cancer 
who are ineligible for cisplatin-containing chemotherapy and have previously received one or more prior lines of 
therapy. The conversion to regular approval was supported by the pivotal phase 3 clinical trial called EV-301 and the 
expanded indication was supported by data from the second cohort in the EV-201 trial. The FDA reviewed the 
application for regular approval under the Oncology Center of Excellence's, or OCE's, Real Time Oncology Review, or 
RTOR, pilot program.

PADCEV is also approved in Canada, Israel, Japan, and Switzerland in previously treated metastatic urothelial 

cancer. 

PADCEV is being co-developed and jointly commercialized with Astellas Pharma, Inc., or Astellas. In the U.S., 

we and Astellas are jointly promoting PADCEV. We record net sales of PADCEV in the U.S. and are responsible for all 
U.S. distribution activities. We and Astellas each bear the costs of our own sales organizations in the U.S., equally share 
certain other costs associated with commercializing PADCEV in the U.S., and equally share in any profits realized in the 
U.S. Outside the U.S., we have commercialization rights in all other countries in North and South America, and Astellas 
has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa. The agreement is 
intended to provide that we and Astellas will effectively equally share in costs incurred and any profits realized in all of 
these markets. Cost and profit sharing in Canada, the United Kingdom, Germany, France, Spain and Italy will be based 
on product sales and costs of commercialization. In the remaining markets, the commercializing party will bear costs and 
will pay the other party a royalty rate applied to net sales of the product based on a rate intended to approximate an equal 
profit share for both parties.
TUKYSA®

TUKYSA is an oral, small molecule tyrosine kinase inhibitor, or TKI, that is highly selective for HER2, a growth 

factor receptor overexpressed in certain cancers. HER2 mediates cell growth, differentiation and survival. Tumors that 
over-express HER2 are generally more aggressive and historically have been associated with poor overall survival, 
compared with HER2-negative cancers. In April 2020, TUKYSA received approval from the FDA in combination with 
trastuzumab and capecitabine for the treatment of adult patients with advanced unresectable or metastatic HER2-positive 
breast cancer, including patients with brain metastases, who have received one or more prior anti-HER2-based regimens 
in the metastatic setting. FDA approval of TUKYSA was supported by data from the HER2CLIMB trial.

4

5

The application for approval was reviewed under the FDA's RTOR pilot program. We also participated in the 
Project Orbis initiative of the FDA OCE which provides a framework for concurrent submission and review of oncology 
products among international partners. Under this program we have received approval in the U.S., Canada, Australia, 
Singapore, and Switzerland. In February 2021, the EC granted marketing authorization for TUKYSA in combination 
with trastuzumab and capecitabine for the treatment of adult patients with HER2-positive locally advanced or metastatic 
breast cancer who have received at least two prior anti-HER2 treatment regimens. This approval is valid in all countries 
of the European Union as well as Norway, Liechtenstein, Iceland and Northern Ireland. In Europe, we have begun 
marketing TUKYSA in Austria, France, Germany and Switzerland. Additionally, in February 2021, the UK Medicines 
and Healthcare products Regulatory Agency, or MHRA, granted a Great Britain marketing authorization for TUKYSA. 

We are responsible for commercializing TUKYSA in the U.S., Canada and Europe. In September 2020, we 

entered into a license and collaboration agreement, or the TUKYSA Agreement, with Merck & Co., Inc., or Merck, 
pursuant to which we granted exclusive rights to Merck to commercialize TUKYSA in Asia, the Middle East and Latin 
America and other regions outside of the U.S., Canada and Europe. The collaboration is intended to accelerate global 
availability of TUKYSA. 
TIVDAK®

TIVDAK is an ADC targeting tissue factor, a protein expressed on the surface of cells that has increased levels 

of expression on multiple solid tumors. The FDA granted accelerated approval of TIVDAK in September 2021 for the 
treatment of adult patients with recurrent or metastatic cervical cancer with disease progression on or after 
chemotherapy. FDA approval was supported by data from the innovaTV 204 trial where it was evaluated in patients with 
recurrent or metastatic cervical cancer who had received no more than two prior systemic regimens in the recurrent or 
metastatic setting, including at least one prior platinum-based chemotherapy regimen. Continued approval may be 
contingent upon verification and description of clinical benefit in confirmatory trials.

TIVDAK is being co-developed with Genmab A/S, or Genmab, under an agreement in which the companies 

share all costs and profits for the product on a 50:50 basis. Under a joint commercialization agreement, we and Genmab 
co-promote TIVDAK in the U.S. and we record net sales of TIVDAK in the U.S. and are responsible for leading U.S. 
distribution activities. The companies will each maintain 50% of the sales representatives and medical science liaisons, 
equally share those and certain other costs associated with commercializing TIVDAK in the U.S., and equally share in 
any profits realized in the U.S. Outside the U.S., we have commercialization rights in the rest of the world except for 
Japan, where Genmab has commercialization rights. In Europe, China, and Japan, we and Genmab will equally share 
50% of the costs associated with commercializing TIVDAK as well as any profits realized in these markets. In markets 
outside the U.S. other than Europe, China, and Japan, aside from certain costs specified in the agreement, we will be 
solely responsible for all costs associated with commercializing TIVDAK, and will pay Genmab a royalty based on a 
percentage of aggregate net sales.

Our Clinical Development Pipeline

The following table summarizes the key clinical trials of ADCETRIS, PADCEV, TUKYSA and TIVDAK:

Product 

Tumor Type

Setting

Trial Name / Description

Diffuse large B-cell lymphoma 

ECHELON-3: In combination with lenalidomide and 

Phase 3*

Hodgkin lymphoma

In combination with nivolumab, doxorubicin and 

Phase 2

Peripheral T-cell lymphoma (< 10% 

In combination with cyclophosphamide, doxorubicin 

Phase 2*

CheckMate 744: In combination with nivolumab1

Phase 2 

rituximab

dacarbazine

Monotherapy

Retreatment

and prednisone

inhibitor treatment

chemotherapy alone

pembrolizumab

pembrolizumab

EV-104: intravesical 

EV-202: Monotherapy

In combination with pembrolizumab | post PD-1 

Phase 2

EV-302: In combination with pembrolizumab vs 

Phase 3*

1L/2L

EV-103: Monotherapy and in combination with 

Phase 2*

EV-303/KEYNOTE-905: In combination with 

Phase 3*

pembrolizumab | cisplatin-ineligible

EV-304/KEYNOTE-B15: In combination with 

Phase 3*

pembrolizumab | cisplatin-eligible

EV-103: Monotherapy and in combination with 

Phase 2

ADCETRIS 

(brentuximab 

vedotin)

Hodgkin lymphoma or Peripheral T-cell 

lymphoma, unfit for chemotherapy

Hodgkin lymphoma or Peripheral T-cell 

lymphoma

Hodgkin lymphoma (pediatrics)

CD30 expression)

Metastatic solid tumors

Locally advanced or metastatic 

urothelial cancer

PADCEV 

(enfortumab 

vedotin-ejfv)2

Muscle invasive bladder cancer

Non-muscle invasive bladder cancer

Locally advanced or metastatic solid 

tumors 

HER2+ metastatic breast cancer 

High risk HER2+ breast cancer

HER2+ metastatic breast cancer

HER2CLIMB-02: In combination with T-DM1

COMPASSHER2 RD4: In combination with T-DM1

maintenance

HER2CLIMB-05: In combination with 

trastuzumab and pertuzumab

TUKYSA 

(tucatinib)

HER2+ metastatic breast cancer

HER2CLIMB-04: In combination with 

Phase 2

trastuzumab deruxtecan

HER2+ metastatic colorectal cancer

HER2+ gastroesophogeal cancer

MOUNTAINEER: In combination with trastuzumab

Phase 2* 

MOUNTAINEER-02: In combination trastuzumab, 

Phase 2*

Metastatic solid tumors HER2 

alterations

HER2+ gastric cancer

TIVDAK

(tisotumab vedotin-

tftv)3

Locally advanced solid tumors

Metastatic solid tumors

Platinum-resistant ovarian cancer

ramucirumab and chemotherapy

In combination trastuzumab**

In combination with trastuzumab and other anti-

cancer agents

innovaTV 301: Monotherapy

agents

innovaTV 206: (Japan only)

innovaTV 207: Monotherapy or in combination

innovaTV 208: Monotherapy

Metastatic/recurrent cervical cancer

innovaTV 205: In combination with other anti-cancer 

Phase 1/2

1L: front/first-line     2L:second-line     R/R:relapsed or refractory     ADJ = adjuvant     P = perioperative     BCGU= BCG unresponsive

* indicates registrational intent

**HR-positive  metastatic breast cancer also in combination with fulvestrant

Clinical collaboration with Bristol-Myers Squibb

50:50 co-development and commercial collaboration with Astellas

50:50 co-development and commercial collaboration with Genmab

1.

2.

3.

4.

Conducted in collaboration with Alliance for Clinical Trials in Oncology and National Cancer Institute (NCI)

R/R

1L

1L

R/R

R/R

1L

R/R

1L

P

P

P

BCGU

 2L+

1L/2L

ADJ

1L

2L+

R/R

2L

2L

1L

2L/3L

1L/2L

2L/3L

R/R

2L

Development 

Status

Phase 2

Phase 2*

Phase 1

Phase 2

Phase 3*

Phase 3* 

Phase 3*

Phase 2

Phase 1

Phase 3*

Phase 2 

Phase 2 

Phase 2 

6

7

Project Orbis initiative of the FDA OCE which provides a framework for concurrent submission and review of oncology 

products among international partners. Under this program we have received approval in the U.S., Canada, Australia, 

Singapore, and Switzerland. In February 2021, the EC granted marketing authorization for TUKYSA in combination 

with trastuzumab and capecitabine for the treatment of adult patients with HER2-positive locally advanced or metastatic 

breast cancer who have received at least two prior anti-HER2 treatment regimens. This approval is valid in all countries 

of the European Union as well as Norway, Liechtenstein, Iceland and Northern Ireland. In Europe, we have begun 

marketing TUKYSA in Austria, France, Germany and Switzerland. Additionally, in February 2021, the UK Medicines 

and Healthcare products Regulatory Agency, or MHRA, granted a Great Britain marketing authorization for TUKYSA. 

We are responsible for commercializing TUKYSA in the U.S., Canada and Europe. In September 2020, we 

entered into a license and collaboration agreement, or the TUKYSA Agreement, with Merck & Co., Inc., or Merck, 

pursuant to which we granted exclusive rights to Merck to commercialize TUKYSA in Asia, the Middle East and Latin 

America and other regions outside of the U.S., Canada and Europe. The collaboration is intended to accelerate global 

availability of TUKYSA. 

TIVDAK®

TIVDAK is an ADC targeting tissue factor, a protein expressed on the surface of cells that has increased levels 

of expression on multiple solid tumors. The FDA granted accelerated approval of TIVDAK in September 2021 for the 

treatment of adult patients with recurrent or metastatic cervical cancer with disease progression on or after 

chemotherapy. FDA approval was supported by data from the innovaTV 204 trial where it was evaluated in patients with 

recurrent or metastatic cervical cancer who had received no more than two prior systemic regimens in the recurrent or 

metastatic setting, including at least one prior platinum-based chemotherapy regimen. Continued approval may be 

contingent upon verification and description of clinical benefit in confirmatory trials.

TIVDAK is being co-developed with Genmab A/S, or Genmab, under an agreement in which the companies 

share all costs and profits for the product on a 50:50 basis. Under a joint commercialization agreement, we and Genmab 

co-promote TIVDAK in the U.S. and we record net sales of TIVDAK in the U.S. and are responsible for leading U.S. 

distribution activities. The companies will each maintain 50% of the sales representatives and medical science liaisons, 

equally share those and certain other costs associated with commercializing TIVDAK in the U.S., and equally share in 

any profits realized in the U.S. Outside the U.S., we have commercialization rights in the rest of the world except for 

Japan, where Genmab has commercialization rights. In Europe, China, and Japan, we and Genmab will equally share 

50% of the costs associated with commercializing TIVDAK as well as any profits realized in these markets. In markets 

outside the U.S. other than Europe, China, and Japan, aside from certain costs specified in the agreement, we will be 

solely responsible for all costs associated with commercializing TIVDAK, and will pay Genmab a royalty based on a 

percentage of aggregate net sales.

The application for approval was reviewed under the FDA's RTOR pilot program. We also participated in the 

Our Clinical Development Pipeline

The following table summarizes the key clinical trials of ADCETRIS, PADCEV, TUKYSA and TIVDAK:

Product 

Tumor Type

Setting

Trial Name / Description

ADCETRIS 
(brentuximab 
vedotin)

Diffuse large B-cell lymphoma 

Hodgkin lymphoma

Hodgkin lymphoma or Peripheral T-cell 
lymphoma, unfit for chemotherapy

Hodgkin lymphoma or Peripheral T-cell 
lymphoma

Hodgkin lymphoma (pediatrics)

Peripheral T-cell lymphoma (< 10% 
CD30 expression)

Metastatic solid tumors

Locally advanced or metastatic 
urothelial cancer

PADCEV 
(enfortumab 
vedotin-ejfv)2

Muscle invasive bladder cancer

Non-muscle invasive bladder cancer

Locally advanced or metastatic solid 
tumors 

HER2+ metastatic breast cancer 

High risk HER2+ breast cancer

HER2+ metastatic breast cancer

HER2+ metastatic breast cancer

HER2+ metastatic colorectal cancer

HER2+ gastroesophogeal cancer

Metastatic solid tumors HER2 
alterations
HER2+ gastric cancer

TUKYSA 
(tucatinib)

TIVDAK
(tisotumab vedotin-
tftv)3

Metastatic/recurrent cervical cancer

Locally advanced solid tumors

Metastatic solid tumors

Platinum-resistant ovarian cancer

R/R

1L

1L

R/R

R/R

1L

R/R

1L

1L/2L

P

P

P

BCGU

 2L+

1L/2L

ADJ

1L
maintenance

2L+

R/R

2L

2L

1L

2L/3L

1L/2L

2L/3L

R/R

2L

ECHELON-3: In combination with lenalidomide and 
rituximab

In combination with nivolumab, doxorubicin and 
dacarbazine

Monotherapy

Retreatment

CheckMate 744: In combination with nivolumab1
In combination with cyclophosphamide, doxorubicin 
and prednisone

In combination with pembrolizumab | post PD-1 
inhibitor treatment

EV-302: In combination with pembrolizumab vs 
chemotherapy alone
EV-103: Monotherapy and in combination with 
pembrolizumab
EV-303/KEYNOTE-905: In combination with 
pembrolizumab | cisplatin-ineligible

EV-304/KEYNOTE-B15: In combination with 
pembrolizumab | cisplatin-eligible

EV-103: Monotherapy and in combination with 
pembrolizumab

EV-104: intravesical 

EV-202: Monotherapy

HER2CLIMB-02: In combination with T-DM1
COMPASSHER2 RD4: In combination with T-DM1
HER2CLIMB-05: In combination with 
trastuzumab and pertuzumab

HER2CLIMB-04: In combination with 
trastuzumab deruxtecan

Development 
Status

Phase 3*

Phase 2

Phase 2

Phase 2*

Phase 2 

Phase 2*

Phase 2

Phase 3*

Phase 2*

Phase 3*

Phase 3*

Phase 2

Phase 1

Phase 2

Phase 3*

Phase 3* 

Phase 3*

Phase 2

MOUNTAINEER: In combination with trastuzumab

Phase 2* 

MOUNTAINEER-02: In combination trastuzumab, 
ramucirumab and chemotherapy

In combination trastuzumab**

In combination with trastuzumab and other anti-
cancer agents

innovaTV 301: Monotherapy
innovaTV 205: In combination with other anti-cancer 
agents

innovaTV 206: (Japan only)

innovaTV 207: Monotherapy or in combination

innovaTV 208: Monotherapy

Phase 2*

Phase 2

Phase 1

Phase 3*
Phase 1/2

Phase 2 

Phase 2 

Phase 2 

1L: front/first-line     2L:second-line     R/R:relapsed or refractory     ADJ = adjuvant     P = perioperative     BCGU= BCG unresponsive
* indicates registrational intent
**HR-positive  metastatic breast cancer also in combination with fulvestrant

1.
2.
3.
4.

Clinical collaboration with Bristol-Myers Squibb
50:50 co-development and commercial collaboration with Astellas
50:50 co-development and commercial collaboration with Genmab
Conducted in collaboration with Alliance for Clinical Trials in Oncology and National Cancer Institute (NCI)

6

7

The table below lists the clinical trials of our development candidates. 

Product Candidates

Tumor Type

Disitamab Vedotin

Ladiratuzumab 
Vedotin1

HER2-expressing metastatic urothelial 
cancer

Metastatic triple-negative breast cancer

Metastatic solid tumors

Metastatic breast cancer

SEA-CD40

Pancreatic cancer

Setting

2L/3L

1L

R/R

R/R
1L

Melanoma and non-small cell lung cancer

1L/R/R

SEA-TGT

SEA-BCMA

Solid tumors and lymphoma

Multiple myeloma

SEA-CD70

SGN-CD228A

SGN-B6A

SGN-STNV

SGN-PDL1V

SGN-B7H4V

SGN-ALPV

MDS / AML

Solid tumors

Solid tumors

Solid tumors

Solid tumors

Solid tumors

Solid tumors

R/R

R/R

R/R

R/R

R/R

R/R

R/R

R/R

R/R

Trial Name / Description

Monotherapy

In combination with pembrolizumab

Monotherapy

Monotherapy

In combination with other anti-cancer agents

In combination with pembrolizumab and other ant-cancer 
agents
Monotherapy or in combination with sasanlimab

Monotherapy and in combination with other anti-cancer 
agents

Monotherapy

Monotherapy

Monotherapy

Monotherapy

Monotherapy

Monotherapy

Monotherapy

Development 
Status

Phase 2

Phase 2

Phase 2

Phase 1

Phase 1

Phase 2

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

1L: front/first-line     2L:second-line     3L: third-line    R/R:relapsed or refractory 
1. 50:50 co-development and commercial collaboration with Merck

Clinical Development Status

ADCETRIS (brentuximab vedotin) 

Beyond our current labeled indications, we are evaluating ADCETRIS as monotherapy and in combination with 
other agents in ongoing trials, including several potential registration-enabling trials such as the ECHELON-3 phase 3 
trial in relapsed or refractory diffuse large B-cell lymphoma. In addition to our corporate-sponsored trials there are 
numerous investigator-sponsored trials of ADCETRIS in the United States. The investigator-sponsored trials include the 
use of ADCETRIS in a number of malignant hematologic indications and in solid tumors.  

In February 2022, the Company announced that the phase 3 ECHELON-1 clinical trial demonstrated a statistically 

significant improvement in OS (p=0.009) in patients with advanced Hodgkin lymphoma following treatment with 
ADCETRIS in combination with chemotherapy. With approximately six years median follow up, patients receiving 
ADCETRIS plus doxorubicin, vinblastine, and dacarbazine (A+AVD) in the frontline setting had a 41 percent reduction 
in the risk of death (HR 0.59; [95% CI: 0.396 to 0.879]) compared with patients receiving doxorubicin, bleomycin, 
vinblastine, and dacarbazine (ABVD). The safety profile of ADCETRIS was consistent with previous studies and no new 
safety events were observed.

PADCEV (enfortumab vedotin-ejfv)

In collaboration with Astellas we are conducting or planning to conduct clinical trials across the spectrum of 
bladder cancer including ongoing trials in frontline metastatic urothelial cancer and muscle invasive bladder cancer. We 
are planning to conduct a trial in non-muscle invasive bladder cancer. In addition, we are conducting a trial in a range of 
other solid tumors. 

In September 2020, we announced that the EV-301 trial, which compared PADCEV to chemotherapy in adult 

patients with locally advanced or metastatic urothelial cancer who were previously treated with platinum-based 
chemotherapy and a PD-1/L1 inhibitor, met its primary endpoint of overall survival, or OS, compared to chemotherapy. 
For patients in the PADCEV arm of the trial, rash, fatigue, and decreased neutrophil count were the most frequent Grade 
3 or greater treatment-related adverse events occurring in more than 5 percent of patients. In July 2021, the FDA 
converted PADCEV's accelerated approval to regular approval based on data from the EV-301 trial. 

In March 2021, the EMA accepted for review a Marketing Authorization Application for PADCEV based on the 

EV-301 trial. In December 2021, the Committee for Medicinal Products for Human Use, or CHMP, of the European 

Medicines Agency, or EMA, adopted a positive opinion, recommending approval of PADCEV as monotherapy for the 

treatment of adult patients with locally advanced or metastatic urothelial cancer who have previously received platinum-

containing chemotherapy and a PD-1/L1 inhibitor. The European Commission decision-making process has been paused 

for additional CHMP questions related to severe skin reactions in a French compassionate access program. European 

Commission decisions are valid in the European Union Member States, as well as Iceland, Norway and Liechtenstein.  In 

addition, applications are under review for PADCEV approval in Australia, under the FDA's Project Orbis program, as 

well as in Singapore, Brazil and other countries.

In July 2021, the FDA granted regular approval for a new indication for adult patients with locally advanced or 

metastatic urothelial cancer who are ineligible for cisplatin-containing chemotherapy and have previously received one 

or more prior lines of therapy. The approval was based on data from the second cohort of the EV-201 trial. 

PADCEV is also being investigated in first-line metastatic urothelial cancer and earlier stages of bladder cancer. 

We and Astellas are conducting a phase 1b/2 clinical trial, called EV-103, that is a multi-cohort, open-label trial of 

PADCEV alone or in combination with other agents. The trial is evaluating safety, tolerability and activity in locally 

advanced and first- and second-line metastatic urothelial cancer, and was expanded to include muscle invasive bladder 

cancer, or MIBC. 

In February 2020, based on the positive initial results of the dose-escalation cohort and the expansion Cohort A of 

the EV-103 trial, the FDA granted Breakthrough Therapy designation for PADCEV in combination with pembrolizumab 

for the treatment of patients with unresectable locally advanced or metastatic urothelial cancer who are unable to receive 

cisplatin-based chemotherapy in the first-line setting. In April 2020, we announced that, based on discussions with the 

FDA, data from the randomized cohort K in the EV-103 trial, along with other data from the EV-103 trial, could 

potentially support registration under the FDA's accelerated approval pathway. The primary outcome measures are 

objective response rate and duration of response, or DOR. In October 2021, we completed enrollment in cohort K. 

In addition to the potential accelerated approval pathway based on the EV-103 trial, we are conducting a global, 

registrational phase 3 trial, called EV-302, in frontline metastatic urothelial cancer in collaboration with Astellas and 

Merck. We, Astellas and Merck are jointly funding EV-302 and the trial is being conducted by us. EV-302 is an open-

label, randomized phase 3 clinical trial evaluating the combination of PADCEV and pembrolizumab versus 

chemotherapy alone in patients with previously untreated locally advanced or metastatic urothelial cancer. The trial 

includes metastatic urothelial cancer patients who are either eligible or ineligible for cisplatin-based chemotherapy. The 

trial has dual primary endpoints of progression free survival, or PFS, and overall survival, or OS, and is intended to 

support global regulatory submissions and potentially serve as a confirmatory trial if accelerated approval is granted 

based on EV-103. 

In April 2020, we and Astellas entered into an agreement with Merck to evaluate PADCEV in MIBC. Merck has 

amended its ongoing phase 3 KEYNOTE-905/EV-303 registrational trial in cisplatin-ineligible patients with MIBC to 

include an arm evaluating PADCEV in combination with pembrolizumab. In October 2020, we and Astellas entered into 

an agreement with Merck to evaluate PADCEV in combination with pembrolizumab in a phase 3 trial, called 

KEYNOTE-B15/EV-304, to be conducted by Merck in cisplatin-eligible patients with MIBC. This trial was initiated in 

the first quarter of 2021.

In January 2021, we enrolled the first patient in a phase 1 trial, called EV-104, evaluating PADCEV in patients 

with BCG unresponsive non-muscle invasive bladder cancer. 

In January 2020, we and Astellas also initiated a phase 2 clinical trial, called EV-202, to evaluate PADCEV 

monotherapy in solid tumors that have high-levels of Nectin-4 expression, including non-small cell lung, head and neck, 

gastric/esophageal and breast cancers.

TUKYSA (tucatinib)

We are conducting a broad clinical development program for TUKYSA including ongoing and planned trials in 

earlier lines of breast cancer and in other HER2-positive cancers. The positive results of the HER2CLIMB trial served as 

the basis for approval in the U.S., Canada, the European Union as well as other countries. Merck is co-funding a portion 

of the TUKYSA global development plan.

8

9

The table below lists the clinical trials of our development candidates. 

Product Candidates

Tumor Type

Trial Name / Description

Development 

Disitamab Vedotin

cancer

HER2-expressing metastatic urothelial 

Monotherapy

Metastatic triple-negative breast cancer

In combination with pembrolizumab

Ladiratuzumab 

Vedotin1

Metastatic solid tumors

Metastatic breast cancer

SEA-CD40

Pancreatic cancer

In combination with other anti-cancer agents

Melanoma and non-small cell lung cancer

1L/R/R

In combination with pembrolizumab and other ant-cancer 

SEA-TGT

SEA-BCMA

Solid tumors and lymphoma

Multiple myeloma

Monotherapy or in combination with sasanlimab

Monotherapy and in combination with other anti-cancer 

Setting

2L/3L

1L

R/R

R/R

1L

R/R

R/R

R/R

R/R

R/R

R/R

R/R

R/R

R/R

Monotherapy

Monotherapy

agents

agents

Monotherapy

Monotherapy

Monotherapy

Monotherapy

Monotherapy

Monotherapy

Monotherapy

SEA-CD70

SGN-CD228A

SGN-B6A

SGN-STNV

SGN-PDL1V

SGN-B7H4V

SGN-ALPV

MDS / AML

Solid tumors

Solid tumors

Solid tumors

Solid tumors

Solid tumors

Solid tumors

1L: front/first-line     2L:second-line     3L: third-line    R/R:relapsed or refractory 

1. 50:50 co-development and commercial collaboration with Merck

Clinical Development Status

ADCETRIS (brentuximab vedotin) 

Status

Phase 2

Phase 2

Phase 2

Phase 1

Phase 1

Phase 2

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

Phase 1

Beyond our current labeled indications, we are evaluating ADCETRIS as monotherapy and in combination with 

other agents in ongoing trials, including several potential registration-enabling trials such as the ECHELON-3 phase 3 

trial in relapsed or refractory diffuse large B-cell lymphoma. In addition to our corporate-sponsored trials there are 

numerous investigator-sponsored trials of ADCETRIS in the United States. The investigator-sponsored trials include the 

use of ADCETRIS in a number of malignant hematologic indications and in solid tumors.  

In February 2022, the Company announced that the phase 3 ECHELON-1 clinical trial demonstrated a statistically 

significant improvement in OS (p=0.009) in patients with advanced Hodgkin lymphoma following treatment with 

ADCETRIS in combination with chemotherapy. With approximately six years median follow up, patients receiving 

ADCETRIS plus doxorubicin, vinblastine, and dacarbazine (A+AVD) in the frontline setting had a 41 percent reduction 

in the risk of death (HR 0.59; [95% CI: 0.396 to 0.879]) compared with patients receiving doxorubicin, bleomycin, 

vinblastine, and dacarbazine (ABVD). The safety profile of ADCETRIS was consistent with previous studies and no new 

safety events were observed.

PADCEV (enfortumab vedotin-ejfv)

In collaboration with Astellas we are conducting or planning to conduct clinical trials across the spectrum of 

bladder cancer including ongoing trials in frontline metastatic urothelial cancer and muscle invasive bladder cancer. We 

are planning to conduct a trial in non-muscle invasive bladder cancer. In addition, we are conducting a trial in a range of 

other solid tumors. 

In September 2020, we announced that the EV-301 trial, which compared PADCEV to chemotherapy in adult 

patients with locally advanced or metastatic urothelial cancer who were previously treated with platinum-based 

chemotherapy and a PD-1/L1 inhibitor, met its primary endpoint of overall survival, or OS, compared to chemotherapy. 

For patients in the PADCEV arm of the trial, rash, fatigue, and decreased neutrophil count were the most frequent Grade 

3 or greater treatment-related adverse events occurring in more than 5 percent of patients. In July 2021, the FDA 

converted PADCEV's accelerated approval to regular approval based on data from the EV-301 trial. 

In March 2021, the EMA accepted for review a Marketing Authorization Application for PADCEV based on the 

EV-301 trial. In December 2021, the Committee for Medicinal Products for Human Use, or CHMP, of the European 
Medicines Agency, or EMA, adopted a positive opinion, recommending approval of PADCEV as monotherapy for the 
treatment of adult patients with locally advanced or metastatic urothelial cancer who have previously received platinum-
containing chemotherapy and a PD-1/L1 inhibitor. The European Commission decision-making process has been paused 
for additional CHMP questions related to severe skin reactions in a French compassionate access program. European 
Commission decisions are valid in the European Union Member States, as well as Iceland, Norway and Liechtenstein.  In 
addition, applications are under review for PADCEV approval in Australia, under the FDA's Project Orbis program, as 
well as in Singapore, Brazil and other countries.

In July 2021, the FDA granted regular approval for a new indication for adult patients with locally advanced or 
metastatic urothelial cancer who are ineligible for cisplatin-containing chemotherapy and have previously received one 
or more prior lines of therapy. The approval was based on data from the second cohort of the EV-201 trial. 

PADCEV is also being investigated in first-line metastatic urothelial cancer and earlier stages of bladder cancer. 

We and Astellas are conducting a phase 1b/2 clinical trial, called EV-103, that is a multi-cohort, open-label trial of 
PADCEV alone or in combination with other agents. The trial is evaluating safety, tolerability and activity in locally 
advanced and first- and second-line metastatic urothelial cancer, and was expanded to include muscle invasive bladder 
cancer, or MIBC. 

In February 2020, based on the positive initial results of the dose-escalation cohort and the expansion Cohort A of 
the EV-103 trial, the FDA granted Breakthrough Therapy designation for PADCEV in combination with pembrolizumab 
for the treatment of patients with unresectable locally advanced or metastatic urothelial cancer who are unable to receive 
cisplatin-based chemotherapy in the first-line setting. In April 2020, we announced that, based on discussions with the 
FDA, data from the randomized cohort K in the EV-103 trial, along with other data from the EV-103 trial, could 
potentially support registration under the FDA's accelerated approval pathway. The primary outcome measures are 
objective response rate and duration of response, or DOR. In October 2021, we completed enrollment in cohort K. 

In addition to the potential accelerated approval pathway based on the EV-103 trial, we are conducting a global, 

registrational phase 3 trial, called EV-302, in frontline metastatic urothelial cancer in collaboration with Astellas and 
Merck. We, Astellas and Merck are jointly funding EV-302 and the trial is being conducted by us. EV-302 is an open-
label, randomized phase 3 clinical trial evaluating the combination of PADCEV and pembrolizumab versus 
chemotherapy alone in patients with previously untreated locally advanced or metastatic urothelial cancer. The trial 
includes metastatic urothelial cancer patients who are either eligible or ineligible for cisplatin-based chemotherapy. The 
trial has dual primary endpoints of progression free survival, or PFS, and overall survival, or OS, and is intended to 
support global regulatory submissions and potentially serve as a confirmatory trial if accelerated approval is granted 
based on EV-103. 

In April 2020, we and Astellas entered into an agreement with Merck to evaluate PADCEV in MIBC. Merck has 

amended its ongoing phase 3 KEYNOTE-905/EV-303 registrational trial in cisplatin-ineligible patients with MIBC to 
include an arm evaluating PADCEV in combination with pembrolizumab. In October 2020, we and Astellas entered into 
an agreement with Merck to evaluate PADCEV in combination with pembrolizumab in a phase 3 trial, called 
KEYNOTE-B15/EV-304, to be conducted by Merck in cisplatin-eligible patients with MIBC. This trial was initiated in 
the first quarter of 2021.

In January 2021, we enrolled the first patient in a phase 1 trial, called EV-104, evaluating PADCEV in patients 

with BCG unresponsive non-muscle invasive bladder cancer. 

In January 2020, we and Astellas also initiated a phase 2 clinical trial, called EV-202, to evaluate PADCEV 
monotherapy in solid tumors that have high-levels of Nectin-4 expression, including non-small cell lung, head and neck, 
gastric/esophageal and breast cancers.

TUKYSA (tucatinib)

We are conducting a broad clinical development program for TUKYSA including ongoing and planned trials in 

earlier lines of breast cancer and in other HER2-positive cancers. The positive results of the HER2CLIMB trial served as 
the basis for approval in the U.S., Canada, the European Union as well as other countries. Merck is co-funding a portion 
of the TUKYSA global development plan.

8

9

In December 2021, we presented new data at the San Antonio Breast Cancer Symposium from exploratory 
analyses from the pivotal HER2CLIMB trial showing that improvement in OS was maintained after an additional 15.6 
months of follow-up when TUKYSA was combined with trastuzumab and capecitabine in patients with HER2-positive 
metastatic breast cancer who had stable or active brain metastases. After a median follow-up of 29.6 months, the 
TUKYSA regimen improved OS for patients with brain metastases by 9.1 months compared to trastuzumab and 
capecitabine alone (21.6 months vs. 12.5 months) (HR: 0.60; [95% CI: 0.44, 0.81]). The benefit extended to patients with 
active or stable brain metastases.

In October 2019, we initiated a phase 3 randomized trial, called HER2CLIMB-02, evaluating TUKYSA versus 

placebo, each in combination with T-DM1, for patients with unresectable locally advanced or metastatic HER2-positive 
breast cancer, including those with brain metastases, who have had prior treatment with a taxane and trastuzumab. 

We are supporting a U.S. cooperative group, the Alliance for Clinical Trials in Oncology, that is conducting a 

phase 3 randomized trial, called CompassHER2 RD, which is evaluating TUKYSA in combination with T-DM1 in the 
adjuvant setting for patients with high-risk, HER2-positive breast cancer.

We are also conducting a phase 2 trial, called HER2CLIMB-04, evaluating TUKYSA in combination with 

trastuzumab deruxtecan in previously treated locally-advanced or metastatic HER2-positive breast cancer.

We are also initiating a phase 3 trial, called HER2CLIMB-05, evaluating TUKYSA compared to placebo in 

future costs and profits worldwide for LV.

combination with trastuzumab and pertuzumab in the frontline maintenance setting for patients with metastatic HER2-
positive breast cancer.

We are conducting a phase 2 trial, called MOUNTAINEER, evaluating TUKYSA in combination with 
trastuzumab in patients with HER2-positive, RAS wild-type metastatic colorectal cancer after treatment with first- and 
second-line standard-of-care therapies. Initial results from 23 patients were presented at the ESMO 2019 Congress that 
demonstrated encouraging antitumor activity. In September 2021, we completed enrollment in the trial. We believe the 
trial could potentially support an application for accelerated approval in the U.S. 

We are conducting a phase 2/3 trial, called MOUNTAINEER-02, in combination with trastuzumab, ramucirumab 
and paclitaxel in second-line HER2-positive metastatic gastroesophageal cancer. We have also initiated a phase 1b trial 
evaluating TUKYSA in combination with trastuzumab and oxaliplatin based chemotherapy in first-line HER2-positive 
unresectable or metastatic colorectal, gastric, esophageal and gallbladder cancers.

TIVDAK (tisotumab vedotin-tftv)

In collaboration with Genmab, we are developing TIVDAK for metastatic cervical cancer and are evaluating it for 

other solid tumors. In September 2021, we received FDA accelerated approval of TIVDAK for the treatment of adult 
patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy. Continued 
approval may be contingent upon verification and description of clinical benefit in confirmatory trials.

In January 2021, we and Genmab initiated a phase 3 clinical trial, called innovaTV 301, to evaluate TIVDAK 

compared to chemotherapy in patients with recurrent or metastatic cervical cancer who have received one or two prior 
lines of therapy. innovaTV 301 is intended to support global regulatory applications for potential approvals in regions 
where innovaTV 204 does not support approval and to serve as a confirmatory trial in the U.S.

Additionally, we are conducting a phase 2 clinical trial, called innovaTV 207, for patients with relapsed, locally 

advanced or metastatic solid tumors and a phase 2 clinical trial, called innovaTV 208, for patients with platinum-resistant 

ovarian cancer. 

Disitamab Vedotin

urothelial cancer. 

Ladiratuzumab Vedotin

In September 2021, we and RemeGen entered into an exclusive license agreement to develop and commercialize 

disitamab vedotin, a novel HER2-targeted ADC, which has shown anti-tumor activity in several solid tumor types across 

a spectrum of HER2 levels, including urothelial, gastric and breast cancer, in all countries outside of RemeGen’s 

territory of Asia, excluding Japan and Singapore. We have a broad clinical development program planned including an 

ongoing phase 2 trial evaluating disitamab vedotin as monotherapy in previously treated HER2-expressing metastatic 

We are developing ladiratuzumab vedotin, or LV, an ADC targeting LIV-1, which is currently being evaluated in 

phase 1 and phase 2 clinical trials both as monotherapy and in combination with other agents for patients with metastatic 

breast cancer and select solid tumors with high LIV-1 expression. In September 2020, we and Merck entered into a 

license and collaboration agreement, or the LV Agreement, under which the companies will jointly develop and share 

Other clinical and early-stage product candidates

We are advancing a pipeline of early-stage clinical candidates as well as multiple preclinical and research-stage 

programs that employ our proprietary technologies. We submitted three Investigational New Drug applications to the 

FDA in 2021.

Our Antibody-Drug Conjugate (ADC) Technology

ADCETRIS, PADCEV, TIVDAK and many product candidates in our clinical-stage pipeline utilize our ADC 

technology. ADCs are monoclonal antibodies that are linked to cytotoxic, or cell-killing, agents. Our ADCs utilize 

monoclonal antibodies that internalize within target cells after binding to a specified cell-surface receptor. Enzymes 

present inside the cell catalyze the release of the cytotoxic agent from the monoclonal antibody, which then results in the 

desired activity, specific killing of the target cell.

A key component of our ADCs are the linkers that attach the cell-killing agent to the monoclonal antibody. The 

drug linkers are designed to deliver the cytotoxic agent to tumors by virtue of the monoclonal antibody binding to the 

intended cell surface receptor on the target cell. The cytotoxic agent is released when the ADC internalizes within the 

target cell, resulting in cell killing. This targeted delivery of the cell-killing agent is intended to maximize delivery of the 

cytotoxic agent to targeted cells while minimizing toxicity to normal tissues. Our most advanced ADCs, including 

ADCETRIS, PADCEV, TIVDAK, disitamab vedotin, and ladiratuzumab vedotin, use our proprietary auristatin-based 

ADC technology. Auristatins are microtubule disrupting agents. In contrast to natural products that are often more 

difficult to produce and link to antibodies, the cytotoxic drugs used in our ADCs are synthetically produced and are 

readily scalable for manufacturing. This technology is also the basis of our ADC collaborations. We own or hold 

exclusive or partially-exclusive licenses to multiple issued patents and patent applications covering our ADC technology. 

We are also conducting a phase 2 clinical trial, called innovaTV 205, evaluating TIVDAK as monotherapy and in 

We continue to evaluate new linkers, antibody formats and cell-killing agents for use in our ADC programs.

combination with certain other anti-cancer agents for first- and second-line treatment of patients with recurrent or 
advanced cervical cancer. In September 2021, interim results were presented at the European Society for Medical 
Oncology Annual Congress from two cohorts of the phase 1b/2 innovaTV 205 trial, evaluating TIVDAK as combination 
therapy for recurrent or metastatic cervical cancer. Both combinations showed encouraging, durable anti-tumor activity 
and demonstrated a manageable and acceptable safety profile. The combination with carboplatin in first-line treatment 
demonstrated an objective response rate, or ORR, of 55 percent and the median duration of response, or DOR, was 8.3 
months. Grade 3 or greater adverse events, or AEs, occurred in 78.8 percent of patients with 57.6 percent of patients 
experiencing Grade 3 or greater AEs related to treatment with TIVDAK. The combination with pembrolizumab in 
patients who had received 1-2 prior systemic therapies achieved an ORR of 38 percent and a median DOR of 13.8 
months.

10

11

In December 2021, we presented new data at the San Antonio Breast Cancer Symposium from exploratory 

analyses from the pivotal HER2CLIMB trial showing that improvement in OS was maintained after an additional 15.6 

months of follow-up when TUKYSA was combined with trastuzumab and capecitabine in patients with HER2-positive 

metastatic breast cancer who had stable or active brain metastases. After a median follow-up of 29.6 months, the 

TUKYSA regimen improved OS for patients with brain metastases by 9.1 months compared to trastuzumab and 

capecitabine alone (21.6 months vs. 12.5 months) (HR: 0.60; [95% CI: 0.44, 0.81]). The benefit extended to patients with 

active or stable brain metastases.

In October 2019, we initiated a phase 3 randomized trial, called HER2CLIMB-02, evaluating TUKYSA versus 

placebo, each in combination with T-DM1, for patients with unresectable locally advanced or metastatic HER2-positive 

breast cancer, including those with brain metastases, who have had prior treatment with a taxane and trastuzumab. 

We are supporting a U.S. cooperative group, the Alliance for Clinical Trials in Oncology, that is conducting a 

phase 3 randomized trial, called CompassHER2 RD, which is evaluating TUKYSA in combination with T-DM1 in the 

adjuvant setting for patients with high-risk, HER2-positive breast cancer.

We are also conducting a phase 2 trial, called HER2CLIMB-04, evaluating TUKYSA in combination with 

trastuzumab deruxtecan in previously treated locally-advanced or metastatic HER2-positive breast cancer.

We are also initiating a phase 3 trial, called HER2CLIMB-05, evaluating TUKYSA compared to placebo in 

combination with trastuzumab and pertuzumab in the frontline maintenance setting for patients with metastatic HER2-

positive breast cancer.

We are conducting a phase 2 trial, called MOUNTAINEER, evaluating TUKYSA in combination with 

trastuzumab in patients with HER2-positive, RAS wild-type metastatic colorectal cancer after treatment with first- and 

second-line standard-of-care therapies. Initial results from 23 patients were presented at the ESMO 2019 Congress that 

demonstrated encouraging antitumor activity. In September 2021, we completed enrollment in the trial. We believe the 

trial could potentially support an application for accelerated approval in the U.S. 

We are conducting a phase 2/3 trial, called MOUNTAINEER-02, in combination with trastuzumab, ramucirumab 

and paclitaxel in second-line HER2-positive metastatic gastroesophageal cancer. We have also initiated a phase 1b trial 

evaluating TUKYSA in combination with trastuzumab and oxaliplatin based chemotherapy in first-line HER2-positive 

unresectable or metastatic colorectal, gastric, esophageal and gallbladder cancers.

TIVDAK (tisotumab vedotin-tftv)

In collaboration with Genmab, we are developing TIVDAK for metastatic cervical cancer and are evaluating it for 

other solid tumors. In September 2021, we received FDA accelerated approval of TIVDAK for the treatment of adult 

patients with recurrent or metastatic cervical cancer with disease progression on or after chemotherapy. Continued 

approval may be contingent upon verification and description of clinical benefit in confirmatory trials.

In January 2021, we and Genmab initiated a phase 3 clinical trial, called innovaTV 301, to evaluate TIVDAK 

compared to chemotherapy in patients with recurrent or metastatic cervical cancer who have received one or two prior 

lines of therapy. innovaTV 301 is intended to support global regulatory applications for potential approvals in regions 

where innovaTV 204 does not support approval and to serve as a confirmatory trial in the U.S.

We are also conducting a phase 2 clinical trial, called innovaTV 205, evaluating TIVDAK as monotherapy and in 

combination with certain other anti-cancer agents for first- and second-line treatment of patients with recurrent or 

advanced cervical cancer. In September 2021, interim results were presented at the European Society for Medical 

Oncology Annual Congress from two cohorts of the phase 1b/2 innovaTV 205 trial, evaluating TIVDAK as combination 

therapy for recurrent or metastatic cervical cancer. Both combinations showed encouraging, durable anti-tumor activity 

and demonstrated a manageable and acceptable safety profile. The combination with carboplatin in first-line treatment 

demonstrated an objective response rate, or ORR, of 55 percent and the median duration of response, or DOR, was 8.3 

months. Grade 3 or greater adverse events, or AEs, occurred in 78.8 percent of patients with 57.6 percent of patients 

experiencing Grade 3 or greater AEs related to treatment with TIVDAK. The combination with pembrolizumab in 

patients who had received 1-2 prior systemic therapies achieved an ORR of 38 percent and a median DOR of 13.8 

months.

Additionally, we are conducting a phase 2 clinical trial, called innovaTV 207, for patients with relapsed, locally 

advanced or metastatic solid tumors and a phase 2 clinical trial, called innovaTV 208, for patients with platinum-resistant 
ovarian cancer. 

Disitamab Vedotin

In September 2021, we and RemeGen entered into an exclusive license agreement to develop and commercialize 

disitamab vedotin, a novel HER2-targeted ADC, which has shown anti-tumor activity in several solid tumor types across 
a spectrum of HER2 levels, including urothelial, gastric and breast cancer, in all countries outside of RemeGen’s 
territory of Asia, excluding Japan and Singapore. We have a broad clinical development program planned including an 
ongoing phase 2 trial evaluating disitamab vedotin as monotherapy in previously treated HER2-expressing metastatic 
urothelial cancer. 

Ladiratuzumab Vedotin

We are developing ladiratuzumab vedotin, or LV, an ADC targeting LIV-1, which is currently being evaluated in 
phase 1 and phase 2 clinical trials both as monotherapy and in combination with other agents for patients with metastatic 
breast cancer and select solid tumors with high LIV-1 expression. In September 2020, we and Merck entered into a 
license and collaboration agreement, or the LV Agreement, under which the companies will jointly develop and share 
future costs and profits worldwide for LV.

Other clinical and early-stage product candidates

We are advancing a pipeline of early-stage clinical candidates as well as multiple preclinical and research-stage 
programs that employ our proprietary technologies. We submitted three Investigational New Drug applications to the 
FDA in 2021.

Our Antibody-Drug Conjugate (ADC) Technology

ADCETRIS, PADCEV, TIVDAK and many product candidates in our clinical-stage pipeline utilize our ADC 

technology. ADCs are monoclonal antibodies that are linked to cytotoxic, or cell-killing, agents. Our ADCs utilize 
monoclonal antibodies that internalize within target cells after binding to a specified cell-surface receptor. Enzymes 
present inside the cell catalyze the release of the cytotoxic agent from the monoclonal antibody, which then results in the 
desired activity, specific killing of the target cell.

A key component of our ADCs are the linkers that attach the cell-killing agent to the monoclonal antibody. The 
drug linkers are designed to deliver the cytotoxic agent to tumors by virtue of the monoclonal antibody binding to the 
intended cell surface receptor on the target cell. The cytotoxic agent is released when the ADC internalizes within the 
target cell, resulting in cell killing. This targeted delivery of the cell-killing agent is intended to maximize delivery of the 
cytotoxic agent to targeted cells while minimizing toxicity to normal tissues. Our most advanced ADCs, including 
ADCETRIS, PADCEV, TIVDAK, disitamab vedotin, and ladiratuzumab vedotin, use our proprietary auristatin-based 
ADC technology. Auristatins are microtubule disrupting agents. In contrast to natural products that are often more 
difficult to produce and link to antibodies, the cytotoxic drugs used in our ADCs are synthetically produced and are 
readily scalable for manufacturing. This technology is also the basis of our ADC collaborations. We own or hold 
exclusive or partially-exclusive licenses to multiple issued patents and patent applications covering our ADC technology. 
We continue to evaluate new linkers, antibody formats and cell-killing agents for use in our ADC programs.

10

11

Our Sugar-Engineered Antibody (SEA) Technology

Our proprietary SEA technology is a method to selectively reduce fucose incorporation in monoclonal antibodies 
as they are produced in cell line-based manufacturing. Our preclinical data show that this results in increased binding to 
innate immune effector cells and enhanced potency in antibody dependent cellular cytotoxicity, or ADCC, in tumor cells. 
We believe this enhancement in ADCC activity may provide improved anti-tumor activity. Our SEA technology is a 
novel approach to modify the activity of monoclonal antibodies that is complementary to our ADC technology.

A key feature of our SEA technology is that no genetic modification of the antibody-producing cell line is 
necessary and standard cell culture conditions can be used while maintaining the underlying manufacturing processes, 
yields and product quality. We believe the SEA approach may be simpler and more cost-effective to implement as 
compared to existing technologies for enhancing antibody effector function, most of which require development of new 
cell lines. 

We have several product candidates that are being evaluated in phase 1 clinical trials that utilize our SEA 
technology including SEA-CD40, SEA-TGT, SEA-BCMA and SEA-CD70. These agents are targeted at a variety of 
cancer types.

Other Technologies

In addition, we utilize other technologies designed to maximize antitumor activity and reduce toxicity of antibody-

based therapies. Genetic engineering enables us to produce antibodies that are optimized for their intended uses. For 
ADCs, we screen and select antibodies that bind to antigens that are differentially expressed on tumor cells versus vital 
normal tissues, rapidly internalized within target cells and have potent anti-tumor activity in preclinical models. For our 
SEA technology we produce antibodies that demonstrate potent anti-tumor activities by virtue of ADCC, or through 
additional immune stimulatory mechanisms that are triggered by the enhanced binding potency to innate immune cells. 
Our ADCs utilize native or engineered conjugation sites to optimize drug attachment. In some cases, we evaluate the use 
of our monoclonal antibodies and ADCs in combination with conventional chemotherapy and other anticancer agents, 
which may result in increased antitumor activity. 

Research Programs

In addition to our pipeline of current product candidates and technologies, we have internal research programs 

directed toward developing new classes of potent anti-tumor and immune stimulatory agents and new ADC linkers, the 
identification of novel drug targets and monoclonal antibodies, and advancing our antibody engineering initiatives.

New Tumor Cell-Killing Agents. We continue to identify and study new agents with anti-tumor mechanisms of 

action that will provide pipeline diversity and complement the auristatins that we currently use in our ADC technology. 
We also seek to develop new drugs that are designed to activate the host immune system by targeting key immune 
stimulatory pathways that can mediate innate or adaptive anti-tumor immune responses. 

New Drug Linkers. We are conducting research with the intent to develop new ADC linkers that are designed to 
provide the appropriate stability in the bloodstream and drug release characteristics to effectively target cancer cells and 
improved cancer cell selectivity and tolerability.

Novel Monoclonal Antibodies and Antigen Targets. We are actively engaged in internal efforts to identify and 

develop monoclonal antibodies, and other therapeutic molecules, to target tumor antigens and important tumor or 
immune pathways. For ADCs, we focus on drug targets that are highly expressed on the surface of cancer cells that have 
the appropriate expression, distribution and internalization properties that make them desirable as monoclonal antibody 
or ADC targets. We may then create and screen panels of cancer-reactive monoclonal antibodies in our laboratories to 
identify those with the desired specificity and optimized drug delivery properties. Additionally, we identify targets that 
play key roles in anti-tumor innate or adaptive immune responses and identify antibodies and other therapeutic molecules 
to stimulate an anti-tumor immune response. We supplement these internal efforts by evaluating opportunities to in-
license targets and antibodies from academic groups and other biotechnology and pharmaceutical companies, such as our 
ongoing collaborations with Astellas and Genmab.

Antibody Engineering. We have substantial internal expertise in antibody engineering including humanization, 

binding affinity optimization, enhancement of immunological function by blocking fucosylation, as well as engineering 

antibodies to improve drug linkage sites for use with our ADC technology. By modifying the number and type of drug-

linkage sites found on our antibodies, we believe that we can improve ADC drug properties and the cost-effectiveness of 

our manufacturing processes for conjugation of ADCs.

Corporate Collaborations 

We enter into collaborations with pharmaceutical and biotechnology companies to advance the development and 

commercialization of our product candidates and to supplement our internal pipeline. We seek collaborations that will 

allow us to retain significant future participation in product sales through either profit-sharing or royalties paid on net 

sales. We also have licensed our technologies to collaborators to be developed with their own antibodies. These 

collaborations benefit us in many ways, including generating cash flow and revenues that partially offset expenditures on 

our internal research and development programs, expanding our knowledge base regarding ADCs across multiple targets 

and antibodies provided by our collaborators and providing us with future pipeline opportunities through co-development 

or opt-in rights to new product candidates.

Takeda ADCETRIS Collaboration

We have an agreement with Takeda for the global co-development of ADCETRIS and the commercialization of 

ADCETRIS by Takeda in its territory. We have commercial rights for ADCETRIS in the U.S. and its territories and in 

Canada. Takeda has commercial rights in the rest of the world. Under the collaboration, we and Takeda can each conduct 

development activities and equally co-fund the cost of certain mutually agreed development activities. Costs associated 

with co-development activities are included in research and development expense.

As of December 31, 2021, we had achieved milestone payments totaling $157.5 million related to regulatory and 

commercial progress by Takeda. As of December 31, 2021, total future potential development and regulatory milestone 

payments to us under this collaboration could total $77.0 million. In addition, we recognize royalty revenues, where 

royalties are based on a percentage of Takeda's net sales of ADCETRIS in its licensed territories, with percentages 

ranging from the mid-teens to the mid-twenties based on annual net sales tiers, and sales-based milestones. Takeda bears 

a portion of third-party royalty costs owed on its sales of ADCETRIS, which is included in royalty revenues. 

Either party may terminate the collaboration agreement if the other party materially breaches the agreement and 

such breach remains uncured. Takeda may terminate the collaboration agreement for any reason upon prior written 

notice to us and we may terminate the collaboration agreement in certain circumstances. The collaboration agreement 

can also be terminated by mutual written consent of the parties. If neither party terminates the collaboration agreement, 

then the agreement automatically terminates on the expiration of all payment obligations.

Astellas PADCEV Collaboration

We have a collaboration agreement with Agensys, Inc., which subsequently became an affiliate of Astellas, to 

jointly research, develop and commercialize ADCs for the treatment of several types of cancer. The collaboration 

encompasses combinations of our ADC technology with fully-human antibodies developed by Astellas to proprietary 

cancer targets. Under this collaboration, we and Astellas are equally co-funding all development costs for PADCEV. 

In 2018, we and Astellas entered into a joint commercialization agreement to govern the global commercialization 

of PADCEV:

•

In the U.S., we and Astellas jointly promote PADCEV. We record sales of PADCEV in the U.S. and are 

responsible for all U.S. distribution activities. The companies each bear the costs of their own sales 

organizations in the U.S., equally share certain other costs associated with commercializing PADCEV in the 

U.S., and equally share in any profits realized in the U.S. 

12

13

Our Sugar-Engineered Antibody (SEA) Technology

Our proprietary SEA technology is a method to selectively reduce fucose incorporation in monoclonal antibodies 

as they are produced in cell line-based manufacturing. Our preclinical data show that this results in increased binding to 

innate immune effector cells and enhanced potency in antibody dependent cellular cytotoxicity, or ADCC, in tumor cells. 

We believe this enhancement in ADCC activity may provide improved anti-tumor activity. Our SEA technology is a 

novel approach to modify the activity of monoclonal antibodies that is complementary to our ADC technology.

A key feature of our SEA technology is that no genetic modification of the antibody-producing cell line is 

necessary and standard cell culture conditions can be used while maintaining the underlying manufacturing processes, 

yields and product quality. We believe the SEA approach may be simpler and more cost-effective to implement as 

compared to existing technologies for enhancing antibody effector function, most of which require development of new 

We have several product candidates that are being evaluated in phase 1 clinical trials that utilize our SEA 

technology including SEA-CD40, SEA-TGT, SEA-BCMA and SEA-CD70. These agents are targeted at a variety of 

cell lines. 

cancer types.

Other Technologies

In addition, we utilize other technologies designed to maximize antitumor activity and reduce toxicity of antibody-

based therapies. Genetic engineering enables us to produce antibodies that are optimized for their intended uses. For 

ADCs, we screen and select antibodies that bind to antigens that are differentially expressed on tumor cells versus vital 

normal tissues, rapidly internalized within target cells and have potent anti-tumor activity in preclinical models. For our 

SEA technology we produce antibodies that demonstrate potent anti-tumor activities by virtue of ADCC, or through 

additional immune stimulatory mechanisms that are triggered by the enhanced binding potency to innate immune cells. 

Our ADCs utilize native or engineered conjugation sites to optimize drug attachment. In some cases, we evaluate the use 

of our monoclonal antibodies and ADCs in combination with conventional chemotherapy and other anticancer agents, 

which may result in increased antitumor activity. 

Research Programs

In addition to our pipeline of current product candidates and technologies, we have internal research programs 

directed toward developing new classes of potent anti-tumor and immune stimulatory agents and new ADC linkers, the 

identification of novel drug targets and monoclonal antibodies, and advancing our antibody engineering initiatives.

New Tumor Cell-Killing Agents. We continue to identify and study new agents with anti-tumor mechanisms of 

action that will provide pipeline diversity and complement the auristatins that we currently use in our ADC technology. 

We also seek to develop new drugs that are designed to activate the host immune system by targeting key immune 

stimulatory pathways that can mediate innate or adaptive anti-tumor immune responses. 

New Drug Linkers. We are conducting research with the intent to develop new ADC linkers that are designed to 

provide the appropriate stability in the bloodstream and drug release characteristics to effectively target cancer cells and 

improved cancer cell selectivity and tolerability.

Novel Monoclonal Antibodies and Antigen Targets. We are actively engaged in internal efforts to identify and 

develop monoclonal antibodies, and other therapeutic molecules, to target tumor antigens and important tumor or 

immune pathways. For ADCs, we focus on drug targets that are highly expressed on the surface of cancer cells that have 

the appropriate expression, distribution and internalization properties that make them desirable as monoclonal antibody 

or ADC targets. We may then create and screen panels of cancer-reactive monoclonal antibodies in our laboratories to 

identify those with the desired specificity and optimized drug delivery properties. Additionally, we identify targets that 

play key roles in anti-tumor innate or adaptive immune responses and identify antibodies and other therapeutic molecules 

to stimulate an anti-tumor immune response. We supplement these internal efforts by evaluating opportunities to in-

license targets and antibodies from academic groups and other biotechnology and pharmaceutical companies, such as our 

ongoing collaborations with Astellas and Genmab.

Antibody Engineering. We have substantial internal expertise in antibody engineering including humanization, 

binding affinity optimization, enhancement of immunological function by blocking fucosylation, as well as engineering 
antibodies to improve drug linkage sites for use with our ADC technology. By modifying the number and type of drug-
linkage sites found on our antibodies, we believe that we can improve ADC drug properties and the cost-effectiveness of 
our manufacturing processes for conjugation of ADCs.

Corporate Collaborations 

We enter into collaborations with pharmaceutical and biotechnology companies to advance the development and 

commercialization of our product candidates and to supplement our internal pipeline. We seek collaborations that will 
allow us to retain significant future participation in product sales through either profit-sharing or royalties paid on net 
sales. We also have licensed our technologies to collaborators to be developed with their own antibodies. These 
collaborations benefit us in many ways, including generating cash flow and revenues that partially offset expenditures on 
our internal research and development programs, expanding our knowledge base regarding ADCs across multiple targets 
and antibodies provided by our collaborators and providing us with future pipeline opportunities through co-development 
or opt-in rights to new product candidates.

Takeda ADCETRIS Collaboration

We have an agreement with Takeda for the global co-development of ADCETRIS and the commercialization of 
ADCETRIS by Takeda in its territory. We have commercial rights for ADCETRIS in the U.S. and its territories and in 
Canada. Takeda has commercial rights in the rest of the world. Under the collaboration, we and Takeda can each conduct 
development activities and equally co-fund the cost of certain mutually agreed development activities. Costs associated 
with co-development activities are included in research and development expense.

As of December 31, 2021, we had achieved milestone payments totaling $157.5 million related to regulatory and 
commercial progress by Takeda. As of December 31, 2021, total future potential development and regulatory milestone 
payments to us under this collaboration could total $77.0 million. In addition, we recognize royalty revenues, where 
royalties are based on a percentage of Takeda's net sales of ADCETRIS in its licensed territories, with percentages 
ranging from the mid-teens to the mid-twenties based on annual net sales tiers, and sales-based milestones. Takeda bears 
a portion of third-party royalty costs owed on its sales of ADCETRIS, which is included in royalty revenues. 

Either party may terminate the collaboration agreement if the other party materially breaches the agreement and 

such breach remains uncured. Takeda may terminate the collaboration agreement for any reason upon prior written 
notice to us and we may terminate the collaboration agreement in certain circumstances. The collaboration agreement 
can also be terminated by mutual written consent of the parties. If neither party terminates the collaboration agreement, 
then the agreement automatically terminates on the expiration of all payment obligations.

Astellas PADCEV Collaboration

We have a collaboration agreement with Agensys, Inc., which subsequently became an affiliate of Astellas, to 

jointly research, develop and commercialize ADCs for the treatment of several types of cancer. The collaboration 
encompasses combinations of our ADC technology with fully-human antibodies developed by Astellas to proprietary 
cancer targets. Under this collaboration, we and Astellas are equally co-funding all development costs for PADCEV. 

In 2018, we and Astellas entered into a joint commercialization agreement to govern the global commercialization 

of PADCEV:

•

In the U.S., we and Astellas jointly promote PADCEV. We record sales of PADCEV in the U.S. and are 
responsible for all U.S. distribution activities. The companies each bear the costs of their own sales 
organizations in the U.S., equally share certain other costs associated with commercializing PADCEV in the 
U.S., and equally share in any profits realized in the U.S. 

12

13

•

Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas 
has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa. The 
agreement is intended to provide that we and Astellas will effectively equally share in costs incurred and any 
profits realized in all of these markets. Cost and profit sharing in Canada, the United Kingdom, Germany, 
France, Spain and Italy will be based on product sales and costs of commercialization. In the remaining 
markets, the commercializing party will bear costs and will pay the other party a royalty rate applied to net 
sales of the product based on a rate intended to approximate an equal profit share for both parties.

Astellas or its affiliates are responsible for overseeing the manufacturing supply chain for PADCEV for 

development and commercial use. However, we are responsible for packaging and labeling in countries in which we sell 
PADCEV. In addition, if the parties determine that a second source is required, we will be responsible for establishing 
such second source, whether internally or through a third party.

Either party may terminate the collaboration agreement if the other party becomes insolvent or the other party 
materially breaches the agreement and such breach remains uncured. Subject to certain restrictions, either party may 
terminate the collaboration agreement for any reason upon prior written notice to the other party. The collaboration 
agreement can also be terminated by mutual written consent of the parties. If neither party exercises its option to 
terminate the collaboration agreement, then the agreement will automatically terminate on the later of the expiration of 
all payment obligations pursuant to the collaboration agreement, or the day upon which we and Astellas cease to develop 
and commercialize products under the agreement. 

Either party may terminate the joint commercialization agreement if the other party becomes insolvent. The joint 
commercialization agreement expires on a country-by-country basis upon complete cessation of the commercialization, 
launch and selling of PADCEV in that country.

Either party may also opt out of co-development and profit-sharing under the collaboration agreement in return for 
receiving milestones and royalties from the continuing party. In addition, either party may opt out of co-development and 
profit-sharing for PADCEV on a country-by-country basis, in return for receiving royalties pursuant to the collaboration 
agreement from the continuing party with respect to that country.

Merck TUKYSA Collaboration

In September 2020, we entered into the TUKYSA Agreement with Merck. Under the TUKYSA Agreement, we 

granted Merck exclusive rights to commercialize TUKYSA in Asia, the Middle East and Latin America and other 
regions outside of the U.S., Canada and Europe. Merck is responsible for marketing applications for approval in its 
territory, supported by the positive results from the HER2CLIMB clinical trial. We retained commercial rights in, and 
will record sales in, the U.S., Canada and Europe. Merck also agreed to co-fund a portion of the TUKYSA global 
development plan, which encompasses several ongoing and planned trials across HER2-positive cancers. We will 
continue to lead ongoing TUKYSA global development operational execution. Merck will solely fund and conduct 
country-specific clinical trials necessary to support anticipated regulatory applications in its territories. Under the 
TUKYSA Agreement, we are responsible for supplying Merck with TUKYSA for the purpose of clinical development 
and commercialization. We received an upfront cash payment from Merck of $125.0 million and also received $85.0 
million in prepaid research and development funding to be applied to Merck’s global development cost sharing 
obligations. We are eligible to receive progress-dependent milestone payments of up to $65.0 million, and are entitled to 
receive tiered royalties on sales of TUKYSA by Merck that begin in the low twenty percent range and escalate based 
sales volume by Merck in its territory. We owe Array Biopharma Inc., or Array, an affiliate of Pfizer, a portion of any 
non-royalty payments received from sublicensing TUKYSA rights, as well as a low double-digit royalty based on net 
sales of TUKYSA by us, and will owe a single-digit royalty based on net sales of TUKYSA by Merck in its territories.

Genmab TIVDAK Collaboration 

We have a collaboration agreement with Genmab to develop and commercialize ADCs targeting tissue factor, 

under which we previously exercised a co-development option for TIVDAK. Under this collaboration, we and Genmab 

are co-funding all development costs for TIVDAK. 

In October 2020, we and Genmab entered into a joint commercialization agreement to govern the global 

commercialization of TIVDAK:

•

In the U.S., we and Genmab co-promote TIVDAK. We record sales of TIVDAK in the U.S. and are 

responsible for leading U.S. distribution activities. The companies will each maintain 50% of the sales 

representatives and medical science liaisons, equally share those and certain other costs associated with 

commercializing TIVDAK in the U.S., and equally share in any profits realized in the U.S.

•

Outside the U.S., we have commercialization rights in the rest of the world except for Japan, where Genmab 

has commercialization rights. In Europe, China, and Japan, we and Genmab will equally share 50% of the 

costs associated with commercializing TIVDAK as well as any profits realized in these markets. In markets 

outside the U.S. other than Europe, China, and Japan, aside from certain costs specified in the agreement, we 

will be solely responsible for all costs associated with commercializing TIVDAK, and will pay Genmab a 

royalty based on a percentage of aggregate net sales ranging from the mid-teens to mid-twenties.

Under the joint commercialization agreement, we are responsible for overseeing the clinical and commercial 

manufacturing of TIVDAK. Either party may terminate the collaboration agreement or the joint commercialization 

agreement if the other party becomes insolvent or materially breaches the applicable agreement and such breach remains 

uncured. In addition, either party may terminate the collaboration agreement if such party’s patent rights subject to the 

agreement are challenged by the other party or its sublicensees. Either party may also opt out of co-development and 

profit-sharing under the collaboration agreement in return for receiving milestones and royalties from the continuing 

party. The opt out provisions of the collaboration agreement may also be applied to the joint commercialization 

agreement. In addition, Genmab may elect to opt out of co-promotion of TIVDAK in the United States by providing us 

with prior written notice.

RemeGen Disitamab Vedotin License Agreement

In September 2021, we and RemeGen entered into an exclusive worldwide licensing agreement to develop and 

commercialize disitamab vedotin, a novel HER2-targeted ADC. Under the terms of the agreement, we made a $200.0 

million upfront payment to obtain exclusive license rights to disitamab vedotin for global development and 

commercialization, outside of RemeGen’s territory. RemeGen retains development and commercialization rights for 

Asia, excluding Japan and Singapore. We will lead global development and RemeGen will fund and operationalize the 

portion of global clinical trials attributable to its territory. RemeGen will also be responsible for all clinical development 

and regulatory submissions specific to its territory. We will pay RemeGen up to $195.0 million in potential milestone 

payments across multiple indications and products based upon the achievement of specified development goals, and up 

to $2.2 billion in potential milestone payments based on the achievement of specified regulatory and commercialization 

goals. RemeGen will be entitled to a tiered, high single digit to mid-teen percentage royalty based on net sales of 

disitamab vedotin in our territory.

The agreement will remain in effect, unless earlier terminated, until the expiration, on a country-by-country and 

product-by-product basis, of the applicable royalty term, at which point the license for such product shall become fully 

paid-up, royalty-free, perpetual, irrevocable and non-exclusive in such country. The agreement also contains customary 

provisions for termination including by us for convenience, by either party in the event of breach of the agreement, 

subject to cure, upon a challenge of a party’s licensed patents or upon the other party’s bankruptcy. RemeGen has 

standard reversion rights in connection with certain early termination events.

14

15

•

Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas 

Genmab TIVDAK Collaboration 

has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa. The 

agreement is intended to provide that we and Astellas will effectively equally share in costs incurred and any 

profits realized in all of these markets. Cost and profit sharing in Canada, the United Kingdom, Germany, 

France, Spain and Italy will be based on product sales and costs of commercialization. In the remaining 

markets, the commercializing party will bear costs and will pay the other party a royalty rate applied to net 

sales of the product based on a rate intended to approximate an equal profit share for both parties.

Astellas or its affiliates are responsible for overseeing the manufacturing supply chain for PADCEV for 

development and commercial use. However, we are responsible for packaging and labeling in countries in which we sell 

PADCEV. In addition, if the parties determine that a second source is required, we will be responsible for establishing 

such second source, whether internally or through a third party.

Either party may terminate the collaboration agreement if the other party becomes insolvent or the other party 

materially breaches the agreement and such breach remains uncured. Subject to certain restrictions, either party may 

terminate the collaboration agreement for any reason upon prior written notice to the other party. The collaboration 

agreement can also be terminated by mutual written consent of the parties. If neither party exercises its option to 

terminate the collaboration agreement, then the agreement will automatically terminate on the later of the expiration of 

all payment obligations pursuant to the collaboration agreement, or the day upon which we and Astellas cease to develop 

and commercialize products under the agreement. 

Either party may terminate the joint commercialization agreement if the other party becomes insolvent. The joint 

commercialization agreement expires on a country-by-country basis upon complete cessation of the commercialization, 

launch and selling of PADCEV in that country.

Either party may also opt out of co-development and profit-sharing under the collaboration agreement in return for 

receiving milestones and royalties from the continuing party. In addition, either party may opt out of co-development and 

profit-sharing for PADCEV on a country-by-country basis, in return for receiving royalties pursuant to the collaboration 

agreement from the continuing party with respect to that country.

Merck TUKYSA Collaboration

In September 2020, we entered into the TUKYSA Agreement with Merck. Under the TUKYSA Agreement, we 

granted Merck exclusive rights to commercialize TUKYSA in Asia, the Middle East and Latin America and other 

regions outside of the U.S., Canada and Europe. Merck is responsible for marketing applications for approval in its 

territory, supported by the positive results from the HER2CLIMB clinical trial. We retained commercial rights in, and 

will record sales in, the U.S., Canada and Europe. Merck also agreed to co-fund a portion of the TUKYSA global 

development plan, which encompasses several ongoing and planned trials across HER2-positive cancers. We will 

continue to lead ongoing TUKYSA global development operational execution. Merck will solely fund and conduct 

country-specific clinical trials necessary to support anticipated regulatory applications in its territories. Under the 

TUKYSA Agreement, we are responsible for supplying Merck with TUKYSA for the purpose of clinical development 

and commercialization. We received an upfront cash payment from Merck of $125.0 million and also received $85.0 

million in prepaid research and development funding to be applied to Merck’s global development cost sharing 

obligations. We are eligible to receive progress-dependent milestone payments of up to $65.0 million, and are entitled to 

receive tiered royalties on sales of TUKYSA by Merck that begin in the low twenty percent range and escalate based 

sales volume by Merck in its territory. We owe Array Biopharma Inc., or Array, an affiliate of Pfizer, a portion of any 

non-royalty payments received from sublicensing TUKYSA rights, as well as a low double-digit royalty based on net 

sales of TUKYSA by us, and will owe a single-digit royalty based on net sales of TUKYSA by Merck in its territories.

We have a collaboration agreement with Genmab to develop and commercialize ADCs targeting tissue factor, 

under which we previously exercised a co-development option for TIVDAK. Under this collaboration, we and Genmab 
are co-funding all development costs for TIVDAK. 

In October 2020, we and Genmab entered into a joint commercialization agreement to govern the global 

commercialization of TIVDAK:

•

•

In the U.S., we and Genmab co-promote TIVDAK. We record sales of TIVDAK in the U.S. and are 
responsible for leading U.S. distribution activities. The companies will each maintain 50% of the sales 
representatives and medical science liaisons, equally share those and certain other costs associated with 
commercializing TIVDAK in the U.S., and equally share in any profits realized in the U.S.

Outside the U.S., we have commercialization rights in the rest of the world except for Japan, where Genmab 
has commercialization rights. In Europe, China, and Japan, we and Genmab will equally share 50% of the 
costs associated with commercializing TIVDAK as well as any profits realized in these markets. In markets 
outside the U.S. other than Europe, China, and Japan, aside from certain costs specified in the agreement, we 
will be solely responsible for all costs associated with commercializing TIVDAK, and will pay Genmab a 
royalty based on a percentage of aggregate net sales ranging from the mid-teens to mid-twenties.

Under the joint commercialization agreement, we are responsible for overseeing the clinical and commercial 
manufacturing of TIVDAK. Either party may terminate the collaboration agreement or the joint commercialization 
agreement if the other party becomes insolvent or materially breaches the applicable agreement and such breach remains 
uncured. In addition, either party may terminate the collaboration agreement if such party’s patent rights subject to the 
agreement are challenged by the other party or its sublicensees. Either party may also opt out of co-development and 
profit-sharing under the collaboration agreement in return for receiving milestones and royalties from the continuing 
party. The opt out provisions of the collaboration agreement may also be applied to the joint commercialization 
agreement. In addition, Genmab may elect to opt out of co-promotion of TIVDAK in the United States by providing us 
with prior written notice.

RemeGen Disitamab Vedotin License Agreement

In September 2021, we and RemeGen entered into an exclusive worldwide licensing agreement to develop and 
commercialize disitamab vedotin, a novel HER2-targeted ADC. Under the terms of the agreement, we made a $200.0 
million upfront payment to obtain exclusive license rights to disitamab vedotin for global development and 
commercialization, outside of RemeGen’s territory. RemeGen retains development and commercialization rights for 
Asia, excluding Japan and Singapore. We will lead global development and RemeGen will fund and operationalize the 
portion of global clinical trials attributable to its territory. RemeGen will also be responsible for all clinical development 
and regulatory submissions specific to its territory. We will pay RemeGen up to $195.0 million in potential milestone 
payments across multiple indications and products based upon the achievement of specified development goals, and up 
to $2.2 billion in potential milestone payments based on the achievement of specified regulatory and commercialization 
goals. RemeGen will be entitled to a tiered, high single digit to mid-teen percentage royalty based on net sales of 
disitamab vedotin in our territory.

The agreement will remain in effect, unless earlier terminated, until the expiration, on a country-by-country and 
product-by-product basis, of the applicable royalty term, at which point the license for such product shall become fully 
paid-up, royalty-free, perpetual, irrevocable and non-exclusive in such country. The agreement also contains customary 
provisions for termination including by us for convenience, by either party in the event of breach of the agreement, 
subject to cure, upon a challenge of a party’s licensed patents or upon the other party’s bankruptcy. RemeGen has 
standard reversion rights in connection with certain early termination events.

14

15

Merck LV Collaboration

In-license Agreements 

In September 2020, we entered into the LV Agreement with Merck. Under the terms of the LV Agreement, we 

granted Merck a co-exclusive worldwide development and commercialization license for LV and agreed to jointly 
develop and commercialize LV on a worldwide basis. We received an upfront cash payment of $600.0 million, and we 
are eligible to receive up to $850.0 million in milestone payments upon the initiation of certain clinical trials and 
regulatory approval in certain major markets, and up to an additional $1.8 billion in milestone payments upon the 
achievement of specified annual global net sales thresholds. Each company is responsible for 50% of global costs to 
develop and commercialize LV and will receive 50% of potential future profits. We will lead regulatory and distribution 
activities, and will record sales, in the United States and Canada. Merck will lead regulatory activities in Europe, and we 
will lead distribution activities and record sales in Europe. We and Merck will co-commercialize LV in the United States 
and Europe. Merck will lead regulatory, promotion and distribution activities, and will record sales, in countries outside 
of the United States, Canada and Europe.

The LV Agreement will remain in effect, unless earlier terminated, until LV is no longer being developed or 

commercialized under the LV Agreement. The LV Agreement also contains customary provisions for termination by 
Merck for convenience, and by either party, including in the event of breach of the LV Agreement, subject to cure, or 
upon a challenge of such party’s licensed patents or upon the other party’s bankruptcy, subject, in each case, to 
customary reversion rights.

In connection with the LV Agreement, we entered into a stock purchase agreement with Merck in September 

2020, referred to as the Purchase Agreement, pursuant to which we agreed to issue and sell, and Merck agreed to 
purchase 5,000,000 newly-issued shares of our common stock, at a purchase price of $200 per share, for an aggregate 
purchase price of $1.0 billion. We closed the transactions contemplated by the Purchase Agreement in October 2020.

ADC License Agreements

We have license agreements for our ADC technology with a number of biotechnology and pharmaceutical 

companies. Under these agreements, which we have entered into in the ordinary course of business, we have granted 
research and commercial licenses to use our technology, most often in conjunction with the licensee's technology. In 
certain agreements, we also have agreed to conduct limited development activities and to provide other materials, 
supplies, and services to our licensees during a specified term of the agreement. We typically receive upfront cash 
payments and progress- and sales-dependent milestones for the achievement by our licensees of certain events, and 
annual maintenance fees and support fees for research and development services and materials provided under the 
agreements. We also are entitled to receive royalties on net sales of any resulting products incorporating our ADC 
technology. Our licensees are solely responsible for research, product development, manufacturing and 
commercialization of any product candidates under these agreements, which includes the achievement of the potential 
milestones.

In 2019, Genentech received accelerated approval from the FDA for PolivyTM (polatuzumab vedotin-piic), an ADC 

that uses our technology, to treat patients with relapsed or refractory diffuse large B-cell lymphoma. In August 2020, 
GlaxoSmithKline plc, or GSK, received accelerated approval from the FDA and conditional marketing authorization 
from the EC for Blenrep™ (belantamab mafodotin-blmf), an ADC developed by GSK that uses our technology, for 
treatment of patients with relapsed or refractory multiple myeloma who have received at least four prior therapies 
including an anti-CD38 monoclonal antibody, a proteasome inhibitor and an immunomodulatory agent. Under our ADC 
license agreements with Genentech and GSK, these events triggered milestone payments to us and we are also entitled 
receive royalties on net sales of Polivy and Blenrep worldwide. The product candidates being developed under our other 
ADC license agreements are at various stages of clinical and preclinical development. Our ability to generate meaningful 
future revenues from our other ADC license agreements will largely depend on products that incorporate our 
technologies entering late-stage clinical development, and receiving marketing approval from the FDA and subsequently 
being commercialized, if any.

We have in-licensed antibodies, targets and enabling technologies from pharmaceutical and biotechnology 

companies and academic institutions for use in our pipeline programs and ADC technology, including the following: 

•

Bristol-Myers Squibb License. In 1998, we obtained rights to some of our technologies and product 

candidates, portions of which are exclusive, through a license agreement with BMS. Through this license, we 

secured rights to use various targeting technologies. Under the terms of the license agreement, we were 

required to pay royalties in the low single digits on net sales of products, including ADCETRIS, which 

incorporate various technologies owned by BMS. Our obligation to pay royalties on ADCETRIS under the 

agreement expired in August 2021.

•

University of Miami License. In 1999, we entered into an exclusive license agreement with the University of 

Miami, Florida, covering an anti-CD30 monoclonal antibody that is the basis for the antibody component of 

ADCETRIS. Under the terms of this license, we made an upfront payment and progress-dependent milestone 

payments. We are required to pay annual maintenance fees and royalties in the low single digits on net sales 

of ADCETRIS. The term of the license agreement expired in August 2021, upon which we have in perpetuity 

a fully paid-up, royalty free, nonexclusive, sublicensable license.

•

Array BioPharma, Inc. We are a party to a license agreement with Array, which was acquired by Pfizer in 

July 2019. Pursuant to the license agreement, Array has granted us an exclusive license to develop, 

manufacture and commercialize TUKYSA. We will pay Array a portion of any non-royalty payments

received from sublicensing TUKYSA rights, including non-royalty payments received from Merck pursuant 

to the TUKYSA Agreement. Array is also entitled to receive a low double-digit royalty based on net sales of 

TUKYSA by us and a single-digit royalty based on any net sales of TUKYSA by our sublicensees, including 

Merck. The term of the license agreement expires on a country-by-country basis upon the later of the 

expiration of the last valid claim covering TUKYSA within that country or 10 years after the first commercial 

sale of TUKYSA within that country. We and Array each have the right to terminate the license agreement 

prior to its expiration for insolvency or material breach, subject to cure and dispute resolution provisions. 

•

Other Licenses. Under the terms of in-license agreements related to our pipeline programs, we would 

potentially owe development, regulatory, and sales-based milestones, and royalties on net sales of certain 

approved products. 

Patents and Proprietary Technology

Our owned and licensed patents and patent applications are directed to ADCETRIS, PADCEV, TUKYSA, 

TIVDAK, our product candidates, monoclonal antibodies, our ADC and SEA technologies and other antibody-based 

and/or enabling technologies. We commonly seek patent claims directed to compositions of matter, including antibodies, 

ADCs, and drug-linkers containing highly potent cell-killing agents, as well as methods of using such compositions. 

When appropriate, we also seek claims to related technologies, such as methods of using certain sugar analogs utilized in 

our SEA technology. For each of our products and product candidates, we have filed or expect to file multiple patent 

applications. We maintain patents and prosecute applications worldwide for technologies that we have out-licensed, such 

as our ADC technology. Similarly, for partnered products and product candidates, such as ADCETRIS, PADCEV, 

TUKYSA, TIVDAK, disitamab vedotin and LV, we seek to work closely with our development partners to coordinate 

patent efforts, including patent application filings, prosecution, term extension, defense and enforcement. As our 

products and product candidates advance through research and development, we seek to diligently identify and protect 

new inventions, such as combination therapies, improvements to methods of manufacturing, and methods of treatment. 

We also work closely with our scientific personnel to identify and protect new inventions that could eventually add to 

our development pipeline.

We own or have rights to the following patents relating to our products and our pipeline (in addition to certain 

patents covering our early-stage product candidates):

•

For ADCETRIS and our related ADC technology, we own twelve patents in the United States and Europe 

that will expire between 2022 and 2031.

16

17

Merck LV Collaboration

In-license Agreements 

In September 2020, we entered into the LV Agreement with Merck. Under the terms of the LV Agreement, we 

granted Merck a co-exclusive worldwide development and commercialization license for LV and agreed to jointly 

develop and commercialize LV on a worldwide basis. We received an upfront cash payment of $600.0 million, and we 

are eligible to receive up to $850.0 million in milestone payments upon the initiation of certain clinical trials and 

regulatory approval in certain major markets, and up to an additional $1.8 billion in milestone payments upon the 

achievement of specified annual global net sales thresholds. Each company is responsible for 50% of global costs to 

develop and commercialize LV and will receive 50% of potential future profits. We will lead regulatory and distribution 

activities, and will record sales, in the United States and Canada. Merck will lead regulatory activities in Europe, and we 

will lead distribution activities and record sales in Europe. We and Merck will co-commercialize LV in the United States 

and Europe. Merck will lead regulatory, promotion and distribution activities, and will record sales, in countries outside 

of the United States, Canada and Europe.

The LV Agreement will remain in effect, unless earlier terminated, until LV is no longer being developed or 

commercialized under the LV Agreement. The LV Agreement also contains customary provisions for termination by 

Merck for convenience, and by either party, including in the event of breach of the LV Agreement, subject to cure, or 

upon a challenge of such party’s licensed patents or upon the other party’s bankruptcy, subject, in each case, to 

customary reversion rights.

In connection with the LV Agreement, we entered into a stock purchase agreement with Merck in September 

2020, referred to as the Purchase Agreement, pursuant to which we agreed to issue and sell, and Merck agreed to 

purchase 5,000,000 newly-issued shares of our common stock, at a purchase price of $200 per share, for an aggregate 

purchase price of $1.0 billion. We closed the transactions contemplated by the Purchase Agreement in October 2020.

ADC License Agreements

We have license agreements for our ADC technology with a number of biotechnology and pharmaceutical 

companies. Under these agreements, which we have entered into in the ordinary course of business, we have granted 

research and commercial licenses to use our technology, most often in conjunction with the licensee's technology. In 

certain agreements, we also have agreed to conduct limited development activities and to provide other materials, 

supplies, and services to our licensees during a specified term of the agreement. We typically receive upfront cash 

payments and progress- and sales-dependent milestones for the achievement by our licensees of certain events, and 

annual maintenance fees and support fees for research and development services and materials provided under the 

agreements. We also are entitled to receive royalties on net sales of any resulting products incorporating our ADC 

technology. Our licensees are solely responsible for research, product development, manufacturing and 

milestones.

In 2019, Genentech received accelerated approval from the FDA for PolivyTM (polatuzumab vedotin-piic), an ADC 

that uses our technology, to treat patients with relapsed or refractory diffuse large B-cell lymphoma. In August 2020, 

GlaxoSmithKline plc, or GSK, received accelerated approval from the FDA and conditional marketing authorization 

from the EC for Blenrep™ (belantamab mafodotin-blmf), an ADC developed by GSK that uses our technology, for 

treatment of patients with relapsed or refractory multiple myeloma who have received at least four prior therapies 

including an anti-CD38 monoclonal antibody, a proteasome inhibitor and an immunomodulatory agent. Under our ADC 

license agreements with Genentech and GSK, these events triggered milestone payments to us and we are also entitled 

receive royalties on net sales of Polivy and Blenrep worldwide. The product candidates being developed under our other 

ADC license agreements are at various stages of clinical and preclinical development. Our ability to generate meaningful 

future revenues from our other ADC license agreements will largely depend on products that incorporate our 

technologies entering late-stage clinical development, and receiving marketing approval from the FDA and subsequently 

being commercialized, if any.

We have in-licensed antibodies, targets and enabling technologies from pharmaceutical and biotechnology 

companies and academic institutions for use in our pipeline programs and ADC technology, including the following: 

•

•

•

•

Bristol-Myers Squibb License. In 1998, we obtained rights to some of our technologies and product 
candidates, portions of which are exclusive, through a license agreement with BMS. Through this license, we 
secured rights to use various targeting technologies. Under the terms of the license agreement, we were 
required to pay royalties in the low single digits on net sales of products, including ADCETRIS, which 
incorporate various technologies owned by BMS. Our obligation to pay royalties on ADCETRIS under the 
agreement expired in August 2021.

University of Miami License. In 1999, we entered into an exclusive license agreement with the University of 
Miami, Florida, covering an anti-CD30 monoclonal antibody that is the basis for the antibody component of 
ADCETRIS. Under the terms of this license, we made an upfront payment and progress-dependent milestone 
payments. We are required to pay annual maintenance fees and royalties in the low single digits on net sales 
of ADCETRIS. The term of the license agreement expired in August 2021, upon which we have in perpetuity 
a fully paid-up, royalty free, nonexclusive, sublicensable license.

Array BioPharma, Inc. We are a party to a license agreement with Array, which was acquired by Pfizer in 
July 2019. Pursuant to the license agreement, Array has granted us an exclusive license to develop, 
manufacture and commercialize TUKYSA. We will pay Array a portion of any non-royalty payments
received from sublicensing TUKYSA rights, including non-royalty payments received from Merck pursuant 
to the TUKYSA Agreement. Array is also entitled to receive a low double-digit royalty based on net sales of 
TUKYSA by us and a single-digit royalty based on any net sales of TUKYSA by our sublicensees, including 
Merck. The term of the license agreement expires on a country-by-country basis upon the later of the 
expiration of the last valid claim covering TUKYSA within that country or 10 years after the first commercial 
sale of TUKYSA within that country. We and Array each have the right to terminate the license agreement 
prior to its expiration for insolvency or material breach, subject to cure and dispute resolution provisions. 

Other Licenses. Under the terms of in-license agreements related to our pipeline programs, we would 
potentially owe development, regulatory, and sales-based milestones, and royalties on net sales of certain 
approved products. 

Patents and Proprietary Technology

commercialization of any product candidates under these agreements, which includes the achievement of the potential 

Our owned and licensed patents and patent applications are directed to ADCETRIS, PADCEV, TUKYSA, 

TIVDAK, our product candidates, monoclonal antibodies, our ADC and SEA technologies and other antibody-based 
and/or enabling technologies. We commonly seek patent claims directed to compositions of matter, including antibodies, 
ADCs, and drug-linkers containing highly potent cell-killing agents, as well as methods of using such compositions. 
When appropriate, we also seek claims to related technologies, such as methods of using certain sugar analogs utilized in 
our SEA technology. For each of our products and product candidates, we have filed or expect to file multiple patent 
applications. We maintain patents and prosecute applications worldwide for technologies that we have out-licensed, such 
as our ADC technology. Similarly, for partnered products and product candidates, such as ADCETRIS, PADCEV, 
TUKYSA, TIVDAK, disitamab vedotin and LV, we seek to work closely with our development partners to coordinate 
patent efforts, including patent application filings, prosecution, term extension, defense and enforcement. As our 
products and product candidates advance through research and development, we seek to diligently identify and protect 
new inventions, such as combination therapies, improvements to methods of manufacturing, and methods of treatment. 
We also work closely with our scientific personnel to identify and protect new inventions that could eventually add to 
our development pipeline.

We own or have rights to the following patents relating to our products and our pipeline (in addition to certain 

patents covering our early-stage product candidates):

•

For ADCETRIS and our related ADC technology, we own twelve patents in the United States and Europe 
that will expire between 2022 and 2031.

16

17

•

•

•

•

•

For PADCEV and our related ADC technology, we own, co-own or have licensed rights to fourteen patents in 
the United States and Europe that will expire between 2022 and 2031. Of these patents, we own or co-own 
twelve patents and have licensed rights to two patents.

For TUKYSA, we have licensed rights to nine patents in the United States and Europe that will expire 
between 2024 and 2033.

For TIVDAK and our related ADC technology, we own or have licensed rights to eleven patents in the United 
States and Europe that will expire between 2022 and 2036. Of these patents, we own five patents and have 
licensed rights to six patents.

For disitamab vedotin and our related ADC technology, we own or have licensed rights to eight patents in the 
United States and Europe that will expire between 2022 and 2034. Of these patents, we own five patents and 
have licensed rights to three patents.

For LV and our related ADC technology, we own or have licensed rights to nine patents in the United States 
and Europe that will expire between 2022 and 2032. Of these patents, we own eight patents and have licensed 
rights to one patent.

The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, 
the scope of its coverage as determined by the patent office or courts in the country, and the availability of legal remedies 
in the country. The list above does not identify all patents that may be related to our products and product candidates. For 
example, in addition to the listed patents, we have patents on platform technologies (that relate to certain general classes 
of products or methods), as well as patents that relate to methods of using, manufacturing or administering a product or 
product candidate, that may confer additional patent protection. We also have pending patent applications that may give 
rise to new patents related to one or more of these agents.

The information in the above list is based on our current assessment of patents that we own, co-own or control or 

have licensed. The information is subject to revision, for example, in the event of changes in the law or legal rulings 
affecting our patents or if we become aware of new information. Significant legal issues remain unresolved as to the 
extent and scope of available patent protection for biotechnology products and processes in the U.S. and other important 
markets outside the U.S. We expect that litigation will likely be necessary to determine the term, validity, enforceability, 
and/or scope of certain of our patents and other proprietary rights. An adverse decision or ruling with respect to one or 
more of our patents could result in the loss of patent protection for a product and, in turn, the introduction of competitor 
products or follow-on biologics to the market earlier than anticipated, and could force us to either obtain third-party 
licenses at a material cost or cease using a technology or commercializing a product.

Patents expire, on a country by country basis, at various times depending on various factors, including the filing 

date of the corresponding patent application(s), the availability of patent term extension and supplemental protection 
certificates and requirements for terminal disclaimers. Although we believe our owned and licensed patents and patent 
applications provide us with a competitive advantage, the patent positions of biotechnology and pharmaceutical 
companies can be uncertain and involve complex legal and factual questions. We and our corporate collaborators may 
not be able to develop patentable products or processes or obtain patents from pending patent applications. Even if patent 
claims are allowed, the claims may not issue. In the event of issuance, the patents may not be sufficient to protect the 
proprietary technology owned by or licensed to us or our corporate collaborators. Our or our collaborators’ current 
patents, or patents that issue on pending applications, may be challenged, invalidated, infringed or circumvented. In 
addition, changes to patent laws in the United States or in other countries may limit our ability to defend or enforce our 
patents, or may apply retroactively to affect the term and/or scope of our patents. Our patents have been and may in the 
future be challenged by third parties in post-issuance administrative proceedings or in litigation as invalid, not infringed 
or unenforceable under U.S. or foreign laws, or they may be infringed by third parties. As a result, we are or may be 
from time to time involved in the defense and enforcement of our patent or other intellectual property rights in a court of 
law and administrative tribunals, such as in U.S. Patent and Trademark Office inter partes review or reexamination 
proceedings, foreign opposition proceedings or related legal and administrative proceedings in the United States and 
elsewhere. The costs of defending our patents or enforcing our proprietary rights in post-issuance administrative 
proceedings or litigation may be substantial and the outcome can be uncertain. An adverse outcome may allow third 
parties to use our proprietary technologies without a license from us or our collaborators. Our and our collaborators’ 
patents may also be circumvented, which may allow third parties to use similar technologies without a license from us or 
our collaborators. 

Our commercial success depends significantly on our ability to operate without infringing patents and proprietary 

rights of third parties. Organizations such as pharmaceutical and biotechnology companies, universities and research 

institutions may have filed patent applications or may have been granted patents that cover technologies similar to the 

technologies owned or licensed to us or to our collaborators. In addition, we are monitoring the progress of multiple 

pending patent applications of other organizations that, if granted, may require us to license or challenge their validity or 

enforceability in order to continue commercializing our products or to commercialize our product candidates. Our 

challenges to patents of other organizations may not be successful, which may affect our ability to commercialize our 

products and product candidates. We cannot determine with certainty whether patents or patent applications of other 

parties may materially affect our or our collaborators’ ability to make, use or sell our products and product candidates.

We require our scientific personnel to maintain laboratory notebooks and other research records in accordance 

with our policies, which are designed to strengthen and support our intellectual property protection. In addition to our 

patented intellectual property, we also rely on trade secrets and other proprietary information, especially when we do not 

believe that patent protection is appropriate or can be obtained. Our policy is to require each of our employees, 

consultants and advisors to execute a proprietary information and inventions assignment agreement before beginning 

their employment, consulting or advisory relationship with us. These agreements provide that the individual must keep 

confidential and not disclose to other parties any confidential information developed or learned by the individual during 

the course of their relationship with us except in limited circumstances. These agreements also provide that we will own 

all inventions conceived or reduced to practice by the individual in the course of rendering services to us. Our policy and 

agreements and those of our collaborators may not sufficiently protect our confidential information, or third parties may 

independently develop equivalent information.

Government Regulation

The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries impose 

substantial requirements upon the clinical development, pre-market approval, manufacture, marketing and distribution of 

biopharmaceutical products. These agencies and other regulatory agencies regulate research and development activities 

and the testing, approval, manufacture, quality control, safety, efficacy, labeling, storage, distribution, import, export, 

recordkeeping, pricing, advertising and promotion of products and product candidates. Failure to comply with applicable 

FDA or other requirements may result in Warning Letters, civil or criminal penalties, suspension or delays in clinical 

development, recall or seizure of products, partial or total suspension of production or withdrawal of a product from the 

market. The development and approval process requires substantial time, effort and financial resources, and we cannot be 

certain that any approvals for our product candidates will be granted on a timely basis, if at all. We must obtain approval 

of our product candidates from the FDA before we can begin marketing them in the United States. Similar approvals are 

also required in other countries.

Product development and approval within this regulatory framework is uncertain, can take many years and 

requires the expenditure of substantial resources. The necessary steps before a new biopharmaceutical product may be 

sold in the United States ordinarily include: 

preclinical in vitro and in vivo tests, some of which must comply with Good Laboratory Practices, or GLP;

submission to the FDA of an IND which must become effective before clinical trials may commence, and 

which must be updated periodically as new information is obtained and at least annually with a report on 

development of a drug formulation and manufacture of the drug for clinical trials, and commercial sale, if 

completion of adequate and well controlled human clinical trials to establish the safety and efficacy of the 

product candidate for its intended use;

submission to the FDA of a Biologics License Application, or BLA, or a New Drug Application, or NDA, 

which must be accompanied by a substantial user fee unless the fee is waived;

FDA pre-approval inspection of manufacturing facilities for current Good Manufacturing Practices, or GMP, 

compliance and FDA inspection of select clinical trial sites and/or trial sponsors for Good Clinical Practice, or 

GCP, compliance; and

development;

approved;

•

•

•

•

•

•

18

19

•

•

•

•

•

For PADCEV and our related ADC technology, we own, co-own or have licensed rights to fourteen patents in 

the United States and Europe that will expire between 2022 and 2031. Of these patents, we own or co-own 

twelve patents and have licensed rights to two patents.

For TUKYSA, we have licensed rights to nine patents in the United States and Europe that will expire 

between 2024 and 2033.

licensed rights to six patents.

For TIVDAK and our related ADC technology, we own or have licensed rights to eleven patents in the United 

States and Europe that will expire between 2022 and 2036. Of these patents, we own five patents and have 

For disitamab vedotin and our related ADC technology, we own or have licensed rights to eight patents in the 

United States and Europe that will expire between 2022 and 2034. Of these patents, we own five patents and 

have licensed rights to three patents.

For LV and our related ADC technology, we own or have licensed rights to nine patents in the United States 

and Europe that will expire between 2022 and 2032. Of these patents, we own eight patents and have licensed 

rights to one patent.

The actual protection afforded by a patent, which can vary from country to country, depends on the type of patent, 

the scope of its coverage as determined by the patent office or courts in the country, and the availability of legal remedies 

in the country. The list above does not identify all patents that may be related to our products and product candidates. For 

example, in addition to the listed patents, we have patents on platform technologies (that relate to certain general classes 

of products or methods), as well as patents that relate to methods of using, manufacturing or administering a product or 

product candidate, that may confer additional patent protection. We also have pending patent applications that may give 

rise to new patents related to one or more of these agents.

The information in the above list is based on our current assessment of patents that we own, co-own or control or 

have licensed. The information is subject to revision, for example, in the event of changes in the law or legal rulings 

affecting our patents or if we become aware of new information. Significant legal issues remain unresolved as to the 

extent and scope of available patent protection for biotechnology products and processes in the U.S. and other important 

markets outside the U.S. We expect that litigation will likely be necessary to determine the term, validity, enforceability, 

and/or scope of certain of our patents and other proprietary rights. An adverse decision or ruling with respect to one or 

more of our patents could result in the loss of patent protection for a product and, in turn, the introduction of competitor 

products or follow-on biologics to the market earlier than anticipated, and could force us to either obtain third-party 

licenses at a material cost or cease using a technology or commercializing a product.

Patents expire, on a country by country basis, at various times depending on various factors, including the filing 

date of the corresponding patent application(s), the availability of patent term extension and supplemental protection 

certificates and requirements for terminal disclaimers. Although we believe our owned and licensed patents and patent 

applications provide us with a competitive advantage, the patent positions of biotechnology and pharmaceutical 

companies can be uncertain and involve complex legal and factual questions. We and our corporate collaborators may 

not be able to develop patentable products or processes or obtain patents from pending patent applications. Even if patent 

claims are allowed, the claims may not issue. In the event of issuance, the patents may not be sufficient to protect the 

proprietary technology owned by or licensed to us or our corporate collaborators. Our or our collaborators’ current 

patents, or patents that issue on pending applications, may be challenged, invalidated, infringed or circumvented. In 

addition, changes to patent laws in the United States or in other countries may limit our ability to defend or enforce our 

patents, or may apply retroactively to affect the term and/or scope of our patents. Our patents have been and may in the 

future be challenged by third parties in post-issuance administrative proceedings or in litigation as invalid, not infringed 

or unenforceable under U.S. or foreign laws, or they may be infringed by third parties. As a result, we are or may be 

from time to time involved in the defense and enforcement of our patent or other intellectual property rights in a court of 

law and administrative tribunals, such as in U.S. Patent and Trademark Office inter partes review or reexamination 

proceedings, foreign opposition proceedings or related legal and administrative proceedings in the United States and 

elsewhere. The costs of defending our patents or enforcing our proprietary rights in post-issuance administrative 

proceedings or litigation may be substantial and the outcome can be uncertain. An adverse outcome may allow third 

parties to use our proprietary technologies without a license from us or our collaborators. Our and our collaborators’ 

patents may also be circumvented, which may allow third parties to use similar technologies without a license from us or 

our collaborators. 

Our commercial success depends significantly on our ability to operate without infringing patents and proprietary 

rights of third parties. Organizations such as pharmaceutical and biotechnology companies, universities and research 
institutions may have filed patent applications or may have been granted patents that cover technologies similar to the 
technologies owned or licensed to us or to our collaborators. In addition, we are monitoring the progress of multiple 
pending patent applications of other organizations that, if granted, may require us to license or challenge their validity or 
enforceability in order to continue commercializing our products or to commercialize our product candidates. Our 
challenges to patents of other organizations may not be successful, which may affect our ability to commercialize our 
products and product candidates. We cannot determine with certainty whether patents or patent applications of other 
parties may materially affect our or our collaborators’ ability to make, use or sell our products and product candidates.

We require our scientific personnel to maintain laboratory notebooks and other research records in accordance 
with our policies, which are designed to strengthen and support our intellectual property protection. In addition to our 
patented intellectual property, we also rely on trade secrets and other proprietary information, especially when we do not 
believe that patent protection is appropriate or can be obtained. Our policy is to require each of our employees, 
consultants and advisors to execute a proprietary information and inventions assignment agreement before beginning 
their employment, consulting or advisory relationship with us. These agreements provide that the individual must keep 
confidential and not disclose to other parties any confidential information developed or learned by the individual during 
the course of their relationship with us except in limited circumstances. These agreements also provide that we will own 
all inventions conceived or reduced to practice by the individual in the course of rendering services to us. Our policy and 
agreements and those of our collaborators may not sufficiently protect our confidential information, or third parties may 
independently develop equivalent information.

Government Regulation

The FDA and comparable regulatory agencies in state and local jurisdictions and in foreign countries impose 
substantial requirements upon the clinical development, pre-market approval, manufacture, marketing and distribution of 
biopharmaceutical products. These agencies and other regulatory agencies regulate research and development activities 
and the testing, approval, manufacture, quality control, safety, efficacy, labeling, storage, distribution, import, export, 
recordkeeping, pricing, advertising and promotion of products and product candidates. Failure to comply with applicable 
FDA or other requirements may result in Warning Letters, civil or criminal penalties, suspension or delays in clinical 
development, recall or seizure of products, partial or total suspension of production or withdrawal of a product from the 
market. The development and approval process requires substantial time, effort and financial resources, and we cannot be 
certain that any approvals for our product candidates will be granted on a timely basis, if at all. We must obtain approval 
of our product candidates from the FDA before we can begin marketing them in the United States. Similar approvals are 
also required in other countries.

Product development and approval within this regulatory framework is uncertain, can take many years and 
requires the expenditure of substantial resources. The necessary steps before a new biopharmaceutical product may be 
sold in the United States ordinarily include: 

•

•

•

•

•

•

preclinical in vitro and in vivo tests, some of which must comply with Good Laboratory Practices, or GLP;

submission to the FDA of an IND which must become effective before clinical trials may commence, and 
which must be updated periodically as new information is obtained and at least annually with a report on 
development;

development of a drug formulation and manufacture of the drug for clinical trials, and commercial sale, if 
approved;

completion of adequate and well controlled human clinical trials to establish the safety and efficacy of the 
product candidate for its intended use;

submission to the FDA of a Biologics License Application, or BLA, or a New Drug Application, or NDA, 
which must be accompanied by a substantial user fee unless the fee is waived;

FDA pre-approval inspection of manufacturing facilities for current Good Manufacturing Practices, or GMP, 
compliance and FDA inspection of select clinical trial sites and/or trial sponsors for Good Clinical Practice, or 
GCP, compliance; and

18

19

•

FDA review and approval of the BLA or NDA, which includes the product prescribing information, prior to 
any commercial sale.

Clinical Trials Regulation in the U.S.

The results of preclinical tests (which include laboratory evaluation as well as preclinical GLP studies to evaluate 

mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the 

toxicity) for a particular product candidate, together with related manufacturing information and analytical data, and a 
clinical protocol are submitted as part of an IND to the FDA. The IND automatically becomes effective 30 days after 
receipt by the FDA, unless the FDA, within the 30 day time period, raises concerns or questions about the conduct of the 
clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks. In such a 
case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. New 
clinical trial protocols can be submitted to the existing IND during product development. Further, an independent 
institutional review board, or IRB, for each medical center proposing to conduct the clinical trial must review and 
approve the plan for any clinical trial before it commences at that center and it must monitor the study until completed. 
The FDA, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the 
subjects or patients are being exposed to an unacceptable health risk. Clinical testing also must satisfy extensive GCP 
regulations and regulations for informed consent and privacy of individually-identifiable information.

Clinical trials generally are conducted in three sequential phases that may overlap or in some instances, be 
skipped. In phase 1, the initial introduction of the product into humans, the product candidate is tested to assess safety, 
metabolism, pharmacokinetics and pharmacological actions associated with increasing doses. Phase 2 usually involves 
trials in a limited patient population to evaluate the efficacy of the potential product for specific, targeted indications, 
determine dosage tolerance and optimum dosage and further identify possible adverse reactions and safety risks. Phase 3 
and pivotal trials are undertaken to evaluate further clinical efficacy and safety often in comparison to standard therapies 
within a broader patient population, generally at geographically dispersed clinical sites. Phase 4, or post-marketing, trials 
may be required as a condition of commercial approval by the FDA and may also be voluntarily initiated by us or our 
collaborators. Phase 1, phase 2 or phase 3 testing may not be completed successfully within any specific period of time, 
if at all, with respect to any of our product candidates. Similarly, suggestions of safety, tolerability or efficacy in earlier 
stage trials do not necessarily predict findings of safety and efficacy in subsequent trials. Furthermore, the FDA, an IRB 
or we may suspend a clinical trial at any time for various reasons, including a finding that the subjects or patients are 
being exposed to an unacceptable health risk. Clinical trials are subject to central registration and results reporting 
requirements, such as on www.clinicaltrials.gov.

Approval Process in the U.S.

The results of preclinical studies, pharmaceutical development and clinical trials, together with information on a 

product’s chemistry, manufacturing, and controls, are submitted to the FDA, in the form of a BLA or NDA, for approval 
of the manufacture, marketing and commercial shipment of the pharmaceutical product. Data from clinical trials are not 
always conclusive and the FDA and other regulatory agencies may interpret data differently than we or our collaborators 
interpret data. The FDA may also convene an Advisory Committee of external advisors to answer questions regarding 
the approvability and labeling of an application. The FDA is not obligated to follow the Advisory Committee’s 
recommendation. The submission of a BLA or NDA is required to be accompanied by a substantial user fee, with few 
exceptions or waivers. The user fee is administered under the Prescription Drug User Fee Act, or PDUFA, which sets 
goals for the timeliness of the FDA’s review. A standard review period is twelve months from submission of an original 
application, while priority review is eight months from submission of an original application. The testing and approval 
process is likely to require substantial time, effort and resources, and there can be no assurance that any approval will be 
granted on a timely basis, if at all. The FDA may deny review of an application by refusing to file the application or not 
approve an application by issuance of a complete response letter if applicable regulatory criteria are not satisfied, require 
additional testing or information, or require post-market testing and surveillance to monitor the safety or efficacy of the 
product. Approval may occur with significant Risk Evaluation and Mitigation Strategies, or REMS, that limit the clinical 
use in the prescribing information, distribution or promotion of a product. 

20

21

Drug or biologic products studied for their safety and effectiveness in treating serious or life-threatening diseases 

or conditions may receive accelerated approval from the FDA upon a determination that the product has an effect on a 

surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured 

earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or 

availability or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require the 

sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated 

effect on irreversible morbidity or mortality or other clinical benefit. In addition, the FDA requires, as a condition for 

accelerated approval, pre-approval of promotional materials. 

Once an approval is issued, the FDA may require safety-related labeling changes or withdraw product approval if 

ongoing regulatory requirements are not met or if safety problems occur after the product reaches the market. In addition, 

the FDA may require further testing of an approved product, including phase 4 clinical trials, and surveillance programs 

to monitor the safety of the approved product, and the FDA has the power to prevent or limit further marketing of the 

approved product based on the results of these post-marketing programs or other information. 

Post-Approval Regulations in the U.S.

Products manufactured or distributed pursuant to FDA approvals are subject to continuing regulation by the FDA, 

including manufacture, labeling, distribution, advertising, promotion, recordkeeping, annual product quality review and 

reporting requirements. Adverse event experience with the product must be reported to the FDA in a timely fashion, and 

pharmacovigilance programs to proactively look for these adverse events are mandated by the FDA. 

Manufacturers and their subcontractors are required to register their establishments with the FDA and certain state 

agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with 

ongoing regulatory requirements, including current Good Manufacturing Practices, or cGMP, which impose certain 

procedural and documentation requirements upon us and our third-party manufacturers. Following such inspections, the 

FDA may issue notices on Form FDA 483 and Warning Letters that could cause us to modify certain activities. A Form 

FDA 483 notice, if issued at the conclusion of an FDA inspection, can list conditions the FDA investigators believe may 

have violated cGMP or other FDA regulations or guidance. Failure to adequately and promptly correct the 

observations(s) can result in further regulatory enforcement action. In addition to Form FDA 483 notices and Warning 

Letters, failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or 

regulatory action, such as suspension of manufacturing, seizure of product, injunctive action or possible civil penalties. 

We cannot be certain that we or our present or future third-party manufacturers or suppliers will be able to comply with 

the cGMP regulations and other ongoing FDA regulatory requirements. If we or our present or future third-party 

manufacturers or suppliers are not able to comply with these requirements, the FDA may halt our clinical trials, not 

approve our products, require us to recall a product from distribution or withdraw approval of the BLA or NDA for that 

product. Failure to comply with ongoing regulatory obligations can result in delay of approval or Warning Letters, 

product seizures, criminal penalties, and withdrawal of approved products, among other enforcement remedies.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the 

market. These regulations include standards and restrictions for direct-to-consumer advertising, industry-sponsored 

scientific and educational activities, promotional activities involving the internet, and off-label promotion. While 

physicians may prescribe products for off-label uses, manufacturers may only promote products for the approved 

indications and in accordance with the provisions of the approved label. The FDA has very broad enforcement authority 

under the Federal Food, Drug and Cosmetic Act, and failure to abide by these regulations can result in penalties, 

including the issuance of a Warning Letter directing entities to correct deviations from FDA standards, and state and 

federal civil and criminal investigations and prosecutions. 

•

FDA review and approval of the BLA or NDA, which includes the product prescribing information, prior to 

Drug or biologic products studied for their safety and effectiveness in treating serious or life-threatening diseases 

any commercial sale.

Clinical Trials Regulation in the U.S.

The results of preclinical tests (which include laboratory evaluation as well as preclinical GLP studies to evaluate 

toxicity) for a particular product candidate, together with related manufacturing information and analytical data, and a 

clinical protocol are submitted as part of an IND to the FDA. The IND automatically becomes effective 30 days after 

receipt by the FDA, unless the FDA, within the 30 day time period, raises concerns or questions about the conduct of the 

clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks. In such a 

case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. New 

clinical trial protocols can be submitted to the existing IND during product development. Further, an independent 

institutional review board, or IRB, for each medical center proposing to conduct the clinical trial must review and 

approve the plan for any clinical trial before it commences at that center and it must monitor the study until completed. 

The FDA, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the 

subjects or patients are being exposed to an unacceptable health risk. Clinical testing also must satisfy extensive GCP 

regulations and regulations for informed consent and privacy of individually-identifiable information.

Clinical trials generally are conducted in three sequential phases that may overlap or in some instances, be 

skipped. In phase 1, the initial introduction of the product into humans, the product candidate is tested to assess safety, 

metabolism, pharmacokinetics and pharmacological actions associated with increasing doses. Phase 2 usually involves 

trials in a limited patient population to evaluate the efficacy of the potential product for specific, targeted indications, 

determine dosage tolerance and optimum dosage and further identify possible adverse reactions and safety risks. Phase 3 

and pivotal trials are undertaken to evaluate further clinical efficacy and safety often in comparison to standard therapies 

within a broader patient population, generally at geographically dispersed clinical sites. Phase 4, or post-marketing, trials 

may be required as a condition of commercial approval by the FDA and may also be voluntarily initiated by us or our 

collaborators. Phase 1, phase 2 or phase 3 testing may not be completed successfully within any specific period of time, 

if at all, with respect to any of our product candidates. Similarly, suggestions of safety, tolerability or efficacy in earlier 

stage trials do not necessarily predict findings of safety and efficacy in subsequent trials. Furthermore, the FDA, an IRB 

or we may suspend a clinical trial at any time for various reasons, including a finding that the subjects or patients are 

being exposed to an unacceptable health risk. Clinical trials are subject to central registration and results reporting 

requirements, such as on www.clinicaltrials.gov.

Approval Process in the U.S.

The results of preclinical studies, pharmaceutical development and clinical trials, together with information on a 

product’s chemistry, manufacturing, and controls, are submitted to the FDA, in the form of a BLA or NDA, for approval 

of the manufacture, marketing and commercial shipment of the pharmaceutical product. Data from clinical trials are not 

always conclusive and the FDA and other regulatory agencies may interpret data differently than we or our collaborators 

interpret data. The FDA may also convene an Advisory Committee of external advisors to answer questions regarding 

the approvability and labeling of an application. The FDA is not obligated to follow the Advisory Committee’s 

recommendation. The submission of a BLA or NDA is required to be accompanied by a substantial user fee, with few 

exceptions or waivers. The user fee is administered under the Prescription Drug User Fee Act, or PDUFA, which sets 

goals for the timeliness of the FDA’s review. A standard review period is twelve months from submission of an original 

application, while priority review is eight months from submission of an original application. The testing and approval 

process is likely to require substantial time, effort and resources, and there can be no assurance that any approval will be 

granted on a timely basis, if at all. The FDA may deny review of an application by refusing to file the application or not 

approve an application by issuance of a complete response letter if applicable regulatory criteria are not satisfied, require 

additional testing or information, or require post-market testing and surveillance to monitor the safety or efficacy of the 

product. Approval may occur with significant Risk Evaluation and Mitigation Strategies, or REMS, that limit the clinical 

use in the prescribing information, distribution or promotion of a product. 

or conditions may receive accelerated approval from the FDA upon a determination that the product has an effect on a 
surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured 
earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or 
mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the 
availability or lack of alternative treatments. As a condition of accelerated approval, the FDA will generally require the 
sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated 
effect on irreversible morbidity or mortality or other clinical benefit. In addition, the FDA requires, as a condition for 
accelerated approval, pre-approval of promotional materials. 

Once an approval is issued, the FDA may require safety-related labeling changes or withdraw product approval if 
ongoing regulatory requirements are not met or if safety problems occur after the product reaches the market. In addition, 
the FDA may require further testing of an approved product, including phase 4 clinical trials, and surveillance programs 
to monitor the safety of the approved product, and the FDA has the power to prevent or limit further marketing of the 
approved product based on the results of these post-marketing programs or other information. 

Post-Approval Regulations in the U.S.

Products manufactured or distributed pursuant to FDA approvals are subject to continuing regulation by the FDA, 
including manufacture, labeling, distribution, advertising, promotion, recordkeeping, annual product quality review and 
reporting requirements. Adverse event experience with the product must be reported to the FDA in a timely fashion, and 
pharmacovigilance programs to proactively look for these adverse events are mandated by the FDA. 

Manufacturers and their subcontractors are required to register their establishments with the FDA and certain state 
agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with 
ongoing regulatory requirements, including current Good Manufacturing Practices, or cGMP, which impose certain 
procedural and documentation requirements upon us and our third-party manufacturers. Following such inspections, the 
FDA may issue notices on Form FDA 483 and Warning Letters that could cause us to modify certain activities. A Form 
FDA 483 notice, if issued at the conclusion of an FDA inspection, can list conditions the FDA investigators believe may 
have violated cGMP or other FDA regulations or guidance. Failure to adequately and promptly correct the 
observations(s) can result in further regulatory enforcement action. In addition to Form FDA 483 notices and Warning 
Letters, failure to comply with the statutory and regulatory requirements can subject a manufacturer to possible legal or 
regulatory action, such as suspension of manufacturing, seizure of product, injunctive action or possible civil penalties. 
We cannot be certain that we or our present or future third-party manufacturers or suppliers will be able to comply with 
the cGMP regulations and other ongoing FDA regulatory requirements. If we or our present or future third-party 
manufacturers or suppliers are not able to comply with these requirements, the FDA may halt our clinical trials, not 
approve our products, require us to recall a product from distribution or withdraw approval of the BLA or NDA for that 
product. Failure to comply with ongoing regulatory obligations can result in delay of approval or Warning Letters, 
product seizures, criminal penalties, and withdrawal of approved products, among other enforcement remedies.

The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the 
market. These regulations include standards and restrictions for direct-to-consumer advertising, industry-sponsored 
scientific and educational activities, promotional activities involving the internet, and off-label promotion. While 
physicians may prescribe products for off-label uses, manufacturers may only promote products for the approved 
indications and in accordance with the provisions of the approved label. The FDA has very broad enforcement authority 
under the Federal Food, Drug and Cosmetic Act, and failure to abide by these regulations can result in penalties, 
including the issuance of a Warning Letter directing entities to correct deviations from FDA standards, and state and 
federal civil and criminal investigations and prosecutions. 

20

21

FDA Regulation of Companion Diagnostics

Marketing Authorization Regulation in Europe

Certain of our products and product candidates may rely upon in vitro companion diagnostics for use in selecting 
the patients that we believe will respond to our therapeutics. If safe and effective use of a therapeutic product depends on 
an in vitro diagnostic, the FDA generally will require approval or clearance of a reproducible, validated diagnostic test to 
be used with our therapeutic product at the same time that FDA approves the therapeutic product. The review of these in 
vitro companion diagnostics in conjunction with the review of our cancer treatments involves coordination of review by 
the FDA’s Center for Drug Evaluation and Research and by the FDA’s Center for Devices and Radiological Health. The 
FDA’s premarket approval, or PMA, process is costly, lengthy, and uncertain. The receipt and timing of PMA approval 
may have a significant effect on the receipt and timing of any future commercial approvals for our products and product 
candidates. Human diagnostic products are subject to pervasive and ongoing regulatory obligations, including the 
submission of medical device reports, adherence to the Quality Systems Regulation, recordkeeping and product labeling, 
as enforced by the FDA and comparable state authorities. 

The FDA's approval of ADCETRIS in the frontline PTCL indication included a post-marketing commitment to 
develop a clinically validated in-vitro diagnostic device for the selection of patients with CD30-expressing PTCL, not 
including sALCL, for treatment with ADCETRIS in this indication. We and Takeda have a collaboration with Ventana 
Medical Systems, Inc., or Ventana, under which Ventana is working to develop, manufacture and commercialize a 
companion diagnostic test to measure CD30 expression levels in tissue specimens. 

Regulations Outside of the United States 

In addition to regulations in the U.S., we and our collaborators are and will be subject to regulations of other 
countries governing clinical trials, manufacturing, distribution and sales of our products. We must obtain approval by the 
regulatory authorities of countries outside of the U.S. before we can commence clinical trials in those countries and 
approval of the regulators of such countries or economic areas before we may market products in those countries or 
areas. For example, to commercialize TUKYSA in Europe, we need to comply with applicable European regulations. 
The approval requirements and processes can vary greatly, and the time required may be longer or shorter than that 
required for FDA approval. Requirements governing the conduct of clinical trials, product licensing, pricing and 
reimbursement also vary greatly from place to place. 

Clinical Trials Regulation in Europe

In the EU, pursuant to the currently applicable Clinical Trials Directive 2001/20/EC and the Directive 2005/28/EC 

including with respect to post-marketing authorization studies, product manufacturing, advertising and promotion, 

on GCP, a system for the approval of clinical trials in the EU has been implemented through national legislation of the 
EU member states. Under this system, an applicant must obtain approval from the national competent authority of an EU 
member state in which the clinical trial is to be conducted, or in multiple member states if the clinical trial is to be 
conducted in a number of member states. Furthermore, the applicant may only start a clinical trial at a specific study site 
after the independent ethics committee for each site has issued a favorable opinion. The clinical trial application must be 
accompanied by an investigational medicinal product dossier with supporting information prescribed by Directive 
2001/20/EC and Directive 2005/28/EC and corresponding national laws of the individual EU member states and further 
detailed in applicable guidance documents. In April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 
536/2014, which was set to replace the Clinical Trials Directive 2001/20/EC. The new Clinical Trials Regulation (EU) 
No 536/2014 came into effect in January 2022 with a three-year transition period in which clinical trial sponsors will be 
able to choose among different submission pathways. Specifically, the new regulation, which is directly applicable in all 
EU member states, aims at simplifying and streamlining the approval of clinical trials in the EU. For instance, the new 
Clinical Trials Regulation provides for a streamlined application procedure via a single entry point and strictly defined 
deadlines for the assessment of clinical trial applications.

In the European Economic Area, which is comprised of the 27 member states of the EU plus Norway, Iceland and 

Liechtenstein, medicinal products can only be commercialized after obtaining a marketing authorization through one of 

the following procedures: centralized, mutual recognition, and decentralized. Under the centralized procedure, a single 

marketing authorization application is submitted to the CHMP, which then makes a recommendation to the EC. The EC 

makes the final determination on whether to approve the application. The centralized procedure is compulsory for the 

approval, among others, of human medicines containing a new active substance to treat cancer. The mutual recognition 

and decentralized procedures provide for mutual recognition of individual national approval decisions and are available 

for products that are not subject to the mandatory scope of the centralized procedure. The U.K., following its exit from 

the EU and EEA, and Switzerland conduct separate regulatory reviews of new drug applications. Until December 31st, 

2022, the U.K. will also issue national approvals via “reliance route”, by recognizing the centralized EU approvals of 

new medicines.

For the EMA, an application designated as standard review typically lasts approximately twelve to fourteen 

months depending on the length of time sponsors take to address EMA questions. An accelerated assessment procedure 

is applicable to marketing authorization applications for medicinal products that are expected to be of major public health 

interest. For applications that receive accelerated assessment designation and are able to remain on this timeline, the 

review may last approximately seven months depending on the length of time sponsors take to address EMA questions. It 

is not unusual, however, for applications that receive accelerated assessment designation to revert to standard review if, 

for example, the EMA has determined that the significance of the questions that the company needs to address would be 

more appropriate under the standard review timelines. At the end of the review period, EMA will issue an opinion either 

in support of granting a marketing authorization (positive opinion) or recommending refusal of a marketing authorization 

(negative opinion). In the event of a negative opinion, the company may request a re-examination of the application. The 

initial marketing authorization granted in the EU is valid for five years. Once renewed, the authorization will be valid for 

an unlimited period, unless the national competent authority or the EC decides on justified grounds to proceed with one 

additional five-year renewal. The renewal of a marketing authorization is subject to a re-evaluation of the risk-benefit 

balance of the product by the national competent authorities or the EMA.

Post-approval Regulation in Europe

distribution, and safety reporting. 

In countries where we receive regulatory approvals, we are subject to a variety of post-authorization regulations, 

Various requirements apply to the manufacturing and placing of medicinal products on the EU market. The 

manufacturing of medicinal products in the EU requires a manufacturing authorization, and the manufacturing 

authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance. 

These requirements include compliance with EU cGMP standards when manufacturing medicinal products and active 

pharmaceutical ingredients, or APIs, including the manufacture of APIs outside of the EU with the intention to import 

the APIs into the EU. Similarly, the distribution of medicinal products into and within the EU is subject to compliance 

with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for 

distribution which are granted by the competent authorities of the individual EU member states. Marketing authorization 

holders may be subject to civil, criminal or administrative sanctions, including suspension of manufacturing 

authorization, in case of non-compliance with the EU or EU member states’ requirements applicable to the 

manufacturing of medicinal products.

The advertising and promotion of medicinal products are subject to EU member states’ laws governing promotion 

of medicinal products, interactions with physicians, misleading and comparative advertising and unfair commercial 

practices. In addition, legislation adopted by individual EU member states may apply to the advertising and promotion of 

medicinal products. Violations of the rules governing the promotion of medicinal products in the EU could be penalized 

by administrative measures, fines and imprisonment. These laws may further limit or restrict the advertising and 

promotion of our future products and impose limitations on promotional activities with healthcare professionals. 

22

23

FDA Regulation of Companion Diagnostics

Marketing Authorization Regulation in Europe

Certain of our products and product candidates may rely upon in vitro companion diagnostics for use in selecting 

the patients that we believe will respond to our therapeutics. If safe and effective use of a therapeutic product depends on 

an in vitro diagnostic, the FDA generally will require approval or clearance of a reproducible, validated diagnostic test to 

be used with our therapeutic product at the same time that FDA approves the therapeutic product. The review of these in 

vitro companion diagnostics in conjunction with the review of our cancer treatments involves coordination of review by 

the FDA’s Center for Drug Evaluation and Research and by the FDA’s Center for Devices and Radiological Health. The 

FDA’s premarket approval, or PMA, process is costly, lengthy, and uncertain. The receipt and timing of PMA approval 

may have a significant effect on the receipt and timing of any future commercial approvals for our products and product 

candidates. Human diagnostic products are subject to pervasive and ongoing regulatory obligations, including the 

submission of medical device reports, adherence to the Quality Systems Regulation, recordkeeping and product labeling, 

as enforced by the FDA and comparable state authorities. 

The FDA's approval of ADCETRIS in the frontline PTCL indication included a post-marketing commitment to 

develop a clinically validated in-vitro diagnostic device for the selection of patients with CD30-expressing PTCL, not 

including sALCL, for treatment with ADCETRIS in this indication. We and Takeda have a collaboration with Ventana 

Medical Systems, Inc., or Ventana, under which Ventana is working to develop, manufacture and commercialize a 

companion diagnostic test to measure CD30 expression levels in tissue specimens. 

Regulations Outside of the United States 

In addition to regulations in the U.S., we and our collaborators are and will be subject to regulations of other 

countries governing clinical trials, manufacturing, distribution and sales of our products. We must obtain approval by the 

regulatory authorities of countries outside of the U.S. before we can commence clinical trials in those countries and 

approval of the regulators of such countries or economic areas before we may market products in those countries or 

areas. For example, to commercialize TUKYSA in Europe, we need to comply with applicable European regulations. 

The approval requirements and processes can vary greatly, and the time required may be longer or shorter than that 

required for FDA approval. Requirements governing the conduct of clinical trials, product licensing, pricing and 

reimbursement also vary greatly from place to place. 

Clinical Trials Regulation in Europe

In the EU, pursuant to the currently applicable Clinical Trials Directive 2001/20/EC and the Directive 2005/28/EC 

on GCP, a system for the approval of clinical trials in the EU has been implemented through national legislation of the 

EU member states. Under this system, an applicant must obtain approval from the national competent authority of an EU 

member state in which the clinical trial is to be conducted, or in multiple member states if the clinical trial is to be 

conducted in a number of member states. Furthermore, the applicant may only start a clinical trial at a specific study site 

after the independent ethics committee for each site has issued a favorable opinion. The clinical trial application must be 

accompanied by an investigational medicinal product dossier with supporting information prescribed by Directive 

2001/20/EC and Directive 2005/28/EC and corresponding national laws of the individual EU member states and further 

detailed in applicable guidance documents. In April 2014, the EU adopted a new Clinical Trials Regulation (EU) No 

536/2014, which was set to replace the Clinical Trials Directive 2001/20/EC. The new Clinical Trials Regulation (EU) 

No 536/2014 came into effect in January 2022 with a three-year transition period in which clinical trial sponsors will be 

able to choose among different submission pathways. Specifically, the new regulation, which is directly applicable in all 

EU member states, aims at simplifying and streamlining the approval of clinical trials in the EU. For instance, the new 

Clinical Trials Regulation provides for a streamlined application procedure via a single entry point and strictly defined 

deadlines for the assessment of clinical trial applications.

In the European Economic Area, which is comprised of the 27 member states of the EU plus Norway, Iceland and 

Liechtenstein, medicinal products can only be commercialized after obtaining a marketing authorization through one of 
the following procedures: centralized, mutual recognition, and decentralized. Under the centralized procedure, a single 
marketing authorization application is submitted to the CHMP, which then makes a recommendation to the EC. The EC 
makes the final determination on whether to approve the application. The centralized procedure is compulsory for the 
approval, among others, of human medicines containing a new active substance to treat cancer. The mutual recognition 
and decentralized procedures provide for mutual recognition of individual national approval decisions and are available 
for products that are not subject to the mandatory scope of the centralized procedure. The U.K., following its exit from 
the EU and EEA, and Switzerland conduct separate regulatory reviews of new drug applications. Until December 31st, 
2022, the U.K. will also issue national approvals via “reliance route”, by recognizing the centralized EU approvals of 
new medicines.

For the EMA, an application designated as standard review typically lasts approximately twelve to fourteen 
months depending on the length of time sponsors take to address EMA questions. An accelerated assessment procedure 
is applicable to marketing authorization applications for medicinal products that are expected to be of major public health 
interest. For applications that receive accelerated assessment designation and are able to remain on this timeline, the 
review may last approximately seven months depending on the length of time sponsors take to address EMA questions. It 
is not unusual, however, for applications that receive accelerated assessment designation to revert to standard review if, 
for example, the EMA has determined that the significance of the questions that the company needs to address would be 
more appropriate under the standard review timelines. At the end of the review period, EMA will issue an opinion either 
in support of granting a marketing authorization (positive opinion) or recommending refusal of a marketing authorization 
(negative opinion). In the event of a negative opinion, the company may request a re-examination of the application. The 
initial marketing authorization granted in the EU is valid for five years. Once renewed, the authorization will be valid for 
an unlimited period, unless the national competent authority or the EC decides on justified grounds to proceed with one 
additional five-year renewal. The renewal of a marketing authorization is subject to a re-evaluation of the risk-benefit 
balance of the product by the national competent authorities or the EMA.

Post-approval Regulation in Europe

In countries where we receive regulatory approvals, we are subject to a variety of post-authorization regulations, 

including with respect to post-marketing authorization studies, product manufacturing, advertising and promotion, 
distribution, and safety reporting. 

Various requirements apply to the manufacturing and placing of medicinal products on the EU market. The 

manufacturing of medicinal products in the EU requires a manufacturing authorization, and the manufacturing 
authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance. 
These requirements include compliance with EU cGMP standards when manufacturing medicinal products and active 
pharmaceutical ingredients, or APIs, including the manufacture of APIs outside of the EU with the intention to import 
the APIs into the EU. Similarly, the distribution of medicinal products into and within the EU is subject to compliance 
with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for 
distribution which are granted by the competent authorities of the individual EU member states. Marketing authorization 
holders may be subject to civil, criminal or administrative sanctions, including suspension of manufacturing 
authorization, in case of non-compliance with the EU or EU member states’ requirements applicable to the 
manufacturing of medicinal products.

The advertising and promotion of medicinal products are subject to EU member states’ laws governing promotion 

of medicinal products, interactions with physicians, misleading and comparative advertising and unfair commercial 
practices. In addition, legislation adopted by individual EU member states may apply to the advertising and promotion of 
medicinal products. Violations of the rules governing the promotion of medicinal products in the EU could be penalized 
by administrative measures, fines and imprisonment. These laws may further limit or restrict the advertising and 
promotion of our future products and impose limitations on promotional activities with healthcare professionals. 

22

23

The holder of an EU marketing authorization for a medicinal product must also comply with the EU’s 
pharmacovigilance legislation, which includes requirements for conducting pharmacovigilance surveillance, or the 
assessment and monitoring of the safety of medicinal products. The EMA reviews periodic safety update reports 
submitted by marketing authorization holders. If the EMA has concerns that the risk-benefit profile of a product has 
changed, it can adopt an opinion advising that the existing marketing authorization for the product be amended. The 
agency can also require that the marketing authorization holder conducts post-authorization safety studies. Non-
compliance with such obligations can lead to the variation, suspension or withdrawal of marketing authorization or 
imposition of financial penalties or other enforcement measures.

Healthcare Regulation

U.S. federal and state healthcare laws and regulations are also applicable to our business. If we fail to comply with 

these laws, we could face substantial penalties and our business, results of operations, financial condition and prospects 
could be adversely affected. The healthcare laws and regulations that may affect our operations include, without 
limitation, anti-kickback and false claims laws, regulations prohibiting off-label promotion activities, and transparency 
laws regarding payments or other items of value provided to healthcare providers.

The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully soliciting, offering, 

receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an 
individual, or the furnishing or arranging for a good or service, for which payment may be made, in whole or in part, 
under a federal healthcare program, such as the Medicare and Medicaid programs. The term “remuneration” has been 
broadly interpreted to include anything of value. Although there are a number of statutory exceptions and regulatory safe 
harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. 
Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or 
recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of 
the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se 
illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis 
based on a cumulative review of all its facts and circumstances. Several courts have interpreted the statute’s intent 
requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal 
healthcare covered business, the Anti-Kickback Statute has been violated. Additionally, the intent standard under the 
Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act of 2010, as amended by the 
Health Care and Education Reconciliation Act of 2010, collectively PPACA, to a stricter standard such that a person or 
entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a 
violation. PPACA also codified case law that a claim including items or services resulting from a violation of the federal 
Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. In 
addition, a criminal conviction for violation of the federal Anti-Kickback Statute requires mandatory exclusion from 
participation in federal healthcare programs.

The federal civil and criminal false claims laws, including the federal civil False Claims Act, prohibit, among 

other things, individuals or entities from knowingly presenting, or causing to be presented, a false claim to, or the 
knowing use of false statements to obtain payment from, or approval by, the federal government, including the Medicare 
and Medicaid programs, or knowingly making, using, or causing to be made or used a false record or statement material 
to a false or fraudulent claim or to avoid, decrease, or conceal an obligation to pay money to the federal government.

The FDA and other governmental authorities also actively investigate allegations of off-label promotion activities 

in order to enforce regulations prohibiting these types of activities. In recent years, private whistleblowers have also 
pursued False Claims Act cases against a number of pharmaceutical companies for causing false claims to be submitted 
as a result of off-label promotion. If we are found to have promoted an approved product for off-label uses, we may be 
subject to significant liability, including significant civil and administrative financial penalties and other remedies as well 
as criminal penalties and other sanctions. Even when a company is not determined to have engaged in off-label 
promotion, the allegation from government authorities or market participants that a company has engaged in such 
activities could have a significant impact on the company’s sales, business and financial condition. The U.S. government 
has also required companies to enter into complex corporate integrity agreements, deferred prosecution agreements and/
or non-prosecution agreements that impose significant reporting and other burdens on the affected companies.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal 

criminal statutes that prohibit, among other actions, knowingly and willfully executing or attempting to execute a scheme 

to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or 

stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and 

knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious or 

fraudulent statement in connection with the delivery of or payment for healthcare benefits, items, or services. Like the 

Anti-Kickback Statute, PPACA amended the intent standard for certain healthcare fraud under HIPAA such that a person 

or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have 

committed a violation.

The civil monetary penalties statute imposes penalties against any person or entity that, among other things, is 

determined to have presented or caused to be presented a claim to a federal health program that the person knows or 

should know is for an item or service that was not provided as claimed or is false or fraudulent.

The federal transparency requirements under the Physician Payments Sunshine Act, created under PPACA and its 

implementing regulations, require certain manufacturers of drugs, devices, biologics and medical supplies for which 

payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to annually report 

information related to certain payments or other transfers of value provided to physicians (defined to include doctors, 

dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and 

nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the 

physicians and teaching hospitals, and to report annually certain ownership and investment interests held by physicians 

and their immediate family members. Failure to submit timely, accurately and completely the required information for all 

payments, transfers of value and ownership or investment interests may result in civil monetary penalties of up to an 

aggregate of $150,000 per year and up to an aggregate of $1 million per year for “knowing failures,” as adjusted for 

inflation. Covered manufacturers are required to submit reports on aggregate payment data to the Secretary of the U.S. 

Department of Health and Human Services on an annual basis.

Many states have similar statutes or regulations to the above federal laws and regulations that may be broader in 

scope than the aforementioned federal versions and apply regardless of payor, and many of which differ from each other 

in significant ways and may not have the same effect, further complicating compliance efforts. Additionally, our business 

operations in countries outside the United States, including Canada and the EU, may subject us to additional regulation. 

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available 

under such laws, it is possible that some of our business activities could be subject to challenge under one or more of 

such laws. If our operations were found to be in violation of any of the health regulatory laws described above or any 

other laws that apply to us, we may be subject to penalties, including significant criminal, civil and administrative 

penalties, damages, fines, disgorgement, contractual damages, reputational harm, administrative burdens, imprisonment, 

diminished profits and future earnings, exclusion from government healthcare reimbursement programs, additional 

reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to 

resolve allegations of non-compliance with these laws, and/or the curtailment or restructuring of our operations. 

Anti-Corruption Legislation

We are also subject to numerous other laws and regulations that are not specific to the healthcare industry. For 

instance, the U.S. Foreign Corrupt Practices Act, or FCPA, generally prohibits paying, offering to pay, or authorizing the 

payment of anything of value to any foreign government official, governmental staff members, political party or political 

candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity. 

The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the 

transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. In Europe, 

national anti-corruption laws prohibit giving, offering, or promising bribes to any person, including foreign government 

officials and private persons, as well as requesting, agreeing to receive, or accepting bribes from any person. Various 

European anti-corruption laws have broad extraterritorial reach and therefore we may be subject to those laws even if we 

do not have an established entity in those countries and we may be held liable for bribes given, offered or promised to 

any person, including private persons, by employees and persons associated with us in order to obtain or retain business 

or a business advantage. As we continue to expand our footprint and activities internationally, our exposure to 

compliance risks under the FCPA and other similar laws will likewise increase.

24

25

The holder of an EU marketing authorization for a medicinal product must also comply with the EU’s 

pharmacovigilance legislation, which includes requirements for conducting pharmacovigilance surveillance, or the 

assessment and monitoring of the safety of medicinal products. The EMA reviews periodic safety update reports 

submitted by marketing authorization holders. If the EMA has concerns that the risk-benefit profile of a product has 

changed, it can adopt an opinion advising that the existing marketing authorization for the product be amended. The 

agency can also require that the marketing authorization holder conducts post-authorization safety studies. Non-

compliance with such obligations can lead to the variation, suspension or withdrawal of marketing authorization or 

imposition of financial penalties or other enforcement measures.

Healthcare Regulation

U.S. federal and state healthcare laws and regulations are also applicable to our business. If we fail to comply with 

these laws, we could face substantial penalties and our business, results of operations, financial condition and prospects 

could be adversely affected. The healthcare laws and regulations that may affect our operations include, without 

limitation, anti-kickback and false claims laws, regulations prohibiting off-label promotion activities, and transparency 

laws regarding payments or other items of value provided to healthcare providers.

The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully soliciting, offering, 

receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an 

individual, or the furnishing or arranging for a good or service, for which payment may be made, in whole or in part, 

under a federal healthcare program, such as the Medicare and Medicaid programs. The term “remuneration” has been 

broadly interpreted to include anything of value. Although there are a number of statutory exceptions and regulatory safe 

harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly. 

Practices that involve remuneration that may be alleged to be intended to induce prescribing, purchases or 

recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of 

the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se 

illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis 

based on a cumulative review of all its facts and circumstances. Several courts have interpreted the statute’s intent 

requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal 

healthcare covered business, the Anti-Kickback Statute has been violated. Additionally, the intent standard under the 

Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act of 2010, as amended by the 

Health Care and Education Reconciliation Act of 2010, collectively PPACA, to a stricter standard such that a person or 

entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a 

violation. PPACA also codified case law that a claim including items or services resulting from a violation of the federal 

Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. In 

addition, a criminal conviction for violation of the federal Anti-Kickback Statute requires mandatory exclusion from 

participation in federal healthcare programs.

The federal civil and criminal false claims laws, including the federal civil False Claims Act, prohibit, among 

other things, individuals or entities from knowingly presenting, or causing to be presented, a false claim to, or the 

knowing use of false statements to obtain payment from, or approval by, the federal government, including the Medicare 

and Medicaid programs, or knowingly making, using, or causing to be made or used a false record or statement material 

to a false or fraudulent claim or to avoid, decrease, or conceal an obligation to pay money to the federal government.

The FDA and other governmental authorities also actively investigate allegations of off-label promotion activities 

in order to enforce regulations prohibiting these types of activities. In recent years, private whistleblowers have also 

pursued False Claims Act cases against a number of pharmaceutical companies for causing false claims to be submitted 

as a result of off-label promotion. If we are found to have promoted an approved product for off-label uses, we may be 

subject to significant liability, including significant civil and administrative financial penalties and other remedies as well 

as criminal penalties and other sanctions. Even when a company is not determined to have engaged in off-label 

promotion, the allegation from government authorities or market participants that a company has engaged in such 

activities could have a significant impact on the company’s sales, business and financial condition. The U.S. government 

has also required companies to enter into complex corporate integrity agreements, deferred prosecution agreements and/

or non-prosecution agreements that impose significant reporting and other burdens on the affected companies.

The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal 

criminal statutes that prohibit, among other actions, knowingly and willfully executing or attempting to execute a scheme 
to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or 
stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense, and 
knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious or 
fraudulent statement in connection with the delivery of or payment for healthcare benefits, items, or services. Like the 
Anti-Kickback Statute, PPACA amended the intent standard for certain healthcare fraud under HIPAA such that a person 
or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have 
committed a violation.

The civil monetary penalties statute imposes penalties against any person or entity that, among other things, is 
determined to have presented or caused to be presented a claim to a federal health program that the person knows or 
should know is for an item or service that was not provided as claimed or is false or fraudulent.

The federal transparency requirements under the Physician Payments Sunshine Act, created under PPACA and its 

implementing regulations, require certain manufacturers of drugs, devices, biologics and medical supplies for which 
payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program to annually report 
information related to certain payments or other transfers of value provided to physicians (defined to include doctors, 
dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and 
nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the 
physicians and teaching hospitals, and to report annually certain ownership and investment interests held by physicians 
and their immediate family members. Failure to submit timely, accurately and completely the required information for all 
payments, transfers of value and ownership or investment interests may result in civil monetary penalties of up to an 
aggregate of $150,000 per year and up to an aggregate of $1 million per year for “knowing failures,” as adjusted for 
inflation. Covered manufacturers are required to submit reports on aggregate payment data to the Secretary of the U.S. 
Department of Health and Human Services on an annual basis.

Many states have similar statutes or regulations to the above federal laws and regulations that may be broader in 

scope than the aforementioned federal versions and apply regardless of payor, and many of which differ from each other 
in significant ways and may not have the same effect, further complicating compliance efforts. Additionally, our business 
operations in countries outside the United States, including Canada and the EU, may subject us to additional regulation. 

Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available 
under such laws, it is possible that some of our business activities could be subject to challenge under one or more of 
such laws. If our operations were found to be in violation of any of the health regulatory laws described above or any 
other laws that apply to us, we may be subject to penalties, including significant criminal, civil and administrative 
penalties, damages, fines, disgorgement, contractual damages, reputational harm, administrative burdens, imprisonment, 
diminished profits and future earnings, exclusion from government healthcare reimbursement programs, additional 
reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to 
resolve allegations of non-compliance with these laws, and/or the curtailment or restructuring of our operations. 

Anti-Corruption Legislation

We are also subject to numerous other laws and regulations that are not specific to the healthcare industry. For 

instance, the U.S. Foreign Corrupt Practices Act, or FCPA, generally prohibits paying, offering to pay, or authorizing the 
payment of anything of value to any foreign government official, governmental staff members, political party or political 
candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity. 
The FCPA also requires public companies to make and keep books and records that accurately and fairly reflect the 
transactions of the corporation and to devise and maintain an adequate system of internal accounting controls. In Europe, 
national anti-corruption laws prohibit giving, offering, or promising bribes to any person, including foreign government 
officials and private persons, as well as requesting, agreeing to receive, or accepting bribes from any person. Various 
European anti-corruption laws have broad extraterritorial reach and therefore we may be subject to those laws even if we 
do not have an established entity in those countries and we may be held liable for bribes given, offered or promised to 
any person, including private persons, by employees and persons associated with us in order to obtain or retain business 
or a business advantage. As we continue to expand our footprint and activities internationally, our exposure to 
compliance risks under the FCPA and other similar laws will likewise increase.

24

25

Privacy and Security Laws

There are also numerous privacy and data protection laws to which we are currently, and/or may in the future, be 

subject. In the United States, federal, state, and local governments have enacted numerous data privacy and security 
laws, including data breach notification laws, personal data privacy laws, and consumer protection laws. The laws are not 
consistent, and states frequently amend existing laws, requiring attention to constantly changing regulatory requirements. 
For example, the California Consumer Privacy Act, or CCPA, became effective on January 1, 2020, and the California 
Privacy Rights Act, or CPRA, will take effect in January 2023 (with a look back for certain rights to January 2022). The 
CPRA will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive 
personal information. We may also be subject to additional U.S. privacy regulations in the future, including the Virginia 
Consumer Data Protection Act and the Colorado Privacy Act, both of which become effective in 2023. In addition, at the 
federal level, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its 
implementing regulations impose additional obligations on certain types of individuals and entities with respect to the 
security, privacy and transmission of individually identifiable health information. 

EU member countries and other jurisdictions, including Switzerland, the United Kingdom and Canada, have also 

adopted data protection laws and regulations which impose significant compliance obligations. For example, the EU’s 
General Data Protection Regulation, or GDPR, imposes a range of requirements relating to the collection, use, handling 
and protection of personal data. Violations of the GDPR can result in significant penalties, including potential fines of up 
to €20 million or 4% of the annual global revenues of the non-compliant company, whichever is greater. The GDPR has 
increased our responsibility and potential liability in relation to all types of personal data that we process, including 
clinical trial data and employee information. In addition, local data protection authorities can have different 
interpretations of the GDPR, leading to compliance challenges as a result of potential inconsistencies amongst various 
EU member states. 

Among other requirements, the GDPR regulates transfers of personal data to countries that have not been found to 

provide adequate protection to such personal data, including the U.S. This includes transfers between us and our 
subsidiaries. In July 2020, the Court of Justice of the EU, or the CJEU, invalidated one of the primary safeguards 
enabling U.S. companies to import personal information from Europe, the EU-U.S. Privacy Shield. The same decision 
also raised questions about whether one of the primary alternatives to the EU-U.S. Privacy Shield, namely, the EC’s 
Standard Contractual Clauses, or SCCs, provide sufficient protection for personal data transfers without analyzing each 
transfer and implementing supplementary measures to protect the data. As a result of the CJEU’s decision, the EC issued 
new SCCs in June 2021 that repeal and replace the previous clauses. Companies relying on the SCCs for transfers have 
until December 2022 to implement the new clauses. Following recommendations from the European Data Protection 
Board, we are reviewing personal data transfers from the EU and adding the new SCCs and supplementary measures, 
when required. Since local data protection authorities can interpret GDPR and the CJEU’s decision differently, there is 
no definitive set of controls that can ensure GDPR compliance across our business operations. In addition, authorities in 
Switzerland and the United Kingdom, whose data protection laws are similar to those of the EU, also invalidated the use 
of privacy shields. Additional compliance efforts may be needed to respond to evolving regulatory guidance. If our 
compliance solutions are found to be insufficient, we could face substantial fines under European data protection laws as 
well as injunctions against processing and/or transferring personal information from Europe. The inability to import 
personal information from Europe could restrict our clinical trial activities in Europe, limit our ability to collaborate with 
contract research organizations, service providers, contractors and other companies subject to European data protection 
laws, interfere with our ability to hire employees in Europe and require us to increase our data processing capabilities in 
Europe at significant expense. 

In addition, we may be subject to other foreign data privacy and security laws. For example, China’s Personal 
Information Protection Law, or PIPL, which took effect in November 2021, imposes various requirements related to 
personal information processing, similar to the GDPR and CCPA. In particular, the PIPL sets out personal information 
localization requirements, along with rules regarding the transfer of personal information outside of China. Such 
transfers may require assessment and/or approval by China’s Cyberspace Administration, certification by professional 
institutions or entering into contracts with and supervising overseas recipients. Violations of the PIPL may lead to an 
administrative fine of up to RMB 50 million or 5% of turnover in the last year. 

Any failure or alleged failure to comply with legal or contractual obligations, policies and industry standards 

relating to personal information, and any incident resulting in the unauthorized access to, or acquisition, release or 

transfer of, personal information, may result in governmental investigations or enforcement actions, litigation, fines, 

penalties, damage to our reputation and other adverse consequences. In addition, we expect that laws, regulations, 

policies and industry standards relating to privacy and data protection will continue to evolve. These changes may 

require us to modify our practices and may increase our costs of doing business. In addition, privacy advocates and 

industry groups have regularly proposed, and may propose in the future, self-regulatory standards that may legally or 

contractually apply to us. If we fail to follow these standards, even if no personal information is compromised, we may 

incur significant fines or experience a significant increase in costs. 

Coverage and Reimbursement 

Sales of our current and any future approved products will depend, in part, on the extent to which the costs of our 

products will be covered by third-party payors, such as government health programs, commercial insurance and managed 

healthcare organizations. Patients who are prescribed treatment for their conditions and providers performing the 

prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. 

Patients and providers are unlikely to use our products unless coverage is provided and reimbursement is adequate to 

cover a significant portion of the cost of our products. Pharmaceutical products are typically reimbursed based on FDA 

labeled indications, recognized compendia listings, available medical literature, evidence of favorable clinical outcomes, 

determination of medical necessity and cost effectiveness.

Additionally, a third-party payor’s decision to provide coverage for a product does not imply that an adequate 

reimbursement rate will be approved. In the United States, no uniform policy of coverage and reimbursement for 

products exists among third-party payors. Therefore, coverage and reimbursement for products can differ significantly 

from payor to payor. Decisions regarding the extent of coverage and amount of reimbursement to be provided for each of 

our product candidates is individual to each insurer, can vary based on provider contract, and will be affected by state 

and federal laws providing for reimbursement formulas based on acquisition cost. Third-party payors continue to work 

diligently to control their spending on prescription drugs and medical service. The containment of healthcare costs has 

become a priority of the U.S. government and abroad, and the prices of drugs have been a focus in this effort. The U.S. 

government, state legislatures and the governments of other countries have shown significant interest in implementing 

cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of 

generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in 

jurisdictions with existing controls and measures, could further limit our net sales and negatively impact our operating 

results. Payors, commercial and public, in the U.S. and abroad, must review the therapeutic value of our products before 

extending coverage under their plans to reimburse our products. If third-party payors do not find a product to be of 

therapeutic value, they may not cover it or, if they do, they may do so at an insufficient level of payment.

26

27

Privacy and Security Laws

There are also numerous privacy and data protection laws to which we are currently, and/or may in the future, be 

subject. In the United States, federal, state, and local governments have enacted numerous data privacy and security 

laws, including data breach notification laws, personal data privacy laws, and consumer protection laws. The laws are not 

consistent, and states frequently amend existing laws, requiring attention to constantly changing regulatory requirements. 

For example, the California Consumer Privacy Act, or CCPA, became effective on January 1, 2020, and the California 

Privacy Rights Act, or CPRA, will take effect in January 2023 (with a look back for certain rights to January 2022). The 

CPRA will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive 

personal information. We may also be subject to additional U.S. privacy regulations in the future, including the Virginia 

Consumer Data Protection Act and the Colorado Privacy Act, both of which become effective in 2023. In addition, at the 

federal level, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its 

implementing regulations impose additional obligations on certain types of individuals and entities with respect to the 

security, privacy and transmission of individually identifiable health information. 

EU member countries and other jurisdictions, including Switzerland, the United Kingdom and Canada, have also 

adopted data protection laws and regulations which impose significant compliance obligations. For example, the EU’s 

General Data Protection Regulation, or GDPR, imposes a range of requirements relating to the collection, use, handling 

and protection of personal data. Violations of the GDPR can result in significant penalties, including potential fines of up 

to €20 million or 4% of the annual global revenues of the non-compliant company, whichever is greater. The GDPR has 

increased our responsibility and potential liability in relation to all types of personal data that we process, including 

clinical trial data and employee information. In addition, local data protection authorities can have different 

interpretations of the GDPR, leading to compliance challenges as a result of potential inconsistencies amongst various 

EU member states. 

Among other requirements, the GDPR regulates transfers of personal data to countries that have not been found to 

provide adequate protection to such personal data, including the U.S. This includes transfers between us and our 

subsidiaries. In July 2020, the Court of Justice of the EU, or the CJEU, invalidated one of the primary safeguards 

enabling U.S. companies to import personal information from Europe, the EU-U.S. Privacy Shield. The same decision 

also raised questions about whether one of the primary alternatives to the EU-U.S. Privacy Shield, namely, the EC’s 

Standard Contractual Clauses, or SCCs, provide sufficient protection for personal data transfers without analyzing each 

transfer and implementing supplementary measures to protect the data. As a result of the CJEU’s decision, the EC issued 

new SCCs in June 2021 that repeal and replace the previous clauses. Companies relying on the SCCs for transfers have 

until December 2022 to implement the new clauses. Following recommendations from the European Data Protection 

Board, we are reviewing personal data transfers from the EU and adding the new SCCs and supplementary measures, 

when required. Since local data protection authorities can interpret GDPR and the CJEU’s decision differently, there is 

no definitive set of controls that can ensure GDPR compliance across our business operations. In addition, authorities in 

Switzerland and the United Kingdom, whose data protection laws are similar to those of the EU, also invalidated the use 

of privacy shields. Additional compliance efforts may be needed to respond to evolving regulatory guidance. If our 

compliance solutions are found to be insufficient, we could face substantial fines under European data protection laws as 

well as injunctions against processing and/or transferring personal information from Europe. The inability to import 

personal information from Europe could restrict our clinical trial activities in Europe, limit our ability to collaborate with 

contract research organizations, service providers, contractors and other companies subject to European data protection 

laws, interfere with our ability to hire employees in Europe and require us to increase our data processing capabilities in 

Europe at significant expense. 

In addition, we may be subject to other foreign data privacy and security laws. For example, China’s Personal 

Information Protection Law, or PIPL, which took effect in November 2021, imposes various requirements related to 

personal information processing, similar to the GDPR and CCPA. In particular, the PIPL sets out personal information 

localization requirements, along with rules regarding the transfer of personal information outside of China. Such 

transfers may require assessment and/or approval by China’s Cyberspace Administration, certification by professional 

institutions or entering into contracts with and supervising overseas recipients. Violations of the PIPL may lead to an 

administrative fine of up to RMB 50 million or 5% of turnover in the last year. 

Any failure or alleged failure to comply with legal or contractual obligations, policies and industry standards 

relating to personal information, and any incident resulting in the unauthorized access to, or acquisition, release or 
transfer of, personal information, may result in governmental investigations or enforcement actions, litigation, fines, 
penalties, damage to our reputation and other adverse consequences. In addition, we expect that laws, regulations, 
policies and industry standards relating to privacy and data protection will continue to evolve. These changes may 
require us to modify our practices and may increase our costs of doing business. In addition, privacy advocates and 
industry groups have regularly proposed, and may propose in the future, self-regulatory standards that may legally or 
contractually apply to us. If we fail to follow these standards, even if no personal information is compromised, we may 
incur significant fines or experience a significant increase in costs. 

Coverage and Reimbursement 

Sales of our current and any future approved products will depend, in part, on the extent to which the costs of our 

products will be covered by third-party payors, such as government health programs, commercial insurance and managed 
healthcare organizations. Patients who are prescribed treatment for their conditions and providers performing the 
prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. 
Patients and providers are unlikely to use our products unless coverage is provided and reimbursement is adequate to 
cover a significant portion of the cost of our products. Pharmaceutical products are typically reimbursed based on FDA 
labeled indications, recognized compendia listings, available medical literature, evidence of favorable clinical outcomes, 
determination of medical necessity and cost effectiveness.

Additionally, a third-party payor’s decision to provide coverage for a product does not imply that an adequate 

reimbursement rate will be approved. In the United States, no uniform policy of coverage and reimbursement for 
products exists among third-party payors. Therefore, coverage and reimbursement for products can differ significantly 
from payor to payor. Decisions regarding the extent of coverage and amount of reimbursement to be provided for each of 
our product candidates is individual to each insurer, can vary based on provider contract, and will be affected by state 
and federal laws providing for reimbursement formulas based on acquisition cost. Third-party payors continue to work 
diligently to control their spending on prescription drugs and medical service. The containment of healthcare costs has 
become a priority of the U.S. government and abroad, and the prices of drugs have been a focus in this effort. The U.S. 
government, state legislatures and the governments of other countries have shown significant interest in implementing 
cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of 
generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in 
jurisdictions with existing controls and measures, could further limit our net sales and negatively impact our operating 
results. Payors, commercial and public, in the U.S. and abroad, must review the therapeutic value of our products before 
extending coverage under their plans to reimburse our products. If third-party payors do not find a product to be of 
therapeutic value, they may not cover it or, if they do, they may do so at an insufficient level of payment.

26

27

Many of the patients in the U.S. who seek treatment with our products may be eligible for Medicare or Medicaid 
benefits. The Medicare and Medicaid programs are administered by the Centers for Medicare and Medicaid Services, or 
CMS, and coverage and reimbursement for products and services under these programs are subject to changes in CMS 
regulations and interpretive policy determinations, in addition to statutory changes made by Congress. For example, 
PPACA increased the mandated Medicaid rebate on most branded prescription drugs from 15.1% of average 
manufacturer price, or AMP, to 23.1% of AMP, expanded the rebate to Medicaid managed care utilization and increased 
the types of entities eligible for the federal 340B drug discount program. Federal budget decisions have reduced 
Medicare payment rates, and future budget decisions may reduce Medicare payment rates again. In addition, as a 
condition of federal funds being made available to cover our products under Medicaid, we are required to participate in 
the Medicaid drug rebate program. The rebate amount under this program varies by quarter, and is based on pricing data 
we report to CMS. In addition, because we participate in the Medicaid drug rebate program, we must make our products 
available to authorized users of the Federal Supply Schedule of the General Services Administration. This requires 
compliance with additional laws and requirements, including offering our products at a reduced price to federal agencies 
including the United States Department of Veterans Affairs and United States Department of Defense, the Public Health 
Service and the Indian Health Service. We are also required to offer discounted pricing to certain eligible not for profit 
entities that are eligible for 340B pricing under the Public Health Services Act. Participation in these programs requires 
submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the 
entry into government procurement contracts governed by the Federal Acquisition Regulations and the guidance 
governing such calculations is not always clear. Compliance with such requirements can require significant investment in 
personnel, systems and resources, but failure to properly calculate our prices, or offer required discounts or rebates could 
subject us to substantial criminal, civil and/or administrative penalties, as well as, administrative burdens and exclusion 
from or contract termination regarding these programs. The terms of these government programs could change in the 
future which may increase the discounts or rebates we are required to offer, possibly reducing the revenue derived from 
sales of our products to these entities.

Policies governing drug pricing vary widely from country to country. In many European countries, authorities 

regulate the pricing of a pharmaceutical product at launch or subsequent to launch through direct price controls such as 
international reference pricing. In addition, in many European countries, pharmaceutical products are funded largely by 
the national healthcare systems. As a result, patients are unlikely to use a pharmaceutical product that is not reimbursed 
by the national authorities. There can be no assurance as to the pricing and/or level of reimbursement that may be 
available for our products in countries with pricing and reimbursement policies in place at the national level. 

Health Technology Assessment, or HTA, of pharmaceutical products is becoming an increasingly common part of 

the pricing and reimbursement procedures in EU member states. The HTA process, which is governed by the national 
laws of the applicable country, aims to measure the added value of a new health technology compared to existing ones by 
assessing its public health impact, therapeutic impact and economic and societal impact in the context and setting of the 
individual country’s national healthcare system. HTA generally focuses on the clinical efficacy and effectiveness, safety, 
cost and cost-effectiveness of individual pharmaceutical products in comparison to the local standard of care, as well as 
their potential implications for the healthcare system. The outcome of HTA regarding specific medicinal products will 
often influence the pricing and reimbursement status granted to these pharmaceutical products by the competent 
authorities of individual EU member states. Pursuant to Directive 2011/24/EU, a voluntary network of national 
authorities or bodies responsible for HTA in the individual EU member states was established. The purpose of the 
network is to facilitate and support the exchange of scientific information concerning HTAs. This could lead to 
harmonization between EU member states of the criteria taken into account in the conduct of HTA and their impact on 
pricing and reimbursement decisions.

Healthcare Reform 

PPACA substantially changed the way healthcare is financed by both governmental and private insurers and 

significantly affected the pharmaceutical industry. PPACA has, among other things, expanded and increased industry 

rebates for products covered under Medicaid programs and changed the coverage requirements under the Medicare Part 

D program. In order for a biopharmaceutical product to receive federal reimbursement under the Medicare Part B and 

Medicaid programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to 

entities eligible to participate in the drug pricing program under the Public Health Services Act, or PHS. The required 

PHS discount on a given product is calculated based on the Average Manufacturers Price, or AMP, and Medicaid rebate 

amounts reported by the manufacturer. PPACA expanded the types of entities eligible to receive discounted PHS pricing, 

although, under the current state of the law, with the exception of children’s hospitals, these newly eligible entities will 

not be eligible to receive discounted PHS pricing on orphan drugs when used for the orphan indication. In addition, as 

PHS drug pricing is determined based on AMP and Medicaid rebate data, revisions, including the AMP rule, to the 

Medicaid rebate formula and AMP definition described above could cause the required PHS discount to increase.

In addition, other legislative changes have been proposed and adopted since PPACA was enacted. The Budget 

Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend to 

Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at 

least $1.2 trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction to several government 

programs. This includes reductions to Medicare payments to providers, which went into effect in April 2013 and, due to 

subsequent legislative action, will remain in effect through 2031, with the exception of a temporary suspension from 

May 1, 2020 through March 31, 2022 and a temporary cut in the amount of the reduction from April 1 through June 30 

2022, unless additional congressional action is taken. The American Taxpayer Relief Act of 2012, among other things, 

reduced Medicare payments to several providers and increased the statute of limitations period for the government to 

recover overpayments to providers from three to five years. 

In addition, the Drug Supply Chain Security Act, or DSCSA, was enacted with the aim of building an electronic 

system to identify and trace certain prescription drugs distributed in the United States, including most biological 

products. The DSCSA mandates phased-in and resource-intensive obligations for pharmaceutical manufacturers, 

wholesale distributors, and dispensers over a 10-year period that is expected to culminate in November 2023.

As described above in "Coverage and Reimbursement", federal and state legislatures, governments in countries 

outside the U.S., health agencies and third-party payors continue to focus on containing the cost of healthcare. 

Legislative and regulatory changes and increasing pressure from social sources are likely to further influence the manner 

in which our products are priced, prescribed, purchased and reimbursed. For example, the federal government has 

implemented reforms to government healthcare programs in the U.S., including changes to the methods for, and amounts 

of, Medicare reimbursement and changes to the Medicaid Drug Rebate Program. On March 11, 2021, President Biden 

signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, 

currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, 

beginning January 1, 2024. Proposed changes to the Medicare Part B program requiring rebates for discarded drug 

products could increase potential rebates. The Biden administration also recently announced an Executive Order that 

includes initiatives to support the implementation of Canadian drug importation and reduce drug prices. In response to 

President Biden’s Executive Order, on September 9, 2021, the U.S. Department of Health and Human Services released 

a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a 

variety of potential legislative policies that Congress could pursue to advance these principles. No legislation or 

administrative actions have been finalized to implement these principles. In addition, Congress is considering drug 

pricing as part of other healthcare reform initiatives. 

Competition 

The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies and 

intense competition. Many third parties compete with us in developing various approaches to treating cancer. They 

include pharmaceutical companies, biotechnology companies, academic institutions and other research organizations.

28

29

Many of the patients in the U.S. who seek treatment with our products may be eligible for Medicare or Medicaid 

Healthcare Reform 

benefits. The Medicare and Medicaid programs are administered by the Centers for Medicare and Medicaid Services, or 

CMS, and coverage and reimbursement for products and services under these programs are subject to changes in CMS 

regulations and interpretive policy determinations, in addition to statutory changes made by Congress. For example, 

PPACA increased the mandated Medicaid rebate on most branded prescription drugs from 15.1% of average 

manufacturer price, or AMP, to 23.1% of AMP, expanded the rebate to Medicaid managed care utilization and increased 

the types of entities eligible for the federal 340B drug discount program. Federal budget decisions have reduced 

Medicare payment rates, and future budget decisions may reduce Medicare payment rates again. In addition, as a 

condition of federal funds being made available to cover our products under Medicaid, we are required to participate in 

the Medicaid drug rebate program. The rebate amount under this program varies by quarter, and is based on pricing data 

we report to CMS. In addition, because we participate in the Medicaid drug rebate program, we must make our products 

available to authorized users of the Federal Supply Schedule of the General Services Administration. This requires 

compliance with additional laws and requirements, including offering our products at a reduced price to federal agencies 

including the United States Department of Veterans Affairs and United States Department of Defense, the Public Health 

Service and the Indian Health Service. We are also required to offer discounted pricing to certain eligible not for profit 

entities that are eligible for 340B pricing under the Public Health Services Act. Participation in these programs requires 

submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the 

entry into government procurement contracts governed by the Federal Acquisition Regulations and the guidance 

governing such calculations is not always clear. Compliance with such requirements can require significant investment in 

personnel, systems and resources, but failure to properly calculate our prices, or offer required discounts or rebates could 

subject us to substantial criminal, civil and/or administrative penalties, as well as, administrative burdens and exclusion 

from or contract termination regarding these programs. The terms of these government programs could change in the 

future which may increase the discounts or rebates we are required to offer, possibly reducing the revenue derived from 

sales of our products to these entities.

Policies governing drug pricing vary widely from country to country. In many European countries, authorities 

regulate the pricing of a pharmaceutical product at launch or subsequent to launch through direct price controls such as 

international reference pricing. In addition, in many European countries, pharmaceutical products are funded largely by 

the national healthcare systems. As a result, patients are unlikely to use a pharmaceutical product that is not reimbursed 

by the national authorities. There can be no assurance as to the pricing and/or level of reimbursement that may be 

available for our products in countries with pricing and reimbursement policies in place at the national level. 

Health Technology Assessment, or HTA, of pharmaceutical products is becoming an increasingly common part of 

the pricing and reimbursement procedures in EU member states. The HTA process, which is governed by the national 

laws of the applicable country, aims to measure the added value of a new health technology compared to existing ones by 

assessing its public health impact, therapeutic impact and economic and societal impact in the context and setting of the 

individual country’s national healthcare system. HTA generally focuses on the clinical efficacy and effectiveness, safety, 

cost and cost-effectiveness of individual pharmaceutical products in comparison to the local standard of care, as well as 

their potential implications for the healthcare system. The outcome of HTA regarding specific medicinal products will 

often influence the pricing and reimbursement status granted to these pharmaceutical products by the competent 

authorities of individual EU member states. Pursuant to Directive 2011/24/EU, a voluntary network of national 

authorities or bodies responsible for HTA in the individual EU member states was established. The purpose of the 

network is to facilitate and support the exchange of scientific information concerning HTAs. This could lead to 

harmonization between EU member states of the criteria taken into account in the conduct of HTA and their impact on 

pricing and reimbursement decisions.

PPACA substantially changed the way healthcare is financed by both governmental and private insurers and 

significantly affected the pharmaceutical industry. PPACA has, among other things, expanded and increased industry 
rebates for products covered under Medicaid programs and changed the coverage requirements under the Medicare Part 
D program. In order for a biopharmaceutical product to receive federal reimbursement under the Medicare Part B and 
Medicaid programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to 
entities eligible to participate in the drug pricing program under the Public Health Services Act, or PHS. The required 
PHS discount on a given product is calculated based on the Average Manufacturers Price, or AMP, and Medicaid rebate 
amounts reported by the manufacturer. PPACA expanded the types of entities eligible to receive discounted PHS pricing, 
although, under the current state of the law, with the exception of children’s hospitals, these newly eligible entities will 
not be eligible to receive discounted PHS pricing on orphan drugs when used for the orphan indication. In addition, as 
PHS drug pricing is determined based on AMP and Medicaid rebate data, revisions, including the AMP rule, to the 
Medicaid rebate formula and AMP definition described above could cause the required PHS discount to increase.

In addition, other legislative changes have been proposed and adopted since PPACA was enacted. The Budget 
Control Act of 2011, among other things, created the Joint Select Committee on Deficit Reduction to recommend to 
Congress proposals in spending reductions. The Joint Select Committee did not achieve a targeted deficit reduction of at 
least $1.2 trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction to several government 
programs. This includes reductions to Medicare payments to providers, which went into effect in April 2013 and, due to 
subsequent legislative action, will remain in effect through 2031, with the exception of a temporary suspension from 
May 1, 2020 through March 31, 2022 and a temporary cut in the amount of the reduction from April 1 through June 30 
2022, unless additional congressional action is taken. The American Taxpayer Relief Act of 2012, among other things, 
reduced Medicare payments to several providers and increased the statute of limitations period for the government to 
recover overpayments to providers from three to five years. 

In addition, the Drug Supply Chain Security Act, or DSCSA, was enacted with the aim of building an electronic 

system to identify and trace certain prescription drugs distributed in the United States, including most biological 
products. The DSCSA mandates phased-in and resource-intensive obligations for pharmaceutical manufacturers, 
wholesale distributors, and dispensers over a 10-year period that is expected to culminate in November 2023.

As described above in "Coverage and Reimbursement", federal and state legislatures, governments in countries 

outside the U.S., health agencies and third-party payors continue to focus on containing the cost of healthcare. 
Legislative and regulatory changes and increasing pressure from social sources are likely to further influence the manner 
in which our products are priced, prescribed, purchased and reimbursed. For example, the federal government has 
implemented reforms to government healthcare programs in the U.S., including changes to the methods for, and amounts 
of, Medicare reimbursement and changes to the Medicaid Drug Rebate Program. On March 11, 2021, President Biden 
signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, 
currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, 
beginning January 1, 2024. Proposed changes to the Medicare Part B program requiring rebates for discarded drug 
products could increase potential rebates. The Biden administration also recently announced an Executive Order that 
includes initiatives to support the implementation of Canadian drug importation and reduce drug prices. In response to 
President Biden’s Executive Order, on September 9, 2021, the U.S. Department of Health and Human Services released 
a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a 
variety of potential legislative policies that Congress could pursue to advance these principles. No legislation or 
administrative actions have been finalized to implement these principles. In addition, Congress is considering drug 
pricing as part of other healthcare reform initiatives. 

Competition 

The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies and 
intense competition. Many third parties compete with us in developing various approaches to treating cancer. They 
include pharmaceutical companies, biotechnology companies, academic institutions and other research organizations.

28

29

Many of our competitors have significantly greater financial resources and expertise in research and development, 

With respect to TIVDAK, in October 2021, Merck’s pembrolizumab was approved in combination with 

manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approval and marketing than we do. 
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative 
arrangements with large and established companies.

With respect to ADCETRIS, there are several other FDA approved drugs for its approved indications. BMS’s 
nivolumab and Merck’s pembrolizumab are approved for the treatment of certain patients with relapsed or refractory 
classical Hodgkin lymphoma, and Acrotech Biopharma’s pralatrexate and belinostat are approved for relapsed or 
refractory systemic anaplastic large cell lymphoma, or sALCL, among other T-cell lymphomas. Celgene's romidepsin is 
approved for cutaneous T-cell lymphoma. Kyowa Kirin’s mogamulizumab is approved for adult patients with relapsed or 
refractory mycosis fungoides or Sézary syndrome. The competition ADCETRIS faces from these and other therapies is 
intensifying. Additionally, Merck conducted a phase 3 clinical trial in relapsed or refractory classical Hodgkin lymphoma 
comparing pembrolizumab to ADCETRIS. An interim analysis of this clinical trial demonstrated a statistically 
significant improvement in progression-free survival for pembrolizumab compared with ADCETRIS, resulting in a label 
expansion to an earlier line of therapy, and we expect increased competition from pembrolizumab in this indication. We 
are also aware of multiple investigational agents currently being studied that, if successful, may compete with 
ADCETRIS in the future, such as camidanlumab tesirine being studied in a phase 2 study in relapsed/refractory classical 
Hodgkin lymphoma. Merck is also conducting a phase 2 study in newly diagnosed classical Hodgkin lymphoma. Data 
have also been presented on several developing technologies, including bispecific antibodies and CAR modified T-cell 
therapies that may compete with ADCETRIS in the future. Further, there are many competing approaches used in the 
treatment of patients in ADCETRIS’ approved indications, including autologous hematopoietic stem cell transplant, 
allogeneic hematopoietic stem cell transplant and chemotherapy, in addition to clinical trials with experimental agents.

With respect to PADCEV, other treatments in pretreated metastatic urothelial cancer include sacituzumab 

govitecan (a Trop-2-directed antibody and topoisomerase inhibitor conjugate), checkpoint inhibitor monotherapy, 
generic chemotherapy and, for patients with select FGFR genetic alterations, Janssen’s erdafitinib. Front line metastatic 
urothelial cancer has traditionally been treated with chemotherapy alone but is evolving to include checkpoint inhibitors 
for cisplatin-ineligible patients with high PD-L1 expression in addition to patients who are ineligible for platinum 
therapy. Several trials of investigational agents in combination with chemotherapy or other novel agents are ongoing. 
Continued development of PD-(L)1 targeted therapies across early stage bladder cancer and in metastatic bladder cancer 
in frontline combinations with chemotherapy, in frontline maintenance with the recent approval of avelumab, and in 
pretreated disease, could potentially impact PADCEV usage and enrollment in PADCEV clinical trials.

With respect to TUKYSA, there are multiple marketed products which target HER2, including the antibodies 
trastuzumab and pertuzumab and the antibody drug conjugate T-DM1. In addition, lapatinib is an EGFR/HER2 oral 
kinase inhibitor for the treatment of metastatic breast cancer, and neratinib is an irreversible pan-HER kinase inhibitor 
indicated for extended adjuvant treatment and treatment of metastatic breast cancer in patients who received two or more 
prior anti-HER2-based regimens. Daiichi Sankyo and AstraZeneca have fam-trastuzumab deruxtecan-nxki which was 
approved by the FDA for patients who have received two or more prior anti-HER2-based regimens in the metastatic 
breast cancer setting and recently in the HER2 positive gastric cancer setting. The agent was also granted conditional 
marketing authorization by the EMA for the treatment of adult patients with unresectable or metastatic HER2-positive 
breast cancer who have received two or more prior anti-HER2-based regimens. In addition, fam-trastuzumab deruxtecan-
nxki is being reviewed by the FDA for use in 2nd line (i.e., in patients who previously received one anti-HER2 based 
regimen in the metastatic setting) based on the DESTINY-breast 03 trial results. If approved, the sequence of therapies 
patients receive in this condition is likely to change, with greater fam-trastuzumab deruxtecan-nxki use in 2nd line. This 
may pose increased competition for TUKYSA, which is approved by the FDA for patients who have received one or 
more prior anti-HER2-based regimens in the metastatic setting, including in patients with brain metastases. MacroGenics 
has a HER2 targeted, Fc-optimized antibody, margetuximab, which was recently approved by the FDA in patients who 
have received at least two previous anti-HER2 regimens. Additionally, Byondis has an antibody drug conjugate, 
SYD985, and recently released results from its pivotal trial in metastatic breast cancer patients treated with multiple anti-
HER2-based regimens. Approval of SYD985 for this patient population may occur in 2022.

chemotherapy, with or without bevacizumab, for the treatment of recurrent or metastatic cervical cancer whose tumors 

express PD-L1 and was grated full approval as a monotherapy for recurrent or metastatic cervical cancer patients with 

disease progression on or after chemotherapy in patients whose tumors express PD-L1. We are also aware of other 

companies that currently have products in development for the treatment of late-stage cervical cancer which could be 

competitive with TIVDAK, including Agenus, BMS, Iovance Biotherapeutics, Merck, Regeneron Pharmaceuticals, 

Sanofi-Aventis and Roche. Cemiplimab is being reviewed in several countries outside the U.S. for the treatment of 

patients with recurrent or metastatic cervical cancer following progression on platinum-based chemotherapy. A 

supplemental Biologics License Application for cemiplimab was recently withdrawn in the U.S.

Many other pharmaceutical and biotechnology companies are developing and/or marketing therapies for the same 

types of cancer that our product candidates are designed and being developed to treat. In addition, we are aware of a 

number of other companies that have ADC and other technologies that may be competitive with ours. We are also aware 

of a number of companies developing monoclonal antibodies directed at the same antigen targets or for the treatment of 

the same diseases as our product candidates. In addition, our ADC collaborators may develop compounds utilizing our 

technology that may compete with product candidates that we are developing.

The risk of biosimilar or generic challenges has also been increasing in our industry. In the U.S. and the EU, after 

a period of exclusivity for an innovator’s approved biological product or branded drug has passed, there are abbreviated 

pathways for approval of biosimilar products or generic drugs. For example, in the U.S., the Biologics Price Competition 

and Innovation Act of 2009 created an abbreviated approval pathway for biological products that are demonstrated to be 

“highly similar” or “biosimilar” to or “interchangeable” with an FDA approved biological product. This pathway allows 

competitors to reference the FDA’s prior approvals regarding innovative biological products and data submitted with a 

BLA to obtain approval of a biosimilar application twelve years after the time of approval of the innovative biological 

product. The twelve-year exclusivity period runs from the initial approval of the innovator product and not from approval 

of a new indication. In addition, the twelve-year exclusivity period does not prevent another company from 

independently developing a product that is highly similar to the innovative product, generating all the data necessary for 

a full BLA and seeking approval. Exclusivity only assures that another company cannot rely on the FDA’s prior 

approvals in approving a BLA for an innovator’s biological product to support the biosimilar product’s approval. 

Further, under the FDA’s current interpretation, it is possible that a biosimilar applicant could obtain approval for one or 

more of the indications approved for the innovator product by extrapolating clinical data from one indication to support 

approval for other indications. Similarly, in the EU, the EC has granted marketing authorizations for biosimilars pursuant 

to a set of general and product class-specific guidelines. In addition, it is not possible to predict changes in law that might 

reduce regulatory exclusivity. As a result, and due to uncertainties regarding patent protection, it is not possible to predict 

the length of market exclusivity for any particular product with certainty based solely on the expiration of the relevant 

patent(s) or the current forms of regulatory exclusivity. Absent patent protection or regulatory exclusivity for our 

products, it is possible, both in the United States and elsewhere, that biosimilar, interchangeable or generic versions of 

those products may be approved and marketed, which would likely result in substantial and rapid reductions in revenues 

from sales of those products.

It is also possible that our competitors will succeed in developing technologies that are more effective than our 

products and product candidates or that would render our technology obsolete or noncompetitive, or will succeed in 

developing biosimilar, interchangeable or generic products for our products and product candidates. We anticipate that 

we will continue to face increasing competition in the future as new companies enter our market and scientific 

developments surrounding biosimilars and other cancer therapies continue to accelerate. We cannot predict to what 

extent the entry of biosimilars or other competing products will impact potential future sales of our products and product 

With respect to our current and potential future product candidates, we believe that our ability to compete 

effectively and develop products that can be manufactured cost-effectively and marketed successfully will depend on our 

advance our technology platforms;

license additional technology;

complete clinical trials which position our products for regulatory and commercial success;

candidates.

ability to:

•

•

•

30

31

Many of our competitors have significantly greater financial resources and expertise in research and development, 

manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approval and marketing than we do. 

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative 

arrangements with large and established companies.

With respect to ADCETRIS, there are several other FDA approved drugs for its approved indications. BMS’s 

nivolumab and Merck’s pembrolizumab are approved for the treatment of certain patients with relapsed or refractory 

classical Hodgkin lymphoma, and Acrotech Biopharma’s pralatrexate and belinostat are approved for relapsed or 

refractory systemic anaplastic large cell lymphoma, or sALCL, among other T-cell lymphomas. Celgene's romidepsin is 

approved for cutaneous T-cell lymphoma. Kyowa Kirin’s mogamulizumab is approved for adult patients with relapsed or 

refractory mycosis fungoides or Sézary syndrome. The competition ADCETRIS faces from these and other therapies is 

intensifying. Additionally, Merck conducted a phase 3 clinical trial in relapsed or refractory classical Hodgkin lymphoma 

comparing pembrolizumab to ADCETRIS. An interim analysis of this clinical trial demonstrated a statistically 

significant improvement in progression-free survival for pembrolizumab compared with ADCETRIS, resulting in a label 

expansion to an earlier line of therapy, and we expect increased competition from pembrolizumab in this indication. We 

are also aware of multiple investigational agents currently being studied that, if successful, may compete with 

ADCETRIS in the future, such as camidanlumab tesirine being studied in a phase 2 study in relapsed/refractory classical 

Hodgkin lymphoma. Merck is also conducting a phase 2 study in newly diagnosed classical Hodgkin lymphoma. Data 

have also been presented on several developing technologies, including bispecific antibodies and CAR modified T-cell 

therapies that may compete with ADCETRIS in the future. Further, there are many competing approaches used in the 

treatment of patients in ADCETRIS’ approved indications, including autologous hematopoietic stem cell transplant, 

allogeneic hematopoietic stem cell transplant and chemotherapy, in addition to clinical trials with experimental agents.

With respect to PADCEV, other treatments in pretreated metastatic urothelial cancer include sacituzumab 

govitecan (a Trop-2-directed antibody and topoisomerase inhibitor conjugate), checkpoint inhibitor monotherapy, 

generic chemotherapy and, for patients with select FGFR genetic alterations, Janssen’s erdafitinib. Front line metastatic 

urothelial cancer has traditionally been treated with chemotherapy alone but is evolving to include checkpoint inhibitors 

for cisplatin-ineligible patients with high PD-L1 expression in addition to patients who are ineligible for platinum 

therapy. Several trials of investigational agents in combination with chemotherapy or other novel agents are ongoing. 

Continued development of PD-(L)1 targeted therapies across early stage bladder cancer and in metastatic bladder cancer 

in frontline combinations with chemotherapy, in frontline maintenance with the recent approval of avelumab, and in 

pretreated disease, could potentially impact PADCEV usage and enrollment in PADCEV clinical trials.

With respect to TUKYSA, there are multiple marketed products which target HER2, including the antibodies 

trastuzumab and pertuzumab and the antibody drug conjugate T-DM1. In addition, lapatinib is an EGFR/HER2 oral 

kinase inhibitor for the treatment of metastatic breast cancer, and neratinib is an irreversible pan-HER kinase inhibitor 

indicated for extended adjuvant treatment and treatment of metastatic breast cancer in patients who received two or more 

prior anti-HER2-based regimens. Daiichi Sankyo and AstraZeneca have fam-trastuzumab deruxtecan-nxki which was 

approved by the FDA for patients who have received two or more prior anti-HER2-based regimens in the metastatic 

breast cancer setting and recently in the HER2 positive gastric cancer setting. The agent was also granted conditional 

marketing authorization by the EMA for the treatment of adult patients with unresectable or metastatic HER2-positive 

breast cancer who have received two or more prior anti-HER2-based regimens. In addition, fam-trastuzumab deruxtecan-

nxki is being reviewed by the FDA for use in 2nd line (i.e., in patients who previously received one anti-HER2 based 

regimen in the metastatic setting) based on the DESTINY-breast 03 trial results. If approved, the sequence of therapies 

patients receive in this condition is likely to change, with greater fam-trastuzumab deruxtecan-nxki use in 2nd line. This 

may pose increased competition for TUKYSA, which is approved by the FDA for patients who have received one or 

more prior anti-HER2-based regimens in the metastatic setting, including in patients with brain metastases. MacroGenics 

has a HER2 targeted, Fc-optimized antibody, margetuximab, which was recently approved by the FDA in patients who 

have received at least two previous anti-HER2 regimens. Additionally, Byondis has an antibody drug conjugate, 

SYD985, and recently released results from its pivotal trial in metastatic breast cancer patients treated with multiple anti-

HER2-based regimens. Approval of SYD985 for this patient population may occur in 2022.

With respect to TIVDAK, in October 2021, Merck’s pembrolizumab was approved in combination with 
chemotherapy, with or without bevacizumab, for the treatment of recurrent or metastatic cervical cancer whose tumors 
express PD-L1 and was grated full approval as a monotherapy for recurrent or metastatic cervical cancer patients with 
disease progression on or after chemotherapy in patients whose tumors express PD-L1. We are also aware of other 
companies that currently have products in development for the treatment of late-stage cervical cancer which could be 
competitive with TIVDAK, including Agenus, BMS, Iovance Biotherapeutics, Merck, Regeneron Pharmaceuticals, 
Sanofi-Aventis and Roche. Cemiplimab is being reviewed in several countries outside the U.S. for the treatment of 
patients with recurrent or metastatic cervical cancer following progression on platinum-based chemotherapy. A 
supplemental Biologics License Application for cemiplimab was recently withdrawn in the U.S.

Many other pharmaceutical and biotechnology companies are developing and/or marketing therapies for the same 

types of cancer that our product candidates are designed and being developed to treat. In addition, we are aware of a 
number of other companies that have ADC and other technologies that may be competitive with ours. We are also aware 
of a number of companies developing monoclonal antibodies directed at the same antigen targets or for the treatment of 
the same diseases as our product candidates. In addition, our ADC collaborators may develop compounds utilizing our 
technology that may compete with product candidates that we are developing.

The risk of biosimilar or generic challenges has also been increasing in our industry. In the U.S. and the EU, after 
a period of exclusivity for an innovator’s approved biological product or branded drug has passed, there are abbreviated 
pathways for approval of biosimilar products or generic drugs. For example, in the U.S., the Biologics Price Competition 
and Innovation Act of 2009 created an abbreviated approval pathway for biological products that are demonstrated to be 
“highly similar” or “biosimilar” to or “interchangeable” with an FDA approved biological product. This pathway allows 
competitors to reference the FDA’s prior approvals regarding innovative biological products and data submitted with a 
BLA to obtain approval of a biosimilar application twelve years after the time of approval of the innovative biological 
product. The twelve-year exclusivity period runs from the initial approval of the innovator product and not from approval 
of a new indication. In addition, the twelve-year exclusivity period does not prevent another company from 
independently developing a product that is highly similar to the innovative product, generating all the data necessary for 
a full BLA and seeking approval. Exclusivity only assures that another company cannot rely on the FDA’s prior 
approvals in approving a BLA for an innovator’s biological product to support the biosimilar product’s approval. 
Further, under the FDA’s current interpretation, it is possible that a biosimilar applicant could obtain approval for one or 
more of the indications approved for the innovator product by extrapolating clinical data from one indication to support 
approval for other indications. Similarly, in the EU, the EC has granted marketing authorizations for biosimilars pursuant 
to a set of general and product class-specific guidelines. In addition, it is not possible to predict changes in law that might 
reduce regulatory exclusivity. As a result, and due to uncertainties regarding patent protection, it is not possible to predict 
the length of market exclusivity for any particular product with certainty based solely on the expiration of the relevant 
patent(s) or the current forms of regulatory exclusivity. Absent patent protection or regulatory exclusivity for our 
products, it is possible, both in the United States and elsewhere, that biosimilar, interchangeable or generic versions of 
those products may be approved and marketed, which would likely result in substantial and rapid reductions in revenues 
from sales of those products.

It is also possible that our competitors will succeed in developing technologies that are more effective than our 

products and product candidates or that would render our technology obsolete or noncompetitive, or will succeed in 
developing biosimilar, interchangeable or generic products for our products and product candidates. We anticipate that 
we will continue to face increasing competition in the future as new companies enter our market and scientific 
developments surrounding biosimilars and other cancer therapies continue to accelerate. We cannot predict to what 
extent the entry of biosimilars or other competing products will impact potential future sales of our products and product 
candidates.

With respect to our current and potential future product candidates, we believe that our ability to compete 
effectively and develop products that can be manufactured cost-effectively and marketed successfully will depend on our 
ability to:

•

•

•

advance our technology platforms;

license additional technology;

complete clinical trials which position our products for regulatory and commercial success;

30

31

• maintain a proprietary position in our technologies and products;

PADCEV

•

•

•

•

•

•

obtain required government and other public and private approvals on a timely basis;

attract and retain key personnel;

commercialize effectively;

obtain reimbursement for our products in approved indications;

comply with applicable laws, regulations and regulatory requirements and restrictions with respect to the 
commercialization of our products, including with respect to any changed or increased regulatory restrictions; 
and

enter into additional collaborations to advance the development and commercialization of our product 
candidates.

Manufacturing 

We own a biologics manufacturing facility located in Bothell, Washington, which we use to support certain 
clinical and commercial supply needs, and have signed a lease to a facility currently being constructed in Everett, 
Washington, which will be used for future manufacturing capability. However, we rely and expect to continue to rely on 
collaborators, contract manufacturers and other third parties to produce and store sufficient quantities of drug product for 
both our clinical and commercial programs. While we believe that the existing supplies of our products and our and our 
collaborators’ contract manufacturing relationships will be sufficient to accommodate current clinical and commercial 
needs, we or our collaborators may need to obtain additional manufacturing arrangements or increase manufacturing 
capability to meet potential future commercial needs, which could require additional capital investment or cause delays. 

ADCETRIS

We rely on contract manufacturing organizations to supply ADCETRIS for our clinical trials and for commercial 

sale. For the monoclonal antibody used in ADCETRIS, we have contracted with AbbVie for clinical and commercial 
supplies. For the drug linker used in ADCETRIS, we have contracted with Millipore Sigma, an affiliate of Merck KGaA, 
for clinical and commercial supplies. We have multiple contract manufacturers for conjugating the drug linker to the 
antibody and producing ADCETRIS drug product. In addition, we rely on other third parties to supply the raw materials 
used to produce ADCETRIS, and to perform additional steps in the manufacturing process, including storage and 
distribution of ADCETRIS and our product candidates. For the foreseeable future, we expect to continue to rely on 
contract manufacturers and other third parties to produce, store and distribute sufficient quantities of ADCETRIS for use 
in our clinical trials and for commercial sale. 

AbbVie Biotechnology. In 2004, we entered into a development and supply agreement with AbbVie (formerly a 

part of Abbott Laboratories) to manufacture developmental, clinical and commercial quantities of anti-CD30 monoclonal 
antibody, which is a component of ADCETRIS. The agreement generally provides for the supply by AbbVie and the 
purchase by us of such anti-CD30 monoclonal antibody. Under terms of the supply agreement, we may purchase a 
portion of our required anti-CD30 monoclonal antibody from a second source third-party supplier. We are required to 
make a minimum annual purchase. The anti-CD30 monoclonal antibody is purchased by us based upon a rolling forecast. 
The supply agreement will continue until 2025 with an automatic one-year term extension unless either party provides 
written termination notice to the other party. Either party has the right to terminate the supply agreement if the other 
party materially breaches its obligations thereunder.

Millipore Sigma. In 2010, we entered into a commercial supply agreement with Sigma Aldrich Fine Chemicals, or 

SAFC, which was subsequently acquired by Millipore Sigma, an affiliate of Merck KGaA. Under this agreement, 
Millipore Sigma manufactures commercial quantities of the drug linker that is a component of ADCETRIS. Under terms 
of the supply agreement, we may purchase a portion of our required drug linker from a second source third-party 
supplier. We are required to make a minimum annual purchase. The drug linker is purchased by us based upon a rolling 
forecast. The supply agreement will continue until 2029 with automatic term extension unless either party provides 
written notice of termination to the other party. Either party has the right to terminate the supply agreement if the other 
party materially breaches its obligations thereunder. 

Under the terms of our collaboration and commercialization agreements with Astellas, Astellas is responsible for 

overseeing the manufacturing supply chain for PADCEV. Accordingly, we rely on Astellas to provide commercial and 

clinical supply of PADCEV. For the foreseeable future, we expect to continue to rely on Astellas and other third parties 

to produce, store and distribute sufficient quantities of PADCEV for commercial sale and for use in our clinical trials. In 

addition, we are responsible for establishing a second source supply chain for PADCEV, whether through internal or 

third party sources.

TUKYSA

With respect to TUKYSA, we rely on multiple contract manufacturers and other third parties to perform 

manufacturing services for us including Sterling Pharma Solutions Limited, or Sterling, for production of the starting 

materials for TUKYSA, Esteve Quimica, S.A., or Esteve to produce the active pharmaceutical ingredient, Hovione 

FarmaCiencia SA, or Hovione, to complete spray drying and Corden Plankstadt, or Corden, to produce the tablets for 

TUKYSA. For the foreseeable future, we expect to continue to rely on contract manufacturers and other third parties to 

produce and store sufficient quantities of TUKYSA. We have limited prior experience as an organization manufacturing 

TUKYSA and small molecule drug products generally, and we have relatively new working relationships with many of 

the third party manufacturers involved in TUKYSA manufacture. 

Sterling. We have a commercial supply agreement with Sterling to manufacture starting materials for TUKYSA. 

The agreement provides that we will purchase starting materials pursuant to rolling forecasts and will purchase a 

minimum percentage of our requirements for the starting materials from Sterling. The agreement will remain in effect 

until 2025, after which it will continue automatically for up to two additional years subject to termination by either party 

giving written notice to the other party. Either party has the right to terminate the agreement if the other party commits 

any breach of the agreement and does not remedy, make a bona fide attempt to remedy or enter into negotiations to 

resolve, the breach after notice to do so, if capable of remedy. 

Esteve Quimica. Our commercial supply agreement with Esteve provides that we will order the active 

pharmaceutical agreement for TUKYSA pursuant to rolling forecasts. The agreement will remain in effect until 2025, 

after which it will automatically renew subject to termination by us by giving written notice to Esteve. Either party has 

the right to terminate the agreement if the other party fails to cure a material breach. 

Corden. We have a commercial supply agreement with Corden to produce TUKYSA tablets. The agreement 

provides that we will order pursuant to rolling forecasts and will purchase a minimum percentage of our requirements 

from Corden. The agreement will remain in effect until 2025, after which it will be renewed if not terminated with 

written notice prior to the expiration of the term. Either party has the right to terminate the agreement if the other party 

commits a breach and does not cure or commence and diligently continue actions to cure such default. 

Hovione. We have a commercial supply agreement with Hovione to manufacture the tucatinib spray-dried 

dispersion or drug product intermediate for TUKYSA. The agreement provides that we will order pursuant to rolling 

forecasts and will purchase a minimum percentage of our requirements from Hovione. The agreement will remain in 

effect until 2026, followed by successive automatic two-year renewals. Either party may terminate the agreement by 

written notice prior to commencement of the applicable renewal term. In addition, either party has the right to terminate 

the agreement if the other party breaches the agreement and does not remedy the breach after written notice or if the 

occurrence of a force majeure event prevents the other party from performing its obligations under the agreement.

TIVDAK 

We also rely on multiple contract manufacturers and other third parties to perform manufacturing services for us 

with respect to TIVDAK. For the foreseeable future, we expect to continue to rely on contract manufacturers and other 

third parties to produce and store sufficient quantities of TIVDAK. 

Our Product Candidates

with respect to our product candidates. 

We also rely on multiple contract manufacturers and other third parties to perform manufacturing services for us 

32

33

•

•

•

•

•

•

and

candidates.

Manufacturing 

enter into additional collaborations to advance the development and commercialization of our product 

We own a biologics manufacturing facility located in Bothell, Washington, which we use to support certain 

clinical and commercial supply needs, and have signed a lease to a facility currently being constructed in Everett, 

Washington, which will be used for future manufacturing capability. However, we rely and expect to continue to rely on 

collaborators, contract manufacturers and other third parties to produce and store sufficient quantities of drug product for 

both our clinical and commercial programs. While we believe that the existing supplies of our products and our and our 

collaborators’ contract manufacturing relationships will be sufficient to accommodate current clinical and commercial 

needs, we or our collaborators may need to obtain additional manufacturing arrangements or increase manufacturing 

capability to meet potential future commercial needs, which could require additional capital investment or cause delays. 

ADCETRIS

We rely on contract manufacturing organizations to supply ADCETRIS for our clinical trials and for commercial 

sale. For the monoclonal antibody used in ADCETRIS, we have contracted with AbbVie for clinical and commercial 

supplies. For the drug linker used in ADCETRIS, we have contracted with Millipore Sigma, an affiliate of Merck KGaA, 

for clinical and commercial supplies. We have multiple contract manufacturers for conjugating the drug linker to the 

antibody and producing ADCETRIS drug product. In addition, we rely on other third parties to supply the raw materials 

used to produce ADCETRIS, and to perform additional steps in the manufacturing process, including storage and 

distribution of ADCETRIS and our product candidates. For the foreseeable future, we expect to continue to rely on 

contract manufacturers and other third parties to produce, store and distribute sufficient quantities of ADCETRIS for use 

in our clinical trials and for commercial sale. 

AbbVie Biotechnology. In 2004, we entered into a development and supply agreement with AbbVie (formerly a 

part of Abbott Laboratories) to manufacture developmental, clinical and commercial quantities of anti-CD30 monoclonal 

antibody, which is a component of ADCETRIS. The agreement generally provides for the supply by AbbVie and the 

purchase by us of such anti-CD30 monoclonal antibody. Under terms of the supply agreement, we may purchase a 

portion of our required anti-CD30 monoclonal antibody from a second source third-party supplier. We are required to 

make a minimum annual purchase. The anti-CD30 monoclonal antibody is purchased by us based upon a rolling forecast. 

The supply agreement will continue until 2025 with an automatic one-year term extension unless either party provides 

written termination notice to the other party. Either party has the right to terminate the supply agreement if the other 

party materially breaches its obligations thereunder.

Millipore Sigma. In 2010, we entered into a commercial supply agreement with Sigma Aldrich Fine Chemicals, or 

SAFC, which was subsequently acquired by Millipore Sigma, an affiliate of Merck KGaA. Under this agreement, 

Millipore Sigma manufactures commercial quantities of the drug linker that is a component of ADCETRIS. Under terms 

of the supply agreement, we may purchase a portion of our required drug linker from a second source third-party 

supplier. We are required to make a minimum annual purchase. The drug linker is purchased by us based upon a rolling 

forecast. The supply agreement will continue until 2029 with automatic term extension unless either party provides 

written notice of termination to the other party. Either party has the right to terminate the supply agreement if the other 

party materially breaches its obligations thereunder. 

• maintain a proprietary position in our technologies and products;

PADCEV

obtain required government and other public and private approvals on a timely basis;

attract and retain key personnel;

commercialize effectively;

obtain reimbursement for our products in approved indications;

Under the terms of our collaboration and commercialization agreements with Astellas, Astellas is responsible for 
overseeing the manufacturing supply chain for PADCEV. Accordingly, we rely on Astellas to provide commercial and 
clinical supply of PADCEV. For the foreseeable future, we expect to continue to rely on Astellas and other third parties 
to produce, store and distribute sufficient quantities of PADCEV for commercial sale and for use in our clinical trials. In 
addition, we are responsible for establishing a second source supply chain for PADCEV, whether through internal or 
third party sources.

comply with applicable laws, regulations and regulatory requirements and restrictions with respect to the 

commercialization of our products, including with respect to any changed or increased regulatory restrictions; 

TUKYSA

With respect to TUKYSA, we rely on multiple contract manufacturers and other third parties to perform 
manufacturing services for us including Sterling Pharma Solutions Limited, or Sterling, for production of the starting 
materials for TUKYSA, Esteve Quimica, S.A., or Esteve to produce the active pharmaceutical ingredient, Hovione 
FarmaCiencia SA, or Hovione, to complete spray drying and Corden Plankstadt, or Corden, to produce the tablets for 
TUKYSA. For the foreseeable future, we expect to continue to rely on contract manufacturers and other third parties to 
produce and store sufficient quantities of TUKYSA. We have limited prior experience as an organization manufacturing 
TUKYSA and small molecule drug products generally, and we have relatively new working relationships with many of 
the third party manufacturers involved in TUKYSA manufacture. 

Sterling. We have a commercial supply agreement with Sterling to manufacture starting materials for TUKYSA. 

The agreement provides that we will purchase starting materials pursuant to rolling forecasts and will purchase a 
minimum percentage of our requirements for the starting materials from Sterling. The agreement will remain in effect 
until 2025, after which it will continue automatically for up to two additional years subject to termination by either party 
giving written notice to the other party. Either party has the right to terminate the agreement if the other party commits 
any breach of the agreement and does not remedy, make a bona fide attempt to remedy or enter into negotiations to 
resolve, the breach after notice to do so, if capable of remedy. 

Esteve Quimica. Our commercial supply agreement with Esteve provides that we will order the active 
pharmaceutical agreement for TUKYSA pursuant to rolling forecasts. The agreement will remain in effect until 2025, 
after which it will automatically renew subject to termination by us by giving written notice to Esteve. Either party has 
the right to terminate the agreement if the other party fails to cure a material breach. 

Corden. We have a commercial supply agreement with Corden to produce TUKYSA tablets. The agreement 

provides that we will order pursuant to rolling forecasts and will purchase a minimum percentage of our requirements 
from Corden. The agreement will remain in effect until 2025, after which it will be renewed if not terminated with 
written notice prior to the expiration of the term. Either party has the right to terminate the agreement if the other party 
commits a breach and does not cure or commence and diligently continue actions to cure such default. 

Hovione. We have a commercial supply agreement with Hovione to manufacture the tucatinib spray-dried 

dispersion or drug product intermediate for TUKYSA. The agreement provides that we will order pursuant to rolling 
forecasts and will purchase a minimum percentage of our requirements from Hovione. The agreement will remain in 
effect until 2026, followed by successive automatic two-year renewals. Either party may terminate the agreement by 
written notice prior to commencement of the applicable renewal term. In addition, either party has the right to terminate 
the agreement if the other party breaches the agreement and does not remedy the breach after written notice or if the 
occurrence of a force majeure event prevents the other party from performing its obligations under the agreement.

TIVDAK 

We also rely on multiple contract manufacturers and other third parties to perform manufacturing services for us 
with respect to TIVDAK. For the foreseeable future, we expect to continue to rely on contract manufacturers and other 
third parties to produce and store sufficient quantities of TIVDAK. 

Our Product Candidates

We also rely on multiple contract manufacturers and other third parties to perform manufacturing services for us 

with respect to our product candidates. 

32

33

Commercial Operations

We have allocated commercial resources, including sales, marketing, supply chain management and 

reimbursement capabilities, to commercialize ADCETRIS and PADCEV in the U.S. and Canada, TUKYSA in the U.S., 
Europe and Canada, and TIVDAK in the U.S. We believe the markets for our products in their approved indications are 
addressable with a targeted sales and marketing organization. We intend to continue promoting our products in our 
territories for their current indications and any additional indications we may obtain in the future. Astellas jointly 
commercializes PADCEV with us in the U.S. In addition, Genmab jointly commercializes TIVDAK with us in the U.S.

In the U.S., we sell ADCETRIS, PADCEV, TUKYSA, and TIVDAK through a limited number of specialty 

distributors. Three of our major distributors, together with entities under their common control—AmerisourceBergen 
Corporation, Cardinal Health, Inc., and McKesson Corporation—each accounted for 10% or more of our total net 
product sales in 2021, 2020 and 2019. Healthcare providers purchase ADCETRIS, PADCEV, TUKYSA, and TIVDAK 
through these specialty distributors and the product is drop shipped directly to the healthcare provider. In addition to 
specialty distributors, we also sell TUKYSA to a limited number of specialty pharmacies.

ADCETRIS, PADCEV and TIVDAK are infused products and generally shipped directly to healthcare providers 
and facilities for administration to patients. TUKYSA is an oral product ordered by prescription and typically dispensed 
to patients by the network specialty pharmacies, at physician in-office dispensing sites, or by hospital/Integrated Delivery 
Network pharmacies.

In Europe, we have allocated commercial resources, including sales, marketing, supply chain management, and 

reimbursement capabilities to enable and execute launches across key markets in Europe. Hospitals in Europe can 
purchase TUKYSA directly from Seagen or indirectly from wholesale distributors. In European countries where we have 
not established our own sales force, TUKYSA can be accessed through distribution partners.

Human Capital Resources 

As of December 31, 2021, we had 2,675 employees. Of these employees, 1,586 were engaged in or support 

research, clinical, and supply chain management activities, 511 were in administrative and business-related positions, 
and 578 were in sales and marketing. We consider our employee relations to be good. 

Diversity, Equity and Inclusion

We believe that fostering diversity, equity, and inclusion is a key element to discovering, developing, and bringing 

transformative therapies to patients with cancer. As of the end of 2021, 58% of our global workforce and 39% of our 
leadership (at the executive director level and above) were female. In addition, as of the end of 2021, 34% of our U.S. 
workforce and 33% of our U.S. leadership (at the executive director level and above) were racially or ethnically diverse. 
We strive to build a workforce representative of the people we serve and to nurture an inclusive culture where all voices 
are welcomed, heard, and respected. In 2021, we adopted additional initiatives to further build our capacity to meet our 
diversity, equity and inclusion goals.

Recruiting and Retention

We believe that we have been successful in attracting and retaining talented personnel to support our expanding 
business, though competition for personnel in our industry is intense. We monitor recruiting efforts using a variety of 
metrics such as internal placement rates, cycle times, cost per hire, information on the retention of business-critical hires 
(such as medical directors and executives), and the percentage of budgeted openings filled on time and on budget. We 
also track voluntary and involuntary turnover rates for the company as a whole, for business-critical talent and by gender, 
race or ethnicity, time in role and job level.

Compensation and Benefits

We offer competitive pay and benefits designed to attract and retain exceptional talent and drive company 
performance. In setting appropriate compensation levels, we look at the average base pay rate for each position based on 
market data. At the time of our last completed annual compensation review, effective February 2021, for regular 
employees who were eligible for a pay increase, the average ratio of base pay to this market rate was 100%. We also 
offer an annual cash incentive program, a sales incentive program and long-term equity incentive plans designed to assist 
in attracting, retaining and motivating employees and promoting the creation of long-term value for stockholders.

Our standard employee benefits in the U.S. include paid and unpaid leaves, medical, dental and vision insurance 

coverage, a 401(k) plan, short- and long-term disability, life insurance, flexible spending accounts and an employee stock 

purchase plan. We also offer a variety of voluntary benefits that allow employees to select options that meet their needs, 

including telehealth, an employee assistance program, backup childcare, adoption assistance, a travel solution for nursing 

mothers, education assistance, fitness reimbursements, and wellness programs. We benchmark our benefits program 

against others in our industry on an annual basis. 

Succession Planning and Leadership Development 

We establish retention plans for our executives and other business-critical talent and review their total 

compensation and unvested equity annually. Succession, development, and retention plans for our executive officers are 

reviewed at the Board level. In addition, we hold company-wide talent-planning reviews both at the executive and 

departmental levels. To help accelerate the development of leaders across the company, we have established the Seagen 

Leadership Academy, a program that provides training, leadership opportunities, mentorship and support to high-

potential talent at the director level and above. 

COVID-19

We are continuing to closely monitor the impact of the evolving effects of the COVID-19 pandemic on our 

business. We have a cross-functional COVID-19 working group, which meets periodically to discuss policies and 

protocols, strategic planning, business continuity, and other matters relating to the pandemic. We are continuing to take 

proactive steps designed to protect the health and safety of our workforce, patients, and healthcare professionals, and to 

continue our business operations so we can advance our goal of bringing important medicines to patients. Earlier in the 

pandemic, we instituted a mandatory work-from-home policy for employees who could perform their jobs offsite, but 

continued our essential research, manufacturing, and laboratory activities on site. More recently, we began to allow 

additional U.S. office-based employees who have been fully vaccinated to return to the office on a voluntary and limited 

basis. We maintain a number of precautionary measures designed to protect our on-site employees, such as enhanced 

facilities cleaning, lower concentrations of staff, contact tracing and making testing available. We also monitor the 

progress of our essential onsite activities for impacts relating to the COVID-19 pandemic. After pausing most in-person 

customer interactions in healthcare settings earlier in the pandemic, our field-based personnel are now using a mix of in-

person interactions and electronic communications, such as emails, phone calls and video conferences, to support 

healthcare providers and patients. 

We believe that the measures we have implemented are appropriate and are helping to reduce transmission of 

COVID-19, and we will continue to monitor conditions and related guidance from governmental authorities and adjust 

our activities as appropriate. For information regarding the impacts related to the COVID-19 pandemic on our ability and 

the ability of our collaborators to effectively market, sell and distribute our products and to develop our products and 

product candidates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—

Overview—Outlook” in Part II Item 7 of this Annual Report on Form 10-K.

Corporate Information

We were incorporated in Delaware on July 15, 1997, as Seattle Genetics, Inc. In October 2020, we changed our 

corporate name from Seattle Genetics, Inc. to Seagen Inc., reflecting the global expansion of our operations. Our 

principal executive offices are located at 21823 30th Drive SE, Bothell, Washington 98021. Our telephone number is 

(425) 527-4000, and our website address is www.seagen.com. Seagen®, ADCETRIS®, PADCEV®, TUKYSA® and 

TIVDAK® are our registered trademarks in the United States. All other trademarks, tradenames and service marks 

included in this Annual Report on Form 10-K are the property of their respective owners.

We file electronically with the Securities and Exchange Commission, or SEC, our Annual Reports on Form 10-K, 

Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished 

pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. We make available on our website at 

www.seagen.com, free of charge, through a hyperlink on our website, copies of these reports, as soon as reasonably 

practicable after electronically filing such reports with, or furnishing them to, the SEC. Information found on, or 

accessible through, our website is not part of, and is not incorporated into, this Annual Report on Form 10-K. In addition, 

the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other 

information regarding issuers that file electronically with the SEC.

34

35

Commercial Operations

We have allocated commercial resources, including sales, marketing, supply chain management and 

reimbursement capabilities, to commercialize ADCETRIS and PADCEV in the U.S. and Canada, TUKYSA in the U.S., 

Europe and Canada, and TIVDAK in the U.S. We believe the markets for our products in their approved indications are 

addressable with a targeted sales and marketing organization. We intend to continue promoting our products in our 

territories for their current indications and any additional indications we may obtain in the future. Astellas jointly 

Our standard employee benefits in the U.S. include paid and unpaid leaves, medical, dental and vision insurance 

coverage, a 401(k) plan, short- and long-term disability, life insurance, flexible spending accounts and an employee stock 
purchase plan. We also offer a variety of voluntary benefits that allow employees to select options that meet their needs, 
including telehealth, an employee assistance program, backup childcare, adoption assistance, a travel solution for nursing 
mothers, education assistance, fitness reimbursements, and wellness programs. We benchmark our benefits program 
against others in our industry on an annual basis. 

commercializes PADCEV with us in the U.S. In addition, Genmab jointly commercializes TIVDAK with us in the U.S.

Succession Planning and Leadership Development 

In the U.S., we sell ADCETRIS, PADCEV, TUKYSA, and TIVDAK through a limited number of specialty 

distributors. Three of our major distributors, together with entities under their common control—AmerisourceBergen 

Corporation, Cardinal Health, Inc., and McKesson Corporation—each accounted for 10% or more of our total net 

product sales in 2021, 2020 and 2019. Healthcare providers purchase ADCETRIS, PADCEV, TUKYSA, and TIVDAK 

through these specialty distributors and the product is drop shipped directly to the healthcare provider. In addition to 

specialty distributors, we also sell TUKYSA to a limited number of specialty pharmacies.

We establish retention plans for our executives and other business-critical talent and review their total 

compensation and unvested equity annually. Succession, development, and retention plans for our executive officers are 
reviewed at the Board level. In addition, we hold company-wide talent-planning reviews both at the executive and 
departmental levels. To help accelerate the development of leaders across the company, we have established the Seagen 
Leadership Academy, a program that provides training, leadership opportunities, mentorship and support to high-
potential talent at the director level and above. 

ADCETRIS, PADCEV and TIVDAK are infused products and generally shipped directly to healthcare providers 

COVID-19

and facilities for administration to patients. TUKYSA is an oral product ordered by prescription and typically dispensed 

to patients by the network specialty pharmacies, at physician in-office dispensing sites, or by hospital/Integrated Delivery 

Network pharmacies.

In Europe, we have allocated commercial resources, including sales, marketing, supply chain management, and 

reimbursement capabilities to enable and execute launches across key markets in Europe. Hospitals in Europe can 

purchase TUKYSA directly from Seagen or indirectly from wholesale distributors. In European countries where we have 

not established our own sales force, TUKYSA can be accessed through distribution partners.

Human Capital Resources 

Diversity, Equity and Inclusion

As of December 31, 2021, we had 2,675 employees. Of these employees, 1,586 were engaged in or support 

research, clinical, and supply chain management activities, 511 were in administrative and business-related positions, 

and 578 were in sales and marketing. We consider our employee relations to be good. 

We believe that fostering diversity, equity, and inclusion is a key element to discovering, developing, and bringing 

transformative therapies to patients with cancer. As of the end of 2021, 58% of our global workforce and 39% of our 

leadership (at the executive director level and above) were female. In addition, as of the end of 2021, 34% of our U.S. 

workforce and 33% of our U.S. leadership (at the executive director level and above) were racially or ethnically diverse. 

We strive to build a workforce representative of the people we serve and to nurture an inclusive culture where all voices 

are welcomed, heard, and respected. In 2021, we adopted additional initiatives to further build our capacity to meet our 

diversity, equity and inclusion goals.

Recruiting and Retention

We believe that we have been successful in attracting and retaining talented personnel to support our expanding 

business, though competition for personnel in our industry is intense. We monitor recruiting efforts using a variety of 

metrics such as internal placement rates, cycle times, cost per hire, information on the retention of business-critical hires 

(such as medical directors and executives), and the percentage of budgeted openings filled on time and on budget. We 

also track voluntary and involuntary turnover rates for the company as a whole, for business-critical talent and by gender, 

race or ethnicity, time in role and job level.

Compensation and Benefits

We offer competitive pay and benefits designed to attract and retain exceptional talent and drive company 

performance. In setting appropriate compensation levels, we look at the average base pay rate for each position based on 

market data. At the time of our last completed annual compensation review, effective February 2021, for regular 

employees who were eligible for a pay increase, the average ratio of base pay to this market rate was 100%. We also 

offer an annual cash incentive program, a sales incentive program and long-term equity incentive plans designed to assist 

in attracting, retaining and motivating employees and promoting the creation of long-term value for stockholders.

We are continuing to closely monitor the impact of the evolving effects of the COVID-19 pandemic on our 
business. We have a cross-functional COVID-19 working group, which meets periodically to discuss policies and 
protocols, strategic planning, business continuity, and other matters relating to the pandemic. We are continuing to take 
proactive steps designed to protect the health and safety of our workforce, patients, and healthcare professionals, and to 
continue our business operations so we can advance our goal of bringing important medicines to patients. Earlier in the 
pandemic, we instituted a mandatory work-from-home policy for employees who could perform their jobs offsite, but 
continued our essential research, manufacturing, and laboratory activities on site. More recently, we began to allow 
additional U.S. office-based employees who have been fully vaccinated to return to the office on a voluntary and limited 
basis. We maintain a number of precautionary measures designed to protect our on-site employees, such as enhanced 
facilities cleaning, lower concentrations of staff, contact tracing and making testing available. We also monitor the 
progress of our essential onsite activities for impacts relating to the COVID-19 pandemic. After pausing most in-person 
customer interactions in healthcare settings earlier in the pandemic, our field-based personnel are now using a mix of in-
person interactions and electronic communications, such as emails, phone calls and video conferences, to support 
healthcare providers and patients. 

We believe that the measures we have implemented are appropriate and are helping to reduce transmission of 

COVID-19, and we will continue to monitor conditions and related guidance from governmental authorities and adjust 
our activities as appropriate. For information regarding the impacts related to the COVID-19 pandemic on our ability and 
the ability of our collaborators to effectively market, sell and distribute our products and to develop our products and 
product candidates, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—
Overview—Outlook” in Part II Item 7 of this Annual Report on Form 10-K.

Corporate Information

We were incorporated in Delaware on July 15, 1997, as Seattle Genetics, Inc. In October 2020, we changed our 

corporate name from Seattle Genetics, Inc. to Seagen Inc., reflecting the global expansion of our operations. Our 
principal executive offices are located at 21823 30th Drive SE, Bothell, Washington 98021. Our telephone number is 
(425) 527-4000, and our website address is www.seagen.com. Seagen®, ADCETRIS®, PADCEV®, TUKYSA® and 
TIVDAK® are our registered trademarks in the United States. All other trademarks, tradenames and service marks 
included in this Annual Report on Form 10-K are the property of their respective owners.

We file electronically with the Securities and Exchange Commission, or SEC, our Annual Reports on Form 10-K, 

Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished 
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. We make available on our website at 
www.seagen.com, free of charge, through a hyperlink on our website, copies of these reports, as soon as reasonably 
practicable after electronically filing such reports with, or furnishing them to, the SEC. Information found on, or 
accessible through, our website is not part of, and is not incorporated into, this Annual Report on Form 10-K. In addition, 
the SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other 
information regarding issuers that file electronically with the SEC.

34

35

Item 1A. 

Risk Factors 

regulatory restrictions may change or increase;

You should carefully consider the following risk factors, in addition to the other information contained in this 
Annual Report on Form 10-K, including our consolidated financial statements and related notes. If any of the events 
described in the following risk factors occurs, our business, operating results and financial condition could be seriously 
harmed. This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. 
Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors 
that are described below and elsewhere in this Annual Report on Form 10-K.

Risks Related to Our Products, Product Candidates and Research and Development

Our success depends on our ability to effectively commercialize our products. If we and our collaborators are 

unable to effectively commercialize our products and to expand their utilization, our ability to generate significant 
revenue and our prospects for profitability will be adversely affected.

Our ability to generate revenue from product sales and our prospects for profitability are substantially dependent 
on our and our collaborators’ ability to effectively commercialize our products and expand their utilization. We may not 
be able to fully realize the commercial potential of our products, and/or commercial sales of our products may be lower 
than our projections, for a number of reasons, including:

•

•

•

•

•

•

•

•

•

•

•

•

•

we and our collaborators may be unable to effectively launch, market and commercialize our products, 
including in any new markets or in any new indications;

we and our collaborators may not be able to establish or demonstrate to the medical community the efficacy, 
safety and value of our products and their potential advantages compared to existing and future therapeutics in 
their approved indications;

we and our collaborators may not be able to obtain and maintain regulatory and other required governmental 
approvals to market our products in any additional territories or for any additional indications;

new competitive therapies in the approved indications for our products have been approved by regulatory 
authorities or may be approved or submitted to regulatory authorities for approval in the near term;

there may continue to be new adverse results, adverse events or safety concerns reported in connection with the 
use of our products, including in clinical trials;

there may be additional changes to the labeling for our products that further restrict how we market and sell our 
products, including as a result of data collected from clinical trials and/or as a result of the use of our products;

the incidence rate of new patients or the duration of therapy in the approved indications for our products may be 
lower than our projections;

negative impacts related to the COVID-19 pandemic, including potential further impacts on cancer diagnosis 
rates, may increase or become more severe;

we may encounter challenges in joint decision making and joint execution with our collaborators that adversely 
affect product sales;

co-promotion arrangements, such as the joint commercialization of PADCEV with Astellas in the U.S. and the 
joint commercialization of TIVDAK with Genmab in the U.S., may not be successful;

our products may be impacted by adverse reimbursement and coverage policies from government and private 
payors such as Medicare, Medicaid, insurance companies, health maintenance organizations and other plan 
administrators, or may be subject to pricing pressures enacted by industry organizations or state and federal 
governments, including as a result of increased scrutiny over pharmaceutical pricing, the cost of alternative 
treatment options or otherwise;

we and our collaborators may not be able to obtain favorable pricing and reimbursement approvals in additional 
territories in a timely manner or at all;

physicians may be reluctant to prescribe our products due to side effects associated with their use or until longer 
term efficacy and safety data exist;

•

•

•

products; and

we and our collaborators may not have adequate financial or other resources to effectively commercialize our 

we and our collaborators may not be able to accurately predict demand for our products and obtain adequate 

commercial supplies of our products to meet demand at an acceptable cost.

Our ability to grow our product sales in future periods is also dependent on price increases, and we periodically 

increase the price of our products. Price increases on our products, as well as negative publicity regarding drug pricing 

and increases in drug prices generally, whether on our products or products distributed by other pharmaceutical 

companies, could negatively affect market acceptance of, and sales of, our products. In any event, we cannot assure you 

that price increases we have taken or may take in the future will not negatively affect our future product sales.

If we and our collaborators are unable to successfully commercialize our products or if sales of a product do not 

reach the levels we expect, then our business, results of operation, financial condition and growth prospects could be 

adversely affected. 

Our success also depends on our ability to obtain regulatory approvals for our product candidates and for our 

current products in additional territories, as well as our ability to expand the labeled indications of use for our current 

products. Our inability to do so could have a material adverse effect on our business, results of operations, financial 

condition and growth prospects.

We and our collaborators are required to obtain marketing approvals from applicable regulatory authorities in 

order to market our products or to expand the labeled indications of use for our current marketed products. However, 

regulatory review is a lengthy and expensive process, and approval is highly uncertain.

The FDA and other regulatory agencies have substantial discretion in the approval process and in determining 

when or whether regulatory approval will be obtained. Clinical trial data are subject to differing interpretations. Even if 

we believe data are promising, regulatory authorities may disagree and may require additional data, limit the scope of the 

approval or deny approval altogether. For example, although applications for approval of PADCEV were submitted to 

various regulatory authorities based on results from the EV-201 and EV-301 trials, regulatory authorities may not 

approve these applications in a timely manner or at all. In this regard, although the Committee for Medicinal Products for 

Human Use, or CHMP, of the European Medicines Agency, or EMA, adopted a positive opinion, recommending 

approval of PADCEV as monotherapy for the treatment of adult patients with locally advanced or metastatic urothelial 

cancer who have previously received platinum-containing chemotherapy and a PD-1/L1 inhibitor, the European 

Commission decision-making process has been paused for additional CHMP questions related to severe skin reactions in 

a French compassionate access program. It is possible that the European Commission may not approve PADCEV in a 

timely manner or at all. In addition, the approval of a product candidate by one regulatory agency does not mean that 

other regulatory agencies will also approve such product candidate.

Any approval that a product does receive may be more restricted than anticipated. For example, regulatory 

authorities may approve a product for fewer indications or narrower indications than requested. Further, regulatory 

agencies may impose safety monitoring, educational requirements or risk evaluation and mitigation strategies, or REMS. 

Regulatory authorities may also fail to approve the facilities or processes used to manufacture a product candidate or the 

dosing or delivery methods.

The regulatory review process may also take significantly longer than expected, which may delay or eliminate any 

potential revenues from sales of the affected product or product candidate. Target action dates and regulatory timelines 

may be subject to substantial delays. Although the FDA and EMA have programs to facilitate expedited development 

and accelerated approval processes, these programs may not result in faster review or approval than conventional 

procedures and do not assure ultimate approval. In addition, although the FDA granted Breakthrough Therapy 

designation to each of PADCEV and disitamab vedotin in a specified treatment setting, these Breakthrough Therapy 

designations do not increase the likelihood that PADCEV or disitamab vedotin will receive marketing approval in the 

specified settings or in any other settings in a timely manner or at all. Disruptions at the FDA and other agencies due to 

reduced funding levels, government shutdowns, impacts associated with the COVID-19 pandemic or other factors, may 

also lead to delays in the regulatory review process. These disruptions may also slow our other interactions with 

regulatory agencies, which may slow our other product development efforts. 

36

37

Item 1A. 

Risk Factors 

You should carefully consider the following risk factors, in addition to the other information contained in this 

Annual Report on Form 10-K, including our consolidated financial statements and related notes. If any of the events 

described in the following risk factors occurs, our business, operating results and financial condition could be seriously 

harmed. This Annual Report on Form 10-K also contains forward-looking statements that involve risks and uncertainties. 

Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors 

that are described below and elsewhere in this Annual Report on Form 10-K.

Risks Related to Our Products, Product Candidates and Research and Development

Our success depends on our ability to effectively commercialize our products. If we and our collaborators are 

unable to effectively commercialize our products and to expand their utilization, our ability to generate significant 

revenue and our prospects for profitability will be adversely affected.

Our ability to generate revenue from product sales and our prospects for profitability are substantially dependent 

on our and our collaborators’ ability to effectively commercialize our products and expand their utilization. We may not 

be able to fully realize the commercial potential of our products, and/or commercial sales of our products may be lower 

than our projections, for a number of reasons, including:

•

•

•

•

•

•

•

•

•

•

•

•

•

we and our collaborators may be unable to effectively launch, market and commercialize our products, 

including in any new markets or in any new indications;

we and our collaborators may not be able to establish or demonstrate to the medical community the efficacy, 

safety and value of our products and their potential advantages compared to existing and future therapeutics in 

their approved indications;

we and our collaborators may not be able to obtain and maintain regulatory and other required governmental 

approvals to market our products in any additional territories or for any additional indications;

new competitive therapies in the approved indications for our products have been approved by regulatory 

authorities or may be approved or submitted to regulatory authorities for approval in the near term;

there may continue to be new adverse results, adverse events or safety concerns reported in connection with the 

use of our products, including in clinical trials;

there may be additional changes to the labeling for our products that further restrict how we market and sell our 

products, including as a result of data collected from clinical trials and/or as a result of the use of our products;

the incidence rate of new patients or the duration of therapy in the approved indications for our products may be 

lower than our projections;

negative impacts related to the COVID-19 pandemic, including potential further impacts on cancer diagnosis 

rates, may increase or become more severe;

we may encounter challenges in joint decision making and joint execution with our collaborators that adversely 

affect product sales;

co-promotion arrangements, such as the joint commercialization of PADCEV with Astellas in the U.S. and the 

joint commercialization of TIVDAK with Genmab in the U.S., may not be successful;

our products may be impacted by adverse reimbursement and coverage policies from government and private 

payors such as Medicare, Medicaid, insurance companies, health maintenance organizations and other plan 

administrators, or may be subject to pricing pressures enacted by industry organizations or state and federal 

governments, including as a result of increased scrutiny over pharmaceutical pricing, the cost of alternative 

we and our collaborators may not be able to obtain favorable pricing and reimbursement approvals in additional 

treatment options or otherwise;

territories in a timely manner or at all;

term efficacy and safety data exist;

physicians may be reluctant to prescribe our products due to side effects associated with their use or until longer 

•

•

•

regulatory restrictions may change or increase;

we and our collaborators may not have adequate financial or other resources to effectively commercialize our 
products; and

we and our collaborators may not be able to accurately predict demand for our products and obtain adequate 
commercial supplies of our products to meet demand at an acceptable cost.

Our ability to grow our product sales in future periods is also dependent on price increases, and we periodically 
increase the price of our products. Price increases on our products, as well as negative publicity regarding drug pricing 
and increases in drug prices generally, whether on our products or products distributed by other pharmaceutical 
companies, could negatively affect market acceptance of, and sales of, our products. In any event, we cannot assure you 
that price increases we have taken or may take in the future will not negatively affect our future product sales.

If we and our collaborators are unable to successfully commercialize our products or if sales of a product do not 

reach the levels we expect, then our business, results of operation, financial condition and growth prospects could be 
adversely affected. 

Our success also depends on our ability to obtain regulatory approvals for our product candidates and for our 

current products in additional territories, as well as our ability to expand the labeled indications of use for our current 
products. Our inability to do so could have a material adverse effect on our business, results of operations, financial 
condition and growth prospects.

We and our collaborators are required to obtain marketing approvals from applicable regulatory authorities in 
order to market our products or to expand the labeled indications of use for our current marketed products. However, 
regulatory review is a lengthy and expensive process, and approval is highly uncertain.

The FDA and other regulatory agencies have substantial discretion in the approval process and in determining 

when or whether regulatory approval will be obtained. Clinical trial data are subject to differing interpretations. Even if 
we believe data are promising, regulatory authorities may disagree and may require additional data, limit the scope of the 
approval or deny approval altogether. For example, although applications for approval of PADCEV were submitted to 
various regulatory authorities based on results from the EV-201 and EV-301 trials, regulatory authorities may not 
approve these applications in a timely manner or at all. In this regard, although the Committee for Medicinal Products for 
Human Use, or CHMP, of the European Medicines Agency, or EMA, adopted a positive opinion, recommending 
approval of PADCEV as monotherapy for the treatment of adult patients with locally advanced or metastatic urothelial 
cancer who have previously received platinum-containing chemotherapy and a PD-1/L1 inhibitor, the European 
Commission decision-making process has been paused for additional CHMP questions related to severe skin reactions in 
a French compassionate access program. It is possible that the European Commission may not approve PADCEV in a 
timely manner or at all. In addition, the approval of a product candidate by one regulatory agency does not mean that 
other regulatory agencies will also approve such product candidate.

Any approval that a product does receive may be more restricted than anticipated. For example, regulatory 

authorities may approve a product for fewer indications or narrower indications than requested. Further, regulatory 
agencies may impose safety monitoring, educational requirements or risk evaluation and mitigation strategies, or REMS. 
Regulatory authorities may also fail to approve the facilities or processes used to manufacture a product candidate or the 
dosing or delivery methods.

The regulatory review process may also take significantly longer than expected, which may delay or eliminate any 

potential revenues from sales of the affected product or product candidate. Target action dates and regulatory timelines 
may be subject to substantial delays. Although the FDA and EMA have programs to facilitate expedited development 
and accelerated approval processes, these programs may not result in faster review or approval than conventional 
procedures and do not assure ultimate approval. In addition, although the FDA granted Breakthrough Therapy 
designation to each of PADCEV and disitamab vedotin in a specified treatment setting, these Breakthrough Therapy 
designations do not increase the likelihood that PADCEV or disitamab vedotin will receive marketing approval in the 
specified settings or in any other settings in a timely manner or at all. Disruptions at the FDA and other agencies due to 
reduced funding levels, government shutdowns, impacts associated with the COVID-19 pandemic or other factors, may 
also lead to delays in the regulatory review process. These disruptions may also slow our other interactions with 
regulatory agencies, which may slow our other product development efforts. 

36

37

If a product candidate fails to receive regulatory approvals, we will not have the anticipated revenues from that 

product candidate to fund our operations, and we may not recoup or receive any return on our investment in that product 
candidate. Similarly, if regulatory authorities do not approve product labeling that is necessary or desirable for the 
successful commercialization of an approved product, or if they do not approve an application to expand a product’s 
labeled indications of use or market the product in a new territory, then our anticipated revenue from that product may be 
adversely affected. Any of these events could have a material adverse effect on our business, results of operations, 
financial condition and growth prospects.

Even if regulatory approval is achieved, the launch of a new product or of an existing product in a new 

indication or territory is subject to a number of risks and uncertainties and may not be successful. 

Sales of a new product and sales of an existing product in a new indication or territory are subject to significant 

risks and uncertainties and can be particularly difficult to predict. For example, the commercialization of TIVDAK is at 
an early stage and may not be successful. In addition to commercialization risks described elsewhere in these "Risk 
Factors", impacts related to the COVID-19 pandemic, including restrictions on in-person interactions and resulting 
impacts on our ability to connect with key customers and conduct payor engagements, could limit our and our 
collaborators' abilities to effectively launch and commercialize a new product or to launch and commercialize an existing 
product in a new indication or territory. A proposed launch, including the launch of TUKYSA in countries in Europe 
where TUKYSA has not yet launched, could also be delayed or impaired due to a variety of factors, including supply 
constraints, delays in arranging a commercial infrastructure, delays in obtaining or failure to obtain pricing and 
reimbursement approvals, or other factors. These risks could be heightened by impacts related to the COVID-19 
pandemic. Delays or other difficulties due to any of these factors could negatively impact anticipated revenue from the 
affected product. In addition, prior to TUKYSA, we had no prior experience as an organization launching or 
commercializing a product outside the U.S. and Canada, which could adversely affect our ability to maximize the 
commercial potential of TUKYSA. If we and our collaborators are unable to successfully launch and commercialize any 
newly approved products and/or to successfully launch and commercialize our existing products in new indications or 
territories, then our business, results of operation, financial condition and growth prospects could be adversely affected. 

Reports of adverse events or safety concerns involving our products or product candidates could delay or 
prevent us from obtaining or maintaining regulatory approvals or could negatively impact sales of our products or the 
prospects for our product candidates.

Reports of adverse events or safety concerns involving our products and product candidates could result in the 

limitation, denial or withdrawal of regulatory approval by the FDA or other regulatory authorities for any or all 
indications, the need to conduct additional trials, implementation of a REMS or the inclusion of unfavorable information 
in our product labeling and, in turn, could delay or prevent us from commercializing the applicable product or product 
candidate. There are no assurances that patients receiving our products will not experience serious adverse events, 
including fatal events, in the future, whether the serious adverse events are disclosed in the prescribing information or are 
newly reported. Further, there are no assurances that patients receiving our products with co-morbid diseases not 
previously studied, such as autoimmune diseases, will not experience new or different serious adverse events in the 
future.

The prescribing information for each of our products includes warnings and precautions for various toxicities and 

reactions, including certain fatal reactions. The prescribing information for ADCETRIS also includes a boxed warning 

related to the risk that JC virus infection resulting in progressive multifocal leukoencephalopathy and death can occur in 

patients receiving ADCETRIS. The prescribing information for PADCEV also includes a boxed warning related to the 

risk that severe and fatal cutaneous adverse reactions, including Stevens-Johnson syndrome and toxic epidermal 

necrolysis, may occur in patients receiving PADCEV. The prescribing information for TIVDAK also includes a boxed 

warning related to the risk that ocular toxicity may occur in patients receiving TIVDAK, and the boxed warning includes 

requirements for ophthalmic exams at baseline, prior to each dose, and as clinically indicated, as well as premedication 

and eye care. We have updated the prescribing information for our products from time to time in the past, based on 

reports of adverse events or safety concerns, and we may be required to further update the prescribing information for 

our products, including boxed warnings, limitations of use, contraindications, warnings and precautions, and adverse 

reactions, or to implement a REMS in the future. Side effects and toxicities associated with our products, as well as the 

warnings, precautions and requirements listed in the prescribing information for our products, could affect the 

willingness of physicians to prescribe, and patients to utilize, our products and thus harm commercial sales of our 

products. Implementation of a REMS could advantage products that compete with ours or make it more difficult or 

expensive for us to distribute our products.

Likewise, reports of adverse events or safety concerns involving our products and product candidates could 

interrupt, delay or halt clinical trials of our products and product candidates, including the post-approval confirmatory 

studies that regulatory agencies have required us or our collaborators to complete. There have been serious side effects 

and, in some cases, deaths in clinical trials for our products and product candidates that were deemed to be treatment-

related by the investigators in those trials, and additional and/or unexpected side effects may be observed in these or 

other trials in the future. In addition, in response to prior safety events observed in our clinical trials, including serious 

side effects and patient deaths, we have in the past, and may in the future, institute additional precautionary safety 

measures such as dosing caps and delays, enhanced monitoring for side effects, and modified patient inclusion and 

exclusion criteria. Additional and/or unexpected safety events could be observed in these or other trials that could delay 

or prevent us from advancing the clinical development of, or obtaining regulatory approvals for, our products and 

product candidates, could require us to alter the approved labeling of our products, may cause a trial to be redone or 

terminated, may affect patient recruitment or may affect the ability of enrolled patients to complete a trial. As a result, 

such safety events could adversely affect our business, results of operations, financial condition and growth prospects. 

Clinical trials and product development are expensive, time consuming and uncertain, may take longer than we 

expect and may not be successful. Our failure to effectively advance our development programs in a timely manner or 

at all could have a material adverse effect on our business, results of operations, financial condition and growth 

prospects.

Our long-term success will depend upon the successful development of new products, as well as developing our 

existing products for new indications. However, only a small number of development programs result in the 

commercialization of a product. It is possible that none of our product candidates will ever become commercial products 

and that none of our existing products will obtain regulatory approval in any additional indications or territories. We and 

our collaborators are currently conducting multiple clinical trials for our products and product candidates, and we plan to 

commence additional trials in the future. Each of these trials requires the investment of substantial expense and time. 

However, there can be no assurance that the design or conduct of these trials, or any data collected from them, will be 

sufficient to support advancement to the next stage of development, any regulatory approvals or commercial viability.

38

39

If a product candidate fails to receive regulatory approvals, we will not have the anticipated revenues from that 

product candidate to fund our operations, and we may not recoup or receive any return on our investment in that product 

candidate. Similarly, if regulatory authorities do not approve product labeling that is necessary or desirable for the 

successful commercialization of an approved product, or if they do not approve an application to expand a product’s 

labeled indications of use or market the product in a new territory, then our anticipated revenue from that product may be 

adversely affected. Any of these events could have a material adverse effect on our business, results of operations, 

financial condition and growth prospects.

Even if regulatory approval is achieved, the launch of a new product or of an existing product in a new 

indication or territory is subject to a number of risks and uncertainties and may not be successful. 

Sales of a new product and sales of an existing product in a new indication or territory are subject to significant 

risks and uncertainties and can be particularly difficult to predict. For example, the commercialization of TIVDAK is at 

an early stage and may not be successful. In addition to commercialization risks described elsewhere in these "Risk 

Factors", impacts related to the COVID-19 pandemic, including restrictions on in-person interactions and resulting 

impacts on our ability to connect with key customers and conduct payor engagements, could limit our and our 

collaborators' abilities to effectively launch and commercialize a new product or to launch and commercialize an existing 

product in a new indication or territory. A proposed launch, including the launch of TUKYSA in countries in Europe 

where TUKYSA has not yet launched, could also be delayed or impaired due to a variety of factors, including supply 

constraints, delays in arranging a commercial infrastructure, delays in obtaining or failure to obtain pricing and 

reimbursement approvals, or other factors. These risks could be heightened by impacts related to the COVID-19 

pandemic. Delays or other difficulties due to any of these factors could negatively impact anticipated revenue from the 

affected product. In addition, prior to TUKYSA, we had no prior experience as an organization launching or 

commercializing a product outside the U.S. and Canada, which could adversely affect our ability to maximize the 

commercial potential of TUKYSA. If we and our collaborators are unable to successfully launch and commercialize any 

newly approved products and/or to successfully launch and commercialize our existing products in new indications or 

territories, then our business, results of operation, financial condition and growth prospects could be adversely affected. 

Reports of adverse events or safety concerns involving our products or product candidates could delay or 

prevent us from obtaining or maintaining regulatory approvals or could negatively impact sales of our products or the 

prospects for our product candidates.

Reports of adverse events or safety concerns involving our products and product candidates could result in the 

limitation, denial or withdrawal of regulatory approval by the FDA or other regulatory authorities for any or all 

indications, the need to conduct additional trials, implementation of a REMS or the inclusion of unfavorable information 

in our product labeling and, in turn, could delay or prevent us from commercializing the applicable product or product 

candidate. There are no assurances that patients receiving our products will not experience serious adverse events, 

including fatal events, in the future, whether the serious adverse events are disclosed in the prescribing information or are 

newly reported. Further, there are no assurances that patients receiving our products with co-morbid diseases not 

previously studied, such as autoimmune diseases, will not experience new or different serious adverse events in the 

future.

The prescribing information for each of our products includes warnings and precautions for various toxicities and 

reactions, including certain fatal reactions. The prescribing information for ADCETRIS also includes a boxed warning 
related to the risk that JC virus infection resulting in progressive multifocal leukoencephalopathy and death can occur in 
patients receiving ADCETRIS. The prescribing information for PADCEV also includes a boxed warning related to the 
risk that severe and fatal cutaneous adverse reactions, including Stevens-Johnson syndrome and toxic epidermal 
necrolysis, may occur in patients receiving PADCEV. The prescribing information for TIVDAK also includes a boxed 
warning related to the risk that ocular toxicity may occur in patients receiving TIVDAK, and the boxed warning includes 
requirements for ophthalmic exams at baseline, prior to each dose, and as clinically indicated, as well as premedication 
and eye care. We have updated the prescribing information for our products from time to time in the past, based on 
reports of adverse events or safety concerns, and we may be required to further update the prescribing information for 
our products, including boxed warnings, limitations of use, contraindications, warnings and precautions, and adverse 
reactions, or to implement a REMS in the future. Side effects and toxicities associated with our products, as well as the 
warnings, precautions and requirements listed in the prescribing information for our products, could affect the 
willingness of physicians to prescribe, and patients to utilize, our products and thus harm commercial sales of our 
products. Implementation of a REMS could advantage products that compete with ours or make it more difficult or 
expensive for us to distribute our products.

Likewise, reports of adverse events or safety concerns involving our products and product candidates could 

interrupt, delay or halt clinical trials of our products and product candidates, including the post-approval confirmatory 
studies that regulatory agencies have required us or our collaborators to complete. There have been serious side effects 
and, in some cases, deaths in clinical trials for our products and product candidates that were deemed to be treatment-
related by the investigators in those trials, and additional and/or unexpected side effects may be observed in these or 
other trials in the future. In addition, in response to prior safety events observed in our clinical trials, including serious 
side effects and patient deaths, we have in the past, and may in the future, institute additional precautionary safety 
measures such as dosing caps and delays, enhanced monitoring for side effects, and modified patient inclusion and 
exclusion criteria. Additional and/or unexpected safety events could be observed in these or other trials that could delay 
or prevent us from advancing the clinical development of, or obtaining regulatory approvals for, our products and 
product candidates, could require us to alter the approved labeling of our products, may cause a trial to be redone or 
terminated, may affect patient recruitment or may affect the ability of enrolled patients to complete a trial. As a result, 
such safety events could adversely affect our business, results of operations, financial condition and growth prospects. 

Clinical trials and product development are expensive, time consuming and uncertain, may take longer than we 
expect and may not be successful. Our failure to effectively advance our development programs in a timely manner or 
at all could have a material adverse effect on our business, results of operations, financial condition and growth 
prospects.

Our long-term success will depend upon the successful development of new products, as well as developing our 

existing products for new indications. However, only a small number of development programs result in the 
commercialization of a product. It is possible that none of our product candidates will ever become commercial products 
and that none of our existing products will obtain regulatory approval in any additional indications or territories. We and 
our collaborators are currently conducting multiple clinical trials for our products and product candidates, and we plan to 
commence additional trials in the future. Each of these trials requires the investment of substantial expense and time. 
However, there can be no assurance that the design or conduct of these trials, or any data collected from them, will be 
sufficient to support advancement to the next stage of development, any regulatory approvals or commercial viability.

38

39

Many of our clinical trials were initiated based on limited data. Encouraging preclinical, preliminary or interim 

data, and/or positive early-stage clinical trial results do not ensure that full, larger scale, later stage or confirmatory trials 
will be successful or that regulatory approval will be obtained. For example, despite the positive initial results we and 
Astellas reported from the dose-escalation cohort and expansion cohort A of the EV-103 trial, we cannot be certain that 
PADCEV will demonstrate sufficient efficacy or a favorable safety profile in other trials, including the EV-302 trial, or 
in other cohorts of the EV-103 trial, including cohort K. PADCEV may never be approved for use in any frontline setting 
or any other additional indications. Similarly, despite the encouraging antitumor activity in initial results from 23 patients 
in the MOUNTAINEER trial, we cannot be certain that TUKYSA will demonstrate sufficient efficacy or a favorable 
safety profile in the MOUNTAINEER trial or in other trials. TUKYSA may never be approved for use in the 
MOUNTAINEER treatment setting or in any other additional indications. Many companies in the pharmaceutical and 
biotechnology industries, including us, have suffered significant setbacks in late-stage clinical trials after achieving 
encouraging or positive results in early-stage development. We cannot be certain that we will not face similar setbacks in 
our ongoing or planned clinical trials, including ongoing pivotal and confirmatory trials.

There may still be important facts about the safety, efficacy, and risk versus benefit of our products and product 

requirements and potential delays, as well as risks associated with different standards of medical care.

candidates, as single agents or in combination with other agents, that are not known to us at this time and that may 
negatively impact our ability to develop and commercialize them. Safety events or concerns, or negative or inconclusive 
trial results, could adversely affect the development timeline and the regulatory approval and commercialization 
prospects for our products and product candidates, or cause us to cease further development of a product or product 
candidate, any of which may materially and adversely affect our business, results of operations, financial condition and 
growth prospects. In addition, we may make a strategic decision to discontinue development if, for example, we believe 
commercialization will be difficult relative to the standard of care or we prefer to prioritize other opportunities in our 
pipeline. We also face intense competition, and it is possible that a clinical trial may meet its safety and efficacy 
endpoints but we may choose not to advance the development of a product or product due to changes in the competitive 
environment.

From time to time, the commencement, continuation and completion of our clinical trials have been subject to 

delays, and we are likely to experience additional delays in the future. Factors that could lead to the delay, suspension, 
termination or need to modify clinical trials of our products and product candidates include:

•

•

•

•

•

•

•

•

•

•

•

•

adverse medical events or side effects, including fatalities, in treated patients or other safety issues or concerns;

deficiencies in the conduct of the clinical trial, including failure to conduct the clinical trial in accordance with 
regulatory requirements, Good Clinical Practice, or GCP, or study protocols;

problems, errors or other deficiencies with respect to data collection, data processing and analysis;

action by competent authorities to place a clinical hold or partial clinical hold on a trial or compound;

the time required to determine efficacy may be longer than expected;

unfavorable scientific results or insufficient data to support safety and effectiveness;

inadequate supply or deficient quality of the applicable product or product candidate or of other materials 
necessary to complete the trials;

inability to reach agreement on acceptable terms with prospective trial sites, the terms of which can be subject 
to extensive negotiation and may vary significantly among different trial sites;

delay or failure to obtain institutional review board, or IRB, or ethics committee approval to conduct a clinical 
trial at a prospective site;

decisions by competent authorities, IRBs, ethics committees, our collaborators or us, or recommendation by a 
data monitoring committee, to suspend or terminate a clinical trial for safety issues, futility or any other reason 
or to demand variations in the protocols or conduct of clinical trials;

changes in governmental regulations or administrative actions that adversely affect the ability to continue to 
conduct or to complete a clinical trial;

budgetary constraints or prohibitively high clinical trial costs; 

40

41

•

•

•

difficulties in identifying and enrolling patients who meet trial eligibility criteria;

lower than anticipated retention rates for patients who have initiated a clinical trial; and

the risks and evolving effects of the COVID-19 pandemic.

Additionally, patient enrollment is a function of many factors, including the size of the patient population, the 

proximity of patients to clinical sites, the eligibility criteria for the trial, the existence of competing clinical trials, 

perceived side effects and the availability of alternative or new treatments. We have experienced enrollment-related 

delays in clinical trials in the past, and we will likely continue to experience similar delays in our current and future 

trials. Many of our future and ongoing clinical trials are being or will be coordinated or conducted with collaborators. If 

we and these collaborators fail to collaborate effectively, we may experience delays or adverse effects on the 

commencement, continuation or completion of these trials. In addition, our collaborators have operational control over 

some of the studies we conduct jointly and we do not have full visibility into these studies run by our collaborators. We 

also conduct clinical trials in countries outside the U.S., which may subject us to additional expenses, regulatory 

If a product candidate or a potential new indication fails at any stage of development, or if we or our collaborators 

otherwise discontinue development of a product candidate or indication for any reason, we will not have the anticipated 

revenues from that product candidate or indication to fund our operations and we may not recoup or receive any return 

on our investment in that product candidate or indication. Failure to effectively advance our development programs in a 

timely manner or at all could have a material adverse effect on our business, results of operations, financial condition and 

prospects.

The successful commercialization of our products will depend, in part, on the extent to which governmental 

authorities and health insurers establish adequate coverage and reimbursement levels and pricing policies.

Successful sales of our current and any future approved products will depend, in part, on the extent to which 

coverage and reimbursement for our products will be available from government and health administration authorities, 

private health insurers and other third-party payors. To manage healthcare costs, many governments and third-party 

payors increasingly scrutinize the pricing of new products and require increasing levels of evidence of favorable clinical 

outcomes and cost-effectiveness before extending coverage. In light of this pricing scrutiny, we cannot be sure that we 

and our collaborators will achieve and maintain coverage for our products and any product candidates that we or our 

collaborators commercialize and, if available, that the reimbursement rates will be adequate and grant access to all 

eligible patients. If we or our collaborators are unable to obtain and maintain coverage and adequate levels of 

reimbursement for our current and any future approved products that we or our collaborators commercialize, their 

marketability will be negatively and materially impacted. For example, we cannot be certain that third-party payors will 

continue to provide coverage and adequate reimbursement for ADCETRIS in the frontline Hodgkin lymphoma 

indication based on the relative price and perceived benefit of ADCETRIS as compared to alternative treatment options, 

which may materially harm our ability to maintain or increase sales of ADCETRIS or may otherwise negatively affect 

future ADCETRIS sales. Similarly, we cannot be certain that third-party payors will provide coverage and adequate 

reimbursement for PADCEV, TUKYSA or TIVDAK based on their relative price and perceived benefits as compared to 

alternative treatment options or otherwise, which may materially harm our and our collaborators’ ability to successfully 

commercialize PADCEV, TUKYSA and TIVDAK in our respective designated territories. In addition, we have also 

experienced an increase in gross-to-net deductions for ADCETRIS since the beginning of the pandemic, which has been 

driven by the proportion of ADCETRIS sales subject to discounts through the federal 340B drug discount program, as 

well as increases in discount rates. We believe that the increase in gross-to-net deductions is, in part, due to a shift in the 

locations where ADCETRIS is administered. We may further experience additional increases in gross-to-net deductions 

for ADCETRIS and the rest of our portfolio in the future based on market and site-of-care dynamics.

Many of our clinical trials were initiated based on limited data. Encouraging preclinical, preliminary or interim 

data, and/or positive early-stage clinical trial results do not ensure that full, larger scale, later stage or confirmatory trials 

will be successful or that regulatory approval will be obtained. For example, despite the positive initial results we and 

Astellas reported from the dose-escalation cohort and expansion cohort A of the EV-103 trial, we cannot be certain that 

PADCEV will demonstrate sufficient efficacy or a favorable safety profile in other trials, including the EV-302 trial, or 

in other cohorts of the EV-103 trial, including cohort K. PADCEV may never be approved for use in any frontline setting 

or any other additional indications. Similarly, despite the encouraging antitumor activity in initial results from 23 patients 

in the MOUNTAINEER trial, we cannot be certain that TUKYSA will demonstrate sufficient efficacy or a favorable 

safety profile in the MOUNTAINEER trial or in other trials. TUKYSA may never be approved for use in the 

MOUNTAINEER treatment setting or in any other additional indications. Many companies in the pharmaceutical and 

biotechnology industries, including us, have suffered significant setbacks in late-stage clinical trials after achieving 

encouraging or positive results in early-stage development. We cannot be certain that we will not face similar setbacks in 

our ongoing or planned clinical trials, including ongoing pivotal and confirmatory trials.

There may still be important facts about the safety, efficacy, and risk versus benefit of our products and product 

candidates, as single agents or in combination with other agents, that are not known to us at this time and that may 

negatively impact our ability to develop and commercialize them. Safety events or concerns, or negative or inconclusive 

trial results, could adversely affect the development timeline and the regulatory approval and commercialization 

prospects for our products and product candidates, or cause us to cease further development of a product or product 

candidate, any of which may materially and adversely affect our business, results of operations, financial condition and 

growth prospects. In addition, we may make a strategic decision to discontinue development if, for example, we believe 

commercialization will be difficult relative to the standard of care or we prefer to prioritize other opportunities in our 

pipeline. We also face intense competition, and it is possible that a clinical trial may meet its safety and efficacy 

endpoints but we may choose not to advance the development of a product or product due to changes in the competitive 

environment.

From time to time, the commencement, continuation and completion of our clinical trials have been subject to 

delays, and we are likely to experience additional delays in the future. Factors that could lead to the delay, suspension, 

termination or need to modify clinical trials of our products and product candidates include:

•

•

•

•

•

•

•

•

•

•

•

•

adverse medical events or side effects, including fatalities, in treated patients or other safety issues or concerns;

deficiencies in the conduct of the clinical trial, including failure to conduct the clinical trial in accordance with 

regulatory requirements, Good Clinical Practice, or GCP, or study protocols;

problems, errors or other deficiencies with respect to data collection, data processing and analysis;

action by competent authorities to place a clinical hold or partial clinical hold on a trial or compound;

the time required to determine efficacy may be longer than expected;

unfavorable scientific results or insufficient data to support safety and effectiveness;

inadequate supply or deficient quality of the applicable product or product candidate or of other materials 

necessary to complete the trials;

inability to reach agreement on acceptable terms with prospective trial sites, the terms of which can be subject 

to extensive negotiation and may vary significantly among different trial sites;

delay or failure to obtain institutional review board, or IRB, or ethics committee approval to conduct a clinical 

trial at a prospective site;

decisions by competent authorities, IRBs, ethics committees, our collaborators or us, or recommendation by a 

data monitoring committee, to suspend or terminate a clinical trial for safety issues, futility or any other reason 

or to demand variations in the protocols or conduct of clinical trials;

changes in governmental regulations or administrative actions that adversely affect the ability to continue to 

conduct or to complete a clinical trial;

budgetary constraints or prohibitively high clinical trial costs; 

•

•

•

difficulties in identifying and enrolling patients who meet trial eligibility criteria;

lower than anticipated retention rates for patients who have initiated a clinical trial; and

the risks and evolving effects of the COVID-19 pandemic.

Additionally, patient enrollment is a function of many factors, including the size of the patient population, the 

proximity of patients to clinical sites, the eligibility criteria for the trial, the existence of competing clinical trials, 
perceived side effects and the availability of alternative or new treatments. We have experienced enrollment-related 
delays in clinical trials in the past, and we will likely continue to experience similar delays in our current and future 
trials. Many of our future and ongoing clinical trials are being or will be coordinated or conducted with collaborators. If 
we and these collaborators fail to collaborate effectively, we may experience delays or adverse effects on the 
commencement, continuation or completion of these trials. In addition, our collaborators have operational control over 
some of the studies we conduct jointly and we do not have full visibility into these studies run by our collaborators. We 
also conduct clinical trials in countries outside the U.S., which may subject us to additional expenses, regulatory 
requirements and potential delays, as well as risks associated with different standards of medical care.

If a product candidate or a potential new indication fails at any stage of development, or if we or our collaborators 
otherwise discontinue development of a product candidate or indication for any reason, we will not have the anticipated 
revenues from that product candidate or indication to fund our operations and we may not recoup or receive any return 
on our investment in that product candidate or indication. Failure to effectively advance our development programs in a 
timely manner or at all could have a material adverse effect on our business, results of operations, financial condition and 
prospects.

The successful commercialization of our products will depend, in part, on the extent to which governmental 

authorities and health insurers establish adequate coverage and reimbursement levels and pricing policies.

Successful sales of our current and any future approved products will depend, in part, on the extent to which 

coverage and reimbursement for our products will be available from government and health administration authorities, 
private health insurers and other third-party payors. To manage healthcare costs, many governments and third-party 
payors increasingly scrutinize the pricing of new products and require increasing levels of evidence of favorable clinical 
outcomes and cost-effectiveness before extending coverage. In light of this pricing scrutiny, we cannot be sure that we 
and our collaborators will achieve and maintain coverage for our products and any product candidates that we or our 
collaborators commercialize and, if available, that the reimbursement rates will be adequate and grant access to all 
eligible patients. If we or our collaborators are unable to obtain and maintain coverage and adequate levels of 
reimbursement for our current and any future approved products that we or our collaborators commercialize, their 
marketability will be negatively and materially impacted. For example, we cannot be certain that third-party payors will 
continue to provide coverage and adequate reimbursement for ADCETRIS in the frontline Hodgkin lymphoma 
indication based on the relative price and perceived benefit of ADCETRIS as compared to alternative treatment options, 
which may materially harm our ability to maintain or increase sales of ADCETRIS or may otherwise negatively affect 
future ADCETRIS sales. Similarly, we cannot be certain that third-party payors will provide coverage and adequate 
reimbursement for PADCEV, TUKYSA or TIVDAK based on their relative price and perceived benefits as compared to 
alternative treatment options or otherwise, which may materially harm our and our collaborators’ ability to successfully 
commercialize PADCEV, TUKYSA and TIVDAK in our respective designated territories. In addition, we have also 
experienced an increase in gross-to-net deductions for ADCETRIS since the beginning of the pandemic, which has been 
driven by the proportion of ADCETRIS sales subject to discounts through the federal 340B drug discount program, as 
well as increases in discount rates. We believe that the increase in gross-to-net deductions is, in part, due to a shift in the 
locations where ADCETRIS is administered. We may further experience additional increases in gross-to-net deductions 
for ADCETRIS and the rest of our portfolio in the future based on market and site-of-care dynamics.

40

41

In many jurisdictions, including many countries in Europe, the proposed pricing for a drug must be approved in an 
individual country before it may be lawfully marketed, which could delay entry of a product into a market or, if pricing is 
not approved, may prevent us or our collaborators from selling a product in a country where it has received regulatory 
approval. In European countries where we have obtained regulatory approval of TUKYSA, we will seek pricing and 
reimbursement agreements for TUKYSA in accordance with local timelines. As an organization, we did not have any 
experience applying for pricing and reimbursement approvals in jurisdictions outside the U.S. and Canada prior to our 
applications with respect to TUKYSA. Further, authorities in Europe have substantial discretion in the pricing and 
reimbursement approval process and in determining when or whether coverage will be available for a product in its 
initial indication or for any additional indications or in additional territories. In addition, in some cases, they may lower 
the price for a medicine after the price has been established. If we or Merck are unable to obtain favorable pricing and 
reimbursement approvals in the countries that represent significant potential markets, our anticipated revenue from and 
growth prospects for TUKYSA in those regions would be negatively affected.

Eligibility for coverage and reimbursement does not imply that payors will pay for a drug in all cases or at a rate 

financial position.

that captures the value delivered to patients, payors and the overall healthcare system; allows for continued investment in 
innovative treatments for cancer patients; or covers our costs, including research, development, manufacture, sale and 
distribution. In addition, obtaining and maintaining adequate coverage and reimbursement status is time-consuming and 
costly. Third-party payors may deny coverage and reimbursement status altogether for a given product, or they may 
cover the product but establish prices at levels that are too low to enable us to realize an appropriate return on our 
investment in product development or limit access to select patient populations, reducing revenue potential. Further, in 
the U.S., there is no uniform policy of coverage and reimbursement among third-party payors. Third-party payors often 
rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. 
However, decisions regarding the extent of coverage and amount of reimbursement to be provided is made on a payor-
by-payor basis. One payor’s determination to provide coverage for a product does not assure that other payors will also 
provide coverage for the product. Because the rules and regulations regarding coverage and reimbursement change 
frequently, in some cases at short notice, even when there is favorable coverage and reimbursement, future changes may 
occur that adversely impact the favorable status.

The unavailability or inadequacy of third-party coverage and reimbursement could have a material adverse effect 

on the market acceptance of our current and any future approved products and the future revenues we may expect to 
receive from those products. In addition, we are unable to predict what additional legislation or regulation relating to the 
healthcare industry or third-party coverage and reimbursement may be upheld or enacted in the future, or what effect 
such legislation or regulation would have on our business. Continuing negative publicity regarding pharmaceutical 
pricing practices and ongoing governmental and societal scrutiny create significant uncertainty regarding regulation of 
the healthcare industry and third-party coverage and reimbursement in the U.S. and other jurisdictions. If additional 
healthcare policies or reforms intended to curb healthcare costs are implemented or if we experience negative publicity 
with respect to pricing of our products or the pricing of pharmaceutical products generally, the prices that we charge for 
our current and any future approved products may be limited, and our revenues from sales of our current and any future 
approved products may be negatively impacted. 

The successful commercialization of our products will also depend in part on the acceptance of our products by 

the medical community, patients and third-party payors.

The degree of market acceptance among patients, physicians, and third-party payors is important to our ability to 

successfully commercialize our current and any future approved products. The degree of acceptance will depend on a 
number of factors including the clinical benefits of our products, the effectiveness of our marketing, sales and 
distribution strategy and operations, the perceived advantages and relative cost, safety and efficacy of alternative 
treatments, and the acceptance and degree of adoption of our products by institutional treatment pathways and 
institutional, local, and national clinical guidelines. In the U.S., many oncology practices and healthcare providers rely 
on the National Comprehensive Cancer Networks® Clinical Practice Guidelines in Oncology or other institutional 
practice pathways in decisions related to treatment of patients and utilization of medicines. To the extent that our current 
or any future approved products are not included or positioned favorably in such treatment guidelines and pathways, the 
full utilization potential of our products may not be reached, which may harm our ability to successfully commercialize 
our current or any future approved products.

Any failures or setbacks in our ADC development program or our other platform technologies could negatively 

affect our business and financial position.

ADCETRIS, PADCEV, TIVDAK and our ladiratuzumab vedotin and disitamab vedotin product candidates are all 

based on antibody-drug conjugate, or ADC, technology, which utilizes proprietary stable linkers and potent cell-killing 

synthetic agents. Our ADC technology is also the basis of our license agreements with AbbVie Biotechnology Ltd., or 

AbbVie, Astellas, Genentech, Inc., a member of the Roche Group, or Genentech, and GlaxoSmithKline LLC, or GSK, 

and our collaboration agreements with Takeda, Astellas, Genmab and Merck. Any failures or setbacks in our ADC 

development program or with respect to our additional proprietary technologies, including adverse effects resulting from 

the use of this technology in human clinical trials and/or the imposition of clinical holds on our trials of our product 

candidates, could have a detrimental impact on the continued commercialization of our products in their current or any 

potential future approved indications and on our product candidate pipeline, as well as our ability to maintain and/or 

enter into new corporate collaborations regarding our ADC technology, which would negatively affect our business and 

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.

The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies and 

intense competition. Many third parties compete with us in developing various approaches to treating cancer. They 

include pharmaceutical companies, biotechnology companies, academic institutions and other research organizations. 

Many of our competitors have significantly greater financial resources and expertise in research and development, 

manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approval and marketing than we do. 

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative 

arrangements with large and established companies.

With respect to ADCETRIS, there are several other FDA approved drugs for its approved indications. BMS’s 

nivolumab and Merck’s pembrolizumab are approved for the treatment of certain patients with relapsed or refractory 

classical Hodgkin lymphoma, and Acrotech Biopharma’s pralatrexate and belinostat are approved for relapsed or 

refractory systemic anaplastic large cell lymphoma, or sALCL, among other T-cell lymphomas. Celgene's romidepsin is 

approved for cutaneous T-cell lymphoma. Kyowa Kirin’s mogamulizumab is approved for adult patients with relapsed or 

refractory mycosis fungoides or Sézary syndrome. The competition ADCETRIS faces from these and other therapies is 

intensifying. Additionally, Merck conducted a phase 3 clinical trial in relapsed or refractory classical Hodgkin lymphoma 

comparing pembrolizumab to ADCETRIS. An interim analysis of this clinical trial demonstrated a statistically 

significant improvement in progression-free survival for pembrolizumab compared with ADCETRIS, resulting in a label 

expansion to an earlier line of therapy, and we expect increased competition from pembrolizumab in this indication. We 

are also aware of multiple investigational agents currently being studied that, if successful, may compete with 

ADCETRIS in the future, such as camidanlumab tesirine being studied in a phase 2 study in relapsed/refractory classical 

Hodgkin lymphoma. Merck is conducting a phase 2 study in newly diagnosed classical Hodgkin lymphoma. Data have 

also been presented on several developing technologies, including bispecific antibodies and CAR modified T-cell 

therapies that may compete with ADCETRIS in the future. Further, there are many competing approaches used in the 

treatment of patients in ADCETRIS’ approved indications, including autologous hematopoietic stem cell transplant, 

allogeneic hematopoietic stem cell transplant and chemotherapy, in addition to clinical trials with experimental agents.

With respect to PADCEV, other treatments in pretreated metastatic urothelial cancer include sacituzumab 

govitecan (a Trop-2-directed antibody and topoisomerase inhibitor conjugate), checkpoint inhibitor monotherapy, 

generic chemotherapy and, for patients with select FGFR genetic alterations, Janssen’s erdafitinib. Front line metastatic 

urothelial cancer has traditionally been treated with chemotherapy alone but is evolving to include checkpoint inhibitors 

for cisplatin-ineligible patients with high PD-L1 expression in addition to patients who are ineligible for platinum 

therapy. Several trials of investigational agents in combination with chemotherapy or other novel agents are ongoing. 

Continued development of PD-(L)1 targeted therapies across early stage bladder cancer and in metastatic bladder cancer 

in frontline combinations with chemotherapy, in frontline maintenance with the recent approval of avelumab, and in 

pretreated disease, could potentially impact PADCEV usage and enrollment in PADCEV clinical trials.

42

43

In many jurisdictions, including many countries in Europe, the proposed pricing for a drug must be approved in an 

Any failures or setbacks in our ADC development program or our other platform technologies could negatively 

individual country before it may be lawfully marketed, which could delay entry of a product into a market or, if pricing is 

affect our business and financial position.

not approved, may prevent us or our collaborators from selling a product in a country where it has received regulatory 

approval. In European countries where we have obtained regulatory approval of TUKYSA, we will seek pricing and 

reimbursement agreements for TUKYSA in accordance with local timelines. As an organization, we did not have any 

experience applying for pricing and reimbursement approvals in jurisdictions outside the U.S. and Canada prior to our 

applications with respect to TUKYSA. Further, authorities in Europe have substantial discretion in the pricing and 

reimbursement approval process and in determining when or whether coverage will be available for a product in its 

initial indication or for any additional indications or in additional territories. In addition, in some cases, they may lower 

the price for a medicine after the price has been established. If we or Merck are unable to obtain favorable pricing and 

reimbursement approvals in the countries that represent significant potential markets, our anticipated revenue from and 

growth prospects for TUKYSA in those regions would be negatively affected.

Eligibility for coverage and reimbursement does not imply that payors will pay for a drug in all cases or at a rate 

that captures the value delivered to patients, payors and the overall healthcare system; allows for continued investment in 

innovative treatments for cancer patients; or covers our costs, including research, development, manufacture, sale and 

distribution. In addition, obtaining and maintaining adequate coverage and reimbursement status is time-consuming and 

costly. Third-party payors may deny coverage and reimbursement status altogether for a given product, or they may 

cover the product but establish prices at levels that are too low to enable us to realize an appropriate return on our 

investment in product development or limit access to select patient populations, reducing revenue potential. Further, in 

the U.S., there is no uniform policy of coverage and reimbursement among third-party payors. Third-party payors often 

rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies. 

However, decisions regarding the extent of coverage and amount of reimbursement to be provided is made on a payor-

by-payor basis. One payor’s determination to provide coverage for a product does not assure that other payors will also 

provide coverage for the product. Because the rules and regulations regarding coverage and reimbursement change 

frequently, in some cases at short notice, even when there is favorable coverage and reimbursement, future changes may 

occur that adversely impact the favorable status.

The unavailability or inadequacy of third-party coverage and reimbursement could have a material adverse effect 

on the market acceptance of our current and any future approved products and the future revenues we may expect to 

receive from those products. In addition, we are unable to predict what additional legislation or regulation relating to the 

healthcare industry or third-party coverage and reimbursement may be upheld or enacted in the future, or what effect 

such legislation or regulation would have on our business. Continuing negative publicity regarding pharmaceutical 

pricing practices and ongoing governmental and societal scrutiny create significant uncertainty regarding regulation of 

the healthcare industry and third-party coverage and reimbursement in the U.S. and other jurisdictions. If additional 

healthcare policies or reforms intended to curb healthcare costs are implemented or if we experience negative publicity 

with respect to pricing of our products or the pricing of pharmaceutical products generally, the prices that we charge for 

our current and any future approved products may be limited, and our revenues from sales of our current and any future 

approved products may be negatively impacted. 

The successful commercialization of our products will also depend in part on the acceptance of our products by 

the medical community, patients and third-party payors.

The degree of market acceptance among patients, physicians, and third-party payors is important to our ability to 

successfully commercialize our current and any future approved products. The degree of acceptance will depend on a 

number of factors including the clinical benefits of our products, the effectiveness of our marketing, sales and 

distribution strategy and operations, the perceived advantages and relative cost, safety and efficacy of alternative 

treatments, and the acceptance and degree of adoption of our products by institutional treatment pathways and 

institutional, local, and national clinical guidelines. In the U.S., many oncology practices and healthcare providers rely 

on the National Comprehensive Cancer Networks® Clinical Practice Guidelines in Oncology or other institutional 

practice pathways in decisions related to treatment of patients and utilization of medicines. To the extent that our current 

or any future approved products are not included or positioned favorably in such treatment guidelines and pathways, the 

full utilization potential of our products may not be reached, which may harm our ability to successfully commercialize 

our current or any future approved products.

ADCETRIS, PADCEV, TIVDAK and our ladiratuzumab vedotin and disitamab vedotin product candidates are all 

based on antibody-drug conjugate, or ADC, technology, which utilizes proprietary stable linkers and potent cell-killing 
synthetic agents. Our ADC technology is also the basis of our license agreements with AbbVie Biotechnology Ltd., or 
AbbVie, Astellas, Genentech, Inc., a member of the Roche Group, or Genentech, and GlaxoSmithKline LLC, or GSK, 
and our collaboration agreements with Takeda, Astellas, Genmab and Merck. Any failures or setbacks in our ADC 
development program or with respect to our additional proprietary technologies, including adverse effects resulting from 
the use of this technology in human clinical trials and/or the imposition of clinical holds on our trials of our product 
candidates, could have a detrimental impact on the continued commercialization of our products in their current or any 
potential future approved indications and on our product candidate pipeline, as well as our ability to maintain and/or 
enter into new corporate collaborations regarding our ADC technology, which would negatively affect our business and 
financial position.

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.

The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies and 
intense competition. Many third parties compete with us in developing various approaches to treating cancer. They 
include pharmaceutical companies, biotechnology companies, academic institutions and other research organizations. 
Many of our competitors have significantly greater financial resources and expertise in research and development, 
manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approval and marketing than we do. 
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative 
arrangements with large and established companies.

With respect to ADCETRIS, there are several other FDA approved drugs for its approved indications. BMS’s 
nivolumab and Merck’s pembrolizumab are approved for the treatment of certain patients with relapsed or refractory 
classical Hodgkin lymphoma, and Acrotech Biopharma’s pralatrexate and belinostat are approved for relapsed or 
refractory systemic anaplastic large cell lymphoma, or sALCL, among other T-cell lymphomas. Celgene's romidepsin is 
approved for cutaneous T-cell lymphoma. Kyowa Kirin’s mogamulizumab is approved for adult patients with relapsed or 
refractory mycosis fungoides or Sézary syndrome. The competition ADCETRIS faces from these and other therapies is 
intensifying. Additionally, Merck conducted a phase 3 clinical trial in relapsed or refractory classical Hodgkin lymphoma 
comparing pembrolizumab to ADCETRIS. An interim analysis of this clinical trial demonstrated a statistically 
significant improvement in progression-free survival for pembrolizumab compared with ADCETRIS, resulting in a label 
expansion to an earlier line of therapy, and we expect increased competition from pembrolizumab in this indication. We 
are also aware of multiple investigational agents currently being studied that, if successful, may compete with 
ADCETRIS in the future, such as camidanlumab tesirine being studied in a phase 2 study in relapsed/refractory classical 
Hodgkin lymphoma. Merck is conducting a phase 2 study in newly diagnosed classical Hodgkin lymphoma. Data have 
also been presented on several developing technologies, including bispecific antibodies and CAR modified T-cell 
therapies that may compete with ADCETRIS in the future. Further, there are many competing approaches used in the 
treatment of patients in ADCETRIS’ approved indications, including autologous hematopoietic stem cell transplant, 
allogeneic hematopoietic stem cell transplant and chemotherapy, in addition to clinical trials with experimental agents.

With respect to PADCEV, other treatments in pretreated metastatic urothelial cancer include sacituzumab 

govitecan (a Trop-2-directed antibody and topoisomerase inhibitor conjugate), checkpoint inhibitor monotherapy, 
generic chemotherapy and, for patients with select FGFR genetic alterations, Janssen’s erdafitinib. Front line metastatic 
urothelial cancer has traditionally been treated with chemotherapy alone but is evolving to include checkpoint inhibitors 
for cisplatin-ineligible patients with high PD-L1 expression in addition to patients who are ineligible for platinum 
therapy. Several trials of investigational agents in combination with chemotherapy or other novel agents are ongoing. 
Continued development of PD-(L)1 targeted therapies across early stage bladder cancer and in metastatic bladder cancer 
in frontline combinations with chemotherapy, in frontline maintenance with the recent approval of avelumab, and in 
pretreated disease, could potentially impact PADCEV usage and enrollment in PADCEV clinical trials.

42

43

With respect to TUKYSA, there are multiple marketed products which target HER2, including the antibodies 
trastuzumab and pertuzumab and the antibody drug conjugate T-DM1. In addition, lapatinib is an EGFR/HER2 oral 
kinase inhibitor for the treatment of metastatic breast cancer, and neratinib is an irreversible pan-HER kinase inhibitor 
indicated for extended adjuvant treatment and treatment of metastatic breast cancer in patients who received two or more 
prior anti-HER2-based regimens. Daiichi Sankyo and AstraZeneca have fam-trastuzumab deruxtecan-nxki which was 
approved by the FDA for patients who have received two or more prior anti-HER2-based regimens in the metastatic 
breast cancer setting and recently in the HER2 positive gastric cancer setting. The agent was also granted conditional 
marketing authorization by the EMA for the treatment of adult patients with unresectable or metastatic HER2-positive 
breast cancer who have received two or more prior anti-HER2-based regimens. In addition, fam-trastuzumab deruxtecan-
nxki is being reviewed by the FDA for use in 2nd line (i.e., in patients who previously received one anti-HER2 based 
regimen in the metastatic setting) based on the DESTINY-breast 03 trial results. If approved, the sequence of therapies 
patients receive in this condition is likely to change, with greater fam-trastuzumab deruxtecan-nxki use in 2nd line. This 
may pose increased competition for TUKYSA, which is approved by the FDA for patients who have received one or 
more prior anti-HER2-based regimens in the metastatic setting, including in patients with brain metastases. MacroGenics 
has a HER2 targeted, Fc-optimized antibody, margetuximab, which was recently approved by the FDA in patients who 
have received at least two previous anti-HER2 regimens. Additionally, Byondis has an antibody drug conjugate, 
SYD985, and recently released results from its pivotal trial in metastatic breast cancer patients treated with multiple anti-
HER2-based regimens. Approval of SYD985 for this patient population may occur in 2022.

With respect to TIVDAK, in October 2021, Merck’s pembrolizumab was approved in combination with 
chemotherapy, with or without bevacizumab, for the treatment of recurrent or metastatic cervical cancer whose tumors 
express PD-L1 and was grated full approval as a monotherapy for recurrent or metastatic cervical cancer patients with 
disease progression on or after chemotherapy in patients whose tumors express PD-L1. We are also aware of other 
companies that currently have products in development for the treatment of late-stage cervical cancer which could be 
competitive with TIVDAK, including Agenus, BMS, Iovance Biotherapeutics, Merck, Regeneron Pharmaceuticals, 
Sanofi-Aventis and Roche. Cemiplimab is being reviewed in several countries outside the U.S. for the treatment of 
patients with recurrent or metastatic cervical cancer following progression on platinum-based chemotherapy. A 
supplemental Biologics License Application for cemiplimab was recently withdrawn in the U.S. 

Many other pharmaceutical and biotechnology companies are developing and/or marketing therapies for the same 

types of cancer that our product candidates are designed and being developed to treat. In addition, we are aware of a 
number of other companies that have ADC and other technologies that may be competitive with ours. We are also aware 
of a number of companies developing monoclonal antibodies directed at the same antigen targets or for the treatment of 
the same diseases as our product candidates. In addition, our ADC collaborators may develop compounds utilizing our 
technology that may compete with product candidates that we are developing.

The risk of biosimilar or generic challenges has also been increasing in our industry. In the U.S. and the EU, after 
a period of exclusivity for an innovator’s approved biological product or branded drug has passed, there are abbreviated 
pathways for approval of biosimilar products or generic drugs. In addition, it is not possible to predict changes in law 
that might reduce regulatory exclusivity. As a result, and due to uncertainties regarding patent protection, it is not 
possible to predict the length of market exclusivity for any particular product with certainty based solely on the 
expiration of the relevant patent(s) or the current forms of regulatory exclusivity. Absent patent protection or regulatory 
exclusivity for our products, it is possible, both in the United States and elsewhere, that biosimilar, interchangeable or 
generic versions of those products may be approved and marketed, which would likely result in substantial and rapid 
reductions in revenues from sales of those products.

It is also possible that our competitors will succeed in developing technologies that are more effective than our 

products and product candidates or that would render our technology obsolete or noncompetitive, or will succeed in 
developing biosimilar, interchangeable or generic products for our products and product candidates. We anticipate that 
we will continue to face increasing competition in the future as new companies enter our market and scientific 
developments surrounding biosimilars and other cancer therapies continue to accelerate. We cannot predict to what 
extent the entry of biosimilars or other competing products will impact potential future sales of our products and product 
candidates.

Risks Related to Regulatory Oversight, and Other Legal Compliance Matters

Our products and any future approved products remain subject to extensive ongoing regulatory obligations and 

oversight, including post-approval requirements, that could result in penalties and significant additional expense and 

could negatively impact our and our collaborators’ ability to commercialize our current and any future approved 

products.

Any product that has received regulatory approval remains subject to extensive ongoing obligations and continued 

review from applicable regulatory agencies. These obligations include, among other things, drug safety reporting and 

surveillance, submission of other post-marketing information and reports, pre-clearance of certain promotional materials, 

manufacturing processes and practices, product labeling, confirmatory or post-approval clinical research, import and 

export requirements and record keeping. These obligations may result in significant expense and limit our and our 

collaborators’ ability to commercialize our current and any future approved products. Any violation of ongoing 

regulatory obligations could result in restrictions on the applicable product, including the withdrawal of the applicable 

product from the market. 

If FDA approval is granted via the accelerated approval pathway or a product receives conditional marketing 

authorization from another comparable regulatory agency, we and our collaborators may be required to conduct a post-

marketing confirmatory trial in support of full approval and to comply with other additional requirements. For example, 

in connection with ADCETRIS’s conditional marketing authorization in relapsed Hodgkin lymphoma, relapsed 

cutaneous T-cell lymphoma, and both relapsed and frontline sALCL in the EU, Takeda is subject to certain post-approval 

requirements, including the requirement to conduct clinical trials to confirm clinical benefit. The FDA’s accelerated 

approval of TIVDAK also included a requirement for a confirmatory trial. An unsuccessful post-marketing study or 

failure to complete such a study with due diligence could result in the withdrawal of marketing approval. Post-marketing 

studies may also suggest unfavorable safety information that could require us to update the product’s prescribing 

information or limit or prevent the product’s widespread use. In addition, the labeling, advertising and promotion of 

products that have received accelerated approval from the FDA, including TIVDAK, are subject to additional regulatory 

requirements, which entail significant expense and could negatively impact the product’s commercialization.

Regulatory authorities may also impose additional post-marketing commitments, including requirements for 

companion diagnostics. For example, the FDA’s approval of ADCETRIS in the frontline peripheral T-cell lymphoma 

indication included a post-marketing commitment to develop an in-vitro diagnostic device for the selection of patients 

with CD30-expressing PTCL, not including SALCL, for treatment with ADCETRIS in this indication. We and Takeda 

have a collaboration with Ventana Medical Systems, Inc., or Ventana, under which Ventana is working to develop such a 

diagnostic device. 

We and the manufacturers of our current and any future approved products are also required, or will be required, 

to comply with current Good Manufacturing Practices, or cGMP, regulations, which include requirements relating to 

quality control and quality assurance as well as the corresponding maintenance of records and documentation. Further, 

regulatory agencies must approve these manufacturing facilities before they can be used to manufacture our products and 

product candidates, and these facilities are subject to ongoing regulatory inspections. In addition, any approved product, 

its manufacturer and the manufacturer’s facilities are subject to continual regulatory review and inspections, including 

periodic unannounced inspections. Failure to comply with applicable FDA and other regulatory requirements may 

subject us to administrative or judicially imposed sanctions and other consequences, including:

issuance of Form FDA 483 notices or Warning Letters by the FDA or other regulatory agencies;

•

•

•

•

•

•

•

•

imposition of fines and other civil penalties;

criminal prosecutions;

injunctions, suspensions or revocations of regulatory approvals;

suspension of any ongoing clinical trials;

total or partial suspension of manufacturing;

delays in regulatory approvals and commercialization;

refusal by the FDA to approve pending applications or supplements to approved applications submitted by us;

44

45

With respect to TUKYSA, there are multiple marketed products which target HER2, including the antibodies 

Risks Related to Regulatory Oversight, and Other Legal Compliance Matters

trastuzumab and pertuzumab and the antibody drug conjugate T-DM1. In addition, lapatinib is an EGFR/HER2 oral 

kinase inhibitor for the treatment of metastatic breast cancer, and neratinib is an irreversible pan-HER kinase inhibitor 

indicated for extended adjuvant treatment and treatment of metastatic breast cancer in patients who received two or more 

prior anti-HER2-based regimens. Daiichi Sankyo and AstraZeneca have fam-trastuzumab deruxtecan-nxki which was 

approved by the FDA for patients who have received two or more prior anti-HER2-based regimens in the metastatic 

breast cancer setting and recently in the HER2 positive gastric cancer setting. The agent was also granted conditional 

marketing authorization by the EMA for the treatment of adult patients with unresectable or metastatic HER2-positive 

breast cancer who have received two or more prior anti-HER2-based regimens. In addition, fam-trastuzumab deruxtecan-

nxki is being reviewed by the FDA for use in 2nd line (i.e., in patients who previously received one anti-HER2 based 

regimen in the metastatic setting) based on the DESTINY-breast 03 trial results. If approved, the sequence of therapies 

patients receive in this condition is likely to change, with greater fam-trastuzumab deruxtecan-nxki use in 2nd line. This 

may pose increased competition for TUKYSA, which is approved by the FDA for patients who have received one or 

more prior anti-HER2-based regimens in the metastatic setting, including in patients with brain metastases. MacroGenics 

has a HER2 targeted, Fc-optimized antibody, margetuximab, which was recently approved by the FDA in patients who 

have received at least two previous anti-HER2 regimens. Additionally, Byondis has an antibody drug conjugate, 

SYD985, and recently released results from its pivotal trial in metastatic breast cancer patients treated with multiple anti-

HER2-based regimens. Approval of SYD985 for this patient population may occur in 2022.

With respect to TIVDAK, in October 2021, Merck’s pembrolizumab was approved in combination with 

chemotherapy, with or without bevacizumab, for the treatment of recurrent or metastatic cervical cancer whose tumors 

express PD-L1 and was grated full approval as a monotherapy for recurrent or metastatic cervical cancer patients with 

disease progression on or after chemotherapy in patients whose tumors express PD-L1. We are also aware of other 

companies that currently have products in development for the treatment of late-stage cervical cancer which could be 

competitive with TIVDAK, including Agenus, BMS, Iovance Biotherapeutics, Merck, Regeneron Pharmaceuticals, 

Sanofi-Aventis and Roche. Cemiplimab is being reviewed in several countries outside the U.S. for the treatment of 

patients with recurrent or metastatic cervical cancer following progression on platinum-based chemotherapy. A 

supplemental Biologics License Application for cemiplimab was recently withdrawn in the U.S. 

Many other pharmaceutical and biotechnology companies are developing and/or marketing therapies for the same 

types of cancer that our product candidates are designed and being developed to treat. In addition, we are aware of a 

number of other companies that have ADC and other technologies that may be competitive with ours. We are also aware 

of a number of companies developing monoclonal antibodies directed at the same antigen targets or for the treatment of 

the same diseases as our product candidates. In addition, our ADC collaborators may develop compounds utilizing our 

technology that may compete with product candidates that we are developing.

The risk of biosimilar or generic challenges has also been increasing in our industry. In the U.S. and the EU, after 

a period of exclusivity for an innovator’s approved biological product or branded drug has passed, there are abbreviated 

pathways for approval of biosimilar products or generic drugs. In addition, it is not possible to predict changes in law 

that might reduce regulatory exclusivity. As a result, and due to uncertainties regarding patent protection, it is not 

possible to predict the length of market exclusivity for any particular product with certainty based solely on the 

expiration of the relevant patent(s) or the current forms of regulatory exclusivity. Absent patent protection or regulatory 

exclusivity for our products, it is possible, both in the United States and elsewhere, that biosimilar, interchangeable or 

generic versions of those products may be approved and marketed, which would likely result in substantial and rapid 

reductions in revenues from sales of those products.

It is also possible that our competitors will succeed in developing technologies that are more effective than our 

products and product candidates or that would render our technology obsolete or noncompetitive, or will succeed in 

developing biosimilar, interchangeable or generic products for our products and product candidates. We anticipate that 

we will continue to face increasing competition in the future as new companies enter our market and scientific 

developments surrounding biosimilars and other cancer therapies continue to accelerate. We cannot predict to what 

extent the entry of biosimilars or other competing products will impact potential future sales of our products and product 

candidates.

Our products and any future approved products remain subject to extensive ongoing regulatory obligations and 
oversight, including post-approval requirements, that could result in penalties and significant additional expense and 
could negatively impact our and our collaborators’ ability to commercialize our current and any future approved 
products.

Any product that has received regulatory approval remains subject to extensive ongoing obligations and continued 

review from applicable regulatory agencies. These obligations include, among other things, drug safety reporting and 
surveillance, submission of other post-marketing information and reports, pre-clearance of certain promotional materials, 
manufacturing processes and practices, product labeling, confirmatory or post-approval clinical research, import and 
export requirements and record keeping. These obligations may result in significant expense and limit our and our 
collaborators’ ability to commercialize our current and any future approved products. Any violation of ongoing 
regulatory obligations could result in restrictions on the applicable product, including the withdrawal of the applicable 
product from the market. 

If FDA approval is granted via the accelerated approval pathway or a product receives conditional marketing 

authorization from another comparable regulatory agency, we and our collaborators may be required to conduct a post-
marketing confirmatory trial in support of full approval and to comply with other additional requirements. For example, 
in connection with ADCETRIS’s conditional marketing authorization in relapsed Hodgkin lymphoma, relapsed 
cutaneous T-cell lymphoma, and both relapsed and frontline sALCL in the EU, Takeda is subject to certain post-approval 
requirements, including the requirement to conduct clinical trials to confirm clinical benefit. The FDA’s accelerated 
approval of TIVDAK also included a requirement for a confirmatory trial. An unsuccessful post-marketing study or 
failure to complete such a study with due diligence could result in the withdrawal of marketing approval. Post-marketing 
studies may also suggest unfavorable safety information that could require us to update the product’s prescribing 
information or limit or prevent the product’s widespread use. In addition, the labeling, advertising and promotion of 
products that have received accelerated approval from the FDA, including TIVDAK, are subject to additional regulatory 
requirements, which entail significant expense and could negatively impact the product’s commercialization.

Regulatory authorities may also impose additional post-marketing commitments, including requirements for 

companion diagnostics. For example, the FDA’s approval of ADCETRIS in the frontline peripheral T-cell lymphoma 
indication included a post-marketing commitment to develop an in-vitro diagnostic device for the selection of patients 
with CD30-expressing PTCL, not including SALCL, for treatment with ADCETRIS in this indication. We and Takeda 
have a collaboration with Ventana Medical Systems, Inc., or Ventana, under which Ventana is working to develop such a 
diagnostic device. 

We and the manufacturers of our current and any future approved products are also required, or will be required, 

to comply with current Good Manufacturing Practices, or cGMP, regulations, which include requirements relating to 
quality control and quality assurance as well as the corresponding maintenance of records and documentation. Further, 
regulatory agencies must approve these manufacturing facilities before they can be used to manufacture our products and 
product candidates, and these facilities are subject to ongoing regulatory inspections. In addition, any approved product, 
its manufacturer and the manufacturer’s facilities are subject to continual regulatory review and inspections, including 
periodic unannounced inspections. Failure to comply with applicable FDA and other regulatory requirements may 
subject us to administrative or judicially imposed sanctions and other consequences, including:

•

•

•

•

•

•

•

•

issuance of Form FDA 483 notices or Warning Letters by the FDA or other regulatory agencies;

imposition of fines and other civil penalties;

criminal prosecutions;

injunctions, suspensions or revocations of regulatory approvals;

suspension of any ongoing clinical trials;

total or partial suspension of manufacturing;

delays in regulatory approvals and commercialization;

refusal by the FDA to approve pending applications or supplements to approved applications submitted by us;

44

45

•

•

•

•

refusals to permit drugs to be imported into or exported from the U.S.;

restrictions on operations, including costly new manufacturing requirements; 

product recalls or seizures or withdrawal of the affected product from the market; and

products, as well as those of our collaborators. 

reputational harm.

The policies of the FDA and other regulatory agencies may change and additional laws and regulations may be 
enacted that could prevent or delay regulatory approval of our product candidates or of our products in any additional 
indications or territories, or further restrict or regulate post-approval activities. Any problems with a product or any 
violation of ongoing regulatory obligations could result in restrictions on the applicable product, including the 
withdrawal of the applicable product from the market. If we are not able to maintain regulatory compliance, we or our 
collaborators might not be permitted to commercialize our current or any future approved products and our business 
would suffer.

Healthcare law and policy changes may negatively impact our business, including by decreasing the prices that 

we and our collaborators receive for our products.

In recent years, there have been a number of legislative and regulatory actions and executive orders that have 

made reforms to the U.S. healthcare system. The implementation of certain of these policy changes has decreased our 
revenues and increased our costs, and federal and state legislatures, governments in countries outside the U.S., health 
agencies and third-party payors continue to focus on containing the cost of healthcare. Further legislative and regulatory 
changes, and increasing pressure from social sources, are likely to further influence the manner in which our products are 
priced, reimbursed, prescribed and purchased. Such additional reforms could result in further reductions in coverage and 
levels of reimbursement for our products, expansion of U.S. government rebate and discount programs, increases in the 
rebates and discounts payable under these programs, requests for additional or supplemental rebates, and additional 
downward pressure on the prices that we and our collaborators receive for our products. 

The federal government has implemented reforms to government healthcare programs in the U.S., including 

changes to the methods for, and amounts of, Medicare reimbursement and changes to the Medicaid Drug Rebate 
Program. For example, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, 
which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, 
for single source and innovator multiple source drugs, beginning January 1, 2024. On November 15, 2021, President 
Biden signed the Infrastructure Investment and Jobs Act, which included changes to the Medicare Part B program 
requiring rebates for some discarded drug products that will increase future rebates. The Biden administration also 
recently announced an Executive Order that includes initiatives to support the implementation of Canadian drug 
importation and reduce drug prices. In response to President Biden’s Executive Order, on September 9, 2021, the U.S. 
Department of Health and Human Services released a Comprehensive Plan for Addressing High Drug Prices that 
outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could 
pursue to advance these principles. No legislation or administrative actions have been finalized to implement these 
principles. In addition, Congress is considering drug pricing as part of other healthcare reform initiatives. 

Some states are also considering legislation, or have passed laws, that would control the prices and coverage and 

reimbursement levels of drugs, including laws to allow importation of pharmaceutical products from lower cost 
jurisdictions outside the U.S. and laws intended to impose price controls on state drug purchases. 

In addition, governments in countries outside the U.S. control the costs of pharmaceuticals. Many European 
countries and Canada have established pricing and reimbursement policies that contain costs by referencing the price of 
the same or similar products in other countries. In these instances, if coverage or the level of reimbursement is reduced, 
limited or eliminated in one or more countries, we may be unable to obtain or maintain anticipated pricing or 
reimbursement in other countries or in new markets. This may create the opportunity for third-party cross-border trade or 
may influence our decision whether to sell a product in one or more countries, thus adversely affecting our geographic 
expansion plans.

It is also possible that governments may take additional action to reform the healthcare system in response to the 

evolving effects of the COVID-19 pandemic. 

We cannot assure you as to the ultimate content, timing, or effect of future healthcare law and policy changes, nor 

is it possible at this time to estimate the impact of any such potential changes; however, such changes or the ultimate 

impact of changes could materially and adversely affect our revenue or sales of our current and or potential future 

We are subject to various state, federal and international laws and regulations, including healthcare laws and 

regulations, that may impact our business and could subject us to significant fines and penalties or other negative 

consequences.

Our operations may be directly or indirectly subject to various healthcare laws, including, without limitation, the 

federal Anti-Kickback Statute, federal civil and criminal false claims laws, regulations prohibiting off-label promotions 

and federal transparency requirements. These laws may impact, among other things, the sales, marketing and education 

programs for our products and any future approved products. In addition, the number and complexity of healthcare laws 

and regulations applicable to our business continue to increase.

The federal Anti-Kickback Statute prohibits, among other things, knowingly and willingly soliciting, offering, 

receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an 

individual, or the furnishing or arranging for a good or service, for which payment may be made, in whole or in part, 

under a federal healthcare program such as the Medicare and Medicaid programs. Although there are a number of 

statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and 

safe harbors are drawn narrowly, and practices that involve remuneration not intended to induce prescribing, purchases 

or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. In addition, a 

criminal conviction for violation of the federal Anti-Kickback Statute requires mandatory exclusion from participation in 

federal healthcare programs.

The federal civil and criminal false claims laws, including the civil False Claims Act, prohibit, among other 

things, persons or entities from knowingly presenting, or causing to be presented, a false claim to, or the knowing use of 

false statements to obtain payment from or approval by, the federal government, including the Medicare and Medicaid 

programs, or knowingly making, using, or causing to be made or used a false record or statement material to a false or 

fraudulent claim or to avoid, decrease, or conceal an obligation to pay money to the federal government. Many 

pharmaceutical and other healthcare companies have been investigated and have reached substantial financial settlements 

with the federal government under the civil False Claims Act for a variety of alleged improper marketing, promotion or 

other activities.

The FDA and other governmental authorities also actively investigate allegations of off-label promotion activities 

in order to enforce regulations prohibiting these types of activities. In recent years, private whistleblowers have also 

pursued False Claims Act cases against a number of pharmaceutical companies for causing false claims to be submitted 

as a result of off-label promotion. If we are found to have promoted an approved product for off-label uses, we may be 

subject to significant liability, including significant civil and administrative financial penalties and other remedies as well 

as criminal penalties and other sanctions. Even when a company is not determined to have engaged in off-label 

promotion, the allegation from government authorities or market participants that a company has engaged in such 

activities could have a significant impact on the company’s sales, business and financial condition. The U.S. government 

has also required companies to enter into complex corporate integrity agreements, deferred prosecution agreements and/

or non-prosecution agreements that impose significant reporting and other burdens on the affected companies.

The federal transparency requirements under the Physician Payments Sunshine Act require certain manufacturers 

of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the 

Children’s Health Insurance Program to annually report information related to certain payments or other transfers of 

value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare 

professionals (such as physician assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at 

the request of, or designated on behalf of, the physicians and teaching hospitals, and to report annually certain ownership 

and investment interests held by physicians and their immediate family members. Failure to submit timely, accurately 

and completely the required information for all payments, transfers of value and ownership or investment interests may 

result in civil monetary penalties of up to an aggregate of $150,000 per year plus up to an aggregate of $1 million per 

year for “knowing failures,” as adjusted for inflation.

46

47

refusals to permit drugs to be imported into or exported from the U.S.;

restrictions on operations, including costly new manufacturing requirements; 

product recalls or seizures or withdrawal of the affected product from the market; and

•

•

•

•

reputational harm.

The policies of the FDA and other regulatory agencies may change and additional laws and regulations may be 

enacted that could prevent or delay regulatory approval of our product candidates or of our products in any additional 

indications or territories, or further restrict or regulate post-approval activities. Any problems with a product or any 

violation of ongoing regulatory obligations could result in restrictions on the applicable product, including the 

withdrawal of the applicable product from the market. If we are not able to maintain regulatory compliance, we or our 

collaborators might not be permitted to commercialize our current or any future approved products and our business 

would suffer.

Healthcare law and policy changes may negatively impact our business, including by decreasing the prices that 

we and our collaborators receive for our products.

In recent years, there have been a number of legislative and regulatory actions and executive orders that have 

made reforms to the U.S. healthcare system. The implementation of certain of these policy changes has decreased our 

revenues and increased our costs, and federal and state legislatures, governments in countries outside the U.S., health 

agencies and third-party payors continue to focus on containing the cost of healthcare. Further legislative and regulatory 

changes, and increasing pressure from social sources, are likely to further influence the manner in which our products are 

priced, reimbursed, prescribed and purchased. Such additional reforms could result in further reductions in coverage and 

levels of reimbursement for our products, expansion of U.S. government rebate and discount programs, increases in the 

rebates and discounts payable under these programs, requests for additional or supplemental rebates, and additional 

downward pressure on the prices that we and our collaborators receive for our products. 

The federal government has implemented reforms to government healthcare programs in the U.S., including 

changes to the methods for, and amounts of, Medicare reimbursement and changes to the Medicaid Drug Rebate 

Program. For example, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, 

which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, 

for single source and innovator multiple source drugs, beginning January 1, 2024. On November 15, 2021, President 

Biden signed the Infrastructure Investment and Jobs Act, which included changes to the Medicare Part B program 

requiring rebates for some discarded drug products that will increase future rebates. The Biden administration also 

recently announced an Executive Order that includes initiatives to support the implementation of Canadian drug 

importation and reduce drug prices. In response to President Biden’s Executive Order, on September 9, 2021, the U.S. 

Department of Health and Human Services released a Comprehensive Plan for Addressing High Drug Prices that 

outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could 

pursue to advance these principles. No legislation or administrative actions have been finalized to implement these 

principles. In addition, Congress is considering drug pricing as part of other healthcare reform initiatives. 

Some states are also considering legislation, or have passed laws, that would control the prices and coverage and 

reimbursement levels of drugs, including laws to allow importation of pharmaceutical products from lower cost 

jurisdictions outside the U.S. and laws intended to impose price controls on state drug purchases. 

In addition, governments in countries outside the U.S. control the costs of pharmaceuticals. Many European 

countries and Canada have established pricing and reimbursement policies that contain costs by referencing the price of 

the same or similar products in other countries. In these instances, if coverage or the level of reimbursement is reduced, 

limited or eliminated in one or more countries, we may be unable to obtain or maintain anticipated pricing or 

reimbursement in other countries or in new markets. This may create the opportunity for third-party cross-border trade or 

may influence our decision whether to sell a product in one or more countries, thus adversely affecting our geographic 

expansion plans.

It is also possible that governments may take additional action to reform the healthcare system in response to the 

evolving effects of the COVID-19 pandemic. 

We cannot assure you as to the ultimate content, timing, or effect of future healthcare law and policy changes, nor 

is it possible at this time to estimate the impact of any such potential changes; however, such changes or the ultimate 
impact of changes could materially and adversely affect our revenue or sales of our current and or potential future 
products, as well as those of our collaborators. 

We are subject to various state, federal and international laws and regulations, including healthcare laws and 

regulations, that may impact our business and could subject us to significant fines and penalties or other negative 
consequences.

Our operations may be directly or indirectly subject to various healthcare laws, including, without limitation, the 
federal Anti-Kickback Statute, federal civil and criminal false claims laws, regulations prohibiting off-label promotions 
and federal transparency requirements. These laws may impact, among other things, the sales, marketing and education 
programs for our products and any future approved products. In addition, the number and complexity of healthcare laws 
and regulations applicable to our business continue to increase.

The federal Anti-Kickback Statute prohibits, among other things, knowingly and willingly soliciting, offering, 

receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an 
individual, or the furnishing or arranging for a good or service, for which payment may be made, in whole or in part, 
under a federal healthcare program such as the Medicare and Medicaid programs. Although there are a number of 
statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and 
safe harbors are drawn narrowly, and practices that involve remuneration not intended to induce prescribing, purchases 
or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. In addition, a 
criminal conviction for violation of the federal Anti-Kickback Statute requires mandatory exclusion from participation in 
federal healthcare programs.

The federal civil and criminal false claims laws, including the civil False Claims Act, prohibit, among other 
things, persons or entities from knowingly presenting, or causing to be presented, a false claim to, or the knowing use of 
false statements to obtain payment from or approval by, the federal government, including the Medicare and Medicaid 
programs, or knowingly making, using, or causing to be made or used a false record or statement material to a false or 
fraudulent claim or to avoid, decrease, or conceal an obligation to pay money to the federal government. Many 
pharmaceutical and other healthcare companies have been investigated and have reached substantial financial settlements 
with the federal government under the civil False Claims Act for a variety of alleged improper marketing, promotion or 
other activities.

The FDA and other governmental authorities also actively investigate allegations of off-label promotion activities 

in order to enforce regulations prohibiting these types of activities. In recent years, private whistleblowers have also 
pursued False Claims Act cases against a number of pharmaceutical companies for causing false claims to be submitted 
as a result of off-label promotion. If we are found to have promoted an approved product for off-label uses, we may be 
subject to significant liability, including significant civil and administrative financial penalties and other remedies as well 
as criminal penalties and other sanctions. Even when a company is not determined to have engaged in off-label 
promotion, the allegation from government authorities or market participants that a company has engaged in such 
activities could have a significant impact on the company’s sales, business and financial condition. The U.S. government 
has also required companies to enter into complex corporate integrity agreements, deferred prosecution agreements and/
or non-prosecution agreements that impose significant reporting and other burdens on the affected companies.

The federal transparency requirements under the Physician Payments Sunshine Act require certain manufacturers 

of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid, or the 
Children’s Health Insurance Program to annually report information related to certain payments or other transfers of 
value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare 
professionals (such as physician assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at 
the request of, or designated on behalf of, the physicians and teaching hospitals, and to report annually certain ownership 
and investment interests held by physicians and their immediate family members. Failure to submit timely, accurately 
and completely the required information for all payments, transfers of value and ownership or investment interests may 
result in civil monetary penalties of up to an aggregate of $150,000 per year plus up to an aggregate of $1 million per 
year for “knowing failures,” as adjusted for inflation.

46

47

In addition, there has been increased scrutiny of company-sponsored patient assistance programs, including co-

pay assistance programs, and donations to third-party charities that provide such assistance. There has also been 
enhanced scrutiny by governments of reimbursement support offerings, clinical education programs and promotional 
speaker programs. If we or our vendors are deemed to fail to comply with laws or regulations in the operation of these 
programs, we could be subject to damages, fines, penalties or other criminal, civil or administrative sanctions or 
enforcement actions. Further, in connection with civil settlements related to these laws and regulations, the U.S. 
government has and may in the future require companies to enter into complex corporate integrity agreements that 
impost significant reporting and other requirements. 

Other healthcare laws and regulations that may affect our ability to operate include, among others, the federal civil 

monetary penalties statute and the healthcare fraud provisions of the federal Health Insurance Portability and 
Accountability Act, or HIPAA. In addition, many states and jurisdictions outside the U.S. have similar laws and 
regulations, such as anti-kickback, anti-bribery and corruption, false claims and transparency, to which we are currently 
and/or may in the future, be subject. Additional information about these requirements is provided under “Government 
Regulation – Healthcare Regulation” in this Annual Report on Form 10-K. 

We are also subject to numerous other laws and regulations that while not specific to the healthcare industry, do 
apply to the healthcare industry in important ways. For example, we are subject to antitrust regulations with respect to 
interactions with other participants in the markets we currently serve or may serve in the future. These antitrust laws are 
vigorously enforced in the U.S. and in other jurisdictions in which we operate.

In an effort to comply with applicable laws and regulations, we have implemented a compliance program designed 

amongst various EU member states. 

to actively identify, prevent and mitigate risk by implementing policies and systems and promoting a culture of 
compliance. We also actively work to revise and evolve our compliance program in an effort to keep pace with evolving 
compliance risks and the growing scale of our business. However, we cannot guarantee that our compliance program will 
be sufficient or effective, that we will be able to integrate the operations of newly formed affiliates or acquired 
businesses into our compliance program effectively or on a timely basis, that our employees will comply with our 
policies, that our employees will notify us of any violation of our policies, that we will have the ability to take 
appropriate and timely corrective action in response to any such violation, or that we will make decisions and take 
actions that will limit or avoid liability for whistleblower claims or actions by governmental authorities. If we are found 
to be in violation of any of the laws and regulations described above or other applicable laws, we may be subject to 
penalties, including significant civil, criminal and administrative penalties, damages, fines, disgorgement, contractual 
damages, reputational harm, administrative burdens, imprisonment, diminished profits and future earnings, exclusion 
from government healthcare reimbursement programs, additional reporting requirements and oversight if we become 
subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, 
and/or the curtailment or restructuring of our operations. Any of these outcomes could have a material adverse effect on 
our business, results of operations, financial condition and growth prospects. Regardless of whether we have complied 
with the law, a government investigation could negatively impact our business practices, harm our reputation, divert the 
attention of management and increase our expenses. Moreover, achieving and sustaining compliance with applicable 
federal, state and healthcare laws outside the U.S. is costly and time-consuming for our management.

We  are  subject  to  stringent  and  changing  obligations  related  to  data  privacy  and  information  security.  Our 
actual  or  perceived  failure  to  comply  with  such  obligations  could  lead  to  governmental  investigations  or  actions, 
litigation, fines and penalties, a disruption of our business operations, reputational harm and other adverse business 
impacts.

We are subject to numerous privacy and data protection laws and regulations governing personal information, 
including healthcare information. In addition, the legislative and regulatory landscape for privacy and data protection 
continues to evolve. 

In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, 

including data breach notification laws, personal data privacy laws, and consumer protection laws. The laws are not 

consistent, and states frequently amend existing laws, requiring attention to constantly changing regulatory requirements. 

For example, the California Consumer Privacy Act, or CCPA, became effective on January 1, 2020, and the California 

Privacy Rights Act, or CPRA, will take effect in January 2023 (with a look back for certain rights to January 2022). The 

CPRA will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive 

personal information. We may also be subject to additional U.S. privacy regulations in the future, including the Virginia 

Consumer Data Protection Act and the Colorado Privacy Act, both of which become effective in 2023. In addition, at the 

federal level, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its 

implementing regulations impose additional obligations on certain types of individuals and entities with respect to the 

security, privacy and transmission of individually identifiable health information. 

EU member countries and other jurisdictions, including Switzerland, the United Kingdom, or the U.K., and 

Canada, have also adopted data protection laws and regulations which impose significant compliance obligations. For 

example, the EU’s General Data Protection Regulation, or GDPR, imposes a range of requirements relating to the 

collection, use, handling and protection of personal data. Violations of the GDPR can result in significant penalties, 

including potential fines of up to €20 million or 4% of the annual global revenues of the non-compliant company, 

whichever is greater. The GDPR has increased our responsibility and potential liability in relation to all types of personal 

data that we process, including clinical trial data and employee information. In addition, local data protection authorities 

can have different interpretations of the GDPR, leading to compliance challenges as a result of potential inconsistencies 

Among other requirements, the GDPR regulates transfers of personal data to countries that have not been found to 

provide adequate protection to such personal data, including the U.S. This includes transfers between us and our 

subsidiaries. In July 2020, the Court of Justice of the EU, or the CJEU, invalidated one of the primary safeguards 

enabling U.S. companies to import personal information from Europe, the EU-U.S. Privacy Shield. The same decision 

also raised questions about whether one of the primary alternatives to the EU-U.S. Privacy Shield, namely, the EC’s 

Standard Contractual Clauses, or SCCs, provide sufficient protection for personal data transfers without analyzing each 

transfer and implementing supplementary measures to protect the data. As a result of the CJEU’s decision, the EC issued 

new SCCs in June 2021 that repeal and replace the previous clauses. Companies relying on the SCCs for transfers have 

until December 2022 to implement the new clauses. Following recommendations from the European Data Protection 

Board, we are reviewing personal data transfers from the EU and adding the new SCCs and supplementary measures, 

when required. Since local data protection authorities can interpret GDPR and the CJEU’s decision differently, there is 

no definitive set of controls that can ensure GDPR compliance across our business operations. In addition, authorities in 

Switzerland and the U.K., whose data protection laws are similar to those of the EU, also invalidated the use of privacy 

shields. Additional compliance efforts may be needed to respond to evolving regulatory guidance. If our compliance 

solutions are found to be insufficient, we could face substantial fines under European data protection laws as well as 

injunctions against processing and/or transferring personal information from Europe. The inability to import personal 

information from Europe could restrict our clinical trial activities in Europe, limit our ability to collaborate with contract 

research organizations, service providers, contractors and other companies subject to European data protection laws, 

interfere with our ability to hire employees in Europe and require us to increase our data processing capabilities in 

Europe at significant expense. 

In addition, we may be subject to other foreign data privacy and security laws. For example, China’s Personal 

Information Protection Law, or PIPL, which took effect in November 2021, imposes various requirements related to 

personal information processing, similar to the GDPR and CCPA. In particular, the PIPL sets out personal information 

localization requirements, along with rules regarding the transfer of personal information outside of China. Such 

transfers may require assessment and/or approval by China’s Cyberspace Administration, certification by professional 

institutions or entering into contracts with and supervising overseas recipients. Violations of the PIPL may lead to an 

administrative fine of up to RMB 50 million or 5% of turnover in the last year. 

48

49

In addition, there has been increased scrutiny of company-sponsored patient assistance programs, including co-

pay assistance programs, and donations to third-party charities that provide such assistance. There has also been 

enhanced scrutiny by governments of reimbursement support offerings, clinical education programs and promotional 

speaker programs. If we or our vendors are deemed to fail to comply with laws or regulations in the operation of these 

programs, we could be subject to damages, fines, penalties or other criminal, civil or administrative sanctions or 

enforcement actions. Further, in connection with civil settlements related to these laws and regulations, the U.S. 

government has and may in the future require companies to enter into complex corporate integrity agreements that 

impost significant reporting and other requirements. 

Other healthcare laws and regulations that may affect our ability to operate include, among others, the federal civil 

monetary penalties statute and the healthcare fraud provisions of the federal Health Insurance Portability and 

Accountability Act, or HIPAA. In addition, many states and jurisdictions outside the U.S. have similar laws and 

regulations, such as anti-kickback, anti-bribery and corruption, false claims and transparency, to which we are currently 

and/or may in the future, be subject. Additional information about these requirements is provided under “Government 

Regulation – Healthcare Regulation” in this Annual Report on Form 10-K. 

We are also subject to numerous other laws and regulations that while not specific to the healthcare industry, do 

apply to the healthcare industry in important ways. For example, we are subject to antitrust regulations with respect to 

interactions with other participants in the markets we currently serve or may serve in the future. These antitrust laws are 

vigorously enforced in the U.S. and in other jurisdictions in which we operate.

In an effort to comply with applicable laws and regulations, we have implemented a compliance program designed 

to actively identify, prevent and mitigate risk by implementing policies and systems and promoting a culture of 

compliance. We also actively work to revise and evolve our compliance program in an effort to keep pace with evolving 

compliance risks and the growing scale of our business. However, we cannot guarantee that our compliance program will 

be sufficient or effective, that we will be able to integrate the operations of newly formed affiliates or acquired 

businesses into our compliance program effectively or on a timely basis, that our employees will comply with our 

policies, that our employees will notify us of any violation of our policies, that we will have the ability to take 

appropriate and timely corrective action in response to any such violation, or that we will make decisions and take 

actions that will limit or avoid liability for whistleblower claims or actions by governmental authorities. If we are found 

to be in violation of any of the laws and regulations described above or other applicable laws, we may be subject to 

penalties, including significant civil, criminal and administrative penalties, damages, fines, disgorgement, contractual 

damages, reputational harm, administrative burdens, imprisonment, diminished profits and future earnings, exclusion 

from government healthcare reimbursement programs, additional reporting requirements and oversight if we become 

subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, 

and/or the curtailment or restructuring of our operations. Any of these outcomes could have a material adverse effect on 

our business, results of operations, financial condition and growth prospects. Regardless of whether we have complied 

with the law, a government investigation could negatively impact our business practices, harm our reputation, divert the 

attention of management and increase our expenses. Moreover, achieving and sustaining compliance with applicable 

federal, state and healthcare laws outside the U.S. is costly and time-consuming for our management.

We  are  subject  to  stringent  and  changing  obligations  related  to  data  privacy  and  information  security.  Our 

actual  or  perceived  failure  to  comply  with  such  obligations  could  lead  to  governmental  investigations  or  actions, 

litigation, fines and penalties, a disruption of our business operations, reputational harm and other adverse business 

impacts.

continues to evolve. 

We are subject to numerous privacy and data protection laws and regulations governing personal information, 

including healthcare information. In addition, the legislative and regulatory landscape for privacy and data protection 

In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, 

including data breach notification laws, personal data privacy laws, and consumer protection laws. The laws are not 
consistent, and states frequently amend existing laws, requiring attention to constantly changing regulatory requirements. 
For example, the California Consumer Privacy Act, or CCPA, became effective on January 1, 2020, and the California 
Privacy Rights Act, or CPRA, will take effect in January 2023 (with a look back for certain rights to January 2022). The 
CPRA will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive 
personal information. We may also be subject to additional U.S. privacy regulations in the future, including the Virginia 
Consumer Data Protection Act and the Colorado Privacy Act, both of which become effective in 2023. In addition, at the 
federal level, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and its 
implementing regulations impose additional obligations on certain types of individuals and entities with respect to the 
security, privacy and transmission of individually identifiable health information. 

EU member countries and other jurisdictions, including Switzerland, the United Kingdom, or the U.K., and 

Canada, have also adopted data protection laws and regulations which impose significant compliance obligations. For 
example, the EU’s General Data Protection Regulation, or GDPR, imposes a range of requirements relating to the 
collection, use, handling and protection of personal data. Violations of the GDPR can result in significant penalties, 
including potential fines of up to €20 million or 4% of the annual global revenues of the non-compliant company, 
whichever is greater. The GDPR has increased our responsibility and potential liability in relation to all types of personal 
data that we process, including clinical trial data and employee information. In addition, local data protection authorities 
can have different interpretations of the GDPR, leading to compliance challenges as a result of potential inconsistencies 
amongst various EU member states. 

Among other requirements, the GDPR regulates transfers of personal data to countries that have not been found to 

provide adequate protection to such personal data, including the U.S. This includes transfers between us and our 
subsidiaries. In July 2020, the Court of Justice of the EU, or the CJEU, invalidated one of the primary safeguards 
enabling U.S. companies to import personal information from Europe, the EU-U.S. Privacy Shield. The same decision 
also raised questions about whether one of the primary alternatives to the EU-U.S. Privacy Shield, namely, the EC’s 
Standard Contractual Clauses, or SCCs, provide sufficient protection for personal data transfers without analyzing each 
transfer and implementing supplementary measures to protect the data. As a result of the CJEU’s decision, the EC issued 
new SCCs in June 2021 that repeal and replace the previous clauses. Companies relying on the SCCs for transfers have 
until December 2022 to implement the new clauses. Following recommendations from the European Data Protection 
Board, we are reviewing personal data transfers from the EU and adding the new SCCs and supplementary measures, 
when required. Since local data protection authorities can interpret GDPR and the CJEU’s decision differently, there is 
no definitive set of controls that can ensure GDPR compliance across our business operations. In addition, authorities in 
Switzerland and the U.K., whose data protection laws are similar to those of the EU, also invalidated the use of privacy 
shields. Additional compliance efforts may be needed to respond to evolving regulatory guidance. If our compliance 
solutions are found to be insufficient, we could face substantial fines under European data protection laws as well as 
injunctions against processing and/or transferring personal information from Europe. The inability to import personal 
information from Europe could restrict our clinical trial activities in Europe, limit our ability to collaborate with contract 
research organizations, service providers, contractors and other companies subject to European data protection laws, 
interfere with our ability to hire employees in Europe and require us to increase our data processing capabilities in 
Europe at significant expense. 

In addition, we may be subject to other foreign data privacy and security laws. For example, China’s Personal 
Information Protection Law, or PIPL, which took effect in November 2021, imposes various requirements related to 
personal information processing, similar to the GDPR and CCPA. In particular, the PIPL sets out personal information 
localization requirements, along with rules regarding the transfer of personal information outside of China. Such 
transfers may require assessment and/or approval by China’s Cyberspace Administration, certification by professional 
institutions or entering into contracts with and supervising overseas recipients. Violations of the PIPL may lead to an 
administrative fine of up to RMB 50 million or 5% of turnover in the last year. 

48

49

Any failure or alleged failure to comply with legal or contractual obligations, policies and industry standards 

relating to personal information, and any incident resulting in the unauthorized access to, or acquisition, release or 
transfer of, personal information, may result in governmental investigations or enforcement actions, litigation, fines, 
penalties, damage to our reputation and other adverse consequences. In addition, we expect that laws, regulations, 
policies and industry standards relating to privacy and data protection will continue to evolve. These changes may 
require us to modify our practices and may increase our costs of doing business. In addition, privacy advocates and 
industry groups have regularly proposed, and may propose in the future, self-regulatory standards that may legally or 
contractually apply to us. If we fail to follow these standards, even if no personal information is compromised, we may 
incur significant fines or experience a significant increase in costs. 

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, including:

The testing, manufacturing, marketing, and sale of products and product candidates expose us to product liability 
claims. As a result, it is possible that we may be named as a defendant in product liability suits that may allege that drug 
products we manufactured for BMS resulted in injury to patients. While we have obtained product liability insurance, it 
may not provide adequate coverage against all potential liabilities. In addition, we may not be able to maintain insurance 
coverage on acceptable terms or at all. If a product liability claim or series of claims is brought against us, we may 
experience substantial financial losses, including uninsured liabilities or liabilities in excess of insured amounts, and may 
be required to limit further development and commercialization of our products, either of which could have a material 
adverse effect on our business, results of operations, financial condition and growth prospects. Additionally, product 
liability claims, regardless of their merits, could be costly, could divert management’s attention and could adversely 
affect our reputation and the demand for our products. 

Product recalls may be issued at our discretion, or at the discretion of government agencies and other entities that 

have regulatory authority for pharmaceutical sales. Any recall of our products could materially adversely affect our 
business by rendering us unable to sell our products for some time and by adversely affecting our reputation.

Our operations involve hazardous materials and are subject to environmental, health and safety laws and 

regulations.

We are subject to environmental, health and safety laws and regulations, including those governing the use and 

disposal of hazardous materials, and we spend considerable time complying with such laws and regulations. Our 
business activities involve the controlled use of hazardous materials, and although we take precautions to prevent 
accidental contamination or injury from these materials, we cannot completely eliminate the risk of using these materials. 
In this regard, with respect to our manufacturing facility, we may incur substantial costs to comply with environmental 
laws and regulations and may become subject to the risk of accidental contamination or injury from the use of hazardous 
materials in our manufacturing process. It is also possible that our manufacturing facility may expose us to 
environmental liabilities associated with historical site conditions that we are not currently aware of and did not cause. 
Some environmental laws impose liability for contamination on current owners or operators of affected sites, regardless 
of fault. In the event of an accident or environmental discharge, or new or previously unknown contamination is 
discovered or new cleanup obligations are otherwise imposed in connection with any of our currently or previously 
owned or operated facilities, we may be held liable for remediation obligations, damages or fines, which may exceed our 
insurance coverage and materially harm our business, financial condition and results of operations. Additional federal, 
state and local laws and regulations affecting our operations may be adopted in the future. We may incur substantial 
costs to comply with, and substantial fines or penalties if we violate, any of these laws or regulations.

Risks Related to Our Reliance on Third Parties

Our collaborators and licensees may not perform as expected, which may negatively affect our ability to 

develop and commercialize our products and product candidates and/or generate revenues through technology 

licensing, and may otherwise negatively affect our business.

We have established collaborations with third parties to develop and market each of our products and some of our 

current and potential future product candidates. These include our collaborations with Takeda for ADCETRIS, with 

Astellas for PADCEV, with Merck for TUKYSA and with Genmab for TIVDAK. We also have established clinical trial 

collaborations to develop certain of our products or product candidates in combination with the products or product 

candidates of third parties. Our dependence on these collaboration and licensing arrangements subjects us to a number of 

•

•

•

•

•

•

•

we are not able to control the amount or timing of resources our collaborators and licensees devote to the 

development or commercialization of our programs, products or product candidates;

the interests of our collaborators may not always be aligned with our interests, and such parties may not pursue 

regulatory approvals or market a product in the same manner or to the same extent that we would, which could 

adversely affect our revenue, or may adopt tax strategies that could have an adverse effect on our business, 

results of operations or financial condition;

•

with respect to products or product candidates under joint control, we may encounter challenges in joint 

decision making and joint execution, including with respect to any joint development or commercialization 

plans or co-promotion activities, which may delay or otherwise harm the research, development, launch or 

commercialization of the applicable products and product candidates;

disputes may arise between us and our collaborators or licensees, including with respect to the achievement and 

payment of milestones or ownership of rights to technology developed, that could result in litigation or 

any failure on the part of our collaborators to comply with applicable laws, including tax laws, regulatory 

requirements and/or applicable contractual obligations or to fulfill any responsibilities they may have to protect 

and enforce any intellectual property rights underlying our products could have an adverse effect on our revenue 

as well as involve us in possible legal proceedings; 

•

any improper conduct or actions on the part of our collaborators, licensees or other third parties could subject us 

to civil or criminal investigations and monetary penalties and injunctions, impact the accuracy and timing of our 

financial reporting and/or adversely impact our ability to conduct business, our operating results and our 

arbitration;

reputation;

business combinations or significant changes in a collaborator’s business strategy may adversely affect such 

party’s willingness or ability to complete its obligations under any arrangement;

a collaborator could independently move forward with competing products, therapeutic approaches or 

technologies, either independently or in collaboration with others, including with our competitors; and

our collaboration agreements may be terminated, breached or allowed to expire, or our collaborators may reduce 

the scope of our agreements with them.

If our collaborative and license arrangements are not successful, then our ability to advance the development and 

commercialization of the applicable products and product candidates, or to otherwise generate revenue from these 

arrangements, will be adversely affected, and our business and business prospects may be materially harmed. If any of 

our collaborators terminates our collaboration or opts out of their obligations, we may have to engage another 

collaborator, or we may have to complete the development process and undertake commercializing the applicable 

product or product candidate in our collaborator’s current territories ourselves. This could significantly disrupt or delay 

the development and commercialization of the applicable product or product candidate and substantially increase our 

costs. Any of these events could have a material adverse effect on our business, results of operations, financial condition 

and growth prospects. 

50

51

Any failure or alleged failure to comply with legal or contractual obligations, policies and industry standards 

relating to personal information, and any incident resulting in the unauthorized access to, or acquisition, release or 

transfer of, personal information, may result in governmental investigations or enforcement actions, litigation, fines, 

penalties, damage to our reputation and other adverse consequences. In addition, we expect that laws, regulations, 

policies and industry standards relating to privacy and data protection will continue to evolve. These changes may 

require us to modify our practices and may increase our costs of doing business. In addition, privacy advocates and 

industry groups have regularly proposed, and may propose in the future, self-regulatory standards that may legally or 

contractually apply to us. If we fail to follow these standards, even if no personal information is compromised, we may 

incur significant fines or experience a significant increase in costs. 

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.

The testing, manufacturing, marketing, and sale of products and product candidates expose us to product liability 

claims. As a result, it is possible that we may be named as a defendant in product liability suits that may allege that drug 

products we manufactured for BMS resulted in injury to patients. While we have obtained product liability insurance, it 

may not provide adequate coverage against all potential liabilities. In addition, we may not be able to maintain insurance 

coverage on acceptable terms or at all. If a product liability claim or series of claims is brought against us, we may 

experience substantial financial losses, including uninsured liabilities or liabilities in excess of insured amounts, and may 

be required to limit further development and commercialization of our products, either of which could have a material 

adverse effect on our business, results of operations, financial condition and growth prospects. Additionally, product 

liability claims, regardless of their merits, could be costly, could divert management’s attention and could adversely 

affect our reputation and the demand for our products. 

Product recalls may be issued at our discretion, or at the discretion of government agencies and other entities that 

have regulatory authority for pharmaceutical sales. Any recall of our products could materially adversely affect our 

business by rendering us unable to sell our products for some time and by adversely affecting our reputation.

Our operations involve hazardous materials and are subject to environmental, health and safety laws and 

regulations.

We are subject to environmental, health and safety laws and regulations, including those governing the use and 

disposal of hazardous materials, and we spend considerable time complying with such laws and regulations. Our 

business activities involve the controlled use of hazardous materials, and although we take precautions to prevent 

accidental contamination or injury from these materials, we cannot completely eliminate the risk of using these materials. 

In this regard, with respect to our manufacturing facility, we may incur substantial costs to comply with environmental 

laws and regulations and may become subject to the risk of accidental contamination or injury from the use of hazardous 

materials in our manufacturing process. It is also possible that our manufacturing facility may expose us to 

environmental liabilities associated with historical site conditions that we are not currently aware of and did not cause. 

Some environmental laws impose liability for contamination on current owners or operators of affected sites, regardless 

of fault. In the event of an accident or environmental discharge, or new or previously unknown contamination is 

discovered or new cleanup obligations are otherwise imposed in connection with any of our currently or previously 

owned or operated facilities, we may be held liable for remediation obligations, damages or fines, which may exceed our 

insurance coverage and materially harm our business, financial condition and results of operations. Additional federal, 

state and local laws and regulations affecting our operations may be adopted in the future. We may incur substantial 

costs to comply with, and substantial fines or penalties if we violate, any of these laws or regulations.

Risks Related to Our Reliance on Third Parties

Our collaborators and licensees may not perform as expected, which may negatively affect our ability to 
develop and commercialize our products and product candidates and/or generate revenues through technology 
licensing, and may otherwise negatively affect our business.

We have established collaborations with third parties to develop and market each of our products and some of our 

current and potential future product candidates. These include our collaborations with Takeda for ADCETRIS, with 
Astellas for PADCEV, with Merck for TUKYSA and with Genmab for TIVDAK. We also have established clinical trial 
collaborations to develop certain of our products or product candidates in combination with the products or product 
candidates of third parties. Our dependence on these collaboration and licensing arrangements subjects us to a number of 
risks, including:

•

•

•

•

•

•

•

•

•

we are not able to control the amount or timing of resources our collaborators and licensees devote to the 
development or commercialization of our programs, products or product candidates;

the interests of our collaborators may not always be aligned with our interests, and such parties may not pursue 
regulatory approvals or market a product in the same manner or to the same extent that we would, which could 
adversely affect our revenue, or may adopt tax strategies that could have an adverse effect on our business, 
results of operations or financial condition;

with respect to products or product candidates under joint control, we may encounter challenges in joint 
decision making and joint execution, including with respect to any joint development or commercialization 
plans or co-promotion activities, which may delay or otherwise harm the research, development, launch or 
commercialization of the applicable products and product candidates;

disputes may arise between us and our collaborators or licensees, including with respect to the achievement and 
payment of milestones or ownership of rights to technology developed, that could result in litigation or 
arbitration;

any failure on the part of our collaborators to comply with applicable laws, including tax laws, regulatory 
requirements and/or applicable contractual obligations or to fulfill any responsibilities they may have to protect 
and enforce any intellectual property rights underlying our products could have an adverse effect on our revenue 
as well as involve us in possible legal proceedings; 

any improper conduct or actions on the part of our collaborators, licensees or other third parties could subject us 
to civil or criminal investigations and monetary penalties and injunctions, impact the accuracy and timing of our 
financial reporting and/or adversely impact our ability to conduct business, our operating results and our 
reputation;

business combinations or significant changes in a collaborator’s business strategy may adversely affect such 
party’s willingness or ability to complete its obligations under any arrangement;

a collaborator could independently move forward with competing products, therapeutic approaches or 
technologies, either independently or in collaboration with others, including with our competitors; and

our collaboration agreements may be terminated, breached or allowed to expire, or our collaborators may reduce 
the scope of our agreements with them.

If our collaborative and license arrangements are not successful, then our ability to advance the development and 

commercialization of the applicable products and product candidates, or to otherwise generate revenue from these 
arrangements, will be adversely affected, and our business and business prospects may be materially harmed. If any of 
our collaborators terminates our collaboration or opts out of their obligations, we may have to engage another 
collaborator, or we may have to complete the development process and undertake commercializing the applicable 
product or product candidate in our collaborator’s current territories ourselves. This could significantly disrupt or delay 
the development and commercialization of the applicable product or product candidate and substantially increase our 
costs. Any of these events could have a material adverse effect on our business, results of operations, financial condition 
and growth prospects. 

50

51

A substantial portion of our revenue results from payments made under agreements with our collaborators. The 

loss of any of our collaborators, changes in product development or business strategies of our collaborators, or the failure 
of our collaborators to perform their obligations under their agreements with us for any reason, including paying license 
or technology fees, milestone payments, royalties or reimbursements, could have a material adverse effect on our 
business, results of operations, financial condition and growth prospects. Payments under our existing and potential 
future collaboration agreements are also subject to significant fluctuations in both timing and amount, which could cause 
our revenue to fall below the expectations of securities analysts and investors and cause a decrease in our stock price.

In addition to collaboration agreements, we also have ADC license agreements that allow our licensees to use our 

proprietary ADC technology. Our ADC licensees conduct all research, product development, manufacturing and 
commercialization of any product candidates under these agreements. Any delay or termination of the development and 
commercialization of a licensed product or product candidate by the licensee could adversely affect our business, results 
of operations, financial condition and growth prospects by reducing or eliminating the potential for us to receive 
applicable milestones and royalties. 

We currently rely on third-party manufacturers and other third parties for production of our drug products, 

and our dependence on these third parties may impair the continued development and commercialization of our 
products and product candidates.

We own a biologics manufacturing facility located in Bothell, Washington, which we use to support our clinical 

supply needs, and we recently invested in the facility infrastructure to enable it to potentially support some of our 
commercial supply needs in the future, as well. We have also signed a lease to a facility currently being constructed in 
Everett, Washington, which will be used for future manufacturing capability. However, we rely and expect to continue to 
rely on collaborators, contract manufacturers and other third parties to produce and store sufficient quantities of drug 
product for both our clinical and commercial programs. In some cases, we rely on contract manufacturers and other third 
parties that are single-source suppliers to complete steps in the manufacturing process. If any of the parties in our supply 
chain cease or interrupt production or otherwise fail to deliver materials, products or services on a timely basis, with 
sufficient quality, and at commercially reasonable prices, and we fail to find replacements or to develop our own 
manufacturing capabilities, we may bear costly losses or be required to delay or suspend clinical trials or otherwise delay 
or discontinue development, production and sale of our products. As a result, our business, results of operations, 
financial condition and growth prospects could be materially and adversely affected. 

There are a limited number of facilities in which each of our products and product candidates can be produced. 

Any interruption of the operation of those facilities, due to equipment malfunction or failure, damage to the facility, 
natural disasters, regulatory actions, contractual disputes or other events, could result in delays, cancellation of 
shipments, loss of product in the manufacturing process, or a shortfall in supply. Further, we and our collaborators 
depend on outside vendors for the supply of raw materials used to produce our products and product candidates. If these 
suppliers were to cease production or otherwise fail to supply quality raw materials and we or our collaborators were 
unable to contract with alternative suppliers for these raw materials on acceptable terms, our ability to have our products 
manufactured to meet clinical and commercial requirements would be adversely affected. In an effort to increase the 
availability of needed medical and other supplies and products in connection with the COVID-19 pandemic, we and our 
suppliers may elect to, or governments may require us or our suppliers to, allocate raw materials used in manufacturing 
or manufacturing capacity (for example pursuant to the U.S. Defense Production Act) in a way that adversely affects our 
ability to have our products manufactured to meet clinical and commercial requirements. In addition, if any of the parties 
in our supply chain are adversely impacted by the evolving effects of the COVID-19 pandemic, such as staffing 
shortages, productions slowdowns and/or disruptions in delivery systems, there could be disruptions and delays in the 
manufacturing and supply of our products and product candidates. 

While we believe that the existing supplies of our products and our and our collaborators’ contract manufacturing 

relationships will be sufficient to accommodate current clinical and commercial needs, we or our collaborators may need 

to obtain additional manufacturing arrangements or increase manufacturing capability to meet potential future 

commercial needs, which could require additional capital investment or cause delays. We cannot assure you that we can 

enter into additional manufacturing arrangements on commercially reasonable terms or at all. Forecasting demand for a 

new product or for a newly-approved territory or indication for an existing product can be challenging. If demand for a 

product exceeds our estimates or if our commercial manufacturers are unable or unwilling to increase production 

capacity commensurate with demand, our commercialization of the affected product could be negatively impacted by 

short-term product supply challenges. Supply challenges would adversely impact our revenues and could negatively 

affect our relationships with patients and healthcare professionals. In addition, any failures or delays in manufacturing 

adequate product supplies and in putting in place or expanding our manufacturing and supply infrastructure could delay 

or impede our and collaborators’ ability to launch and commercialize our products, including TUKYSA, in additional 

markets where they have obtained regulatory approval. 

In order to obtain regulatory approval of any product candidate or regulatory approval of any product in a new 

jurisdiction, the suppliers for that product or product candidate must obtain approval to manufacture and supply product. 

In addition, the facilities utilized to manufacture the product or product candidate will be subject to pre-approval 

regulatory inspections. Any delay or failure in generating the chemistry, manufacturing and control data required in 

connection with any application for regulatory approval, or challenges in the regulatory inspection process, could 

negatively impact our ability to meet our anticipated regulatory submission dates, delay any approval decisions and/or 

negatively affect our ability to obtain regulatory approval at all. Any failure of us, our collaborators or a manufacturer to 

obtain approval to manufacture and supply product in a jurisdiction, or to obtain and distribute adequate supplies of the 

product, on a timely basis or in accordance with applicable specifications and local requirements could negatively impact 

our ability to successfully launch and commercialize the applicable product in that jurisdiction and to generate sales of 

that product at the levels we expect. We or our collaborators may also encounter difficulties in meeting the regulatory 

requirements applicable to the manufacturing process for these agents, in managing the additional complexity of 

manufacturing for a number of markets outside the U.S. or in responding to changes in the amount or timing of supply 

needs. Any failures or delays in meeting these requirements could substantially delay or impede our ability to obtain 

regulatory approvals for and to market these agents, which could negatively impact our operating results and adversely 

affect our business.

and increase our costs.

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 revenues 

We sell ADCETRIS, PADCEV and TIVDAK through a limited number of specialty distributors. Healthcare 

providers order ADCETRIS, PADCEV and TIVDAK through these distributors. We receive orders from distributors and 

generally ship product directly to the healthcare provider. We sell TUKYSA through a distribution network of specialty 

pharmacies, integrated delivery network hospitals and practices that dispense in the office. These distributors and 

distribution network partners do not set or determine demand for our products; however, our ability to effectively 

commercialize our products will depend, in part, on their performance. If we lost a major distributor or partner, revenue 

during any period of disruption could suffer and we might incur additional costs. In addition, business disruptions arising 

from the COVID-19 pandemic could negatively affect the ability of some of our distributors or distribution network 

partners to pay amounts owed to us in a timely manner or at all.

We are dependent on third parties such as contract research organizations, medical institutions and clinical 

investigators to assist with the design, review, management and conduct of our clinical trials and other activities.

We also depend on third parties such as contract research organizations, medical institutions and clinical 

investigators to assist with the design, review, management and conduct of our clinical trials and other activities. Our 

reliance on these third parties reduces our control over these activities but does not relieve us of our responsibilities. For 

example, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with regulatory 

requirements, GCP and study protocols. To the extent these third parties fail to successfully carry out their contractual 

duties or meet expected deadlines, our clinical trials and regulatory filings may be negatively impacted including 

possible impacts to data, results, or conclusions, increased costs, and delays to regulatory timelines, which may harm our 

reputation and business. 

52

53

A substantial portion of our revenue results from payments made under agreements with our collaborators. The 

loss of any of our collaborators, changes in product development or business strategies of our collaborators, or the failure 

of our collaborators to perform their obligations under their agreements with us for any reason, including paying license 

or technology fees, milestone payments, royalties or reimbursements, could have a material adverse effect on our 

business, results of operations, financial condition and growth prospects. Payments under our existing and potential 

future collaboration agreements are also subject to significant fluctuations in both timing and amount, which could cause 

our revenue to fall below the expectations of securities analysts and investors and cause a decrease in our stock price.

In addition to collaboration agreements, we also have ADC license agreements that allow our licensees to use our 

proprietary ADC technology. Our ADC licensees conduct all research, product development, manufacturing and 

commercialization of any product candidates under these agreements. Any delay or termination of the development and 

commercialization of a licensed product or product candidate by the licensee could adversely affect our business, results 

of operations, financial condition and growth prospects by reducing or eliminating the potential for us to receive 

applicable milestones and royalties. 

We currently rely on third-party manufacturers and other third parties for production of our drug products, 

and our dependence on these third parties may impair the continued development and commercialization of our 

products and product candidates.

We own a biologics manufacturing facility located in Bothell, Washington, which we use to support our clinical 

supply needs, and we recently invested in the facility infrastructure to enable it to potentially support some of our 

commercial supply needs in the future, as well. We have also signed a lease to a facility currently being constructed in 

Everett, Washington, which will be used for future manufacturing capability. However, we rely and expect to continue to 

rely on collaborators, contract manufacturers and other third parties to produce and store sufficient quantities of drug 

product for both our clinical and commercial programs. In some cases, we rely on contract manufacturers and other third 

parties that are single-source suppliers to complete steps in the manufacturing process. If any of the parties in our supply 

chain cease or interrupt production or otherwise fail to deliver materials, products or services on a timely basis, with 

sufficient quality, and at commercially reasonable prices, and we fail to find replacements or to develop our own 

manufacturing capabilities, we may bear costly losses or be required to delay or suspend clinical trials or otherwise delay 

or discontinue development, production and sale of our products. As a result, our business, results of operations, 

financial condition and growth prospects could be materially and adversely affected. 

There are a limited number of facilities in which each of our products and product candidates can be produced. 

Any interruption of the operation of those facilities, due to equipment malfunction or failure, damage to the facility, 

natural disasters, regulatory actions, contractual disputes or other events, could result in delays, cancellation of 

shipments, loss of product in the manufacturing process, or a shortfall in supply. Further, we and our collaborators 

depend on outside vendors for the supply of raw materials used to produce our products and product candidates. If these 

suppliers were to cease production or otherwise fail to supply quality raw materials and we or our collaborators were 

unable to contract with alternative suppliers for these raw materials on acceptable terms, our ability to have our products 

manufactured to meet clinical and commercial requirements would be adversely affected. In an effort to increase the 

availability of needed medical and other supplies and products in connection with the COVID-19 pandemic, we and our 

suppliers may elect to, or governments may require us or our suppliers to, allocate raw materials used in manufacturing 

or manufacturing capacity (for example pursuant to the U.S. Defense Production Act) in a way that adversely affects our 

ability to have our products manufactured to meet clinical and commercial requirements. In addition, if any of the parties 

in our supply chain are adversely impacted by the evolving effects of the COVID-19 pandemic, such as staffing 

shortages, productions slowdowns and/or disruptions in delivery systems, there could be disruptions and delays in the 

manufacturing and supply of our products and product candidates. 

While we believe that the existing supplies of our products and our and our collaborators’ contract manufacturing 
relationships will be sufficient to accommodate current clinical and commercial needs, we or our collaborators may need 
to obtain additional manufacturing arrangements or increase manufacturing capability to meet potential future 
commercial needs, which could require additional capital investment or cause delays. We cannot assure you that we can 
enter into additional manufacturing arrangements on commercially reasonable terms or at all. Forecasting demand for a 
new product or for a newly-approved territory or indication for an existing product can be challenging. If demand for a 
product exceeds our estimates or if our commercial manufacturers are unable or unwilling to increase production 
capacity commensurate with demand, our commercialization of the affected product could be negatively impacted by 
short-term product supply challenges. Supply challenges would adversely impact our revenues and could negatively 
affect our relationships with patients and healthcare professionals. In addition, any failures or delays in manufacturing 
adequate product supplies and in putting in place or expanding our manufacturing and supply infrastructure could delay 
or impede our and collaborators’ ability to launch and commercialize our products, including TUKYSA, in additional 
markets where they have obtained regulatory approval. 

In order to obtain regulatory approval of any product candidate or regulatory approval of any product in a new 

jurisdiction, the suppliers for that product or product candidate must obtain approval to manufacture and supply product. 
In addition, the facilities utilized to manufacture the product or product candidate will be subject to pre-approval 
regulatory inspections. Any delay or failure in generating the chemistry, manufacturing and control data required in 
connection with any application for regulatory approval, or challenges in the regulatory inspection process, could 
negatively impact our ability to meet our anticipated regulatory submission dates, delay any approval decisions and/or 
negatively affect our ability to obtain regulatory approval at all. Any failure of us, our collaborators or a manufacturer to 
obtain approval to manufacture and supply product in a jurisdiction, or to obtain and distribute adequate supplies of the 
product, on a timely basis or in accordance with applicable specifications and local requirements could negatively impact 
our ability to successfully launch and commercialize the applicable product in that jurisdiction and to generate sales of 
that product at the levels we expect. We or our collaborators may also encounter difficulties in meeting the regulatory 
requirements applicable to the manufacturing process for these agents, in managing the additional complexity of 
manufacturing for a number of markets outside the U.S. or in responding to changes in the amount or timing of supply 
needs. Any failures or delays in meeting these requirements could substantially delay or impede our ability to obtain 
regulatory approvals for and to market these agents, which could negatively impact our operating results and adversely 
affect our business.

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 revenues 
and increase our costs.

We sell ADCETRIS, PADCEV and TIVDAK through a limited number of specialty distributors. Healthcare 
providers order ADCETRIS, PADCEV and TIVDAK through these distributors. We receive orders from distributors and 
generally ship product directly to the healthcare provider. We sell TUKYSA through a distribution network of specialty 
pharmacies, integrated delivery network hospitals and practices that dispense in the office. These distributors and 
distribution network partners do not set or determine demand for our products; however, our ability to effectively 
commercialize our products will depend, in part, on their performance. If we lost a major distributor or partner, revenue 
during any period of disruption could suffer and we might incur additional costs. In addition, business disruptions arising 
from the COVID-19 pandemic could negatively affect the ability of some of our distributors or distribution network 
partners to pay amounts owed to us in a timely manner or at all.

We are dependent on third parties such as contract research organizations, medical institutions and clinical 

investigators to assist with the design, review, management and conduct of our clinical trials and other activities.

We also depend on third parties such as contract research organizations, medical institutions and clinical 
investigators to assist with the design, review, management and conduct of our clinical trials and other activities. Our 
reliance on these third parties reduces our control over these activities but does not relieve us of our responsibilities. For 
example, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with regulatory 
requirements, GCP and study protocols. To the extent these third parties fail to successfully carry out their contractual 
duties or meet expected deadlines, our clinical trials and regulatory filings may be negatively impacted including 
possible impacts to data, results, or conclusions, increased costs, and delays to regulatory timelines, which may harm our 
reputation and business. 

52

53

Risks Related to Intellectual Property and Litigation

If we are unable to enforce our intellectual property rights or if we fail to sustain and further procure 
additional intellectual property rights, we may not be able to successfully commercialize our products or any future 
products and competitors may be able to develop competing therapies.

Our success depends, in part, on obtaining and maintaining patent protection and successfully enforcing these 
patents and defending them against third-party challenges in the U.S. and other countries. We own multiple U.S. and 
foreign patents and pending patent applications for our technologies. We also have rights to issued U.S. patents, patent 
applications, and their foreign counterparts, relating to our monoclonal antibody, linker and drug-based technologies. 
Our rights to these patents and patent applications are derived in part from worldwide licenses from third parties. 

The standards that the U.S. Patent and Trademark Office, or USPTO, and patent offices in other countries use to 

grant patents are not always applied predictably or uniformly and can change. Consequently, our pending patent 
applications may not be allowed and, if allowed, may not contain the type and extent of patent claims that will be 
adequate to conduct our business as planned. Additionally, patents may have a shorter patent term than expected or may 
not contain claims that will permit us to stop competitors from using our technology or similar technology or from 
copying our products. Similarly, the standards that courts use to interpret patents are not always applied predictably or 
uniformly and may evolve, particularly as new technologies develop. For example, the U.S. Federal Circuit Court of 
Appeals and the U.S. Supreme Court have modified some legal standards applied by the USPTO in examination of U.S. 
patent applications, which may decrease the likelihood that we will be able to obtain patents and may increase the 
likelihood of challenges to patents we obtain or license. These changes and any future changes to the patent system in the 
U.S. or in other countries could increase the uncertainties and costs surrounding the prosecution of our patent 
applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on 
our business, results of operations, financial condition and growth prospects. In addition, changes to patent laws may be 
applied retroactively to affect the validity, enforceability, or term of our patents. Patent protection outside the U.S. is 
particularly uncertain and costly. The laws of some countries may not protect our intellectual property rights to the same 
extent as U.S. laws, and many companies in our industry have encountered significant difficulties in protecting and 
defending such rights in these jurisdictions. 

We rely on external agents to perform certain activities to maintain our patents. Although we carefully select and 

oversee these agents, the failure of an agent to properly perform these maintenance activities, whether through mistake or 
otherwise, could adversely affect our intellectual property rights. Additionally, if we do not control all of the intellectual 
property rights in-licensed to us with respect to a drug candidate and the entity that controls the intellectual property 
rights does not adequately protect those rights, our rights may be impaired, which may impact our ability to develop, 
market and commercialize the in-licensed drug candidate.

We rely on trade secrets and other proprietary information where we believe patent protection is not appropriate or 

obtainable. However, trade secrets and other proprietary information are difficult to protect. We have taken measures to 
protect our unpatented trade secrets and know-how, including the use of confidentiality and assignment of inventions 
agreements with our employees, consultants and certain contractors. It is possible, however, that these persons may 
breach the agreements or that our competitors may independently develop or otherwise discover our trade secrets or 
other proprietary information. Our research collaborators may also publish confidential data or other restricted 
information to which we have rights. If we cannot maintain the confidentiality of our technology and other confidential 
information in connection with our collaborations, then our ability to receive patent protection or protect our proprietary 
information may be impaired. In addition, under proposed or adopted policies in the EU, information related to clinical 
trials and clinical trial data that historically were considered confidential are now increasingly subject to public 
disclosure. The move toward public disclosure of this information could adversely affect our business in many ways, 
such as by requiring the disclosure of confidential methodologies for product development, preventing us from obtaining 
intellectual property right protection for innovations, requiring significant resources to prevent others from violating our 
intellectual property rights, adding complexity to compliance with applicable data privacy regulations, and enabling 
competitors to use our data to gain approvals for their own products.

We may incur substantial costs and lose important rights or may not be able to continue to commercialize our 

products 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.

We may face potential lawsuits by companies, academic institutions or others alleging infringement of their 

intellectual property. Due to the amount of intellectual property in our field, we cannot be certain that we do not infringe 

intellectual property rights of competitors or that we will not infringe intellectual property rights of competitors granted 

or created in the future. In addition, we are monitoring the progress of multiple pending patent applications of other 

organizations that, if granted, may require us to license or challenge their enforceability in order to continue 

commercializing our products or to commercialize our product candidates that may be approved for commercial sale. 

Our challenges to patents of other organizations may not be successful, which may affect our ability to commercialize 

our products or product candidates. If it is ultimately determined that our products infringe a third-party’s intellectual 

property rights, we may be required to pay substantial damages, including lost profits, royalties, treble damages, 

attorneys’ fees and costs. Even if infringement claims against us are without merit, the results may be unpredictable. In 

addition, defending lawsuits takes significant time, may be expensive and may divert management’s attention from other 

business concerns. Further, we may be stopped from developing, manufacturing or selling our products unless and until 

we obtain a license from the owner of the relevant technology or other intellectual property rights, or we may be forced 

to undertake costly design-arounds, if feasible. If such a license is available at all, it may require us to pay substantial 

royalties or other fees.

We are or may be from time to time involved in the defense and enforcement of our patent or other intellectual 

property rights in a court of law, USPTO interference, inter partes review, or IPR, post-grant review, or PGR, or 

reexamination proceeding, foreign opposition proceeding or related legal and administrative proceeding in the U.S. and 

elsewhere. In addition, if we choose to go to court to stop a third party from infringing our patents, that third party has 

the right to ask the court to rule that these patents are invalid, not infringed and/or should not be enforced. Under the 

America Invents Act, a third party may also have the option to challenge the validity of certain patents at the Patent Trial 

and Appeal Board, or PTAB, of the USPTO whether they are accused of infringing our patents or not, and certain entities 

associated with hedge funds, pharmaceutical companies and other entities have challenged valuable pharmaceutical 

patents through the IPR process. These lawsuits and administrative proceedings are expensive and consume time and 

other resources, and we may not be successful in these proceedings or in stopping infringement. In addition, there is a 

risk that a court will decide that these patents are not valid or not infringed or otherwise not enforceable, or that the 

PTAB will decide that certain patents are not valid, and that we do not have the right to stop a third party from using the 

patented subject matter. Successful challenges to our patent or other intellectual property rights through these 

proceedings could result in a loss of rights in the relevant jurisdiction and may allow third parties to use our proprietary 

technologies without a license from us or our collaborators, which may also result in loss of future royalty payments. 

Furthermore, if such challenges to our rights are not resolved promptly in our favor, our existing business relationships 

may be jeopardized and we could be delayed or prevented from entering into new collaborations or from 

commercializing potential products, which could adversely affect our business, results of operations, financial condition 

and growth prospects. In addition, we may challenge the patent or other intellectual property rights of third parties and if 

we are unsuccessful in actions we bring against the rights of such parties, through litigation or otherwise, and it is 

determined that we infringe the intellectual property rights of such parties, we may be prevented from commercializing 

potential products in the relevant jurisdiction, or may be required to obtain licenses to those rights or develop or obtain 

alternative technologies, any of which could harm our business.

54

55

Risks Related to Intellectual Property and Litigation

If we are unable to enforce our intellectual property rights or if we fail to sustain and further procure 

additional intellectual property rights, we may not be able to successfully commercialize our products or any future 

products and competitors may be able to develop competing therapies.

Our success depends, in part, on obtaining and maintaining patent protection and successfully enforcing these 

patents and defending them against third-party challenges in the U.S. and other countries. We own multiple U.S. and 

foreign patents and pending patent applications for our technologies. We also have rights to issued U.S. patents, patent 

applications, and their foreign counterparts, relating to our monoclonal antibody, linker and drug-based technologies. 

Our rights to these patents and patent applications are derived in part from worldwide licenses from third parties. 

The standards that the U.S. Patent and Trademark Office, or USPTO, and patent offices in other countries use to 

grant patents are not always applied predictably or uniformly and can change. Consequently, our pending patent 

applications may not be allowed and, if allowed, may not contain the type and extent of patent claims that will be 

adequate to conduct our business as planned. Additionally, patents may have a shorter patent term than expected or may 

not contain claims that will permit us to stop competitors from using our technology or similar technology or from 

copying our products. Similarly, the standards that courts use to interpret patents are not always applied predictably or 

uniformly and may evolve, particularly as new technologies develop. For example, the U.S. Federal Circuit Court of 

Appeals and the U.S. Supreme Court have modified some legal standards applied by the USPTO in examination of U.S. 

patent applications, which may decrease the likelihood that we will be able to obtain patents and may increase the 

likelihood of challenges to patents we obtain or license. These changes and any future changes to the patent system in the 

U.S. or in other countries could increase the uncertainties and costs surrounding the prosecution of our patent 

applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on 

our business, results of operations, financial condition and growth prospects. In addition, changes to patent laws may be 

applied retroactively to affect the validity, enforceability, or term of our patents. Patent protection outside the U.S. is 

particularly uncertain and costly. The laws of some countries may not protect our intellectual property rights to the same 

extent as U.S. laws, and many companies in our industry have encountered significant difficulties in protecting and 

defending such rights in these jurisdictions. 

We rely on external agents to perform certain activities to maintain our patents. Although we carefully select and 

oversee these agents, the failure of an agent to properly perform these maintenance activities, whether through mistake or 

otherwise, could adversely affect our intellectual property rights. Additionally, if we do not control all of the intellectual 

property rights in-licensed to us with respect to a drug candidate and the entity that controls the intellectual property 

rights does not adequately protect those rights, our rights may be impaired, which may impact our ability to develop, 

market and commercialize the in-licensed drug candidate.

We rely on trade secrets and other proprietary information where we believe patent protection is not appropriate or 

obtainable. However, trade secrets and other proprietary information are difficult to protect. We have taken measures to 

protect our unpatented trade secrets and know-how, including the use of confidentiality and assignment of inventions 

agreements with our employees, consultants and certain contractors. It is possible, however, that these persons may 

breach the agreements or that our competitors may independently develop or otherwise discover our trade secrets or 

other proprietary information. Our research collaborators may also publish confidential data or other restricted 

information to which we have rights. If we cannot maintain the confidentiality of our technology and other confidential 

information in connection with our collaborations, then our ability to receive patent protection or protect our proprietary 

information may be impaired. In addition, under proposed or adopted policies in the EU, information related to clinical 

trials and clinical trial data that historically were considered confidential are now increasingly subject to public 

disclosure. The move toward public disclosure of this information could adversely affect our business in many ways, 

such as by requiring the disclosure of confidential methodologies for product development, preventing us from obtaining 

intellectual property right protection for innovations, requiring significant resources to prevent others from violating our 

intellectual property rights, adding complexity to compliance with applicable data privacy regulations, and enabling 

competitors to use our data to gain approvals for their own products.

We may incur substantial costs and lose important rights or may not be able to continue to commercialize our 
products 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.

We may face potential lawsuits by companies, academic institutions or others alleging infringement of their 
intellectual property. Due to the amount of intellectual property in our field, we cannot be certain that we do not infringe 
intellectual property rights of competitors or that we will not infringe intellectual property rights of competitors granted 
or created in the future. In addition, we are monitoring the progress of multiple pending patent applications of other 
organizations that, if granted, may require us to license or challenge their enforceability in order to continue 
commercializing our products or to commercialize our product candidates that may be approved for commercial sale. 
Our challenges to patents of other organizations may not be successful, which may affect our ability to commercialize 
our products or product candidates. If it is ultimately determined that our products infringe a third-party’s intellectual 
property rights, we may be required to pay substantial damages, including lost profits, royalties, treble damages, 
attorneys’ fees and costs. Even if infringement claims against us are without merit, the results may be unpredictable. In 
addition, defending lawsuits takes significant time, may be expensive and may divert management’s attention from other 
business concerns. Further, we may be stopped from developing, manufacturing or selling our products unless and until 
we obtain a license from the owner of the relevant technology or other intellectual property rights, or we may be forced 
to undertake costly design-arounds, if feasible. If such a license is available at all, it may require us to pay substantial 
royalties or other fees.

We are or may be from time to time involved in the defense and enforcement of our patent or other intellectual 

property rights in a court of law, USPTO interference, inter partes review, or IPR, post-grant review, or PGR, or 
reexamination proceeding, foreign opposition proceeding or related legal and administrative proceeding in the U.S. and 
elsewhere. In addition, if we choose to go to court to stop a third party from infringing our patents, that third party has 
the right to ask the court to rule that these patents are invalid, not infringed and/or should not be enforced. Under the 
America Invents Act, a third party may also have the option to challenge the validity of certain patents at the Patent Trial 
and Appeal Board, or PTAB, of the USPTO whether they are accused of infringing our patents or not, and certain entities 
associated with hedge funds, pharmaceutical companies and other entities have challenged valuable pharmaceutical 
patents through the IPR process. These lawsuits and administrative proceedings are expensive and consume time and 
other resources, and we may not be successful in these proceedings or in stopping infringement. In addition, there is a 
risk that a court will decide that these patents are not valid or not infringed or otherwise not enforceable, or that the 
PTAB will decide that certain patents are not valid, and that we do not have the right to stop a third party from using the 
patented subject matter. Successful challenges to our patent or other intellectual property rights through these 
proceedings could result in a loss of rights in the relevant jurisdiction and may allow third parties to use our proprietary 
technologies without a license from us or our collaborators, which may also result in loss of future royalty payments. 
Furthermore, if such challenges to our rights are not resolved promptly in our favor, our existing business relationships 
may be jeopardized and we could be delayed or prevented from entering into new collaborations or from 
commercializing potential products, which could adversely affect our business, results of operations, financial condition 
and growth prospects. In addition, we may challenge the patent or other intellectual property rights of third parties and if 
we are unsuccessful in actions we bring against the rights of such parties, through litigation or otherwise, and it is 
determined that we infringe the intellectual property rights of such parties, we may be prevented from commercializing 
potential products in the relevant jurisdiction, or may be required to obtain licenses to those rights or develop or obtain 
alternative technologies, any of which could harm our business.

54

55

We and our collaborators rely on license agreements for certain aspects of our products and 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 our products and product 
candidates.

We have entered into agreements with third-party commercial and academic institutions to license technology for 
use in ADCETRIS, TUKYSA, our product candidates and technologies such as our ADC technology. Currently, we have 
license agreements with BMS, the University of Miami and Array BioPharma, Inc., among others. In addition to royalty 
provisions and other payment obligations, some of these license agreements contain diligence and milestone-based 
termination provisions, in which case our failure to meet any agreed upon royalty or diligence requirements or 
milestones may allow the licensor to terminate the agreement. Many of our license agreements grant us exclusive 
licenses to the underlying technologies. In addition, Astellas has agreements to license technology for use in PADCEV. 
We rely on Astellas to maintain these license agreements. If Astellas fails to maintain these license agreements, if our 
licensors terminate our license agreements or if we or our collaborators are unable to maintain the exclusivity of our 
exclusive license agreements, we may be unable to continue to develop and commercialize our products or product 
candidates. Further, we have had in the past, and we or our collaborators may in the future have, disputes with our 
licensors, which may impact our ability to develop and commercialize our products or product candidates or require us to 
enter into additional licenses. An adverse result in potential future disputes with our or our collaborators’ licensors may 
impact our ability to develop and commercialize our products and product candidates, or may require us to enter into 
additional licenses or to incur additional costs in litigation or settlement. In addition, continued development and 
commercialization of our products and product candidates will likely require us to secure licenses to additional 
technologies. We may not be able to secure these licenses on commercially reasonable terms, if at all.

We have been and may in the future be subject to litigation, which could result in substantial expenses and 

damages and may divert management’s time and attention from our business.

We are engaged in multiple legal disputes with Daiichi Sankyo Co. Ltd., or Daiichi Sankyo. We are in a dispute 

with Daiichi Sankyo regarding the ownership of certain technology used by Daiichi Sankyo in its cancer drug 
ENHERTU and certain product candidates. An arbitration hearing relating to the dispute was conducted in June 2021. 
Recently, the arbitration hearing record was reopened by the arbitrator to consider additional evidence. As a result, the 
decision may occur after the first quarter of 2022. In addition, we filed a complaint in the U.S. District Court for the 
Eastern District of Texas to commence an action for infringement of our U.S. Patent No. 10,808,039, or the ‘039 Patent, 
by Daiichi Sankyo’s importation into, offer for sale, sale, and use in the U.S. of ENHERTU. Daiichi Sankyo (as well as 
Daiichi Sankyo, Inc. and AstraZeneca Pharmaceuticals, LP, or AstraZeneca) subsequently filed an action in the U.S. 
District Court for the District of Delaware seeking a declaratory judgment that ENHERTU does not infringe the ‘039 
Patent. The Delaware action has been stayed by court order. Daiichi Sankyo, Inc. and AstraZeneca also filed two 
Petitions for Post-Grant Review with the U.S. Patent Office seeking to have claims of the ‘039 Patent cancelled as 
unpatentable. On June 24, 2021, the U.S. Patent Office issued a decision denying both Petitions for Post-Grant Review. 
The trial in the patent infringement case in Texas is scheduled to begin on April 4, 2022. As a result of these disputes, we 
have incurred and will continue to incur litigation expenses. In addition, from time to time, we may become involved in 
other lawsuits, claims and proceedings relating to the conduct of our business, including those pertaining to the defense 
and enforcement of our patent or other intellectual property rights and our contractual rights.

These and other potential future litigations are subject to inherent uncertainties, and the actual costs to be incurred 

relating to litigations may be impacted by unknown factors. The outcome of litigation is necessarily uncertain, and we 
could be forced to expend significant resources in the course of these and potential future litigations, we may be subject 
to additional claims and counterclaims that may result in liabilities or require us to take or refrain from certain actions, 
and we may not prevail. Monitoring, defending against and pursuing legal actions can be time-consuming for our 
management and detract from our ability to fully focus our internal resources on our business activities, which could 
result in delays of our clinical trials or our development and commercialization efforts. In addition, we may incur 
substantial legal fees and costs in connection with these and potential future litigations. Decisions adverse to our interests 
in these and potential future litigations could result in the payment of substantial damages, or possibly fines, or affect our 
intellectual property rights and could have a material adverse effect on our business, results of operations, financial 
condition and growth prospects. Successful challenges to our patent or other intellectual property rights could result in a 
loss of rights in the relevant jurisdiction and may allow third parties to use our proprietary technologies without a license 

from us or our collaborators. In addition, the uncertainty associated with litigation could lead to increased volatility in 

our stock price.

Risks Related to Our Operations, Managing Our Growth and Other Risks

The evolving effects of the COVID-19 pandemic and associated global economic instability could have further 

adverse effects on our business, including our commercialization efforts, supply chain, regulatory activities, clinical 

development activities and other business operations.

Our business is currently being adversely affected and could be materially and adversely affected in the future by 

the evolving effects of the COVID-19 pandemic. Our ongoing increased reliance on personnel working from home may 

present operational and workplace culture challenges, negatively impact productivity or disrupt, delay or otherwise 

adversely impact our business. This could also increase our cybersecurity risk, create data accessibility concerns and 

make us more susceptible to communication disruptions, any of which could adversely impact our business operations. 

In addition, our oversight of third-party manufacturers is currently being conducted primarily by virtual means, which 

may increase the chance of a manufacturing quality issue. Our field-based personnel are using a mix of in-person 

interactions and electronic communications, such as emails, phone calls and video conferences, to support healthcare 

providers and patients. Many healthcare professionals are facing additional demands on their time during the ongoing 

COVID-19 pandemic. We expect the different quality of electronic interactions as compared with in-person interactions, 

as well as the reduced quantity of interactions during the COVID-19 pandemic, to reduce the effectiveness of our sales 

personnel, as well as those of our collaborators, which could negatively affect our product sales and those of our 

collaborators, as well as physician awareness of our products. In this regard, we believe that the need to conduct some of 

our activities virtually is negatively impacting our ability to connect with key customers, including those familiar with 

competitive products, and our ability to conduct payor engagements. 

We face a number of challenges that will limit our ability to fully resume in-person interactions, including 

increasing COVID-19 infection rates due to coronavirus mutations and/or low vaccination rates in different areas or 

otherwise, the need to navigate varying restrictions for entering healthcare facilities and the pandemic's impacts on 

employee childcare arrangements. In addition, we may subsequently decide or be forced to resume a more restrictive 

remote work model, whether as a result of further spikes or surges in COVID-19 infection or hospitalization rates or 

otherwise. Moreover, the long-term effects of the COVID-19 pandemic are also unknown and it is possible that 

following the pandemic, healthcare institutions could alter their policies with respect to in person visits by 

pharmaceutical company representatives. COVID-19 related restrictions could also present product distribution 

challenges as we utilize recently initiated distribution channels for TUKYSA. 

The evolving effects of the COVID-19 pandemic appear to have negatively affected and may continue to 

negatively affect our product sales due to challenges in patient access to healthcare settings, loss of individual health 

insurance coverage, and inability to access government healthcare programs due to backlogs, some or all of which appear 

to have negatively affected diagnosis rates, may affect side effect management and course of treatment and may increase 

enrollment in our patient support programs. In this regard, impacts associated with the COVID-19 pandemic appear to 

have led to a reduction in the rate of Hodgkin lymphoma diagnoses, may have adversely affected diagnosis rates of other 

cancers, and may further adversely affect rates of cancer diagnoses in the future. We also expect that the conversion of 

medical conferences to a virtual format may reduce our ability to effectively disseminate scientific information about our 

products, which may result in decreased physician awareness of our products, their approved indications and their 

efficacy and safety.

56

57

We and our collaborators rely on license agreements for certain aspects of our products and 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 our products and product 

candidates.

We have entered into agreements with third-party commercial and academic institutions to license technology for 

use in ADCETRIS, TUKYSA, our product candidates and technologies such as our ADC technology. Currently, we have 

license agreements with BMS, the University of Miami and Array BioPharma, Inc., among others. In addition to royalty 

provisions and other payment obligations, some of these license agreements contain diligence and milestone-based 

termination provisions, in which case our failure to meet any agreed upon royalty or diligence requirements or 

milestones may allow the licensor to terminate the agreement. Many of our license agreements grant us exclusive 

licenses to the underlying technologies. In addition, Astellas has agreements to license technology for use in PADCEV. 

We rely on Astellas to maintain these license agreements. If Astellas fails to maintain these license agreements, if our 

licensors terminate our license agreements or if we or our collaborators are unable to maintain the exclusivity of our 

exclusive license agreements, we may be unable to continue to develop and commercialize our products or product 

candidates. Further, we have had in the past, and we or our collaborators may in the future have, disputes with our 

licensors, which may impact our ability to develop and commercialize our products or product candidates or require us to 

enter into additional licenses. An adverse result in potential future disputes with our or our collaborators’ licensors may 

impact our ability to develop and commercialize our products and product candidates, or may require us to enter into 

additional licenses or to incur additional costs in litigation or settlement. In addition, continued development and 

commercialization of our products and product candidates will likely require us to secure licenses to additional 

technologies. We may not be able to secure these licenses on commercially reasonable terms, if at all.

We have been and may in the future be subject to litigation, which could result in substantial expenses and 

damages and may divert management’s time and attention from our business.

We are engaged in multiple legal disputes with Daiichi Sankyo Co. Ltd., or Daiichi Sankyo. We are in a dispute 

with Daiichi Sankyo regarding the ownership of certain technology used by Daiichi Sankyo in its cancer drug 

ENHERTU and certain product candidates. An arbitration hearing relating to the dispute was conducted in June 2021. 

Recently, the arbitration hearing record was reopened by the arbitrator to consider additional evidence. As a result, the 

decision may occur after the first quarter of 2022. In addition, we filed a complaint in the U.S. District Court for the 

Eastern District of Texas to commence an action for infringement of our U.S. Patent No. 10,808,039, or the ‘039 Patent, 

by Daiichi Sankyo’s importation into, offer for sale, sale, and use in the U.S. of ENHERTU. Daiichi Sankyo (as well as 

Daiichi Sankyo, Inc. and AstraZeneca Pharmaceuticals, LP, or AstraZeneca) subsequently filed an action in the U.S. 

District Court for the District of Delaware seeking a declaratory judgment that ENHERTU does not infringe the ‘039 

Patent. The Delaware action has been stayed by court order. Daiichi Sankyo, Inc. and AstraZeneca also filed two 

Petitions for Post-Grant Review with the U.S. Patent Office seeking to have claims of the ‘039 Patent cancelled as 

unpatentable. On June 24, 2021, the U.S. Patent Office issued a decision denying both Petitions for Post-Grant Review. 

The trial in the patent infringement case in Texas is scheduled to begin on April 4, 2022. As a result of these disputes, we 

have incurred and will continue to incur litigation expenses. In addition, from time to time, we may become involved in 

other lawsuits, claims and proceedings relating to the conduct of our business, including those pertaining to the defense 

and enforcement of our patent or other intellectual property rights and our contractual rights.

These and other potential future litigations are subject to inherent uncertainties, and the actual costs to be incurred 

relating to litigations may be impacted by unknown factors. The outcome of litigation is necessarily uncertain, and we 

could be forced to expend significant resources in the course of these and potential future litigations, we may be subject 

to additional claims and counterclaims that may result in liabilities or require us to take or refrain from certain actions, 

and we may not prevail. Monitoring, defending against and pursuing legal actions can be time-consuming for our 

management and detract from our ability to fully focus our internal resources on our business activities, which could 

result in delays of our clinical trials or our development and commercialization efforts. In addition, we may incur 

substantial legal fees and costs in connection with these and potential future litigations. Decisions adverse to our interests 

in these and potential future litigations could result in the payment of substantial damages, or possibly fines, or affect our 

intellectual property rights and could have a material adverse effect on our business, results of operations, financial 

condition and growth prospects. Successful challenges to our patent or other intellectual property rights could result in a 

loss of rights in the relevant jurisdiction and may allow third parties to use our proprietary technologies without a license 

from us or our collaborators. In addition, the uncertainty associated with litigation could lead to increased volatility in 
our stock price.

Risks Related to Our Operations, Managing Our Growth and Other Risks

The evolving effects of the COVID-19 pandemic and associated global economic instability could have further 
adverse effects on our business, including our commercialization efforts, supply chain, regulatory activities, clinical 
development activities and other business operations.

Our business is currently being adversely affected and could be materially and adversely affected in the future by 
the evolving effects of the COVID-19 pandemic. Our ongoing increased reliance on personnel working from home may 
present operational and workplace culture challenges, negatively impact productivity or disrupt, delay or otherwise 
adversely impact our business. This could also increase our cybersecurity risk, create data accessibility concerns and 
make us more susceptible to communication disruptions, any of which could adversely impact our business operations. 
In addition, our oversight of third-party manufacturers is currently being conducted primarily by virtual means, which 
may increase the chance of a manufacturing quality issue. Our field-based personnel are using a mix of in-person 
interactions and electronic communications, such as emails, phone calls and video conferences, to support healthcare 
providers and patients. Many healthcare professionals are facing additional demands on their time during the ongoing 
COVID-19 pandemic. We expect the different quality of electronic interactions as compared with in-person interactions, 
as well as the reduced quantity of interactions during the COVID-19 pandemic, to reduce the effectiveness of our sales 
personnel, as well as those of our collaborators, which could negatively affect our product sales and those of our 
collaborators, as well as physician awareness of our products. In this regard, we believe that the need to conduct some of 
our activities virtually is negatively impacting our ability to connect with key customers, including those familiar with 
competitive products, and our ability to conduct payor engagements. 

We face a number of challenges that will limit our ability to fully resume in-person interactions, including 

increasing COVID-19 infection rates due to coronavirus mutations and/or low vaccination rates in different areas or 
otherwise, the need to navigate varying restrictions for entering healthcare facilities and the pandemic's impacts on 
employee childcare arrangements. In addition, we may subsequently decide or be forced to resume a more restrictive 
remote work model, whether as a result of further spikes or surges in COVID-19 infection or hospitalization rates or 
otherwise. Moreover, the long-term effects of the COVID-19 pandemic are also unknown and it is possible that 
following the pandemic, healthcare institutions could alter their policies with respect to in person visits by 
pharmaceutical company representatives. COVID-19 related restrictions could also present product distribution 
challenges as we utilize recently initiated distribution channels for TUKYSA. 

The evolving effects of the COVID-19 pandemic appear to have negatively affected and may continue to 
negatively affect our product sales due to challenges in patient access to healthcare settings, loss of individual health 
insurance coverage, and inability to access government healthcare programs due to backlogs, some or all of which appear 
to have negatively affected diagnosis rates, may affect side effect management and course of treatment and may increase 
enrollment in our patient support programs. In this regard, impacts associated with the COVID-19 pandemic appear to 
have led to a reduction in the rate of Hodgkin lymphoma diagnoses, may have adversely affected diagnosis rates of other 
cancers, and may further adversely affect rates of cancer diagnoses in the future. We also expect that the conversion of 
medical conferences to a virtual format may reduce our ability to effectively disseminate scientific information about our 
products, which may result in decreased physician awareness of our products, their approved indications and their 
efficacy and safety.

56

57

Some of the sites participating in our clinical trials are affected by site closings, reduced capacity, staffing 

shortages or other effects of the COVID-19 pandemic. At some sites, we are experiencing impacts to our ability to 
monitor patients, activate sites, screen and enroll patients, complete site monitoring and manage samples. The extent of 
the impact on a particular clinical trial depends on the current stage of activities at a given site, for example study start up 
versus post-enrollment, and the number of impacted sites participating in that trial. Impacts on diagnosis rates associated 
with the COVID-19 pandemic may also negatively impact enrollment. While we do not at this time anticipate the need to 
revise our publicly reported projected clinical milestone dates as a result of the effects of the COVID-19 pandemic, there 
may continue to be adverse impacts to our clinical study timelines, which, depending upon the duration and severity of 
the evolving effects of the COVID-19 pandemic, could ultimately delay data availability. Due to the suspension of data 
monitoring activities at sites that do not currently allow remote monitoring, as well as impacts on the ability to monitor 
patients, maintain patient treatment according to the trial protocols and manage samples, there is also the potential for 
negative impacts on data quality. While we are actively utilizing digital monitoring measures and other mitigations 
designed to prevent negative data quality impacts, if there were in fact a negative impact on data quality, we or our 
collaborators could be required to repeat, extend the duration of, or increase the size of clinical trials, which could 
significantly delay potential commercialization and require greater expenditures. We expect that similar factors will 
impact clinical studies operationalized by our collaborators. In addition, many of our non-essential on-site research 
activities are currently significantly reduced as a result of the COVID-19 pandemic, which may negatively impact the 
number of investigational new drug application, or IND, candidates entering our clinical pipeline in future years. 

The effects of the COVID-19 pandemic continue to rapidly evolve. These effects have increased market volatility 

and could result in a significant long-term disruption of global financial markets, reducing our ability to access capital, 
which could in the future negatively affect our liquidity. In addition, economic instability resulting from the effects of the 
COVID-19 pandemic could materially affect our business and the value of our common stock. 

The extent to which the evolving effects of the COVID-19 pandemic impact our business will depend on future 

developments that are highly uncertain, such as coronavirus variants that may prove to be especially contagious or 
virulent, the ultimate duration and severity of the pandemic, government actions, such as travel restrictions, quarantines 
and social distancing requirements in the U.S. and in other countries, business closures or business disruptions and the 
effectiveness of vaccine programs and other actions taken to contain and treat the disease. Accordingly, we do not yet 
know the full extent of potential effects from the pandemic. However, these effects could materially and adversely affect 
our business, results of operations, financial condition and growth prospects. In addition, the evolving effects of the 
COVID-19 pandemic may also heighten many of the other risks described elsewhere in this “Risk Factors” section. It is 
also possible that future global pandemics could occur and materially and adversely affect our business, results of 
operations, financial condition and growth prospects.

If we are unable to manage our growth, our business, results of operations, financial condition and growth 

prospects may be adversely affected.

We have experienced and expect to continue to experience significant growth in the number of our employees and 

in the scope and complexity of our operations. This rapid growth and additional complexity places significant demands 
on our management and other personnel, our operational and financial resources and our third party suppliers. Our 
current and planned personnel, operational and financial systems, procedures, controls and suppliers may not be adequate 
to support our growth, and we may experience operating inefficiencies, delays, control deficiencies, compliance issues or 
other problems. In addition, we may not be able to achieve any necessary growth objectives in a timely or cost-effective 
manner, or at all, and may not realize a positive return on our investment. If we are unable to manage our growth 
effectively, our business, results of operations, financial condition and growth prospects may be adversely affected.

•

diverse clinical, drug safety, drug quality, drug supply, healthcare compliance and other pharmaceutical 

regulatory regimes, and any future changes to such requirements, in the countries and regions where we are 

located or do business;

• multiple, differing and changing laws and regulations such as tax laws, privacy regulations, tariffs, trade 

restrictions, export and import restrictions, employment, immigration and labor laws, corporate laws, and other 

governmental approvals, permits and licenses;

differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls;

adverse tax consequences, including changes in applicable tax laws and regulations;

political tensions, economic weakness, including inflation, or political or economic instability in particular 

economies and markets;

currency fluctuations, which could result in increased operating expenses or reduced revenues;

challenges inherent in efficiently managing employees in diverse geographies and different languages;

challenges in adapting systems, policies, benefits and compliance programs for different countries;

reliance on vendors who are located far from our headquarters and with whom we have not worked previously; 

•

•

•

•

•

•

•

•

and

workforce uncertainty in countries where labor unrest is more common.

Additionally, the U.S. Foreign Corrupt Practices Act, or FCPA, and the anti-bribery laws and regulations of other 

countries are extensive and far-reaching. We must ensure that accurate records and controls required by the FCPA are 

maintained with respect to the activities of our employees, distributors and service providers in all of the countries where 

we operate. In the course of conducting operations internationally, we interact with regulatory authorities, as well as with 

healthcare professionals who are often employed by governments and may be deemed to be foreign officials under the 

FCPA. Any interactions with any such third parties that are found to be in violation of relevant laws could result in 

substantial fines and penalties and could materially harm our business. Emerging-market countries may be especially 

vulnerable to periods of political, legal, and financial instability and may have a higher risk of corrupt business practices. 

As we expand our international operations, we continue to supplement and expand our global compliance program, 

controls, policies and procedures. However, there can be no assurance that such measures will work effectively at all 

times or protect us against liability. There is a risk that acts committed by our employees, agents, distributors, 

collaborators or third-party providers might violate the FCPA and other anti-corruption laws and that we might be held 

responsible. Furthermore, any finding of a violation under one country’s laws may increase the likelihood that we will be 

prosecuted and be found to have violated another country’s laws. Our failure, or the failure of others who we engage to 

act on our behalf, to comply with the laws and regulations of the countries in which we operate, or will operate in the 

future, could result in criminal and civil penalties, other remedial measures and reputational damage, all of which could 

materially harm our business, financial condition, results of operations, and prospects. As we continue to expand our 

footprint and activities internationally, our exposure to compliance risks under the FCPA and other similar laws will 

likewise increase. 

As a business, we do not have significant experience conducting operations outside of the U.S. and Canada. We 

might not be successful in establishing and conducting commercial and other operations in these regions and may not 

realize a positive return on our investment. Our failure to successfully do so could have a material adverse effect on our 

business, results of operations, financial condition and growth prospects. These and other risks associated with 

Risks associated with our expanding operations in countries outside the U.S. could materially adversely affect 

expanding our international operations, as described elsewhere in these risk factors, could have a material adverse effect 

our business.

on our business, results of operations, financial condition and growth prospects.

We have operations outside the U.S., and we plan to continue expanding our operations internationally. For 
example, we are continuing to expand our commercial infrastructure in Europe and Canada. Consequently, we are, and 
will increasingly be, subject to risks and complexities related to operating internationally, including: 

•

the increased complexity and costs inherent in managing international operations, including in geographically 
disparate locations;

58

59

Some of the sites participating in our clinical trials are affected by site closings, reduced capacity, staffing 

shortages or other effects of the COVID-19 pandemic. At some sites, we are experiencing impacts to our ability to 

monitor patients, activate sites, screen and enroll patients, complete site monitoring and manage samples. The extent of 

the impact on a particular clinical trial depends on the current stage of activities at a given site, for example study start up 

versus post-enrollment, and the number of impacted sites participating in that trial. Impacts on diagnosis rates associated 

with the COVID-19 pandemic may also negatively impact enrollment. While we do not at this time anticipate the need to 

revise our publicly reported projected clinical milestone dates as a result of the effects of the COVID-19 pandemic, there 

may continue to be adverse impacts to our clinical study timelines, which, depending upon the duration and severity of 

the evolving effects of the COVID-19 pandemic, could ultimately delay data availability. Due to the suspension of data 

monitoring activities at sites that do not currently allow remote monitoring, as well as impacts on the ability to monitor 

patients, maintain patient treatment according to the trial protocols and manage samples, there is also the potential for 

negative impacts on data quality. While we are actively utilizing digital monitoring measures and other mitigations 

designed to prevent negative data quality impacts, if there were in fact a negative impact on data quality, we or our 

collaborators could be required to repeat, extend the duration of, or increase the size of clinical trials, which could 

significantly delay potential commercialization and require greater expenditures. We expect that similar factors will 

impact clinical studies operationalized by our collaborators. In addition, many of our non-essential on-site research 

activities are currently significantly reduced as a result of the COVID-19 pandemic, which may negatively impact the 

number of investigational new drug application, or IND, candidates entering our clinical pipeline in future years. 

The effects of the COVID-19 pandemic continue to rapidly evolve. These effects have increased market volatility 

and could result in a significant long-term disruption of global financial markets, reducing our ability to access capital, 

which could in the future negatively affect our liquidity. In addition, economic instability resulting from the effects of the 

COVID-19 pandemic could materially affect our business and the value of our common stock. 

The extent to which the evolving effects of the COVID-19 pandemic impact our business will depend on future 

developments that are highly uncertain, such as coronavirus variants that may prove to be especially contagious or 

virulent, the ultimate duration and severity of the pandemic, government actions, such as travel restrictions, quarantines 

and social distancing requirements in the U.S. and in other countries, business closures or business disruptions and the 

effectiveness of vaccine programs and other actions taken to contain and treat the disease. Accordingly, we do not yet 

know the full extent of potential effects from the pandemic. However, these effects could materially and adversely affect 

our business, results of operations, financial condition and growth prospects. In addition, the evolving effects of the 

COVID-19 pandemic may also heighten many of the other risks described elsewhere in this “Risk Factors” section. It is 

also possible that future global pandemics could occur and materially and adversely affect our business, results of 

operations, financial condition and growth prospects.

If we are unable to manage our growth, our business, results of operations, financial condition and growth 

prospects may be adversely affected.

We have experienced and expect to continue to experience significant growth in the number of our employees and 

in the scope and complexity of our operations. This rapid growth and additional complexity places significant demands 

on our management and other personnel, our operational and financial resources and our third party suppliers. Our 

current and planned personnel, operational and financial systems, procedures, controls and suppliers may not be adequate 

to support our growth, and we may experience operating inefficiencies, delays, control deficiencies, compliance issues or 

other problems. In addition, we may not be able to achieve any necessary growth objectives in a timely or cost-effective 

manner, or at all, and may not realize a positive return on our investment. If we are unable to manage our growth 

effectively, our business, results of operations, financial condition and growth prospects may be adversely affected.

Risks associated with our expanding operations in countries outside the U.S. could materially adversely affect 

our business.

We have operations outside the U.S., and we plan to continue expanding our operations internationally. For 

example, we are continuing to expand our commercial infrastructure in Europe and Canada. Consequently, we are, and 

will increasingly be, subject to risks and complexities related to operating internationally, including: 

•

the increased complexity and costs inherent in managing international operations, including in geographically 

disparate locations;

•

diverse clinical, drug safety, drug quality, drug supply, healthcare compliance and other pharmaceutical 
regulatory regimes, and any future changes to such requirements, in the countries and regions where we are 
located or do business;

• multiple, differing and changing laws and regulations such as tax laws, privacy regulations, tariffs, trade 

restrictions, export and import restrictions, employment, immigration and labor laws, corporate laws, and other 
governmental approvals, permits and licenses;

•

•

•

•

•

•

•

•

differing payor reimbursement regimes, governmental payors or patient self-pay systems and price controls;

adverse tax consequences, including changes in applicable tax laws and regulations;

political tensions, economic weakness, including inflation, or political or economic instability in particular 
economies and markets;

currency fluctuations, which could result in increased operating expenses or reduced revenues;

challenges inherent in efficiently managing employees in diverse geographies and different languages;

challenges in adapting systems, policies, benefits and compliance programs for different countries;

reliance on vendors who are located far from our headquarters and with whom we have not worked previously; 
and

workforce uncertainty in countries where labor unrest is more common.

Additionally, the U.S. Foreign Corrupt Practices Act, or FCPA, and the anti-bribery laws and regulations of other 

countries are extensive and far-reaching. We must ensure that accurate records and controls required by the FCPA are 
maintained with respect to the activities of our employees, distributors and service providers in all of the countries where 
we operate. In the course of conducting operations internationally, we interact with regulatory authorities, as well as with 
healthcare professionals who are often employed by governments and may be deemed to be foreign officials under the 
FCPA. Any interactions with any such third parties that are found to be in violation of relevant laws could result in 
substantial fines and penalties and could materially harm our business. Emerging-market countries may be especially 
vulnerable to periods of political, legal, and financial instability and may have a higher risk of corrupt business practices. 
As we expand our international operations, we continue to supplement and expand our global compliance program, 
controls, policies and procedures. However, there can be no assurance that such measures will work effectively at all 
times or protect us against liability. There is a risk that acts committed by our employees, agents, distributors, 
collaborators or third-party providers might violate the FCPA and other anti-corruption laws and that we might be held 
responsible. Furthermore, any finding of a violation under one country’s laws may increase the likelihood that we will be 
prosecuted and be found to have violated another country’s laws. Our failure, or the failure of others who we engage to 
act on our behalf, to comply with the laws and regulations of the countries in which we operate, or will operate in the 
future, could result in criminal and civil penalties, other remedial measures and reputational damage, all of which could 
materially harm our business, financial condition, results of operations, and prospects. As we continue to expand our 
footprint and activities internationally, our exposure to compliance risks under the FCPA and other similar laws will 
likewise increase. 

As a business, we do not have significant experience conducting operations outside of the U.S. and Canada. We 
might not be successful in establishing and conducting commercial and other operations in these regions and may not 
realize a positive return on our investment. Our failure to successfully do so could have a material adverse effect on our 
business, results of operations, financial condition and growth prospects. These and other risks associated with 
expanding our international operations, as described elsewhere in these risk factors, could have a material adverse effect 
on our business, results of operations, financial condition and growth prospects.

58

59

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.

We actively evaluate various strategic transactions on an ongoing basis, including licensing or otherwise acquiring 

key personnel. For example, we have scientific personnel with significant and unique expertise in monoclonal antibodies, 

complementary products, product candidates, technologies or businesses. We may spend significant amounts, issue 
dilutive securities and/or assume or incur significant debt obligations in connection with these transactions. In addition, 
these transactions, including our recent in-license of development and commercialization rights to disitamab vedotin and 
any potential future acquisitions or licensing transactions, entail numerous risks, including:

•

•

•

•

•

•

•

•

•

•

•

•

•

risks associated with satisfying the closing conditions relating to such transactions and realizing their anticipated 
benefits;

increased operating expenses and cash requirements;

difficulty integrating acquired technologies, products, operations, compliance programs and personnel with our 
existing business;

acquired or licensed products, product candidates or technologies, such as disitamab vedotin, may not perform 
as expected and may not result in regulatory approvals;

failure to successfully develop and commercialize acquired or licensed products, product candidates or 
technologies or to achieve other strategic objectives; 

the potential disruption of our historical core business;

diversion of management’s attention in connection with both negotiating the acquisition or license and 
integrating the business, technology or product;

retention of key employees;

uncertainties in our ability to maintain key business relationships of any acquired companies;

difficulty implementing and maintaining effective internal control over financial reporting of businesses that we 
acquire;

exposure to unanticipated liabilities of acquired companies or companies in which we invest;

the potential need to write down assets or recognize impairment charges or significant amortization expenses; 
and

potential costly and time-consuming litigation, including stockholder lawsuits.

As a result of these or other problems and risks, businesses, technologies or products we acquire or invest in or 

obtain licenses to may not produce the revenues, earnings, business synergies or other benefits that we anticipated, 
within the expected timeframe or at all. As a result, we may incur higher costs and realize lower revenues than we had 
anticipated. We cannot assure you that any acquisitions or investments we have made or may make in the future will be 
completed or that, if completed, the acquired business, licenses, investments, products, or technologies will generate 
sufficient revenue to offset the costs or other negative effects on our business. Further, while we seek to mitigate risks 
and liabilities of potential acquisitions and in-licensing transactions through, among other things, due diligence, there 
may be risks and liabilities that we fail to discover, that are not disclosed to us, or that we inadequately assess. Any 
failure in identifying and managing these risks, liabilities and uncertainties effectively, including in connection with our 
recent in-license of development and commercialization rights to disitamab vedotin, could have a material adverse effect 
on our business, results of operations, financial condition and growth prospects. Moreover, we may not be able to 
identify, negotiate and close strategic acquisition or in-licensing opportunities in the future, and this inability could 
impair our ability to grow or obtain access to technology or products that may be important to the development of our 
business. Other pharmaceutical companies, many of which may have substantially greater resources, compete with us for 
these opportunities. Failure to effectively advance our business strategy and manage our operations through acquisitions 
or in-licensing transactions could have a material adverse effect on our business, results of operations, financial 
condition, and growth prospects.

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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.

We are highly dependent on the efforts and abilities of the principal members of our senior management and other 

ADCs and related technologies, and our products and product candidates. The loss of the services of any one of the 

principal members of our managerial, scientific or other key staff may prevent us from achieving our business objectives.

In addition, the competition for qualified personnel in the biotechnology field is intense, and our future success 

depends upon our ability to attract, retain and motivate highly skilled biotechnology employees. In order to continue to 

commercialize our products, and advance the development and commercialization of our product candidates, we will be 

required to expand our workforce and management team, particularly in the areas of manufacturing, clinical trials, 

regulatory affairs, business development, sales and marketing, both in the U.S. and in Europe. We continue to face 

intense competition for qualified individuals from numerous pharmaceutical and biotechnology companies, as well as 

academic and other research institutions, and with increasing reliance on remote work arrangements, the geographic 

market in which we compete for talent is expanding. Our ability to attract and retain talent in this competitive 

environment may be further complicated by evolving employment trends arising from the COVID-19 pandemic, 

including an increased preference for remote, alternative or flexible work arrangements. Our failure to effectively 

compete for and retain talent could negatively affect our ability to achieve our business objectives and have a material 

adverse effect on our business, results of operations, financial condition and growth prospects.

If our information technology systems or data are or were compromised, we could experience interruptions to 

our operations, legal claims, liability, harm to our reputation, a loss of sales and other adverse impacts.

We and our collaborators, suppliers and service providers rely on information technology systems to keep 

financial and other records, capture laboratory and clinical trial data, support internal and external communications and 

operate other critical functions. Despite our security measures, these systems are potentially vulnerable to malware, 

cyber-attacks, security breaches, natural disasters, terrorism, software and hardware failures, telecommunication and 

electrical failures, and similar issues. If such an event were to occur, it could result in material interruptions to our 

operations, loss of data or applications, loss of sales, significant extra expenses to restore data or systems, reputational 

harm and diversion of funds. For example, the loss of preclinical study or clinical trial data could result in delays in our 

product development or regulatory approval efforts and significantly increase our costs in order to recover or reproduce 

the data. The effects of the COVID-19 pandemic have intensified our dependence on information technology systems as 

many of our critical business activities are currently being conducted remotely and our increased reliance on personnel 

working from home could increase our cybersecurity risk.

In addition to traditional computer “hackers” and threat actors, sophisticated nation-state and nation-state 

supported actors now engage in attacks (including advanced persistent threat intrusions). Ransomware attacks, including 

those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly 

prevalent and severe. To alleviate the financial, operational and reputational impact of a ransomware attack, it may be 

preferable to make extortion payments, but we may be unwilling or unable to do so (including, for example, if applicable 

laws or regulations prohibit such payments). Similarly, supply chain attacks have increased in frequency and severity. 

We cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do 

not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the 

systems and networks of third parties that support us. 

Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change 

frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques 

or implement adequate preventative measures. We may also experience security breaches that may remain undetected for 

an extended period. Although, to our knowledge, we have not experienced any material security breach to date, any such 

breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or 

stolen. While we have taken steps to protect the security of the personal data and other sensitive information that we 

handle, there can be no assurance that any security measures will be effective against current or future security threats. 

Any unauthorized or accidental access to, or disclosure, modification, misuse, or loss of, personal or other data could 

result in legal claims or proceedings, liability, significant regulatory penalties, and loss of trade secrets or other 

intellectual property. In addition, such an event could disrupt our operations, damage our reputation and delay 

development of our product candidates.

We have engaged in, and may in the future engage in, strategic transactions that increase our capital 

If we lose our key personnel or are unable to attract and retain additional qualified personnel, our future 

requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities and subject us to other 

growth and ability to compete would suffer.

risks.

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•

•

•

•

•

•

•

•

•

•

•

We actively evaluate various strategic transactions on an ongoing basis, including licensing or otherwise acquiring 

complementary products, product candidates, technologies or businesses. We may spend significant amounts, issue 

dilutive securities and/or assume or incur significant debt obligations in connection with these transactions. In addition, 

these transactions, including our recent in-license of development and commercialization rights to disitamab vedotin and 

any potential future acquisitions or licensing transactions, entail numerous risks, including:

risks associated with satisfying the closing conditions relating to such transactions and realizing their anticipated 

benefits;

existing business;

increased operating expenses and cash requirements;

difficulty integrating acquired technologies, products, operations, compliance programs and personnel with our 

acquired or licensed products, product candidates or technologies, such as disitamab vedotin, may not perform 

as expected and may not result in regulatory approvals;

failure to successfully develop and commercialize acquired or licensed products, product candidates or 

technologies or to achieve other strategic objectives; 

the potential disruption of our historical core business;

integrating the business, technology or product;

retention of key employees;

diversion of management’s attention in connection with both negotiating the acquisition or license and 

uncertainties in our ability to maintain key business relationships of any acquired companies;

difficulty implementing and maintaining effective internal control over financial reporting of businesses that we 

exposure to unanticipated liabilities of acquired companies or companies in which we invest;

the potential need to write down assets or recognize impairment charges or significant amortization expenses; 

acquire;

and

potential costly and time-consuming litigation, including stockholder lawsuits.

As a result of these or other problems and risks, businesses, technologies or products we acquire or invest in or 

obtain licenses to may not produce the revenues, earnings, business synergies or other benefits that we anticipated, 

within the expected timeframe or at all. As a result, we may incur higher costs and realize lower revenues than we had 

anticipated. We cannot assure you that any acquisitions or investments we have made or may make in the future will be 

completed or that, if completed, the acquired business, licenses, investments, products, or technologies will generate 

sufficient revenue to offset the costs or other negative effects on our business. Further, while we seek to mitigate risks 

and liabilities of potential acquisitions and in-licensing transactions through, among other things, due diligence, there 

may be risks and liabilities that we fail to discover, that are not disclosed to us, or that we inadequately assess. Any 

failure in identifying and managing these risks, liabilities and uncertainties effectively, including in connection with our 

recent in-license of development and commercialization rights to disitamab vedotin, could have a material adverse effect 

on our business, results of operations, financial condition and growth prospects. Moreover, we may not be able to 

identify, negotiate and close strategic acquisition or in-licensing opportunities in the future, and this inability could 

impair our ability to grow or obtain access to technology or products that may be important to the development of our 

business. Other pharmaceutical companies, many of which may have substantially greater resources, compete with us for 

these opportunities. Failure to effectively advance our business strategy and manage our operations through acquisitions 

or in-licensing transactions could have a material adverse effect on our business, results of operations, financial 

condition, and growth prospects.

We are highly dependent on the efforts and abilities of the principal members of our senior management and other 
key personnel. For example, we have scientific personnel with significant and unique expertise in monoclonal antibodies, 
ADCs and related technologies, and our products and product candidates. The loss of the services of any one of the 
principal members of our managerial, scientific or other key staff may prevent us from achieving our business objectives.

In addition, the competition for qualified personnel in the biotechnology field is intense, and our future success 
depends upon our ability to attract, retain and motivate highly skilled biotechnology employees. In order to continue to 
commercialize our products, and advance the development and commercialization of our product candidates, we will be 
required to expand our workforce and management team, particularly in the areas of manufacturing, clinical trials, 
regulatory affairs, business development, sales and marketing, both in the U.S. and in Europe. We continue to face 
intense competition for qualified individuals from numerous pharmaceutical and biotechnology companies, as well as 
academic and other research institutions, and with increasing reliance on remote work arrangements, the geographic 
market in which we compete for talent is expanding. Our ability to attract and retain talent in this competitive 
environment may be further complicated by evolving employment trends arising from the COVID-19 pandemic, 
including an increased preference for remote, alternative or flexible work arrangements. Our failure to effectively 
compete for and retain talent could negatively affect our ability to achieve our business objectives and have a material 
adverse effect on our business, results of operations, financial condition and growth prospects.

If our information technology systems or data are or were compromised, we could experience interruptions to 

our operations, legal claims, liability, harm to our reputation, a loss of sales and other adverse impacts.

We and our collaborators, suppliers and service providers rely on information technology systems to keep 
financial and other records, capture laboratory and clinical trial data, support internal and external communications and 
operate other critical functions. Despite our security measures, these systems are potentially vulnerable to malware, 
cyber-attacks, security breaches, natural disasters, terrorism, software and hardware failures, telecommunication and 
electrical failures, and similar issues. If such an event were to occur, it could result in material interruptions to our 
operations, loss of data or applications, loss of sales, significant extra expenses to restore data or systems, reputational 
harm and diversion of funds. For example, the loss of preclinical study or clinical trial data could result in delays in our 
product development or regulatory approval efforts and significantly increase our costs in order to recover or reproduce 
the data. The effects of the COVID-19 pandemic have intensified our dependence on information technology systems as 
many of our critical business activities are currently being conducted remotely and our increased reliance on personnel 
working from home could increase our cybersecurity risk.

In addition to traditional computer “hackers” and threat actors, sophisticated nation-state and nation-state 
supported actors now engage in attacks (including advanced persistent threat intrusions). Ransomware attacks, including 
those from organized criminal threat actors, nation-states and nation-state supported actors, are becoming increasingly 
prevalent and severe. To alleviate the financial, operational and reputational impact of a ransomware attack, it may be 
preferable to make extortion payments, but we may be unwilling or unable to do so (including, for example, if applicable 
laws or regulations prohibit such payments). Similarly, supply chain attacks have increased in frequency and severity. 
We cannot guarantee that third parties and infrastructure in our supply chain have not been compromised or that they do 
not contain exploitable defects or bugs that could result in a breach of or disruption to our systems and networks or the 
systems and networks of third parties that support us. 

Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change 
frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques 
or implement adequate preventative measures. We may also experience security breaches that may remain undetected for 
an extended period. Although, to our knowledge, we have not experienced any material security breach to date, any such 
breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or 
stolen. While we have taken steps to protect the security of the personal data and other sensitive information that we 
handle, there can be no assurance that any security measures will be effective against current or future security threats. 
Any unauthorized or accidental access to, or disclosure, modification, misuse, or loss of, personal or other data could 
result in legal claims or proceedings, liability, significant regulatory penalties, and loss of trade secrets or other 
intellectual property. In addition, such an event could disrupt our operations, damage our reputation and delay 
development of our product candidates.

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61

Risks Related to Our Operating Results, Financial Condition and Capital Requirements

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.

Our operating results are difficult to predict and may fluctuate significantly from quarter to quarter and year to 
year. We believe that our quarterly and annual results of operations may be affected by a variety of factors, including:

•

•

•

•

•

•

•

•

•

•

•

•

•

customer ordering patterns for our products, which may vary significantly from period to period;

the overall level of demand for our products, including the impact of any competitive or biosimilar products;

the extent to which coverage and adequate reimbursement for our products is available from government and 
other third-party payors;

changes in the amount of deductions from gross sales, including government-mandated rebates, chargebacks 
and discounts that can vary because of changes to the government discount percentage, including increases in 
the discount percentage resulting from price increases, or due to different levels of utilization by entities entitled 
to government rebates and discounts and changes in patient demographics;

increases in the scope of eligibility for customers to purchase our products at the discounted government price 
or to obtain government-mandated rebates on purchases of our products;

the timing, receipt and amount of development funding and milestone, royalty and other payments under 
collaboration and license arrangements, which may vary significantly from quarter to quarter;

entry into new strategic transactions, such as collaborations, license agreements or acquisitions of products, 
technologies or businesses; 

changes in our cost of sales due to potential new product launches, royalties owed under technology license 
agreements or write-offs of inventory;

the incidence rate of new patients in the approved indications for our products;

the evolving effects of the COVID-19 pandemic, including those leading to past and potential future reductions 
in rates of cancer diagnoses;

the timing, cost and level of investment in our sales and marketing efforts to support our products sales;

the timing, cost and level of investment in clinical trials, research and development, pre-commercialization, 
manufacturing and other activities by us or our collaborators; and

expenditures to develop and/or commercialize any additional products, product candidates, or technologies that 
we may develop, in-license, or acquire.

Sales of a newly-approved product, or sales an existing product in a newly-approved indication or territory, are 

particularly difficult to predict. Sales results or trends for such products, indications or territories in any period may not 
necessarily be indicative of future performance. Changes in our operations, such as new or expanding pipeline programs, 
the continued expansion or our international operations, additional business activities, or entry into strategic transactions, 
including potential future acquisitions of products, technologies or businesses, may cause significant fluctuations in our 
expenses. In addition, stock-based compensation expense may vary significantly from period to period. The variables we 
use for valuing these awards, including our underlying stock price, change over time. Additionally, from time to time, we 
have implemented long-term incentive plans for eligible employees, and the incentives provided under these plans are 
contingent upon the achievement of certain regulatory milestones. Costs of performance-based compensation under these 
plans are not recorded as an expense until the achievement of the applicable milestones is deemed probable, which may 
result in large fluctuations to the expense we must recognize in any particular period.

For these and other reasons, it is difficult for us to accurately forecast future sales of our current or any future 

approved products, collaboration and license agreement revenues, royalty revenues, operating expenses or future profits 

or losses. In addition, although we provide financial guidance from time to time, such guidance is based on assumptions 

that may be incorrect or that may change from quarter to quarter. You also should not rely on operating results in any 

period as being indicative of future performance. Our operating results have on occasion been, and in in future periods 

may also be, below prior period results, our own guidance and/or the expectations of securities analysts or investors. 

Such results could cause the trading price of our common stock to decline, perhaps substantially.

We have a history of net losses. We expect to continue to incur net losses and may not achieve future sustained 

profitability for some time, if at all.

We have incurred substantial net losses in each of our years of operation, other than the year ended December 31, 

2020. We have incurred these losses principally from costs incurred in our research and development programs and from 

our selling, general and administrative expenses. We expect to continue to spend substantial amounts on research and 

development, including amounts for conducting clinical trials of our products and product candidates. In addition, we 

expect to make substantial expenditures to commercialize our products and potentially commercialize our product 

candidates. For example, in connection with our recent in-license of development and commercialization rights to 

disitamab vedotin, we have incurred and expect to continue to incur substantial expenses, including to further develop 

and potentially commercialize disitamab vedotin. We may also pursue new operations or continue the expansion of our 

existing operations, including with respect to the continued development of our commercial infrastructure in Europe and 

our plans to otherwise continue to expand our operations internationally. Accordingly, we expect to continue to incur net 

losses in the future and may not achieve sustained profitability for some time, if at all. Although we recognize revenue 

from product sales and we continue to earn amounts under our collaboration agreements, our revenue and profit potential 

is unproven and our future operating results are difficult to predict. Even if we do achieve profitability in the future, we 

may not be able to sustain or increase profitability on a quarterly or annual basis. If we are unable to achieve and sustain 

profitability, the market value of our common stock will likely decline.

We may need to raise additional capital that may not be available to us.

We expect to make additional capital outlays and to increase operating expenditures over the next several years as 

we hire additional employees, support our development and commercialization activities, invest in our facilities, and 

expand globally, which may require us to raise additional capital. In addition, we may pursue new operations or continue 

the expansion of our existing operations, including with respect to the continued development of our commercial 

infrastructure in Europe and our plans to otherwise continue to expand our operations internationally. Our commitment 

of resources to the continuing development, regulatory and commercialization activities for our products, the continued 

research, development and manufacturing of our product candidates, our pursuit of regulatory approvals for and 

preparing to potentially launch and commercialize our product candidates, and the anticipated expansion of our pipeline 

and operations may require us to raise additional capital. Further, we actively evaluate various strategic transactions on 

an ongoing basis, including licensing or otherwise acquiring complementary products, technologies or businesses, and 

we may require significant additional capital in order to complete or otherwise provide funding for such transactions. We 

may seek additional capital through some or all of the following methods: corporate collaborations, licensing 

arrangements and public or private debt or equity financings. We do not know whether additional capital will be 

available when needed, or that, if available, we will obtain financing on terms favorable to us or our stockholders. If we 

are unable to raise additional funds when we need them, we may be required to scale back our operations, delay, reduce 

the scope of, or eliminate development programs enter into collaboration or license agreements on terms that are not 

favorable to us, sell or relinquish rights to certain assets, proprietary technologies or product candidates or forego 

strategic opportunities. Our future capital requirements will depend upon a number of factors, including:

the level of sales of our products and any future approved products;

the time and costs involved in pursuing regulatory approvals and the timing of any approvals;

the costs, timing, progress and results of our research and development, including preclinical testing and clinical 

the timing, receipt and amount of royalty revenue generated from commercial sales by our collaborators and 

licensees, as well as development funding, milestone payments and other payments under collaboration and 

license arrangements;

•

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trials;

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Risks Related to Our Operating Results, Financial Condition and Capital Requirements

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.

Our operating results are difficult to predict and may fluctuate significantly from quarter to quarter and year to 

year. We believe that our quarterly and annual results of operations may be affected by a variety of factors, including:

•

•

•

•

•

•

•

•

•

•

•

•

•

customer ordering patterns for our products, which may vary significantly from period to period;

the overall level of demand for our products, including the impact of any competitive or biosimilar products;

the extent to which coverage and adequate reimbursement for our products is available from government and 

other third-party payors;

changes in the amount of deductions from gross sales, including government-mandated rebates, chargebacks 

and discounts that can vary because of changes to the government discount percentage, including increases in 

the discount percentage resulting from price increases, or due to different levels of utilization by entities entitled 

to government rebates and discounts and changes in patient demographics;

increases in the scope of eligibility for customers to purchase our products at the discounted government price 

or to obtain government-mandated rebates on purchases of our products;

the timing, receipt and amount of development funding and milestone, royalty and other payments under 

collaboration and license arrangements, which may vary significantly from quarter to quarter;

entry into new strategic transactions, such as collaborations, license agreements or acquisitions of products, 

technologies or businesses; 

agreements or write-offs of inventory;

changes in our cost of sales due to potential new product launches, royalties owed under technology license 

the incidence rate of new patients in the approved indications for our products;

the evolving effects of the COVID-19 pandemic, including those leading to past and potential future reductions 

in rates of cancer diagnoses;

the timing, cost and level of investment in our sales and marketing efforts to support our products sales;

the timing, cost and level of investment in clinical trials, research and development, pre-commercialization, 

manufacturing and other activities by us or our collaborators; and

expenditures to develop and/or commercialize any additional products, product candidates, or technologies that 

we may develop, in-license, or acquire.

Sales of a newly-approved product, or sales an existing product in a newly-approved indication or territory, are 

particularly difficult to predict. Sales results or trends for such products, indications or territories in any period may not 

necessarily be indicative of future performance. Changes in our operations, such as new or expanding pipeline programs, 

the continued expansion or our international operations, additional business activities, or entry into strategic transactions, 

including potential future acquisitions of products, technologies or businesses, may cause significant fluctuations in our 

expenses. In addition, stock-based compensation expense may vary significantly from period to period. The variables we 

use for valuing these awards, including our underlying stock price, change over time. Additionally, from time to time, we 

have implemented long-term incentive plans for eligible employees, and the incentives provided under these plans are 

contingent upon the achievement of certain regulatory milestones. Costs of performance-based compensation under these 

plans are not recorded as an expense until the achievement of the applicable milestones is deemed probable, which may 

result in large fluctuations to the expense we must recognize in any particular period.

For these and other reasons, it is difficult for us to accurately forecast future sales of our current or any future 

approved products, collaboration and license agreement revenues, royalty revenues, operating expenses or future profits 
or losses. In addition, although we provide financial guidance from time to time, such guidance is based on assumptions 
that may be incorrect or that may change from quarter to quarter. You also should not rely on operating results in any 
period as being indicative of future performance. Our operating results have on occasion been, and in in future periods 
may also be, below prior period results, our own guidance and/or the expectations of securities analysts or investors. 
Such results could cause the trading price of our common stock to decline, perhaps substantially.

We have a history of net losses. We expect to continue to incur net losses and may not achieve future sustained 

profitability for some time, if at all.

We have incurred substantial net losses in each of our years of operation, other than the year ended December 31, 
2020. We have incurred these losses principally from costs incurred in our research and development programs and from 
our selling, general and administrative expenses. We expect to continue to spend substantial amounts on research and 
development, including amounts for conducting clinical trials of our products and product candidates. In addition, we 
expect to make substantial expenditures to commercialize our products and potentially commercialize our product 
candidates. For example, in connection with our recent in-license of development and commercialization rights to 
disitamab vedotin, we have incurred and expect to continue to incur substantial expenses, including to further develop 
and potentially commercialize disitamab vedotin. We may also pursue new operations or continue the expansion of our 
existing operations, including with respect to the continued development of our commercial infrastructure in Europe and 
our plans to otherwise continue to expand our operations internationally. Accordingly, we expect to continue to incur net 
losses in the future and may not achieve sustained profitability for some time, if at all. Although we recognize revenue 
from product sales and we continue to earn amounts under our collaboration agreements, our revenue and profit potential 
is unproven and our future operating results are difficult to predict. Even if we do achieve profitability in the future, we 
may not be able to sustain or increase profitability on a quarterly or annual basis. If we are unable to achieve and sustain 
profitability, the market value of our common stock will likely decline.

We may need to raise additional capital that may not be available to us.

We expect to make additional capital outlays and to increase operating expenditures over the next several years as 

we hire additional employees, support our development and commercialization activities, invest in our facilities, and 
expand globally, which may require us to raise additional capital. In addition, we may pursue new operations or continue 
the expansion of our existing operations, including with respect to the continued development of our commercial 
infrastructure in Europe and our plans to otherwise continue to expand our operations internationally. Our commitment 
of resources to the continuing development, regulatory and commercialization activities for our products, the continued 
research, development and manufacturing of our product candidates, our pursuit of regulatory approvals for and 
preparing to potentially launch and commercialize our product candidates, and the anticipated expansion of our pipeline 
and operations may require us to raise additional capital. Further, we actively evaluate various strategic transactions on 
an ongoing basis, including licensing or otherwise acquiring complementary products, technologies or businesses, and 
we may require significant additional capital in order to complete or otherwise provide funding for such transactions. We 
may seek additional capital through some or all of the following methods: corporate collaborations, licensing 
arrangements and public or private debt or equity financings. We do not know whether additional capital will be 
available when needed, or that, if available, we will obtain financing on terms favorable to us or our stockholders. If we 
are unable to raise additional funds when we need them, we may be required to scale back our operations, delay, reduce 
the scope of, or eliminate development programs enter into collaboration or license agreements on terms that are not 
favorable to us, sell or relinquish rights to certain assets, proprietary technologies or product candidates or forego 
strategic opportunities. Our future capital requirements will depend upon a number of factors, including:

•

•

•

•

the level of sales of our products and any future approved products;

the time and costs involved in pursuing regulatory approvals and the timing of any approvals;

the costs, timing, progress and results of our research and development, including preclinical testing and clinical 
trials;

the timing, receipt and amount of royalty revenue generated from commercial sales by our collaborators and 
licensees, as well as development funding, milestone payments and other payments under collaboration and 
license arrangements;

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•

•

•

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•

•

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announcements regarding, or negative publicity concerning, adverse events or safety concerns associated with 

the use of our products or product candidates;

issuance of new or changed analysts’ reports and recommendations regarding us or our competitors;

termination of or changes in our existing collaborations or licensing arrangements, or establishment of new 

collaborations or licensing arrangements;

our failure to achieve the perceived benefits of our strategic transactions, including our recent in-license of 

development and commercialization rights to disitamab vedotin, as rapidly or to the extent anticipated by 

financial analysts or investors;

or technologies;

our entry into additional material strategic transactions including licensing or acquisition of products, businesses 

regulatory actions with respect to our products, product candidates, clinical trials or regulatory filings;

our raising of additional capital and the terms upon which we may raise any additional capital;

developments or disputes concerning our proprietary rights, including with respect to our disputes with Daiichi 

Sankyo;

developments regarding any litigation or potential litigation;

the evolving effects of the COVID-19 pandemic;

share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

changes in laws, regulations or government policies, including with respect to pricing and reimbursement; 

• market conditions for equity investments in general, or the biotechnology or pharmaceutical industries in 

particular; and

other economic, social or political conditions.

The stock markets in general, and the markets for biotechnology and pharmaceutical stocks in particular, have 

historically experienced significant volatility that has often been unrelated or disproportionate to the operating 

performance of particular companies. In the past, companies whose securities have experienced periods of volatility in 

market price have been subjected to securities class action or derivative litigation. In this regard, we have been, and may 

in the future again become, subject to claims and litigation alleging violations of the securities laws or other related 

claims. Lawsuits brought against us could result in substantial costs, which would hurt our financial condition and results 

of operations and divert management’s attention and resources. 

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the cost of establishing and maintaining clinical supplies of our products and product candidates and 
commercial supplies of our current and any future approved products;

clinical trial results;

the extent of our investment in development, manufacturing and commercialization outside the U.S.;

our collaborators or our competitors;

announcements regarding the results of discovery efforts, product development and commercial activities by us, 

the costs associated with past and potential future strategic transactions, including acquisitions or licenses of 
additional technologies, products or businesses as well as licenses we may need to commercialize our current or 
any future approved products;

the terms and timing of any future collaboration, licensing and other arrangements;

expenses associated with current or future litigation;

the potential costs associated with international, state and federal taxes; and

competing technological and market developments.

In addition, changes in our spending rate may occur that would consume available capital resources sooner, such 

as increased development, manufacturing and clinical trial expenses in connection with our expanding pipeline programs 
or our undertaking of additional programs, business activities or entry into additional strategic transactions, including 
potential future acquisitions of products, technologies or businesses. Moreover, we may choose to raise additional capital 
due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future 
operating plans. To the extent that we raise additional capital by issuing equity securities, our stockholders may 
experience substantial dilution. Debt financing arrangements may require us to pledge certain assets or enter into 
covenants that could restrict our operations or our ability to pay dividends or other distributions on our common stock or 
incur further indebtedness. To the extent that we raise additional funds through collaboration and licensing arrangements, 
we may be required to relinquish some rights to our technologies or product candidates, or grant licenses on terms that 
are not favorable to us.

During the past several years, domestic and international financial markets have experienced, and they may 
continue to experience, extreme disruption from time to time, including, among other things, high volatility, significant 
declines in stock prices and severely diminished liquidity and credit availability for both borrowers and investors. Such 
adverse capital and credit market conditions could make it more difficult to obtain additional capital on favorable terms, 
or at all, which could have a material adverse effect on our business and growth prospects. For example, our ability to 
raise additional capital may be adversely impacted by deteriorating global economic conditions and the disruptions to 
and volatility in the credit and financial markets in the U.S. and worldwide resulting from the evolving effects of the 
COVID-19 pandemic.

The potential future impairment of intangible assets and goodwill may negatively affect our results of 

operations and financial position.

As of December 31, 2021, we carried $535.3 million of intangible assets, net and goodwill on our condensed 
consolidated balance sheet. Our intangible assets and goodwill are subject to an impairment analysis whenever events or 
changes in circumstances indicate the carrying amount of the asset may not be recoverable. Additionally, goodwill and 
indefinite-lived assets are subject to an impairment test at least annually. Events giving rise to impairment are an inherent 
risk in the pharmaceutical industry and cannot be predicted. Our results of operations and financial position in future 
periods could be negatively impacted should future impairments of intangible assets or goodwill occur.

Risks Related to Our Common Stock

Our stock price is volatile and our shares may suffer a decline in value.

The market price of our stock has been, and is likely to continue to be, volatile. As a result of fluctuations in the 
price of our common stock, you may be unable to sell your shares at or above the price you paid for them. The market 
price of our common stock may be subject to substantial volatility in response to many risk factors listed in this section, 
and others beyond our control, including:

•

•

the levels of product sales;

regulatory approval or non-approval of our products or product candidates, specific label indications for or 
restrictions, warnings or limitations in their use, or delays in the regulatory review process;

64

65

•

•

•

•

•

•

•

•

•

the cost of establishing and maintaining clinical supplies of our products and product candidates and 

commercial supplies of our current and any future approved products;

the extent of our investment in development, manufacturing and commercialization outside the U.S.;

the costs associated with past and potential future strategic transactions, including acquisitions or licenses of 

additional technologies, products or businesses as well as licenses we may need to commercialize our current or 

any future approved products;

the terms and timing of any future collaboration, licensing and other arrangements;

expenses associated with current or future litigation;

the potential costs associated with international, state and federal taxes; and

competing technological and market developments.

In addition, changes in our spending rate may occur that would consume available capital resources sooner, such 

as increased development, manufacturing and clinical trial expenses in connection with our expanding pipeline programs 

or our undertaking of additional programs, business activities or entry into additional strategic transactions, including 

potential future acquisitions of products, technologies or businesses. Moreover, we may choose to raise additional capital 

due to market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future 

operating plans. To the extent that we raise additional capital by issuing equity securities, our stockholders may 

experience substantial dilution. Debt financing arrangements may require us to pledge certain assets or enter into 

covenants that could restrict our operations or our ability to pay dividends or other distributions on our common stock or 

incur further indebtedness. To the extent that we raise additional funds through collaboration and licensing arrangements, 

we may be required to relinquish some rights to our technologies or product candidates, or grant licenses on terms that 

are not favorable to us.

During the past several years, domestic and international financial markets have experienced, and they may 

continue to experience, extreme disruption from time to time, including, among other things, high volatility, significant 

declines in stock prices and severely diminished liquidity and credit availability for both borrowers and investors. Such 

adverse capital and credit market conditions could make it more difficult to obtain additional capital on favorable terms, 

or at all, which could have a material adverse effect on our business and growth prospects. For example, our ability to 

raise additional capital may be adversely impacted by deteriorating global economic conditions and the disruptions to 

and volatility in the credit and financial markets in the U.S. and worldwide resulting from the evolving effects of the 

COVID-19 pandemic.

operations and financial position.

The potential future impairment of intangible assets and goodwill may negatively affect our results of 

As of December 31, 2021, we carried $535.3 million of intangible assets, net and goodwill on our condensed 

consolidated balance sheet. Our intangible assets and goodwill are subject to an impairment analysis whenever events or 

changes in circumstances indicate the carrying amount of the asset may not be recoverable. Additionally, goodwill and 

indefinite-lived assets are subject to an impairment test at least annually. Events giving rise to impairment are an inherent 

risk in the pharmaceutical industry and cannot be predicted. Our results of operations and financial position in future 

periods could be negatively impacted should future impairments of intangible assets or goodwill occur.

Risks Related to Our Common Stock

Our stock price is volatile and our shares may suffer a decline in value.

The market price of our stock has been, and is likely to continue to be, volatile. As a result of fluctuations in the 

price of our common stock, you may be unable to sell your shares at or above the price you paid for them. The market 

price of our common stock may be subject to substantial volatility in response to many risk factors listed in this section, 

and others beyond our control, including:

the levels of product sales;

regulatory approval or non-approval of our products or product candidates, specific label indications for or 

restrictions, warnings or limitations in their use, or delays in the regulatory review process;

•

•

•

•

•

•

•

•

•

•

•

•

•

•

clinical trial results;

announcements regarding the results of discovery efforts, product development and commercial activities by us, 
our collaborators or our competitors;

announcements regarding, or negative publicity concerning, adverse events or safety concerns associated with 
the use of our products or product candidates;

issuance of new or changed analysts’ reports and recommendations regarding us or our competitors;

termination of or changes in our existing collaborations or licensing arrangements, or establishment of new 
collaborations or licensing arrangements;

our failure to achieve the perceived benefits of our strategic transactions, including our recent in-license of 
development and commercialization rights to disitamab vedotin, as rapidly or to the extent anticipated by 
financial analysts or investors;

our entry into additional material strategic transactions including licensing or acquisition of products, businesses 
or technologies;

regulatory actions with respect to our products, product candidates, clinical trials or regulatory filings;

our raising of additional capital and the terms upon which we may raise any additional capital;

developments or disputes concerning our proprietary rights, including with respect to our disputes with Daiichi 
Sankyo;

developments regarding any litigation or potential litigation;

the evolving effects of the COVID-19 pandemic;

share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;

changes in laws, regulations or government policies, including with respect to pricing and reimbursement; 

• market conditions for equity investments in general, or the biotechnology or pharmaceutical industries in 

particular; and

•

other economic, social or political conditions.

The stock markets in general, and the markets for biotechnology and pharmaceutical stocks in particular, have 

historically experienced significant volatility that has often been unrelated or disproportionate to the operating 
performance of particular companies. In the past, companies whose securities have experienced periods of volatility in 
market price have been subjected to securities class action or derivative litigation. In this regard, we have been, and may 
in the future again become, subject to claims and litigation alleging violations of the securities laws or other related 
claims. Lawsuits brought against us could result in substantial costs, which would hurt our financial condition and results 
of operations and divert management’s attention and resources. 

64

65

Substantial future sales or issuances of shares of our common stock or equity-related securities could cause the 

Our disclosures related to environmental, social and governance, or ESG, matters expose us to various risks, 

market price of our common stock to decline.

including risks to our reputation and stock price.

Sales of a substantial number of shares of our common stock, and sales by members of our management or board 
of directors or entities affiliated with such members, could occur at any time. In addition, in December 2020, pursuant to 
a ten-year registration rights agreement we entered into with certain entities affiliated with Baker Bros. Advisors LP, or 
the Baker Entities, we registered up to 47,366,602 shares of our common stock for resale by the Baker Entities, and we 
may be required to register the resale of additional shares held by the Baker Entities from time to time in the future. Sales 
by our management, our directors, their affiliates, or significant shareholders like the Baker Entities, or the perception in 
the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our 
common stock, perhaps substantially, and could impair our ability to raise capital through the sale of additional equity or 
equity-related securities. In addition, we may issue a substantial number of shares of our common stock or equity-related 
securities, including convertible debt, to meet our capital needs, including in connection with funding potential future 
acquisition or licensing opportunities, capital expenditures or product development costs. These issuances could be 
substantially dilutive and could adversely affect the market price of our common stock. Likewise, future issuances of our 
common stock upon the exercise, conversion or settlement of equity-based awards or other equity-related securities 
would dilute existing stockholders’ ownership interest in our company.

Our existing stockholders have significant control of our management and affairs.

Based on information available to us as of December 31, 2021, the Baker Entities collectively beneficially owned 
approximately 26% of our common stock. In addition, based solely on the most recent Schedules 13G and 13D filed with 
the SEC, reports filed with the SEC under Section 16 of the Exchange Act, and our outstanding shares of common stock 
as of December 31, 2021, our executive officers and directors and holders of greater than five percent of our outstanding 
common stock beneficially owned approximately 51% of our voting power as of December 31, 2021. As a result, these 
stockholders are able to exert substantial influence over our management and affairs and matters requiring stockholder 
approval, including the election of directors and approval of significant corporate transactions, such as mergers, 
consolidations or the sale of substantially all of our assets. Consequently, this concentration of ownership may result in 
our taking corporate actions that other stockholders may not consider to be in their best interest. For example, it may 
have the effect of delaying, deferring or preventing a change in control, including a merger, consolidation, takeover or 
other business combination involving us or discourage a potential acquirer from making a tender offer or otherwise 
attempting to obtain control, which might affect the market price of our common stock.

Anti-takeover provisions could make it more difficult for a third party to acquire us.

Our Board of Directors has the authority to issue up to 5,000,000 shares of preferred stock and to determine the 

terms of those shares, including voting rights, without any further action by the stockholders. The rights of the holders of 
common stock may be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that 
may be issued in the future. The issuance of preferred stock may have the effect of delaying, deferring or preventing a 
change of control of Seagen. Further, certain provisions of our charter documents, including provisions eliminating the 
ability of stockholders to take action by written consent and limiting the ability of stockholders to raise matters at a 
meeting of stockholders without giving advance notice, may have the effect of delaying or preventing changes in control 
or management of Seagen, which could have an adverse effect on the market price of our stock. In addition, our charter 
documents provide for a classified board, which may make it more difficult for a third party to gain control of our Board 
of Directors. Similarly, state laws in Delaware and Washington related to corporate takeovers may prevent or delay a 
change of control of Seagen.

Investors are increasingly likely to factor ESG disclosures into their investment decisions. We have elevated the 

degree to which we manage, track and report on our ESG efforts and goals. Where provided, goal statements are 

aspirational, are subject to a number of risks, many of which are beyond our control, and are not guarantees. Our 

processes and operations may not always conform to various frameworks for identifying, measuring and reporting ESG 

metrics, and ESG reporting standards may change over time, either of which could result in significant revisions to 

reported metrics. In addition, our interpretation of reporting standards may differ from those of others. Any failure or 

perceived failure to pursue or fulfill our goals or to satisfy various reporting standards could have negative impacts on 

our reputation and stock price and expose us to litigation or government actions.

General Risk Factors

financial condition or growth prospects.

Changes in tax laws or regulations may have a material adverse effect on our business, results of operations, 

Due to economic and political conditions, new tax laws, statutes, rules, regulations or ordinances could be enacted 

at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws, 

statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. For example, 

the current U.S. presidential administration has proposed numerous corporate tax reform proposals including 

implementation of a minimum tax on book income and increasing taxation of international business operations. In 

addition, as we continue to expand our operations internationally, we may become increasingly subject to taxation in 

jurisdictions outside the U.S. Changes in corporate tax rates or in rules applicable to the realization of net deferred tax 

assets relating to our operations, the taxation of foreign earnings or the deductibility of expenses could have a material 

impact on the value of our deferred tax assets, result in significant one-time charges, increase our future tax expense or 

otherwise have a material adverse effect on our business, results of operations, financial condition or growth prospects.

If our facilities are damaged or our research and development, manufacturing or other business processes are 

interrupted, our business could be seriously harmed.

We conduct most of our business in a limited number of facilities. Damage or extended periods of interruption to 

these facilities due to fire, natural disaster, severe weather, power loss, communications failure, unauthorized entry or 

other events could cause significant disruption and/or delays in our research and development, manufacturing and 

commercial activities and could cause us to incur large expenses to repair or replace the facilities. Although we maintain 

property damage and business interruption insurance coverage on these facilities, our insurance might not cover all losses 

under such circumstances and our business may be seriously harmed by such disruption, delays and costs.

Legislative actions and new accounting pronouncements are likely to impact our future financial position or 

results of operations.

Future changes in financial accounting standards may cause adverse, unexpected revenue fluctuations and affect 

our financial position or results of operations. New pronouncements and varying interpretations of pronouncements have 

occurred with frequency in the past and are expected to occur again in the future. As a result we may be required to make 

changes in our accounting policies that could adversely affect our reported revenues and expenses, future profitability or 

financial position. The application of existing or future financial accounting standards, particularly those relating to the 

way we account for revenues and costs, could have a significant impact on our reported results.

66

67

Substantial future sales or issuances of shares of our common stock or equity-related securities could cause the 

Our disclosures related to environmental, social and governance, or ESG, matters expose us to various risks, 

market price of our common stock to decline.

including risks to our reputation and stock price.

Sales of a substantial number of shares of our common stock, and sales by members of our management or board 

of directors or entities affiliated with such members, could occur at any time. In addition, in December 2020, pursuant to 

a ten-year registration rights agreement we entered into with certain entities affiliated with Baker Bros. Advisors LP, or 

the Baker Entities, we registered up to 47,366,602 shares of our common stock for resale by the Baker Entities, and we 

may be required to register the resale of additional shares held by the Baker Entities from time to time in the future. Sales 

by our management, our directors, their affiliates, or significant shareholders like the Baker Entities, or the perception in 

the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our 

common stock, perhaps substantially, and could impair our ability to raise capital through the sale of additional equity or 

equity-related securities. In addition, we may issue a substantial number of shares of our common stock or equity-related 

securities, including convertible debt, to meet our capital needs, including in connection with funding potential future 

acquisition or licensing opportunities, capital expenditures or product development costs. These issuances could be 

substantially dilutive and could adversely affect the market price of our common stock. Likewise, future issuances of our 

common stock upon the exercise, conversion or settlement of equity-based awards or other equity-related securities 

would dilute existing stockholders’ ownership interest in our company.

Our existing stockholders have significant control of our management and affairs.

Based on information available to us as of December 31, 2021, the Baker Entities collectively beneficially owned 

approximately 26% of our common stock. In addition, based solely on the most recent Schedules 13G and 13D filed with 

the SEC, reports filed with the SEC under Section 16 of the Exchange Act, and our outstanding shares of common stock 

as of December 31, 2021, our executive officers and directors and holders of greater than five percent of our outstanding 

common stock beneficially owned approximately 51% of our voting power as of December 31, 2021. As a result, these 

stockholders are able to exert substantial influence over our management and affairs and matters requiring stockholder 

approval, including the election of directors and approval of significant corporate transactions, such as mergers, 

consolidations or the sale of substantially all of our assets. Consequently, this concentration of ownership may result in 

our taking corporate actions that other stockholders may not consider to be in their best interest. For example, it may 

have the effect of delaying, deferring or preventing a change in control, including a merger, consolidation, takeover or 

other business combination involving us or discourage a potential acquirer from making a tender offer or otherwise 

attempting to obtain control, which might affect the market price of our common stock.

Anti-takeover provisions could make it more difficult for a third party to acquire us.

Our Board of Directors has the authority to issue up to 5,000,000 shares of preferred stock and to determine the 

terms of those shares, including voting rights, without any further action by the stockholders. The rights of the holders of 

common stock may be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that 

may be issued in the future. The issuance of preferred stock may have the effect of delaying, deferring or preventing a 

change of control of Seagen. Further, certain provisions of our charter documents, including provisions eliminating the 

ability of stockholders to take action by written consent and limiting the ability of stockholders to raise matters at a 

meeting of stockholders without giving advance notice, may have the effect of delaying or preventing changes in control 

or management of Seagen, which could have an adverse effect on the market price of our stock. In addition, our charter 

documents provide for a classified board, which may make it more difficult for a third party to gain control of our Board 

of Directors. Similarly, state laws in Delaware and Washington related to corporate takeovers may prevent or delay a 

change of control of Seagen.

Investors are increasingly likely to factor ESG disclosures into their investment decisions. We have elevated the 

degree to which we manage, track and report on our ESG efforts and goals. Where provided, goal statements are 
aspirational, are subject to a number of risks, many of which are beyond our control, and are not guarantees. Our 
processes and operations may not always conform to various frameworks for identifying, measuring and reporting ESG 
metrics, and ESG reporting standards may change over time, either of which could result in significant revisions to 
reported metrics. In addition, our interpretation of reporting standards may differ from those of others. Any failure or 
perceived failure to pursue or fulfill our goals or to satisfy various reporting standards could have negative impacts on 
our reputation and stock price and expose us to litigation or government actions.

General Risk Factors

Changes in tax laws or regulations may have a material adverse effect on our business, results of operations, 

financial condition or growth prospects.

Due to economic and political conditions, new tax laws, statutes, rules, regulations or ordinances could be enacted 

at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws, 
statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. For example, 
the current U.S. presidential administration has proposed numerous corporate tax reform proposals including 
implementation of a minimum tax on book income and increasing taxation of international business operations. In 
addition, as we continue to expand our operations internationally, we may become increasingly subject to taxation in 
jurisdictions outside the U.S. Changes in corporate tax rates or in rules applicable to the realization of net deferred tax 
assets relating to our operations, the taxation of foreign earnings or the deductibility of expenses could have a material 
impact on the value of our deferred tax assets, result in significant one-time charges, increase our future tax expense or 
otherwise have a material adverse effect on our business, results of operations, financial condition or growth prospects.

If our facilities are damaged or our research and development, manufacturing or other business processes are 

interrupted, our business could be seriously harmed.

We conduct most of our business in a limited number of facilities. Damage or extended periods of interruption to 

these facilities due to fire, natural disaster, severe weather, power loss, communications failure, unauthorized entry or 
other events could cause significant disruption and/or delays in our research and development, manufacturing and 
commercial activities and could cause us to incur large expenses to repair or replace the facilities. Although we maintain 
property damage and business interruption insurance coverage on these facilities, our insurance might not cover all losses 
under such circumstances and our business may be seriously harmed by such disruption, delays and costs.

Legislative actions and new accounting pronouncements are likely to impact our future financial position or 

results of operations.

Future changes in financial accounting standards may cause adverse, unexpected revenue fluctuations and affect 

our financial position or results of operations. New pronouncements and varying interpretations of pronouncements have 
occurred with frequency in the past and are expected to occur again in the future. As a result we may be required to make 
changes in our accounting policies that could adversely affect our reported revenues and expenses, future profitability or 
financial position. The application of existing or future financial accounting standards, particularly those relating to the 
way we account for revenues and costs, could have a significant impact on our reported results.

66

67

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties 

Our headquarters are in Bothell, Washington. Our Bothell campus comprises 11 leased buildings of office and 

warehouse space that we use for laboratory, discovery, research and development and general and administrative 
purposes, and a biologics manufacturing facility which we own. We have signed a lease to a facility currently being 
constructed in Everett, Washington, which will be used for future manufacturing capability. We also have leased space in 
Seattle, Washington, South San Francisco, California, Mississauga, Canada, Zug, Switzerland, and in several other 
European locations used for general and administrative purposes. All of our significant leases include renewal options. 
We believe that our real estate is currently adequate to meet our needs. As we continue to expand our operations, we may 
need to lease or purchase additional real estate. 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 

PART II

Securities

Our Common Stock

record. 

Dividend Policy 

Our common stock is traded on the Nasdaq Global Select Market under the symbol “SGEN.” As of February 4, 

2022, there were 183,626,064 shares of our common stock outstanding, which were held by approximately 54 holders of 

We have not paid any cash dividends on our common stock since our inception. We do not intend to pay any cash 

dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business operations.

Sales of Unregistered Securities and Issuer Repurchases of Securities 

Item 3. Legal Proceedings

There were no unregistered sales of equity securities by us during 2021. In addition, we did not repurchase any of 

The information set forth in Note 13 of the Notes to Consolidated Financial Statements included in Part II Item 8 

of this Annual Report on Form 10-K is incorporated by reference into this Item 3.

our equity securities during 2021.

Stock Performance Graph 

Item 4. Mine Safety Disclosures

Not applicable.

The table below shows the cumulative total return to our stockholders during the period from December 31, 2016 

through December 31, 2021 in comparison to the indicated indexes. The results assume that $100 was invested on 

December 31, 2016 in our common stock and each of the indicated indexes, including reinvestment of any dividends. 

$350

$300

$250

$200

$150

$100

$50

12/2016

12/2017

12/2018

12/2019

12/2020

12/2021

Seagen Inc.

Nasdaq Composite

Nasdaq Biotechnology

Seagen Inc.

Nasdaq Composite

Nasdaq Biotechnology

2016

2017

2018

2019

2020

2021

$ 

100.00  $ 

101.38  $ 

107.37  $ 

216.52  $ 

331.89  $ 

100.00 

100.00 

129.64 

121.63 

125.96 

110.85 

172.17 

138.69 

249.51 

175.33 

292.97 

304.85 

175.37 

December 31,

This information under “Stock Performance Graph” is not deemed filed with the Securities and Exchange 

Commission and is not to be incorporated by reference in any filing of Seagen Inc. under the Securities Act of 1933, as 

amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual 

Report on Form 10-K and irrespective of any general incorporation language in those filings.

68

69

 
 
 
 
 
 
 
 
 
 
 
 
 
Item 1B. Unresolved Staff Comments

None.

Item 2. Properties 

Our headquarters are in Bothell, Washington. Our Bothell campus comprises 11 leased buildings of office and 

warehouse space that we use for laboratory, discovery, research and development and general and administrative 

purposes, and a biologics manufacturing facility which we own. We have signed a lease to a facility currently being 

constructed in Everett, Washington, which will be used for future manufacturing capability. We also have leased space in 

Seattle, Washington, South San Francisco, California, Mississauga, Canada, Zug, Switzerland, and in several other 

European locations used for general and administrative purposes. All of our significant leases include renewal options. 

We believe that our real estate is currently adequate to meet our needs. As we continue to expand our operations, we may 

need to lease or purchase additional real estate. 

Item 3. Legal Proceedings

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity 
Securities

PART II

Our Common Stock

Our common stock is traded on the Nasdaq Global Select Market under the symbol “SGEN.” As of February 4, 

2022, there were 183,626,064 shares of our common stock outstanding, which were held by approximately 54 holders of 
record. 

Dividend Policy 

We have not paid any cash dividends on our common stock since our inception. We do not intend to pay any cash 

dividends in the foreseeable future, but intend to retain all earnings, if any, for use in our business operations.

Sales of Unregistered Securities and Issuer Repurchases of Securities 

There were no unregistered sales of equity securities by us during 2021. In addition, we did not repurchase any of 

The information set forth in Note 13 of the Notes to Consolidated Financial Statements included in Part II Item 8 

of this Annual Report on Form 10-K is incorporated by reference into this Item 3.

our equity securities during 2021.

Stock Performance Graph 

Item 4. Mine Safety Disclosures

Not applicable.

The table below shows the cumulative total return to our stockholders during the period from December 31, 2016 

through December 31, 2021 in comparison to the indicated indexes. The results assume that $100 was invested on 
December 31, 2016 in our common stock and each of the indicated indexes, including reinvestment of any dividends. 

$350

$300

$250

$200

$150

$100

$50

12/2016

12/2017

12/2018

12/2019

12/2020

12/2021

Seagen Inc.

Nasdaq Composite

Nasdaq Biotechnology

2016

2017

2018

2019

2020

2021

Seagen Inc.
Nasdaq Composite
Nasdaq Biotechnology

$ 

100.00  $ 
100.00 
100.00 

101.38  $ 
129.64 
121.63 

107.37  $ 
125.96 
110.85 

216.52  $ 
172.17 
138.69 

331.89  $ 
249.51 
175.33 

292.97 
304.85 
175.37 

December 31,

This information under “Stock Performance Graph” is not deemed filed with the Securities and Exchange 
Commission and is not to be incorporated by reference in any filing of Seagen Inc. under the Securities Act of 1933, as 
amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Annual 
Report on Form 10-K and irrespective of any general incorporation language in those filings.

68

69

 
 
 
 
 
 
 
 
 
 
 
 
 
Item 6. [Reserved]

Expanded indication approved in the European Union and first approval in China for our partner Takeda.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 

The following discussion of our financial condition and results of operations contains forward-looking statements 
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 
Forward-looking statements are based on our management’s beliefs and assumptions and on information currently 
available to our management. All statements other than statements of historical facts are “forward-looking statements” 
for purposes of these provisions, including those relating to future events or our future financial performance and 
financial guidance. In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” 
“will,” “should,” “expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “potential,” “intend” 
or “continue,” the negative of terms like these or other comparable terminology, and other words or terms of similar 
meaning in connection with any discussion of future operating or financial performance. These statements are only 
predictions. All forward-looking statements included in this Annual Report on Form 10-K are based on information 
available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Any or 
all of our forward-looking statements in this document may turn out to be wrong. Actual events or results may differ 
materially. Our forward-looking statements can be affected by inaccurate assumptions we might make or by known or 
unknown risks, uncertainties and other factors. We discuss many of these risks, uncertainties and other factors in this 
Annual Report on Form 10-K in greater detail in “Part I Item 1A—Risk Factors.” We caution investors that our 
business and financial performance are subject to substantial risks and uncertainties.

You should read the following discussion and analysis in conjunction with our consolidated financial statements 

and notes thereto included elsewhere in this Annual Report on Form 10-K.

Overview

Seagen is a biotechnology company that develops and commercializes targeted therapies to treat cancer. We are 
commercializing ADCETRIS for the treatment of certain CD30-expressing lymphomas, PADCEV for the treatment of 
certain metastatic urothelial cancers, TUKYSA for the treatment of certain metastatic HER2-positive breast cancers, and 
TIVDAK for the treatment of certain metastatic cervical cancers. We are also advancing a pipeline of novel therapies for 
solid tumors and blood-related cancers designed to address unmet medical needs and improve treatment outcomes for 
patients. Many of our programs, including ADCETRIS, PADCEV and TIVDAK, are based on our antibody-drug 
conjugate, or ADC, technology that utilizes the targeting ability of monoclonal antibodies to deliver cell-killing agents 
directly to cancer cells. 

2021 highlights and recent developments

Corporate

•
•

•

Achieved 38% growth in net product sales for full year 2021 compared to full year 2020. 
Entered into an exclusive license agreement with RemeGen, Co. Ltd., or RemeGen, to develop and 
commercialize disitamab vedotin, a novel HER2-targeted ADC. 
Continued to make strategic investments in our pipeline, commercial launches, infrastructure, and headcount to 
support our future growth. 

ADCETRIS

•

•

•

Announced in February 2022 that the phase 3 ECHELON-1 clinical trial demonstrated a statistically significant 
improvement in OS (p=0.009) in patients with advanced Hodgkin lymphoma following treatment with 
ADCETRIS in combination with chemotherapy. With approximately six years median follow up, patients 
receiving ADCETRIS plus doxorubicin, vinblastine, and dacarbazine (A+AVD) in the frontline setting had a 41 
percent reduction in the risk of death (HR 0.59; [95% CI: 0.396 to 0.879]) compared with patients receiving 
doxorubicin, bleomycin, vinblastine, and dacarbazine (ABVD). The safety profile of ADCETRIS was 
consistent with previous studies and no new safety events were observed.
Published five-year updates of the phase 3 ECHELON-1 and ECHELON-2 trials in frontline advanced 
lymphoma and PTCL respectively.
Expanded clinical program including initiation of phase 3 trial in relapsed and refractory diffuse large B-cell 
lymphoma and expanded a trial in frontline Hodgkin lymphoma to evaluate stage I and II patients.

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U.S. Food and Drug Administration, or FDA: 

converted PADCEV's accelerated approval to regular approval; and

approved a new indication for PADCEV in the treatment of patients with locally advanced or 

metastatic urothelial cancer who are ineligible for cisplatin-containing chemotherapy and have 

previously received one or more prior lines of therapy. 

Received approval for PADCEV from Japan's Ministry of Health, Labour and Welfare, or MHLW, for the 

treatment of patients with radically unresectable urothelial cancer that has progressed after anti-cancer 

chemotherapy in September 2021.

Completed enrollment in Cohort K of the EV-103 clinical trial of PADCEV in combination with Merck's 

pembrolizumab as first-line treatment for metastatic urothelial cancer in October 2021. The trial could 

potentially support registration under the FDA's accelerated approval pathway if the results are positive.

Enrolled first patient in a phase 1 EV-104 clinical trial evaluating dosing of PADCEV administered 

intravesically in patients with Bacillus Calmette-Guerin, or BCG, unresponsive non-muscle invasive bladder 

Received approval in the European Union, Canada and Great Britain for previously treated metastatic HER2-

positive breast cancer. 

Completed enrollment in the phase 2 MOUNTAINEER clinical trial of TUKYSA in combination with 

trastuzumab and as a single agent in patients with HER2-positive metastatic colorectal cancer following 

previous treatment with first- and second-line standard-of-care therapies. The trial could potentially support 

registration under the FDA's accelerated approval pathway.

Received accelerated approval by the FDA for the treatment of adult patients with recurrent or metastatic 

cervical cancer with disease progression on or after chemotherapy. We began the commercial launch in 

Published results of the TIVDAK pivotal trial, innovaTV 204, in patients with previously treated recurrent or 

metastatic cervical cancer in The Lancet Oncology April 2021. The data were used to support accelerated 

PADCEV

◦

◦

cancer.

TUKYSA

•

•

•

•

•

•

•

•

•

•

•

September 2021.

approval in the U.S. 

TIVDAK

Pipeline

cancer.

Reported initial clinical data on SEA-BCMA in multiple myeloma and SEA-CD40 in metastatic pancreatic 

Initiated phase 1 trials of additional novel drug candidates.

Also refer to Part I Item 1 “Business” for more information about our products, pipeline, technologies, research 

programs, and future plans for our clinical programs, including recent key business achievements.

Item 6. [Reserved]

•

Expanded indication approved in the European Union and first approval in China for our partner Takeda.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 

PADCEV

The following discussion of our financial condition and results of operations contains forward-looking statements 

within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. 

Forward-looking statements are based on our management’s beliefs and assumptions and on information currently 

available to our management. All statements other than statements of historical facts are “forward-looking statements” 

for purposes of these provisions, including those relating to future events or our future financial performance and 

financial guidance. In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” 

“will,” “should,” “expect,” “plan,” “anticipate,” “project,” “believe,” “estimate,” “predict,” “potential,” “intend” 

or “continue,” the negative of terms like these or other comparable terminology, and other words or terms of similar 

meaning in connection with any discussion of future operating or financial performance. These statements are only 

predictions. All forward-looking statements included in this Annual Report on Form 10-K are based on information 

available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Any or 

all of our forward-looking statements in this document may turn out to be wrong. Actual events or results may differ 

materially. Our forward-looking statements can be affected by inaccurate assumptions we might make or by known or 

unknown risks, uncertainties and other factors. We discuss many of these risks, uncertainties and other factors in this 

Annual Report on Form 10-K in greater detail in “Part I Item 1A—Risk Factors.” We caution investors that our 

business and financial performance are subject to substantial risks and uncertainties.

You should read the following discussion and analysis in conjunction with our consolidated financial statements 

and notes thereto included elsewhere in this Annual Report on Form 10-K.

Overview

Seagen is a biotechnology company that develops and commercializes targeted therapies to treat cancer. We are 

commercializing ADCETRIS for the treatment of certain CD30-expressing lymphomas, PADCEV for the treatment of 

certain metastatic urothelial cancers, TUKYSA for the treatment of certain metastatic HER2-positive breast cancers, and 

TIVDAK for the treatment of certain metastatic cervical cancers. We are also advancing a pipeline of novel therapies for 

solid tumors and blood-related cancers designed to address unmet medical needs and improve treatment outcomes for 

patients. Many of our programs, including ADCETRIS, PADCEV and TIVDAK, are based on our antibody-drug 

conjugate, or ADC, technology that utilizes the targeting ability of monoclonal antibodies to deliver cell-killing agents 

directly to cancer cells. 

2021 highlights and recent developments

Corporate

support our future growth. 

ADCETRIS

•

•

•

•

•

Achieved 38% growth in net product sales for full year 2021 compared to full year 2020. 

Entered into an exclusive license agreement with RemeGen, Co. Ltd., or RemeGen, to develop and 

commercialize disitamab vedotin, a novel HER2-targeted ADC. 

Continued to make strategic investments in our pipeline, commercial launches, infrastructure, and headcount to 

•

Announced in February 2022 that the phase 3 ECHELON-1 clinical trial demonstrated a statistically significant 

improvement in OS (p=0.009) in patients with advanced Hodgkin lymphoma following treatment with 

ADCETRIS in combination with chemotherapy. With approximately six years median follow up, patients 

receiving ADCETRIS plus doxorubicin, vinblastine, and dacarbazine (A+AVD) in the frontline setting had a 41 

percent reduction in the risk of death (HR 0.59; [95% CI: 0.396 to 0.879]) compared with patients receiving 

doxorubicin, bleomycin, vinblastine, and dacarbazine (ABVD). The safety profile of ADCETRIS was 

consistent with previous studies and no new safety events were observed.

Published five-year updates of the phase 3 ECHELON-1 and ECHELON-2 trials in frontline advanced 

lymphoma and PTCL respectively.

Expanded clinical program including initiation of phase 3 trial in relapsed and refractory diffuse large B-cell 

lymphoma and expanded a trial in frontline Hodgkin lymphoma to evaluate stage I and II patients.

•

U.S. Food and Drug Administration, or FDA: 

◦
◦

converted PADCEV's accelerated approval to regular approval; and
approved a new indication for PADCEV in the treatment of patients with locally advanced or 
metastatic urothelial cancer who are ineligible for cisplatin-containing chemotherapy and have 
previously received one or more prior lines of therapy. 

•

•

•

Received approval for PADCEV from Japan's Ministry of Health, Labour and Welfare, or MHLW, for the 
treatment of patients with radically unresectable urothelial cancer that has progressed after anti-cancer 
chemotherapy in September 2021.
Completed enrollment in Cohort K of the EV-103 clinical trial of PADCEV in combination with Merck's 
pembrolizumab as first-line treatment for metastatic urothelial cancer in October 2021. The trial could 
potentially support registration under the FDA's accelerated approval pathway if the results are positive.
Enrolled first patient in a phase 1 EV-104 clinical trial evaluating dosing of PADCEV administered 
intravesically in patients with Bacillus Calmette-Guerin, or BCG, unresponsive non-muscle invasive bladder 
cancer.

TUKYSA

•

•

Received approval in the European Union, Canada and Great Britain for previously treated metastatic HER2-
positive breast cancer. 
Completed enrollment in the phase 2 MOUNTAINEER clinical trial of TUKYSA in combination with 
trastuzumab and as a single agent in patients with HER2-positive metastatic colorectal cancer following 
previous treatment with first- and second-line standard-of-care therapies. The trial could potentially support 
registration under the FDA's accelerated approval pathway.

TIVDAK

•

•

Received accelerated approval by the FDA for the treatment of adult patients with recurrent or metastatic 
cervical cancer with disease progression on or after chemotherapy. We began the commercial launch in 
September 2021.
Published results of the TIVDAK pivotal trial, innovaTV 204, in patients with previously treated recurrent or 
metastatic cervical cancer in The Lancet Oncology April 2021. The data were used to support accelerated 
approval in the U.S. 

Pipeline

•

•

Reported initial clinical data on SEA-BCMA in multiple myeloma and SEA-CD40 in metastatic pancreatic 
cancer.
Initiated phase 1 trials of additional novel drug candidates.

Also refer to Part I Item 1 “Business” for more information about our products, pipeline, technologies, research 

programs, and future plans for our clinical programs, including recent key business achievements.

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•

impacts related to the COVID-19 pandemic, including potential further adverse effects on the rate of Hodgkin 

lymphoma diagnoses and potential adverse impacts on diagnosis rates for other cancers.

As a result of these and other factors, our future net product sales for each of our products can be difficult to 

accurately predict from period to period. We cannot assure you that sales of any of our products will continue to grow or 

that we can maintain sales of any of our products at or near current levels. 

The biopharmaceutical industry and the markets in which we operate are intensely competitive. Many of our 

competitors are working to develop or have commercialized products similar to those we market or are developing. Drug 

prices are under significant scrutiny and we expect drug pricing and other healthcare costs to continue to be subject to 

intense political and societal pressures on a global basis. For example, in July 2021, the Biden administration announced 

an Executive Order that includes initiatives aimed at lowering prescription drug costs and implementing Canadian drug 

importation, and in response to President Biden’s Executive Order, in September 2021, the U.S. Department of Health 

and Human Services released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug 

pricing reform and sets out a variety of potential legislative policies that Congress could pursue to advance these 

principles. In addition to pricing actions and other measures being taken worldwide designed to reduce healthcare costs 

and limit the overall level of government expenditures, our sales and operations could also be affected by other risks of 

We expect that amounts received from our collaboration agreements, including royalties, will continue to be an 

important source of our revenues and cash flows. These revenues and cash flows will be impacted by future development 

funding and the achievement of development, clinical and commercial success by our collaborators under our existing 

collaboration and license agreements, as well as by entering into potential new collaboration and license agreements.

Our ongoing research, development, manufacturing and commercial activities will require substantial amounts of 

capital and may not ultimately be successful. We expect that we will incur substantial expenses, and we will require 

significant financial resources and additional personnel in order to advance the development of, to pursue, obtain and 

maintain regulatory approvals for, and to commercialize our products and product candidates, and expand our pipeline. 

In addition, we may pursue new operations or continue the expansion of our existing operations, including with respect 

to the continued development of our commercial infrastructure in Europe and our plans to otherwise continue to expand 

our operations internationally. As a result, we may need to raise additional capital, and our operating expenses may 

fluctuate as a result of such activities. We may also incur substantial milestone payment obligations to certain of our 

licensors, including RemeGen, as our product candidates progress through clinical trials towards potential 

commercialization.

Outlook

We recognize product sales revenue from ADCETRIS in the U.S. and Canada, from PADCEV and TIVDAK in 

the U.S., and from TUKYSA in the U.S., Europe and Canada. We expect growth in net product sales in 2022 from 2021 
to be primarily driven by sales growth of PADCEV and, to a lesser extent, TIVDAK, ADCETRIS and TUKYSA. While 
we anticipate that sales of ADCETRIS will increase modestly in 2022 as compared to 2021, we have experienced 
continued impacts associated with the COVID-19 pandemic, which appear to have led to a reduction in the rate of 
Hodgkin lymphoma diagnoses and may further adversely affect the rate of Hodgkin lymphoma diagnoses in the future. 
We have also experienced an increase in gross-to-net deductions for ADCETRIS since the beginning of the pandemic, 
which has been driven by the proportion of ADCETRIS sales subject to discounts through the federal 340B drug 
discount program, as well as increases in discount rates. We believe that the increase in gross-to-net deductions is, in 
part, due to a shift in the locations where ADCETRIS is administered. We may further experience additional increases in 
gross-to-net deductions for ADCETRIS and the rest of our portfolio in the future based on market and site-of-care 
dynamics. Subject to potentially securing additional labels, we anticipate that the rate of growth of PADCEV and 
TUKYSA sales will decelerate in 2022 compared to 2021 as we continue to more fully penetrate the markets for their 
currently approved labels within the U.S.

Our ability to maintain or continue to grow net product sales and to realize the anticipated benefits of our 

doing business internationally.

investments in our products depends on a number of factors including:

•

•

•

•

•

•

•

•

•

•

•

•

•

•

our and our collaborators’ ability to demonstrate to the medical community the efficacy, safety and value of our 
products and their potential advantages compared to existing and future therapeutics in their approved 
indications;

the extent to which we and our collaborators are able to obtain regulatory and other approvals of our products in 
additional territories and/or in additional indications, including any approvals for PADCEV in the frontline 
metastatic urothelial cancer setting and any approvals for TUKYSA in earlier lines of breast cancer and/or other 
HER2-positive cancers;

our and our collaborators’ ability to successfully launch, market and commercialize our products in any new 
markets or new indications, if regulatory approval is obtained; 

competition from other therapies and changing market dynamics, as further described in "Business—
Competition" in Part I of this Annual Report on Form 10-K; for example, the potential approval of Enhertu for 
second-line HER2-positive metastatic breast cancer could pose increased competition for TUKYSA; 

the extent to which we are able to successfully work with Astellas to jointly market and commercialize 
PADCEV in the U.S., and with Genmab to jointly market and commercialize TIVDAK in the U.S.;

our ability to successfully market and commercialize TUKYSA in our territories outside the U.S.;

the extent to which coverage and adequate levels of reimbursement for our products are available from 
governments and other third-party payors;

the extent to which we and our collaborators are able to obtain required pricing and reimbursement approvals of 
our products in additional territories, most notably with respect to TUKYSA;

the impact of current and future healthcare reform measures, including measures that could result in more 
rigorous coverage criteria or reduce the price that we receive for our products;

the incidence flow of patients eligible for treatment in our products’ approved indications;

our and our collaborators’ ability to accurately predict and supply product demand;

duration of therapy for patients receiving our products;

our and our collaborators' ability to successfully comply with rigorous post-marketing requirements, including 
requirements related to a confirmatory trial as a result of TIVDAK’s accelerated approval by the FDA, and to 
convert TIVDAK's accelerated approval to regular approval in the U.S.;

the acceptance of TIVDAK and its required eye care by the medical community and patients; and

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•

impacts related to the COVID-19 pandemic, including potential further adverse effects on the rate of Hodgkin 
lymphoma diagnoses and potential adverse impacts on diagnosis rates for other cancers.

As a result of these and other factors, our future net product sales for each of our products can be difficult to 
accurately predict from period to period. We cannot assure you that sales of any of our products will continue to grow or 
that we can maintain sales of any of our products at or near current levels. 

The biopharmaceutical industry and the markets in which we operate are intensely competitive. Many of our 
competitors are working to develop or have commercialized products similar to those we market or are developing. Drug 
prices are under significant scrutiny and we expect drug pricing and other healthcare costs to continue to be subject to 
intense political and societal pressures on a global basis. For example, in July 2021, the Biden administration announced 
an Executive Order that includes initiatives aimed at lowering prescription drug costs and implementing Canadian drug 
importation, and in response to President Biden’s Executive Order, in September 2021, the U.S. Department of Health 
and Human Services released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug 
pricing reform and sets out a variety of potential legislative policies that Congress could pursue to advance these 
principles. In addition to pricing actions and other measures being taken worldwide designed to reduce healthcare costs 
and limit the overall level of government expenditures, our sales and operations could also be affected by other risks of 
doing business internationally.

We expect that amounts received from our collaboration agreements, including royalties, will continue to be an 

important source of our revenues and cash flows. These revenues and cash flows will be impacted by future development 
funding and the achievement of development, clinical and commercial success by our collaborators under our existing 
collaboration and license agreements, as well as by entering into potential new collaboration and license agreements.

Our ongoing research, development, manufacturing and commercial activities will require substantial amounts of 

capital and may not ultimately be successful. We expect that we will incur substantial expenses, and we will require 
significant financial resources and additional personnel in order to advance the development of, to pursue, obtain and 
maintain regulatory approvals for, and to commercialize our products and product candidates, and expand our pipeline. 
In addition, we may pursue new operations or continue the expansion of our existing operations, including with respect 
to the continued development of our commercial infrastructure in Europe and our plans to otherwise continue to expand 
our operations internationally. As a result, we may need to raise additional capital, and our operating expenses may 
fluctuate as a result of such activities. We may also incur substantial milestone payment obligations to certain of our 
licensors, including RemeGen, as our product candidates progress through clinical trials towards potential 
commercialization.

Outlook

We recognize product sales revenue from ADCETRIS in the U.S. and Canada, from PADCEV and TIVDAK in 

the U.S., and from TUKYSA in the U.S., Europe and Canada. We expect growth in net product sales in 2022 from 2021 

to be primarily driven by sales growth of PADCEV and, to a lesser extent, TIVDAK, ADCETRIS and TUKYSA. While 

we anticipate that sales of ADCETRIS will increase modestly in 2022 as compared to 2021, we have experienced 

continued impacts associated with the COVID-19 pandemic, which appear to have led to a reduction in the rate of 

Hodgkin lymphoma diagnoses and may further adversely affect the rate of Hodgkin lymphoma diagnoses in the future. 

We have also experienced an increase in gross-to-net deductions for ADCETRIS since the beginning of the pandemic, 

which has been driven by the proportion of ADCETRIS sales subject to discounts through the federal 340B drug 

discount program, as well as increases in discount rates. We believe that the increase in gross-to-net deductions is, in 

part, due to a shift in the locations where ADCETRIS is administered. We may further experience additional increases in 

gross-to-net deductions for ADCETRIS and the rest of our portfolio in the future based on market and site-of-care 

dynamics. Subject to potentially securing additional labels, we anticipate that the rate of growth of PADCEV and 

TUKYSA sales will decelerate in 2022 compared to 2021 as we continue to more fully penetrate the markets for their 

currently approved labels within the U.S.

Our ability to maintain or continue to grow net product sales and to realize the anticipated benefits of our 

investments in our products depends on a number of factors including:

our and our collaborators’ ability to demonstrate to the medical community the efficacy, safety and value of our 

products and their potential advantages compared to existing and future therapeutics in their approved 

indications;

the extent to which we and our collaborators are able to obtain regulatory and other approvals of our products in 

additional territories and/or in additional indications, including any approvals for PADCEV in the frontline 

metastatic urothelial cancer setting and any approvals for TUKYSA in earlier lines of breast cancer and/or other 

HER2-positive cancers;

our and our collaborators’ ability to successfully launch, market and commercialize our products in any new 

markets or new indications, if regulatory approval is obtained; 

competition from other therapies and changing market dynamics, as further described in "Business—

Competition" in Part I of this Annual Report on Form 10-K; for example, the potential approval of Enhertu for 

second-line HER2-positive metastatic breast cancer could pose increased competition for TUKYSA; 

the extent to which we are able to successfully work with Astellas to jointly market and commercialize 

PADCEV in the U.S., and with Genmab to jointly market and commercialize TIVDAK in the U.S.;

our ability to successfully market and commercialize TUKYSA in our territories outside the U.S.;

the extent to which coverage and adequate levels of reimbursement for our products are available from 

governments and other third-party payors;

the extent to which we and our collaborators are able to obtain required pricing and reimbursement approvals of 

our products in additional territories, most notably with respect to TUKYSA;

the impact of current and future healthcare reform measures, including measures that could result in more 

rigorous coverage criteria or reduce the price that we receive for our products;

the incidence flow of patients eligible for treatment in our products’ approved indications;

our and our collaborators’ ability to accurately predict and supply product demand;

duration of therapy for patients receiving our products;

our and our collaborators' ability to successfully comply with rigorous post-marketing requirements, including 

requirements related to a confirmatory trial as a result of TIVDAK’s accelerated approval by the FDA, and to 

convert TIVDAK's accelerated approval to regular approval in the U.S.;

the acceptance of TIVDAK and its required eye care by the medical community and patients; and

•

•

•

•

•

•

•

•

•

•

•

•

•

•

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We are closely evaluating the impacts of the evolving effects of the COVID-19 pandemic on our ability and the 

ability of our collaborators to effectively market, sell and distribute our products and to develop our products and product 
candidates. Our field-based personnel are using a mix of in-person interactions and electronic communications, such as 
emails, phone calls and video conferences, to support healthcare providers and patients. Many healthcare professionals 
that we normally call on are working a greater proportion of their working schedule from home and are facing additional 
demands on their time during the ongoing COVID-19 pandemic. We are continuing to experience increased competition 
for virtual appointments with healthcare professionals and a significant reduction in the number of interactions our sales 
personnel are having with physicians. We expect the different quality of electronic interactions as compared with in-
person interactions, as well as the reduced quantity of interactions during the COVID-19 pandemic, to reduce the 
effectiveness of our sales personnel, as well as those of our collaborators, which could negatively affect our product sales 
and those of our collaborators, as well as physician awareness of our products. In this regard, we believe that the need to 
conduct some of our activities virtually is negatively impacting our ability to connect with key customers, including 
those familiar with competitive products, and our ability to conduct payor engagements. We face a number of challenges 
that will limit our ability to fully resume in-person interactions for the foreseeable future, including increasing 
COVID-19 infection rates due to coronavirus mutations and/or low vaccination rates or otherwise, the need to navigate 
varying restrictions for entering healthcare facilities and the pandemic's impacts on employee childcare arrangements. In 
addition, the effects of the COVID-19 pandemic continue to evolve rapidly, and we may subsequently be forced to, or 
subsequently determine that we should, resume a more restrictive remote work model, whether as a result of further 
spikes or surges in COVID-19 infection or hospitalization rates or otherwise. Moreover, the long-term effects of the 
COVID-19 pandemic are also unknown and it is possible that following the pandemic, healthcare institutions could alter 
their policies with respect to in person visits by pharmaceutical company representatives. COVID-19 related restrictions 
could also present product distribution challenges as we utilize recently initiated distribution channels for TUKYSA. We 
also expect that the conversion of medical conferences to a virtual format may reduce our ability to effectively 
disseminate scientific information about our products, which may result in decreased physician awareness of our 
products, their approved indications and their efficacy and safety. The evolving effects of the COVID-19 pandemic 
appear to have negatively affected and may continue to negatively affect our product sales due to challenges in patient 
access to healthcare settings, significant increases in unemployment and the resulting loss of individual health insurance 
coverage, and inability to access government healthcare programs due to backlogs, some or all of which appear to have 
negatively affected diagnosis rates, may affect side effect management and course of treatment and may increase 
enrollment in our patient support programs. In this regard, impacts associated with the COVID-19 pandemic appear to 
have led to a reduction in the rate of Hodgkin lymphoma diagnoses, may have adversely affected diagnosis rates of other 
cancers, and may further adversely affect rates of cancer diagnoses in the future. 

Some of the sites participating in our clinical trials are affected by site closings, reduced capacity, staffing 

shortages, or other effects of the COVID-19 pandemic. At some sites, we are experiencing impacts to our ability to 
monitor patients, activate sites, screen and enroll patients, complete site monitoring and manage samples. The extent of 
the impact of these factors on a particular clinical trial depends on the current stage of activities at a given site, for 
example study start up versus post-enrollment, and the number of impacted sites participating in that trial. Impacts on 
diagnosis rates associated with the COVID-19 pandemic may also negatively impact enrollment. While we do not at this 
time anticipate the need to revise our publicly reported projected clinical milestone dates as a result of the effects of the 
COVID-19 pandemic, there may continue to be adverse impacts to our clinical study timelines, which, depending upon 
the duration and severity of the evolving effects of the COVID-19 pandemic, could ultimately delay data availability. In 
addition, many of our non-essential on-site research activities are currently significantly reduced as a result of the 
COVID-19 pandemic, which may negatively impact the number of IND candidates entering our clinical pipeline in 
future years. 

The extent to which the risks and evolving effects of the COVID-19 pandemic impact our business, our ability to 

generate sales of and revenues from our approved products, and our clinical development and regulatory efforts will 
depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate 
duration and severity of the pandemic, government actions, such as travel restrictions, quarantines and social distancing 
requirements in the U.S. and in other countries, business closures or business disruptions and the effectiveness of actions 
taken in the U.S. and in other countries to contain and treat the disease, including the effectiveness and timing of vaccine 
programs in the U.S. and worldwide. For more information on the risks and uncertainties associated with the evolving 
effects of the COVID-19 pandemic on our business, our ability to generate sales of and revenues from our approved 
products, and our clinical development and regulatory efforts, see “Part II Item 1A—Risk Factors.”

Because of the above and other factors, our results of operations may vary substantially from year to year and 

from quarter to quarter and, as a result, we believe that period to period comparisons of our operating results may not be 

meaningful and should not be relied upon as being indicative of our future performance.

Financial summary

For 2021, our net product sales increased by $385.0 million or 38% compared to 2020, due primarily to growth 

from TUKYSA and PADCEV. Royalty revenues increased $23.8 million or 19% compared to 2020, driven by higher 

sales of ADCETRIS by Takeda in its territories, as well as higher net sales from our other licensees. Total revenues 

decreased to $1.6 billion, compared to $2.2 billion in 2020, primarily impacted by $975.2 million collaboration and 

license agreement revenues recognized related to the agreements we entered into with Merck during 2020.

For 2021, total costs and expenses increased to $2.3 billion, compared to $1.6 billion in 2020. Expenses in 2021 

included a $200.0 million upfront payment related to the RemeGen exclusive licensing agreement as well as higher 

research and development expenses, higher cost of sales, and higher selling, general and administrative expenses.

As of December 31, 2021, we had $2.2 billion in cash, cash equivalents and investments and $3.1 billion in total 

stockholders’ equity.

In addition, the section of this Management’s Discussion and Analysis of Financial Condition and Results of 

Operations generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions 

of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Annual Report on Form 

10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part 

II Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the 

SEC on February 12, 2021.

Critical Accounting Policies and Estimates

A summary of the significant accounting policies is provided in Note 1 to our Consolidated Financial Statements. 

The preparation of financial statements in accordance with generally accepted accounting principles, or GAAP, requires 

us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and 

expenses, and related disclosures of contingent assets and liabilities.

We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various 

other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for 

making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses 

that are not readily apparent from other sources. Actual results may differ from those estimates under different 

assumptions and conditions. 

Management considers an accounting estimate to be critical if:

• it requires a significant level of estimation uncertainty; and

• changes in the estimate are reasonably likely to have a material effect on our financial condition or results of 

operations. 

We believe the following critical accounting policies and estimates describe the more significant judgments and 

estimates used in the preparation of our consolidated financial statements.

Net Product Sales. We sell our products primarily through a limited number of specialty distributors and 

specialty pharmacies in the U.S., and to a lesser extent, internationally. The delivery of our products represents a single 

performance obligation for these transactions and we record net product sales when control is transferred to the 

customer, which generally occurs upon receipt by the customer. The transaction price for net product sales represents the 

amount we expect to receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, 

estimated product returns, and other deductions. Accruals are established for these deductions, and actual amounts 

incurred are offset against applicable accruals. We reflect these accruals as either a reduction in the related account 

receivable from the distributor or as an accrued liability, depending on the nature of the sales deduction. Sales deductions 

are based on management’s estimates that consider payor mix in target markets and experience to-date. These estimates 

involve a substantial degree of judgment, in particular, for government-mandated rebates and chargebacks, such as for 

the Medicaid and 340B programs.

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We are closely evaluating the impacts of the evolving effects of the COVID-19 pandemic on our ability and the 

ability of our collaborators to effectively market, sell and distribute our products and to develop our products and product 

candidates. Our field-based personnel are using a mix of in-person interactions and electronic communications, such as 

emails, phone calls and video conferences, to support healthcare providers and patients. Many healthcare professionals 

that we normally call on are working a greater proportion of their working schedule from home and are facing additional 

demands on their time during the ongoing COVID-19 pandemic. We are continuing to experience increased competition 

for virtual appointments with healthcare professionals and a significant reduction in the number of interactions our sales 

personnel are having with physicians. We expect the different quality of electronic interactions as compared with in-

person interactions, as well as the reduced quantity of interactions during the COVID-19 pandemic, to reduce the 

effectiveness of our sales personnel, as well as those of our collaborators, which could negatively affect our product sales 

and those of our collaborators, as well as physician awareness of our products. In this regard, we believe that the need to 

conduct some of our activities virtually is negatively impacting our ability to connect with key customers, including 

those familiar with competitive products, and our ability to conduct payor engagements. We face a number of challenges 

that will limit our ability to fully resume in-person interactions for the foreseeable future, including increasing 

COVID-19 infection rates due to coronavirus mutations and/or low vaccination rates or otherwise, the need to navigate 

varying restrictions for entering healthcare facilities and the pandemic's impacts on employee childcare arrangements. In 

addition, the effects of the COVID-19 pandemic continue to evolve rapidly, and we may subsequently be forced to, or 

subsequently determine that we should, resume a more restrictive remote work model, whether as a result of further 

spikes or surges in COVID-19 infection or hospitalization rates or otherwise. Moreover, the long-term effects of the 

COVID-19 pandemic are also unknown and it is possible that following the pandemic, healthcare institutions could alter 

their policies with respect to in person visits by pharmaceutical company representatives. COVID-19 related restrictions 

could also present product distribution challenges as we utilize recently initiated distribution channels for TUKYSA. We 

also expect that the conversion of medical conferences to a virtual format may reduce our ability to effectively 

disseminate scientific information about our products, which may result in decreased physician awareness of our 

products, their approved indications and their efficacy and safety. The evolving effects of the COVID-19 pandemic 

appear to have negatively affected and may continue to negatively affect our product sales due to challenges in patient 

access to healthcare settings, significant increases in unemployment and the resulting loss of individual health insurance 

coverage, and inability to access government healthcare programs due to backlogs, some or all of which appear to have 

negatively affected diagnosis rates, may affect side effect management and course of treatment and may increase 

enrollment in our patient support programs. In this regard, impacts associated with the COVID-19 pandemic appear to 

have led to a reduction in the rate of Hodgkin lymphoma diagnoses, may have adversely affected diagnosis rates of other 

cancers, and may further adversely affect rates of cancer diagnoses in the future. 

Some of the sites participating in our clinical trials are affected by site closings, reduced capacity, staffing 

shortages, or other effects of the COVID-19 pandemic. At some sites, we are experiencing impacts to our ability to 

monitor patients, activate sites, screen and enroll patients, complete site monitoring and manage samples. The extent of 

the impact of these factors on a particular clinical trial depends on the current stage of activities at a given site, for 

example study start up versus post-enrollment, and the number of impacted sites participating in that trial. Impacts on 

diagnosis rates associated with the COVID-19 pandemic may also negatively impact enrollment. While we do not at this 

time anticipate the need to revise our publicly reported projected clinical milestone dates as a result of the effects of the 

COVID-19 pandemic, there may continue to be adverse impacts to our clinical study timelines, which, depending upon 

the duration and severity of the evolving effects of the COVID-19 pandemic, could ultimately delay data availability. In 

addition, many of our non-essential on-site research activities are currently significantly reduced as a result of the 

COVID-19 pandemic, which may negatively impact the number of IND candidates entering our clinical pipeline in 

future years. 

The extent to which the risks and evolving effects of the COVID-19 pandemic impact our business, our ability to 

generate sales of and revenues from our approved products, and our clinical development and regulatory efforts will 

depend on future developments that are highly uncertain and cannot be predicted with confidence, such as the ultimate 

duration and severity of the pandemic, government actions, such as travel restrictions, quarantines and social distancing 

requirements in the U.S. and in other countries, business closures or business disruptions and the effectiveness of actions 

taken in the U.S. and in other countries to contain and treat the disease, including the effectiveness and timing of vaccine 

programs in the U.S. and worldwide. For more information on the risks and uncertainties associated with the evolving 

effects of the COVID-19 pandemic on our business, our ability to generate sales of and revenues from our approved 

products, and our clinical development and regulatory efforts, see “Part II Item 1A—Risk Factors.”

Because of the above and other factors, our results of operations may vary substantially from year to year and 

from quarter to quarter and, as a result, we believe that period to period comparisons of our operating results may not be 
meaningful and should not be relied upon as being indicative of our future performance.

Financial summary

For 2021, our net product sales increased by $385.0 million or 38% compared to 2020, due primarily to growth 
from TUKYSA and PADCEV. Royalty revenues increased $23.8 million or 19% compared to 2020, driven by higher 
sales of ADCETRIS by Takeda in its territories, as well as higher net sales from our other licensees. Total revenues 
decreased to $1.6 billion, compared to $2.2 billion in 2020, primarily impacted by $975.2 million collaboration and 
license agreement revenues recognized related to the agreements we entered into with Merck during 2020.

For 2021, total costs and expenses increased to $2.3 billion, compared to $1.6 billion in 2020. Expenses in 2021 

included a $200.0 million upfront payment related to the RemeGen exclusive licensing agreement as well as higher 
research and development expenses, higher cost of sales, and higher selling, general and administrative expenses.

As of December 31, 2021, we had $2.2 billion in cash, cash equivalents and investments and $3.1 billion in total 

stockholders’ equity.

In addition, the section of this Management’s Discussion and Analysis of Financial Condition and Results of 
Operations generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions 
of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Annual Report on Form 
10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part 
II Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the 
SEC on February 12, 2021.

Critical Accounting Policies and Estimates

A summary of the significant accounting policies is provided in Note 1 to our Consolidated Financial Statements. 
The preparation of financial statements in accordance with generally accepted accounting principles, or GAAP, requires 
us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and 
expenses, and related disclosures of contingent assets and liabilities.

We evaluate our estimates on an ongoing basis. We base our estimates on historical experience and on various 

other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for 
making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses 
that are not readily apparent from other sources. Actual results may differ from those estimates under different 
assumptions and conditions. 

Management considers an accounting estimate to be critical if:
• it requires a significant level of estimation uncertainty; and
• changes in the estimate are reasonably likely to have a material effect on our financial condition or results of 
operations. 

We believe the following critical accounting policies and estimates describe the more significant judgments and 

estimates used in the preparation of our consolidated financial statements.

Net Product Sales. We sell our products primarily through a limited number of specialty distributors and 
specialty pharmacies in the U.S., and to a lesser extent, internationally. The delivery of our products represents a single 
performance obligation for these transactions and we record net product sales when control is transferred to the 
customer, which generally occurs upon receipt by the customer. The transaction price for net product sales represents the 
amount we expect to receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, 
estimated product returns, and other deductions. Accruals are established for these deductions, and actual amounts 
incurred are offset against applicable accruals. We reflect these accruals as either a reduction in the related account 
receivable from the distributor or as an accrued liability, depending on the nature of the sales deduction. Sales deductions 
are based on management’s estimates that consider payor mix in target markets and experience to-date. These estimates 
involve a substantial degree of judgment, in particular, for government-mandated rebates and chargebacks, such as for 
the Medicaid and 340B programs.

74

75

U.S. government-mandated rebates and chargebacks: We have entered into a Medicaid Drug Rebate Agreement, 
or MDRA, with the Centers for Medicare & Medicaid Services. This agreement provides for a rebate based on covered 
purchases of our products. Medicaid rebates are invoiced to us by the various state Medicaid programs. We estimate 
Medicaid rebates using the expected value approach, based on a variety of factors, including payor mix and our 
experience to-date.

We have a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive 
a discount on eligible purchases of our products. In addition, we have entered into a Pharmaceutical Pricing Agreement 
with the Secretary of Health and Human Services, which enables certain entities that qualify for government pricing 
under the Public Health Services Act, or PHS, to receive discounts on their qualified purchases of our products. Under 
these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the 
applicable discounted price. We estimate expected chargebacks for FSS and PHS purchases based on the expected value 
of each entity’s eligibility for the FSS and PHS programs. We also review historical rebate and chargeback information 
to further refine these estimates.

Accrued Liabilities. As part of the process of preparing financial statements, we estimate accrued liabilities. This 
process involves identifying services that have been performed and the time period over which they will be performed on 
our behalf, and estimating the level of services performed and the associated costs incurred for such services where we 
have not yet been invoiced or otherwise notified of actual cost. We record these estimates in our consolidated financial 
statements as of each balance sheet date.

Long-term Incentive Plans, Performance-based and Market-based Restricted Stock Awards. We have long 

term incentive plans and have granted certain senior leadership other performance- and market-based restricted stock 
awards, which provide eligible employees with the opportunity to receive performance-based incentive compensation, 
which may be comprised of cash, and/or restricted stock units, or RSUs. The payment of cash and the grant or vesting of 
RSUs awards are contingent upon the achievement of pre-determined performance goals, which may include regulatory 
milestones, revenue targets, or total shareholder return compared to our industry peer group. We record compensation 
expense over the estimated service period for each performance goal when we believe the performance goal is 
considered probable, which we assess at each reporting date. Once a performance goal is considered probable, we record 
compensation expense based on the portion of the service period elapsed to date with respect to that performance goal, 
with a cumulative catch-up, net of estimated forfeitures, and recognize any remaining compensation expense, if any, over 
the remaining estimated service period. Assessing whether performance goals are probable to be achieved and estimating 
the timing upon which the goal may be achieved, each may involve a significant amount of uncertainty.

Results of Operations - Years Ended December 31, 2021, 2020, and 2019 

Net product sales 

(dollars in thousands)
ADCETRIS
PADCEV
TUKYSA
TIVDAK

Net product sales

$ 

2021
705,561  $ 
339,918 
333,952 
6,135 

2020
658,577  $ 
222,436 
119,585 
— 

$  1,385,566  $  1,000,598  $ 

2019
627,733 
244 
— 
— 
627,977 

Percentage change

2021/2020

2020/2019

 7 %
 53 %
 179 %
NM
 38 %

 5 %
NM
NM
NM
 59 %

NM: No amount in comparable period or not a meaningful comparison.

Our net product sales grew 38% during 2021 as compared to 2020, primarily driven by volume growth of our 

recently commercialized products TUKYSA and PADCEV, and to a lesser extent, higher volumes of ADCETRIS vials 
sold. We began commercializing TIVDAK in the U.S. following FDA approval in September 2021. 

(in thousands)

Balance, 

beginning of 

year

Provision related 

to current 

year sales

Adjustments for 

prior period 

sales

Payments/credits 

for current 

year sales

Payments/credits 

for prior year 

sales

year

Balance, end of 

ADCETRIS net product sales increased in 2021 from 2020 primarily due to higher volumes. TUKYSA net sales 

grew $214.4 million or 179% in 2021 as compared to 2020, driven by continued penetration in its current FDA approved 

indication in addition to global expansion following approval in the European Union in February 2021. TUKYSA was 

launched in April 2020. PADCEV net product sales grew $117.5 million or 53% in 2021 as compared to 2020, driven by 

continued penetration in its initial FDA approved indication as well as by FDA approval in July 2021 for PADCEV's use 

in an additional indication, and to a lesser extent, higher sales of drug product for use in clinical trials for the 2021 

periods. 

We expect growth in net product sales in 2022 from 2021 to be primarily driven by sales growth of PADCEV, and 

to a lesser extent, TIVDAK and ADCETRIS. Refer to “Overview—Outlook” above for additional information.

Gross-to-net deductions, net of related payments and credits, were as follows: 

December 31, 2021

December 31, 2020

December 31, 2019

Distribution 

fees,

product 

returns

and other

Distribution 

fees,

product 

returns

and other

Rebates and

chargebacks

Total

Rebates and

chargebacks

Total

Rebates and

chargebacks

Total

Distribution 

fees,

product 

returns

and other

$ 

44,193 

$ 

15,689 

$ 

59,882 

$ 

38,084 

$ 

7,519 

$ 

45,603 

$ 

26,968 

$ 

5,604 

$ 

32,572 

492,527 

40,491 

533,018 

358,238 

28,724 

386,962 

253,702 

15,298 

269,000 

(4,212) 

(1,220) 

(5,432) 

(1,341) 

— 

(1,341) 

(392) 

(464) 

(856) 

(428,045) 

(32,087) 

(460,132) 

(319,444) 

(18,886) 

(338,330) 

(217,905) 

(11,349) 

(229,254) 

(29,574) 

(6,055) 

(35,629) 

(31,344) 

(1,668) 

(33,012) 

(24,289) 

(1,570) 

(25,859) 

$ 

74,889 

$ 

16,818 

$ 

91,707 

$ 

44,193 

$ 

15,689 

$ 

59,882 

$ 

38,084 

$ 

7,519 

$ 

45,603 

Government-mandated rebates and chargebacks are the most significant component of our total gross-to-net 

deductions and the discount percentage has been increasing year-over-year. These discount percentages increased during 

2021 and 2020 as a result of price increases that we instituted that exceeded the rate of inflation. The most significant 

portion of our gross-to-net accrual balances as of December 31, 2021 and 2020 was for ADCETRIS Medicaid rebates. 

For 2021, the provision related to current year sales and payments/credits for current year sales increased as compared to 

2020, due to higher gross product sales. For 2021, payments/credits for prior year sales were consistent with 2020. We 

expect future gross-to-net deductions to fluctuate based on the volume of purchases eligible for government mandated 

discounts and rebates, as well as changes in the discount percentage which is impacted by potential future price 

increases, the rate of inflation, and other factors. We expect gross-to-net deductions to increase in 2022 as compared to 

2021, driven by anticipated growth in our gross product sales.

Royalty revenues 

Royalty revenues primarily reflect royalties earned under the ADCETRIS collaboration with Takeda. These 

royalties include commercial sales-based milestones and sales royalties. Sales royalties are based on a percentage of 

Takeda’s net sales of ADCETRIS, with rates that range from the mid-teens to the mid-twenties based on annual net sales 

tiers. Takeda bears third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty 

revenues. Royalty revenues also reflect, to a lesser extent, amounts from Genentech earned on net sales of Polivy 

beginning in 2019, and amounts from GlaxoSmithKline earned on net sales of Blenrep beginning in 2020, both of which 

products utilize technology that we have licensed to them, as well as royalty revenues from Merck's TUKYSA net 

product sales and RemeGen's net product sales of disitamab vedotin.

76

77

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government-mandated rebates and chargebacks: We have entered into a Medicaid Drug Rebate Agreement, 

or MDRA, with the Centers for Medicare & Medicaid Services. This agreement provides for a rebate based on covered 

purchases of our products. Medicaid rebates are invoiced to us by the various state Medicaid programs. We estimate 

Medicaid rebates using the expected value approach, based on a variety of factors, including payor mix and our 

experience to-date.

We have a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive 

a discount on eligible purchases of our products. In addition, we have entered into a Pharmaceutical Pricing Agreement 

with the Secretary of Health and Human Services, which enables certain entities that qualify for government pricing 

under the Public Health Services Act, or PHS, to receive discounts on their qualified purchases of our products. Under 

these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the 

applicable discounted price. We estimate expected chargebacks for FSS and PHS purchases based on the expected value 

of each entity’s eligibility for the FSS and PHS programs. We also review historical rebate and chargeback information 

to further refine these estimates.

Accrued Liabilities. As part of the process of preparing financial statements, we estimate accrued liabilities. This 

process involves identifying services that have been performed and the time period over which they will be performed on 

our behalf, and estimating the level of services performed and the associated costs incurred for such services where we 

have not yet been invoiced or otherwise notified of actual cost. We record these estimates in our consolidated financial 

statements as of each balance sheet date.

Long-term Incentive Plans, Performance-based and Market-based Restricted Stock Awards. We have long 

term incentive plans and have granted certain senior leadership other performance- and market-based restricted stock 

awards, which provide eligible employees with the opportunity to receive performance-based incentive compensation, 

which may be comprised of cash, and/or restricted stock units, or RSUs. The payment of cash and the grant or vesting of 

RSUs awards are contingent upon the achievement of pre-determined performance goals, which may include regulatory 

milestones, revenue targets, or total shareholder return compared to our industry peer group. We record compensation 

expense over the estimated service period for each performance goal when we believe the performance goal is 

considered probable, which we assess at each reporting date. Once a performance goal is considered probable, we record 

compensation expense based on the portion of the service period elapsed to date with respect to that performance goal, 

with a cumulative catch-up, net of estimated forfeitures, and recognize any remaining compensation expense, if any, over 

the remaining estimated service period. Assessing whether performance goals are probable to be achieved and estimating 

the timing upon which the goal may be achieved, each may involve a significant amount of uncertainty.

Results of Operations - Years Ended December 31, 2021, 2020, and 2019 

Net product sales 

(dollars in thousands)

ADCETRIS

PADCEV

TUKYSA

TIVDAK

2021

2020

2019

2021/2020

2020/2019

$ 

705,561  $ 

658,577  $ 

627,733 

339,918 

333,952 

6,135 

222,436 

119,585 

— 

244 

— 

— 

Percentage change

 7 %

 53 %

 179 %

NM

 38 %

 5 %

NM

NM

NM

 59 %

Net product sales

$  1,385,566  $  1,000,598  $ 

627,977 

NM: No amount in comparable period or not a meaningful comparison.

Our net product sales grew 38% during 2021 as compared to 2020, primarily driven by volume growth of our 

recently commercialized products TUKYSA and PADCEV, and to a lesser extent, higher volumes of ADCETRIS vials 

sold. We began commercializing TIVDAK in the U.S. following FDA approval in September 2021. 

ADCETRIS net product sales increased in 2021 from 2020 primarily due to higher volumes. TUKYSA net sales 

grew $214.4 million or 179% in 2021 as compared to 2020, driven by continued penetration in its current FDA approved 
indication in addition to global expansion following approval in the European Union in February 2021. TUKYSA was 
launched in April 2020. PADCEV net product sales grew $117.5 million or 53% in 2021 as compared to 2020, driven by 
continued penetration in its initial FDA approved indication as well as by FDA approval in July 2021 for PADCEV's use 
in an additional indication, and to a lesser extent, higher sales of drug product for use in clinical trials for the 2021 
periods. 

We expect growth in net product sales in 2022 from 2021 to be primarily driven by sales growth of PADCEV, and 

to a lesser extent, TIVDAK and ADCETRIS. Refer to “Overview—Outlook” above for additional information.

Gross-to-net deductions, net of related payments and credits, were as follows: 

December 31, 2021

December 31, 2020

December 31, 2019

Distribution 
fees,
product 
returns
and other

Rebates and
chargebacks

Total

Rebates and
chargebacks

Distribution 
fees,
product 
returns
and other

Total

Rebates and
chargebacks

Distribution 
fees,
product 
returns
and other

Total

$ 

44,193 

$ 

15,689 

$ 

59,882 

$ 

38,084 

$ 

7,519 

$ 

45,603 

$ 

26,968 

$ 

5,604 

$ 

32,572 

492,527 

40,491 

533,018 

358,238 

28,724 

386,962 

253,702 

15,298 

269,000 

(4,212) 

(1,220) 

(5,432) 

(1,341) 

— 

(1,341) 

(392) 

(464) 

(856) 

(428,045) 

(32,087) 

(460,132) 

(319,444) 

(18,886) 

(338,330) 

(217,905) 

(11,349) 

(229,254) 

(29,574) 

(6,055) 

(35,629) 

(31,344) 

(1,668) 

(33,012) 

(24,289) 

(1,570) 

(25,859) 

$ 

74,889 

$ 

16,818 

$ 

91,707 

$ 

44,193 

$ 

15,689 

$ 

59,882 

$ 

38,084 

$ 

7,519 

$ 

45,603 

(in thousands)

Balance, 

beginning of 
year

Provision related 
to current 
year sales

Adjustments for 
prior period 
sales

Payments/credits 
for current 
year sales

Payments/credits 
for prior year 
sales

Balance, end of 

year

Government-mandated rebates and chargebacks are the most significant component of our total gross-to-net 
deductions and the discount percentage has been increasing year-over-year. These discount percentages increased during 
2021 and 2020 as a result of price increases that we instituted that exceeded the rate of inflation. The most significant 
portion of our gross-to-net accrual balances as of December 31, 2021 and 2020 was for ADCETRIS Medicaid rebates. 
For 2021, the provision related to current year sales and payments/credits for current year sales increased as compared to 
2020, due to higher gross product sales. For 2021, payments/credits for prior year sales were consistent with 2020. We 
expect future gross-to-net deductions to fluctuate based on the volume of purchases eligible for government mandated 
discounts and rebates, as well as changes in the discount percentage which is impacted by potential future price 
increases, the rate of inflation, and other factors. We expect gross-to-net deductions to increase in 2022 as compared to 
2021, driven by anticipated growth in our gross product sales.

Royalty revenues 

Royalty revenues primarily reflect royalties earned under the ADCETRIS collaboration with Takeda. These 

royalties include commercial sales-based milestones and sales royalties. Sales royalties are based on a percentage of 
Takeda’s net sales of ADCETRIS, with rates that range from the mid-teens to the mid-twenties based on annual net sales 
tiers. Takeda bears third-party royalty costs owed on its sales of ADCETRIS. This amount is included in royalty 
revenues. Royalty revenues also reflect, to a lesser extent, amounts from Genentech earned on net sales of Polivy 
beginning in 2019, and amounts from GlaxoSmithKline earned on net sales of Blenrep beginning in 2020, both of which 
products utilize technology that we have licensed to them, as well as royalty revenues from Merck's TUKYSA net 
product sales and RemeGen's net product sales of disitamab vedotin.

76

77

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in thousands)
Royalty revenues

2021
150,523  $ 

2020
126,756  $ 

2019
138,491 

$ 

Percentage change

2021/2020

2020/2019

 19 %

 (8) %

Royalty revenues increased in 2021 as compared to 2020, primarily due to growth in Takeda net sales of 
ADCETRIS in its territories, as well as higher royalties earned on net sales of Polivy, Blenrep, and by our other 
licensees.

We expect that royalty revenues will increase in 2022 as compared to 2021 primarily due to higher royalties from 

anticipated growth in ADCETRIS sales volume by Takeda, as well as anticipated growth of our other licensees' net 
product sales.

Collaboration and license agreement revenues 

Collaboration and license agreement revenues reflect amounts earned under certain of our license and 
collaboration agreements. These revenues reflect license fees, payments received by us for technology access and 
maintenance fees, sales of drug supply to our collaborators, milestone payments, and reimbursement payments for 
research and development support that we provide to our collaborators. 

Collaboration and license agreement revenues by collaborator were as follows:

(dollars in thousands)
GlaxoSmithKline

Takeda
Merck
Other

Percentage change

2021

2020

2019

2021/2020

2020/2019

$ 

11,000  $ 
6,958 
1,168 
19,156 

26,000  $ 
32,107 
975,150 
14,925 

12,200 
108,175 
— 
29,870 

 (58) %
 (78) %
 (100) %
 28 %

 113 %
 (70) %
NM
 (50) %

Total collaboration and license 

agreement revenues

$ 

38,282  $  1,048,182  $ 

150,245 

 (96) %

 598 %

NM: No amount in comparable period or not a meaningful comparison.

Collaboration revenues from GlaxoSmithKline decreased in 2021 as compared to 2020, primarily due to 
recognition of two regulatory milestones achieved by GlaxoSmithKline in the third quarter of 2020, offset in part by 
recognition of a regulatory milestone achieved in 2021.

Collaboration revenues from Takeda decreased in 2021 as compared to 2020, primarily due to a decrease in 

ADCETRIS drug supply sold to Takeda. We supply ADCETRIS to Takeda based on Takeda's product supply needs, 
which fluctuates from period to period.

Collaboration and license agreement revenues from Merck in 2020 included license revenues of $975.2 million 

related to the LV Agreement and the TUKYSA Agreement. Refer to Note 10 of the Notes to Consolidated Financial 
Statements included in Part II Item 8 for additional information.

Other collaboration revenues increased in 2021 as compared to 2020 primarily due drug product supplied to a 

collaborator.

We expect that collaboration and license agreements revenues will decline slightly in 2022 as compared to 2021. 

Our collaboration and license agreement revenues are impacted by the term and duration of those agreements and by 
progress-dependent milestones, annual maintenance fees, and reimbursement of materials and support services. 
Collaboration and license agreement revenues may vary substantially from year to year and quarter to quarter depending 
on the progress made by our collaborators with their product candidates, amount of drug supplied to our collaborators, 
the level of support we provide to our collaborators, specifically to Takeda under our ADCETRIS collaboration, the 
timing of milestones achieved and our ability to enter into potential additional collaboration and license agreements. 

We discuss the below arrangements in greater detail under the heading “Corporate Collaborations” in Part I Item 1 

Collaboration and license agreements 

of this Annual Report on Form 10-K.

Takeda ADCETRIS collaboration

We have an agreement with Takeda for the global co-development of ADCETRIS and the commercialization of 

ADCETRIS by Takeda in its territory. We recognize payments from Takeda, including progress-dependent development 

and regulatory milestone payments, reimbursement for drug supplied, and net development cost reimbursement 

payments, as collaboration and license agreement revenues upon transfer of control of the goods or services over the 

development period. When the performance of development activities under the collaboration results in us making a 

reimbursement payment to Takeda, that payment reduces collaboration and license agreement revenues. We also 

recognize royalty revenues based on a percentage of Takeda's net sales of ADCETRIS in its territories, ranging from the 

mid-teens to the mid-twenties based on annual net sales tiers, as well as sales-based milestones. Takeda bears a portion 

of third-party royalty costs owed on its sales of ADCETRIS, which is included in royalty revenues.

Astellas PADCEV collaboration

We have a collaboration agreement with Agensys, Inc., which subsequently became an affiliate of Astellas, to 

jointly research, develop and commercialize ADCs for the treatment of several types of cancer. Under this collaboration, 

we and Astellas are equally co-funding all development and certain commercialization costs for PADCEV. In the U.S., 

we and Astellas jointly promote PADCEV. We record sales of PADCEV in the U.S. and are responsible for all U.S. 

distribution activities. The companies each bear the costs of their own sales organizations in the U.S., equally share 

certain other costs associated with commercializing PADCEV in the U.S., and equally share in any profits realized in the 

U.S. Gross profit share payments owed to Astellas in the U.S. under the joint commercialization agreement are recorded 

in cost of sales. Outside the U.S., we have commercialization rights in all countries in North and South America, and 

Astellas has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa.

Astellas or its affiliates are responsible for overseeing the manufacturing supply chain for PADCEV for 

development and commercial use. However, we are responsible for packaging and labeling in countries in which we sell 

PADCEV. In addition, if the parties determine that a second source is required, we will be responsible for establishing 

such second source whether internally or through a third party.

Merck TUKYSA collaboration

In September 2020, we entered into the TUKYSA Agreement with Merck. We granted exclusive rights to 

commercialize TUKYSA in Asia, the Middle East and Latin America and other regions outside of the U.S., Canada and 

Europe. Under the terms of the TUKYSA Agreement, Merck is responsible for marketing applications for approval in its 

territory, supported by the positive results from the HER2CLIMB clinical trial. We retained commercial rights in, and 

will record sales in, the U.S., Canada and Europe. Merck is also co-funding a portion of the TUKYSA global 

development plan, which encompasses several ongoing and planned trials across HER2-positive cancers. We will 

continue to lead ongoing TUKYSA global development operational execution. Merck will solely fund and conduct 

country-specific clinical trials necessary to support anticipated regulatory applications in its territories. We received an 

upfront cash payment from Merck of $125.0 million and also received $85.0 million in prepaid research and 

development funding to be applied to Merck’s global development cost sharing obligations. We are eligible to receive 

progress-dependent milestone payments of up to $65.0 million, and are entitled to receive tiered royalties on sales of 

TUKYSA by Merck that begin in the low twenty percent range and escalate based sales volume by Merck in its territory. 

We recognized license revenue of $125.0 million during the year ended December 31, 2020 associated with the 

TUKYSA Agreement, and we recognize such cost sharing proportionately with the performance of the underlying 

activities, while recording Merck’s reimbursement of our expenses as a reduction of research and development expenses. 

Sales of TUKYSA drug product supplied is included in collaboration and license agreement revenues. The prepayment 

received for global development cost-sharing was recorded as a co-development liability in accrued liabilities and other 

or other long-term liabilities on our consolidated balance sheet as of December 31, 2020. As joint development expenses 

are incurred, we recognize the portion of Merck’s prepayment as a reduction of our research and development expenses 

on our consolidated statements of comprehensive income (loss). As of December 31, 2021 and 2020, $55.3 million and 

$80.9 million was recorded as the remaining co-development liability, respectively.

78

79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(dollars in thousands)

Royalty revenues

2021

2020

2019

2021/2020

2020/2019

$ 

150,523  $ 

126,756  $ 

138,491 

 19 %

 (8) %

Royalty revenues increased in 2021 as compared to 2020, primarily due to growth in Takeda net sales of 

ADCETRIS in its territories, as well as higher royalties earned on net sales of Polivy, Blenrep, and by our other 

We expect that royalty revenues will increase in 2022 as compared to 2021 primarily due to higher royalties from 

anticipated growth in ADCETRIS sales volume by Takeda, as well as anticipated growth of our other licensees' net 

licensees.

product sales.

Collaboration and license agreement revenues 

Collaboration and license agreement revenues reflect amounts earned under certain of our license and 

collaboration agreements. These revenues reflect license fees, payments received by us for technology access and 

maintenance fees, sales of drug supply to our collaborators, milestone payments, and reimbursement payments for 

research and development support that we provide to our collaborators. 

Collaboration and license agreement revenues by collaborator were as follows:

(dollars in thousands)

GlaxoSmithKline

Takeda

Merck

Other

Total collaboration and license 

agreement revenues

NM: No amount in comparable period or not a meaningful comparison.

Percentage change

2021

2020

2019

2021/2020

2020/2019

$ 

11,000  $ 

26,000  $ 

12,200 

6,958 

1,168 

19,156 

32,107 

975,150 

14,925 

108,175 

— 

29,870 

 (58) %

 (78) %

 (100) %

 28 %

 113 %

 (70) %

NM

 (50) %

$ 

38,282  $  1,048,182  $ 

150,245 

 (96) %

 598 %

Collaboration revenues from GlaxoSmithKline decreased in 2021 as compared to 2020, primarily due to 

recognition of two regulatory milestones achieved by GlaxoSmithKline in the third quarter of 2020, offset in part by 

recognition of a regulatory milestone achieved in 2021.

Collaboration revenues from Takeda decreased in 2021 as compared to 2020, primarily due to a decrease in 

ADCETRIS drug supply sold to Takeda. We supply ADCETRIS to Takeda based on Takeda's product supply needs, 

which fluctuates from period to period.

Collaboration and license agreement revenues from Merck in 2020 included license revenues of $975.2 million 

related to the LV Agreement and the TUKYSA Agreement. Refer to Note 10 of the Notes to Consolidated Financial 

Statements included in Part II Item 8 for additional information.

Other collaboration revenues increased in 2021 as compared to 2020 primarily due drug product supplied to a 

collaborator.

We expect that collaboration and license agreements revenues will decline slightly in 2022 as compared to 2021. 

Our collaboration and license agreement revenues are impacted by the term and duration of those agreements and by 

progress-dependent milestones, annual maintenance fees, and reimbursement of materials and support services. 

Collaboration and license agreement revenues may vary substantially from year to year and quarter to quarter depending 

on the progress made by our collaborators with their product candidates, amount of drug supplied to our collaborators, 

the level of support we provide to our collaborators, specifically to Takeda under our ADCETRIS collaboration, the 

timing of milestones achieved and our ability to enter into potential additional collaboration and license agreements. 

Percentage change

Collaboration and license agreements 

We discuss the below arrangements in greater detail under the heading “Corporate Collaborations” in Part I Item 1 

of this Annual Report on Form 10-K.

Takeda ADCETRIS collaboration

We have an agreement with Takeda for the global co-development of ADCETRIS and the commercialization of 

ADCETRIS by Takeda in its territory. We recognize payments from Takeda, including progress-dependent development 
and regulatory milestone payments, reimbursement for drug supplied, and net development cost reimbursement 
payments, as collaboration and license agreement revenues upon transfer of control of the goods or services over the 
development period. When the performance of development activities under the collaboration results in us making a 
reimbursement payment to Takeda, that payment reduces collaboration and license agreement revenues. We also 
recognize royalty revenues based on a percentage of Takeda's net sales of ADCETRIS in its territories, ranging from the 
mid-teens to the mid-twenties based on annual net sales tiers, as well as sales-based milestones. Takeda bears a portion 
of third-party royalty costs owed on its sales of ADCETRIS, which is included in royalty revenues.

Astellas PADCEV collaboration

We have a collaboration agreement with Agensys, Inc., which subsequently became an affiliate of Astellas, to 

jointly research, develop and commercialize ADCs for the treatment of several types of cancer. Under this collaboration, 
we and Astellas are equally co-funding all development and certain commercialization costs for PADCEV. In the U.S., 
we and Astellas jointly promote PADCEV. We record sales of PADCEV in the U.S. and are responsible for all U.S. 
distribution activities. The companies each bear the costs of their own sales organizations in the U.S., equally share 
certain other costs associated with commercializing PADCEV in the U.S., and equally share in any profits realized in the 
U.S. Gross profit share payments owed to Astellas in the U.S. under the joint commercialization agreement are recorded 
in cost of sales. Outside the U.S., we have commercialization rights in all countries in North and South America, and 
Astellas has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa.

Astellas or its affiliates are responsible for overseeing the manufacturing supply chain for PADCEV for 
development and commercial use. However, we are responsible for packaging and labeling in countries in which we sell 
PADCEV. In addition, if the parties determine that a second source is required, we will be responsible for establishing 
such second source whether internally or through a third party.

Merck TUKYSA collaboration

In September 2020, we entered into the TUKYSA Agreement with Merck. We granted exclusive rights to 
commercialize TUKYSA in Asia, the Middle East and Latin America and other regions outside of the U.S., Canada and 
Europe. Under the terms of the TUKYSA Agreement, Merck is responsible for marketing applications for approval in its 
territory, supported by the positive results from the HER2CLIMB clinical trial. We retained commercial rights in, and 
will record sales in, the U.S., Canada and Europe. Merck is also co-funding a portion of the TUKYSA global 
development plan, which encompasses several ongoing and planned trials across HER2-positive cancers. We will 
continue to lead ongoing TUKYSA global development operational execution. Merck will solely fund and conduct 
country-specific clinical trials necessary to support anticipated regulatory applications in its territories. We received an 
upfront cash payment from Merck of $125.0 million and also received $85.0 million in prepaid research and 
development funding to be applied to Merck’s global development cost sharing obligations. We are eligible to receive 
progress-dependent milestone payments of up to $65.0 million, and are entitled to receive tiered royalties on sales of 
TUKYSA by Merck that begin in the low twenty percent range and escalate based sales volume by Merck in its territory. 

We recognized license revenue of $125.0 million during the year ended December 31, 2020 associated with the 

TUKYSA Agreement, and we recognize such cost sharing proportionately with the performance of the underlying 
activities, while recording Merck’s reimbursement of our expenses as a reduction of research and development expenses. 
Sales of TUKYSA drug product supplied is included in collaboration and license agreement revenues. The prepayment 
received for global development cost-sharing was recorded as a co-development liability in accrued liabilities and other 
or other long-term liabilities on our consolidated balance sheet as of December 31, 2020. As joint development expenses 
are incurred, we recognize the portion of Merck’s prepayment as a reduction of our research and development expenses 
on our consolidated statements of comprehensive income (loss). As of December 31, 2021 and 2020, $55.3 million and 
$80.9 million was recorded as the remaining co-development liability, respectively.

78

79

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Genmab TIVDAK collaboration

We have an agreement with Genmab to develop and commercialize ADCs targeting tissue factor, under which we 
previously exercised a co-development option for TIVDAK. Under this collaboration, we and Genmab are co-funding all 
development costs for TIVDAK. TIVDAK was approved by FDA in September 2021. In the U.S., following FDA 
approval in September 2021, we and Genmab co-promote TIVDAK. We record sales of TIVDAK in the U.S. and are 
responsible for leading U.S. distribution activities. The companies will each maintain 50% of the sales representatives 
and medical science liaisons, equally share those and certain other costs associated with commercializing TIVDAK in 
the U.S., individually bear the costs of certain other personnel in the U.S., and equally share in any profits realized in the 
U.S. Gross profit share payments owed to Genmab in the U.S. under the joint commercialization agreement are recorded 
in cost of sales. Outside the U.S., we have commercialization rights in the rest of the world except for Japan, where 
Genmab has commercialization rights. In Europe, China, and Japan, we and Genmab equally share 50% of the costs 
associated with commercializing TIVDAK as well as any profits realized in these markets. In markets outside the U.S. 
other than Europe, China, and Japan, aside from certain costs specified in the agreement, we are solely responsible for all 
costs associated with commercializing TIVDAK and will pay Genmab a royalty based on a percentage of aggregate net 
sales ranging from the mid-teens to mid-twenties.

RemeGen disitamab vedotin license agreement

In September 2021, we and RemeGen entered into an exclusive worldwide licensing agreement to develop and 

commercialize disitamab vedotin, a novel HER2-targeted ADC. Disitamab vedotin combines the drug-linker technology 
originally developed by us with RemeGen’s novel HER2 antibody. Disitamab vedotin received FDA Breakthrough 
Therapy designation in 2020 for use in second-line treatment of patients with HER2-expressing, locally advanced or 
metastatic urothelial cancer who have previously received platinum-containing chemotherapy. Also in 2020, RemeGen 
announced FDA’s clearance of an IND application for a phase 2 clinical trial in locally advanced or metastatic urothelial 
cancer. Disitamab vedotin is conditionally approved for treating locally advanced metastatic gastric cancer in China, and 
in July 2021 the National Medical Products Administration of China also accepted a NDA for disitamab vedotin in 
locally advanced or metastatic urothelial cancer.

Under the terms of the agreement, we made a $200.0 million upfront payment to obtain exclusive license rights to 

disitamab vedotin for global development and commercialization, outside of RemeGen’s territory. RemeGen retains 
development and commercialization rights for Asia, excluding Japan and Singapore. We will lead global development 
and RemeGen will fund and operationalize the portion of global clinical trials attributable to its territory. RemeGen will 
also be responsible for all clinical development and regulatory submissions specific to its territory. We will pay 
RemeGen up to $195.0 million in potential milestone payments across multiple indications and products based upon the 
achievement of specified development goals, and up to $2.2 billion in potential milestone payments based on the 
achievement of specified regulatory and commercialization goals. RemeGen will be entitled to a tiered, high single digit 
to mid-teen percentage royalty based on net sales of disitamab vedotin in our territory.

Merck LV collaboration

In September 2020, we entered into the LV Agreement with Merck. We are pursuing a broad joint development 

program evaluating LV as monotherapy and in combination setting, including with Merck’s anti-PD-1 therapy 
KEYTRUDA® (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast cancer and other 
LIV-1-expressing solid tumors. Under the terms of the LV Agreement, we granted Merck a co-exclusive worldwide 
development and commercialization license for LV, and agreed to jointly develop and commercialize LV on a worldwide 
basis. We received an upfront cash payment of $600.0 million, and we are eligible to receive up to $850.0 million in 
milestone payments upon the initiation of certain clinical trials and regulatory approval in certain major markets, and up 
to an additional $1.75 billion in milestone payments upon the achievement of specified annual global net sales thresholds 
of LV. Each company is responsible for 50% of global costs to develop and commercialize LV and will receive 50% of 
potential future profits. In connection with the LV Agreement, we entered into a stock purchase agreement with Merck in 
September 2020, pursuant to which we agreed to issue and sell, and Merck agreed to purchase 5,000,000 newly-issued 
shares of our common stock, at a purchase price of $200 per share, for an aggregate purchase price of $1.0 billion, 
referred to as the Purchase Agreement. We closed the Purchase Agreement in October 2020.

We recognized license revenue of $850.1 million during the year ended December 31, 2020 associated with the 

LV Agreement and Purchase Agreement, and we recognize such cost sharing proportionately with the performance of 

the underlying activities, while recording Merck’s reimbursement of our expenses as a reduction of research and 

development expenses.

Other technology collaboration and license agreements

We have other collaboration and license agreements for our ADC technology with a number of biotechnology and 

pharmaceutical companies. We typically receive upfront cash payments and progress- and sales-dependent milestones 

for the achievement by our licensees of certain events, and annual maintenance fees and support fees for research and 

development services and materials provided under the agreements. These amounts are recognized as revenue over the 

performance obligation period if the license is determined not to be distinct from other goods and services provided, or, 

if there is no performance obligation, upon transfer of control of the goods or services to the customer. 

As of December 31, 2021, the remaining potential milestone payments to us under our other ADC license and 

collaboration agreements could total approximately $0.9 billion if all potential product candidates achieved all of their 

milestone events. Of this amount, approximately $0.4 billion relates to the achievement of development and regulatory 

milestones, and approximately $0.5 billion relates to the achievement of commercial milestones. Since we do not control 

the research, development or commercialization of any of the products that would generate these milestones, we are not 

able to reasonably estimate when, if at all, any potential future milestone payments or royalties may be payable by our 

collaborators. We do not expect, and investors should not assume, that we will receive all of the potential milestone 

payments described above, and it is possible that we may never receive any additional significant milestone payments 

under these ADC license and collaboration agreements.

Cost of sales 

Cost of sales includes manufacturing and distribution costs of product sold, gross profit share with Astellas and 

Genmab pursuant to those respective collaborations, amortization of acquired technology license costs, royalties owed on 

our PADCEV net product sales, and royalties owed on global ADCETRIS, TUKYSA and TIVDAK net product sales.

(dollars in thousands)

Cost of sales

2021

2020

2019

2021/2020

2020/2019

$ 

311,565  $ 

217,720  $ 

43,952 

 43 %

 395 %

Percentage change

Cost of sales increased in 2021 as compared to 2020, driven by higher gross profit sharing owed to our 

collaborators related to certain net product sales, higher costs of drug product supply sold, and higher amortization 

expense associated with acquired TUKYSA technology costs, offset in part by a payment owed to a third-party 

technology licensor resulting from the TUKYSA Agreement in 2020. 

The gross profit share owed to collaborators totaled $162.0 million, $104.6 million, and $0 for the years ended 

December 31, 2021, 2020, and 2019, respectively. We recorded amortization expense of $23.1 million and $16.3 million 

for acquired TUKYSA technology costs during the years ended December 31, 2021 and 2020, respectively.

We expect cost of sales to increase in 2022 as compared to 2021 as a result of the net product sales growth of our 

marketed products, contributing to higher anticipated gross profit sharing with our collaborations, higher manufacturing 

costs for goods sold, and increased royalties owed on certain net sales of our products.

80

81

 
Genmab TIVDAK collaboration

We have an agreement with Genmab to develop and commercialize ADCs targeting tissue factor, under which we 

previously exercised a co-development option for TIVDAK. Under this collaboration, we and Genmab are co-funding all 

development costs for TIVDAK. TIVDAK was approved by FDA in September 2021. In the U.S., following FDA 

approval in September 2021, we and Genmab co-promote TIVDAK. We record sales of TIVDAK in the U.S. and are 

responsible for leading U.S. distribution activities. The companies will each maintain 50% of the sales representatives 

and medical science liaisons, equally share those and certain other costs associated with commercializing TIVDAK in 

the U.S., individually bear the costs of certain other personnel in the U.S., and equally share in any profits realized in the 

U.S. Gross profit share payments owed to Genmab in the U.S. under the joint commercialization agreement are recorded 

in cost of sales. Outside the U.S., we have commercialization rights in the rest of the world except for Japan, where 

Genmab has commercialization rights. In Europe, China, and Japan, we and Genmab equally share 50% of the costs 

associated with commercializing TIVDAK as well as any profits realized in these markets. In markets outside the U.S. 

other than Europe, China, and Japan, aside from certain costs specified in the agreement, we are solely responsible for all 

costs associated with commercializing TIVDAK and will pay Genmab a royalty based on a percentage of aggregate net 

sales ranging from the mid-teens to mid-twenties.

RemeGen disitamab vedotin license agreement

In September 2021, we and RemeGen entered into an exclusive worldwide licensing agreement to develop and 

commercialize disitamab vedotin, a novel HER2-targeted ADC. Disitamab vedotin combines the drug-linker technology 

originally developed by us with RemeGen’s novel HER2 antibody. Disitamab vedotin received FDA Breakthrough 

Therapy designation in 2020 for use in second-line treatment of patients with HER2-expressing, locally advanced or 

metastatic urothelial cancer who have previously received platinum-containing chemotherapy. Also in 2020, RemeGen 

announced FDA’s clearance of an IND application for a phase 2 clinical trial in locally advanced or metastatic urothelial 

cancer. Disitamab vedotin is conditionally approved for treating locally advanced metastatic gastric cancer in China, and 

in July 2021 the National Medical Products Administration of China also accepted a NDA for disitamab vedotin in 

locally advanced or metastatic urothelial cancer.

Under the terms of the agreement, we made a $200.0 million upfront payment to obtain exclusive license rights to 

disitamab vedotin for global development and commercialization, outside of RemeGen’s territory. RemeGen retains 

development and commercialization rights for Asia, excluding Japan and Singapore. We will lead global development 

and RemeGen will fund and operationalize the portion of global clinical trials attributable to its territory. RemeGen will 

also be responsible for all clinical development and regulatory submissions specific to its territory. We will pay 

RemeGen up to $195.0 million in potential milestone payments across multiple indications and products based upon the 

achievement of specified development goals, and up to $2.2 billion in potential milestone payments based on the 

achievement of specified regulatory and commercialization goals. RemeGen will be entitled to a tiered, high single digit 

to mid-teen percentage royalty based on net sales of disitamab vedotin in our territory.

Merck LV collaboration

In September 2020, we entered into the LV Agreement with Merck. We are pursuing a broad joint development 

program evaluating LV as monotherapy and in combination setting, including with Merck’s anti-PD-1 therapy 

KEYTRUDA® (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast cancer and other 

LIV-1-expressing solid tumors. Under the terms of the LV Agreement, we granted Merck a co-exclusive worldwide 

development and commercialization license for LV, and agreed to jointly develop and commercialize LV on a worldwide 

basis. We received an upfront cash payment of $600.0 million, and we are eligible to receive up to $850.0 million in 

milestone payments upon the initiation of certain clinical trials and regulatory approval in certain major markets, and up 

to an additional $1.75 billion in milestone payments upon the achievement of specified annual global net sales thresholds 

of LV. Each company is responsible for 50% of global costs to develop and commercialize LV and will receive 50% of 

potential future profits. In connection with the LV Agreement, we entered into a stock purchase agreement with Merck in 

September 2020, pursuant to which we agreed to issue and sell, and Merck agreed to purchase 5,000,000 newly-issued 

shares of our common stock, at a purchase price of $200 per share, for an aggregate purchase price of $1.0 billion, 

referred to as the Purchase Agreement. We closed the Purchase Agreement in October 2020.

We recognized license revenue of $850.1 million during the year ended December 31, 2020 associated with the 
LV Agreement and Purchase Agreement, and we recognize such cost sharing proportionately with the performance of 
the underlying activities, while recording Merck’s reimbursement of our expenses as a reduction of research and 
development expenses.

Other technology collaboration and license agreements

We have other collaboration and license agreements for our ADC technology with a number of biotechnology and 

pharmaceutical companies. We typically receive upfront cash payments and progress- and sales-dependent milestones 
for the achievement by our licensees of certain events, and annual maintenance fees and support fees for research and 
development services and materials provided under the agreements. These amounts are recognized as revenue over the 
performance obligation period if the license is determined not to be distinct from other goods and services provided, or, 
if there is no performance obligation, upon transfer of control of the goods or services to the customer. 

As of December 31, 2021, the remaining potential milestone payments to us under our other ADC license and 

collaboration agreements could total approximately $0.9 billion if all potential product candidates achieved all of their 
milestone events. Of this amount, approximately $0.4 billion relates to the achievement of development and regulatory 
milestones, and approximately $0.5 billion relates to the achievement of commercial milestones. Since we do not control 
the research, development or commercialization of any of the products that would generate these milestones, we are not 
able to reasonably estimate when, if at all, any potential future milestone payments or royalties may be payable by our 
collaborators. We do not expect, and investors should not assume, that we will receive all of the potential milestone 
payments described above, and it is possible that we may never receive any additional significant milestone payments 
under these ADC license and collaboration agreements.

Cost of sales 

Cost of sales includes manufacturing and distribution costs of product sold, gross profit share with Astellas and 

Genmab pursuant to those respective collaborations, amortization of acquired technology license costs, royalties owed on 
our PADCEV net product sales, and royalties owed on global ADCETRIS, TUKYSA and TIVDAK net product sales.

(dollars in thousands)
Cost of sales

2021
311,565  $ 

2020
217,720  $ 

$ 

2019

2021/2020

2020/2019

43,952 

 43 %

 395 %

Percentage change

Cost of sales increased in 2021 as compared to 2020, driven by higher gross profit sharing owed to our 
collaborators related to certain net product sales, higher costs of drug product supply sold, and higher amortization 
expense associated with acquired TUKYSA technology costs, offset in part by a payment owed to a third-party 
technology licensor resulting from the TUKYSA Agreement in 2020. 

The gross profit share owed to collaborators totaled $162.0 million, $104.6 million, and $0 for the years ended 

December 31, 2021, 2020, and 2019, respectively. We recorded amortization expense of $23.1 million and $16.3 million 
for acquired TUKYSA technology costs during the years ended December 31, 2021 and 2020, respectively.

We expect cost of sales to increase in 2022 as compared to 2021 as a result of the net product sales growth of our 
marketed products, contributing to higher anticipated gross profit sharing with our collaborations, higher manufacturing 
costs for goods sold, and increased royalties owed on certain net sales of our products.

80

81

 
Research and development

(dollars in thousands)
Research and clinical development
Process sciences and manufacturing

2021
950,309  $ 

2020
581,496  $ 

$ 

278,363 

245,633 

2019
497,986 

221,388 

Total research and development

$  1,228,672  $ 

827,129  $ 

719,374 

Percentage change

2021/2020

2020/2019

 63 %

 13 %

 49 %

 17 %

 11 %

 15 %

Research and clinical development expenses include personnel, occupancy and laboratory expenses, technology 

access fees, preclinical translational biology and in vitro and in vivo studies, IND-enabling pharmacology and toxicology 
studies, and external clinical trial costs including costs for clinical sites, clinical research organizations, contractors and 
regulatory activities associated with conducting human clinical trials. The increase in 2021 as compared to 2020 
primarily reflected the $200.0 million RemeGen upfront license payment made in 2021, as well as higher employee-
related costs and external development costs mainly to support our early- and late-stage pipeline of product candidates.

Process sciences and manufacturing expenses include personnel and occupancy expenses, manufacturing costs for 

the scale-up and pre-approval manufacturing of product candidates used in research and our clinical trials, and costs for 
drug product supplied to our collaborators. Process sciences and manufacturing expenses also include quality control and 
assurance activities, and storage and shipment of our product candidates. The increase in 2021 compared to 2020 
primarily reflected the timing of our manufacturing of product candidates for use in clinical trials, as well as increased 
manufacturing of our approved products.

We utilize our employee and infrastructure resources across multiple research and development projects. We track 

human resource efforts expended on many of our programs for purposes of billing our collaborators for time incurred at 
agreed upon rates and for resource planning. We do not account for actual costs on a project basis as it relates to our 
infrastructure, facility, employee and other indirect costs; however, we do separately track significant third-party costs 
including clinical trial costs, manufacturing costs and other contracted service costs on a project basis. To that end, the 
following table shows third-party costs incurred for research, contract manufacturing of our product candidates and 
clinical and regulatory services, as well as development milestone payments for in-licensed technology for our products 
and certain of our clinical-stage product candidates. The table also presents upfront technology costs, other costs and 
overhead consisting of third-party costs for our preclinical stage programs, personnel, facilities, manufacturing, and other 
indirect costs not directly charged to development programs, as well as cost reimbursements received from or payments 
made to collaborators related to our product candidates.

2021

2020

2019

2021/2020

2020/2019

Percentage change

(dollars in thousands)
TUKYSA (tucatinib)

PADCEV (enfortumab vedotin-ejfv)

ADCETRIS (brentuximab vedotin)

TIVDAK (tisotumab vedotin)

Ladiratuzumab vedotin

Other clinical stage programs

Total third-party costs for clinical stage programs

Upfront technology costs

Other costs, overhead, and net cost-sharing with collaborators

$ 

153,546  $ 

81,292  $ 

79,564 

77,539 

45,712 

21,975 

62,985 

441,321 

200,000 

38,031 

75,589 

15,573 

19,715 

48,727 

278,927 

5,000 

84,277 

24,954 

59,705 

9,813 

22,776 

11,828 

213,353 

15,000 

Total research and development

587,351 

543,202 

491,021 

$  1,228,672  $ 

827,129  $ 

719,374 

NM: No amount in comparable period or not a meaningful comparison.

 89 %

 109 %

 3 %

 194 %

 11 %

 29 %

 58 %

NM

 8 %

 49 %

 (4) %

 52 %

 27 %

 59 %

 (13) %

 312 %

 31 %

 (67) %

 11 %

 15 %

Third-party costs for TUKYSA, PADCEV, TIVDAK, and ladiratuzumab vedotin increased in 2021 as compared 

to 2020, primarily due to higher clinical trial costs. Third-party costs for ADCETRIS were consistent in 2021 as 
compared to 2020.

82

83

Third-party costs for other clinical stage programs increased in 2021 as compared to 2020 due to higher clinical 

trial costs and an in-license development milestone payment made in 2021 related to one of our clinical pipeline 

programs. 

license payment made in 2021.

Upfront technology costs increased in 2021 as compared to 2020 due to the $200.0 million RemeGen upfront 

Other costs, overhead, and net cost-sharing with collaborators increased slightly in 2021 as compared to 2020 due 

to addition of new preclinical programs and higher employee-related expenses from headcount growth. During the years 

ended December 31, 2021, 2020, and 2019 net research and development cost-sharing reimbursements from and 

payments made to collaborators were $83.8 million, $(2.2) million, and $(47.0) million, respectively.

In order to advance our product candidates toward commercialization, the product candidates are tested in 

numerous preclinical safety, toxicology and efficacy studies. We then conduct clinical trials for those product candidates 

that take several years or more to complete. The length of time varies substantially based upon the type, complexity, 

novelty and intended use of a product candidate. We will also need to conduct additional clinical trials in order to expand 

labeled indications of use for our commercial products. The outcome of our clinical trials is uncertain. The cost of 

clinical trials may vary significantly as a result of a variety of factors, including the number of patients enrolled, patient 

site costs, quantity and source of drug supply required, safety and efficacy of the product candidate, and extent of 

regulatory efforts, among others. 

We anticipate that our total research and development expenses in 2022 will increase compared to 2021 primarily 

due to higher costs for the continued development of our approved products and product candidates, offset partly by the 

$200.0 million RemeGen upfront license payment in 2021. 

The risks and uncertainties associated with our research and development projects are discussed more fully in 

“Part I Item 1A—Risk Factors.” As a result of these risks and uncertainties, we are unable to determine with any degree 

of certainty the duration and completion costs of our research and development projects, anticipated completion dates, or 

when and to what extent we will receive cash inflows from the commercialization and sale of our products in any 

additional approved indications or of any of our product candidates.

Selling, general and administrative 

(dollars in thousands)

2021

2020

2019

2021/2020

2020/2019

Selling, general and administrative

$ 

716,190  $ 

533,835  $ 

373,932 

 34 %

 43 %

Percentage change

Selling, general and administrative expenses increased in 2021 compared to 2020, primarily reflecting higher 

commercial costs to support our 38% net product sales growth, including commercial investments made to support the 

European TUKYSA launches and the U.S. launch of TIVDAK. Our general and administrative expenses also increased 

in 2021 compared to 2020 due to 34% headcount growth as well as higher legal expenses.

We anticipate that selling, general and administrative expenses will increase in 2022 as compared to 2021 as we 

continue our commercial activities in support of our product launches, and invest in infrastructure to support our 

continued growth in the U.S. and Europe.

Investment and other income, net

(dollars in thousands)

Gain on equity securities

Investment and other income, net

Total investment and other income, net

2021

2020

2019

2021/2020

2020/2019

$ 

$ 

4,744  $ 

11,604  $ 

50,124 

1,607 

7,245 

11,771 

6,351  $ 

18,849  $ 

61,895 

 (59) 

 (78) %

 (66) 

 (77) %

 (38) %

 (70) %

Percentage change

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Research and development

(dollars in thousands)

2021

2020

2019

2021/2020

2020/2019

Research and clinical development

Process sciences and manufacturing

$ 

950,309  $ 

581,496  $ 

497,986 

278,363 

245,633 

221,388 

Total research and development

$  1,228,672  $ 

827,129  $ 

719,374 

 63 %

 13 %

 49 %

 17 %

 11 %

 15 %

Percentage change

Research and clinical development expenses include personnel, occupancy and laboratory expenses, technology 

access fees, preclinical translational biology and in vitro and in vivo studies, IND-enabling pharmacology and toxicology 

studies, and external clinical trial costs including costs for clinical sites, clinical research organizations, contractors and 

regulatory activities associated with conducting human clinical trials. The increase in 2021 as compared to 2020 

primarily reflected the $200.0 million RemeGen upfront license payment made in 2021, as well as higher employee-

related costs and external development costs mainly to support our early- and late-stage pipeline of product candidates.

Process sciences and manufacturing expenses include personnel and occupancy expenses, manufacturing costs for 

the scale-up and pre-approval manufacturing of product candidates used in research and our clinical trials, and costs for 

drug product supplied to our collaborators. Process sciences and manufacturing expenses also include quality control and 

assurance activities, and storage and shipment of our product candidates. The increase in 2021 compared to 2020 

primarily reflected the timing of our manufacturing of product candidates for use in clinical trials, as well as increased 

manufacturing of our approved products.

We utilize our employee and infrastructure resources across multiple research and development projects. We track 

human resource efforts expended on many of our programs for purposes of billing our collaborators for time incurred at 

agreed upon rates and for resource planning. We do not account for actual costs on a project basis as it relates to our 

infrastructure, facility, employee and other indirect costs; however, we do separately track significant third-party costs 

including clinical trial costs, manufacturing costs and other contracted service costs on a project basis. To that end, the 

following table shows third-party costs incurred for research, contract manufacturing of our product candidates and 

clinical and regulatory services, as well as development milestone payments for in-licensed technology for our products 

and certain of our clinical-stage product candidates. The table also presents upfront technology costs, other costs and 

overhead consisting of third-party costs for our preclinical stage programs, personnel, facilities, manufacturing, and other 

indirect costs not directly charged to development programs, as well as cost reimbursements received from or payments 

made to collaborators related to our product candidates.

(dollars in thousands)

TUKYSA (tucatinib)

PADCEV (enfortumab vedotin-ejfv)

ADCETRIS (brentuximab vedotin)

TIVDAK (tisotumab vedotin)

Ladiratuzumab vedotin

Other clinical stage programs

Total third-party costs for clinical stage programs

Upfront technology costs

Other costs, overhead, and net cost-sharing with collaborators

Total research and development

NM: No amount in comparable period or not a meaningful comparison.

2021

2020

2019

2021/2020

2020/2019

$ 

153,546  $ 

81,292  $ 

Percentage change

79,564 

77,539 

45,712 

21,975 

62,985 

441,321 

200,000 

38,031 

75,589 

15,573 

19,715 

48,727 

278,927 

5,000 

84,277 

24,954 

59,705 

9,813 

22,776 

11,828 

213,353 

15,000 

587,351 

543,202 

491,021 

$  1,228,672  $ 

827,129  $ 

719,374 

 89 %

 109 %

 3 %

 194 %

 11 %

 29 %

 58 %

NM

 8 %

 49 %

 (4) %

 52 %

 27 %

 59 %

 (13) %

 312 %

 31 %

 (67) %

 11 %

 15 %

Third-party costs for TUKYSA, PADCEV, TIVDAK, and ladiratuzumab vedotin increased in 2021 as compared 

to 2020, primarily due to higher clinical trial costs. Third-party costs for ADCETRIS were consistent in 2021 as 

compared to 2020.

Third-party costs for other clinical stage programs increased in 2021 as compared to 2020 due to higher clinical 

trial costs and an in-license development milestone payment made in 2021 related to one of our clinical pipeline 
programs. 

Upfront technology costs increased in 2021 as compared to 2020 due to the $200.0 million RemeGen upfront 

license payment made in 2021.

Other costs, overhead, and net cost-sharing with collaborators increased slightly in 2021 as compared to 2020 due 
to addition of new preclinical programs and higher employee-related expenses from headcount growth. During the years 
ended December 31, 2021, 2020, and 2019 net research and development cost-sharing reimbursements from and 
payments made to collaborators were $83.8 million, $(2.2) million, and $(47.0) million, respectively.

In order to advance our product candidates toward commercialization, the product candidates are tested in 
numerous preclinical safety, toxicology and efficacy studies. We then conduct clinical trials for those product candidates 
that take several years or more to complete. The length of time varies substantially based upon the type, complexity, 
novelty and intended use of a product candidate. We will also need to conduct additional clinical trials in order to expand 
labeled indications of use for our commercial products. The outcome of our clinical trials is uncertain. The cost of 
clinical trials may vary significantly as a result of a variety of factors, including the number of patients enrolled, patient 
site costs, quantity and source of drug supply required, safety and efficacy of the product candidate, and extent of 
regulatory efforts, among others. 

We anticipate that our total research and development expenses in 2022 will increase compared to 2021 primarily 
due to higher costs for the continued development of our approved products and product candidates, offset partly by the 
$200.0 million RemeGen upfront license payment in 2021. 

The risks and uncertainties associated with our research and development projects are discussed more fully in 

“Part I Item 1A—Risk Factors.” As a result of these risks and uncertainties, we are unable to determine with any degree 
of certainty the duration and completion costs of our research and development projects, anticipated completion dates, or 
when and to what extent we will receive cash inflows from the commercialization and sale of our products in any 
additional approved indications or of any of our product candidates.

Selling, general and administrative 

(dollars in thousands)
Selling, general and administrative

2021
716,190  $ 

2020
533,835  $ 

2019
373,932 

$ 

Percentage change

2021/2020

2020/2019

 34 %

 43 %

Selling, general and administrative expenses increased in 2021 compared to 2020, primarily reflecting higher 

commercial costs to support our 38% net product sales growth, including commercial investments made to support the 
European TUKYSA launches and the U.S. launch of TIVDAK. Our general and administrative expenses also increased 
in 2021 compared to 2020 due to 34% headcount growth as well as higher legal expenses.

We anticipate that selling, general and administrative expenses will increase in 2022 as compared to 2021 as we 

continue our commercial activities in support of our product launches, and invest in infrastructure to support our 
continued growth in the U.S. and Europe.

Investment and other income, net

(dollars in thousands)

2021

2020

2019

2021/2020

2020/2019

Gain on equity securities
Investment and other income, net

Total investment and other income, net

$ 

$ 

4,744  $ 

11,604  $ 

50,124 

1,607 

7,245 

11,771 

6,351  $ 

18,849  $ 

61,895 

 (59) 

 (78) %

 (66) 

 (77) %

 (38) %

 (70) %

Percentage change

82

83

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investment and other income, net includes other non-operating income and loss, such as unrealized holding gains 

and losses on equity securities, realized gains and losses on equity and debt securities, and amounts earned on our 
investments in U.S. Treasury securities. 

At our currently planned spending rates, we believe that our existing financial resources, together with product 

and royalty revenues, and reimbursements and profit sharing we expect to receive under our existing collaboration and 

license agreements, will be sufficient to fund our operations for at least the next twelve months from the date of this 

Investment and other income decreased for the year ended December 31, 2021 as compared to 2020, due to lower 

average yields experienced within our investment portfolio during 2021, as well as lower gains on equity securities. 

filing. 

Income taxes

We recorded a benefit from income taxes of $1.2 million for the year ended December 31, 2021 compared with a 

provision for income taxes of $2.0 million for the year ended December 31, 2020. The benefit from income taxes in 2021 
reflected the generation of additional available state research and development tax credits. The provision for income 
taxes in 2020 primarily related to state income generated as a result of the license agreements with Merck entered into in 
2020. We utilized net operating loss carryforwards to offset the federal tax liability in 2020.

Liquidity and capital resources

(dollars in thousands)
Cash, cash equivalents and investments
Working capital
Stockholders’ equity

(dollars in thousands)
Cash provided by (used in):

Operating activities

Investing activities

Financing activities

December 31,

2021

2020

$  2,160,036  $  2,660,250  $ 

2,300,340 
3,065,139 

2,674,246 
3,488,100 

2019
868,338 
917,284 
1,876,287 

Years ended December 31,

2021

2020

2019

$ 

(499,007)  $ 

856,568  $ 

(163,737) 

288,884 

(1,419,012)   

(277,729) 

77,779 

846,108 

637,842 

The change in net cash from operating activities from 2021 as compared to 2020 was primarily related to the 
change in our net income (loss), working capital fluctuations and changes in our non-cash expenses, all of which are 
highly variable.

The change in net cash from investing activities from 2021 as compared to 2020 reflected differences between the 
proceeds received from sale and maturity of our investments and amounts reinvested, and the difference for purchases of 
property, plant, and equipment.

The change in net cash from financing activities in 2021 as compared to 2020 was driven by the proceeds from 
issuances of common stock in 2020, as well as lower proceeds from the exercise of stock options and employee stock 
purchase plan.

We primarily have financed our operations through the issuance of our common stock, collections from 

commercial sales of our products, amounts received pursuant to license and collaboration agreements, and royalty 
revenues. To a lesser degree, we also have financed our operations through investment income. These financing and 
revenue sources have allowed us to maintain adequate levels of cash and investments. 

Our cash, cash equivalents, and investments are held in a variety of non-interest bearing bank accounts and 
interest-bearing instruments subject to investment guidelines allowing for holdings in U.S. government and agency 
securities, corporate securities, taxable municipal bonds, commercial paper and money market accounts. Our investment 
portfolio is structured to provide for investment maturities and access to cash to fund our anticipated working capital 
needs. However, if our liquidity needs should be accelerated for any reason in the near term, or investments do not pay at 
maturity, we may be required to sell investment securities in our portfolio prior to their scheduled maturities, which may 
result in a loss. As of December 31, 2021, we had $2.2 billion held in cash, cash equivalents, and investments.

84

85

We expect to make additional capital outlays and to increase operating expenditures over the next several years as 

we hire additional employees, and support our development, commercialization, invest in our facilities, and expand 

globally, which may require us to raise additional capital. Further, we actively evaluate various strategic transactions on 

an ongoing basis, including licensing or otherwise acquiring complementary products, technologies or businesses, and 

we may require significant additional capital in order to complete or otherwise provide funding for such transactions. We 

may seek additional capital through some or all of the following methods: corporate collaborations, licensing 

arrangements, and public or private debt or equity financings. We have no committed sources of funding and do not 

know whether additional capital will be available when needed, or that, if available, we will obtain financing on terms 

favorable to us or our stockholders. If we are unable to raise additional funds when we need them, our business and 

operations may be adversely affected.

Material Cash Requirements

Our material cash requirements in the short- and long-term consist of the following operational, capital, and 

manufacturing expenditures, a portion of which contain contractual or other obligations. We plan to fund our material 

cash requirements with our current financial resources together with our anticipated receipts of accounts receivable, 

product sales and royalty revenues, and reimbursements we expect to receive under our existing collaboration and license 

agreements. 

Operating expenditures. Our primary uses of cash and operating expenses relate to paying employees and 

consultants, administering clinical trials, marketing our products, and providing technology and facility infrastructure to 

support our operations. Our research and development expenses in 2021 were $1.2 billion, and we expect to increase our 

investment in research and development expenses in 2022. Our sales, general and administrative expenses were 

$716.2 million in 2021, and we expect to increase our sales, general, and administrative expenses to support our business 

growth in 2022. On a long-term basis, we manage future cash requirements relative to our long-term business plans.

Operating costs also relate to our building leases for our office and laboratory facilities expiring in 2022 through 

2029 that contain rate escalations and options for us to extend the leases. Our future minimum lease payments as of 

December 31, 2021 totaled $17.1 million related to short-term lease liabilities, and $64.9 million related to long-term 

lease liabilities. We signed a 20-year lease in June 2021 for a building complex in Everett, Washington that has not 

commenced as of December 31, 2021, and therefore rent payments are not included in lease liability balances as of 

December 31, 2021. Refer to Note 3 in the Notes to Financial Statements in Item 8 for further detail of our lease 

obligations.

Capital expenditures. We make investments in our office, laboratory, and manufacturing facilities to enable 

continued expansion of our business. These include leasehold and building improvements at our approximately 1 million 

square feet of leased and owned properties, installation of laboratory and manufacturing equipment, computers, software, 

and office equipment. Our purchases for property and equipment for 2021 were $52.3 million, and we anticipate these 

investments to grow in 2022 to support our anticipated business growth and long-term facility needs, including a 

significant multi-year investment in a building complex being constructed in Everett, Washington, which is expected to 

provide us additional manufacturing, laboratory, and office space in the future. We expect our capital expenditures for 

this Everett facility to be approximately $350 million to $400 million over the next three years.

Manufacturing costs, and supply agreements. Some of our inventory components and products require long 

lead times to manufacture. Therefore, we make substantial and often long-term investments in our supply chain in order 

to ensure we have enough drug product to meet current and future revenue forecasts, as well as clinical trial needs. 

Supply agreements primarily include non-cancelable obligations under our manufacturing, license and collaboration, and 

technology agreements. Further, a substantial portion of those non-cancelable obligations include minimum payments 

related to manufacturing our product candidates for use in our clinical trials and for commercial operations in the case of 

ADCETRIS. Future minimum contractual commitments under these arrangements December 31, 2021 totaled 

$204.3 million related to short-term obligations, and $191.7 million related to long-term obligations. Refer to Note 12 in 

the Notes to Financial Statements in Item 8 for further detail of our manufacturing supply agreements. 

 
 
 
 
 
 
 
 
 
 
 
 
Investment and other income, net includes other non-operating income and loss, such as unrealized holding gains 

and losses on equity securities, realized gains and losses on equity and debt securities, and amounts earned on our 

investments in U.S. Treasury securities. 

Investment and other income decreased for the year ended December 31, 2021 as compared to 2020, due to lower 

average yields experienced within our investment portfolio during 2021, as well as lower gains on equity securities. 

Income taxes

We recorded a benefit from income taxes of $1.2 million for the year ended December 31, 2021 compared with a 

provision for income taxes of $2.0 million for the year ended December 31, 2020. The benefit from income taxes in 2021 

reflected the generation of additional available state research and development tax credits. The provision for income 

taxes in 2020 primarily related to state income generated as a result of the license agreements with Merck entered into in 

2020. We utilized net operating loss carryforwards to offset the federal tax liability in 2020.

Liquidity and capital resources

(dollars in thousands)

Cash, cash equivalents and investments

Working capital

Stockholders’ equity

(dollars in thousands)

Cash provided by (used in):

Operating activities

Investing activities

Financing activities

December 31,

2021

2020

2019

$  2,160,036  $  2,660,250  $ 

868,338 

2,300,340 

3,065,139 

2,674,246 

3,488,100 

917,284 

1,876,287 

Years ended December 31,

2021

2020

2019

$ 

(499,007)  $ 

856,568  $ 

(163,737) 

288,884 

(1,419,012)   

(277,729) 

77,779 

846,108 

637,842 

The change in net cash from operating activities from 2021 as compared to 2020 was primarily related to the 

change in our net income (loss), working capital fluctuations and changes in our non-cash expenses, all of which are 

highly variable.

purchase plan.

The change in net cash from investing activities from 2021 as compared to 2020 reflected differences between the 

proceeds received from sale and maturity of our investments and amounts reinvested, and the difference for purchases of 

property, plant, and equipment.

The change in net cash from financing activities in 2021 as compared to 2020 was driven by the proceeds from 

issuances of common stock in 2020, as well as lower proceeds from the exercise of stock options and employee stock 

We primarily have financed our operations through the issuance of our common stock, collections from 

commercial sales of our products, amounts received pursuant to license and collaboration agreements, and royalty 

revenues. To a lesser degree, we also have financed our operations through investment income. These financing and 

revenue sources have allowed us to maintain adequate levels of cash and investments. 

Our cash, cash equivalents, and investments are held in a variety of non-interest bearing bank accounts and 

interest-bearing instruments subject to investment guidelines allowing for holdings in U.S. government and agency 

securities, corporate securities, taxable municipal bonds, commercial paper and money market accounts. Our investment 

portfolio is structured to provide for investment maturities and access to cash to fund our anticipated working capital 

needs. However, if our liquidity needs should be accelerated for any reason in the near term, or investments do not pay at 

maturity, we may be required to sell investment securities in our portfolio prior to their scheduled maturities, which may 

result in a loss. As of December 31, 2021, we had $2.2 billion held in cash, cash equivalents, and investments.

At our currently planned spending rates, we believe that our existing financial resources, together with product 
and royalty revenues, and reimbursements and profit sharing we expect to receive under our existing collaboration and 
license agreements, will be sufficient to fund our operations for at least the next twelve months from the date of this 
filing. 

We expect to make additional capital outlays and to increase operating expenditures over the next several years as 

we hire additional employees, and support our development, commercialization, invest in our facilities, and expand 
globally, which may require us to raise additional capital. Further, we actively evaluate various strategic transactions on 
an ongoing basis, including licensing or otherwise acquiring complementary products, technologies or businesses, and 
we may require significant additional capital in order to complete or otherwise provide funding for such transactions. We 
may seek additional capital through some or all of the following methods: corporate collaborations, licensing 
arrangements, and public or private debt or equity financings. We have no committed sources of funding and do not 
know whether additional capital will be available when needed, or that, if available, we will obtain financing on terms 
favorable to us or our stockholders. If we are unable to raise additional funds when we need them, our business and 
operations may be adversely affected.

Material Cash Requirements

Our material cash requirements in the short- and long-term consist of the following operational, capital, and 

manufacturing expenditures, a portion of which contain contractual or other obligations. We plan to fund our material 
cash requirements with our current financial resources together with our anticipated receipts of accounts receivable, 
product sales and royalty revenues, and reimbursements we expect to receive under our existing collaboration and license 
agreements. 

Operating expenditures. Our primary uses of cash and operating expenses relate to paying employees and 
consultants, administering clinical trials, marketing our products, and providing technology and facility infrastructure to 
support our operations. Our research and development expenses in 2021 were $1.2 billion, and we expect to increase our 
investment in research and development expenses in 2022. Our sales, general and administrative expenses were 
$716.2 million in 2021, and we expect to increase our sales, general, and administrative expenses to support our business 
growth in 2022. On a long-term basis, we manage future cash requirements relative to our long-term business plans.

Operating costs also relate to our building leases for our office and laboratory facilities expiring in 2022 through 

2029 that contain rate escalations and options for us to extend the leases. Our future minimum lease payments as of 
December 31, 2021 totaled $17.1 million related to short-term lease liabilities, and $64.9 million related to long-term 
lease liabilities. We signed a 20-year lease in June 2021 for a building complex in Everett, Washington that has not 
commenced as of December 31, 2021, and therefore rent payments are not included in lease liability balances as of 
December 31, 2021. Refer to Note 3 in the Notes to Financial Statements in Item 8 for further detail of our lease 
obligations.

Capital expenditures. We make investments in our office, laboratory, and manufacturing facilities to enable 
continued expansion of our business. These include leasehold and building improvements at our approximately 1 million 
square feet of leased and owned properties, installation of laboratory and manufacturing equipment, computers, software, 
and office equipment. Our purchases for property and equipment for 2021 were $52.3 million, and we anticipate these 
investments to grow in 2022 to support our anticipated business growth and long-term facility needs, including a 
significant multi-year investment in a building complex being constructed in Everett, Washington, which is expected to 
provide us additional manufacturing, laboratory, and office space in the future. We expect our capital expenditures for 
this Everett facility to be approximately $350 million to $400 million over the next three years.

Manufacturing costs, and supply agreements. Some of our inventory components and products require long 

lead times to manufacture. Therefore, we make substantial and often long-term investments in our supply chain in order 
to ensure we have enough drug product to meet current and future revenue forecasts, as well as clinical trial needs. 
Supply agreements primarily include non-cancelable obligations under our manufacturing, license and collaboration, and 
technology agreements. Further, a substantial portion of those non-cancelable obligations include minimum payments 
related to manufacturing our product candidates for use in our clinical trials and for commercial operations in the case of 
ADCETRIS. Future minimum contractual commitments under these arrangements December 31, 2021 totaled 
$204.3 million related to short-term obligations, and $191.7 million related to long-term obligations. Refer to Note 12 in 
the Notes to Financial Statements in Item 8 for further detail of our manufacturing supply agreements. 

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85

 
 
 
 
 
 
 
 
 
 
 
 
Royalties, milestones and profit-sharing associated with our licensed technology and collaboration 
agreements. Some of our license and collaboration agreements provide for periodic maintenance fees over specified 
time periods, profit share payments, and/or payments by us upon the achievement of development and regulatory 
milestones. Some of our licensing agreements also obligate us to pay royalties based on net sales of products utilizing 
licensed technology. Such royalties and profit share payments are dependent on future product sales and are contingent 
on events that have not yet occurred. Royalties and profit share payments totaled $225.6 million in 2021 and are 
expected to increase in future periods. Milestone payments generally become due and payable upon the achievement of 
certain events. Future milestone payments potentially owed related to in-licensed technology totaled $4.0 billion as of 
December 31, 2021, consisting of up to approximately $0.4 billion in development and clinical milestones, up to 
approximately $1.3 billion in regulatory milestones, and up to approximately $2.3 billion in commercial milestones.

Recent accounting pronouncements 

See the section “Recent accounting pronouncements” in Note 1 to the Notes to Consolidated Financial Statements 

in Part II Item 8 of this Annual Report on Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 

Interest Rate Risk 

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. We 

currently have holdings in U.S. Treasury securities. A summary of our investment securities follows:

(dollars in thousands)

Short-term investments

Long-term investments

Total

December 31,

2021

2020

$  1,735,202  $  2,000,996 

— 

100,830 

$  1,735,202  $  2,101,826 

We have estimated the effect on our investment portfolio of a hypothetical increase in interest rates by one percent 

to be a reduction of $5.7 million in the fair value of our investments as of December 31, 2021. In addition, a hypothetical 

decrease of 10% in the effective yield of our investments would reduce our expected investment income by $0.1 million 

over the next twelve months based on our investment balance at December 31, 2021. 

Foreign Currency Risk 

Most of our revenues and expenses are denominated in U.S. dollars and as a result, we have not experienced 

significant foreign currency transaction gains and losses to date. Our commercial sales in Europe are primarily 

denominated in Euros and in Canada are denominated in Canadian Dollars. We also had other transactions denominated 

in foreign currencies during the year ended December 31, 2021, primarily related to operations in Europe, contract 

manufacturing and ex-U.S. clinical trial activities, and we expect to continue to do so. Our royalties from Takeda are 

derived from their sales of ADCETRIS in multiple countries and in multiple currencies that are converted into U.S. 

dollars for purposes of determining the royalty owed to us. Our limited foreign currency exposure is to fluctuations in the 

Euro, British Pound, Canadian Dollar, Swiss Franc, Danish Krone, and Swedish Krona. We do not anticipate that foreign 

currency transaction gains or losses will be significant at our current level of operations. However, transaction gains or 

losses may become significant in the future as we continue to expand our operations internationally. We have not 

engaged in foreign currency hedging to date; however, we may do so in the future.

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87

 
 
 
Royalties, milestones and profit-sharing associated with our licensed technology and collaboration 

Item 7A. Quantitative and Qualitative Disclosures about Market Risk 

agreements. Some of our license and collaboration agreements provide for periodic maintenance fees over specified 

time periods, profit share payments, and/or payments by us upon the achievement of development and regulatory 

milestones. Some of our licensing agreements also obligate us to pay royalties based on net sales of products utilizing 

licensed technology. Such royalties and profit share payments are dependent on future product sales and are contingent 

on events that have not yet occurred. Royalties and profit share payments totaled $225.6 million in 2021 and are 

expected to increase in future periods. Milestone payments generally become due and payable upon the achievement of 

certain events. Future milestone payments potentially owed related to in-licensed technology totaled $4.0 billion as of 

December 31, 2021, consisting of up to approximately $0.4 billion in development and clinical milestones, up to 

approximately $1.3 billion in regulatory milestones, and up to approximately $2.3 billion in commercial milestones.

Recent accounting pronouncements 

See the section “Recent accounting pronouncements” in Note 1 to the Notes to Consolidated Financial Statements 

in Part II Item 8 of this Annual Report on Form 10-K.

Interest Rate Risk 

Our exposure to market risk for changes in interest rates relates primarily to our investment portfolio. We 

currently have holdings in U.S. Treasury securities. A summary of our investment securities follows:

(dollars in thousands)
Short-term investments
Long-term investments

Total

December 31,

2021

2020

$  1,735,202  $  2,000,996 
100,830 
$  1,735,202  $  2,101,826 

— 

We have estimated the effect on our investment portfolio of a hypothetical increase in interest rates by one percent 
to be a reduction of $5.7 million in the fair value of our investments as of December 31, 2021. In addition, a hypothetical 
decrease of 10% in the effective yield of our investments would reduce our expected investment income by $0.1 million 
over the next twelve months based on our investment balance at December 31, 2021. 

Foreign Currency Risk 

Most of our revenues and expenses are denominated in U.S. dollars and as a result, we have not experienced 

significant foreign currency transaction gains and losses to date. Our commercial sales in Europe are primarily 
denominated in Euros and in Canada are denominated in Canadian Dollars. We also had other transactions denominated 
in foreign currencies during the year ended December 31, 2021, primarily related to operations in Europe, contract 
manufacturing and ex-U.S. clinical trial activities, and we expect to continue to do so. Our royalties from Takeda are 
derived from their sales of ADCETRIS in multiple countries and in multiple currencies that are converted into U.S. 
dollars for purposes of determining the royalty owed to us. Our limited foreign currency exposure is to fluctuations in the 
Euro, British Pound, Canadian Dollar, Swiss Franc, Danish Krone, and Swedish Krona. We do not anticipate that foreign 
currency transaction gains or losses will be significant at our current level of operations. However, transaction gains or 
losses may become significant in the future as we continue to expand our operations internationally. We have not 
engaged in foreign currency hedging to date; however, we may do so in the future.

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87

 
 
 
Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

Index to Financial Statements

To the Board of Directors and Stockholders of

Seagen Inc. 

Report of Independent Registered Public Accounting Firm (PCAOB ID 238)

Consolidated Balance Sheets

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Page

89

91

92

93

94

95

Opinions on the Financial Statements and Internal Control over Financial Reporting 

We have audited the accompanying consolidated balance sheets of Seagen Inc. and its subsidiaries (the “Company”) as of December 

31, 2021 and 2020, and the related consolidated statements of comprehensive income (loss), of stockholders’ equity and of cash flows 

for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the 

“consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 

2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring 

Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of 

the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the 

period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in 

our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 

2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over 

financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's 

Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the 

Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We 

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are 

required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules 

and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits 

to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to 

error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the 

consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such 

procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial 

statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well 

as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting 

included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and 

testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included 

performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable 

basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of 

financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting 

principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the 

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the 

company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in 

accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in 

accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding 

prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect 

on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections 

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in 

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

88

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Item 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

Index to Financial Statements

To the Board of Directors and Stockholders of
Seagen Inc. 

Report of Independent Registered Public Accounting Firm (PCAOB ID 238)

Consolidated Balance Sheets

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Stockholders’ Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Page

89

91

92

93

94

95

Opinions on the Financial Statements and Internal Control over Financial Reporting 

We have audited the accompanying consolidated balance sheets of Seagen Inc. and its subsidiaries (the “Company”) as of December 
31, 2021 and 2020, and the related consolidated statements of comprehensive income (loss), of stockholders’ equity and of cash flows 
for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the 
“consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 
2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of 
the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the 
period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in 
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 
2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over 
financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's 
Annual Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the 
Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We 
are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are 
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules 
and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits 
to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to 
error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the 
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such 
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial 
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well 
as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting 
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and 
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included 
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable 
basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of 
financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting 
principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the 
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the 
company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in 
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in 
accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding 
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect 
on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections 
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in 
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

88

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements 
that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are 
material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The 
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a 
whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or 
on the accounts or disclosures to which it relates.

Government-mandated rebates - Medicaid

As described in Note 1 to the consolidated financial statements, the Company records product sales net of estimated government-
mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. Accruals are established for these 
deductions, and actual amounts incurred are offset against applicable accruals. As disclosed by management, amounts accrued for 
rebates and chargebacks as of December 31, 2021 are $74.9 million, with the most significant portion of the accrual balance related to 
ADCETRIS Medicaid rebates. Management estimates Medicaid rebates using the expected value approach, based on a variety of 
factors, including payor mix and experience to-date. Management also reviews historical rebate information to further refine these 
estimates. 

The principal considerations for our determination that performing procedures relating to government-mandated rebates – Medicaid is 
a critical audit matter are (i) the significant judgment by management when determining the rebate estimate and (ii) the high degree of 
auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s estimate 
and significant assumptions related to payor mix and estimated purchases covered by the various state Medicaid programs. 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion 
on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the various state 
Medicaid programs, including controls over the assumptions used to estimate the rebate. These procedures also included, among 
others, (i) testing management’s process for determining the rebate estimate; (ii) evaluating the appropriateness of management’s 
model; (iii) testing the completeness and accuracy of the underlying data used by management; and (iv) evaluating the significant 
assumptions used by management including payor mix and estimated purchases covered by the various state Medicaid programs. 
Evaluating management’s assumptions involved evaluating whether the assumptions were reasonable considering (i) the consistency 
of the historical covered purchases and rebate processing times; (ii) expansion of state Medicaid programs; (iii) comparing 
assumptions to other industry data; (iv) testing of actual rebate claims processed by the Company; and (v) whether these assumptions 
were consistent with evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

Seattle, Washington
February 9, 2022

We have served as the Company’s auditor since 1998.

Seagen Inc.

Consolidated Balance Sheets

(In thousands, except par value)

Assets

Current assets:

Cash and cash equivalents

Short-term investments

Accounts receivable, net

Inventories

Prepaid expenses and other current assets

Total current assets

Property and equipment, net

Operating lease right-of-use assets

Long-term investments

Intangible assets, net

Goodwill

Other non-current assets

Total assets

Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

Accrued liabilities and other

Total current liabilities

Long-term liabilities:

Operating lease liabilities, long-term

Other long-term liabilities

Total long-term liabilities

Commitments and contingencies

Stockholders’ equity:

outstanding at December 31, 2020

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

Preferred stock, $0.001 par value, 5,000 shares authorized; none issued

Common stock, $0.001 par value, 250,000 shares authorized; 183,381 shares 

issued and outstanding at December 31, 2021 and 180,902 shares issued and 

The accompanying notes are an integral part of these consolidated financial statements.

December 31,

2021

2020

$ 

424,834  $ 

558,424 

1,735,202 

2,000,996 

2,869,194 

3,062,384 

$  3,719,604  $  4,000,906 

$ 

114,824  $ 

78,067 

324,988 

116,136 

61,840 

196,700 

61,480 

100,830 

283,680 

274,671 

21,161 

310,071 

388,138 

61,884 

62,784 

124,668 

389,256 

200,663 

119,239 

210,073 

57,889 

— 

260,593 

274,671 

47,184 

454,030 

568,854 

56,665 

28,946 

85,611 

— 

183 

1,179 

4,607,816 

4,356,922 

181 

565 

(1,544,039)   

(869,568) 

3,065,139 

3,488,100 

$  3,719,604  $  4,000,906 

90

91

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements 

that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are 

material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The 

communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a 

whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or 

on the accounts or disclosures to which it relates.

Government-mandated rebates - Medicaid

As described in Note 1 to the consolidated financial statements, the Company records product sales net of estimated government-

mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. Accruals are established for these 

deductions, and actual amounts incurred are offset against applicable accruals. As disclosed by management, amounts accrued for 

rebates and chargebacks as of December 31, 2021 are $74.9 million, with the most significant portion of the accrual balance related to 

ADCETRIS Medicaid rebates. Management estimates Medicaid rebates using the expected value approach, based on a variety of 

factors, including payor mix and experience to-date. Management also reviews historical rebate information to further refine these 

estimates. 

The principal considerations for our determination that performing procedures relating to government-mandated rebates – Medicaid is 

a critical audit matter are (i) the significant judgment by management when determining the rebate estimate and (ii) the high degree of 

auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to management’s estimate 

and significant assumptions related to payor mix and estimated purchases covered by the various state Medicaid programs. 

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion 

on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the various state 

Medicaid programs, including controls over the assumptions used to estimate the rebate. These procedures also included, among 

others, (i) testing management’s process for determining the rebate estimate; (ii) evaluating the appropriateness of management’s 

model; (iii) testing the completeness and accuracy of the underlying data used by management; and (iv) evaluating the significant 

assumptions used by management including payor mix and estimated purchases covered by the various state Medicaid programs. 

Evaluating management’s assumptions involved evaluating whether the assumptions were reasonable considering (i) the consistency 

of the historical covered purchases and rebate processing times; (ii) expansion of state Medicaid programs; (iii) comparing 

assumptions to other industry data; (iv) testing of actual rebate claims processed by the Company; and (v) whether these assumptions 

were consistent with evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

Seattle, Washington

February 9, 2022

We have served as the Company’s auditor since 1998.

Seagen Inc.
Consolidated Balance Sheets
(In thousands, except par value)

December 31,

2021

2020

Assets
Current assets:

Cash and cash equivalents
Short-term investments
Accounts receivable, net
Inventories
Prepaid expenses and other current assets

Total current assets

Property and equipment, net
Operating lease right-of-use assets
Long-term investments

Intangible assets, net
Goodwill
Other non-current assets
Total assets

Liabilities and Stockholders’ Equity
Current liabilities:

Accounts payable
Accrued liabilities and other
Total current liabilities

Long-term liabilities:

Operating lease liabilities, long-term
Other long-term liabilities

Total long-term liabilities
Commitments and contingencies
Stockholders’ equity:

$ 

424,834  $ 

558,424 
2,000,996 
324,988 
116,136 
61,840 
3,062,384 
196,700 
61,480 
100,830 
283,680 
274,671 
21,161 
$  3,719,604  $  4,000,906 

1,735,202 
389,256 
200,663 
119,239 
2,869,194 
210,073 
57,889 
— 
260,593 
274,671 
47,184 

$ 

114,824  $ 
454,030 
568,854 

78,067 
310,071 
388,138 

56,665 
28,946 
85,611 

61,884 
62,784 
124,668 

Preferred stock, $0.001 par value, 5,000 shares authorized; none issued

— 

Common stock, $0.001 par value, 250,000 shares authorized; 183,381 shares 
issued and outstanding at December 31, 2021 and 180,902 shares issued and 
outstanding at December 31, 2020

Additional paid-in capital
Accumulated other comprehensive income
Accumulated deficit

Total stockholders’ equity
Total liabilities and stockholders’ equity

183 
4,607,816 
1,179 

181 
4,356,922 
565 
(869,568) 
3,488,100 
$  3,719,604  $  4,000,906 

(1,544,039)   
3,065,139 

The accompanying notes are an integral part of these consolidated financial statements.

90

91

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.
Consolidated Statements of Comprehensive Income (Loss) 
(In thousands, except per share amounts)

Consolidated Statements of Stockholders’ Equity

Seagen Inc.

(In thousands)

Revenues:

Net product sales

Royalty revenues
Collaboration and license agreement revenues

Total revenues
Costs and expenses:
Cost of sales
Research and development
Selling, general and administrative

Total costs and expenses

(Loss) income  from operations
Investment and other income, net
(Loss) income before income taxes
(Benefit) provision for income taxes
Net (loss) income
Net (loss) income per share - basic

Net (loss) income per share - diluted
Shares used in computation of per share amounts - basic

Shares used in computation of per share amounts - diluted

Comprehensive (loss) income:
Net (loss) income
Other comprehensive income:

Years ended December 31,

2021

2020

2019

$  1,385,566  $  1,000,598  $ 

150,523 
38,282 
1,574,371 

126,756 
1,048,182 
2,175,536 

627,977 
138,491 
150,245 
916,713 

311,565 
1,228,672 
716,190 
2,256,427 
(682,056)   
6,351 
(675,705)   
(1,234)   
(674,471)  $ 
(3.70)  $ 

217,720 
827,129 
533,835 
1,578,684 
596,852 
18,849 
615,701 
2,031 
613,670  $ 
3.51  $ 

43,952 
719,374 
373,932 
1,137,258 
(220,545) 
61,895 
(158,650) 
— 
(158,650) 
(0.96) 

(3.70)  $ 

3.37  $ 

(0.96) 

182,048 
182,048 

174,834 
182,287 

165,498 
165,498 

$ 
$ 

$ 

$ 

(674,471)  $ 

613,670  $ 

(158,650) 

Unrealized (loss) gain on securities available-for-sale, net of 
income tax provision of $0, $0, and $0, respectively
Foreign currency translation gain, net of income tax provision of 
$0, $0, and $0, respectively

Total other comprehensive income

Comprehensive (loss) income

(211)   

(186)   

204 

825 
614 
(673,857)  $ 

522 
336 
614,006  $ 

65 
269 
(158,381) 

$ 

The accompanying notes are an integral part of these consolidated financial statements.

Balances at December 31, 2018

Net loss

Other comprehensive income

Issuance of common stock for stock option 

exercises and employee stock purchase plan

Restricted stock vested during the period, net

Issuance of common stock

Share-based compensation

Balances at December 31, 2019

Net income

Other comprehensive income

Issuance of common stock for stock option 

exercises and employee stock purchase plan

Restricted stock vested during the period, net

Issuance of common stock

Share-based compensation

Balances at December 31, 2020

Net loss

Other comprehensive income

Issuance of common stock for stock option 

exercises and employee stock purchase plan

Restricted stock vested during the period, net

Share-based compensation

Balances at December 31, 2021

Common stock

Shares

Amount

Additional

paid-in

capital

Accumulated 

other 

comprehensive 

income (loss)

Accumulated

stockholders’

deficit

Total

equity

160,262 

$ 

160 

$ 

2,598,411 

$ 

(40)  $ 

(1,324,588)  $ 

1,273,943 

(158,650) 

(158,650) 

171,994 

— 

— 

2,621 

897 

8,214 

— 

— 

— 

— 

— 

— 

2,466 

1,442 

5,000 

1,545 

934 

— 

180,902 

— 

— 

3 

1 

8 

— 

172 

— 

— 

2 

2 

5 

— 

181 

— 

— 

1 

1 

— 

— 

— 

89,148 

(1) 

548,683 

122,883 

3,359,124 

— 

— 

96,255 

(2) 

749,845 

151,700 

4,356,922 

— 

— 

77,778 

(1) 

173,117 

— 

269 

— 

— 

— 

— 

229 

— 

336 

— 

— 

— 

— 

565 

— 

614 

— 

— 

— 

(1,483,238) 

1,876,287 

613,670 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

— 

(869,568) 

(674,471) 

269 

89,151 

— 

548,691 

122,883 

613,670 

336 

96,257 

— 

749,850 

151,700 

3,488,100 

(674,471) 

614 

77,779 

— 

173,117 

183,381 

$ 

183 

$ 

4,607,816 

$ 

1,179 

$ 

(1,544,039)  $ 

3,065,139 

The accompanying notes are an integral part of these consolidated financial statements.

92

93

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.

Consolidated Statements of Comprehensive Income (Loss) 

(In thousands, except per share amounts)

Seagen Inc.
Consolidated Statements of Stockholders’ Equity
(In thousands)

Collaboration and license agreement revenues

Revenues:

Net product sales

Royalty revenues

Total revenues

Costs and expenses:

Cost of sales

Research and development

Selling, general and administrative

Total costs and expenses

(Loss) income  from operations

Investment and other income, net

(Loss) income before income taxes

(Benefit) provision for income taxes

Net (loss) income

Net (loss) income per share - basic

Net (loss) income per share - diluted

Shares used in computation of per share amounts - basic

Shares used in computation of per share amounts - diluted

Comprehensive (loss) income:

Net (loss) income

Other comprehensive income:

Unrealized (loss) gain on securities available-for-sale, net of 

income tax provision of $0, $0, and $0, respectively

Foreign currency translation gain, net of income tax provision of 

$0, $0, and $0, respectively

Total other comprehensive income

Comprehensive (loss) income

Years ended December 31,

2021

2020

2019

$  1,385,566  $  1,000,598  $ 

627,977 

150,523 

38,282 

1,574,371 

311,565 

1,228,672 

716,190 

126,756 

1,048,182 

2,175,536 

217,720 

827,129 

533,835 

138,491 

150,245 

916,713 

43,952 

719,374 

373,932 

2,256,427 

1,578,684 

1,137,258 

(682,056)   

596,852 

(220,545) 

6,351 

18,849 

61,895 

(675,705)   

615,701 

(158,650) 

(1,234)   

2,031 

— 

(674,471)  $ 

613,670  $ 

(158,650) 

(3.70)  $ 

(3.70)  $ 

3.51  $ 

3.37  $ 

182,048 

182,048 

174,834 

182,287 

(0.96) 

(0.96) 

165,498 

165,498 

$ 

$ 

$ 

$ 

(674,471)  $ 

613,670  $ 

(158,650) 

(211)   

(186)   

825 

614 

522 

336 

204 

65 

269 

$ 

(673,857)  $ 

614,006  $ 

(158,381) 

The accompanying notes are an integral part of these consolidated financial statements.

Balances at December 31, 2018

Net loss

Other comprehensive income

Issuance of common stock for stock option 
exercises and employee stock purchase plan

Restricted stock vested during the period, net

Issuance of common stock

Share-based compensation

Balances at December 31, 2019

Net income

Other comprehensive income

Issuance of common stock for stock option 
exercises and employee stock purchase plan

Restricted stock vested during the period, net

Issuance of common stock

Share-based compensation

Balances at December 31, 2020

Net loss

Other comprehensive income

Issuance of common stock for stock option 
exercises and employee stock purchase plan

Restricted stock vested during the period, net

Share-based compensation

Balances at December 31, 2021

Common stock

Shares

Amount

Additional
paid-in
capital

Accumulated 
other 
comprehensive 
income (loss)

Accumulated
deficit

Total
stockholders’
equity

160,262 

$ 

160 

$ 

2,598,411 

$ 

(40)  $ 

(1,324,588)  $ 

1,273,943 

— 

— 

2,621 

897 

8,214 

— 

171,994 

— 

— 

2,466 

1,442 

5,000 

— 

180,902 

— 

— 

1,545 

934 

— 

— 

— 

3 

1 

8 

— 

172 

— 

— 

2 

2 

5 

— 

181 

— 

— 

1 

1 

— 

— 

— 

89,148 

(1) 

548,683 

122,883 

3,359,124 

— 

— 

96,255 

(2) 

749,845 

151,700 

4,356,922 

— 

— 

77,778 

(1) 

173,117 

— 

269 

— 

— 

— 

— 

229 

— 

336 

— 

— 

— 

— 

565 

— 

614 

— 

— 

— 

(158,650) 

(158,650) 

— 

— 

— 

— 

— 

269 

89,151 

— 

548,691 

122,883 

(1,483,238) 

1,876,287 

613,670 

— 

— 

— 

— 

— 

(869,568) 

(674,471) 

— 

— 

— 

— 

613,670 

336 

96,257 

— 

749,850 

151,700 

3,488,100 

(674,471) 

614 

77,779 

— 

173,117 

183,381 

$ 

183 

$ 

4,607,816 

$ 

1,179 

$ 

(1,544,039)  $ 

3,065,139 

The accompanying notes are an integral part of these consolidated financial statements.

92

93

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.
Consolidated Statements of Cash Flows
(In thousands)

Operating activities:
Net (loss) income

Adjustments to reconcile net income (loss) to net cash provided 
(used) by operating activities
Share-based compensation
Depreciation and amortization

Amortization of intangible assets
Amortization of right-of-use-assets
Amortization of premiums, accretion of discounts, and (gains) 

losses on debt securities

Gain on equity securities
(Gain) loss on disposals of property and equipment

Deferred income taxes
Changes in operating assets and liabilities:

Accounts receivable, net
Inventories
Prepaid expenses and other assets
Lease liabilities

Deferred revenue

Other liabilities

Net cash (used) provided by operating activities

Investing activities:

Purchases of securities
Proceeds from maturities of securities
Proceeds from sales of securities
Purchases of property and equipment

Net cash provided (used) by investing activities

Financing activities:

Net proceeds from issuance of common stock
Proceeds from exercise of stock options and employee stock 

purchase plan

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Years ended December 31,

2021

2020

2019

$ 

(674,471)  $ 

613,670  $ 

(158,650) 

173,117 
42,854 
23,087 
12,685 

147,233 
36,045 
16,345 
10,994 

15,933 
(4,744)   

— 
548 

3,104 
(11,604)   

(26)   
(2,053)   

(64,268)   
(84,527)   
(66,422)   

(88,727)   
(30,204)   
(22,231)   

(14,388)   

(11,271)   

— 
141,589 
(499,007)   

— 
195,293 
856,568 

(3,424,286)   
3,765,500 
— 

(52,330)   
288,884 

(2,483,336)   
952,000 
194,733 
(82,409)   
(1,419,012)   

127,349 
23,759 
15 
9,740 

(4,916) 
(50,124) 

1,853 
— 

(89,720) 
(32,693) 
2,459 

(6,660) 

(33,600) 
47,451 
(163,737) 

(992,976) 
786,000 
— 
(70,753) 
(277,729) 

— 

749,850 

548,691 

77,779 
77,779 
(1,246)   
(133,590)   
558,424 
424,834  $ 

96,258 
846,108 
198 
283,862 
274,562 
558,424  $ 

89,151 
637,842 
— 
196,376 
78,186 
274,562 

$ 

The accompanying notes are an integral part of these consolidated financial statements.

Seagen Inc.

Notes to Consolidated Financial Statements

1. Organization and Summary of Significant Accounting Policies

-

Organization 

We are a biotechnology company that develops and commercializes targeted therapies to treat cancer. We are 

commercializing ADCETRIS®, or brentuximab vedotin, for the treatment of certain CD30-expressing lymphomas, 

PADCEV®, or enfortumab vedotin-ejfv, for the treatment of certain metastatic urothelial cancers, TIVDAK™, or 

tisotumab vedotin-tftv, for the treatment of certain metastatic cervical cancers, and TUKYSA®, or tucatinib, for 

treatment of certain metastatic HER2-positive breast cancers. We are also advancing a pipeline of novel therapies for 

solid tumors and blood-related cancers designed to address unmet medical needs and improve treatment outcomes for 

patients. Many of our programs, including ADCETRIS, PADCEV and TIVDAK, are based on our antibody-drug 

conjugate, or ADC, technology that utilizes the targeting ability of monoclonal antibodies to deliver cell-killing agents 

directly to cancer cells.

Basis of presentation 

The accompanying consolidated financial statements reflect the accounts of Seagen Inc. and its wholly-owned 

subsidiaries (collectively “Seagen,” “we,” “our,” or “us”). The consolidated financial statements have been prepared in 

accordance with U.S. generally accepted accounting principles, or GAAP. All intercompany transactions and balances 

have been eliminated. Management has determined that we operate in one segment: the development and sale of 

pharmaceutical products on our own behalf or in collaboration with others. 

Use of estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and 

judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual 

results could differ from those estimates. Estimates include those used for revenue recognition, valuation of investments, 

inventory valuation, accrued liabilities, including those related to the long-term incentive plans and performance-based 

equity, clinical trials and contingencies, and stock option valuation.

We consider all highly liquid investments with maturities of three months or less at the date of acquisition to be 

Cash and cash equivalents 

cash equivalents.

Non-cash activities 

for additional information.

Investments 

We had $9.9 million and $6.0 million of accrued capital expenditures as of December 31, 2021 and 2020, 

respectively. Accrued capital expenditures have been treated as a non-cash investing activity and, accordingly, have not 

been included in the consolidated statement of cash flows until such amounts have been paid in cash. During the years 

ended December 31, 2021, 2020 and 2019, we recorded $9.1 million, $7.2 million, and $40.3 million, respectively, of 

right-of-use assets in exchange for lease liabilities, which has been treated as a non-cash operating activity. See Note 3 

We hold certain equity securities which are reported at estimated fair value based on quoted market prices. 

Changes in the fair value of equity securities are recorded in income or loss. The cost of equity securities for purposes of 

computing gains and losses is based on the specific identification method.

94

95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows

Seagen Inc.

(In thousands)

Operating activities:

Net (loss) income

Adjustments to reconcile net income (loss) to net cash provided 

(used) by operating activities

Share-based compensation

Depreciation and amortization

Amortization of intangible assets

Amortization of right-of-use-assets

losses on debt securities

Gain on equity securities

Amortization of premiums, accretion of discounts, and (gains) 

(Gain) loss on disposals of property and equipment

Deferred income taxes

Changes in operating assets and liabilities:

Accounts receivable, net

Inventories

Prepaid expenses and other assets

Lease liabilities

Deferred revenue

Other liabilities

Net cash (used) provided by operating activities

Investing activities:

Purchases of securities

Proceeds from maturities of securities

Proceeds from sales of securities

Purchases of property and equipment

Net cash provided (used) by investing activities

Financing activities:

Net proceeds from issuance of common stock

Proceeds from exercise of stock options and employee stock 

purchase plan

Net cash provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Years ended December 31,

2021

2020

2019

$ 

(674,471)  $ 

613,670  $ 

(158,650) 

173,117 

147,233 

36,045 

16,345 

10,994 

127,349 

23,759 

15 

9,740 

42,854 

23,087 

12,685 

15,933 

3,104 

(4,916) 

(4,744)   

(11,604)   

(50,124) 

— 

548 

(26)   

(2,053)   

1,853 

— 

(64,268)   

(84,527)   

(66,422)   

(88,727)   

(30,204)   

(22,231)   

(14,388)   

(11,271)   

— 

141,589 

(499,007)   

— 

195,293 

856,568 

(89,720) 

(32,693) 

2,459 

(6,660) 

(33,600) 

47,451 

(163,737) 

(3,424,286)   

(2,483,336)   

(992,976) 

3,765,500 

— 

952,000 

194,733 

786,000 

— 

(52,330)   

(82,409)   

(70,753) 

288,884 

(1,419,012)   

(277,729) 

— 

749,850 

548,691 

77,779 

77,779 

(1,246)   

(133,590)   

558,424 

96,258 

846,108 

198 

283,862 

274,562 

89,151 

637,842 

— 

196,376 

78,186 

$ 

424,834  $ 

558,424  $ 

274,562 

The accompanying notes are an integral part of these consolidated financial statements.

Seagen Inc.
Notes to Consolidated Financial Statements

-
1. Organization and Summary of Significant Accounting Policies

Organization 

We are a biotechnology company that develops and commercializes targeted therapies to treat cancer. We are 
commercializing ADCETRIS®, or brentuximab vedotin, for the treatment of certain CD30-expressing lymphomas, 
PADCEV®, or enfortumab vedotin-ejfv, for the treatment of certain metastatic urothelial cancers, TIVDAK™, or 
tisotumab vedotin-tftv, for the treatment of certain metastatic cervical cancers, and TUKYSA®, or tucatinib, for 
treatment of certain metastatic HER2-positive breast cancers. We are also advancing a pipeline of novel therapies for 
solid tumors and blood-related cancers designed to address unmet medical needs and improve treatment outcomes for 
patients. Many of our programs, including ADCETRIS, PADCEV and TIVDAK, are based on our antibody-drug 
conjugate, or ADC, technology that utilizes the targeting ability of monoclonal antibodies to deliver cell-killing agents 
directly to cancer cells.

Basis of presentation 

The accompanying consolidated financial statements reflect the accounts of Seagen Inc. and its wholly-owned 

subsidiaries (collectively “Seagen,” “we,” “our,” or “us”). The consolidated financial statements have been prepared in 
accordance with U.S. generally accepted accounting principles, or GAAP. All intercompany transactions and balances 
have been eliminated. Management has determined that we operate in one segment: the development and sale of 
pharmaceutical products on our own behalf or in collaboration with others. 

Use of estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and 

judgments that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual 
results could differ from those estimates. Estimates include those used for revenue recognition, valuation of investments, 
inventory valuation, accrued liabilities, including those related to the long-term incentive plans and performance-based 
equity, clinical trials and contingencies, and stock option valuation.

Cash and cash equivalents 

We consider all highly liquid investments with maturities of three months or less at the date of acquisition to be 

cash equivalents.

Non-cash activities 

We had $9.9 million and $6.0 million of accrued capital expenditures as of December 31, 2021 and 2020, 
respectively. Accrued capital expenditures have been treated as a non-cash investing activity and, accordingly, have not 
been included in the consolidated statement of cash flows until such amounts have been paid in cash. During the years 
ended December 31, 2021, 2020 and 2019, we recorded $9.1 million, $7.2 million, and $40.3 million, respectively, of 
right-of-use assets in exchange for lease liabilities, which has been treated as a non-cash operating activity. See Note 3 
for additional information.

Investments 

We hold certain equity securities which are reported at estimated fair value based on quoted market prices. 
Changes in the fair value of equity securities are recorded in income or loss. The cost of equity securities for purposes of 
computing gains and losses is based on the specific identification method.

94

95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

We invest our available cash primarily in debt securities. These debt securities are classified as available-for-sale, 
which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive 
income (loss) in stockholders’ equity. Realized gains, realized losses and declines in the value of debt securities judged 
to be other-than-temporary are included in investment and other income, net. The cost of debt securities for purposes of 
computing realized and unrealized gains and losses is based on the specific identification method. Amortization of 
premiums and accretion of discounts on debt securities are included in investment and other income, net. Interest and 
dividends earned are included in investment and other income, net. Accrued interest receivable as of December 31, 2021 
and 2020, were $0.4 million and $5.3 million, respectively, and were included in prepaid expenses and other current 
assets. We classify investments in debt securities maturing within one year of the reporting date, or where management’s 
intent is to use the investments to fund current operations or to make them available for current operations, as short-term 
investments. 

If the estimated fair value of a debt security is below its carrying value, we evaluate whether it is more likely than 
not that we will sell the security before its anticipated recovery in market value and whether evidence indicating that the 
cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. We also 
evaluate whether or not we intend to sell the investment. If the impairment is considered to be other-than-temporary, the 
security is written down to its estimated fair value. In addition, we consider whether credit losses exist for any securities. 
A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the 
security. Other-than-temporary declines in estimated fair value and credit losses are included in investment and other 
income, net.

Fair value of financial instruments 

The recorded amounts of certain financial instruments, including cash and cash equivalents, interest receivable, 

accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short 
maturities. Investments that are classified as available-for-sale are recorded at estimated fair value. The estimated fair 
value for securities held is determined using quoted market prices, broker or dealer quotations, or alternative pricing 
sources with reasonable levels of price transparency.

Leases

We determine if an arrangement is a lease at inception date. All of our currently effective leases are classified as 

operating leases. Operating lease liabilities and the corresponding right-of-use assets are recognized based on the present 
value of the future minimum lease payments over the lease term at commencement date. The operating lease right-of-use 
asset also excludes lease incentives and initial direct costs incurred. As our existing leases do not contain an implicit 
interest rate, we estimate our incremental borrowing rate based on information available at commencement date in 
determining the present value of future payments. We include options to extend the lease in our lease liability and right-
of-use asset when it is reasonably certain that we will exercise that option. Our lease agreements do not contain any 
material residual value guarantees or material restrictive covenants. Variable lease cost primarily includes building 
operating expenses as charged to us by our landlords.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For our 

short-term leases, we recognize lease payments as an expense on a straight-line base over the lease term. 

Inventories

We consider regulatory approval of product candidates to be uncertain. Accordingly, we charge manufacturing 

costs to research and development expense until such time as a product has received regulatory approval for commercial 
sale. Production costs for our marketed products are capitalized into inventory. Inventory that is deployed for clinical, 
research or development use is charged to research and development expense when it is no longer available for 
commercial sales. Production costs for our other product candidates are charged to research and development expense.

We value our inventories at the lower of cost or market value. Cost is determined on a specific identification basis. 
Inventory includes the cost of materials, third-party contract manufacturing and overhead associated with the production 
of our commercialized products. In the event that we identify excess, obsolete or unsalable inventory, its value is written 
down to net realizable value.

Property and equipment

Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are 

depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows:

Building and improvements

Laboratory and manufacturing equipment

Furniture and fixtures

Computers, software and office equipment

Leasehold improvements are amortized over the shorter of the remaining term of the applicable lease or the useful 

life of the asset. Gains and losses from the disposal of property and equipment are reflected in income or loss at the time 

of disposition and have not been significant. Expenditures for additions and improvements to our facilities are capitalized 

and expenditures for maintenance and repairs are charged to expense as incurred. 

Intangible assets, net

Our intangible assets are primarily comprised of acquired TUKYSA technology. Upon FDA approval and 

commercial launch of TUKYSA in April 2020, we classified in-process research and development costs related to the 

acquired TUKYSA technology as finite-lived intangible assets. The following table presents the balances of our finite-

lived intangible assets for the periods presented: 

Years

20-30

5-15

5

3

December 31,

2021

2020

$ 

$ 

305,650  $ 

(45,057)   

260,593  $ 

305,650 

(21,970) 

283,680 

Years ended December 31,

2021

2020

2019

$ 

23,087  $ 

16,345  $ 

— 

(dollars in thousands)

Gross carrying value

Less: accumulated amortization

Total

(dollars in thousands )

Amortization expense

Goodwill

The following table presents our amortization expense related to acquired TUKYSA technology costs, included in 

cost of sales in our consolidated statements of comprehensive income (loss), for the periods presented: 

The weighted average useful life of our finite-lived intangible assets was 11 years as of December 31, 2021, and 

estimated future amortization expense related to acquired TUKYSA technology costs is $23.1 million for each of the 

years ending December 31, 2022 through December 31, 2026.

We evaluate goodwill for impairment annually, as of October 1, or more frequently when events or circumstances 

indicate that impairment may have occurred. As part of the impairment evaluation, we may elect to perform an 

assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value 

of the reporting unit (for goodwill) is less than its carrying value, we then would proceed with the quantitative 

impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value 

exceeds the fair value.

96

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Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

We invest our available cash primarily in debt securities. These debt securities are classified as available-for-sale, 

which are reported at estimated fair value with unrealized gains and losses included in accumulated other comprehensive 

income (loss) in stockholders’ equity. Realized gains, realized losses and declines in the value of debt securities judged 

to be other-than-temporary are included in investment and other income, net. The cost of debt securities for purposes of 

computing realized and unrealized gains and losses is based on the specific identification method. Amortization of 

premiums and accretion of discounts on debt securities are included in investment and other income, net. Interest and 

dividends earned are included in investment and other income, net. Accrued interest receivable as of December 31, 2021 

and 2020, were $0.4 million and $5.3 million, respectively, and were included in prepaid expenses and other current 

assets. We classify investments in debt securities maturing within one year of the reporting date, or where management’s 

intent is to use the investments to fund current operations or to make them available for current operations, as short-term 

investments. 

If the estimated fair value of a debt security is below its carrying value, we evaluate whether it is more likely than 

not that we will sell the security before its anticipated recovery in market value and whether evidence indicating that the 

cost of the investment is recoverable within a reasonable period of time outweighs evidence to the contrary. We also 

evaluate whether or not we intend to sell the investment. If the impairment is considered to be other-than-temporary, the 

security is written down to its estimated fair value. In addition, we consider whether credit losses exist for any securities. 

A credit loss exists if the present value of cash flows expected to be collected is less than the amortized cost basis of the 

security. Other-than-temporary declines in estimated fair value and credit losses are included in investment and other 

income, net.

Fair value of financial instruments 

The recorded amounts of certain financial instruments, including cash and cash equivalents, interest receivable, 

accounts receivable, accounts payable and accrued liabilities approximate fair value due to their relatively short 

maturities. Investments that are classified as available-for-sale are recorded at estimated fair value. The estimated fair 

value for securities held is determined using quoted market prices, broker or dealer quotations, or alternative pricing 

sources with reasonable levels of price transparency.

Leases

We determine if an arrangement is a lease at inception date. All of our currently effective leases are classified as 

operating leases. Operating lease liabilities and the corresponding right-of-use assets are recognized based on the present 

value of the future minimum lease payments over the lease term at commencement date. The operating lease right-of-use 

asset also excludes lease incentives and initial direct costs incurred. As our existing leases do not contain an implicit 

interest rate, we estimate our incremental borrowing rate based on information available at commencement date in 

determining the present value of future payments. We include options to extend the lease in our lease liability and right-

of-use asset when it is reasonably certain that we will exercise that option. Our lease agreements do not contain any 

material residual value guarantees or material restrictive covenants. Variable lease cost primarily includes building 

operating expenses as charged to us by our landlords.

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. For our 

short-term leases, we recognize lease payments as an expense on a straight-line base over the lease term. 

Inventories

We consider regulatory approval of product candidates to be uncertain. Accordingly, we charge manufacturing 

costs to research and development expense until such time as a product has received regulatory approval for commercial 

sale. Production costs for our marketed products are capitalized into inventory. Inventory that is deployed for clinical, 

research or development use is charged to research and development expense when it is no longer available for 

commercial sales. Production costs for our other product candidates are charged to research and development expense.

We value our inventories at the lower of cost or market value. Cost is determined on a specific identification basis. 

Inventory includes the cost of materials, third-party contract manufacturing and overhead associated with the production 

of our commercialized products. In the event that we identify excess, obsolete or unsalable inventory, its value is written 

down to net realizable value.

Property and equipment

Property and equipment are stated at cost. Land is not depreciated, while all other property and equipment are 

depreciated using the straight-line method over the estimated useful lives of the assets, which are generally as follows:

Building and improvements
Laboratory and manufacturing equipment
Furniture and fixtures
Computers, software and office equipment

Years

20-30
5-15
5
3

Leasehold improvements are amortized over the shorter of the remaining term of the applicable lease or the useful 
life of the asset. Gains and losses from the disposal of property and equipment are reflected in income or loss at the time 
of disposition and have not been significant. Expenditures for additions and improvements to our facilities are capitalized 
and expenditures for maintenance and repairs are charged to expense as incurred. 

Intangible assets, net

Our intangible assets are primarily comprised of acquired TUKYSA technology. Upon FDA approval and 
commercial launch of TUKYSA in April 2020, we classified in-process research and development costs related to the 
acquired TUKYSA technology as finite-lived intangible assets. The following table presents the balances of our finite-
lived intangible assets for the periods presented: 

(dollars in thousands)
Gross carrying value

Less: accumulated amortization

Total

December 31,

2021

2020

$ 

$ 

305,650  $ 

(45,057)   

260,593  $ 

305,650 

(21,970) 

283,680 

The following table presents our amortization expense related to acquired TUKYSA technology costs, included in 

cost of sales in our consolidated statements of comprehensive income (loss), for the periods presented: 

(dollars in thousands )
Amortization expense

Years ended December 31,

2021

2020

2019

$ 

23,087  $ 

16,345  $ 

— 

The weighted average useful life of our finite-lived intangible assets was 11 years as of December 31, 2021, and 

estimated future amortization expense related to acquired TUKYSA technology costs is $23.1 million for each of the 
years ending December 31, 2022 through December 31, 2026.

Goodwill

We evaluate goodwill for impairment annually, as of October 1, or more frequently when events or circumstances 

indicate that impairment may have occurred. As part of the impairment evaluation, we may elect to perform an 
assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value 
of the reporting unit (for goodwill) is less than its carrying value, we then would proceed with the quantitative 
impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value 
exceeds the fair value.

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Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

Impairment of long-lived assets

Revenue recognition - Royalty revenues

We assess the impairment of long-lived assets, including intangible assets and property and equipment, whenever 

events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully 
recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the 
asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. If an 
impairment in value exists, the asset is written down to its estimated fair value. We have not recognized any impairment 
losses through December 31, 2021 as there have been no events warranting an impairment analysis. Our long-lived assets 
are primarily located in the U.S.; however, we have multiple subsidiaries in foreign jurisdictions, including several 
subsidiaries in Europe.

Revenue recognition - Net product sales 

We sell our products primarily through a limited number of specialty distributors and specialty pharmacies in the 

U.S, and to a lesser extent, internationally. The delivery of our products represents a single performance obligation for 
these transactions and we record net product sales at the point in time when control is transferred to the customer, which 
generally occurs upon receipt by the customer. The transaction price for net product sales represents the amount we 
expect to receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, estimated 
product returns, and other deductions. Accruals are established for these deductions, and actual amounts incurred are 
offset against applicable accruals. We reflect these accruals as either a reduction in the related account receivable from 
the distributor or as an accrued liability, depending on the nature of the sales deduction. Sales deductions are based on 
management’s estimates that consider payor mix in target markets and experience to-date. These estimates involve a 
substantial degree of judgment.

Outside of the U.S., the transaction price for net product sales represents the amount we expect to receive, which 
is net of estimated discounts, estimated government mandated rebates, distribution fees, estimated product returns, and 
other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable 
accruals. These estimates involve judgment in estimating net product sales.

U.S. government-mandated rebates and chargebacks: We have entered into a Medicaid Drug Rebate 
Agreement, or MDRA, with the Centers for Medicare & Medicaid Services. This agreement provides for a rebate based 
on covered purchases of our products. Medicaid rebates are invoiced to us by the various state Medicaid programs. We 
estimate Medicaid rebates using the expected value approach, based on a variety of factors, including payor mix and our 
experience to-date.

We have a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive 
a discount on eligible purchases of our products. In addition, we have entered into a Pharmaceutical Pricing Agreement 
with the Secretary of Health and Human Services, which enables certain entities that qualify for government pricing 
under the Public Health Services Act, or PHS, to receive discounts on their qualified purchases of our products. Under 
these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the 
applicable discounted price. We estimate expected chargebacks for FSS and PHS purchases based on the expected value 
of each entity’s eligibility for the FSS and PHS programs. We also review historical rebate and chargeback information 
to further refine these estimates.

Distribution fees, product returns and other deductions: Our distributors charge a volume-based fee for 
distribution services that they perform for us. We allow for the return of product that is within a specified number of days 
of its expiration date or that is damaged. We estimate product returns based on our experience to-date using the expected 
value approach. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of 
commercial coinsurance amounts through our patient support programs. Estimated contributions for commercial 
coinsurance under Seagen Secure are deducted from gross sales and are based on an analysis of expected plan utilization. 
These estimates are adjusted as necessary to reflect our actual experience.

Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda 

Pharmaceutical Company Limited, or Takeda. These royalties include commercial sales-based milestones and sales 

royalties that relate predominantly to the license of intellectual property. Sales royalties are based on a percentage of 

Takeda’s net sales of ADCETRIS, with rates that range from the mid-teens to the mid-twenties based on annual net sales 

tiers. Takeda bears a portion of low single digit third-party royalty costs owed on its sales of ADCETRIS. This amount is 

included in royalty revenues. Amounts owed to our third-party licensors related to Takeda’s sales of ADCETRIS are 

recorded in cost of sales. These amounts are recognized in the period in which the related sales by Takeda occur. Royalty 

revenues also reflect amounts from Genentech, Inc., a member of the Roche Group, or Genentech, earned on net sales of 

Polivy, and amounts from GlaxoSmithKline earned on net sales of Blenrep.

Revenue recognition - Collaboration and license agreement revenues

We have collaboration and license agreements for our technology with a number of biotechnology and 

pharmaceutical companies. Under these agreements, we typically receive or are entitled to receive upfront cash payments 

and progress- and sales-dependent milestones for the achievement by our licensees of certain events, and annual 

maintenance fees and support fees for research and development services and materials provided under the agreements. 

We also are entitled to receive royalties on net sales of any resulting products incorporating our technology. Generally, 

our licensees are solely responsible for research, product development, manufacturing and commercialization of any 

product candidates under these collaborations, which includes the achievement of the potential milestones. Since we may 

not take a substantive role or control the research, development or commercialization of any products generated by some 

of our licensees, we may not be able to reasonably estimate when, if at all, any potential future milestone payments or 

royalties may be payable to us by our licensees. As such, the potential future milestone payments associated with certain 

of our collaboration and license agreements involve a substantial degree of uncertainty and risk that they may never be 

received.

Collaboration and license agreements are initially evaluated as to whether the intellectual property licenses 

granted by us represent distinct performance obligations. If they are determined to be distinct, the value of the 

intellectual property licenses would be recognized up-front while the research and development service fees would be 

recognized as the performance obligations are satisfied. Variable consideration is assessed at each reporting period as to 

whether it is not subject to future reversal of cumulative revenue and, therefore, should be included in the transaction 

price. Assessing the recognition of variable consideration requires significant judgment. If a contract includes a fixed or 

minimum amount of research and development support, this also would be included in the transaction price. Changes to 

collaboration and license agreements, such as the extensions of the research term or increasing the number of targets or 

technology covered under an existing agreement, are assessed for whether they represent a modification or should be 

accounted for as a new contract.

We have concluded that the license of intellectual property in certain collaboration and license agreements is not 

distinct from the perspective of our customers at the time of initial transfer, since we often do not license intellectual 

property without related technology transfer and research and development support services. Such evaluation requires 

significant judgment since it is made from the customer's perspective. Our performance obligations under our 

collaborations may include such things as providing intellectual property licenses, performing technology transfer, 

performing research and development consulting services, providing reagents, ADCs, and other materials, and notifying 

the customer of any enhancements to licensed technology or new technology that we discover, among others. We 

determined our performance obligations under certain collaboration and license agreements as evaluated at contract 

inception were not distinct and represented a single performance obligation. Upfront payments are amortized to revenue 

over the performance period. Upfront payment contract liabilities resulting from our collaborations do not represent a 

financing component as the payment is not financing the transfer of goods or services, and the technology underlying the 

licenses granted reflects research and development expenses already incurred by us. For agreements beyond the initial 

performance period, we have no remaining performance obligations. We may receive license maintenance fees and 

potential milestones and royalties based on collaborator development and regulatory progress, which are recorded in the 

period achieved in the case of milestones, and during the period of the related sales for royalties.

98

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Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

Impairment of long-lived assets

Revenue recognition - Royalty revenues

We assess the impairment of long-lived assets, including intangible assets and property and equipment, whenever 

events or changes in business circumstances indicate that the carrying amounts of the assets may not be fully 

recoverable. When such events occur, we determine whether there has been an impairment in value by comparing the 

asset’s carrying value with its fair value, as measured by the anticipated undiscounted net cash flows of the asset. If an 

impairment in value exists, the asset is written down to its estimated fair value. We have not recognized any impairment 

losses through December 31, 2021 as there have been no events warranting an impairment analysis. Our long-lived assets 

are primarily located in the U.S.; however, we have multiple subsidiaries in foreign jurisdictions, including several 

subsidiaries in Europe.

Revenue recognition - Net product sales 

We sell our products primarily through a limited number of specialty distributors and specialty pharmacies in the 

U.S, and to a lesser extent, internationally. The delivery of our products represents a single performance obligation for 

these transactions and we record net product sales at the point in time when control is transferred to the customer, which 

generally occurs upon receipt by the customer. The transaction price for net product sales represents the amount we 

expect to receive, which is net of estimated government-mandated rebates and chargebacks, distribution fees, estimated 

product returns, and other deductions. Accruals are established for these deductions, and actual amounts incurred are 

offset against applicable accruals. We reflect these accruals as either a reduction in the related account receivable from 

the distributor or as an accrued liability, depending on the nature of the sales deduction. Sales deductions are based on 

management’s estimates that consider payor mix in target markets and experience to-date. These estimates involve a 

substantial degree of judgment.

Outside of the U.S., the transaction price for net product sales represents the amount we expect to receive, which 

is net of estimated discounts, estimated government mandated rebates, distribution fees, estimated product returns, and 

other deductions. Accruals are established for these deductions, and actual amounts incurred are offset against applicable 

accruals. These estimates involve judgment in estimating net product sales.

U.S. government-mandated rebates and chargebacks: We have entered into a Medicaid Drug Rebate 

Agreement, or MDRA, with the Centers for Medicare & Medicaid Services. This agreement provides for a rebate based 

on covered purchases of our products. Medicaid rebates are invoiced to us by the various state Medicaid programs. We 

estimate Medicaid rebates using the expected value approach, based on a variety of factors, including payor mix and our 

experience to-date.

We have a Federal Supply Schedule, or FSS, agreement under which certain U.S. government purchasers receive 

a discount on eligible purchases of our products. In addition, we have entered into a Pharmaceutical Pricing Agreement 

with the Secretary of Health and Human Services, which enables certain entities that qualify for government pricing 

under the Public Health Services Act, or PHS, to receive discounts on their qualified purchases of our products. Under 

these agreements, distributors process a chargeback to us for the difference between wholesale acquisition cost and the 

applicable discounted price. We estimate expected chargebacks for FSS and PHS purchases based on the expected value 

of each entity’s eligibility for the FSS and PHS programs. We also review historical rebate and chargeback information 

to further refine these estimates.

Distribution fees, product returns and other deductions: Our distributors charge a volume-based fee for 

distribution services that they perform for us. We allow for the return of product that is within a specified number of days 

of its expiration date or that is damaged. We estimate product returns based on our experience to-date using the expected 

value approach. We provide financial assistance to qualifying patients that are underinsured or cannot cover the cost of 

commercial coinsurance amounts through our patient support programs. Estimated contributions for commercial 

coinsurance under Seagen Secure are deducted from gross sales and are based on an analysis of expected plan utilization. 

These estimates are adjusted as necessary to reflect our actual experience.

Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with Takeda 
Pharmaceutical Company Limited, or Takeda. These royalties include commercial sales-based milestones and sales 
royalties that relate predominantly to the license of intellectual property. Sales royalties are based on a percentage of 
Takeda’s net sales of ADCETRIS, with rates that range from the mid-teens to the mid-twenties based on annual net sales 
tiers. Takeda bears a portion of low single digit third-party royalty costs owed on its sales of ADCETRIS. This amount is 
included in royalty revenues. Amounts owed to our third-party licensors related to Takeda’s sales of ADCETRIS are 
recorded in cost of sales. These amounts are recognized in the period in which the related sales by Takeda occur. Royalty 
revenues also reflect amounts from Genentech, Inc., a member of the Roche Group, or Genentech, earned on net sales of 
Polivy, and amounts from GlaxoSmithKline earned on net sales of Blenrep.

Revenue recognition - Collaboration and license agreement revenues

We have collaboration and license agreements for our technology with a number of biotechnology and 

pharmaceutical companies. Under these agreements, we typically receive or are entitled to receive upfront cash payments 
and progress- and sales-dependent milestones for the achievement by our licensees of certain events, and annual 
maintenance fees and support fees for research and development services and materials provided under the agreements. 
We also are entitled to receive royalties on net sales of any resulting products incorporating our technology. Generally, 
our licensees are solely responsible for research, product development, manufacturing and commercialization of any 
product candidates under these collaborations, which includes the achievement of the potential milestones. Since we may 
not take a substantive role or control the research, development or commercialization of any products generated by some 
of our licensees, we may not be able to reasonably estimate when, if at all, any potential future milestone payments or 
royalties may be payable to us by our licensees. As such, the potential future milestone payments associated with certain 
of our collaboration and license agreements involve a substantial degree of uncertainty and risk that they may never be 
received.

Collaboration and license agreements are initially evaluated as to whether the intellectual property licenses 

granted by us represent distinct performance obligations. If they are determined to be distinct, the value of the 
intellectual property licenses would be recognized up-front while the research and development service fees would be 
recognized as the performance obligations are satisfied. Variable consideration is assessed at each reporting period as to 
whether it is not subject to future reversal of cumulative revenue and, therefore, should be included in the transaction 
price. Assessing the recognition of variable consideration requires significant judgment. If a contract includes a fixed or 
minimum amount of research and development support, this also would be included in the transaction price. Changes to 
collaboration and license agreements, such as the extensions of the research term or increasing the number of targets or 
technology covered under an existing agreement, are assessed for whether they represent a modification or should be 
accounted for as a new contract.

We have concluded that the license of intellectual property in certain collaboration and license agreements is not 

distinct from the perspective of our customers at the time of initial transfer, since we often do not license intellectual 
property without related technology transfer and research and development support services. Such evaluation requires 
significant judgment since it is made from the customer's perspective. Our performance obligations under our 
collaborations may include such things as providing intellectual property licenses, performing technology transfer, 
performing research and development consulting services, providing reagents, ADCs, and other materials, and notifying 
the customer of any enhancements to licensed technology or new technology that we discover, among others. We 
determined our performance obligations under certain collaboration and license agreements as evaluated at contract 
inception were not distinct and represented a single performance obligation. Upfront payments are amortized to revenue 
over the performance period. Upfront payment contract liabilities resulting from our collaborations do not represent a 
financing component as the payment is not financing the transfer of goods or services, and the technology underlying the 
licenses granted reflects research and development expenses already incurred by us. For agreements beyond the initial 
performance period, we have no remaining performance obligations. We may receive license maintenance fees and 
potential milestones and royalties based on collaborator development and regulatory progress, which are recorded in the 
period achieved in the case of milestones, and during the period of the related sales for royalties.

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Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

When no performance obligations are required of us, or following the completion of the performance obligation 

period, such amounts are recognized upon transfer of control of the goods or services to the customer. Generally, all 
amounts received or due other than sales-based milestones and royalties are classified as collaboration and license 
agreement revenues. Sales-based milestones and royalties are recognized as royalty revenue in the period the related sale 
occurred.

We generally invoice our collaborators and licensees on a monthly or quarterly basis, or upon the completion of 
the effort or achievement of a milestone, based on the terms of each agreement. Deferred revenue arises from amounts 
received in advance of the culmination of the earnings process and is recognized as revenue in future periods as 
performance obligations are satisfied. Deferred revenue expected to be recognized within the next twelve months is 
classified as a current liability.

We sell our products through a limited number of distributors and specialty pharmacies. The following table 

presents each major distributor or collaborator that comprised more than 10% of total revenue:

Research and development expenses 

The following table presents each major distributor or collaborator that accounted for more than 10% of accounts 

Research and development, or R&D, expenses consist of salaries, benefits and other headcount-related costs of 
our R&D staff, preclinical activities, clinical trials and related manufacturing costs, lab supplies, contract and outside 
service fees and facilities and overhead expenses for research, development and preclinical studies focused on drug 
discovery, development and testing. R&D activities are expensed as incurred.

Clinical trial expenses are a significant component of research and development expenses, and we outsource a 

significant portion of these costs to third parties. Third-party clinical trial expenses include investigator fees, site costs, 
clinical research organization costs, and costs for central laboratory testing and data management. Costs associated with 
activities performed under co-development collaborations are reflected in R&D expense. In-licensing fees, milestones, 
maintenance fees and other costs to acquire technologies utilized in R&D for product candidates that have not yet 
received regulatory approval and that are not expected to have alternative future use are expensed when incurred. Non-
refundable advance payments for goods or services that will be used or rendered for future R&D activities are capitalized 
and recognized as expense as the related goods are delivered or the related services are performed. This results in the 
temporary deferral of recording expense for amounts incurred for research and development activities from the time 
payments are made until the time goods or services are provided.

Advertising 

Advertising costs are expensed as incurred. We incurred $88.8 million, $59.3 million, and $33.5 million in 

advertising expenses during 2021, 2020, and 2019, respectively.

Concentration of credit risk

Cash, cash equivalents and investments are invested in accordance with our investment policy. The policy 
includes guidelines for the investment of cash reserves and is reviewed periodically to minimize credit risk. Most of our 
investments are in U.S. Treasury securities and are not federally insured. We have accounts receivable from the sale of 
our products from a small number of distributors, and from our collaborators. We do not require collateral on amounts 
due from our distributors or our collaborators and are therefore subject to credit risk.

Allowance for doubtful accounts

 We estimate an allowance for doubtful accounts based on our assessment of the collectability of customer 
accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, the age 
of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. As of 
December 31, 2021 and 2020, there was no allowance for doubtful accounts, and we recognized no credit losses during 
the years ended December 31, 2021, 2020, and 2019.

Geographic and customer information 

Net product revenues are attributed to countries based on the location of the customer. Royalty revenues and 
collaboration and licenses agreements revenues are attributed to countries based on the location of the Company’s 
subsidiary associated with the royalty or collaborative arrangement related to such revenues. Over 90% of our revenues 
and assets are related to operations in the U.S. for all periods presented; however, we have multiple subsidiaries in 
foreign jurisdictions, including several subsidiaries in Europe.

100

101

Years ended December 31,

2021

2020

2019

 36 %

 27 %

 17 %

 9 %

 — %

 18 %

 15 %

 10 %

 7 %

 45 %

 29 %

 22 %

 16 %

 11 %

 26 %

 21 %

 18 %

 27 %

 — %

 32 %

 25 %

 16 %

 13 %

December 31,

2021

2020

Distributor A

Distributor B

Distributor C

Collaborator A

Collaborator B

receivable:

Distributor A

Distributor B

Distributor C

Collaborator A

Major suppliers

our business.

Income taxes

The use of a relatively small number of contract manufacturers to supply drug necessary for our commercial and 

clinical operations create a concentration of risk for us. While primarily one source of supply is utilized for certain 

components of our approved products and our clinical product candidates, other sources are available should we need to 

change suppliers. For PADCEV, in particular, we rely on Astellas for both commercial and clinical supply as Astellas 

oversees the manufacturing supply chain. As a form of reducing near-term risk, we endeavor to maintain reasonable 

levels of drug supply inventory across the supply chain. A change in suppliers or disruption at one of our suppliers, 

however, could cause a delay or interruption in delivery of drug or clinical trials. Such an event would adversely affect 

We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been 

included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the 

differences between the financial statement and tax bases of assets and liabilities using tax rates in effect for the year in 

which the differences are expected to reverse. We have provided a valuation allowance against substantially all our 

deferred tax assets for all periods presented. A valuation allowance is recorded when it is more likely than not that some 

portion or all of the net deferred tax asset will not be realized. Future realization of deferred tax assets is dependent upon 

a number of factors, including the existence of sufficient taxable income based on future earnings, the timing and amount 

of which is uncertain. The assessment regarding whether a valuation allowance is required considers the evaluation of 

both positive and negative evidence when concluding whether it is more likely than not that deferred tax assets are 

realizable. Based upon a review of all available evidence, we determined that it is not more likely than not that the U.S. 

deferred tax assets will be realized, and therefore the deferred tax assets have been fully offset by a valuation allowance. 

We follow the guidance related to accounting for uncertainty in income taxes, which requires the recognition of an 

uncertain tax position when it is more likely than not to be sustainable upon audit by the applicable taxing authority. If 

this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely 

of being realized upon ultimate settlement.

 
 
 
 
Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

We sell our products through a limited number of distributors and specialty pharmacies. The following table 

presents each major distributor or collaborator that comprised more than 10% of total revenue:

Distributor A
Distributor B
Distributor C
Collaborator A
Collaborator B

Years ended December 31,

2021

2020

2019

 36 %
 27 %
 17 %
 9 %
 — %

 18 %
 15 %
 10 %
 7 %
 45 %

 26 %
 21 %
 18 %
 27 %
 — %

The following table presents each major distributor or collaborator that accounted for more than 10% of accounts 

receivable:

Distributor A
Distributor B
Distributor C
Collaborator A

Major suppliers

December 31,

2021

2020

 29 %
 22 %
 16 %
 11 %

 32 %
 25 %
 16 %
 13 %

The use of a relatively small number of contract manufacturers to supply drug necessary for our commercial and 

clinical operations create a concentration of risk for us. While primarily one source of supply is utilized for certain 
components of our approved products and our clinical product candidates, other sources are available should we need to 
change suppliers. For PADCEV, in particular, we rely on Astellas for both commercial and clinical supply as Astellas 
oversees the manufacturing supply chain. As a form of reducing near-term risk, we endeavor to maintain reasonable 
levels of drug supply inventory across the supply chain. A change in suppliers or disruption at one of our suppliers, 
however, could cause a delay or interruption in delivery of drug or clinical trials. Such an event would adversely affect 
our business.

Income taxes

We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been 

included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the 
differences between the financial statement and tax bases of assets and liabilities using tax rates in effect for the year in 
which the differences are expected to reverse. We have provided a valuation allowance against substantially all our 
deferred tax assets for all periods presented. A valuation allowance is recorded when it is more likely than not that some 
portion or all of the net deferred tax asset will not be realized. Future realization of deferred tax assets is dependent upon 
a number of factors, including the existence of sufficient taxable income based on future earnings, the timing and amount 
of which is uncertain. The assessment regarding whether a valuation allowance is required considers the evaluation of 
both positive and negative evidence when concluding whether it is more likely than not that deferred tax assets are 
realizable. Based upon a review of all available evidence, we determined that it is not more likely than not that the U.S. 
deferred tax assets will be realized, and therefore the deferred tax assets have been fully offset by a valuation allowance. 

We follow the guidance related to accounting for uncertainty in income taxes, which requires the recognition of an 

uncertain tax position when it is more likely than not to be sustainable upon audit by the applicable taxing authority. If 
this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely 
of being realized upon ultimate settlement.

When no performance obligations are required of us, or following the completion of the performance obligation 

period, such amounts are recognized upon transfer of control of the goods or services to the customer. Generally, all 

amounts received or due other than sales-based milestones and royalties are classified as collaboration and license 

agreement revenues. Sales-based milestones and royalties are recognized as royalty revenue in the period the related sale 

occurred.

We generally invoice our collaborators and licensees on a monthly or quarterly basis, or upon the completion of 

the effort or achievement of a milestone, based on the terms of each agreement. Deferred revenue arises from amounts 

received in advance of the culmination of the earnings process and is recognized as revenue in future periods as 

performance obligations are satisfied. Deferred revenue expected to be recognized within the next twelve months is 

classified as a current liability.

Research and development expenses 

Research and development, or R&D, expenses consist of salaries, benefits and other headcount-related costs of 

our R&D staff, preclinical activities, clinical trials and related manufacturing costs, lab supplies, contract and outside 

service fees and facilities and overhead expenses for research, development and preclinical studies focused on drug 

discovery, development and testing. R&D activities are expensed as incurred.

Clinical trial expenses are a significant component of research and development expenses, and we outsource a 

significant portion of these costs to third parties. Third-party clinical trial expenses include investigator fees, site costs, 

clinical research organization costs, and costs for central laboratory testing and data management. Costs associated with 

activities performed under co-development collaborations are reflected in R&D expense. In-licensing fees, milestones, 

maintenance fees and other costs to acquire technologies utilized in R&D for product candidates that have not yet 

received regulatory approval and that are not expected to have alternative future use are expensed when incurred. Non-

refundable advance payments for goods or services that will be used or rendered for future R&D activities are capitalized 

and recognized as expense as the related goods are delivered or the related services are performed. This results in the 

temporary deferral of recording expense for amounts incurred for research and development activities from the time 

payments are made until the time goods or services are provided.

Advertising costs are expensed as incurred. We incurred $88.8 million, $59.3 million, and $33.5 million in 

advertising expenses during 2021, 2020, and 2019, respectively.

Advertising 

Concentration of credit risk

Cash, cash equivalents and investments are invested in accordance with our investment policy. The policy 

includes guidelines for the investment of cash reserves and is reviewed periodically to minimize credit risk. Most of our 

investments are in U.S. Treasury securities and are not federally insured. We have accounts receivable from the sale of 

our products from a small number of distributors, and from our collaborators. We do not require collateral on amounts 

due from our distributors or our collaborators and are therefore subject to credit risk.

Allowance for doubtful accounts

 We estimate an allowance for doubtful accounts based on our assessment of the collectability of customer 

accounts. We regularly review the allowance by considering factors such as historical experience, credit quality, the age 

of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay. As of 

December 31, 2021 and 2020, there was no allowance for doubtful accounts, and we recognized no credit losses during 

the years ended December 31, 2021, 2020, and 2019.

Geographic and customer information 

Net product revenues are attributed to countries based on the location of the customer. Royalty revenues and 

collaboration and licenses agreements revenues are attributed to countries based on the location of the Company’s 

subsidiary associated with the royalty or collaborative arrangement related to such revenues. Over 90% of our revenues 

and assets are related to operations in the U.S. for all periods presented; however, we have multiple subsidiaries in 

foreign jurisdictions, including several subsidiaries in Europe.

100

101

 
 
 
 
Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

Share-based compensation

Certain risks and uncertainties 

We use the graded-vesting attribution method for recognizing compensation expense for our stock options and 

restricted stock units, or RSUs. Compensation expense is recognized over the requisite service periods on awards 
ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in 
subsequent periods if actual forfeitures differ from those estimates. For performance-based stock options and RSUs, we 
record compensation expense over the estimated service period once the achievement of the performance-based 
milestone is considered probable. At each reporting date, we assess whether achievement of a milestone is considered 
probable, and if so, record compensation expense based on the portion of the service period elapsed to date with respect 
to that milestone, with a cumulative catch-up, net of estimated forfeitures. We will recognize remaining compensation 
expense with respect to a milestone, if any, over the remaining estimated service period.

Long-term incentive plans, performance-based and market-based restricted stock awards

We have established Long-Term Incentive Plans, or LTIPs, and have granted certain senior leadership other 
performance- and market-based restricted stock awards. The LTIPs and other performance-based compensation restricted 
stock awards provide eligible employees with the opportunity to receive performance-based incentive compensation, 
which may be comprised of cash and/or RSUs. The payment of cash and the grant and/or vesting of RSUs are contingent 
upon the achievement of pre-determined performance goals, which may include regulatory milestones, revenue targets, 
or total shareholder return compared to our industry peer group. We record compensation expense over the estimated 
service period for each performance goal subject to the achievement of the performance goal being considered probable 
in accordance with the provisions of ASC Topic 450--Contingencies. At each reporting date, we assess whether 
achievement of a performance goal is considered probable and, if so, record compensation expense based on the portion 
of the service period elapsed to date with respect to that milestone, with a cumulative catch-up, net of estimated 
forfeitures. We recognize compensation expense with respect to a milestone over the remaining estimated service period.

The total estimate of unrecognized compensation expense could change in the future for several reasons, including 
the addition or termination of employees, the recognition of LTIP compensation expense, or the addition, termination, or 
modification of an LTIP.

Comprehensive income (loss) 

Comprehensive income (loss) is the change in stockholders’ equity from transactions and other events and 
circumstances other than those resulting from investments by stockholders and distributions to stockholders. Our 
comprehensive income (loss) is comprised of net income (loss), unrealized gains and losses on available-for-sale 
securities, net of income tax provision and foreign currency translation adjustments, net of income tax provision.

Loss contingencies

We are involved in various legal proceedings in the normal course of business. A loss contingency is recorded if it 

is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably 
estimated. We evaluate, among other factors, the probability of an unfavorable outcome and our ability to make a 
reasonable estimate and the amount of the ultimate loss. Loss contingencies that are determined to be reasonably 
possible, but not probable, are disclosed but not recorded. Legal fees incurred as a result of our involvement in legal 
procedures are expensed as incurred.

Our revenues are derived from net product sales, royalties, and from collaboration and license agreements. Our 

products are subject to regulation by the FDA in the U.S. and other regulatory agencies outside the U.S. as well as 

competition by other pharmaceutical companies. Our collaboration and license agreement revenues are derived from a 

relatively small number of agreements. Each of these agreements can be terminated by our collaborators at their 

discretion. We are also subject to risks common to companies in the pharmaceutical industry, including risks and 

uncertainties related to commercial success and acceptance of our products and our potential future products by patients, 

physicians and payers, competition from other products, regulatory approvals, regulatory requirements, business 

combinations and product or product candidate acquisition and in-licensing transactions, and protection of intellectual 

property. Also, drug development is a lengthy process characterized by a relatively low rate of success. We may commit 

substantial resources toward developing product candidates that never result in further development, achieve regulatory 

approvals or achieve commercial success. Likewise, we have committed and expect to continue to commit substantial 

resources towards additional clinical development of our products in an effort to continue to expand our products' labeled 

indications of use, and there can be no assurance that we and/or our partners will obtain and maintain the necessary 

regulatory approvals to market our products for any additional indications.

Guarantees

In the normal course of business, we indemnify our directors, certain employees and other parties, including 

distributors, collaboration partners, lessors and other parties that perform certain work on behalf of, or for us to take 

licenses to our technologies. We have agreed to hold these parties harmless against losses arising from our breach of 

representations or covenants, intellectual property infringement or other claims made against these parties in 

performance of their work with us. These agreements typically limit the time within which the party may seek 

indemnification by us and the amount of the claim. It is not possible to prospectively determine the maximum potential 

amount of liability under these indemnification agreements. Further, each potential claim would be based on the unique 

facts and circumstances of the claim and the particular provisions of each agreement.

Recent accounting pronouncements adopted

In December 2019, the FASB issued “ASU 2019-12, Simplifying the Accounting for Income Taxes.” The 

objective of the standard is to improve areas of GAAP by removing certain exceptions permitted by ASC Topic 740-- 

Income Taxes and clarifying existing guidance to facilitate consistent application. We adopted the standard on January 1, 

2021. The adoption of this ASU did not have a material impact on our financial condition, results of operations, cash 

flows, or financial statement disclosures.

2. Revenue from contracts with customers

The following table presents our disaggregated revenue for the years presented.

(dollars in thousands)

ADCETRIS

PADCEV

TUKYSA

TIVDAK

Net product sales

Royalty revenues

Total revenues

Collaboration and license agreement revenues

Years ended December 31,

2021

2020

2019

$ 

705,561  $ 

658,577  $ 

627,733 

339,918 

333,952 

6,135 

222,436 

119,585 

— 

244 

— 

— 

$  1,385,566  $  1,000,598  $ 

627,977 

$ 

$ 

150,523  $ 

126,756  $ 

138,491 

38,282  $  1,048,182  $ 

150,245 

$  1,574,371  $  2,175,536  $ 

916,713 

102

103

 
 
 
 
 
 
 
 
 
 
Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

Share-based compensation

Certain risks and uncertainties 

We use the graded-vesting attribution method for recognizing compensation expense for our stock options and 

restricted stock units, or RSUs. Compensation expense is recognized over the requisite service periods on awards 

ultimately expected to vest and reduced for forfeitures that are estimated at the time of grant and revised, if necessary, in 

subsequent periods if actual forfeitures differ from those estimates. For performance-based stock options and RSUs, we 

record compensation expense over the estimated service period once the achievement of the performance-based 

milestone is considered probable. At each reporting date, we assess whether achievement of a milestone is considered 

probable, and if so, record compensation expense based on the portion of the service period elapsed to date with respect 

to that milestone, with a cumulative catch-up, net of estimated forfeitures. We will recognize remaining compensation 

expense with respect to a milestone, if any, over the remaining estimated service period.

Long-term incentive plans, performance-based and market-based restricted stock awards

We have established Long-Term Incentive Plans, or LTIPs, and have granted certain senior leadership other 

performance- and market-based restricted stock awards. The LTIPs and other performance-based compensation restricted 

stock awards provide eligible employees with the opportunity to receive performance-based incentive compensation, 

which may be comprised of cash and/or RSUs. The payment of cash and the grant and/or vesting of RSUs are contingent 

upon the achievement of pre-determined performance goals, which may include regulatory milestones, revenue targets, 

or total shareholder return compared to our industry peer group. We record compensation expense over the estimated 

service period for each performance goal subject to the achievement of the performance goal being considered probable 

in accordance with the provisions of ASC Topic 450--Contingencies. At each reporting date, we assess whether 

achievement of a performance goal is considered probable and, if so, record compensation expense based on the portion 

of the service period elapsed to date with respect to that milestone, with a cumulative catch-up, net of estimated 

forfeitures. We recognize compensation expense with respect to a milestone over the remaining estimated service period.

The total estimate of unrecognized compensation expense could change in the future for several reasons, including 

the addition or termination of employees, the recognition of LTIP compensation expense, or the addition, termination, or 

modification of an LTIP.

Comprehensive income (loss) 

Comprehensive income (loss) is the change in stockholders’ equity from transactions and other events and 

circumstances other than those resulting from investments by stockholders and distributions to stockholders. Our 

comprehensive income (loss) is comprised of net income (loss), unrealized gains and losses on available-for-sale 

securities, net of income tax provision and foreign currency translation adjustments, net of income tax provision.

Loss contingencies

We are involved in various legal proceedings in the normal course of business. A loss contingency is recorded if it 

is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be reasonably 

estimated. We evaluate, among other factors, the probability of an unfavorable outcome and our ability to make a 

reasonable estimate and the amount of the ultimate loss. Loss contingencies that are determined to be reasonably 

possible, but not probable, are disclosed but not recorded. Legal fees incurred as a result of our involvement in legal 

procedures are expensed as incurred.

Our revenues are derived from net product sales, royalties, and from collaboration and license agreements. Our 

products are subject to regulation by the FDA in the U.S. and other regulatory agencies outside the U.S. as well as 
competition by other pharmaceutical companies. Our collaboration and license agreement revenues are derived from a 
relatively small number of agreements. Each of these agreements can be terminated by our collaborators at their 
discretion. We are also subject to risks common to companies in the pharmaceutical industry, including risks and 
uncertainties related to commercial success and acceptance of our products and our potential future products by patients, 
physicians and payers, competition from other products, regulatory approvals, regulatory requirements, business 
combinations and product or product candidate acquisition and in-licensing transactions, and protection of intellectual 
property. Also, drug development is a lengthy process characterized by a relatively low rate of success. We may commit 
substantial resources toward developing product candidates that never result in further development, achieve regulatory 
approvals or achieve commercial success. Likewise, we have committed and expect to continue to commit substantial 
resources towards additional clinical development of our products in an effort to continue to expand our products' labeled 
indications of use, and there can be no assurance that we and/or our partners will obtain and maintain the necessary 
regulatory approvals to market our products for any additional indications.

Guarantees

In the normal course of business, we indemnify our directors, certain employees and other parties, including 
distributors, collaboration partners, lessors and other parties that perform certain work on behalf of, or for us to take 
licenses to our technologies. We have agreed to hold these parties harmless against losses arising from our breach of 
representations or covenants, intellectual property infringement or other claims made against these parties in 
performance of their work with us. These agreements typically limit the time within which the party may seek 
indemnification by us and the amount of the claim. It is not possible to prospectively determine the maximum potential 
amount of liability under these indemnification agreements. Further, each potential claim would be based on the unique 
facts and circumstances of the claim and the particular provisions of each agreement.

Recent accounting pronouncements adopted

In December 2019, the FASB issued “ASU 2019-12, Simplifying the Accounting for Income Taxes.” The 
objective of the standard is to improve areas of GAAP by removing certain exceptions permitted by ASC Topic 740-- 
Income Taxes and clarifying existing guidance to facilitate consistent application. We adopted the standard on January 1, 
2021. The adoption of this ASU did not have a material impact on our financial condition, results of operations, cash 
flows, or financial statement disclosures.

2. Revenue from contracts with customers

The following table presents our disaggregated revenue for the years presented.

(dollars in thousands)
ADCETRIS

PADCEV

TUKYSA

TIVDAK

Net product sales

Royalty revenues

Collaboration and license agreement revenues

Total revenues

Years ended December 31,

2021

2020

2019

$ 

705,561  $ 

658,577  $ 

627,733 

339,918 

333,952 

6,135 

222,436 

119,585 

— 

244 

— 

— 

$  1,385,566  $  1,000,598  $ 

627,977 

$ 

$ 

150,523  $ 

126,756  $ 

138,491 

38,282  $  1,048,182  $ 

150,245 

$  1,574,371  $  2,175,536  $ 

916,713 

102

103

 
 
 
 
 
 
 
 
 
 
Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

In 2020, collaboration and license agreement revenues included $975.2 million related to our LV and TUKYSA 
license and collaboration agreements with Merck. See Note 10 for further information. In 2019, other collaboration and 
license agreement revenues included $20.0 million from BeiGene, Ltd., or BeiGene. BeiGene is a related party due to a 
common shareholder that has a representative or representatives serving on each company's respective Board of 
Directors.

Contract balances and performance obligations

We had no contract assets or liabilities as of December 31, 2021 and 2020. We recognized collaboration and 

license agreement revenues of $0.0 million, $0.0 million and $33.6 million during the years ended December 31, 2021, 
2020, and 2019, respectively, that were included in deferred revenue as of the beginning of the respective years.

3. Leases

We have operating leases for our office and laboratory facilities with terms that expire from 2022 through 2029. 

During the years ended December 31, 2021, 2020 and 2019, we recorded $9.1 million, $7.2 million and $40.3 million of 
right-of-use assets in exchange for lease liabilities, respectively. All of our significant leases include options for us to 
extend the lease term. None of our options to extend the rental term of any existing leases were considered reasonably 
certain as of December 31, 2021.

In June 2021, we entered into a lease agreement for an approximately 258,000 square feet building complex to be 

constructed by the landlord on approximately 20.5 acres of land in Everett, Washington. We intend to use the building 
for future manufacturing, laboratory, and office space. Under the terms of the lease, base rent is payable at an initial rate 
of $4.0 million per year, subject to annual escalations of 3% during the initial term of 20 years. The lease commences on 
the date when construction and delivery of the building shell and related improvements by the landlord have been 
substantially completed. We will record a lease liability and right-of-use assets on our condensed consolidated balance 
sheet on the lease commencement date, which has not commenced of December 31, 2021. We have an option to renew 
the lease for two additional terms of ten years each. In addition, we have an option to purchase the premises in the future. 

Supplemental operating lease information was as follows:

(dollars in thousands, except term and rate )

Operating lease cost

Variable lease cost

Total lease cost

$ 

$ 

Cash paid for amounts included in measurement of lease liabilities $ 

Years ended December 31,

2021

16,219 

4,227 

20,446 

16,814 

$ 

$ 

$ 

2020

15,013 

3,937 

18,950 

14,265 

$ 

$ 

$ 

2019

13,590 

2,958 

16,548 

10,197 

Weighted average remaining lease term (in years)

Weighted average discount rate

 As of December 31,

2021

2020

5.87

 5.0 %

6.16

 5.2 %

Rent expense attributable to non-cancelable operating leases totaled approximately $16.5 million, $16.6 million, 

and $14.6 million for the years ended December 31, 2021, 2020, and 2019, respectively. 

12,749 

61,884 

74,633 

17,088 

16,375 

12,333 

8,489 

7,999 

19,718 

82,002 

$ 

(11,432) 

$ 

70,570 

Operating lease liabilities were recorded in the following captions of our consolidated balance sheet as follows:

As of December 31,

2021

2020

$ 

$ 

13,905  $ 

56,665 

70,570  $ 

As of December 31, 2021, future minimum lease payments under the lease agreements were as follows:

(dollars in thousands )

Accrued liabilities and other

Operating lease liabilities, long-term

Total

(dollars in thousands)

Years ending December 31,

2022

2023

2024

2025

2026

Thereafter

Less: imputed interest

Total

4. Fair Value 

hierarchy are:

Total future minimum lease payments

We have certain assets that are measured at fair value on a recurring basis according to a fair value hierarchy that 

prioritizes the inputs, assumptions and valuation techniques used to measure fair value. The three levels of the fair value 

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, 

Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are 

Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and 

unrestricted assets or liabilities.

observable, either directly or indirectly.

unobservable.

The determination of a financial instrument’s level within the fair value hierarchy is based on an assessment of the 

lowest level of any input that is significant to the fair value measurement. We consider observable data to be market data 

which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by 

independent sources that are actively involved in the relevant market.

104

105

 
 
 
 
 
 
 
 
 
 
 
 
In 2020, collaboration and license agreement revenues included $975.2 million related to our LV and TUKYSA 

license and collaboration agreements with Merck. See Note 10 for further information. In 2019, other collaboration and 

license agreement revenues included $20.0 million from BeiGene, Ltd., or BeiGene. BeiGene is a related party due to a 

common shareholder that has a representative or representatives serving on each company's respective Board of 

Contract balances and performance obligations

We had no contract assets or liabilities as of December 31, 2021 and 2020. We recognized collaboration and 

license agreement revenues of $0.0 million, $0.0 million and $33.6 million during the years ended December 31, 2021, 

2020, and 2019, respectively, that were included in deferred revenue as of the beginning of the respective years.

Directors.

3. Leases

We have operating leases for our office and laboratory facilities with terms that expire from 2022 through 2029. 

During the years ended December 31, 2021, 2020 and 2019, we recorded $9.1 million, $7.2 million and $40.3 million of 

right-of-use assets in exchange for lease liabilities, respectively. All of our significant leases include options for us to 

extend the lease term. None of our options to extend the rental term of any existing leases were considered reasonably 

certain as of December 31, 2021.

In June 2021, we entered into a lease agreement for an approximately 258,000 square feet building complex to be 

constructed by the landlord on approximately 20.5 acres of land in Everett, Washington. We intend to use the building 

for future manufacturing, laboratory, and office space. Under the terms of the lease, base rent is payable at an initial rate 

of $4.0 million per year, subject to annual escalations of 3% during the initial term of 20 years. The lease commences on 

the date when construction and delivery of the building shell and related improvements by the landlord have been 

substantially completed. We will record a lease liability and right-of-use assets on our condensed consolidated balance 

sheet on the lease commencement date, which has not commenced of December 31, 2021. We have an option to renew 

the lease for two additional terms of ten years each. In addition, we have an option to purchase the premises in the future. 

Supplemental operating lease information was as follows:

(dollars in thousands, except term and rate )

Operating lease cost

Variable lease cost

Total lease cost

Cash paid for amounts included in measurement of lease liabilities $ 

Years ended December 31,

2021

16,219 

4,227 

20,446 

16,814 

$ 

$ 

$ 

2020

15,013 

3,937 

18,950 

14,265 

$ 

$ 

$ 

$ 

$ 

2019

13,590 

2,958 

16,548 

10,197 

Weighted average remaining lease term (in years)

Weighted average discount rate

 As of December 31,

2021

2020

5.87

 5.0 %

6.16

 5.2 %

Rent expense attributable to non-cancelable operating leases totaled approximately $16.5 million, $16.6 million, 

and $14.6 million for the years ended December 31, 2021, 2020, and 2019, respectively. 

Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

Operating lease liabilities were recorded in the following captions of our consolidated balance sheet as follows:

(dollars in thousands )

Accrued liabilities and other

Operating lease liabilities, long-term

Total

As of December 31,

2021

2020

$ 

$ 

13,905  $ 

56,665 

70,570  $ 

As of December 31, 2021, future minimum lease payments under the lease agreements were as follows:

(dollars in thousands)
Years ending December 31,

2022

2023

2024

2025
2026

Thereafter

Total future minimum lease payments

Less: imputed interest

Total

4. Fair Value 

12,749 

61,884 

74,633 

17,088 

16,375 

12,333 

8,489 
7,999 

19,718 

82,002 

$ 

(11,432) 

$ 

70,570 

We have certain assets that are measured at fair value on a recurring basis according to a fair value hierarchy that 
prioritizes the inputs, assumptions and valuation techniques used to measure fair value. The three levels of the fair value 
hierarchy are:

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, 

unrestricted assets or liabilities.

Level 2: Quoted prices in markets that are not active or financial instruments for which all significant inputs are 

observable, either directly or indirectly.

Level 3: Prices or valuations that require inputs that are both significant to the fair value measurement and 

unobservable.

The determination of a financial instrument’s level within the fair value hierarchy is based on an assessment of the 
lowest level of any input that is significant to the fair value measurement. We consider observable data to be market data 
which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by 
independent sources that are actively involved in the relevant market.

104

105

 
 
 
 
 
 
 
 
 
 
 
 
Years ended December 31,

2021

2020

2019

$ 

$ 

4,744  $ 

11,604  $ 

1,607 

7,245 

6,351  $ 

18,849  $ 

50,124 

11,771 

61,895 

Gain on equity securities includes the realized and unrealized holding gains and losses on our equity securities.

Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

The fair value hierarchy of assets carried at fair value and measured on a recurring basis was as follows:

5. Investment and Other Income, Net 

Fair value measurement using:

Investment and other income, net consisted of the following:

(dollars in thousands)
December 31, 2021

Quoted prices
in active
markets for
identical
assets
(Level 1)

Other
observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)

Total

Short-term investments—U.S. Treasury securities

$  1,735,202  $ 

Other non-current assets—equity securities

14,009 

Total

December 31, 2020

$  1,749,211  $ 

Short-term investments—U.S. Treasury securities

$  2,000,996  $ 

Long-term investments—U.S. Treasury securities

100,830 

Total

$  2,101,826  $ 

—  $ 

— 

—  $ 

—  $ 

— 

—  $ 

—  $  1,735,202 

— 

14,009 

—  $  1,749,211 

—  $  2,000,996 

— 

100,830 

—  $  2,101,826 

 Our short- and long-term debt investments portfolio only contains investments in U.S. Treasury and other U.S. 

government-backed securities. We review our portfolio based on the underlying risk profile of the securities and have a 
zero loss expectation for these investments. We also regularly review the securities in an unrealized loss position and 
evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific 
factors, and current economic conditions. During the years ended December 31, 2021, 2020 and 2019, we recognized no 
year-to-date credit loss related to our short- and long-term investments, and had no allowance for credit loss recorded as 
of December 31, 2021.

Our debt securities consisted of the following:

(dollars in thousands)
December 31, 2021

U.S. Treasury securities

Contractual maturities (at date of purchase):

Due in one year or less

Due in one to two years

Total

December 31, 2020

U.S. Treasury securities

Amortized
cost

Gross
unrealized
gains

Gross
unrealized
losses

Fair
value

$  1,735,388  $ 

12  $ 

(198)  $  1,735,202 

$  1,635,307 

100,081 

$  1,735,388 

$  1,635,118 

100,084 

$  1,735,202 

$  2,101,801  $ 

259  $ 

(234)  $  2,101,826 

Contractual maturities (at date of purchase):

Due in one year or less

Due in one to two years

Total

$  1,791,399 

310,402 
$  2,101,801 

$  1,791,239 

310,587 
$  2,101,826 

(dollars in thousands)

Gain on equity securities

Investment and other income, net

Total investment and other income, net

6. Inventories

Inventories consisted of the following:

(dollars in thousands)

Raw materials

Work in process

Finished goods

Total

7. Property and equipment 

Property and equipment consisted of the following:

(dollars in thousands)

Leasehold improvements

Laboratory and manufacturing equipment

Building

Computers, software and office equipment

Furniture and fixtures

Land

Less: accumulated depreciation and amortization

Total

December 31,

2021

2020

$ 

12,181  $ 

152,635 

35,847 

3,799 

95,250 

17,087 

$ 

200,663  $ 

116,136 

December 31,

2021

2020

$ 

193,635  $ 

204,918 

104,702 

49,806 

52,078 

17,563 

4,771 

78,724 

23,341 

45,141 

15,825 

4,771 

422,555 

372,720 

(212,482)   

(176,020) 

$ 

210,073  $ 

196,700 

We capitalize our commercial inventory costs. Inventory that is deployed into clinical, research or development 

use is charged to research and development expense when it is no longer available for use in commercial sales.

Depreciation and amortization expenses on property and equipment totaled $42.9 million, $36.0 million, and 

$23.8 million for the years ended December 31, 2021, 2020, and 2019, respectively. Leasehold improvements included 

$44.0 million and $24.5 million of construction in process at December 31, 2021 and 2020, respectively.

106

107

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

The fair value hierarchy of assets carried at fair value and measured on a recurring basis was as follows:

5. Investment and Other Income, Net 

Fair value measurement using:

Investment and other income, net consisted of the following:

Quoted prices

in active

markets for

identical

assets

(Level 1)

Other

observable

inputs

(Level 2)

Significant

unobservable

inputs

(Level 3)

Total

(dollars in thousands)

December 31, 2021

Total

December 31, 2020

Short-term investments—U.S. Treasury securities

$  1,735,202  $ 

Other non-current assets—equity securities

14,009 

$  1,749,211  $ 

Short-term investments—U.S. Treasury securities

$  2,000,996  $ 

Long-term investments—U.S. Treasury securities

100,830 

Total

$  2,101,826  $ 

—  $ 

— 

—  $ 

—  $ 

— 

—  $ 

—  $  1,735,202 

— 

14,009 

—  $  1,749,211 

—  $  2,000,996 

— 

100,830 

—  $  2,101,826 

 Our short- and long-term debt investments portfolio only contains investments in U.S. Treasury and other U.S. 

government-backed securities. We review our portfolio based on the underlying risk profile of the securities and have a 

zero loss expectation for these investments. We also regularly review the securities in an unrealized loss position and 

evaluate the current expected credit loss by considering factors such as historical experience, market data, issuer-specific 

factors, and current economic conditions. During the years ended December 31, 2021, 2020 and 2019, we recognized no 

year-to-date credit loss related to our short- and long-term investments, and had no allowance for credit loss recorded as 

of December 31, 2021.

Our debt securities consisted of the following:

Amortized

cost

Gross

unrealized

gains

Gross

unrealized

losses

Fair

value

$  1,735,388  $ 

12  $ 

(198)  $  1,735,202 

Contractual maturities (at date of purchase):

(dollars in thousands)

December 31, 2021

U.S. Treasury securities

Due in one year or less

Due in one to two years

Total

December 31, 2020

U.S. Treasury securities

Due in one year or less

Due in one to two years

Total

$  1,635,307 

100,081 

$  1,735,388 

$  1,791,399 

310,402 

$  2,101,801 

Contractual maturities (at date of purchase):

$  2,101,801  $ 

259  $ 

(234)  $  2,101,826 

$  1,635,118 

100,084 

$  1,735,202 

$  1,791,239 

310,587 

$  2,101,826 

(dollars in thousands)

Gain on equity securities
Investment and other income, net

Total investment and other income, net

Years ended December 31,

2021

2020

2019

$ 

$ 

4,744  $ 

11,604  $ 

1,607 

7,245 

6,351  $ 

18,849  $ 

50,124 

11,771 

61,895 

Gain on equity securities includes the realized and unrealized holding gains and losses on our equity securities.

6. Inventories

Inventories consisted of the following:

(dollars in thousands)
Raw materials
Work in process
Finished goods
Total

December 31,

2021

2020

$ 

$ 

12,181  $ 
152,635 
35,847 
200,663  $ 

3,799 
95,250 
17,087 
116,136 

We capitalize our commercial inventory costs. Inventory that is deployed into clinical, research or development 

use is charged to research and development expense when it is no longer available for use in commercial sales.

7. Property and equipment 

Property and equipment consisted of the following:

(dollars in thousands)
Leasehold improvements
Laboratory and manufacturing equipment
Building
Computers, software and office equipment
Furniture and fixtures
Land

Less: accumulated depreciation and amortization

Total

December 31,

2021
193,635  $ 
104,702 
49,806 
52,078 
17,563 
4,771 
422,555 
(212,482)   
210,073  $ 

2020
204,918 
78,724 
23,341 
45,141 
15,825 
4,771 
372,720 
(176,020) 
196,700 

$ 

$ 

Depreciation and amortization expenses on property and equipment totaled $42.9 million, $36.0 million, and 

$23.8 million for the years ended December 31, 2021, 2020, and 2019, respectively. Leasehold improvements included 
$44.0 million and $24.5 million of construction in process at December 31, 2021 and 2020, respectively.

106

107

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.
Notes to Consolidated Financial Statements

8. Accrued liabilities 

Accrued liabilities consisted of the following: 

(dollars in thousands)
Employee compensation and benefits
Clinical trial and related costs
Contract manufacturing
Gross-to-net deductions and third-party royalties
Other

Total

9. Income taxes

December 31,

2021
139,052  $ 
122,468 
21,867 
81,316 
89,327 
454,030  $ 

2020

96,902 
69,756 
20,765 
52,565 
70,083 
310,071 

$ 

$ 

Our income (loss) before income taxes by jurisdiction consisted of the following:

(dollars in thousands)
U.S.

Foreign

Total

Years ended December 31,

2021

2020

2019

$ 

(680,398)  $ 

613,054  $ 

(160,189) 

4,693 

2,647 

1,539 

$ 

(675,705)  $ 

615,701  $ 

(158,650) 

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

Statutory federal income tax rate
Tax credits
State income taxes and other
Valuation allowance
Stock compensation
Non-deductible asset basis

Effective tax rate

Years ended December 31,

2021

2020

2019

 21.0 %
 7.2 
 4.6 
 (35.7) 
 3.1 
 — 
 0.2 %

 21.0 %
 (5.4) 
 1.5 
 (8.4) 
 (8.4) 
 — 
 0.3 %

 21.0 %
 11.0 
 4.7 
 (37.1) 
 6.4 
 (6.0) 
 0.0 %

For the year ended December 31, 2021, we recorded a tax benefit of $1.2 million, consisting of a current tax 
benefit of $1.7 million and a deferred tax expense of $0.5 million, primarily related to the generation of additional 
available state research and development tax credits. 

For the year ended December 31, 2020, we recorded a provision for income taxes of $2.0 million consisting 
primarily of $3.7 million of current state taxes offset by a net $1.7 million deferred foreign tax benefit primarily related 
to the release of a valuation allowance on our foreign deferred tax asset for net operating losses. We had existing federal 
tax carryforwards sufficient to offset any federal tax liability, and we incurred state tax liabilities of $3.7 million due to 
limitations on the use of existing state carryforwards against taxable income.

For the year ended December 31, 2019, we did not record any income tax expense or benefit due to our valuation 

allowance and tax loss position.

As of December 31, 2021, unremitted earnings of our foreign subsidiaries will be retained indefinitely by the 
foreign subsidiaries for continuing investment. If foreign earnings were to be repatriated to the U.S., we could be subject 
to additional state income and withholding taxes. 

Seagen Inc.

Notes to Consolidated Financial Statements

Our net deferred tax assets consisted of the following:

(dollars in thousands)

Deferred tax assets:

Net operating loss carryforwards

Foreign net operating loss carryforwards

Tax credit carryforwards

Share-based compensation

Allowance and accruals

Operating lease liabilities

Inventory

Capitalized research and development

Intangibles and amortization

Total deferred tax assets

Less: valuation allowance

Deferred tax liability:

Right-of-use assets

Intangibles and amortization

Depreciation

Other

Net deferred tax assets

Total deferred tax assets, net of valuation allowance

December 31,

2021

2020

$ 

331,284  $ 

228,041 

7,566 

278,925 

41,087 

47,119 

16,461 

14,629 

6,947 

5,399 

8,341 

224,233 

33,315 

29,355 

16,596 

19,402 

4,139 

— 

749,417 

563,422 

(730,130)   

(489,519) 

19,287 

73,903 

(13,434)   

— 

(3,428)   

(920)   

$ 

1,505  $ 

(13,647) 

(46,018) 

(10,215) 

(1,970) 

2,053 

A valuation allowance of $730.1 million and $489.5 million at December 31, 2021 and 2020, respectively, has 

been recognized to offset net deferred tax assets where realization of such assets is uncertain. The valuation allowance 

increased by $240.6 million in 2021, decreased by $46.8 million in 2020, and increased by $58.5 million in 2019, which 

was mostly related to the changes in our deferred tax asset balances. The 2021 and 2019 increases in the valuation 

allowance were primarily due to the net operating loss and tax credit generation. The 2020 decrease in the valuation 

allowance was primarily due to the net operating loss utilization, partially offset by tax credit generation.

At December 31, 2021, we had gross federal NOL carryforwards of $1,347 million of which $709 million may be 

carried forward indefinitely and $638 million expire from 2033 to 2037 if not utilized, gross state NOL carryforwards of 

$614.4 million, gross foreign NOL carryforwards of $38.3 million, and tax credit carryforwards of $302.4 million 

expiring from 2022 to 2041.

Utilization of the NOL and tax credit carryforwards may be subject to a substantial annual limitation in the event 

of a change in ownership as set forth in Section 382 of the Internal Revenue Code of 1986, as amended. We have 

evaluated ownership changes through the year ended December 31, 2020 and believe that it is likely that utilization of its 

NOLs would not be limited under Section 382 as of December 31, 2020. It is possible that there has been or may be a 

change in ownership after this date which would limit our ability to utilize our NOLs. Any limitation may result in the 

expiration of the NOLs and tax credit carryforwards before utilization. 

Unrecognized tax benefits arise when the estimated benefit recorded in the financial statements differs from the 

amounts taken or expected to be taken in a tax return because of uncertainties. The total amount of unrecognized tax 

benefit was $30.3 million and $23.1 million as of December 31, 2021 and 2020, respectively. Interest and penalties 

related to uncertain tax positions, if any, will be recognized as a component of income tax expense. We do not anticipate 

any significant changes to our unrecognized tax positions or benefits during the next twelve months. Tax years 2001 to 

2021 remain subject to future examination for federal, state and foreign income taxes. 

108

109

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

8. Accrued liabilities 

Accrued liabilities consisted of the following: 

(dollars in thousands)

Employee compensation and benefits

Clinical trial and related costs

Contract manufacturing

Gross-to-net deductions and third-party royalties

Other

Total

9. Income taxes

(dollars in thousands)

U.S.

Foreign

Total

Statutory federal income tax rate

Tax credits

State income taxes and other

Valuation allowance

Stock compensation

Non-deductible asset basis

Effective tax rate

December 31,

2021

2020

$ 

139,052  $ 

122,468 

21,867 

81,316 

89,327 

96,902 

69,756 

20,765 

52,565 

70,083 

$ 

454,030  $ 

310,071 

Years ended December 31,

2021

2020

2019

$ 

(680,398)  $ 

613,054  $ 

(160,189) 

4,693 

2,647 

1,539 

$ 

(675,705)  $ 

615,701  $ 

(158,650) 

Years ended December 31,

2021

2020

2019

 21.0 %

 21.0 %

 21.0 %

 (35.7) 

 7.2 

 4.6 

 3.1 

 — 

 (5.4) 

 1.5 

 (8.4) 

 (8.4) 

 — 

 11.0 

 4.7 

 (37.1) 

 6.4 

 (6.0) 

 0.2 %

 0.3 %

 0.0 %

Our income (loss) before income taxes by jurisdiction consisted of the following:

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

For the year ended December 31, 2021, we recorded a tax benefit of $1.2 million, consisting of a current tax 

benefit of $1.7 million and a deferred tax expense of $0.5 million, primarily related to the generation of additional 

available state research and development tax credits. 

For the year ended December 31, 2020, we recorded a provision for income taxes of $2.0 million consisting 

primarily of $3.7 million of current state taxes offset by a net $1.7 million deferred foreign tax benefit primarily related 

to the release of a valuation allowance on our foreign deferred tax asset for net operating losses. We had existing federal 

tax carryforwards sufficient to offset any federal tax liability, and we incurred state tax liabilities of $3.7 million due to 

limitations on the use of existing state carryforwards against taxable income.

For the year ended December 31, 2019, we did not record any income tax expense or benefit due to our valuation 

allowance and tax loss position.

As of December 31, 2021, unremitted earnings of our foreign subsidiaries will be retained indefinitely by the 

foreign subsidiaries for continuing investment. If foreign earnings were to be repatriated to the U.S., we could be subject 

to additional state income and withholding taxes. 

Our net deferred tax assets consisted of the following:

(dollars in thousands)
Deferred tax assets:

Net operating loss carryforwards
Foreign net operating loss carryforwards
Tax credit carryforwards
Share-based compensation
Allowance and accruals
Operating lease liabilities
Inventory
Capitalized research and development
Intangibles and amortization
Total deferred tax assets
Less: valuation allowance
Total deferred tax assets, net of valuation allowance

Deferred tax liability:

Right-of-use assets
Intangibles and amortization
Depreciation
Other

Net deferred tax assets

$ 

December 31,

2021

2020

331,284  $ 
7,566 
278,925 
41,087 
47,119 
16,461 
14,629 
6,947 
5,399 
749,417 
(730,130)   
19,287 

228,041 
8,341 
224,233 
33,315 
29,355 
16,596 
19,402 
4,139 
— 
563,422 
(489,519) 
73,903 

(13,434)   

— 
(3,428)   
(920)   
1,505  $ 

(13,647) 
(46,018) 
(10,215) 
(1,970) 
2,053 

$ 

A valuation allowance of $730.1 million and $489.5 million at December 31, 2021 and 2020, respectively, has 
been recognized to offset net deferred tax assets where realization of such assets is uncertain. The valuation allowance 
increased by $240.6 million in 2021, decreased by $46.8 million in 2020, and increased by $58.5 million in 2019, which 
was mostly related to the changes in our deferred tax asset balances. The 2021 and 2019 increases in the valuation 
allowance were primarily due to the net operating loss and tax credit generation. The 2020 decrease in the valuation 
allowance was primarily due to the net operating loss utilization, partially offset by tax credit generation.

At December 31, 2021, we had gross federal NOL carryforwards of $1,347 million of which $709 million may be 
carried forward indefinitely and $638 million expire from 2033 to 2037 if not utilized, gross state NOL carryforwards of 
$614.4 million, gross foreign NOL carryforwards of $38.3 million, and tax credit carryforwards of $302.4 million 
expiring from 2022 to 2041.

Utilization of the NOL and tax credit carryforwards may be subject to a substantial annual limitation in the event 

of a change in ownership as set forth in Section 382 of the Internal Revenue Code of 1986, as amended. We have 
evaluated ownership changes through the year ended December 31, 2020 and believe that it is likely that utilization of its 
NOLs would not be limited under Section 382 as of December 31, 2020. It is possible that there has been or may be a 
change in ownership after this date which would limit our ability to utilize our NOLs. Any limitation may result in the 
expiration of the NOLs and tax credit carryforwards before utilization. 

Unrecognized tax benefits arise when the estimated benefit recorded in the financial statements differs from the 

amounts taken or expected to be taken in a tax return because of uncertainties. The total amount of unrecognized tax 
benefit was $30.3 million and $23.1 million as of December 31, 2021 and 2020, respectively. Interest and penalties 
related to uncertain tax positions, if any, will be recognized as a component of income tax expense. We do not anticipate 
any significant changes to our unrecognized tax positions or benefits during the next twelve months. Tax years 2001 to 
2021 remain subject to future examination for federal, state and foreign income taxes. 

108

109

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:

•

Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas 

(dollars in thousands)
Balance at January 1
Increase (decrease) related to prior year tax positions
Increase related to current year tax positions
Balance at December 31

10. Collaboration and license agreements 

Years ended December 31,

2021

2020

2019

$ 

$ 

23,078  $ 
1,894 
5,334 
30,306  $ 

24,018  $ 
(4,008)   
3,068 
23,078  $ 

20,706 
— 
3,312 
24,018 

We have collaboration and license agreements with a number of pharmaceutical and biotechnology companies. 

Revenues recognized under these agreements are disclosed in Note 2.

These agreements generally may be terminated due to material and uncured breaches, insolvency of either party, 

mutual written consent, unilateral decision of one or either party upon prior written notice, expiration of payment 
obligations, cessation of development or commercialization of the products, and/or challenges to patents which are 
subject to the related agreement. Each agreement is discussed in more detail in the following sections.

Takeda ADCETRIS collaboration

The Takeda ADCETRIS collaboration provides for the global co-development of ADCETRIS and the 

commercialization of ADCETRIS by Takeda in its territory. We have commercial rights for ADCETRIS in the U.S. and 
its territories and in Canada. Takeda has commercial rights in the rest of the world. Under the collaboration, we and 
Takeda can each conduct development activities and equally co-fund the cost of certain mutually agreed development 
activities. Costs associated with co-development activities are included in research and development expense.

We recognize payments received from Takeda, including progress-dependent development and regulatory 

milestone payments, reimbursement for drug supplied, and net development cost reimbursement payments, as 
collaboration and license agreement revenues upon transfer of control of the goods or services over the development 
period. When the performance of development activities under the collaboration results in us making a reimbursement 
payment to Takeda, that payment reduces collaboration and license agreement revenues. In addition, we recognize 
royalty revenues, where royalties are based on a percentage of Takeda’s net sales of ADCETRIS in its licensed 
territories, with percentages ranging from the mid-teens to the mid-twenties based on annual net sales tiers, and sales-
based milestones. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS, which is included 
in royalty revenues. 

Astellas PADCEV collaboration

We have a collaboration agreement with Agensys, Inc., which subsequently became an affiliate of Astellas, to 

jointly research, develop and commercialize ADCs for the treatment of several types of cancer. The collaboration 
encompasses combinations of our ADC technology with fully-human antibodies developed by Astellas to proprietary 
cancer targets. Under this collaboration, we and Astellas are co-funding all development costs for PADCEV. We rely on 
Astellas to supply PADCEV for commercial sales and for our clinical trials, and Astellas oversees the manufacturing 
supply chain for PADCEV. Costs associated with co-development activities are included in research and development 
expense and amounted to $145.4 million, $99.3 million, and $76.8 million for the years ended December 31, 2021, 2020, 
and 2019, respectively.

In 2018, we and Astellas entered into a joint commercialization agreement to govern the global commercialization 

of PADCEV:

•

In the U.S., we and Astellas jointly promote PADCEV. We record sales of PADCEV in the U.S. and are 
responsible for all U.S. distribution activities. The companies each bear the costs of their own sales 
organizations in the U.S., equally share certain costs associated with commercializing PADCEV in the U.S., 
and equally share in any profits realized in the U.S. We and Astellas launched PADCEV in the U.S. in 
December 2019. Gross profit share payments owed to Astellas in the U.S. are recorded in cost of sales and 
totaled $159.0 million and $104.6 million during the years ended December 31, 2021 and 2020, respectively. 

has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa. The 

agreement is intended to provide that we and Astellas will effectively equally share in costs incurred and any 

profits realized in all of these markets. Cost and profit sharing in Canada, the United Kingdom, Germany, 

France, Spain and Italy will be based on product sales and costs of commercialization. In the remaining 

markets, the commercializing party will bear costs and will pay the other party a royalty rate applied to net 

sales of the product based on a rate intended to approximate an equal profit share for both parties.

Either party may opt out of co-development and profit-sharing under the collaboration agreement in return for 

receiving milestones and royalties from the continuing party. Astellas or its affiliates are responsible for overseeing the 

manufacturing supply chain for PADCEV for development and commercial use. However, we are responsible for 

packaging and labeling in countries in which we sell PADCEV. In addition, if the parties determine that a second source 

is required, we will be responsible for establishing such second source whether internally or through a third party.

Genmab TIVDAK collaboration

We have an agreement with Genmab to develop and commercialize ADCs targeting tissue factor, under which we 

previously exercised a co-development option for TIVDAK. In October 2020, we and Genmab entered into a joint 

commercialization agreement to govern the global commercialization of TIVDAK. The FDA granted accelerated 

approval of TIVDAK in September 2021 for the treatment of adult patients with recurrent or metastatic cervical cancer 

with disease progression on or after chemotherapy.

• 

In the U.S., we and Genmab co-promote TIVDAK. We record sales of TIVDAK in the U.S. and are 

responsible for leading U.S. distribution activities. The companies will each hire and maintain 50% of the 

sales representatives and medical science liaisons, equally share those and certain other costs associated with 

commercializing TIVDAK in the U.S., and equally share in any profits realized in the U.S. Gross profit share 

payments owed to Genmab in the U.S. are recorded in cost of sales.

•  Outside the U.S., we have commercialization rights in the rest of the world except for Japan, where Genmab 

has commercialization rights. In Europe, China, and Japan, we and Genmab equally share 50% of the costs 

associated with commercializing TIVDAK as well as any profits realized in these markets. In markets outside 

the U.S. other than Europe, China, and Japan, aside from certain costs specified in the agreement, we are 

solely responsible for all costs associated with commercializing TIVDAK and will pay Genmab a royalty 

based on a percentage of aggregate net sales ranging from the mid-teens to mid-twenties.

Costs associated with co-development activities are included in research and development expense and amounted 

$63.7 million, $50.1 million, and $48.5 million for the years ended December 31, 2021, 2020, and 2019, respectively. 

Either party may opt out of co-development and profit-sharing under the collaboration agreement in return for receiving 

milestones and royalties from the continuing party. Either party may also opt out of co-development and profit-sharing 

under the collaboration agreement in return for receiving milestones and royalties from the continuing party. The opt out 

provisions of the collaboration agreement may also be applied to the joint commercialization agreement. In addition, 

Genmab may elect to opt out of co-promotion of TIVDAK in the U.S. by providing us with prior written notice.

Merck LV and TUKYSA license and collaboration agreements, and stock purchase agreement 

In September 2020, we entered into two license and collaboration agreements, and a stock purchase agreement, 

with Merck.

Under one of the license and collaboration agreements, referred to as the LV Agreement, we are pursuing a broad 

joint development program evaluating ladiratuzumab vedotin, or LV, as monotherapy and in combination with Merck’s 

anti-PD-1 therapy KEYTRUDA® (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast 

cancer and other LIV-1-expressing solid tumors. Pursuant to the LV Agreement, we granted to Merck a co-exclusive 

worldwide development and commercialization license for LV, and agreed to jointly develop and commercialize LV on a 

worldwide basis. We received an upfront cash payment of $600.0 million, and we are eligible to receive up to 

$850.0 million in milestone payments upon the initiation of certain clinical trials and regulatory approval in certain major 

markets, and up to an additional $1.75 billion in milestone payments upon the achievement of specified annual global net 

sales thresholds of LV. Each company is responsible for 50% of global costs to develop and commercialize LV and will 

receive 50% of potential future profits. 

110

111

 
 
 
 
 
 
Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:

(dollars in thousands)

Balance at January 1

Increase (decrease) related to prior year tax positions

Increase related to current year tax positions

Balance at December 31

10. Collaboration and license agreements 

Years ended December 31,

2021

2020

2019

$ 

23,078  $ 

24,018  $ 

20,706 

1,894 

5,334 

(4,008)   

3,068 

$ 

30,306  $ 

23,078  $ 

— 

3,312 

24,018 

We have collaboration and license agreements with a number of pharmaceutical and biotechnology companies. 

Revenues recognized under these agreements are disclosed in Note 2.

These agreements generally may be terminated due to material and uncured breaches, insolvency of either party, 

mutual written consent, unilateral decision of one or either party upon prior written notice, expiration of payment 

obligations, cessation of development or commercialization of the products, and/or challenges to patents which are 

subject to the related agreement. Each agreement is discussed in more detail in the following sections.

Takeda ADCETRIS collaboration

The Takeda ADCETRIS collaboration provides for the global co-development of ADCETRIS and the 

commercialization of ADCETRIS by Takeda in its territory. We have commercial rights for ADCETRIS in the U.S. and 

its territories and in Canada. Takeda has commercial rights in the rest of the world. Under the collaboration, we and 

Takeda can each conduct development activities and equally co-fund the cost of certain mutually agreed development 

activities. Costs associated with co-development activities are included in research and development expense.

We recognize payments received from Takeda, including progress-dependent development and regulatory 

milestone payments, reimbursement for drug supplied, and net development cost reimbursement payments, as 

collaboration and license agreement revenues upon transfer of control of the goods or services over the development 

period. When the performance of development activities under the collaboration results in us making a reimbursement 

payment to Takeda, that payment reduces collaboration and license agreement revenues. In addition, we recognize 

royalty revenues, where royalties are based on a percentage of Takeda’s net sales of ADCETRIS in its licensed 

territories, with percentages ranging from the mid-teens to the mid-twenties based on annual net sales tiers, and sales-

based milestones. Takeda bears a portion of third-party royalty costs owed on its sales of ADCETRIS, which is included 

in royalty revenues. 

Astellas PADCEV collaboration

We have a collaboration agreement with Agensys, Inc., which subsequently became an affiliate of Astellas, to 

jointly research, develop and commercialize ADCs for the treatment of several types of cancer. The collaboration 

encompasses combinations of our ADC technology with fully-human antibodies developed by Astellas to proprietary 

cancer targets. Under this collaboration, we and Astellas are co-funding all development costs for PADCEV. We rely on 

Astellas to supply PADCEV for commercial sales and for our clinical trials, and Astellas oversees the manufacturing 

supply chain for PADCEV. Costs associated with co-development activities are included in research and development 

expense and amounted to $145.4 million, $99.3 million, and $76.8 million for the years ended December 31, 2021, 2020, 

and 2019, respectively.

of PADCEV:

In 2018, we and Astellas entered into a joint commercialization agreement to govern the global commercialization 

•

In the U.S., we and Astellas jointly promote PADCEV. We record sales of PADCEV in the U.S. and are 

responsible for all U.S. distribution activities. The companies each bear the costs of their own sales 

organizations in the U.S., equally share certain costs associated with commercializing PADCEV in the U.S., 

and equally share in any profits realized in the U.S. We and Astellas launched PADCEV in the U.S. in 

December 2019. Gross profit share payments owed to Astellas in the U.S. are recorded in cost of sales and 

totaled $159.0 million and $104.6 million during the years ended December 31, 2021 and 2020, respectively. 

•

Outside the U.S., we have commercialization rights in all countries in North and South America, and Astellas 
has commercialization rights in the rest of the world, including Europe, Asia, Australia and Africa. The 
agreement is intended to provide that we and Astellas will effectively equally share in costs incurred and any 
profits realized in all of these markets. Cost and profit sharing in Canada, the United Kingdom, Germany, 
France, Spain and Italy will be based on product sales and costs of commercialization. In the remaining 
markets, the commercializing party will bear costs and will pay the other party a royalty rate applied to net 
sales of the product based on a rate intended to approximate an equal profit share for both parties.

Either party may opt out of co-development and profit-sharing under the collaboration agreement in return for 

receiving milestones and royalties from the continuing party. Astellas or its affiliates are responsible for overseeing the 
manufacturing supply chain for PADCEV for development and commercial use. However, we are responsible for 
packaging and labeling in countries in which we sell PADCEV. In addition, if the parties determine that a second source 
is required, we will be responsible for establishing such second source whether internally or through a third party.

Genmab TIVDAK collaboration

We have an agreement with Genmab to develop and commercialize ADCs targeting tissue factor, under which we 

previously exercised a co-development option for TIVDAK. In October 2020, we and Genmab entered into a joint 
commercialization agreement to govern the global commercialization of TIVDAK. The FDA granted accelerated 
approval of TIVDAK in September 2021 for the treatment of adult patients with recurrent or metastatic cervical cancer 
with disease progression on or after chemotherapy.

• 

In the U.S., we and Genmab co-promote TIVDAK. We record sales of TIVDAK in the U.S. and are 
responsible for leading U.S. distribution activities. The companies will each hire and maintain 50% of the 
sales representatives and medical science liaisons, equally share those and certain other costs associated with 
commercializing TIVDAK in the U.S., and equally share in any profits realized in the U.S. Gross profit share 
payments owed to Genmab in the U.S. are recorded in cost of sales.

•  Outside the U.S., we have commercialization rights in the rest of the world except for Japan, where Genmab 

has commercialization rights. In Europe, China, and Japan, we and Genmab equally share 50% of the costs 
associated with commercializing TIVDAK as well as any profits realized in these markets. In markets outside 
the U.S. other than Europe, China, and Japan, aside from certain costs specified in the agreement, we are 
solely responsible for all costs associated with commercializing TIVDAK and will pay Genmab a royalty 
based on a percentage of aggregate net sales ranging from the mid-teens to mid-twenties.

Costs associated with co-development activities are included in research and development expense and amounted 

$63.7 million, $50.1 million, and $48.5 million for the years ended December 31, 2021, 2020, and 2019, respectively. 
Either party may opt out of co-development and profit-sharing under the collaboration agreement in return for receiving 
milestones and royalties from the continuing party. Either party may also opt out of co-development and profit-sharing 
under the collaboration agreement in return for receiving milestones and royalties from the continuing party. The opt out 
provisions of the collaboration agreement may also be applied to the joint commercialization agreement. In addition, 
Genmab may elect to opt out of co-promotion of TIVDAK in the U.S. by providing us with prior written notice.

Merck LV and TUKYSA license and collaboration agreements, and stock purchase agreement 

In September 2020, we entered into two license and collaboration agreements, and a stock purchase agreement, 

with Merck.

Under one of the license and collaboration agreements, referred to as the LV Agreement, we are pursuing a broad 
joint development program evaluating ladiratuzumab vedotin, or LV, as monotherapy and in combination with Merck’s 
anti-PD-1 therapy KEYTRUDA® (pembrolizumab) in triple-negative breast cancer, hormone receptor-positive breast 
cancer and other LIV-1-expressing solid tumors. Pursuant to the LV Agreement, we granted to Merck a co-exclusive 
worldwide development and commercialization license for LV, and agreed to jointly develop and commercialize LV on a 
worldwide basis. We received an upfront cash payment of $600.0 million, and we are eligible to receive up to 
$850.0 million in milestone payments upon the initiation of certain clinical trials and regulatory approval in certain major 
markets, and up to an additional $1.75 billion in milestone payments upon the achievement of specified annual global net 
sales thresholds of LV. Each company is responsible for 50% of global costs to develop and commercialize LV and will 
receive 50% of potential future profits. 

110

111

 
 
 
 
 
 
Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

In connection with the LV Agreement, we entered into a stock purchase agreement with Merck, referred to as the 

Purchase Agreement, pursuant to which we agreed to issue and sell, and Merck agreed to purchase 5,000,000 newly 
issued shares of our common stock, at a purchase price of $200 per share, for an aggregate purchase price of $1.0 billion.

Under the other license and collaboration agreement, referred to as the TUKYSA Agreement, we granted Merck 

exclusive rights to commercialize TUKYSA in Asia, the Middle East and Latin America and other regions outside of the 
U.S., Canada and Europe. Pursuant to the TUKYSA Agreement, Merck is responsible for marketing applications for 
approval in its territory, supported by the positive results from the HER2CLIMB clinical trial. We retained commercial 
rights in the U.S., Canada and Europe, where we will record sales. Merck is also co-funding a portion of the TUKYSA 
global development plan, which encompasses several ongoing and planned trials across HER2-positive cancers. We will 
continue to lead ongoing TUKYSA global development operational execution. Merck will solely fund and conduct 
country-specific clinical trials necessary to support anticipated regulatory applications in its territories. We received an 
upfront cash payment from Merck of $125.0 million and also received $85.0 million in prepaid research and 
development funding to be applied to Merck’s global development cost sharing obligations. We are eligible to receive 
progress-dependent milestone payments of up to $65.0 million, and are entitled to receive tiered royalties on sales of 
TUKYSA by Merck that begin in the low twenty percent range and escalate based sales volume by Merck in its territory. 
We owe a portion of any non-royalty payments received from sublicensing TUKYSA rights to a technology licensor, as 
well as a low double-digit royalty based on net sales of TUKYSA by us, and will owe a single-digit royalty based on net 
sales of TUKYSA by Merck in its territories.

We determined that these agreements are within the scope of ASC 808. Pursuant to ASC 808, we considered other 

treating locally advanced metastatic gastric cancer in China, and in July 2021 the National Medical Products 

authoritative guidance for distinct units of account related to these agreements, including ASC 606. Our performance 
obligations within the scope of ASC 606 consisted of the delivery of the LV license and transfer of regulatory 
information to enable the LV collaboration, the delivery of the TUKYSA license and transfer of regulatory materials for 
use by Merck in its territory, and supply of commercial TUKYSA inventory to Merck for use in its territory. The LV 
license and TUKYSA license are functional intellectual property and distinct from the other promises made under the 
contract. Since we also determined that Merck can benefit from the LV license and the TUKYSA licenses at the time of 
conveyance, the related performance obligations were satisfied at that point in time. Therefore, we recognized the license 
revenue under ASC 606 of $725.0 million in collaboration and license agreement revenues during the year ended 
December 31, 2020.

Potential development, regulatory, and sales-based milestones, and royalties, will be accounted for as variable 

transaction price related to the LV or TUKYSA licenses under ASC 606. Given the uncertain nature of these payments, 
we determined they were fully constrained upon entering the agreements and not included in the transaction price. We 
will re-evaluate the transaction price at each reporting period and as uncertain events are resolved or other changes in 
circumstances occur.

We and Merck will share equally in LV global development costs and profits, if any, and Merck is co-funding a 

portion of the TUKYSA global development plan. We consider the collaborative activities associated with the global 
development and commercialization of LV, and the global development of TUKYSA, to be units of account within the 
scope of ASC 808. We recognize development cost sharing proportionately with the performance of the underlying 
activities, and record Merck’s reimbursement of our expenses as a reduction of research and development expenses. 
Reimbursements from Merck for the LV Agreement and TUKYSA Agreement were not material during the year ended 
December 31, 2020. Merck’s prepayment of $85.0 million towards the TUKYSA global development plan was recorded 
as a co-development liability in other long-term liabilities on our consolidated balance sheet as of December 31, 2020. 
As joint development expenses are incurred, we recognize the portion of Merck’s prepayment as a reduction of our 
research and development expenses on our consolidated statements of comprehensive income (loss). As of December 31, 
2021, $40.2 million and $15.1 million was recorded as the remaining co-development liability in accrued liabilities and 
other long-term liabilities, respectively. As of December 31, 2020, $30.1 million and $50.8 million was recorded as the 
remaining co-development liability in accrued liabilities and other long-term liabilities, respectively. Sales of TUKYSA 
drug product supplied to Merck were included in collaboration and license agreement revenues.

The fair market value of 5,000,000 shares of our common stock was $749.9 million, based on the closing price of 

the last trading day prior to the Purchase Agreement being executed. We accounted for the associated premium of 

$250.1 million as a freestanding equity-linked instrument under ASC 815. The premium was determined to be variable 

consideration in the calculation of the total transaction price related to the LV license, and was initially recorded in 

deferred revenue due to the substantive contingency associated with closing of the sale of shares under the Purchase 

Agreement. The closing of the sale of the shares pursuant to the Purchase Agreement occurred in October 2020. Upon 

closing, we recorded the fair market value of the shares issued in stockholders’ equity on our consolidated balance sheet. 

The variable consideration restraint was removed upon the closing of the sale of shares pursuant to the Purchase 

Agreement, and the premium was recognized in collaboration and license agreement revenues in the quarter and year 

ended December 31, 2020.

RemeGen license agreement

In September 2021, we and RemeGen Co., Ltd., or RemeGen, entered into an exclusive worldwide licensing 

agreement to develop and commercialize disitamab vedotin, a novel HER2-targeted ADC. Disitamab vedotin combines 

the drug-linker technology originally developed by us with RemeGen’s novel HER2 antibody. Disitamab vedotin 

received FDA Breakthrough Therapy designation in 2020 for use in second-line treatment of patients with HER2-

expressing, locally advanced or metastatic urothelial cancer who have previously received platinum-containing 

chemotherapy. Also in 2020, RemeGen announced FDA’s clearance of an Investigational New Drug application for a 

phase 2clinical trial in locally advanced or metastatic urothelial cancer. Disitamab vedotin is conditionally approved for 

Administration of China also accepted a New Drug Application for disitamab vedotin in locally advanced or metastatic 

urothelial cancer.

Under the terms of the agreement, we obtained exclusive license rights to disitamab vedotin for global 

development and commercialization outside of RemeGen’s territory for an upfront payment of $200.0 million. The 

license was accounted for as an asset acquisition and the upfront payment was included in research and development 

expenses for the year ended December 31, 2021. RemeGen retains development and commercialization rights for Asia, 

excluding Japan and Singapore. We will lead global development and RemeGen will fund and operationalize the portion 

of global clinical trials attributable to its territory. RemeGen will also be responsible for all clinical development and 

regulatory submissions specific to its territory. We will pay RemeGen up to $195.0 million in potential milestone 

payments across multiple indications and products based upon the achievement of specified development goals, and up 

to $2.2 billion in potential milestone payments based on the achievement of specified regulatory and commercialization 

goals. RemeGen will be entitled to a tiered, high single digit to mid-teen percentage royalty based on net sales of 

disitamab vedotin in our territory.

Other collaboration and license agreements

We have other collaboration and license agreements for our technology with a number of biotechnology and 

pharmaceutical companies. Under these agreements, we have granted research and commercial licenses to use our 

technology, most often in conjunction with the licensee's technology. In certain agreements, we also have agreed to 

conduct limited development activities and to provide other materials, supplies and services to our licensees during a 

specified term of the agreement. We typically receive upfront cash payments and progress- and sales-dependent 

milestones for the achievement by our licensees of certain events, and annual maintenance fees and support fees for 

research and development services and materials provided under the agreements. These amounts are recognized as 

revenue over the performance obligation period if the license is determined to not be distinct from other goods and 

services provided, or, if there is no performance obligation, upon transfer of control of the goods or services to the 

customer. We also are entitled to receive royalties on net sales of any resulting products incorporating our ADC 

technology. Our licensees are solely responsible for research, product development, manufacturing and 

commercialization of any product candidates under these agreements, which includes the achievement of the potential 

milestones. For agreements beyond the initial performance period, we have no remaining performance obligations. We 

may receive license maintenance fees and potential milestones and royalties based on collaborator development and 

regulatory progress, which are recorded in the period achieved in the case of milestones, and during the period of the 

related sales for royalties.

112

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Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

In connection with the LV Agreement, we entered into a stock purchase agreement with Merck, referred to as the 

Purchase Agreement, pursuant to which we agreed to issue and sell, and Merck agreed to purchase 5,000,000 newly 

issued shares of our common stock, at a purchase price of $200 per share, for an aggregate purchase price of $1.0 billion.

Under the other license and collaboration agreement, referred to as the TUKYSA Agreement, we granted Merck 

exclusive rights to commercialize TUKYSA in Asia, the Middle East and Latin America and other regions outside of the 

U.S., Canada and Europe. Pursuant to the TUKYSA Agreement, Merck is responsible for marketing applications for 

approval in its territory, supported by the positive results from the HER2CLIMB clinical trial. We retained commercial 

rights in the U.S., Canada and Europe, where we will record sales. Merck is also co-funding a portion of the TUKYSA 

global development plan, which encompasses several ongoing and planned trials across HER2-positive cancers. We will 

continue to lead ongoing TUKYSA global development operational execution. Merck will solely fund and conduct 

country-specific clinical trials necessary to support anticipated regulatory applications in its territories. We received an 

upfront cash payment from Merck of $125.0 million and also received $85.0 million in prepaid research and 

development funding to be applied to Merck’s global development cost sharing obligations. We are eligible to receive 

progress-dependent milestone payments of up to $65.0 million, and are entitled to receive tiered royalties on sales of 

TUKYSA by Merck that begin in the low twenty percent range and escalate based sales volume by Merck in its territory. 

We owe a portion of any non-royalty payments received from sublicensing TUKYSA rights to a technology licensor, as 

well as a low double-digit royalty based on net sales of TUKYSA by us, and will owe a single-digit royalty based on net 

sales of TUKYSA by Merck in its territories.

We determined that these agreements are within the scope of ASC 808. Pursuant to ASC 808, we considered other 

authoritative guidance for distinct units of account related to these agreements, including ASC 606. Our performance 

obligations within the scope of ASC 606 consisted of the delivery of the LV license and transfer of regulatory 

information to enable the LV collaboration, the delivery of the TUKYSA license and transfer of regulatory materials for 

use by Merck in its territory, and supply of commercial TUKYSA inventory to Merck for use in its territory. The LV 

license and TUKYSA license are functional intellectual property and distinct from the other promises made under the 

contract. Since we also determined that Merck can benefit from the LV license and the TUKYSA licenses at the time of 

conveyance, the related performance obligations were satisfied at that point in time. Therefore, we recognized the license 

revenue under ASC 606 of $725.0 million in collaboration and license agreement revenues during the year ended 

December 31, 2020.

circumstances occur.

Potential development, regulatory, and sales-based milestones, and royalties, will be accounted for as variable 

transaction price related to the LV or TUKYSA licenses under ASC 606. Given the uncertain nature of these payments, 

we determined they were fully constrained upon entering the agreements and not included in the transaction price. We 

will re-evaluate the transaction price at each reporting period and as uncertain events are resolved or other changes in 

We and Merck will share equally in LV global development costs and profits, if any, and Merck is co-funding a 

portion of the TUKYSA global development plan. We consider the collaborative activities associated with the global 

development and commercialization of LV, and the global development of TUKYSA, to be units of account within the 

scope of ASC 808. We recognize development cost sharing proportionately with the performance of the underlying 

activities, and record Merck’s reimbursement of our expenses as a reduction of research and development expenses. 

Reimbursements from Merck for the LV Agreement and TUKYSA Agreement were not material during the year ended 

December 31, 2020. Merck’s prepayment of $85.0 million towards the TUKYSA global development plan was recorded 

as a co-development liability in other long-term liabilities on our consolidated balance sheet as of December 31, 2020. 

As joint development expenses are incurred, we recognize the portion of Merck’s prepayment as a reduction of our 

research and development expenses on our consolidated statements of comprehensive income (loss). As of December 31, 

2021, $40.2 million and $15.1 million was recorded as the remaining co-development liability in accrued liabilities and 

other long-term liabilities, respectively. As of December 31, 2020, $30.1 million and $50.8 million was recorded as the 

remaining co-development liability in accrued liabilities and other long-term liabilities, respectively. Sales of TUKYSA 

drug product supplied to Merck were included in collaboration and license agreement revenues.

The fair market value of 5,000,000 shares of our common stock was $749.9 million, based on the closing price of 

the last trading day prior to the Purchase Agreement being executed. We accounted for the associated premium of 
$250.1 million as a freestanding equity-linked instrument under ASC 815. The premium was determined to be variable 
consideration in the calculation of the total transaction price related to the LV license, and was initially recorded in 
deferred revenue due to the substantive contingency associated with closing of the sale of shares under the Purchase 
Agreement. The closing of the sale of the shares pursuant to the Purchase Agreement occurred in October 2020. Upon 
closing, we recorded the fair market value of the shares issued in stockholders’ equity on our consolidated balance sheet. 
The variable consideration restraint was removed upon the closing of the sale of shares pursuant to the Purchase 
Agreement, and the premium was recognized in collaboration and license agreement revenues in the quarter and year 
ended December 31, 2020.

RemeGen license agreement

In September 2021, we and RemeGen Co., Ltd., or RemeGen, entered into an exclusive worldwide licensing 

agreement to develop and commercialize disitamab vedotin, a novel HER2-targeted ADC. Disitamab vedotin combines 
the drug-linker technology originally developed by us with RemeGen’s novel HER2 antibody. Disitamab vedotin 
received FDA Breakthrough Therapy designation in 2020 for use in second-line treatment of patients with HER2-
expressing, locally advanced or metastatic urothelial cancer who have previously received platinum-containing 
chemotherapy. Also in 2020, RemeGen announced FDA’s clearance of an Investigational New Drug application for a 
phase 2clinical trial in locally advanced or metastatic urothelial cancer. Disitamab vedotin is conditionally approved for 
treating locally advanced metastatic gastric cancer in China, and in July 2021 the National Medical Products 
Administration of China also accepted a New Drug Application for disitamab vedotin in locally advanced or metastatic 
urothelial cancer.

Under the terms of the agreement, we obtained exclusive license rights to disitamab vedotin for global 
development and commercialization outside of RemeGen’s territory for an upfront payment of $200.0 million. The 
license was accounted for as an asset acquisition and the upfront payment was included in research and development 
expenses for the year ended December 31, 2021. RemeGen retains development and commercialization rights for Asia, 
excluding Japan and Singapore. We will lead global development and RemeGen will fund and operationalize the portion 
of global clinical trials attributable to its territory. RemeGen will also be responsible for all clinical development and 
regulatory submissions specific to its territory. We will pay RemeGen up to $195.0 million in potential milestone 
payments across multiple indications and products based upon the achievement of specified development goals, and up 
to $2.2 billion in potential milestone payments based on the achievement of specified regulatory and commercialization 
goals. RemeGen will be entitled to a tiered, high single digit to mid-teen percentage royalty based on net sales of 
disitamab vedotin in our territory.

Other collaboration and license agreements

We have other collaboration and license agreements for our technology with a number of biotechnology and 
pharmaceutical companies. Under these agreements, we have granted research and commercial licenses to use our 
technology, most often in conjunction with the licensee's technology. In certain agreements, we also have agreed to 
conduct limited development activities and to provide other materials, supplies and services to our licensees during a 
specified term of the agreement. We typically receive upfront cash payments and progress- and sales-dependent 
milestones for the achievement by our licensees of certain events, and annual maintenance fees and support fees for 
research and development services and materials provided under the agreements. These amounts are recognized as 
revenue over the performance obligation period if the license is determined to not be distinct from other goods and 
services provided, or, if there is no performance obligation, upon transfer of control of the goods or services to the 
customer. We also are entitled to receive royalties on net sales of any resulting products incorporating our ADC 
technology. Our licensees are solely responsible for research, product development, manufacturing and 
commercialization of any product candidates under these agreements, which includes the achievement of the potential 
milestones. For agreements beyond the initial performance period, we have no remaining performance obligations. We 
may receive license maintenance fees and potential milestones and royalties based on collaborator development and 
regulatory progress, which are recorded in the period achieved in the case of milestones, and during the period of the 
related sales for royalties.

112

113

Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

11. In-license agreements

We have in-licensed antibodies, targets and enabling technologies from pharmaceutical and biotechnology 
companies and academic institutions for use in our pipeline programs and ADC technology. We would potentially owe 
development, regulatory, and sales-based milestones, and royalties on net sales, as defined, of certain approved products. 
We were required to pay royalties in the low single digits on net sales of ADCETRIS under the terms of two exclusive 
license agreements, which expired in 2021.

We are a party to a license agreement in which we were granted an exclusive license to develop, manufacture and 

commercialize TUKYSA. We pay the licensor a portion of any non-royalty payments received from sublicensing 
TUKYSA rights, a low double-digit royalty based on net sales of TUKYSA by us, and a single-digit royalty based on net 
sales of TUKYSA by our sublicensees. The term of the license agreement expires on a country-by-country basis upon the 
later of the expiration of the last valid claim covering TUKYSA within that country or 10 years after the first commercial 
sale of TUKYSA within that country.

12. Commitments and contingencies

We have certain non-cancelable obligations under various agreements, including supply agreements relating to the 

manufacture of our commercial products, and our product candidates that contain annual minimum purchase 
commitments and other firm commitments when a binding forecast is provided. As of December 31, 2021, our future 
obligations related to supply and other agreements were as follows:

(dollars in thousands)
Years ending December 31,
2022
2023
2024
2025
2026
Thereafter
Total

$ 

$ 

204,328 
89,460 
62,686 
33,016 
6,513 
— 
396,003 

Non-cancelable obligations under these agreements do not include payments that are contingent upon achievement 

of certain progress-dependent milestones or royalties based on net sales of commercial products. These amounts have 
been excluded from the table because the events triggering the obligations have not yet occurred.

In July 2019, we completed an underwritten public offering of 8,214,286 shares of our common stock at a public 

offering price of $70.00 per share. The offering resulted in net proceeds to us of $548.7 million, after deducting 

underwriting discounts, commissions, and other offering expenses.

See Note 3 for our future obligations related to operating leases as of December 31, 2021.

At December 31, 2021, shares of common stock reserved for future issuance are as follows:

13. Legal matters 

We are engaged in multiple legal disputes with Daiichi Sankyo Co. Ltd., or Daiichi Sankyo.

Dispute over ownership of intellectual property

We are in a dispute with Daiichi Sankyo regarding the ownership of certain technology used by Daiichi Sankyo in 
its cancer drug ENHERTU and certain product candidates. We believe that the linker and other ADC technology used in 
ENHERTU and these drug candidates are improvements to our ADC technology, the ownership of which we contend 
was assigned to us under the terms of a 2008 collaboration agreement between us and Daiichi Sankyo. On November 12, 
2019, we submitted an arbitration demand to the American Arbitration Association seeking, among other remedies, a 
declaration that we are the owner of the intellectual property rights under dispute, monetary damages, and a running 
royalty. On April 27, 2020, the arbitrator confirmed the dispute should be resolved in arbitration. The arbitration hearing 
was conducted in June 2021. Recently, the arbitration hearing record was reopened by the arbitrator to consider 
additional evidence. As a result, the decision may occur after the first quarter of 2022.

114

115

On November 4, 2019, Daiichi Sankyo filed a declaratory judgment action in the United States District Court for 

the District of Delaware, alleging that we are not entitled to the intellectual property rights under dispute, in an attempt to 

have the dispute adjudicated in federal court. The case has been stayed and administratively closed by court order.

Patent infringement

On October 19, 2020, we filed a complaint in the United States District Court for the Eastern District of Texas to 

commence an action for infringement of our U.S. Patent No. 10,808,039, or the '039 Patent, by Daiichi Sankyo’s 

importation into, offer for sale, sale, and use in the United States of the cancer drug ENHERTU. This action is seeking, 

among other remedies, a judgment that Daiichi Sankyo infringed one or more valid and enforceable claims of the '039 

Patent, monetary damages and a running royalty. Daiichi Sankyo (as well as Daiichi Sankyo, Inc. and AstraZeneca 

Pharmaceuticals, LP, or AstraZeneca) subsequently filed an action on November 13, 2020 in the U.S. District Court for 

the District of Delaware seeking a declaratory judgment that ENHERTU does not infringe the ‘039 Patent. The Delaware 

action has been stayed by court order. Daiichi Sankyo, Inc. and AstraZeneca also filed two Petitions for Post-Grant 

Review on December 23, 2020 and January 22, 2021 with the U.S. Patent Office seeking to have claims of the ‘039 

Patent cancelled as unpatentable. On June 24, 2021, the U.S. Patent Office issued a decision denying both Petitions for 

Post-Grant Review. The trial in the patent infringement case in Texas is scheduled to begin on April 4, 2022.

As a result of these disputes, we have incurred and will continue to incur litigation expenses. In addition, from 

time to time, we may become involved in other lawsuits, claims and proceedings relating to the conduct of our business, 

including those pertaining to the defense and enforcement of our patent or other intellectual property rights and our 

contractual rights. These proceedings are costly and time consuming, and they may subject us to claims which may result 

in liabilities or require us to take or refrain from certain actions. Additionally, successful challenges to our patent or other 

intellectual property rights through these proceedings could result in a loss of rights in the relevant jurisdiction and may 

allow third parties to use our proprietary technologies without a license from us or our collaborators.

14. Stockholders’ equity

In October 2020, we closed the sale of the shares pursuant to the Purchase Agreement, and issued 5,000,000 

shares of our common stock to Merck at a purchase price of $200 per share, for proceeds of $1.0 billion. As a result, we 

recorded $749.9 million in stockholders’ equity on our consolidated balance sheet and recognized the $250.1 million 

premium attributed to the Purchase Agreement in collaboration and license agreement revenues for the year ended 

December 31, 2020.

(in thousands)

Stock options and RSUs outstanding

Shares available for future grant under the 2007 Equity Incentive Plan

Employee stock purchase plan shares available for future issuance

Total

10,535 

6,673 

840 

18,048 

 
 
 
 
 
 
 
 
 
 
Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

On November 4, 2019, Daiichi Sankyo filed a declaratory judgment action in the United States District Court for 

the District of Delaware, alleging that we are not entitled to the intellectual property rights under dispute, in an attempt to 
have the dispute adjudicated in federal court. The case has been stayed and administratively closed by court order.

Patent infringement

On October 19, 2020, we filed a complaint in the United States District Court for the Eastern District of Texas to 

commence an action for infringement of our U.S. Patent No. 10,808,039, or the '039 Patent, by Daiichi Sankyo’s 
importation into, offer for sale, sale, and use in the United States of the cancer drug ENHERTU. This action is seeking, 
among other remedies, a judgment that Daiichi Sankyo infringed one or more valid and enforceable claims of the '039 
Patent, monetary damages and a running royalty. Daiichi Sankyo (as well as Daiichi Sankyo, Inc. and AstraZeneca 
Pharmaceuticals, LP, or AstraZeneca) subsequently filed an action on November 13, 2020 in the U.S. District Court for 
the District of Delaware seeking a declaratory judgment that ENHERTU does not infringe the ‘039 Patent. The Delaware 
action has been stayed by court order. Daiichi Sankyo, Inc. and AstraZeneca also filed two Petitions for Post-Grant 
Review on December 23, 2020 and January 22, 2021 with the U.S. Patent Office seeking to have claims of the ‘039 
Patent cancelled as unpatentable. On June 24, 2021, the U.S. Patent Office issued a decision denying both Petitions for 
Post-Grant Review. The trial in the patent infringement case in Texas is scheduled to begin on April 4, 2022.

As a result of these disputes, we have incurred and will continue to incur litigation expenses. In addition, from 

time to time, we may become involved in other lawsuits, claims and proceedings relating to the conduct of our business, 
including those pertaining to the defense and enforcement of our patent or other intellectual property rights and our 
contractual rights. These proceedings are costly and time consuming, and they may subject us to claims which may result 
in liabilities or require us to take or refrain from certain actions. Additionally, successful challenges to our patent or other 
intellectual property rights through these proceedings could result in a loss of rights in the relevant jurisdiction and may 
allow third parties to use our proprietary technologies without a license from us or our collaborators.

14. Stockholders’ equity

In October 2020, we closed the sale of the shares pursuant to the Purchase Agreement, and issued 5,000,000 
shares of our common stock to Merck at a purchase price of $200 per share, for proceeds of $1.0 billion. As a result, we 
recorded $749.9 million in stockholders’ equity on our consolidated balance sheet and recognized the $250.1 million 
premium attributed to the Purchase Agreement in collaboration and license agreement revenues for the year ended 
December 31, 2020.

Non-cancelable obligations under these agreements do not include payments that are contingent upon achievement 

of certain progress-dependent milestones or royalties based on net sales of commercial products. These amounts have 

been excluded from the table because the events triggering the obligations have not yet occurred.

In July 2019, we completed an underwritten public offering of 8,214,286 shares of our common stock at a public 

offering price of $70.00 per share. The offering resulted in net proceeds to us of $548.7 million, after deducting 
underwriting discounts, commissions, and other offering expenses.

See Note 3 for our future obligations related to operating leases as of December 31, 2021.

At December 31, 2021, shares of common stock reserved for future issuance are as follows:

(in thousands)
Stock options and RSUs outstanding
Shares available for future grant under the 2007 Equity Incentive Plan
Employee stock purchase plan shares available for future issuance

Total

10,535 
6,673 
840 
18,048 

11. In-license agreements

We have in-licensed antibodies, targets and enabling technologies from pharmaceutical and biotechnology 

companies and academic institutions for use in our pipeline programs and ADC technology. We would potentially owe 

development, regulatory, and sales-based milestones, and royalties on net sales, as defined, of certain approved products. 

We were required to pay royalties in the low single digits on net sales of ADCETRIS under the terms of two exclusive 

license agreements, which expired in 2021.

We are a party to a license agreement in which we were granted an exclusive license to develop, manufacture and 

commercialize TUKYSA. We pay the licensor a portion of any non-royalty payments received from sublicensing 

TUKYSA rights, a low double-digit royalty based on net sales of TUKYSA by us, and a single-digit royalty based on net 

sales of TUKYSA by our sublicensees. The term of the license agreement expires on a country-by-country basis upon the 

later of the expiration of the last valid claim covering TUKYSA within that country or 10 years after the first commercial 

sale of TUKYSA within that country.

12. Commitments and contingencies

We have certain non-cancelable obligations under various agreements, including supply agreements relating to the 

manufacture of our commercial products, and our product candidates that contain annual minimum purchase 

commitments and other firm commitments when a binding forecast is provided. As of December 31, 2021, our future 

obligations related to supply and other agreements were as follows:

(dollars in thousands)

Years ending December 31,

2022

2023

2024

2025

2026

Thereafter

Total

$ 

204,328 

89,460 

62,686 

33,016 

6,513 

— 

$ 

396,003 

13. Legal matters 

We are engaged in multiple legal disputes with Daiichi Sankyo Co. Ltd., or Daiichi Sankyo.

Dispute over ownership of intellectual property

We are in a dispute with Daiichi Sankyo regarding the ownership of certain technology used by Daiichi Sankyo in 

its cancer drug ENHERTU and certain product candidates. We believe that the linker and other ADC technology used in 

ENHERTU and these drug candidates are improvements to our ADC technology, the ownership of which we contend 

was assigned to us under the terms of a 2008 collaboration agreement between us and Daiichi Sankyo. On November 12, 

2019, we submitted an arbitration demand to the American Arbitration Association seeking, among other remedies, a 

declaration that we are the owner of the intellectual property rights under dispute, monetary damages, and a running 

royalty. On April 27, 2020, the arbitrator confirmed the dispute should be resolved in arbitration. The arbitration hearing 

was conducted in June 2021. Recently, the arbitration hearing record was reopened by the arbitrator to consider 

additional evidence. As a result, the decision may occur after the first quarter of 2022.

114

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Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

15. Net (loss) income per share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of 
common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income 
(loss) by the weighted average number of common shares and potentially dilutive common shares outstanding during the 
period. Potentially dilutive common shares include incremental common shares issuable upon the vesting of unvested 
restricted stock units and the exercise of outstanding stock options, calculated using the treasury stock method. 

(dollars in thousands, except per share amounts)
Net (loss) income

Weighted average common shares outstanding - basic
Effect of potentially dilutive common shares
Weighted average common shares outstanding - diluted

Net (loss) income per share - basic
Net (loss) income per share - diluted

Years ended December 31,

2021
(674,471)  $ 

2020
613,670  $ 

2019
(158,650) 

$ 

182,048 
— 
182,048 

174,834 
7,453 
182,287 

165,498 
— 
165,498 

$ 
$ 

(3.70)  $ 
(3.70)  $ 

3.51  $ 
3.37  $ 

(0.96) 
(0.96) 

We excluded the potential shares of common stock from the computation of diluted net income (loss) per share 
because their effect would have been antidilutive. The following table presents the weighted average number of shares 
that have been excluded for all periods presented:

(in thousands)
Stock options and RSUs

16. Share-based compensation 

2007 Equity Incentive Plan 

Years ended December 31,

2021

2020

2019

10,327 

356 

12,774 

Our 2007 Equity Incentive Plan, or the 2007 Plan, provides for the issuance of our common stock to employees, 

including our officers, directors and consultants and affiliates. The 2007 Plan was amended and restated in 2020 to 
reserve an additional 6,000,000 shares thereunder, such that an aggregate of 39,000,000 shares of our common stock 
were authorized for issuance as of December 31, 2021, and to extend the term of the 2007 Plan through May 2030 unless 
it is terminated earlier pursuant to its terms. Under the 2007 Plan, we may issue stock options (including incentive stock 
options and nonstatutory stock options), restricted stock, RSUs, stock appreciation rights and other similar types of 
awards. We have only issued options to purchase shares of common stock and RSUs under the 2007 Plan, including 
options and RSUs with time-based or performance-based vesting requirements. Performance-based vesting occurs upon 
achievement of pre-determined regulatory milestones, sales-based milestones, or market-based performance metrics.

Incentive stock options under the 2007 Plan may be granted only to our employees. The exercise price of an 
incentive stock option or a nonstatutory stock option may not be less than 100% of the fair market value of the common 
stock on the date the option is granted and the options generally have a maximum term of ten years from the date of 
grant. Generally, options granted to employees under the 2007 Plan vest 25% one year after the grant date and thereafter 
ratably each month over the following thirty-six months. Generally, RSUs granted to employees vest 25% each year 
beginning one year after the grant date. Option and RSU grants to non-employee members of our board of directors vest 
over one year. The vesting of performance-based awards generally includes vesting upon achievement of pre-determined 
milestones or metrics and, in some cases, vesting upon achievement of pre-determined milestones or metrics in addition 
to the passage of time.

The 2007 Plan provides for (i) the full acceleration of vesting of equity awards upon a change in control if the 

successor company does not assume, substitute or otherwise replace the equity awards upon the change in control; and 

(ii) the full acceleration of vesting of any equity awards if at the time of, immediately prior to or within twelve months 

after a change in control of the Company, the holder of such equity awards is involuntarily terminated without cause or is 

constructively terminated by the successor company that assumed, substituted or otherwise replaced such stock awards in 

The following table presents our total share-based compensation expense for the periods presented:

connection with the change in control.

Share-based compensation expense 

(dollars in thousands)

Research and development

Selling, general and administrative

Total share-based compensation expense

Years ended December 31,

2021

2020

$ 

79,715  $ 

72,749  $ 

93,402 

173,117 

74,484 

147,233 

2019

64,730 

62,619 

127,349 

No tax benefit was recognized for the years ended December 31, 2021 and 2019 since there is no taxable income 

for those years and a valuation allowance is available to offset all potential tax benefits associated with its deferred tax 

assets. We recognized a tax benefit of $55.7 million related to share-based compensation expense for 2020. 

Valuation assumptions

We calculate the fair value of each option award on the date of grant using the Black-Scholes option pricing 

model. The following weighted-average assumptions were used for the periods indicated:

Risk-free interest rate

Expected lives (in 

years)

Expected dividend

Expected volatility

2007 Plan

Years ended December 31,

Employee Stock Purchase Plan

Years ended December 31,

2021

2020

2019

2021

2020

2019

 0.8 %

 0.3 %

 1.5 %

 0.1 %

 1.3 %

 2.2 %

5.7

 0 %

 44 %

5.7

 0 %

 44 %

5.6

 0 %

 44 %

0.5

 0 %

 44 %

0.5

 0 %

 47 %

0.5

 0 %

 43 %

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected 

life of the award. Our computation of expected life was determined based on our historical experience with similar 

awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and expectations of 

future employee behavior. A forfeiture rate is estimated at the time of grant to reflect the amount of awards that are 

granted but are expected to be forfeited by the award holder prior to vesting. The estimated forfeiture rate applied to 

these amounts is derived from historical stock award forfeiture behavior. We have never paid cash dividends and do not 

currently intend to pay cash dividends. Our computation of expected volatility is based on the historical volatility of our 

stock price.

The fair value of RSUs is determined based on the closing price of our common stock on the date of grant.

116

117

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

15. Net (loss) income per share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of 

common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income 

(loss) by the weighted average number of common shares and potentially dilutive common shares outstanding during the 

period. Potentially dilutive common shares include incremental common shares issuable upon the vesting of unvested 

restricted stock units and the exercise of outstanding stock options, calculated using the treasury stock method. 

(dollars in thousands, except per share amounts)

Net (loss) income

Weighted average common shares outstanding - basic

Effect of potentially dilutive common shares

Weighted average common shares outstanding - diluted

Net (loss) income per share - basic

Net (loss) income per share - diluted

(in thousands)

Stock options and RSUs

16. Share-based compensation 

2007 Equity Incentive Plan 

Years ended December 31,

2021

2020

2019

$ 

(674,471)  $ 

613,670  $ 

(158,650) 

182,048 

— 

182,048 

174,834 

7,453 

182,287 

165,498 

— 

165,498 

$ 

$ 

(3.70)  $ 

(3.70)  $ 

3.51  $ 

3.37  $ 

(0.96) 

(0.96) 

Years ended December 31,

2021

2020

2019

10,327 

356 

12,774 

We excluded the potential shares of common stock from the computation of diluted net income (loss) per share 

because their effect would have been antidilutive. The following table presents the weighted average number of shares 

that have been excluded for all periods presented:

Our 2007 Equity Incentive Plan, or the 2007 Plan, provides for the issuance of our common stock to employees, 

including our officers, directors and consultants and affiliates. The 2007 Plan was amended and restated in 2020 to 

reserve an additional 6,000,000 shares thereunder, such that an aggregate of 39,000,000 shares of our common stock 

were authorized for issuance as of December 31, 2021, and to extend the term of the 2007 Plan through May 2030 unless 

it is terminated earlier pursuant to its terms. Under the 2007 Plan, we may issue stock options (including incentive stock 

options and nonstatutory stock options), restricted stock, RSUs, stock appreciation rights and other similar types of 

awards. We have only issued options to purchase shares of common stock and RSUs under the 2007 Plan, including 

options and RSUs with time-based or performance-based vesting requirements. Performance-based vesting occurs upon 

achievement of pre-determined regulatory milestones, sales-based milestones, or market-based performance metrics.

Incentive stock options under the 2007 Plan may be granted only to our employees. The exercise price of an 

incentive stock option or a nonstatutory stock option may not be less than 100% of the fair market value of the common 

stock on the date the option is granted and the options generally have a maximum term of ten years from the date of 

grant. Generally, options granted to employees under the 2007 Plan vest 25% one year after the grant date and thereafter 

ratably each month over the following thirty-six months. Generally, RSUs granted to employees vest 25% each year 

beginning one year after the grant date. Option and RSU grants to non-employee members of our board of directors vest 

over one year. The vesting of performance-based awards generally includes vesting upon achievement of pre-determined 

milestones or metrics and, in some cases, vesting upon achievement of pre-determined milestones or metrics in addition 

to the passage of time.

The 2007 Plan provides for (i) the full acceleration of vesting of equity awards upon a change in control if the 

successor company does not assume, substitute or otherwise replace the equity awards upon the change in control; and 
(ii) the full acceleration of vesting of any equity awards if at the time of, immediately prior to or within twelve months 
after a change in control of the Company, the holder of such equity awards is involuntarily terminated without cause or is 
constructively terminated by the successor company that assumed, substituted or otherwise replaced such stock awards in 
connection with the change in control.

Share-based compensation expense 

The following table presents our total share-based compensation expense for the periods presented:

(dollars in thousands)
Research and development
Selling, general and administrative
Total share-based compensation expense

Years ended December 31,

2021

2020

$ 

79,715  $ 
93,402 
173,117 

72,749  $ 
74,484 
147,233 

2019

64,730 
62,619 
127,349 

No tax benefit was recognized for the years ended December 31, 2021 and 2019 since there is no taxable income 
for those years and a valuation allowance is available to offset all potential tax benefits associated with its deferred tax 
assets. We recognized a tax benefit of $55.7 million related to share-based compensation expense for 2020. 

Valuation assumptions

We calculate the fair value of each option award on the date of grant using the Black-Scholes option pricing 

model. The following weighted-average assumptions were used for the periods indicated:

Risk-free interest rate
Expected lives (in 
years)
Expected dividend
Expected volatility

2007 Plan

Years ended December 31,

Employee Stock Purchase Plan

Years ended December 31,

2021

2020

2019

2021

2020

2019

 0.8 %

 0.3 %

 1.5 %

 0.1 %

 1.3 %

 2.2 %

5.7
 0 %
 44 %

5.7
 0 %
 44 %

5.6
 0 %
 44 %

0.5
 0 %
 44 %

0.5
 0 %
 47 %

0.5
 0 %
 43 %

The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for the expected 

life of the award. Our computation of expected life was determined based on our historical experience with similar 
awards, giving consideration to the contractual terms of the share-based awards, vesting schedules and expectations of 
future employee behavior. A forfeiture rate is estimated at the time of grant to reflect the amount of awards that are 
granted but are expected to be forfeited by the award holder prior to vesting. The estimated forfeiture rate applied to 
these amounts is derived from historical stock award forfeiture behavior. We have never paid cash dividends and do not 
currently intend to pay cash dividends. Our computation of expected volatility is based on the historical volatility of our 
stock price.

The fair value of RSUs is determined based on the closing price of our common stock on the date of grant.

116

117

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.
Notes to Consolidated Financial Statements

Seagen Inc.

Notes to Consolidated Financial Statements

During 2020, an LTIP milestone was achieved related to FDA approval of TUKYSA, which triggered vesting of 

performance-based stock awards previously granted to eligible participants, and an RSU grant to eligible participants. 

The vesting of the previously granted performance-based stock awards related to this LTIP is included in the table below. 

The second tranche grant upon milestone achievement and time-based vesting of these awards is included in the "RSU 

activity" table above.

During 2019, an LTIP milestone was achieved related to the FDA approval of PADCEV, which triggered a cash 

payment to eligible participants and an RSU grant to certain eligible participants. The vesting of grants made under that 

LTIP is time-based and is included in the “RSU activity” table above. 

A summary of activity related to our performance-based RSUs and LTIPs is as follows:

Share

equivalent

Weighted-

average

grant date

fair value

678,406  $ 

202,293  $ 

(31)  $ 

(77,947)  $ 

802,721  $ 

128.96 

161.90 

136.87 

127.82 

136.10 

Non-vested at December 31, 2020

Granted

Vested

Forfeited

Non-vested at December 31, 2021

based awards was approximately $83 million. 

Employee Stock Purchase Plan

As of December 31, 2021, the estimated unrecognized compensation cost related to all LTIPs and performance-

Under the current terms of the Amended and Restated 2000 Employee Stock Purchase Plan, or the Employee 

Stock Purchase Plan, employees can purchase shares of our common stock based on a percentage of their compensation 

subject to certain limits. Shares are purchased at the lower of 85 percent of the fair market value of our common stock on 

either the first day or the last day of each six-month offering period. Share issuance activity under the Employee Stock 

Purchase Plan is disclosed in our consolidated statements of stockholders’ equity. In May 2019, our stockholders 

approved an increase of 1,000,000 shares in the number of shares of common stock authorized for issuance under the 

Employee Stock Purchase Plan. 

17. Employee benefit plan 

We have a 401(k) Plan for all of our U.S. employees. Eligible employees may contribute through payroll 

deductions, and we may match the employees’ 401(k) contributions, at our discretion and not to exceed a prescribed 

annual limit. Under this matching program, we contributed $24.8 million in 2021, $18.0 million in 2020, and $11.9 

million in 2019.

Stock option activity

A summary of stock option activity is as follows:

Balance at December 31, 2020
Granted
Exercised
Forfeited/expired
Balance at December 31, 2021
Expected to vest
Options exercisable

Weighted-
average
exercise price 
per share

Weighted-
average
remaining 
contractual term
(in years)

Aggregate
intrinsic value
(in thousands)

5.98 $ 
5.89 $ 
4.82 $ 

561,783 
558,941 
496,438 

62.60 
156.07 
41.47 
107.48 
79.53 
77.71 
56.86 

Shares
7,881,259  $ 
1,135,689  $ 
(1,398,901)  $ 
(243,593)  $ 
7,374,454  $ 
7,171,594  $ 
5,057,083  $ 

The weighted average grant-date fair values of options granted with exercise prices equal to market were $64.22, 

$64.66, and $30.51 for the years ended December 31, 2021, 2020, and 2019, respectively.

The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the 
underlying options and the quoted price of our common stock for all options that were in-the-money at December 31, 
2021. The aggregate intrinsic value of options exercised was $168.7 million during 2021, $271.0 million during 2020, 
and $128.4 million during 2019, determined as of the date of option exercise. As of December 31, 2021, there was 
approximately $64.6 million of total unrecognized compensation cost related to unvested options, as adjusted for 
expected forfeitures. That cost is expected to be recognized over a weighted-average period of 1.30 years. We utilize 
newly issued shares to satisfy option exercises.

RSU activity 

A summary of RSU activity, excluding performance-based RSUs and LTIPs, is as follows:

Non-vested at December 31, 2020
Granted
Vested
Forfeited

Non-vested at December 31, 2021

Share
equivalent

2,357,506  $ 
1,180,665  $ 
(934,049)  $ 
(245,861)  $ 
2,358,261  $ 

Weighted-
average
grant date
fair value

105.50 
157.45 
93.61 
117.01 
135.07 

 The weighted average grant-date fair values of RSUs granted were $157.45, $159.51, and $75.58 for the years 

ended December 31, 2021, 2020, and 2019, respectively. The total fair value of RSUs that vested during 2021, 2020, and 
2019 (measured on the date of vesting) was $149.8 million, $187.1 million, and $67.1 million, respectively. As of 
December 31, 2021, there was approximately $110.4 million of total unrecognized compensation cost related to non-
vested RSU awards, as adjusted for expected forfeitures. That cost is expected to be recognized over a weighted-average 
period of 1.71 years. We utilize newly issued shares for RSUs that vest.

LTIP, performance-based and market-based awards activity

We have various LTIPs, which contain performance-based equity compensation, and have granted other 

performance-based and market-based awards to certain senior leadership.

During 2021, an LTIP milestone was achieved related to FDA approval of TIVDAK, which triggered a cash 
payment and an RSU grant to eligible participants. The vesting of grants made under that LTIP is time-based and is 
included in the “RSU activity” table above.

118

119

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Seagen Inc.

Notes to Consolidated Financial Statements

Seagen Inc.
Notes to Consolidated Financial Statements

Stock option activity

A summary of stock option activity is as follows:

Balance at December 31, 2020

Granted

Exercised

Forfeited/expired

Balance at December 31, 2021

Expected to vest

Options exercisable

Weighted-

average

Weighted-

average

remaining 

exercise price 

contractual term

per share

(in years)

Aggregate

intrinsic value

(in thousands)

Shares

7,881,259  $ 

1,135,689  $ 

(1,398,901)  $ 

(243,593)  $ 

7,374,454  $ 

7,171,594  $ 

5,057,083  $ 

62.60 

156.07 

41.47 

107.48 

79.53 

77.71 

56.86 

5.98 $ 

5.89 $ 

4.82 $ 

561,783 

558,941 

496,438 

The weighted average grant-date fair values of options granted with exercise prices equal to market were $64.22, 

$64.66, and $30.51 for the years ended December 31, 2021, 2020, and 2019, respectively.

The aggregate intrinsic value in the table above is calculated as the difference between the exercise price of the 

underlying options and the quoted price of our common stock for all options that were in-the-money at December 31, 

2021. The aggregate intrinsic value of options exercised was $168.7 million during 2021, $271.0 million during 2020, 

and $128.4 million during 2019, determined as of the date of option exercise. As of December 31, 2021, there was 

approximately $64.6 million of total unrecognized compensation cost related to unvested options, as adjusted for 

expected forfeitures. That cost is expected to be recognized over a weighted-average period of 1.30 years. We utilize 

newly issued shares to satisfy option exercises.

RSU activity 

A summary of RSU activity, excluding performance-based RSUs and LTIPs, is as follows:

Non-vested at December 31, 2020

Granted

Vested

Forfeited

Non-vested at December 31, 2021

Share

equivalent

2,357,506  $ 

1,180,665  $ 

(934,049)  $ 

(245,861)  $ 

2,358,261  $ 

Weighted-

average

grant date

fair value

105.50 

157.45 

93.61 

117.01 

135.07 

 The weighted average grant-date fair values of RSUs granted were $157.45, $159.51, and $75.58 for the years 

ended December 31, 2021, 2020, and 2019, respectively. The total fair value of RSUs that vested during 2021, 2020, and 

2019 (measured on the date of vesting) was $149.8 million, $187.1 million, and $67.1 million, respectively. As of 

December 31, 2021, there was approximately $110.4 million of total unrecognized compensation cost related to non-

vested RSU awards, as adjusted for expected forfeitures. That cost is expected to be recognized over a weighted-average 

period of 1.71 years. We utilize newly issued shares for RSUs that vest.

LTIP, performance-based and market-based awards activity

We have various LTIPs, which contain performance-based equity compensation, and have granted other 

performance-based and market-based awards to certain senior leadership.

During 2021, an LTIP milestone was achieved related to FDA approval of TIVDAK, which triggered a cash 

payment and an RSU grant to eligible participants. The vesting of grants made under that LTIP is time-based and is 

included in the “RSU activity” table above.

During 2020, an LTIP milestone was achieved related to FDA approval of TUKYSA, which triggered vesting of 

performance-based stock awards previously granted to eligible participants, and an RSU grant to eligible participants. 
The vesting of the previously granted performance-based stock awards related to this LTIP is included in the table below. 
The second tranche grant upon milestone achievement and time-based vesting of these awards is included in the "RSU 
activity" table above.

During 2019, an LTIP milestone was achieved related to the FDA approval of PADCEV, which triggered a cash 
payment to eligible participants and an RSU grant to certain eligible participants. The vesting of grants made under that 
LTIP is time-based and is included in the “RSU activity” table above. 

A summary of activity related to our performance-based RSUs and LTIPs is as follows:

Non-vested at December 31, 2020
Granted
Vested
Forfeited

Non-vested at December 31, 2021

Share
equivalent

Weighted-
average
grant date
fair value

678,406  $ 
202,293  $ 
(31)  $ 
(77,947)  $ 
802,721  $ 

128.96 
161.90 
136.87 
127.82 
136.10 

As of December 31, 2021, the estimated unrecognized compensation cost related to all LTIPs and performance-

based awards was approximately $83 million. 

Employee Stock Purchase Plan

Under the current terms of the Amended and Restated 2000 Employee Stock Purchase Plan, or the Employee 

Stock Purchase Plan, employees can purchase shares of our common stock based on a percentage of their compensation 
subject to certain limits. Shares are purchased at the lower of 85 percent of the fair market value of our common stock on 
either the first day or the last day of each six-month offering period. Share issuance activity under the Employee Stock 
Purchase Plan is disclosed in our consolidated statements of stockholders’ equity. In May 2019, our stockholders 
approved an increase of 1,000,000 shares in the number of shares of common stock authorized for issuance under the 
Employee Stock Purchase Plan. 

17. Employee benefit plan 

We have a 401(k) Plan for all of our U.S. employees. Eligible employees may contribute through payroll 
deductions, and we may match the employees’ 401(k) contributions, at our discretion and not to exceed a prescribed 
annual limit. Under this matching program, we contributed $24.8 million in 2021, $18.0 million in 2020, and $11.9 
million in 2019.

118

119

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With respect to all of our Executive Officers, including Dr. Siegall, their employment agreements were amended 

to increase the change of control protection period from 12 months after a change of control to 3 months prior to and 18 

months after a change of control and to update the related change of control provisions in such agreements.  

The foregoing is only a brief description of certain terms of the Amended Employment Agreements, including the 

Amended Siegall Employment Agreement, does not purport to be complete and is qualified in its entirety by reference to 

the full text of the Amended Employment Agreements, including the Amended Siegall Employment Agreement, which 

are filed as Exhibits 10.52 to 10.57 to this annual report on Form 10-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

a. Evaluation of disclosure controls and procedures. Our Chief Executive Officer and our Chief Financial Officer 
have evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities 
Exchange Act of 1934, as amended) prior to the filing of this annual report. Based on that evaluation, they have 
concluded that, as of the end of the period covered by this annual report, our disclosure controls and procedures 
were, in design and operation, effective at the reasonable assurance level. 

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, 
assurance that the objectives of the control system are met. Because of inherent limitations in all control 
systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within an 
organization have been detected. Accordingly, our disclosure controls and procedures are designed to provide 
reasonable, not absolute, assurance that the objectives of our disclosure control system are met.

b. Changes in internal control over financial reporting. There have not been any changes in our internal control 
over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are 
reasonably likely to materially affect, our internal control over financial reporting. 

c. Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible 
for establishing and maintaining adequate internal control over financial reporting, as such term is defined in 
Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. Our management conducted an 
evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework in 
Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the 
Treadway Commission. Based on its evaluation under the framework in Internal Control—Integrated 
Framework, our management concluded that our internal control over financial reporting was effective as of 
December 31, 2021.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by 

PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is 
included in Item 8 in this Annual Report on Form 10-K.

Item 9B. Other Information 

On February 9, 2022, following the approval of the Compensation Committee of our Board of Directors, we 
entered into an amended and restated employment agreement, or an Amended Employment Agreement, with each of our 
executive officers, including Clay Siegall, our President and Chief Executive Officer, Todd Simpson, our Chief Financial 
Officer, Roger Dansey, our Chief Medical Officer, Vaughn Himes, our Chief Technical Officer, Jean Liu, our Chief 
Legal Officer, and Charles Romp, our Executive Vice President, Commercial U.S., or our Executive Officers. 

The Amended Employment Agreement with Dr. Siegall, or the Amended Siegall Employment Agreement, 

amends and restates the employment agreement that we previously entered into with Dr. Siegall. Provisions that were 
amended include, among other things:

•

•

In the event his employment is constructively terminated or terminated by us without cause, the period to 
receive payment of COBRA health insurance premiums and the period of vesting acceleration for his 
outstanding equity awards were increased from 12 months to 18 months. 

In the event his employment is constructively terminated or terminated by us without cause within 3 months 
prior to or 18 months after a change of control of Seagen, (i) his cash severance period was increased from 24 to 
36 months, (ii) his bonus payment was increased from a payment equal to his annual target bonus multiplied by 
2 to a payment equal to his annual target bonus multiplied by 3 (the payment of a pro-rated portion of his annual 
target bonus for the year of his termination remains unchanged) and (iii) the period to receive payment of 
COBRA health insurance premiums was increased from 24 months to 36 months.

120

121

 
With respect to all of our Executive Officers, including Dr. Siegall, their employment agreements were amended 
to increase the change of control protection period from 12 months after a change of control to 3 months prior to and 18 
months after a change of control and to update the related change of control provisions in such agreements.  

The foregoing is only a brief description of certain terms of the Amended Employment Agreements, including the 
Amended Siegall Employment Agreement, does not purport to be complete and is qualified in its entirety by reference to 
the full text of the Amended Employment Agreements, including the Amended Siegall Employment Agreement, which 
are filed as Exhibits 10.52 to 10.57 to this annual report on Form 10-K.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

a. Evaluation of disclosure controls and procedures. Our Chief Executive Officer and our Chief Financial Officer 

have evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities 

Exchange Act of 1934, as amended) prior to the filing of this annual report. Based on that evaluation, they have 

concluded that, as of the end of the period covered by this annual report, our disclosure controls and procedures 

were, in design and operation, effective at the reasonable assurance level. 

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, 

assurance that the objectives of the control system are met. Because of inherent limitations in all control 

systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within an 

organization have been detected. Accordingly, our disclosure controls and procedures are designed to provide 

reasonable, not absolute, assurance that the objectives of our disclosure control system are met.

b. Changes in internal control over financial reporting. There have not been any changes in our internal control 

over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are 

reasonably likely to materially affect, our internal control over financial reporting. 

c. Management’s Annual Report on Internal Control over Financial Reporting. Our management is responsible 

for establishing and maintaining adequate internal control over financial reporting, as such term is defined in 

Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended. Our management conducted an 

evaluation of the effectiveness of our internal control over financial reporting based on the 2013 framework in 

Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the 

Treadway Commission. Based on its evaluation under the framework in Internal Control—Integrated 

Framework, our management concluded that our internal control over financial reporting was effective as of 

December 31, 2021.

The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by 

PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is 

included in Item 8 in this Annual Report on Form 10-K.

Item 9B. Other Information 

On February 9, 2022, following the approval of the Compensation Committee of our Board of Directors, we 

entered into an amended and restated employment agreement, or an Amended Employment Agreement, with each of our 

executive officers, including Clay Siegall, our President and Chief Executive Officer, Todd Simpson, our Chief Financial 

Officer, Roger Dansey, our Chief Medical Officer, Vaughn Himes, our Chief Technical Officer, Jean Liu, our Chief 

Legal Officer, and Charles Romp, our Executive Vice President, Commercial U.S., or our Executive Officers. 

The Amended Employment Agreement with Dr. Siegall, or the Amended Siegall Employment Agreement, 

amends and restates the employment agreement that we previously entered into with Dr. Siegall. Provisions that were 

amended include, among other things:

•

In the event his employment is constructively terminated or terminated by us without cause, the period to 

receive payment of COBRA health insurance premiums and the period of vesting acceleration for his 

outstanding equity awards were increased from 12 months to 18 months. 

•

In the event his employment is constructively terminated or terminated by us without cause within 3 months 

prior to or 18 months after a change of control of Seagen, (i) his cash severance period was increased from 24 to 

36 months, (ii) his bonus payment was increased from a payment equal to his annual target bonus multiplied by 

2 to a payment equal to his annual target bonus multiplied by 3 (the payment of a pro-rated portion of his annual 

target bonus for the year of his termination remains unchanged) and (iii) the period to receive payment of 

COBRA health insurance premiums was increased from 24 months to 36 months.

120

121

 
PART III

PART IV

The information required by Part III is omitted from this report because we will file a definitive proxy statement 

within 120 days after the end of our 2021 fiscal year pursuant to Regulation 14A for our 2022 Annual Meeting of 
Stockholders, or the 2022 Proxy Statement, and the information to be included in the 2022 Proxy Statement is 
incorporated herein by reference.

Item 10. Directors, Executive Officers and Corporate Governance

1. The information required by this Item concerning our executive officers and our directors and nominees for 

director, including information with respect to our audit committee and audit committee financial expert, may 
be found under the section entitled “Proposal No. 1—Election of Directors” appearing in the 2022 Proxy 
Statement. Such information is incorporated herein by reference.

2. The information required by this Item concerning our code of ethics may be found under the section entitled 
“Proposal No. 1—Election of Directors—Corporate Governance—Code of Conduct and Business Ethics” 
appearing in the 2022 Proxy Statement. Such information is incorporated herein by reference.

Item 11. Executive Compensation

The information required by this Item may be found under the sections entitled “Proposal No. 1—Election of 
Directors—Director Compensation” and “Proposal No. 2 – Advisory Vote on Executive Compensation—Compensation 
of Executive Officers” appearing in the 2022 Proxy Statement. Such information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

1. The information required by this Item with respect to security ownership of certain beneficial owners and 

management may be found under the section entitled “Security Ownership of Certain Beneficial Owners and 
Management” appearing in the 2022 Proxy Statement. Such information is incorporated herein by reference.

2. The information required by this Item with respect to securities authorized for issuance under our equity 
compensation plans may be found under the sections entitled “Equity Compensation Plan Information” 
appearing in the 2022 Proxy Statement. Such information is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

1. The information required by this Item concerning related party transactions may be found under the section 

entitled “Certain Relationships and Related Party Transactions” appearing in the 2022 Proxy Statement. Such 
information is incorporated herein by reference. 

2. The information required by this Item concerning director independence may be found under the section entitled 
“Proposal No. 1—Election of Directors—Corporate Governance—Director Independence” appearing in the 
2022 Proxy Statement. Such information is incorporated herein by reference. 

Item 14. Principal Accounting Fees and Services

The information required by this Item may be found under the section entitled “Proposal No. 3—Ratification of 

Appointment of Independent Registered Public Accounting Firm” appearing in the 2022 Proxy Statement. Such 
information is incorporated herein by reference.

Item 15. Exhibits, Financial Statement Schedules 

1. The following documents are filed as part of this report:

a. Financial Statements and Report of Independent Registered Public Accounting Firm

b. Financial Statement Schedules have been omitted because the information required to be set forth

therein is not applicable or is shown in the financial statements or notes thereto.

c. Exhibits are incorporated herein by reference or are filed with this report as indicated below (numbered

in accordance with Item 601 of Regulation S-K).

2. Exhibits

Exhibit

Number

2.1††

Fourth Amended and Restated Certificate of Incorporation 

10-Q

000-32405

11/7/2008

Amended and Restated Bylaws of Seagen Inc. (f.k.a. 

8-K

000-32405

1/16/2020

Exhibit Description

License Agreement dated as of August 8, 2021 between 

RemeGen Co. Ltd. and Seagen Inc. 

of Seagen Inc. (f.k.a. Seattle Genetics, Inc.).

Certificate of Amendment of Fourth Amended and 

Restated Certificate of Incorporation of Seagen Inc. (f.k.a. 

Seattle Genetics, Inc.).

Certificate of Amendment of Fourth Amended and 

Restated Certificate of Incorporation of Seagen Inc. (f.k.a 

Seattle Genetics, Inc.).

Seattle Genetics, Inc.).

Description of Securities of Seagen Inc.

Specimen Stock Certificate.

Investor Rights Agreement dated July 8, 2003 

among Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and certain 

of its stockholders.

Registration Rights Agreement, dated September 10, 2015, 

by and between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) 

and the persons listed on Schedule A attached thereto.

Collaboration Agreement between Seagen Inc. (f.k.a. 

Seattle Genetics, Inc.) and Millennium Pharmaceuticals, 

Inc. (a wholly-owned subsidiary of Takeda Pharmaceutical 

Company Limited) dated December 14, 2009.

2007 between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

Agensys, Inc.

Amendment to the Collaboration and License Agreement 

between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

Agensys, Inc. dated effective November 20, 2009.

Joint Commercialization Agreement dated October 20, 

2018 between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

2.1

3.1

3.3

3.1

4.1

4.2

4.3

Incorporation By Reference

Form

8-K

SEC File No.

Exhibit

Filing Date

000-32405

9/21/2021

8-K

000-32405

5/26/2011

8-K

000-32405

3.1

10/8/2020

10-K

10-K

10-Q

000-32405

000-32405

000-32405

2/6/2020

2/12/2021

11/7/2008

8-K

000-32405

10.1

9/11/2015

10-K

000-32405

10.1

2/6/2020

10-K

000-32405

10.49

3/12/2010

10-Q

000-32405

10.1

7/16/2019

3.1

3.2

3.3

3.4

4.1

4.2

4.3

4.4

10.1†

10.3†

10.4†

10.2+††

Collaboration and License Agreement dated January 7, 

—

—

—

—

10.5††

Amendment to Joint Commercialization Agreement 

10-Q

000-32405

10.1

7/29/2021

between Seagen Inc. and Agensys, Inc. effective January 1, 

10.6†

License and Collaboration Agreement, effective October 7, 

2011, between Genmab A/S and Seagen Inc. (f.k.a. Seattle 

10-Q/A 000-32405

10.3

4/13/2018

Agensys, Inc.

2020.

Genetics, Inc.).

122

123

PART III

PART IV

The information required by Part III is omitted from this report because we will file a definitive proxy statement 

within 120 days after the end of our 2021 fiscal year pursuant to Regulation 14A for our 2022 Annual Meeting of 

Stockholders, or the 2022 Proxy Statement, and the information to be included in the 2022 Proxy Statement is 

incorporated herein by reference.

Item 10. Directors, Executive Officers and Corporate Governance

1. The information required by this Item concerning our executive officers and our directors and nominees for 

director, including information with respect to our audit committee and audit committee financial expert, may 

be found under the section entitled “Proposal No. 1—Election of Directors” appearing in the 2022 Proxy 

Statement. Such information is incorporated herein by reference.

2. The information required by this Item concerning our code of ethics may be found under the section entitled 

“Proposal No. 1—Election of Directors—Corporate Governance—Code of Conduct and Business Ethics” 

appearing in the 2022 Proxy Statement. Such information is incorporated herein by reference.

Item 11. Executive Compensation

The information required by this Item may be found under the sections entitled “Proposal No. 1—Election of 

Directors—Director Compensation” and “Proposal No. 2 – Advisory Vote on Executive Compensation—Compensation 

of Executive Officers” appearing in the 2022 Proxy Statement. Such information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

1. The information required by this Item with respect to security ownership of certain beneficial owners and 

management may be found under the section entitled “Security Ownership of Certain Beneficial Owners and 

Management” appearing in the 2022 Proxy Statement. Such information is incorporated herein by reference.

2. The information required by this Item with respect to securities authorized for issuance under our equity 

compensation plans may be found under the sections entitled “Equity Compensation Plan Information” 

appearing in the 2022 Proxy Statement. Such information is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

1. The information required by this Item concerning related party transactions may be found under the section 

entitled “Certain Relationships and Related Party Transactions” appearing in the 2022 Proxy Statement. Such 

information is incorporated herein by reference. 

2. The information required by this Item concerning director independence may be found under the section entitled 

“Proposal No. 1—Election of Directors—Corporate Governance—Director Independence” appearing in the 

2022 Proxy Statement. Such information is incorporated herein by reference. 

Item 14. Principal Accounting Fees and Services

The information required by this Item may be found under the section entitled “Proposal No. 3—Ratification of 

Appointment of Independent Registered Public Accounting Firm” appearing in the 2022 Proxy Statement. Such 

information is incorporated herein by reference.

Item 15. Exhibits, Financial Statement Schedules 

1. The following documents are filed as part of this report:

a. Financial Statements and Report of Independent Registered Public Accounting Firm

b. Financial Statement Schedules have been omitted because the information required to be set forth

therein is not applicable or is shown in the financial statements or notes thereto.

c. Exhibits are incorporated herein by reference or are filed with this report as indicated below (numbered

in accordance with Item 601 of Regulation S-K).

2. Exhibits

Exhibit
Number
2.1††

3.1

3.2

3.3

3.4

4.1
4.2
4.3

4.4

10.1†

10.2+††

10.3†

10.4†

10.5††

10.6†

Exhibit Description

License Agreement dated as of August 8, 2021 between 
RemeGen Co. Ltd. and Seagen Inc. 
Fourth Amended and Restated Certificate of Incorporation 
of Seagen Inc. (f.k.a. Seattle Genetics, Inc.).
Certificate of Amendment of Fourth Amended and 
Restated Certificate of Incorporation of Seagen Inc. (f.k.a. 
Seattle Genetics, Inc.).
Certificate of Amendment of Fourth Amended and 
Restated Certificate of Incorporation of Seagen Inc. (f.k.a 
Seattle Genetics, Inc.).
Amended and Restated Bylaws of Seagen Inc. (f.k.a. 
Seattle Genetics, Inc.).
Description of Securities of Seagen Inc.
Specimen Stock Certificate.
Investor Rights Agreement dated July 8, 2003 
among Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and certain 
of its stockholders.
Registration Rights Agreement, dated September 10, 2015, 
by and between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) 
and the persons listed on Schedule A attached thereto.
Collaboration Agreement between Seagen Inc. (f.k.a. 
Seattle Genetics, Inc.) and Millennium Pharmaceuticals, 
Inc. (a wholly-owned subsidiary of Takeda Pharmaceutical 
Company Limited) dated December 14, 2009.
Collaboration and License Agreement dated January 7, 
2007 between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
Agensys, Inc.
Amendment to the Collaboration and License Agreement 
between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
Agensys, Inc. dated effective November 20, 2009.
Joint Commercialization Agreement dated October 20, 
2018 between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
Agensys, Inc.
Amendment to Joint Commercialization Agreement 
between Seagen Inc. and Agensys, Inc. effective January 1, 
2020.
License and Collaboration Agreement, effective October 7, 
2011, between Genmab A/S and Seagen Inc. (f.k.a. Seattle 
Genetics, Inc.).

Incorporation By Reference

Form
8-K

SEC File No.
000-32405

Exhibit
2.1

Filing Date
9/21/2021

10-Q

000-32405

8-K

000-32405

3.1

3.3

11/7/2008

5/26/2011

8-K

000-32405

3.1

10/8/2020

8-K

000-32405

10-K
10-K
10-Q

000-32405
000-32405
000-32405

3.1

4.1
4.2
4.3

1/16/2020

2/6/2020
2/12/2021
11/7/2008

8-K

000-32405

10.1

9/11/2015

10-K

000-32405

10.1

2/6/2020

—

—

—

—

10-K

000-32405

10.49

3/12/2010

10-Q

000-32405

10.1

7/16/2019

10-Q

000-32405

10.1

7/29/2021

10-Q/A 000-32405

10.3

4/13/2018

122

123

Exhibit
Number
10.7††

10.8††

10.9††

10.10

10.11

10.12

10.13†

10.14

10.15

10.16††

10.17

10.18††

10.19††

10.20††

10.21††

10.22†

Exhibit Description

Joint Commercialization Agreement dated October 19, 
2020 between Genmab A/S and Seagen Inc. (f.k.a. Seattle 
Genetics Inc.).
License and Collaboration Agreement related to 
ladiratuzumab vedotin dated September 13, 2020 between 
Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and Merck Sharp 
& Dohme Corp. 
Stock Purchase Agreement dated September 13, 2020 
between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
Merck Sharp & Dohme Corp. 
License Agreement dated March 30, 1998 between Seagen 
Inc. (f.k.a. Seattle Genetics, Inc.) and Bristol-Myers Squibb 
Company.
Amendment Letter to the Bristol-Myers Squibb Company 
License Agreement dated July 29, 1999 between Seagen 
Inc. (f.k.a. Seattle Genetics, Inc.) and Bristol-Myers Squibb 
Company.
Amendment Agreement to the Bristol-Myers Squibb 
Company License Agreement dated July 26, 2000 between 
Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and Bristol-Myers 
Squibb Company.
Amendment to License Agreement to the Bristol-Myers 
Squibb Company License Agreement dated December 18, 
2015 between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
Bristol-Myers Squibb Company.
License Agreement dated September 20, 1999 between 
Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and the University 
of Miami.
Amendment No. 1 to the University of Miami License 
Agreement dated August 4, 2000 between Seagen Inc. 
(f.k.a. Seattle Genetics, Inc.) and the University of Miami.
Letter Agreement Regarding Royalty between the 
University of Miami and Seagen Inc. (f.k.a. Seattle 
Genetics, Inc.) dated April 11, 2016.

License Agreement between Cascadian Therapeutics, LLC 
(f.k.a. Cascadian Therapeutics, Inc.) and Array BioPharma 
Inc. dated December 11, 2014.
Amendment No. 1 to License Agreement dated April 23, 
2020 between Cascadian Therapeutics, LLC (f.k.a 
Cascadian Therapeutics, Inc.) and Array Biopharma Inc. 
Commercial Supply Agreement dated December 1, 2010 
between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
SAFC, an operating division of Sigma-Aldrich, Inc.

First Amendment to Commercial Supply Agreement 
effective as of January 20, 2014 between Seagen Inc. (f.k.a. 
Seattle Genetics, Inc.) and SAFC, an operating division of 
Sigma-Aldrich, Inc.
Second Amendment to Commercial Supply Agreement 
effective as of December 2, 2016 between Seagen Inc. 
(f.k.a. Seattle Genetics, Inc.) and SAFC, an operating 
division of Sigma-Aldrich, Inc.
Third Amendment to Commercial Supply Agreement 
effective as of July 1, 2019 between Seagen Inc. (f.k.a. 
Seattle Genetics, Inc.) and SAFC, an operating division of 
Sigma-Aldrich, Inc.

Incorporation By Reference

Form
10-K

SEC File No.
000-32405

Exhibit
10.6

Filing Date
2/12/2021

10-Q

000-32405

10.1

10/30/2020

10-Q

000-32405

10.2

10/30/2020

10-K/A 000-32405

10.1

11/26/2010

10-K/A 000-32405

10.2

11/26/2010

S-1/A

333-50266

10.7

12/5/2000

10-K

000-32405

10.4

2/19/2016

10.30†

Seventh Amendment to Development and Supply 

10-K

000-32405

10.42

2/27/2013

10.29††

Sixth Amendment to Development and Supply Agreement 

10-K

000-32405

10.26

2/12/2021

10-K/A 000-32405

10.6

11/26/2010

10-K/A 000-32405

10.7

11/26/2010

10-Q

000-32405

10.2

7/29/2021

10-Q

000-32405

10.1

4/26/2018

10-Q

000-32405

10.5

7/31/2020

10.31†

Eighth Amendment to Development and Supply Agreement 

10-Q

000-32405

10.2

7/30/2015

10-Q

000-32405

10.1

10/28/2021

10.33+††

Tenth Amendment to Development and Supply Agreement, 

—

—

—

—

10.34††

Eleventh Amendment to Development and Supply 

10-K

000-32405

10.29

2/6/2020

10-K

000-32405

10.16

2/12/2021

10.35†

Twelfth Amendment to Development and Supply 

10-Q

000-32405

10.2

7/16/2019

10-K

000-32405

10.17

2/12/2021

10-K

000-32405

10.18

2/12/2021

10-Q

000-32405

10.2

10/30/2019

10.25†

Second Amendment to Development and Supply 

10-Q

000-32405

10.4

11/4/2011

10.27†

Fourth Amendment to Development and Supply Agreement 

10-Q

000-32405

10.6

11/4/2011

Incorporation By Reference

Form

10-K

SEC File No.

Exhibit

Filing Date

000-32405

10.15

2/27/2015

10-Q

000-32405

10.1

8/8/2008

10-Q

000-32405

10.5

11/4/2011

10-Q

000-32405

10.7

11/4/2011

Exhibit

Number

10.23

10.24†

10.26†

10.28†

Exhibit Description

Development and Supply Agreement dated February 23, 

2004 between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

Abbott Laboratories.

First Amendment to Development and Supply Agreement 

dated April 17, 2008 between Seagen Inc. (f.k.a. Seattle 

Genetics, Inc.) and Abbott Laboratories, Inc.

Agreement dated June 15, 2009 between Seagen Inc. (f.k.a. 

Seattle Genetics, Inc.) and Abbott Laboratories, Inc.

Third Amendment to Development and Supply Agreement 

dated November 5, 2009 between Seagen Inc. (f.k.a. Seattle 

Genetics, Inc.) and Abbott Laboratories, Inc.

dated April 18, 2010 between Seagen Inc. (f.k.a. Seattle 

Genetics, Inc.) and Abbott Laboratories, Inc.

Fifth Amendment to Development and Supply Agreement 

dated August 24, 2010 between Seagen Inc. (f.k.a. Seattle 

Genetics, Inc.) and Abbott Laboratories, Inc.

dated November 18, 2010 between Seagen Inc. (f.k.a. 

Seattle Genetics, Inc.) and Abbott Laboratories, Inc.

Agreement dated January 2, 2013 between Seagen Inc. 

(f.k.a. Seattle Genetics, Inc.) and Abbott Laboratories, Inc.

dated July 7, 2015 between Seagen Inc. (f.k.a. Seattle 

Genetics, Inc.) and AbbVie Inc. (formerly part of Abbott 

Laboratories, Inc.).

10.32††

Ninth Amendment to Development and Supply Agreement, 

effective as of August 28, 2016 between Seagen Inc. (f.k.a. 

Seattle Genetics, Inc.) and AbbVie Inc. (formerly part of 

Abbott Laboratories, Inc.).

effective as of December 26, 2016 between Seagen Inc. 

(f.k.a. Seattle Genetics, Inc.) and AbbVie, Inc. (formerly 

part of Abbott Laboratories, Inc.).

Agreement effective July 12, 2018 between Seagen Inc. 

(f.k.a. Seattle Genetics, Inc.) and AbbVie Inc. (formerly 

part of Abbott Laboratories, Inc.).

Agreement, effective as of April 25, 2019 between Seagen 

Inc. (f.k.a. Seattle Genetics, Inc.) and AbbVie, Inc. 

(formerly part of Abbott Laboratories, Inc.).

10.36††

Commercial Supply Agreement dated June 13, 2019 

between Seagen Inc. (f.k.a Seattle Genetics, Inc.) and 

Esteve Quimica, S.A.

10.37††

Amendment No. 1 to Commercial Supply Agreement dated 

April 14, 2020 between Seagen Inc. (f.k.a. Seattle Genetics, 

Inc.) and Esteve Quimica, S.A.

10.38††

Commercial Supply Agreement dated February 20, 2020 

between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

Corden Plankstadt.

10.39††

Commercial Supply Agreement dated April 2, 2020 

between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

Sterling Pharma Solutions Limited.

10-Q

000-32405

10.1

7/31/2020

10-Q

000-32405

10.2

7/31/2020

10-Q

000-32405

10.3

7/31/2020

10-Q

000-32405

10.4

7/31/2020

124

125

 
 
10.8††

License and Collaboration Agreement related to 

10-Q

000-32405

10.1

10/30/2020

Exhibit

Number

10.7††

10.10

10.11

10.12

10.13†

10.14

10.15

10.18††

10.19††

10.21††

10.22†

Exhibit Description

Joint Commercialization Agreement dated October 19, 

2020 between Genmab A/S and Seagen Inc. (f.k.a. Seattle 

Genetics Inc.).

ladiratuzumab vedotin dated September 13, 2020 between 

Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and Merck Sharp 

& Dohme Corp. 

10.9††

Stock Purchase Agreement dated September 13, 2020 

between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

Merck Sharp & Dohme Corp. 

License Agreement dated March 30, 1998 between Seagen 

Inc. (f.k.a. Seattle Genetics, Inc.) and Bristol-Myers Squibb 

Company.

Company.

Amendment Letter to the Bristol-Myers Squibb Company 

License Agreement dated July 29, 1999 between Seagen 

Inc. (f.k.a. Seattle Genetics, Inc.) and Bristol-Myers Squibb 

Amendment Agreement to the Bristol-Myers Squibb 

Company License Agreement dated July 26, 2000 between 

Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and Bristol-Myers 

Squibb Company.

Amendment to License Agreement to the Bristol-Myers 

Squibb Company License Agreement dated December 18, 

2015 between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

Bristol-Myers Squibb Company.

License Agreement dated September 20, 1999 between 

Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and the University 

of Miami.

Amendment No. 1 to the University of Miami License 

Agreement dated August 4, 2000 between Seagen Inc. 

(f.k.a. Seattle Genetics, Inc.) and the University of Miami.

Inc. dated December 11, 2014.

Amendment No. 1 to License Agreement dated April 23, 

2020 between Cascadian Therapeutics, LLC (f.k.a 

Cascadian Therapeutics, Inc.) and Array Biopharma Inc. 

Commercial Supply Agreement dated December 1, 2010 

between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

SAFC, an operating division of Sigma-Aldrich, Inc.

effective as of January 20, 2014 between Seagen Inc. (f.k.a. 

Seattle Genetics, Inc.) and SAFC, an operating division of 

Sigma-Aldrich, Inc.

Second Amendment to Commercial Supply Agreement 

effective as of December 2, 2016 between Seagen Inc. 

(f.k.a. Seattle Genetics, Inc.) and SAFC, an operating 

division of Sigma-Aldrich, Inc.

Third Amendment to Commercial Supply Agreement 

effective as of July 1, 2019 between Seagen Inc. (f.k.a. 

Seattle Genetics, Inc.) and SAFC, an operating division of 

Sigma-Aldrich, Inc.

Incorporation By Reference

Form

10-K

SEC File No.

Exhibit

Filing Date

000-32405

10.6

2/12/2021

10-Q

000-32405

10.2

10/30/2020

10-K/A 000-32405

10.1

11/26/2010

10-K/A 000-32405

10.2

11/26/2010

S-1/A

333-50266

10.7

12/5/2000

10-K

000-32405

10.4

2/19/2016

10-K/A 000-32405

10.6

11/26/2010

10-K/A 000-32405

10.7

11/26/2010

10-Q

000-32405

10.2

7/29/2021

10-Q

000-32405

10.5

7/31/2020

10-K

000-32405

10.16

2/12/2021

10-K

000-32405

10.18

2/12/2021

10-Q

000-32405

10.2

10/30/2019

10.16††

Letter Agreement Regarding Royalty between the 

University of Miami and Seagen Inc. (f.k.a. Seattle 

Genetics, Inc.) dated April 11, 2016.

10.17

License Agreement between Cascadian Therapeutics, LLC 

(f.k.a. Cascadian Therapeutics, Inc.) and Array BioPharma 

10-Q

000-32405

10.1

4/26/2018

10.20††

First Amendment to Commercial Supply Agreement 

10-K

000-32405

10.17

2/12/2021

Exhibit
Number
10.23

10.24†

10.25†

10.26†

10.27†

10.28†

10.29††

10.30†

10.31†

10.32††

10.33+††

10.34††

10.35†

10.36††

10.37††

10.38††

10.39††

Exhibit Description

Development and Supply Agreement dated February 23, 
2004 between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
Abbott Laboratories.
First Amendment to Development and Supply Agreement 
dated April 17, 2008 between Seagen Inc. (f.k.a. Seattle 
Genetics, Inc.) and Abbott Laboratories, Inc.
Second Amendment to Development and Supply 
Agreement dated June 15, 2009 between Seagen Inc. (f.k.a. 
Seattle Genetics, Inc.) and Abbott Laboratories, Inc.
Third Amendment to Development and Supply Agreement 
dated November 5, 2009 between Seagen Inc. (f.k.a. Seattle 
Genetics, Inc.) and Abbott Laboratories, Inc.
Fourth Amendment to Development and Supply Agreement 
dated April 18, 2010 between Seagen Inc. (f.k.a. Seattle 
Genetics, Inc.) and Abbott Laboratories, Inc.
Fifth Amendment to Development and Supply Agreement 
dated August 24, 2010 between Seagen Inc. (f.k.a. Seattle 
Genetics, Inc.) and Abbott Laboratories, Inc.
Sixth Amendment to Development and Supply Agreement 
dated November 18, 2010 between Seagen Inc. (f.k.a. 
Seattle Genetics, Inc.) and Abbott Laboratories, Inc.
Seventh Amendment to Development and Supply 
Agreement dated January 2, 2013 between Seagen Inc. 
(f.k.a. Seattle Genetics, Inc.) and Abbott Laboratories, Inc.
Eighth Amendment to Development and Supply Agreement 
dated July 7, 2015 between Seagen Inc. (f.k.a. Seattle 
Genetics, Inc.) and AbbVie Inc. (formerly part of Abbott 
Laboratories, Inc.).
Ninth Amendment to Development and Supply Agreement, 
effective as of August 28, 2016 between Seagen Inc. (f.k.a. 
Seattle Genetics, Inc.) and AbbVie Inc. (formerly part of 
Abbott Laboratories, Inc.).
Tenth Amendment to Development and Supply Agreement, 
effective as of December 26, 2016 between Seagen Inc. 
(f.k.a. Seattle Genetics, Inc.) and AbbVie, Inc. (formerly 
part of Abbott Laboratories, Inc.).
Eleventh Amendment to Development and Supply 
Agreement effective July 12, 2018 between Seagen Inc. 
(f.k.a. Seattle Genetics, Inc.) and AbbVie Inc. (formerly 
part of Abbott Laboratories, Inc.).
Twelfth Amendment to Development and Supply 
Agreement, effective as of April 25, 2019 between Seagen 
Inc. (f.k.a. Seattle Genetics, Inc.) and AbbVie, Inc. 
(formerly part of Abbott Laboratories, Inc.).
Commercial Supply Agreement dated June 13, 2019 
between Seagen Inc. (f.k.a Seattle Genetics, Inc.) and 
Esteve Quimica, S.A.
Amendment No. 1 to Commercial Supply Agreement dated 
April 14, 2020 between Seagen Inc. (f.k.a. Seattle Genetics, 
Inc.) and Esteve Quimica, S.A.
Commercial Supply Agreement dated February 20, 2020 
between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
Corden Plankstadt.
Commercial Supply Agreement dated April 2, 2020 
between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
Sterling Pharma Solutions Limited.

Incorporation By Reference

Form
10-K

SEC File No.
000-32405

Exhibit
10.15

Filing Date
2/27/2015

10-Q

000-32405

10.1

8/8/2008

10-Q

000-32405

10.4

11/4/2011

10-Q

000-32405

10.5

11/4/2011

10-Q

000-32405

10.6

11/4/2011

10-Q

000-32405

10.7

11/4/2011

10-K

000-32405

10.26

2/12/2021

10-K

000-32405

10.42

2/27/2013

10-Q

000-32405

10.2

7/30/2015

10-Q

000-32405

10.1

10/28/2021

—

—

—

—

10-K

000-32405

10.29

2/6/2020

10-Q

000-32405

10.2

7/16/2019

10-Q

000-32405

10.1

7/31/2020

10-Q

000-32405

10.2

7/31/2020

10-Q

000-32405

10.3

7/31/2020

10-Q

000-32405

10.4

7/31/2020

124

125

 
 
Exhibit
Number
10.40††

10.41

10.42

10.43†

10.44††

10.45†

10.46††

10.47†

10.48††

10.49†

10.50

10.51*

10.52+*

Exhibit Description

Commercial Supply Agreement between Hovione 
Farmaciencia, SA and Seagen Inc. dated July 1, 2021.

Lease Agreement dated December 1, 2000 between Seagen 
Inc. (f.k.a. Seattle Genetics, Inc.) and WCM 132-302, LLC.
First Amendment to Lease dated May 28, 2003 between 
Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
B&N 141-302, LLC.
Second Amendment to Lease dated July 1, 2008 between 
Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 
B&N 141-302, LLC.
Third Amendment to Lease dated May 9, 2011 between 
Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and B&N 
141-302, LLC.
Fourth Amendment to Lease dated October 24, 2017 
between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and SNH 
Medical Office Properties Trust, as successor in interest to 
B&N 141-302, LLC.
Office Lease dated May 9, 2011 between Seagen Inc. (f.k.a. 
Seattle Genetics, Inc.) and WCM Highlands II, LLC.
First Amendment to Office Lease dated October 24, 2017 
between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and SNH 
Medical Office Properties Trust, as successor in interest to 
WCM Highlands II, LLC.
Lease agreement dated June 12, 2021 between Seagen Inc. 
and DPIF2 WA 7 Mountain View, LLC.

Purchase Agreement, dated June 16, 2017, between 
BMR-3450 Monte Villa Parkway, LLC and ZymoGenetics, 
Inc
Assignment and Assumption of Purchase Agreement, dated 
July 30, 2017, between ZymoGenetics, Inc. and Seagen 
Inc. (f.k.a. Seattle Genetics, Inc.).
Form of Indemnification Agreement between Seagen Inc. 
(f.k.a. Seattle Genetics, Inc.) and each of its officers and 
directors.
Amended and Restated Employment Agreement dated 
February 9, 2022, between Seagen Inc. and Clay Siegall.

10.53+*

Amended and Restated Employment Agreement dated 
February 9, 2022, between Seagen Inc. and Roger Dansey.

10.54+*

Amended and Restated Employment Agreement dated 
February 9, 2022, between Seagen Inc. and Vaughn Himes.

10.55+*

Amended and Restated Employment Agreement dated 
February 9, 2022, between Seagen Inc. and Jean Liu.

10.56+*

Amended and Restated Employment Agreement dated 
February 9, 2022, between Seagen Inc. and Charles Romp.

10.57+*

Amended and Restated Employment Agreement dated 
February 9, 2022, between Seagen Inc. and Todd Simpson.

Incorporation By Reference

Form
10-Q

SEC File No.
000-32405

Exhibit
10.2

Filing Date
10/28/2021

S-1/A

333-50266

10.21

1/4/2001

10-Q

333-50266

10.1

8/12/2003

10-Q

000-32405

10.1

11/7/2008

10-Q

000-32405

10.2

4/29/2021

10-K

000-32405

10.12

02/15/2018

10-Q

000-32405

10.1

4/29/2021

10-K

000-32405

10.14

2/15/2018

10-Q

000-32405

10.3

7/29/2021

10-Q

000-32405

10.1

11/6/2017

10-Q

000-32405

10.2

11/6/2017

S-1/A

333-50266

10.29

1/4/2001

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

2010.

effective as of May 18, 2012.

effective as of May 16, 2014.

effective as of May 20, 2016.

effective as of May 18, 2018.

effective as of May 15, 2020.

May 9, 2016.

September 29, 2017.

October 24, 2018.

4, 2019.

9, 2021.

Exhibit

Number

10.58*

Exhibit Description

Amended and Restated 1998 Stock Option Plan, effective 

as of August 5, 2009.

Incorporation By Reference

Form

10-Q

SEC File No.

Exhibit

Filing Date

000-32405

10.1

8/10/2009

10.59*

2000 Directors’ Stock Option Plan, as amended February 5, 

10-K

000-32405

10.13

3/12/2010

10.60*

Amended and Restated 2007 Equity Incentive Plan, 

10-Q

000-32405

10.1

8/8/2012

10.61*

Amended and Restated 2007 Equity Incentive Plan, 

10-Q

000-32405

10.1

8/8/2014

10.62*

Amended and Restated 2007 Equity Incentive Plan, 

10-Q

000-32405

10.4

7/26/2016

10.63*

Amended and Restated 2007 Equity Incentive Plan, 

10-Q

000-32405

10.2

7/26/2018

10.64*

Amended and Restated 2007 Equity Incentive Plan, 

10-Q

000-32405

10.6

7/31/2020

10.65*

Long Term Incentive Plan for ECHELON-1, effective as of 

10-Q

000-32405

10.2

7/26/2016

10.66*

Long Term Incentive Plan for EV and TV, effective as of 

10-Q

000-32405

10.4

11/6/2017

10.67*

Long Term Incentive Plan for Tucatinib, effective as of 

10-Q

000-32405

10.7

10/26/2018

10.68*

Senior Executive Annual Bonus Plan, as amended February 

10-K

000-32405

10.69

02/07/2019

10.69*

Senior Executive Annual Bonus Plan, as amended February 

10-K

000-32405

10.66

2/12/2021

10.70*

Amended and Restated 2000 Employee Stock Purchase 

10-Q

000-32405

10.3

4/29/2021

Plan, effective  March 12, 2021.

10.71*

Rules of the Amended and Restated 2007 Equity Incentive 

Plan for Restricted Stock Unit Awards Granted to French 

Grantees effective as of March 13, 2020.

10-Q

000-32405

10.3

4/30/2020

10.72*

Form Notice of Grant and Stock Option Agreement under 

10-K

000-32405

10.11

3/15/2005

the Amended and Restated 1998 Stock Option Plan.

10.73*

Form Notice of Grant and Stock Option Agreement under 

10-K

000-32405

10.12

3/15/2005

10.74*

Form Stock Option Agreement for employees under 2007 

10-K

000-32405

10.44

3/13/2009

the 2000 Directors’ Stock Option Plan.

Equity Incentive Plan.

10.75*

Form of Notice of Stock Option Grant and Stock 

10-Q

000-32405

10.4

8/5/2011

10.76*

Form of Stock Unit Grant Notice and Stock Unit 

8-K

000-32405

10.1

8/30/2011

10.77*

Form of Stock Unit Grant Notice and Stock Unit 

10-K

000-32405

10.33

2/28/2014

Option Agreement for non-employee directors under the 

Amended and Restated 2007 Equity Incentive Plan.

Agreement for employees under the Amended and Restated 

2007 Equity Incentive Plan.

Agreement for non-employee directors under the Amended 

and Restated 2007 Equity Incentive Plan. 

Form of Stock Option Agreement for Long Term Incentive 

Plan for ECHELON-1 under the Amended and Restated 

2007 Equity Incentive Plan.

Form of Notice of Stock Option Grant and Stock Option 

Agreement for non-employee directors under the Amended 

and Restated 2007 Equity Incentive Plan (approved May 

18, 2018).

10.78*

10.79*

10-Q

000-32405

10.3

7/26/2016

10-Q

000-32405

10.3

7/26/2018

126

127

 
 
Exhibit

Number

10.40††

10.41

Exhibit Description

Commercial Supply Agreement between Hovione 

Farmaciencia, SA and Seagen Inc. dated July 1, 2021.

Incorporation By Reference

Form

10-Q

SEC File No.

Exhibit

Filing Date

000-32405

10.2

10/28/2021

Lease Agreement dated December 1, 2000 between Seagen 

Inc. (f.k.a. Seattle Genetics, Inc.) and WCM 132-302, LLC.

S-1/A

333-50266

10.21

1/4/2001

10.42

First Amendment to Lease dated May 28, 2003 between 

10-Q

333-50266

10.1

8/12/2003

10.43†

Second Amendment to Lease dated July 1, 2008 between 

10-Q

000-32405

10.1

11/7/2008

10.44††

Third Amendment to Lease dated May 9, 2011 between 

10-Q

000-32405

10.2

4/29/2021

Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

B&N 141-302, LLC.

Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and 

B&N 141-302, LLC.

Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and B&N 

141-302, LLC.

between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and SNH 

Medical Office Properties Trust, as successor in interest to 

B&N 141-302, LLC.

10.45†

Fourth Amendment to Lease dated October 24, 2017 

10-K

000-32405

10.12

02/15/2018

10.46††

Office Lease dated May 9, 2011 between Seagen Inc. (f.k.a. 

10-Q

000-32405

10.1

4/29/2021

Seattle Genetics, Inc.) and WCM Highlands II, LLC.

10.47†

First Amendment to Office Lease dated October 24, 2017 

between Seagen Inc. (f.k.a. Seattle Genetics, Inc.) and SNH 

Medical Office Properties Trust, as successor in interest to 

WCM Highlands II, LLC.

10-K

000-32405

10.14

2/15/2018

10.48††

Lease agreement dated June 12, 2021 between Seagen Inc. 

10-Q

000-32405

10.3

7/29/2021

and DPIF2 WA 7 Mountain View, LLC.

10.49†

Purchase Agreement, dated June 16, 2017, between 

10-Q

000-32405

10.1

11/6/2017

10.50

Assignment and Assumption of Purchase Agreement, dated 

10-Q

000-32405

10.2

11/6/2017

BMR-3450 Monte Villa Parkway, LLC and ZymoGenetics, 

Inc

July 30, 2017, between ZymoGenetics, Inc. and Seagen 

Inc. (f.k.a. Seattle Genetics, Inc.).

10.51*

Form of Indemnification Agreement between Seagen Inc. 

(f.k.a. Seattle Genetics, Inc.) and each of its officers and 

S-1/A

333-50266

10.29

1/4/2001

directors.

10.52+*

Amended and Restated Employment Agreement dated 

February 9, 2022, between Seagen Inc. and Clay Siegall.

10.53+*

Amended and Restated Employment Agreement dated 

February 9, 2022, between Seagen Inc. and Roger Dansey.

10.54+*

Amended and Restated Employment Agreement dated 

February 9, 2022, between Seagen Inc. and Vaughn Himes.

10.55+*

Amended and Restated Employment Agreement dated 

February 9, 2022, between Seagen Inc. and Jean Liu.

10.56+*

Amended and Restated Employment Agreement dated 

February 9, 2022, between Seagen Inc. and Charles Romp.

10.57+*

Amended and Restated Employment Agreement dated 

February 9, 2022, between Seagen Inc. and Todd Simpson.

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

Exhibit
Number
10.58*

10.59*

10.60*

10.61*

10.62*

10.63*

10.64*

10.65*

10.66*

10.67*

10.68*

10.69*

10.70*

10.71*

10.72*

10.73*

10.74*

10.75*

10.76*

10.77*

10.78*

10.79*

Exhibit Description
Amended and Restated 1998 Stock Option Plan, effective 
as of August 5, 2009.
2000 Directors’ Stock Option Plan, as amended February 5, 
2010.
Amended and Restated 2007 Equity Incentive Plan, 
effective as of May 18, 2012.
Amended and Restated 2007 Equity Incentive Plan, 
effective as of May 16, 2014.
Amended and Restated 2007 Equity Incentive Plan, 
effective as of May 20, 2016.
Amended and Restated 2007 Equity Incentive Plan, 
effective as of May 18, 2018.
Amended and Restated 2007 Equity Incentive Plan, 
effective as of May 15, 2020.
Long Term Incentive Plan for ECHELON-1, effective as of 
May 9, 2016.
Long Term Incentive Plan for EV and TV, effective as of 
September 29, 2017.
Long Term Incentive Plan for Tucatinib, effective as of 
October 24, 2018.
Senior Executive Annual Bonus Plan, as amended February 
4, 2019.
Senior Executive Annual Bonus Plan, as amended February 
9, 2021.
Amended and Restated 2000 Employee Stock Purchase 
Plan, effective  March 12, 2021.

Rules of the Amended and Restated 2007 Equity Incentive 
Plan for Restricted Stock Unit Awards Granted to French 
Grantees effective as of March 13, 2020.
Form Notice of Grant and Stock Option Agreement under 
the Amended and Restated 1998 Stock Option Plan.
Form Notice of Grant and Stock Option Agreement under 
the 2000 Directors’ Stock Option Plan.
Form Stock Option Agreement for employees under 2007 
Equity Incentive Plan.
Form of Notice of Stock Option Grant and Stock 
Option Agreement for non-employee directors under the 
Amended and Restated 2007 Equity Incentive Plan.
Form of Stock Unit Grant Notice and Stock Unit 
Agreement for employees under the Amended and Restated 
2007 Equity Incentive Plan.
Form of Stock Unit Grant Notice and Stock Unit 
Agreement for non-employee directors under the Amended 
and Restated 2007 Equity Incentive Plan. 
Form of Stock Option Agreement for Long Term Incentive 
Plan for ECHELON-1 under the Amended and Restated 
2007 Equity Incentive Plan.
Form of Notice of Stock Option Grant and Stock Option 
Agreement for non-employee directors under the Amended 
and Restated 2007 Equity Incentive Plan (approved May 
18, 2018).

Incorporation By Reference

Form
10-Q

SEC File No.
000-32405

Exhibit
10.1

Filing Date
8/10/2009

10-K

000-32405

10.13

3/12/2010

10-Q

000-32405

10.1

8/8/2012

10-Q

000-32405

10.1

8/8/2014

10-Q

000-32405

10.4

7/26/2016

10-Q

000-32405

10.2

7/26/2018

10-Q

000-32405

10.6

7/31/2020

10-Q

000-32405

10.2

7/26/2016

10-Q

000-32405

10.4

11/6/2017

10-Q

000-32405

10.7

10/26/2018

10-K

000-32405

10.69

02/07/2019

10-K

000-32405

10.66

2/12/2021

10-Q

000-32405

10.3

4/29/2021

10-Q

000-32405

10.3

4/30/2020

10-K

000-32405

10.11

3/15/2005

10-K

000-32405

10.12

3/15/2005

10-K

000-32405

10.44

3/13/2009

10-Q

000-32405

10.4

8/5/2011

8-K

000-32405

10.1

8/30/2011

10-K

000-32405

10.33

2/28/2014

10-Q

000-32405

10.3

7/26/2016

10-Q

000-32405

10.3

7/26/2018

126

127

 
 
Exhibit
Number
10.80*

10.81*

10.82*

10.83*

10.84*

10.85*

10.86*

10.87*

10.88*

10.89*

10.90*

10.91*

10.92*

10.93*

10.94*

10.95*

Exhibit Description

Form of Stock Unit Grant Notice and Stock Unit 
Agreement for non-employee directors under the Amended 
and Restated 2007 Equity Incentive Plan (approved May 
18, 2018).
Form of Stock Option Agreement for Non-US Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved May 18, 2018).
Form of Stock Unit Grant Notice and Stock Unit 
Agreement for non-US participants under the Amended and 
Restated 2007 Equity Incentive Plan (approved May 18, 
2018).
Form of Performance-Based Stock Option Agreement for 
employees under the Amended and Restated 2007 Equity 
Incentive Plan (approved May 18, 2018).
Form of Time-Based Stock Option Agreement for 
employees under the Amended and Restated 2007 Equity 
Incentive Plan (approved May 18, 2018).
Form of Performance-Based Stock Unit Grant Notice and 
Stock Unit Agreement for employees under the Amended 
and Restated 2007 Equity Incentive Plan (approved May 
18, 2018).
Form of Time-Based Stock Unit Grant Notice and Stock 
Unit Agreement for employees under the Amended and 
Restated 2007 Equity Incentive Plan (approved May 18, 
2018).
Form of Stock Option Agreement for U.S. Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved August 30, 2018).
Form of Stock Option Agreement for non-US Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved August 30, 2018).
Form of Performance-Based Stock Unit Agreement for 
U.S. Participants under the Amended and Restated 2007 
Equity Incentive Plan (approved August 30, 2018). 
Form of Stock Unit Grant Notice and Stock Unit 
Agreement for US Participants under the Amended and 
Restated 2007 Equity Incentive Plan (approved October 24, 
2018).
Form of Stock Unit Grant Notice and Stock Unit 
Agreement for non-US Participants under the Amended 
and Restated 2007 Equity Incentive Plan (approved 
October 24, 2018).
Form of Performance-Based Stock Unit Grant Notice and 
Stock Unit Agreement under the Amended and Restated 
2007 Equity Incentive Plan (approved August 26, 2019).
Form of Stock Option Agreement for U.S. Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved December 19, 2019). 
Form of Stock Option Agreement for Non-US Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved December 19, 2019). 
Form of Time-Based Stock Unit Grant Notice and Stock 
Unit Agreement for employees under the Amended and 
Restated 2007 Equity Incentive Plan (approved December 
19, 2019).

10.99*

Form of Stock Unit Grant Notice for Non-US Participants 

10-K

000-32405

10.86

2/6/2020

Incorporation By Reference

Form

10-K

SEC File No.

Exhibit

Filing Date

000-32405

10.83

2/6/2020

10-K

000-32405

10.84

2/6/2020

10-K

000-32405

10.85

2/6/2020

10-K

000-32405

10.87

2/6/2020

Exhibit

Number

10.96*

10.97*

10.98*

Exhibit Description

Form of Stock Unit Grant Notice and Stock Unit 

Agreement for non-US Participants under the Amended 

and Restated 2007 Equity Incentive Plan (approved 

December 19, 2019). 

Form of Performance-Based Stock Unit Agreement for 

U.S. Participants under the Amended and Restated 2007 

Equity Incentive Plan (approved December 19, 2019).

Form of Stock Unit Grant Notice for US Participants Long 

Term Incentive Plan for EV and TV (approved December 

19, 2019).

Long Term Incentive Plan for EV and TV (approved 

December 19, 2019).

10.100*

Form of Performance-Based Stock Unit Notice and Stock 

Unit Agreement for U.S. Participants under the Amended 

and Restated 2007 Equity Incentive Plan (approved 

December 24, 2019).

Unit Agreement for Non-U.S. Participants under the 

Amended and Restated 2007 Equity Incentive Plan 

(approved December 24, 2019).

10.102*

Form of Stock Option Agreement for U.S. Participants 

under the Amended and Restated 2007 Equity Incentive 

Plan (approved March 13, 2020).

under the Amended and Restated 2007 Equity Incentive 

Plan (approved March 13, 2020).

Agreement for French Grantees under the Amended and 

Restated 2007 Equity Incentive Plan (approved March 13, 

2020).

Form of Performance-Based Stock Unit Grant Notice and 

Stock Unit Agreement under the Amended and Restated 

2007 Equity Incentive Plan (approved August 16, 2020).

10.106*

Form of Stock Option Agreement for U.S. Participants 

under the Amended and Restated 2007 Equity Incentive 

Plan (approved March 8, 2021).

10.108*

10.109*

under the Amended and Restated 2007 Equity Incentive 

Plan (approved March 8, 2021).

Form of Stock Option Agreement for Non-Employee 

Directors under the Amended and Restated 2007 Equity 

Incentive Plan (approved March 8, 2021).

Form of Time-Based Stock Unit Grant Notice and Stock 

Unit Agreement for U.S. Participants under the Amended 

and Restated 2007 Equity Incentive Plan (approved March 

Incorporation By Reference

Form
10-Q

SEC File No.
000-32405

Exhibit
10.4

Filing Date
7/26/2018

10-Q

000-32405

10.5

7/26/2018

10-Q

000-32405

10.6

7/26/2018

10-Q

000-32405

10.7

7/26/2018

10-Q

000-32405

10.8

7/26/2018

10-Q

000-32405

10.9

7/26/2018

10.101*

Form of Performance-Based Stock Unit Notice and Stock 

10-K

000-32405

10.88

2/6/2020

10-Q

000-32405

10.10

7/26/2018

10-Q

000-32405

10.1

4/30/2020

10-Q

000-32405

10.8

10/26/2018

10-Q

000-32405

10.9

10/26/2018

10.103*

Form of Stock Option Agreement for Non-U.S. Participants 

10-Q

000-32405

10.2

4/30/2020

10.104*

Form of Stock Unit Grant Notice and Stock Unit 

10-Q

000-32405

10.4

4/30/2020

10-Q

000-32405

10.10

10/26/2018

10.105*

10-Q

000-32405

10.3

10/30/2020

10-Q

000-32405

10.11

10/26/2018

10-Q

000-32405

10.4

4/29/2021

10-Q

000-32405

10.12

10/26/2018

10-Q

000-32405

10.1

10/30/2019

10-K

000-32405

10.80

2/6/2020

10-K

000-32405

10.81

2/6/2020

10-K

000-32405

10.82

2/6/2020

10.107*

Form of Stock Option Agreement for Non-U.S. Participants 

10-Q

000-32405

10.5

4/29/2021

10-Q

000-32405

10.6

4/29/2021

10-Q

000-32405

10.7

4/29/2021

10.110*

Form of Stock Unit Grant Notice and Stock Unit 

10-Q

000-32405

10.8

4/29/2021

Agreement for Non-U.S. Participants under the Amended 

and Restated 2007 Equity Incentive Plan (approved March 

10.111*

Form of Stock Unit Grant Notice and Stock Unit 

10-Q

000-32405

10.9

4/29/2021

Agreement for French Grantees under the Amended and 

Restated 2007 Equity Incentive Plan (approved March 8, 

8, 2021).

8, 2021).

2021).

128

129

 
 
Exhibit

Number

10.80*

10.81*

10.82*

10.83*

10.84*

10.85*

10.86*

10.87*

10.88*

10.89*

10.90*

10.91*

10.92*

10.93*

10.94*

10.95*

Exhibit Description

Form of Stock Unit Grant Notice and Stock Unit 

Agreement for non-employee directors under the Amended 

and Restated 2007 Equity Incentive Plan (approved May 

18, 2018).

Form of Stock Option Agreement for Non-US Participants 

under the Amended and Restated 2007 Equity Incentive 

Plan (approved May 18, 2018).

Form of Stock Unit Grant Notice and Stock Unit 

Agreement for non-US participants under the Amended and 

Restated 2007 Equity Incentive Plan (approved May 18, 

2018).

Form of Performance-Based Stock Option Agreement for 

employees under the Amended and Restated 2007 Equity 

Incentive Plan (approved May 18, 2018).

Form of Time-Based Stock Option Agreement for 

employees under the Amended and Restated 2007 Equity 

Incentive Plan (approved May 18, 2018).

Form of Performance-Based Stock Unit Grant Notice and 

Stock Unit Agreement for employees under the Amended 

and Restated 2007 Equity Incentive Plan (approved May 

18, 2018).

2018).

Form of Time-Based Stock Unit Grant Notice and Stock 

Unit Agreement for employees under the Amended and 

Restated 2007 Equity Incentive Plan (approved May 18, 

Form of Stock Option Agreement for U.S. Participants 

under the Amended and Restated 2007 Equity Incentive 

Plan (approved August 30, 2018).

Form of Stock Option Agreement for non-US Participants 

under the Amended and Restated 2007 Equity Incentive 

Plan (approved August 30, 2018).

Form of Performance-Based Stock Unit Agreement for 

U.S. Participants under the Amended and Restated 2007 

Equity Incentive Plan (approved August 30, 2018). 

Form of Stock Unit Grant Notice and Stock Unit 

Agreement for US Participants under the Amended and 

Restated 2007 Equity Incentive Plan (approved October 24, 

2018).

Form of Stock Unit Grant Notice and Stock Unit 

Agreement for non-US Participants under the Amended 

and Restated 2007 Equity Incentive Plan (approved 

October 24, 2018).

Form of Performance-Based Stock Unit Grant Notice and 

Stock Unit Agreement under the Amended and Restated 

2007 Equity Incentive Plan (approved August 26, 2019).

Form of Stock Option Agreement for U.S. Participants 

under the Amended and Restated 2007 Equity Incentive 

Plan (approved December 19, 2019). 

Form of Stock Option Agreement for Non-US Participants 

under the Amended and Restated 2007 Equity Incentive 

Plan (approved December 19, 2019). 

Form of Time-Based Stock Unit Grant Notice and Stock 

Unit Agreement for employees under the Amended and 

Restated 2007 Equity Incentive Plan (approved December 

19, 2019).

Incorporation By Reference

Form

10-Q

SEC File No.

Exhibit

Filing Date

000-32405

10.4

7/26/2018

10-Q

000-32405

10.5

7/26/2018

10-Q

000-32405

10.6

7/26/2018

10-Q

000-32405

10.7

7/26/2018

10-Q

000-32405

10.8

7/26/2018

10-Q

000-32405

10.9

7/26/2018

10-Q

000-32405

10.10

7/26/2018

10-Q

000-32405

10.8

10/26/2018

10-Q

000-32405

10.9

10/26/2018

10-Q

000-32405

10.10

10/26/2018

10-Q

000-32405

10.11

10/26/2018

10-Q

000-32405

10.12

10/26/2018

10-Q

000-32405

10.1

10/30/2019

10-K

000-32405

10.80

2/6/2020

10-K

000-32405

10.81

2/6/2020

10-K

000-32405

10.82

2/6/2020

Exhibit
Number
10.96*

10.97*

10.98*

10.99*

10.100*

10.101*

10.102*

10.103*

10.104*

10.105*

10.106*

10.107*

10.108*

10.109*

10.110*

10.111*

Exhibit Description

Form of Stock Unit Grant Notice and Stock Unit 
Agreement for non-US Participants under the Amended 
and Restated 2007 Equity Incentive Plan (approved 
December 19, 2019). 
Form of Performance-Based Stock Unit Agreement for 
U.S. Participants under the Amended and Restated 2007 
Equity Incentive Plan (approved December 19, 2019).
Form of Stock Unit Grant Notice for US Participants Long 
Term Incentive Plan for EV and TV (approved December 
19, 2019).
Form of Stock Unit Grant Notice for Non-US Participants 
Long Term Incentive Plan for EV and TV (approved 
December 19, 2019).
Form of Performance-Based Stock Unit Notice and Stock 
Unit Agreement for U.S. Participants under the Amended 
and Restated 2007 Equity Incentive Plan (approved 
December 24, 2019).
Form of Performance-Based Stock Unit Notice and Stock 
Unit Agreement for Non-U.S. Participants under the 
Amended and Restated 2007 Equity Incentive Plan 
(approved December 24, 2019).
Form of Stock Option Agreement for U.S. Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved March 13, 2020).
Form of Stock Option Agreement for Non-U.S. Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved March 13, 2020).
Form of Stock Unit Grant Notice and Stock Unit 
Agreement for French Grantees under the Amended and 
Restated 2007 Equity Incentive Plan (approved March 13, 
2020).
Form of Performance-Based Stock Unit Grant Notice and 
Stock Unit Agreement under the Amended and Restated 
2007 Equity Incentive Plan (approved August 16, 2020).
Form of Stock Option Agreement for U.S. Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved March 8, 2021).

Form of Stock Option Agreement for Non-U.S. Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved March 8, 2021).

Form of Stock Option Agreement for Non-Employee 
Directors under the Amended and Restated 2007 Equity 
Incentive Plan (approved March 8, 2021).

Form of Time-Based Stock Unit Grant Notice and Stock 
Unit Agreement for U.S. Participants under the Amended 
and Restated 2007 Equity Incentive Plan (approved March 
8, 2021).
Form of Stock Unit Grant Notice and Stock Unit 
Agreement for Non-U.S. Participants under the Amended 
and Restated 2007 Equity Incentive Plan (approved March 
8, 2021).

Form of Stock Unit Grant Notice and Stock Unit 
Agreement for French Grantees under the Amended and 
Restated 2007 Equity Incentive Plan (approved March 8, 
2021).

Incorporation By Reference

Form
10-K

SEC File No.
000-32405

Exhibit
10.83

Filing Date
2/6/2020

10-K

000-32405

10.84

2/6/2020

10-K

000-32405

10.85

2/6/2020

10-K

000-32405

10.86

2/6/2020

10-K

000-32405

10.87

2/6/2020

10-K

000-32405

10.88

2/6/2020

10-Q

000-32405

10.1

4/30/2020

10-Q

000-32405

10.2

4/30/2020

10-Q

000-32405

10.4

4/30/2020

10-Q

000-32405

10.3

10/30/2020

10-Q

000-32405

10.4

4/29/2021

10-Q

000-32405

10.5

4/29/2021

10-Q

000-32405

10.6

4/29/2021

10-Q

000-32405

10.7

4/29/2021

10-Q

000-32405

10.8

4/29/2021

10-Q

000-32405

10.9

4/29/2021

128

129

 
 
+

†

††

*

Filed herewith.

Pursuant to a request for confidential treatment, portions of this Exhibit have been redacted from the 

publicly filed document and have been furnished separately to the Securities and Exchange Commission 

as required by Rule 24b-2 under the Securities Exchange Act of 1934.

Certain confidential information contained in this Exhibit, marked by asterisks in the Exhibit, has been 

omitted pursuant to Item 601(b)(2) of Regulation S-K.

Indicates a management contract or compensatory plan or arrangement.

Item 16. Form 10-K Summary

None.

Exhibit
Number
10.112*

10.113*

10.114*

10.115*

10.116*

10.117*

Exhibit Description

Form of Stock Unit Grant Notice and Stock Unit 
Agreement for non-employee directors under the Amended 
and Restated 2007 Equity Incentive Plan (approved March 
8, 2021).
Form of Performance-Based Stock Unit Grant Notice and 
Stock Unit Agreement for employees under the Amended 
and Restated 2007 Equity Incentive Plan (approved August 
16, 2021).
Form of Stock Option Agreement for U.S. Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved August 16, 2021).
Form of Stock Option Agreement for Non-U.S. Participants 
under the Amended and Restated 2007 Equity Incentive 
Plan (approved August 16, 2021).
Form of Stock Unit Grant Notice and Stock Unit 
Agreement for U.S. Participants under the Amended and 
Restated 2007 Equity Incentive Plan (approved August 16, 
2021).
Form of Stock Unit Grant Notice and Stock Unit 
Agreement for Non-U.S. Participants under the Amended 
and Restated 2007 Equity Incentive Plan (approved August 
16, 2021).

Incorporation By Reference

Form
10-Q

SEC File No.
000-32405

Exhibit
10.10

Filing Date
4/29/2021

10-Q

000-32405

10.3

10/28/2021

10-Q

000-32405

10.4

10/28/2021

10-Q

000-32405

10.5

10/28/2021

10-Q

000-32405

10.6

10/28/2021

10-Q

000-32405

10.7

10/28/2021

10.118+*

Form of Performance-Based Stock Unit Grant Notice and 
Stock Unit Agreement under the Amended and Restated 
2007 Equity Incentive Plan (approved January 18, 2022).

—

—

—

—

21.1+

23.1+
31.1+

31.2+

32.1+

32.2+

101

104

Subsidiaries of Seagen Inc.

Consent of Independent Registered Public Accounting Firm
Certification of Chief Executive Officer pursuant to Rule 
13a-14(a).
Certification of Chief Financial Officer pursuant to Rule 
13a-14(a).
Certification of Chief Executive Officer pursuant to 18 
U.S.C. Section 1350.
Certification of Chief Financial Officer pursuant to 
18 U.S.C. Section 1350.
The following financial statements from the Company's 
Annual Report on Form 10-K for the year ended December 
31, 2021, formatted in Inline XBRL: (i) Consolidated 
Balance Sheets, (ii) Consolidated Statements of 
Comprehensive Income (Loss), (iii) Consolidated 
Statements of Stockholders' Equity, (iv) Consolidated 
Statements of Cash Flows, and (v) Notes to Consolidated 
Financial Statements, tagged as blocks of text and 
including detailed tags.
Cover Page Interactive Data File (formatted as Inline 
XBRL and contained in Exhibit 101)

—

—
—

—

—

—

—

—

—
—

—

—

—

—

—

—
—

—

—

—

—

—

—
—

—

—

—

—

—

—

—

—

130

131

 
+
†

††

*

Filed herewith.
Pursuant to a request for confidential treatment, portions of this Exhibit have been redacted from the 
publicly filed document and have been furnished separately to the Securities and Exchange Commission 
as required by Rule 24b-2 under the Securities Exchange Act of 1934.
Certain confidential information contained in this Exhibit, marked by asterisks in the Exhibit, has been 
omitted pursuant to Item 601(b)(2) of Regulation S-K.
Indicates a management contract or compensatory plan or arrangement.

Item 16. Form 10-K Summary

None.

Exhibit

Number

10.112*

10.113*

Exhibit Description

Form of Stock Unit Grant Notice and Stock Unit 

Agreement for non-employee directors under the Amended 

and Restated 2007 Equity Incentive Plan (approved March 

Form of Performance-Based Stock Unit Grant Notice and 

Stock Unit Agreement for employees under the Amended 

and Restated 2007 Equity Incentive Plan (approved August 

8, 2021).

16, 2021).

Incorporation By Reference

Form

10-Q

SEC File No.

Exhibit

Filing Date

000-32405

10.10

4/29/2021

10-Q

000-32405

10.3

10/28/2021

10.114*

Form of Stock Option Agreement for U.S. Participants 

under the Amended and Restated 2007 Equity Incentive 

Plan (approved August 16, 2021).

10-Q

000-32405

10.4

10/28/2021

10.115*

Form of Stock Option Agreement for Non-U.S. Participants 

10-Q

000-32405

10.5

10/28/2021

10.116*

Form of Stock Unit Grant Notice and Stock Unit 

10-Q

000-32405

10.6

10/28/2021

under the Amended and Restated 2007 Equity Incentive 

Plan (approved August 16, 2021).

Agreement for U.S. Participants under the Amended and 

Restated 2007 Equity Incentive Plan (approved August 16, 

10.117*

Form of Stock Unit Grant Notice and Stock Unit 

10-Q

000-32405

10.7

10/28/2021

Agreement for Non-U.S. Participants under the Amended 

and Restated 2007 Equity Incentive Plan (approved August 

2021).

16, 2021).

10.118+*

Form of Performance-Based Stock Unit Grant Notice and 

Stock Unit Agreement under the Amended and Restated 

2007 Equity Incentive Plan (approved January 18, 2022).

—

—

—

—

Subsidiaries of Seagen Inc.

Consent of Independent Registered Public Accounting Firm

Certification of Chief Executive Officer pursuant to Rule 

13a-14(a).

13a-14(a).

31.2+

Certification of Chief Financial Officer pursuant to Rule 

32.1+

Certification of Chief Executive Officer pursuant to 18 

32.2+

Certification of Chief Financial Officer pursuant to 

U.S.C. Section 1350.

18 U.S.C. Section 1350.

21.1+

23.1+

31.1+

101

The following financial statements from the Company's 

Annual Report on Form 10-K for the year ended December 

31, 2021, formatted in Inline XBRL: (i) Consolidated 

Balance Sheets, (ii) Consolidated Statements of 

Comprehensive Income (Loss), (iii) Consolidated 

Statements of Stockholders' Equity, (iv) Consolidated 

Statements of Cash Flows, and (v) Notes to Consolidated 

Financial Statements, tagged as blocks of text and 

including detailed tags.

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

—

104

Cover Page Interactive Data File (formatted as Inline 

—

—

—

—

XBRL and contained in Exhibit 101)

130

131

 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly 

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

I, Clay B. Siegall, certify that:

1.

I have reviewed this Annual Report on Form 10-K of Seagen Inc.;

CERTIFICATIONS

Exhibit 31.1

Date: February 9, 2022

SEAGEN INC.

/S/     CLAY B. SIEGALL

Clay B. Siegall
President & Chief Executive Officer
(Principal Executive Officer)

Date: February 9, 2022

/S/     TODD E. SIMPSON

Todd E. Simpson
Chief Financial Officer
(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the 

following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature

/S/    CLAY B. SIEGALL
Clay B. Siegall

/S/    TODD E. SIMPSON
Todd E. Simpson

/S/    FELIX J. BAKER

Title

Date

Director, President & CEO (Principal Executive Officer)

  February 9, 2022

Chief Financial Officer (Principal Financial and Accounting Officer)   February 9, 2022

Felix J. Baker

Director

/S/    DAVID W. GRYSKA
David W. Gryska

/S/    MARC E. LIPPMAN
Marc E. Lippman

/S/    TED LOVE
Ted Love

/S/    JOHN A. ORWIN
John A. Orwin

/S/    ALPNA SETH
Alpna Seth

Director

Director

Director

Director

Director

/S/    NANCY A. SIMONIAN
Nancy A. Simonian

Director

/S/    DANIEL G. WELCH
Daniel G. Welch

Director

132

  February 9, 2022

  February 9, 2022

  February 9, 2022

February 9, 2022

  February 9, 2022

February 9, 2022

  February 9, 2022

  February 9, 2022

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material 

fact necessary to make the statements made, in light of the circumstances under which such statements were made, not 

misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present 

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the 

periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls 

and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial 

reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be 

designed under our supervision, to ensure that material information relating to the registrant, including its 

consolidated subsidiaries, is made known to us by others within those entities, particularly during the period 

in which this report is being prepared;

b.

designed such internal control over financial reporting, or caused such internal control over financial 

reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of 

financial reporting and the preparation of financial statements for external purposes in accordance with 

generally accepted accounting principles;

c.

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 

our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period 

covered by this report based on such evaluation; and

d.

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred 

during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual 

report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control 

over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control 

over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or 

persons performing the equivalent functions):

a.

all significant deficiencies and material weaknesses in the design or operation of internal control over 

financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, 

summarize and report financial information; and

b.

any fraud, whether or not material, that involves management or other employees who have a significant role 

in the registrant’s internal control over financial reporting.

By:

/s/ Clay B. Siegall

Clay B. Siegall

Chief Executive Officer

(Principal Executive Officer)

Date: February 9, 2022

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly 

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

SEAGEN INC.

/S/     CLAY B. SIEGALL

Clay B. Siegall

President & Chief Executive Officer

(Principal Executive Officer)

/S/     TODD E. SIMPSON

Todd E. Simpson

Chief Financial Officer

(Principal Financial and Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the 

following persons on behalf of the registrant and in the capacities and on the dates indicated.

Title

Date

Clay B. Siegall

Director, President & CEO (Principal Executive Officer)

  February 9, 2022

Todd E. Simpson

Chief Financial Officer (Principal Financial and Accounting Officer)   February 9, 2022

Date: February 9, 2022

Date: February 9, 2022

Signature

/S/    CLAY B. SIEGALL

/S/    TODD E. SIMPSON

/S/    FELIX J. BAKER

Felix J. Baker

Director

/S/    DAVID W. GRYSKA

David W. Gryska

Director

/S/    MARC E. LIPPMAN

Marc E. Lippman

Director

/S/    TED LOVE

Ted Love

Director

/S/    JOHN A. ORWIN

John A. Orwin

Director

/S/    ALPNA SETH

Alpna Seth

Director

/S/    NANCY A. SIMONIAN

Nancy A. Simonian

Director

/S/    DANIEL G. WELCH

Daniel G. Welch

Director

  February 9, 2022

  February 9, 2022

  February 9, 2022

February 9, 2022

  February 9, 2022

February 9, 2022

  February 9, 2022

  February 9, 2022

132

I, Clay B. Siegall, certify that:

1.

I have reviewed this Annual Report on Form 10-K of Seagen Inc.;

CERTIFICATIONS

Exhibit 31.1

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material 
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not 
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present 

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the 
periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls 
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial 
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

b.

c.

d.

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be 
designed under our supervision, to ensure that material information relating to the registrant, including its 
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period 
in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial 
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of 
financial reporting and the preparation of financial statements for external purposes in accordance with 
generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period 
covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred 
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual 
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control 
over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control 
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or 
persons performing the equivalent functions):

a.

b.

all significant deficiencies and material weaknesses in the design or operation of internal control over 
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, 
summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role 
in the registrant’s internal control over financial reporting.

By:

/s/ Clay B. Siegall

Clay B. Siegall

Chief Executive Officer

(Principal Executive Officer)

Date: February 9, 2022

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exhibit 31.2

Exhibit 32.1

SEAGEN INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Seagen Inc. (the “Company”) on Form 10-K for the year ended December 31, 2021, as 

filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Clay B. Siegall, Chief Executive 

Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley 

Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of 

operations of the Company.

By:

/s/ Clay B. Siegall

Clay B. Siegall

Chief Executive Officer

(Principal Executive Officer)

Date: February 9, 2022

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange 

Commission and is not to be incorporated by reference into any filing of Seagen Inc. under the Securities Act of 1933, as 

amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), 

irrespective of any general incorporation language contained in such filing.

I, Todd E. Simpson, certify that:

1.

I have reviewed this Annual Report on Form 10-K of Seagen Inc.;

CERTIFICATIONS

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material 
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not 
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present 

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the 
periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls 
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial 
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

b.

c.

d.

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be 
designed under our supervision, to ensure that material information relating to the registrant, including its 
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period 
in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial 
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of 
financial reporting and the preparation of financial statements for external purposes in accordance with 
generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period 
covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred 
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual 
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control 
over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control 
over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or 
persons performing the equivalent functions):

a.

b.

all significant deficiencies and material weaknesses in the design or operation of internal control over 
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, 
summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role 
in the registrant’s internal control over financial reporting.

By:

/s/ Todd E. Simpson

Todd E. Simpson

Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: February 9, 2022

Exhibit 31.2

Exhibit 32.1

I, Todd E. Simpson, certify that:

1.

I have reviewed this Annual Report on Form 10-K of Seagen Inc.;

CERTIFICATIONS

SEAGEN INC.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material 

fact necessary to make the statements made, in light of the circumstances under which such statements were made, not 

misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present 

in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the 

periods presented in this report;

In connection with the Annual Report of Seagen Inc. (the “Company”) on Form 10-K for the year ended December 31, 2021, as 
filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Clay B. Siegall, Chief Executive 
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley 
Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of 

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls 

and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial 

reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

By:

operations of the Company.

/s/ Clay B. Siegall

Clay B. Siegall

Chief Executive Officer

(Principal Executive Officer)

Date: February 9, 2022

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange 
Commission and is not to be incorporated by reference into any filing of Seagen Inc. under the Securities Act of 1933, as 
amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), 
irrespective of any general incorporation language contained in such filing.

a.

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be 

designed under our supervision, to ensure that material information relating to the registrant, including its 

consolidated subsidiaries, is made known to us by others within those entities, particularly during the period 

in which this report is being prepared;

b.

designed such internal control over financial reporting, or caused such internal control over financial 

reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of 

financial reporting and the preparation of financial statements for external purposes in accordance with 

generally accepted accounting principles;

c.

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 

our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period 

covered by this report based on such evaluation; and

d.

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred 

during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual 

report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control 

over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control 

over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or 

persons performing the equivalent functions):

a.

all significant deficiencies and material weaknesses in the design or operation of internal control over 

financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, 

summarize and report financial information; and

b.

any fraud, whether or not material, that involves management or other employees who have a significant role 

in the registrant’s internal control over financial reporting.

By:

/s/ Todd E. Simpson

Todd E. Simpson

Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: February 9, 2022

SEAGEN  INC.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.2

In connection with the Annual Report of Seagen Inc. (the “Company”) on Form 10-K for the year ended December 31, 2021, as 
filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Todd E. Simpson, Chief Financial 
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley 
Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of 

operations of the Company.

By:

/s/ Todd E. Simpson

Todd E. Simpson

Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: February 9, 2022

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange 
Commission and is not to be incorporated by reference into any filing of Seagen Inc. under the Securities Act of 1933, as 
amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), 
irrespective of any general incorporation language contained in such filing.

This page intentionally left blank.

SEAGEN  INC.

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.2

In connection with the Annual Report of Seagen Inc. (the “Company”) on Form 10-K for the year ended December 31, 2021, as 

filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Todd E. Simpson, Chief Financial 

Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley 

Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of 

operations of the Company.

By:

/s/ Todd E. Simpson

Todd E. Simpson

Chief Financial Officer

(Principal Financial and Accounting Officer)

Date: February 9, 2022

This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange 

Commission and is not to be incorporated by reference into any filing of Seagen Inc. under the Securities Act of 1933, as 

amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-K), 

irrespective of any general incorporation language contained in such filing.

This page intentionally left blank.

This page intentionally left blank.

Corporate Information

Executive Management

Board of Directors

Clay B. Siegall, Ph.D.

Clay B. Siegall, Ph.D.

President, Chief Executive Officer and Chairman of the Board

President, Chief Executive Officer and Chairman of the Board, 

Roger D. Dansey, M.D.

Chief Medical Officer

Vaughn B. Himes, Ph.D.

Chief Technical Officer

Jean I. Liu, J.D.

Chief Legal Officer

Todd E. Simpson

Chief Financial Officer

Lee J. Heeson

Natasha A. Hernday

Seagen

Felix J. Baker, Ph.D.

Co-Managing Member, Baker Bros. Advisors

Former Executive Vice President and Chief Financial Officer, 

David W. Gryska

Incyte Corporation

Marc E. Lippman, M.D.

Professor of Oncology at Georgetown University Medical 

Center’s Lombardi Comprehensive Cancer Center

Ted W. Love, M.D.

Therapeutics

Executive Vice President, Commercial International

President and Chief Executive Officer, Global Blood 

Executive Vice President, Corporate Development 

John A. Orwin

and Alliance Management

President and Chief Executive Officer, Atreca

Christopher P. Pawlowicz

Alpna H. Seth, Ph.D.

Executive Vice President, Human Resources

President and Chief Executive Officer, Nura Bio

Charles (Chip) R. Romp

Nancy A. Simonian, M.D.

Executive Vice President, Commercial U.S.

Chief Executive Officer, Syros Pharmaceuticals

Daniel G. Welch

Former Executive Partner of Sofinnova Ventures

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Corporate Headquarters

Transfer Agent & Registrar

Stock Listing

Seagen Inc. 

21823 30th Drive Southeast 

Bothell, WA 98021 

(425) 527-4000

Website

www.seagen.com

Corporate Responsibility 

Report

Available at www.seagen.com/who-we-

are/corporate-responsibility

www.computershare.com/investor

Computershare 

P.O. Box 505000

Louisville, KY 40233

(877) 419-8489

Legal Counsel

Cooley LLP 

Seattle, Washington

Independent Auditors

PricewaterhouseCoopers LLP

Seattle, Washington

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The Company’s common stock is traded 

on the Nasdaq Global Select Market  

under the symbol SGEN.

Stockholder Inquiries

Communications regarding transfer 

requirements, lost stock certificates or 

changes of address should be directed 

to our Transfer Agent and Registrar. 

Inquiries regarding the Company and 

its activities, or requests for a copy of 

financial documents, such as this annual 

report and the Form 10-K, may be 

directed to the Corporate Secretary or 

the Investor Relations department at our 

corporate headquarters.

This page intentionally left blank.

Corporate Information

Executive Management

Clay B. Siegall, Ph.D.
President, Chief Executive Officer and Chairman of the Board

Roger D. Dansey, M.D.
Chief Medical Officer

Vaughn B. Himes, Ph.D.
Chief Technical Officer

Jean I. Liu, J.D.
Chief Legal Officer

Todd E. Simpson
Chief Financial Officer

Lee J. Heeson
Executive Vice President, Commercial International

Natasha A. Hernday
Executive Vice President, Corporate Development 
and Alliance Management

Christopher P. Pawlowicz
Executive Vice President, Human Resources

Charles (Chip) R. Romp
Executive Vice President, Commercial U.S.

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Board of Directors

Clay B. Siegall, Ph.D.
President, Chief Executive Officer and Chairman of the Board, 
Seagen

Felix J. Baker, Ph.D.
Co-Managing Member, Baker Bros. Advisors

David W. Gryska
Former Executive Vice President and Chief Financial Officer, 
Incyte Corporation

Marc E. Lippman, M.D.
Professor of Oncology at Georgetown University Medical 
Center’s Lombardi Comprehensive Cancer Center

Ted W. Love, M.D.
President and Chief Executive Officer, Global Blood 
Therapeutics

John A. Orwin
President and Chief Executive Officer, Atreca

Alpna H. Seth, Ph.D.
President and Chief Executive Officer, Nura Bio

Nancy A. Simonian, M.D.
Chief Executive Officer, Syros Pharmaceuticals

Daniel G. Welch
Former Executive Partner of Sofinnova Ventures

Corporate Headquarters
Seagen Inc. 

21823 30th Drive Southeast 

Bothell, WA 98021 

(425) 527-4000

Website
www.seagen.com

Corporate Responsibility 
Report
Available at www.seagen.com/who-we-

are/corporate-responsibility

Transfer Agent & Registrar
Computershare 

P.O. Box 505000

Louisville, KY 40233

(877) 419-8489

www.computershare.com/investor

Legal Counsel
Cooley LLP 

Seattle, Washington

Independent Auditors
PricewaterhouseCoopers LLP

Seattle, Washington

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Stock Listing
The Company’s common stock is traded 

on the Nasdaq Global Select Market  

under the symbol SGEN.

Stockholder Inquiries
Communications regarding transfer 

requirements, lost stock certificates or 

changes of address should be directed 

to our Transfer Agent and Registrar. 

Inquiries regarding the Company and 

its activities, or requests for a copy of 

financial documents, such as this annual 

report and the Form 10-K, may be 

directed to the Corporate Secretary or 

the Investor Relations department at our 

corporate headquarters.

seagen.com        Nasdaq: SGEN        

 @SeagenGlobal        

  Find us on LinkedIn

Forward-Looking Statements  This 2021 Annual Report, including Seagen’s Annual Report on Form 10-K for the year ended December 31, 2021 included with the 2021 Annual Re-
port, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, such as those, among others, 
relating to the Company’s 2022 outlook, the Company’s potential to achieve the noted development and regulatory milestones in 2022 and future periods, the Company’s potential to effectively 
commercialize the Company’s products in its territories globally; anticipated activities related to the Company’s planned and ongoing clinical trials, including clinical trial initiation, enrollment and 
data availability and the expected timing thereof; the potential for the Company’s clinical trials to support further development, regulatory submissions and potential marketing approvals; the 
opportunities for, and the therapeutic and commercial potential of ADCETRIS, PADCEV, TUKYSA, TIVDAK and the Company’s product candidates and those of its licensees and collaborators; 
as well as other statements that are not historical facts. Actual results or developments may differ materially from those projected or expected, as well as risks and uncertainties associated with 
maintaining or increasing sales of ADCETRIS, PADCEV, TUKYSA and TIVDAK due to competition, unexpected adverse events, regulatory action, reimbursement, market adoption by physicians, 
the impacts of the COVID-19 pandemic, global trends toward healthcare cost containment, challenges in commercializing outside of the U.S. or other factors. The Company may also be delayed 
or unsuccessful in its planned clinical trial initiations, enrollment in and conduct of its clinical trials, obtaining data from clinical trials, planned COVID-19 pandemic, negative or disappointing 
clinical trial results, unexpected adverse events or regulatory actions and the inherent uncertainty associated with the regulatory approval process and the pricing and reimbursement process when 
applicable. Seagen discusses many of these risks, uncertainties and other factors in greater detail under the heading “Item 1A-Risk Factors” in its Annual Report on Form 10-K for the year ended 
December 31, 2021 included with this 2021 Annual Report. Seagen disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, 
future events or otherwise except as required by applicable law.

©2022 Seagen Inc. Seagen, the Seagen logo, ADCETRIS, TUKYSA and TIVDAK are our registered trademarks in the United States. PADCEV is a U.S. registered trademark jointly owned by us and 
Agensys, Inc. All other trademarks, tradenames and service marks are the property of their respective owners.