10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2023

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, Washington 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 each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001	SGEN	The Nasdaq Stock Market LLC

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, 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	☒	Accelerated filer	☐
Non-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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐ No  ☒

As of October 27, 2023, there were 188,662,672 shares of the registrant’s common stock outstanding.

Seagen Inc.

Quarterly Report on Form 10-Q

For the Quarter Ended September 30, 2023

INDEX

		Page
PART I. FINANCIAL INFORMATION (Unaudited)
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Comprehensive Loss	4
	Condensed Consolidated Statements of Stockholders’ Equity	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 5.	Other Information	71
Item 6.	Exhibits	72
SIGNATURE		73

2

PART I. FINANCIAL INFORMATION

Item 1.    Condensed Consolidated Financial Statements

Seagen Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except par value)

	September 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	428,568	$	319,940
Short-term investments	808,418		1,415,130
Accounts receivable, net	631,555		501,912
Inventories	531,188		427,211
Prepaid expenses and other current assets	151,864		138,340
Total current assets	2,551,593		2,802,533
Property and equipment, net	358,801		248,179
Operating lease right-of-use assets	128,861		46,738
Intangible assets, net	220,255		237,516
Goodwill	274,671		274,671
Other non-current assets	100,080		64,895
Total assets	$	3,634,261	$	3,674,532
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	224,813	$	207,851
Accrued liabilities and other	729,903		610,553
Total current liabilities	954,716		818,404
Long-term liabilities:
Operating lease liabilities, long-term	113,487		43,474
Other long-term liabilities	15,637		8,835
Total long-term liabilities	129,124		52,309
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 shares authorized; none issued	—		—
Common stock, $0.001 par value, 250,000 shares authorized; 188,628 shares issued and outstanding at September 30, 2023 and 186,559 shares issued and outstanding at December 31, 2022	189		187
Additional paid-in capital	5,302,239		4,954,469
Accumulated other comprehensive income	4,394		3,510
Accumulated deficit	(2,756,401)		(2,154,347)
Total stockholders’ equity	2,550,421		2,803,819
Total liabilities and stockholders’ equity	$	3,634,261	$	3,674,532

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Seagen Inc.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Revenues:
Net product sales	$	570,729	$	428,089	$	1,583,343	$	1,242,889
Royalty revenues	63,561		43,904		144,927		111,194
Collaboration and license agreement revenues	14,360		38,307		43,931		80,179
Total revenues	648,650		510,300		1,772,201		1,434,262
Costs and expenses:
Cost of sales	165,254		108,122		457,783		301,848
Research and development	449,047		384,605		1,204,930		986,518
Selling, general and administrative	265,687		210,378		746,060		604,862
Total costs and expenses	879,988		703,105		2,408,773		1,893,228
Loss from operations	(231,338)		(192,805)		(636,572)		(458,966)
Investment and other income, net	14,978		4,278		41,463		479
Loss before income taxes	(216,360)		(188,527)		(595,109)		(458,487)
(Benefit) provision for income taxes	(571)		2,289		6,945		3,650
Net loss	$	(215,789)	$	(190,816)	$	(602,054)	$	(462,137)
Net loss per share - basic and diluted	$	(1.15)	$	(1.03)	$	(3.21)	$	(2.51)
Shares used in computation of per share amounts - basic and diluted	188,135		184,792		187,532		184,199
Comprehensive loss:
Net loss	$	(215,789)	$	(190,816)	$	(602,054)	$	(462,137)
Other comprehensive income:
Unrealized gain (loss) on securities available-for-sale, net of tax	97		(875)		1,639		(4,472)
Foreign currency translation gain (loss)	189		3,363		(755)		6,288
Total other comprehensive income	286		2,488		884		1,816
Comprehensive loss	$	(215,503)	$	(188,328)	$	(601,170)	$	(460,321)

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Seagen Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited)

(In thousands)

	Common stock
	Shares	Amount		Additional paid-in capital		Accumulated other comprehensive income		Accumulated deficit		Total stockholders’ equity
Balances as of December 31, 2021	183,381	$	183	$	4,607,816	$	1,179	$	(1,544,039)	$	3,065,139
Net loss	—	—		—		—		(136,494)		(136,494)
Other comprehensive loss	—	—		—		(755)		—		(755)
Issuance of common stock for stock option exercises and employee stock purchase plan	463	1		26,663		—		—		26,664
Restricted stock vested during the period, net	48	—		—		—		—		—
Share-based compensation	—	—		43,913		—		—		43,913
Balances as of March 31, 2022	183,892	184		4,678,392		424		(1,680,533)		2,998,467
Net loss	—	—		—		—		(134,827)		(134,827)
Other comprehensive income	—	—		—		83		—		83
Issuance of common stock for stock option exercises and employee stock purchase plan	298	—		14,960		—		—		14,960
Restricted stock vested during the period, net	179	—		—		—		—		—
Share-based compensation	—	—		54,129		—		—		54,129
Balances as of June 30, 2022	184,369	$	184	$	4,747,481	$	507	$	(1,815,360)	$	2,932,812
Net loss	—	—		—		—		(190,816)		(190,816)
Other comprehensive income	—	—		—		2,488		—		2,488
Issuance of common stock for stock option exercises and employee stock purchase plan	263	—		18,388		—		—		18,388
Restricted stock vested during the period, net	602	1		—		—		—		1
Share-based compensation	—	—		58,938		—		—		58,938
Balances as of September 30, 2022	185,234	$	185	$	4,824,807	$	2,995	$	(2,006,176)	$	2,821,811
Balances as of December 31, 2022	186,559	$	187	$	4,954,469	$	3,510	$	(2,154,347)	$	2,803,819
Net loss	—	—		—		—		(174,737)		(174,737)
Other comprehensive income	—	—		—		198		—		198
Issuance of common stock for stock option exercises and employee stock purchase plan	569	—		42,240		—		—		42,240
Restricted stock vested during the period, net	223	—		—		—		—		—
Shares withheld for tax withholdings during the period	(62)	—		(12,303)		—		—		(12,303)
Share-based compensation	—	—		63,939		—		—		63,939
Balances as of March 31, 2023	187,289	187		5,048,345		3,708		(2,329,084)		2,723,156
Net loss	—	—		—		—		(211,528)		(211,528)
Other comprehensive income	—	—		—		400		—		400
Issuance of common stock for stock option exercises and employee stock purchase plan	212	1		13,814		—		—		13,815
Restricted stock vested during the period, net	171					—		—		—
Share-based compensation	—	—		93,216		—		—		93,216
Balances as of June 30, 2023	187,672	188		5,155,375		4,108		(2,540,612)		2,619,059
Net loss	—	—		—		—		(215,789)		(215,789)
Other comprehensive income	—	—		—		286		—		286
Issuance of common stock for stock option exercises and employee stock purchase plan	160			15,520		—		—		15,520
Restricted stock vested during the period, net	796	1		1		—		—		2
Share-based compensation	—	—		131,343		—		—		131,343
Balances as of September 30, 2023	188,628	189		5,302,239		4,394		(2,756,401)		2,550,421

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

Seagen Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Nine Months Ended September 30,
	2023		2022
Operating activities:
Net loss	$	(602,054)	$	(462,137)
Adjustments to reconcile net loss to net cash used by operating activities
Share-based compensation	288,498		156,980
Depreciation	38,056		34,642
Amortization of intangible assets	17,261		17,261
Amortization of right-of-use assets	11,339		9,441
Amortization of premiums, accretion of discounts, and (gains) losses on debt securities	(34,333)		(1,129)
Losses on equity securities	2,750		9,747
Deferred income taxes	835		(221)
Inventory write-off	46,524		—
Changes in operating assets and liabilities
Accounts receivable, net	(129,643)		(97,499)
Inventories	(150,501)		(164,307)
Prepaid expenses and other assets	(53,186)		(11,300)
Lease liability	(10,257)		(11,842)
Other liabilities	114,000		146,053
Net cash used by operating activities	(460,711)		(374,311)
Investing activities:
Purchases of securities	(1,699,316)		(2,060,242)
Proceeds from maturities of securities	2,342,000		2,391,000
Payments for lessor-owned assets	(2,954)		(17,936)
Purchases of property and equipment	(131,815)		(48,095)
Net cash provided by investing activities	507,915		264,727
Financing activities:
Proceeds from exercise of stock options and employee stock purchase plan	71,577		60,013
Employee taxes paid related to net share settlement of stock-based awards	(12,303)		—
Net cash provided by financing activities	59,274		60,013
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(804)		(6,893)
Net increase (decrease) in cash, cash equivalents, and restricted cash	105,674		(56,464)
Cash, cash equivalents, and restricted cash at beginning of period	323,486		424,834
Cash, cash equivalents, and restricted cash at end of period	$	429,160	$	368,370

The accompanying notes are an integral part of these condensed consolidated financial statements.

6

Seagen Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

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.

Pending Transaction with Pfizer

In March 2023, we entered into a definitive merger agreement, or the Merger Agreement, under which, on the terms and subject to the conditions thereof, Pfizer Inc., or Pfizer, will acquire Seagen Inc., or Seagen, for $229 in cash per Seagen share for a total enterprise value of $43 billion. The companies seek to accelerate the next generation of cancer breakthroughs and bring new solutions to patients by combining the power of Seagen’s ADC technology with the scale and strength of Pfizer’s capabilities and expertise. On May 30, 2023, our shareholders approved a proposal to adopt the Merger Agreement. However, the closing of the transaction, which we refer to herein as the Pfizer Merger, remains subject to fulfillment of customary closing conditions, including the receipt of required regulatory approvals. In this regard, on June 1, 2023, we and Pfizer referred the Pfizer Merger to the European Commission, or the EC, for review under Article 4(5) of the EU Merger Regulation. On June 23, 2023, the EC accepted jurisdiction as a result of such referral and receipt of approval from the EC for the Pfizer Merger became a condition for the closing of the Pfizer Merger. On October 19, 2023, the EC approved the Pfizer merger unconditionally pursuant to Article 6(1)b of the EU Merger Regulation. Additionally, on July 14, 2023, we and Pfizer each received a request for additional information and documentary materials, or a Second Request, from the Federal Trade Commission, or the FTC, in connection with the FTC’s review of the Pfizer Merger. The effect of a Second Request is to extend the waiting period imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act, until 30 days after Seagen and Pfizer each have substantially complied with the Second Request issued to it, unless that period is terminated sooner by the FTC. Completion of the Pfizer Merger remains subject to the expiration or termination of the waiting period under the HSR Act and the satisfaction or waiver of the other closing conditions specified in the Merger Agreement.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seagen Inc. and its wholly-owned subsidiaries (collectively “Seagen,” the “Company,” “we,” “our,” or “us”). All intercompany transactions and balances have been eliminated upon consolidation. 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. Substantially all of our assets and revenues are related to operations in the U.S.; however, we have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe.

The condensed consolidated balance sheet data as of December 31, 2022 were derived from the audited consolidated financial statements not included in this quarterly report on Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and generally accepted accounting principles in the United States of America, or GAAP, for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position and results of our operations as of and for the periods presented.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC.

The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of our operations for the three and nine month periods ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year or any other interim period.

7

Non-cash activities

We had $53.3 million and $20.1 million of accrued capital expenditures as of September 30, 2023 and December 31, 2022, respectively. Accrued capital expenditures are treated as a non-cash investing activity and, accordingly, have not been included in the condensed consolidated statement of cash flows until such amounts have been paid in cash. We recorded $93.5 million and $0.9 million right-of-use assets during the nine months ended September 30, 2023 and 2022, respectively, and lease liabilities of $75.3 million and $0.5 million during the nine months ended September 30, 2023 and 2022, respectively.

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.

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 September 30, 2023 and December 31, 2022, were $0.0 million and $5.2 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.

Restricted Cash

As of September 30, 2023, we had $0.6 million cash held in escrow restricted by a contractual agreement related to our Everett, Washington building construction project. The restricted cash was recorded in prepaid expenses and other current assets in the condensed consolidated balance sheet. We determine classification based on the expected duration of the restriction.

Our total cash, cash equivalents, and restricted cash, as presented in the condensed consolidated statements of cash flows, was as follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	428,568	$	319,940
Restricted cash included in prepaid expenses and other current assets	592		3,546
Total cash, cash equivalents, and restricted cash as presented in the condensed consolidated statements of cash flows	$	429,160	$	323,486

Intangible assets, net

Our intangible assets are primarily comprised of acquired TUKYSA technology. The following table presents the balances of our finite-lived intangible assets for the periods presented:

(dollars in thousands)	September 30, 2023		December 31, 2022
Gross carrying value	$	305,650	$	305,650
Less: accumulated amortization	(85,395)		(68,134)
Total	$	220,255	$	237,516

8

The following table presents our amortization expense related to acquired TUKYSA technology costs, included in cost of sales in our condensed consolidated statements of comprehensive loss, for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Amortization expense	$	5,817	$	5,817	$	17,261	$	17,261

The weighted average remaining useful life of our finite-lived intangible assets was approximately 10 years as of September 30, 2023, and estimated future amortization expense related to acquired TUKYSA is $5.8 million for the three months ending December 31, 2023, and TUKYSA technology costs is $23.1 million for each of the years ending December 31, 2024 through December 31, 2028.

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, eligible customers receive an applicable discount which is processed through the distributor as 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 our patient assistance program, 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.

Revenue recognition - Royalty revenues

Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with an affiliate of 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.

9

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 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.

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.

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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.

In September 2023, we entered into a research and license agreement under which we owed an upfront payment of $60.0 million that was recorded in accounts payable as of September 30, 2023 and paid in October 2023. The agreement includes options to license technologies and contains contingent research, development, regulatory and commercial milestone payments potentially totaling up to $3.4 billion. The substantial majority of these contingent payments are dependent upon, among other things, our exercise of the options and future product sales. The agreement also includes mid-single to low double digit tiered royalties on future sales and the licensor retains an option for U.S. profit sharing and co-promotion on up to two products.

Recent Accounting Pronouncements

We reviewed recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact on our condensed consolidated financial statements.

2. Revenue from contracts with customers

The following table presents our disaggregated revenue for the periods presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
ADCETRIS	$	246,071	$	218,521	$	750,986	$	601,449
PADCEV	199,516		105,330		479,452		329,114
TUKYSA	102,071		87,771		288,651		267,235
TIVDAK	23,071		16,467		64,254		45,091
Net product sales	$	570,729	$	428,089	$	1,583,343	$	1,242,889
Royalty revenues	$	63,561	$	43,904	$	144,927	$	111,194
Collaboration and license agreement revenues	$	14,360	$	38,307	$	43,931	$	80,179
Total revenues	$	648,650	$	510,300	$	1,772,201	$	1,434,262

3. Leases

We have operating leases for our office and laboratory facilities with terms that expire from 2023 through 2042. We recorded $93.5 million and $0.9 million right-of-use assets during the nine months ended September 30, 2023 and 2022, respectively, and lease liabilities of $75.3 million and $0.5 million during the nine months ended September 30, 2023 and 2022, 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 September 30, 2023.

In June 2021, we entered into a lease agreement for an approximately 258,000 square foot 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 commenced in January 2023 when construction and delivery of the building shell and related improvements by the landlord were substantially completed, and we recorded a lease liability and right-of-use assets on our condensed consolidated balance sheet. 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.

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Supplemental operating lease information was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023			2022
Operating lease cost	$	5,514	$	3,682	$	16,426		$	11,824
Variable lease cost	1,307		1,039		3,870			3,360
Total lease cost	$	6,821	$	4,721	$	20,296		$	15,184
Cash paid for amounts included in measurement of lease liabilities	$	5,307	$	4,089	$	14,215		$	12,838
					As of September 30,
					2023			2022
Weighted average remaining lease term					11.2 years			5.4 years
Weighted average discount rate					6.9		%	5.0		%

Operating lease liabilities were recorded in the following captions of our condensed consolidated balance sheets as follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Accrued liabilities and other	$	11,089	$	14,517
Operating lease liabilities, long-term	113,487		43,474
Total	$	124,576	$	57,991

4. Net loss per share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares and dilutive potential 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.

We excluded the potential shares of common stock from the computation of diluted net 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:

	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2023	2022	2023	2022
Stock options and RSUs	9,000	9,948	8,699	10,029

5. Fair value

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.

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The fair value hierarchy of assets carried at fair value and measured on a recurring basis was as follows: 

	Fair value measurement using:
(dollars in thousands)	Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
September 30, 2023
Short-term investments—U.S. Treasury securities	$	808,418	$	—	$	—	$	808,418
Other non-current assets—equity securities	1,104		—		—		1,104
Total	$	809,522	$	—	$	—	$	809,522
December 31, 2022
Short-term investments—U.S. Treasury securities	$	1,415,130	$	—	$	—	$	1,415,130
Other non-current assets—equity securities	3,854		—		—		3,854
Total	$	1,418,984	$	—	$	—	$	1,418,984

Our short-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 three and nine months ended September 30, 2023 and 2022, 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 September 30, 2023 or December 31, 2022.

Our debt securities consisted of the following:

(dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
September 30, 2023
U.S. Treasury securities	$	808,366	$	67	$	(15)	$	808,418
Contractual maturities (at date of purchase):
Due in one year or less	$	808,366					$	808,418
December 31, 2022
U.S. Treasury securities	$	1,416,717	$	96	$	(1,683)	$	1,415,130
Contractual maturities (at date of purchase):
Due in one year or less	$	1,400,852					$	1,399,382
Due in one to two years	15,865						15,748
Total	$	1,416,717					$	1,415,130

6. Investment and other income, net

Investment and other income, net consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Gain (loss) on equity securities	$	491	$	(2,669)	$	(2,750)	$	(9,747)
Investment and other income, net	14,487		6,947		44,213		10,226
Total investment and other income, net	$	14,978	$	4,278	$	41,463	$	479

Gain (loss) on equity securities includes the realized and unrealized holding gains and losses on our equity securities. At times, we hold equity investments in certain companies acquired in relation to a strategic partnership. Shares held at the end of reporting periods are marked to market in our condensed consolidated financial statements, which can result in unrealized gains and losses.

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7. Inventories

Inventories consisted of the following:

(dollars in thousands)	September 30, 2023		December 31, 2022
Raw materials	$	12,845	$	14,916
Work in process	479,584		357,275
Finished goods	38,759		55,020
Total	$	531,188	$	427,211

We capitalize our commercial inventory costs. Work in process represents inventory at various stages of the production process, which includes costs for materials, labor, and overhead applied during the production process. 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. During the nine months ended September 30, 2023, we recorded a $47 million inventory write-off related to in-process production of one of our products that did not meet a release specification that was updated in June 2023.

8. Accrued liabilities

Accrued liabilities consisted of the following: 

(dollars in thousands)	September 30, 2023		December 31, 2022
Clinical trial and related costs	$	222,488	$	194,006
Employee compensation and benefits	212,442		175,506
Gross-to-net deductions and third-party royalties	153,266		119,289
Acquisition related expenses	27,445		—
Other	114,262		121,752
Total	$	729,903	$	610,553

We have incurred approximately $40 million of acquisition related expenses in connection with the pending merger with Pfizer for the nine months ended September 30, 2023, with $27 million remaining in accrued liabilities.

9. Share-based compensation

The following table presents our total share-based compensation expense for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Research and development	$	70,062	$	31,328	$	149,974	$	77,850
Selling, general and administrative	61,281		27,610		138,524		79,130
Total share-based compensation expense	$	131,343	$	58,938	$	288,498	$	156,980

During the nine months ended September 30, 2023, we granted retention awards of approximately $280 million in the form of cash and RSUs to incentivize certain employees to remain employed at the company during the pendency of the Pfizer Merger and following the closing of the transaction. The awards consist of 20% in the form of cash that vests on the 9-month anniversary of the grant, 30% in the form of RSUs that vest on the 18-month anniversary of the grant, 25% in the form of RSUs that vest on the 24-month anniversary of the grant, and 25% in the form of RSUs that vest on the 30-month anniversary of the grant.

As of September 30, 2023, there was $545.3 million of unrecognized compensation cost related to unvested options including options subject to market-based performance metrics, and restricted stock unit awards, excluding our performance-based RSUs, net of forfeitures. The estimated unrecognized compensation expense related to our performance-based RSUs was approximately $48 million as of September 30, 2023.

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10. Income taxes

For the three and nine months ended September 30, 2023, we had taxable profits in the U.S. as a result of amendments to IRC Section 174, which took effect January 1, 2022 pursuant to the 2017 Tax Cuts and Jobs Act. For the three months ended September 30, 2023, we recorded an income tax benefit of $0.6 million, primarily related to higher forecasted 2023 book loss, decreasing provision for income taxes. For the nine months ended September 30, 2023, we recorded an income tax provision of $6.9 million primarily related to estimated state tax liabilities for which there were limitations on the use of existing state tax carryforwards. We had existing federal tax carryforwards sufficient to offset most of the federal liability. Our income tax provision also reflected taxable profits in foreign jurisdictions. Our effective tax rate for the three and nine months ended September 30, 2023 of approximately (0.3%) and 1.2%, respectively, differed from the federal statutory rate primarily because of changes in the valuation allowance against substantially all of our deferred tax assets.

For the three and nine months ended September 30, 2022, we had taxable profits in the U.S. as a result of amendments to IRC Section 174, which took effect January 1, 2022 pursuant to the 2017 Tax Cuts and Jobs Act. We recorded an income tax provision of $2.3 million and $3.6 million for the three and nine months ended September 30, 2022, respectively, primarily related to estimated state tax liabilities for which there were limitations on the use of existing state tax carryforwards. We had existing federal tax carryforwards sufficient to offset any federal liability. Our income tax provision also reflected taxable profits in foreign jurisdictions. For the three and nine months ended September 30, 2022, our effective tax rate of approximately 1.2% and 0.8%, respectively, differed from the federal statutory rate primarily because we have provided a valuation allowance against substantially all our deferred tax assets.

11. Legal matters

From time to time, we are involved in legal matters, including the disputes below. As a result of these disputes, we have incurred and will continue to incur litigation expenses.

Dispute over ownership of intellectual property

We have been in a dispute with Daiichi Sankyo Co. Ltd., or Daiichi Sankyo, regarding the ownership of certain technology used by Daiichi Sankyo in its cancer drug Enhertu® (fam-trastuzumab deruxtecan-nxki) 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 contended, was assigned to us under the terms of a 2008 collaboration agreement between us and Daiichi Sankyo, or the Daiichi Sankyo Collaboration Agreement.

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.

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 and April 2022. On August 12, 2022, the arbitrator ruled in favor of Daiichi Sankyo, citing statute of limitations and disagreement with us on the interpretation of the contract. On November 10, 2022, we filed a motion to vacate the arbitration award in the U.S. District Court for the Western District of Washington, and that action has been stayed pending a final award in the arbitration.

The Daiichi Sankyo Collaboration Agreement provides that judgment rendered by an arbitrator shall include costs of arbitration, reasonable attorneys’ fees and reasonable costs for expert and other witnesses. On September 14, 2022, Daiichi Sankyo submitted a petition for approximately $58 million for reimbursement of its legal fees and costs associated with the arbitration. We filed oppositions to Daiichi Sankyo’s request on October 12, 2022 and May 23, 2023. The arbitrator held a hearing on Daiichi Sankyo’s fee request on September 15, 2023.

While we oppose any fees being awarded to Daiichi Sankyo, a liability between approximately $14 million and $58 million is reasonably estimable. An estimate of our liability for these fees towards the low end of the range has been recorded in accrued liabilities in our condensed consolidated financial statements. It is reasonably possible the arbitrator will render an award pursuant to Daiichi Sankyo’s request that is different from what we have accrued or estimated and that we will need to adjust our estimate in future periods pursuant to the arbitrator’s award.

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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. The remedies sought in this action include, 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. On July 27, 2021, AstraZeneca Pharmaceuticals LP, or AstraZeneca moved to intervene as defendants. The court granted AstraZeneca’s motion to intervene on July 28, 2021.

Daiichi Sankyo (as well as Daiichi Sankyo, Inc. and 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 and Trademark Office, or USPTO, seeking to have claims of the ’039 Patent cancelled as unpatentable. On June 24, 2021, the USPTO issued a decision denying both petitions for post-grant review. On April 7, 2022, the USPTO granted a request on rehearing and instituted two post-grant review proceedings, but on July 15, 2022, the USPTO issued a new decision denying post-grant review of the claims asserted in the patent infringement action. On February 7, 2023, in response to Daiichi Sankyo and AstraZeneca’s second request for rehearing of the denial of the post-grant review to the USPTO and for Precedential Opinion Panel, or POP, review, the Precedential Opinion Panel issued an order denying the request for POP review but directing the USPTO panel evaluating the second rehearing request to make an explicit finding using its own discretion as to whether the post-grant review petition presents a “compelling” showing of invalidity as part of its ruling on the pending second rehearing request. The panel was also directed to rule on the second rehearing request within two weeks from the POP order. On February 14, 2023, the panel decided to institute the post-grant review of the claims of the ’039 Patent asserted in the patent infringement action. The panel held oral argument on Daiichi Sankyo and AstraZeneca’s petition for post-grant review on August 24, 2023. We expect the panel to issue a ruling by February 14, 2024.

On April 8, 2022, a jury in the United States District Court for the Eastern District of Texas found that Daiichi Sankyo willfully infringed the asserted claims of the ’039 Patent with its Enhertu product, and also found that the asserted claims were not invalid. The jury further awarded damages of $41.8 million for infringement from October 20, 2020 through March 31, 2022. The court also denied Daiichi Sankyo’s claim that the ’039 Patent should be unenforceable under the equitable theory of prosecution laches, entered judgment in favor of us based on the jury’s verdict that Daiichi Sankyo willfully infringed the ’039 Patent consisting of pre-trial damages in the sum of $41.8 million, and awarded us pre- and post-trial interest and costs. On August 21, 2023, the court denied Daiichi Sankyo and AstraZeneca’s motion for a new trial and renewed motions for judgment as a matter of law on invalidity and non-infringement, and granted our request for an ongoing royalty on Daiichi Sankyo’s future sales of Enhertu in the United States through the current expiration date of the ’039 Patent. On September 18, 2023, Daiichi Sankyo and AstraZeneca filed a motion to amend the final judgment to clarify the court’s order regarding the ongoing royalty granted in our favor. On October 17, 2023, the court granted in part Daiichi Sankyo and AstraZeneca’s motion and issued an amended final judgment, which provides for an ongoing 8% royalty on Daiichi Sankyo’s future sales of Enhertu in the United States by its subsidiary Daiichi Sankyo, Inc. through November 4, 2024.

On September 20, 2023, Daiichi Sankyo and AstraZeneca filed a notice of appeal to the United States Court of Appeals for the Federal Circuit. The appeal was deactivated on September 26, 2023 due to Daiichi Sankyo and AstraZeneca’s pending motion to amend the judgment. We anticipate that the appeal will be reactivated at some point in light of the resolution of Daiichi Sankyo and AstraZeneca’s motion.

Pursuant to ASC 450, awards of this nature must be either realized or realizable to be reflected in the company’s financial statements. No amounts related to these patent infringement matters have been reflected in our condensed consolidated financial statements as of September 30, 2023.

PADCEV product liability litigation

On March 14, 2023, a purported class action was filed in the United States District Court for the Central District of California against us, Astellas and Agensys, Inc., alleging that the defendants failed to warn of side effects to the skin that can occur when taking PADCEV. The complaint alleges claims under strict liability, negligence and fraud, and seeks damages, including punitive damages, interest, attorneys’ fees and costs. We intend to vigorously defend against these claims. No amounts related to these matters have been reflected in our condensed consolidated financial statements as of September 30, 2023.

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Litigation related to the Pfizer Merger

Six lawsuits were filed by purported Seagen stockholders in connection with the Pfizer Merger. The complaints alleged, among other things, that certain disclosures in the preliminary proxy statement we filed on April 14, 2023 or definitive proxy statement we filed on April 24, 2023 in connection with the Pfizer Merger were materially incomplete and misleading. Four actions, captioned O’Dell v. Seagen Inc., et al., No. 1:23-cv-03254 (Apr. 19, 2023), Boyd v. Seagen Inc., et al., No. 1:23-cv-03309 (Apr. 20, 2023), Wang v. Seagen Inc., et al., No. 1:23-cv-03302 (Apr. 20, 2023), and Ober v. Seagen Inc., et al., No. 1:23-cv-03378 (Apr. 21, 2023), were filed in the United States District Court for the Southern District of New York; one action, captioned McDaniel v. Seagen, Inc. et al., No. 1:23-cv-00504 (May 8, 2023), was filed in the United States District Court for the District of Delaware; and one action, captioned Nicosia v. Baker et al., No. 23-2-03250-31 (May 2, 2023), was filed in the Superior Court of the State of Washington for the County of Snohomish. The six complaints included the Company and the current members of our board of directors as defendants, and the plaintiffs alleged, among other things, violations of Sections 14(a) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78n(a), 78t(a), SEC Rule 14a-9, 17 C.F.R. 240.14a-9 and 17 C.F.R. § 244.100 and, in the case of the Washington State complaint, also included Pfizer as a defendant and alleged violations of Washington State securities laws. The complaints sought, among other relief, to enjoin us from consummating the Pfizer Merger and to be awarded rescissory damages, including reasonable attorneys’ and expert fees and expenses. All of the actions were voluntarily dismissed following the publication of additional disclosures by the Company. No amounts related to these matters have been reflected in our condensed consolidated financial statements as of September 30, 2023.

We are not aware of the filing of other lawsuits challenging the Pfizer Merger or the proxy statement; however, additional lawsuits arising out of the Pfizer Merger or the related proxy statement may be filed in the future.

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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

As used in this Quarterly Report on Form 10-Q, “Seagen,” the “Company”, “we,” “us” and “our” refer to Seagen Inc. and its wholly-owned subsidiaries. This Quarterly Report on Form 10-Q, including 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 Quarterly Report on Form 10-Q 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 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 Quarterly Report on Form 10-Q in greater detail under the heading “Part II Item 1A—Risk Factors.” We caution investors that our business and financial performance are subject to substantial risks and uncertainties.

Overview

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 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.

Third quarter 2023 highlights and recent developments

Business Highlights

•We reported 33% growth in net product sales for the third quarter in 2023 as compared to the same period of the prior year.

•In September 2023, we published our updated annual Corporate Responsibility Report, providing highlights from our ESG (environment, social, and governance) efforts, achievements and future commitments. Highlights of the report include multiple positive clinical trial results and label expansions across our commercial portfolio, new diversity, equity and inclusion strategy, publishing our Human Rights Policy and Supplier Code of Conduct, enhancing governance programs across numerous areas including compliance and information security, and new environmental initiatives.

•The European Commission approved the acquisition of Seagen by Pfizer unconditionally pursuant to Article 6(1)b under the EU Merger Regulation on October 19, 2023. The completion of the transaction remains subject to other customary closing conditions, including the expiration or termination of the waiting period under the HSR Act relating to the consummation of the transaction, and the satisfaction or waiver of the other closing conditions specified in the Merger Agreement. As previously disclosed, on July 14, 2023, we and Pfizer each received a Second Request from the FTC in connection with the FTC’s review of the transaction. The effect of the Second Request is to extend the waiting period imposed by the HSR Act, until 30 days after we and Pfizer each have substantially complied with the applicable Second Request, unless the period is terminated sooner by the FTC. We continue to expect that the transaction will be completed in late 2023 or early 2024.

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Product and Pipeline Highlights

PADCEV

•In October 2023, data from the phase 3 EV-302 trial of PADCEV in combination with pembrolizumab were presented at the European Society for Medical Oncology Congress 2023, or ESMO, in a late-breaking oral presentation, demonstrating a 53% reduction in risk of death compared to chemotherapy in patients with previously untreated locally advanced or metastatic urothelial cancer, or la/mUC, who were eligible for cisplatin- or carboplatin-containing chemotherapy regardless of PD-L1 status. The combination improved median overall survival, or OS, by more than 15 months versus chemotherapy. OS results were consistent across all pre-defined subgroups, including cisplatin eligibility and PD-L1 expression level. The safety results in EV-302 were consistent with those previously reported with this combination in the EV-103 trial in cisplatin-ineligible patients with la/mUC. No new safety signals were identified. An extension study in China continues to enroll patients. The EV-302 trial is intended to serve as the basis for global submissions and as the confirmatory trial for the U.S. accelerated approval of this combination. We intend to submit a supplemental Biologics License Application, or sBLA, to the U.S. Food and Drug Administration, or FDA, this year.

•In October 2023, data demonstrating promising activity and a generally manageable safety profile from Cohort L of the EV-103 trial evaluating PADCEV monotherapy as perioperative treatment in cisplatin-ineligible patients with muscle-invasive bladder cancer, or MIBC, were presented at ESMO.

ADCETRIS

•In October 2023, the European Commission approved ADCETRIS in combination with chemotherapy in previously untreated CD30-positive stage III Hodgkin lymphoma, based on updated positive OS results from the Phase 3 ECHELON-1 clinical trial.

•Initial data for ADCETRIS in combination with pembrolizumab in metastatic solid tumors will be presented at the Society for Immunotherapy of Cancer, or SITC, Annual Meeting being held November 3-5, 2023.

TUKYSA

•In August 2023, we announced that the phase 3 HER2CLIMB-02 clinical trial of TUKYSA in combination with the ADC ado-trastuzumab emtansine met its primary endpoint of progression-free survival, or PFS. Patients in the trial had unresectable locally advanced or metastatic human epidermal growth factor receptor 2-positive (HER2-positive) breast cancer and had received previous treatment with a taxane and trastuzumab. OS data, a secondary endpoint, are not yet mature. Discontinuations due to adverse events were more common in the combination arm of the trial, but no new safety signals emerged for the combination.

TIVDAK

•In October 2023, data from the innovaTV 301 trial were presented in an oral session at ESMO that demonstrated a 30% reduction in risk of death in recurrent or metastatic cervical cancer patients with disease progression on or after first-line therapy, compared with chemotherapy. The safety profile of TIVDAK in innovaTV 301 was consistent with its known safety profile as presented in the U.S. prescribing information, and no new safety signals were observed. The results from innovaTV 301 are intended to serve as the confirmatory trial for the U.S. accelerated approval and support potential global regulatory applications.

Disitamab Vedotin

•In the third quarter of 2023, we initiated a phase 3 clinical trial evaluating disitamab vedotin in combination with pembrolizumab versus chemotherapy in patients with previously untreated locally advanced or metastatic HER2-positive urothelial cancer in the third quarter of 2023.

Earlier-Stage Programs

•In October 2023, initial data for SGN-B7H4V were presented at ESMO, demonstrating antitumor activity across a variety of dose levels, dose schedules and tumor types with commonly observed adverse events including peripheral neuropathy, neutropenia, diarrhea, and nausea, consistent with other ADCs.

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•We initiated a phase 1 trial for SGN-EGFRd2, a gamma delta bispecific T-cell engager for EGFR-expressing solid tumors. Year to date, we have submitted Investigational New Drug applications, or INDs, for three novel targeted cancer therapies, including SGN-EGFRd2, SGN-35T and SGN-CEACAM5C, with the goal of submitting one additional IND before year end. Preclinical data for SGN-35T, a next generation CD30-directed ADC with a novel tripeptide drug linker designed to improve the tolerability profile compared with ADCETRIS, were presented at the annual AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in October.

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Our Medicines

Our approved medicines include the following:

Product*	Therapeutic Area	U.S. Approved Indication
	Hodgkin Lymphoma	Previously untreated Stage III/IV classical Hodgkin lymphoma, or cHL, in combination with doxorubicin, vinblastine and dacarbazine
		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
		Pediatric patients 2 years and older with previously untreated high risk cHL, in combination with doxorubicin, vincristine, etoposide, prednisone, and cyclophosphamide
	T-cell Lymphoma	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
		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	Indicated: •as a single agent 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 platinum-containing chemotherapy, or •are ineligible for cisplatin-containing chemotherapy and have previously received one or more prior lines of therapy. •in combination with pembrolizumab for the treatment of adult patients with locally advanced or metastatic urothelial cancer who are not eligible for cisplatin-containing chemotherapy
	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.
	Colorectal Caner	In combination with trastuzumab for adult patients with RAS wild-type, HER2-positive unresectable or metastatic colorectal cancer that has progressed following treatment with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy.
	Cervical Cancer	Recurrent or metastatic cervical cancer with disease progression on or after chemotherapy.
*PADCEV, TUKYSA and TIVDAK are only indicated for use in adults.

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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 FDA approval in 2011 and is now approved in a total of seven indications to treat Hodgkin lymphoma and certain T-cell lymphomas in various settings, including as frontline therapy for both adult and pediatric patients.

The most recent approval was granted in November 2022 for the treatment of pediatric patients two years and older with previously untreated high risk classical Hodgkin lymphoma, in combination with doxorubicin, vincristine, etoposide, prednisone, and cyclophosphamide. The approval resulted in a grant of pediatric exclusivity, which extends the period of U.S. market exclusivity for ADCETRIS by an additional six months. Additionally, the FDA granted Orphan Drug Exclusivity that provides seven years of market exclusivity for its recently approved indication in children with previously untreated high risk Hodgkin lymphoma.

In June 2023, the U.S. Prescribing Information for ADCETRIS was updated to include six-year OS results from the phase 3 ECHELON-1 clinical trial of ADCETRIS plus combination chemotherapy in patients with previously untreated Stage III or IV classical Hodgkin lymphoma compared to chemotherapy alone. The update was based on statistically significant 41% reduction in risk of death versus the previous standard of care in patients with frontline advanced classical Hodgkin lymphoma.

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 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 la/mUC 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 la/mUC 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.

In April 2022, the EC approved PADCEV as monotherapy for the treatment of adult patients with la/mUC who have previously received a platinum-containing chemotherapy and a PD-1/L1 inhibitor. The approval is applicable in the European Union member states, as well as Iceland, Norway and Liechtenstein.

PADCEV is also approved in other countries for previously treated la/mUC, including Brazil, Canada, Japan, Great Britain and Switzerland.

In April 2023, the FDA granted PADCEV with pembrolizumab accelerated approval in the U.S. as a combination therapy for the treatment of adult patients with la/mUC who are not eligible to receive cisplatin-containing chemotherapy. Continued approval for this indication is contingent upon verification and description of clinical benefit in the EV-302 confirmatory trial.

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 are based on product sales and costs of commercialization. In the remaining markets, the commercializing party is responsible for bearing the costs and paying 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.

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TUKYSA®

TUKYSA is an oral, small molecule tyrosine kinase inhibitor 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.

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, granted a Great Britain marketing authorization for TUKYSA.

In January 2023, TUKYSA received accelerated approval from the FDA in combination with trastuzumab for adult patients with RAS wild-type, HER2-positive unresectable or metastatic colorectal cancer that has progressed following treatment with fluoropyrimidine-, oxaliplatin- and irinotecan-based chemotherapy. The approval was based on tumor response rate and durability of response from the phase 2 MOUNTAINEER clinical trial. Continued approval for this indication may be contingent upon verification and description of clinical benefit in confirmatory trials.

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.

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 is 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 equally share all costs and profits for the product. 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, and certain territories where Zai Lab has commercialization rights, as further described below. 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.

In September 2022, we announced an exclusive collaboration and license agreement with Zai Lab for the development and commercialization of TIVDAK in mainland China, Hong Kong, Macau, and Taiwan. Under the terms of the agreement, we received an upfront fee of $30 million in October 2022, and are entitled to receive potential development, regulatory, and commercial milestone payments, and tiered royalties on net sales of TIVDAK in the Zai Lab territory. Based on our existing collaboration with Genmab, the upfront payment, milestone payments, and royalties will be equally shared with Genmab.

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Clinical Development and Regulatory 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 the ECHELON-3 clinical trial in relapsed or refractory diffuse large B-cell lymphoma. In June 2023, updated efficacy and safety results from Part C of a phase 2 single-arm trial (SGN35-027) evaluating ADCETRIS in combination with the PD-1 inhibitor nivolumab and standard chemotherapy agents doxorubicin and dacarbazine (AN+AD) for the frontline treatment of patients with early-stage classical Hodgkin lymphoma showed a high overall response rate of 98% and a 93% complete response rate. The regimen was well tolerated, with the most frequently reported treatment-related adverse events of any grade occurring in more than 30 percent of patients being nausea (65%), peripheral sensory neuropathy (47%) and fatigue (44%). 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.

Outside of the U.S., a phase 3 clinical trial from the clinical research cooperative German Hodgkin Study Group demonstrated ADCETRIS in combination with chemotherapy – a regimen called BrECADD (brentuximab vedotin [ADCETRIS], etoposide, cyclophosphamide, doxorubicin [Adriamycin], dacarbazine, and dexamethasone) – met its co-primary endpoints of non-inferior efficacy and superior tolerability versus a highly efficacious yet chemotherapy-intense treatment regimen of escalated BEACOPP (bleomycin, etoposide, doxorubicin (Adriamycin), cyclophosphamide, vincristine, procarbazine, and prednisone), which is an international standard of care in the frontline advanced classical Hodgkin lymphoma setting and commonly used in Europe. An interim analysis at 40 months showed an unprecedented 94.9% 3-year PFS for patients treated with the ADCETRIS combination of BrECADD versus 92.3% for eBEACOPP. Twelve-month post-treatment safety data were consistent with previously presented HD21 data.

PADCEV (enfortumab vedotin-ejfv)

In addition to jurisdictions where PADCEV is currently approved, applications are under review for approval in the previously treated metastatic urothelial cancer setting in other countries. 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 MIBC. In addition, we are conducting a trial in a range of other solid tumors.

PADCEV is continuing to be 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 MIBC. In April 2023, the FDA granted PADCEV with pembrolizumab accelerated approval in the U.S. as a combination therapy for the treatment of adult patients with la/mUC who are not eligible to receive cisplatin-containing chemotherapy. Continued approval for this indication is contingent upon verification and description of clinical benefit in the EV-302 confirmatory trial.

We are conducting a global, phase 3 clinical 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 la/mUC. In October 2023, data from the phase 3 EV-302 trial were presented at ESMO in a late-breaking oral presentation demonstrating the combination improved OS and PFS with statistically significant and clinically meaningful results in patients with previously untreated la/mUC. The EV-302 study met its dual primary endpoints of OS and PFS, compared to platinum and gemcitabine chemotherapy. Patients treated with PADCEV and pembrolizumab experienced: median OS of 31.5 months (95% CI: 25.4-NR) compared to 16.1 months (95% CI: 13.9-18.3) in the chemotherapy arm; significantly prolonged OS, reducing the risk of death by 53% compared to treatment with chemotherapy (Hazard Ratio [HR]=0.468; 95% Confidence Interval [CI]: 0.376-0.582; P<0.00001); median PFS of 12.5 months (95% CI: 10.4-16.6) compared to 6.3 months (95% CI: 6.2-6.5) in the chemotherapy arm; 55% reduction in the risk of cancer progression or death compared to treatment with chemotherapy (HR=0.450; 95% CI: (0.377-0.538); P<0.00001); consistent OS results across all pre-defined subgroups, including cisplatin eligibility and PD-L1 expression level. The most common (≥3%) Grade 3 or higher adverse events related to treatment with PADCEV and pembrolizumab were rash maculo-papular, hyperglycemia, neutropenia, peripheral sensory neuropathy, diarrhea, and anemia. The safety results in EV-302 were consistent with those previously reported with this combination in EV-103 in cisplatin-ineligible patients with la/mUC. No new safety signals were identified. The EV-302 trial is intended to serve as the basis for global submissions and as the confirmatory trial for the U.S. accelerated approval of this combination. We intend to submit a sBLA to the FDA this year. We have initiated an extension study in China which continues to enroll patients.

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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 clinical 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. We expect to have initial topline results in MIBC in 2025.

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. Astellas is conducting the trial and has obtained topline results in some cohorts. We and Astellas will be reviewing the results and discussing future direction. In June 2023, we reported initial data from the study at the American Society of Clinical Oncology, or ASCO, Annual Meeting that demonstrated clinically meaningful responses in patients with head and neck cancers whose disease had progressed on prior anticancer therapies. A manageable safety profile was observed, consistent with that identified in previously studied populations with advanced urothelial cancer.

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.

In August 2023, we reported that the phase 3 HER2CLIMB-02 clinical trial of TUKYSA in combination with the ADC ado-trastuzumab emtansine met its primary endpoint of PFS. Patients in the trial had unresectable locally advanced or metastatic HER2-positive breast cancer and had received previous treatment with a taxane and trastuzumab. OS data, a secondary endpoint, are not yet mature. Discontinuations due to adverse events were more common in the combination arm of the trial, but no new safety signals emerged for the combination. For this trial, we have initiated an extension study in China which continues to enroll patients.

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 clinical trial, called HER2CLIMB-04, evaluating TUKYSA in combination with trastuzumab deruxtecan in previously treated locally-advanced or metastatic HER2-positive breast cancer.

We have also initiated a phase 3 clinical 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.

In addition, we are conducting a phase 3 clinical trial, called MOUNTAINEER-03, in combination with trastuzumab and mFOLFOX6 in first-line HER2-positive metastatic colorectal cancer, which is intended to serve as a confirmatory trial for the accelerated approval in the U.S. based on the MOUNTAINEER trial and potentially support future global regulatory submissions.

In June 2023, data from a phase 2 basket study of TUKYSA and trastuzumab in previously treated HER2-positive metastatic biliary tract cancer showed clinically meaningful antitumor activity with a confirmed objective response rate of 46.7% and a median duration of response of 6.0 months. The combination was well tolerated, with the most common treatment-emergent adverse events being pyrexia (43.3%) and diarrhea (40.0%).

We also have an ongoing 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 as a potential therapy in other 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. Continued approval is contingent upon verification and description of clinical benefit in confirmatory trials. In December 2022, the NCCN Guidelines were updated elevating TIVDAK to a Category 2A Preferred Regimen for second-line or subsequent recurrent or metastatic cervical cancer.

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In October 2023, data from the innovaTV 301 trial were presented in an oral session at ESMO that demonstrated treatment with TIVDAK resulted in a statistically significant and clinically meaningful 30% reduction in the risk of death in recurrent or metastatic cervical cancer patients with disease progression on or after first-line therapy, compared with chemotherapy (HR: 0.70, 95% CI: 0.54-0.89, p=0.00381). Additionally, TIVDAK demonstrated the following results compared with chemotherapy: PFS results were statistically significant with TIVDAK, demonstrating a 33% reduction in the risk of disease worsening or death compared with chemotherapy (HR: 0.67 [95% CI, 0.54-0.82], p<0.0001);confirmed objective response rate (ORR) was also statistically significantly improved with TIVDAK (17.8%) compared with chemotherapy (5.2%); odds ratio: 4.0 [95% CI, 2.1-7.6], p<0.0001), all the complete responses were seen in the TIVDAK arm, defined as patients with no detectable evidence of a tumor over a specified time period; disease control rate (DCR), defined as the percentage of patients who achieved complete response, partial response, or stable disease, was 75.9% (95% CI, 70.1-80.0) in the TIVDAK arm compared with 58.2% (95% CI, 51.8-64.4) in the chemotherapy arm. The safety profile of TIVDAK in innovaTV 301 was consistent with its known safety profile as presented in the U.S. prescribing information, and no new safety signals were observed. The results from innovaTV 301 are intended to serve as the confirmatory trial for the U.S. accelerated approval and support potential global regulatory applications. We have initiated an extension study in China which continues to enroll patients.

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. Additionally, in June 2022, we announced interim data from the innovaTV 205 trial, which included data evaluating TIVDAK in combination with pembrolizumab in patients with recurrent or metastatic cervical cancer who have not received prior systemic therapy. This combination cohort enrolled 33 patients with recurrent or metastatic cervical cancer who had not received any prior systemic therapy. At the time of data cutoff, the confirmed objective response rate among 32 evaluable patients was 41% with 16% of patients achieving complete responses and 25% of patients achieving partial responses. Median DOR was not reached with median follow-up of 18.8 months. In this cohort, the most common TEAEs were alopecia (61%), diarrhea (55%), epistaxis (49%), conjunctivitis (45%), and nausea (46%). We reported additional data in the Journal of Clinical Oncology in August of 2023.

We are conducting a phase 2 clinical trial, called innovaTV 207, for patients with relapsed, locally advanced or metastatic solid tumors. In April 2023, data was presented at the AACR Annual Meeting from an interim analysis of the Part C portion of the innovaTV 207 phase 2 study of TIVDAK given every 2 weeks in patients with recurrent or metastatic squamous cell carcinoma of the head and neck who have progressed after prior platinum combination, immunotherapy, and targeted therapy, if eligible. Results with this regimen demonstrated encouraging preliminary antitumor activity with a confirmed overall response rate of 40% and a manageable safety profile.

Disitamab vedotin

Effective 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 clinical trial evaluating disitamab vedotin as monotherapy in previously treated HER2-expressing metastatic urothelial cancer, and we initiated a phase 3 clinical trial evaluating disitamab vedotin in combination with pembrolizumab in first-line treatment for HER2-expressing metastatic urothelial cancer in the third quarter of 2023.

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. In November 2022, we reported interim phase 1 monotherapy results for SGN-B6A at the SITC Annual Meeting. In the study, dose escalation cohorts enrolled 79 participants with metastatic or unresectable solid tumors whose disease had relapsed or was refractory to standard of care therapies and had not previously received an MMAE-containing agent or agent targeting integrin beta-6. Participants had received a median of 3 lines of therapy for metastatic disease prior to enrollment in the study. SGN-B6A demonstrated a manageable and tolerable safety profile at the explored dose levels and schedules. Intermittent dosing schedules (2Q3W, 2Q4W) are being evaluated further. The initial anti-tumor activity observed in heavily pre-treated patients is encouraging and has triggered expansion cohorts in NSCLC, or non-small cell lung cancer, HNSCC, or head and neck squamous cell cancer, and ESCC, or esophageal squamous cell cancer, which includes treatment as monotherapy and in combination with pembrolizumab which are currently ongoing. We reported additional data on the trial at the ASCO Annual Meeting which demonstrated durable responses in a heavily pretreated patient population. We are planning to initiate a phase 3 trial evaluating SGN-B6A monotherapy compared to standard of care, docetaxel, in patients with previously treated non-small cell lung cancer by year end 2023.

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We are also developing SGN-B7H4V, an ADC which we are evaluating in a phase 1 clinical trial in certain solid tumors including breast, endometrial and ovarian cancer. In October 2023, we reported initial data at ESMO demonstrating antitumor activity across doses and tumor types with commonly observed adverse events including peripheral neuropathy, neutropenia, diarrhea, and nausea, consistent with other vedotin ADCs.

In September 2022, we entered into an agreement with LAVA Therapeutics N.V., or LAVA, to develop and commercialize LAVA-1223, also known as SGN-EGFRd2, a preclinical gamma delta bispecific T-cell engager for EGFR-expressing solid tumors. We received an exclusive global license for SGN-EGFRd2 and the opportunity to exclusively negotiate rights to apply LAVA’s proprietary Gammabody™ platform on up to two additional tumor targets. We initiated a phase 1 trial for SGN-EGFRd2, a gamma delta bispecific T-cell engager for EGFR-expressing solid tumors.

In March 2022, we entered into a collaboration with Sanofi to develop and potentially commercialize multiple novel ADCs. The agreement is an exclusive collaboration that will utilize Sanofi’s proprietary monoclonal antibody technology and our proprietary ADC technology for up to three cancer targets. In April 2023, we and Sanofi presented the first preclinical data from a novel topoisomerase I inhibitor ADC targeting CEACAM5, showing potent antitumor activity in patient-derived colorectal cancer models. We submitted an IND for the initial ADC in the fourth quarter of 2023.

In January 2023, the first patient was dosed in a phase 1 trial of SGN-BB228, a CD228x4-1BB bispecific molecule, in advanced melanoma and other solid tumors.

Portfolio prioritization

We prioritize the development of assets based on a multitude of factors, including but not limited to, likelihood of technical success, clinical differentiation, potential patient and commercial opportunity, and competitive landscape. The implications of the Inflation Reduction Act of 2022, or IRA, are also factored into our analysis with the passage of that law. As a result of a recent prioritization assessment, we have decided to stop further development of SEA-TGT, SGN-ALPV and SGN-STNV. In addition, we have decided that our ECHELON-3 ADCETRIS trial in diffuse large B-cell lymphoma will no longer be considered registrational. To add to our pipeline, we have a goal of submitting INDs for four novel drug candidates in 2023 by year end. We have made IND submissions for SGN-EGFRd2, SGN-35T and SGN-CEACAM5C in the second, third and fourth quarters of 2023, respectively.

Antibody-Drug Conjugate Technology License Agreements

Genentech has received approval from the FDA for Polivy® (polatuzumab vedotin-piic), an ADC that uses our technology, to treat patients with diffuse large B-cell lymphoma. In August 2020, GSK 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 an affiliate of GSK, these events triggered milestone payments to us and we are also entitled to receive royalties on net sales of Polivy and Blenrep worldwide. In November 2022, GSK announced that it had initiated the process for withdrawal of U.S. marketing authorization for Blenrep following a request by the FDA.

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.

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Outlook

We recognize product sales revenue from ADCETRIS in the U.S. and Canada, from PADCEV in the U.S., Canada, and Latin America, from TUKYSA in the U.S., Europe and Canada, and TIVDAK in the U.S. We expect 2023 growth in net product sales of our portfolio to be primarily supported by sales volume growth and to a lesser degree price favorability. Over the past several years, we have experienced a favorable effect on gross-to-net deductions in the U.S. market associated with high inflation; however this effect might be reduced as inflation has had a recent downward trend. In addition, we experienced a reduction in diagnosis rates for the ADCETRIS frontline indications during the COVID-19 pandemic; however, recently, we believe these diagnosis rates have returned to pre-pandemic levels. We cannot predict how these diagnosis rates will trend in the future. We expect that ADCETRIS and PADCEV will remain the largest contributors to our sales growth in 2023. We expect ADCETRIS growth in 2023 compared to 2022 to be driven by continued use across its seven indications, most notably in frontline advanced Hodgkin lymphoma, despite increased competition in this setting. We expect additional impacts from increased competition in this setting from the SWOG Cancer Research Network’s S1826 clinical trial. This trial demonstrated a statistically significant improvement in PFS for Opdivo® (nivolumab) in combination with chemotherapy compared with ADCETRIS in combination with chemotherapy in the frontline classical Hodgkin lymphoma setting. We anticipate PADCEV growth in 2023 to be driven primarily by sales in its frontline la/mUC indication in the U.S, and that the rate of growth of PADCEV for its previously-treated la/mUC indications in the U.S. will decelerate in 2023 compared to 2022 after three full years in the market since PADCEV’s launch. Additionally, while growth in PADCEV sales has been primarily driven by use of checkpoint inhibitors as frontline maintenance therapy, uptake of checkpoint inhibitors in that setting has flattened, which has been limiting PADCEV’s near-term growth in its previously-treated la/mUC indications. We also expect that TUKYSA’s market position will continue to be impacted by competitive dynamics related to Enhertu’s increased use in the second line plus setting. We also expect that the competitive impact from Enhertu’s approvals in breast cancer on TUKYSA growth will decelerate in the rest of 2023.

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 additional approvals for PADCEV in the frontline la/mUC 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, including our and Astellas’ ability to successfully launch, market and commercialize PADCEV in its frontline la/mUC indication in the U.S. and Astellas’ ability to successfully launch, market and commercialize PADCEV in Japan, Europe and its other markets;

•competition from other therapies and changing market dynamics, as further described in “Risk Factors—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,” below; for example, the approval of Enhertu for second-line HER2-positive metastatic breast cancer has resulted and is expected to continue to result in increased competition for TUKYSA and we have recently seen and expect additional increased competition for ADCETRIS in the frontline advanced Hodgkin lymphoma setting;

•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 and Merck’s abilities to successfully market and commercialize TUKYSA in our respective 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 PADCEV and TUKYSA;

•future inflation levels and their impact on mandatory discounts under U.S. government programs;

•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;

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•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 confirmatory trials as a result of PADCEV’s, TUKYSA’s and TIVDAK’s accelerated approvals by the FDA, and to convert these accelerated approvals to regular approvals in the U.S.; and

•with respect to TIVDAK, the acceptance of TIVDAK and its required eye care by the medical community and patients.

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, or HHS, 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. Further, on August 16, 2022, President Biden signed the IRA, into law, which, among other things, (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, and subjects drug manufacturers to civil monetary penalties and a potential excise tax for offering a price that is not equal to or less than the negotiated “maximum fair price” under the law; (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation; and (iii) redesigns the Medicare Part D program, increasing manufacturer rebates within the catastrophic coverage phase. While the IRA’s drug price negotiation program is currently subject to legal challenges, it is likely that the IRA will have a significant impact on the pharmaceutical industry. 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 as our product candidates progress through clinical trials towards potential commercialization.

In connection with the pending acquisition of the Company by Pfizer, we expect to incur additional non-recurring acquisition and transaction fees, which include legal and advisory fees, and substantial acquisition-related costs, including employee retention expenses.

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 the nine months ended September 30, 2023, our total revenues increased to $1,772.2 million, compared to $1,434.3 million for the same period in 2022. This increase was primarily driven by $340.5 million or 27% higher net product sales, due to growth from our commercial portfolio.

For the nine months ended September 30, 2023, total costs and expenses increased to $2,408.8 million, compared to $1,893.2 million for the same period in 2022. The increase was due primarily to higher research and development expenses, higher cost of sales, and higher sales, general, and administrative expenses.

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As of September 30, 2023, we had $1.2 billion in cash, cash equivalents and investments and $2.6 billion in total stockholders’ equity.

Results of operations

Net product sales

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2023		2022		% Change		2023		2022		% Change
ADCETRIS	$	246,071	$	218,521	13	%	$	750,986	$	601,449	25	%
PADCEV	199,516		105,330		89	%	479,452		329,114		46	%
TUKYSA	102,071		87,771		16	%	288,651		267,235		8	%
TIVDAK	23,071		16,467		40	%	64,254		45,091		42	%
Net product sales	$	570,729	$	428,089	33	%	$	1,583,343	$	1,242,889	27	%

Our net product sales increased during the three and nine months ended September 30, 2023 as compared to the comparable periods in 2022, driven by continued commercial execution.

ADCETRIS net product sales grew primarily due to higher volume growth driven by greater use in frontline advanced Hodgkin lymphoma, despite recent increased competition in this setting. PADCEV growth was driven by use as first-line treatment for patients with locally advanced or metastatic urothelial cancer who are not eligible to receive cisplatin-containing chemotherapy following its approval for this indication in April 2023. The increase in TUKYSA net product sales reflects volume growth driven by the important role it serves in the treatment of HER2-positivive metastatic breast cancer, as well as contributions from its colorectal cancer indication. TIVDAK growth reflects continued uptake in its current indication.

We expect growth in net product sales in 2023 as compared to 2022 to be primarily supported by sales volume growth and to a lesser degree price favorability. Refer to “Overview—Outlook” above for additional information.

Gross-to-net deductions, net of related payments and credits, were as follows:

(in thousands)	Rebates and chargebacks		Distribution fees, product returns and other		Total
Balance as of December 31, 2022	$	111,251	$	21,978	$	133,229
Provision related to current period sales	597,440		51,790		649,230
Adjustment for prior period sales	(1,999)		(2,188)		(4,187)
Payments/credits for current period sales	(506,615)		(40,003)		(546,618)
Payments/credits for prior period sales	(57,154)		(6,924)		(64,078)
Balance as of September 30, 2023	$	142,923	$	24,653	$	167,576

Government-mandated rebates and chargebacks are the most significant component of our total gross-to-net deductions and the discount changes over time. The most significant portion of our gross-to-net accrual balances as of September 30, 2023 and 2022 was for Medicaid rebates. 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 2023 as compared to 2022, 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 amounts from Genentech earned on net sales of Polivy® (polatuzumab vedotin) and, to a lesser extent, amounts from GlaxoSmithKline earned on net sales of Blenrep, both of which utilize technology that we have licensed to them, as well as royalties on TUKYSA sales by Merck in its territory, and royalties on disitamab vedotin sales by RemeGen in its territory.

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	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2023		2022		% Change		2023		2022		% Change
Royalty revenues	$	63,561	$	43,904	45	%	$	144,927	$	111,194	30	%

Royalty revenues increased for the three and nine months ended September 30, 2023 from the comparable periods in 2022, due primarily to higher royalties from sales of Polivy by Roche and higher net product sales by our licensees in their territories driven by Takeda’s net sales growth of ADCETRIS outside the U.S. and Canada.

We expect that royalty revenues will increase in 2023 as compared to 2022 primarily due to higher royalties from anticipated growth of licensees’ net product sales, including sales of ADCETRIS by Takeda in its territory along with contributions from sales of Polivy by Roche.

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.

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2023		2022		% Change		2023		2022		% Change
Collaboration and license agreement revenues	$	14,360	$	38,307	(63)	%	$	43,931	$	80,179	(45)	%

Collaboration and license agreement revenues decreased for the three months ended September 30, 2023 compared to the comparable period in 2022, due primarily to a prior period upfront license payment of $30.0 million received from Zai Lab. The decrease in collaboration and license agreement revenues for the nine months ended September 30, 2023 compared to the comparable period in 2022 was due to the prior period upfront license payment from Zai Lab and the prior period milestone payment received from AbbVie, partially offset by $10.1 million incremental Astellas collaboration revenue.

Collaboration and license agreement revenue is highly dependent on progress by our collaboration partners and new collaborations that are difficult to predict. We expect that collaboration and license agreements revenues will decrease in 2023 as compared to 2022. 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.

Collaboration and license agreements

Takeda ADCETRIS collaboration

We have a collaboration 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 licensed 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.

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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 initial 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, we are in the process of establishing a second source manufacturing supply chain, through a combination of internal manufacturing capacity and third parties. In this regard, our manufacturing facility in Bothell, Washington is used to support commercial production of PADCEV antibody.

Genmab TIVDAK collaborations

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 sharing all development costs for TIVDAK. TIVDAK was approved by FDA in September 2021. 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 are each responsible for maintaining 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, and certain territories where Zai Lab has commercialization rights, as further described below. In Europe, China, and Japan, we and Genmab equally share 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.

In September 2022, we announced an exclusive collaboration and license agreement with Zai Lab for the development and commercialization of TIVDAK in mainland China, Hong Kong, Macau, and Taiwan. Under the terms of the agreement, we received an upfront payment of $30.0 million in October 2022, and are entitled to receive potential future development, regulatory, and commercial milestone payments, and tiered royalties on net sales of TIVDAK in the Zai Lab territory. Based on our existing collaboration with Genmab, the upfront payment, milestone payments, and royalties will be equally shared with Genmab.

Merck LV collaboration

In 2020, we entered into a license and collaboration agreement, or the LV Agreement, with a subsidiary of Merck. Under the terms of the LV Agreement, we granted Merck a co-exclusive worldwide development and commercialization license for ladiratuzumab vedotin, or LV, and agreed to jointly develop and commercialize LV on a worldwide basis. We received an upfront cash payment and were eligible to receive milestone payments upon the initiation of certain clinical trials, regulatory approval in certain major markets and achievement of specified annual global net sales thresholds of LV. In addition, the agreement provided that each company is responsible for 50% of global costs to develop and commercialize LV and will receive 50% of potential future profits.

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. In the second quarter of 2023, we decided to deprioritize the LV program. We and Merck agreed to terminate the LV Agreement, effective as of October 14, 2023.

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Merck TUKYSA collaboration

In 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 are eligible to receive progress-dependent milestone payments, and are entitled to receive tiered royalties on sales of TUKYSA by Merck that begin in the low twenty percent range and escalate based on sales volume by Merck in its territory.

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 $85.0 million 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 condensed 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 condensed consolidated statements of comprehensive loss. As of September 30, 2023 and December 31, 2022, $0.0 million and $15.5 million was recorded as the remaining co-development liability, respectively.

RemeGen disitamab vedotin license agreement

Effective 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 new drug application 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 may 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 technology collaboration and license agreements

We have other collaboration and license agreements for our 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.

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 license and collaboration agreements.

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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.

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2023		2022		% Change		2023		2022		% Change
Cost of sales	$	165,254	$	108,122	53	%	$	457,783	$	301,848	52	%

Cost of sales increased for the three and nine months ended September 30, 2023 from the comparable periods in 2022, reflecting higher sales of our medicines resulting in higher gross profit sharing owed to our collaboration partners, and higher product costs from sales volume increases. In addition, cost of sales in the nine months ended September 30, 2023 included a $47 million inventory write-off related to in-process production of one of our products that did not meet a release specification that was updated in June 2023. This inventory adjustment and new release specification are not expected to impact availability of product supply required to meet current or future demand. The gross profit share to collaborators totaled $103.1 million and $249.0 million for the three and nine months ended September 30, 2023, respectively, as compared to $71.0 million and $189.4 million for the comparable periods in 2022.

We expect cost of sales to increase in 2023 as compared to 2022 as a result of the net product sales growth of our marketed products, contributing to higher manufacturing costs due to sales volume increases for our products sold and higher anticipated gross profit sharing with our collaborators, as well as the inventory write-off in the second quarter of 2023.

Research and development

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2023		2022		% Change		2023		2022		% Change
Research and clinical development	$	330,354	$	304,263	9	%	$	894,931	$	766,591	17	%
Process sciences and manufacturing	118,693		80,342		48	%	309,999		219,927		41	%
Total research and development	$	449,047	$	384,605	17	%	$	1,204,930	$	986,518	22	%

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. Other research and clinical development costs grew during the three and nine months ended September 30, 2023 from the comparable periods in 2022, driven by higher employee-related costs and clinical trial costs to support our early- and late-stage pipeline of product candidates, offset in part by the $50.0 million upfront payment to LAVA Therapeutics during the comparable periods in 2022.

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 increases for the three and nine months ended September 30, 2023 from the comparable periods in 2022 primarily reflected higher employee-related costs and the timing of manufacturing costs of our product candidates for use in clinical trials.

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, 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 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.

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	Three months ended September 30,				Nine months ended September 30,
(dollars in thousands)	2023		2022		2023		2022
TUKYSA (tucatinib)	$	47,699	$	61,090	$	144,194	$	153,633
PADCEV (enfortumab vedotin-ejfv)	16,640		22,911		56,643		65,517
ADCETRIS (brentuximab vedotin)	15,706		22,249		49,403		61,116
TIVDAK (tisotumab vedotin)	12,804		12,773		36,555		31,463
Ladiratuzumab vedotin	5,559		3,463		12,005		11,206
Disitamab vedotin	23,197		9,616		45,960		27,495
Other clinical stage programs	33,431		17,449		85,569		64,209
Total third-party costs for clinical stage programs	155,036		149,551		430,329		414,639
Other costs, overhead, and net cost-sharing with collaborators	294,011		235,054		774,601		571,879
Total research and development	$	449,047	$	384,605	$	1,204,930	$	986,518

Third-party costs for TUKYSA decreased for the three and nine months ended September 30, 2023 as compared to the 2022 periods, due primarily to decreased clinical trials expenses.

Third-party costs for PADCEV decreased for the three and nine months ended September 30, 2023 as compared to the 2022 periods, due to decreased clinical trials expenses.

Third-party costs for ADCETRIS decreased for the three and nine months ended September 30, 2023 as compared to the 2022 periods, due to decreased clinical trials expenses.

Third-party costs for TIVDAK were flat for the three months ended September 30, 2023 as compared to the 2022 period and increased for the nine months ended September 30, 2023 as compared to the 2022 period, due to higher clinical trials expenses.

Third-party costs for ladiratuzumab vedotin increased for the three and nine months ended September 30, 2023 as compared to the 2022 periods due to timing of clinical trials expenses.

Third-party costs for disitamab vedotin increased for the three and nine months ended September 30, 2023 as compared to the 2022 periods due to increased clinical trial expenses.

Third-party costs for other clinical stage programs increased for the three and nine months ended September 30, 2023 as compared to the 2022 periods, due to the higher clinical trials expenses.

Other costs, overhead, and net cost-sharing reimbursements from or payments made to collaborators increased for the three and nine months ended September 30, 2023 from the comparable periods in 2022, due to higher employee-related costs. During the three months ended September 30, 2023 and 2022, net cost-sharing reimbursements from collaborators were $23.2 million and $32.8 million, respectively. During the nine months ended September 30, 2023 and 2022, net cost-sharing reimbursements from collaborators were $68.3 million and $77.1 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 2023 will increase compared to 2022 primarily due to higher costs for the continued development of our approved products and product candidates and employee retention expenses.

The risks and uncertainties associated with our research and development projects are discussed more fully in “Part II 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.

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Selling, general and administrative 

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2023		2022		% Change		2023		2022		% Change
Selling, general and administrative	$	265,687	$	210,378	26	%	$	746,060	$	604,862	23	%

Selling, general and administrative expenses increased for the three and nine months ended September 30, 2023 from the comparable periods in 2022, reflecting higher expenses to support our ongoing commercialization efforts, which includes higher compensation expenses, and $3 million and $40 million in expenses associated with the pending acquisition by Pfizer for the three and nine months ended September 30, 2023, respectively.

We anticipate that selling, general and administrative expenses will increase in 2023 as compared to 2022 due to higher commercial activities to drive growth of our approved products and to support our overall growth strategy, acquisition related expenses associated with the pending acquisition by Pfizer and employee retention expenses.

Investment and other income, net

	Three months ended September 30,						Nine months ended September 30,
(dollars in thousands)	2023		2022		% Change		2023		2022		% Change
Gain (loss) on equity securities	$	491	$	(2,669)	(118)	%	$	(2,750)	$	(9,747)	(72)	%
Investment and other income, net	14,487		6,947		109	%	44,213		10,226		332	%
Total investment and other income, net	$	14,978	$	4,278	250	%	$	41,463	$	479	NM
NM: No amount in comparable period or not a meaningful comparison.

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.

The gains and losses on equity securities for the three and nine months ended September 30, 2023 and 2022 was due to unrealized holding gains and losses resulting from a change in the share price of securities held during the respective periods. Investment and other income, net increased for the three and nine months ended September 30, 2023 due to higher yields on our debt securities investments in the 2023 periods compared to the 2022 periods.

Income taxes

We had an income tax benefit of $0.6 million for the three months ended September 30, 2023 compared to a provision for income taxes of $2.3 million for the three months ended September 30, 2022. The decrease in provision for income taxes was primarily due to a higher forecasted 2023 book loss, decreasing our annual estimated tax rate and provision for income taxes. Our provision for income taxes was $6.9 million for the nine months ended September 30, 2023 compared to $3.6 million for the nine months ended September 30, 2022. The increase in the provision for income taxes was the result of less available tax net operating loss carryforwards to offset taxable profits in the U.S. and increased limitations on utilization of the tax net operating losses and credits.

Liquidity and capital resources

(in thousands)	September 30, 2023		December 31, 2022
Cash, cash equivalents, and investments	$	1,236,986	$	1,735,070
Working capital	1,596,877		1,984,129
Stockholders’ equity	2,550,421		2,803,819

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	Nine months ended September 30,
(in thousands)	2023		2022
Cash provided (used) by:
Operating activities	$	(460,711)	$	(374,311)
Investing activities	507,915		264,727
Financing activities	59,274		60,013

The change in net cash from operating activities for the nine months ended September 30, 2023 as compared to the comparable period in 2022 was primarily related to an increase in net loss and increases in net working capital.

The change in net cash from investing activities for the nine months ended September 30, 2023 as compared to the comparable period in 2022 reflected differences between the proceeds from maturities of securities and amounts used for purchases of securities, the difference for purchases of property, plant, and equipment, and the payment for lessor-owned assets.

The change in net cash from financing activities for the nine months ended September 30, 2023 as compared to the comparable period in 2022 was driven by higher proceeds from the exercise of stock options and the employee stock purchase plan offset by employee taxes paid related to net share settlement of stock-based awards.

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 September 30, 2023, we had $1.2 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.

In March 2023, we entered into a definitive merger agreement under which, on the terms and subject to the conditions thereof, Pfizer will acquire us for $229 per share in cash. We have agreed to various covenants and agreements in the definitive merger agreement, including, among others, agreements to conduct our business in the ordinary course. Outside of certain limited exceptions, we may not take certain actions without Pfizer’s consent, including: (i) acquiring businesses and disposing of significant assets; (ii) making or agreeing to make any capital expenditures that would exceed our budget and capital plan; (iii) issuing equity; and (iv) incurring indebtedness. We do not believe these restrictions will prevent us from being able to fund our operations, working capital needs or capital expenditure requirements.

If the Pfizer Merger is not consummated and we continue to operate as an independent entity, 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. 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 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, 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 forgo strategic opportunities.

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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 for the nine months ended September 30, 2023 were $1,204.9 million and we expect to increase our investment in research and development expenses in 2023. Our sales, general and administrative expenses were $746.1 million for the nine months ended September 30, 2023, and we expect to increase our sales, general, and administrative expenses to support our business growth in 2023. 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 2023 through 2042 that contain rate escalations and options for us to extend the leases. Our future minimum lease payments as of September 30, 2023 totaled $19.3 million related to short-term lease liabilities, and $172.6 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 commenced in January 2023 and is included in lease liability balances as of September 30, 2023. Refer to Note 3 in the Notes to Financial Statements in Item 1 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 the nine months ended September 30, 2023 were $131.8 million, and we anticipate these investments to grow in 2023 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 additional capital expenditures for this Everett facility to be approximately $200 million to $250 million through 2024.

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. There have been no material changes related to our future minimum contractual commitments under these arrangements as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 filed February 15, 2023.

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 $299.8 million for the nine months ended September 30, 2023 and are expected to increase in future periods. Milestone payments generally become due and payable upon the achievement of certain events. There have been no material changes related to our future milestone payments potentially owed related to in-licensed technology as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2022 filed February 15, 2023.

Critical accounting policies

The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts reported in our financial statements and accompanying notes. 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. Our critical accounting policies, those with the more significant judgments and estimates, used in the preparation of our financial statements for the nine months ended September 30, 2023 were consistent with those in Part II Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2022.

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Item 3.    Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risk disclosures as set forth in Part II Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 4.    Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) under the Securities Exchange Act of 1934, as amended) prior to the filing of this quarterly report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this quarterly 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 September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Other Information

Item 1.    Legal Proceedings

The information required to be set forth under this Item 1 is incorporated by reference to “Note 11. Legal matters” of the Notes to Condensed Consolidated Financial Statements included in Part 1 Item 1 of this Quarterly Report on Form 10-Q. 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.

Item 1A.    Risk Factors

You should carefully consider the following risk factors, in addition to the other information contained in this Quarterly Report on Form 10-Q, including our condensed 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 Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q.

Risk Factor Summary

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 and uncertainties summarized in this risk factor summary, as well as other risks that we face, follows this summary. This summary is qualified in its entirety by that more complete discussion of such risks and uncertainties.

•The consummation of our proposed acquisition by Pfizer Inc., or Pfizer, which we refer to herein as the Pfizer Merger, is subject to a number of conditions, many of which are largely outside of the parties’ control, and, if these conditions are not satisfied or waived on a timely basis, the Agreement and Plan of Merger, or the Merger Agreement, with Pfizer and Aris Merger Sub, Inc., a wholly owned subsidiary of Pfizer, or Merger Sub, may be terminated and the Pfizer Merger may not be completed.

•Failure to complete the Pfizer Merger could adversely affect our stock price and future business and financial results.

•While the Pfizer Merger is pending, we will be subject to business uncertainties and certain contractual restrictions that could adversely affect our business and operations.

•Litigation against us, Pfizer, or the members of our or their respective boards, could prevent or delay the completion of the Pfizer Merger.

•If the Pfizer Merger is not consummated by March 12, 2024, or, under certain conditions, September 12, 2024, either we or Pfizer may terminate the Merger Agreement, subject to certain exceptions.

•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.

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•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.

•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.

•Public health crises and associated global economic instability could have 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.

•Certain existing stockholders have significant control of our management and affairs.

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Risks Related to our Proposed Acquisition by Pfizer

The consummation of our proposed acquisition by Pfizer is subject to a number of conditions, many of which are largely outside of the parties’ control, and, if these conditions are not satisfied or waived on a timely basis, the Merger Agreement may be terminated and the Pfizer Merger may not be completed.

On March 12, 2023, we entered into the Merger Agreement, pursuant to which, among other things, Merger Sub will be merged with and into the Company with the Company surviving the Pfizer Merger as a wholly owned subsidiary of Pfizer. The Pfizer Merger is subject to certain customary closing conditions, including: (i) the expiration or earlier termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act, and receipt of certain non-U.S. antitrust and foreign investment approvals; (ii) no statute, rule or regulation that prohibits the consummation of the Pfizer Merger having been enacted, issued, enforced or promulgated and remaining in effect in certain specified jurisdictions, and no order or injunction of a court of competent jurisdiction being in effect that prohibits or makes illegal the consummation of the Pfizer Merger; (iii) subject to certain materiality qualifications, the accuracy of representations and warranties of the Company, Pfizer and Merger Sub, as applicable, under the Merger Agreement and the performance in all material respects by the Company, Pfizer and Merger Sub, as applicable, of their respective obligations under the Merger Agreement; and (iv) no material adverse effect on the Company having occurred since the date of the Merger Agreement that is continuing.

On July 14, 2023, we and Pfizer each received a request for additional information and documentary materials, or a Second Request, from the Federal Trade Commission, or the FTC, in connection with the FTC’s review of the pending Pfizer Merger. The effect of the Second Request is to extend the waiting period imposed by the HSR Act, until 30 days after we and Pfizer each have substantially complied with the applicable Second Request, unless the period is terminated sooner by the FTC. The Second Request, and any further inquiries or actions from the FTC, could have the effect of substantially delaying, imposing restrictions on, or impeding or precluding the completion of the pending Pfizer Merger. The FTC may take steps to prevent the Pfizer Merger, or condition its clearance of the Pfizer Merger on Pfizer’s or our agreement to various requirements, limitations, or costs, or require divestitures or place restrictions on the conduct of Pfizer’s business following the Pfizer Merger. These requirements, limitations, costs, divestitures, or restrictions may result in the delay or abandonment of the pending Pfizer Merger. Moreover, antitrust governmental authorities could initiate legal proceedings against Pfizer and/or us seeking to prevent, or otherwise seek to prevent, the Pfizer Merger.

We cannot predict with certainty whether and when any of the required closing conditions, including the expiration or termination of the HSR Act waiting period, will be satisfied or if additional uncertainties may arise, and we cannot guarantee that we will be able to successfully consummate the Pfizer Merger as currently contemplated under the Merger Agreement, or at all. The failure to satisfy all of the required conditions could delay the completion of the Pfizer Merger by a significant period of time or prevent it from occurring. Any delay in completing the Pfizer Merger could cause the parties to not realize some or all of the benefits that are expected to be achieved if the Pfizer Merger is successfully completed within the expected timeframe and on the expected terms. There can be no assurance that the conditions to closing of the Pfizer Merger will be satisfied or waived or that the Pfizer Merger will be completed within the expected timeframe or at all.

Failure to complete the Pfizer Merger could adversely affect our stock price and future business and financial results.

There can be no assurance that the conditions to the closing of the Pfizer Merger will be satisfied or waived or that the Pfizer Merger will be completed. If the Pfizer Merger is not completed within the expected timeframe or at all, our ongoing business could be adversely affected and we will be subject to a variety of risks and possible consequences associated with the failure to complete the Pfizer Merger, including the following: (i) following, or in connection with, the termination of the Merger Agreement, in certain circumstances, we will be required to pay Pfizer a termination fee of $1.646 billion; (ii) we will incur certain transaction costs, including legal, accounting, financial advisor, filing, printing and mailing fees, and substantial acquisition-related costs, including employee retention expenses, regardless of whether the Pfizer Merger closes; (iii) under the Merger Agreement, we are subject to certain restrictions on the conduct of our business prior to the closing of the Pfizer Merger, which may adversely affect our ability to execute certain of our business strategies; (iv) due to restrictions in the Merger Agreement on certain significant financing transactions prior to the closing of the Pfizer Merger, we may be unable to raise the capital required to execute certain of our business strategies; and (v) the proposed Pfizer Merger, whether or not it closes, will divert the attention of certain of our management and other key employees from ongoing business activities, including the pursuit of other opportunities that could be beneficial to us as an independent company.

If the Pfizer Merger is not completed, these risks could materially affect our business and financial results and our stock price, including to the extent that the current market price of our common stock is positively affected by a market assumption that the Pfizer Merger will be completed.

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While the Pfizer Merger is pending, we will be subject to business uncertainties and certain contractual restrictions that could adversely affect our business and operations.

In connection with the pending Pfizer Merger, some of our existing or prospective customers, collaborators, vendors or other third parties may react unfavorably, including by delaying, deferring or ceasing to provide goods or services, delaying or deferring other decisions concerning their business relationships or transactions with us, refusing to extend credit to us, or otherwise seeking to change the terms on which they do business with us. These actions could adversely affect our revenues, earnings, funds from operations, cash flows and expenses, regardless of whether the Pfizer Merger is completed. In addition, due to certain restrictions in the Merger Agreement on the conduct of business prior to completing the Pfizer Merger, we may be unable, during the pendency of the Pfizer Merger, to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions, even if such actions would prove beneficial, and we may have to forgo certain opportunities we might otherwise pursue. The restrictions on financing transactions may also lead us to delay, reduce the scope of, or eliminate certain business activities or forgo certain opportunities to conserve cash.

In addition, as a result of the pending Pfizer Merger, current and prospective employees could experience uncertainty about their future with us. The pendency of the Pfizer Merger may make it more difficult for us to effectively retain, recruit and incentivize employees, including key management and technical, manufacturing, and other personnel, and may cause distractions from our strategy and day-to-day operations for our current employees and management.

Litigation against us, Pfizer, or the members of our or their respective boards, could prevent or delay the completion of the Pfizer Merger.

It is a condition to the Pfizer Merger that there shall be no order or injunction of a court of competent jurisdiction prohibiting or making illegal the consummation of the Pfizer Merger. Six lawsuits were filed by purported Seagen stockholders in connection with the Pfizer Merger, all of which have been voluntarily dismissed following the publication of additional disclosures by the Company. While we are not aware of the filing of other lawsuits challenging the Pfizer Merger, additional lawsuits arising out of the Pfizer Merger may be filed in the future. The outcome of such lawsuits cannot be assured, including the amount of costs associated with defending these claims or any other liabilities that may be incurred in connection with the litigation of these claims. If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Pfizer Merger on the agreed-upon terms, such an injunction may delay the consummation of the Pfizer Merger in the expected timeframe, or may prevent the Pfizer Merger from being consummated at all. Whether or not any plaintiff’s claim is successful, this type of litigation can result in significant costs and divert management’s attention and resources from the closing of the Pfizer Merger and ongoing business activities, which could adversely affect our operations.

If the Pfizer Merger is not consummated by March 12, 2024, or, under certain conditions, September 12, 2024, either we or Pfizer may terminate the Merger Agreement, subject to certain exceptions.

Either we or Pfizer may terminate the Merger Agreement if the Pfizer Merger has not been completed by March 12, 2024, or if all conditions to closing other than those relating to antitrust and foreign investment laws and those that by their nature are to be satisfied at the closing have been satisfied, then September 12, 2024. However, this termination right will not be available to a party whose material breach of the Merger Agreement proximately caused the failure to consummate the Pfizer Merger on time. In the event the Merger Agreement is terminated by either party due to the failure of the Pfizer Merger to close by March 12, 2024, we will have incurred significant costs and will have diverted significant management focus and resources from other strategic opportunities and ongoing business activities without our stockholders realizing the anticipated benefits of the Pfizer Merger.

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;

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•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 global economic instability and inflationary pressures;

•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;

•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.

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The U.S. Food and Drug Administration, or 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 we plan to submit a supplemental Biologics License Application, or sBLA, to the FDA based on the results of the EV-302 trial, the FDA or its advisors may disagree with our interpretation of the data from this trial. We cannot be certain any such sBLA will be accepted or approved in a timely matter 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 post-marketing testing, 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. In addition, although the FDA and EMA have programs to facilitate expedited development and accelerated approval processes, these programs may not result in faster development, review or approval than conventional procedures and do not assure ultimate approval. For example, although the FDA granted Breakthrough Therapy designation to disitamab vedotin in a specified treatment setting, this designation does not provide any assurance that disitamab vedotin will receive marketing approval in the specified setting 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 or other factors, may also lead to delays in the submission of regulatory submissions or the regulatory review process. These disruptions may also slow our other interactions with regulatory agencies, which may slow our other product development efforts.

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. A proposed launch, including the launch of PADCEV and TUKYSA in countries where they have 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. 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.

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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.

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. 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.

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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;

•the risks and impacts from public health crises; and

•risks related to military and geopolitical conflicts, including the ongoing military conflict between Russia and Ukraine and sanctions imposed against Russia by the international community, the conflict in the Middle East and the related risk of a larger regional conflict, or others.

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.

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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 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, gross-to-net deduction rates are dependent on market and site of care dynamics that may continue to evolve throughout the lifecycle of each of our products. These gross-to-net deduction rates also vary by product. We have experienced fluctuations in gross-to-net deductions in the past and may experience additional fluctuations in gross-to-net deductions for one or more of our products in the future.

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 TUKYSA and PADCEV have obtained regulatory approval, we will seek additional pricing and reimbursement agreements for TUKYSA, and work with Astellas to seek additional pricing and reimbursement agreements for PADCEV, in accordance with local timelines. 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 our collaborators 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 PADCEV and/or 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 (i) captures the value delivered to patients, payors and the overall healthcare system; (ii) allows for continued investment in innovative treatments for cancer patients; or (iii) 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. Further, in the event that our product candidates rely upon in vitro companion diagnostics for use in selecting the patients that we believe will respond to our therapeutics, we or our collaborators may be required to obtain coverage and reimbursement separate and apart from the coverage and reimbursement we may seek for our product candidates. 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.

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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 Network, or NCCN, Clinical Practice Guidelines in Oncology, or NCCN Guidelines, 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 many of our product candidates are based on 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., Astellas, Genentech, Inc., a member of the Roche Group, or Genentech, and GlaxoSmithKline LLC and our collaboration agreements with Takeda, Astellas, Genmab, Merck and Zai Lab. 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. The competition ADCETRIS faces from these and other therapies is intensifying. We are also aware of multiple investigational agents currently being studied that, if successful, may compete with ADCETRIS. Bristol-Myers Squibb’s, or 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. BMS’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. 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 pembrolizumab is now competing with ADCETRIS in this indication. In addition, in the frontline classical Hodgkin lymphoma setting, an investigator-initiated phase 3 clinical trial demonstrated a statistically significant improvement in progression-free survival for nivolumab in combination with chemotherapy compared with ADCETRIS in combination with chemotherapy, resulting in increased competition in this setting. In addition, a study of pembrolizumab in combination with chemotherapy in the frontline Hodgkin lymphoma setting is ongoing. MK-4820A is in a phase 2 study in relapsed/refractory classical Hodgkin lymphoma. Nivolumab, with or without chemotherapy, in a phase 2 investigator initiated trial, has demonstrated significant objective response rate in the salvage setting. 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.

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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 was traditionally 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. Avelumab is used for frontline maintenance therapy, and 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, and in pretreated disease, could potentially impact PADCEV usage and enrollment in PADCEV clinical trials.

With respect to TUKYSA, there are multiple marketed competitor products which target HER2, including the antibodies trastuzumab and pertuzumab and kinase inhibitors lapatinib and neratinib. In addition, ado-trastuzumab emtansine, or T-DM1 is a HER2-targeted antibody and microtubule inhibitor conjugate indicated, as a single agent, for the treatment of patients with HER2-positive metastatic breast cancer who previously received trastuzumab and taxane, separately or in combination. Daiichi Sankyo and AstraZeneca have fam-trastuzumab deruxtecan-nxki, which was approved by the FDA for adults with metastatic breast cancer who received a prior treatment for HER2-positive metastatic breast cancer or have breast cancer that has come back within six months of completing treatment for their early-stage breast cancer, and was also approved by the FDA in the HER2-low metastatic breast cancer setting following chemotherapy and in the HER2-positive gastric cancer setting post-trastuzumab-based therapy. 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 one or more prior anti-HER2-based regimens. We believe that the sequence of therapies patients receive for HER2-positive breast cancer is likely to continue to change in both the U.S. and EU, with greater fam-trastuzumab deruxtecan-nxki use in second line, displacing the previous standard of care, T-DM1. This has resulted and is expected to continue to result in 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 breast cancer setting, including in patients with brain metastases. In June 2023, interim results were presented from a phase 2 clinical trial of fam-trastuzumab deruxtecan-nxki in patients with locally advanced, unresectable or metastatic previously treated, HER2-expressing solid tumors not eligible for curative therapy. MacroGenics has a HER2 targeted, Fc-optimized antibody, margetuximab, which is approved by the FDA for patients who have received at least two previous anti-HER2 regimens. Additionally, Byondis released results from a pivotal trial of its antibody drug conjugate, SYD985, in metastatic breast cancer patients treated with multiple anti-HER2-based regimens and the FDA accepted a regulatory submission based on these results. In May 2023, the FDA issued a complete response letter for the SYD985 regulatory submission, requesting additional information. In May 2023, Roche entered into a global agreement with Zion Pharma to develop and commercialize their blood brain barrier penetrant oral HER2 tyrosine kinase inhibitor ZN-A-1041 in HER2-positive metastatic breast cancer. The ongoing phase 1 trial is being conducted at multiple sites in the US and China. There are a number of regimens, besides trastuzumab in combination with TUKYSA, that are included in the NCCN Guidelines for HER2-positive metastatic colorectal cancer, including fam-trastuzumab deruxtecan-nxki, which is recommended by NCCN for use as part of a combination therapy.

With respect to TIVDAK, Merck’s pembrolizumab is approved by the FDA and EC in first line in combination with chemotherapy, with or without bevacizumab, for the treatment of recurrent or metastatic cervical cancer whose tumors express PD-L1 and is approved by the FDA in second line as a monotherapy for recurrent or metastatic cervical cancer patients with disease progression on or after chemotherapy in patients whose tumors express PD-L1. In September 2022, pembrolizumab was approved in Japan as first-line therapy in combination with chemotherapy, with or without bevacizumab, for patients with recurrent or metastatic cervical cancer who are not amenable to curative treatment. We are also aware of other companies that currently have products in development (PD-(L)1 combinations or novel therapies) for the treatment of late-stage cervical cancer which could be competitive with TIVDAK, including BMS, Iovance Biotherapeutics, Merck, Regeneron Pharmaceuticals and Roche. Regeneron’s cemiplimab received Canadian approval in March 2022, EC approval in November 2022 and Japanese approval in December 2022 for the treatment of patients with recurrent or metastatic cervical cancer following progression on platinum-based chemotherapy. These approvals will likely impact the potential future opportunity for TIVDAK in these geographies. A supplemental Biologics License Application for cemiplimab was withdrawn in the U.S. in January 2022.

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.

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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 PADCEV in its first-line urothelial cancer indication, of TUKYSA in its colorectal cancer indication, and of TIVDAK also included requirements for confirmatory trials. 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 PADCEV, TUKYSA and TIVDAK, are subject to additional regulatory requirements, which entail significant expense and could negatively impact the product’s commercialization. Recent legislation has given the FDA additional authority to require accountability and enforce the post-marketing requirements and commitments associated with accelerated approval.

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 and/or state 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:

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•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;

•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.

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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, in March 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. In November 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 are expected to increase future rebates for ADCETRIS, TIVDAK and possibly PADCEV with an implementation date in the first quarter of 2023. The Biden administration also 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, or HHS, 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. Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022, or IRA, into law, which among other things, (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs and biologics covered under Medicare, and subjects drug manufacturers to civil monetary penalties and a potential excise tax for offering a price that is not equal to or less than the negotiated “maximum fair price” under the law; (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize drug price increases that outpace inflation; and (iii) redesigns the Medicare Part D program, increasing manufacturer rebates within the catastrophic coverage phase. The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. HHS has and will continue to issue and update guidance as these programs are implemented. These provisions will take effect progressively beginning in fiscal year 2023, although the Medicare drug price negotiation program is currently subject to legal challenges. It is currently unclear how the IRA will be effectuated but is likely to have a significant impact on the pharmaceutical industry. Further, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Centers for Medicare and Medicaid Innovation, which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care. One of the models may create differential reimbursement for certain drugs approved under the FDA’s Accelerated Approval Pathway. More detail is anticipated in the coming year. It is unclear whether the models will be utilized in any health reform measures in the future.

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.

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 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. 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.

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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.

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 “Business—Government Regulation—Healthcare Regulation” in Part I Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission, or SEC.

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.

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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.

We are subject to numerous privacy and data protection laws and regulations globally governing personal information, including healthcare information. In addition, the legislative and regulatory landscape for privacy and data protection continues to evolve as technological advances focus significant attention on the impact to personal privacy.

In the United States, federal, state, and local governments have enacted numerous data privacy and security laws, including data security and 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, took effect January 1, 2023. The CPRA significantly modifies the CCPA, including by expanding individual rights, especially with respect to certain sensitive personal information. We may also be subject to additional U.S. state privacy regulations in the future as state regulators focus increasingly on protecting consumer health data outside the scope of HIPAA. Washington, Connecticut, and Nevada have passed consumer health data privacy laws that impact us, and it is likely that other state laws will follow. 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. The U.S. Federal Trade Commission is also active in enforcing Section 5 of the FTC Act to assess companies’ stated privacy practices in relation to sharing of personal data for advertising and related purposes.

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 or that is processed on our behalf, including data from clinical trials, employees, collaborators and vendors. 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.

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Among other requirements, the GDPR regulates transfers of personal data to countries under an adequacy decision. In July 2020, the Court of Justice of the EU, or the CJEU, invalidated the EU-U.S. Privacy Shield, one of the primary mechanisms enabling U.S. companies to import personal data from Europe. On July 10, 2023, the EU Commission adopted an adequacy decision for the EU-U.S. Data Privacy Framework, or the EU-U.S. DPF, which replaces the invalidated EU-U.S. Privacy Shield and permits personal data be transferred from the EU to U.S. companies that self-certify to participate in the EU-U.S. DPF. The authorities in Switzerland and the U.K., whose data protection laws are similar to those of the EU, are following suit. The U.K. Extension to the EU-U.S. DPF, or aka Data Bridge, comes into effect on October 12, 2023 and permits U.S. companies self-certified to the EU-U.S. DPF and the Data Bridge to transfer personal data from the U.K. to the U.S. U.S. companies may also continue to rely on the modernized Standard Contractual Clauses, or SCCs, for data transfers from Europe and the UK International Data Transfer Agreement, or IDTA, or the SCCs appended with the UK Addendum for data transfers from the U.K. We continue to review personal data transfers from the EU and add the new SCCs while we evaluate whether to seek to self-certify under the EU-U.S. DPF. 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, may take different views. 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 data from Europe. The inability to import personal data 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, or CAC, certification by professional institutions, or entering into contracts with and supervising overseas recipients in accordance with the requirements of the CAC’s newly finalized standard contractual clauses and regulations which became effective June 1, 2023. 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 and develop. 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 resulted in injury to patients. For example, on March 14, 2023, a purported class action was filed in the United States District Court for the Central District of California against us, Astellas and Agensys, Inc., alleging that the defendants failed to warn of side effects to the skin that can occur when taking PADCEV. The complaint alleges claims under strict liability, negligence and fraud, and seeks damages, including punitive damages, interest, attorneys’ fees and costs. We intend to vigorously defend against these claims.

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. A product liability claim or series of claims could result in substantial financial losses, including uninsured liabilities or liabilities in excess of insured amounts, and we 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.

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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 and Zai Lab 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.

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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.

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, as well as for commercial production of PADCEV antibody, for which the facility was recently approved by the FDA. We have also signed a lease for a site in Everett, Washington, where we are constructing a new manufacturing facility that we intend to use for future biologics manufacturing. We have made and plan to continue to make investments in these facilities with no assurance that these investments will be recouped. We may experience cost overruns, delays or other difficulties in construction, obtaining regulatory approvals and permits or in otherwise bringing the Everett facility online. In addition, 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 addition, if any of the parties in our supply chain are adversely impacted by the lingering 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.

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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 PADCEV and 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 geopolitical unrest and macroeconomic downturns 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 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.

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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.

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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 reexamination proceeding, foreign opposition proceeding or related legal and administrative proceeding in the U.S. and elsewhere. For example, see the risk factor below titled, “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,” for information on certain disputes with Daiichi Sankyo Co. Ltd, or Daiichi Sankyo, and AstraZeneca Pharmaceuticals, LP, or AstraZeneca. 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.

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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. These agreements include our license agreement with 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 have been in a dispute with Daiichi Sankyo regarding the ownership of certain technology used by Daiichi Sankyo in its cancer drug Enhertu (fam-trastuzumab deruxtecan-nxki) and certain product candidates. On August 12, 2022, the arbitrator in this dispute ruled in favor of Daiichi Sankyo, citing statute of limitations and disagreement with us on the interpretation of the contract. On November 10, 2022, we filed a motion to vacate the arbitration award in the U.S. District Court for the Western District of Washington, and that action has been stayed pending a final award in the arbitration. On September 14, 2022, Daiichi Sankyo submitted a petition for approximately $58 million for reimbursement of its legal fees and costs associated with the arbitration. We filed oppositions to Daiichi Sankyo’s request on October 12, 2022 and May 23, 2023. The arbitrator held a hearing on Daiichi Sankyo’s fee request on September 15, 2023.

In October 2020, 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, Inc. and AstraZeneca filed two petitions for post-grant review with the USPTO seeking to have claims of the ‘039 Patent cancelled as unpatentable. On February 14, 2023, a USPTO panel decided to institute the post-grant review of the claims of the ‘039 Patent asserted in the patent infringement action. The panel held oral argument on Daiichi Sankyo and AstraZeneca’s petition for post-grant review on August 24, 2023. We expect the panel to issue a ruling by February 14, 2024. On April 8, 2022, a jury in the U.S. District Court for the Eastern District of Texas found that Daiichi Sankyo willfully infringed the asserted claims of the ‘039 Patent with its Enhertu product, and also found that the asserted claims were not invalid. The court entered judgment in our favor consisting of pre-trial damages in the sum of $41.8 million, and awarded us pre- and post-trial interest and costs. On August 21, 2023, the court denied Daiichi Sankyo and AstraZeneca’s motion for a new trial and renewed motions for judgment as a matter of law on invalidity and non-infringement, and granted our request for an ongoing royalty on Daiichi Sankyo’s future sales of Enhertu in the United States through the current expiration date of the ‘039 Patent. On September 18, 2023, Daiichi Sankyo and AstraZeneca filed a motion to amend the final judgment to clarify the court’s order regarding the ongoing royalty granted in our favor. On October 17, 2023, the court granted in part Daiichi Sankyo and AstraZeneca’s motion and issued an amended final judgement, which provides for an ongoing 8% royalty on Daiichi Sankyo’s future sales of Enhertu in the United States by its subsidiary Daiichi Sankyo, Inc. through November 4, 2024. On September 20, 2023, Daiichi Sankyo and AstraZeneca filed a notice of appeal to the United States Court of Appeals for the Federal Circuit. The appeal was deactivated on September 26, 2023 due to Daiichi Sankyo and AstraZeneca’s pending motion to amend the judgment. We anticipate that the appeal will be reactivated at some point in light of the resolution of Daiichi Sankyo and AstraZeneca’s motion.

On March 14, 2023, a purported class action was filed in the United States District Court for the Central District of California against us, Astellas and Agensys, Inc., alleging that the defendants failed to warn of side effects to the skin that can occur when taking PADCEV. The complaint alleges claims under strict liability, negligence and fraud, and seeks damages, including punitive damages, interest, attorneys’ fees and costs. We intend to vigorously defend against these claims.

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.

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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

Public health crises and associated economic instability could have adverse effects on our business, including our commercialization efforts, supply chain, regulatory activities, research and development activities, and other business operations.

Our business could be materially and adversely affected by future public health crises or the lingering effects of the COVID-19 pandemic. Such events, as well as any related government actions, social distancing and other impacts, could result in a variety of risks to our business, including negative impacts to research and development activities, enrollment in or conduct of clinical trials, regulatory activities, cancer diagnosis rates, or sales and marketing efforts, or could result in supply chain, manufacturing or product distribution challenges. Such developments may also disrupt global financial markets, which could reduce our ability to access capital, negatively affect our liquidity, and materially affect our business and the value of our common stock. The extent to which any such developments impact our business will depend on future factors that are highly uncertain, such as virus variants or diseases that may prove to be especially contagious or virulent, the ultimate duration and severity of the health epidemic, government actions, such as travel restrictions, quarantines and social distancing requirements, business closures or business disruptions and the effectiveness of vaccine programs and other actions taken to contain and treat the disease. These effects could 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. 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;

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•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.

For example, the U.S. government and other nations have imposed sanctions, including significant restrictions on most companies’ ability to do business in Russia, as a result of the ongoing military conflict between Russia and Ukraine. It is not possible to predict the broader or longer-term consequences of this conflict or other conflicts, which could include further sanctions, embargoes, regional instability, geopolitical shifts and adverse effects on macroeconomic conditions, security conditions, currency exchange rates, the price and availability of energy, and financial markets. Such geopolitical instability and uncertainty could have a negative impact on our ability to continue expanding our operations internationally and to otherwise generate revenues and develop our product candidates internationally. In addition, a significant escalation or expansion of economic disruption or the conflict’s current scope could have a material adverse effect on our business, results of operations, financial condition and growth prospects. Recent strengthening of the U.S. dollar as compared to other currencies, including currencies in jurisdictions where we and our licensees sell products, has adversely affected royalty revenues and TUKYSA net product sales in Europe and could further adversely affect these sources of revenues.

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.

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 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 in-license of development and commercialization rights to disitamab vedotin and SGN-EGFRd2, 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;

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•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 and SGN-EGFRd2, 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 in-license of development and commercialization rights to disitamab vedotin and SGN-EGFRd2, 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.

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 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. For example, in November 2022, David R. Epstein was appointed as Chief Executive Officer and as a member of our Board of Directors, and Roger Dansey, M.D., was appointed President, Research and Development and Chief Medical Officer. Changes to company strategy, which can often times occur with the appointment of new executive leadership, can create uncertainty. Failure to ensure a smooth transition and successfully implement our strategy could have a material adverse effect on our business, results of operations, financial condition and growth prospects.

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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, 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 transition to more remote and hybrid work schedules have intensified our dependence on information technology systems as many of our critical business activities are being conducted remotely, and our increased reliance on personnel working from home could increase our cybersecurity risk. In addition, our cybersecurity risk could be increased as a result of military or geopolitical conflicts, including the ongoing military conflict between Russia and Ukraine and the related sanctions imposed against Russia, the conflict in the Middle East and the related risk of a larger regional conflict, or otherwise.

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.

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;

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•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 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 of 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 granted performance-based equity awards to eligible employees with vesting of the awards contingent upon the achievement of certain regulatory milestones. Costs of performance-based compensation for these awards 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 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.

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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 forgo 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;

•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.

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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 future public health crises, inflationary pressures, rising interest rates, military and geopolitical conflicts, including the ongoing military conflict between Russia and Ukraine and related sanctions imposed against Russia, the conflict in the Middle East and the related risk of a larger regional conflict, or otherwise.

The potential future impairment of intangible assets and goodwill may negatively affect our results of operations and financial position.

As of September 30, 2023, we carried $494.9 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 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;

•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.

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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.

Substantial future sales or issuances of shares of our common stock or equity-related securities could cause the market price of our common stock to decline.

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 reregister such securities if the earlier registration statement expires or 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.

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

Based on information available to us as of September 30, 2023, the Baker Entities collectively beneficially owned approximately 24% 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 Securities Exchange Act of 1934, as amended, or the Exchange Act, and our outstanding shares of common stock as of September 30, 2023, our executive officers and directors and holders of greater than five percent of our outstanding common stock beneficially owned approximately 43% of our voting power as of September 30, 2023. 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.

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Our disclosures related to environmental, social and governance, or ESG, matters expose us to various risks, including risks to our reputation and stock price.

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. Moreover, the SEC has recently proposed certain mandated ESG reporting requirements, such as the SEC’s proposed rules designed to enhance and standardize climate-related disclosures, which, if finally approved, would significantly increase our compliance and reporting costs and may also result in disclosures that certain investors or other stakeholders may deem to negatively impact our reputation and/or that harm our stock price.

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, various countries have made or are actively considering changes to existing tax laws, which could adversely affect our business operations and financial performance, and we cannot predict the form or timing of such changes. For example, beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures in the year incurred, requiring amortization in accordance with IRC Section 174. If this requirement is not repealed or otherwise modified, it will reduce our operating cash flows. In addition, the current U.S. presidential administration continues to pursue numerous corporate tax reform proposals to increase taxation of international business operations. Further, organizations such as the Organization for Economic Cooperation and Development have published action plans that, if adopted by countries where we do business, could increase our tax obligations in those countries. 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.

Item 5.    Other Information

During the three months ended September 30, 2023, none of our directors or officers (as defined in Rule 16a-1(f)) adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement with respect to our securities.

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Item 6.    Exhibits

Exhibit		Incorporation By Reference
Number	Exhibit Description	Form	SEC File No.	Exhibit	Filing Date
2.1†	Agreement and Plan of Merger, dated March 12, 2023, by and among Seagen Inc., Pfizer Inc. and Aris Merger Sub, Inc.	8-K	000-32405	2.1	3/13/2023
3.1	Fourth Amended and Restated Certificate of Incorporation of Seagen Inc.	10-Q	000-32405	3.1	11/7/2008
3.2	Certificate of Amendment of Fourth Amended and Restated Certificate of Incorporation of Seagen Inc.	8-K	000-32405	3.3	5/26/2011
3.3	Certificate of Amendment of Fourth Amended and Restated Certificate of Incorporation of Seagen Inc.	8-K	000-32405	3.1	10/8/2020
3.4	Amended and Restated Bylaws of Seagen Inc.	8-K	000-32405	3.1	11/18/2022
4.1	Specimen Stock Certificate.	10-K	000-32405	4.2	2/12/2021
4.2	Investor Rights Agreement dated July 8, 2003 among Seagen Inc. and certain of its stockholders.	10-Q	000-32405	4.3	11/7/2008
4.3	Registration Rights Agreement dated September 10, 2015 between Seagen Inc. and the persons listed on Schedule A attached thereto.	8-K	000-32405	10.1	9/11/2015
10.1+*	Form of Global Stock Unit Grant Notice and Global Stock Unit Agreement under the Amended and Restated 2007 Equity Incentive Plan (approved August 14, 2023).	—	—	—	—
10.2+*	Form of Global Performance Stock Unit Grant Notice and Global Performance Stock Unit Agreement under the Amended and Restated 2007 Equity Incentive Plan (approved August 15, 2023).	—	—	—	—
31.1+	Certification of Chief Executive Officer pursuant to Rule 13a-14(a).	—	—	—	—
31.2+	Certification of Chief Financial Officer pursuant to Rule 13a-14(a).	—	—	—	—
32.1+	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.	—	—	—	—
32.2+	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.	—	—	—	—
101	The following financial statements from Seagen’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Comprehensive Loss, (iii) Condensed Consolidated Statements of Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.	—	—	—	—
104	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).	—	—	—	—

+	Filed herewith.
†	Certain schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally to the SEC a copy of any omitted schedules upon request.
*	Indicates a management contract or compensatory plan or arrangement.

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SIGNATURE

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.

SEAGEN INC.
By:	/s/ Todd E. Simpson
	Todd E. Simpson
	Duly Authorized and Chief Financial Officer
	(Principal Financial and Accounting Officer)
Date:	November 1, 2023

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EX-10.1

SEAGEN INC. GLOBAL STOCK UNIT GRANT NOTICE (AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN) Seagen Inc. (the “Company”), pursuant to its Amended and Restated 2007 Equity Incentive Plan (the “Plan”), hereby awards to Participant a Stock Unit Award for the number of stock units set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth herein and in the Plan and the Global Stock Unit Agreement (including any additional terms and conditions for Participant’s country set forth in the attached appendix (the “Appendix”)), both of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or the Global Stock Unit Agreement, as applicable. Except as otherwise explicitly provided herein, in the event of any conflict between the terms in the Award and the Plan, the terms of the Plan shall control. Participant: [•] Date of Grant: [•] Number of Stock Units Subject to Award: [•] Vesting Schedule: Subject to Section 2 of the Global Stock Unit Agreement, the Award shall vest on the below vesting date(s). Notwithstanding the following, vesting shall terminate upon the Participant’s Termination of Employment. [•] Issuance Schedule: The Shares to be issued in respect of the Award will be issued in accordance with the issuance schedule set forth in Section 7 of the Global Stock Unit Agreement. Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Global Stock Unit Grant Notice, the Global Stock Unit Agreement (including the Appendix) and the Plan. Participant also acknowledges receipt of the Prospectus for the Plan. Participant further acknowledges that as of the Date of Grant, this Global Stock Unit Grant Notice, the Global Stock Unit Agreement (including the Appendix) and the Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and written agreements on that subject, with the exception of any arrangement that would provide for vesting acceleration of the Award upon the terms and conditions set forth therein. Exhibit 10.1

EVP+ – 2023 Annual Awards 8-15-2023 Participant’s electronic acceptance shall signify Participant’s execution of this Global Stock Unit Grant Notice and understanding that this Award is granted and governed under the terms and conditions set forth herein. SEAGEN INC. Jean I. Liu Chief Legal Officer **PLEASE PRINT AND RETAIN THIS AGREEMENT FOR YOUR RECORDS**

1. SEAGEN INC. AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN GLOBAL STOCK UNIT AGREEMENT Pursuant to the Global Stock Unit Grant Notice (“Grant Notice”) and this Global Stock Unit Agreement, including any additional terms and conditions for your country set forth in the appendix attached hereto (this “Agreement”), Seagen Inc. (the “Company”) has awarded you a Stock Unit Award (the “Award”) under its Amended and Restated 2007 Equity Incentive Plan (the “Plan”). Your Award is granted to you effective as of the Date of Grant set forth in the Grant Notice for this Award. This Agreement shall be deemed to be agreed to by the Company and you upon your execution of the Grant Notice to which it is attached. Capitalized terms not explicitly defined in this Agreement shall have the same meanings given to them in the Plan or the Grant Notice, as applicable. Except as otherwise explicitly provided herein, in the event of any conflict between the terms in this Agreement and the Plan, the terms of the Plan shall control. The details of your Award, in addition to those set forth in the Grant Notice and the Plan, are as follows. 1. GRANT OF THE AWARD. This Award represents the right to be issued on a future date the number of Shares that is equal to the number of stock units indicated in the Grant Notice (the “Stock Units”). As of the Date of Grant, the Company will credit to a bookkeeping account maintained by the Company for your benefit (the “Account”) the number of Stock Units subject to the Award. This Award is granted in consideration of your services to the Company or an Affiliate. Except as otherwise provided herein, you will not be required to make any payment to the Company (other than future services to the Company) with respect to your receipt of the Award, the vesting of the Stock Units or the delivery of the Shares to be issued in respect of the Award. 2. VESTING. (a) Subject to the limitations contained herein, your Award will vest, if at all, in accordance with the vesting schedule provided in the Grant Notice, provided that you have not incurred a Termination of Employment before the vesting date set forth in the Grant Notice. Upon your Termination of Employment, the Stock Units credited to the Account that are not vested on the date of such Termination of Employment will be forfeited at no cost to the Company and you will have no further right, title or interest in the Stock Units or the Shares to be issued in respect of the Award. (b) By accepting the grant of this Award, you acknowledge and agree that the terms set forth in this Section 2 supersede any contrary terms regarding the vesting of this Award set forth in any notice or other communication that you receive from, or that is displayed by, E*TRADE or other third party designated by the Company. (c) For purposes of your Award, your Termination of Employment will be considered to be (regardless of the reason of termination, whether or not later found to be invalid or in breach of employment or other laws or rules in the jurisdiction where you are providing services or the terms of your employment or service agreement, if any) effective as of the date that

2. you cease to actively provide services to the Company or any Affiliate and will not be extended by any notice period (e.g., employment or service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment or other laws in the jurisdiction where you are employed or providing services or the terms of your employment or service agreement, if any). The Company shall have exclusive discretion to determine when you are no longer actively employed or providing services for purposes of the Plan (including whether you still may be considered to be providing services while on a leave of absence). (d) Notwithstanding the foregoing or anything in this Agreement to the contrary, in the event of your Termination of Employment as a result of your Disability, the vesting of your Award shall accelerate such that your Award shall become vested as to an additional twelve (12) months, effective as of the date of such Termination of Employment, to the extent that your Award is outstanding on such date. (e) Notwithstanding the foregoing or anything in this Agreement to the contrary, in the event of your Termination of Employment as a result of your death, your Award (and all other Seagen Inc. stock units granted to you that do not have performance or milestone vesting conditions) shall accelerate and vest in full, effective as of the date of such Termination of Employment, to the extent that your Award is outstanding on such date. (f) Notwithstanding the foregoing or anything in your employment agreement or your equity incentives letter with the Company, if any and as applicable, this Agreement, the Grant Notice or the Plan to the contrary, in the event that the transactions contemplated by the Agreement and Plan of Merger, dated as of March 12, 2023, by and among Pfizer Inc. (“Pfizer”), Aris Merger Sub, Inc. and the Company (such agreement, together with any amendment thereto, the “Merger Agreement”) are consummated, one-third (1/3) of the outstanding, unvested portion of your Award upon such consummation shall vest immediately prior to the Effective Time (as defined in the Merger Agreement). The portion of your Award that is outstanding and unvested as of the Effective Time, after taking into account the prior sentence, shall be substituted automatically with a Pfizer cash-based award (a “Pfizer Cash Award”) with respect to an amount in cash equal to the product of (i) the Merger Consideration (as defined in the Merger Agreement), multiplied by (ii) the number of Stock Units then subject to the unvested portion of your Award. The Pfizer Cash Award shall vest 50% on the first anniversary of the Closing (as defined in the Merger Agreement), and 50% on the second anniversary of the Closing, provided that you have not incurred a Termination of Employment before the applicable vesting date. In the event of your Termination of Employment by the Company or Pfizer without Cause, as a result of your Disability, as a result of your death, or by you for Good Reason (as defined below), then subject to your (or your estate’s, in the event of your death) execution and non-revocation of a release of claims against the Company, Pfizer and their affiliates in a form provided to you by Pfizer (and used by Pfizer for similarly situated employees) following such Termination of Employment (the “Release”) and your compliance with any currently applicable post-termination obligations, your Pfizer Cash Award shall accelerate and vest in full, effective as of the date of such Termination of Employment, to the extent that your Pfizer Cash Award is outstanding on such date, and be paid to you promptly (but no more than sixty (60) days) following the date of such Termination of Employment.

3. For purposes of this Section 2(f), “Good Reason” means: (A) a material reduction or change in your job duties, responsibilities and requirements inconsistent with your position with the Company and prior duties, responsibilities and requirements, provided that neither a mere change in title alone nor reassignment to a position that is substantially similar to the position held prior to the change in terms of job duties, responsibilities or requirements shall constitute a material reduction in job responsibilities, (B) a reduction in your then-current base salary, or (C) you refuse to relocate to a facility or location more than fifty (50) miles from the Company’s current location or, if you have a fully remote or hybrid work arrangement (involving both off-site services and in- person services at the Company’s offices or facilities), you refuse to accept a material modification to such fully remote or flexible hybrid work arrangement, as such arrangement, if any, existed as of March 12, 2023 (it being understood that reasonable requests to attend occasional or regular meetings, trainings or other events in the Company’s or Pfizer’s offices or facilities will not constitute a material modification to such an arrangement). In the case of prong (A), the determination of whether a material reduction or change in job duties, responsibilities and requirements inconsistent with your position with the Company and prior duties, responsibilities and requirements has occurred shall be assessed and made in good faith by the majority vote of a committee comprising no fewer than five employees of Pfizer identified by Pfizer’s SVP Total Rewards in good faith, at least three of whom shall have been legacy employees of the Company, with the determination of a majority of the committee members binding on you and Pfizer. In each case, you must first provide notice to Pfizer of the existence of the circumstances giving rise to Good Reason within ninety (90) days of the initial existence of such circumstances; Pfizer must be provided with a period of thirty (30) days from the date of receipt of such notice to cure the circumstances giving rise to Good Reason; and your Termination of Employment for Good Reason must occur within six (6) months of the expiration of the cure period. Each Pfizer Cash Award shall otherwise be subject to substantially the same terms and conditions applicable to your Award as of immediately prior to the Effective Time. 3. FORFEITURE OF AWARD NOT TIMELY ACCEPTED. The Award is conditioned upon your electronic acceptance of the Award, as set forth in the Grant Notice. Notwithstanding the foregoing or anything in this Agreement to the contrary, if you fail to accept the Award prior to the vesting dates set forth in the Grant Notice, the portion of the Award that otherwise would have vested on each such date will be forfeited at no cost to the Company, and you will have no further right, title or interest in such portion. In the event of your Termination of Employment as a result of your death or Disability prior to acceptance of the Award, the Company will deem the Award as being accepted. 4. NUMBER OF SHARES. (a) The number of Stock Units subject to your Award may be adjusted from time to time for changes in capitalization, as provided in Section 13 of the Plan. (b) Any additional Stock Units that become subject to the Award pursuant to this Section 4 shall be subject, in a manner determined by the Administrator, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Stock Units covered by your Award.

4. (c) Notwithstanding the provisions of this Section 4, no fractional Shares or rights for fractional Shares shall be created pursuant to this Section 4. The Administrator shall, in its discretion, determine an equivalent benefit for any fractional Shares or fractional Shares that might be created by the adjustments referred to in this Section 4. 5. COMPLIANCE WITH APPLICABLE LAWS. You may not be issued any Shares in respect of your Award unless either (i) such Shares are registered under the Securities Act (or other applicable securities laws in the case of Participants not subject to U.S. securities laws); or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act (or other applicable securities laws in the case of Participants not subject to U.S. securities laws). Your Award also must comply with other applicable laws and regulations governing the Award and issuance of Shares, and you will not receive such Shares if the Company determines that such receipt would not be in material compliance with such laws and regulations. You represent and warrant that you (a) have been furnished with a copy of the prospectus for the Plan and all information deemed necessary to evaluate the merits and risks of receipt of the Award, (b) have had the opportunity to ask questions concerning the information received about the Award and the Company, and (c) have been given the opportunity to obtain any information you deem necessary to verify the accuracy of any information obtained concerning the Award and the Company. 6. TRANSFER RESTRICTIONS. Your Award is not transferable, except by will or by the laws of descent and distribution. In addition to any other limitation on transfer created by applicable securities laws, you agree not to assign, hypothecate, donate, encumber or otherwise dispose of any interest in any of the Shares subject to the Award until such Shares are issued to you in accordance with Section 7 of this Agreement. After such Shares have been issued to you, you are free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such Shares provided that any such actions are in compliance with the provisions herein and applicable securities laws. 7. DATE OF ISSUANCE. (a) If the Award is exempt from application of Section 409A of the Code and any state law of similar effect (collectively “Section 409A”), then, subject to Section 11, the Company will deliver to you a number of Shares equal to the number of vested Stock Units subject to your Award, including any additional Stock Units received pursuant to Section 4 above that relate to those vested Stock Units on or within 60 days following the applicable vesting date (the “Original Issuance Date”). However, if the Original Issuance Date falls on a date that is not a business day, such delivery date shall instead fall on the next following business day. Notwithstanding the foregoing, if (i) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy or policies on trading in Company securities or (2) on a date when you are otherwise permitted to sell Shares on the open market; and (ii) the Company elects, prior to the Original Issuance Date, (x) not to satisfy the Withholding Obligation (as defined in Section 11(b) hereof) by withholding Shares from the Shares otherwise due, on the Original Issuance Date, to you under this Award pursuant to Section 11 hereof, and (y) not to permit you to satisfy the Withholding Obligation in cash, then such Shares shall not be delivered on such Original Issuance Date and shall instead be delivered on the first business day of the next occurring

5. open window period applicable to you or the next business day when you are not prohibited from selling Shares on the open market, as applicable (and regardless of whether there has been a Termination of Employment before such time), but in no event later than the 15th day of the third calendar month of the calendar year following the calendar year in which the Stock Units are no longer considered to be subject to a substantial risk of forfeiture. Delivery of the Shares pursuant to the provisions of this Section 7(a) is intended to comply with the requirements for the short- term deferral exemption available under Treasury Regulations Section 1.409A-1(b)(4) and shall be construed and administered in such manner. The form of such delivery of the Shares (e.g., a stock certificate or electronic entry evidencing such Shares) shall be determined by the Company. (b) The provisions of this Section 7(a) are intended to apply if the Award is subject to Section 409A because of the terms of a severance arrangement or other agreement between you and the Company, if any, that provide for acceleration of vesting of the Award upon your separation from service (as such term is defined in Section 409A(a)(2)(A)(i) of the Code (“Separation from Service”) and such severance benefit does not satisfy the requirements for an exemption from application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(4) or 1.409A-1(b)(9) (“Non-Exempt Severance Arrangement”). If the Award is subject to and not exempt from application of Section 409A due to application of a Non-Exempt Severance Arrangement, the following provisions in this Section 7(a) shall supersede anything to the contrary in Section 7(a). (i) If the Award vests in the ordinary course before your Termination of Employment in accordance with the vesting schedule set forth in the Grant Notice, without accelerating vesting under the terms of a Non-Exempt Severance Arrangement, in no event will the Shares to be issued in respect of your Award be issued any later than December 31st of the calendar year that includes the applicable vesting date. (ii) If vesting of the Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with your Separation from Service, and such vesting acceleration provisions were in effect as of the date of grant of the Award and, therefore, are part of the terms of the Award as of the date of grant, then the Shares will be earlier issued in respect of your Award upon your Separation from Service in accordance with the terms of the Non-Exempt Severance Arrangement, but in no event later than the 60th day that follows the date of your Separation from Service. However, if at the time the Shares would otherwise be issued you are subject to the distribution limitations contained in Section 409A applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such Shares shall instead be issued on the date that is six months following the date of your Separation from Service, or, if earlier, the date of your death that occurs within such six-month period. (iii) If either (A) vesting of the Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with your Separation from Service, and such vesting acceleration provisions were not in effect as of the date of grant of the Award and, therefore, are not a part of the terms of the Award on the date of grant, or (B) vesting accelerates pursuant to Section (a) or Section 13 of the Plan, then such acceleration of vesting of the Award shall not accelerate the issuance date of the Shares (or any substitute property), but such Shares (or substitute property) shall instead be issued on the same schedule as set forth in the Grant Notice as if they had vested in the ordinary course before your Termination of Employment,

6. notwithstanding the vesting acceleration of the Award. Such issuance schedule is intended to satisfy the requirements of payment on a specified date or pursuant to a fixed schedule, as provided under Treasury Regulations Section 1.409A-3(a)(4). (c) Notwithstanding anything to the contrary set forth herein, the Company explicitly reserves the right to earlier issue the Shares in respect of the Award to the extent permitted and in compliance with the requirements of Section 409A, including pursuant to any of the exemptions available in Treasury Regulations Section 1.409A-3(j)(4)(ix). (d) The provisions in this Agreement for delivery of the Shares in respect of the Award are intended either to comply with the requirements of Section 409A or to provide a basis for exemption from such requirements so that the delivery of such Shares will not trigger the additional tax imposed under Section 409A, and any ambiguities herein will be so interpreted. (e) The Administrator may modify the terms of this Agreement and/or the Plan without your consent, in the manner that the Administrator may determine to be necessary or advisable in order to comply with Code Section 409A or to mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply under Code Section 409A if compliance is not practical. This Section 7(e) does not create an obligation on the part of the Company to modify the terms of this Agreement or the Plan and does not guarantee that this Award or the delivery of Shares upon settlement of the Award will not be subject to taxes, interest and penalties or any other adverse tax consequences under Code Section 409A. Nothing in this Agreement shall provide a basis for any person to take any action against the Company or any of its Subsidiaries or Affiliates based on matters covered by Code Section 409A, including the tax treatment of any amounts paid under this Agreement, and neither the Company nor any of its Subsidiaries or Affiliates will have any liability under any circumstances to the Participant or any other party if the Award, the delivery of Shares upon vesting/settlement of the Award or other payment or tax event hereunder that is intended to be exempt from, or compliant with, Code Section 409A, is not so exempt or compliant or for any action taken by the Administrator with respect thereto. 8. DIVIDENDS. You shall receive no benefit or adjustment to your Award with respect to any cash dividend, stock dividend or other distribution that does not result from a change in capitalization as provided in Section 13 of the Plan; provided, however, that this sentence shall not apply with respect to any Shares that are delivered to you in connection with your Award after such Shares have been delivered to you. 9. AWARD NOT A SERVICE CONTRACT. (a) Nothing in this Agreement (including, but not limited to, the vesting of your Award pursuant to the schedule set forth in Section 2 herein or the issuance of the Shares in respect of your Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan shall: (i) confer upon you any right to continue in the employ of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically

7. accrued under the terms of this Agreement or Plan; or (iv) deprive the Company or an Affiliate of the right to terminate your employment without regard to any future vesting opportunity that you may have. (b) By accepting this Award, you acknowledge and agree that the right to continue vesting in the Award pursuant to the schedule set forth in Section 2 is earned only by continuing as an employee, director or consultant of the Company or Affiliate, as applicable (not through the act of being hired, being granted this Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”). You further acknowledge and agree that such a reorganization could result in your Termination of Employment, or the termination of Affiliate status of your employer and the loss of benefits available to you under this Agreement, including but not limited to, the termination of the right to continue vesting in the Award. You further acknowledge and agree that this Agreement, the Plan, the transactions contemplated hereunder and the vesting schedule set forth herein or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of continued engagement as an employee or consultant for the term of this Agreement, for any period, or at all, and shall not interfere in any way with your right or the Company’s right to terminate your service at any time, with or without cause and with or without notice. 10. NATURE OF AWARD. In accepting your Award, you acknowledge, understand and agree that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted under the Plan; (b) the Award is exceptional, voluntary and occasional and does not create any contractual or other right to receive future Awards (whether on the same or different terms), or benefits in lieu of an Award, even if an Award has been granted in the past; (c) all decisions with respect to future awards of Stock Units or other grants, if any, will be at the sole discretion of the Company; (d) you are voluntarily participating in the Plan; (e) the Award and any Shares acquired under the Plan, and the income from and value of same, are not intended to replace any pension rights or compensation; (f) the future value of the Shares underlying the Award is unknown, indeterminable and cannot be predicted with certainty; (g) no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from your Termination of Employment (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or rendering services or the terms of your employment agreement, if any);

8. (h) unless otherwise provided herein, in the Plan or by the Company in its discretion, the Award and the benefits evidenced by this Agreement do not create any entitlement to have the Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; (i) unless otherwise agreed with the Company, the Award and the Shares subject to the Award, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of an Affiliate; (j) if the Award vests and you are issued Shares, the value of such Shares may increase or decrease in value following the date the Shares are issued; even below the Fair Market Value on the date the Award is granted to you; (k) the Award and the Shares subject to the Award, and the income and value of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of- service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments; and (l) the Award and the Shares subject to the Award, and the income and value of same, shall not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any benefit plan sponsored by the Company, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s benefit plans. 11. TAX OBLIGATIONS. (a) By accepting this Award, you acknowledge that, regardless of any action taken by the Company or any Affiliate the ultimate liability for any and all income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”) is and remains your responsibility and may exceed the amount actually withheld by the Company or its Affiliates, if any. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company and/or its Affiliates may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Company has no duty or obligation to minimize the tax consequences to you of this Award and shall not be liable to you for any adverse tax consequences to you arising in connection with this Award. (b) On or before the time you receive a distribution of Shares pursuant to your Award, or at any time thereafter as requested by the Company, you hereby authorize any required withholding from the Shares issuable to you and/or otherwise agree to make adequate provision in cash for any sums required to satisfy any and all Tax-Related Items (the “Withholding Obligation”). (c) In this regard, you authorize the Company and/or an Affiliate, or their respective agents, at their discretion, to satisfy the Withholding Obligation by one or a combination of the following:

9. (i) Requiring you to make a payment in a form acceptable to the Company; or (ii) Withholding from your wages or other cash compensation payable to you; or (iii) Withholding from proceeds of the sale of shares of Common Stock acquired upon settlement of the Award either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or (iv) Withholding in shares of Common Stock to be issued upon settlement of the Award, provided, however, that if you are a Section 16 officer of the Company under the Exchange Act, then the Committee (as constituted in accordance with Rule 16b-3 under the Exchange Act) shall establish the method of withholding from alternatives (i)-(iv) herein and, if the Committee does not exercise its discretion prior to the Withholding Obligation event, then you shall be entitled to elect the method of withholding from alternatives (i)-(iv) herein; or (v) Any other method of withholding determined by the Company and to the extent required by applicable law or the Plan, approved by the Committee. (d) Unless the Withholding Obligation of the Company and/or any Affiliate are satisfied, the Company shall have no obligation to deliver to you any Shares. (e) In the event the Withholding Obligation of the Company arises prior to the delivery to you of Shares or it is determined after the delivery of Shares to you that the amount of the Withholding Obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount. (f) The Company may withhold or account for Tax-Related Items by considering statutory or other withholding rates, including minimum or maximum rates applicable in your jurisdiction(s). In the event of over-withholding, you may receive a refund of any over- withheld amount in cash (with no entitlement to the equivalent in Common Stock), or if not refunded, you may seek a refund from the local tax authorities. In the event of under-withholding, you may be required to pay any additional Tax-Related Items directly to the applicable tax authority or to the Company and/or the employer. If the Withholding Obligation is satisfied by withholding in shares of Common Stock, for tax purposes, you will be deemed to have been issued the full number of shares of Common Stock subject to the vested RSUs, notwithstanding that a number of the shares of Common Stock is held back solely for the purpose of paying the Tax- Related Items. The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of Common Stock, if you fail to comply with your obligations in connection with the Tax-Related Items. 12. NO ADVICE REGARDING GRANT. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation

10. in the Plan, or your acquisition or sale of the underlying Shares. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the consequences of accepting this Award and by signing the Grant Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so. 13. UNSECURED OBLIGATION. Your Award is unfunded, and as a holder of a vested Award, you shall be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue Shares pursuant to this Agreement. You shall not have voting or any other rights as a stockholder of the Company with respect to the Shares to be issued pursuant to this Agreement until such Shares are issued to you pursuant to Section 7 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person. 14. OTHER DOCUMENTS. You hereby acknowledge receipt or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy on trading in Company securities permitting employees to sell Shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time. 15. NOTICES; ELECTRONIC DELIVERY AND ACCEPTANCE. Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this Award by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or any third party designated by the Company and agree notice shall be provided upon posting to your electronic account held by the Company or any third party designated by the Company. You hereby acknowledge that delivery, execution and acceptance of this or any other such documents by electronic means constitutes valid and effective delivery, execution and acceptance and shall be legally effective to create a valid and binding agreement. 16. CLAWBACK/RECOUPMENT. The Award will be subject to recoupment, rescission, payback, cancelation or other action, in each case, in accordance with (i) any clawback policy adopted by the Company (whether such policy is adopted on or after the date of this Agreement or required under applicable law) providing for the recovery of Awards, Shares, proceeds, or payments to you in the event of fraud or as required by applicable law or governance considerations or in other similar circumstances and (ii) any such other clawback, recovery or recoupment provisions set forth in an individual written agreement between you and the Company. No recovery of compensation under such a clawback policy will be an event giving rise to your right to resign for “good reason” or “constructive termination” (or similar term) under any plan of, or agreement with, the Company.

11. 17. MISCELLANEOUS. (a) The rights and obligations of the Company under your Award shall be transferable by the Company to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by, the Company’s successors and assigns. (b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award. (c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award, and fully understand all provisions of your Award. (d) You acknowledge and agree that the Company shall not be liable for any exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of your Award or of any amounts due to you pursuant to the settlement of the Award or the subsequent sale of any Shares acquired upon settlement. (e) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. (f) All obligations of the Company under the Plan and this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. 18. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided herein, in the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan shall control. 19. ENTIRE AGREEMENT. The Plan, this Agreement and the Grant Notice constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and you with respect to the subject matter hereof, with the exception of any arrangement that would provide for vesting acceleration of this Award upon the terms and conditions set forth therein. 20. SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

12. 21. DATA PRIVACY. To participate in the Plan, you will need to review the information provided in this Section and, where applicable, declare your consent to the processing of personal data by the Company and third parties noted below. (a) EEA+ Controller and Representative. If you are based in the European Union (“EU”), the European Economic Area, Switzerland or, if and when the United Kingdom leaves the European Union, the United Kingdom (collectively “EEA+”), you should note that the Company, with its registered address at 21823 30th Drive SE Bothell, Washington 98021, United States of America, is the controller responsible for the processing of your personal data in connection with the Agreement and the Plan. The Company’s representative in the EU is Seagen Netherlands B.V., located at Evert van de Beekstraat 1, -140 1118CL Schiphol, Netherlands with office phone: +31 207 99 15 60. (b) Data Collection and Usage. In connection with the administration of the Plan, the Company collects, processes, uses and transfers certain personally-identifiable information about you, which may include your name, home address and telephone number, email address, date of birth, social insurance, passport number or other identification number, salary, nationality, job title, details of all Awards or any other entitlement to Shares awarded, canceled, exercised, settled, vested, unvested or outstanding in your favor and additional similar or related data, which the Company receives from you or the entity that employs you (“Personal Data”). Specifically, the Company collects, processes and uses Personal Data for the purposes of performing its contractual obligations under this Agreement, implementing, administering and managing your participation in the Plan and facilitating compliance with applicable tax and securities law. If you are based in the EEA+, the legal basis, where required, for the processing of Personal Data by the Company is the necessity for the Company to (i) perform its contractual obligations under this Agreement, (ii) comply with legal obligations established in the EEA+, and/or (iii) pursue the legitimate interest of complying with legal obligations established outside of the EEA+. If you are based outside of the EEA+, the legal basis, where required, for the processing of Data by the Company is your consent, as further described in (h) below. (c) Stock Plan Administration Service Providers. The Company transfers Personal Data to E*TRADE Corporate Financial Services, Inc., and E*TRADE Securities LLC (collectively, “E*TRADE”) and certain of its affiliated companies and successors (the “Stock Plan Provider”), an independent service provider, which assists the Company with the implementation, administration and management of the Plan, including providing ancillary services related to stock plan administration. The Company may select a different service provider or additional service providers and share Personal Data with such other provider serving in a similar manner. The processing of Personal Data will take place through both electronic and non-electronic means. Personal Data will only be accessible by those individuals requiring access to it for purposes of implementing, administering and operating the Plan, including providing ancillary services related to stock plan administration. You may be asked to agree on separate terms and data processing practices with the Stock Plan Provider, with such agreement being a condition to the ability to participate in the Plan.

13. (d) International Data Transfers. The Company and the Stock Plan Provider are based in the United States. The country where you live may have different data privacy laws and protections than the United States. In particular, the United States does not have the same level of protections for personal data as countries in the EEA+. The European Commission requires U.S. companies to protect personal data leaving the EEA+ by implementing safeguards such as the Standard Contractual Clauses adopted by the EU Commission. If you are based in the EEA+, Personal Data will be transferred from the EEA+ to the Company and onward from the Company to the Stock Plan Provider, or if applicable, another service provider, based on the EU Standard Contractual Clauses. You may request a copy of the Standard Contractual Clauses by contacting dataprotection@seagen.com. If you are based in a jurisdiction outside of the EEA+, Personal Data will be transferred from your jurisdiction to the Company and onward from the Company to the Stock Plan Provider, or if applicable, another service provider based on your consent, as further described in (h) below. (e) Data Retention. The Company will use Personal Data only as long as necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including tax and securities laws. When the Company no longer needs Personal Data for any of these purposes, the Company will remove it from its systems. (f) Voluntariness and Consequences of Consent Denial or Withdrawal. Participation in the Plan is voluntary and you are providing the consents herein on a purely voluntary basis. You may withdraw your consent at any time, with future effect and for any or no reason. If you do not consent, or if you later seek to withdraw your consent, your salary from or employment or service relationship with your employer will not be affected. The only consequence of denying or withdrawing consent is that the Company would not be able to grant Awards to you under the Plan or administer or maintain your participation in the Plan. If you withdraw your consent, the Company will stop processing your Personal Data for the purposes stated in Section (b) above unless to the extent necessary to comply with tax or other legal obligations in connection with Awards granted before you withdrew your consent. (g) Data Subject Rights. You may have a number of rights under data privacy laws in your jurisdiction. Subject to the conditions set out in the applicable law and depending on where you are based, such rights may include the right to (i) request access to, or copies of, Personal Data processed by the Company, (ii) rectification of incorrect Personal Data, (iii) deletion of Personal Data, (iv) restrict the processing of Personal Data, (v) object to the processing of Personal Data for legitimate interests, (vi) portability of Personal Data, (vii) lodge complaints with competent authorities in your jurisdiction, and/or to (viii) receive a list with the names and addresses of any potential recipients of Personal Data. To receive clarification regarding these rights or to exercise these rights, you can contact dataprotection@seagen.com. (h) Necessary Disclosure of Personal Data. You understand that providing the Company with Personal Data is necessary for the performance of this Agreement and that your refusal to provide Personal Data would make it impossible for the Company to perform its contractual obligations and would affect your ability to participate in the Plan.

14. (i) Declaration of Consent (if you are outside the EEA+). By clicking on the “I accept” button on the Acknowledge Grant screen on the stock plan administration site, you are declaring that you unambiguously consent to the collection, use and transfer, in electronic or other form, of your Personal Data, as described above and in any other grant materials, by and among, as applicable, the entity that employs you, the Company, any Affiliate and any service provider involved in stock plan administration, including but not limited to the Stock Plan Provider, for the exclusive purpose of implementing, administering and managing your participation in the Plan, including providing ancillary services related to stock plan administration. You understand that you may, at any time, refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Seagen Inc. Director of Privacy Law. If you do not consent or later seek to revoke your consent, your employment status or service with the entity that employs you will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant the Award or any other equity award to you or administer or maintain such awards. Therefore, you understand that refusing or withdrawing consent will affect your ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, you should contact the Company’s Stock Plan Administrator. 22. INSIDER TRADING RESTRICTIONS/MARKET ABUSE LAWS. You acknowledge that, depending on your country, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to acquire or sell the Shares or rights to the Shares under the Plan during such times as you are considered to have “inside information” regarding the Company (as defined by the laws in your country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions, and you are advised to speak to your personal advisor on this matter. 23. FOREIGN ASSET/ACCOUNT AND TAX REPORTING, EXCHANGE CONTROLS. Your country may have certain foreign asset, account and/or tax reporting requirements and exchange controls which may affect your ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside your country. You understand that you may be required to report such accounts, assets or transactions to the tax or other authorities in your country. You also may be required to repatriate sale proceeds or other funds received as a result of participation in the Plan to your country through a designated bank or broker and/or within a certain time after receipt. In addition, you may be subject to tax payment and/or reporting obligations in connection with any income realized under the Plan and/or from the sale of Shares. You acknowledge that you are responsible for complying with all such requirements, and that you should consult personal legal and tax advisors, as applicable, to ensure compliance. 24. WAIVER. You acknowledge that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of this Agreement. 25. LANGUAGE. You acknowledge that you are sufficiently proficient in the English language, or have consulted with an advisor who is sufficiently proficient in English, so as to allow you to understand the terms and conditions of this Agreement. If you have received this

15. Agreement, or any other document related to this Award and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control. 26. APPENDIX. Notwithstanding any provisions in this Agreement to the contrary, your Award shall be subject to the additional terms and conditions for your country set forth in the Appendix. Moreover, if you transfer residence and/or employment to another country reflected in the Appendix, the terms and conditions for such country will apply to you to the extent the Company determines in its sole discretion, that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this Agreement. 27. GOVERNING LAW/VENUE. The interpretation, performance and enforcement of this Agreement will be governed by the law of the State of Delaware without regard to that state’s conflicts of laws rules. For purposes of any action, lawsuit or other proceedings brought due to your participation in the Plan, relating to it, or arising from it, you hereby submit to and consent to the sole and exclusive jurisdiction of the United States District Court for the Southern District of New York (or should such court lack jurisdiction to hear such action, suit or proceeding, in a New York state court in the County of New York), and no other courts, where this Award is granted and/or to be performed. 28. IMPOSITION OF OTHER REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. 29. AMENDMENT. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amended solely by the Administrator by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that no such amendment materially adversely affecting your rights hereunder may be made without your written consent, except as otherwise provided in the Plan. Without limiting the foregoing, the Administrator reserves the right to change, by written notice to you and without your prior written consent, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant to facilitate compliance with applicable laws or regulations or any future law, regulation, ruling, or judicial decision.

16. SEAGEN INC. APPENDIX TO GLOBAL STOCK UNIT AGREEMENT Capitalized terms used but not defined in this Appendix have the meanings set forth in the Plan and/or in the Agreement. Terms and Conditions This Appendix includes additional terms and conditions that govern this Award if you reside and/or work in one of the countries listed below. If you are a citizen or resident of a country other than the one in which the you are currently residing and/or working, transfer employment and/or residency to another country after the Award is granted, or are considered a resident of another country for local law purposes, the Company shall, in its discretion, determine to what extent the terms and conditions herein will apply to you. Notifications This Appendix also includes information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of August 2023. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time that you acquire Shares or sell Shares acquired under the Plan. In addition, the information contained herein is general in nature and may not apply to your particular situation and the Company is not in a position to assure you of any particular result. Accordingly, you acknowledge that you should seek appropriate professional advice as to how the relevant laws in your country may apply to your situation. Finally, you acknowledge that if you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer employment and/or residency to another country after the Award is granted, or are considered a resident of another country for local law purposes, the information contained herein may not be applicable to you.

17. AUSTRIA Notifications Exchange Control Information. If you hold securities (including Shares acquired under the Plan) or cash (including proceeds from the sale of Shares) outside of Austria, you may be subject to reporting obligations to the Austrian National Bank. If the value of the Shares meets or exceeds a certain threshold, you must report the securities held on a quarterly basis to the Austrian National Bank as of the last day of the quarter, on or before the 15th day of the month following the end of the calendar quarter. In all other cases, an annual reporting obligation applies and the report has to be filed as of December 31 on or before January 31 of the following year using the form P2. Where the cash amount held outside of Austria meets or exceeds a certain threshold, monthly reporting obligations apply as explained in the next paragraph. In connection with the sale of Shares, or receipt any cash dividends, you may have exchange control obligations if you hold the cash proceeds outside of Austria. If the transaction volume of all of your accounts abroad meets or exceeds a certain threshold, you must report to the Austrian National Bank the movements and balances of all accounts on a monthly basis, as of the last day of the month, on or before the 15th day of the following month, on the prescribed form (Meldungen SI-Forderungen und/oder SI-Verpflichtungen). BELGIUM Notifications Foreign Asset / Account Reporting. Belgian residents are required to report any security (e.g., Shares acquired under the Plan) or bank account established outside of Belgium on their annual tax return. In a separate report, Belgian residents are also required to provide the National Bank of Belgium with certain details regarding such foreign accounts (including the account number, bank name and country in which any such account was opened). The forms to complete this report are available on the website of the National Bank of Belgium. Belgian residents should consult with their personal tax advisors to determine their personal reporting obligations. Annual Securities Accounts Tax. If the value of securities held in a Belgian or foreign securities account exceeds €1 million, a new “annual securities account tax” applies. Belgian residents should consult with their personal tax advisor regarding the new tax. CANADA Terms and Conditions Settlement of Restricted Stock Units. Notwithstanding any terms or conditions of the Plan or the Agreement to the contrary, Restricted Stock Units will be settled in shares of Common Stock only, not cash.

18. IMPORTANT ACKNOWLEDGMENT. In accepting this Award, you acknowledge that you have received a copy of the Plan and the Agreement and reviewed the Plan and the Agreement in their entirety and fully understand and accept all provisions of the Plan and the Agreement. YOU FURTHER SPECIFICALLY ACKNOWLEDGE THAT YOU HAVE READ AND EXPRESSLY ACCEPT SECTION 2 (VESTING) OF THIS AGREEMENT, AS AMENDED BY THE FOLLOWING APPENDIX PROVISION: Termination of Employment. This provision replaces Section 2(c) of the Agreement: For purposes of the Stock Unit Award, and notwithstanding anything to the contrary in the Agreement or the Plan, you will be deemed to experience a Termination of Employment (and your right to vest in the Restricted Stock Units and receive shares of Common Stock under the Plan, if any, will terminate effective as of) the date that is the earlier of: (1) the date you cease to be an Employee or Consultant; (2) the date on which you receive written notice of termination; or (3) the date you are no longer actively providing services to the Company or any other Affiliate (except where such inactive service results from a leave of absence that is required to be provided to you under Applicable Law), and in each case: (i) regardless of the reason of such cessation or termination; and (ii) whether or not such cessation or termination is (or is later found to be) unlawful, or invalid, or in breach of Applicable Laws (including, but not limited to, employment-related statutory and/or common and/or civil law, or other laws or rules in the jurisdiction where you are providing services), or in breach of the terms of your employment or service agreement, if any. For clarity, in each case, such date will be determined regardless of (and will not be extended by) any notice period or severance period or period of “garden leave” or period of reasonable notice or period covered by compensation/indemnity/damages in lieu of reasonable notice, or any similar period to which you claim to be entitled, whether mandated under Applicable Laws (including, but not limited to, employment-related statutory law and/or common law and/or civil law), or claimed by you under the terms of your employment or service agreement (if any), or claimed by you on any other basis whatsoever. The Board or its delegate shall have exclusive discretion to determine when you cease to be an Employee or Consultant or are no longer actively employed for purposes your participation in the Plan (including whether you may still be considered to be providing services while on a leave of absence that is not required to be provided to you under Applicable Law). Data Privacy. This provision supplements Section 21 of the Agreement:

19. You hereby authorize the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operation of the Plan. You further authorize the Company, your employer and/or any other Affiliate to disclose and discuss such information with their advisors. You also authorize the Company, your employer and/or any other Affiliate to record such information and to keep such information in your employee file. Notifications Securities Law Information. You understand that you are permitted to sell shares of Common Stock acquired pursuant to the Plan through the designated broker appointed under the Plan, if any, provided the sale of the shares acquired pursuant to the Plan takes place outside of Canada through the facilities of a stock exchange on which the shares are listed, and the Company is not a reporting issuer in any jurisdiction of Canada at the time of sale. Foreign Asset/Account Reporting Information. Specified Foreign property, including Stock Units, shares of Common Stock acquired under the Plan and other rights to receive shares of a non-Canadian company held by a Canadian resident must generally be reported annually on a Form T1135 (Foreign Income Verification Statement) if the total cost of the specified foreign property exceeds C$100,000 at any time during the year. Thus, if the C$100,000 cost threshold is exceeded by other foreign specified property held by the individual, the award of Restricted Stock Units must be reported (generally at a nil cost). For purposes of such reporting, shares of Common Stock acquired under the Plan may be reported at their adjusted cost basis. The adjusted cost basis of a share is generally equal to the fair market value of such share at the time of acquisition; however, if you own other shares of Common Stock (e.g., acquired under other circumstances or at another time), the adjusted cost basis may have to be averaged with the adjusted cost bases of the other shares of Common Stock. You should consult with your personal tax advisor to determine your reporting requirements. DENMARK Terms and Conditions Danish Stock Option Act. By accepting this Award, you acknowledge that you received an Employer Statement, translated into Danish, which is being provided to comply with the Danish Stock Option Act. Notifications Foreign Asset/Account Reporting Information. If you establish an account holding shares or cash outside of Denmark, you must report the account to the Danish Tax Administration. The form which should be used to make the report can be obtained from a local bank.

20. SPECIAL NOTICE FOR EMPLOYEES IN DENMARK EMPLOYER STATEMENT Pursuant to Section 3(1) of the Act on Stock Options in employment relations, as amended January 1, 2019 (the “Stock Option Act”), you are entitled to receive the following information regarding the restricted stock units granted to you by Seagen Inc. (the “Company”) under the Seagen Inc. Amended and Restated 2007 Equity Incentive Plan (the “Plan”) in a written statement. This statement contains information applicable to your participation in the Plan, as required under the Stock Option Act, while the other terms and conditions of your restricted stock units (“Stock Units”) are described in detail in the Plan and the Stock Unit Award Agreement (the “Agreement”), both of which have been made available to you. Capitalized terms used but not defined herein shall have the same meanings given to them in the Plan or the Agreement, as applicable. Section 1 of the Stock Option Act provides that the Stock Option Act only applies to employees. Employees are defined in section 2 of the Stock Option Act as persons who receive remuneration for their personal services in an employment relationship. Persons, including managers, who are not regarded as employees under the Stock Option Act, will not be subject to the Stock Option Act. If you are not an employee within the meaning of the Stock Option Act, the Company therefore has no obligation to issue an employer information statement to you and you will not be able to rely on this statement for legal purposes, since only the terms and conditions set out in the Plan apply. 1. Date of grant The date of grant of your Stock Units is the date that the Board or its delegates approved a grant for you and determined it would be effective, which is set forth in the Agreement. 2. Terms or conditions for Stock Unit grant The grant of Stock Units under the Plan is made at the sole discretion of the Company. Employees, Directors and Consultants of the Company and its Affiliates, are eligible to receive grants under the Plan. The Board has broad discretion to determine who will receive Stock Units and to set the terms and conditions of the Stock Units. The Company may decide, in its sole discretion, not to make any grants of Stock Units to you in the future. Under the terms of the Plan and the Agreement, you have no entitlement or claim to receive future grants of Stock Units. 3. Vesting date or period The Stock Units will vest over a period of time (as set forth in the Agreement), subject to your continuous service through the applicable vesting date and other conditions set forth in the Plan and Agreement, and subject to Section 5 of this statement. 4. Exercise Price

21. No exercise price is payable upon the conversion of your Stock Units into shares of Common Stock in accordance with the vesting and settlement schedule described in the Agreement. 5. Your rights upon termination of employment Subject to the provisions below regarding accelerated vesting in certain circumstances, your eligibility to receive any vesting of this Award will cease upon your Termination of Employment and the Stock Units credited to the Account that were not vested on the date of such termination will be forfeited at no cost to the Company and you will have no further right, title or interest in or to such Award or the shares of Common Stock to be issued in respect of such portion of the Award. In the event of your Termination of Employment as a result of your Disability, the vesting of your Award shall accelerate such that your Award shall become vested as to an additional twelve (12) months, effective as of the date of such Termination of Employment, to the extent that your Award is outstanding on such date. In the event of your Termination of Employment as a result of your death, your Award (and all other Seagen Inc. stock units granted to you that do not have performance or milestone vesting conditions) shall accelerate and vest in full, effective as of the date of such Termination of Employment, to the extent that your Award is outstanding on such date. 6. Financial aspects of participating in the Plan The grant of Stock Units has no immediate financial consequences for you. The value of the Stock Units is not taken into account when calculating holiday allowances, pension contributions or other statutory consideration calculated on the basis of salary. Shares of stock are financial instruments and investing in stock will always have financial risk. The future value of Company shares is unknown and cannot be predicted with certainty. Seagen Inc. 21823 - 30th Drive S.E. Bothell, Washington 98021 U.S.A.

22. SÆRLIG MEDDELELSE TIL MEDARBEJDERE I DANMARK ARBEJDSGIVERERKLÆRING I henhold til § 3, stk. 1, i lov om brug af køberet eller tegningsret m.v. i ansættelsesforhold som ændret 1. januar 2019 ("Aktieoptionsloven") er du berettiget til i en skriftlig erklæring at modtage følgende oplysninger om de betingede aktier, som du modtager fra Seagen Inc. (“Selskabet”) i henhold til Seagen Inc.'s "Amended and Restated 2007 Equity Incentive Plan" ("Ordningen"). Denne erklæring indeholder de oplysninger, der i henhold til Aktieoptionsloven gælder for din deltagelse i Ordningen, mens de øvrige vilkår og betingelser for de betingede aktier ("Betingede Aktier") er nærmere beskrevet i Ordningen og i Aktietildelingsaftalen ("Aftalen"), som begge er udleveret til dig. Begreber, der står med stort begyndelsesbogstav i denne arbejdsgivererklæring, men som ikke er defineret heri, har den i Ordningen eller Aftalen anførte betydning. I henhold til Aktieoptionslovens § 1 finder loven kun anvendelse for lønmodtagere. Lønmodtagere er defineret i Aktieoptionslovens § 2 som personer, der modtager vederlag for personligt arbejde i tjenesteforhold. Personer, herunder direktører, som ikke anses for at være lønmodtagere i Aktieoptionslovens forstand, er ikke omfattet af Aktieoptionsloven. Hvis du ikke er lønmodtager i Aktieoptionslovens forstand, er Selskabet derfor ikke forpligtet til at udstede en arbejdsgivererklæring til dig, og du vil ikke i juridisk henseende kunne henholde dig til denne arbejdsgivererklæring, da det alene er bestemmelserne i Ordningen, der er gældende. 1. Tildelingstidspunkt Tidspunktet for tildeling af de Betingede Aktier er den dag, hvor Bestyrelsen eller en repræsentant for Bestyrelsen godkendte tildelingen og besluttede, at den skulle træde i kraft. Tidspunktet fremgår af Aftalen. 2. Vilkår og betingelser for tildelingen af Betingede Aktier Tildelingen af Betingede Aktier i henhold til Ordningen sker efter Selskabets eget skøn. Tildeling kan i henhold til Ordningen ske til Medarbejdere, Bestyrelsesmedlemmer og Konsulenter i Selskabet og dets Tilknyttede Selskaber. Bestyrelsen har vide beføjelser til at bestemme, hvem der skal modtage Betingede Aktier og på hvilke vilkår. Selskabet kan frit vælge fremover ikke at tildele din nogen Betingede Aktier. I henhold til bestemmelserne i Ordningen og Aftalen har du ikke hverken ret til eller krav på fremover at få tildelt Betingede Aktier. 3. Modningsdato eller -periode De Betingede Aktier modnes over en periode (som anført i Aftalen), forudsat at du fortsat er ansat på modningsdatoen, og at de øvrige betingelser i Ordningen og i Aftalen er opfyldt, dog med forbehold for pkt. 5 nedenfor. 4. Udnyttelseskurs

23. Der skal ikke betales nogen udnyttelseskurs i forbindelse med konverteringen af de Betingede Aktier til Ordinære Aktier i overensstemmelse med den i Aftalen beskrevne modnings- og afregningsplan. 5. Din retsstilling i forbindelse med fratræden Med forbehold for bestemmelserne nedenfor vedrørende fremskyndet modning ophører modningen ved din Fratræden, og de Betingede Aktier på din Konto, som ikke er modnet på fratrædelsestidspunktet, bortfalder uden omkostninger for Selskabet, og du vil ikke længere have ret eller adkomst til Tildelingen eller de Ordinære Aktier, der udstedes i relation til denne del af Tildelingen. Såfremt du Fratræder, fordi du eller bliver Uarbejdsdygtig, fremskyndes modningen af Tildelingen, således at Tildelingen modnes, som om du havde været ansat i en periode på yderligere tolv (12) måneder fra Fratrædelsesdatoen, såfremt Tildelingen endnu ikke er modnet på dette tidspunkt. Såfremt du Fratræder, fordi du død, optjeningen er fuldt fremskyndet for Allokeringen (og alle andre Seagen Inc.-aktieenheder, der er tildelt dig, og som ikke har præstations- eller milepælsvilkår), således at Tildelingen modnes, såfremt Tildelingen endnu ikke er modnet på dette tidspunkt. 6. Økonomiske aspekter ved deltagelse i Ordningen Tildelingen af Betingede Aktier har ingen umiddelbare økonomiske konsekvenser for dig. Værdien af de Betingede Aktier indgår ikke i beregningen af feriepenge, pensionsbidrag eller øvrige lovpligtige, vederlagsafhængige ydelser. Aktier er finansielle instrumenter, og investering i aktier vil altid være forbundet med en økonomisk risiko. Den fremtidige værdi af Selskabets aktier kendes ikke og kan ikke forudsiges med sikkerhed. Seagen Inc. 21823 - 30th Drive S.E. Bothell, Washington 98021 U.S.A.

24. FINLAND There are no country-specific provisions. FRANCE Terms and Conditions Non-Qualified Award. The Stock Units are not granted as a “French-qualified” Award and are not intended to qualify for the special tax and social security treatment applicable to shares granted for no consideration under Sections L. 225-197-1 to L. 225-197-5 and Sections L. 22-10-59 and L. 22-10-60 of the French Commercial Code, as amended. Consent to Receive Information in English. By accepting this Award, you confirm having read and understood the Plan and the Agreement which were provided in the English language. You accept the terms of those documents accordingly. Consentement Relatif à la Langue Utilisée. En acceptant l’attribution, vous confirmez avoir lu et compris le Plan et ce Contrat, qui ont été communiqués en langue anglaise. Vous acceptez les termes de ces documents en connaissance de cause. Notifications Foreign Asset/Account Reporting Information. If you hold cash or shares of Common Stock outside of France or maintain a foreign bank or brokerage account (including accounts that were opened and closed during the tax year), you are required to report such assets and accounts to the French tax authorities on an annual basis on a specified form together with your income tax return. Failure to complete this reporting can trigger significant penalties. GERMANY Notifications Exchange Control Information. Cross-border payments in excess of €12,500 must be reported to the German Federal Bank (Bundesbank). If you make or receive a payment in excess of this amount (including if you acquire shares of Common Stock with a value in excess of this amount under the Plan or sell shares of Common Stock via a foreign broker, bank or service provider and receive proceeds in excess of this amount) and/or if the Company withholds or sells shares of Common Stock with a value in excess of this amount to cover Tax-Related Items, you must report the payment and/or the value of the shares of Common Stock withheld or sold to Bundesbank. Such reports must be made either electronically using the “General Statistics Reporting Portal” (“Allgemeine Meldeportal Statistik”) available via the Bundesbank's website (www.bundesbank.de) or via such other method (e.g., by email or telephone) as is permitted or required by Bundesbank. The report must be submitted monthly or within such timing as is permitted or required by Bundesbank. You are responsible for making this report.

25. Foreign Asset/Account Reporting Information. If your acquisition of shares of Common Stock acquired under the Plan leads to a so-called qualified participation at any point during the calendar year, you may need to report the acquisition when you file your tax return for the relevant year. A qualified participation is attained if (i) the value of the shares of Common Stock exceeds €150,000, or (ii) in the unlikely event that you hold shares of Common Stock exceeding 10% of the Company’s share capital. However, if the shares of Common Stock are listed on a recognized U.S. stock exchange and you own less than 1% of the Company, this requirement will not apply to you. ITALY Terms and Conditions Plan Document Acknowledgment. In accepting this Award, you acknowledge that you have received a copy of the Plan and the Agreement and reviewed the Plan and the Agreement in their entirety and fully understand and accept all provisions of the Plan and the Agreement. You further acknowledge that you have read and specifically and expressly approve the following sections of the Agreement: Section 10. Nature of Award; Section 11. Tax Obligations; Section 12. No Advice Regarding Grant; Section 20. Severability; Section 21. Data Privacy; Section 25. Language; Section 27. Governing Law/Venue; and Section 28. Imposition of Other Requirements. Undertaking to Provide Notice of Sale. In accepting this Award, you undertake to notify the Employer, in writing on a Notice of Sale substantially in the form as attached hereto as Exhibit A, within fifteen (15) days of any sale or disposal of Seagen Inc. shares acquired under the Plan which occurs within three (3) years of the date the shares were issued to you and which triggers, pursuant to art. 51, par. 2, letter g) of Presidential Decree no. 917/1986, the taxation as employment income at vesting (i.e., the fair market value of the shares on the date of vesting) previously exempted. Notifications Foreign Asset/Account Reporting Information. If you are an Italian resident and at any time during the fiscal year hold investments or financial assets outside of Italy (e.g., cash, shares of Common Stock) which may generate income taxable in Italy (or if you are the beneficial owner of such an investment or asset, even if you do not directly hold the investment or asset under Italian money laundering provisions), you are required to report such investments or assets on your annual tax return for such fiscal year (on UNICO Form, RW Schedule) or on a special form if you are not required to file a tax return. Foreign Financial Assets Tax. The fair market value of any shares of Common Stock held outside of Italy is subject to a foreign assets tax. Financial assets include shares of Common Stock acquired under the Plan. The taxable amount will be the fair market value of the financial assets assessed at the end of the calendar year. You should consult with your personal tax advisor about the foreign financial assets tax.

26. NETHERLANDS There are no country-specific provisions. NORWAY There are no country-specific provisions. PORTUGAL Terms and Conditions Consent to Receive Information in English. You hereby expressly declare that you have full knowledge of the English language and have read, understood and fully accepted and agreed with the terms and conditions established in the Plan and the Agreement. Conhecimento da Lingua. Contratado, pelo presente instrumento, declara expressamente que tem pleno conhecimento da língua inglesa e que leu, compreendeu e livremente aceitou e concordou com os termos e condições estabelecidas no Plano e no Acordo. Notifications Exchange Control Information. If you receive shares of Common Stock upon vesting and settlement of the Award, the acquisition of shares of Common Stock should be reported to the Banco de Portugal for statistical purposes. If shares of Common Stock are deposited with a commercial bank or financial intermediary in Portugal, such bank or financial intermediary will submit the report on your behalf. If the shares of Common Stock are not deposited with a commercial bank or financial intermediary in Portugal, you are responsible for submitting the report to the Banco de Portugal. PUERTO RICO There are no country-specific provisions. SPAIN Terms and Conditions Labor Law Acknowledgment. The following provisions supplement Section 10 of the Agreement: By accepting this Award, you agree to participation in the Plan and acknowledge that you have received a copy of the Plan. You understand and agree that, except as otherwise provided in the Agreement, you will forfeit any Stock Units in the event of your Termination of Employment by reason of, but not limited to, resignation, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or

27. recognized to be without cause (i.e., subject to a “despido improcedente,” individual or collective dismissal on objective grounds, whether adjudged or recognized to be with or without cause, material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the Workers’ Statute, Article 50 of the Workers’ Statute, unilateral withdrawal by the Service Recipient and under Article 10.3 of the Royal Decree 1382/1985. Furthermore, you understand that the Company has unilaterally, gratuitously and discretionally decided to grant Stock Units under the Plan to individuals who are employees of the Company or its Affiliates throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any Affiliates on an ongoing basis except as set forth under the terms of the Plan and the Agreement. Consequently, you understand that any Award is given on the assumption and condition that it shall not become a part of any employment contract (either with the Company or any Affiliates) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. Further, you understand and freely accept that there is no guarantee that any benefit whatsoever shall arise from any gratuitous and discretionary grant since the future value of the Stock Units and shares of Common Stock is unknown and unpredictable and you may forfeit the Stock Units if your Termination of Employment occurs prior to vesting. In addition, you understand that this Award would not be made but for the assumptions and conditions referred to above; thus, you understand, acknowledge and freely accept that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then this Award shall be null and void. Notifications Exchange Control Information. You are required to electronically declare to the Bank of Spain any security accounts (including brokerage accounts held abroad), as well as the securities (including shares of Common Stock acquired under the Plan) held in such accounts if the value of the transactions for all such accounts during the prior year or the balances of such accounts as of December 31 of the prior year exceeds EUR 1 million. Different thresholds and deadlines to file this declaration apply. However, if neither such transactions during the immediately preceding year nor the balances / positions as of December 31 exceed EUR 1 million, no such declaration must be filed unless expressly required by the Bank of Spain. If any of such thresholds were exceeded during the current year, you may be required to file the relevant declaration corresponding to the prior year, however, a summarized form of declaration may be available. You should consult your personal tax or legal advisor for further information regarding your exchange control reporting obligations. Additionally, if you hold 10% or more of the share capital of the Company or such other amount that would entitle you to join the Board, the acquisition of shares under Plan must be declared for statistical purposes to the Direccion General de Comercio e Inversiones (the “DGCI”), the Bureau for Commerce and Investments, which is a department of the Ministry of Industry, Trade and Tourism. Generally, the declaration must be filed in January for shares (and any other securities) owned as of December 31 of each year; however, if the value of the shares acquired or the amount of the sale proceeds you realize from the sale of shares exceeds a certain threshold (currently

28. €1,502,530), the declaration must be filed within one month of the acquisition or sale, as applicable. Foreign Asset/Account Reporting Information. To the extent that you hold rights or assets (i.e., cash or shares of Common Stock held in a bank or brokerage account) outside Spain with a value in excess of €50,000 per type of right or asset (e.g., shares of Common Stock, cash, etc.) as of December 31 each year, you are required to report information on such rights and assets on your tax return for such year. After such rights or assets are initially reported, the reporting obligation will only apply for subsequent years if the value of any previously-reported rights or assets increases by more than €20,000. You should consult with your personal tax and legal advisors to ensure that you are properly complying with your reporting obligations. Securities Law Information. No “offer of securities to the public,” as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the grant of this Award. The Agreement has not been nor will it be registered with the Comisión Nacional del Mercado de Valores, and does not constitute a public offering prospectus. SWEDEN There are no country-specific provisions. SWITZERLAND Terms and Conditions Grant of the Award. The Award granted to a Swiss Participant is a voluntary gratuity (Gratifikation) as determined at the Company's sole discretion which the Participant has no entitlement to and which does not constitute an entitlement of the Participant for a grant of further Awards in the future. Language Acknowledgement. You confirm having read and understood the documents relating to the Plan, including the Agreement, including this Appendix and all terms and conditions included therein, which were provided in the English language only. You confirm having sufficient language capabilities to understand these terms and conditions in full. Du bestätigst, dass du den Plan sowie die dazugehörigen Dokumente, inklusive der Vereinbarung, mit all den darin enthaltenen Bedingungen und Voraussetzungen, welche in englischer Sprache verfasst sind, gelesen und verstanden hast. Du bestätigst dass Deine Sprachkenntnisse genügend sind, um die Bedingungen und Voraussetzungen zu verstehen. Notifications Securities Law Information. Neither the Agreement nor any other materials relating to the Award (i) constitutes a prospectus according to articles 35 et seq. of the Swiss Federal Act on Financial Services (“FinSA”) (ii) may be publicly distributed or otherwise made publicly available in Switzerland to any person other than an employee of the Company or (iii) has been filed with

29. approved or supervised by any Swiss reviewing body according to article 51 FinSA or any Swiss regulatory authority, including the Swiss Financial Market Supervisory Authority FINMA. UNITED KINGDOM Terms and Conditions Tax Obligations. The following provision supplements Section 11 of the Agreement: Without limitation to Section 11 of the Agreement, you agree that you are liable for all Tax-Related Items and hereby covenant to pay all such Tax-Related Items, as and when requested by the Company or your employer or by HM’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). You also agree to indemnify and keep indemnified the Company and your employer against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf. Notwithstanding the foregoing, if you are a director or an executive officer of the Company (within the meaning of such terms for purposes of Section 13(k) of the Exchange Act), you acknowledge that you may not be able to indemnify the Company or your employer for the amount of any income tax not collected from or paid by you, as it may be considered a loan. In this case, the amount of any income tax not collected within 90 days of the end of the U.K. tax year in which the event giving rise to the Tax-Related Item(s) occurs may constitute an additional benefit to you on which additional income tax and National Insurance contributions (“NICs”) may be payable. You will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company or your employer (as appropriate) for the value of any employee NICs due on this additional benefit, which the Company or your employer may recover from you by any of the means referred to in the Plan or Section 11 of the Agreement. NIC Joint Election. As a condition of your participation in the Plan and the vesting and settlement of the Award or receipt of any benefit in connection with the Award, you agree to accept any liability for secondary Class 1 NICs that may be payable by the Company or your employer (or any successor to the Company or your employer) in connection with the Award and any event giving rise to Tax-Related Items (the “Employer’s Liability”). Without prejudice to the foregoing, you agree to enter into the following joint election with the Company, the form of such joint election being formally approved by HMRC (the “Joint Election”), and any other required consent or elections. You further agree to enter into such other Joint Elections as may be required between you and any successor to the Company and/or your employer for the purpose of continuing the effectiveness of the Joint Election. You further agree that the Company and/or your employer may collect the Employer’s Liability from you by any of the means set forth in Section 11 of the Agreement. If you do not enter into the Joint Election prior to the vesting of the Award or any other event giving rise to Tax-Related Items, you will not be entitled to vest in the Award and receive shares of Common Stock (or receive any other benefit in connection with the Award) unless and until

30. you enter into the Joint Election, and no shares of Common Stock or other benefit will be issued to you under the Plan, without any liability to the Company, your employer or any other service recipient.

31. Note to UK Participants in the Seagen Inc. Amended and Restated 2007 Equity Incentive Plan Important Note on the Election to Transfer Employer NICs If you are liable for National Insurance contributions (“NICs”) in the UK in connection with your participation in the Seagen Inc. Amended and Restated 2007 Equity Incentive Plan (the "Plan") and as a condition of your participation in the Plan, you are required to enter into an Election to transfer to you any liability for employer’s NICs that may arise in connection with your participation in the Plan. By entering into the Election:  you agree that any employer’s NICs liability that may arise in connection with your participation in the Plan will be transferred to you;  you authorise your employer to recover an amount sufficient to cover this liability by such methods including, but not limited to, deductions from your salary or other payments due or the sale of sufficient shares acquired pursuant to your awards. By signing this Election, you are agreeing to be bound by the terms of the Election. Please read the Election carefully. Please print and keep a copy of the Election for your records.

32. SEAGEN INC. AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN Election To Transfer the Employer’s National Insurance Liability to the Employee This Election is between: A. The individual who has obtained authorised access to this Election (the “Employee”), who is employed by one of the employing companies listed in the attached schedule (the “Employer”) and who is eligible to receive stock options, restricted stock units and performance-based restricted stock units (“Awards”) pursuant to the Seagen Inc. Amended and Restated 2007 Equity Incentive Plan (the “Plan”), and B. Seagen Inc., 21717 30th Dr SE, Bothell, Washington 98021 USA (the “Company”), which may grant Awards under the Plan and is entering into this Election on behalf of the Employer. 1. Introduction 1.1 This Election relates to all Awards granted to the Employee under the Plan on or after 1 January 2020 up to the termination date of the Plan. 1.2 In this Election the following words and phrases have the following meanings: (a) “Chargeable Event” means any event giving rise to Relevant Employment Income. (b) “ITEPA” means the Income Tax (Earnings and Pensions) Act 2003.   (c) “Relevant Employment Income” from Awards on which Employer’s National Insurance Contributions become due is defined as: (i) an amount that counts as employment income of the earner under section 426 ITEPA (restricted securities: charge on certain post-acquisition events); (ii) an amount that counts as employment income of the earner under section 438 of ITEPA (convertible securities: charge on certain post-acquisition events); or   (iii)any gain that is treated as remuneration derived from the earner’s employment by virtue of section 4(4)(a) SSCBA, including without limitation:   (A) the acquisition of securities pursuant to Awards (within the meaning of section 477(3)(a) of ITEPA);

33. (B) the assignment or release of the Awards in return for consideration (within the meaning of section 477(3)(b) of ITEPA); and (C) the receipt of a benefit in connection with the Awards other than a benefit within (i) or (ii) above (within the meaning of section 477(3)(c) of ITEPA). (d) “SSCBA” means the Social Security Contributions and Benefits Act 1992. 1.3 This Election relates to the employer’s secondary Class 1 National Insurance Contributions (the “Employer’s Liability”) which may arise in respect of Relevant Employment Income in respect of the Awards pursuant to section 4(4)(a) and/or paragraph 3B(1A) of Schedule 1 of the SSCBA. 1.4 This Election does not apply in relation to any liability, or any part of any liability, arising as a result of regulations being given retrospective effect by virtue of section 4B(2) of either the SSCBA, or the Social Security Contributions and Benefits (Northern Ireland) Act 1992. 1.5 This Election does not apply to the extent that it relates to relevant employment income which is employment income of the earner by virtue of Chapter 3A of Part VII of ITEPA (employment income: securities with artificially depressed market value). 2. The Election The Employee and the Company jointly elect that the entire liability of the Employer to pay the Employer’s Liability that arises on any Relevant Employment Income is hereby transferred to the Employee. The Employee understands that, by signing or electronically accepting this Election, he or she will become personally liable for the Employer’s Liability covered by this Election. This Election is made in accordance with paragraph 3B(1) of Schedule 1 to SSCBA. 3. Payment of the Employer’s Liability 3.1 The Employee hereby authorises the Company and/or the Employer to collect the Employer’s Liability in respect of any Relevant Employment Income from the Employee at any time after the Chargeable Event: (i) by deduction from salary or any other payment payable to the Employee at any time on or after the date of the Chargeable Event; and/or (ii) directly from the Employee by payment in cash or cleared funds; and/or (iii) by arranging, on behalf of the Employee, for the sale of some of the securities which the Employee is entitled to receive in respect of the Awards; and/or (iv) by any other means specified in the applicable award agreement.

34. 3.2 The Company hereby reserves for itself and the Employer the right to withhold the transfer of any securities to the Employee in respect of the Awards until full payment of the Employer’s Liability is received. 3.3 The Company agrees to procure the remittance by the Employer of the Employer’s Liability to HM Revenue & Customs on behalf of the Employee within 14 days after the end of the UK tax month during which the Chargeable Event occurs (or within 17 days after the end of the UK tax month during which the Chargeable Event occurs, if payments are made electronically). 4. Duration of Election 4.1 The Employee and the Company agree to be bound by the terms of this Election regardless of whether the Employee is transferred abroad or is not employed by the Employer on the date on which the Employer’s Liability becomes due. 4.2 Any reference to the Company and/or the Employer shall include that entity’s successors in title and assigns as permitted in accordance with the terms of the Plan and relevant award agreement. This Election will continue in effect in respect of any awards which replace the Awards in circumstances where section 483 of ITEPA applies. 4.3 This Election will continue in effect until the earliest of the following: (i) the Employee and the Company agree in writing that it should cease to have effect; (ii) on the date the Company serves written notice on the Employee terminating its effect; (iii) on the date HM Revenue & Customs withdraws approval of this Election; or (iv) after due payment of the Employer’s Liability in respect of the entirety of the Awards to which this Election relates or could relate, such that the Election ceases to have effect in accordance with its terms. Acceptance by the Employee The Employee acknowledges that, by clicking on the “ACCEPT” box in the E*TRADE online acceptance screen, or by signing the Election, the Employee agrees to be bound by the terms of this Election. Signature of Participant Printed Name Date

35. Awards subject to this Election Award Date Award No. Acceptance by the Company The Company acknowledges that, by signing this Election or arranging for the scanned signature of an authorised representative to appear on this Election, the Company agrees to be bound by the terms of this Election. Signature for and on behalf of the Company Position _______

36. SCHEDULE OF EMPLOYER COMPANIES The following are employer companies to which this Election may apply: For each company, provide the following details: Name of Company: Seagen U.K. Ltd. Registered Office: The Charter Building, Charter Place, Uxbridge, England UB81JG Company Registration Number: 06321958 Corporation Tax District: Corporation Tax Reference: 623 73208 17853 A PAYE Reference: 120/EE19799

37. EXHIBIT A SEAGEN INC. AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN NOTICE OF SALE Italian Employees Only Note: If you sell or otherwise dispose of Seagen Inc. shares acquired upon vesting of restricted stock units which were not subject to income tax and social insurance under the exemption provided by art. 51, par. 2, lett. g) of Presidential Decree no. 917/1986 and such sale occurs within three (3) years from the date the shares were issued to you, you are required to provide this Notice of Sale to Seagen Italy S.r.l. (“Seagen Italy”) within 15 days of the date of such sale. In the event that you have acquired shares on more than one date, in order to identify the shares that are deemed sold and, thus, if the sale is occurred within three (3) years from the issuance date, you must follow the first-in-first-out principle. EMPLOYEE INFORMATION Name (last, first, middle) _________________________________ Employee ID Number Home Address Delivery Address: City, Postal Code, Country: Telephone: ___________________________ Email:

38. 1. I hereby notify Seagen Italy that on [month/day/year] I sold or otherwise disposed of ___________ [number] shares acquired upon the vesting of restricted stock units granted under the 2007 Equity Incentive Plan. Those restricted stock units vested on the following date(s): [month/day/year]. I understand that Italian law requires that any shares sold be identified under the first-in-first-out principle, i.e., in the event that I have acquired shares on more than one date, the shares identified above are the shares acquired earliest and not yet sold. These shares were not subject to income tax and social insurance contributions at the time of vest under an exemption pursuant to art. 51, par. 2, letter g of Presidential Decree no. 917/1986 up to €2,065 per calendar year. 2. I understand that if I am employed by Seagen Italy at the time I sell or dispose of shares reported on this notice, Seagen Italy will include the income attributable to said shares (i.e., the fair market value of the shares as determined under Italian law) that was previously exempted in my current year income for tax and social insurance withholding and reporting purposes. In the event that I am no longer employed by Seagen Italy, Seagen Italy may inform my new employer or the Istituto Nazionale Previdenza Sociale, as applicable, that I have sold shares resulting in taxable income. I am [check one]: □ employed at Seagen Italy, □ employed at [insert company name and address], □ not employed, but am receiving a government pension, or □ other [explain]. Signature: ______________________________________ Date: ______________________________________ Give original form to Payroll Department, Seagen Italy. Keep a copy for your records.

EX-10.2

SEAGEN INC. GLOBAL PERFORMANCE STOCK UNIT GRANT NOTICE (AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN) Seagen Inc. (the “Company”), pursuant to its Amended and Restated 2007 Equity Incentive Plan (the “Plan”), hereby awards to Participant a Stock Unit Award for the number of stock units set forth below (the “Award”). The Award is subject to all of the terms and conditions as set forth herein and in the Plan and the Global Performance Stock Unit Agreement (including Exhibit A to the Global Performance Stock Unit Agreement and any special terms and conditions for Participant’s country set forth in the attached appendix (the “Appendix”)), both of which are incorporated herein in their entirety. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Plan or the Global Performance Stock Unit Agreement, as applicable. Except as otherwise explicitly provided herein, in the event of any conflict between the terms in the Award and the Plan, the terms of the Plan shall control; provided, however, that the terms of the Award shall control with respect to any terms regarding a Change of Control or a Termination of Employment. Participant: [•] Date of Grant: [•] Target Number of Stock Units Subject to Award (the “Target Shares”): [•] Maximum Number of Stock Units Subject to Award (the “Maximum Shares”): [•] Vesting Schedule: The Award shall vest in accordance with Section 2 of the Global Performance Stock Unit Agreement and Exhibit A to the Global Performance Stock Unit Agreement. Issuance Schedule: The Shares to be issued in respect of the Award will be issued in accordance with the issuance schedule set forth in Section 7 of the Global Performance Stock Unit Agreement. Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Global Performance Stock Unit Grant Notice, the Global Performance Stock Unit Agreement (including Exhibit A to the Global Performance Stock Unit Agreement and the Appendix) and the Plan. Participant also acknowledges receipt of the Prospectus for the Plan. Participant further acknowledges that as of the Date of Grant, this Global Performance Stock Unit Grant Notice, the Global Performance Stock Unit Agreement (including Exhibit A to the Global Performance Stock Unit Agreement and the Appendix) and the Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and written agreements on that subject. Exhibit 10.2

2023 PSU Awards 8-15-2023 Participant’s electronic acceptance shall signify Participant’s execution of this Global Performance Stock Unit Grant Notice and understanding that the Award is granted and governed under the terms and conditions set forth herein. SEAGEN INC. Jean I. Liu Chief Legal Officer **PLEASE PRINT AND RETAIN THIS AGREEMENT FOR YOUR RECORDS**

1 SEAGEN INC. AMENDED AND RESTATED 2007 EQUITY INCENTIVE PLAN GLOBAL PERFORMANCE STOCK UNIT AGREEMENT Pursuant to the Global Performance Stock Unit Grant Notice (“Grant Notice”) and this Global Performance Stock Unit Agreement, including any special terms and conditions for your country set forth in the appendix attached hereto (this “Agreement”), Seagen Inc. (the “Company”) has awarded you a Stock Unit Award (the “Award”) under its Amended and Restated 2007 Equity Incentive Plan (the “Plan”). Your Award is granted to you effective as of the Date of Grant set forth in the Grant Notice for the Award. This Agreement shall be deemed to be agreed to by the Company and you upon your execution of the Grant Notice to which it is attached. Capitalized terms not explicitly defined in this Agreement shall have the same meanings given to them in the Plan or the Grant Notice, as applicable. Except as otherwise explicitly provided herein, in the event of any conflict between the terms in this Agreement and the Plan, the terms of the Plan shall control; provided, however, that the terms of this Agreement shall control with respect to any terms regarding a Change of Control or a Termination of Employment. The details of your Award, in addition to those set forth in the Grant Notice and the Plan, are as follows. 1. GRANT OF THE AWARD. The Award represents the right to be issued on a future date the number of Shares that is equal to the number of stock units indicated in the Grant Notice (the “Stock Units”), contingent upon the performance criteria and the terms set forth in this Agreement (including Exhibit A to this Agreement). As of the Date of Grant, the Company will credit to a bookkeeping account maintained by the Company for your benefit (the “Account”) the maximum number of Stock Units subject to the Award. Except as otherwise provided herein, you will not be required to make any payment to the Company with respect to your receipt of the Award, the vesting of the Stock Units or the delivery of the Shares to be issued in respect of the Award. 2. VESTING. (a) Subject to the terms of Sections 10, 11 and 13 of this Agreement, your Award will vest, if at all, in accordance with this Section 2 and the vesting terms provided in Exhibit A to this Agreement, provided that you have not incurred a Termination of Employment before the Vesting Date (as defined in Exhibit A to this Agreement). Except as set forth in this Agreement, upon your Termination of Employment, the Stock Units credited to the Account that were not vested on the date of such Termination of Employment will be forfeited at no cost to the Company and you will have no further right, title or interest in the Stock Units or the Shares to be issued in respect of the Award. By accepting the grant of the Award, you acknowledge and agree that the terms set forth in this Agreement (including the vesting terms provided in Exhibit A to this Agreement) supersede any contrary terms regarding the vesting of the Award set forth in any notice or other communication that you receive from, or that is displayed by, E*TRADE or other third party designated by the Company. (b) The Grant Notice sets forth the target and maximum number of Stock Units that are eligible to vest in connection with the achievement of the performance condition

2 determined by the Compensation Committee of the Board of Directors of the Company or any subcommittee thereof (the “Committee”) and set forth in the Performance Goal Grid in Exhibit A to this Agreement (the “Performance Goal Grid”). (c) The Committee shall certify the level of achievement of the performance condition and the associated number of Stock Units that shall be entitled to vest pursuant to the terms of this Agreement (the “Certified Shares”) in accordance with Exhibit A to this Agreement. Subject to the terms of Sections 10 and 11 of this Agreement, no Stock Units subject to your Award shall become Certified Shares unless and until the Committee certifies that the performance condition has been achieved. The Committee will have the full authority to determine whether the performance condition was achieved and approve the Certified Shares in accordance with Exhibit A to this Agreement; provided, however, that (i) such Certified Shares may not exceed the Maximum Shares (as set forth in the Grant Notice, subject to Section 4 of this Agreement) and, (ii) subject to the terms of Sections 10 and 11 of this Agreement, in the event of performance below the Threshold (as defined in Exhibit A to this Agreement), none of the Stock Units will vest and you will have no further right, title or interest in the Stock Units. Any Certified Shares will become eligible to vest on the Vesting Date (as defined in Exhibit A to this Agreement), subject to the terms of Sections 2(a), 10, 11 and 13 of this Agreement. (d) Subject to the terms of Sections 10 and 11 of this Agreement, in the event the Committee determines that the performance condition is not fully or partially achieved, the related Stock Units will not vest and will be forfeited effective as of the last day of the Performance Period (as defined in Exhibit A to this Agreement), subject to earlier forfeiture in the event of your Termination of Employment (except as set forth in this Agreement), and you will have no further right, title or interest in the Stock Units associated with such performance condition. (e) For purposes of your Award, your Termination of Employment will be considered to be (regardless of the reason of termination, whether or not later found to be invalid or in breach of employment or other laws or rules in the jurisdiction where you are providing services or the terms of your employment or service agreement, if any) effective as of the date that you cease to actively provide services to the Company or any Affiliate and will not be extended by any notice period (e.g., employment or service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment or other laws in the jurisdiction where you are employed or providing services or the terms of your employment or service agreement, if any). The Company shall have exclusive discretion to determine when you are no longer actively employed or providing services for purposes of the Plan (including whether you still may be considered to be providing services while on a leave of absence). 3. FORFEITURE OF AWARD NOT TIMELY ACCEPTED. The Award is conditioned upon your electronic acceptance of the Award, as set forth in the Grant Notice. Notwithstanding the foregoing or anything in this Agreement to the contrary, if you fail to accept the Award prior to the Vesting Date, the portion of the Award that otherwise would have vested on the Vesting Date will be forfeited at no cost to the Company, and you will have no further right, title or interest in such portion. In the event of your Termination of Employment as a result of your death or Disability prior to acceptance of the Award, the Company will deem the Award as being accepted.

3 4. NUMBER OF SHARES. (a) The number of Stock Units subject to your Award may be adjusted from time to time for changes in capitalization, as provided in Section 13 of the Plan. (b) Any additional Stock Units that become subject to the Award pursuant to this Section 4 shall be subject, in a manner determined by the Administrator, to the same forfeiture restrictions, restrictions on transferability, and time and manner of delivery as applicable to the other Stock Units covered by your Award. (c) Notwithstanding the provisions of this Section 4, no fractional Shares or rights for fractional Shares shall be created pursuant to this Section 4. The Administrator shall, in its discretion, determine an equivalent benefit for any fractional Shares or fractional Shares that might be created by the adjustments referred to in this Section 4. 5. COMPLIANCE WITH APPLICABLE LAWS. You may not be issued any Shares in respect of your Award unless either (i) such Shares are registered under the Securities Act (or other applicable securities laws in the case of Participants not subject to U.S. securities laws); or (ii) the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act (or other applicable securities laws in the case of Participants not subject to U.S. securities laws). Your Award also must comply with other applicable laws and regulations governing the Award and issuance of Shares, and you will not receive such Shares if the Company determines that such receipt would not be in material compliance with such laws and regulations. You represent and warrant that you (a) have been furnished with a copy of the prospectus for the Plan and all information deemed necessary to evaluate the merits and risks of receipt of the Award, (b) have had the opportunity to ask questions concerning the information received about the Award and the Company, and (c) have been given the opportunity to obtain any information you deem necessary to verify the accuracy of any information obtained concerning the Award and the Company. 6. TRANSFER RESTRICTIONS. Your Award is not transferable, except by will or by the laws of descent and distribution. In addition to any other limitation on transfer created by applicable securities laws, you agree not to assign, hypothecate, donate, encumber or otherwise dispose of any interest in any of the Shares subject to the Award until such Shares are issued to you in accordance with Section 7 of this Agreement. After such Shares have been issued to you, you are free to assign, hypothecate, donate, encumber or otherwise dispose of any interest in such Shares provided that any such actions are in compliance with the provisions herein and applicable securities laws. 7. DATE OF ISSUANCE. (a) If the Award is exempt from application of Section 409A of the Code and any state law of similar effect (collectively “Section 409A”), then subject to Section 13, the Company will deliver to you a number of Shares equal to the number of Certified Shares, including any additional Certified Shares resulting from any Stock Units received pursuant to Section 4 above, on or within 60 days following the applicable vesting date (the “Original Issuance Date”). However, if the Original Issuance Date falls on a date that is not a business day, such delivery date

4 shall instead fall on the next following business day. Notwithstanding the foregoing, if (i) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, as determined by the Company in accordance with the Company’s then-effective policy or policies on trading in Company securities or (2) on a date when you are otherwise permitted to sell Shares on the open market; and (ii) the Company elects, prior to the Original Issuance Date, (x) not to satisfy the Withholding Obligation (as defined in Section 13(b) hereof) by withholding Shares from the Shares otherwise due, on the Original Issuance Date, to you under the Award pursuant to Section 13 hereof, and (y) not to permit you to satisfy the Withholding Obligation in cash, then such Shares shall not be delivered on such Original Issuance Date and shall instead be delivered on the first business day of the next occurring open window period applicable to you or the next business day when you are not prohibited from selling Shares on the open market, as applicable (and regardless of whether there has been a Termination of Employment before such time), but in no event later than the 15th day of the third calendar month of the calendar year following the calendar year in which the Stock Units are no longer considered to be subject to a substantial risk of forfeiture. Delivery of the Shares pursuant to the provisions of this Section 7(a) is intended to comply with the requirements for the short-term deferral exemption available under Treasury Regulations Section 1.409A-1(b)(4) and shall be construed and administered in such manner. The form of such delivery of the Shares (e.g., a stock certificate or electronic entry evidencing such Shares) shall be determined by the Company. (b) The provisions of this Section 7(b) are intended to apply if the Award is subject to Section 409A because of the terms of a severance arrangement or other agreement between you and the Company, if any, that provide for acceleration of vesting of the Award upon your separation from service (as such term is defined in Section 409A(a)(2)(A)(i) of the Code (“Separation from Service”) and such severance benefit does not satisfy the requirements for an exemption from application of Section 409A provided under Treasury Regulations Section 1.409A-1(b)(4) or 1.409A-1(b)(9) (“Non-Exempt Severance Arrangement”). If the Award is subject to and not exempt from application of Section 409A due to application of a Non-Exempt Severance Arrangement, the following provisions in this Section 7(b) shall supersede anything to the contrary in Section 7(a). (i) If the Award vests in the ordinary course before your Termination of Employment in accordance with Section 2 of this Agreement and Exhibit A to this Agreement, without accelerating vesting under the terms of a Non-Exempt Severance Arrangement, in no event will the Shares to be issued in respect of your Award be issued any later than the later of: (A) December 31st of the calendar year that includes the applicable vesting date and (B) the 60th day that follows the applicable vesting date. (ii) If vesting of the Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with your Separation from Service, and such vesting acceleration provisions were in effect as of the date of grant of the Award and, therefore, are part of the terms of the Award as of the date of grant, then the Shares will be earlier issued in respect of your Award upon your Separation from Service in accordance with the terms of the Non-Exempt Severance Arrangement, but in no event later than the 60th day that follows the date of your Separation from Service. However, if at the time the Shares would otherwise be issued you are subject to the distribution limitations contained in Section 409A applicable to “specified employees,” as defined in Section 409A(a)(2)(B)(i) of the Code, such Shares shall instead be

5 issued on the date that is six months following the date of your Separation from Service, or, if earlier, the date of your death that occurs within such six-month period. (iii) If either (A) vesting of the Award accelerates under the terms of a Non-Exempt Severance Arrangement in connection with your Separation from Service, and such vesting acceleration provisions were not in effect as of the date of grant of the Award and, therefore, are not a part of the terms of the Award on the date of grant, or (B) vesting accelerates pursuant to Section 4(b) or 13 of the Plan, then such acceleration of vesting of the Award shall not accelerate the issuance date of the Shares (or any substitute property), but such Shares (or substitute property) shall instead be issued on the same schedule as set forth in Exhibit A to this Agreement as if they had vested in the ordinary course before your Termination of Employment, notwithstanding the vesting acceleration of the Award. Such issuance schedule is intended to satisfy the requirements of payment on a specified date or pursuant to a fixed schedule, as provided under Treasury Regulations Section 1.409A-3(a)(4). (c) Notwithstanding anything to the contrary set forth herein, the Company explicitly reserves the right to earlier issue the Shares in respect of the Award to the extent permitted and in compliance with the requirements of Section 409A, including pursuant to any of the exemptions available in Treasury Regulations Section 1.409A-3(j)(4)(ix). (d) The provisions in this Agreement for delivery of the Shares in respect of the Award are intended either to comply with the requirements of Section 409A or to provide a basis for exemption from such requirements so that the delivery of such Shares will not trigger the additional tax imposed under Section 409A, and any ambiguities herein will be so interpreted. (e) The Administrator may modify the terms of this Agreement and/or the Plan without your consent, in the manner that the Administrator may determine to be necessary or advisable in order to comply with Code Section 409A or to mitigate any additional tax, interest and/or penalties or other adverse tax consequences that may apply under Code Section 409A if compliance is not practical. This Section 7(e) does not create an obligation on the part of the Company to modify the terms of this Agreement or the Plan and does not guarantee that the Award or the delivery of Shares upon settlement of the Award will not be subject to taxes, interest and penalties or any other adverse tax consequences under Code Section 409A. Nothing in this Agreement shall provide a basis for any person to take any action against the Company or any of its Subsidiaries or Affiliates based on matters covered by Code Section 409A, including the tax treatment of any amounts paid under this Agreement, and neither the Company nor any of its Subsidiaries or Affiliates will have any liability under any circumstances to the Participant or any other party if the Award, the delivery of Shares upon vesting/settlement of the Award or other payment or tax event hereunder that is intended to be exempt from, or compliant with, Code Section 409A, is not so exempt or compliant or for any action taken by the Administrator with respect thereto. 8. DIVIDENDS. You shall receive no benefit or adjustment to your Award with respect to any cash dividend, stock dividend or other distribution that does not result from a change in capitalization as provided in Section 13 of the Plan; provided, however, that this sentence shall not apply with respect to any Shares that are delivered to you in connection with your Award after such Shares have been delivered to you.

6 9. AWARD NOT A SERVICE CONTRACT. (a) Nothing in this Agreement (including, but not limited to, the vesting of your Award pursuant to this Agreement (including Exhibit A to this Agreement) or the issuance of the Shares in respect of your Award), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan shall: (i) confer upon you any right to continue in the employ of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company or an Affiliate of the right to terminate your employment without regard to any future vesting opportunity that you may have. (b) By accepting the Award, you acknowledge and agree that the right to vest in the Award pursuant to this Agreement (including Exhibit A to this Agreement) is earned according to the terms of this Agreement (not through the act of being hired, being granted the Award or any other award or benefit) and that the Company has the right to reorganize, sell, spin- out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”). You further acknowledge and agree that such a reorganization could result in your Termination of Employment, or the termination of Affiliate status of your employer and the loss of benefits available to you under this Agreement, including but not limited to, the termination of the right to continue vesting in the Award, except as otherwise provided in this Agreement. You further acknowledge and agree that this Agreement, the Plan, the transactions contemplated hereunder and the vesting terms set forth herein or any covenant of good faith and fair dealing that may be found implicit in any of them do not constitute an express or implied promise of continued engagement as an employee or consultant for the term of this Agreement, for any period, or at all, and shall not interfere in any way with your right or the Company’s right to terminate your service at any time, with or without cause and with or without notice. 10. CHANGE OF CONTROL. (a) Pfizer Change of Control. Notwithstanding anything in your employment agreement or your equity incentives letter with the Company, if any, and as applicable, this Agreement, the Grant Notice or the Plan to the contrary, in the event that the transactions contemplated by the Agreement and Plan of Merger, dated as of March 12, 2023, by and among Pfizer Inc. (“Pfizer”), Aris Merger Sub, Inc. and the Company (such agreement, together with any amendment thereto, the “Merger Agreement”) are consummated, Exhibit A to this Agreement shall cease to apply and the portion of your Award that is outstanding and unvested upon such consummation shall no longer be subject to performance-based conditions and such outstanding portion of your Award will be based on 100% of the Target Shares subject to the Award. In addition, one-third (1/3) of the outstanding, unvested portion of your Award upon such consummation shall vest immediately prior to the Effective Time (as defined in the Merger Agreement).

7 The portion of your Award that is outstanding and unvested as of the Effective Time, after taking into account the prior sentence, shall be substituted automatically with a Pfizer cash-based award (a “Pfizer Cash Award”) with respect to an amount in cash equal to the product of (i) the Merger Consideration (as defined in the Merger Agreement), multiplied by (ii) the number of Stock Units (based on 100% of the Target Shares subject to the Award) then subject to the unvested portion of your Award. The Pfizer Cash Award shall vest 50% on the first anniversary of the Closing (as defined in the Merger Agreement), and 50% on the second anniversary of the Closing, provided that you have not incurred a Termination of Employment before the applicable vesting date. In the event of your Termination of Employment by the Company or Pfizer without Cause, as a result of your Disability, as a result of your death, or by you for Good Reason (as defined below), then subject to your (or your estate’s, in the event of your death) execution and non-revocation of a release of claims against the Company, Pfizer and their affiliates in a form provided to you by Pfizer (and used by Pfizer for similarly situated employees) following such Termination of Employment (the “Release”) and your compliance with any currently applicable post-termination obligations, your Pfizer Cash Award shall accelerate and vest in full, effective as of the date of such Termination of Employment, to the extent that your Pfizer Cash Award is outstanding on such date, and be paid to you promptly (but no more than sixty (60) days) following the date of such Termination of Employment. For purposes of this Section 10(a), “Good Reason” means: (A) a material reduction or change in your job duties, responsibilities and requirements inconsistent with your position with the Company and prior duties, responsibilities and requirements, provided that neither a mere change in title alone nor reassignment to a position that is substantially similar to the position held prior to the change in terms of job duties, responsibilities or requirements shall constitute a material reduction in job responsibilities, (B) a reduction in your then-current base salary, or (C) you refuse to relocate to a facility or location more than fifty (50) miles from the Company’s current location or, if you have a fully remote or hybrid work arrangement (involving both off-site services and in- person services at the Company’s offices or facilities), you refuse to accept a material modification to such fully remote or flexible hybrid work arrangement, as such arrangement, if any, existed as of March 12, 2023 (it being understood that reasonable requests to attend occasional or regular meetings, trainings or other events in the Company’s or Pfizer’s offices or facilities will not constitute a material modification to such an arrangement). In the case of prong (A), the determination of whether a material reduction or change in job duties, responsibilities and requirements inconsistent with your position with the Company and prior duties, responsibilities and requirements has occurred shall be assessed and made in good faith by the majority vote of a committee comprising no fewer than five employees of Pfizer identified by Pfizer’s SVP Total Rewards in good faith, at least three of whom shall have been legacy employees of the Company, with the determination of a majority of the committee members binding on you and Pfizer. In each case, you must first provide notice to Pfizer of the existence of the circumstances giving rise to Good Reason within ninety (90) days of the initial existence of such circumstances; Pfizer must be provided with a period of thirty (30) days from the date of receipt of such notice to cure the circumstances giving rise to Good Reason; and your Termination of Employment for Good Reason must occur within six (6) months of the expiration of the cure period. Each Pfizer Cash Award shall otherwise be subject to substantially the same terms and conditions applicable to your Award as of immediately prior to the Effective Time.

8 (b) Non-Pfizer Change of Control. Notwithstanding anything to the contrary in this Agreement, the Plan or any written agreement between you and the Company (including the employment agreement between you and the Company, or, if different, the Affiliate that employs you, as it may be amended and restated from time to time (the “Employment Agreement”) and any equity incentives letter between you and the Company (an “Equity Letter,” and each of the Employment Agreement and any Equity Letter, a “Seagen Agreement”)) , but subject to Section 409A as described in Section 7 above, in the event a Change of Control (as defined in the applicable Seagen Agreement) other than the transactions with Pfizer contemplated by the Merger Agreement (any such Change of Control, a “Non-Pfizer Change of Control”) occurs before the last day of the Performance Period (as defined in Exhibit A to this Agreement) and before your Termination of Employment (except as set forth in Section 10(b)(iv) of this Agreement), the following shall apply: (i) Determination of Certified Shares. Prior to the effective time of the Non-Pfizer Change of Control, the Committee will determine the number of Certified Shares in the manner specified in Exhibit A to this Agreement. (ii) Award May Be Assumed. If the acquirer or successor (or its parent or subsidiary corporation) in the Non-Pfizer Change of Control (the “Acquirer”) assumes the Award in a manner consistent with Section 13(c) of the Plan, then the Certified Shares will vest on the last day of the Performance Period (as defined in Exhibit A to this Agreement), provided that, except as set forth below, you have not incurred a Termination of Employment prior to such date. (iii) If Award Is Not Assumed. If the Acquirer determines that it will not assume the Award in the Non-Pfizer Change of Control, then the provisions of Section 13(c) of the Plan shall apply with respect to the Certified Shares and references to “fully vested” in such section shall mean the number of Certified Shares determined in accordance with Exhibit A to this Agreement. (iv) Non-Pfizer Change of Control and Involuntary Termination. If you incur an Involuntary Termination (as defined in the applicable Seagen Agreement) immediately prior to or within 12 months after the Non-Pfizer Change of Control, then the “accelerated vesting” provision of the applicable Seagen Agreement shall apply with respect to the Certified Shares and references to “fully vested” in such provision shall mean the number of Certified Shares determined in accordance with Exhibit A to this Agreement. 11. TERMINATION OF EMPLOYMENT. Except as set forth in Section 10(b)(iv) of this Agreement, notwithstanding anything to the contrary in this Agreement, the Plan or any written agreement between you and the Company (including any Seagen Agreement), but subject to Section 409A as described in Section 7 above, in the event your Termination of Employment other than following the consummation of the transactions contemplated by the Merger Agreement (in which case this Section 11 shall be inapplicable) occurs before the last day of the Performance Period (as defined in Exhibit A to this Agreement), the following shall apply: (a) If such Termination of Employment is due to your death or Disability (as defined in the applicable Seagen Agreement) and the Award is outstanding on the date of such

9 Termination of Employment, then the Committee will determine the number of Certified Shares in the manner specified in Exhibit A to this Agreement and the Certified Shares will vest effective as of the date of such Termination of Employment. (b) If such Termination of Employment is due to your Retirement (as defined below) and the Award is outstanding on the date of such Termination of Employment, then the Committee will determine the number of Certified Shares in the manner specified in Exhibit A to this Agreement and the Certified Shares will vest effective as of the Vesting Date. For purposes of this Agreement, “Retirement” means your voluntary Termination of Employment, other than as a result of your death, Disability or Termination of Employment for Cause, at a point in time when (i) the combination of your age and length of service as an employee of the Company together is equal to at least 65, (ii) your length of service as an employee of the Company is at least five years, and (iii) at least one full year of the Performance Period has been completed. (c) If such Termination of Employment is not due to your death, Disability (as defined in the applicable Seagen Agreement) or Retirement, then to the extent the Award is outstanding on the date of such Termination of Employment, (i) you will forfeit the Award as of the date of such Termination of Employment and (ii) the Award will terminate as of the date of such Termination of Employment and your eligibility for any future or additional benefits under the Award will terminate as of such date. For clarity, this Section 11 shall supersede the “accelerated vesting” provision of the applicable Seagen Agreement which sets forth the treatment of the Award if you incur an Involuntary Termination (as defined in the applicable Seagen Agreement), which provisions shall not be applicable for purposes of the Award (other than as provided under Section 10(b)(iv) above). 12. NATURE OF AWARD. In accepting your Award, you acknowledge, understand and agree that: (a) the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted under the Plan; (b) the Award is exceptional, voluntary and occasional and does not create any contractual or other right to receive future Awards (whether on the same or different terms), or benefits in lieu of an Award, even if an Award has been granted in the past; (c) all decisions with respect to future awards of Stock Units or other grants, if any, will be at the sole discretion of the Company; (d) you are voluntarily participating in the Plan; (e) the Award and any Shares acquired under the Plan, and the income from and value of same, are not intended to replace any pension rights or compensation; (f) the future value of the Shares underlying the Award is unknown, indeterminable and cannot be predicted with certainty;

10 (g) except as may be provided in any Seagen Agreement, no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from your Termination of Employment (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or rendering services or the terms of your employment agreement, if any); (h) unless otherwise provided herein, in a Seagen Agreement, in the Plan or by the Company in its discretion, the Award and the benefits evidenced by this Agreement do not create any entitlement to have the Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; (i) unless otherwise agreed with the Company, the Award and the Shares subject to the Award, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of an Affiliate; (j) if the Award vests and you are issued Shares, the value of such Shares may increase or decrease in value following the date the Shares are issued; even below the Fair Market Value on the date the Award is granted to you; (k) the Award and the Shares subject to the Award, and the income and value of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of- service payments, bonuses, holiday pay, long-service awards, pension or retirement or welfare benefits or similar payments; and (l) the Award and the Shares subject to the Award, and the income and value of same, shall not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any benefit plan sponsored by the Company, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s benefit plans. 13. TAX OBLIGATIONS. (a) By accepting the Award, you acknowledge that, regardless of any action taken by the Company or any Affiliate the ultimate liability for any and all income tax, social insurance, payroll tax, fringe benefit tax, payment on account or other tax-related items related to your participation in the Plan and legally applicable to you (“Tax-Related Items”) is and remains your responsibility and may exceed the amount actually withheld by the Company or its Affiliates, if any. Further, if you are subject to Tax-Related Items in more than one jurisdiction, you acknowledge that the Company and/or its Affiliates may be required to withhold or account for Tax-Related Items in more than one jurisdiction. The Company has no duty or obligation to minimize the tax consequences to you of the Award and shall not be liable to you for any adverse tax consequences to you arising in connection with the Award. (b) On or before the time you receive a distribution of Shares pursuant to your Award, or at any time thereafter as requested by the Company, you hereby authorize any required withholding from the Shares issuable to you and/or otherwise agree to make adequate provision in

11 cash for any sums required to satisfy any and all Tax-Related Items (the “Withholding Obligation”). (c) In this regard, you authorize the Company and/or an Affiliate, or their respective agents, at their discretion, to satisfy the Withholding Obligation by one or a combination of the following: (i) Requiring you to make a payment in a form acceptable to the Company; or (ii) Withholding from your wages or other cash compensation payable to you; or (iii) Withholding from proceeds of the sale of shares of Common Stock acquired upon settlement of the Award either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent); or (iv) Withholding in shares of Common Stock to be issued upon settlement of the Award, provided, however, that if you are a Section 16 officer of the Company under the Exchange Act, then the Committee (as constituted in accordance with Rule 16b-3 under the Exchange Act) shall establish the method of withholding from alternatives (i)-(iv) herein and, if the Committee does not exercise its discretion prior to the Withholding Obligation event, then you shall be entitled to elect the method of withholding from alternatives (i)-(iv) herein; or (v) Any other method of withholding determined by the Company and to the extent required by applicable law or the Plan, approved by the Committee. (d) Unless the Withholding Obligation of the Company and/or any Affiliate are satisfied, the Company shall have no obligation to deliver to you any Shares. (e) In the event the Withholding Obligation of the Company arises prior to the delivery to you of Shares or it is determined after the delivery of Shares to you that the amount of the Withholding Obligation was greater than the amount withheld by the Company, you agree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount. (f) The Company may withhold or account for Tax-Related Items by considering statutory or other withholding rates, including minimum or maximum rates applicable in your jurisdiction(s). In the event of over-withholding, you may receive a refund of any over- withheld amount in cash (with no entitlement to the equivalent in Common Stock), or if not refunded, you may seek a refund from the local tax authorities. In the event of under-withholding, you may be required to pay any additional Tax-Related Items directly to the applicable tax authority or to the Company and/or the employer. If the Withholding Obligation is satisfied by withholding in shares of Common Stock, for tax purposes, you will be deemed to have been issued the full number of shares of Common Stock subject to the vested RSUs, notwithstanding that a number of the shares of Common Stock is held back solely for the purpose of paying the Tax- Related Items.

12 The Company may refuse to issue or deliver the shares or the proceeds of the sale of shares of Common Stock, if you fail to comply with your obligations in connection with the Tax-Related Items. 14. NO ADVICE REGARDING GRANT. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Shares. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the consequences of accepting the Award and by signing the Grant Notice, you have agreed that you have done so or knowingly and voluntarily declined to do so. 15. UNSECURED OBLIGATION. Your Award is unfunded, and as a holder of a vested Award, you shall be considered an unsecured creditor of the Company with respect to the Company’s obligation, if any, to issue Shares pursuant to this Agreement. You shall not have voting or any other rights as a stockholder of the Company with respect to the Shares to be issued pursuant to this Agreement until such Shares are issued to you pursuant to Section 7 of this Agreement. Upon such issuance, you will obtain full voting and other rights as a stockholder of the Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person. 16. OTHER DOCUMENTS. You hereby acknowledge receipt or the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy on trading in Company securities permitting employees to sell Shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time. 17. NOTICES; ELECTRONIC DELIVERY AND ACCEPTANCE. Any notices provided for in your Award or the Plan shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and the Award by electronic means or to request your consent to participate in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or any third party designated by the Company and agree notice shall be provided upon posting to your electronic account held by the Company or any third party designated by the Company. You hereby acknowledge that delivery, execution and acceptance of this or any other such documents by electronic means constitutes valid and effective delivery, execution and acceptance and shall be legally effective to create a valid and binding agreement. 18. MISCELLANEOUS. (a) The rights and obligations of the Company under your Award shall be transferable by the Company to any one or more persons or entities, and all covenants and

13 agreements hereunder shall inure to the benefit of, and be enforceable by, the Company’s successors and assigns. (b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your Award. (c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your Award, and fully understand all provisions of your Award. (d) You acknowledge and agree that the Company shall not be liable for any exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of your Award or of any amounts due to you pursuant to the settlement of the Award or the subsequent sale of any Shares acquired upon settlement. (e) This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. (f) All obligations of the Company under the Plan and this Agreement shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company. 19. GOVERNING PLAN DOCUMENT. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your Award, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan. Except as expressly provided herein and other than with respect to any terms set forth in Section 10, Section 11 and Section 13 of this Agreement, in the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan shall control. 20. ENTIRE AGREEMENT. The Plan, this Agreement and the Grant Notice constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and you with respect to the subject matter hereof. 21. SEVERABILITY. If all or any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid. 22. DATA PRIVACY. To participate in the Plan, you will need to review the information provided in this Section and, where applicable, declare your consent to the processing of personal data by the Company and third parties noted below.

14 (a) EEA+ Controller and Representative. If you are based in the European Union (“EU”), the European Economic Area, Switzerland or, if and when the United Kingdom leaves the European Union, the United Kingdom (collectively “EEA+”), you should note that the Company, with its registered address at 21823 30th Drive SE Bothell, Washington 98021, United States of America, is the controller responsible for the processing of your personal data in connection with this Agreement and the Plan. The Company’s representative in the EU is Seagen Netherlands B.V., located at Evert van de Beekstraat 1, -140 1118CL Schiphol, Netherlands with office phone: +31 207 99 15 60. (b) Data Collection and Usage. In connection with the administration of the Plan, the Company collects, processes, uses and transfers certain personally-identifiable information about you, which may include your name, home address and telephone number, email address, date of birth, social insurance, passport number or other identification number, salary, nationality, job title, details of all Awards or any other entitlement to Shares awarded, canceled, exercised, settled, vested, unvested or outstanding in your favor and additional similar or related data, which the Company receives from you or the entity that employs you (“Personal Data”). Specifically, the Company collects, processes and uses Personal Data for the purposes of performing its contractual obligations under this Agreement, implementing, administering and managing your participation in the Plan and facilitating compliance with applicable tax and securities law. If you are based in the EEA+, the legal basis, where required, for the processing of Personal Data by the Company is the necessity for the Company to (i) perform its contractual obligations under this Agreement, (ii) comply with legal obligations established in the EEA+, and/or (iii) pursue the legitimate interest of complying with legal obligations established outside of the EEA+. If you are based outside of the EEA+, the legal basis, where required, for the processing of Data by the Company is your consent, as further described in (h) below. (c) Stock Plan Administration Service Providers. The Company transfers Personal Data to E*TRADE Corporate Financial Services, Inc. and E*TRADE Securities LLC (collectively, “E*TRADE”) and certain of its affiliated companies and successors (the “Stock Plan Provider”), an independent service provider, which assists the Company with the implementation, administration and management of the Plan, including providing ancillary services related to stock plan administration. The Company may select a different service provider or additional service providers and share Personal Data with such other provider serving in a similar manner. The processing of Personal Data will take place through both electronic and non-electronic means. Personal Data will only be accessible by those individuals requiring access to it for purposes of implementing administering and operating the Plan, including providing ancillary services related to stock plan administration. You may be asked to agree on separate terms and data processing practices with the Stock Plan Provider, with such agreement being a condition to the ability to participate in the Plan. (d) International Data Transfers. The Company and the Stock Plan Provider are based in the United States. The country where you live may have different data privacy laws and protections than the United States. In particular, the United States does not have the same

15 level of protections for personal data as countries in the EEA+. The European Commission requires U.S. companies to protect personal data leaving the EEA+ by implementing safeguards such as the Standard Contractual Clauses adopted by the EU Commission. If you are based in the EEA+, Personal Data will be transferred from the EEA+ to the Company and onward from the Company to the Stock Plan Provider, or if applicable, another service provider, based on the EU Standard Contractual Clauses. You may request a copy of the Standard Contractual Clauses by contacting dataprotection@seagen.com. If you are based in a jurisdiction outside of the EEA+, Personal Data will be transferred from your jurisdiction to the Company and onward from the Company to the Stock Plan Provider, or if applicable, another service provider based on your consent, as further described in (h) below. (e) Data Retention. The Company will use Personal Data only as long as necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including tax and securities laws. When the Company no longer needs Personal Data for any of these purposes, the Company will remove it from its systems. (f) Voluntariness and Consequences of Consent Denial or Withdrawal. Participation in the Plan is voluntary and you are providing the consents herein on a purely voluntary basis. You may withdraw your consent at any time, with future effect and for any or no reason. If you do not consent, or if you later seek to withdraw your consent, your salary from or employment or service relationship with your employer will not be affected. The only consequence of denying or withdrawing consent is that the Company would not be able to grant Awards to you under the Plan or administer or maintain your participation in the Plan. If you withdraw your consent, the Company will stop processing your Personal Data for the purposes stated in Section (b) above unless to the extent necessary to comply with tax or other legal obligations in connection with Awards granted before you withdrew your consent. (g) Data Subject Rights. You may have a number of rights under data privacy laws in your jurisdiction. Subject to the conditions set out in the applicable law and depending on where you are based, such rights may include the right to (i) request access to, or copies of, Personal Data processed by the Company, (ii) rectification of incorrect Personal Data, (iii) deletion of Personal Data, (iv) restrict the processing of Personal Data, (v) object to the processing of Personal Data for legitimate interests, (vi) portability of Personal Data, (vii) lodge complaints with competent authorities in your jurisdiction, and/or to (viii) receive a list with the names and addresses of any potential recipients of Personal Data. To receive clarification regarding these rights or to exercise these rights, you can contact dataprotection@seagen.com. (h) Necessary Disclosure of Personal Data. You understand that providing the Company with Personal Data is necessary for the performance of this Agreement and that your refusal to provide Personal Data would make it impossible for the Company to perform its contractual obligations and would affect your ability to participate in the Plan. (i) Declaration of Consent (if you are outside the EEA+). By clicking on the “I accept” button on the Acknowledge Grant screen on the stock plan administration site, you

16 are declaring that you unambiguously consent to the collection, use and transfer, in electronic or other form, of your Personal Data, as described above and in any other grant materials, by and among, as applicable, the entity that employs you, the Company, any Affiliate and any service provider involved in stock plan administration, including but not limited to the Stock Plan Provider, for the exclusive purpose of implementing, administering and managing your participation in the Plan, including providing ancillary services related to stock plan administration. You understand that you may, at any time, refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Seagen Inc. Director of Privacy Law. If you do not consent or later seek to revoke your consent, your employment status or service with the entity that employs you will not be affected; the only consequence of refusing or withdrawing consent is that the Company would not be able to grant the Award or any other equity award to you or administer or maintain such awards. Therefore, you understand that refusing or withdrawing consent will affect your ability to participate in the Plan. For more information on the consequences of refusal to consent or withdrawal of consent, you should contact the Company’s Stock Plan Administrator. 23. INSIDER TRADING RESTRICTIONS/MARKET ABUSE LAWS. You acknowledge that, depending on your country, you may be subject to insider trading restrictions and/or market abuse laws, which may affect your ability to acquire or sell the Shares or rights to the Shares under the Plan during such times as you are considered to have “inside information” regarding the Company (as defined by the laws in your country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. You acknowledge that it is your responsibility to comply with any applicable restrictions, and you are advised to speak to your personal advisor on this matter. 24. FOREIGN ASSET/ACCOUNT AND TAX REPORTING, EXCHANGE CONTROLS. Your country may have certain foreign asset, account and/or tax reporting requirements and exchange controls which may affect your ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside your country. You understand that you may be required to report such accounts, assets or transactions to the tax or other authorities in your country. You also may be required to repatriate sale proceeds or other funds received as a result of participation in the Plan to your country through a designated bank or broker and/or within a certain time after receipt. In addition, you may be subject to tax payment and/or reporting obligations in connection with any income realized under the Plan and/or from the sale of Shares. You acknowledge that you are responsible for complying with all such requirements, and that you should consult personal legal and tax advisors, as applicable, to ensure compliance. 25. WAIVER. You acknowledge that a waiver by the Company of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach of this Agreement. 26. LANGUAGE. You acknowledge that you are sufficiently proficient in the English language, or have consulted with an advisor who is sufficiently proficient in English, so as to allow you to understand the terms and conditions of this Agreement. If you have received this Agreement, or any other document related to the Award and/or the Plan translated into a language

17 other than English and if the meaning of the translated version is different than the English version, the English version will control. 27. APPENDIX. Notwithstanding any provisions in this Agreement to the contrary, your Award shall be subject to the additional terms and conditions for your country set forth in the Appendix. Moreover, if you transfer residence and/or employment to another country reflected in the Appendix, the terms and conditions for such country will apply to you to the extent the Company determines in its sole discretion, that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. The Appendix constitutes part of this Agreement. 28. GOVERNING LAW/VENUE. The interpretation, performance and enforcement of this Agreement will be governed by the law of the State of Delaware without regard to that state’s conflicts of laws rules. For purposes of any action, lawsuit or other proceedings brought due to your participation in the Plan, relating to it, or arising from it, you hereby submit to and consent to the sole and exclusive jurisdiction of the United States District Court for the Southern District of New York (or should such court lack jurisdiction to hear such action, suit or proceeding, in a New York state court in the County of New York), and no other courts, where the Award is granted and/or to be performed. 29. IMPOSITION OF OTHER REQUIREMENTS. The Company reserves the right to impose other requirements on your participation in the Plan, and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. 30. AMENDMENT. This Agreement may not be modified, amended or terminated except by an instrument in writing, signed by you and by a duly authorized representative of the Company. Notwithstanding the foregoing, this Agreement may be amended solely by the Administrator by a writing which specifically states that it is amending this Agreement, so long as a copy of such amendment is delivered to you, and provided that no such amendment materially adversely affecting your rights hereunder may be made without your written consent, except as otherwise provided in the Plan. Without limiting the foregoing, the Administrator reserves the right to change, by written notice to you and without your prior written consent, the provisions of this Agreement in any way it may deem necessary or advisable to carry out the purpose of the grant to facilitate compliance with applicable laws or regulations or any future law, regulation, ruling, or judicial decision. 31. CLAWBACK/RECOUPMENT. The Award will be subject to recoupment, rescission, payback, cancelation or other action, in each case, in accordance with (i) any clawback policy adopted by the Company (whether such policy is adopted on or after the date of this Agreement or required under applicable law) providing for the recovery of Awards, Shares, proceeds, or payments to you in the event of fraud or as required by applicable law or governance considerations or in other similar circumstances and (ii) any such other clawback, recovery or recoupment provisions set forth in an individual written agreement between you and the Company. No recovery of compensation under such a clawback policy will be an event giving rise to your right

18 to resign for “good reason” or “constructive termination” (or similar term) under any plan of, or agreement with, the Company.

SEAGEN INC. APPENDIX TO GLOBAL STOCK UNIT AGREEMENT Capitalized terms used but not defined in this Appendix have the meanings set forth in the Plan and/or in the Agreement. Terms and Conditions This Appendix includes additional terms and conditions that govern the Award if you reside and/or work in one of the countries listed below. If you are a citizen or resident of a country other than the one in which the you are currently residing and/or working, transfer employment and/or residency to another country after the Award is granted, or are considered a resident of another country for local law purposes, the Company shall, in its discretion, determine to what extent the terms and conditions herein will apply to you. Notifications This Appendix also includes information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan. The information is based on the securities, exchange control and other laws in effect in the respective countries as of August 2023. Such laws are often complex and change frequently. As a result, the Company strongly recommends that you not rely on the information in this Appendix as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date at the time that you acquire Shares or sell Shares acquired under the Plan. In addition, the information contained herein is general in nature and may not apply to your particular situation and the Company is not in a position to assure you of any particular result. Accordingly, you acknowledge that you should seek appropriate professional advice as to how the relevant laws in your country may apply to your situation. Finally, you acknowledge that if you are a citizen or resident of a country other than the one in which you are currently residing and/or working, transfer employment and/or residency to another country after the Award is granted, or are considered a resident of another country for local law purposes, the information contained herein may not be applicable to you.

SWITZERLAND Terms and Conditions Grant of the Award. The Award granted to a Swiss Participant is a voluntary gratuity (Gratifikation) as determined at the Company's sole discretion which the Participant has no entitlement to and which does not constitute an entitlement of the Participant for a grant of further Awards in the future. Language Acknowledgement. You confirm having read and understood the documents relating to the Plan, including the Agreement, including Exhibit A and this Appendix and all terms and conditions included therein, which were provided in the English language only. You confirm having sufficient language capabilities to understand these terms and conditions in full. Du bestätigst, dass du den Plan sowie die dazugehörigen Dokumente, inklusive der Vereinbarung, mit Anhang A und dieser Anhang und all den darin enthaltenen Bedingungen und Voraussetzungen, welche in englischer Sprache verfasst sind, gelesen und verstanden hast. Du bestätigst dass Deine Sprachkenntnisse genügend sind, um die Bedingungen und Voraussetzungen zu verstehen. Notifications Securities Law Information. Neither the Agreement nor any other materials relating to the Award (i) constitutes a prospectus according to articles 35 et seq. of the Swiss Federal Act on Financial Services (“FinSA”) (ii) may be publicly distributed or otherwise made publicly available in Switzerland to any person other than an employee of the Company or (iii) has been filed with approved or supervised by any Swiss reviewing body according to article 51 FinSA or any Swiss regulatory authority, including the Swiss Financial Market Supervisory Authority FINMA.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, David R. Epstein, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Seagen Inc.;

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/ David R. Epstein
	David R. Epstein
	Chief Executive Officer
	(Principal Executive Officer)
Date:	November 1, 2023

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Todd E. Simpson, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Seagen Inc.;

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/ Todd E. Simpson
	Todd E. Simpson
	Chief Financial Officer
	(Principal Financial and Accounting Officer)
Date:	November 1, 2023

EX-32.1

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 Quarterly Report of Seagen Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David R. Epstein, 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/ David R. Epstein
	David R. Epstein
	Chief Executive Officer
	(Principal Executive Officer)
Date:	November 1, 2023

This certification accompanies the Form 10-Q 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-Q), irrespective of any general incorporation language contained in such filing.

EX-32.2

Exhibit 32.2

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 Quarterly Report of Seagen Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2023, 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:	November 1, 2023

This certification accompanies the Form 10-Q 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-Q), irrespective of any general incorporation language contained in such filing.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Oct. 27, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	0-32405
Entity Registrant Name	SEAGEN INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	91-1874389
Entity Address	21823 30th Drive SE
Entity Address, City or Town	Bothell
Entity Address, State or Province	WA
Postal Zip Code	98021
City Area Code	425
Local Phone Number	527-4000
Title of 12(b) Security	Common Stock, par value $0.001
Trading Symbol	SGEN
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		188,662,672
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001060736
Current Fiscal Year End Date	--12-31

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 428,568	$ 319,940
Short-term investments	808,418	1,415,130
Accounts receivable, net	631,555	501,912
Inventories	531,188	427,211
Prepaid expenses and other current assets	151,864	138,340
Total current assets	2,551,593	2,802,533
Property and equipment, net	358,801	248,179
Operating lease right-of-use assets	128,861	46,738
Intangible assets, net	220,255	237,516
Goodwill	274,671	274,671
Other non-current assets	100,080	64,895
Total assets	3,634,261	3,674,532
Current liabilities:
Accounts payable	224,813	207,851
Accrued liabilities and other	729,903	610,553
Total current liabilities	954,716	818,404
Long-term liabilities:
Operating lease liabilities, long-term	113,487	43,474
Other long-term liabilities	15,637	8,835
Total long-term liabilities	129,124	52,309
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value, 5,000 shares authorized; none issued	0	0
Common stock, $0.001 par value, 250,000 shares authorized; 188,628 shares issued and outstanding at September 30, 2023 and 186,559 shares issued and outstanding at December 31, 2022	189	187
Additional paid-in capital	5,302,239	4,954,469
Accumulated other comprehensive income	4,394	3,510
Accumulated deficit	(2,756,401)	(2,154,347)
Total stockholders’ equity	2,550,421	2,803,819
Total liabilities and stockholders’ equity	$ 3,634,261	$ 3,674,532

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	250,000,000	250,000,000
Common stock, shares issued (in shares)	188,628,000	186,559,000
Common stock, shares outstanding (in shares)	188,628,000	186,559,000

XML

Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Revenues:
Total revenues	$ 648,650	$ 510,300	$ 1,772,201	$ 1,434,262
Costs and expenses:
Cost of sales	165,254	108,122	457,783	301,848
Research and development	449,047	384,605	1,204,930	986,518
Selling, general and administrative	265,687	210,378	746,060	604,862
Total costs and expenses	879,988	703,105	2,408,773	1,893,228
Loss from operations	(231,338)	(192,805)	(636,572)	(458,966)
Investment and other income, net	14,978	4,278	41,463	479
Loss before income taxes	(216,360)	(188,527)	(595,109)	(458,487)
(Benefit) provision for income taxes	(571)	2,289	6,945	3,650
Net loss	$ (215,789)	$ (190,816)	$ (602,054)	$ (462,137)
Net loss per share - basic (in dollars per share)	$ (1.15)	$ (1.03)	$ (3.21)	$ (2.51)
Net loss per share - diluted (in dollars per share)	$ (1.15)	$ (1.03)	$ (3.21)	$ (2.51)
Shares used in computation of per share amounts - basic (in shares)	188,135	184,792	187,532	184,199
Shares used in computation of per share amounts - diluted (in shares)	188,135	184,792	187,532	184,199
Comprehensive loss:
Net loss	$ (215,789)	$ (190,816)	$ (602,054)	$ (462,137)
Other comprehensive income:
Unrealized gain (loss) on securities available-for-sale, net of tax	97	(875)	1,639	(4,472)
Foreign currency translation gain (loss)	189	3,363	(755)	6,288
Total other comprehensive income	286	2,488	884	1,816
Comprehensive loss	(215,503)	(188,328)	(601,170)	(460,321)
Net product sales
Revenues:
Total revenues	570,729	428,089	1,583,343	1,242,889
Royalty revenues
Revenues:
Total revenues	63,561	43,904	144,927	111,194
Collaboration and license agreement revenues
Revenues:
Total revenues	$ 14,360	$ 38,307	$ 43,931	$ 80,179

XML

Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common stock	Additional paid-in capital	Accumulated other comprehensive income	Accumulated deficit
Beginning (in shares) at Dec. 31, 2021		183,381
Beginning at Dec. 31, 2021	$ 3,065,139	$ 183	$ 4,607,816	$ 1,179	$ (1,544,039)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(136,494)				(136,494)
Other comprehensive income (loss)	(755)			(755)
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares)		463
Issuance of common stock for stock option exercises and employee stock purchase plan	26,664	$ 1	26,663
Restricted stock vested during the period, net (in shares)		48
Share-based compensation	43,913		43,913
Ending (in shares) at Mar. 31, 2022		183,892
Ending at Mar. 31, 2022	2,998,467	$ 184	4,678,392	424	(1,680,533)
Beginning (in shares) at Dec. 31, 2021		183,381
Beginning at Dec. 31, 2021	3,065,139	$ 183	4,607,816	1,179	(1,544,039)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(462,137)
Other comprehensive income (loss)	1,816
Ending (in shares) at Sep. 30, 2022		185,234
Ending at Sep. 30, 2022	2,821,811	$ 185	4,824,807	2,995	(2,006,176)
Beginning (in shares) at Mar. 31, 2022		183,892
Beginning at Mar. 31, 2022	2,998,467	$ 184	4,678,392	424	(1,680,533)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(134,827)				(134,827)
Other comprehensive income (loss)	83			83
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares)		298
Issuance of common stock for stock option exercises and employee stock purchase plan	14,960		14,960
Restricted stock vested during the period, net (in shares)		179
Share-based compensation	54,129		54,129
Ending (in shares) at Jun. 30, 2022		184,369
Ending at Jun. 30, 2022	2,932,812	$ 184	4,747,481	507	(1,815,360)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(190,816)				(190,816)
Other comprehensive income (loss)	2,488			2,488
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares)		263
Issuance of common stock for stock option exercises and employee stock purchase plan	18,388		18,388
Restricted stock vested during the period, net (in shares)		602
Restricted stock vested during the period, net	1	$ 1
Share-based compensation	58,938		58,938
Ending (in shares) at Sep. 30, 2022		185,234
Ending at Sep. 30, 2022	$ 2,821,811	$ 185	4,824,807	2,995	(2,006,176)
Beginning (in shares) at Dec. 31, 2022	186,559	186,559
Beginning at Dec. 31, 2022	$ 2,803,819	$ 187	4,954,469	3,510	(2,154,347)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(174,737)				(174,737)
Other comprehensive income (loss)	198			198
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares)		569
Issuance of common stock for stock option exercises and employee stock purchase plan	42,240		42,240
Restricted stock vested during the period, net (in shares)		223
Shares withheld for tax withholding during the period (in shares)		(62)
Shares withheld for tax withholdings during the period	(12,303)		(12,303)
Share-based compensation	63,939		63,939
Ending (in shares) at Mar. 31, 2023		187,289
Ending at Mar. 31, 2023	$ 2,723,156	$ 187	5,048,345	3,708	(2,329,084)
Beginning (in shares) at Dec. 31, 2022	186,559	186,559
Beginning at Dec. 31, 2022	$ 2,803,819	$ 187	4,954,469	3,510	(2,154,347)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(602,054)
Other comprehensive income (loss)	$ 884
Ending (in shares) at Sep. 30, 2023	188,628	188,628
Ending at Sep. 30, 2023	$ 2,550,421	$ 189	5,302,239	4,394	(2,756,401)
Beginning (in shares) at Mar. 31, 2023		187,289
Beginning at Mar. 31, 2023	2,723,156	$ 187	5,048,345	3,708	(2,329,084)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(211,528)				(211,528)
Other comprehensive income (loss)	400			400
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares)		212
Issuance of common stock for stock option exercises and employee stock purchase plan	13,815	$ 1	13,814
Restricted stock vested during the period, net (in shares)		171
Share-based compensation	93,216		93,216
Ending (in shares) at Jun. 30, 2023		187,672
Ending at Jun. 30, 2023	2,619,059	$ 188	5,155,375	4,108	(2,540,612)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(215,789)				(215,789)
Other comprehensive income (loss)	286			286
Issuance of common stock for stock option exercises and employee stock purchase plan (in shares)		160
Issuance of common stock for stock option exercises and employee stock purchase plan	15,520		15,520
Restricted stock vested during the period, net (in shares)		796
Restricted stock vested during the period, net	2	$ 1	1
Share-based compensation	$ 131,343		131,343
Ending (in shares) at Sep. 30, 2023	188,628	188,628
Ending at Sep. 30, 2023	$ 2,550,421	$ 189	$ 5,302,239	$ 4,394	$ (2,756,401)

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Operating activities:
Net loss	$ (602,054)	$ (462,137)
Adjustments to reconcile net loss to net cash used by operating activities
Share-based compensation	288,498	156,980
Depreciation	38,056	34,642
Amortization of intangible assets	17,261	17,261
Amortization of right-of-use assets	11,339	9,441
Amortization of premiums, accretion of discounts, and (gains) losses on debt securities	(34,333)	(1,129)
Losses on equity securities	2,750	9,747
Deferred income taxes	835	(221)
Inventory write-off	46,524	0
Changes in operating assets and liabilities
Accounts receivable, net	(129,643)	(97,499)
Inventories	(150,501)	(164,307)
Prepaid expenses and other assets	(53,186)	(11,300)
Lease liability	(10,257)	(11,842)
Other liabilities	114,000	146,053
Net cash used by operating activities	(460,711)	(374,311)
Investing activities:
Purchases of securities	(1,699,316)	(2,060,242)
Proceeds from maturities of securities	2,342,000	2,391,000
Payments for lessor-owned assets	(2,954)	(17,936)
Purchases of property and equipment	(131,815)	(48,095)
Net cash provided by investing activities	507,915	264,727
Financing activities:
Proceeds from exercise of stock options and employee stock purchase plan	71,577	60,013
Employee taxes paid related to net share settlement of stock-based awards	(12,303)	0
Net cash provided by financing activities	59,274	60,013
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(804)	(6,893)
Net increase (decrease) in cash, cash equivalents, and restricted cash	105,674	(56,464)
Cash, cash equivalents, and restricted cash at beginning of period	323,486	424,834
Cash, cash equivalents, and restricted cash at end of period	$ 429,160	$ 368,370

XML

Organization and summary of significant accounting policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Organization and summary of significant accounting policies

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.

Pending Transaction with Pfizer

In March 2023, we entered into a definitive merger agreement, or the Merger Agreement, under which, on the terms and subject to the conditions thereof, Pfizer Inc., or Pfizer, will acquire Seagen Inc., or Seagen, for $229 in cash per Seagen share for a total enterprise value of $43 billion. The companies seek to accelerate the next generation of cancer breakthroughs and bring new solutions to patients by combining the power of Seagen’s ADC technology with the scale and strength of Pfizer’s capabilities and expertise. On May 30, 2023, our shareholders approved a proposal to adopt the Merger Agreement. However, the closing of the transaction, which we refer to herein as the Pfizer Merger, remains subject to fulfillment of customary closing conditions, including the receipt of required regulatory approvals. In this regard, on June 1, 2023, we and Pfizer referred the Pfizer Merger to the European Commission, or the EC, for review under Article 4(5) of the EU Merger Regulation. On June 23, 2023, the EC accepted jurisdiction as a result of such referral and receipt of approval from the EC for the Pfizer Merger became a condition for the closing of the Pfizer Merger. On October 19, 2023, the EC approved the Pfizer merger unconditionally pursuant to Article 6(1)b of the EU Merger Regulation. Additionally, on July 14, 2023, we and Pfizer each received a request for additional information and documentary materials, or a Second Request, from the Federal Trade Commission, or the FTC, in connection with the FTC’s review of the Pfizer Merger. The effect of a Second Request is to extend the waiting period imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act, until 30 days after Seagen and Pfizer each have substantially complied with the Second Request issued to it, unless that period is terminated sooner by the FTC. Completion of the Pfizer Merger remains subject to the expiration or termination of the waiting period under the HSR Act and the satisfaction or waiver of the other closing conditions specified in the Merger Agreement.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seagen Inc. and its wholly-owned subsidiaries (collectively “Seagen,” the “Company,” “we,” “our,” or “us”). All intercompany transactions and balances have been eliminated upon consolidation. 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. Substantially all of our assets and revenues are related to operations in the U.S.; however, we have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe.

The condensed consolidated balance sheet data as of December 31, 2022 were derived from the audited consolidated financial statements not included in this quarterly report on Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and generally accepted accounting principles in the United States of America, or GAAP, for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position and results of our operations as of and for the periods presented.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC.

The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of our operations for the three and nine month periods ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year or any other interim period.

Non-cash activities

We had $53.3 million and $20.1 million of accrued capital expenditures as of September 30, 2023 and December 31, 2022, respectively. Accrued capital expenditures are treated as a non-cash investing activity and, accordingly, have not been included in the condensed consolidated statement of cash flows until such amounts have been paid in cash. We recorded $93.5 million and $0.9 million right-of-use assets during the nine months ended September 30, 2023 and 2022, respectively, and lease liabilities of $75.3 million and $0.5 million during the nine months ended September 30, 2023 and 2022, respectively.

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.

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 September 30, 2023 and December 31, 2022, were $0.0 million and $5.2 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.

Restricted Cash

As of September 30, 2023, we had $0.6 million cash held in escrow restricted by a contractual agreement related to our Everett, Washington building construction project. The restricted cash was recorded in prepaid expenses and other current assets in the condensed consolidated balance sheet. We determine classification based on the expected duration of the restriction.

Our total cash, cash equivalents, and restricted cash, as presented in the condensed consolidated statements of cash flows, was as follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	428,568	$	319,940
Restricted cash included in prepaid expenses and other current assets	592		3,546
Total cash, cash equivalents, and restricted cash as presented in the condensed consolidated statements of cash flows	$	429,160	$	323,486

Intangible assets, net

Our intangible assets are primarily comprised of acquired TUKYSA technology. The following table presents the balances of our finite-lived intangible assets for the periods presented:

(dollars in thousands)	September 30, 2023		December 31, 2022
Gross carrying value	$	305,650	$	305,650
Less: accumulated amortization	(85,395)		(68,134)
Total	$	220,255	$	237,516

The following table presents our amortization expense related to acquired TUKYSA technology costs, included in cost of sales in our condensed consolidated statements of comprehensive loss, for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Amortization expense	$	5,817	$	5,817	$	17,261	$	17,261

The weighted average remaining useful life of our finite-lived intangible assets was approximately 10 years as of September 30, 2023, and estimated future amortization expense related to acquired TUKYSA is $5.8 million for the three months ending December 31, 2023, and TUKYSA technology costs is $23.1 million for each of the years ending December 31, 2024 through December 31, 2028.

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, eligible customers receive an applicable discount which is processed through the distributor as 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 our patient assistance program, 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.

Revenue recognition - Royalty revenues

Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with an affiliate of 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 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.

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.

In September 2023, we entered into a research and license agreement under which we owed an upfront payment of $60.0 million that was recorded in accounts payable as of September 30, 2023 and paid in October 2023. The agreement includes options to license technologies and contains contingent research, development, regulatory and commercial milestone payments potentially totaling up to $3.4 billion. The substantial majority of these contingent payments are dependent upon, among other things, our exercise of the options and future product sales. The agreement also includes mid-single to low double digit tiered royalties on future sales and the licensor retains an option for U.S. profit sharing and co-promotion on up to two products.

Recent Accounting Pronouncements

We reviewed recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact on our condensed consolidated financial statements.

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Revenue from contracts with customers

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenue from contracts with customers

Revenue from contracts with customers

The following table presents our disaggregated revenue for the periods presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
ADCETRIS	$	246,071	$	218,521	$	750,986	$	601,449
PADCEV	199,516		105,330		479,452		329,114
TUKYSA	102,071		87,771		288,651		267,235
TIVDAK	23,071		16,467		64,254		45,091
Net product sales	$	570,729	$	428,089	$	1,583,343	$	1,242,889
Royalty revenues	$	63,561	$	43,904	$	144,927	$	111,194
Collaboration and license agreement revenues	$	14,360	$	38,307	$	43,931	$	80,179
Total revenues	$	648,650	$	510,300	$	1,772,201	$	1,434,262

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Leases

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Leases

Leases

We have operating leases for our office and laboratory facilities with terms that expire from 2023 through 2042. We recorded $93.5 million and $0.9 million right-of-use assets during the nine months ended September 30, 2023 and 2022, respectively, and lease liabilities of $75.3 million and $0.5 million during the nine months ended September 30, 2023 and 2022, 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 September 30, 2023.

In June 2021, we entered into a lease agreement for an approximately 258,000 square foot 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 commenced in January 2023 when construction and delivery of the building shell and related improvements by the landlord were substantially completed, and we recorded a lease liability and right-of-use assets on our condensed consolidated balance sheet. 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:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023			2022
Operating lease cost	$	5,514	$	3,682	$	16,426		$	11,824
Variable lease cost	1,307		1,039		3,870			3,360
Total lease cost	$	6,821	$	4,721	$	20,296		$	15,184
Cash paid for amounts included in measurement of lease liabilities	$	5,307	$	4,089	$	14,215		$	12,838
					As of September 30,
					2023			2022
Weighted average remaining lease term					11.2 years			5.4 years
Weighted average discount rate					6.9		%	5.0		%

Operating lease liabilities were recorded in the following captions of our condensed consolidated balance sheets as follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Accrued liabilities and other	$	11,089	$	14,517
Operating lease liabilities, long-term	113,487		43,474
Total	$	124,576	$	57,991

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Net loss per share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net loss per share

Net loss per share

Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted average number of common shares and dilutive potential 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.

We excluded the potential shares of common stock from the computation of diluted net 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:

	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2023	2022	2023	2022
Stock options and RSUs	9,000	9,948	8,699	10,029

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Fair value

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair value

Fair value

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.

The fair value hierarchy of assets carried at fair value and measured on a recurring basis was as follows: 

	Fair value measurement using:
(dollars in thousands)	Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
September 30, 2023
Short-term investments—U.S. Treasury securities	$	808,418	$	—	$	—	$	808,418
Other non-current assets—equity securities	1,104		—		—		1,104
Total	$	809,522	$	—	$	—	$	809,522
December 31, 2022
Short-term investments—U.S. Treasury securities	$	1,415,130	$	—	$	—	$	1,415,130
Other non-current assets—equity securities	3,854		—		—		3,854
Total	$	1,418,984	$	—	$	—	$	1,418,984

Our short-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 three and nine months ended September 30, 2023 and 2022, 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 September 30, 2023 or December 31, 2022.

Our debt securities consisted of the following:

(dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
September 30, 2023
U.S. Treasury securities	$	808,366	$	67	$	(15)	$	808,418
Contractual maturities (at date of purchase):
Due in one year or less	$	808,366					$	808,418
December 31, 2022
U.S. Treasury securities	$	1,416,717	$	96	$	(1,683)	$	1,415,130
Contractual maturities (at date of purchase):
Due in one year or less	$	1,400,852					$	1,399,382
Due in one to two years	15,865						15,748
Total	$	1,416,717					$	1,415,130

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Investment and other income, net

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investment and other income, net

Investment and other income, net

Investment and other income, net consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Gain (loss) on equity securities	$	491	$	(2,669)	$	(2,750)	$	(9,747)
Investment and other income, net	14,487		6,947		44,213		10,226
Total investment and other income, net	$	14,978	$	4,278	$	41,463	$	479

Gain (loss) on equity securities includes the realized and unrealized holding gains and losses on our equity securities. At times, we hold equity investments in certain companies acquired in relation to a strategic partnership. Shares held at the end of reporting periods are marked to market in our condensed consolidated financial statements, which can result in unrealized gains and losses.

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Inventories

9 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following:

(dollars in thousands)	September 30, 2023		December 31, 2022
Raw materials	$	12,845	$	14,916
Work in process	479,584		357,275
Finished goods	38,759		55,020
Total	$	531,188	$	427,211

We capitalize our commercial inventory costs. Work in process represents inventory at various stages of the production process, which includes costs for materials, labor, and overhead applied during the production process. 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. During the nine months ended September 30, 2023, we recorded a $47 million inventory write-off related to in-process production of one of our products that did not meet a release specification that was updated in June 2023.

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Accrued liabilities

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued liabilities

Accrued liabilities

Accrued liabilities consisted of the following: 

(dollars in thousands)	September 30, 2023		December 31, 2022
Clinical trial and related costs	$	222,488	$	194,006
Employee compensation and benefits	212,442		175,506
Gross-to-net deductions and third-party royalties	153,266		119,289
Acquisition related expenses	27,445		—
Other	114,262		121,752
Total	$	729,903	$	610,553

We have incurred approximately $40 million of acquisition related expenses in connection with the pending merger with Pfizer for the nine months ended September 30, 2023, with $27 million remaining in accrued liabilities.

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Share-based compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Share-based compensation

Share-based compensation

The following table presents our total share-based compensation expense for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Research and development	$	70,062	$	31,328	$	149,974	$	77,850
Selling, general and administrative	61,281		27,610		138,524		79,130
Total share-based compensation expense	$	131,343	$	58,938	$	288,498	$	156,980

During the nine months ended September 30, 2023, we granted retention awards of approximately $280 million in the form of cash and RSUs to incentivize certain employees to remain employed at the company during the pendency of the Pfizer Merger and following the closing of the transaction. The awards consist of 20% in the form of cash that vests on the 9-month anniversary of the grant, 30% in the form of RSUs that vest on the 18-month anniversary of the grant, 25% in the form of RSUs that vest on the 24-month anniversary of the grant, and 25% in the form of RSUs that vest on the 30-month anniversary of the grant.

As of September 30, 2023, there was $545.3 million of unrecognized compensation cost related to unvested options including options subject to market-based performance metrics, and restricted stock unit awards, excluding our performance-based RSUs, net of forfeitures. The estimated unrecognized compensation expense related to our performance-based RSUs was approximately $48 million as of September 30, 2023.

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Income taxes

9 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

For the three and nine months ended September 30, 2023, we had taxable profits in the U.S. as a result of amendments to IRC Section 174, which took effect January 1, 2022 pursuant to the 2017 Tax Cuts and Jobs Act. For the three months ended September 30, 2023, we recorded an income tax benefit of $0.6 million, primarily related to higher forecasted 2023 book loss, decreasing provision for income taxes. For the nine months ended September 30, 2023, we recorded an income tax provision of $6.9 million primarily related to estimated state tax liabilities for which there were limitations on the use of existing state tax carryforwards. We had existing federal tax carryforwards sufficient to offset most of the federal liability. Our income tax provision also reflected taxable profits in foreign jurisdictions. Our effective tax rate for the three and nine months ended September 30, 2023 of approximately (0.3%) and 1.2%, respectively, differed from the federal statutory rate primarily because of changes in the valuation allowance against substantially all of our deferred tax assets.

For the three and nine months ended September 30, 2022, we had taxable profits in the U.S. as a result of amendments to IRC Section 174, which took effect January 1, 2022 pursuant to the 2017 Tax Cuts and Jobs Act. We recorded an income tax provision of $2.3 million and $3.6 million for the three and nine months ended September 30, 2022, respectively, primarily related to estimated state tax liabilities for which there were limitations on the use of existing state tax carryforwards. We had existing federal tax carryforwards sufficient to offset any federal liability. Our income tax provision also reflected taxable profits in foreign jurisdictions. For the three and nine months ended September 30, 2022, our effective tax rate of approximately 1.2% and 0.8%, respectively, differed from the federal statutory rate primarily because we have provided a valuation allowance against substantially all our deferred tax assets.

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Legal matters

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Legal matters

Legal matters

From time to time, we are involved in legal matters, including the disputes below. As a result of these disputes, we have incurred and will continue to incur litigation expenses.

Dispute over ownership of intellectual property

We have been in a dispute with Daiichi Sankyo Co. Ltd., or Daiichi Sankyo, regarding the ownership of certain technology used by Daiichi Sankyo in its cancer drug Enhertu® (fam-trastuzumab deruxtecan-nxki) 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 contended, was assigned to us under the terms of a 2008 collaboration agreement between us and Daiichi Sankyo, or the Daiichi Sankyo Collaboration Agreement.

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.

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 and April 2022. On August 12, 2022, the arbitrator ruled in favor of Daiichi Sankyo, citing statute of limitations and disagreement with us on the interpretation of the contract. On November 10, 2022, we filed a motion to vacate the arbitration award in the U.S. District Court for the Western District of Washington, and that action has been stayed pending a final award in the arbitration.

The Daiichi Sankyo Collaboration Agreement provides that judgment rendered by an arbitrator shall include costs of arbitration, reasonable attorneys’ fees and reasonable costs for expert and other witnesses. On September 14, 2022, Daiichi Sankyo submitted a petition for approximately $58 million for reimbursement of its legal fees and costs associated with the arbitration. We filed oppositions to Daiichi Sankyo’s request on October 12, 2022 and May 23, 2023. The arbitrator held a hearing on Daiichi Sankyo’s fee request on September 15, 2023.

While we oppose any fees being awarded to Daiichi Sankyo, a liability between approximately $14 million and $58 million is reasonably estimable. An estimate of our liability for these fees towards the low end of the range has been recorded in accrued liabilities in our condensed consolidated financial statements. It is reasonably possible the arbitrator will render an award pursuant to Daiichi Sankyo’s request that is different from what we have accrued or estimated and that we will need to adjust our estimate in future periods pursuant to the arbitrator’s award.

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. The remedies sought in this action include, 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. On July 27, 2021, AstraZeneca Pharmaceuticals LP, or AstraZeneca moved to intervene as defendants. The court granted AstraZeneca’s motion to intervene on July 28, 2021.

Daiichi Sankyo (as well as Daiichi Sankyo, Inc. and 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 and Trademark Office, or USPTO, seeking to have claims of the ’039 Patent cancelled as unpatentable. On June 24, 2021, the USPTO issued a decision denying both petitions for post-grant review. On April 7, 2022, the USPTO granted a request on rehearing and instituted two post-grant review proceedings, but on July 15, 2022, the USPTO issued a new decision denying post-grant review of the claims asserted in the patent infringement action. On February 7, 2023, in response to Daiichi Sankyo and AstraZeneca’s second request for rehearing of the denial of the post-grant review to the USPTO and for Precedential Opinion Panel, or POP, review, the Precedential Opinion Panel issued an order denying the request for POP review but directing the USPTO panel evaluating the second rehearing request to make an explicit finding using its own discretion as to whether the post-grant review petition presents a “compelling” showing of invalidity as part of its ruling on the pending second rehearing request. The panel was also directed to rule on the second rehearing request within two weeks from the POP order. On February 14, 2023, the panel decided to institute the post-grant review of the claims of the ’039 Patent asserted in the patent infringement action. The panel held oral argument on Daiichi Sankyo and AstraZeneca’s petition for post-grant review on August 24, 2023. We expect the panel to issue a ruling by February 14, 2024.

On April 8, 2022, a jury in the United States District Court for the Eastern District of Texas found that Daiichi Sankyo willfully infringed the asserted claims of the ’039 Patent with its Enhertu product, and also found that the asserted claims were not invalid. The jury further awarded damages of $41.8 million for infringement from October 20, 2020 through March 31, 2022. The court also denied Daiichi Sankyo’s claim that the ’039 Patent should be unenforceable under the equitable theory of prosecution laches, entered judgment in favor of us based on the jury’s verdict that Daiichi Sankyo willfully infringed the ’039 Patent consisting of pre-trial damages in the sum of $41.8 million, and awarded us pre- and post-trial interest and costs. On August 21, 2023, the court denied Daiichi Sankyo and AstraZeneca’s motion for a new trial and renewed motions for judgment as a matter of law on invalidity and non-infringement, and granted our request for an ongoing royalty on Daiichi Sankyo’s future sales of Enhertu in the United States through the current expiration date of the ’039 Patent. On September 18, 2023, Daiichi Sankyo and AstraZeneca filed a motion to amend the final judgment to clarify the court’s order regarding the ongoing royalty granted in our favor. On October 17, 2023, the court granted in part Daiichi Sankyo and AstraZeneca’s motion and issued an amended final judgment, which provides for an ongoing 8% royalty on Daiichi Sankyo’s future sales of Enhertu in the United States by its subsidiary Daiichi Sankyo, Inc. through November 4, 2024.

On September 20, 2023, Daiichi Sankyo and AstraZeneca filed a notice of appeal to the United States Court of Appeals for the Federal Circuit. The appeal was deactivated on September 26, 2023 due to Daiichi Sankyo and AstraZeneca’s pending motion to amend the judgment. We anticipate that the appeal will be reactivated at some point in light of the resolution of Daiichi Sankyo and AstraZeneca’s motion.

Pursuant to ASC 450, awards of this nature must be either realized or realizable to be reflected in the company’s financial statements. No amounts related to these patent infringement matters have been reflected in our condensed consolidated financial statements as of September 30, 2023.

PADCEV product liability litigation

On March 14, 2023, a purported class action was filed in the United States District Court for the Central District of California against us, Astellas and Agensys, Inc., alleging that the defendants failed to warn of side effects to the skin that can occur when taking PADCEV. The complaint alleges claims under strict liability, negligence and fraud, and seeks damages, including punitive damages, interest, attorneys’ fees and costs. We intend to vigorously defend against these claims. No amounts related to these matters have been reflected in our condensed consolidated financial statements as of September 30, 2023.

Litigation related to the Pfizer Merger

Six lawsuits were filed by purported Seagen stockholders in connection with the Pfizer Merger. The complaints alleged, among other things, that certain disclosures in the preliminary proxy statement we filed on April 14, 2023 or definitive proxy statement we filed on April 24, 2023 in connection with the Pfizer Merger were materially incomplete and misleading. Four actions, captioned O’Dell v. Seagen Inc., et al., No. 1:23-cv-03254 (Apr. 19, 2023), Boyd v. Seagen Inc., et al., No. 1:23-cv-03309 (Apr. 20, 2023), Wang v. Seagen Inc., et al., No. 1:23-cv-03302 (Apr. 20, 2023), and Ober v. Seagen Inc., et al., No. 1:23-cv-03378 (Apr. 21, 2023), were filed in the United States District Court for the Southern District of New York; one action, captioned McDaniel v. Seagen, Inc. et al., No. 1:23-cv-00504 (May 8, 2023), was filed in the United States District Court for the District of Delaware; and one action, captioned Nicosia v. Baker et al., No. 23-2-03250-31 (May 2, 2023), was filed in the Superior Court of the State of Washington for the County of Snohomish. The six complaints included the Company and the current members of our board of directors as defendants, and the plaintiffs alleged, among other things, violations of Sections 14(a) and 20(a) of the Exchange Act, 15 U.S.C. §§ 78n(a), 78t(a), SEC Rule 14a-9, 17 C.F.R. 240.14a-9 and 17 C.F.R. § 244.100 and, in the case of the Washington State complaint, also included Pfizer as a defendant and alleged violations of Washington State securities laws. The complaints sought, among other relief, to enjoin us from consummating the Pfizer Merger and to be awarded rescissory damages, including reasonable attorneys’ and expert fees and expenses. All of the actions were voluntarily dismissed following the publication of additional disclosures by the Company. No amounts related to these matters have been reflected in our condensed consolidated financial statements as of September 30, 2023.

We are not aware of the filing of other lawsuits challenging the Pfizer Merger or the proxy statement; however, additional lawsuits arising out of the Pfizer Merger or the related proxy statement may be filed in the future.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Pay vs Performance Disclosure
Net loss	$ (215,789)	$ (211,528)	$ (174,737)	$ (190,816)	$ (134,827)	$ (136,494)	$ (602,054)	$ (462,137)

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Insider Trading Arrangements	3 Months Ended
	Sep. 30, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Organization and summary of significant accounting policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The accompanying unaudited condensed consolidated financial statements reflect the accounts of Seagen Inc. and its wholly-owned subsidiaries (collectively “Seagen,” the “Company,” “we,” “our,” or “us”). All intercompany transactions and balances have been eliminated upon consolidation. 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. Substantially all of our assets and revenues are related to operations in the U.S.; however, we have multiple subsidiaries in foreign jurisdictions, including several subsidiaries in Europe.

The condensed consolidated balance sheet data as of December 31, 2022 were derived from the audited consolidated financial statements not included in this quarterly report on Form 10-Q. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC, and generally accepted accounting principles in the United States of America, or GAAP, for unaudited condensed consolidated financial information. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements reflect all adjustments consisting of normal recurring adjustments that, in the opinion of management, are necessary for a fair statement of our financial position and results of our operations as of and for the periods presented.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC.

The preparation of financial statements in accordance with GAAP requires us to make estimates, assumptions, and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. The results of our operations for the three and nine month periods ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year or any other interim period.

Non-cash activities

Non-cash activities

We had $53.3 million and $20.1 million of accrued capital expenditures as of September 30, 2023 and December 31, 2022, respectively. Accrued capital expenditures are treated as a non-cash investing activity and, accordingly, have not been included in the condensed consolidated statement of cash flows until such amounts have been paid in cash. We recorded $93.5 million and $0.9 million right-of-use assets during the nine months ended September 30, 2023 and 2022, respectively, and lease liabilities of $75.3 million and $0.5 million during the nine months ended September 30, 2023 and 2022, respectively.

Investments

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.

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 September 30, 2023 and December 31, 2022, were $0.0 million and $5.2 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.

Restricted Cash

Restricted Cash

As of September 30, 2023, we had $0.6 million cash held in escrow restricted by a contractual agreement related to our Everett, Washington building construction project. The restricted cash was recorded in prepaid expenses and other current assets in the condensed consolidated balance sheet. We determine classification based on the expected duration of the restriction.

Intangible assets, net

Intangible assets, netOur intangible assets are primarily comprised of acquired TUKYSA technology.

Revenue recognition

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, eligible customers receive an applicable discount which is processed through the distributor as 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 our patient assistance program, 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.

Revenue recognition - Royalty revenues

Royalty revenues primarily reflect amounts earned under the ADCETRIS collaboration with an affiliate of 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 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.

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 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.

In September 2023, we entered into a research and license agreement under which we owed an upfront payment of $60.0 million that was recorded in accounts payable as of September 30, 2023 and paid in October 2023. The agreement includes options to license technologies and contains contingent research, development, regulatory and commercial milestone payments potentially totaling up to $3.4 billion. The substantial majority of these contingent payments are dependent upon, among other things, our exercise of the options and future product sales. The agreement also includes mid-single to low double digit tiered royalties on future sales and the licensor retains an option for U.S. profit sharing and co-promotion on up to two products.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

We reviewed recently issued accounting pronouncements and concluded that they were either not applicable or not expected to have a material impact on our condensed consolidated financial statements.

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Organization and summary of significant accounting policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Cash, Cash Equivalents

Our total cash, cash equivalents, and restricted cash, as presented in the condensed consolidated statements of cash flows, was as follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	428,568	$	319,940
Restricted cash included in prepaid expenses and other current assets	592		3,546
Total cash, cash equivalents, and restricted cash as presented in the condensed consolidated statements of cash flows	$	429,160	$	323,486

Schedule of Cash, Cash Equivalents, and Restricted Cash

Our total cash, cash equivalents, and restricted cash, as presented in the condensed consolidated statements of cash flows, was as follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	428,568	$	319,940
Restricted cash included in prepaid expenses and other current assets	592		3,546
Total cash, cash equivalents, and restricted cash as presented in the condensed consolidated statements of cash flows	$	429,160	$	323,486

Schedule of Finite-Lived Intangible Assets

The following table presents the balances of our finite-lived intangible assets for the periods presented:

(dollars in thousands)	September 30, 2023		December 31, 2022
Gross carrying value	$	305,650	$	305,650
Less: accumulated amortization	(85,395)		(68,134)
Total	$	220,255	$	237,516

Schedule of Amortization Expense

The following table presents our amortization expense related to acquired TUKYSA technology costs, included in cost of sales in our condensed consolidated statements of comprehensive loss, for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Amortization expense	$	5,817	$	5,817	$	17,261	$	17,261

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Revenue from contracts with customers (Tables)

9 Months Ended

Sep. 30, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Collaboration and License Agreement Revenues by Collaborator

The following table presents our disaggregated revenue for the periods presented.

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
ADCETRIS	$	246,071	$	218,521	$	750,986	$	601,449
PADCEV	199,516		105,330		479,452		329,114
TUKYSA	102,071		87,771		288,651		267,235
TIVDAK	23,071		16,467		64,254		45,091
Net product sales	$	570,729	$	428,089	$	1,583,343	$	1,242,889
Royalty revenues	$	63,561	$	43,904	$	144,927	$	111,194
Collaboration and license agreement revenues	$	14,360	$	38,307	$	43,931	$	80,179
Total revenues	$	648,650	$	510,300	$	1,772,201	$	1,434,262

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Leases (Tables)

9 Months Ended

Sep. 30, 2023

Leases [Abstract]

Schedule of Supplemental Operating Lease Information

Supplemental operating lease information was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023			2022
Operating lease cost	$	5,514	$	3,682	$	16,426		$	11,824
Variable lease cost	1,307		1,039		3,870			3,360
Total lease cost	$	6,821	$	4,721	$	20,296		$	15,184
Cash paid for amounts included in measurement of lease liabilities	$	5,307	$	4,089	$	14,215		$	12,838
					As of September 30,
					2023			2022
Weighted average remaining lease term					11.2 years			5.4 years
Weighted average discount rate					6.9		%	5.0		%

Schedule of Operating Lease Assets and Liabilities

Operating lease liabilities were recorded in the following captions of our condensed consolidated balance sheets as follows:

(dollars in thousands)	September 30, 2023		December 31, 2022
Accrued liabilities and other	$	11,089	$	14,517
Operating lease liabilities, long-term	113,487		43,474
Total	$	124,576	$	57,991

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Net loss per share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares

The following table presents the weighted average number of shares that have been excluded for all periods presented:

	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2023	2022	2023	2022
Stock options and RSUs	9,000	9,948	8,699	10,029

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Fair value (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value Hierarchy of Assets Carried at Fair Value and Measured on a Recurring Basis

The fair value hierarchy of assets carried at fair value and measured on a recurring basis was as follows: 

	Fair value measurement using:
(dollars in thousands)	Quoted prices in active markets for identical assets (Level 1)		Other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
September 30, 2023
Short-term investments—U.S. Treasury securities	$	808,418	$	—	$	—	$	808,418
Other non-current assets—equity securities	1,104		—		—		1,104
Total	$	809,522	$	—	$	—	$	809,522
December 31, 2022
Short-term investments—U.S. Treasury securities	$	1,415,130	$	—	$	—	$	1,415,130
Other non-current assets—equity securities	3,854		—		—		3,854
Total	$	1,418,984	$	—	$	—	$	1,418,984

Schedule of Debt Securities

Our debt securities consisted of the following:

(dollars in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Fair value
September 30, 2023
U.S. Treasury securities	$	808,366	$	67	$	(15)	$	808,418
Contractual maturities (at date of purchase):
Due in one year or less	$	808,366					$	808,418
December 31, 2022
U.S. Treasury securities	$	1,416,717	$	96	$	(1,683)	$	1,415,130
Contractual maturities (at date of purchase):
Due in one year or less	$	1,400,852					$	1,399,382
Due in one to two years	15,865						15,748
Total	$	1,416,717					$	1,415,130

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Investment and other income, net (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Investment and Other Income, Net

Investment and other income, net consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Gain (loss) on equity securities	$	491	$	(2,669)	$	(2,750)	$	(9,747)
Investment and other income, net	14,487		6,947		44,213		10,226
Total investment and other income, net	$	14,978	$	4,278	$	41,463	$	479

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Inventories (Tables)

9 Months Ended

Sep. 30, 2023

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following:

(dollars in thousands)	September 30, 2023		December 31, 2022
Raw materials	$	12,845	$	14,916
Work in process	479,584		357,275
Finished goods	38,759		55,020
Total	$	531,188	$	427,211

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Accrued liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following: 

(dollars in thousands)	September 30, 2023		December 31, 2022
Clinical trial and related costs	$	222,488	$	194,006
Employee compensation and benefits	212,442		175,506
Gross-to-net deductions and third-party royalties	153,266		119,289
Acquisition related expenses	27,445		—
Other	114,262		121,752
Total	$	729,903	$	610,553

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Share-based compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Share-based Compensation

The following table presents our total share-based compensation expense for the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in thousands)	2023		2022		2023		2022
Research and development	$	70,062	$	31,328	$	149,974	$	77,850
Selling, general and administrative	61,281		27,610		138,524		79,130
Total share-based compensation expense	$	131,343	$	58,938	$	288,498	$	156,980

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Organization and summary of significant accounting policies - Additional Information (Details) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2023 USD ($) segment	Dec. 31, 2022 USD ($)	Mar. 31, 2023 USD ($) $ / shares	Sep. 30, 2022 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Number of reporting segments | segment	1
Accrued capital expenditures	$ 53,300	$ 20,100
Operating lease right-of-use assets	128,861	46,738
Operating lease liabilities	124,576	57,991
Accrued interest receivable	0	5,200
Cash held in escrow restricted by a contractual agreement	592	$ 3,546
Estimated future amortization expense, remainder of fiscal year	5,800
Estimated future amortization expense, 2024	23,100
Estimated future amortization expense, 2025	23,100
Estimated future amortization expense, 2026	23,100
Estimated future amortization expense, 2027	23,100
Estimated future amortization expense, 2028	23,100
Nurix
Summary Of Significant Accounting Policies [Line Items]
Research and license agreement, upfront payment due	60,000
Research and license agreement, maximum aggregate milestone payments	$ 3,400,000
Weighted Average
Summary Of Significant Accounting Policies [Line Items]
Intangible asset useful life	10 years
Office and Laboratory Facilities
Summary Of Significant Accounting Policies [Line Items]
Operating lease right-of-use assets	$ 93,500			$ 900
Operating lease liabilities	$ 75,300			$ 500
Pfizer Merger
Summary Of Significant Accounting Policies [Line Items]
Share price (in dollars per share) | $ / shares			$ 229
Enterprise value			$ 43,000,000

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Organization and summary of significant accounting policies - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 428,568	$ 319,940
Restricted cash included in prepaid expenses and other current assets	592	3,546
Total cash, cash equivalents, and restricted cash as presented in the condensed consolidated statements of cash flows	$ 429,160	$ 323,486	$ 368,370	$ 424,834

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Organization and summary of significant accounting policies - Finite-lived intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Gross carrying value	$ 305,650	$ 305,650
Less: accumulated amortization	(85,395)	(68,134)
Total	$ 220,255	$ 237,516

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Organization and summary of significant accounting policies - Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Accounting Policies [Abstract]
Amortization expense	$ 5,817	$ 5,817	$ 17,261	$ 17,261

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Revenue from contracts with customers (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Disaggregation of Revenue [Line Items]
Total revenues	$ 648,650	$ 510,300	$ 1,772,201	$ 1,434,262
Net product sales
Disaggregation of Revenue [Line Items]
Total revenues	570,729	428,089	1,583,343	1,242,889
Net product sales | ADCETRIS
Disaggregation of Revenue [Line Items]
Total revenues	246,071	218,521	750,986	601,449
Net product sales | PADCEV
Disaggregation of Revenue [Line Items]
Total revenues	199,516	105,330	479,452	329,114
Net product sales | TUKYSA
Disaggregation of Revenue [Line Items]
Total revenues	102,071	87,771	288,651	267,235
Net product sales | TIVDAK
Disaggregation of Revenue [Line Items]
Total revenues	23,071	16,467	64,254	45,091
Royalty revenues
Disaggregation of Revenue [Line Items]
Total revenues	63,561	43,904	144,927	111,194
Collaboration and license agreement revenues
Disaggregation of Revenue [Line Items]
Total revenues	$ 14,360	$ 38,307	$ 43,931	$ 80,179

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Leases - Additional Information (Details) ft² in Thousands, $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2021 USD ($) a ft² term	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets		$ 128,861		$ 128,861		$ 46,738
Operating lease liabilities		124,576		124,576		$ 57,991
Lease agreement, rented area | ft²	258
Rentable building and complex constructed (in acres) | a	20.5
Cash paid for amounts included in measurement of lease liabilities	$ 4,000	5,307	$ 4,089	14,215	$ 12,838
Annual escalations	3.00%
Initial term	20 years
Option to extend | term	2
Renewal term	10 years
Office and Laboratory Facilities
Lessee, Lease, Description [Line Items]
Operating lease right-of-use assets		93,500	900	93,500	900
Operating lease liabilities		$ 75,300	$ 500	$ 75,300	$ 500

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Leases - Lease Cost (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
	Jun. 30, 2021	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Leases [Abstract]
Operating lease cost		$ 5,514	$ 3,682	$ 16,426	$ 11,824
Variable lease cost		1,307	1,039	3,870	3,360
Total lease cost		6,821	4,721	20,296	15,184
Cash paid for amounts included in measurement of lease liabilities	$ 4,000	$ 5,307	$ 4,089	$ 14,215	$ 12,838
Weighted average remaining lease term		11 years 2 months 12 days	5 years 4 months 24 days	11 years 2 months 12 days	5 years 4 months 24 days
Weighted average discount rate		6.90%	5.00%	6.90%	5.00%

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Leases - Schedule of Balance Sheet Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Leases [Abstract]
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Accrued liabilities and other	Accrued liabilities and other
Accrued liabilities and other	$ 11,089	$ 14,517
Operating lease liabilities, long-term	113,487	43,474
Total	$ 124,576	$ 57,991

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Net loss per share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Stock options and RSUs (in shares)	9,000	9,948	8,699	10,029

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Fair value - Schedule of Fair Value Hierarchy of Assets Carried at Fair Value and Measured on a Recurring Basis (Details) - Fair Value Measurements Recurring - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 809,522	$ 1,418,984
US Treasury Securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	808,418	1,415,130
Equity Securities | Other Non-current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	1,104	3,854
Quoted prices in active markets for identical assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	809,522	1,418,984
Quoted prices in active markets for identical assets (Level 1) | US Treasury Securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	808,418	1,415,130
Quoted prices in active markets for identical assets (Level 1) | Equity Securities | Other Non-current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	1,104	3,854
Other observable inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Other observable inputs (Level 2) | US Treasury Securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Other observable inputs (Level 2) | Equity Securities | Other Non-current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant unobservable inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant unobservable inputs (Level 3) | US Treasury Securities | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	0	0
Significant unobservable inputs (Level 3) | Equity Securities | Other Non-current Assets
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	$ 0	$ 0

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Fair value - Additional Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Fair Value Disclosures [Abstract]
Credit loss	$ 0	$ 0	$ 0	$ 0
Allowance for credit loss	$ 0		$ 0		$ 0

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Fair value - Schedule of Debt Securities (Details) - US Treasury Securities - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized cost	$ 808,366	$ 1,416,717
Gross unrealized gains	67	96
Gross unrealized losses	(15)	(1,683)
Fair value	808,418	1,415,130
Debt securities, Due in one year or less, Amortized cost	808,366	1,400,852
Debt securities, Due in one year or less, Fair value	$ 808,418	1,399,382
Debt securities, Due in one to two years, Amortized cost		15,865
Debt securities, Due in one to two years, Fair value		$ 15,748

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Investment and other income, net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]
Gain (loss) on equity securities	$ 491	$ (2,669)	$ (2,750)	$ (9,747)
Investment and other income, net	14,487	6,947	44,213	10,226
Total investment and other income, net	$ 14,978	$ 4,278	$ 41,463	$ 479

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Inventories (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 12,845		$ 14,916
Work in process	479,584		357,275
Finished goods	38,759		55,020
Total	531,188		$ 427,211
Charge to reduce work in process inventory	$ 46,524	$ 0

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Accrued liabilities - Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Clinical trial and related costs	$ 222,488	$ 194,006
Employee compensation and benefits	212,442	175,506
Gross-to-net deductions and third-party royalties	153,266	119,289
Acquisition related expenses	27,445	0
Other	114,262	121,752
Total	$ 729,903	$ 610,553

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Accrued liabilities - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Line Items]
Acquisition related expenses	$ 27,445	$ 0
Pfizer Merger
Payables and Accruals [Line Items]
Acquisition-related costs	40,000
Acquisition related expenses	$ 27,000

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Share-based compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 131,343	$ 58,938	$ 288,498	$ 156,980
Unrecognized compensation cost	545,300		545,300
Employees Retention Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Value of awards granted	280,000		280,000
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation costs, excluding options	48,000		$ 48,000
Tranche One | Employees Retention Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting rights, percentage			20.00%
Vesting period			9 months
Tranche Two | Employees Retention Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting rights, percentage			30.00%
Vesting period			18 months
Tranche Three | Employees Retention Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting rights, percentage			25.00%
Vesting period			24 months
Tranche Four | Employees Retention Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting rights, percentage			25.00%
Vesting period			30 months
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	70,062	31,328	$ 149,974	77,850
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total share-based compensation expense	$ 61,281	$ 27,610	$ 138,524	$ 79,130

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Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (571)	$ 2,289	$ 6,945	$ 3,650
Effective income tax expense (benefit) rate	0.30%	(1.20%)	(1.20%)	0.80%

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Legal matters (Details) $ in Millions				1 Months Ended	9 Months Ended
	Feb. 07, 2023 week	Sep. 14, 2022 USD ($)	Apr. 08, 2022 USD ($)	Jan. 22, 2021 petition	Sep. 30, 2023 USD ($) claim	Oct. 17, 2023	Apr. 07, 2022 proceeding
Dispute over ownership of intellectual property
Subsequent Event [Line Items]
Loss contingency, damages sought		$ 58.0
Dispute over ownership of intellectual property | Minimum
Subsequent Event [Line Items]
Loss contingency accrual					$ 14.0
Dispute over ownership of intellectual property | Maximum
Subsequent Event [Line Items]
Loss contingency accrual					$ 58.0
Patent infringement
Subsequent Event [Line Items]
Number of petitions filed | petition				2
Number of post-grant review proceedings request granted | proceeding							2
Number of weeks request for second rehearing | week	2
Awarded damages for past infringement			$ 41.8
Patent infringement | Subsequent Event
Subsequent Event [Line Items]
Ongoing royalty on future sales, percentage						0.08
Litigation related to the Pfizer Merger
Subsequent Event [Line Items]
Number of claims filed | claim					6