Under Clay Siegall’s leadership, Seattle Genetics sees wide diversification of revenue

Every Finance 101 course will teach you that diversification is key to risk management, no matter how large or small the portfolio of investments. However, for some types of companies, diversification is a difficult thing to achieve. This is particularly true for corporations that narrowly focus on one product alone. Without themselves becoming investment conglomerates, it may be difficult for these companies to diversify their product line, which can be just as crucial for many companies as diversifying portfolios are for professional investment managers.

Clay Siegall is the founder and CEO of Seattle Genetics, one of the largest pharmaceutical companies in the United States today. Seattle Genetics has always been focused on an extremely narrow product line. As one of the premier cancer researchers in the United States, Dr. Siegall has been interested in primarily one area of drug development, that of a class of drugs known as antibody drug conjugates. This market has promised to yield major breakthroughs in the way that cancer is treated. By directly targeting the site of the tumor, antibody drug conjugates are capable of fighting cancer without the massive systemic release of dangerous drugs into the patient’s body. There are two major results that follow from this, both of enormous benefit to patients fighting cancer.

The first benefit is that the horrible side effects associated with chemotherapy are often mitigated or completely eliminated. This is simply due to the fact that none of the poison that reaches the site of the tumor is actually released into the patient’s circulation. The second major benefit is that, as a direct consequence of being able to avoid to release of chemotherapy agents into the bloodstream, the therapeutic window of antibody drug conjugates is massively higher than it would be for traditional chemotherapy. This means that treatment that would have otherwise taken six months may only take one single sitting with antibody drug conjugates.

Only developing antibody drug conjugates has been a risky strategy. For this reason, under Dr. Siegall’s leadership, Seattle Genetics now has more than 12 drugs in the development pipeline, and it has licensed more than 20 processes and products to other manufacturers, significantly diversifying the company’s revenue streams.

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