* Adcetris meets main goal of improving PFS rate
* Investors focus on narrow drug benefits vs standard of care
* Seattle Genetics shares fall as much as 13.7 pct (Adds details, analyst comment; updates shares)
By Divya Grover
June 26 (Reuters) - Seattle Genetics Inc's lymphoma drug met the main goal in a late stage study, but shares of the company tumbled as the data fell short of investor expectations on the treatment's advantages over standard of care.
The drug, Adcetris, co-developed with Japan's Takeda Pharmaceutical Co Ltd, met the goal of helping blood cancer patients live longer without worsening their condition.
However, the difference in the progression free survival rate of patients on the combination therapy testing Adcetris and the control arm was about 5 percent - 82.1 percent for the drug versus 77.2 percent in the control arm.
The relatively modest improvement of about 5 percent could generate cost concerns among insurers, SunTrust Bank analyst Yatin Suneja said.
Bothell, Washington-based Seattle Genetics shares slumped as much 13.7 percent to $53.30 in afternoon trading on Monday.
Adcetris is approved in the United States to treat patients with classical Hodgkin's lymphoma, who have already received a stem cell transplant or two chemotherapies. The drug is also approved to treat anaplastic large cell lymphoma in patients who have undergone chemotherapy.
However, analysts did not write off the benefits that the drug could offer over the standard treatment, which is a combination of adriamycin, bleomycin, vinblastine and dacarbazine (ABVD) drugs.
"Eliminating bleomycin should be enough to ensure commercial success with a broad label," Morgan Stanley analysts said.
One of the fatal side effects of bleomycin is pulmonary toxicity.
Doctors for long have been trying to get rid of bleomycin from the chemotherapy regimen to increase the long-term durable response rate and decrease toxicity, Seattle Genetics Chief Executive Clay Siegall told Reuters.
Seattle Genetics said it would file for an expanded label in the United States as soon as possible.
About 8,260 Americans were diagnosed with Hodgkin's lymphoma so far in 2017, out of which about 1,070 died, according to the American Cancer Society.
Adcetris, which generated about $266 million in North America sales last year, is also being developed in combination with Bristol-Myers Squibb's immunotherapy, Opdivo, to treat relapsed Hodgkin's lymphoma.
Last week, Seattle Genetics halted a late-stage study of its leukemia drug, vadastuximab talirine, following a "higher rate" of deaths in patients on the drug compared with those on a placebo.
Up to Friday's close, the company's shares had gained 17 percent this year. (Reporting by Divya Grover in Bengaluru; Editing by Anil D'Silva)