Spectrum Pharma Up on Q1 Earnings
By Zacks Equity Research 1 hour ago
Spectrum Pharmaceuticals’ (SPPI) shares are on a high since the announcement of its first-quarter results on May 8. The stock has gained over 5% so far. Spectrum Pharma’s first quarter 2014 earnings (excluding stock-based compensation, depreciation and other special items) of a penny per share were flat year over year.
Spectrum Pharma however reported a first quarter 2014 loss (including stock-based compensation and depreciation but excluding other special items) of 3 cents per share, narrower than the year-ago loss of 4 cents. The Zacks Consensus Estimate was a loss of 21 cents per share for the reported quarter.
Spectrum Pharma’s revenues in the first quarter 2014 came in at $40.1 million, up 3.8% year over year. The increase in revenues was attributable to higher product sales. Revenues were in line with the Zacks Consensus Estimate.
Quarter in Details
Spectrum Pharma recorded quarterly revenues from product sales and licensing fees during the quarter. Product revenues in the reported quarter were up 36.6% year over year to $40.1 million. This consisted of revenues from Fusilev, Folotyn, Zevalin and Marqibo.
Fusilev sales were up 88% to $29.3 million in the reported quarter. The drug is approved for the treatment of metastatic colorectal cancer. Spectrum Pharma expects Fusilev sales to remain in the range of $20−$25 million per quarter in the forthcoming quarters.
Sales from Folotyn, which was added to Spectrum Pharma’s portfolio following its acquisition of Allos Therapeutics, Inc. in Sep 2012, came in at $10.1 million in the first quarter. Folotyn is available in the U.S. for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (:PTCL). The demand for the drug remained in the range of $20−$25 million over the last few quarters.
Zevalin sales during the reported quarter came in at $6.3 million, down 13.7% sequentially due to a slow start in Jan 2014. In Apr 2012, Spectrum Pharma acquired the licensing rights to market Zevalin outside the U.S. Zevalin is currently marketed for the treatment of non-Hodgkin's lymphoma. Spectrum Pharma is looking to expand the drug’s label. Zevalin is being studied in a phase III (:ZEST) study as a consolidation therapy for the treatment of patients suffering from diffuse large B-cell lymphoma.
Marqibo, launched in the U.S. for the treatment of adults suffering from Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) during late third quarter 2013, contributed $1.5 million to the company’s net revenues in the first quarter 2014. Spectrum Pharma gained worldwide rights to Marqibo following the completion of the acquisition of California-based Talon Therapeutics in Jul 2013. Marqibo is also being developed for the treatment of non-Hodgkin's lymphoma.
The company’s adjusted research and development (R&D) expenses of $11.7 million during the quarter were up 8.6% year over year. Adjusted selling, general and administrative (SG&A) expenses of $23.0 million were up 6.2%.
Spectrum Pharma still expects its R&D expenses in 2014 to go up from the 2013 figure of $46.6 million due to higher clinical development activities. Meanwhile SG&A expenses are expected to remain stable for the remaining quarters of 2014.
The FDA is reviewing Spectrum Pharma’s application for Beleodaq (relapsed or refractory peripheral T-cell lymphoma) on a priority basis and a final decision from the U.S. regulatory body on the approval of the candidate is expected by Aug 9, 2014. The company expects to launch the candidate in the third quarter of 2014 depending on approval. Furthermore, the company plans to file for Captisol-enabled melphalan (a conditioning agent for stem cell transplant and multiple myeloma) in the third quarter of 2014.
We are encouraged by Fusilev’s turnaround since the second half of last year after a disappointing first half. Fusilev has been the key revenue generator for Spectrum Pharma. We are also pleased with the company’s efforts to expand its product portfolio and pipeline.
Spectrum Pharma currently carries a Zacks Rank #1 (Strong Buy). Some other stocks worth considering include Gilead Sciences Inc. (GILD), Ariad Pharmaceuticals Inc. (ARIA) and Alexion Pharmaceuticals, Inc. (ALXN). While Gilead carries a Zacks Rank #1 (Strong Buy), Ariad and Alexion carries a Zacks Rank #2.