Shares of Spectrum Pharmaceuticals Inc. plunged in premarket trading Wednesday after the pharmaceutical company said sales of its drug Fusilev could fall significantly this year.
The Henderson, Nev., company's stock started to slide Tuesday after it said it expects Fusilev revenue to total between $10 million and $15 million in the first quarter and about $80 million to $90 million for the year.
The estimate for the year would represent a drop of at least 56 percent from Fusilev's 2012 total of $204.3 million, and it is much less than analysts expected.
Fusilev is an injectable treatment for the side effects of a chemotherapy drug called methotrexate.
Roth Capital Partners analyst Joseph Pantginis said Spectrum's announcement shocked Wall Street, and he believes investor confidence in the company will be shaky until its new sales push show results. He had expected Fusilev revenue of $47.2 million in the first quarter and $210 million for 2013.
"We are certainly disappointed by this news and unfortunately we believe that this sends a poor signal to the Street, which has been hanging on everything Fusilev," Pantginis wrote in a Wednesday morning research note.
Pantginis said that while the Fusilev announcement will hurt Spectrum's stock, he still sees value when looking at the company's total revenue stream.
Company shares had climbed 4 percent to close at $12.43 on Tuesday. That put the stock up 11 percent so far in 2013 before shares began sliding after hours.
By Wednesday morning before markets opened, the stock was down about 40 percent, or $4.93, to $7.50. If that price carries over into regular market trading, it would be its lowest price since 2011.
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