Spectrum Pharma Reports 1Q Loss

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Spectrum Pharmaceuticals (SPPI) reported first quarter of 2013 loss (including stock-based compensation but excluding other special items) of 14 cents per share, narrower than the Zacks Consensus Estimate of a loss of 32 cents. The company reported earnings of 35 cents per share in the year-ago quarter. Results were affected by lower revenues.

Quarter in Details

Spectrum Pharma’s revenues in the reported quarter came in at $38.7 million, down 35.4% year over year. The decline in total revenues was primarily due to lower product sales. Revenues in the first quarter were well below the Zacks Consensus Estimate of $50 million.

Spectrum Pharma recorded quarterly revenues from product sales and licensing fees during the quarter. Product revenues in the reported quarter decreased 48.3% year over year to $29.3 million. Product revenues in the reported quarter consisted of revenues from Fusilev, Folotyn and Zevalin.

Fusilev performed miserably in the quarter. The drug is approved for the treatment of metastatic colorectal cancer. Spectrum Pharma recorded Fusilev sales of $11.8 million in the reported quarter, down 73.5% sequentially. The massive decline in Fusilev sales was due to the reduction in orders from wholesalers for the product. Fusilev’s demand in the hospital segment declined significantly during the quarter. Demand in the clinic segment was relatively stable.

First quarter Fusilev sales were in line with the company’s guidance ($10 million to $15 million) provided in Mar, 2013.

Sales from Folotyn, which was added to Spectrum Pharma’s portfolio following its acquisition of Allos Therapeutics, Inc. in Sep 2012, came in at $9.9 million in the first quarter of 2013. Folotyn is available in the US for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (:PTCL).

Zevalin sales during the reported quarter came in at $7.6 million. In Apr 2012, Spectrum Pharma acquired the licensing rights to market Zevalin outside the US.

Spectrum Pharma also received $9.3 million as licensing fees during the quarter, compared with $3.1 million in the year-ago quarter.

The company’s adjusted research and development (R&D) expenses of $9.5 million during the quarter shot up 34.1% year over year. The increase in R&D expenses during the quarter was primarily due to higher clinical expenses. Adjusted selling, general and administrative (SG&A) expenses in the first quarter of 2013 came in at $17.9 million, up 50% year over year.

Spectrum Pharma, a biotechnology company, currently carries a Zacks Rank #3 (Hold). Other biotech stocks like Athersys Inc. (ATHX), Elan Corporation (ELN) and BioCryst Pharmaceuticals Inc. (BCRX) presently look more attractive. While Athersys carries a Zacks Rank #1 (Strong Buy), Elan and BioCryst carry a Zacks Rank #2 (Buy).

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