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Spectrum Progresses with SPI-2012

Zacks Equity Research

Spectrum Pharmaceuticals (SPPI) recently initiated a phase II study on SPI-2012 (LAPS-GCSF). SPI-2012 is being developed for the treatment of chemotherapy-induced neutropenia which utilizes partner Hanmi Pharmaceutical Company's proprietary Lapscovery Technology.

The multicenter, open label, dose-ranging study will evaluate the effectiveness of SPI-2012 in comparison to a fixed and standard dose of Amgen Inc.’s (AMGN) Neulasta (pegfilgrastim) as a concurrent active control to each dose of SPI-2012.

The study will assess the effectiveness of the test doses of the candidate on mean duration of severe neutropenia during Cycle 1 in patients suffering from breast cancer and also eligible for treatment with adjuvant or neoadjuvant chemotherapy.

In its phase I study, SPI-2012 showed an increase in neutrophil count similar to that of Neulasta, at one-third of the dose.

Though encouraged with the pipeline progress at Spectrum Pharma, we remain concerned about the company’s financial guidance for 2013. Last month, Spectrum Pharma announced that its metastatic colorectal cancer (mCRC) drug, Fusilev, is expected to generate revenues in the range of $80−$90 million in 2013.

In 2012, Spectrum Pharma had recorded total Fusilev sales of $204.3 million. The shifts in hospital sales to generics are primarily responsible for the reduced guidance. The company’s total revenues for the year are expected in the range of $160 million to $180 million, whereas it recorded $267.7 million of total revenue in 2012.

Spectrum Pharma, a biotechnology company, currently carries a Zacks Rank #4 (Sell). Presently, other biotech companies like XOMA Corporation (XOMA) and Agenus Inc. (AGEN) look more attractive. XOMA carries a Zacks Rank #1 (Strong Buy), while Agenus carries a Zacks Rank #2 (Buy). Amgen also carries a Zacks Rank #2.

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