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Spectrum (SPPI) Earnings and Sales Miss Estimates in Q2

Spectrum Pharmaceuticals, Inc. SPPI incurred an adjusted loss of 21 cents per share in the second quarter of 2018, wider than the Zacks Consensus Estimate of a loss of 18 cents and the year-ago quarter loss of 11 cents per share.

Quarterly revenues came in at $24.2 million, down 29.5% from the year-ago quarter. The top line also missed the Zacks Consensus Estimate of $28.03 million.

Spectrum Pharma’s shares were up 5.4% in pre-market trading on Aug 10. Shares of the company have rallied 5.8% so far this year compared with the industry’s increase of 1.6%.

Quarter in Detail

Total product sales came in at $23.8 million, down 23.8% year over year. Sales were generated by six marketed products — Fusilev ($0.8 million), Folotyn ($11.7 million), Zevalin ($1.6 million), Marqibo ($1.1 million), Beleodaq ($2.7 million) and Evomela ($5.8 million). Evomela is facing pricing pressure due to generic entry.

License fees and service revenues were $0.4 million, down 86.8% from the prior-year quarter.

Adjusted research & development expenses were $20.1 million, up 37.9% from the year-ago quarter. Adjusted selling, general and administrative spending was up 35% to $19.6 million.

2018 Guidance Maintained

The company reiterated its revenue guidance for 2018 to the range of $95-$115 million. The company expects to have enough liquid funds to continue its operations into 2020.

Pipeline Update

Spectrum Pharma is evaluating one of its key pipeline candidate, poziotinib, in two separate phase II studies for the treatment of lung cancer and a phase II study for breast cancer. In April, the company published results from an analysis of the first 11 patients from the lung cancer study being conducted with MD Anderson. The candidate achieved an objective response rate of 64% in patients with EGFR exon 20 insertion mutations. The company is planning to evaluate poziotinib in several solid tumors with exon 20 mutations.

Per its discussion with the FDA, the phase II lung cancer study is being viewed as a pivotal registration study. Data from this study may be eligible for regulatory review for approval of the candidate. This might be the reason for the increase in share price in pre-market trading despite dismal quarterly results. However, clarity on path forward will be available by the year end.

The company also has plans to expand the development of the candidate in first-line lung cancer especially in patients with EGFR or HER2 exon 20 mutations. Spectrum Pharma also plans to develop poziotinib in combination with other drugs for superiority compared with the drugs alone and for treating other solid tumors.

The company is developing its lead pipeline candidate, Rolontis, for the treatment of breast cancer.

In February 2018, the company announced the successful completion of the phase III ADVANCE study on Rolontis. The candidate demonstrated non-inferiority to Amgen Inc.’s AMGN Neulasta in improving duration of severe neutropenia in patients with breast cancer.

The company also successfully completed the second phase III study, RECOVER, which confirmed the non-inferiority of the candidate to Neulasta. The company is expected to submit a biologics license application (“BLA”) for Rolontis based on data from these two phase III studies in the fourth quarter of 2018.

Spectrum Pharmaceuticals, Inc. Price, Consensus and EPS Surprise

 

Spectrum Pharmaceuticals, Inc. Price, Consensus and EPS Surprise | Spectrum Pharmaceuticals, Inc. Quote

Zacks Rank & Stocks to Consider

Spectrum Pharma currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the biotech sector are Vertex Pharmaceuticals VRTX and Seattle Genetics SGEN. Both the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vertex’s earnings per share estimates moved up from $3.16 to $3.74 for 2018 and from $4.33 to $4.59 for 2019 in the last 30 days. The company delivered a positive surprise in all the trailing four quarters with an average beat of 27.5%. Share price of the company has increased 16.8% in a year.

Seattle Genetics’ loss per share estimates narrowed from $1.81 to 83 cents for 2018 and from 81 cents to 39 cents for 2019 in the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 12.93%. The company’s shares have rallied 34.6% year to date.

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