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Spectrum Pharma (SPPI) Down 3.7% Since Last Earnings Report: Can It Rebound?

A month has gone by since the last earnings report for Spectrum Pharmaceuticals (SPPI). Shares have lost about 3.7% in that time frame, outperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Spectrum Pharma due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Spectrum Earnings and Sales Beat Estimates in Q3

Spectrum Pharmaceuticals incurred an adjusted loss of 17 cents per share in the third quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of 21 cents but wider than the year-ago quarter loss of 11 cents per share.

Quarterly revenues came in at $25.3 million, down 21.4% from the year-ago quarter. The top line, however, beat the Zacks Consensus Estimate of $24.6 million.

Quarter in Detail

Total product sales came in at $24.6 million, down 23.8% year over year. Sales were generated by six marketed products — Fusilev ($0.6 million), Folotyn ($11.3 million), Zevalin ($1.5 million), Marqibo ($1.1 million), Beleodaq ($3.2 million) and Evomela ($6.9 million). Evomela is facing pricing pressure due to generic entry.

License fees and service revenues were $0.7 million compared with $5.2 million in the prior-year quarter.

Adjusted research & development expenses were $20.2 million, up 53% from the year-ago quarter. Adjusted selling, general and administrative spending was up 3.4% to $16.6 million.

2018 Guidance

The company tightened its revenue guidance range for 2018 to $100-$110 million from the previous guidance of $95-$115 million. The company expects to have enough liquid funds to continue its operations into 2020.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a flat path over the past two months.

VGM Scores

Currently, Spectrum Pharma has a poor Growth Score of F, however its Momentum Score is doing a lot better with an A. However, the stock was allocated a grade of F on the value side, putting it in the fifth quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Spectrum Pharma has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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