Spectrum Pharma Posts Lower Y/Y Q4 Earnings - Analyst Blog

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Spectrum Pharmaceuticals ( SPPI ) reported fourth quarter 2013 earnings (excluding stock-based compensation, depreciation and other special items) of 5 cents per share, well below the year-ago earnings of 29 cents per share. Results were affected by lower revenues.

Spectrum Pharma reported fourth quarter 2013 loss (including stock-based compensation and depreciation but excluding other special items) of a penny per share. The company had reported earnings of 20 cents per share in the year-ago quarter. The Zacks Consensus Estimate was a loss of 10 cents per share for the reported quarter.

Spectrum Pharma's revenues in the reported quarter came in at $41.5 million, down 40.8% year over year. The massive decline in total revenues was primarily due to lower product sales. Revenues were also below the Zacks Consensus Estimate of $45 million.

Spectrum Pharma reported 2013 loss (excluding stock-based compensation, depreciation and other special items) of 9 cents per share as against year-ago earnings of $1.47 per share. Spectrum Pharma reported 2013 loss (including stock-based compensation and depreciation but excluding other special items) of 32 cents per share. The company had reported year-ago earnings of $1.22 per share. The Zacks Consensus Estimate was a loss of 44 cents for 2013. Revenues in the year were down 41.8% to $155.9 million. Revenues were also below the Zacks Consensus Estimate of $159 million.

Quarter in Details

Spectrum Pharma recorded quarterly revenues from product sales and licensing fees during the quarter. Product revenues in the reported quarter were down 39.3% year over year to $40.5 million. This consisted of revenues from Fusilev, Folotyn, Zevalin and Marqibo.

Fusilev's performance has improved in the second half of 2013, after a disappointing first half. The drug is approved for the treatment of metastatic colorectal cancer. Spectrum Pharma recorded Fusilev sales of $20.6 million in the reported quarter.

Spectrum Pharma expects Fusilev sales to remain in the range of $20−$25 million per quarter in the forthcoming quarters.

Sales from Folotyn, which was added to Spectrum Pharma's portfolio following its acquisition of Allos Therapeutics, Inc. in Sep 2012, came in at $11.3 million in the fourth quarter of 2013, up 7.6% sequentially. Folotyn is available in the U.S. for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (PTCL).

Zevalin sales during the reported quarter came in at $7.3 million. In Apr 2012, Spectrum Pharma acquired the licensing rights to market Zevalin outside the U.S. Zevalin is currently marketed for the treatment of non-Hodgkin's lymphoma. Spectrum Pharma is looking to expand the drug's label. Zevalin is being studied in a phase III study for the treatment of patients suffering from diffuse large B-cell lymphoma.

Marqibo, launched in the U.S. for the treatment of adults suffering from Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) during late third quarter 2013, contributed $1.3 million to the company's net revenues in the fourth quarter. Spectrum Pharma gained worldwide rights to Marqibo following the completion of the acquisition of California-based Talon Therapeutics in Jul 2013. Marqibo is also being developed for the treatment of non-Hodgkin's lymphoma.

Spectrum Pharma also received $1.0 million as licensing fees during the quarter, compared with $3.4 million in the year-ago quarter.

The company's adjusted research and development (R&D) expenses of $10.8 million during the quarter went down 21.8% year over year. Adjusted selling, general and administrative (SG&A) expenses in the fourth quarter of 2013 of $25.3 million remained flat year over year.

2014 Outlook

Spectrum Pharma expects its R&D expenses in 2014 to go up from the 2013 figure of $46.6 million due to higher clinical development activities. Meanwhile, SG&A expenses are expected to remain flat on a year-over-year basis (2013 R&D expenses: $91.9 million).

Other Developments


In Dec 2013, Spectrum Pharma has filed a New Drug Application (NDA) for its pipeline candidate, Beleodaq (relapsed or refractory peripheral T-cell lymphoma). The FDA is reviewing its application for Beleodaq on a priority basis and a final decision from the U.S. regulatory body on the approval of the candidate is expected by Aug 9, 2014. Furthermore, the company plans to file for Captisol-enabled melphalan (a conditioning agent for stem cell transplant and multiple myeloma) by the end of 2014. The company expects Captisol-enabled melphalan to be approved by next year.

Our Take

We are encouraged by Fusilev's turnaround in the second half after a disappointing first half 2013. Fusilev has been the key revenue generator for Spectrum Pharma. We are also pleased with the company's efforts to expand its product portfolio and pipeline.

Spectrum Pharma currently carries a Zacks Rank #3 (Hold). Stocks worth considering include Alexion Pharmaceuticals, Inc. ( ALXN ), Biogen Idec Inc. ( BIIB ) and WuXi PharmaTech (Cayman) Inc. ( WX ). While Alexion carries a Zacks Rank #1 (Strong Buy), Biogen and WuXi Pharma hold a Zacks Rank #2 (Buy).



ALEXION PHARMA (ALXN): Free Stock Analysis Report

BIOGEN IDEC INC (BIIB): Free Stock Analysis Report

SPECTRUM PHARMA (SPPI): Free Stock Analysis Report

WUXI PHARMATECH (WX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: ALL , ALXN , BIIB , SPPI , WX

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