) reported second quarter of 2013 loss (including stock-based
compensation but excluding other special items) of 13 cents per
share, wider than the Zacks Consensus Estimate of a loss of 11
cents. The company had reported earnings of 32 cents per share in
the year-ago quarter. Results were affected by lower revenues.
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Quarter in Details
Spectrum Pharma's revenues in the reported quarter came in at
$33.2 million, down 51.6% year over year. The massive decline in
total revenues was primarily due to lower product sales. Revenues
in the second quarter were also well below the Zacks Consensus
Estimate of $52 million.
Spectrum Pharma recorded quarterly revenues from product sales
and licensing fees during the quarter. Product revenues in the
reported quarter were down 50.9% year over year to $32.2 million.
This consisted of revenues from Fusilev, Folotyn and Zevalin.
Fusilev continued to perform miserably in the quarter. The drug
is approved for the treatment of metastatic colorectal cancer.
Spectrum Pharma recorded Fusilev sales of $12.9 million in the
reported quarter, down 77.2% from the year-ago quarter. The
massive decline in Fusilev sales was due to the reduction in
orders from wholesalers for the product. Sales were also down due
to a lower end-user demand and lower net price. Fusilev's demand
in the hospital segment declined significantly during the
quarter. Demand in the clinic segment was also down by a small
Management, however, believes that Fusilev sales will ramp up in
the latter half of the year. Spectrum Pharma expects to generate
Fusilev sales of around $20−$25 million per quarter in the second
half of 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 $12.6 million in the second quarter of
2013, up 27.3% 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 $6.8
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.
Spectrum Pharma also received $1.0 million as licensing fees
during the quarter, compared with $3.1 million in the year-ago
The company's adjusted research and development (R&D)
expenses of $12.9 million during the quarter shot up 34.9% 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 second
quarter of 2013 came in at $22.6 million, up 12.5% year over
Meanwhile the company is gearing up to launch its fourth product,
Marqibo, by the end of the year. Marqibo was added to Spectrum
Pharma's portfolio through the acquisition of Calif. based Talon
Therapeutics in Jul 2013. Marqibo is currently approved in the
U.S. for the treatment of adults suffering from Philadelphia
chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in
second or greater relapse or whose disease has progressed after
two or more anti-leukemia therapies. The same sales force which
currently sells Spectrum Pharma's Folotyn and Zevalin is expected
to be utilized for Marqibo. The addition of Marqibo will boost
Spectrum Pharma's oncology portfolio.
Spectrum Pharma also said that it intends to file a New Drug
Applications (NDA) for its pipeline candidate Belinostat
(relapsed or refractory peripheral T-cell lymphoma) by year end.
Furthermore, the company plans to file for Captisol-enabled
melphalan (multiple myeloma) by next year.
Though we are encouraged by the company's efforts to expand its
product portfolio, we remain concerned about the declining
Folotyn sales. We expect investor focus to stay on the drug's
performance apart from Marqibo in the coming quarters.
Spectrum Pharma currently carries a Zacks Rank #4 (Sell). Other
Biogen Idec Inc.
Gilead Sciences Inc.
) presently look more attractive with a Zacks Rank #1 (Strong