It has been about a month since the last earnings report for Spectrum Pharmaceuticals (SPPI). Shares have lost about 1.1% in that time frame, underperforming 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 the most recent earnings report in order to get a better handle on the important drivers.
Spectrum Misses Earnings Estimates in Q4, Tops Sales
Spectrum Pharmaceuticals incurred adjusted loss of 30 cents per share in the fourth quarter of 2018, wider than the Zacks Consensus Estimate of a loss of 20 cents as well as the year-ago quarter loss of 23 cents per share.
Quarterly revenues came in at $29.4 million, up 2.9% from the year-ago quarter. The top line beat the Zacks Consensus Estimate of $25.97 million.
Quarter in Detail
Total product sales came in at $28 million, up 0.4% year over year. Sales were generated by seven marketed products — Fusilev ($0.4 million), Folotyn ($12.2 million), Zevalin ($0.9 million), Marqibo ($2.3 million), Beleodaq ($3.7 million), Evomela ($7.5 million) and recently launched Khapzory ($0.9 million).
License fees and service revenues were $1.4 million compared with $0.6 million in the prior-year quarter.
Adjusted research & development (R&D) expenses were $33.6 million, up 57.7% from the year-ago quarter due to higher costs related to regulatory application and commercial initiatives for Rolontis. Adjusted selling, general and administrative (SG&A) spending was up 4.2% to $19.9 million.
Spectrum Pharma’s total sales for the full year were down 14.8% to $109.3 million, which comprises product revenues of $104.5 million and license fees and service revenues of $4.9 million. Adjusted loss for the period was 84 cents per share, wider than the year-ago loss of 61 cents per share.
The company expects SG&A expenses to decrease 30% in 2019 as the company divested its marketed portfolio. However, R&D expenses are expected to increase marginally due to higher costs related to pre-commercial supply and tech transfer activities for Rolontis and poziotinib. Its cash, including the amount from sale of assets, is enough to fund operations for at least three years.
How Have Estimates Been Moving Since Then?
Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -28.57% due to these changes.
At this time, Spectrum Pharma has a poor Growth Score of F, a grade with the same score on the momentum front. Following the exact same course, 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.
Spectrum Pharma has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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