Spectrum (SPPI) Reports Narrower-than-Expected Q3 Loss

Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) reported a loss of 22 cents per share in the third quarter of 2016, narrower than the Zacks Consensus Estimate of a loss of 32 cents. Adjusted loss (including stock-based compensation expense) in the quarter came in at 11 cents per share.

Quarterly revenues came in at $33.4 million for the third quarter of 2016, up 16.8% from the year-ago quarter and above the Zacks Consensus Estimate of $30 million.

Quarter in Detail

Spectrum Pharma earns revenues from six marketed products – Fusilev, Folotyn, Zevalin, Marqibo, Beleodaq and Evomela. Total product sales came in at $30.3 million, up 6.3% year over year.

Fusilev sales came in at $4.9 million, down 55.9%, while Folotyn sales were up 29.9% to $11.3 million. Beleodaq generated sales of 3.6 million, up 38.5%, while Marqibo sales were up 46.2% to $1.9 million. However, Zevalin sales plunged 45.8% to $2.6 million. Lastly, Evomela raked in sales of $5.9 million.

License fees and service revenues came in at $3.1 million.

Research & development expenses were $13.3 million, up 34.3%, while selling, general and administrative spending inched up 0.5% to $19.5 million.

Pipeline Update

Spectrum Pharma has been making progress on the development of its pipeline candidates. The company is currently enrolling patients in a phase III study on Rolontis (SPI-2012), under a Special Protocol Assessment (SPA) agreement from the FDA, for the treatment of chemotherapy-induced neutropenia in patients with breast cancer. A biologics license application (BLA) is expected to be filled in 2018.

In addition, the company is evaluating poziotinib in a phase II study for the treatment of breast cancer in patients who have failed multiple other HER2-directed therapies.

Our Take

Spectrum Pharma’s third-quarter results were encouraging, with a narrower-than-expected loss and better-than-anticipated revenues. However, we remain concerned about the declining product sales at the company. Fusilev sales may continue to tumble in the upcoming quarters due to stiff competition in this space.

Going forward, we expect investors to remain focused further on updates by the company.

SPECTRUM PHARMA Price, Consensus and EPS Surprise

SPECTRUM PHARMA Price, Consensus and EPS Surprise | SPECTRUM PHARMA Quote

Zacks Rank & Key Picks

Spectrum Pharma currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Anika Therapeutics Inc. (NASDAQ:ANIK) , Cambrex Corp. (NYSE:CBM) and Vanda Pharmaceuticals, Inc. (NASDAQ:VNDA) . Each of these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Anika’s earnings estimates increased from $1.96 to $2.06 for 2016 and from $2.03 to $2.09 for 2017 over the last 60 days. The company has posted a positive surprise in all of the four trailing quarters with an average beat of 33.14%.

Vanda’s loss estimates narrowed from 68 cents to 56 cents for 2016 over the last 60 days, while its earnings estimates have increased from 16 cents to 17 cents for 2017. The company has posted a positive earnings surprise in three of the four trailing quarters with an average beat of 56.65%.

Cambrex’s earnings estimates have increased from $2.46 to $2.55 for 2016 and from $2.91 to $3.06 for 2017 over the last 60 days. The company has posted a positive earnings surprise in three of the trailing four quarters with an average beat of 19.78%.

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