Spectrum (SPPI) Down, Qapzola Fails To Impress FDA Panel

Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) announced that the FDA’s Oncologic Drugs Advisory Committee (ODAC) has voted against the approval of the company’s bladder cancer treatment Qapzola (apaziquone). Spectrum is looking to get Qapzola approved for the immediate intravesical instillation, post transurethral resection of bladder tumors (post-TURBT) in patients with non-muscle invasive bladder cancer (NMIBC). The company’s shares fell 8.2% on the news.

The ODAC voted that Qapzola failed to demonstrate a substantial evidence of a treatment effect in comparison to placebo. While the FDA is not bound to follow the recommendation of the advisory panels, it usually takes the same into consideration before finally approving a candidate. The regulatory agency is expected to render a final decision by Dec 11, 2016.

Spectrum had submitted a new drug application for Qapzola in Dec 2015 which included data from two randomized controlled studies that were conducted on a single dose of Qapzola compared to placebo following resection of NMIBC.

Both studies had failed to show a reduction in disease recurrence with Qapzola at 2 years. In both studies, the percentage of patients with recurrent disease in the Qapzola arm was numerically lower than that of placebo (6.6% and 6.2%). However, Spectrum identified in post-hoc analyses that the timing of intravesical therapy compared to resection could enhance the effect of Qapzola. The company is currently evaluating this analysis (and the administration of a second-dose of Qapzola) in a phase III study in the same patient population under the FDA’s Special Protocol Assessment agreement.

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The unfavorable recommendation from the FDA’s advisory panel is disappointing. Although Spectrum’s product portfolio currently comprises six marketed products, the company has been unable to generate substantial revenues for most of its products. Therefore, approval of pipeline candidates is crucial for the company.

Considering the lack of FDA-approved treatments for post-TURBT instillation in patients with NMIBC, there exists significant unmet for new treatment options. If approved, Qapzola could cater to the targeted patient population and potentially reduce the healthcare costs associated with the treatment of NMIBC.

Investor focus is expected to remain on the approval status of Qapzola.

Spectrum is a Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the health care sector include Anika Therapeutics Inc. (NASDAQ:ANIK) , Geron Corporation (NASDAQ:GERN) and ANI Pharmaceuticals, Inc. (NASDAQ:ANIP) . You can see the complete list of today’s Zacks #1 Rank stocks here.

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