Spectrum (SPPI) Earnings And Sales Beat Estimates In Q1

Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) incurred a loss of 16 cents per share in the first quarter of 2018, narrower than the Zacks Consensus Estimate of a loss of 24 cents and the year-ago quarter loss of 30 cents per share. However, adjusted loss came in at 15 cents, wider-than the year ago loss of 14 cents.

Quarterly revenues came in at $30.5 million, up 4.8% from the year-ago quarter. The top line also beat the Zacks Consensus Estimate of $26.1 million.

Spectrum Pharma’s shares have underperformed the industry so far this year. The stock has lost 16.5% against the industry’s decline of 5%.

Quarter in Detail

Total product sales came in at $28.1 million, down 8.8% year over year. Sales were generated by six marketed products — Fusilev ($0.6 million), Folotyn ($12.7 million), Zevalin ($3 million), Marqibo ($0.9 million), Beleodaq ($2.7 million) and Evomela ($8.1 million). Evomela is facing pricing pressure due to generic entry.

License fees and service revenues were $2.4 million, down 26.8% from the prior-year quarter.

Adjusted research & development expenses were $17.1 million, up 15.7% from the year-ago quarter. Adjusted selling, general and administrative spending was up 30.1% to $20.4 million due to higher legal fees related to the termination of its former chief executive officer. The company is focused on the development of its two pipeline candidates, poziotinib and Rolontis.

2018 Outlook Raised

The company increased its revenue guidance for 2018 to the range of $95-$115 million (previously $90-$110 million). The company expects to have enough liquid funds to continue its operations into 2020.

Pipeline Update

Spectrum Pharma is evaluating poziotinib in two separate phase II studies for the treatment of lung cancer and a phase II study for breast cancer. In April 2018, the company published results from an analysis of the first 11 patients from the lung cancer study being conducted with MD Anderson. The candidate achieved an objective response rate of 64% in patients with EGFR exon 20 insertion mutations. The company is planning to evaluate poziotinib in several solid tumors with exon 20 mutations.

In February 2018, the company announced the successful completion of the phase III ADVANCE study on Rolontis. The candidate demonstrated non-inferiority to Amgen Inc.’s (NASDAQ:AMGN) Neulasta in improving duration of severe neutropenia in patients with breast cancer.

It has completed enrolling patients for an additional phase III study, RECOVER. Data from this study will be included in the biologics license application (“BLA”) along with ADVANCE study data to be filed with the FDA.

The company expects to file a BLA for Rolontis in the fourth quarter of 2018.

Zacks Rank & Stocks to Consider

Spectrum Pharma carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the biotech sector are Ligand Pharmaceuticals (NASDAQ:LGND) , and Protagonist Therapeutics (NASDAQ:PTGX) . Both the stocks sport a Zacks Rank #1 (Strong Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.

Ligand’s earnings per share estimates moved up from $4.24 to $4.43 for 2018 and remained stable at $5.32 for 2019 over the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.88%. The company’s shares have rallied 14.6% year to date.

Protagonist Therapeutics’ loss estimates narrowed from $1.68 to 66 cents for 2018 and from $2.43 to $1.26 for 2019 over the last 60 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 24.95%.

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