Spectrum Pharmaceuticals Inc. (NASDAQ: SPPI)

Spectrum Pharmaceuticals Inc. (SPPI) is a commercial stage biopharmaceutical company engaged in developing and commercializing therapies with a focus primarily in the areas of hematology-oncology and urology. The Company’s product is apaziquone (formerly EOquin), which is in two phase III clinical trials for non-muscle invasive bladder cancer under a collaboration with Allergan Inc. Another drug, ozarelix, is in a phase II clinical trial for benign prostatic hypertrophy (BPH). On December 15, 2008, SPPI and Cell Therapeutics Inc. (CTI) partnered to form a joint venture RIT Oncology LLC (RIT) to develop Zevalin ([90Y]-ibritumomab tiuxetan) in the United States. Its subsidiaries include OncoRx Pharma Private Limited, Spectrum Pharmaceuticals GmbH, RIT Oncology LLC and Spectrum Pharma Canada. During the year ended December 31, 2008, the Company dissolved NeoJB LLC.

The Company was formerly known as NeoTherapeutics Inc. and changed its name to Spectrum Pharmaceuticals, Inc. in December 2002. SPPI was founded in 1987 and is based in Irvine, California.

Source: https://trading.scottrade.com/quotesresearch/ScottradeResearch.aspx?symbol=SPPI , http://www.spectrumpharm.com/ , http://www.reuters.com/finance/stocks/incomeStatement?symbol=SPPI.W

Financial Summary

Consolidated revenue of $8.1 million was comprised of product sales of $6.0 million – $3.3 million from ZEVALIN and $2.7 million from FUSILEV – and $2.1 million attributable to the amortization of the Allergan licensing fee. This compares to $20.7 million in one-time, non-recurring revenue in the same period of 2008. The Company recorded a net loss of $9.7 million, or ($0.28) per share, compared to net income of $10.7 million, or $0.34 per share, in the second quarter of 2008. Research and development expenses were $7.3 million, as compared to $6.7 million in the same period of 2008, a $0.6 million, or 9.0% increase, mainly due to the amortization of purchased intangibles of ZEVALIN. Selling, general and administrative expenses were $9.2 million, a $6.0 million increase, compared to the $3.2 million in the same period in 2008, attributable to the commercialization of ZEVALIN and FUSILEV.

Consolidated revenue of $22.3 million was comprised of product sales of $18.1 million – $5.9 million from ZEVALIN and $12.2 million from FUSILEV – and $4.2 million attributable to the amortization of the Allergan licensing fee. This compares to $20.7 million in one-time, non-recurring revenue in the same period of 2008. The Company recorded a net loss of $9.1 million, or ($0.27) per share, compared to net income of $2.0 million, or $0.06 per share, in the same period of 2008. Research and development expenses were $13.9 million, as compared to $13.1 million in the same period of 2008, a $0.8 million, or 6% increase, mainly due to the amortization of purchased intangibles of ZEVALIN. Selling, general and administrative expenses were $15.5 million, a $9.7 million increase, compared to the $5.8 million in the same period in 2008, attributable to the commercialization of ZEVALIN and FUSILEV.

Net cash provided by operations in the six month period ended June 30, 2009, was $4.3 million. The positive operating cash flows are primarily due to sales of FUSILEV, arbitration proceeds related to ZEVALIN, and the contribution to research and development expenses by Allergan Inc.

During the second quarter ended June 30, 2009, the Company sold 8.5 million shares of common stock for $51 million in gross proceeds. As of June 30, 2009, the Company had cash, cash equivalents, marketable securities, and financing proceeds receivable of $106 million, compared to $64 million as of March 31, 2009. As of August 7, 2009, there were 42 million shares issued and outstanding.

Source: http://investor.spectrumpharm.com/ , Reuters.com

Analyst Consensus

This is the consensus forecast amongst 2 polled investment analysts. Against the Spectrum Pharmaceuticals Inc company.

The one analyst offering a 12-month price target expects SPPI share price to rise to 8.00 in the next year from the last price of 4.56.

Source: Financial Times.com

Source: http://www.reuters.com/finance/stocks/estimates?symbol=SPPI.W

Investment Highlights

SPPI, a commercial-stage biotechnology company with a primary focus in oncology, last week announced that it received a Complete Response letter from the U.S. Food and Drug Administration (FDA) regarding its supplemental New Drug Application (sNDA) for FUSILEV(R) (levoleucovorin) for injection for treatment of patients with advanced metastatic colorectal cancer. The FDA stated in the Complete Response letter that the submission did not demonstrate that FUSILEV is non-inferior to leucovorin; the FDA recommended that the Company meet with them to discuss options for continuing to seek approval of FUSILEV in advanced metastatic colorectal cancer. The Company plans to promptly request such meeting to discuss options for FUSILEV in this indication.  The FDA did not request any changes to the currently approved indications and package insert.

SPPI announced earlier this year that it has acquired 100% rights to RenaZorb(R) (a family of compounds represented by SPI-014, also known as RZB-014), a lanthanum-based nanotechnology compound with potent and selective phosphate binding properties, for all human and non-human indications. In 2005, the Company acquired the worldwide license to develop RenaZorb for all human therapeutic uses from Altair Nanotechnologies. Today’s acquisition includes all uses and thus provides full rights, and intellectual property, for the asset. In consideration for the license, SPPI will pay to Altair a total of $750,000 in restricted common stock.

SPPI late last month announced that it has received $50 million from existing institutional investors in a previously announced registered direct offering. Spectrum received net proceeds of approximately $47.5 million after deducting placement agent fees and other offering expenses. All of the securities were offered pursuant to an effective shelf registration statement. Proceeds from the transaction will be used for general corporate purposes. After the offering, the company has 48,707,303 shares issued and outstanding.

SPPI last month announced ZEVALIN(R) (ibritumomab tiuxetan), a CD20-directed radiotherapeutic antibody, received approval from the FDA for an expanded label for the treatment of patients with previously untreated follicular non-Hodgkin’s Lymphoma (NHL) who achieve a partial or complete response to first-line chemotherapy. This new and expanded indication supplements the 2002 FDA approval of ZEVALIN as treatment for patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin’s lymphoma. The approval of the new indication was based on data from the FIT Study (First-line Indolent Therapy). The multicenter, randomized, open-label phase III study evaluated the safety and efficacy of ZEVALIN in 414 patients with CD20-positive follicular NHL who had achieved a partial response or a complete response after receiving a first-line chemotherapy regimen. Patients were treated with one of the following first-line chemotherapy regimens: chlorambucil, fludarabine, fludarabine-containing regimen, CVP/COP, CHOP, CHOP-like, or rituximab-containing chemotherapy. At 3.5 years of follow-up, the FIT trial demonstrated that when used as part of first-line chemotherapy for patients with follicular NHL, ZEVALIN significantly improved the median progression-free survival time from 18 months (control arm) to 38 months (ZEVALIN arm).

Source: Scottrade.com, Reuters.com, spectrumpharm.com/

SPPI: 4.40 -0.16 (-3.51%) : Spectrum Pharmaceuticals, Inc. – Yahoo! Finance

Technical Analysis

Source: www.stockcharts.com

Moving Average Price Compare

SPPI is below its 50-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

MACD

The MACD for SPPI currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

Bollinger Bands

SPPI’s recent volatility has been greater than normal. This is evidenced by the increased distance between the upper and lower Bollinger Bands. These bands measure volatility using standard deviation and a large width is due to high volatility. Additionally, SPPI is trading at its lower Bollinger Band. This suggests that the stock price is low relative to its recent price action.

Comparative Analysis

Source: Reuter.com, Nasdaq.com

Insider Trading Activity

Net Share Purchase Activity

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