Spectrum Pharmaceutecals Inc (SPPI)

[antihama]

Summary of SPPI attributes posted on a SA article "Biotech: The Tide Is Turning". The article gives the viewpoint of several different SA authors on what they are looking for in 2018. I was basically skimming over the article but when one SA author, Avisol Capital Partners, made this comment

As part of my newly-gained caution, what I look for nowadays are small companies with a revenue-generating product. It doesn't matter how minuscule that revenue may be; just the fact that the company has done it once gives me confidence in its potential to do it again.

I couldn't help myself and posted the following

Like you Avisol Capital Partners, I am attracted to, as you state, “ As part of my newly-gained caution, what I look for nowadays are small companies with a revenue-generating product.” Considering that, you should look at Spectrum Pharmaceuticals (SPPI). Spectrum has six ‘boring’ niche cancer drugs on the market generating $125 - 135M in revenue per year which pays for most of their R&D expenses of 2 promising clinical drugs that will (should;)) have significant news coming out in the 1st Q. I’m most excited about poziotinib in NSCLC EGFR and HER2 exon 20 insertion mutations, there is nothing on the market that can treat that particular mutation with patients progressing under 3 months (it's actually under 2 months). Preliminary data from 11 patients in the University of Texas MD Anderson Cancer Center trial was reported at the World Conference on Lung Cancer in Japan in Oct 2017 showed an Objective Response Rate of 73%. Current patient population in the US is ~ 5 to 10,000. Just using a back of the envelope calculation, if the drug costs $100,000 and had 5000 pts it would take in $500M. Two things to think about in this calculation is that pts don’t really have an alternate choice in medicines and that other TKIs used in NSCLC and HER2 breast cancer cost considerable more than $100,000. Yes, the data is early but very promising and looking forward to hearing about more mature data/ possible BTD in the 1st half of the year. Spectrum has also started a much bigger phase 2 trial in October for that indication and has another Phase 2 in HER2 metastatic breast cancer. We should also be hearing about Rolontis, a long-acting Granulocyte-Colony Stimulating Factor (G-CSF) that eliminates myelosuppression from chemo drugs. It will compete with Neulasta which currently has $4B in sales in the US. It will have its own J code and is not considered a biosimilar. While management hypes it as a billion $ drug, I’ll be as happy as a clam if it grabs 5 – 10% of the market considering that a biosimilar may make it to the market next year. That by itself will double, triple current sales. Top-line data from a Phase 3 trial under a Special Protocol Assessment is expected in the 1st Q. Launch is expected in 2019. While, as I said, I am skeptical of managements hype of it being a billion dollar drug, current top SPPI management were formerly from Amgen and are quite versed in what it takes to compete. Speaking of top management, the previous CEO, Dr. Raj, who is hated by many investors, was relieved of those duties last month. OK, nuff said. Really, you should take a look.