Spectrum Pharmaceutecals Inc (SPPI)

[antihama]

Comments on the Bob Sharma short article.

Didn't have time to really review it when it came out but did have time this weekend so I feel the need to vent on his 'piece of work'. At least I feel better in doing it.

How can he say some of this stuff with a straight face? First, he uses a price of another TKI, afatinib, or $66,000, as the sales price pozi would be priced. Yeah right. This is accurate if you look at the price of initial approval in 2013 ($5500/ month), but using 2013 prices? Come on, that's deliberately misleading. And it was considered a conservative price to competing lung cancer drug Tarceva at $5800/month. Checking the retail price today on GoodRx, it shows the average price of afatinib at $8929/month or $107,000/year. So his price of $66,000 is totally misleading and right off the bat his estimates are off by 62%. I often site the price of Tagrisso which is the standard in EGFR mutations in NSCLC and when it came out in 2015 was priced at $153,000/yr; the current average retail price is $16,247.59/month or $194,971/yr or 295% more than what Sharma thinks pozi will be priced at. Xalkori, used for the ALT mutation in NSCLC, has an average retail price of $18,919.95/month or $227,039/yr or 344% more. So I would say that you can triple pozi’s sale revenue compared to what he cited and it wouldn’t be an exaggeration by any stretch of the imagination. He then states

The stock seems to be already pricing in excellent efficacy in EGFR exon 20 NSCLC, which may show a decline in ORR further (with longer follow-up).

So if he short changed the potential of pozi for EGFRex20in in NSCLC by 200% should the share price, right now, go up another 200% based on this mutation if the data continues to be good and more comparable sales prices? You would think?

He goes on to discuss the potential of HER2ex20in in NSCLC and believes it won’t work. The MD Anderson WCLC abstract came out a few hours after his article and indicated a 50% interim response rate in HER2ex20in so his theory becomes a moot point and goes right out the window; at least he could use it for 3 hrs or so before the abstract put a squash to it. Sure the abstract provided interim data but even if the ORR drops down to 30%, it will become Standard of Care.

He also cites the Korean HER2, exon 20 NSCLC (adenocarcinoma only) study as an indicator of the mediocre efficacy of poziotinib in HER2, exon 20 NSCLC (adenocarcinoma only) which showed only 33% ORR (two out of six patients had a partial response, another three had stable disease, PFS >4 months). Well that study looked at all HER2 NSCLC mutations not just HER2ex20in so he’s incorrect in using that as support in his thesis. That’s like comparing one citrus fruit to another and saying since lemons taste sour, oranges must taste sour too. The next reference he provided on a ‘retrospective case series’ (of 3 patients ONLY) was a link to another trial but I didn’t find in the reference what he was discussing. I’m sure his other stuff on afatinib as a better drug than pozi will lead to other blind alleys but as I said it’s a moot point since posi showed promising data in HER2ex20in. Anyhows, we’ll have more confirmation on Sept 24th at the MD Anderson update CC with 4 more months of data. You’d think that MD Anderson would be studying afatinib rather than pozi if they believed what Shurma believes to be true? We should believe expert Sharma. Ha!

So at the end of the day, there are ~20,000 patients in the US, EU and Japan where pozi would become the Standard of Care for EGFR and HER2ex20in NSCLC once it’s approved in those regions. And you double that #, as Dr Heymach mentioned in one of his videos, for all the other 20 something tumor types that harbor the exon 20 mutation. At Tagrisso or Xalkori type prices, and even, if treatment is given for only 6 months before they progress, we know what kind of revenue that will bring and where the share price will be in the not too distant future.

Oh yeah, and let’s not forget that Rolontis will start bringing in revenue too in the next year or so, and even if it doesn’t do as well as Spectrum expects it will double or triple revenues current revenues of $100M.