- Total product sales for the three
months ended September 30, 2014 increased 15.6% to $47.9 million
from $41.4 million in the same period last year.
- Non-GAAP diluted EPS was $0.08, and
GAAP EPS was ($0.18).
- Spectrum’s fifth oncology drug,
Beleodaq® (belinostat) for Injection was approved by the FDA and
launched this quarter using our existing sales forces.
- Spectrum is advancing its global Phase
3 development program for its novel GCSF, SPI-2012; Spectrum met
with the EMA in October and is scheduled to meet with the FDA in
December.
- NDA submission for our sixth
anti-cancer drug Captisol-enabledTM (propylene glycol-free)
melphalan expected by the end of the year.
Spectrum Pharmaceuticals, Inc. (NasdaqGS: SPPI), a biotechnology
company with fully integrated commercial and drug development
operations with a primary focus in hematology and oncology,
announced today financial results for the three-month period ended
September 30, 2014.
“We believe Spectrum is at the threshold of a multi-year growth
story,” said Rajesh C. Shrotriya, MD, Chairman and Chief Executive
Officer of Spectrum Pharmaceuticals. “This quarter exemplifies the
execution of Spectrum’s business model. We demonstrated strong
growth in product demand and sales, and such revenue will further
fund the development of our pipeline of novel oncology drugs that
have even greater promise. This quarter we received expedited FDA
approval for Beleodaq, and the upcoming filing of CE Melphalan is
now on the horizon. In addition, we are especially focused on
continuing to aggressively advance our novel long-acting GCSF, SPI
2012, that we believe has blockbuster potential.”
Three-Month Period Ended September 30,
2014 (All numbers are approximate)
GAAP Results
Total revenues were $48.0 million and product sales were $47.9
million in the third quarter of 2014. Total revenue increased 13.1%
from $42.4 million in the third quarter of 2013, while product
sales increased 15.6% from $41.4 million in the third quarter of
2013.
Product sales in the third quarter included: FUSILEV®
(levoleucovorin) net sales of $26.9 million, FOLOTYN® (pralatrexate
injection) net sales of $12.7 million, ZEVALIN® (ibritumomab
tiuxetan) net sales of $4.6 million, MARQIBO® (vinCRIStine sulfate
LIPOSOME injection) net sales of $1.8 million and BELEODAQ®
(belinostat) for Injection nets sales of $2.0 million.
Spectrum recorded net loss of $11.5 million, or ($0.18) per
basic and diluted share in the three-month period ended September
30, 2014, compared to net loss of $7.8 million, or ($0.13) per
basic and diluted share in the comparable period in 2013. Total
research and development expenses were $14.4 million in the
quarter, as compared to $13.6 million in the same period in 2013.
Selling, general and administrative expenses were $24.1 million in
the quarter, compared to $29.0 million in the same period in
2013.
Non-GAAP Results
Spectrum recorded non-GAAP net income of $5.3 million, or $0.08
per basic and diluted share in the three-month period ended
September 30, 2014, compared to non-GAAP net income of $1.7
million, or $0.03 per basic and diluted share in the comparable
period in 2013. Non-GAAP research and development expenses were
$14.0 million, as compared to $11.8 million in the same period of
2013. Non-GAAP selling, general and administrative expenses were
$21.3 million, as compared to $20.5 million in the same period in
2013.
Conference Call
Thursday, November 6, 2014 @ 4:30 p.m.
Eastern/1:30 p.m. Pacific
Domestic: (877) 837-3910, Conference ID#
17917229
International: (973) 796-5077, Conference ID#
17917229
This conference call will also be webcast. Listeners may access
the webcast, which will be available on the investor relations page
of Spectrum Pharmaceutical’s website:
www.sppirx.com on November 6, 2014 at 4:30
p.m. Eastern/1:30 p.m. Pacific.
On the conference call, management will review the financial
results, provide an update on the Company's business and discuss
expectations for the future.
About Spectrum Pharmaceuticals, Inc.
Spectrum Pharmaceuticals is a leading biotechnology company
focused on acquiring, developing, and commercializing drug
products, with a primary focus in oncology and hematology. Spectrum
and its affiliates market five oncology drugs: FUSILEV®
(levoleucovorin) for Injection; FOLOTYN® (pralatrexate injection);
ZEVALIN® (ibritumomab tiuxetan) Injection for intravenous use;
MARQIBO® (vinCRIStine sulfate LIPOSOME injection) for intravenous
infusion; and BELEODAQ® (belinostat) for Injection. Spectrum's
strong track record in in-licensing and acquiring differentiated
drugs, and expertise in clinical development have generated a
robust, diversified and growing pipeline of product candidates in
advanced-stage Phase 2 and Phase 3 studies. More information on
Spectrum is available at www.sppirx.com.
About BELEODAQ®
Beleodaq is a histone deacetylase (HDAC) inhibitor. HDACs
catalyze the removal of acetyl groups from the lysine residues of
histones and some non-histone proteins. In vitro, belinostat caused
the accumulation of acetylated histones and other proteins,
inducing cell cycle arrest and/or apoptosis of some transformed
cells. Belinostat shows preferential cytotoxicity towards tumor
cells compared to normal cells. Belinostat inhibited the enzymatic
activity of histone deacetylases at nanomolar concentrations
(<250 nM).
Please see Beleodaq Full Prescribing Information at
www.beleodaq.com.
Indications and Usage
Beleodaq is a histone deacetylase inhibitor indicated for the
treatment of patients with relapsed or refractory peripheral T-cell
lymphoma (PTCL). This indication is approved under accelerated
approval based on tumor response rate and duration of response. An
improvement in survival or disease-related symptoms has not been
established. Continued approval for this indication may be
contingent upon verification and description of clinical benefit in
the confirmatory trial.
Important Beleodaq Safety Information
Warnings and Precautions
- Beleodaq can cause thrombocytopenia,
leukopenia (neutropenia and lymphopenia), and/or anemia; monitor
blood counts weekly during treatment, and modify dosage as
necessary.
- Serious and sometimes fatal infections,
including pneumonia and sepsis, have occurred with Beleodaq. Do not
administer Beleodaq to patients with an active infection. Patients
with a history of extensive or intensive chemotherapy may be at
higher risk of life threatening infections.
- Beleodaq can cause fatal hepatotoxicity
and liver function test abnormalities. Monitor liver function tests
before treatment and before the start of each cycle. Interrupt or
adjust dosage until recovery, or permanently discontinue Beleodaq
based on the severity of the hepatic toxicity.
- Tumor lysis syndrome has occurred in
Beleodaq-treated patients in the clinical trial of patients with
relapsed or refractory PTCL. Monitor patients with advanced stage
disease and/or high tumor burden and take appropriate
precautions.
- Nausea, vomiting and diarrhea occur
with Beleodaq and may require the use of antiemetic and
antidiarrheal medications.
- Beleodaq can cause fetal harm when
administered to a pregnant woman. Women of childbearing potential
should be advised to avoid pregnancy while receiving Beleodaq. If
this drug is used during pregnancy, or if the patient becomes
pregnant while taking this drug, the patient should be apprised of
potential hazard to the fetus.
Adverse Reactions
- The most common adverse reactions
observed in the trial in patients with relapsed or refractory PTCL
treated with Beleodaq were nausea (42%), fatigue (37%), pyrexia
(35%), anemia (32%), and vomiting (29%).
- Sixty-one patients (47.3%) experienced
serious adverse reactions while taking Beleodaq or within 30 days
after their last dose of Beleodaq.
Drug Interactions
- Beleodaq is primarily metabolized by
UGT1A1. Avoid concomitant administration of Beleodaq with strong
inhibitors of UGT1A1.
Use in Specific Populations
- It is not known whether Beleodaq is
excreted in human milk. Because of the potential for serious
adverse reactions in nursing infants from Beleodaq, a decision
should be made whether to discontinue nursing or discontinue drug,
taking into account the importance of the drug to the mother.
About Captisol-Enabled Melphalan
Captisol-enabled, PG-free melphalan is a novel intravenous
formulation of melphalan being investigated for the multiple
myeloma transplant setting, for which it has been granted an Orphan
Drug Designation by the FDA. This formulation eliminates the use of
propylene glycol, which has been reported to cause renal and
cardiac side effects that limit the ability to deliver higher doses
of therapeutic compounds. The use of the Captisol® technology to
reformulate melphalan also improves its stability and is
anticipated to allow for slower infusion rates and longer
administration durations, potentially enabling clinicians to safely
achieve a higher dose intensity for pre-transplant
chemotherapy.
About Captisol®
Captisol is a patent-protected, chemically modified cyclodextrin
with a structure designed to optimize the solubility and stability
of drugs. Captisol was invented and initially developed by
scientists in the laboratories of Dr. Valentino Stella at the
University of Kansas’ Higuchi Biosciences Center for specific use
in drug development and formulation. This unique technology has
enabled seven FDA-approved products, including Onyx
Pharmaceuticals’ Kyprolis®, Baxter International’s Nexterone® and
Merck’s NOXAFIL IV. There are also more than 30 Captisol-enabled
products currently in clinical development.
Forward-looking statement — This press release may contain
forward-looking statements regarding future events and the future
performance of Spectrum Pharmaceuticals that involve risks and
uncertainties that could cause actual results to differ materially.
These statements are based on management's current beliefs and
expectations. These statements include, but are not limited to,
statements that relate to our business and its future, including
certain company milestones, Spectrum's ability to identify,
acquire, develop and commercialize a broad and diverse pipeline of
late-stage clinical and commercial products, leveraging the
expertise of partners and employees around the world to assist us
in the execution of our strategy, and any statements that relate to
the intent, belief, plans or expectations of Spectrum or its
management, or that are not a statement of historical fact. Risks
that could cause actual results to differ include the possibility
that our existing and new drug candidates may not prove safe or
effective, the possibility that our existing and new applications
to the FDA and other regulatory agencies may not receive approval
in a timely manner or at all, the possibility that our existing and
new drug candidates, if approved, may not be more effective, safer
or more cost efficient than competing drugs, the possibility that
our efforts to acquire or in-license and develop additional drug
candidates may fail, our lack of sustained revenue history, our
limited marketing experience, our dependence on third parties for
clinical trials, manufacturing, distribution and quality control
and other risks that are described in further detail in the
Company's reports filed with the Securities and Exchange
Commission. We do not plan to update any such forward-looking
statements and expressly disclaim any duty to update the
information contained in this press release except as required by
law.
SPECTRUM PHARMACEUTICALS, INC.®, FUSILEV®, FOLOTYN®, ZEVALIN®,
MARQIBO®, and BELEODAQ® are registered trademarks of Spectrum
Pharmaceuticals, Inc and its affiliates. REDEFINING CANCER CARE™
and the Spectrum Pharmaceuticals logos are trademarks owned by
Spectrum Pharmaceuticals, Inc. Any other trademarks are the
property of their respective owners.
© 2014 Spectrum Pharmaceuticals, Inc. All Rights Reserved
SPECTRUM PHARMACEUTICALS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except
share and per share amounts) (Unaudited) Three
Months EndedSeptember 30, Nine Months
EndedSeptember 30, 2014
2013 2014
2013 Revenues: Product sales, net $
47,916 $ 41,439 $ 134,867 $ 102,998 License fees and service
revenue 74 1,000 102
11,340 Total revenues $ 47,990 $ 42,439
$ 134,969 $ 114,338 Operating costs and
expenses: Cost of product sales (excludes amortization and
impairment of intangible assets) 6,530 8,221 18,964 22,271 Selling,
general and administrative 24,125 29,003 72,927 73,601 Research and
development 14,420 13,567 55,252 35,910 Amortization and impairment
of intangible assets 7,042 4,935
17,763 14,829 Total operating costs and
expenses 52,117 55,726 164,906
146,611 Loss from operations
(4,127 ) (13,287 ) (29,937 ) (32,273 )
Other expense: Interest expense (2,361 ) (628 ) (6,404 ) (1,542 )
Change in fair value of contingent consideration related to
acquisitions (181 )
—
(1,910 )
—
Other expense (1,393 ) 1,370 (2,238 )
804 Total other expense (3,935 ) 742
(10,552 ) (738 ) Loss before income
taxes (8,062 ) (12,545 ) (40,489 ) (33,011 ) (Provision) benefit
for income taxes (3,477 ) 4,733 (2,254
) 10,249 Net loss $ (11,539 ) $ (7,812 ) $
(42,743 ) $ (22,762 ) Net loss per share: Basic and diluted
$ (0.18 ) $ (0.13 ) $ (0.66 ) $ (0.38 ) Weighted average
shares outstanding: Basic and diluted 64,765,072
61,903,242 64,369,466 60,013,842
SPECTRUM PHARMACEUTICALS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands,
except share and par value amounts) (Unaudited)
September 30,2014 December 31,2013
ASSETS Current assets: Cash and cash equivalents $ 144,234 $
156,306 Marketable securities 3,306 3,471 Accounts receivable, net
of allowance for doubtful accounts of $200 and $206, respectively
60,085 49,483 Other receivables 9,348 7,539 Inventories 9,943
13,519 Prepaid expenses and other current assets 4,505 3,213
Deferred tax assets 138 1,659 Total
current assets 231,559 235,190 Property and equipment, net of
accumulated depreciation 1,414 1,535 Intangible assets, net of
accumulated amortization 237,244 231,352 Goodwill 18,295 18,501
Other assets 21,156 12,577 Total assets
$ 509,668 $ 499,155
LIABILITIES AND
STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and
other accrued liabilities $ 101,801 $ 79,837 Accrued payroll and
benefits 6,863 6,872 Deferred revenue 1,090 156 Drug development
liability 3,119 3,119 Total current
liabilities 112,873 89,984 Drug development liability, less current
portion 13,283 14,623 Deferred revenue, less current portion 8,869
— Acquisition-related contingent obligations 10,239 8,329 Deferred
tax liability 6,989 7,168 Other long-term liabilities 5,787 5,965
Convertible senior notes 95,036 91,480
Total liabilities 253,076 217,549 Commitments and contingencies
Stockholders’ equity: Preferred stock, $0.001 par value; 5,000,000
shares authorized: Series B junior participating preferred stock,
$0.001 par value; 1,500,000 shares authorized; no shares issued and
outstanding — —
Series E Convertible Voting Preferred
Stock, $0.001 par value and $10,000 stated value; 2,000 shares
authorized; 20 shares issued and outstanding at September 30, 2014
and December 31, 2013, respectively (convertible into 40,000 shares
of common stock, with aggregate liquidation value of $240)
123 123
Common stock, $0.001 par value;
175,000,000 shares authorized; 65,743,230 and 64,104,173 shares
issued and outstanding at September 30, 2014 and December 31, 2013,
respectively
66 64 Additional paid-in capital 535,645 518,144 Accumulated other
comprehensive income 1,120 894 Accumulated deficit (280,362
) (237,619 ) Total stockholders’ equity 256,592
281,606
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY $ 509,668 $ 499,155
Non-GAAP Financial Measures
In this press release, Spectrum reports certain historical and
expected non-GAAP results. Non-GAAP financial measures are
reconciled to the most directly comparable GAAP financial measure
in the tables of this press release and the accompanying footnotes.
The non-GAAP financial measures contained herein are a supplement
to the corresponding financial measures prepared in accordance with
generally accepted accounting principles (GAAP). The non-GAAP
financial measures presented exclude the items summarized in the
below table. Management believes that adjustments for these items
assist investors in making comparisons of period-to-period
operating results and that these items are not indicative of the
Company's on-going core operating performance.
Management uses non-GAAP net income (loss) in its evaluation of
the Company's core after-tax results of operations and trends
between fiscal periods and believes that these measures are
important components of its internal performance measurement
process. Management believes that providing these non-GAAP
financial measures allows investors to view the Company's financial
results in the way that management views the financial results.
The non-GAAP financial measures presented herein have certain
limitations in that they do not reflect all of the costs associated
with the operations of the Company's business as determined in
accordance with GAAP. Therefore, investors should consider non-GAAP
financial measures in addition to, and not as a substitute for, or
as superior to, measures of financial performance prepared in
accordance with GAAP. The non-GAAP financial measures presented by
the Company may be different from the non-GAAP financial measures
used by other companies.
SPECTRUM PHARMACEUTICALS, INC.
Condensed Consolidated Statements of Operations and
Reconciliation of Non-GAAP Adjustments (In thousands, except
share and per share data) (Unaudited)
Three months ended
September 30,
Nine months ended
September 30,
2014
2013 2014
2013 GAAP
product sales & license and contract revenue $ 47,990 $ 42,439
$ 134,969 $ 114,338 Non GAAP adjustments to product sales &
license and contract revenue: -- --
--
(7,608
)
Total adjustments to product sales & license and contract
revenues -- --
--
(7,608
)
Non-GAAP product sales & license and contract revenue
47,990 42,439 134,969
106,730 GAAP cost of product sales 6,530 8,221 18,964
22,271 Non-GAAP adjustments to cost of product sales --
-- -- -- Non-GAAP
cost of product sales 6,530 8,221
18,964 22,271 GAAP selling,
general and administrative expenses 24,125 29,003 72,927 73,601 Non
GAAP adjustments to SG&A: Stock-based compensation (2,653 )
(2,708 ) (7,223 ) (7,510 ) Shareholder lawsuit (104 ) (912 ) (1,367
) (1,491 ) Talon acquisition legal & professional fees --
(2,690 ) -- (3,376 ) Reduction of Staff -- (1,972 ) -- (1,972 )
Loan modification expense -- (183 ) -- (183 ) Depreciation expense
(56 ) (23 ) (874 ) (73 ) Total
adjustments to SG&A (2,813 ) (8,488 ) (9,464 ) (14,605 )
Non-GAAP selling, general and administrative 21,312
20,515 63,463 58,996
GAAP research and development 14,420 13,567 55,252 35,910
Non-GAAP adjustments to R&D: Stock-based compensation (411 )
(283 ) (1,366 ) (1,152 ) Depreciation expense (10 ) (76 ) (58 )
(891 ) TopoTarget milestone payment & stock issuance --
--
(17,790 )
--
Reduction in staff -- (708 ) -- (708 ) Talon acquisition fees --
(663 ) -- (663 ) Amendment of Mundipharma agreement resulting in
write off of deferred payment contingency -- --
--
2,431
Non-recurring payment related to co-development agreement --
--
--
(1,100
)
Total adjustments to R&D (421 ) (1,730 ) (19,214 ) (2,083 )
Non-GAAP research and development 13,999
11,837 36,038 33,827
GAAP amortization of purchased
intangibles
7,042 4,935
17,763
14,829
Non-GAAP adjustments to purchased intangibles: Amortization
(7,042 ) (4,935 ) (17,763 ) (14,829 )
Total adjustments to amortization of purchased intangibles (7,042 )
(4,935 )
(17,763
)
(14,829
)
Non-GAAP amortization of purchased intangibles --
-- -- -- GAAP
income from operations (4,127 ) (13,287 ) (29,937 ) (32,273 )
Non-GAAP adjustments to income from operations 10,276
15,153 46,441 23,908
Non-GAAP income from operations 6,149 1,866
16,504 (8,365 ) GAAP other
expense, net (3,935 ) 742 (10,552 ) (738 ) Non-GAAP adjustments to
other expense Realized gain on TopoTarget shares (2,217 ) -- (2,219
) -- Loss on foreign currency exchange 3,863 -- 4,469 --
Market-to-market of contingent consideration 181 -- 1,910 --
Accretion of discount on 2018 Convertible Notes 1,224
-- 3,556 -- Total
adjustments to other expense, net 3,051 --
7,716 -- Non-GAAP other expense,
net (884 ) 742 (2,836 ) (738 )
GAAP (provision)/benefit for income taxes (3,477 ) 4,733
(2,254 ) 10,249 Adjustment to (provision)/benefit for income taxes
3,477 (5,675 ) 2,254
(7,136 ) Non-GAAP provision for income taxes --
(942 ) -- 3,113 GAAP net
loss (11,539 ) (7,812 ) (42,743 ) (22,762 ) Non-GAAP adjustments
16,804 9,478 56,411
16,772 Non-GAAP net income 5,265
1,666 13,668 (5,990 )
Non-GAAP income per share:
Basic $ 0.08 $ 0.03
$
0.21
$
(0.10
)
Diluted $ 0.08 $ 0.03 $ 0.21 $ (0.10 )
Weighted average shares outstanding: Basic 64,765,072
61,903,242 64,369,466 60,013,842
Diluted 64,765,072 66,002,530
64,369,466 60,013,842
Spectrum Pharmaceuticals, Inc.Shiv KapoorVice President,
Strategic Planning & Investor
Relations702-835-6300InvestorRelations@sppirx.com
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