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, 2016. As previously disclosed, the Company was
re-examining the accounting treatment of the 2013 acquisition of
the rights to CE Melphalan from Ligand Pharmaceuticals. This
re-examination has now concluded and the Company has determined
that no change was required.
Three-Month Period Ended
September 30, 2016 (All numbers are
approximate)
GAAP Results
Total product sales were $30.3 million in the third quarter of
2016. Product sales in the third quarter included: FUSILEV®
(levoleucovorin) net sales of $4.9 million, FOLOTYN® (pralatrexate
injection) net sales of $11.3 million, ZEVALIN® (ibritumomab
tiuxetan) net sales of $2.6 million, MARQIBO® (vinCRIStine sulfate
LIPOSOME injection) net sales of $1.9 million, BELEODAQ®
(belinostat for injection) net sales of $3.6 million, and EVOMELA®
(melphalan) for injection net sales of $5.9 million.
Spectrum recorded net loss of $17.5 million, or $(0.22) per
basic and diluted share in the three-month period ended
September 30, 2016, compared to net loss of $18.7 million, or
$(0.28) per basic and diluted share in the comparable period in
2015. Total research and development expenses were $13.3 million in
the quarter, as compared to $9.9 million in the same period in
2015. Selling, general and administrative expenses were $19.5
million in the quarter, compared to $19.4 million in the same
period in 2015.
The Company ended the quarter with Cash and Cash Equivalents of
$171.9 million.
Non-GAAP Results
Spectrum recorded non-GAAP net loss of $5.3 million, or $(0.07)
per basic and diluted share in the three-month period ended
September 30, 2016, compared to non-GAAP net loss of $7.9
million, or $(0.12) per basic and diluted share in the comparable
period in 2015. Non-GAAP research and development expenses were
$12.8 million, as compared to $9.4 million in the same period of
2015. Non-GAAP selling, general and administrative expenses were
$15.6 million, as compared to $17.2 million in the same period in
2015.
About Spectrum Pharmaceuticals, Inc.
Spectrum Pharmaceuticals is a leading biotechnology company
focused on acquiring, developing, and commercializing drug
products, with a primary focus in Hematology and Oncology. Spectrum
currently markets six hematology/oncology drugs, and has an
advanced stage pipeline that has the potential to transform
the Company. Spectrum's strong track record for 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.
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 Spectrum’s 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, the timing
and results of FDA decisions, 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 Spectrum’s 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 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. The Company does not plan to update any such
forward-looking statements and expressly disclaims any duty to
update the information contained in this press release except as
required by law.
SPECTRUM PHARMACEUTICALS, INC. ®, FUSILEV®, FOLOTYN®, ZEVALIN®,
MARQIBO®, BELEODAQ® , and EVOMELA® 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.
© 2016 Spectrum Pharmaceuticals, Inc. All Rights Reserved
SPECTRUM PHARMACEUTICALS, INC.
Condensed Consolidated Statements of
Operations
(In thousands, except per share
amounts)
(Unaudited)
Three Months EndedSeptember 30, Nine Months
EndedSeptember 30, 2016 2015
2016 2015 Revenues: Product sales, net $
30,272 $ 28,457 $ 96,401 $ 102,014 License fees and service revenue
3,121 170 14,807 10,212 Total revenues
$ 33,393 $ 28,627 $ 111,208 $ 112,226
Operating costs and expenses: Cost of product sales (excludes
amortization and impairment charges of intangible assets) 7,503
8,447 18,715 21,508 Cost of service revenue 2,221 — 5,716 —
Selling, general and administrative 19,465 19,411 69,047 65,297
Research and development 13,293 9,924 43,037 35,333 Amortization
and impairment charges of intangible assets 6,907 6,919
19,052 27,857 Total operating costs and
expenses 49,389 44,701 155,567 149,995
Loss from operations (15,996 ) (16,074 ) (44,359 ) (37,769 ) Other
(expense) income: Interest expense, net (2,373 ) (2,274 ) (7,087 )
(6,760 ) Change in fair value of contingent consideration related
to acquisitions 78 81 (1,249 ) (565 ) Other income (expense), net
372 (535 ) 990 (1,501 ) Total other expenses (1,923 )
(2,728 ) (7,346 ) (8,826 ) Loss before income taxes (17,919 )
(18,802 ) (51,705 ) (46,595 ) Benefit (provision) for income taxes
464 78 635 (37 ) Net loss $ (17,455 ) $
(18,724 ) $ (51,070 ) $ (46,632 ) Net loss per share: Basic and
diluted $ (0.22 ) $ (0.28 ) $ (0.73 ) $ (0.71 ) Weighted average
shares outstanding: Basic and diluted 79,303,380 65,855,727
70,437,885 65,457,060
SPECTRUM PHARMACEUTICALS, INC.
Condensed Consolidated Balance
Sheets
(In thousands, expect per share and par
value amounts)
(Unaudited)
September 30, 2016 December 31,
2015 ASSETS Current assets: Cash and cash equivalents
$ 171,605 $ 139,741 Marketable securities 247 245 Accounts
receivable, net of allowance for doubtful accounts of $15 and $120,
respectively 42,466 30,384 Other receivables 7,091 12,572
Inventories 7,303 4,176 Prepaid expenses and other assets 2,702
3,507 Total current assets 231,414 190,625 Property
and equipment, net of accumulated depreciation 538 918 Intangible
assets, net of accumulated amortization and impairment charges
171,460 190,335 Goodwill 18,017 17,960 Other assets 28,015
19,211 Total assets $ 449,444 $ 419,049
LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities:
Accounts payable and other accrued liabilities $ 49,977 $ 56,539
Accrued payroll and benefits 7,741 8,188 Deferred revenue 4,458
6,130 Drug development liability 156 259 Acquisition-related
contingent obligations 0 5,227 Total current
liabilities 62,332 76,343 Drug development liability, less current
portion 14,004 14,427 Deferred revenue, less current portion 741
383 Acquisition-related contingent obligations, less current
portion 1,915 1,439 Deferred tax liability 6,739 6,779 Other
long-term liabilities 8,772 7,444 Convertible senior notes 104,144
99,377 Total liabilities 198,647 206,192 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; 0 and 20 shares issued and
outstanding at September 30, 2016 and December 31, 2015,
respectively (the prior year balance relates to the 20 shares of
preferred stock which were converted into 40,000 shares of common
stock in the current year) — 123 Common stock, $0.001 par value;
175,000,000 shares authorized; 80,566,699 and 68,228,935 shares
issued and outstanding at September 30, 2016 and December 31, 2015,
respectively 80 68 Additional paid-in capital 638,006 552,108
Accumulated other comprehensive loss (2,090 ) (5,319 ) Accumulated
deficit (385,199 ) (334,123 ) Total stockholders’ equity 250,797
212,857 Total liabilities and stockholders’ equity $
449,444 $ 419,049
Non-GAAP Financial Measures
In this press release, Spectrum reports certain historical
“non-GAAP financial measures,” as defined in Regulation G of the
Securities Exchange Act of 1934. Non-GAAP financial measures differ
from financial statements reported in conformity to U.S. generally
accepted accounting principles (“GAAP”). In accordance with
Regulation G, we reconciled each non-GAAP financial measure to its
most directly comparable GAAP measure. Management uses non-GAAP
financial measures to assess our company’s performance and allocate
company resources, and 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. We
believe non-GAAP disclosures also provide investors with
information used generally in our industry for evaluating operating
results. Investors should not place undue reliance on non-GAAP
financial measures, nor should investors consider non-GAAP
financial measures as more meaningful than, or as substitutes or
replacements for, financial measures prepared in accordance with
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.
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 reported under
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.
Reconciliation of Non-GAAP Adjustments
for Condensed Consolidated Statements of Operations
(In thousands, expect per share
amounts)
Three months ended September 30,
2016
Nine months ended September 30,
2016
2016 2015 2016 2015
(1 ) GAAP product sales, net & license fees
and service revenue $ 33,393 $
28,627 $ 111,208 $ 112,226
Non GAAP adjustments to product sales, net
& license fees and service revenue:
— — (6,000 ) (9,681 )
Non-GAAP product sales, net &
license fees and service revenue
$ 33,393 $ 28,627
$ 105,208 $ 102,545
(2 ) GAAP selling, general and administrative
expenses $ 19,465 $ 19,411 $
69,047 $ 65,297 Non GAAP adjustments to
SG&A: Stock-based compensation (2,650 ) (2,005 ) (8,209 )
(7,121 ) Litigation expenses (1,133 ) (67 ) (11,946 ) 9 Insurance
reimbursement under D&O policy — — — 2,111 Depreciation expense
(103 ) (176 ) (432 ) (521 )
Non-GAAP selling, general and
administrative $ 15,579 $
17,163 $ 48,460 $
59,775 (3 ) GAAP research and
development $ 13,293 $ 9,924
$ 43,037 $ 35,333 Non-GAAP adjustments
to R&D: Stock-based compensation (500 ) (495 ) (1,545 ) (1,369
) Depreciation expense (3 ) (9 ) (9 ) (15 ) Other R&D milestone
payments — — (2,826 ) (3,000 )
Non-GAAP research
and development $ 12,790 $
9,420 $ 38,657 $
30,949 (4 ) GAAP net loss
$ (17,455 ) $ (18,724 )
$ (51,070 ) $ (46,632 )
Non-GAAP adjustments to net loss:
Adjustments to product sales, net &
license fees and service revenue, SG&A, and R&D as noted
above
4,389 2,752 18,967 225 Amortization and impairment charges of
intangible assets 6,907 6,919 19,052 27,857 Adjustments to other
(expense) income 1,358 1,275 5,052 5,509 Adjustments to benefit
(provision) for income taxes (464 ) (78 ) (635 ) 37
Non-GAAP net loss $ (5,265 ) $
(7,856 ) $ (8,634 ) $
(13,004 ) (5 ) GAAP loss per share
(Basic and Diluted) $ (0.22 ) $ (0.28 ) $ (0.73 ) $ (0.71 )
Non-GAAP loss per share (Basic and Diluted) $ (0.07 ) $
(0.12 ) $ (0.12 ) $ (0.20 )
Weighted average shares
outstanding: Basic and Diluted 79,303,380 65,855,727 70,437,885
65,457,060
(1) Non-GAAP product sales, net &
license fees and service revenue: These amounts
reflect adjustments to reverse revenue recognition for upfront
revenue from out-licenses and revenue from milestone achievement(s)
that do not consistently recur. The resulting non-GAAP revenue
solely consists of our (i) product sales, (ii) percentage-based
royalties from our licensees’ sales, and (iii) on-going service
revenue. We believe this measure of non-GAAP revenue is more
indicative of the period-over-period success of our core ongoing
product sales and service revenue.
(2) Non-GAAP selling, general and
administrative: These amounts reflect adjustments to
reverse allocated operating expenses for certain non-cash items
(including stock-based compensation and depreciation), as well as
the reversal of irregular operating expense items such as
non-recurring legal fees and settlements. We believe the resulting
non-GAAP SG&A value is more indicative of the
period-over-period success of our administrative expense control,
and more reflective of our normalized SG&A expense trends.
(3) Non-GAAP research and
development: These amounts reflect adjustments to
reverse allocated operating expenses for certain non-cash items
(including stock-based compensation and depreciation), as well as
non-recurring R&D milestone achievements that we record to
expense for our in-licenses. We believe the resulting non-GAAP
R&D value is more reflective of our true R&D expense
trends.
(4) Non-GAAP net loss: These
amounts reflect all non-GAAP adjustments described in (1) through
(3) above, plus other non-cash and/or non-recurring items,
including: (i) adjustments to reverse cost of service expense
recognition for certain service arrangements that do not
consistently recur (which corresponds with our non-GAAP reversal of
license and contract revenue, as discussed in (1) above); (ii)
adjustments to reverse operating expenses for non-cash amortization
and impairment of intangible assets (the reversal of these non-cash
expenses allows for a clearer representation of the
period-over-period success of our overall financial results and
future working capital requirements); (iii) adjustments to reverse
the impact of income taxes; and (iv) adjustments to reverse the
impact of mark-to-market contingent consideration (although our
contingent consideration results from prior acquisitions and is a
part of our business strategy, these adjustments through earnings
typically result from variables other than our current commercial
activity or other operating performance measures that are a focus
of our management), (v) reversal of foreign exchange gains and
losses (noncash), and (vi) debt discount accretion expense
(non-cash) for our convertible notes.
(5) Non-GAAP loss per share:
These amounts reflect all non-GAAP adjustments in (1) through (4)
above to present our overall non-GAAP financial results for each
period on a per-share basis.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161114005298/en/
Spectrum Pharmaceuticals, Inc.Shiv KapoorVice President,
Strategic Planning & Investor Relations702-835-6300InvestorRelations@sppirx.com
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