Spectrum Pharmaceuticals, Inc. (NasdaqGS: SPPI), a
biopharmaceutical company focused on novel and targeted oncology
therapies, announced today financial results for the three-month
period ended June 30, 2019.
“We’ve made significant progress on our pipeline in the last few
months,” said Joe Turgeon, President and CEO of Spectrum
Pharmaceuticals. “Most notably, we completed enrollment in our
first two poziotinib cohorts in the ZENITH20 study and expect to
see results from cohort 1 in the fourth quarter. Based on strong
science, we’ve expanded the poziotinib development program to
include additional areas of high unmet medical need in lung cancer.
We also had a productive meeting with the FDA and expect to submit
the ROLONTIS BLA in the fourth quarter.”
Pipeline Overview:
Poziotinib, an irreversible tyrosine kinase inhibitor
targeting EGFR and HER2 mutations:
- The cornerstone poziotinb ZENITH20 trial currently consists of
seven cohorts of patients with non-small cell lung cancer (NSCLC).
- Cohorts Fully Enrolled
- Cohort 1: Previously treated patients with EGFR exon 20
insertion mutation; topline results expected in the fourth quarter
2019
- Cohort 2: Previously treated patients with HER2 exon 20
insertion mutation; topline results expected in mid-2020
- Cohorts Currently Enrolling
- Cohort 3: Treatment naïve patients with EGFR exon 20 insertion
mutation
- Cohort 4: Treatment naïve patients with HER2 exon 20 insertion
mutation
- Cohort 5: Previously treated or treatment naïve patients with
EGFR or HER2 exon 20 insertion mutation
- Cohort 6: Previously treated first-line osimertinib patients
with acquired EGFR mutations
- Cohort 7: Previously treated patients with atypical EGFR or
HER2 mutation
- Spectrum expects to initiate a basket study in H2 2019.
ROLONTIS® (eflapegrastim), a novel long-acting
GCSF:
- Integrated data from both Phase 3 ROLONTIS clinical trials with
643 patients were presented in a poster session at American Society
of Clinical Oncology 2019 annual meeting.
- The analysis found that integrated efficacy and safety data
from the two identically designed Phase 3 trials - ADVANCE and
RECOVER - were consistent with results from the individual trials,
demonstrating that ROLONTIS was non-inferior to pegfilgrastim in
the reduction of duration of severe neutropenia (DSN) in all four
cycles of treatment.
- Spectrum met with the FDA and expects to submit the ROLONTIS
BLA in the fourth quarter of 2019.
Business Development
- In May 2019, Spectrum completed an asset purchase and license
agreement with ImmunGene, Inc., a privately held biotechnology
company.
- The deal includes an exclusive license for the intellectual
property related to the FIT antibody-interferon fusion technology
drug delivery platform and two innovative early-stage drug
candidates derived from the platform.
- Originally developed by scientists at UCLA, the FIT platform
fuses interferon with a monoclonal antibody providing a mechanism
for targeting many different tumor antigens and has the potential
for broad application in oncology.
Three-Month Period Ended June 30, 2019
(All numbers are from Continuing Operations and are
approximate)
GAAP Results
Spectrum recorded a loss of $28.8 million, or a loss of $0.26
per basic and diluted share, in the three-month period ended June
30, 2019, compared to income of $14.9 million, or $0.15 income per
basic share and $0.14 per diluted share, in the comparable period
in 2018. Total research and development expenses were $17.0 million
in the quarter, as compared to $16.6 million in the same period in
2018. Selling, general and administrative expenses were $17.2
million in the quarter, compared to $16.4 million in the same
period in 2018.
The company ended the quarter with cash, cash equivalents,
restricted cash, and marketable securities of $282 million.
Non-GAAP Results
Spectrum recorded a non-GAAP loss of $25.2 million, or a
non-GAAP loss of $0.23 per basic and diluted share, in the
three-month period ended June 30, 2019, compared to a non-GAAP loss
of $28.8 million, or a non-GAAP loss of $0.28 per basic and diluted
share, in the comparable period in 2018. Non-GAAP research and
development expenses were $13.2 million, as compared to $15.4
million in the same period of 2018. Non-GAAP selling, general and
administrative expenses were $13.7 million, as compared to $13.8
million in the same period in 2018.
Conference Call:
Thursday, August 8, 2019 @ 4:30 p.m.
Eastern/1:30 p.m. Pacific
Domestic: (877) 837-3910, Conference ID#
5378656 International: (973) 796-5077, Conference ID# 5378656
This conference call will also be webcast. Listeners may access
the webcast, which will be available on the investor relations page
of Spectrum Pharmaceuticals' website: http://investor.sppirx.com/events-and-presentations
on August 8, 2019 at 4:30 p.m. Eastern/1:30 p.m. Pacific.
About Spectrum Pharmaceuticals, Inc.
Spectrum Pharmaceuticals is a biopharmaceutical company focused
on acquiring, developing, and commercializing novel and targeted
drug products, with a primary focus in hematology and oncology.
Spectrum has a strong track record of successfully executing across
the biopharmaceutical business model, from in-licensing and
acquiring differentiated drugs, clinically developing novel assets,
successfully gaining regulatory approvals and commercializing in a
competitive healthcare marketplace. Spectrum has a late-stage
pipeline with novel assets that serve areas of unmet need. This
pipeline has the potential to transform the company in the near
future. More information on Spectrum is available at www.sppirx.com.
Notice Regarding Forward-looking Statements
Certain statements in this press release may constitute
“forward-looking statements” within the meaning of the United
States Private Securities Litigation Reform Act of 1995, as amended
to date. These forward-looking statements relate to a variety of
matters, including, without limitation, statements that relate to
Spectrum’s business and its future, the Company’s ability to
execute its long-term strategy, the timing of the BLA filing for
ROLONTIS, the timing of the topline results from the poziotinib
EGFR previously treated and HER2 previously treated non-small cell
lung cancer cohort in the ZENITH20 trial, the potential for the two
poziotinib cohorts to support an NDA filing with the FDA, the
potential clinical applications for the FIT therapies, its
potential for treating both solid and hematologic malignancies, the
ability of the FIT therapies to meet currently unaddressed medical
needs and the size of potential markets, the future potential of
Spectrum’s existing drug pipeline, and any other statements that
are not purely statements of historical fact. These forward-looking
statements are based on management's current beliefs, expectations
and assumptions and are subject to significant risks and
uncertainties. Investors are cautioned not to place undue reliance
on any such forward-looking statements. All such forward-looking
statements speak only as of the date they are made, and Spectrum
undertakes no obligation to update or revise these statements,
whether as a result of new information, future events or otherwise.
Although Spectrum believes that the expectations reflected in these
forward-looking statements are reasonable, these statements involve
many risks and uncertainties that may cause actual results to
differ materially from what may be expressed or implied in these
forward-looking statements, including, without limitation, the
uncertainties inherent in new product development, including
clinical trial results and additional analysis of existing clinical
data, the possibility that Spectrum’s applications to the FDA and
other regulatory agencies may not receive approval in a timely
manner or at all, the possibility that Spectrum’s existing and new
drug candidates, including poziotinib, ROLONTIS and the FIT
therapies, may not be more effective, safer or more cost efficient
than competing drugs, and Spectrum’s dependence on third parties
for clinical trials, manufacturing and quality control. For a
further discussion of risks and uncertainties that could cause
actual results to differ from those expressed in these
forward-looking statements, as well as risks relating to the
business of Spectrum in general, see the risk disclosures in the
Annual Report on Form 10-K of Spectrum for the year ended December
31, 2018, and in subsequent reports on Forms 10-Q and 8-K and other
filings made with the SEC by Spectrum.
SPECTRUM PHARMACEUTICALS, INC.® and ROLONTIS® 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.
© 2019 Spectrum Pharmaceuticals, Inc. All Rights Reserved
SPECTRUM PHARMACEUTICALS,
INC.
Condensed Consolidated
Statements of Operations
(In thousands, except per share
amounts)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Revenues (Note 1(b))
$
—
$
—
$
—
$
—
Operating costs and expenses:
Selling, general and administrative
17,230
16,391
33,182
33,007
Research and development
16,982
16,595
38,868
29,960
Total operating costs and expenses
34,212
32,986
72,050
62,967
Loss from continuing operations
(34,212
)
(32,986
)
(72,050
)
(62,967
)
Other income (expense):
Interest income (expense), net
1,495
(242
)
2,556
(473
)
Other income (expense), net
3,722
48,492
(7,563
)
58,463
Total other income (expense)
5,217
48,250
(5,007
)
57,990
(Loss) income from continuing operations
before income taxes
(28,995
)
15,264
(77,057
)
(4,977
)
Benefit (provision) for income taxes from
continuing operations
212
(370
)
8,454
698
(Loss) income from continuing
operations
$
(28,783
)
$
14,894
$
(68,603
)
$
(4,279
)
Income (loss) from discontinued
operations, net of income taxes
388
(1,150
)
21,053
2,205
Net (loss) income
$
(28,395
)
$
13,744
$
(47,550
)
$
(2,074
)
Basic (loss) income per share:
(Loss) income per common share from
continuing operations
$
(0.26
)
$
0.15
$
(0.63
)
$
(0.04
)
Income (loss) per common share from
discontinued operations
—
(0.01
)
0.19
0.02
Net (loss) income per common share
$
(0.26
)
$
0.14
$
(0.44
)
$
(0.02
)
Diluted (loss) income per share:
(Loss) income per common share from
continuing operations
$
(0.26
)
$
0.14
$
(0.63
)
$
(0.04
)
Income (loss) per common share from
discontinued operations
—
(0.01
)
0.19
0.02
Net (loss) income per common share
$
(0.26
)
$
0.13
$
(0.44
)
$
(0.02
)
Weighted average shares outstanding:
Basic
110,345,135
102,597,059
109,744,405
101,747,416
Diluted
110,345,135
112,617,150
109,744,405
101,747,416
SPECTRUM PHARMACEUTICALS,
INC.
Income from Discontinued
Operations, net of Income Taxes
(In thousands)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2019
2018
2019
2018
Product sales, net***
$
(1,245
)
$
23,753
$
12,938
$
51,863
License fees and service revenue
—
415
290
2,799
Total revenues
$
(1,245
)
$
24,168
$
13,228
$
54,662
Operating costs and expenses:
Cost of sales (excluding amortization of
intangible assets)
433
6,606
3,601
13,420
Selling, general and administrative
(61
)
7,060
5,890
14,549
Research and development
255
4,893
2,791
9,422
Amortization of intangible assets
—
6,934
1,248
13,880
Restructuring - employee severance****
(2,439
)
—
3,858
—
Total operating costs and expenses
$
(1,812
)
$
25,493
$
17,388
$
51,271
Income (loss) from discontinued
operations
$
567
$
(1,325
)
$
(4,160
)
$
3,391
Other (expense) income:
Change in fair value of contingent
consideration
—
(192
)
(1,478
)
(483
)
Gain on sale of Commercial Product
Portfolio*
—
—
33,644
—
Total other (expense) income
$
—
$
(192
)
$
32,166
$
(483
)
Income (loss) from discontinued operations
before income taxes
567
(1,517
)
28,006
2,908
(Provision) benefit for income taxes from
discontinued operations**
(179
)
367
(6,953
)
(703
)
Income (loss) from discontinued
operations, net of income taxes
$
388
$
(1,150
)
$
21,053
$
2,205
*This pre-tax gain on sale represents the $158.8 million
proceeds from the Commercial Product Portfolio Transaction less our
$121.2 book value of transferred net assets (inclusive of assumed
liabilities) to Acrotech on the March 1, 2019 closing date, and
after legal and banker transaction expenses for the three months
ended March 31, 2019 that aggregated $3.9 million.
**This income tax provision (benefit) represents an allocation
of taxes as required under the intraperiod allocation guidance. Due
to our aggregate net operating loss-carryforwards, no federal or
state income tax payments are expected to be made relating to our
current year activity, inclusive of our gain on sale of the
Commercial Product Portfolio.
***The “Product sales, net” is inclusive of our commercial
product sales for January and February 2019, as well as recognized
EVOMELA product sales during the second quarter of 2019 to a single
customer under an active contract that was not yet assumed by
Acrotech. The negative revenue value reflects actual government
chargeback claims received during the three months ended June 30,
2019 that were in excess of current period revenue for this interim
EVOMELA supply arrangement and our then-existing allowance for
government chargebacks.
****The “Restructuring - employee severance” negative value in
the second quarter of 2019 reflects a current period
reclassification to continuing operations “selling, general and
administrative” and “research and development” expenses. This $2.4
million amount was previously included within “income (loss) from
discontinued operations, net of income taxes” in the first quarter
of 2019.
SPECTRUM PHARMACEUTICALS,
INC.
Condensed Consolidated Balance
Sheets
(In thousands, expect per share
and par value amounts)
(Unaudited)
June 30, 2019
December 31, 2018
ASSETS
Current assets:
Cash and cash equivalents
$
118,251
$
157,480
Restricted cash
4,020
—
Marketable securities
160,134
46,508
Accounts receivable, net of allowance for
doubtful accounts of $67 and $67, respectively
2,542
29,873
Other receivables
10,229
3,698
Prepaid expenses and other assets
10,839
7,574
Discontinued operations, current
assets
—
5,555
Total current assets
306,015
250,688
Property and equipment, net of accumulated
depreciation
4,534
385
Other assets
8,277
7,188
Facility and equipment under lease
3,842
—
Discontinued operations, non-current
assets
—
132,625
Total assets
$
322,668
$
390,886
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and other accrued
liabilities
$
44,455
$
69,460
Accrued payroll and benefits
5,262
9,853
Contract liabilities
7,245
4,850
Discontinued operations, current
liabilities
—
2,311
Total current liabilities
56,962
86,474
Deferred tax liabilities
—
1,469
Other long-term liabilities
10,923
5,650
Discontinued operations, non-current
liabilities
—
14,031
Total liabilities
67,885
107,624
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value;
5,000,000 shares authorized; no shares issued and outstanding
—
—
Common stock, $0.001 par value;
300,000,000 shares authorized; 112,684,387 and 110,525,141 issued
and outstanding at June 30, 2019 and December 31, 2018,
respectively
112
110
Additional paid-in capital
905,871
886,740
Accumulated other comprehensive loss
(3,764
)
(3,702
)
Accumulated deficit
(647,436
)
(599,886
)
Total stockholders’ equity
254,783
283,262
Total liabilities and stockholders’
equity
$
322,668
$
390,886
Non-GAAP Financial Measures (from Continuing
Operations)
In this press release, Spectrum reports certain historical
results that have not been prepared in accordance with generally
accepted accounting principles (GAAP), including non-GAAP selling,
general and administrative expenses, non-GAAP research and
development expenses, non-GAAP net loss and non-GAAP net loss per
share. Non-GAAP financial measures are reconciled to the most
directly comparable GAAP financial measures 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 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
these non-GAAP financial measures are useful to investors in
providing greater transparency to the information used by
management in its operational decision-making. Management believes
that the use of these non-GAAP financial measures also facilitates
a comparison of the Company’s underlying operating performance with
that of other companies in its industry, which use similar non-GAAP
measures to supplement their GAAP 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. In addition, other companies, including other
companies in our industry, may calculate non-GAAP financial
measures differently than we do, limiting their usefulness as a
comparative tool. Investors and potential investors are encouraged
to review the reconciliation of our non-GAAP financial measures
contained within this news release with our GAAP financial
results.
SPECTRUM PHARMACEUTICALS,
INC.
Reconciliation of Non-GAAP
Adjustments for Condensed Consolidated Statements of
Operations
(In thousands, expect per share
amounts)
CONTINUING OPERATIONS
ONLY
CONTINUING OPERATIONS
ONLY
Three Months Ended
Six Months Ended
June 30,
June 30,
2019
2018
2019
2018
(1)
GAAP selling, general and
administrative
$
17,230
$
16,391
$
33,182
$
33,007
Non-GAAP adjustments to SG&A:
Stock-based compensation expense
(3,555
)
(2,531
)
(7,030
)
(4,784
)
Depreciation expense
(56
)
(61
)
(122
)
(108
)
Lease expense
—
—
(129
)
—
Severance expense
126
—
(1,515
)
—
Non-GAAP selling, general and
administrative
$
13,745
$
13,799
$
24,386
$
28,115
(2)
GAAP research and development
$
16,982
$
16,595
$
38,868
$
29,960
Non-GAAP adjustments to R&D:
Stock-based compensation expense
(1,344
)
(650
)
(2,227
)
(1,281
)
Depreciation expense
(13
)
(2
)
(15
)
(5
)
Severance expense
286
—
(260
)
—
R&D milestones and in-license upfront
fees
(2,751
)
(500
)
(2,751
)
(500
)
Non-GAAP research and
development
$
13,160
$
15,443
$
33,615
$
28,174
(3)
GAAP net (loss) income from continuing
operations
$
(28,783
)
$
14,894
$
(68,603
)
$
(4,279
)
Non-GAAP adjustments to net (loss) income
from continuing operations:
Adjustments to SG&A and R&D as
noted above
7,307
3,744
14,049
6,678
Adjustments to other (income) expense
(3,477
)
(47,789
)
8,428
(57,333
)
Adjustments to (benefit) provision for
income taxes
(212
)
370
(8,454
)
(698
)
Non-GAAP net loss from continuing
operations
$
(25,165
)
$
(28,781
)
$
(54,580
)
$
(55,632
)
(4)
GAAP net (loss) income from continuing
operations - per basic share
$
(0.26
)
$
0.15
$
(0.63
)
$
(0.04
)
GAAP net (loss) income from continuing
operations - per diluted share
$
(0.26
)
$
0.14
$
(0.63
)
$
(0.04
)
Non-GAAP net loss from continuing
operations - per basic and diluted share
$
(0.23
)
$
(0.28
)
$
(0.50
)
$
(0.55
)
Weighted average shares
outstanding:
Basic
110,345,135
102,597,059
109,744,405
101,747,416
Diluted
110,345,135
112,617,150
109,744,405
101,747,416
(1) Non-GAAP selling, general and
administrative expenses (from continuing operations):
These amounts reflect adjustments to reverse allocated operating
expenses for certain non-cash items (including stock-based
compensation, depreciation and lease expense), as well as the
reversal of non-recurring severance expenses. We believe the
resulting non-GAAP SG&A value is reflective of the
period-over-period success of our administrative expense control
and more indicative of our normalized SG&A expense trends.
(2) Non-GAAP research and development
expenses (from continuing operations): 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 severance expenses and
R&D milestone achievements and upfront in-license fees that we
record to this expense caption. We believe this resulting non-GAAP
R&D value is more indicative of our normalized R&D expense
trends.
(3) Non-GAAP net loss (from continuing
operations): These amounts reflect all non-GAAP
adjustments described in (1) through (2) above, plus other non-cash
and/or non-recurring items, including: (i) adjustments to reverse
the impact of income taxes; (ii) reversal of foreign exchange gains
and losses (non-cash); (iii) reversal of debt discount accretion
expense (non-cash) for our convertible notes during the prior year
period; and (iv) reversal of the mark-to-market adjustment
(non-cash) on our equity securities holdings.
(4) Non-GAAP net loss per share (from
continuing operations): These amounts reflect all
non-GAAP adjustments in (1) through (3) above to present our
overall non-GAAP financial results for each period on a per-share
basis.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190808005802/en/
Shiv Kapoor Vice President, Strategic Planning & Investor
Relations 702-835-6300
InvestorRelations@sppirx.com
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