Spectrum Pharmaceuticals Reports 45% Sales Growth in the Second Quarter, Launches Fifth Product and Moves Closer to a Decision on a Potential Blockbuster
Total product sales for the three months ended
June 30, 2014were $46.9 million, compared to $32.2 millionin the same period last year, an increase of 45%.
- Sequential quarter sales were up 17%, driven primarily by end-user product demand.
Non-GAAP diluted EPS was
$0.09, and GAAP EPS was ( $0.06).
- Spectrum's fifth drug, BeleodaqTM (belinostat) for Injection was approved and launched in July.
Captisol-EnabledTM melphalan met its primary endpoint; the
company had a meeting with the
FDAand is making good progress on preparing the NDA submission.
Spectrum is advancing toward a Phase 3 Go/No-Go decision and expects
to meet with the
FDAthis year for its novel long-acting GCSF drug, SPI-2012.
"The first half of the year has delivered significant growth and we are
excited about the Company's sales trajectory," said
Three-Month Period Ended
Product sales and total revenues were
Product sales in second quarter included: FUSILEV® (levoleucovorin) net
Spectrum recorded net loss of
Spectrum recorded non-GAAP net income of
|Domestic:||(877) 837-3910, Conference ID# 73878916|
|International:||(973) 796-5077, Conference ID# 73878916|
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 August 7, 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.
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.
- 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.
- 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
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.
Forward-looking statement — This press release may contain
forward-looking statements regarding future events and the future
|CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS|
|(In thousands, except share and per share amounts)|
Three Months Ended
Six Months Ended
|Product sales, net||$||46,855||$||32,213||$||86,951||$||61,559|
|License fees and service revenue||—||1,019||28||10,340|
|Operating costs and expenses:|
|Cost of product sales (excludes amortization and impairment of intangible assets)||6,156||7,268||12,434||14,050|
|Selling, general and administrative||25,399||22,584||48,802||44,598|
|Research and development||11,335||10,460||40,832||22,343|
|Amortization and impairment of intangible assets||5,361||5,449||10,721||9,894|
|Total operating costs and expenses||48,251||45,761||112,789||90,885|
|Loss from operations||(1,396||)||(12,529||)||(25,810||)||(18,986||)|
|Change in fair value of contingent consideration related to acquisitions||(1,005||)||
|Total other expense||(3,468||)||(163||)||(6,617||)||(1,481||)|
|Loss before income taxes||(4,864||)||(12,692||)||(32,427||)||(20,467||)|
|Benefit (provision) for income taxes||1,301||2,971||1,223||5,310|
|Net loss per share:|
|Basic and diluted||$||(0.06||)||$||(0.16||)||$||(0.49||)||$||(0.26||)|
|Weighted average shares outstanding:|
|Basic and diluted||64,609,197||58,977,295||64,119,441||58,995,735|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|(In thousands, except share and par value amounts)|
|Cash and cash equivalents||$||132,405||$||156,306|
Accounts receivable, net of allowance for doubtful accounts of
|Prepaid expenses and other current assets||3,410||3,213|
|Deferred tax assets||1,587||1,659|
|Total current assets||220,133||235,190|
|Property and equipment, net of accumulated depreciation||1,407||1,535|
|Intangible assets, net of accumulated amortization||219,735||231,352|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable and other accrued liabilities||$||69,178||$||79,837|
|Accrued payroll and benefits||5,149||6,872|
|Drug development liability||3,119||3,119|
|Total current liabilities||77,479||89,984|
|Drug development liability, less current portion||14,069||14,623|
|Acquisition-related contingent obligations||10,058||8,329|
|Deferred tax liability||8,167||7,168|
|Other long-term liabilities||5,709||5,965|
|Convertible senior notes||93,812||91,480|
|Commitments and contingencies|
Series B junior participating preferred stock,
Series E Convertible Voting Preferred Stock,
|Additional paid-in capital||532,554||518,144|
|Accumulated other comprehensive income||1,734||894|
|Total stockholders' equity||265,654||281,606|
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY||$||474,948||$||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.
|Condensed Consolidated Statements of Operations and Reconciliation of Non-GAAP Adjustments|
|(In thousands, except share and per share data)|
Three months ended
Six months ended
|GAAP product sales & license and contract revenue||$||46,855||$||33,232||$||86,979||$||71,899|
|Non GAAP adjustments to product sales & license and contract revenue:||--||--||
|Total adjustments to product sales & license and contract revenues||--||--||
|Non-GAAP product sales & license and contract revenue||46,855||33,232||86,979||65,674|
|GAAP cost of product sales||6,156||7,268||12,434||14,050|
|Non-GAAP adjustments to cost of product sales||--||--||--||--|
|Non-GAAP cost of product sales||6,156||7,268||12,434||14,050|
|GAAP selling, general and administrative expenses||25,399||22,584||48,802||44,598|
|Non GAAP adjustments to SG&A:|
|Talon acquisition legal & professional fees||--||(686||)||--||(686||)|
|Total adjustments to SG&A||(3,619||)||(3,848||)||(6,650||)||(6,591||)|
|Non-GAAP selling, general and administrative||21,780||18,736||42,152||38,007|
|GAAP research and development||11,335||10,460||40,832||22,343|
|Non-GAAP adjustments to R&D:|
|TopoTarget milestone payment & stock issuance||--||--||(17,790||)|
|Amendment of Mundipharma agreement resulting in write off of deferred payment contingency||--||2,431||
|Non-recurring payment related to co-development agreement||--||--||
|Total adjustments to R&D||(522||)||1,927||(18,794||)||123|
|Non-GAAP research and development||10,813||12,387||22,038||22,466|
GAAP amortization of purchased intangibles
|Non-GAAP adjustments to purchased intangibles:|
|Total adjustments to amortization of purchased intangibles||(5,361||)||(5,449||)||
|Non-GAAP amortization of purchased intangibles||--||--||--||--|
|GAAP income from operations||(1,396||)||(12,529||)||(25,810||)||(18,986||)|
|Non-GAAP adjustments to income from operations||9,502||7,370||36,165||10,137|
|Non-GAAP income from operations||8,106||(5,159||)||10,355||(8,849||)|
|GAAP other expense, net||(3,468||)||(163||)||(6,617||)||(1,481||)|
|Non-GAAP adjustments to other expense|
|Market-to-market of contingent consideration||1,005||--||1,729||--|
|Accretion of discount on 2018 Convertible Notes||1,185||--||2,332||--|
|Total adjustments to other expense, net||2,190||--||4,061||--|
|Non-GAAP other expense, net||(1,278||)||(163||)||(2,556||)||(1,481||)|
|GAAP (provision)/benefit for income taxes||1,301||2,971||1,223||5,310|
|Adjustment to (provision)/benefit for income taxes||(1,301||)||(2,971||)||(1,223||)||(5,310||)|
|Non-GAAP provision for income taxes||--||--||--||--|
|GAAP net loss||(3,563||)||(9,721||)||(31,204||)||(15,157||)|
|Non-GAAP net income||6,828||(5,322||)||7,799||(10,330||)|
Non-GAAP income per share:
|Weighted average shares outstanding:|
Vice President, Strategic Planning & Investor Relations
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