Spectrum Pharmaceuticals Reports First Quarter 2017 Financial Results and Pipeline Update
Phase 3 ADVANCE Pivotal study: Number of evaluable patients
reduced to 400 from 580, per an amended Special Protocol
Assessment (SPA) received from the
- ADVANCE study is 75% enrolled and the Company expects to complete enrollment in the second half of this year.
To strengthen the regulatory package in the
U.S.and Europe, the Company has initiated an international 218-patient RECOVER study and first patient enrollment is imminent.
- The Company continues to expect to file a BLA next year.
- Phase 3 ADVANCE Pivotal study: Number of evaluable patients reduced to 400 from 580, per an amended Special Protocol Assessment (SPA) received from the
Phase 2 study in non-small cell lung cancer patients with EGFR
exon 20 insertion mutations was recently initiated at
The University of Texas MD Anderson Cancer Center.
- Interim results are expected before year end.
- Phase 2 study in non-small cell lung cancer patients with EGFR exon 20 insertion mutations was recently initiated at
- Phase 3 study is expected to start enrolling patients in the third quarter.
The current study based on a new SPA from the
FDA, is required to enroll 425 evaluable patients compared to 1,557 in the previous SPA.
Q1 revenues were
$29.1 million, including $25.8 millionin product sales.
"We remain focused on our advanced stage pipeline and look forward to
several important milestones in the near future," said Rajesh C.
Shrotriya, MD, Chairman and Chief Executive Officer of Spectrum
Pharmaceuticals. "Based on the preclinical results and clinical data
from the first compassionate-use patient, treated at
ROLONTIS (eflapegrastim), a novel long-acting GCSF: A
pivotal Phase 3 study (ADVANCE) was initiated under an SPA from the
FDAin 2016 to evaluate ROLONTIS in the management of chemotherapy-induced neutropenia. Based on the amended SPA, the size of the ADVANCE study was reduced to 400 from 580 evaluable patients. The ADVANCE study is now 75% enrolled and the Company expects to complete enrollment in the second half of this year. To strengthen the regulatory package in the U.S.and Europe, the Company has initiated the 218-patient RECOVER study, which is expected to include sites not only from the U.S., but also from Europe, Canadaand South Korea. For the RECOVER Study, sites have been initiated and first patient enrollment is imminent. The Company continues to expect to file the BLA next year.
Poziotinib, a potential best-in-class, novel, pan-HER inhibitor:
An investigator sponsored trial has been initiated at the
University of Texas MD Anderson Cancer Centerin non-small cell lung cancer patients with EGFR exon 20 insertion mutations. The study is expected to yield interim results before year end. Spectrum is also conducting a Phase 2 breast cancer study in the U.S., based on promising Phase 1 study efficacy data in breast cancer patients who had failed multiple HER2-directed therapies. Further, multiple Phase 2 studies are being conducted in South Koreaby Hanmi Pharmaceuticalsand National OncoVenture to study breast, lung, head-and-neck and gastric cancer indications.
QAPZOLA, a potent tumor-activated drug being investigated for low
and intermediate risk non-muscle invasive bladder cancer: The
Company received a new SPA from the
FDAfor a new Phase 3 study incorporating learnings from the previous studies, as well as recommendations from the FDA. Compared to the previous program, this new Phase 3 study will include fewer evaluable patients (n=425 versus 1,557 patients), use a higher dosage of QAPZOLA (8 mg versus 4 mg), and will evaluate time-to-recurrence as the primary endpoint. The Phase 3 trial is expected to start enrolling patients in the third quarter.
Three-Month Period Ended
Total product sales were
Spectrum recorded net loss of
The Company ended the quarter with Cash and Cash Equivalents of
Spectrum recorded non-GAAP net loss of
|Domestic:||(877) 837-3910, Conference ID# 5573704|
|International:||(973) 796-5077, Conference ID# 5573704|
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: www.sppirx.com on May 2, 2017 at 4:30 p.m. Eastern/1:30 p.m. Pacific.
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
|Condensed Consolidated Statements of Operations|
|(In thousands, except per share amounts)|
|Three Months Ended|
|Product sales, net||$||25,845||$||35,241|
|License fees and service revenue||3,256||8,625|
|Operating costs and expenses:|
|Cost of product sales (excludes amortization and impairment charges of intangible assets)||8,135||5,604|
|Cost of service revenue||2,103||1,282|
|Selling, general and administrative||18,607||21,962|
|Research and development||14,696||15,462|
|Amortization and impairment charges of intangible assets||6,889||5,839|
|Total operating costs and expenses||50,430||50,149|
|Loss from operations||(21,329||)||(6,283||)|
|Other (expense) income:|
|Interest expense, net||(2,052||)||(2,340||)|
|Change in fair value of contingent consideration related to acquisitions||(197||)||(1,042||)|
|Other income, net||410||278|
|Total other expenses||(1,839||)||(3,104||)|
|Loss before income taxes||(23,168||)||(9,387||)|
|Benefit for income taxes||201||66|
|Net loss per share:|
|Basic and diluted||$||(0.29||)||$||(0.14||)|
|Weighted average shares outstanding:|
|Basic and diluted||78,523,023||65,597,261|
|Condensed Consolidated Balance Sheets|
|(In thousands, expect per share and par value amounts)|
|Cash and cash equivalents||$||137,196||$||158,222|
Accounts receivable, net of allowance for doubtful accounts of
|Prepaid expenses and other assets||3,726||3,930|
|Total current assets||196,993||216,650|
|Property and equipment, net of accumulated depreciation||493||449|
|Intangible assets, net of accumulated amortization and impairment charges||157,419||164,234|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accounts payable and other accrued liabilities||$||48,228||$||52,483|
|Accrued payroll and benefits||5,174||8,981|
|Drug development liability||861||861|
|Acquisition-related contingent obligations||—||—|
|Total current liabilities||57,185||65,513|
|Drug development liability, less current portion||11,910||12,269|
|Deferred revenue, less current portion||316||323|
|Acquisition-related contingent obligations, less current portion||1,512||1,315|
|Deferred tax liabilities||6,749||6,675|
|Other long-term liabilities||9,874||9,604|
|Convertible senior notes||98,590||97,043|
|Commitments and contingencies|
Series B junior participating preferred stock,
Series E convertible voting preferred stock,
|Additional paid-in capital||642,518||640,166|
|Accumulated other comprehensive income (loss)||380||(1,579||)|
|Total stockholders' equity||217,370||236,026|
|Total liabilities and stockholders' equity||$||403,506||$||428,768|
Non-GAAP Financial Measures
In this press release, Spectrum reports certain historical "non-GAAP
financial measures," as defined in Regulation G of the Securities
Exchange Act of 1934. Non-GAAP financial measures differ from financial
statements reported in conformity to
The non-GAAP financial measures presented exclude the items summarized in the below table. Management believes that adjustments for these items assist investors in making comparisons of period-to-period operating results and that these items are not indicative of the Company's on-going core operating performance.
The non-GAAP financial measures presented herein have certain limitations in that they do not reflect all of the costs associated with the operations of the Company's business as reported under GAAP. Therefore, investors should consider non-GAAP financial measures in addition to, and not as a substitute for, or as superior to, measures of financial performance prepared in accordance with GAAP. The non-GAAP financial measures presented by the Company may be different from the non-GAAP financial measures used by other companies.
|Reconciliation of Non-GAAP Adjustments for Condensed Consolidated Statements of Operations|
(In thousands, expect per share amounts)
|Three Months Ended|
|(1)||GAAP product sales, net & license fees and service revenue||$||29,101||$||43,866|
|Non GAAP adjustments to product sales, net & license fees and service revenue:||—||(6,000||)|
|Non-GAAP product sales, net & license fees and service revenue||$||29,101||$||37,866|
|(2)||GAAP selling, general and administrative expenses||$||18,607||$||21,962|
|Non GAAP adjustments to SG&A:|
|Non-GAAP selling, general and administrative||$||15,660||$||16,732|
|(3)||GAAP research and development||$||14,696||$||15,462|
|Non-GAAP adjustments to R&D:|
|Other R&D milestone payments||—||(2,056||)|
|Non-GAAP research and development||$||14,294||$||12,996|
|(4)||GAAP net loss||$||(22,967||)||$||(9,321||)|
|Non-GAAP adjustments to net loss:|
|Adjustments to product sales, net & license fees and service revenue, SG&A, and R&D as noted above||3,349||1,696|
|Amortization and impairment charges of intangible assets||6,889||5,839|
|Adjustments to other expense (income)||1,573||2,200|
|Adjustments to (benefit) provision for income taxes||(201||)||(66||)|
|Non-GAAP net loss||$||(11,357||)||$||348|
|(5)||GAAP loss per share (Basic and Diluted)||$||(0.29||)||$||(0.14||)|
|Non-GAAP loss per share (Basic and Diluted)|
|Weighted average shares outstanding:|
(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.
Vice President, Strategic Planning & Investor Relations
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