Spectrum Pharmaceuticals Reports Record Revenues and Strong Profits for Second Quarter; Revenues of $68.7 Million up 51.5% over Last Year and Strong non-GAAP EPS of $0.37, up 48% over Last Year
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Financial Highlights
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$278.5 Million in Cash, Investments and Receivables as ofJune 30, 2012 -- AfterCash Payment of$25.4 Million for Ex-US ZEVALIN Rights -- As Compared with$253 Million inMarch 31, 2012 . -
Three- and Six-Month Total Revenues of
$68.7 Million and$128.6 Million , Respectively, Compared to$45.4 Million and$89.0 Million in the Same Periods Last Year. -
Non-GAAP EPS of
$0.37 per Diluted Share Compared to$0.25 Per Diluted Share in the Second Quarter Last Year. GAAP EPS of$0.29 per Diluted Share Compared to$0.12 Per Diluted Share in the Second Quarter Last Year.
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Product Highlights
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Record FUSILEV Revenues of
$56.6 Million Compared to$33.9 Million in the Second Quarter Last Year. Current Trends Indicate Strong Demand Should Continue. - Company Poised to Grow ZEVALIN through Global Expansion.
- Planned Acquisition of Allos Therapeutics, Inc. Would Add FOLOTYN® to Commercial Portfolio.
- Spectrum Has 10 Drugs in Clinical Development. Several Near-Term Catalysts including Clinical Data from Late-Stage Trials.
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Record FUSILEV Revenues of
"The second quarter was a historic period for Spectrum, during which we
had record revenues and strong profits," said
Three-Month Period Ended
Consolidated revenue of
GAAP Results
The Company recorded net income of
Non-GAAP Results
The Company recorded non-GAAP net income of
During the three-month period ended
There were approximately 59.8 million shares of common stock issued and
outstanding as of
Six-Month Period Ended
The Company recorded net income of
Conference Call
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Domestic: | (877) 837-3910, Conference ID# 14285827 | |||||
International: | (973) 796-5077, Conference ID# 14285827 | |||||
For interested individuals unable to join the call, a replay will be
available from August 8, 2012 @ 4:30 p.m. ET/1:30 p.m. PT through August
22, 2012 until
Domestic Replay Dial-In #: | (855) 859-2056, Conference ID# 14285827 | ||||||||||
International Replay Dial-In #: | (404) 537-3406, Conference ID# 14285827 |
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 August 8, 2012 at 1:30 p.m. Eastern/10:30 a.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.
Key Accomplishments for the First Half of 2012
FUSILEV® (levoleucovorin) for Injection
- Continued revenue and market penetration.
- Expanded manufacturing capacity assures reliable supply to meet increasing demand.
ZEVALIN® (ibritumomab tiuxetan) Injection for intravenous use
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Commenced ex-US operations. Outside U.S., incidence and prevalence of
follicular
NHL is higher than in the U.S., and research interest is strong, with presence at major ex-U.S. medical conferences. -
Recent key data presentations have included:
- Phase 2 data reported at the ASCO meeting suggested reduced need for standard chemotherapy when given in combination with ZEVALIN to patients with more advanced stage III/IV CD20+ diffuse large B-cell lymphoma (DLBCL).
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Phase 2 data presented at the
European Hematology Association meeting demonstrated 2-year overall survival rate of 91% for ZEVALIN plus high dose chemotherapy (Z-BEAM), vs. 61% for chemotherapy, i.e. BEAM, alone.
- As part of a broad clinical program for ZEVALIN, Spectrum initiated a Phase 2 trial in rituximab-refractory low-grade or follicular B-cell non-Hodgkin's lymphoma using ZEVALIN as part of a motexafin gadolinium combination regimen.
Earlier-stage Development Pipeline
- Initiated a Phase 2 study for lucanthone in primary Glioblastoma Multiforme (GBM).
- Initiated a Phase 1 study for RenaZorb® (also referred to as SPI-014).
Potential Catalysts for the Second Half of 2012
FUSILEV®
- Continue to expand market penetration.
ZEVALIN®
- Grow ZEVALIN sales through worldwide expansion.
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Report early results from investigator-initiated study comparing
ZEVALIN with rituximab maintenance in
NHL ("ZAR" study). - Commence pivotal "ZEST" study assessing 2-year overall survival and progression-free survival in DLBCL patients 60 years and older.
- Expand head-to-head study of a single ZEVALIN vs. rituximab maintenance in follicular non-Hodgkin's lymphoma ("RoZetta" study).
Late-stage Drug Candidates
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Belinostat:
Topline data expected in Q4 from pivotal trial in relapsed refractory peripheral T-cell lymphoma (PTCL). -
Apaziquone: Expect to meet with the
FDA in Q4.
Earlier-stage Development Pipeline
- Report topline clinical data from Renazorb®.
- Initiate a Phase 2 study for SPI-1620.
- Initiate a Phase 2 study for SPI-2012.
Business Development
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Anticipate Closing Allos Therapeutics, Inc. Acquisition.
About
About Allos Therapeutics, Inc.
Allos Therapeutics is a biopharmaceutical company committed to the
development and commercialization of innovative anti-cancer
therapeutics.
About FUSILEV® (levoleucovorin) for injection
FUSILEV, a novel folate analog, is approved as a ready-to-use solution
(FUSILEV Injection), and as freeze-dried powder (FUSILEV for Injection).
FUSILEV is indicated for use in combination chemotherapy with
5-fluorouracil in the palliative treatment of patients with advanced
metastatic colorectal cancer. FUSILEV is also indicated for rescue after
high-dose methotrexate therapy in osteosarcoma. FUSILEV is also
indicated to diminish the toxicity and counteract the effects of
impaired methotrexate elimination and of inadvertent overdosage of folic
acid antagonists. FUSILEV, under various trade names, is marketed
outside
Important FUSILEV® (levoleucovorin) Safety Considerations
FUSILEV is dosed at one-half the usual dose of racemic d,l-leucovorin. FUSILEV is contraindicated for patients who have had previous allergic reactions attributed to folic acid or folinic acid. Due to calcium content, no more than 16-mL (160-mg) of levoleucovorin solution should be injected intravenously per minute. FUSILEV enhances the toxicity of fluorouracil. Concomitant use of d,l-leucovorin with trimethoprim-sulfamethoxazole for pneumocystis carinii pneumonia in HIV patients was associated with increased rates of treatment failure in a placebo-controlled study. Allergic reactions were reported in patients receiving FUSILEV. Vomiting (38%), stomatitis (38%) and nausea (19%) were reported in patients receiving FUSILEV as rescue after high dose methotrexate therapy. The most common adverse reactions ( > 50%) in patients with advanced colorectal cancer receiving FUSILEV in combination with 5-fluorouracil were diarrhea, nausea and stomatitis. FUSILEV may counteract the antiepileptic effect of phenobarbital, phenytoin and primidone, and increase the frequency of seizures in susceptible patients.
Full prescribing information can be found at www.FUSILEV.com.
About ZEVALIN® and the ZEVALIN Therapeutic Regimen
ZEVALIN (ibritumomab tiuxetan) injection for intravenous use, is indicated for the treatment of patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin's lymphoma (NHL). ZEVALIN is also indicated for the treatment of patients with previously untreated follicular non-Hodgkin's Lymphoma who achieve a partial or complete response to first-line chemotherapy.
ZEVALIN is a CD20-directed radiotherapeutic antibody. The ZEVALIN
therapeutic regimen consists of two components: rituximab, and
Yttrium-90 (
Important ZEVALIN® Safety Information
Deaths have occurred within 24 hours of rituximab infusion, an essential component of the ZEVALIN therapeutic regimen. These fatalities were associated with hypoxia, pulmonary infiltrates, acute respiratory distress syndrome, myocardial infarction, ventricular fibrillation, or cardiogenic shock. Most (80%) fatalities occurred with the first rituximab infusion. ZEVALIN administration can result in severe and prolonged cytopenias in most patients. Severe cutaneous and mucocutaneous reactions, some fatal, can occur with the ZEVALIN therapeutic regimen.
Please see full Prescribing Information, including BOXED WARNINGS, for ZEVALIN and rituximab. Full prescribing information for ZEVALIN can be found at www.ZEVALIN.com.
About FOLOTYN®
FOLOTYN, (pralatrexate injection), a folate analogue metabolic
inhibitor, was discovered by
Important FOLOTYN® Safety Information
Warnings and Precautions
FOLOTYN may suppress bone marrow function, manifested by thrombocytopenia, neutropenia, and anemia. Monitor blood counts and omit or modify dose for hematologic toxicities.
Mucositis may occur. If greater-than or equal to Grade 2 mucositis is observed, omit or modify dose. Patients should be instructed to take folic acid and receive vitamin B12 to potentially reduce treatment-related hematological toxicity and mucositis.
Fatal dermatologic reactions may occur. Dermatologic reactions may be progressive and increase in severity with further treatment. Patients with dermatologic reactions should be monitored closely, and if severe, FOLOTYN should be withheld or discontinued. Tumor lysis syndrome may occur. Monitor patients and treat if needed.
FOLOTYN can cause fetal harm. Women should avoid becoming pregnant while being treated with FOLOTYN and pregnant women should be informed of the potential harm to the fetus.
Use caution and monitor patients when administering FOLOTYN to patients with moderate to severe renal function impairment.
Elevated liver function test abnormalities may occur and require monitoring. If liver function test abnormalities are greater-than or equal to Grade 3, omit or modify dose.
Adverse Reactions
The most common adverse reactions were mucositis (70%), thrombocytopenia (41%), nausea (40%), and fatigue (36%). The most common serious adverse events are pyrexia, mucositis, sepsis, febrile neutropenia, dehydration, dyspnea, and thrombocytopenia.
Use in Specific Patient Population
Nursing mothers should be advised to discontinue nursing or the drug, taking into consideration the importance of the drug to the mother.
Drug Interactions
Co-administration of drugs subject to renal clearance (e.g., probenecid, NSAIDs, and trimethoprim/sulfamethoxazole) may result in delayed renal clearance.
Please see FOLOTYN® Full Prescribing Information at www.FOLOTYN.com.
This press release may contain forward-looking statements regarding
future events and the future performance of
Additional risks that could cause actual results to differ include,
with respect to
The tender offer described herein commenced on
© 2012
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 Income and Reconciliation of Non-GAAP Adjustments (In thousands, except share and per share data) (Unaudited) |
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Three Months Ended
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Three Months Ended
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GAAP |
Non-GAAP
Adjustments |
Non-GAAP | GAAP |
Non-GAAP
Adjustments |
Non-GAAP | |||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||
Product sales, net | $ | 65,627 | $ - | $ | 65,627 | $ | 42,287 | $ - | $ | 42,287 | ||||||||||||||||||||
License and contract revenue | 3,075 | - | 3,075 | 3,075 | - | 3,075 | ||||||||||||||||||||||||
Total revenues | $ | 68,702 | $ - | $ | 68,702 | $ | 45,362 | $ - | $ | 45,362 | ||||||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||||||
Cost of product sales (excludes amortization of purchased intangible assets) |
11,574 | - | 11,574 | 8,130 | - | 8,130 | ||||||||||||||||||||||||
Selling, general and administrative | 23,347 | (2,685 | )(1) | |||||||||||||||||||||||||||
(3,228 | )(4) | 17,434 | 18,699 | (6,321 | )(1) | 12,378 | ||||||||||||||||||||||||
Research and development | 9,583 | (397 | )(1) | 9,186 | 7,686 | (495 | )(1) | 7,191 | ||||||||||||||||||||||
Amortization of purchased intangibles | 1,636 | (1,636 | )(5) | - | 930 | (930 | )(5) | - | ||||||||||||||||||||||
Total operating costs and expenses | 46,140 | (7,946 | ) | 38,194 | 35,445 | (7,746 | ) | 27,699 | ||||||||||||||||||||||
Income from operations | 22,562 | 7,946 | 30,508 | 9,917 | 7,746 | 17,663 | ||||||||||||||||||||||||
Change in fair value of common stock warrant liability | - | - | - | (1,237 | ) |
1,237 |
(2) |
- | ||||||||||||||||||||||
Other income (expense), net | (1,507 | ) | - | (1,507 | ) | 174 | - | 174 | ||||||||||||||||||||||
Income before provision for income taxes | 21,055 | 7,946 | 29,001 | 8,854 | 8,983 | 17,837 | ||||||||||||||||||||||||
Provision for income taxes | (2,985 | ) | (2,787 | ) | (5,772 | ) | (1,650 | ) | (1,725 | ) | (3,375 | ) | ||||||||||||||||||
Net income | $ | 18,070 |
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$ | 23,229 | $ | 7,204 |
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$ | 14,462 | ||||||||||||||||||||
Net income per share: | ||||||||||||||||||||||||||||||
Basic | $ | 0.31 | $ | 0.40 | $ | 0.14 | $ | 0.28 | ||||||||||||||||||||||
Diluted | $ | 0.29 | $ | 0.37 | $ | 0.12 | $ | 0.25 | ||||||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||||||
Basic | 58,763,700 | 58,763,700 | 52,257,049 | 52,257,049 | ||||||||||||||||||||||||||
Diluted | 63,387,003 | 63,387,003 | 58,265,264 | 58,265,264 | ||||||||||||||||||||||||||
(1) | Adjustment for stock-based compensation expense recognized in the period | |
(2) | Add back the change in fair value of common stock warrant liability | |
(3) | Add back one-time payment related to co-development agreement | |
(4) |
Add back the legal and professional fees related to the |
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(5) | Add back amortization of certain acquired intangible assets related to business combinations | |
Condensed Consolidated Statements of Income and Reconciliation of Non-GAAP Adjustments (In thousands, except share and per share data) (Unaudited) |
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Six Months Ended
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Six Months Ended
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GAAP |
Non-GAAP
Adjustments |
Non-GAAP | GAAP |
Non-GAAP
Adjustments |
Non-GAAP | |||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||||
Product sales, net | $ | 122,411 | $ | - | $ | 122,411 | $ | 82,810 | $ | - | $ | 82,810 | ||||||||||||||||||||
License and contract revenue | 6,150 | - | 6,150 | 6,150 | - | 6,150 | ||||||||||||||||||||||||||
Total revenues | $ | 128,561 | $ | - | $ | 128,561 | $ | 88,960 | $ | - | $ | 88,960 | ||||||||||||||||||||
Operating costs and expenses: | ||||||||||||||||||||||||||||||||
Cost of product sales (excludes amortization of purchased intangible assets) | 20,247 | - | 20,247 | 14,710 | - | 14,710 | ||||||||||||||||||||||||||
Selling, general and administrative | 41,609 | (5,309 | )(1) | |||||||||||||||||||||||||||||
(272 | )(5) | |||||||||||||||||||||||||||||||
(4,059 | )(4) | 31,969 | 31,450 | (9,981 | )(1) | 21,469 | ||||||||||||||||||||||||||
Research and development | 18,474 | (788 | )(1) | |||||||||||||||||||||||||||||
(1,000 | )(3) | 16,686 | 13,516 | (899 | )(1) | 12,617 | ||||||||||||||||||||||||||
Amortization of purchased intangibles | 2,566 | (2,566 | )(6) | - | 1,860 | (1,860 | )(6) | - | ||||||||||||||||||||||||
Total operating costs and expenses | 82,896 | (13,994 | ) | 68,902 | 61,536 | (12,740 | ) | 48,796 | ||||||||||||||||||||||||
Income from operations | 45,665 | 13,994 | 59,659 | 27,424 | 12,740 | 40,164 | ||||||||||||||||||||||||||
Change in fair value of common stock warrant liability | - | - | - | (6,487 | ) |
6,487 |
(2) |
- | ||||||||||||||||||||||||
Other income, net | (1,369 | ) | - | (1,369 | ) | 694 | - | 694 | ||||||||||||||||||||||||
Income before provision for income taxes | 44,296 | 13,994 | 58,290 | 21,631 | 19,227 | 40,858 | ||||||||||||||||||||||||||
Benefit (provision) for income taxes | 20,316 | ( 28,472 | ) | (8,156 | ) | (1,650 | ) | (1,650 | ) | (3,300 | ) | |||||||||||||||||||||
Net income | $ | 64,612 | $ | (14,478 | ) | $ | 50,134 | $ | 19,981 | $ | 17,577 | $ | 37,558 | |||||||||||||||||||
Net income per share: | ||||||||||||||||||||||||||||||||
Basic | $ | 1.10 | $ | 0.86 | $ | 0.39 | $ | 0.72 | ||||||||||||||||||||||||
Diluted | $ | 1.01 | $ | 0.79 | $ | 0.35 | $ | 0.66 | ||||||||||||||||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||||||||
Basic | 58,617,530 | 58,617,530 | 51,814,122 | 51,814,122 | ||||||||||||||||||||||||||||
Diluted | 63,666,546 | 63,666,546 | 56,845,371 | 56,845,371 | ||||||||||||||||||||||||||||
(1) | Adjustment for stock-based compensation expense recognized in the period | |
(2) | Add back the change in fair value of common stock warrant liability | |
(3) | Add back one-time payment related to co-development agreement | |
(4) |
Add back the legal and professional fees related to the |
|
(5) | Add back the costs associated with a reduction in staff in Q1 | |
(6) | Add back amortization of certain acquired intangible assets related to business combinations | |
SUMMARY CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) |
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June 30,
2012 |
December 31,
2011 |
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Cash and equivalents | 190,154 | 121,202 | |||||||||
Marketable securities | 3,550 | 40,060 | |||||||||
Accounts receivable, net | 84,839 | 51,703 | |||||||||
Inventories, net | 7,686 | 10,762 | |||||||||
Prepaid expenses and other current assets | 1,800 | 2,074 | |||||||||
Deferred tax asset | 10,532 | - | |||||||||
Total current assets | 298,561 | 225,801 | |||||||||
Investments | - | 9,283 | |||||||||
Property and equipment, net | 2,488 | 2,681 | |||||||||
Intangible assets, net | 60,327 | 41,654 | |||||||||
Goodwill | 2,389 | - | |||||||||
Deferred tax asset | 20,961 | - | |||||||||
Other assets | 2,846 | 1,361 | |||||||||
Total Assets | $ | 387,572 | $ | 280,780 | |||||||
Current liabilities | $ | 116,025 | $ | 78,537 | |||||||
Deferred revenue and other credits — less current portion | 8,329 | 14,029 | |||||||||
Other long-term liabilities | 467 | 307 | |||||||||
Total liabilities | 124,821 | 92,873 | |||||||||
Total stockholders' equity | 262,751 | 187,907 | |||||||||
Total liabilities and stockholders' equity | $ | 387,572 | $ | 280,780 | |||||||
Vice
President, Strategic Planning & Investor Relations
InvestorRelations@sppirx.com
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