Spectrum Pharmaceuticals Reports Second Quarter 2015 Financial Results and Pipeline Update
- SPI-2012: Pursuing Special Protocol Assessment (SPA) before initiating a non-inferiority Phase 3 study, also powered at 80% for superiority to pegfilgrastim
-
EVOMELA™ (melphalan hydrochloride) for
injection: On track for
FDA decision (NDA PDUFA date ofOctober 23, 2015 ) - Poziotinib: Expect to initiate Phase 2 study in breast cancer
- Apaziquone: On track for NDA filing by year end
-
Company raises guidance following better operating performance; now
expects to exit 2015 with cash of more than
$110 million
"The results from this quarter demonstrate our ability to maintain
financial discipline while continuing to fund our highest priority
projects," said
Pipeline Update:
Two Potential Blockbusters, One Near-term FDA Decision and One Near-term NDA Submission
-
SPI-2012, a novel long-acting GCSF: In Phase 2 trials earlier
this year, SPI-2012's efficacy was shown to be non-inferior at the
middle dose, and superior to the blockbuster drug pegfilgrastim at the
higher dose tested. Based on discussion with the
FDA , the Company plans to initiate a Phase 3 study this year, and is seeking an SPA for this study that would be powered at over 90% to demonstrate non-inferiority and at 80% to demonstrate superiority to pegfilgrastim. -
EVOMELA, a propylene-glycol free formulation of melphalan with
improved stability: NDA review is ongoing and is on track for an
FDA decision onOctober 23, 2015 . This drug is expected to be launched using Spectrum's existing sales force, and pre-launch activities have commenced. -
Poziotinib, a potential best-in-class, novel, pan-HER
inhibitor: The Company plans to initiate a U.S. based breast
cancer program based on compelling Phase 1 efficacy data demonstrated
in breast cancer patients who had failed multiple other HER-2 directed
therapies. In addition, multiple Phase 2 studies funded by
Hanmi Pharmaceuticals are currently ongoing. -
Apaziquone, a potent pro-drug being investigated for
non-muscle-invasive bladder cancer: Apaziquone is a
bio-reductive agent activated by reductase enzymes, such as
DT-diaphorase, expressed by bladder tumor cells, to form a cytotoxic
alkylating agent. Spectrum expects to file an NDA by year-end.
Additionally, the Company is seeking an SPA with the
FDA before commencing an additional confirmatory Phase 3 Study.
Three-Month Period Ended
GAAP Results
Total product sales were
Product sales in the second quarter included: FUSILEV®
(levoleucovorin) net sales of
Spectrum recorded net loss of
Non-GAAP Results
Spectrum recorded non-GAAP net loss of
2015 Financial Guidance
Spectrum projects year-end aggregate cash and cash equivalents and
marketable securities of over
Conference Call
Domestic: (877) 837-3910, Conference ID# 85787537
International: (973) 796-5077, Conference ID# 85787537
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 6, 2015 at 4:30 p.m. Eastern/1:30 p.m. Pacific.
About
About Evomela™
Evomela, a propylene glycol-free formulation of melphalan,is being
investigated for the multiple myeloma transplant setting, for which it
has been granted an Orphan Drug Designation by the
About Captisol®
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
performance of
© 2015
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Condensed Consolidated Statements of Operations | ||||||||||||||||
(In thousands, except per share amounts) |
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(Unaudited) |
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Three Months Ended |
Six Months Ended |
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2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues: | ||||||||||||||||
Product sales, net | $ | 35,144 | $ | 46,855 | $ | 73,557 | $ | 86,951 | ||||||||
License fees and service revenue | 9,838 | — | 10,042 | 28 | ||||||||||||
Total revenues | $ | 44,982 | $ | 46,855 | $ | 83,599 | $ | 86,979 | ||||||||
Operating expenses: | ||||||||||||||||
Cost of product sales (excludes amortization of purchased intangible assets) | 5,990 | 6,156 | 13,061 | 12,434 | ||||||||||||
Selling, general and administrative | 22,552 | 25,399 | 45,886 | 48,802 | ||||||||||||
Research and development | 9,558 | 11,335 | 25,409 | 40,832 | ||||||||||||
Amortization and impairment of intangible assets | 6,916 | 5,361 | 20,938 | 10,721 | ||||||||||||
Total operating costs and expenses | 45,016 | 48,251 | 105,294 | 112,789 | ||||||||||||
Loss from operations | (34 | ) | (1,396 | ) | (21,695 | ) | (25,810 | ) | ||||||||
Other Expenses: | ||||||||||||||||
Interest expense | (2,258 | ) | (1,976 | ) | (4,486 | ) | (4,043 | ) | ||||||||
Change in fair value of contingent consideration related to acquisitions | (146 | ) | (1,005 | ) | (646 | ) | (1,729 | ) | ||||||||
Other income (expense), net | 69 | (487 | ) | (966 | ) | (845 | ) | |||||||||
Total other expenses | (2,335 | ) | (3,468 | ) | (6,098 | ) | (6,617 | ) | ||||||||
Loss before income taxes | (2,369 | ) | (4,864 | ) | (27,793 | ) | (32,427 | ) | ||||||||
Benefit (provision) for income taxes | 23 | 1,301 | (115 | ) | 1,223 | |||||||||||
Net loss | $ | (2,346 | ) | $ | (3,563 | ) | $ | (27,908 | ) | $ | (31,204 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.43 | ) | $ | (0.49 | ) | ||||
Diluted | $ | (0.04 | ) | $ | (0.06 | ) | $ | (0.43 | ) | $ | (0.49 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 65,466,004 | 64,609,197 | 65,167,162 | 64,119,441 | ||||||||||||
Diluted | 65,466,004 | 64,609,197 | 65,167,162 | 64,119,441 | ||||||||||||
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Condensed Consolidated Balance Sheets | |||||||||
(In thousands, expect per share and par value amounts) |
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(Unaudited) |
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2015 |
2014 |
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ASSETS | |||||||||
Current assets: | |||||||||
Cash and equivalents | $ | 142,271 | $ | 129,942 | |||||
Marketable securities | 3,308 | 3,306 | |||||||
Accounts receivable, net of allowance for doubtful accounts of |
41,684 | 70,758 | |||||||
Other receivables | 8,245 | 5,489 | |||||||
Inventories | 8,794 | 9,200 | |||||||
Prepaid expenses | 2,688 | 3,774 | |||||||
Deferred tax assets | 172 | — | |||||||
Total current assets | 207,162 | 222,469 | |||||||
Property and equipment, net of accumulated depreciation | 1,265 | 1,405 | |||||||
Intangible assets, net of accumulated amortization | 207,955 | 230,100 | |||||||
Goodwill | 17,995 | 18,195 | |||||||
Other assets | 19,952 | 17,864 | |||||||
Total assets | $ | 454,329 | $ | 490,033 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current liabilities: | |||||||||
Accounts payable and other accrued obligations | $ | 71,823 | $ | 84,994 | |||||
Accrued payroll and benefits | 5,777 | 8,444 | |||||||
Deferred revenue | 7,087 | 9,959 | |||||||
Drug development liability | 573 | 1,141 | |||||||
Acquisition-related contingent obligations | 5,243 | 4,901 | |||||||
Total current liabilities | 90,503 | 109,439 | |||||||
Drug development liability, less current portion | 13,916 | 14,644 | |||||||
Deferred revenue, less current portion | 414 | — | |||||||
Acquisition-related contingent obligations, less current portion | 2,745 | 2,441 | |||||||
Deferred tax liability | 6,753 | 6,569 | |||||||
Other long-term liabilities | 6,994 | 6,088 | |||||||
Convertible senior notes | 98,866 | 96,298 | |||||||
Total liabilities | 220,191 | 235,479 | |||||||
Stockholders' equity: | |||||||||
Preferred stock, |
|||||||||
Series B junior participating preferred stock, |
— | — | |||||||
Series E convertible voting preferred stock, |
123 | 123 | |||||||
Common stock, |
66 | 66 | |||||||
Additional paid-in capital | 545,359 | 538,553 | |||||||
Accumulated other comprehensive loss | (165 | ) | (850 | ) | |||||
Accumulated deficit | (311,245 | ) | (283,338 | ) | |||||
Total stockholders' equity | 234,138 | 254,554 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 454,329 | $ | 490,033 | |||||
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.
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Reconciliation of Non-GAAP Adjustments for Condensed Consolidated Statements of Operations | |||||||||||||||||||||
(In thousands, expect per share amounts) |
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(Unaudited) |
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Three months ended
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Six months ended
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2015 | 2014 | 2015 | 2014 | ||||||||||||||||||
GAAP product sales, net & license fees and service revenue | $ | 44,982 | $ | 46,855 | $ | 83,599 | $ | 86,979 | |||||||||||||
Non GAAP adjustments to product sales, net & license fees and service revenue: | (9,682 | ) | — | (9,682 | ) | — | |||||||||||||||
Total adjustments to product sales, net & license fees and service revenues | (9,682 | ) | — | (9,682 | ) | — | |||||||||||||||
Non-GAAP product sales & license and contract revenue | 35,300 | 46,855 | 73,917 | 86,979 | |||||||||||||||||
GAAP cost of product sales (excludes amortization of intangible assets) | 5,990 | 6,156 | 13,061 | 12,434 | |||||||||||||||||
Non-GAAP adjustments to cost of product sales | — | — | — | — | |||||||||||||||||
Non-GAAP cost of product sales (excludes amortization of intangible assets) | 5,990 | 6,156 | 13,061 | 12,434 | |||||||||||||||||
GAAP selling, general and administrative expenses | 22,552 | 25,399 | 45,886 | 48,802 | |||||||||||||||||
Non GAAP adjustments to SG&A: | |||||||||||||||||||||
Stock-based compensation | (3,087 | ) | (2,163 | ) | (5,116 | ) | (4,570 | ) | |||||||||||||
Shareholder lawsuit expenses | 25 | (884 | ) | 441 | (1,263 | ) | |||||||||||||||
Insurance reimbursement under D&O policy | 365 | — | 1,746 | — | |||||||||||||||||
Depreciation expense | (177 | ) | (572 | ) | (345 | ) | (817 | ) | |||||||||||||
Total adjustments to SG&A | (2,874 | ) | (3,619 | ) | (3,274 | ) | (6,650 | ) | |||||||||||||
Non-GAAP selling, general and administrative | 19,678 | 21,780 | 42,612 | 42,152 | |||||||||||||||||
GAAP research and development | 9,558 | 11,335 | 25,409 | 40,832 | |||||||||||||||||
Non-GAAP adjustments to R&D: | |||||||||||||||||||||
Stock-based compensation | (441 | ) | (511 | ) | (873 | ) | (955 | ) | |||||||||||||
Depreciation expense | (3 | ) | (11 | ) | (6 | ) | (49 | ) | |||||||||||||
Beleodaq milestone cash payment & stock issuance | — | — | — | (17,790 | ) | ||||||||||||||||
Other R&D milestone payments | — | — | (3,000 | ) | — | ||||||||||||||||
Total adjustments to R&D | (444 | ) | (522 | ) | (3,879 | ) | (18,794 | ) | |||||||||||||
Non-GAAP research and development | 9,114 | 10,813 | 21,530 | 22,038 | |||||||||||||||||
GAAP amortization and impairment of intangible assets | 6,916 | 5,361 | 20,938 | 10,721 | |||||||||||||||||
Non-GAAP adjustments to amortization and impairment of intangible assets: | |||||||||||||||||||||
Amortization expense | (6,916 | ) | (5,361 | ) | (13,778 | ) | (10,721 | ) | |||||||||||||
Impairment of FUSILEV distribution rights | — | — | (7,160 | ) | — | ||||||||||||||||
Total adjustments to amortization and impairment of intangibles | (6,916 | ) | (5,361 | ) | (20,938 | ) | (10,721 | ) | |||||||||||||
Non-GAAP amortization and impairment of intangibles | — | — | — | — | |||||||||||||||||
GAAP loss from operations | (34 | ) | (1,396 | ) | (21,695 | ) | (25,810 | ) | |||||||||||||
Non-GAAP adjustments to loss from operations | 552 | 9,502 | 18,409 | 36,165 | |||||||||||||||||
Non-GAAP income (loss) from operations | 518 | 8,106 | (3,286 | ) | 10,355 | ||||||||||||||||
GAAP total other expenses, net | (2,335 | ) | (3,468 | ) | (6,098 | ) | (6,617 | ) | |||||||||||||
Market-to-market of contingent consideration | 146 | 1,005 | 646 | 1,729 | |||||||||||||||||
Loss on foreign currency exchange | (127 | ) | — | 1,019 | — | ||||||||||||||||
Accretion of discount on 2018 Convertible Notes | 1,298 | 1,185 | 2,569 | 2,332 | |||||||||||||||||
Total adjustments to other expense, net | 1,317 | 2,190 | 4,234 | 4,061 | |||||||||||||||||
Non-GAAP total other expenses, net | (1,018 | ) | (1,278 | ) | (1,864 | ) | (2,556 | ) | |||||||||||||
GAAP benefit (provision) for income taxes | 23 | 1,301 | (115 | ) | 1,223 | ||||||||||||||||
Adjustment to benefit (provision) for income taxes | (23 | ) | (1,301 | ) | 115 | (1,223 | ) | ||||||||||||||
Non-GAAP benefit (provision) for income taxes | — | — | — | — | |||||||||||||||||
GAAP net loss | (2,346 | ) | (3,563 | ) | (27,908 | ) | (31,204 | ) | |||||||||||||
Total non-GAAP adjustments | 1,846 | 10,391 | 22,758 | 39,003 | |||||||||||||||||
Non-GAAP net (loss) income | $ | (500 | ) | $ | 6,828 | $ | (5,150 | ) | $ | 7,799 | |||||||||||
Non-GAAP (loss) income per share: | |||||||||||||||||||||
Basic | $ | (0.01 | ) | $ | 0.11 | $ | (0.08 | ) | $ | 0.12 | |||||||||||
Diluted | $ | (0.01 | ) | $ | 0.09 | $ | (0.08 | ) | $ | 0.10 | |||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||
Basic | 65,466,004 | 64,609,197 | 65,167,162 | 64,119,441 | |||||||||||||||||
Diluted | 65,466,004 | 79,260,064 | 65,167,162 | 79,012,587 | |||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20150806006369/en/
Vice President,
Strategic Planning & Investor Relations
702-835-6300
InvestorRelations@sppirx.com
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