Spectrum Pharmaceuticals Reports Second Quarter 2016 Financial Results and Pipeline Update
- SPI-2012 (eflapegrastim) pivotal Phase 3 study is actively enrolling breast cancer patients in over 80 clinical sites in the U.S.
- Poziotinib Phase 2 trial is enrolling breast cancer patients who have failed other HER2-directed therapies.
-
Qapzola™ (apaziquone) advisory panel scheduled on
September 14, 2016 , andFDA decision expected onDecember 11, 2016 . -
Q2 revenues were
$33.9 million , including$30.9 million in product sales. The Company's sixthFDA approved drug EVOMELA® (melphalan) for injection was launched in the second quarter; formulary access and adoption in top institutions is encouraging. -
The Company raised
$45.1 million in Q2, and an additional$28.8 million in Q3, utilizing an at-the-market security offering.
"I am very pleased with the progress we have made on our pipeline and
our commercial portfolio," said
Pipeline Update:
-
SPI-2012 (eflapegrastim), a novel long-acting GCSF: A pivotal
Phase 3 study was initiated under a Special Protocol Assessment (SPA)
from the
FDA in Q1 2016 to evaluate SPI-2012 in the management of chemotherapy-induced neutropenia in approximately 580 patients with breast cancer. Enrollment is on track and the company expects to file a BLA in 2018. Moderate to severe neutropenia is a serious side effect of certain chemotherapeutic agents which can lead to infection, hospitalization, and even death. The Phase 2 data demonstrated that SPI-2012 was non-inferior to pegfilgrastim at the middle dose tested, and statistically superior in terms of duration of severe neutropenia at the highest dose tested. SPI-2012 was also shown to have an acceptable safety profile with no significant dose-related or unexpected toxicities. -
Poziotinib, a potential best-in-class, novel, pan-HER inhibitor:
Spectrum is continuing to enroll a Phase 2 breast cancer program
in the
U.S. , based on promising Phase 1 efficacy data in breast cancer patients who had failed multiple other HER2-directed therapies. In addition, multiple Phase 2 studies are being conducted inSouth Korea byHanmi Pharmaceuticals and National OncoVenture. -
Qapzola, a potent tumor-activated drug being investigated for
non-muscle invasive bladder cancer: The
FDA is expected to make a decision on Qapzola's approval by the PDUFA date ofDecember 11, 2016 . TheFDA plans to hold an advisory committee meeting onSeptember 14, 2016 . The Company is actively enrolling an additional randomized, placebo-controlled Phase 3 trial under a SPA agreement. The Phase 3 study has been specifically designed to build on learnings from the previous studies, as well as recommendations from the FDA.
Three-Month Period Ended
GAAP Results
Total product sales were
Spectrum recorded net loss of
Non-GAAP Results
Spectrum recorded non-GAAP net loss of
Conference Call
Domestic: (877) 837-3910, Conference ID# 49557622
International: (973) 796-5077, Conference ID# 49557622
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 9, 2016 at 4:30 p.m. Eastern/1:30 p.m. Pacific.
About
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 expects an FDA decision on another drug in the second half of 2016. Additionally, Spectrum's pipeline includes three drugs in advanced stages of clinical development that have 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
performance of
© 2016
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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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2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenues: | ||||||||||||||||
Product sales, net | $ | 30,887 | $ | 35,144 | $ | 66,129 | $ | 73,557 | ||||||||
License fees and service revenue | 3,062 | 9,838 | 11,686 | 10,042 | ||||||||||||
Total revenues | $ | 33,949 | $ | 44,982 | $ | 77,815 | $ | 83,599 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of product sales (excludes amortization and impairment charges of intangible assets) | 5,609 | 5,990 | 11,212 | 13,061 | ||||||||||||
Cost of service revenue | 2,214 | — | 3,495 | — | ||||||||||||
Selling, general and administrative | 27,620 | 22,552 | 49,583 | 45,886 | ||||||||||||
Research and development | 14,281 | 9,558 | 29,744 | 25,409 | ||||||||||||
Amortization and impairment charges of intangible assets | 6,306 | 6,916 | 12,145 | 20,938 | ||||||||||||
Total operating costs and expenses |
56,030 | 45,016 | 106,179 | 105,294 | ||||||||||||
Loss from operations | (22,081 | ) | (34 | ) | (28,364 | ) | (21,695 | ) | ||||||||
Other (expense) income: | ||||||||||||||||
Interest expense, net | (2,375 | ) | (2,258 | ) | (4,714 | ) | (4,486 | ) | ||||||||
Change in fair value of contingent consideration related to acquisitions | (285 | ) | (146 | ) | (1,327 | ) | (646 | ) | ||||||||
Other income (expense), net | 340 | 69 | 618 | (966 | ) | |||||||||||
Total other expenses | (2,320 | ) | (2,335 | ) | (5,423 | ) | (6,098 | ) | ||||||||
Loss before income taxes | (24,401 | ) | (2,369 | ) | (33,787 | ) | (27,793 | ) | ||||||||
Benefit (provision) for income taxes | 106 | 23 | 171 | (115 | ) | |||||||||||
Net loss | $ | (24,295 | ) | $ | (2,346 | ) | $ | (33,616 | ) | $ | (27,908 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.35 | ) | $ | (0.04 | ) | $ | (0.50 | ) | $ | (0.43 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic and diluted | 68,575,021 | 65,466,004 | 67,146,188 | 65,167,162 | ||||||||||||
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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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2016 |
2015 |
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ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 155,759 | $ | 139,741 | ||||
Marketable securities | 247 | 245 | ||||||
Accounts receivable, net of allowance for doubtful accounts of |
34,319 | 30,384 | ||||||
Other receivables | 6,968 | 12,572 | ||||||
Inventories | 6,405 | 4,176 | ||||||
Prepaid expenses and other assets | 2,954 | 3,507 | ||||||
Total current assets | 206,652 | 190,625 | ||||||
Property and equipment, net of accumulated depreciation | 643 | 918 | ||||||
Intangible assets, net of accumulated amortization and impairment charges | 178,312 | 190,335 | ||||||
|
17,997 | 17,960 | ||||||
Other assets | 25,600 | 19,211 | ||||||
Total assets | $ | 429,204 | $ | 419,049 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and other accrued liabilities | $ | 48,208 | $ | 56,539 | ||||
Accrued payroll and benefits | 6,496 | 8,188 | ||||||
Deferred revenue | 3,461 | 6,130 | ||||||
Drug development liability | 156 | 259 | ||||||
Acquisition-related contingent obligations | — | 5,227 | ||||||
Total current liabilities | 58,321 | 76,343 | ||||||
Drug development liability, less current portion | 14,227 | 14,427 | ||||||
Deferred revenue, less current portion | 750 | 383 | ||||||
Acquisition-related contingent obligations, less current portion | 1,993 | 1,439 | ||||||
Deferred tax liability | 6,831 | 6,779 | ||||||
Other long-term liabilities | 8,661 | 7,444 | ||||||
Convertible senior notes | 102,522 | 99,377 | ||||||
Total liabilities | 193,305 | 206,192 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, |
— | — | ||||||
Series B junior participating preferred stock, |
— | — | ||||||
Series E Convertible Voting Preferred Stock, |
— | 123 | ||||||
Common stock, |
75 | 68 | ||||||
Additional paid-in capital | 606,220 | 552,108 | ||||||
Accumulated other comprehensive loss | (2,651 | ) | (5,319 | ) | ||||
Accumulated deficit | (367,745 | ) | (334,123 | ) | ||||
Total stockholders' equity | 235,899 | 212,857 | ||||||
Total liabilities and stockholders' equity | $ | 429,204 | $ | 419,049 | ||||
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 |
Six months ended |
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2016 | 2015 | 2016 | 2015 | |||||||||||||
GAAP product sales, net & license fees and service revenue | $ | 33,949 | $ | 44,982 | $ | 77,815 | $ | 83,599 | ||||||||
Non GAAP adjustments to product sales, net & license fees and service revenue: | — | (9,682 | ) | (6,000 | ) | (9,682 | ) | |||||||||
Total adjustments to product sales, net & license fees and service revenue |
— | (9,682 | ) | (6,000 | ) | (9,682 | ) | |||||||||
Non-GAAP product sales & license and contract revenue | 33,949 | 35,300 | 71,815 | 73,917 | ||||||||||||
GAAP cost of product sales (excludes amortization and impairment of intangible assets) | 5,609 | 5,990 | 11,212 | 13,061 | ||||||||||||
Non-GAAP adjustments to cost of product sales | — | — | — | — | ||||||||||||
Non-GAAP cost of product sales (excludes amortization and impairment of intangible assets) | 5,609 | 5,990 | 11,212 | 13,061 | ||||||||||||
GAAP cost of service revenue | 2,214 | — | 3,495 | — | ||||||||||||
Non-GAAP adjustments to cost of service revenue | — | — | — | |||||||||||||
Non-GAAP cost of service revenue | 2,214 | — | 3,495 | — | ||||||||||||
GAAP selling, general and administrative expenses | 27,620 | 22,552 | 49,583 | 45,886 | ||||||||||||
Non GAAP adjustments to SG&A: | ||||||||||||||||
Stock-based compensation | (2,790 | ) | (3,087 | ) | (5,559 | ) | (5,116 | ) | ||||||||
Litigation expenses | (8,518 | ) | 25 | (10,813 | ) | 441 | ||||||||||
Insurance reimbursement under D&O policy | — | 365 | — | 1,746 | ||||||||||||
Depreciation expense | (164 | ) | (177 | ) | (329 | ) | (345 | ) | ||||||||
Total adjustments to SG&A | (11,472 | ) | (2,874 | ) | (16,701 | ) | (3,274 | ) | ||||||||
Non-GAAP selling, general and administrative | 16,148 | 19,678 | 32,882 | 42,612 | ||||||||||||
GAAP research and development | 14,281 | 9,558 | 29,744 | 25,409 | ||||||||||||
Non-GAAP adjustments to R&D: | ||||||||||||||||
Stock-based compensation | (637 | ) | (441 | ) | (1,045 | ) | (873 | ) | ||||||||
Depreciation expense | (3 | ) | (3 | ) | (6 | ) | (6 | ) | ||||||||
Other R&D milestone payments | (770 | ) | — | (2,826 | ) | (3,000 | ) | |||||||||
Total adjustments to R&D |
(1,410 | ) | (444 | ) | (3,877 | ) | (3,879 | ) | ||||||||
Non-GAAP research and development | 12,871 | 9,114 | 25,867 | 21,530 | ||||||||||||
GAAP amortization and impairment of intangible assets | 6,306 | 6,916 | 12,145 | 20,938 | ||||||||||||
Non-GAAP adjustments to amortization and impairment charges of intangible assets: | ||||||||||||||||
Amortization expense | (6,306 | ) | (6,916 | ) | (12,145 | ) | (13,778 | ) | ||||||||
Impairment of FUSILEV distribution rights | — | — | — | (7,160 | ) | |||||||||||
Total adjustments to amortization and impairment charges of intangible assets |
(6,306 | ) | (6,916 | ) | (12,145 | ) | (20,938 | ) | ||||||||
Non-GAAP amortization and impairment of intangibles | — | — | — | — | ||||||||||||
GAAP loss from operations | (22,081 | ) | (34 | ) | (28,364 | ) | (21,695 | ) | ||||||||
Non-GAAP adjustments to loss from operations | 19,188 | 552 | 26,723 | 18,409 | ||||||||||||
Non-GAAP income (loss) from operations | (2,893 | ) | 518 | (1,641 | ) | (3,286 | ) | |||||||||
GAAP total other (expenses) income, net | (2,320 | ) | (2,335 | ) | (5,423 | ) | (6,098 | ) | ||||||||
Market-to-market of contingent consideration | 285 | 146 | 1,327 | 646 | ||||||||||||
(Gain) Loss on foreign currency exchange | (206 | ) | (127 | ) | (433 | ) | 1,019 | |||||||||
Accretion of discount on 2018 Convertible Notes | 1,416 | 1,298 | 2,800 | 2,569 | ||||||||||||
Total adjustments to other (expenses) income, net | 1,495 | 1,317 | 3,694 | 4,234 | ||||||||||||
Non-GAAP total other expenses, net | (825 | ) | (1,018 | ) | (1,729 | ) | (1,864 | ) | ||||||||
GAAP benefit (provision) for income taxes | 106 | 23 | 171 | (115 | ) | |||||||||||
Adjustment to benefit (provision) for income taxes | (106 | ) | (23 | ) | (171 | ) | 115 | |||||||||
Non-GAAP benefit (provision) for income taxes | — | — | — | — | ||||||||||||
GAAP net loss | (24,295 | ) | (2,346 | ) | (33,616 | ) | (27,908 | ) | ||||||||
Total non-GAAP adjustments | 20,577 | 1,846 | 30,246 | 22,758 | ||||||||||||
Non-GAAP net loss | $ | (3,718 | ) | $ | (500 | ) | $ | (3,370 | ) | $ | (5,150 | ) | ||||
Non-GAAP loss per share: | ||||||||||||||||
Basic | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.08 | ) | ||||
Diluted | $ | (0.05 | ) | $ | (0.01 | ) | $ | (0.05 | ) | $ | (0.08 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 68,575,021 | 65,466,004 | 67,146,188 | 65,167,162 | ||||||||||||
Diluted | 68,575,021 | 65,466,004 | 67,146,188 | 65,167,162 | ||||||||||||
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Vice President,
Strategic Planning & Investor Relations
702-835-6300
InvestorRelations@sppirx.com
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