Spectrum Pharmaceuticals Reports Second Quarter 2017 Financial Results and Pipeline Update
-
ROLONTIS™ (eflapegrastim):
- BLA filing expected next year.
-
Enrollment completed in registrational ADVANCE Study under a
Special Protocol Assessment (SPA) with the
FDA . Topline results expected in Q1 2018. -
A second smaller study RECOVER is enrolling patients in EU and
U.S. Enrollment completion expected in Q1 2018.
-
Poziotinib:
-
Interim results are expected before year end from an ongoing
Phase 2 study in non-small cell lung cancer patients with exon 20
insertion mutations in EGFR or HER2. This study is being conducted
at
The University of Texas MD Anderson Cancer Center . -
Following discussions with the
FDA , the Company is initiating an additional multicenter clinical trial to expedite the development of poziotinib in this patient population.
-
Interim results are expected before year end from an ongoing
Phase 2 study in non-small cell lung cancer patients with exon 20
insertion mutations in EGFR or HER2. This study is being conducted
at
-
Financials:
-
Q2 revenues were
$34.3 million , including$31.2 million in product sales. -
FOLOTYN® (pralatrexate injection) was recently approved in
Japan and the Company expects multiple related milestone payments totaling approximately$5 million fromMundipharma in the second half of the year.
-
Q2 revenues were
"During the second quarter we made significant progress in our highest
priority clinical programs and achieved solid performance across our
commercial business," said Rajesh C. Shrotriya, MD, Chairman and Chief
Executive Officer of Spectrum Pharmaceuticals. "We completed enrollment
in ROLONTIS's ADVANCE registrational Phase 3 study ahead of schedule and
enrollment in a second international study RECOVER is well under way in
Pipeline Update:
-
ROLONTIS (eflapegrastim), a novel long-acting GCSF: A
registrational Phase 3 study ADVANCE was initiated under an SPA with
the
FDA last year to evaluate ROLONTIS in the management of chemotherapy-induced neutropenia. The Company has completed enrollment in the ADVANCE study with 405 patients randomized and expects to report topline data in Q1 2018. To strengthen the regulatory package in theEurope andU.S. , the Company is currently enrolling the 218-patient international RECOVER study. 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 is currently enrolling at the
University of Texas MD Anderson Cancer Center in non-small cell lung cancer patients with exon 20 insertion mutations in EGFR or HER2. The study is expected to yield interim results before year end. Following discussions with theFDA , the Company is initiating an additional multicenter study in a similar patient population. Spectrum is also conducting a Phase 2 breast cancer study in the third-line setting in theU.S. , based on promising Phase 1 study efficacy data in breast cancer patients who had failed multiple HER2-directed therapies. The Company is in discussions with theFDA about a combination trial of poziotinib and standard of care therapy in HER2+ breast cancer patients in the second-line setting. -
QAPZOLA™, a potent tumor-activated drug for bladder cancer is being
investigated for low and intermediate risk non-muscle invasive bladder
cancer: The Company has an SPA from the
FDA for 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. Approximately 50 sites have been selected thus far for enrolling patients in the Phase 3 study and patients are currently being screened.
Three-Month Period Ended
GAAP Results
Total product sales were
Spectrum recorded a net loss of
Our
Non-GAAP Results
Spectrum recorded non-GAAP net loss of
Conference Call
Domestic: | (877) 837-3910, Conference ID# 44585743 | |||
International: | (973) 796-5077, Conference ID# 44585743 |
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 3, 2017 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 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
performance of
© 2017
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Condensed Consolidated Statements of Operations |
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(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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2017 | 2016 | 2017 | 2016 | |||||||||||||
Revenues: | ||||||||||||||||
Product sales, net | $ | 31,156 | $ | 30,887 | $ | 57,001 | $ | 66,129 | ||||||||
License fees and service revenue | 3,145 | 3,062 | 6,401 | 11,686 | ||||||||||||
Total revenues | 34,301 | 33,949 | 63,402 | 77,815 | ||||||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of product sales (excludes amortization and impairment charges of intangible assets) | 11,303 | 5,609 | 19,439 | 11,212 | ||||||||||||
Cost of service revenue | 2,118 | 2,214 | 4,221 | 3,495 | ||||||||||||
Selling, general and administrative | 17,107 | 27,620 | 35,715 | 49,583 | ||||||||||||
Research and development | 15,097 | 14,281 | 29,792 | 29,744 | ||||||||||||
Amortization and impairment charges of intangible assets | 6,901 | 6,306 | 13,790 | 12,145 | ||||||||||||
Total operating costs and expenses | 52,526 | 56,030 | 102,957 | 106,179 | ||||||||||||
Loss from operations | (18,225 | ) | (22,081 | ) | (39,555 | ) | (28,364 | ) | ||||||||
Other (expense) income: | ||||||||||||||||
Interest expense, net | (2,131 | ) | (2,375 | ) | (4,182 | ) | (4,714 | ) | ||||||||
Change in fair value of contingent consideration related to acquisitions | (97 | ) | (285 | ) | (294 | ) | (1,327 | ) | ||||||||
Other income, net | 240 | 340 | 650 | 618 | ||||||||||||
Total other expenses | (1,988 | ) | (2,320 | ) | (3,826 | ) | (5,423 | ) | ||||||||
Loss before income taxes | (20,213 | ) | (24,401 | ) | (43,381 | ) | (33,787 | ) | ||||||||
(Provision) benefit for income taxes | (255 | ) | 106 | (54 | ) | 171 | ||||||||||
Net loss | $ | (20,468 | ) | $ | (24,295 | ) | $ | (43,435 | ) | $ | (33,616 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic and diluted | $ | (0.26 | ) | $ | (0.35 | ) | $ | (0.55 | ) | $ | (0.50 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic and diluted | 78,576,260 | 68,575,021 | 78,366,610 | 67,146,188 | ||||||||||||
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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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2017 |
2016 |
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ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 138,313 | $ | 158,222 | ||||
Marketable securities | 248 | 247 | ||||||
Accounts receivable, net of allowance for doubtful accounts of |
41,977 | 39,782 | ||||||
Other receivables | 3,950 | 5,754 | ||||||
Inventories | 10,157 | 8,715 | ||||||
Prepaid expenses and other assets | 4,369 | 3,930 | ||||||
Total current assets | 199,014 | 216,650 | ||||||
Property and equipment, net of accumulated depreciation | 517 | 449 | ||||||
Intangible assets, net of accumulated amortization and impairment charges | 150,815 | 164,234 | ||||||
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18,057 | 17,886 | ||||||
Other assets | 26,684 | 29,549 | ||||||
Total assets | $ | 395,087 | $ | 428,768 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable and other accrued liabilities | $ | 55,617 | $ | 52,483 | ||||
Accrued payroll and benefits | 6,244 | 8,981 | ||||||
Deferred revenue | 2,551 | 3,188 | ||||||
Drug development liability | 153 | 861 | ||||||
Acquisition-related contingent obligations | — | — | ||||||
Total current liabilities | 64,565 | 65,513 | ||||||
Drug development liability, less current portion | 12,410 | 12,269 | ||||||
Deferred revenue, less current portion | 326 | 323 | ||||||
Acquisition-related contingent obligations | 1,609 | 1,315 | ||||||
Deferred tax liabilities | 6,802 | 6,675 | ||||||
Other long-term liabilities | 10,451 | 9,604 | ||||||
Convertible senior notes | 100,157 | 97,043 | ||||||
Total liabilities | 196,320 | 192,742 | ||||||
Commitments and contingencies | ||||||||
Stockholders' equity: | ||||||||
Preferred stock, |
— | — | ||||||
Series B junior participating preferred stock, |
— | — | ||||||
Series E convertible voting preferred stock, |
— | — | ||||||
Common stock, |
80 | 80 | ||||||
Additional paid-in capital | 646,542 | 640,166 | ||||||
Accumulated other comprehensive loss | (1,779 | ) | (1,579 | ) | ||||
Accumulated deficit | (446,076 | ) | (402,641 | ) | ||||
Total stockholders' equity | 198,767 | 236,026 | ||||||
Total liabilities and stockholders' equity | $ | 395,087 | $ | 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.
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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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Three Months Ended |
Six Months Ended |
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2017 | 2016 | 2017 | 2016 | |||||||||||||||
(1) | GAAP product sales, net & license fees and service revenue | $ | 34,301 | $ | 33,949 | $ | 63,402 | $ | 77,815 | |||||||||
Non GAAP adjustments to product sales, net & license fees and service revenue: | — | — | — | (6,000 | ) | |||||||||||||
Non-GAAP product sales, net & license fees and service revenue | $ | 34,301 | $ | 33,949 | $ | 63,402 | $ | 71,815 | ||||||||||
(2) | GAAP selling, general and administrative expenses | $ | 17,107 | $ | 27,620 | $ | 35,715 | $ | 49,583 | |||||||||
Non GAAP adjustments to SG&A: | ||||||||||||||||||
Stock-based compensation | (2,574 | ) | (2,790 | ) | (5,316 | ) | (5,559 | ) | ||||||||||
Litigation expenses | — | (8,518 | ) | — | (10,813 | ) | ||||||||||||
Depreciation expense | (76 | ) | (164 | ) | (166 | ) | (329 | ) | ||||||||||
Non-GAAP selling, general and administrative | $ | 14,457 | $ | 16,148 | $ | 30,233 | $ | 32,882 | ||||||||||
(3) | GAAP research and development | $ | 15,097 | $ | 14,281 | $ | 29,792 | $ | 29,744 | |||||||||
Non-GAAP adjustments to R&D: | ||||||||||||||||||
Stock-based compensation | (529 | ) | (637 | ) | (928 | ) | (1,045 | ) | ||||||||||
Depreciation expense | (2 | ) | (3 | ) | (5 | ) | (6 | ) | ||||||||||
Other R&D milestone payments | — | (770 | ) | — | (2,826 | ) | ||||||||||||
Non-GAAP research and development | $ | 14,566 | $ | 12,871 | $ | 28,859 | $ | 25,867 | ||||||||||
(4) | GAAP net loss | $ | (20,468 | ) | $ | (24,295 | ) | $ | (43,435 | ) | $ | (33,616 | ) | |||||
Non-GAAP adjustments to net loss: | ||||||||||||||||||
Adjustments to product sales, net & license fees and service revenue, SG&A, and R&D as noted above | 3,181 | 12,882 |
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6,415 |
|
14,578 | ||||||||||||
Amortization and impairment charges of intangible assets | 6,901 | 6,306 | 13,790 | 12,145 | ||||||||||||||
Adjustments to other expense, net | 1,525 | 1,495 | 3,098 | 3,694 | ||||||||||||||
Adjustments to provision (benefit) for income taxes | 255 | (106 | ) | 54 | (171 | ) | ||||||||||||
Non-GAAP net loss | $ | (8,606 | ) | $ | (3,718 | ) | $ | (20,078 | ) | $ | (3,370 | ) | ||||||
(5) | GAAP loss per share (Basic and Diluted) | $ | (0.26 | ) | $ | (0.35 | ) | $ | (0.55 | ) | $ | (0.50 | ) | |||||
Non-GAAP loss per share (Basic and Diluted) | ||||||||||||||||||
Basic and diluted | $ | (0.11 | ) | $ | (0.05 | ) | $ | (0.26 | ) | $ | (0.05 | ) | ||||||
Weighted average shares outstanding: | ||||||||||||||||||
Basic and diluted | 78,576,260 | 68,575,021 | 78,366,610 | 67,146,188 | ||||||||||||||
(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 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); (ii) adjustments to reverse the impact of income taxes; and (iii) 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), (iv) reversal of foreign exchange gains and losses (noncash), and (v) 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.
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Vice President,
Strategic Planning & Investor Relations
702-835-6300
InvestorRelations@sppirx.com
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