Spectrum Pharmaceuticals Reports Third Quarter 2015 Financial Results and Pipeline Update
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Company met with the
FDA , made significant progress, and is ready to initiate SPI-2012 Pivotal clinical trial upon agreement on Special Protocol Assessment (SPA) - On track for apaziquone NDA filing by year end based on previous Phase 3 studies; additional Phase 3 trial initiated under SPA
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Meeting with
FDA scheduled onNovember 6, 2015 to address the Complete Response Letter on EVOMELA™(melphalan) for injection - Phase 2 poziotinib breast cancer study designed, and will be submitted with IND by year end
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Spectrum raises guidance on year-end cash to over
$125 million , up from the Company's previous guidance of$110 million
"The highest priority of the Company remains SPI-2012, which is a
late-stage drug that could compete in the multi-billion dollar
neutropenia market," said
Pipeline Update- Two Potential Blockbusters and One Near-term NDA Submission:
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SPI-2012, a novel long-acting GCSF: In a Phase 2 dose ranging
study, SPI-2012 was shown to be superior at the higher dose tested and
non-inferior at the middle dose in decreasing the duration of severe
neutropenia compared to the blockbuster drug pegfilgrastim. SPI-2012
was also shown to have an acceptable safety profile with no
significant dose-related or unexpected toxicities. The Phase 2 data
will be presented at the San Antonio Breast Cancer Symposium. Spectrum
has continued to have productive discussions with the
FDA , expects to finalize the pivotal study design this year, and start the study shortly after reaching SPA agreement with the Agency. Over 80 study sites have already been qualified. -
Apaziquone, a potent tumor-activated pro-drug for non-muscle
invasive bladder cancer: By year end, Spectrum expects to file the
NDA based on the previous Phase 3 studies. The Company has also
initiated enrollment in an additional randomized, placebo-controlled
Phase 3 trial under the SPA agreement, and treated the first patient
in late October. This Phase 3 study has been specifically designed to
address important lessons learned from the previous apaziquone Phase 3
studies, as well as recommendations made by the
FDA . -
EVOMELA, a propylene-glycol free melphalan formulation with
improved stability: Spectrum is actively addressing the
non-clinical issues raised in the Complete Response Letter regarding
the EVOMELA NDA.
FDA has granted a Type A meeting forNovember 6, 2015 and the company believes these issues can be swiftly resolved. Spectrum plans to launch this drug with our existing sales force. -
Poziotinib, a potential best-in-class, novel, pan-HER inhibitor:
The Company plans to initiate a breast cancer program in the U.S.,
based on compelling Phase 1 efficacy data in breast cancer patients
who had failed multiple other HER-2 directed therapies. In addition,
multiple Phase 2 studies funded by our partner,
Hanmi Pharmaceuticals , are currently ongoing inSouth Korea .
Three-Month Period Ended
GAAP Results
Total product sales were
Product sales in the third 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 raises guidance on year-end cash to over
Conference Call
Domestic: (877) 837-3910, Conference ID# 54872723
International: (973) 796-5077, Conference ID# 54872723
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 November 4, 2015 at 4:30 p.m. Eastern/1:30 p.m. Pacific.
About
About EVOMELA™
EVOMELA is a new, propylene glycol-free melphalan formulation that
demonstrated bioequivalence to the standard melphalan formulation
(Alkeran) in a Phase 2 clinical study (Aljitawi et al, Bone Marrow
Transplant, 2014). EVOMELA has been granted Orphan Drug Designation by
the
EVOMELA's formulation eliminates the need to use a propylene glycol containing custom diluent, which is required with other intravenous melphalan formulations, and has been reported to cause renal and cardiac side effects. The use of the Captisol® technology to reformulate melphalan also improved its stability, extending its use time to five hours, which is anticipated to simplify preparation and administration logistics, and allow for slower infusion rates and longer administration durations for pre-transplant chemotherapy.
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
Condensed Consolidated Statements of Operations (In thousands, except per share amounts) (Unaudited) |
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Three Months Ended |
Nine Months Ended |
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2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenues: | ||||||||||||||||
Product sales, net | $ | 28,457 | $ | 47,916 | $ | 102,014 | $ | 134,867 | ||||||||
License fees and service revenue | 170 | 74 | 10,212 | 102 | ||||||||||||
Total revenues | $ | 28,627 | $ | 47,990 | $ | 112,226 | $ | 134,969 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of product sales (excludes amortization of intangible assets) | 8,447 | 6,530 | 21,508 | 18,964 | ||||||||||||
Selling, general and administrative | 19,411 | 24,125 | 65,297 | 72,927 | ||||||||||||
Research and development | 9,924 | 14,420 | 35,333 | 55,252 | ||||||||||||
Amortization and impairment of intangible assets | 6,919 | 7,042 | 27,857 | 17,763 | ||||||||||||
Total operating costs and expenses | 44,701 | 52,117 | 149,995 | 164,906 | ||||||||||||
Loss from operations | (16,074 | ) | (4,127 | ) | (37,769 | ) | (29,937 | ) | ||||||||
Other expenses: | ||||||||||||||||
Interest expense, net | (2,274 | ) | (2,361 | ) | (6,760 | ) | (6,404 | ) | ||||||||
Change in fair value of contingent consideration related to acquisitions | 81 | (181 | ) | (565 | ) | (1,910 | ) | |||||||||
Other expense, net | (535 | ) | (1,393 | ) | (1,501 | ) | (2,238 | ) | ||||||||
Total other expenses | (2,728 | ) | (3,935 | ) | (8,826 | ) | (10,552 | ) | ||||||||
Loss before income taxes | (18,802 | ) | (8,062 | ) | (46,595 | ) | (40,489 | ) | ||||||||
Benefit (provision) for income taxes | 78 | (3,477 | ) | (37 | ) | (2,254 | ) | |||||||||
Net loss | $ | (18,724 | ) | $ | (11,539 | ) | $ | (46,632 | ) | $ | (42,743 | ) | ||||
Net loss per share: | ||||||||||||||||
Basic | $ | (0.28 | ) | $ | (0.18 | ) | $ | (0.71 | ) | $ | (0.66 | ) | ||||
Diluted | $ | (0.28 | ) | $ | (0.18 | ) | $ | (0.71 | ) | $ | (0.66 | ) | ||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 65,855,727 | 64,765,072 | 65,457,060 | 64,369,466 | ||||||||||||
Diluted | 65,855,727 | 64,765,072 | 65,457,060 | 64,369,466 | ||||||||||||
Condensed Consolidated Balance Sheets (In thousands, expect per share and par value amounts) (Unaudited) |
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ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 136,527 | 129,942 | |||
Marketable securities | 245 | 3,306 | |||
Accounts receivable, net of allowance for doubtful accounts of |
48,150 | 70,758 | |||
Other receivables | 12,347 | 5,489 | |||
Inventories | 7,071 | 9,200 | |||
Prepaid expenses | 3,963 | 3,774 | |||
Deferred tax assets | 82 | — | |||
Total current assets | 208,385 | 222,469 | |||
Property and equipment, net of accumulated depreciation | 1,079 | 1,405 | |||
Intangible assets, net of accumulated amortization | 201,184 | 230,100 | |||
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18,023 | 18,195 | |||
Other assets | 17,842 | 17,864 | |||
Total assets | 446,513 | 490,033 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
Current liabilities: | |||||
Accounts payable and other accrued liabilities | 78,116 | 84,994 | |||
Accrued payroll and benefits | 7,140 | 8,444 | |||
Deferred revenue | 9,990 | 9,959 | |||
Drug development liability | 573 | 1,141 | |||
Acquisition-related contingent obligations | 5,373 | 4,901 | |||
Total current liabilities | 101,192 | 109,439 | |||
Drug development liability, less current portion | 13,827 | 14,644 | |||
Deferred revenue, less current portion | 407 | — | |||
Acquisition-related contingent obligations, less current portion | 2,534 | 2,441 | |||
Deferred tax liability | 6,659 | 6,569 | |||
Other long-term liabilities | 6,963 | 6,088 | |||
Convertible senior notes | 100,192 | 96,298 | |||
Total liabilities | 231,774 | 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 | 548,232 | 538,553 | |||
Accumulated other comprehensive loss | (3,712 | ) | (850 | ) | |
Accumulated deficit | (329,970 | ) | (283,338 | ) | |
Total stockholders' equity | 214,739 | 254,554 | |||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 446,513 | 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.
Reconciliation of Non-GAAP Adjustments for Condensed Consolidated Statements of Operations (In thousands, expect per share amounts) (Unaudited) |
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Three months ended |
Nine months ended |
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2015 | 2014 | 2015 | 2014 | |||||||||||||||||
GAAP product sales, net & license fees and service revenue | $ | 28,627 | $ | 47,990 | $ | 112,226 | $ | 134,969 | ||||||||||||
Non GAAP adjustments to product sales, net & license fees and service revenue: | — | — | (9,681 | ) | — | |||||||||||||||
Total adjustments to product sales, net & license fees and service revenues | — | — | (9,681 | ) | — | |||||||||||||||
Non-GAAP product sales & license and contract revenue | 28,627 | 47,990 | 102,545 | 134,969 | ||||||||||||||||
GAAP cost of product sales (excludes amortization of intangible assets) | 8,447 | 6,530 | 21,508 | 18,964 | ||||||||||||||||
Non-GAAP adjustments to cost of product sales | — | — | — | — | ||||||||||||||||
Non-GAAP cost of product sales (excludes amortization of intangible assets) | 8,447 | 6,530 | 21,508 | 18,964 | ||||||||||||||||
GAAP selling, general and administrative expenses | 19,411 | 24,125 | 65,297 | 72,927 | ||||||||||||||||
Non GAAP adjustments to SG&A: | ||||||||||||||||||||
Stock-based compensation | (2,005 | ) | (2,653 | ) | (7,121 | ) | (7,223 | ) | ||||||||||||
Shareholder lawsuit expenses | (67 | ) | (104 | ) | 9 | (1,367 | ) | |||||||||||||
Insurance reimbursement under D&O policy | — | — | 2,111 | — | ||||||||||||||||
Depreciation expense | (176 | ) | (56 | ) | (521 | ) | (874 | ) | ||||||||||||
Total adjustments to SG&A | (2,248 | ) | (2,813 | ) | (5,522 | ) | (9,464 | ) | ||||||||||||
Non-GAAP selling, general and administrative | 17,163 | 21,312 | 59,775 | 63,463 | ||||||||||||||||
GAAP research and development | 9,924 | 14,420 | 35,333 | 55,252 | ||||||||||||||||
Non-GAAP adjustments to R&D: | ||||||||||||||||||||
Stock-based compensation | (495 | ) | (411 | ) | (1,369 | ) | (1,366 | ) | ||||||||||||
Depreciation expense | (9 | ) | (10 | ) | (15 | ) | (58 | ) | ||||||||||||
Beleodaq milestone cash payment & stock issuance | — | — | — | (17,790 | ) | |||||||||||||||
Other R&D milestone payments | — | — | (3,000 | ) | — | |||||||||||||||
Total adjustments to R&D | (504 | ) | (421 | ) | (4,384 | ) | (19,214 | ) | ||||||||||||
Non-GAAP research and development | 9,420 | 13,999 | 30,949 | 36,038 | ||||||||||||||||
GAAP amortization and impairment of intangible assets | 6,919 | 7,042 | 27,857 | 17,763 | ||||||||||||||||
Non-GAAP adjustments to amortization and impairment of intangible assets: | ||||||||||||||||||||
Amortization expense | (6,919 | ) | (7,042 | ) | (20,697 | ) | (17,763 | ) | ||||||||||||
Impairment of FUSILEV distribution rights | — | — | (7,160 | ) | — | |||||||||||||||
Total adjustments to amortization and impairment of intangibles | (6,919 | ) | (7,042 | ) | (27,857 | ) | (17,763 | ) | ||||||||||||
Non-GAAP amortization and impairment of intangibles | — | — | — | — | ||||||||||||||||
GAAP loss from operations | (16,074 | ) | (4,127 | ) | (37,769 | ) | (29,937 | ) | ||||||||||||
Non-GAAP adjustments to loss from operations | 9,671 | 10,276 | 28,082 | 46,441 | ||||||||||||||||
Non-GAAP income (loss) from operations | (6,403 | ) | 6,149 | (9,687 | ) | 16,504 | ||||||||||||||
GAAP total other expenses, net | (2,728 | ) | (3,935 | ) | (8,826 | ) | (10,552 | ) | ||||||||||||
Realized gain on TopoTarget shares | — | (2,217 | ) | — | (2,219 | ) | ||||||||||||||
Market-to-market of contingent consideration | (81 | ) | 181 | 565 | 1,910 | |||||||||||||||
Loss on foreign currency exchange | 30 | 3,863 | 1,049 | 4,469 | ||||||||||||||||
Accretion of discount on 2018 Convertible Notes | 1,326 | 1,224 | 3,895 | 3,556 | ||||||||||||||||
Total adjustments to other expense, net | 1,275 | 3,051 | 5,509 | 7,716 | ||||||||||||||||
Non-GAAP total other expenses, net | (1,453 | ) | (884 | ) | (3,317 | ) | (2,836 | ) | ||||||||||||
GAAP benefit (provision) for income taxes | 78 | (3,477 | ) | (37 | ) | (2,254 | ) | |||||||||||||
Adjustment to benefit (provision) for income taxes | (78 | ) | 3,477 | 37 | 2,254 | |||||||||||||||
Non-GAAP benefit (provision) for income taxes | — | — | — | — | ||||||||||||||||
GAAP net loss | (18,724 | ) | (11,539 | ) | (46,632 | ) | (42,743 | ) | ||||||||||||
Total non-GAAP adjustments | 10,868 | 16,804 | 33,628 | 56,411 | ||||||||||||||||
Non-GAAP net (loss) income | $ | (7,856 | ) | $ | 5,265 | $ | (13,004 | ) | $ | 13,668 | ||||||||||
Non-GAAP (loss) income per share: | ||||||||||||||||||||
Basic | $ | (0.12 | ) | $ | 0.08 | $ | (0.20 | ) | $ | 0.21 | ||||||||||
Diluted | $ | (0.12 | ) | $ | 0.07 | $ | (0.20 | ) | $ | 0.17 | ||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||
Basic | 65,855,727 | 64,765,072 | 65,457,060 | 64,369,466 | ||||||||||||||||
Diluted | 65,855,727 | 79,473,994 | 65,457,060 | 79,166,593 |
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Vice President,
Strategic Planning & Investor Relations
702-835-6300
InvestorRelations@sppirx.com
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