This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Spectrum Pharma: Zevalin Bubble Deflates

HENDERSON, Nev. ( TheStreet) -- Spectrum Pharmaceuticals (SPPI - Get Report) has a (shrinking) Zevalin problem.

First-quarter sales of the non-Hodgkin's lymphoma drug totaled $5.9 million, which means sales fell 9% from the first quarter last year. More worrisome is that Zevalin sales fell 26% sequentially, making this quarter the first in two years where Zevalin sales did not grow, even just a little.

The last time Zevalin sales dipped below $6 million in a quarter was December 2009.

Spectrum shares were down $1.06, or 12%, to $8.05 in early Wednesday trading.

Spectrum offered no explanation in its earnings release or 10-Q for the decline in Zevalin sales, so hopefully management addresses the issue on its conference call later this afternoon.

In its earnings pre-announcement last week, Spectrum management said it expected Zevalin sales "to grow gradually over time." Regression, not gradual growth, was the measure in the first quarter.

Zevalin is a monoclonal antibody that seeks out and attaches itself to cancer cells. But unlike other such drugs, Zevalin carries a radioactive payload designed to kill the cancer cells while leaving neighboring healthy cells intact. Zevalin was the first in a new class of "radio-immunotherapies" approved by the FDA.

Unfortunately, the technology the makes Zevalin so effective also makes it complicated to administer to patients and difficult to sell. Idec Pharmaceuticals, the company that developed Zevalin, didn't have much luck and neither did Biogen Idec when it acquired Idec. After that, Zevalin was sold to Cell Therapeutics, which couldn't market the drug effectively. Now, it's Spectrum's turn.

Spectrum has applied to the U.S. Food and Drug Administration for approval to lift a requirement that patients undergo a pre-treatment "bioscan" before Zevalin is administered. The company hopes that this will make it more convenient to treat patients with Zevalin and boost sales. An FDA decision on lifting the bioscan requirement is set for Nov. 20.

Zevalin is the key growth driver for Spectrum, which is why first-quarter's lackluster sales of the cancer drug are overshadowing what was, in all other respects, a very good financial performance.

Spectrum earned 23 cents a share in the quarter on total revenue of $43.6 million, topping the consensus analyst estimate by a wide margin. However, Spectrum's pre-announcement of better-than-expected revenue last week meant investors already knew about the outperformance.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
SPPI $7.08 -1.10%
AAPL $93.75 -1.10%
FB $117.53 0.69%
GOOG $693.00 0.29%
TSLA $240.76 -2.81%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs