HENDERSON, Nev. ( TheStreet) -- Spectrum Pharmaceuticals (SPPI) said Thursday that it hasn't cut the price of its colon cancer drug Fusilev but the company still refuses to explain why reported Fusilev sales are not keeping pace with increases in unit volume.
A logical answer is that Spectrum has increased the size of discounts, rebates and other financial incentives to doctors so that they'll prescribe more Fusilev. In fact, Spectrum's 10-Q for the second quarter filed with the Securities and Exchange Commission shows a marked increase in discounts and rebates, all of which lower the effective, net selling price of Spectrum's drugs, including Fusilev.
Spectrum is selling more Fusilev -- no one disputes that -- but net sales appear lower than expected because of discounting.
"Misleading reports suggesting marked decrease in pricing are erroneous and grossly misrepresent the company's Fusilev growth statregy. Spectrum has not reduced prices and Fusilev continues to show growth through new accounts and reorders," Spectrum said today in a statement, apparently in response to my story published Tuesday detailing the company's Fusilev discounting.That's a strongly worded statement but it doesn't address the relevant questions. If Spectrum wants to be transparent about its Fusilev growth strategy, the company could disclose gross and net sales of the drug every quarter. Alternatively, how about continuing to report net sales but also disclosing the gross-to-net discount every quarter? This is relevant information that other drug companies report to investors on a regular basis, so Spectrum could easily do the same.
>To contact the writer of this article, click here: Adam Feuerstein. >To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein. >To submit a news tip, send an email to: email@example.com. Follow TheStreet on Twitter and become a fan on Facebook.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV