NEW YORK (TheStreet) -- Shares of Spectrum Pharmaceuticals, Inc. (SPPI) are up 1.69% to $9.05 after the biotech company announced that the FDA granted Accelerated Approval of Beleodaq for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (PTCL).
An improvement in survival or disease-related symptoms has not been established.
Continued approval for this indication may be contingent upon verification and description of clinical benefit in the confirmatory trial.
TheStreet Ratings team rates SPECTRUM PHARMACEUTICALS INC as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate SPECTRUM PHARMACEUTICALS INC (SPPI) a SELL. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Biotechnology industry. The net income has significantly decreased by 408.6% when compared to the same quarter one year ago, falling from -$5.44 million to -$27.64 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Biotechnology industry and the overall market, SPECTRUM PHARMACEUTICALS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- Net operating cash flow has significantly decreased to -$39.99 million or 284.76% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- SPECTRUM PHARMACEUTICALS INC has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. The company has reported a trend of declining earnings per share over the past two years. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, SPECTRUM PHARMACEUTICALS INC swung to a loss, reporting -$1.01 versus $1.46 in the prior year. This year, the market expects an improvement in earnings (-$0.70 versus -$1.01).
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
- You can view the full analysis from the report here: SPPI Ratings Report