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Momentum

Michael Vodicka

Spectrum Pharmaceuticals, Inc.

SPPI

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Spectrum Pharmaceuticals, Inc. (SPPI - Snapshot Report) has been a big winner in 2011, recently hitting a new all-time high after reporting strong Q1 results that came in well ahead of expectations. With estimates on the rise and high industry rank, this Zacks #1 Rank stock has plenty of momentum.

Company Description

Spectrum Pharmaceuticals, Inc. operates as a commercial stage biotechnology company with an emphasis in oncology and hematology. The company was founded in 1987 and has a market cap of $523 million.

Although shares were a bit volatile on the news, Spectrum stepped up and reported strong Q1 results in early May that came in well ahead of expectations.

First-Quarter Results

Revenue for the period was up more than four times since last year to $44 million. Earnings also came in strong at 33 cents, blowing past the Zacks Consensus Estimate calling for earnings of one cent.

The good quarter was driven by an impressive performance from FUSILEV (levoleucorin), where sales jumped to $35 million from $600,000 last year as the FDA builds on its original approval of the drug for domestic distribution from 2008.

Financial Profile

The company exited the quarter with its strong financial profile well intact, with cash and short-term investments of $80 million against no long-term debt.

Estimates

We saw some very bullish movement in estimates off the good quarter, with the current year jumping to 33 cents from a loss of 35 cents three months ago.

Valuation

Speculative biotech company's tend to trade at a premium, and that's true in this case too, with SPPI's forward P/E of 30X a premium to the market and the industry average.

12-Month Chart

On the chart, SPPI has seen big gains in 2011, recently rebounding from a key trend line to move back within striking distance of the 52-week high at $10.63. Take a look below.

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