Back to top

Analyst Blog

Spectrum Pharmaceuticals, Inc. (SPPI - Snapshot Report) recently launched its newly acquired drug, Marqibo, in the U.S. Marqibo is approved in the U.S. for the treatment of adults suffering from Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed after being treated with two or more anti-leukemia therapies.

Marqibo is also being developed in two phase III studies in indications including non-Hodgkin's lymphoma.

We note that Spectrum Pharma gained worldwide rights to Marqibo following the completion of the acquisition of California-based Talon Therapeutics. In Jul 2013, Spectrum Pharma acquired Talon Therapeutics for an upfront cash consideration of $11.3 million.

Apart from the upfront cash payment, Spectrum Pharma also issued 3 million shares of its common stock to Talon stockholders to cancel out the outstanding indebtedness under Talon's credit facility. The shareholders of Talon are also entitled to receive contingent value rights (CVRs) of up to $195 million in cash payments on achieving certain milestones related to Talon’s Marqibo and Menadione Topical Lotion.

Menadione Topical Lotion was added to Spectrum Pharma’s pipeline following the acquisition. The candidate is being developed for the treatment of skin toxicity. The transaction also added brakiva and alocrest to Spectrum Pharma’s pipeline. These are liposomal versions of approved anti-cancer drugs.

The same sales force, which currently sells Spectrum Pharma’s Folotyn and Zevalin, is being utilized for Marqibo. Folotyn and Zevalin are currently approved for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (PTCL) and non-Hodgkin's lymphoma (NHL), respectively. Folotyn and Zevalin contributed around $12.6 million and $6.8 million, respectively, to Spectrum Pharma’s total revenues in the second quarter of 2013. We expect investor focus to remain on Marqibo going forward.

Spectrum Pharma currently carries a Zacks Rank #4 (Sell). Other stocks like Biogen Idec Inc. (BIIB - Analyst Report), Gilead Sciences Inc. (GILD - Analyst Report) and Actelion Ltd. (ALIOF) presently look more attractive with a Zacks Rank #1 (Strong Buy).

Please login to Zacks.com or register to post a comment.