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Spectrum Pharmaceuticals (SPPI) Q3 Earnings: What's in Store?

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Spectrum Pharmaceuticals, Inc. is scheduled to report third-quarter 2017 results on Nov. 2 after the market closes.

The company’s track record has been impressive. Spectrum beat estimates in all the trailing four quarters, delivering an average positive surprise of 20.08%. In the last reported quarter, Spectrum delivered a beat of 3.7%.

Spectrum Pharma’s share price has increased 337.3% year to date compared with the industry’s decline of 1.3%.

Let’s see how things are shaping up for this announcement.

Factors at Play

Spectrum's product portfolio comprises six marketed products – Fusilev, Folotyn, Zevalin, Marqibo, Beleodaq and Evomela.

However, Folotyn and Evomela have shown impressive growth and generated nearly 70% of the total sales in the second quarter. The company expects Evomela to continue its strong performance in the to-be-reported quarter. Also, the approval of Folotyn in Japan in July will further boost the top line. Moreover, the approval triggered a milestone payment of $5 million which should boost the topline in the third quarter. The Zacks Consensus Estimate for Folotyn sales stands at $11 million.

Moreover, the company has three advanced candidates in its pipeline – Rolontis, Qapzola and Poziotinib. Spectrum Pharma is also developing Folotyn in combination with Romidepsin as a treatment for relapsed or refractory peripheral T-Cell Lymphoma. During the quarter, the company enrolled the first patient in a phase III study evaluating Qapzola for the treatment of low and intermediate risk non-muscle invasive bladder cancer.

Moreover, it completed enrolling patients in the phase III study, ADVANCE, evaluating Rolontis in patients with breast cancer with chemotherapy-induced neutropenia. Top-line data from the study is expected in the first quarter of 2018. The company expects to file a biologics license application (BLA) next year.

In October, the company initiated a multicenter phase II study evaluating Poziotinib for the treatment of non-small cell lung cancer patients with a genetic mutation involving exon 20.

We expect the company to provide further updates on the studies in its third-quarter earnings call.

Earnings Whispers

Our proven model does not conclusively show that Spectrum Pharma is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate stand at a loss of 23 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Although Spectrum Pharma’s Zacks Rank #3 increases the predictive power of ESP, its 0.00% ESP makes surprise prediction difficult.

Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some healthcare stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Clovis Oncology, Inc. is scheduled to release results on Nov 1 after the market close. The company has an Earnings ESP of +2.01% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Myriad Genetics, Inc. (MYGN - Free Report) has an Earnings ESP of +1.04% and a Zacks Rank #2. The company is scheduled to release results on Nov 7.

Syndax Pharmaceuticals, Inc. (SNDX - Free Report) has an Earnings ESP of +2.9% and a Zacks Rank #3. The company is expected to release results on Nov 9.

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