Spectrum Pharmaceuticals (SPPI - Snapshot Report) recently acquired global development and commercialization rights to Ligand Pharmaceuticals Inc’s (LGND - Snapshot Report) Captisol-enabled, propylene glycol-free (PG-free) melphalan. Captisol-enabled melphalan is currently being developed as a conditioning treatment before autologous stem cell transplant for patients suffering from multiple myeloma.
Ligand Pharma will be receiving a license fee, milestone payments and royalties from Spectrum Pharma following potential commercialization of the candidate. Spectrum Pharma will now be responsible for the ongoing pivotal clinical study on the candidate. The company expects to file a New Drug Application (NDA) with the US Food and Drug Administration (FDA) in the first half of 2014.
The news is encouraging for Spectrum Pharma. The deal will add another late-stage program to Spectrum Pharma’s portfolio. The company already has belinostat and apaziquone in its late stage program.
Spectrum Pharma expects to file an NDA for its peripheral T-cell lymphoma candidate, belinostat, around mid-2013 and expects to commercialize the candidate in 2014, provided it gains FDA approval. The company also expects to file an NDA for oncology candidate apaziquone in 2014.
We, however, remain concerned about the company’s financial guidance for 2013. In its recently announced financial guidance for 2013. Spectrum Pharma noted that its metastatic colorectal cancer (mCRC) drug, Fusilev, will generate revenues of around $80−$90 million in 2013.
In 2012, Spectrum Pharma had recorded total Fusilev sales of $204.3 million. But the company expects that sales in 2013 will be impacted by the shifting of hospitals to generics. However, clinical segment sales are expected to be stable and the company believes this segment will continue to grow.
The company’s total revenues for the year are expected in the range of $160 million to $180 million, whereas it recorded $267.7 million of total revenue in 2012.
Spectrum Pharma, a biotechnology company, currently carries a Zacks Rank #4 (Sell). Presently, other biotech companies like Cytokinetics Inc. (CYTK - Snapshot Report) and Agenus Inc (AGEN - Snapshot Report) look more attractive. Cytokinetics carries a Zacks Rank #1 (Strong Buy), while Agenus carries a Zacks Rank #2 (Buy).