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What Awaits Spectrum Pharmaceuticals (SPPI) in Q4 Earnings?

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Investors are likely to focus on updates related to Spectrum Pharmaceuticals, Inc.'s SPPI commercialization plan for Rolontis, following a potential approval, on fourth-quarter earnings call.

Notably, Spectrum Pharma’s earnings history is mixed with the biotech company outpacing the Zacks Consensus Estimate in two out of the last four quarters and missing the same twice, with the average negative surprise being 10.14%.

Spectrum Pharma’s share price has plunged 75.3% in the past year compared with the industry’s decline of 3.1%.

 

In the last reported quarter, the company delivered a positive earnings surprise of 15.38%.

Let’s see how things have shaped up for this announcement.

Factors to Note

With no marketed products in its portfolio, the company does not generate any revenues. We note that in March 2019, Spectrum Pharma completed the sale of its marketed portfolio to privately-held Acrotech Biopharma for an upfront payment of $158.8 million.

In October 2019, the company re-submitted an updated biologics license application (“BLA”) seeking approval for its most advanced candidate, Rolontis, for the management of chemotherapy-induced neutropenia. We note that the company had voluntarily withdrawn its previously submitted BLA for Rolontis. The FDA accepted the BLA for review in December with a decision expected in October 2020. We expect investors to focus on an update related to commercialization plans for Rolontis, following its potential approval, on its fourth-quarter earnings call.

The company is also evaluating another pipeline candidate, poziotinib, in a mid-stage study as a potential treatment for non-small cell lung cancer.

Regulatory activity related to Rolontis and clinical development of poziotinib are likely to have driven operating expenses higher in the soon-to-be-reported quarter.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Spectrum Pharma this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Spectrum Pharma has an Earnings ESP of 0.00% because both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 22 cents.

Zacks Rank: Spectrum Pharma currently has a Zacks Rank #3.

Stocks That Warrant a Look

Here are some biotech stocks that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat in their upcoming releases.

Vericel Corporation VCEL has an Earnings ESP of +11.29% and a Zacks Rank #1. The company is scheduled to release fourth-quarter results on Feb 25. You can see the complete list of today’s Zacks #1 Rank stocks here.

Immunomedics, Inc. IMMU has an Earnings ESP of +3.37% and a Zacks Rank #2.

AMAG Pharmaceuticals, Inc. AMAG has an Earnings ESP of +31.03% and a Zacks Rank #3.

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