Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) has been one of our better overall coverage stories on this site. There’s always a bit of luck with this sort of thing, but we have been mostly right in the narrative and the swings here, calling for a decline on anything other than perfect data revelations back in September, and then announcing a possible bottom in place in our October 3 piece.

Now, with shares back on the move to the upside, are we seeing cause for a shift in the narrative out of ASH? First off, let’s put the company’s ASH announcement in context.

Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) develops and commercializes oncology and hematology drug products. The main assets at the market include FUSILEV for metastatic colorectal cancer, FOLOTYN for peripheral T-cell lymphoma (PTCL), ZEVALIN injection for patients with B-cell non-Hodgkin’s lymphoma, MARQIBO for adult patients with Philadelphia chromosome-negative acute lymphoblastic leukemia, BELEODAQ injection for PTCL, and EVOMELA for use as a conditioning treatment prior to autologous stem cell transplant in multiple myeloma patients.

As we covered in our last piece, the company is also developing POZIOTINIB for treating breast and lung cancer; ROLONTIS for chemotherapy-induced neutropenia; and QAPZOLA for intravesical instillation in post-transurethral resection of bladder tumors in patients with non-muscle invasive bladder cancer.

The main ASH announcement for the company was on the company’s efforts to show that the use of oral leucovorin (basically a type of folic acid) can help to mitigate problems of oral mucositis (the common tissue swelling the mouth that often accompanies chemo treatments) for those using FOLOTYN for hematological malignancies, including PTCL and CTCL.

This is a marketing issue. If the company could show that there is a simple and accessible way to reduce one of the most common side effects of using FOLOTYN, then it has obvious implications for the drug’s marketability.

So, how’d it go?

It went very well. According to the study, only 5.7% of patients using FOLOTYN with oral leucovorin experienced oral mucositis of Grade 2 or worse (compared to 52% of patients just using FOLOTYN without oral leucovorin).

That has major implications for the marketability of this drug.

“Mucositis is a frequent complication of FOLOTYN therapy, which can cause painful inflammation of the digestive tract. It is often managed by omitting, delaying, or reducing the dose of this medication in some patients,” said Andrei R Shustov, MD, lead investigator, professor of medicine, hematology, University of Washington School of Medicine, and hematologist, Seattle Cancer Care Alliance. “We are excited about how significantly leucovorin was able to reduce the rate of mucositis in patients and believe this study established the foundation for the potential use of leucovorin as a preventive regimen for FOLOTYN patients.”

“While previous studies have established the use of FOLOTYN as an option in relapsed or refractory PTCL patients, mucositis has been an issue that could impact treatment and quality of life,” said Francois Lebel, MD, Chief Medical Officer, Spectrum Pharmaceuticals. “This is the first prospective study to suggest that leucovorin may prevent or reduce oral mucositis. These are welcome findings that merit further studies of leucovorin as an adjunct to FOLOTYN so we can one day provide definitive guidance to physicians to help reduce concerns of FOLOTYN treatment delay or discomfort due to oral mucositis.”

The stock closed above its 50-day simple moving average on Friday into the data and held those gains on Monday. Shares of SPPI are now about 25% above their late October lows.

 

Big Picture Stuff

Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) sells its drugs through group purchasing organizations, wholesalers, and directly in the United States; and through distributors in Europe. Spectrum Pharmaceuticals, Inc. has licensing and development agreement with Cell Therapeutics, Inc.; license agreement with Merck & Cie AG, Sloan-Kettering Institute, and Cydex Pharmaceuticals, Inc.; development and commercialization collaboration agreement with Allergan, Inc.; collaboration agreement with Nippon Kayaku Co., LTD.; licensing and collaboration agreement with Onxeo DK; and co-development and commercialization agreement with Hanmi Pharmaceutical Company.

The company was formerly known as NeoTherapeutics, Inc. and changed its name to Spectrum Pharmaceuticals, Inc. in December 2002.

Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) pulled in sales of $25.3M in its last reported quarterly financials, representing top line growth of -30.6%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($220.6M against $100.9M).

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