What is SPPI really worth? (SPPI)

[Michael]

Have a look at the daily and weekly chart of SPPI:






The runaway gap under huge volume is due to good results from several of their drugs candidates:

Positive Results of Satraplatin Pivotal Phase 3 Trial in Patients with Hormone-Refractory Prostate Cancer

  Positive Phase 2 Data with Ozarelix in Patients with Benign Prostatic Hypertrophy

  Phase 2 Data for Ozarelix in Hormone-Dependent Prostate Cancer

This has pushed the stock up to the strong resistance at 5.5 but will this run have enough power to break through 

SPPI's market cap is $134 million they have $55 million in cash and short-term investments. The latest result from the Satraplatin phase III trial means that they can expect additional $58 million in milestone payments and they are also expecting $10 million in milestone payments from PAR pharmaceuticals on Generic drugs.

Add the cash together and the pipeline seems very cheap. That is surprising because the company has several interesting drugs in late stage development. Three drugs expected to be launched in 2007 and one in 2008.





These drugs are all targeting indications with a large market potential and have all shown promising results in the Phase II and III trials.

Most of the drugs in the pipeline are developed in Partnership with other pharmaceuticals and the royalty payments has in most cases not been published so it is obviously it is difficult to estimate the future revenue from the drug candidates. Management has hinted that they will receive royalties in the low teens for Satraplatin and I would expect that they would receive similar payments for the other drugs. A very rough estimate of royalty payments/revenue from their 3 leading drugs would be in the area of $100 million.

The analysts covering the stock have targets between $10 and $13 and this doesn't seem overly optimistic.

Short-term we need to break through 5.5 and this might take a few trials so if you like the stock I would build a position between 5.0 and 5.5.

Disclaimer: I like the stock  and am already invested.

[Terliso]

Applause Mike good call...   I'll take a position on SPPI on the touch of 9SMA.

thanks mike

[Terliso]

SPPI

[la-onda]

Business Week update:

Spectrum Has A Rosy Glow
By Gene G. Marcial
Gene Marcial

Sudden SpurtWhen Spectrum Pharmaceuticals (SPPI) (SPPI) announced on Sept. 25 that results from the Phase 3 trials of its Satraplatin were "positive," its shares bolted from 3.49 to 5 in a day--and are now at 5.34. Satraplatin is platinum-based chemotherapy taken orally for hormone-resistant prostate cancer. After the stock's jump, some warn there may be limited room to run. Not so, says Ren Benjamin of Rodman & Renshaw, who rates it "outperform," with a 12-month target of 13. Based on early results and the timeline for accelerated approval, he says, Satraplatin may be launched in the U.S. in the third quarter of 2007. Assuming world sales of $500 million a year, Benjamin figures Spectrum's royalties from partners GPC Biotech and Pharmion (PHRM ) will total $50 million by 2012. But he says the price doesn't yet reflect Spectrum's other products, such as Ozarelix for enlarged prostates. On Oct. 2, Spectrum announced that Phase 2 trials for Ozarelix were "significantly positive." The trials, held in Europe with partner Æ terna Zentaris, had "an excellent safety profile" in treating benign prostatic hypertrophy, says CEO Rajesh Shrotriya.
Megan Murphy of Lazard Capital Markets, who rates Spectrum a "buy," has a 12-month price target of 10.

http://www.businessweek.com/magazine/content/06_42/b4005127.htm?chan=search

[Terliso]

I'll take a position on SPPI on the touch of 9SMA.

SPPI now touched the 9sma

[Terliso]

I got this message from yahoo board....


SPPI has 3 drugs ready for launch during 2007. This means a positive cash flow and earnings per share are very probable for late 2007 and really make a difference for 2008. Therefore, I recommend call options for Jan 2007, at a $7.50 strike price. I own 30 contracts (3,000 shares at 100 shares per contract. I paid $0.15/share last week with the stock trading at $5.33/share. Now at $5.50 they last traded at .20/share or a 33% profit. When SPPI reaches $7.50, the strike price, the call option will be worth about $2.32 and 30 contracts will be worth $6,900.

I only paid $450 for the 30 contracts. That is a profit of 6,960-450=$6,510. If the price hits $12.00 in December, the call will sell for $6.82, $20,400.

I also believe in the LEAPS or long term call options and will be buying a lot more and you should consider them... if you believe in the future of this stock.

I also bought Jan 2009 calls and bought the $1.75 call at a $7.50 strike price while the stock was trading at $5.33. When the stock hits $30/share in 2008, my call will be worth about $27.62! I own 5 contracts (500) shares. I love this opportunity to really hit a home run.

Good luck fellow investors. I hope this info is profitable for you. I do have a vested interest as you know, so the more you buy, the faster my options as well as yours will go up, as the stock price goes up. This is the fastest way to profit from a sure thing. 

[Michael]

Hi Oliver and Terliso

SPPI looks great. It starts to be portfolio material (where is Ramsburg when you need him )

Fundamentally it is a steal here and it seems like we might break the longterm resistance at 5.5 today.

We will see where this move will take us.....

[la-onda]

in @ 5.68 $ 

[Terliso]

Hi Oliver and Terliso

SPPI looks great. It starts to be portfolio material (where is Ramsburg when you need him )

Fundamentally it is a steal here and it seems like we might break the longterm resistance at 5.5 today.

We will see where this move will take us.....

Yeah.... I start to wonder why SPPI is not in the portpolio

[Michael]

Welcome in the club Oliver 

What a finish! We not only broke through 5.5 but ended the day at 52 week high right at the top of the candle.

[la-onda]

I have bought more on the pullback 

beginning of November new conference:
http://www.rodmanandrenshaw.com/Conferences.asp?CID=conf19&ACT=presenters&BGCOLOR=wht

[la-onda]

SPPI short update:
...
SPECTRUM PHARMA I (NASDAQ:SPPI) has had 15794405 shares shorted at a volume weighted average short price of $5.840. $63,177,620.00 was shorted at this level and may begin short squeezing imminently. This represents a portion of the total short volume since January 2005. To see all the data, please visit SqueezeTrigger.com . As of September 10th, the Total Short Interest was 1369676 shares. There are $7,998,907.84 worth of shares that have been shorted and have not yet covered. Go to www.SqueezeTrigger.com to find out the exact price that the entire Total Short Interest will start covering!

http://www.financialrealtime.com/stocks/stock-alerts/market720481.html;jsessionid=AA94117D7C2EB1BE03D07C37921F8A67

Next earning release on 2nd of November !

http://www.financialrealtime.com/stocks/earnings-news/n723162.html;jsessionid=AA94117D7C2EB1BE03D07C37921F8A67

[la-onda]

Spectrum Pharmaceuticals Announces Third Quarter 2006 Financial Results and Pipeline Update
Friday November 3, 7:00 am ET
- Ends Third Quarter With Approximately $50 Million and Approximately 25 Million Shares Outstanding
Conference Call Today, November 3, 2006 at 12:00 p.m. Eastern Time (9:00 a.m. Pacific Time)
Domestic: 866.510.0712 International: 617.597.5380 Passcode: 70365629 Webcast at www.spectrumpharm.com

IRVINE, Calif., Nov. 3 /PRNewswire-FirstCall/ -- Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI - News) today reported results for the third quarter ended September 30, 2006.

For the third quarter of 2006, Spectrum Pharmaceuticals recorded a net loss of approximately $7.4 million, or approximately $0.30 per share, compared to a net loss of approximately $5.2 million, or approximately $0.32 per share, in the third quarter of 2005. The net cash used in operations during the nine-months ended September 30, 2006 and 2005 was approximately $13.3 million and $11.1 million, respectively. The net cash used in operations for the third quarter of 2006 was approximately $4.4 million. As of September 30, 2006, the Company had cash, cash equivalents and marketable securities of approximately $50 million.

    Spectrum's Third Quarter Highlights

    -  Reported positive results in the pivotal Phase 3 trial of satraplatin
       as a second-line treatment for patients suffering from hormone
       refractory prostate cancer (HRPC).  The trial, evaluating satraplatin
       plus prednisone versus placebo plus prednisone showed that the
       satraplatin arm provided highly statistically significant results
       (p<0.00001) for progression free survival in patients suffering from
       HRPC using the protocol-specified log-rank test.

    -  Initiated a Phase 2 trial of satraplatin in combination with
       Tarceva® in patients suffering from inoperable, advanced, non-small
       cell lung cancer by our partner, GPC Biotech AG.

    -  Reported favorable Phase 2 results of Spectrum's proprietary drug,
       ozarelix, in patients suffering from Benign Prostate Hypertropy (BPH).
       The results were highly statistically significant (p<0.0001) in
       improving clinical symptoms of BPH as measured by the International
       Prostate Symptom Score (IPSS), the standard method of assessing BPH
       symptoms and the primary endpoint of the study.  Other efficacy
       endpoints of the study, such as urine flow, residual urine volume, and
       quality of life were also met.  In addition, the drug had an excellent
       safety profile.

    -  Partner AEterna Zentaris entered into an agreement with Nippon Kayaku,
       a key player in the Japanese oncology market, for the development and
       marketing of ozarelix for all potential oncology indications in Japan.
       Under Spectrum's license agreement with AEterna Zentaris, Spectrum is
       entitled to receive fifty percent of the upfront and milestone payments
       and royalties AEterna Zentaris' receives under this agreement with
       Nippon Kayaku.

"This quarter has been pivotal for Spectrum. We achieved significant milestones in two of our late-stage programs, including positive Phase 3 results for satraplatin in patients with hormone refractory prostate cancer and favorable Phase 2 results for ozarelix in patients with benign prostate hypertrophy," stated Rajesh Shrotriya, M.D., Chairman, President and Chief Executive Officer of Spectrum Pharmaceuticals. "These events validate our business model of acquiring undervalued compounds with the potential to significantly improve people's lives, and fuel additional growth for the company. With positive Phase 3 satraplatin data in hand, we are closer to receiving significant milestone payments and royalties on sales, which we will use to enhance shareholder value by advancing the development of our proprietary pipeline of drugs, including EOquin(TM) and ozarelix."

    2006 and 2007 Events and Milestones

    -  Sumatriptan injection patent litigation trial with GlaxoSmithKline is
       set for November 13, 2006.  If there is a successful ruling by the
       court, Spectrum could launch sumatriptan injection with our partner,
       PAR Pharmaceutical, in the second half of 2007.

    -  Host an Analyst & Investor Day on November 28, 2006 at 4:00 p.m. ET at
       the Intercontinental-Barclays in New York City.

    -  Finalize a Special Protocol Assessment (SPA) with the FDA for the Phase
       3 trial of EOquin as a treatment for superficial bladder cancer and
       subsequently initiate the Phase 3 trial.

    -  Our partner, GPC Biotech AG, completes a New Drug Application (NDA)
       filing for satraplatin in patients with hormone refractory prostate
       cancer.  Spectrum will receive a milestone payment upon acceptance of
       the NDA by the FDA.

    -  Develop a Phase 3 trial protocol with the FDA for ozarelix in patients
       suffering from benign prostate hypertrophy and initiate a Phase 3 trial
       in this indication in 2007.

    -  Obtain approval of satraplatin in mid-2007 and launch satraplatin soon
       thereafter.

    -  Respond in early 2007 to certain chemistry and manufacturing questions
       relating to the NDA for LFA; obtain approval thereafter and launch in
       the second half of 2007.

Spectrum reported $92,000 in revenues for the quarter ended September 30, 2006 compared to $184,000 in revenues in the quarter ended September 30, 2005. Research and development expenses increased by approximately $2.5 million, from approximately $3.3 million in the three-month period ended September 30, 2005 to approximately $5.8 million in the three-month period ended September 30, 2006, due to the expanded scope of the company's research and development activities, including an increase in the number of personnel in preparation for Phase 3 trials for EOquin(TM) and ozarelix. General and administrative expenses decreased by approximately $0.7 million to approximately $1.5 million in the three-month period ended September 30, 2006 compared to approximately $2.2 million in the same period last year. The decrease in general and administrative expenses is primarily due to a decrease in legal expense in connection with the lawsuit regarding our patent challenge of GlaxoSmithKline's Imitrex® injection.

Stock-based charges increased by approximately $0.5 million from approximately $0.2 million in the three-month period ended September 30, 2005 to approximately $0.7 million in the three-month period ended September 30, 2006. This increase is primarily due to our adoption of SFAS 123®, effective January 1, 2006.

updated presentation:
http://www.spectrumpharm.com/documents/1106_Company_Presentation.pdf

[la-onda]

yahoo board quotation:
GlaxoSmithKline (GSK) has filed a patent infringement lawsuit in federal court against Spectrum Pharmaceuticals to prevent Spectrum from developing a generic version of GSK's migraine drug Imitrex.

GSK filed suit in the U.S. District Court for the District of Delaware to meet the required 45-day window called for under the Hatch-Waxman Act. Under Hatch-Waxman, if an abbreviated new drug application (ANDA) applicant files a Paragraph IV certification and notifies the patent holder, the patent holder has 45 days to sue the applicant for infringement.

Spectrum initiated a challenge to GSK's Imitrex (sumatriptan succinate) injection in 6 mg/0.5 mL doses when it filed an ANDA with a Paragraph IV certification in October 2004. The FDA notified Spectrum that it had received the Paragraph IV certification in January. GSK's patent on Imitrex is set to expire Feb. 6, 2009.

Moving forward to you question, the Sumatriptan injection patent litigation trial with GlaxoSmithKline is set for November 13, 2006. According to investor relations, a successful ruling by the court could result in SPPI's launch of a Sumatriptan injection with its partner, PAR Pharmaceutical, in the second half of 2007. I can tell you from personal experience, that very few civil suits go to trial, and even those that do, often settle before a trier of fact makes its findings. I will not be at all surprised to see news of a settlement any day. The costs of trial preparation can be very high. While both sides are likely using this fact to secure their negotiation positions, news in the next week or so is likely IMO. Read what you will into today's share price increase.

The issues, as I see them, are (1) whether SPPI can negotiate a settlement that is well accepted by the market (or at least is able to put a very positive spin on any deal reached); and, the actual long-term value of the deal to share-holders. The obvious down-side is a loss at trial would do more harm that just the loss of potential additional revenue. Alternatively, a clear victory at trial should give us a good boost.

Michael, any comments from your side?

cheers
Oliver

[Michael]

Michael, any comments from your side?

GSK recently settled with RDY for the tablet version of Imitrex so yes a settlement is likely. When that is said Imitrex is not key for the valuation of Spectrum even though it would have a positive effect if they settled or if they won the court case. The Imitrex patent expires in the start of 2009 so a settlement would at best move the commercial launch forward with a year. (in the case of RDY 4-5 months).

Spectrums real value lay in their proprietary pipeline of drugs like Satraplatin, LFA, Ozaralix and EOquin all of them in late stage trials.

There are several key announcement to look forwardin the coming year:

• Finalize a Special Protocol Assessment (SPA) with the FDA for the Phase 3 trial of EOquin as a treatment for superficial bladder cancer and subsequently initiate the Phase 3 trial.
• GPC Biotech AG, to complete a New Drug Application (NDA) filing for satraplatin in patients with hormone refractory prostate cancer.  Spectrum will receive a milestone payment upon acceptance of the NDA by the FDA.
• Develop a Phase 3 trial protocol with the FDA for ozarelix in patients suffering from benign prostate hypertrophy and initiate a Phase 3 trial in this indication in 2007.
• Obtain approval of satraplatin in mid-2007 and launch satraplatin soon thereafter.
• Respond in early 2007 to certain chemistry and manufacturing questions relating to the NDA for LFA; obtain approval thereafter and launch in the second half of 2007.