Spectrum Pharmaceuticals reports consolidated revenues of $7.1M for the third quarter of 2009

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Nov 12 2009

Spectrum Pharmaceuticals, Inc. (NasdaqGM: SPPI), a commercial-stage biotechnology company with a primary focus in oncology, today reported financial results for the third quarter ended September 30, 2009.

“During the quarter, we made significant progress toward stabilizing, and ultimately growing, ZEVALIN^® sales revenue, even before its September 3^rd approval in the first-line setting,” said Rajesh C. Shrotriya, MD, Chairman, Chief Executive Officer, and President of Spectrum Pharmaceuticals. “We believe the sales stabilization in the third quarter is a direct result of our concerted efforts to remove many of the barriers that have hindered ZEVALIN’s use in the hospital and community settings. We continue to remain optimistic about ZEVALIN’s growth prospects, as ZEVALIN has received a Category 1 recommendation from the National Comprehensive Cancer Network^® Drugs and Biologic Compendium™, we have significantly expanded our sales force, ZEVALIN received a label expanding approval in September, and we have made great progress toward a streamlined reimbursement standard for this important therapeutic.”

Third Quarter Results Ended September 30, 2009

Consolidated revenue of $7.1 million was comprised of product sales of $5.0 million – $4.7 million from ZEVALIN and $0.3 million from FUSILEV^® – and $2.1 million attributable to the amortization of the Allergan licensing fee. This compares to no similar revenue in the same period in 2008. The Company recorded a net loss of $8.4 million, or ($0.20) per share, compared to net loss of $8.8 million, or ($0.28) per share, in the third quarter of 2008. Total research and development expenses were $5.5 million, as compared to $6.0 million in the same period of 2008, a $0.5 million, or 8.3% decrease, mainly due to sharing by its partner, Allergan Inc., of apaziquone related development costs, and a reduction in costs related to other pipeline products. Selling, general and administrative expenses were $7.0 million, a $3.9 million increase, compared to the $3.1 million in the same period in 2008, attributable to the direct cost of commercialization activities of ZEVALIN and FUSILEV and related payroll costs.

Nine-Month ResultsEnded September 30, 2009

Consolidated revenue of $29.4 million was comprised of product sales of $23.0 million – $10.6 million from ZEVALIN and $12.4 million from FUSILEV – and $6.4 million attributable to the amortization of the Allergan licensing fee. This compares to $20.7 million of one-time, non-recurring revenue in the same period of 2008 from the sale of rights to certain non-core products. The Company recorded a net loss of $17.5 million, or ($0.48) per share, compared to a net loss of $6.8 million, or ($0.22) per share, in the same period of 2008. Research and development expenses were $17.5 million, as compared to $19.1 million in the same period of 2008, a $1.6 million, or 8.4% decrease, mainly due to sharing by its partner, Allergan Inc., of apaziquone related development costs, and a reduction in costs related to other pipeline products. Selling, general and administrative expenses were $22.5 million, a $13.6 million increase, compared to the $8.9 million in the same period in 2008, attributable to the commercialization of ZEVALIN and FUSILEV and related payroll costs.

Net cash used in operations in the nine month period ended September 30, 2009 was $7.1 million. The operating cash outflows are primarily attributable to higher selling, general, and administrative expenses, substantially mitigated by revenues from ZEVALIN and FUSILEV and the participation by Allergan Inc. in apaziquone related development expenses.

During the third quarter ended September 30, 2009, the Company sold 6.6 million shares of common stock for $50 million in gross proceeds. As of September 30, 2009, the Company had cash and short term investments of $143 million, compared to $106 million as of June 30, 2009. As of September 30, 2009, the Company had 48.7 million shares issued and outstanding.

Company Achievements and Milestones

ZEVALIN^®

Approved by FDA in 1^st Line Setting on September 3, 2009;
Received Average Sales Price (ASP) methodology in the Hospital Outpatient Prospective Payment System (HOPPS), effective January 1, 2010;
Achieved Sales Stabilization in 3Q09;

Apaziquone

Signed a collaboration agreement with Nippon Kayaku for Asian territories
- Total potential value of collaboration exceeds $151 million;
- Spectrum to receive an upfront payment of $15 million, up to $136 million in milestones, and royalties;
- Nippon Kayaku responsible for 100% of development and commercial expenses;
- Spectrum retains commercial rights to South Korea.
Complete enrollment in ongoing phase 3 registrational trials by year end
- Enrolled 1,500 patients to date.

FUSILEV^®