Her er mine foreløbige konklusioner og iagttagelser. Der kommer nok mere til når jeg lige får det ind på livet. Men jeg er stadig meget positivt. Især i forhold til nuværende aktiekurs.

Først om regnskabet:

De havde en omsætning stort set på niveau med sidste kvartal (dog indregnet en del Folotyn). Deres Omsætning er steget ifht. samme kvartal sidste år med 37 % og deres EPS er på 0,33 mod 0,34 året inden. Dette skal ses i forhold til at der er brugt 5-6 mio. $ i ekstraomkostninger vedrørende afskedigelser og advokat og revisorregninger vedrørende Allos og Bayer aftalerne i dette kvartal.

De har i 3 kvartaler i 2012 lavet en EPS på 1,32 hvilket modsvarer en P/E på 8 ved nuværende kurs. Og her er ikke indregnet Q4 endnu. Deres EPS for dette Q fraregnet ekstraomkostninger ville være på 0,42 eller 1,68 annualiseret. Dette svarer til en P/E på 6,42. Deres EPS kommer til at stige i 2013 i takt med at de strømliner Allos købet, hæver omsætningen og opnår synergier. Jeg spår 2-2,5 i EPS for 2013 svarende til P/E på 4,32-5,42. Det er ret unikt med den store pipeline de har og de vækstmuligheder. Har aldrig set noget lignende. Deres Cash flow i dette Q har ligeledes været imponerende. De har stadig 235 mio. $ i Cash efter Allos handlen på 130 mio. $. Dog har de nu en gæld på 75 mio. $.

Herefter den mere spændende CC:

Det første jeg hørte ved CC var negativt da jeg hørte de aktuelle salgstal opdelt på produktet. Disse viste en tilbagegang for Fusilev fra 56 til 52 mio. $ og for Zevalin fra 9 til 8 mio. $. Omvendt omsatte Folotyn for 6 mio. $ fra 5/9 til 30/9. Heraf dog 3 mio. $ bulksalg til kliniske studier.

Fusilev:

Fusilev salget er faldet lidt i dette kvartal til 52 mio. $ fra historisk høje 56 mio. $ i sidste kvartal. Jf. SPPI er nedgangen dette kvartal dog kun et resultat af flukationer og den reelle ordreindgang på Fusilev er steget 13 % i dette kvartal sammenlignet med sidste kvartal. Endnu mere spændende er det at de nu 31 % i markedsandel er opnået ved kun at kontakte 40 % af alle lægerne (dog 40 % af de største). Værd at bemærke er at 75 % af alle lægerne siger at de INGEN problemer har med at få adgang til generisk leucovorin. På trods af dette har SPPI altså en markedsandel på 31 % ved kun at kontakte 40 % af markedet. Det viser at lægerne foretrækker Fusilev fremfor generisk Leucovorin, og at man ikke skal bekymre sig så meget omkring om producenterne af generisk leucovorin begynder at masseproducere igen. Det vil ikke smadre Fusilev salget.

Jeg citerer Ken Keller her:

“Because of changes in buying patterns, there can be some fluctuation in FUSILEV sales as we saw this quarter. Importantly, FUSILEV demand remains strong despite readily available supplies of generic leucovorin. Market research shows that 75% of physicians say that generic leucovorin is available without difficulty. It is clear that physicians are continuing to choose FUSILEV even when other options are available.

This quarter, there was a 13% increase in the number of accounts ordering FUSILEV. When I look at market penetration over the past 12 months, FUSILEV penetration is up from 29% in the last quarter to 31% in this quarter, and we believe there is room for improvement. The recent market survey suggested that 60% of physicians treating colorectal cancer patients have not yet been contacted by a Spectrum sales representative. We can, and we will change that.”

Noget andet der er værd at bemærke ved Fusilev er at Raj nævner disse flukationer i salget kvartal efter kvartal som vil komme (fordi de store community setting køber ind til lagre). Det de fokuserer på SPPI er hvordan udviklingen (account order) er hos slutbrugeren. Spændende i forhold til den fremtidige vækst.

Raj: “Adnan, as we said in the past, net sales will fluctuate based on timing of orders from wholesalers. What we want to monitor very closely is underlying end-user demand. Underlying demand is stable. In fact, the number of accounts order in Q3 was the highest ever as stated by Ken.”

Herudover nævner han at når de sælger til sygehuse mv. er det til en noget lavere pris end når de sælger til community settings (som bliver reimburset godt) dette kan påvirke marginer nogle kvartaler.

Sidst men ikke mindst vedrørende Fusilev vil jeg henvise til historikken omkring Fusilev. Hvorfor salget tidligere (2009-2011) svingede en del, og hvorfor det fremadrettet ikke vil gå ned pga. generics:

Raj: “So Difei, actually, your observation is not quite correct. Actually, it’s wrong. The only time the sales of FUSILEV went down was before Spectrum got approval for colorectal cancer. That’s before April 2011. If you go back and look, FDA had given us a special permission to promote drug, sell drug for CRC before we got approval in 2010. Sales went down because we couldn’t promote it. We couldn’t even sell it to the doctors, even if they ordered it, because they were not approved. FDA turned the tap on and off. So actually, FDA called us one day. FDA called me at 10:30 at night, “Dr. Raj, we have shortage of generic leucovorin. Can you sell FUSILEV?” And I said no, we are not approved for colorectal cancer. They said, “No, we are going to give special permission to do that.” So special permission was given from FDA to sell for a finite amount of time. In 2008 December, we sold for about 2 weeks. In 2009, we sold for about 2 months. In 2010, we sold for about 6 months. In 2011, we sold in the first quarter when we actually had to import FUSILEV from Europe, and we went to Pfizer to get — FDA actually allowed us to import FUSILEV from Europe because our manufacturer couldn’t keep up with the demand. So what you are talking about, the sales going down when the generic came up, that was because we could not sell the drug at that time. Since April 2011, it is a different story. Our sales have never ever gone down. They’re going only one way, going up.”

Zevalin:

Der kommer nogle spændende ASH data omkring Zevalin. 10 abstracts herunder 2 oral presentations.

De har i gang i flere studier og fokuserer især på DLBLC. Herunder er de også ved at opbygge deres salgsorganisation i Europa og hjælpe deres partner Fuji i Japan til at øge salget.

Folotyn:

5 abstracts på ASH. Har nu fået godkendt protokollen vedrørende det kombinere Folotyn/Fusilev forsøg og de rekrutterer nu patienter for at løse Mucositis problemet. En sådan løsning kan være med til at øge salget meget af dette produkt. Markedsføringen er også steget efter at langt flere sælgere nu sælger produktet end før i ALTH regi.

Øvrige:

Deres øvrige Pipeline udvikler sig som den skal. De er nu ved at starte phase II forsøg op både med SPI-012 og SPI-1620. Herudover har de stadig Orzarelix og Lucanthone som er i phase IIb forsøg. Vi vil få data fra begge disse 2 stoffer i slutningen af 2013. RenaZorb studiet er også afsluttet hvor vi får data indenfor 2-3 måneder og de forventer at gå i phase II her snarest. Det jeg længe har syntes er ret spændende ved Ken Keller er netop stoffet SPI-2012. Som KK siger nedenfor så vil man køre phase II med SPI-2012 direkte head to head mod Amgens NeuLasta. SPI-2012 har her i phase I vist sig overlegen. Ken Keller og Joe Turgeon var netop de 2 hos Amgen som var hovedansvarlige for at gøre NeuLasta til et 2-3 mia. $ drug. Og nu er de altså ansvarlige for at føre et produkt der hidtil har vist sig overlegen frem. Det bliver rigtigt spændende.

Ken Keller citat:

“Second, we have opened our first sites for Phase II programs for both SPI-2012, our conjugated granulocyte colony-stimulating factor. This is a head-to-head study versus Neulasta, and SPI-1620, our novel endothelium antagonist — agonist for lung cancer and biliary tract carcinoma. We expect to initiate these trials in the next few months.

And third, in the past quarter, we completed a Phase I clinical study of RenaZorb, which is a novel oral phosphate-binding agent designed using nanoparticle technology for patients with renal insufficiency. We expect data from this trial in the next 3 months.”

Og lidt fra Raj omkring Belinostat:

“So Adnan, we are expecting the — that by the — before the end of this year, we should have belinostat data available. As I said, 6 patients are still on this study and the data log is expected to occur by the end of this month or early in first week of December”

Integration:

Allos integrationen går bedre end forventet. Tidligere er udmeldt synergier for 40-50 mio. $. Disse opjusteres nu til minimum 50 mio. $. Det er ret store årlige synergier for et køb der kostede dem 130 mio. $, og købet vil bidrage positivt til EPS allerede i Q4 dette år.

Både ALTH og SPPI var tilsammen ultimo 2011 390 mennesker ansat. I dag er SPPI samlet 200 mennesker og de kan stadig have samme omsætning og vækst som førhen.

Og det bedste – Ken Keller:

Den mand bliver bare guld værd for SPPI. Ingen tvivl. Han har været ansat i godt 3 måneder og han har nået at ændre hele salgsstrukturen, opnå imponerende markedsindsigt, finde en ny CSO (meget kompetent) og sætte sig godt ind i pipelinen. Når han taler er det med en umådelig autoritet og han er ærlig og åben, svarer direkte på spørgsmål (i modsætning til Raj nogle gange) og viser han er meget intelligent. Ham er jeg rigtig glad for, netop fordi jeg var begyndt at miste lidt tillid til Raj (ikke som genial medicinmand, men mere som frontfigur og IR mand). Her har KK en helt anden autoritet. Jeg vil lige som slut nedenfor gengive Ken Kellers ord fra CC:

————————————–

Thank you, Brett, and good morning, everyone. I’m pleased to be part of the Spectrum team. I joined the company because I was very excited by its growth prospects. Everything I’ve learned since I started has reconfirmed and added to my excitement about what lies ahead. I’ve been impressed by the people, the energy, the commitment I see across the organization and the potential we have here to build an exceptional success story. I look forward to contributing and helping patients benefit from our current and future medicines.

I’ll focus my comments today on the 3 areas that we think are most important to share with you. First, I’ll report on the substantial progress we made integrating Allos into Spectrum, and I’ll review how we have refit our commercial organization to drive the future growth of ZEVALIN, FUSILEV and our newly acquired cancer therapeutic, FOLOTYN. I’ll close with a brief update on the progress we made, advancing our pipeline.

As our CEO, Dr. Raj, has stated earlier, we are confident we will achieve at least $50 million in efficiency gains and possibly more through several changes. Some of the most significant and immediate synergies are being realized through the elimination of duplicative administrative and management roles. Headcount for both companies in 2011 was approximately 390 people. Today, as one company, our headcount stands at approximately 200 people. The integration progress is not yet complete. There is still work to be done, and we expect to see further benefits and cost savings in 2013.

This acquisition has also provided us the opportunity to look throughout both companies and upgrade our skill sets and talents across the organization. By taking the best from both, we are now becoming a far more effective and efficient company.

The second area I want to cover today is the progress we made in building and refitting our commercial organization to accelerate the growth of our 3 marketed oncology drugs. We are starting this process from a solid foundation. Because of changes in buying patterns, there can be some fluctuation in FUSILEV sales as we saw this quarter. Importantly, FUSILEV demand remains strong despite readily available supplies of generic leucovorin. Market research shows that 75% of physicians say that generic leucovorin is available without difficulty. It is clear that physicians are continuing to choose FUSILEV even when other options are available.

This quarter, there was a 13% increase in the number of accounts ordering FUSILEV. When I look at market penetration over the past 12 months, FUSILEV penetration is up from 29% in the last quarter to 31% in this quarter, and we believe there is room for improvement. The recent market survey suggested that 60% of physicians treating colorectal cancer patients have not yet been contacted by a Spectrum sales representative. We can, and we will change that.

The beauty of our marketing portfolio is that all 3 drugs, FUSILEV, ZEVALIN and FOLOTYN, will be effectively promoted by a single sales representative. We have cross-trained all of our sales representatives, and we are bringing them all together as a single team next week. This synergy allows us to rightsize the footprint of our sales team and promotional investments to optimize the reach and the frequency of our selling messages. This is something that just wasn’t cost effective for the team that was promoting a single product.

We’ve redesigned our commercial team based on 2 core principles. First, we’ve made a critical decision to have our commercial team be customer-facing heavy and headquarters light. This is consistent with our focus on managing our expenses prudently. And second, we have built the selling model that decentralizes key decision-making to better meet the needs of our customers regionally.

We have established 6 regions in the U.S., each led by a regional sales manager, who will have all key resources at their disposal. Each of these individuals is or will be a seasoned professional in the oncology space. The new commercial team will have more than 90% of its total headcount in direct contact with our customers. Total sales headcount will exceed 60 people, which essentially doubles the number of sales professionals promoting all 3 of our drugs.

These changes, coupled with our expanded product portfolio, have enabled us to attract additional top talent. We have recently recruited Joe Turgeon as our new Senior Vice President of Commercial Operations, and Joe is with us today. Joe has over 25 years of experience as a commercial leader, over 20 years in the oncology space. He was most recently the Vice President of Sales for Amgen. Joe has led teams that have been accountable for generating revenue exceeding $6 billion. This is a quality of the people that Spectrum is now able to attract.

Now I’d like to share just a few highlights from the progress we’ve made in our clinical development program. We have a robust and maturing pipeline with 10 drugs in development for unmet medical needs. At the upcoming American Society of Hematology meeting, there will be 15 presentations on FOLOTYN and ZEVALIN, including 2 oral presentations on ZEVALIN. The new ZEVALIN data will focus on its use across the disease paradigm from first-line use to relapse and refractory disease to more aggressive diffuse large B-cell lymphoma to the transplant setting. This illustrates that lymphoma experts’ interest in ZEVALIN remains high, and thought leaders are actively exploring ways to take advantage of ZEVALIN’s unique efficacy, onetime treatment and well-recognized safety profile.

Second, we have opened our first sites for Phase II programs for both SPI-2012, our conjugated granulocyte colony-stimulating factor. This is a head-to-head study versus Neulasta, and SPI-1620, our novel endothelium antagonist — agonist for lung cancer and biliary tract carcinoma. We expect to initiate these trials in the next few months.

And third, in the past quarter, we completed a Phase I clinical study of RenaZorb, which is a novel oral phosphate-binding agent designed using nanoparticle technology for patients with renal insufficiency. We expect data from this trial in the next 3 months.

That brings me to the end of my prepared statements, and now I will hand the call back to our CEO, Dr. Shrotriya.

About Investor1989

Investor in stocks in about 5 years with some very good profits. Focusing on Biotech and Value stocks. Active investor...

 

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