- Danish stocks
- First North Copenhagen
- Bavarian Nordic
- Chr. Hansen
- DanDrit Biotech
- GN Store Nord
- Novo Nordisk
- Veloxis Pharmaceuticals
- William Demant
- Zealand Pharma
- Norwegian stocks
- Swedish stocks
- A1M Pharma
- Accelerator Nordic
- Clinical Laserthermia
- Eurocine Vaccines
- European Inst. of Science
- IDL Biotech
- Medfield Diagnostics
- Micropos Medical
- Rubicon Life Science
- SPAGO Imaging
- Vivoline Medical
- First North Stockholm
- OMX Stockholm A-F
- OMX Stockholm G-Z
- US stocks
- General discussion
- All posts
Long time since my latest post about Spectrum? Probably because there have not been so much news to discuss. Now we are going into a very important period for the company. I will say that that Q2 2012 will be the most important quarter for the company ever. What can we expect in this quarter?
We will have the Q1 summary.
We will have Apaziquone phase III data for 1600 patients.
We will have data from the CUP study with Belinostat.
This is now the future for spectrum takes place. Will this be a huge Pharma Company or a small biotech company? The data and results will show us. Will we have a PPS at the end of the year about 8 or about 50? Time will tell. As investors, especially us longs, we have to stay concentrated. Don’t let us focus on the PPS and the increase in shorts. The data and the revenue will tell us about the future, not the actually PPS.
So why do I write this update right now? Because this is the time. It is now investor should make their bets. Are they in or are they about. Do they see a bright or a dark future for this company? I will in this article summary about the company and try to be objective so I can help people making their decisions and bets right. Do not focus on the shorts and the PPS; they are irrelevant in some points. Listen to my conclusions and make your own conclusion after that.
Fusilev is against Colon Cancer. In short (people need to understand this to understand this company) Levoleucovorin (Fusilev) is the active isomer of Generic Leucovorin. Fusilev is about 50-60 more expensive than generic Leucovorin. Generic Leucovorin are in US produced by 3 companies. Bedford, Teva and APP. There is at this time a shortage on Leucovorin do to manufacturing problems and increased demands. Rights now the situation is as following:
Bedford: Bedford has all leucovorin calcium powder for injection and solution for injection on back order and the company cannot estimate a release date.
Teva: Teva has Leucovorin calcium lyophilized powder 100 mg and 350 mg vials on back order and the company estimates a release date of late 3rd quarter, 2012. The company has depleted supplies of imported leucovorin calcium (calcium folinate solution) and estimates to release more product in mid-April, 2012.
APP: APP has leucovorin lyophilized powder 200 mg and 500 mg vials on back order and the company estimates a release date of late 2nd quarter, 2012.
Available products: Levoleucovorin Lyophilized Powder for Injection, Spectrum
50 mg vial, 1 count (NDC 68152-0101-11)
This shortage has been for a while. It started for Teva in the second quarter of 2011 and for Bedford in November 2011. But of course it takes some times for doctors to “run out” for Leucovorin on their storages.
Look at that brilliant article (not the comments):
Wolters Kluwer (WK) prescription data says that the presctions of Fusilev are increasing dramatically about February 2012. In the same time the Leucovorin shortage is worth than ever:
“Supporting evidence comes from the WK prescription data for generic leucovorin. WK reported 2,170,000 units sold in 3Q11 and 1,810,000 units in 4Q11. Importantly, unit volumes continue to decline precipitously: only 190,000 units were sold in January and 176,000 units were sold in February (newly published data).”
Raj has stated earlier that this market is a 1 bio. $ Market (in Fusilev prices). What is more important? Spectrum is contracting doctors to use Fusilev. Doctors want Fusilev because there is a liability on this drug. The shortage of Leucovorin have been there on and off for a long time. But before, there were no alternative to Leucovorin because Fusilev wasn’t approved in Colon Cancer. Than FDA needed to work with the manufactures to solve the problem (the patients needed their medic). But know, when Fusilev are available the 3 manufactures are not committed to please FDA anymore, because patients have an alternative. Manufactures of Leucovorin are not making any money of this drug. Raj says the market is 1 bio. $. In Leucovorin prices that are about 20-50 million $ at maximum. There are 3 manufactures and the margins are very low. I do not think they want to sell and produce a drug they do not make money on? So for now, Fusilev can take a huge part of the market. If the community settings are contracting on Fusilev, Spectrum can obtain a big part of the market even if the shortages end.
To new investor, I have to tell there is a risk here. We have not seen the sales of Fusilev when there is no shortage from none of the suppliers. So no one knows if Fusilev sales will decrease dramatically. I do by myself not think the sales ever will be under 200 million are year, but investors need to understand the risks.
Spectrum launched a new campaign a couple of days ago:
They are going directly to the patients. To me Zevalin is the joker. I will not have predictions to this drug because I do not know about the sales? Will it increase now the bioscan has been removed, new data are coming and more important, it is now easy to use? Raj said a while ago they could reach 300-400 million in sales. That was in US, now they have the worldwide rights? Zevalin have the opportunity to be a blockbuster, but there is a huge risk here. Spectrum is spending a lot of money on Spectrum on the relaunch campaign. So for now, Zevalin is a money burner. What if sales don’t increase? I think Raj is too proud to say, I make a mistake, we don’t spend more money at Zevalin. Personally I trust Raj at this time, and I will look at the revenue from Zevalin in the next 4 Quarters before I will make a conclusion on this drug. It can be even very Hugh and just nothing. I think it will be a place between.
We can have the data anytime now. Raj said it would be in April or May. This is the most important news from Spectrum in the entire history of the company. Apaziquone have the opportunities’ to be very Hugh.
I will not talk a lot about the scientistic on Apaziquone. For that, look in my earlier article: http://medicoinvestor.com/about-spectrum-pharmaceuticals-inc.html
Apaziquone have the opportunity to be a blockbuster and have Orphan drug status and then high margins. More important if data are good and Apaziquone get approved Spectrum will receive a lot of milestones from Allergen. I think there will be about 100-150 million $ in the 12 months from Apaziquone just in milestones. But data needs to be good. Than it is great that we have an easy SPA.
RISK: Please note that about Apaziquone there is a huge risk. I love this drug, and think it have a bright future. But we haven’t got the data yet, so this drug can be nothing worth.
Belinostat: I will not talk a lot about Belinostat. The PTCL studies are on track and the CUP study has a delay again again. This is positive. TopoTarget said that the Randomisation code isn’t broken at this time! But we will see when the data arrives.
The Q1 report: I will here by the end of my article talk a little about the Q1 report. To new investors, please note that this I my own estimates and guesses I am writing now. The future can be a lot different from what I expect.
From Zevalin I do not expect much. I hope for some surprise here, but I don’t expect it. I think it I so yearly. So I will say 7-10 million from Zevalin. Over 10 million will be a good surprise to me. But we do have, for 2 months the worldwide sales, I can’t predict how much the sales will be. So I expect the worse, hope for the best.
My hope is on Fusilev sales. Some conservative thoughts are that sales will reach just over 60 million. But actually I think more of 70 million in sales. So my earning estimate is:
Fusilev: 70 million, Zevalin 7 million and amortisations 3 million = total revenue of 80 million.
Gross Margin I expect to be 80-82 %, so about 64 million in Gross earning. Other expenses I expect:
– Selling, general and administrative: 20 million
– Research and development: 7,5 million
– Amortisation: 1 million
Income before taxes: 35 million. If I set taxes to 5 million, we get earning of 30 million in this quarter. It is 0, 54 in EPS and 0, 48 in diluted EPS.
But then we have to focus on 2 payments. First the Zevalin worldwide deal of 20 MEUR. Than the Hammi deal. We don’t know how much the upfront payment is in this deal. What we also don’t know is Spectrum accounting standards. Will they amortize the costs over several years or take all the costs in this quarter. I don’t know. So I will not focus on it, because it is a onetime cost. But I hope they amortize it, because the street really is focusing on EPS on this stock. A bit ridiculous, when there are other stocks with much higher market cap and with negative EPS.
I think that was all for now. I am really looking forward to the next 3 months. Good luck to all of you.
Disclaimer: I am a time totally loaded in Spectrum shares, and probably will continue to increase my position
About Karl M. Bidstrup
Tidligere ejer af Medicoinvestor.com Strategien har gennem mange år været at profitere på etablerede aktier, og brænde det hele af på Bioporto... Sad but true. Kontakt mig på medicoinvestor(A)gmail.com hvis du har en million du ikke ved hvor du skal gemme, så skal jeg nok holde den for dig. 🙂
- Web |
- More Posts(101)
- Spectrum today Long time since my latest post about Spectrum? Probably because...
- About Spectrum Pharmaceuticals Inc. Spectrum Pharmaceuticals Spectrum 2011: 2011 was a fantastic year for...
- Spectrum Pharmaceuticals. An Update. Spectrum update: In this update I will talk about the...
- The Spectrum Pharmaceuticals “Bio CEO Conference”: Yesterday BIO CEO Conference from Spectrum Pharmaceuticals was as expected....
- Lesliejek on Chat transcript regarding the NGAL distr. Agreement with the Wiener Group. (In danish)
- Patrickciz on Chat transcript regarding the NGAL distr. Agreement with the Wiener Group. (In danish)
- Jameskipse on Chat transcript regarding the NGAL distr. Agreement with the Wiener Group. (In danish)
- Rickiehiela on Chat transcript regarding the NGAL distr. Agreement with the Wiener Group. (In danish)
- James Rolitson on Good Discussion on Bronte Capital’s long thesis on Herbalife