Roth Capital (SPPI) Comments on Spectrum (SPPI) Following Tentative FDA Approval of Sandoz's Levoleucovorin Calcium

Roth Capital maintains Spectrum Pharmaceuticals, Inc. (SPPI) at Neutral with a price target of $7 after the FDA website listed Sandoz's, of Novartis (NYSE: NVS), injectable levoleucovorin calcium as having received tentative approval. That listing was made on February 24th.

Analyst Joseph Pantginis commented, This tentative approval follows an earlier report of Sandoz's win in a patent ruling in Nevada court in which the key Fusilev patent was invalidated. We believe this further supports our previous changes to our revenue projections for Fusilev. As we mentioned previously, we do not see Zevalin representing a contributor to revenue growth going forward and believe the drug will be rangebound at about $16-18 million per year in revenue with potential erosion of these numbers beyond 2017. We believe Beleodaq, Marqibo, Folotyn and our projected approval of CE-Melphalan in 4Q15 will only provide small increment growth. With Fusilev representing ~50% of Spectrum's product revenue, we believe recent events represent increased risk to the return to profitability, based on current revenues. We expect to see SPPI placing more emphasis on pipeline assets, such as long acting G-CSF SPI-2012, which is potentially differentiated from Neulasta and upcoming generics. The drug is expected to enter Phase III in 2Q15 and Spectrum met with the FDA and EMA in December 2014 to discuss the potential regulatory path forward.

For an analyst ratings summary and ratings history on Spectrum Pharmaceuticals click here. For more ratings news on Spectrum Pharmaceuticals click here.

Spectrum Pharmaceuticals closed at $6.35 yesterday.

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