Spectrum Pharmaceuticals, Inc. (SPPI)

From recent discussion about Enhertu and Poziotinib.
Benjamin Levy, MD:Let’s move to HER2 [human epidermal growth factor receptor 2]. HER2 mutations; maybe 2% to 5% of all lung cancer, lung adenocarcinoma and we have some new therapies here, Jonathan. For the sake of time trastuzumab emtansine is a drug presented by Bob Li with a response rate of roughly 40%, and a PFS [progression-free survival] around 5 to 6 months. We’ve got poziotinib, which is a pretty toxic drug but has a response rate I think of 30% to 40% but perhaps what’s leading the way is trastuzumab deruxtecan. Do you want to walk us through those data and the importance of this? To me this 1 is on the leading edge and is practice changing.

Jonathan Wesley Riess, MD: The trastuzumab deruxtecan data are very impressive: very good response rate, very good progression-free survival. There are pitfalls to cross-trial comparisons but numerically it appears to be better than many other agents that have reported out clinical trials. It’s got its own unique adverse effect profile, but it’s something I’ve used. It’s not FDA approved, but it’s something I definitely use. I have seen activity and would even consider it potentially in the first-line setting. But then you look at poziotinib. There are data regarding poziotinib that have been presented. It does have a pretty good response rate. The PFS—again, a cross-trial comparison of the pitfalls—seems a bit less than trastuzumab deruxtecan. It’s a tough drug in terms of adverse effects such as diarrhea and rash. That’s where some of these drugs have a therapeutics index issue in terms of toxicity vs maintaining a dose that would give a benefit in terms of PFS and tumor shrinkage.

This is fun. We know it won’t last forever, but wow – this IS fun.

Let’s look at the numbers. SPPI ended green in 4 out of 5 sessions, which makes it 9 out of the last 10. By Friday’s closing bell, the stock was up 30 cents or 28.3%, to close at a robust $1.36. The stock traded for over a buck the whole week. Last time that happened? The week of 4/4.

Notably, the market did not provide a whole lot of support. The NAS was down in 3 of 5 sessions, but still closed the week with a gain of 3.08%. Its loss on the year improved from 20.8% to 16.6%.

The DOW was actually green in 4 of 5 sessions, but still couldn’t keep up with the NAS , as it ended with a gain of 2.92%. Its loss on the year shrunk from 9.85% to 7.22%. Better.

BA was on pace with the DOW, as it gained 2.99% to close at $169.99. Its loss on the year was trimmed to 15.5%.

My bio indexes were mixed. The BTK actually closed red on the week by 0.89%; the IBB was green, but only by 0.82%; the XBI managed a modest gain of 1.7%. Somewhat surprisingly, the XLV had the second highest gain of the bunch, at 1.65%.

The Russell 2000 was head and shoulders above the rest, surging 4.93%.

Last August 13, SPPI closed at $2.35 (last week, the comparison was $3.25). The YoY loss plunged from 67.3% to 42.1%! Finally – for the first time in...I don’t know how long, this comparison is less than a 50% loss.

Here are the daily ranges from this week:

M 1.06-1.14
T 1.01-1.12
W 1.00-1.12
Th 1.20-1.29
F 1.22-1.38

And from last week:

M 0.82-0.85
T 0.82-0.87
W 0.84-0.93
Th 0.87-0.94
F 0.94-1.12

Writing these weekly summaries makes me stand back and take a look at the market and this investment. If I don’t do that, it would be too easy to lose perspective.

The market did not provide a lot of support. It didn’t hurt, but there certainly was no tailwind. This week, for SPPI, the tailwind was the earnings report.

Huh?

How often can that be said about a pharma development company?

But that’s the truth. SPPI reported that it’s close to making money on the drug formerly known as Rolontis. And Pozi is showing success in some types of cancer that have been resistant to all other treatments…and the tox issue seems, finally, to be manageable.

Importantly, the market has noticed. Volume surged to almost twice its average levels in the last 3 sessions of the week. While the market was not a great help, at least it wasn’t a hindrance.

In the next session or two, it would be nice to see the stock close above $1.40, and trade above $1.44. These would confirm the up-trend, even if the stock backed off a bit afterward. Those levels, BTW, were also from early April.

Congrats, longs, on your patience. Extra congrats to those who added when the stock was under a buck.

This has been a great two weeks. Let’s hope it lasts a while longer.

Sarge