Spectrum CEO Says Sales Will Match or Beat Last Quarter

Spectrum Pharmaceuticals Inc.’s fourth-quarter sales will match or beat the previous quarter’s revenue, Chief Executive Officer Rajesh Shrotriya said.

“We will maintain our revenue, the same or better” than third-quarter sales of $51 million for Spectrum, the maker of the cancer drug Fusilev, Shrotriya said today in a telephone interview.

Spectrum, of Irvine, California, declined 6.3 percent to $14.05 at the close in New York, the biggest single-day drop since Oct. 3. “Rumor and perception” that the company’s fourth-quarter revenue will fall short of third-quarter sales may have caused the decline, Shrotriya said.

The company’s stock has had a “tremendous run” in the past year, and “we’re not hearing anything that would have us worry that it’s being derailed,” Reni Benjamin, an analyst with Rodman & Renshaw in New York, said today by telephone. The shares had more than doubled in the year before today.

“Every which way we look at it, we think the momentum is right and that the fundamentals for the company remain strong,” Benjamin said. “That being said, we’re not too surprised that investors would take some profits at some point.”

Spectrum’s fourth-quarter revenue may rise 2.4 percent to $52.2 million, said Joseph Pantginis, an analyst at Roth Capital Partners in New York.

Risk to Fusilev

While demand for the company’s colon-cancer drug Fusilev will probably remain strong for at least the first half of 2012, “the risk has always been prominent” for Spectrum that a shortage of a competing generic drug called leucovorin will end and lead to a decline in sales, Pantginis said in an interview.

Fusilev, an injection known chemically as levoleucovorin, first won FDA approval in 2008 for patients with a bone tumor called osteosarcoma. The agency cleared the drug for wider use in April for patients with advanced colon cancer.

The FDA had earlier taken steps to make Fusilev available to colon-cancer patients amid the shortage of leucovorin, the drug that had been the standard treatment. Fusilev is a purer compound than leucovorin, so it’s effective at half the dosage, according to Spectrum’s Fusilev website.

A shortage of paclitaxel, another generic cancer drug, ended last year, cutting into fourth-quarter sales for Celgene Corp.’s Abraxane, Celgene said today on an earnings call.

That may have led some investors to speculate that the leucovorin shortage may also end soon and cause a similar decline in Spectrum’s Fusilev sales, Pantginis said.

“Even though I consider it to be foolhardy to draw a correlation, there might be some investors out there who might make the leap that says if the paclitaxel shortage is ending, maybe we need to be concerned with the leucovorin shortage ending,” he said.

Spectrum doesn’t expect Fusilev sales to decline if the leucovorin shortage ends, because Fusilev is a “better drug,” Shrotriya said.

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