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Spectrum Pharmaceuticals (NASDAQ:SPPI)

Q4 2012 Earnings Call

February 21, 2013 1:30 pm ET

Executives

Shiv Kapoor - Vice President of Strategic Planning & Investor Relations

Rajesh C. Shrotriya - Chairman, Chief Executive Officer, President, Chairman of Placement Committee and Chairman of Product Acquisition Committee

Brett L. Scott - Acting Chief Financial Officer, Principal Accounting Officer and Senior Vice President

Joseph Kenneth Keller - Chief Operating Officer and Executive Vice President

Joseph Turgeon - Chief Commercial Officer and Senior Vice President

Analysts

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Jason Kantor - Crédit Suisse AG, Research Division

Michael G. King - JMP Securities LLC, Research Division

George B. Zavoico - MLV & Co LLC, Research Division

Difei Yang - WallachBeth Capital, LLC, Research Division

Operator

Good day, ladies and gentlemen, and welcome to the Spectrum Pharmaceuticals Inc. Fourth Quarter and Fiscal Year 2012 Financial Results Conference Call. [Operator Instructions] As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to your host, Mr. Shiv Kapoor, Vice President of Strategic Planning and Investor Relations. Please go ahead, sir.

Shiv Kapoor

Good morning, and thank you for joining us today for Spectrum's fourth quarter and fiscal year 2012 financial results conference call. I'm Shiv Kapoor, Vice President of Strategic Planning and Investor Relations for Spectrum Pharmaceuticals. With me today are Dr. Raj Shrotriya, Chairman, CEO and President; Ken Keller, Executive VP and Chief Operating Officer; Brett Scott, Acting CFO; Dr. Steve Fruchtman, Chief Medical Officer; and other senior members of the Spectrum management team.

For today's call, first, Dr. Shrotriya will provide you with highlights of the fourth quarter and full year of 2012 and discuss our overall direction and strategy. Brett will then provide a summary of our fourth quarter and full year 2012 financial performance. Following this, Ken will provide an overview of our commercial and research operations. At the end of our prepared remarks, we will open up the call to questions.

Before I pass the call over to Dr. Shrotriya, I would like to remind everyone that during this call, we will be making forward-looking statements regarding future events of Spectrum Pharmaceuticals, including statements about the product sales, profits, losses, the safety, efficacy and development time lines and clinical results of our drug products and drug candidates that involve risks and uncertainties that could cause actual results to differ materially. These risks are described in further detail in our reports filed with the SEC.

These forward-looking statements represent the company's judgment as of the date of this conference call, February 21, 2013, and the company disclaims any intent or obligation to update these forward-looking statements. However, we may choose to update them. And if we do so, we will disseminate the updates to the investing public. For copies of today's press release, historical press releases, 10-Ks, 10-Qs, 8-Ks, and other SEC filings and other important information, please visit our website at www.sppirx.com.

I now would like to hand the call over to Dr. Shrotriya.

Rajesh C. Shrotriya

Thank you, Shiv, and good morning, everyone. We have come a long way since 2008 when FDA approved our first anti-cancer drug, which we launched later that year. Since then, we have had tremendous growth. 2012 was another transformation year of growth. We're strengthening our foundation for the future. We treated tens of thousands of cancer patients, and our product sales grew over 40% in 2012. And this time -- at the same time, we remain fiscally disciplined.

We are pleased to be reporting our second year of profitability with net income of approximately $95 million, up 95% over last year. Additionally, we returned more than $18 million back to the shareholders through the issuance of cash dividends and our stock buyback program.

We are very excited about the outlook for the company. Last year, FUSILEV grew 56% in unit volume, and 33% in dollar sales. FUSILEV demand remains strong, and we continue to see opportunities to expand its use.

Additionally, I am very impressed with the analytics and professionalism of our new commercial organization. Ken will give you a detailed overview of our operations shortly.

This past year, we further diversified our product portfolio of FDA-approved proprietary anticancer drugs, and we further expanded our commercial footprint by recruiting world-class commercial team and by expansion of our territories. The addition of FOLOTYN, our acquisition of Allos Therapeutics in September further complements our already marketed anticancer drugs, FUSILEV and ZEVALIN.

I'm proud that our team has executed a smooth transition. In the first full quarter after acquisition, we're delighted to see strong FOLOTYN sales growth. At the same time, we also have aggressively cut down expenses of the 2 organizations, creating a growing and profitable Hematology-Oncology franchise.

In addition, we continue to develop a strong pipeline that can fuel long-term growth. We are in a coveted position to file 2 new drug applications or NDAs in the next 12 months. Further, we're advancing new product candidates that may represent the next major evolution in the company's organic growth. We expect to continue enrollment of patients in middle-stage clinical trials, exploring novel therapeutics that target blockbuster indications.

Further, we remain active in business development last year. We purchased worldwide rights for ZEVALIN, acquired second biologic drug SPI-2012 in Phase II clinical trials. SPI-2012 is a G-CSF or conjugated granulocyte colony stimulating factor for neutropenia due to chemotherapy.

In addition, last month, we were able to reacquire U.S. and European rights to a later-stage drug apaziquone, formally known as EOquin. Our goal is to accelerate apaziquone's potential registration. There continues to be a significant unmet medical need, but no drugs have been approved and marketed in the United States for more than 20 years for low-grade nonmuscle invasive bladder cancer.

What an exciting time the past year or so has been for us. We have accomplished a great deal and have positioned ourselves well for the next stage of Spectrum's growth. We remain cognizant of the importance of nurturing a great workplace so that we can attract very best leaders such as Ken Keller, our Executive Vice President and Chief Operating Officer. Ken came to us from Amgen after 21 years, most recently as a general manager responsible for managing $3 billion of P&L while keeping a very close watch on expenses. Ken will discuss ways in which we have further bolstered our senior team for continued success. Probably, you'd like what Ken has to say in a few minutes.

I will now hand over the call over to Brett to discuss financials first. Following Brett, Ken will give you an overview of our commercial relationship operations, and I'll be back with you. Thank you. Brett?

Brett L. Scott

Thank you, Dr. Raj, and good morning to everyone on the call today. We achieved more than 2 full years of profitability, unusual for the industry in which we operate, and we are very proud of this.

We had record yearly GAAP revenues of $267.7 million and pro forma revenues of $302 million, which includes a full year of revenue from FOLOTYN and ZEVALIN x U.S. We had GAAP income of $94.5 million. We closed 2012 with cash, cash equivalents and investments of $143 million after paying $133.3 million of the Allos acquisition net of Allos' cash.

I'll now go into greater detail on our fiscal year and quarterly results. All numbers are approximate. Total revenues for the year ending December 31, 2012, were $267.7 million, a 38.7% increase over $193 million in 2011. Product revenues were $255 million or 41.1% greater than the $180.7 million reported in the same period of 2011. These revenues were comprised of FUSILEV sales of $204.3 million, FOLOTYN sales of $20.4 million for approximately 4 months and ZEVALIN sales of $30.3 million.

Net income in 2012 was $94.5 million or $1.61 per basic and $1.46 per diluted share compared to net income of $48.5 million or $0.91 per basic and $0.84 per diluted share in 2011. On a non-GAAP basis, earnings were $91.9 million or $1.57 per basic share and $1.42 per diluted share compared to net income of $76.1 million or $1.43 per basic share and $1.31 per diluted share in 2011.

Total research and development expenses were $42.5 million as compared to $27.7 million in 2011. Selling, general and administrative expenses for the year were $92 million in 2012, which included noncash charges of $13 million compared to $72.6 million, which included noncash charges of $20.6 million in the same period of 2011.

Now let's discuss the 3-month period ended December 31, 2012. We have total revenues of $70.1 million compared to $53 million in the fourth quarter of 2011, an increase of 32.3%. Product revenues were $66.7 million as compared to $49.9 million in the fourth quarter of 2011, an increase of 33.7%.

In the fourth quarter of 2012, FUSILEV sales were $44.5 million, FOLOTYN sales were approximately $14.4 million, and ZEVALIN sales being approximately $7.8 million. On a GAAP basis, net income was $8.6 million or $0.15 per basic and $0.13 per diluted share as compared to net income of $8.3 million or $0.15 per basic and $0.13 per diluted share in the fourth quarter of 2011.

On a non-GAAP basis, net income was $17.6 million or $0.30 per basic and $0.27 per diluted share as compared to $16.2 million or $0.29 per basic and $0.26 per diluted share for the same period in 2011. On a GAAP basis, total research and development expenses for the fourth quarter were $13.9 million as compared to $6.8 million in the same period of 2011. The increase was due primarily to an increase in clinical expenses of $3.7 million and an increase in drug product expense of $2.1 million.

On a non-GAAP basis, research and development expenses for the fourth quarter were $13.4 million as compared to $6.4 million for the same period in 2011. On a GAAP basis, selling, general and administrative expenses for the fourth quarter of 2012 were $27.2 million, which included noncash charges of $4.9 million as compared to $25.3 million, which included noncash charges of $6.6 million in the same period of 2011. The increase was due primarily to increases in advertising, branding, marketing and promotion of our drug products.

On a non-GAAP basis, selling, general and administrative expenses for the fourth quarter of 2012 were $22.2 million as compared to $18.7 million in the same period of 2011. Furthermore, as Dr. Shrotriya also mentioned, we have in place a stock repurchase program to acquire up to $100 million of our common stock. We expect total revenues and operating income to grow in 2013 over 2012.

I appreciate the opportunity to review the numbers and other key financial considerations with you, and I will now hand the call over to Ken Keller.

Joseph Kenneth Keller

Thank you, Brett, and good afternoon, everyone. As Dr. Raj stated, 2012 was a transformative year for us, and we're off to a strong start in 2013.

I'll begin my remarks with a focus on the FUSILEV franchise. Total revenue in 2012 increased 33% to over $200 million. In Q4, we shipped more units of FUSILEV than we did in Q3. However, as Brett stated, net revenue was down Q4 over Q3. The increase in total units was more than offset by an increase in the gross to net adjustments. The majority of this was attributable to an increase in government-mandated discounts.

In the second half of 2012, our FUSILEV business shifted more towards accounts qualified for government pricing especially 340b purchasing. While in 2012, FUSILEV unit sales increased approximately 56% over 2011. Government rebates inclusive of 340b chargebacks increased approximately tenfold from $3.8 million in 2011 to $47.3 million in 2012.

Our market research shows that this shift is largely complete, and going forward, we expect stable demand in this segment. Currently, approximately 75% of total FUSILEV business resides in the clinic segment. This creates a very strong base of FUSILEV business on which we can build upon and focus our commercial efforts against.

To reinforce this, I'm pleased to share with you that the number of clinics purchasing FUSILEV continues to grow and end-user demand year-to-date in 2013 is higher than in December of 2012. We expect this trend to continue throughout 2013.

In addition, discounts outside of those that are government mandated remains low. We are very pleased with the progress the commercial team is making with FOLOTYN. The synergy with ZEVALIN is exactly what we expected, and these 2 products allow for tremendous efficiency within our commercial and our medical organizations.

As the first product approved for the treatment of relapsed and refractory peripheral T-Cell lymphoma, FOLOTYN has established itself as a valuable essential tool in the treatment of this disease. Today, FOLOTYN is used more often than any other medicine in this syndication, and we continue to see growth potential with this product.

Our focus in 2013 will be on increasing patient penetration to our larger sales force and increasing the number of cycles that patients receive. It is still true today that many patients who respond to FOLOTYN therapy stop treatment prematurely because of a side effect called mucositis. This year, we have built a team of nurse educators located across the country who'll be charged with improving the management of mucositis.

Longer term, we await the results of our clinical studies testing the clinical utility of FUSILEV with FOLOTYN to mitigate the incidents and the severity of mucositis.

Now turning to ZEVALIN. In Q4, we established our global footprint as the single worldwide owner of ZEVALIN. Our commercial team is now in place in the EU, and our partnership with Fuji in Japan is fully operational.

ZEVALIN revenue was consistent Q3 to Q4, and we expect the impact of our larger U.S. sales team and the renewed promotion in Japan and the EU to lift sales going forward. To conclude on the commercial front, I'm pleased with the progress the team has made in reshaping itself. We have significantly increased our size. We have recruited highly talented professionals, and we have on-boarded this talent efficiently.

We have simplified our promotional messages. We've elevated our targeting skills, and today, we have reached the stage where everyone on the commercial team is focused on execution. The impact of these efforts will take some time, but looking ahead, we like the trajectory that we're on.

I'll now provide an update on the progress we made advancing our pipeline. First, the recent American Society of Hematology meeting in December highlighted just how far we've come as a Hematology and Oncology company. There were 19 abstracts at this meeting featuring clinical and scientific data for Spectrum's products. There were 2 oral and 10 poster presentations on ZEVALIN demonstrating its use in a number of diverse clinical settings.

There were 3 FOLOTYN-related presentations on new synergistic combinations with other approved agents. Second, as Dr. Raj mentioned, we anticipate filing 2 New Drug Applications in the next 12 months, one for belinostat and one for apaziquone. Third, we completed a Phase I study of RenaZorb, a lanthanum-based nanotechnology phosphate binder. Based on these results, we believe RenaZorb has the potential to offer best-in-class potency, a reduction of pill burden, a pill form that can be easily swallowed compared to existing products. Based on these results, we will be moving RenaZorb into Phase II studies. And fourth, we expect to shortly enroll the first patient in our Phase II study with SPI-2012, our long-acting granulocyte stimulating factor we acquired from Hanmi in 2012. The chemotherapy induced neutropenia market is large. It fits our commercial team well, and the development program can move quickly.

That concludes my updates, and I'll turn the call back over to our CEO, Dr. Raj Shrotriya.

Rajesh C. Shrotriya

Thank you, Ken. Since the products have been in the market, they have benefited tens of thousands of patients with cancer. That said alone more than 40,000 cancer patients used our drugs. We want to do more, bring more therapies to more patients, demonstrate more of the value of our products for diseases that there are often unsatisfactory outcomes. We want to advance more drugs from testing to commercialization more quickly.

We are grateful to serve our various constituencies, which include our patients, our investors and our employees. We want to be able to reach many more physicians and more patients who can benefit from our drugs. I also wish to acknowledge the teams within Spectrum that have brought us to where we are today. I'm especially proud of the capabilities of our new world-class commercial organization.

We will now open the call to questions.

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Adnan Butt of RBC Capital Markets.

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

I'll start with 2 questions. First, either Raj or Ken. Ken, can you shed some light on what is meant by the company's being stable or a high clinical demand this quarter versus the next, does it mean that sales could be stable or do you still expect adjustments and gross to net going into this quarter? And then the second question for me would be can you give some more details about what's assumed in guidance for 2013?

Rajesh C. Shrotriya

Ken, would you like to?

Joseph Kenneth Keller

Sure. Thanks for the question. So when we look at FUSILEV business right now, what we see is end-user demand, customer-generated demand is very, very stable right now. In fact, when you look at the first few weeks of this year, and we have data all the way through January, the demand is actually higher than it was in December. So we feel that the underlying demand is very stable. Now purchasing patterns do change, but the underlying demand is very, very, very solid. The second point I think that will help to clarify is today, 75% of FUSILEV business is in the clinic setting. That setting is very, very sticky for FUSILEV. Once accounts are using this product, it's very rarely do they go back to generic racemic leucovorin. So that gives us a nice place to build upon and really use our new commercial organization to drive and grow the business in that segment from where we are right now.

Rajesh C. Shrotriya

So Adnan, to add to what Ken said, I think you also asked about 2013. We expect with the trends we are seeing in January, and we are seeing the new accounts and the reorders from the old accounts, that we expect that 2013 revenues to continue to grow. And we expect our sales to be higher than we had in 2012.

Adnan S. Butt - RBC Capital Markets, LLC, Research Division

If I can just get one follow up. In terms of 75% of sales coming from the clinic setting, that's an encouraging number. Do you have a handle yet on whether there's room for that market share or penetration to grow in the same setting?

Rajesh C. Shrotriya

Yes. In fact, Ken talked about the fact that we had conducted a survey of our own, and we found that nearly 50% of the doctors have not yet been touched by a Spectrum sales representatives and actually have never used FUSILEV, that's where we see the upside potential, but Ken, would you like to add some?

Joseph Kenneth Keller

I think the key there is in the fourth quarter of this year it's really to address that shortcoming in the past. We brought in the Senior Vice President on the commercial operations, Joe Turgeon. In the last quarter, Joe has really rebuilt the team, and today, we -- our team is fully staffed as opposed to last year where we had 15, 20 people selling our products. Today, we have over 60 people selling our products, and that's going to allow us to reach those doctors we haven't touched before.

Operator

Our next question comes from Joe Pantginis of Roth Capital Partners.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Two questions, maybe one for Ken and then one for Brett. Ken, so going on the same vein with regards to FUSILEV obviously, you mentioned some of the competitive pressures. Obviously, there's leucovorin out there and the competitive pressures or pricing pressures, I should say, based on the government mandate. Can you maybe just add a little more color based on the vein of discussion that was just going on with regard to the types, a little more color of the types of initiatives that you have with regard to targeting physicians in the clinical setting? I know I believe, correct me if I'm wrong, I think just very recently you had a national sales meeting with your new sales force. So what are their marching orders? How are they going to be effectively targeting these physicians?

Joseph Kenneth Keller

So I'll start and then turn it over to Joe Turgeon to fill in some details. But we hired probably 35, 40 people in the last 90 days in our commercial organization. And for the very first time, we brought this whole team together just 2 or 3 weeks ago. And at that meeting, all of these folks will be selling all 3 of our products, and they were trained on it. It's early, but we love the enthusiasm we see. We love the quality of the talent that we brought aboard, and we're going to couple the larger sales force with also a far better ability to understand where our businesses and target our business. We really built up that operation as well but Joe, I'm going to turn it over to Joe Turgeon, our Senior Vice President of Commercial Operations. Can you add a little bit more color?

Joseph Turgeon

Yes, Joe. I think you asked about the targeting itself. Number one, the people we are bringing have great backgrounds. We're bringing in real sales pros who are proven in selling in oncology. So they know exactly how to sell in the setting, which is very important. They are trained in all 3 products. But getting into the targeting, what we've done with all 3 products is now when a rep goes in, we told them which doctors to call on, how many times a quarter based on their potential, and that's on all products. So they go in with the plan with a simplified message and know exactly where to go every day and how many times in a given quarter to call on those people.

Joseph Pantginis - Roth Capital Partners, LLC, Research Division

Okay. That's really helpful, and maybe just a quick follow up for Brett. You guys obviously have the good problem now of being profitable. So I was wondering if you can talk about the impact to Uncle Sam in 2013 and looking at what effective tax rates are you looking at going forward, and how should we consider that?

Brett L. Scott

Yes. Thanks, Joe. You're right. We do have the benefit of being profitable now for more than 2 years and going into 2013. We expect obviously, we're going to be paying Uncle Sam some dollars, and we expect that range to be in the, at least, right now to be in the 35% to 40% range. We are exploring a number of opportunities to reduce that. But for right now, I'd give you that beginning guidance.

Operator

Our next question comes from Jason Kantor of Crédit Suisse.

Jason Kantor - Crédit Suisse AG, Research Division

In the past, you've given gross to net. Could you give that for Q4? And also you mentioned that your unit volume for FUSILEV was higher in Q4 versus Q3. I'm wondering if you could quantify that for us. That would be very helpful.

Rajesh C. Shrotriya

So Ken, can you give us some more color to Jason?

Joseph Kenneth Keller

Sure. So I think I understand your question. So when we look at the number of FUSILEV vials that we shipped out was up in Q4 versus Q3, and it's mid-single-digit increase in units, right about that. And we see that demand shifting more and more to the clinic as I mentioned versus other segments. Can you just ask the question again? I can do a better response.

Jason Kantor - Crédit Suisse AG, Research Division

Yes. What's the overall gross to net adjustment in Q4?

Rajesh C. Shrotriya

I think the -- I think let me try to answer this, Jason, help you understand while Brett, you want to answer the question?

Brett L. Scott

Yes, unfortunately I don't have that number on hand right now.

Rajesh C. Shrotriya

Jason, let me just give you a broad brush stroke picture. We sell FUSILEV into 3 buckets: the community doctors, the government, the discounted hospital, PHS of 340b hospitals and all other hospitals. So the community doctors, that's where you heard Ken say that 70% plus of our business is in community setting. But if at any given quarter, we get more orders from the government hospitals, the hospitals and whatnot, then we end up selling vials where the revenue collected is lesser because the government pays us less money for each vial sold. So that is what makes a gross to net adjustment every quarter different because of this bias or where in which bucket there are more sales. So but as a company, we are very happy that the more vials are sold, it means more vials are being used, more doctors and more patients are benefiting from our drugs and more patients are getting used to how to use FUSILEV.

Joseph Kenneth Keller

If I could just add one thing. When we look at our business right now, we feel that a lot of the shift has already occurred. It's kind of behind us because today, as I mentioned, 75% of the business is in the clinics right? And so there's not going to be a lot more shift going forward, and I'll just say that we will get those numbers for you, and Brett will follow up with you immediately after the call.

Jason Kantor - Crédit Suisse AG, Research Division

Okay, it just seems like if sales are down sequentially by 14%, and you're growing units by 5%, that's a big delta in kind of Q-over-Q change in realized price essentially. Could you give us a better idea of the dynamics sort of going into Q4 and coming out of Q4 in terms of you said 75% of your business is in the community. Where was it at the beginning of the quarter, for example? And how confident are you that the shift is behind you?

Rajesh C. Shrotriya

Ken.

Joseph Kenneth Keller

So what I can tell you, I don't have it for exact beginning of the quarter but I can look back. I've got it for mid-year to the end of the year because that's the way we stage our market research. And what we've seen is a significant shift of our business from hospitals overall to the clinics. And so that 75% number where we are today, that number was in the 60s, mid-60s when we look back 6 months. I don't have it quarter-by-quarter, though.

Operator

Our next question comes from Mike King of JMP Securities.

Michael G. King - JMP Securities LLC, Research Division

Gentlemen, I just want to ask you to help us understand how we should be thinking about [indiscernible] clinics are being acquired [indiscernible] hospitals and therefore, eligibility for 340b discounts. How should we think about that moving forward because all the anecdotal information that we can find is that more and more clinics are selling to hospitals?

Joseph Kenneth Keller

Okay, you broke up a little bit there. But there has been hospitals buying clinics, and we've heard anecdotal cases where their business shifts to 340b purchasing. But that's not a fast-moving trend. We watch it. We monitor it. It actually happens, but it's not a fast-moving trend that we see right now.

Rajesh C. Shrotriya

And also it is not happening just to Spectrum and just to FUSILEV. This is a universal phenomenon. This is happening to more and more practices.

Michael G. King - JMP Securities LLC, Research Division

Yes, very aware of that, yes. Can I ask a follow up on ZEVALIN?

Joseph Kenneth Keller

Sure.

Michael G. King - JMP Securities LLC, Research Division

Maybe talk a little bit about your perspective on the investment that you're making in the product. I think it's a great product. It just doesn't seem like anything really helps to move the needle, and now that we've got some of the oral drugs like lenalidomide and potentially some of the BGK or PI3-kinase inhibitors moving into lymphoma, I'm just wondering how you think about the investment commitment that you made to ZEVALIN and the ultimate payoff for that investment.

Rajesh C. Shrotriya

Mike, I'll try to answer that question, and I'll need some support from Ken. So ZEVALIN is an amazing drug. I'm a doctor, right, treating cancer patients, and ZEVALIN continues to -- after 10 years of its launch, there are more papers presented and accepted and presented at ASH [indiscernible] meeting than any other, there are more papers, and we are not even funding that research. The papers that were presented in 2011 and '12, actually most of the work was done without any support from Spectrum. Most of these papers came from Europe. So here is the way this drug is practiced and prescribed in the United States, this is a paradigm shift that's taking place. But 10 years this drug was neglected. This drug was treated as it had, did not have reimbursement code. Most of the doctors have gone through hematology training, at fellowship knew that this drug is difficult to use. You have to involve a lot of people in giving this drug and you don't have any economics. All of that has changed. The patients had to be sent for this clinics, what is called the bio distribution. Now it takes time. We are seeing already, that places like Kaiser Permanente have now, for the first time, put ZEVALIN on the formula committee. We are seeing pockets where the usage is growing. It will take time, but we expect to see growth in 2013 over 2012.

Joseph Kenneth Keller

This is Ken. The only thing that I would add is we have a great story to tell with ZEVALIN, and it's a story that hasn't been told, and I think that's something that as I joined the company I saw one of the big upsides for us is when we put the right size sales team together with the right medical focus, people don't know the data. If they knew the data, it would be a different story. They don't know the data, the data gets better and better over time. At ASH, we showed the 8-year follow-up from the FIC study. So we're in good position. And as Joe gets his team out there, I think you'll see the results here. And the new agents that you mentioned, most of those new agents will be used in relapsed refractory settings like that. They're still a little bit aways. We have a lot of headroom with ZEVALIN right now, a tremendous amount. In addition to that, we're already seeing some positive signs in the rest of the world, where ZEVALIN hasn't been promoted at all for many, many years.

Unknown Executive

In addition the drug is judged on how good it is on a combination of 2 things, efficacy and ease of administration. There's no single drug including government or the other agency you mentioned in relapsed refractory setting that has the efficacy that has been shown with ZEVALIN. And in addition, it's the convenience, one dose. So if you're a working person or you're a specialist like a hematologist oncologist you, can get one dose and be done with it, with great efficacy, and we think that's where the value of ZEVALIN lies.

Michael G. King - JMP Securities LLC, Research Division

And speaking of which, can you tell me if you took a price increase in the quarter for ZEVALIN?

Joseph Kenneth Keller

In this past quarter, we did not take a price increase. We did not.

Rajesh C. Shrotriya

Mike, I'd just add something more to it. That this is a drug, which now we are studying for newer indications. The indications that we would like this drug to be approved and marketed for diffuse large B-cell lymphoma for which there's unsatisfactory treatment. And there are number of Phase II studies that have already been completed, not on our nickel, on the investigators nickel that show that the drug has absolutely outstanding efficacy. And currently, we have a plan to restore ZEVALIN for some of these newer indications.

Operator

Our next question comes from George Zavoico of MLV and Company.

George B. Zavoico - MLV & Co LLC, Research Division

Two questions. One is with regard to FUSILEV and its continuing sales, now more stable but still potentially growing. Obviously, one of the incentives for the clinics to stay with FUSILEV has been the drug shortage, which is now easing. And you've spoken before about having long term sort of supply contracts, and you've got manufacturing now in multiple sites to guarantee supply. Are there any other incentives for doctors to stay or clinics, hospitals to stay with FUSILEV? And in the generic space supply does become stable, the difference in price is still going to be in incentives just switched back. So what are you thinking in terms of what you might need to do to prevent that?

Joseph Kenneth Keller

Okay. So 2 things. One is, today and at least for the past 3 or 4 months, the ability for any doctor to get generic racemic leucovorin has been fairly easy. Our research shows that definitively. Right now, there's not a difficulty in getting the product. Therefore, if there are new generics that enter the market, we don't think that's going to impact us much. If it's easy, it's easy. It doesn't make a difference. So I don't think that's going to be an issue at all. What we see when clinics use FUSILEV, they love the idea that it has a separate J-code. They find reimbursement very, very easy. They love the idea that's a pure isomer. So once they've got it, they're very reluctant to switch back, and we see that consistently almost universally in the clinic business. So we don't think that if there are 2 or 3 more generics that hit the market in the next 6 months, we don't see it affecting us much.

George B. Zavoico - MLV & Co LLC, Research Division

Okay. That's good news. Second question, with your [indiscernible] which for a long time has been, I thought, one of your crown jewels. You've got it back the full rights back. Where does it stand now? I know you're going to meet with the FDA to see maybe you already know if the FTC had to move forward with the results of the combining the results of the 2 trials.

Rajesh C. Shrotriya

So George, we had a meeting with the FDA, and the bottom line message that we received was the following: that number one, we can file the NDA with the existing data; number two, FDA will most likely convene an advisory board meeting; and number three, FDA encourages us to start at least one new trial to which they will contribute their suggestions. We have written a protocol. We have sent it to the FDA and as soon as it comes in, we have got over 100 sites ready to start enrolling patients. These are the sites that have already worked on 2 previous trials, 611 and 612. And the interesting thing about the 2 studies we have submitted is that both studies don't read the criteria of 0.05. The data is so close that when you combine the 2 trials, the data is significant at 0.01 level, what we call highly significant. And also when you see the 2 studies, they are like mirror images. They will turn in different patient population, by different investigators and yet the results are almost identical. And that's very pointing. For us it is very exciting to see the 2 studies done apart have such similar findings, and I think the FDA's persuaded. And we are going to pursue the registration for this indication as quickly as possible.

George B. Zavoico - MLV & Co LLC, Research Division

And the registration will also be independent of this new trial starting? Is that correct?

Rajesh C. Shrotriya

Well, we plan to file the NDA before this trial is completed. So there is -- what we are trying to do is take advantage of the fact that FDA take certain times, review time, for any drug ensuring that -- so when we file the NDA, we are hoping that by the time our review process comes, we will have completed enrollment in that trial.

George B. Zavoico - MLV & Co LLC, Research Division

So you won't have results?

Rajesh C. Shrotriya

That is true. We could have interim results at that time. That's what we are negotiating with the FDA.

Operator

Our next question comes from Difei Yang of WallachBeth.

Difei Yang - WallachBeth Capital, LLC, Research Division

I have a couple. The first one related is related to FUSILEV. So with this generic leucovorin come back to market, do you see any impact at all with regards to the 3 different customer segments? And if there's any impact, where do you see the most impact, and how is it impacting?

Joseph Kenneth Keller

So generic leucovorin, as you know, is readily available right now. So if more comes back to the market, we don't think it's going to affect us to any great degree. What will likely happen is in those settings, in those situations where accounts prefer generic leucovorin today, when the next one comes out and the next one comes out, they will compete with each other for that business. That's what we see happening. People that prefer and the accounts that prefer FUSILEV, our job is to solidify that business, and we think that business is very sticky right now.

Difei Yang - WallachBeth Capital, LLC, Research Division

So I can reword what you said, help me see if I made it correctly. So you're saying the marketplace is more like FUSILEV and generic leucovorin, maybe a number of generic leucovorin. So the generic leucovorin compete with each other but less so with FUSILEV. Is that the right way to look at things?

Joseph Kenneth Keller

Yes, that's exactly how we look at it. We think it's the right way to look at it.

Difei Yang - WallachBeth Capital, LLC, Research Division

So my next question is with regards to ZEVALIN. I remember sometime ago, we talked about the nuclear medicine, how difficult that creates a barrier for ZEVALIN adoption, and so what's your current thought with regards to that, and how we might be able to operate down that area a little more?

Unknown Executive

Well, we thought that was a continued thing that during unnecessary dosimetry study with the bioscan it was a hurdle, and we were successful in removing that hurdle. And we hope with continued time as physicians continue to get educated regarding efficacy and no need to do a bioscan, ZEVALIN will continue to help patients with non-Hodgkin's lymphoma especially with as Dr. Raj mentioned, we could -- diffuse large B-Cell is also carrying the antigen of CD20. The preliminary data efficacy of ZEVALIN in that indication also looks impressive.

Difei Yang - WallachBeth Capital, LLC, Research Division

Yes. The bioscan requirement, that removal has been there for a few quarters, but we haven't really seen the revenue pick up. Is there -- could you help me to understand that aspect?

Joseph Kenneth Keller

Yes. So right now, when we look at the bioscan being removed absolutely, this makes it easy to use ZEVALIN. There's no doubt about it. Because the size of our sales force wasn't large enough to get the message out to the magnitude that we wanted to, many people still today haven't -- don't really understand that. That is changing. That will change imminently. As I mentioned earlier, we just brought the sales team together. We just trained them 3 weeks ago. You'll see that change very, very quickly, and then we'll realize the benefits of the greater ease-of-use that we have today versus 2 years ago.

Operator

We've reached the end of our allotted time for questions. I'd now like to turn the call back over to Dr. Raj.

Rajesh C. Shrotriya

In conclusion, let me share with you our big picture view of the Spectrum. We, at Spectrum, continue to focus on helping more and more cancer patients. That's a focus of every single person inside the company. We have treated many more cancer patients during the last 4 years than we would've ever imagined when we started this company. In 4 years, our revenues have grown from 0 to over $0.25 billion in 2012. And we have been profitable company for last 2 years. We are rapidly growing, and we're returning some of the investments to our shareholders.

We have year-after-year growth in revenues. This past year alone, we saw over 40% growth in our product sales and 95% growth in our income. This income allows us to fund acquisitions, clinical development of our pipeline and return a portion to our shareholders.

We would like to thank you again for joining us on this call at a very exciting time in the Spectrum's evolution. I'm so excited about 2012 because it stands out as a watershed year for Spectrum. We are proud of our accomplishments and the momentum that is driving us to achieve further important objectives into 2013. We are excited about the potentially 2013 as we have seen in the first 4, 5 weeks of the sales. We are looking forward to a great future for Spectrum and the continued fulfillment of our mission to meet the needs of cancer patients, and remember, I believe the best is yet to come. Thank you.

Operator

Ladies and gentlemen, this does conclude today's conference. You may all disconnect, and have a wonderful day.

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