How Zevalin Is Helping Spectrum 15 comments
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With the recent label expansion of Zevalin to MORE patients with non-Hodgkin's lymphoma (NHL), the FDA sent a clear message to doctors: Treat NHL with Zevalin.
So, how does this help Spectrum Pharmaceuticals (SPPI)?
Previously, SPPI only expected to obtain approval for the first-line use in approximately 26,000 to 28,000 patients.
With the recent label expansion, now 40,000+ patients could qualify for Zevalin.
Past Performance
In the past, Biogen Idec (BIIB) with seven or fewer sales executives marketed Zevalin for the refractory or last resort setting. This setting consists of a patient population totaling between 6,000 to 8,000.
Follow me here.
On average, BIIB was ONLY able to penetrate about 10.5% of the refractory patients (6,000 to 8,000). That's about one sales executive per 1,000 patients.
Projecting the Future
SPPI is now able to market Zevalin to 40,000+ patients. The company has a team of 40 sales executives to market this drug throughout the US. Like BIIB, SPPI has about one sales executive per 1,000 patients.
Zevalin costs anywhere between $24,000 to $30,000 per patient.
If SPPI just matches the very limited market penetration that BIIB was able to achieve - that's 10.5% - then 4,200 patients could receive Zevalin. At $24,000 per patient, that would account for $100.8 million in sales.
If NHL patients are made aware of the Zevalin option, I suspect most of them would opt for the treatment. Due to SPPI's efforts so far, I believe more doctors are finally using Zevalin in consolidation with induction therapy to treat more NHL patients. Here, I point to the 25% increase in Zevalin sales during Q2, the first quarter under SPPI's control. Notably, this was the first increase in quarter over quarter sales for Zevalin in the past three years.
June 12 Projections
On June 12, when I first started covering SPPI, I projected Zevalin sales could reach $180 million. At that time, people thought I was crazy. My simple man's thinking: if more patients know about the treatment they will opt for it. Why? Zevalin works. For more details on Zevalin, please refer to this article from August 20.
I am sticking to my June 12 projections.
Over the next 12 to 18 months, I estimate that 7,500 NHL patients will opt for Zevalin - if they are made aware of the treatment. That's less than 20% of the total patient population for a drug that carries a three-year progression free survival benefit.
With 7,500 patients at $24,000 per treatment, that would represent roughly $180 million in sales.
Is this projection really all that crazy? Ask Reni Benjamin, Rodman and Renshaw's (RODM) biotech analyst why he projected sales of Zevalin could reach $150 million.
Last night, Cramer said "Don't Buy" SPPI. While I genuinely respect Cramer's opinion a great deal, I believe his call on SPPI is dead wrong.
From my view, shares of SPPI remain terribly undervalued and oversold at their current level.
Disclosure: Long SPPI.
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I just read the brief comment cramer made and it was clear he had just a superficial understanding of SSPI. He only referred to the offering's less than stellar impact on the PPS. So what?
It's clear the stock is being gamed.
What say you on the latter?
tresspass--long the common and an assortment of calls.
Possibly. With that said, I think this will prove to be a great investment in time. This day to day action is just a distraction - namely to less patient short-term traders.
Like you, I am also long shares and calls. I like it long-term.
I'm not sure that my response answered your question. I guess I try not to worry about that so much. I am amped about SPPI right now because I am confident that this is a good entry point.
Don't get me wrong, I value Cramer's opinion. Here, I strongly believe he is just wrong. Like he always says, this ain't about making friends. :-)
Justin
I've often posted on Yahoo similar thoughts to your own, re: weak hands and the impatient. No need to comment further about my theory that there is a huge short trap being engineered at this moment.
It will come without news or PR's; it'll strike like a bolt of blue.
trespass
I could not agree with you more.
Justin
"reiterat"??
I believe cuttingand pasting the same comment over and over again is called "spamming"
if you have notihing new to add shut the heck up
That's the way I see it. I addressed the offering earlier this week in another article. I encourage you to check it out.
Good luck!
Justin
If you do not like what I write, there are 3,160 (last I checked) other contributors at SeekingAlpha for you to choose from.
No need to waste your time on me when you have the freedom and ability to make alternative choices.
Good luck!
Justin
For those who read my articles and/or blog entries, I encourage you to review my full disclosure statement.
The claims made in the comment above are absolutely false.
seekingalpha.com/insta...
Thank you.
Justin
Dissent is always welcome without the personal attacks.
If you all would exercise some self-control, I would respond to serious inquiries and comments.
I will never respond to personal attacks.
It is very obvious that you all would never say this stuff to my face. Just because you can hide behind an alias doesn't empower or entitle you to act the way you do.
You can think what you want and I will continue to fight you the entire way.
You really have two choices: act like men or go away and stop wasting your time with me. I will NOT allow you or your multiple aliases to run around like children, act like jerks and personally attack me or others who comment under my articles. So, deal with it.
Reasonable dissent is always welcome. Your form of dissent is NOT and therefore will be deleted.
I am raising the bar. The negativity will not be allowed. I will do everything I possibly can to make sure that the attacks cease. I will neither give up nor be defeated. This stuff must stop.
I have spoken to the Managing Editor at SA and she has offered to help me. SA has no interest in having its contributors constantly and personally attacked by obsessed, hateful readers. It is not good for business or serious readers.
If you do NOT like it, then go somewhere else. Such negativity is NOT welcome here.
Justin M. Hall
On another note it's 7am Boston time and here i am sitting at the computer thinking that it is Monday i have my charts and L2 screen open and ready to go. Maybe my girl is right im addicted to the market ughh but yeA sppi Fusilev approval is right around the corner let's go....
Make no mistakes, this stuff can be addictive. Investing is gambling. Rather than playing with cards, we invest in ideas.
After you play the game for awhile, it will become more routine. With that said, I still check charts each day with the e-Signal software I use, but I rarely login to my brokerage account.
Over time, I have learned to become patient with positions - drug makers are very unpredictable and require patience. One day you think you're heading to the moon and the next day you're hanging around $0.25 and vice versa.
Few climb like SPPI - very controlled, with a nice trend that has advanced straight up all year. As evidenced by a 1-year line or mountain chart, SPPI is, without doubt, a growth company.
It may take some time for others to catch on as many investors are still on the sidelines - no joke. But bro, I'm confident this one will get there.
Not sure if you own it, but I also like ARIA. It is priced very well right now. I have been accumulating shares of the company over time. Like SPPI, I also like this play (ARIA) longer-term, and think it, too, will do very well over the next 6-12 months.
Now, go spend some quality time with your lady today. Be sure to tell her I said hello!
Justin
No apologies needed - we share the same passion.
I like the way you invest. It is impressive. Those who actually read these comments will find some real gems - your comment above is one. No need to put it lights - not everyone needs to know everything. The smart folks will pick it up.
Dude I have a suggestion for the dog - their small, but they make great pets especially in a city environment. Check out a Yorkie or Yorkshire Terrier. I know, it's a candya-- of a dog, but they're a lot of fun and very smart - easy to train! That's just my take. Nevertheless, have fun!
Justin
Don't know if you still check out this blog, but I'd like to know your feelings on the bad news SPPI got last Friday. The drug approval didn't go thru....then shares tanks.
I was on the Zevalin train and made money, as did my wife's acct. When the prices went down that day, we bailed.
However, I've always liked SPPI and always wondered if bailing was good or bad.
Well, I got back in at 5.06 after a close of 6.21 the day prior. The reason? Spectrum is a solid company and they WILL grow and make money.....with or without this latest setback.
I feel fortunate to be back in SPPI at that price. Now........I go long, just like you. I am in an IRA with FIVE long years to go until I am 59 and a half. I figure SPPI can go way up during that time.
What are your thoughts on all of this.
By the way, I enjoy reading your articles and I hate these childish games people play. Good for you for fighting back.
Talk soon,
Slink