Spectrum Pharma: Zevalin Has Blockbuster Potential 35 comments
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A number of positive peer-reviews evaluating Spectrum Pharmaceuticals (SPPI) radio-immunotherapy (RIT), Zevalin® were published this month. The conclusions drawn in these reviews were made from unbiased medical professionals, and indicate that the prospects for Zevalin may be greater than I originally estimated back on June 12. Based on the feedback received from a doctor whose opinion I value, I now believe Zevalin has blockbuster potential. In general, blockbuster drugs typically generate annual revenue of $1 billion or greater.
Preliminary Facts
- On September 4, 2009, Zevalin was approved by the FDA for use as a first-line consolidation therapy in the treatment of patients with non-Hodgkin’s lymphoma (NHL).
- First-line consolidation therapy follows induction therapy. Induction therapy consists of a chemotherapeutic agent taken in combination with Rituxan® and is designed to induce remission in patients with NHL. Rituxan is manufactured and sold by partners Biogen Idec (BIIB) and Roche (RHHBY.PK).
- On April 28, 2008, Zevalin was approved for first-line consolidation use in Europe where the treatment is marketed by Bayer Schering (BYERF.PK). For details on 17 other Zevalin trials that are currently being conducted by Bayer Schering and other investigators, please reference this June 30 article.
I have followed both SPPI and Zevalin very closely over the past two+ years. Since June 12, I have covered the company and Zevalin extensively and tried to do it accurately and honestly. Interested investors should take some time to review my other articles and familiarize themselves with both this company and its very important drug for those afflicted with NHL.
In the September 11 article, supra, I argued Zevalin could eventually become a component of the standard of care treatment for NHL in addition to chemotherapy and Rituxan. This month, evaluations of Zevalin were published in The Oncologist that support that contention – Zevalin will likely become apart of the standard of care treatment for patients with various forms of NHL.
1. Radio-Immunotherapy for Patients with NHL
The favorable efficacy and tolerability profile of radio-immunotherapy (RIT) makes it a promising option for patients with relapsed follicular lymphoma (FL) and transformed non-Hodgkin’s lymphoma (NHL). Furthermore, the recent approval of 90Yibritumomab tiuxetan (Zevalin) for first-line consolidation treatment of FL gives another option for these patients.In light of these data, it seems reasonable to propose the use of Zevalin consolidation therapy after first remission as part of a curative strategy in an effort to improve complete response (CR) rates and potentially improve overall survival (OS). Indeed, the recent European Society for Medical Oncology guidelines have recommended the use of Zevalin in frontline consolidation regimens.Although the wide variability among patients with NHL can mean that identifying the most suitable therapy is sometimes difficult, the suggested treatment algorithm in this paper may aid in the appropriate selection of patients who could benefit from consolidation therapy with Zevalin. It is interesting to note that recent guidelines on the use of RIT recommend that RIT be used for fit patients for whom a curative approach and significant improvement in OS are both a possibility.The use of RIT may provide benefit to a wide range of patients within a variety of treatment regimens, and the guidance provided in this review can aid physicians in appropriate patient selection for treatment with Zevalin.
Source: “Harnessing the Energy: Development of Radioimmunotherapy for Patients with Non-Hodgkin’s Lymphoma,” The Oncologist 2009; 14 (suppl 2): 4-16 www.TheOncologist.com
2. Consolidation to Improve Progression-Free Survival in NHL
Data from clinical trials suggest that radio-immunotherapy (RIT) consolidation therapy is an important treatment approach for patients with follicular lymphoma (FL), with striking phase 3 results recently published for 90Y-ibritumomab tiuxetan (Zevalin) consolidation following induction therapy in previously untreated patients.In particular, the high rates of complete responses (CR) observed may be a key factor in preventing the relapses that are characteristic of FL.Excellent rates of partial response (PR) to CR/CRu conversion with RIT consolidation have led to significantly longer progression free survival (PFS) times, with favorable tolerability and no unexpected toxicities.
Following the release of the Phase 3 Zevalin FIT data, the European Medicines Agency (EMEA) approved its use as consolidation therapy following remission induction in previously untreated patients with FL.
Emerging data suggest that the RIT consolidation approach may also be effective in the treatment of other indolent lymphomas, such as marginal zone lymphoma (MZL), and aggressive lymphomas, such as diffuse large B-cell lymphoma (DLBCL) and mantle cell lymphoma (MCL).With such superior therapy options, the potential impact of RIT on the current and future treatment of both FL and aggressive NHL may include a shift in our approach to therapy and the adoption of RIT consolidation as a standard of care in the first-line setting.
Source: “Rationale for Consolidation to Improve Progression-Free Survival in Patients with Non-Hodgkin’s Lymphoma: A Review of the Evidence,”The Oncologist 2009; 14 (suppl 2): 17-29 www.TheOncologist.com 3. Radio-immunotherapy for Stem Cell Transplantation in NHL
Interestingly, in both chemotherapy-sensitive and chemotherapy-refractory disease, augmentation of high-dose chemotherapy (HDC) with radio-immunotherapy (RIT) prior to autologous stem cell transplantation (ASCT) appears to provide better clinical outcomes than with historical data for pure HDC pretransplant conditioning regimens. Preliminary data from phase 1/2 trials show that RIT may be safely used as a single agent or added at either a high dose or standard dose to HDC preparative regimens for high-risk B-cell non-Hogkin's lymphoma (NHL) histologies (diffuse large B-cell lymphoma (DLBCL), follicular lymphoma (FL), mantle cell lymphoma (MCL), and marginal zone lymphoma (MZL).Preliminary data also suggest that RIT in combination with reduced-instensity conditioning (RIC) in allogenic stem cell transplantation (alloSCT) may improve outcome, by better disease eradication and prevention of recurrence, while maintaining the low toxicity of RIC.All these studies indicate a promising role for RIT based conditioning regimens for stem cell transplantation (SCT), particularly in patients data, large-scale trials should be performed to investigate and further confirm these key observations who cannot tolerate HDC and/or total body irradiation (TBI).
Source: “Radioimmunotherapy for Stem Cell Transplantation in Non-Hodgkin’s Lymphoma: In Pursuit of a Complete Response,”The Oncologist 2009; 14 (suppl 2): 41-51 www.TheOncologist.com The Doc's Take After reviewing these documents, I asked a recently retired oncologist, Jerry Kallas MD, for his thoughts about the conclusions made in the articles. It should be noted that prior to his retirement, Dr. Kallas spent over 40 years treating patients with various forms of cancer. Here’s what he had to say:
Justin,
The articles from The Oncologist are so on target as to Zevalin’s potential to become a standard of care drug therapy for Non-Hodgkin’s lymphoma. I would agree with the statement that Zevalin has blockbuster potential.
My disappointment as a retired Medical Oncologist is that I retired too soon and missed the opportunity to use the many new oncology drug therapies that are now coming to market. Yttrium 90-ibritumamab (Zevalin) is such a drug. It is showing so much potential to increase Non-Hodgkin’s lymphoma treatment response rates as well as progression free survival, and in some patients can be the catalyst for a cure. It is a treatment that the Medical Oncologists will readily prescribe due to its ability to improve response and quality of life survival, as well as its low toxicity, and will likely promote a shift in the approach to lymphoma therapy using consolidation radioimmunotherapy as a standard of care in a first line setting.
Jerry Kallas MD
For SPPI, The Show Isn't Over. It's Just Beginning. Shares of SPPI remain terribly oversold and undervalued. Third quarter earnings will be announced in mid November. At that time, I expect the company will provide shareholders with some sort of guidance on Zevalin sales. SPPI currently has 48.7 million shares outstanding. With solid Zevalin sales over the next 3 to 4 quarters, it is easily foreseeable that shares of SPPI could trade at or near my price target of $23 giving SPPI a market value of $1.12 billion. Caveat Emptor Due to the manipulation of corporate equity by short-sellers as the SEC has failed to reintroduce the up-tick rule to protect those who invest in US companies, investors should ALWAYS hedge their long positions to mitigate risk of loss. A great way to hedge long positions is to purchase put options. I follow this strategy and especially when investing in small cap drug makers. I can honestly say that I have never regretted buying puts to protect my long positions. To ensure your long-term success, be smart with your money and don't assume unnecessary risks. Disclosure: Long SPPI.
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This article has 35 comments:
SK
There is no denying - the chart is ugly. You may be right about the price going lower. I'm afraid that far too many investors probably leveraged up when they bought shares. It looks to me that much of the selling may be margin calls, which is very disappointing.
As I have held consistently, I like the company as a long-term investment and that's how I've played it.
Take care.
Justin
From my view, this is a no-brainer. I am a focused and patient investor.
I have always thought that ZEVALIN was SPPI greatest hope. FUSILEV is just a side product if successful would increase the value of SPPI, I didnt expect FUSILEV rejection to affect the price.
I really hope that RAJ would give guidance on ZEVALIN. Perhaps an estimate of $100mln sales for 2010 is good. It looks like the CME reimbursement will succeed since there has been no uproar about it since August. So they should make it official really soon.
Consolidation therapy is indeed good for complete remission, and I really think ZEVALIN could become a blockbuster drug. With the 40 men sales team, RAJ is actually doing a great job now.
BIOCOM conference at 930am, 27OCTOBER, this should release something.
And lastly, the FIBONACCI 61.8% retracement level is at $4.15, so expect price to rebound from there, this projects a profit taking level at $16.80, which is a FIBONACCI number, hopefully the magic of FIBONACCI will work with SPPI.
It worked with MGM, LVS.
It is refreshing to hear a little optimism about SPPI! This is a good company with one Hell of a drug in Zevalin coupled with a pipeline led by Eoquin which 235K bladder cancer patients could qualify upon approval. If approved Eoquin is a blockbuster.
Relative to ALL other small cap drug makers, SPPI is by far the most attractive in terms of price, value, and with respect to revenue and earnings growth.
In my honest opinion, I have been unable find a better play that comes even remotely close. Not even close.
If the company projects $100 million in revenue for 2010 in mid-February, I will record a video of myself doing a little dance while shares go to $20 on the day of that announcement and post it online for the world to see.
Thank you for the nice comment!
Justin
(1) Phase 3 FIT data was just presented in December 2008 which "uncovered" the benefits of Zevalin.
(2) Zevalin was just approved for first-line use in September.
(3) The three peer-reviews cited above were just published this month.
Based on these three peer reviews, I am not so sure $100 million for the entire year of 2010 is entirely out of the question. I do not think that the company would provide that kind of guidance even if they believed it. Whether sales will, in fact, reach those levels by year-end 2010 is not known right now. I am willing to give it some time.
Good luck to you sir.
Yes I do understand that. I want to make sure that you understand that I am referring to total annual sales.
I think you are underestimating the drug and do not seem to see what I see.
Next month, CMS could approve Zevalin at ASP similar to other chemo drugs.. If so, then the company could charge a fair (higher)price for the drug.
Set that aside for the moment. If there is a SHIFT in the STANDARD OF CARE treatment for NHL, then a majority of doctors will likely implement RIT into the first-line treatment - AND THEY SHOULD. IT WORKS.
If a MAJORITY of doctors implement RIT, then a majority of patients will likely receive and RIT - Bexxar or Zevalin. Since Zevalin retains first-line approval and Bexxar does not, then most doctors, who implement RIT will use Zevalin by default.
At the current price, of $24,000 per treatment (I'm not factoring the increase since we do not know the CMS decision yet), 4,167 patients need to receive it in a year to equal $100 M. Make sense?
4,167 only represents 10% of the total patient pool which Zevalin is approved EXCLUDING watch and wait patients which account for another 20,000 and who also end up receiving treatment at some point down the road.
Back to my argument above regarding standard of care. RIT is likely to become a standard of care treatment as a first-line consolidation. Again, standard of care means that a majority of all doctors will implement RIT into the first-line treatment regimen. Zevalin is the only one with first-line approval and will inherently be preferred by most of the doctors within the majority. A majority is 51%. So if 51% of the patients are treated with RIT, that means 22,000 to 25,000 patients would receive either Bexxar or Zevalin on an annual basis.
Since a majority of patients are more likely to receive Zevalin over Bexxar because Zevalin has already been approved for first-line use and Bexxar has not, then about 22,000 to 25,000 patients would be treated annually with an RIT (Zevalin or Bexxar). With a majority of 51%, approximately 11,000 to 12,500 patients would receive Zevalin. Again Zevalin is more likely to be prescribed over Bexxar as it is approved for first-line use and Bexxar is not.
11,000 to 12,500 patients, which represents a 51% majority of all patients treated with an RIT, would generate between $264M to $300 M at the current price of $24,000.
Hence the importance of shifting the standard of care to include RIT. Such a shift would be a huge milestone for Zevalin. It should be done anyway, the damn drug works.
I hope this helps.
author writes: "If there is a SHIFT in the STANDARD OF CARE treatment for NHL, then a majority of doctors will likely implement RIT into the first-line treatment."
That's a big "if".
Oncologists use what they know. At this point, they have a good drug, which they know well. The most likely scenario for Zevalin is as a second line drug for relapsing patients. Each addition to a drug regimen adds considerably to cost and to the potential for complications. Most community oncologists avoid the the complicated multidrug protocols common at research hospitals if they can . . . in this case, they can.
After Fusilev was rejected the bottom list pit just got deeper. Interestingly enough I see that an oncologist has posted his opinions on Zev and he flat out says he can name a bunch of reasons that docs wouldn't use it. Same goes for Avastin. Personal experience with Avastin told me that it worked yet I believe a lot of oncologist are skeptical or reluctant to give it a try.
Bottom line is that SPPI is now damaged goods. SAve a miracle FDA turnaround for Fusilev, or some other unlikely favorable event surrounding Zev, I can't see anything on the horizon that will perk this price up anytime soon. Maybe $2 per is not out of teh question.
Against my own protocol, I sold the 100K share that I had at $4.59. A buck forty down the drain. That stings. All I can say is that I'd be extremely careful of how analysts portray a stock. I did plenty of my own homework, and I'm very diligent in handling my reviews, but I sure did miss this one.
While an analyst's review might make sense on paper, practical application often proves otherwise - especially in the medical field. I'd cut my losses, lick my wounds, and gone on with life under another stock. That's the brutal truth. It hurts, but it's the truth. At least most of us can say that we weren't the investment company that got lured in at $7.50 per. I suppose the ROE for that firm isn't going to sport a favorbale figure. Just think, they're professionals and they got burned.
I am sorry for you that you had to sell ur 100,000/1000 shares...
at $4.59, there was no sale of 100,000 shares, so thx for ur nonsense. This further shows ur ignorance.
We shall see tomorrow, SPPI will present something. They already know the result of 2 months of ZEVALIN SALES.
My shares were sold off in 23 separate blocks at average of $4.59 per share over a period of 5 days approximately 3 weeks ago. That's how bulk investment is handled. When I purchase or sell large amounts of stock, I typically complete the total move over one or two week's time. I've done the same with general Growth Properties where I'm happy to report that I bought in at an average of $1.33 per in the spring. I've managed to have the nerve to hang on to that stock until today because unlike SPPI, there is factual information that I can base my decisions upon, unlike the information that's coming from "analysts" who claim to have formulated a business model that says the company's revenue will explode to new heights based on the marketing of a drug that's been available for some time.
If Zev is so good, then why did SPPI feel the need to raise $50 Million in a stock offering at the end of September? I'll tell you why and it's not rocket science. SPPI needed a cash infusion for a re-launch marketing campaign for Zev. That my friend is not a good sign. What they do with the original campaign? Did they bungle it? Do they have an inept sales team? Did they lose their focus because they had myopic vision on Fusilev? Most likely the latter. No matter the reason, the original campaign was botched.
Trust me when I tell you that the majority of physicians are generally hesitant to prescribe newly approved drugs because most physicians simply don't want to think about thinks being different tomorrow than they are today. They're complacent,content, and....well, physicians, and physicians think they know more than any pharamcists, pharm R&D company, and of course, the general public. It's called the God complex and until the good-ole-boy network of these physicians dies off, things simply will not change.
If you haven't done so, I'd sell SPPI. There may be a major turnaround for this stock in the future, and target price of $10 might not be out of the question, but when will this be realized? Also, that type of turnaround will not happen overnight. there will be plenty of time for you to get on-board. Surely you can have your money be more productive for you somehwere else in the meantime.
I'm just offering my own advice here. If you don't like, then please don't attack me. I'm simply trying to help everyone protect their money.
On Oct 26 05:56 PM fxchat wrote:
> 6 Moves Ahead,
>
> I am sorry for you that you had to sell ur 100,000/1000 shares...
>
>
> at $4.59, there was no sale of 100,000 shares, so thx for ur nonsense.
> This further shows ur ignorance.
>
> We shall see tomorrow, SPPI will present something. They already
> know the result of 2 months of ZEVALIN SALES.
por lo visto las expectativas de venta es de 100 a 300 mill
Saludos
Zev a una población de pacientes prospectivo de 43.000 pacientes.
2) Ramirez está buscando las ventas en el rango de $ 100 - $ 300 millones, "con facilidad",
3) Raj dice NCCN publicado directrices sobre la forma en Zev s / b utilizado por los médicos
y esta orientación para Zev aparece ahora en la Categoría 1, que es
categoría más amplia.
4) Además, CMS paquete de información relativa a los datos a ser considerados por la CMS
noviembre 2009 para su votación reembolso ..... incluye la NCCN
la directriz de la categoría 1 para el uso de Zev, en todas las fases de NH
linfoma ....
este es un avance de la presentacion de hoy
Saludos
mikel
Saludos
Dr. 1996:
Don't sit on your hands, your patients should have access to RIT.
Call 1-800-Zevalin and SPPI can help you.
On Oct 26 12:04 PM hoopdreamerz@yahoo.com wrote:
> Justin, i understand, but you and Spectrum can make this same case
> until you're all blue in the face but its still not going to sell
> $100M or even $50M or even $25M in 2010.
parece que hoy tambien baja, cuando pensais que tendra tendencia arriba
saludos
mikel
You mentioned reimbursement of 24,000 w/o CMS changes. Have you looked at a newspaper lately? Do you know the rate at which most insurers kick this out?
Why are are you getting advice from a 70 yo onc on a RIT?
However I do recognize my limitations as an investor.
How do I "short" a stock? : )
5% of pts in initial trial of relapsed NHL developed acute myelogenous leukemia/myelodysplastic syndrome at a median 2.9 years.
to kind of understand side effects of radiation- google medical s/s of nuclear attack and read about bone marrow/gi/cns death esp. bone marrow.
I'm a huge fan of pitchblende products but to analyze a product/company, I think it helps to understand the science. unless you're just daytrading a ticker symbol. which is ok ,too.
Czuczman and colleagues recently reviewed a database including 746 patients treated with ibritumomab tiuxetan radioimmunotherapy.20 At a median of 4.4 years of follow-up, there were 19 cases of secondary AML or MDS with a crude incidence rate of 2.5%. Interestingly, comparing patients who developed secondary MDS/AML with those who did not, follicular histology and prior treatment with a purine analog were the only significant differences in risk factors. The association with purine analog treatment remained significant even in multivariate analysis; fludarabine was the purine analog in all cases. Increased age, prior radiation and alkylating agents did not seem to be overly represented in the patients who developed AML or MDS after ibritumomab tiuxetan. Similar risks have been reported with iodine-131 tositumomab, although the purine analog treatment status of those patients did not appear to increase the risk of MDS/AML.21
Importantly, the use of upfront radioimmunotherapy has not been associated with MDS or AML,22 except when combined with chemotherapy.23 One other important finding in the study by Sacchi and colleagues was that the cumulative incidence of secondary cancers continued to increase over the period of follow-up without evidence of a plateau. As previously mentioned, this phenomenon has been recognized in the setting of breast cancer after treatment of Hodgkin’s lymphoma, in which increased risk continues to be present for up to 30 years after radiation therapy. Longer follow-up of this and other non-Hodgkin’s lymphoma cohorts will be important to define the period of risk, which will have implications for the follow-up of these and other patients treated for indolent non-Hodgkin’s lymphoma.
On Nov 01 08:34 AM 1996 wrote:
> zevalin.com prescribing info section 6.1 p.7 roughly
> 5% of pts in initial trial of relapsed NHL developed acute myelogenous
> leukemia/myelodysplastic syndrome at a median 2.9 years.
> to kind of understand side effects of radiation- google medical s/s
> of nuclear attack and read about bone marrow/gi/cns death esp. bone
> marrow.
> I'm a huge fan of pitchblende products but to analyze a product/company,
> I think it helps to understand the science. unless you're just daytrading
> a ticker symbol. which is ok ,too.
> of nuclear attack and read about bone marrow/gi/cns death esp. bone
> marrow."
Although not Zevalin, this study would suggest a little discrepancy in your thoughts about radiation. It would seem to me that the Chemo drugs are the toxic part of the equation.
It concerns me that you are worried about educating a seeking alpha poster, when you really should be educating yourself. Maybe a little continuing ed could help relieve your status quo way of thinking. Also, would this gentlemen fit into your neat box of ridicule for being old and not with the times?
blog.newsweek.com/blog......
The most concerning of the toxicities related to the administration of tositumomab is the potential for the development of secondary malignancy, most notably MDS and AML. Secondary MDS and AML have long been recognized as potential complications of treatment for NHL even before the era of radioimmunotherapy (Armitage et al 2003). With the prolonged survival observed in patients treated with tositumomab, it is unclear whether the development of subsequent MDS/AML is related to the radioimmunotherapy or to the longer period of observation after chemotherapy in patients who are living longer. Bennett and colleagues examined this question in a review of 1071 patients treated with radiolabeled tositumomab (Bennett et al 2005). A 6.3% 5-year cumulative incidence of MDS/AML was observed in patients who received radiolabeled tositumomab in the relapsed/refractory setting. However, with a median follow up of 5 years, no cases of MDS/AML were observed in patients who received tositumomab as initial therapy. Longer follow up is needed, but these initial data suggest that radiolabeled tositumomab is safe and that the development of secondary MDS/AML may be attributable to both the duration and amount of prior chemotherapy as well as to effects of the radioimmunotherapy itself.
www.ncbi.nlm.nih.gov/p.../
On Nov 01 08:34 AM 1996 wrote:
> zevalin.com prescribing info section 6.1 p.7 roughly
> 5% of pts in initial trial of relapsed NHL developed acute myelogenous
> leukemia/myelodysplastic syndrome at a median 2.9 years.
> to kind of understand side effects of radiation- google medical s/s
> of nuclear attack and read about bone marrow/gi/cns death esp. bone
> marrow.
> I'm a huge fan of pitchblende products but to analyze a product/company,
> I think it helps to understand the science. unless you're just daytrading
> a ticker symbol. which is ok ,too.
Talk down to me, you flippin' elitist nerd. You're a coward. My comment to you above did not warrant the response you provided. I seriously doubt you are who you claim to be - a doctor.
I've never offered any kind of scientific opinion. I cited three peer reviews from a well-known source. The reviews were actually written by doctors with legal names. They weren't hiding behind an alias making comments on a social network.
The real problem I have with you is that you could give a damn about patients rights. That, my friend, trumps all of your claims. Whether you like it or not, Zevalin is a very safe and effective treatment. Everything I have read about RIT indicates your claims are way off. Not to mention, you cited the damn label. That's creative work.
Oddly, you did not refute any of the conclusions made in the three peer-reviews cited above. You couldn't. The label is all you need.
Pop Quiz Boy-Genius:
If safety were a real concern as you claim, then why in the Hell did the FDA approve Zevalin for first-line consolidation use? Where were you on 9/4/09?
On Tuesday, 9/3/09, SPPI announced that the CMS approved Zevalin for reimbursement at ASP.
While you claim that Zevalin is not safe, why does it continue to make headway?
No need to respond. I'm not interested in getting this wrong
Good luck sir. I do hope you are not eventually diagnosed with NHL.
Justin