Spectrum Pharma: The Evolution of Zevalin

Nov. 07, 2009 1:26 PM ETSPPI, CTIC, CEPH, BIIB6 Comments
Justin M. Hall profile picture
Justin M. Hall's Blog
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Independent Financial Analyst, Private Fund Manager, Expert Advisor, Capital Gains!

Contributor Since 2009

Justin M. Hall is an extremely accomplished independent financial analyst with more than a decade of experience in the financial markets. He consistently provides expertise to a variety of financial clients and is known for his successful market predictions. Between 2010 and 2014 Justin made 239 specific market recommendations via his online subscription service with an 80% accuracy rate. He has produced enduring results for a variety of clients including those who trade stocks, invest their own money, desire personal wealth management, and institutional investors. But more than an analyst, Justin is a person who influences and persuades, whose judgement is well respected and highly trusted, and whose opinion is sought by those searching for financial and investment advice. Justin received his undergraduate degree from Indiana State University and attended law school at Indiana University. His desire to serve the financial and investment needs of individual clients led him to start Rx Investors.com, an online subscription service that connected individual investors with his expert analysis. Subscribers from all over the world utilized Justin’s advice to generate market income and grow their individual portfolios. Many of these subscribers and clients continued to seek Justin’s analysis and advice for many years, appreciating his unique perspective on the financial industry. A variety of financial outlets have recognized Justin’s expertise and highlighted his work including the Orange County Business Journal, Seeking Alpha, and Zack’s Investment Research. These industry connections have allowed Justin to lend his expert advice to others and expand his influence.
I. Rodman & Renshaw Annual Global Investment Conference on September 10, 2009

II. UBS Global Life Sciences Conference on September 23, 2009

During presentations I and II, presentations were roughly the same.

  1. Please with extremely broad label per FDA recommendation
  2. Very attractive commercial opportunity with Zevalin
  3. Expanded Patient pool on day one, 43,000 NHL patients would qualify.
  4. Watch and wait patients are treated in year 3-5.

III. 2009 BIOCOM Investor Conference on
October 27, 2009

During presentation III, the message changed dramatically.

  • Fusilev: Meet with FDA to discuss a strategy for approval. Regarding the FDA's recent decision, “I have no idea what that means.”
  • Eoquin was acquired $100,000.  SPPI partnered the drug with AGN for $300 million.
  • SPPI has 8 drugs in development and “no drugs in test tube.”  SPPI is not in the business of drug discovery.
  • Financial strength: $150 million in cash
  • Successful management team that is focused on Zevalin.
  • D&T ranks SPPI as the 22nd fastest growing technology company in the world.
What is Zevalin?
  • On September 4, 2009, Zevalin was finally approved for first-line use in all grades of non-Hodgkin’s lymphoma (NHL).
What does first-line approval mean?
  • Prior to September 4, 2009, Zevalin was only indicated for a very small segment of the entire NHL market.
  • Rituxan and Treanda have sales of $2 billion and $300 million, respectively.
  • In 2008, Zevalin sales were a meager $11.3 million. “How much? $11.3 million.”
  • “We bought the rights to this drug because we saw the potential with the drug.”
  • “Our intentions are to turn Zevalin into a hundreds of millions of dollars in sales franchise. And you’ll see why.”
  • [8:50] “So the current approval is now the approval that we got six weeks ago is for first-line indication. That means, the usage of this drug [Zevalin] went from less than a 1,000 patients for a year will go to 43,000 patients for a year. Easy math. Forty-three fold increase in the usage in this drug.”
  • “Eleven million? And we think sales from this drug could be in $100, $200, and $300 million range easily.”
  • Zevalin is a single dose treatment with PFS of 5 years.
  • Peak sales of Zevalin were $20-$23 million per year.  The reason: the company previously responsible for marketing Zevalin, Biogen Idec (BIIB) also sold Rituxan.
What is our marketing strategy?
  • On 9/4/09, everything changed with first-line approval. NCCN guidelines list Zevalin as “Category 1” for NHL. Rituxan is “Category 2b” for maintenance.
  • Until 9/4/09, reimbursement was an issue.  Fifty states reimbursed Zevalin in fifty different ways.  Many doctors, who used Zevalin, lost money. So, there was NO incentive for doctors to use the drug. The reimbursement policies of Medicare and private insurers were very different.  
"Things are changing."
  • CMS has recommended that this drug should be reimbursed like all other oncology drugs, average sales price (ASP) plus 4% to 6%. The CMS made this recommendation.
  • Update: On November 3, 2009, SPPI announced that the CMS approved Zevalin for reimbursement at ASP plus 4% to 6%. Beginning January 1, 2010, Zevalin will be fully reimbursed.
  • In the past, no more than 20 sales executives marketed Zevalin. In 2008, Cell Therapeutics (CTIC) only had seven people selling Zevalin. As of 9/4/09, the company more than doubled its sales force from 24 to 50. Today, up to 70 SPPI reps will sell Zevalin.  “We believe Zevalin deserves attention. It’s a better drug.” Zevalin provides longer disease progression free survival. “It needs to reach patients.”
  • If a doctor wants to use Zevalin, then call Spectrum Pharmaceuticals at 1-800-Zevalin. There, the company can and will help you with all of the logistics so that you can administer the drug to your patients.
  • Zevalin is one dose unlike Rituxan you have to give every 6-8 weeks or like Treanda.
  • Rituxan is marketed by partners Biogen Idec (BIIB) and Roche (OTCQX:RHHBY).  Treanda is marketed by Cephalon (CEPH).


  • Stabilization and sales growth of Zevalin
  • Earnings are scheduled for Friday, November 13, 2009 at 1:00 PM ET.
  • Quarter over quarter (Q1 to Q3): “Zevalin sales have been increasing exactly as we anticipated and as expected.” 
  • “So, we are very pleased with the sales growth of Zevalin. Our first requirement was that we should be able to stabilize sales of Zevalin, which I think we have achieved." 
  • Continue the sales of Fusilev. 
  • Meet with FDA to see what they have in mind about approving colorectal cancer indication
  • Complete enrollment.. 
  • Start another study. 
  • Out-license rights in Japan and the rest of Asia
  • 48.7 million shares outstanding
  • $150 million in cash
  • $3.20 cash per share
  • $0 debt
  • Diversified sources of revenue
  • SPPI is a very diversified company. The company’s success does not hinge on any one binary event.

Disclosure: Long SPPI.

Recommended For You

Comments (6)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.