Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI)

CAPS Rating: 4 out of 5

A biopharmaceutical company that acquires and advances a diversified portfolio of drug candidates, with a focus on oncology, urology and other critical health challenges for which there are few other treatment options.

Recs

3
Player Avatar zzlangerhans (99.85) Submitted: 5/3/2011 3:05:30 AM : Underperform Start Price: $10.06 SPPI Score: +22.07

As expected, Spectrum's share price rose as much as 12% today on an expected FDA approval of Fusilev for colorectal cancer, which was already pretty much written into the share price. Spectrum at a 500M cap has two problems. The first is that dramatic increases in Fusilev revenues in the last three quarters have been due to a shortage of generic leucovorin, and those revenues will likely drop dramatically once that shortage is resolved. Quarterly sales of Fusilev went from under 1M to 6M then 23M and then probably about 30M once generic leucovorin became unavailable. Fusilev for colorectal cancer will likely improve the baseline revenues, but I imagine oncologists have already been using it off-label for that indication if they couldn't get generic leucovorin. No one can be sure where those numbers will end up eventually, but I'm guessing under 10M per quarter.

The second problem is weak growth of the lymphoma drug Zevalin, which may be topping out under 10M per quarter. If the earnings on May 4 don't show significant Zevalin growth, the stock could be in for a bit of punishment. The company oddly released total quarterly revenues of 40M a few days ago but didn't break it down into Fusilev and Zevalin. One has to wonder why.

To make my assessment of Spectrum I relied heavily on the analysis of Adam Feuerstein, who has been a biotech columnist for The Street for many years. I've found Feuerstein to be by far the most valuable single resource in predicting the future performance of small cap biotech stocks. He has an excellent track record in predicting catalysts as well as the long-term performance of these companies and stocks. I have no doubt he could be doing much better financially if he was managing a hedge fund or consulting for a major brokerage, but he seems to simply love journalism. Sadly, many biotech traders seem to be unable to utilize this valuable resource and choose to attack Feuerstein when his opinions conflict with their (usually misguided) hopes for a company's prospects. More often than not they attack him as a stock manipulator on the payroll of hedge funds. The fact that he usually turns out to be right doesn't deter them in the least. On the other hand, they are more than happy to throw their lot in with true manipulators like Garza and the SA crowd. Simply put, if you fit this description you are an idiot. The only thing that I like as much as profiting on a biotech trade is knowing that the money came from you. Cheers.

Report this Post 7 Replies
Member Avatar portefeuille (99.66) Submitted: 5/3/2011 2:17:45 PM
Recs: 0

That has to be said every now and then ...

Member Avatar portefeuille (99.66) Submitted: 5/3/2011 2:21:05 PM
Recs: 0

so maybe checklist34 (fund manager), you (expert), Feuerstein (info seeker) and I (usually right for unknown reason) should work together ...

Member Avatar zzlangerhans (99.85) Submitted: 5/3/2011 3:23:31 PM
Recs: 0

If you can get Feuerstein, you won't be needing me. But I suspect others have tried and failed.

Member Avatar zzlangerhans (99.85) Submitted: 5/9/2011 4:21:44 PM
Recs: 0

This is exactly the kind of convoluted nonsense I was describing. Thank you for the example.

The article was not "strangely timed". Journalists write articles on subjects of interest to the reading public. If a stock is becoming severely overvalued based on misrepresentations by management and commentators biased by their own long investments, I want to know about it.

There was no "bear raid". People read the article and sold the stock, or decided not to buy it. The share price dropped because people had logic and common sense displayed to them where previously only froth and BS prevailed.

Despite the pathetic howls of people who claim directly or indirectly that Feuerstein has ulterior motives in his articles, no one has ever offered a shred of evidence to support this. The Street has an extremely restrictive policy governing the investments of their writers. Feuerstein has proven to be correct long-term more times than I can count, and always follows up his rare bad calls with a mea culpa. The real manipulators simply go silent when their pet pumps eventually tank.

As I've said before, please continue to base your investments on management PR and ignore Feuerstein's opinions. Baby needs a new pair of shoes.

Member Avatar Momentum21 (44.33) Submitted: 5/9/2011 7:16:06 PM
Recs: 0

"I have no doubt he could be doing much better financially if he was managing a hedge fund or consulting for a major brokerage, but he seems to simply love journalism."

He loves being the center of attention is what he loves. If he could achieve that by using his knowledge to trade profitably I am sure he would do it. Small cap biotechs produce many more losers than winners so maintaining a bearish posture is pretty critical to being right more often than not.

I don't think he is corrupt (and I certainly think he is very knowledgeable) but with all due respect, your rub and tug of AF makes me ill... : )

Member Avatar zzlangerhans (99.85) Submitted: 5/10/2011 9:56:00 AM
Recs: 0

These are words of advice for those who have not been corrupted. I have no interest in rescuing the lost.

Member Avatar zzlangerhans (99.85) Submitted: 7/3/2011 5:11:21 PM
Recs: 0

http://caps.fool.com/Pitch/AMRN/4750157/hemispheryx-has-ampligen-and-a.aspx?source=itxsittb0000001

This is you, isn't it? One reason why I don't consider you worthy of a response.

Featured Broker Partners


Advertisement