Rodman & Renshaw Maintains Market Outperform Rating on Spectrum Pharma
Rodman & Renshaw has published a research report on Spectrum Pharmaceuticals (NASDAQ: SPPI) after an unknown generic manufacturing company applied for marketing approval on a generic version of Fusilev.
In the report, Rodman & Renshaw writes, "In our opinion, the paragraph 4 filing has occurred well in advance of the Fusilev orphan drug and patent expiry in an effort to secure 6 months of marketing exclusivity once the patent has expired. Nevertheless, we would like to highlight that Fusilev entered the already highly genericized market of leucovorin and has gained market share (>$40 MM in revenues last quarter) primarily due to manufacturing issues that have plagued generic companies since 2010. Our due diligence suggests that generic manufacturers may continue to produce leucovorin at current levels that should help maintain, if not increase, Fusilev market share. Furthermore, physicians appear to appreciate the ease of reimbursement as well as the manufacturing reliability of Fusilev. To date, Spectrum has approximately 15-20% of the current market share, with plans to increase market penetration through the recent establishment of a 40 member sales force that will target colorectal cancer treatment settings, and the establishment of partnerships with colorectal cancer patient advocacy groups, something that no generic manufacturer will likely do to increase revenues."
Rodman & Renshaw maintains its Market Outperform rating and $16 price target on Spectrum Pharmaceuticals, which is currently trading down $0.67 from yesterday's $14.58 closing price.
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