Why Shares Of Spectrum Pharma Are Ripping Higher

Spectrum Pharmaceuticals, Inc. SPPI shares were advancing strongly Tuesday following a positive clinical readout.

Spectrum's Trial Results: The ZENITH20 Phase 2 trial that evaluated poziotinib in previously treated non-small cell lung cancer patients with HER exon 20 insertion mutations met the prespecified endpoint, Henderson, Nevada-based Spectrum said. 

The results are from a late-stage trial of the investigational drug. 

The second cohort of the midstage study, consisting of 90 patients with the genetic mutations, was administered an oral daily dose of 16mg of poziotinib, the company said.

The intent-to-treat analysis showed a confirmed objective response rate of 27.8% and median duration of response of 5.1 months, with a median follow-up of 8.3 months, Spectrum said.

The company also noted a disease control rate of 70% and median progression-free survival of 5.5 months.

The safety profile was in line with the type of adverse events seen with other second-generation EGFR tyrosine kinase inhibitors and similar to the second cohort, Spectrum said. 

Cantor Analyst Reacts To Readout: The data came as a surprise, Cantor Fitzgerald analyst Alethia Young said in a note.

"We think these data look good and view this update positively since each cohort was designed as a separate pivotal study," the analyst said. 

What's Next For Spectrum: Spectrum said the second cohort was designed to be a registrational study, and the company is in the process of requesting a meeting with the FDA to discuss the data and its plans for a NDA submission.

The company also said it plans to present additional study results for the second cohort at an upcoming medical meeting.

After Spectrum reported in December that data from the first cohort failed to meet the primary endpoint, it amended the study protocol to explore additional twice-daily dosing regimens, as well as lower single daily dose amounts.

Cohorts two and three were not impacted, as they were fully enrolled by then, the company said.

It isn't yet clear why the second cohort was successful where the first failed, although the handling of dosing interruptions may have played a role, Cantor's Young said.

The ZENITH20 trial comprises seven independent cohorts, and results from the third cohort are expected in the second half of 2020.

Cantor estimates peak sales of about $100 million for poziotinib in HER2 second line, and now assumes a 65% probability of success versus zero previously.

The firm reiterated a Neutral rating on Spectrum shares and increased the price target from $4 to $7.

At last check, Spectrum shares were adding 22.99% to $3.98. 

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