With Upcoming Contentious Meeting, This Analyst Cuts Price Target On Spectrum Pharma

  • On Tuesday, the FDA released briefing documents related to Spectrum Pharmaceutical Inc's SPPI application for poziotinib for treating patients with previously treated locally advanced or metastatic NSCLC.
  • HC Wainwright says that though they were ready for a contentious ODAC meeting, the questions and the text in the ODAC briefing documents suggest a more argumentative meeting than expected. 
  • The analyst reiterates the Buy rating but cuts the price target from $12 to $9.
  • "We understood that the side effect profile at the 16mg QD dose would come into question, but the focus on questioning efficacy raises some concerns," the analyst writes.
  • The recent accelerated approval of Daiichi Sankyo DSKNY-AstraZeneca Plc's AZN Enhertu with 58% ORR and an mDOR of 8.7 months also provides more headwinds for poziotinib, the analyst says.
  • None of the other approved NSCLC therapies referenced in the briefing documents specifically indicated for HER2 exon 20 insertion mutations.
  • HC Wainwright lowered the probability of success for poziotinib to 50% from 70%. Considering if the approval comes on November 24, the analyst estimates launch soon with sales of $2.2 million in 2022 and $328 million in 2026.
  • Price Action: SPPI shares are down 3.45% at $0.64 on the last check Wednesday.
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