PropThink: SPPI Could Be Up On CEO Speech Today; Fusilev Pricing And Allos Purchase Key Topics

The CEO of Spectrum Pharmaceuticals SPPI will present today in Southern California at an investor conference (12:00pm EST, webcast available at www.sppirx.com). In addition to reviewing the pipeline, Spectrum management is likely to defend against allegations that it recently cut its price on lead value driver, Fusilev, an intravenous cancer treatment. An article from theStreet.com published last week, made the allegations using sales reported by the company and prescription trend data to calculate that Fusilev's price had been cut by as much as 42% (see PropThink's story last week). The morning of the article, Spectrum stated that the alleged price cut is "erroneous and grossly misrepresents the company's Fusilev growth strategy." Today company management is expected to address this subject again, and comments by the CEO could drive the shares higher given Fusilev's strong performance. 

Fusilev sales have risen for each of the last eight quarters, and notably, the drug beat Wall St. sales estimates in 2Q 2012. Average Selling Price (or ASP), which is a U.S. government-calculated actual selling price of the drug, has been up in both 1Q 2012 and 2Q 2012, a strong fact that disputes the price cut theory. Spectrum believes that its unique J-code (government authorized reimbursement code that doctors use to bill for the brand) will keep physicians prescribing the product even when cheaper alternatives come back on the market. SPPI's acquisition of Allos Therapeutics ALTH is also likely to be a key topic in today's presentation, as Spectrum can take advantage of ALTH's strong cash position; ALTH's lead commercial drug Folotyn; and important cost reductions by combining the two company's selling efforts. These cost savings could benefit SPPI shares in one of two ways: 1) leverage from ALTH could be upside to SPPI's financial prospects if Fusilev continues to grow, Or 2) the cost synergies could provide a strong offset if cheaper alternatives to Fusilev do have a negative impact. Either way, these scenarios could be upside to expectations. During this morning's presentation, Spectrum also plans to talk about its overall business strategy. Expect shares of SPPI to be up into the company's presentation today at noon. 

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