What happened
After the company reported second-quarter earnings, shares of Spectrum Pharmaceuticals (SPPI +0.00%), a commercial-stage hematology and oncology biotech, jumped 13% as of 11:25 a.m. EDT on Friday.
So what
Here's a look at the headline numbers from the quarter:
- Revenue was $24.1 million. This figure was down 30% from the year-ago period and came up short of the $28 million in revenue that Wall Street had expected.
- Net income was $13.7 million. However, adjusted net income was a loss of $21.6 million, or $0.21 per share. That figure matched market watchers' projections.
- Cash balance at quarter's end was $270 million, which the company expects will be enough to fund itself in 2020.
- Management reaffirmed revenue guidance for the full year to land between $95 million to $115 million.
Image source: Getty Images.
So if the company missed on revenue and only matched on the bottom line, why are shares soaring today? The answer lies in the conference call, during which a number of positive developments related to its pipeline that happened during the period were discussed :
- A recent meeting with the Food and Drug Administration led the company to believe that its ongoing phase 2 study of its lung cancer compound poziotinib should be sufficient to qualify as a registrational trial.
- Management believes that poziotinib will receive Breakthrough Therapy Designation.
- This quarter, management plans to hold a prebiologics license application (BLA) meeting with the FDA for Rolontis. The company affirmed that it intends to submit the drug for approval in the fourth quarter.
Overall, the company's pipeline continues to progress nicely, so it's understandable that shares are moving higher today on the updates.
Now what
It's an exciting time to be an investor in Spectrum. Rolontis will be in the FDA's hands before the end of the year, and poziotinib could follow suit soon after. The rumor mill has also been buzzing that the company could be a takeover target.
Overall, the bull case for owning Spectrum continues to look intact. If Rolontis or poziotinib are able to live up to their expectations, it wouldn't surprise me to see this high-flying stock continue to perform for investors.
