In May, I suggested that investors might want to hold off on investing in Spectrum Pharmaceuticals
Spectrum has the same problem that's plagued Momenta Pharmaceuticals
Fusilev, which goes by the chemical name levoleucovorin, competes directly with the generic-but-still-works leucovorin. Fortunately for Spectrum, generic-drug makers -- Teva Pharmaceutical
Valuing Spectrum is still difficult, though. How do you guess when Teva and others will get their act together? And then when -- dare I say, if -- they do, how do you estimate how many doctors will head back to the generic? Unlike a generic that's picked up at a pharmacy by a patient, cancer patients aren't likely to question their doctor about the cost of their medication, so we're basically wondering which doctors would prefer what they were using prior to the shortages versus what they're using now.
Every quarter that goes by pads the company's coffers and makes it a little easier to hold onto doctors that become more comfortable using Fusilev. Even with the company bumping up against its 52-week high set back in July, there would seem to be some room to run higher, although investors are right to remain a little skittish about the generic competition.
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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Teva Pharmaceutical Industries and Momenta Pharmaceuticals. Motley Fool newsletter services have recommended buying shares of Teva Pharmaceutical Industries and Momenta Pharmaceuticals. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.