As the markets kick back into gear following Christmas, one of the biggest moves in the stock market was a small biotech stock. More specifically, Spectrum Pharmaceuticals (NASDAQ: SPPI) fell by 60% on Boxing Day after the company announced just before Christmas that it had missed its target for a key lung cancer drug trial.
The company made the announcement just before Christmas Day on the 24th, hoping that the day off would help calm the sentiments of investors a little bit. As it turns out, this wasn’t the case, as Spectrum Pharmaceuticals lost three-fifths of its market value once the markets opened back on Thursday morning, the worst single-day performance in over 17 years. Spectrum is developing two different drug candidates at the moment, with its non-small cell lung cancer drug Zenith20 being its main product up until now.
Unfortunately for the company, Zenith20 failed to meet its primary endpoint in treating the first group of 115 patients that were on a 15mg dose per day. As it turns out, only 15% of patients had responded at all to the drug, a pretty disappointing performance for the treatment. Spectrum had previously sold off its other business segments in order to focus on a smaller lineup of drug treatments, betting that Zenith20 will end up performing well enough to be a significant revenue generator for the company. While there are other patient groups that are still undergoing treatment, these initial results certainly aren’t encouraging.
“While the response rate of Cohort 1 in this trial was lower than we expected, the positive signals observed for this cohort provide support for the continued clinical evaluation of poziotinib in this patient population with significant unmet medical need,” Spectrum’s CEO Joe Turgeon said in a official press release. “We look forward to providing read outs from Cohorts 2 and 3 in 2020, and plan to provide an update on the overall program strategy during the first quarter of 2020 after a full evaluation of the data from Cohort 1 is completed.”
In response to the news, shares of Spectrum fell by precisely 60% over the course of the day, although after-hours trading has seen the stock recover by a few percentage points. Most analysts covering Spectrum were rather optimistic about the company, although quite a few remained cautiously neutral about the stock. In response to this development, however, it wouldn’t be surprising to see analysts downgrade the stock on this unexpected failure. Time will tell whether Spectrum’s last drug candidate will have the breakthrough potential it’s hoping for, but this initial batch of results seems to have dashed those hopes aside.
Spectrum Pharmaceuticals Company Profile
Spectrum Pharmaceuticals Inc operates in the healthcare sector in the United States. As an oncology products manufacturer, it develops drugs to combat various kinds of tumors. The SPI-2012 is being developed for chemotherapy-induced neutropenia in patients with breast cancer, and EOQUIN addresses immediate intravesical instillation and post-transurethral resection of bladder tumors in patients with non-muscle invasive bladder cancer. Its other products include FUSILEV, FOLOTYN, ZEVALIN, MARQIBO, BELEODAQ and EVOMELA. – Warrior Trading News
