Spectrum Pops 71% In After-Hours On ‘Positive’ Data For Lung Cancer Treatment

Shares in Spectrum Pharmaceuticals (SPPI) jumped 71% in extended trading after announcing positive topline results from a Phase 2 clinical trial evaluating its poziotinib in previously treated non-small cell lung cancer (NSCLC). The stock soared to $5.53 in Monday’s after-market trading. Spectrum said that it met the pre-specified primary endpoint in the poziotinib ZENITH20 Phase 2 clinical trial. Cohort 2 of the ZENITH20 clinical trial enrolled a total of 90 patients who received an oral, once daily dose of 16 mg of poziotinib. All the patients had failed at least one prior therapy with 60 patients (67%) having failed two or more prior therapies, including chemotherapy and immunotherapy. The treatment analysis demonstrated a confirmed objective response rate (ORR) of 27.8%. “The positive results of Cohort 2 are a significant milestone and we are looking forward to meeting with the FDA,” said Spectrum CEO Joe Turgeon. “We believe that poziotinib is a significant advancement for patients with this deadly disease in an area of high unmet medical need.” Spectrum is in the process of requesting a meeting with the FDA to discuss the data as it plans to submit a New Drug Application (NDA). The company expects to present additional study results for cohort 2 at an upcoming medical meeting. With Spectrum shares down more than 11% so far this year, five-star analyst Mayank Mamtani at B.Riley FBR believes some stock catching-up could be lying ahead. “We believe a catalyst-rich 2H20 sets up an attractive risk-reward, where SPPI stock could catch up to the broader biotech rally,” Mamtani wrote in a note to investors this month. Following a virtual meeting with Spectrum’s management, the analyst reiterated a Buy rating on the stock with a $8 price target (146.91% upside potential). “While management anticipates a temporary increase in SG&A for commercialization costs and continued R&D expenditures for pozitionib’s late-stage development, Rolontis sales throughout 2021 will provide meaningful revenue to help bolster the SPPI balance sheet,” Mamtani added. Overall, not many have weighed in with an outlook on SPPI in the last 3 months, but those two analysts who have rate the stock a Buy, and the $9.50 average price target puts the potential twelve-month gain at 193%. (See SPPI stock analysis on TipRanks)
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