Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI): Disappointing Cancer Treatment Results Sparks Selloff


Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) has come under immense selling pressure after an FDA advisory committee said the company’s drug Qapzola did not show evidence of efficacy in studies. Even though the FDA is set to issue a final verdict on the drug in December, investor confidence of a regulatory is waning given the advisory committee verdict.

 FDA Verdict

While the FDA final verdict is usually not tied to the recommendations of the advisory committee, the selloff wave is an indication investors do not expect anything positive form the review. The success of any product when it comes to regulatory approval most of the time hinges on the recommendations of such committees.

Spectrum Pharmaceuticals should be worried given that the FDA has followed the recommendations of the advisory committee 87% of the time. The advisory committee voting 14-0 against approval of the drug, all but continues to evoke doubts on the street of the cancer treatment clinching regulatory approval.

Clinical results in the past have failed to show substantial evidence of treatment effects of the drug in comparison to placebo. The drug has also failed to show reduction in disease recurrence in two randomized studies in the past something that the FDA could use to block regulatory approval.

 Class Action Stand Off

The FDA had initially advised Spectrum Pharmaceutical not to file a New Drug Application of the drug with the existing results. Failure to adhere to the recommendations has already evoked a wave of class action lawsuits against the company. Law firms now allege the company did not take care of shareholders interest with the filing of the NDA application.

Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) sentiments on the street are not dependent on the outcome of one clinical trial. The company currently boasts of six products under its portfolio. However, given that current drugs have failed to generate a substantial amount of sales should spell more trouble for the stock on waning investors’ confidence.


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