The Spectrum Pharma Analyst
B Riley FBR analyst Mayank Mamtani maintained a Buy rating on Spectrum and lowered the price target from $18 to $11.
The Spectrum Pharma Thesis
The topline overall response rate of 14.8% Spectrum reported for Cohort 1 in the Phase 2 study that evaluated poziotinib in previously treated exon 20 deletion EGFR mutant non-small cell lung cancer patients came in below the 20-30% consensus and the 43% reported in the single-center MD Anderson study, Mamtani said in a Friday note. (See his track record here.)
This would mean the 115-patient study failed to meet the pre-specified threshold agreed upon with the FDA for accelerated approval, the analyst said.
Yet the data offered evidence of monotherapy activity, and the 68.7% disease control rate and 7.4 months of response are clinically meaningful in a hard-to-treat patient population, he said.
"While acknowledging cohort 1 results has readthrough to cohorts 2-7, we aren't convinced to take out pozi from our model as is reflected in today's sell-off, i.e., -60%, and believe incremental updates in 2020 to reaffirm confidence in pozi's place in NSCLC treatment paradigm."
B Riley FBR said it sees a valuation floor in the form of more advanced ROLONTIS for treatment of neutropenia that is likely to be commercially launched in the fourth quarter of 2020 — and the $250 million in cash the company has for supporting advancement of earlier stage oncology candidates.
Spectrum Pharma Price Action
The stock was trading 2.29% higher at $3.58 at the time of publication Friday.