Top Pharma Stock Review; Spectrum Pharmaceuticals Highlight

Spectrum Pharmaceuticals, Inc. (NASDAQ: SPPI) shares surged nearly 10% to close at $7.58 today despite a 56% drop in fourth-quarter net income despite a surge in sales of cancer drugs Zevalin and Fusilev, as the prior-year period recorded stock warrant gains.

The company reported consolidated revenue of $34 million, comprised of product sales of $31 million ($8 million from ZEVALIN, $23 million from FUSILEV) and $3 million from licensing fees, an increase over the $9 million in consolidated revenue in the fourth quarter of 2009, which was comprised of $5 million from product sales and the balance from licensing and milestone fees.

Net income was $4 million, or $0.09 per basic and $0.08 per diluted share, compared to net income of $10 million, which includes income of $20 million from the change in the fair value of common stock warrant liability, or $0.21 per basic and $0.20 per diluted share, in the fourth quarter of 2009.

Total research and development expenses were $7 million, as compared to $4 million in the same period of 2009, primarily due to in-licensing of compounds and continued investment in clinical trials. Selling, general and administrative expenses were $13 million compared to $11 million in the same period in 2009, an increase primarily attributable to sales and marketing expenses, including payroll costs and non cash stock compensation costs incurred with the sales of ZEVALIN and FUSILEV.

For full-year 2010, Spectrum posted consolidated revenue of $74 million, comprised of product sales of $61 million ($29 million from ZEVALIN, $32 million from FUSILEV) and $13 million from licensing fees, compared to $38 million in consolidated revenue recorded in 2009, which was comprised of $28 million from product sales ($16 million from ZEVALIN, $12 million from FUSILEV) and $10 million from milestone and licensing fees.

Net t loss attributable to stockholders was $(49 million), or ($0.99) per basic and diluted share, compared to a net loss attributable to stockholders of $(19 million), or ($0.48) per basic and diluted share, in the same period of 2009.

Total research and development expenses were $57 million, as compared to $21 million in the same period of 2009, primarily due to the $30 million upfront payment for the licensing of belinostat, and a one-time charge of $3 million, representing the fair value of 751,956 shares of our common stock issued as consideration for the acquisition and licensing of compounds. Selling, general and administrative expenses were $49 million compared to $34 million in the same period in 2009 an increase primarily due to the $14�million increase attributable to sales and marketing expenses, including payroll costs, incurred with the increase in sales of ZEVALIN and FUSILEV.

As of December 31, 2010, the company had cash, cash equivalents and investments totaling d $104 million, as compared to $125 million as of December 31, 2009, a net decrease of $21 million including the $30 million used for the in-licensing of belinostat.

The U.S. Food and Drug Administration has set April 29, 2011, as the key PDUFA action date for Fusilev in treating colorectal cancer.

The company stock has traded in the range of $3.67 and $7.49 during the past 52 weeks. The company�s market cap is $369.58 million.

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