Spectrum Pharmaceuticals (SPPI) has got 2 pieces of great news in the past 2 weeks: FDA approval for its ready-to-use version of Fusilev under the approved osteoscarcoma indication on Apr 21 and a more critical FDA approval on Apr 29 for Fusilev (levo-leucovorin) for its new indication of metastatic colorectal cancer (mCRC).
I first bought SPPI over 2 years ago when it was less than $2 with call options. Since then, it has appreciated quite a lot. After my call options increased over 100%, I sold half of them to lock in my invested capital and exercised the other half and have held the stock shares since then. It has been up and down and quite volatile, especially it dropped from about $9 to about $5 when it failed to get an approval for its first try for mCRC. Fortunately I did not give up and kept my shares till now. Actually knowing that the FDA would announce its decision on Fri/Apr 29, I even bought more call options early this week to bet that this time it would likely get good news. Fortunately again, it did finally get what it had looked for after several years of trying and so did I but with much less pain as it was just a few days of betting for me.
So what I would do with my shares of SPPI? I intend to keep them as there is a good possibility that Spectrum may be acquired by Teva, the number one generic giant in the world. Teva has already marketed the generic leucovorin. However, due to manufacturing problems, it has voluntarily stopped making generic leucovorin. So currently there is huge shortage of leucovorin for mCRC patients. This is obviously fantastic news for Spectrum. Even before this approval, demand for SPPI’s Fusilev, a pure form of leucovorin, has increased dramatically as off-label use. With this approval, the company can now actively promote its use. So Spectrum is expected to be doing very well in the future. In addition, it has some promising late stage products in the pipelines. That's why I have seen some analysis speculating that Teva may buy Spectrum, which to me makes a lot of sense. If not Teva, it could be another hungry cash-rich hunter to potentially acquire a growing small biopharma like Spectrum. If this turns out to be the case, needless to say, SPPI will further appreciate and probably substantially more.
Of course, it is a pure speculation and no one knows for sure.
No comments:
Post a Comment