Despite Regulatory Setback, Spectrum Still "Unique Investment Opportunity," Says Analyst

• Yesterday, the FDA's Oncologic Drugs Advisory Committee (ODAC) panel voted against Spectrum Pharmaceuticals Inc's (NASDAQ: SPPI) poziotinib's (pozi) risk/benefit ratio and concluded that pozi's benefits do not outweigh the risks for the treatment of HER2 exon 20 insertion mutations.

• Meanwhile, with a newly approved commercial product Rolvedon launching into the $2.3 billion G-CSF space, JMP Securities believes that Spectrum shares still represent a unique investment opportunity with a 34% potential downside (bear case is $0.42) and 1,003% potential upside (bull case is $7).

• JMP reiterates its Market Outperform rating and a price target of $4.

• The analyst writes that the four "yes" votes reiterated the need for new therapies in HER2 exon 20 mutations wherein the treatment options are limited.

• Additionally, given the well-understood safety profile of TKIs, the four "yes" voters indicated that the side effect profile could be managed well.

• Furthermore, JMP acknowledges that given the current cash position, the company would need to make efforts to conserve cash, including cutting R&D, along with a potential capital raise. In a change to the model, JMP has reduced the R&D costs beginning 1Q23 by 30%.

• Price Action: SPPI shares are down 33.80% at $0.42 on the last check Friday.

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See more from Benzinga

• After Regulatory Setback, Spectrum Pharma Secures Up To $65M In Debt Funding

• FDA's Adcomm Gives Thumbs Down To Spectrum Pharmaceuticals' Lung Cancer Candidate

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