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Subject:  Spectrum fusiliv sales to soar? Date:  3/21/2012  8:53 AM
Author:  projectchris Number:  24832 of 25042

Spectrum Pharmaceutical's (NASDAQGS: SPPI) has seen sales for FUSILEV grow dramatically in the last year and these sales have been, and continue to be, the primary driver of the stock. Prior to the survey of oncologists that we conducted in October 2011 and published, Spectrum had reported FUSILEV sales of $33.9MM (2Q11), $35MM (1Q11), $23MM (4Q10) and $6MM (3Q10). Our survey of oncologists, which we published on October 18th, ahead of the 3Q, when the stock was approximately $8.70, revealed that FUSILEV demand was growing and we suggested the stock was undervalued. In this article, we proposed that the next leg of FUSILEV growth is occurring, as indicated by recent prescription data, and that the stock is poised to move higher on 2012 sales.

Since the time of our survey, Spectrum reported 3Q11 FUSILEV sales of $41MM, up $6MM from the prior quarter. The stock subsequently hit an all-time high of $16.00 of January 12th. Spectrum then reported full-year 2011 sales, which showed FUSILEV sales had grown to $43MM in the 4Q, up another $2MM from the report 3Q number of $41MM. While still moving upwards, the observation of a slowing FUSILEV growth rate resulted in a weakening of the stock price to $13.00, where the stock is currently consolidating. Investors may believe that FUSILEV sales are starting to plateau and that shares are fairly valued at this level. As we describe below, we strongly believe this is wrong and again we expect a substantial move upwards.

At $13.00 per share, a cash balance of $161MM (as of 12/21/11), and 59.3MM shares outstanding (as of 2/16/12), Spectrum Pharmaceuticals has an enterprise value of $610MM. In the 4Q, Spectrum reported FUSILEV and ZEVALIN sal