Spectrum Begins Phase III Trial, May See Upside from Generic Leucoverin Recall

Spectrum Pharmaceuticals (NASDAQ:SPPI) moves another cancer treatment further along the pipeline on Wednesday with the initiation of a Phase III trial of Zevalin as a treatment for Diffuse Large B Cell Lymphoma (DLBCL). The primary endpoint of the trial, called ZEST, will be overall survival and will compare the effects of the Zevalin regimen to the standard R-CHOP treatment of patients over the age of 60 with DLBCL. The product is already approved as a radiotherapeutic antibody for certain types of non-Hogdkin’s Lymphoma (NHL), but the medical need in DLBCL provides greater market opportunity for SPPI if Zevalin performs well in the study. In previous Phase II trials, Zevalin improved overall survival in patients with DLBCL following R-CHOP treatment, demonstrating a 5-year overall survival rate of 84% and 5-year progression-free survival of 75% in 44 older patients. Most importantly, however, Zevalin increased overall survival by 15% compared to patients who were treated with R-CHOP therapy alone. R-CHOP is the gold standard, five-drug chemotherapy regimen used in first-line treatment of non-Hodgkin’s Lymphoma.

SPPI’s primary revenue driver, Fusilev, may get a boost on recent news that Bedford Laboratories is recalling a substantial amount of its generic form of the drug, leucoverin, due to safety concerns. The generic recall was reported in July for a small batch of the drug but was expanded on Tuesday to include more of the product than originally anticipated; the defect spotlights the reliability of the branded product over its cheaper competitors. Fusilev has seen consistent sales growth in the last few years but recently faced criticism over supposed price cuts, which management quickly refuted. Along with the recall news, SPPI believes its J-code reimbursement for Fusilev will keep providers utilizing the product, even as cheaper drugs are available (see PropThink’s previous coverage). Spectrum is also looking to its lymphoma drug Folotyn, acquired through the purchase of Allos Therapeutics, to add value to the company’s product line. Spectrum expects Fusilev sales to benefit from existing Folotyn prescribers, and vice versa, as the same providers are likely to utilize both drugs. Shares of SPPI should be strong Wednesday off of the trial news and residual chatter from the leucoverin recall.