Spectrum Pharmaceuticals, Inc. (SPPI) Sinks On Qapzola Finding

An FDA advisory committee ruled against Spectrum Pharmaceuticals, Inc.'s (NASDAQ:SPPI) cancer drug

Sep 14, 2016 at 2:27 PM
facebook twitter linkedin

Unlike this fellow biotech, shares of Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) are sinking, after the company said a Food and Drug Administration (FDA) advisory committee concluded SPPI's cancer drug, Qapzola, did not show substantial improvement over a placebo. While the FDA can still vote to approve the drug in its final ruling in mid-December, SPPI stock is down 5.3% this afternoon at $5.20, after earlier being halted for volatility.

This negative price action is nothing new for SPPI, though. Since hitting its most recent high at $7.16 in early August, the shares have shed more than one-quarter of their value -- due in large part to an earnings-induced bear gap on Aug. 10. In fact, today's plunge has Spectrum Pharmaceuticals on track for its lowest daily close since early March.

On the sentiment front, some short sellers could be kicking themselves for missing out on this latest drop, considering short interest declined nearly 13% in the two most recent reporting periods. However, there's still a lofty 7.4 million SPPI shares sold short, or 7.8 times the stock's average daily pace of trading.

Elsewhere, the shares of Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) could be at risk of getting hit with a round of negative analyst notes. Of the three brokerages covering SPPI, two maintain a "strong buy" rating, with not a single "sell" to be found. Plus, the average 12-month price target of $9.25 stands at a stiff 88% premium to current trading levels. Bearish brokerage notes could create more headwinds for the shares.

Sign up now for Schaeffer's Market Recap to get all the day's big stock movers, must-know technical levels, and top economic stories straight to your inbox.

Minimize Risk While Maximizing Profits

There is no options strategy like this one, which consistently minimizes risk while maintaining maximum profits. Perfect for traders looking for ways to control risk, reduce losses, and increase the likelihood of success when trading calls and puts. The Schaeffer’s team has over 41 years of options trading success targeting +100% gains on every trade. Rest assured your losses are effectively limited to your initial cost at the time of making your move! Don't waste another second... join us right now before the next trade is released! 



Special Offers from Schaeffer's Trading Partners