Shares of small-cap drug maker Spectrum Pharmaceuticals (US:SPPI) climbed 29.3% higher in trading on Tuesday after reporting a bullish fourth quarter update.

For the fourth quarter of 2022, Spectrum told investors that it has generated around $10 million in revenue which is the first time the company has reported sales in almost 5 years. The sales figure was well ahead of analyst forecasts for around $3.5 million in sales.

In January of 2019, the company sold its entire portfolio of seven marketed hematology/oncology products to Acrotech Biopharma.

This recent quarter marks the first booked sales for its approved treatment of ROLVEDON which launched in mid-October. The product was launched with a comprehensive strategy to address a community oncology target market worth $340 billion.

The scale up in sales came at a much faster rate than analysts in the market were expecting.

Rolvedon is an injectable long-acting drug that is used to stimulate the growth of neutrophils which are a type of white blood cell used by the body to fight against infection. The drug is currently being used to reduce the incidence of infection caused by receiving chemotherapy which causes a lack of neutrophils.

During the quarter, 70 targeted accounts purchased Rolvedon which included the top three community oncology networks which represent about 22% of the total clinic market.

The drug maker also reported that it had cash and short term liquidity of $75 million at the close of 2022. Management expects the liquidity will provide a cash runway through 2024.

Spectrum’s CEO Tom Riga told investors “I am pleased with the early receptivity to ROLVEDON from our oncology customers in the first quarter of our launch”. 

Riga was also bullish on the outlook of the company stating “The energy and enthusiasm within our company is high as we look to establish a strong launch trajectory with our novel product in this highly competitive, yet attractive market”

H.C Wainwright & Co analyst Edward White said that the net sales figure dramatically beat the firm’s estimate.

White thinks that Rolvedon is the first long-acting G-CSF product that has been approved in over 20 years and has the ability to gain substantial market share over time. H.C Wainwright & Co kept its ‘buy’ rating on the stock and reiterated its $4 price target.

Fintel’s consensus forecast price target of $3.16 suggests the stock could see a further 350% upside over 2022.

Research on the Fintel platform confirmed Spectrum Pharmaceuticals has been unloved by institutions during the last year. This has been described by a weak Fund Sentiment Score of 30.55.

This score ranks SPPI in the bottom 25% of 37,084 globally screened securities when ranked for institutional buying activity.

This sentiment could begin to turn a corner as SPPI begins to generate growing levels of revenue in the upcoming quarters and years.

Spectrum currently has 132 institutions on the register that collectively own 53.05 million shares. The largest institutions include: Armistice Capital, Vanguard Group Inc, BlackRock Inc, D. E. Shaw & Co, Millennium Management, Geode Capital Management and Morgan Stanley.

Over 2022, it is clear that institutions have slowly began to turn more bullish with the growing level of call option demand as the company moved closer to FDA approval for Rolvedon.

Spectrum also has a second drug candidate currently in Phase 2 & 3 of development called Poziotinib. The treatment is an investigational orally administered inhibitor used for the treatment of solid tumors.

The new drug application (NDA) has been submitted to the FDA for use in adult patients with lung cancer with HER2 exon 20 insertion mutations.

The company will next update investors during the release of its fourth quarter and full year results in March.

This article originally appeared on Fintel

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