Spectrum Pharmaceuticals Inc., an Irvine cancer drug maker, recently got a nod from a writer on the Seeking Alpha investor Web site as an “underappreciated” stock.
“To investors looking for excellent long-term growth opportunities, pay close attention,” blogger Justin Hall wrote.
Small drug makers, particularly cancer drug makers, “are way undervalued at this time,” said Hall, who owns shares in Spectrum.
“Over the next two to three years, this industry will continue to consolidate,” Hall said.
The key for investors is to find cancer drug makers that pose “nominal downside risk” but retain potential for serious growth, Hall said.
Even though Spectrum has “been brushed off by investors as shares continue to be disturbingly controlled and held under $5,” the drug maker still is on Hall’s preferred list, he said.
Spectrum’s shares are down 20% since October, when the Food and Drug Administration delayed Spectrum’s application for its Fusilev drug as a treatment for colorectal cancer.
Fusilev, Spectrum’s first branded drug, is approved for osteosarcoma, a form of bone cancer in children.
Hall said he’s bullish on Spectrum’s Zevalin, a drug for treating non-Hodgkin’s lymphoma blood cancer that it launched last year after becoming the fourth company to own it since it was approved in 2001.
Zevalin represented 42% of Spectrum’s $7.2 million in third-quarter revenue.
The company is due to report fourth-quarter and 2009 results on March 29.
“I firmly believe Zevalin will eventually become the standard of care for non-Hodgkin’s lymphoma. And that is a big deal,” Hall said.
Coupling Zevalin’s growth with other cancer drugs in its pipeline, Spectrum, along with others like it, “makes for an attractive buyout candidate,” Hall wrote.
TriZetto Under Microscope
TriZetto Group Inc., a Newport Beach-based company that makes software to help health plans and benefit administrators manage billing and other services, went under the microscope in Wisconsin a few weeks ago.
An article in the Wisconsin State Journal in Madison detailed the travails of group homes that care for senior citizens and people with disabilities in trying to get paid for their services by Care Wisconsin, a nonprofit.
Care Wisconsin had fallen behind in paying clients because it contracted with TriZetto for billing services, according to the article.
State officials have ordered Care Wisconsin to provide $6.4 million in emergency funding to 160 care providers in order to keep them afloat while the billing problem is being fixed, the article said.
TriZetto had problems integrating a large number of accounts in its system, Care Wisconsin’s chief operating officer, Ken Eimers, told the newspaper.
Care Wisconsin has confidence in TriZetto going forward, Eimers told the newspaper.
TriZetto declined comment.
TriZetto went private in 2008 through a $1.4 billion buyout by Apax Partners, a New York private equity firm.
Regulators Clear Tecnis Lens
The Food and Drug Administration has approved Abbott Laboratories’ Tecnis multifocal one-piece intraocular replacement lens for cataract patients.
Tecnis is made by Abbott’s Santa Ana-based Abbott Medical Optics Inc. unit. Abbott has begun shipping the lens in select markets and plans to start full commercial shipments in April, it said.
The Tecnis lens will be used in cataract patients with and without presbyopia, a condition in which the eye’s natural lens loses its ability to focus.
The lens received presbyopia-correcting intraocular lens status from the Centers for Medicare and Medicaid Services, allowing Medicare beneficiaries a chance to receive the lens as part of their cataract surgeries for an additional fee.
Bits and Pieces:
Orange Coast Memorial Medical Center in Fountain Valley said it launched an electronic medical records system. Orange Coast’s system is made by Epic Systems Corp., a Milwaukee-based vendor whose clients include Kaiser Permanente, which operates hospitals in Anaheim and Irvine, and Talbert Medical Group, a Costa Mesa-based group medical practice … ChromaDex Corp., an Irvine maker of research tools used by the food, beverage and dietary supplements industries, said it received a supply contract from the General Services Administration to provide analytical services to federal agencies … Santa Ana-based West Coast Neurodiagnostics & MRI said it changed its name to Coast2Coast Diagnostics. The company changed its name to reflect both a wider expansion of its business geographically and what it offers, including computed tomography, magnetic resonance imaging, positron emission tomography scanning and nuclear medicine.
