SPPI - What is Happening?

The Food and Drug Administration posted its approvals for the day.

No sign of Fusilev for colorectal cancer.

SPPI (spectrum pharma) has no news yet on its website:

No SPPI halts listed either.


And SPPI has been dropping like a rock because we all know how Wall Street works. What is worse, you never know if SPPI will do their dilution in June. It is a wait and watch or take your 15% loss and get out game now.

unless they flip it like HGSI or DNDN.. Pharmas are roller coasters.. wow!

No major intelligent advise provided in this post.

SPPI Spectrum Pharma (pre) files for BIG dilution

Spectrum Pharmaceuticals (NASDAQ: SPPI) recently put out an SEC filing (pre14a) where the CEO wrote a letter asking shareholders to vote for board members, informed them about record revenues etc. But what was conveniently left out from the letter, but present in the next page was this staggering news.

The approval of an amendment to our Certificate of Incorporation to increase the authorized number of shares of common stock from 100,000,000 to 175,000,000; .

That is some BIG DILUTION. The meeting is set for June 13, 2011 at 10:30 a.m. Pacific Time.

FDA's response to Spectrum's quest to get Fusilev approved for use in treating colorectal cancer (in US) is due on April 29th, 2011. Whether that news (is positive) will move the stock more or if the dilution will have a bigger impact is to be seen.

Insider buy/sales are not too clear with only 4000 net shares bought in the last several months.
Disclosure: No positions as of now. And it looks too volatile for me to initiate any position. I just wrote this post to let people know about the dilution as well as to get some page views


Sources used for research:
Seeking Alpha article
Edgar Filing

UPDATE:

Spectrum Pharma announces FDA approval of FUSILEV's ready-to-use formulation (SPPI) 9.05 -0.03 : Co announces that the FDA has approved co's Supplemental New Drug Application for FUSILEV Injection. Unlike the currently available lyophilized product, this approval is for a "Ready-to-Use" formulation of FUSILEV for Injection. "We are pleased that the FDA has approved the 'Ready-to-Use' formulation of FUSILEV... As the name implies, the RTU formulation provides an additional option for physician and medical staff use. The RTU formulation requires no reconstitution, and is of a higher strength than the currently available lyophilized formulation.

Spectrum Pharma

If you currently hold Spectrum Pharma, and are looking to get out, you can set some limit sells around $ 4.25-$4.30 range.  During a surge it might get filled. On the other hand, you can also sell half at the $4.25 pricing range and hold on  to the other half, as current sentiment on it seems positive and it might climb through beyound the 50 day moving average of $ 4.29 and go forward up till $5 and on.