Armistice Capital Raising the Stakes Against Spectrum Pharmaceuticals, Inc. (SPPI) In Its First Activist Campaign

Armistice also drew attention to Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI)’s ‘dysfunctional culture’, which included an unnecessary sprawl of offices around the globe, including in Tokyo, Japan and Mumbai, India. The fund is pushing for Shrotriya to step down or significantly slash his compensation, a restructuring involving the consolidation of its offices, cutting down on research that is not showing promising signs, and ultimately, a sale of the company following the above changes. Armistice believes that Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI)’s current portfolio of drugs justifies a 40% premium to the current trading levels of its stock.

Following the first letter, the biotechnology company’s board issued a statement that it would carefully consider Armistice’s suggestions in line with its fiduciary duties to increase value for its shareholders and uphold strong corporate governance principles. Armistice sent another letter to Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) on June 2 reiterating many of the issues highlighted in its previous letter, while also urging the company to disclose any offers that the company has received with regards to its sale and  what criteria the board has in relation to accepting any such offer.

As far as Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI)’s financial results for the first quarter are concerned, the company beat both the top and bottom line estimates by delivering a net loss per share of $0.05 against an expected loss of $0.16 and revenues of $51.86 million, which were ahead of estimates by $3.33 million.

Among over 700 hedge funds that we track, the interest in Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) increased over the quarter as 16 firms had invested an aggregate amount of $54.43 million in the company at the end of March, as compared with 12 funds with $54.84 million at the end of the previous quarter. Besides Armistice, Israel Englander‘s Millennium Management and Jim Simons‘ Renaissance Technologies are prominent stockholders of Spectrum Pharmaceuticals, Inc. (NASDAQ:SPPI) with stakes of 1.88 million shares valued at $11.42 million and 1.39 million shares valued at $8.45 million respectively, as of the end of the first quarter.

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