FDA Caution Hits Spectrum Pharma

An advisory panel recommended that the Food and Drug Administration wait to decide on GPC Biotech's(GPCB Quote - Cramer on GPCB - Stock Picks) cancer drug Orplanta, news that sent Spectrum Pharmaceuticals(SPPI Quote - Cramer on SPPI - Stock Picks) plunging in after-market trading Tuesday.

Trading was halted for Munich, Germany-based GPC Biotech Tuesday while the advisory panel met to discuss its lead product candidate, prostate cancer drug Orplatna (satraplatin).

Spectrum Pharmaceuticals, which licensed the drug to GPC and has the option to co-promote it in the U.S., and Pharmion(PHRM Quote - Cramer on PHRM - Stock Picks), which has exclusive European rights to the drug, were negatively affected Friday by a brief released by the Oncology Drugs Advisory Committee that pre-empted this week's meeting.

The panel voted unanimously to recommend that the FDA wait for final survival data before making a decision on the approval of the product, which the company wants indicated for patients with prostate cancer that's no longer responding to prior chemotherapy and resists hormone treatments.

While the FDA, which is expected to make a decision on whether to clear the drug by mid-August, usually follows the recommendations of the panel, it's not bound to do so.

GPC previously thought it would be able to deliver the survival data before the end of this year but indicated today that the data may not be available until late 2008. The company will hold a conference call on Wednesday to discuss the panel's recommendations.

Shares of GPC were down 59 cents, or 2.8%, at $20.36, while they were halted Tuesday. Spectrum, which fell 9.4% throughout the day, plummeted another $1, or 20.8%, to $3.80 in after-market trading. And Pharmion, which closed the regular session down 4.2%, lost another $1.12, or 4.6%, to $23.50 in postmarket trading.