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IRVINE, Calif. (

TheStreet

) --

Spectrum Pharmaceuticals

(SPPI) - Get Spectrum Pharmaceuticals, Inc. Report

is still feeling the ill effects Monday of Friday's decision by the Food and Drug Administration to reject the company's request for an expanded approval of its current cancer drug Fusilev to include treatment for colon cancer.

Spectrum shares are trading around $5 in Monday intraday trading. The stock is off 40% since nearing $9 in early September.

Fusilev's push into colon cancer isn't dead but it is likely to be significantly delayed, which isn't welcome news for Spectrum. Amar Singh, Spectrum's chief commercial officer, told me Friday that the company had been counting on its sales force having two drugs in their bags to detail to oncologists: Fusilev and the lymphoma drug Zevalin.

"Some shifting of internal resources will have to take place now," he said.

Whatever money Spectrum may save on Fusilev marketing may have to be spent -- and then some -- on a new colon cancer study of Fusilev. Singh says the company is trying to schedule a meeting with the FDA to find out what it will take to get Fusilev approved in colon cancer.

"We're not exactly sure what FDA wants yet, so it's premature to speculate," says Singh.

Fusilev is currently approved for a form of bone cancer, but annual sales are minimal. Expansion into colon cancer represents a more significant commercial opportunity for the drug.

Spectrum submitted to the FDA a 10-year-old study that failed to show the superiority of Fusilev over leucovorin, the predeccesor chemotherapy drug that Spectrum would like Fusilev to replace. Spectrum was only seeking an FDA determination that Fusilev and leucovorin were equivalent, but FDA wasn't convinced, apparently.

It's possible that Spectrum may have to run a non-inferiority study of Fusilev against leucovorin in colon cancer patients, although the upcoming FDA meeting will clarify this.

Meantime, Spectrum is moving ahead with the re-launch of the lymphoma drug Zevalin. Singh says it will take three or four months before the company has a clear view on how Zevalin sales are progressing.

Top Roche Exec Joins Dendreon Board

(At 8:18 AM EDT)

TheStreet Recommends

Dendreon

(DNDN)

added two new directors to its board, including Ian Clark, the current chief executive of

Roche's

Genentech unit. Before the Roche acquisition, Clark served as Genentech's chief commercial officer.

Also joining Dendreon's board is Pedro Granadillo, a former

Eli Lilly

(LLY) - Get Eli Lilly and Company Report

manufacturing executive.

Dendreon hasn't formally announced either additions yet, but option grants to both men were disclosed Friday in filings to the Securities and Exchange Commission.

Xconomy.com

was the first to report the news Friday.

The addition of Clark to Dendreon's board will undoubtedly raise investor speculation that Roche is interesting in partnering Provenge, Dendreon's prostate cancer immunotherapy.

Investor Reaction to Onyx Deal

(At 7:45 AM EDT)

I don't know how investors will react to the news this morning that

Onyx Pharmaceuticals

(ONXX)

is

buying

privately held

Proteolix

, but an initial email blast from Cannacord Adams' biotech analyst George Farmer to his clients is probably a fair, early assessment of the deal.

On the plus side, Farmer writes, Proteolix's lead multiple myeloma drug carfilzomib has reported encouraging data in studies treating very late-stage muliple myeloma patients. An FDA approval filing could be submitted next year and the drug has the potential to be a better Velcade, the $1 billion-plus multiple myeloma drug from

Takeda

.

The structure of the deal -- committing $276 million in cash up front – but with the remainder in earn outs tied to carfilzomib's success -- also seems fair to Onyx shareholders, says Farmer.

On the negative side, "if carfilzomib is so promising, why wasn't the company bought by

Celgene

(CELG) - Get Celgene Corporation Report

or Takeda, the most likely contenders," Farmer asks.

Onyx must now also compete against Celgene and Takeda in a multiple myeloma market where it has no experience. Investors may worry that there is a problem with carfilzomib and that the aggressive FDA approval strategy using a single-arm registration study is risky, Farmer says.

BMO analyst Jason Zhang, reached by email, said the upfront payment by Onyx was less than he had expected and that the deal, "could be considered positive given how poor the stock has been."

More investor and analyst reactions to come as they pour in.

-- Reported by Adam Feuerstein in Boston

Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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