Editor's note: This story, which originally was published March 25, 2009, has been updated with details of Cell Therapeutics' prior ownership of Zevalin.

On the morning of Sept. 11, 2001, as hijacked planes slammed into the World Trade Center and Pentagon, an advisory committee to the Food and Drug Administration was simultaneously recommending the approval of a new cancer drug.

That drug, Zevalin, is still struggling to find its way more than seven years later.

Last week, Spectrum Pharmaceuticals ( SPPI) became the latest drug company to take ownership of Zevalin, and now it will try to make the drug a commercial success.

Zevalin is a very effective drug for patients with non-Hodgkin's lymphoma, based on a substantial amount of clinical data collected both before the drug's approval and in subsequent clinical trials. Analysts expected Zevalin sales to exceed $200 million three or four years after the drug's launch in 2002.

But good clinical data never translated into meaningful sales. Zevalin has been a commercial bust, to put it mildly. Last year, sales barely topped $11 million, down from sales of $17 million and $18 million in 2007 and 2006, respectively. Three different companies have tried to make Zevalin into a meaningful commercial product, and none has succeeded.

Enter Spectrum Pharmaceuticals, the fourth and latest company to take ownership of Zevalin and attempt to turn the drug's fortunes around. With a stock price hovering around $1.50, a $48 million market cap and adequate cash reserves, Spectrum is a cheap drug stock with the potential for significant upside if Zevalin succeeds.

Zevalin is a monoclonal antibody that seeks out and attaches itself to cancer cells. But unlike other such drugs, Zevalin carries a radioactive payload designed to kill the cancer cells while leaving neighboring healthy cells intact. Zevalin was the first in a new class of "radio-immunotherapies" approved by the FDA. Since its approval, only one other radio-immunotherapy drug has made it to the market.

Unfortunately, the cutting-edge technology behind Zevalin turned out to be a major hindrance commercially. Because it's a radioactive compound, doctors and patients must go through a long checklist of precautions and pretreatment steps before Zevalin can be administered. Plus, the drug has never enjoyed favorable insurance reimbursement status, so oftentimes, doctors actually lose money when prescribing Zevalin to their patients.

Lastly, both Idec Pharmaceuticals, the company that launched the drug, and its successor Biogen Idec ( BIIB), marketed the drug as a treatment of last resort for non-Hodgkin's lymphoma (NHL) patients for whom all other drugs had failed. This happened despite an FDA label that allowed for more liberal uses of the drug.

Idec (and then Biogen Idec) were not entirely motivated to see Zevalin succeed because that could have crimped sales of their NHL blockbuster drug Rituxan, which was much more important to the companies' growth and profitability. Biogen Idec receives royalties on Rituxan, which is sold by Genentech ( DNA), soon to be acquired by Roche.

So, Zevalin floundered. Biogen Idec eventually sold the drug to Cell Therapeutics ( CTIC) in 2007, which did an even worse job of marketing the drug. Late last year, Cell Therapeutics, in desperate need of cash, sought out Spectrum's help to co-market Zevalin. But before that joint venture could even get off the ground, Cell Therapeutics, even more desperate for cash, decided to sell to Spectrum 100% of the rights to Zevalin. The sale closed March 16.

It remains to be seen whether Spectrum can turn Zevalin around, but there are a few potentially positive signs that the company could succeed where the others have failed. For starters, Spectrum could benefit from an expansion of Zevalin's label based on data submitted by Cell Therapeutics when it owned the drug.

The decision date is in July, and if approved, the new Zevalin label will allow Spectrum to promote the drug for a much broader swath of NHL patients. The new label could also include data that will convince doctors that Zevalin is safe and effective to use in combination with other NHL drugs.

Spectrum is also taking steps to do away with many of the pretreatment steps that made Zevalin so cumbersome to administer. The company is working on sorting out the insurance reimbursement hassles, as well, by holding discussions with Medicare officials, initiated by Cell Therapeutics, to ensure that doctors don't lose money when they use the drug.

Spectrum clearly has a lot of work to do, but if the company is successful, Zevalin sales should stabilize and, hopefully, move meaningfully higher than the $11 million "base" sales of 2008, which Cell Therapeutics achieved with essentially no marketing whatsoever. Spectrum's sales force already sells a relatively small cancer drug called Fusilev, so Zevalin will become an "add on" drug that can be marketed without having to significantly jack up the company's expenses.

While Spectrum should be able to stop the decline in Zevalin sales, the level of sales required to turn the drug and the company cash-flow positive is not clear. Spectrum's management is so far hesitant to offer that type of financial guidance, which is understandable given the number of things that need to go right before Zevalin can be deemed a successful turnaround story.

At this point, investors aren't exactly beating down Spectrum's doors to own the stock. Skepticism about Zevalin runs high -- and rightly so, given the drug's history. GlaxoSmithKline ( GSK) sells a similar drug, Bexxar, but has also had a tough time commercially.

But Spectrum's stock price could start to rise if the FDA approves Zevalin's new and improved label in July and the drug's quarterly sales performance improves.

Clarification: The above story did not initially note that Cell Therapeutics submitted the data package to the FDA seeking an expansion of Zevalin's approved label. Cell Therapeutics also initiated discussions with Medicare officials to improve the reimbursement of Zevalin.

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; click here to send him an email.