The next big event in biotech starts Sept. 11, when U.S. drug reviewers put a promising but controversial cancer drug from IDEC Pharmaceuticals ( IDPH) under the regulatory microscope.

But savvy investors looking to score might want to pay attention the day before to the Food and Drug Administration advisory panel meeting's opening act -- Matrix Pharmaceutical ( MATX).

The small, Fremont, Calif.-based biotech firm will go in front of the cancer drug advisory panel Sept. 10 seeking approval for IntraDose, a novel treatment used to help patients dying from head and neck cancer, the sixth-leading cause of cancer deaths in the U.S.

IntraDose has a very good shot at getting the thumbs-up from the FDA, based on the drug's efficacy and safety record, biotech observers say. And that should be good news for Matrix's stock, which is mostly ignored by investors and appears to be undervalued compared with many of its well-hyped rivals.

Matrix shares closed Friday at $8.97 per share, down almost 50% from their 52-week high in mid-January. The company sports a market value of just $234 million, puny compared with other biotech firms that have a single drug either approved or on the cusp of approval.

"Matrix's data for IntraDose is some of the most rock-solid stuff that I have ever seen," says one normally skeptical biotech hedge fund manager who has a significant long position in the stock.

Now, some caution is warranted. Like all biotech companies, there is a bear case to be made against Matrix and its chances at the FDA, and IntraDose will never be a blockbuster drug. But with estimated peak annual sales of about $100 million for IntraDose in the head and neck cancer market -- a figure that could grow substantially if the drug's use is expanded into other cancers -- Matrix is relatively low-risk.

What's so special about IntraDose? The treatment is not really a new drug at all, but a first-of-its-kind combination of three existing drugs into a cancer-fighting gel that is injected directly into solid tumors. Normally, chemotherapy drugs are injected intravenously and work their way through the blood stream to find and kill cancer cells. This long journey limits their effectiveness. But because IntraDose is injected directly into the tumor, it's more potent and works longer, or at least that's the theory.

IntraDose sounds so elegant and simple, so why is it the first injectable chemotherapy treatment used to treat tumors locally? The big hurdle is getting the cancer-fighting drug to actually stay inside the tumor. Matrix has apparently solved this problem by suspending the well-established chemotherapy drug Cisplatin inside a suspension of collagen gel, which forms a kind of goop that won't seep out of tumors. Added to this goop is epinephrine, which acts like a "chemical tourniquet" to clamp down on blood vessels around the tumor and further helps to keep the cancer-fighting drug inside.

Like many biotech firms developing cancer treatments, Matrix has tested IntraDose on the sickest of the sick first. It is seeking approval to market the drug for use in "refractory" head and neck cancer patients. Simply put, these are patients who have exhausted all other medical options and are weeks or months away from dying.

IntraDose is not a cure. Patients using the treatment still die and the company makes no claims about extending life. But 30% of patients in the company's late-stage test had their head and neck tumors either shrink significantly or disappear altogether, a significant amount for cancer research. Many of these tumors interfere with breathing or make swallowing difficult or impossible, so shrinking or destroying them makes patients much more comfortable.

"There is a growing realization that drugs are needed not just to cure disease but to improve the quality of life of patients with no options," says a doctor/analyst at another hedge fund with a long position in Matrix. "IntraDose will get approved because the drug shows a clear benefit for patients without putting them at any extra risk."

Stu Weisbrod, chief investment manager at the health care hedge fund Merlin Biomed Group, agrees. "IntraDose will get approved. It's a niche product, but the drug legitimizes Matrix's technology platform." Weisbrod is long Matrix.

If Matrix does run into problems at the FDA advisory panel meeting, it will be because of the unusual way IntraDose was tested. Instead of analyzing its data to measure the survival of patients taking the product, the company uses a subjective measure of patient benefit. In its two late-stage tests, IntraDose failed to meet preset patient benefit goals, although the combined data from the tests did pass.

FDA advisory panel meetings can be treacherous affairs because companies never know how independent reviewers will react to their data. Matrix bulls acknowledge that the company has some explaining to do, but the overall results should be strong enough for a positive recommendation.

Matrix is already testing IntraDose to expand its use -- and revenue-generating potential. It would like doctors to use the product in less critically ill head-and-neck cancer patients, as well as with patients suffering from advanced liver, colon and breast cancer. The thought here is that surgeons, for example, could use IntraDose to shrink tumors before going in to remove them. IntraDose might also be equally beneficial to patients receiving radiation therapy for solid-tumor cancers.

In this way, IntraDose could become part of a cancer cure, and not just a palliative treatment for terminally ill patients.

But even if Matrix gets approval for limited use of IntraDose, the company's $234 million market value seems like a screaming deal compared to its peers. By comparison, Ilex Oncology ( ILXO) shares sales of a single approved cancer drug, Campath, with two other companies but sports a market cap of $684 million.

And let's not even talk about Imclone ( IMCL) and its much-discussed experimental colon cancer drug, IMC-C225. This drug, not yet approved for use, seems to only marginally extend the lives of terminally ill patients, yet it's already pushed Imclone's market cap to a whopping $3.3 billion.

So as the Sept. 10-11 cancer drug advisory committee approaches, the hordes will be watching IDEC, but smart biotech investors should pay attention to the meeting's opening act. Matrix may just steal the show.