SPECTRUM PHARMACEUTICALS INC.

Orange County Business Journal, Oct 22-Oct 28, 2007 by Reed, Vita

Spectrum Pharmaceuticals Inc. may have hit a snag this past summer with its brandname cancer drug, but the company's past three years have seen its revenue fire up.

The Irvine drug developer is No. 5 on the Business Journal's annual list of fastest-growing public companies based in Orange County.

Spectrum's revenue has grown 741% in the past three years to $9.2 million for the year ended June 30.

Most of Spectrum's revenue comes from selling generic versions of common drugs. It also sees sales from licensing and royalties. Last year, Spectrum signed a deal with Par Pharmaceutical Cos. of New York to sell and ship generic drugs.

Spectrum said it narrowed its loss in the second quarter to $6.3 million versus a loss of $9 million a year earlier.

A $4 million milestone payment from Germany's GPC Biotech AG, its partner for its satraplatin cancer drug development, helped the company narrow its loss.

Spectrum's second-quarter revenue came in at $4 million. It didn't have any sales in the quarter a year earlier.

In July, the company saw a snag with its bid to sell its first brand-name cancer drug.

Food and Drug Administration reviewers raised several issues with satraplatin, a pill that fights advanced prostate cancer, and the agency moved to ask its oncology advisory panel if action on the application should be halted until final patient survival data came in from clinical trials.

Investors hammered Spectrum's stock on the news, sending it down 30%.

The company's shares are down 17% so far this year. It counted a recent market value of $135 million.

Chief Executive Rajesh Shrotriya said Spectrum's stock isn't the best gauge of how the company's doing.

The stock "completely ignores the fact that our company has never been in a better financial position or had a deeper and more mature pipeline of drugs than we do right now," he said in an earnings call.

Those include ozarelix, a drug designed to treat benign enlarged prostate that's in a mid-stage clinical trial.

Spectrum received a license to develop and market ozarelix for North America and India from Aeterna Zentaris Inc. of Quebec City three years ago.

Meanwhile, GPC pulled the satraplatin application in order to focus on getting overall survival results and integrating the data into a new submission after regulators indicated the drug wouldn't be approved.

"As I've always said, Spectrum is more than just satraplatin," Shrotriya said. "Having said that we're not about to write off satraplatin."

The drug application process is nothing new to Shrotriya, whose career includes 18 years with Bristol-Myers Squibb Co. He took over as Spectrum's chief in 2002.

The executive has overseen the company's transition away from neurology to cancer drugs, including a name change from NeoTherapeutics Inc. early in his tenure.

Spectrum has some 10 drugs in development, and it continues to sign licensing deals.

Shortly after the satraplatin setback. Spectrum signed a licensing deal with Indena SPA of Italy for ortataxel, another cancer fighting drug that's seen positive results in attacking tumors that don't respond to traditional chemotherapy drugs.

Spectrum has exclusive development and commercialization rights to ortataxel. It paid an undisclosed, upfront amount to Indena and also will make additional payments based on achieving certain regulatory and sales milestones.

Spectrum counts 56 workers, all in Orange County. It has existed since 1987.