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Spectrum Pharmaceuticals (SPPI - Snapshot Report) recently announced that it has regained development and commercial rights for apaziquone from Allergan Inc. (AGN - Analyst Report). Spectrum Pharma reacquired the rights for apaziquone in the US, Europe and other territories. In return, the company will pay Allergan a single-digit royalty on specific products containing apaziquone.

Apaziquone, an anti-cancer agent, is being developed for the treatment of non-muscle invasive bladder cancer (NMIBC).

Based on discussions with the US Food and Drug Administration (FDA), the company believes the FDA could accept its new drug application based on currently available phase III data. The candidate will most likely be reviewed by an advisory committee of the agency. As required by the FDA, Spectrum Pharma will conduct another phase III study on apaziquone.

We note that the two phase III trials that were conducted on apaziquone did not yield positive results. The trials failed to meet both the primary and secondary endpoints. However, analysis of pooled data from both studies showed a statistically significant improvement in the apiquazone arm in the primary endpoint of the rate of tumor recurrence at 2 years and time to recurrence (a key secondary endpoint).

We remind investors that Allergan and Spectrum Pharma had signed the collaboration agreement in Oct 2008. Spectrum Pharma had received an upfront payment of $41.5 million.

Spectrum Pharma currently carries a Zacks Rank #3 (Hold). Meanwhile, other biotech stocks like Elan Corporation, plc and Biocryst Pharmaceuticals, Inc (BCRX - Snapshot Report) presently looks more attractive. Elan carries a Zacks Rank #2 (Buy), while Biocryst carries a Zacks Rank #1 (Strong Buy).

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