Spectrum's New Cancer WeaponsBy
Several big investors have been buying little-known Spectrum Pharmaceuticals (SPPI ), which develops anticancer agents that have previous clinical data to back their efficacy and safety. SDS Capital and SCO Financial Group each have a 10% stake, and Barclays Bank owns more than 6%. Institutional interest boosted the stock from 2 in March to 7.87 on Oct. 22. Spectrum has lots more potential, says Daniel DiPietro of SCO Financial, even though no analyst follows it. Last year, it signed a pact with Germany's GPC Biotech to co-develop Satraplatin, a medication for prostate, ovarian, and small-cell lung cancer. Satraplatin had been owned by Bristol Myers-Squibb (BMY ), which decided not to go ahead with development. Spectrum picked it up for $250,000. GPC paid Spectrum $2 million upon signing and a further $2 million on Oct. 13, when Phase 3 clinical trials of Satraplatin began. GPC will pay $18 million more as regulatory targets are met. CFO John McManus says the drug has a potential market of $500 million a year. Spectrum has $25 million in cash and McManus expects Spectrum to make money in 2006.
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Gene G. Marcial