Why Spectrum Pharmaceuticals Sank
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
So what: Spectrum's experimental drug apaziquone, which is aimed at treating the most common form of bladder cancer, failed to show statistical significance in late-stage clinical trials versus the placebo. The drug was developed in partnership with Allergan (NYS: AGN) , and the two did note that the statistical data pooled from their studies could lead to other avenues for apaziquone. Spectrum also announced the acquisition of Allos Therapeutics (NAS: ALTH) for $1.82 per share, or an 11% premium to yesterday's close.
Now what: Allos' lead drug, Folotyn, and Spectrum's Zevalin are both prescribed by hematologist-oncologists, but they attack different types of blood cancer. With both drugs under the same roof, Spectrum expects to save $40 million-$50 million per year, as the sales force pitches the non-competing treatments to the same doctors.
Those savings are nothing to sneeze at, but neither is today's negative news on apaziquone. For now I'm going to call today a wash and put Spectrum on my watchlist for further research.
Craving more input? Start by adding Spectrum Pharmaceuticals to your free and personalized watchlist so you can keep up on the latest news with the company.
At the time this article was published Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.