Spectrum's once-rejected cancer drug wins FDA approval

Spectrum CEO Rajesh Shrotriya

Spectrum Pharmaceuticals ($SPPI) won FDA approval for its take on a common chemotherapy, reversing an October rejection and clearing the way for the acquisitive company's 6th product launch.

The drug, to be sold as Evomela, is a version of the widely used melphalan, reformulated to increase stability, according to Spectrum. The injected treatment is now approved for use in patients with multiple myeloma who are about to receive stem cell transplants or who cannot tolerate oral therapies like Celgene's ($CELG) Revlimid and Pomalyst, the company said.

The FDA rejected Spectrum's first attempt approval last year for reasons the company never disclosed, dealing a blow to the biotech's share value from which it is yet to recover.

With Evomela finally approved, Spectrum is planning to launch the drug with its existing sales force, believing it can cut in on the roughly $100 million market for intravenous melphalan.

Spectrum bought the drug from Ligand Pharmaceuticals ($LGND) in 2013, paying $3 million up front and promising up to $50 million more tied to clinical and regulatory success, plus royalties on sales.

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