There’s been some important news regarding Spectrum Pharmaceuticals (SPPI) and it has not been good. The news concerns the bladder cancer drug, apaziquone, a hopeful product that company trumpeted, has failed in two separate phase two trials. And, although this is seen as a major setback, many still consider Spectrum Pharmaceuticals to be a safe bet in terms of stocks.

The seeming disconnect in these viewpoints, namely that a) the failure of the drug will cause negative effects, and b) that the company will continue to remain strong despite this, both have evidence in their favor.

To begin, the failure of the drug has caused Spectrum Pharmaceutical stock to drop off more than 22%. Spectrum Pharmaceuticals has indicated a desire to continue the study until it reaches success and, although it is believed that the company has the time, money and resources to achieve this, a large number of investors have pulled out due to the failure of the drug.

There is still a hope that the FDA will approve the drug based on the pooled data from both trials, but it is largely accepted that this is a very slim hope. If you consider that one of Spectrum’s rivals, InterMune (ITMN), who had a 50% success rate in its trials of a certain drug, tried to do the same and was still not approved by the FDA. The hope for any success with apaziquone seems thinner still.To continue reading, click here.