Spectrum Pharmaceuticals (Nasdaq:SPPI), has received approval from the U.S. Food and Drug Administration (FDA) for an expanded label for the treatment of patients with previously untreated follicular non-Hodgkin's Lymphoma (NHL), who achieve a partial or complete response to first-line chemotherapy. This new and expanded indication supplements the 2002 FDA approval of ZEVALIN as treatment for patients with relapsed or refractory, low-grade or follicular B-cell non-Hodgkin's lymphoma.

Shares, which were halted ahead of the news, jumped 10% to $9.67 but ended up closing the day down at $8.33 -$0.43 (-4.91%) . Spectrum's stock has surged since March, and is up sharply from the 52-week low of 55 cents in October. Still, it is far off the all-time high of more than $600 in 2000. That price is adjusted based on a 1-for-25 reverse split in 2002.

The decision expands the treatable population to approximately 43,000 patients annually and should add susbtantially to the company's market cap. Some analysts say the current valuation in shares fails to realize the potential of ZEVALIN and completely discounts the value of the company's pipeline.

The FDA's decision on Zevalin was being closely watched by analysts, with some saying the drug's sales could rebound if it won approval. Sales have been falling since its launch in 2005, when it reached about $20 million a year. Last month, the company reported $3.3 million in sales of Zevalin for its second quarter.

The FDA's decision came a few days ahead of schedule, expanding the label for first-line therapy in treatment of non-Hodgkin's lymphoma, or NHL. The expansion allows for a treatable population of about 43,000 patients annually.

"We believe the approval of Zevalin as an effective treatment option following a first-line regimen represents a notable advance in the treatment of non-Hodgkin's lymphoma, and significantly expands the addressable population for Zevalin," said Chief Executive Rajesh Shrotriya.

Approval of the new indication was based on a Phase III study that evaluated the safety and efficacy of Zevalin in 414 patients who received a partial or complete response after receiving a first-line chemotherapy regimen.

Spectrum owns all rights to Zevalin, after acquiring the 50% it didn't already own in March.

"We believe the approval of ZEVALIN as an effective treatment option following a first-line regimen represents a notable advance in the treatment of non-Hodgkin's Lymphoma, and significantly expands the addressable population for ZEVALIN," said Rajesh C. Shrotriya, MD, Chairman, Chief Executive Officer, and President of Spectrum Pharmaceuticals. "We are confident that the strategic and tactical initiatives we have implemented will overcome the clinical, logistical, and reimbursement challenges that have previously hindered physician and patient access to ZEVALIN."

The company will be presenting an overview of their business strategy at the 11^th Annual Rodman & Renshaw Global Investment Conference being held at the New York Palace Hotel in New York City next week. In addition, the company is expecting a second FDA decision (for Fusilev) in early October.

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