Today, BioMedReport's Vinny Cassano shares with us, his thoughts on SPPI:

In early September, when the stock was trading for nearly nine dollars, the FDA approved an expanded label use for Spectrum Pharmaceuticals, Inc's (NASDAQ:SPPI)  non-Hodgkins Lymphoma treatment, Zevalin.

The stock price almost immediately pulled back (in a very similar fashion to the way BDSI shares reacted after receiving positive news this past summer).

After raising nearly fifty million dollars in cash the stock price continued to decline until the FDA rejected Fusilev, Spectrum's colorectal cancer drug. Finally, the stock took a nosedive to it's current levels in the mid $4 range.

I understand that many investors are looking at this stock as a possible rebound play - one that has been beaten down by recent bad news, but with the potential to pay off for those that may just be getting in now.

Sales of Zevalin, which have been on the decline, and Fusilev, which is already approved for the treatment of bone cancer patients, do not necessarily justify the current market cap of two hundred million - in my opinion - especially when considering that Fusilev may need to undergo another trial in order to sway the FDA to possibly change course and approve the drug.

That being said, the company has Apaziquone in Phase III trials and various product candidates in early stages of development. That adds additional value to the company.

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I received a lot of comments and feedback regarding Spectrum Pharmaceuticals earlier this month, when I stated that I was looking for a "buy price" under four dollars.

The stock closed at $4.12 yesterday- not yet under my previously stated buy price- but it is definitely worth watching because the lower the stock drops, the more I believe investors who are speculating on a rebound may jump back in.

With the stock trading this close to four dollars, I can change course and call it a good "rebound" buying point, but I'd hold back on going in big just yet; I might pick up a few shares now (maybe a third of what I wanted to buy) and then I might attempt to average down.

Investors will be happy if the stock has a premature rebound, but it also keeps money on the sidelines if a better opportunity arises.

I still don't consider Zevalin a "blockbuster" - even as a first line treatment - but I have to believe that sales will start increasing again instead of decreasing.

I'm also looking forward to the company's meeting with the FDA regarding Fusilev.  My gut tells me that an additional trial may be required, but the FDA is so unpredictable that the news may not be that dire.

I wouldn't expect too much in terms of short term gains with SPPI, but at the four dollar or below level, I think we've got a decent mid to long term story brewing.

As always, just my own opinion, do your own DD before investing.

Disclosure: No position.