By Sharmistha Banerjee - September 18, 2012 | Tickers: ALXN, REGN, SPPI | 0 Comments

Sharmistha is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.

The biotechnology industry is fuelling mobility and economic growth and it is expected to show a strong upward momentum in the future. Many investors once considered biotech stocks untouchable, but all that is about to change.

Spectrum Pharmaceuticals (NASDAQ: SPPI) a small, fast growing company which has achieved almost quadruple its revenue is gradually getting its due recognition in the biotechnology industry. The strengths and opportunities outnumber the weaknesses and threats. The vast product portfolio and strategic alliances, in the ever growing cancer market that it has garnered, is slowly pushing it above the intense competition.

Spectrums MD, Chairman, Chief Executive Officer, and President said that the company expects $300 million in revenue for this year. Spectrum turned profitable in 2011 after posting losses in prior years, actually earning $48.5 million, or 84 cents a share, in 2011. For 2012, analysts are forecasting earnings of between $1.37 a share and $1.96.

In the first five years since its inception, Spectrum transitioned from a small start-up entity to a growing, development-stage company. In the second five years, Spectrum has transformed into a successful commercial company. Spectrum markets three oncology drugs FUSILEV (levoleucovorin) an Injection marketed in the U.S.; FOLOTYN (pralatrexate injection), also marketed in the U.S.; and ZEVALIN (ibritumomab tiuxetan) another injection, for which the Company has worldwide marketing rights.

Fusilev, which is indicated for osteosarcoma and colorectal cancer, is the big revenue driver accounting for 78% of total sales. The company is not only cash rich but has reported revenue of $232.56 million, with $128.56 million in the first two quarters of 2012.

The completion of the Allos acquisition is a major milestone for Spectrum giving the combined company a third approved drug. Allos is currently focused on the development and commercialization of FOLOTYN (pralatrexate injection), a folate analog metabolic inhibitor. FOLOTYN is approved in the U.S. for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (PTCL). Allos will no longer trade publicly because the company is now a subsidiary of Spectrum

Spectrum has also signed an exclusive collaboration with Allergan (AGN), a technology-driven global health care company, for thedevelopment and commercialization of Apaziquone, an agent aimed at treating non-musclebladder cancer. . Apaziquone is one of Spectrumstwo drugs undergoingphase 3 clinical trials, to determine its safety and efficacy as a potential treatment forbladder cancer.

The company is valued with a P/E ratio of just over 8, which is far less than the forward ratio of biotech companies with similar growth such as Regeneron Pharmaceuticals (NASDAQ: REGN) and Alexion Pharmaceuticals (NASDAQ: ALXN).

Excerpt from:
Spectacular Growth Prospects