There seems to be a lot of speculation on the chances of Spectrum Pharma (NASDAQ:SPPI) being acquired over the coming months. I personally don't think it will happen, but there are a few companies that could be interested. Bayer (OTC:BYERF) will always be mentioned because of the fact they sell Zevalin in Europe, but Bayer did just divest two oncology drugs to Genzyme (GENZ), Fludara and Leukine, which makes me think that oncology is not where they want to focus their company. Allergan (NYSE:AGN) should also be mentioned because of their partnership of bladder cancer drug EOquin with Spectrum, the drug is in phase three trials. If AGN really believes the drug is a winner, then why not try to own 100 percent.
Then there are companies like Onyx (NASDAQ:ONXX), Abraxis Bioscience (ABII) and OSI Pharma (OSIP) who have an solid oncology drug on the market, but have struggled to get a second oncology drug through their pipeline and on to FDA approval. Then there are companies like Cephalon (NASDAQ:CEPH) and Genzyme who have been very aggressive in in-licensing drugs or acquiring oncology drugs and companies. Or how about companies like Seattle Genetics (NASDAQ:SGEN) or Regeneron Pharma (NASDAQ:REGN) who have late stage oncology drugs in their pipeline who could use SPPI salesforce to jumpstart the transition into a commercial stage biotech.
When I do my due diligence on Spectrum, I have to admit it does remind me of MGI Pharma and Pharmion, two specialty pharmas with a focus on oncology. Both ended up being acquired by large companies, MGI by Japanese powerhouse Eisai (OTCPK:ESALY) and Pharmion by US biotech giant Celgene (NASDAQ:CELG). I can also remember when investors didn't think much of those companies. I personally would rather see Spectrum stay independent and try to really build a nice oncology based specialty pharma. I think there is more money to be made this way than by getting lucky with an acquisition.
Disclosure: Long SPPI