8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K/A

(Amendment No. 1)

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 15, 2008

SPECTRUM PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-28782	93-0979187
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)
157 Technology Drive, Irvine, California		92618
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (949) 788-6700

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

     On December 19, 2008, Spectrum Pharmaceuticals, Inc. (“Spectrum”) filed a Current Report on Form 8-K (the “Initial 8-K”) reporting the completion of its previously-announced transaction to enter into a 50/50-owned joint venture (the “Joint Venture”) with Cell Therapeutics, Inc. (“CTI”) to commercialize and develop Zevalin® (ibritumomab tiuxetan) (the “Zevalin Business”) in the United States. Pursuant to this Amendment No. 1 to the Initial 8-K, Spectrum hereby amends and supplements Item 9.01 of the Initial 8-K to file the required financial statements and pro forma financial information that were not filed with the Initial 8-K.

     Filed as Exhibit 99.2 to this Form 8-K/A is the audited financial statement of the Zevalin Business for the nine month period ended September 30, 2008, the most recent relevant financial period for which data is available for the acquired Zevalin Business. The unaudited pro forma combined financial statements and related notes of Spectrum as of September 30, 2008 and for the nine months then ended, are filed as Exhibit 99.3 to this Form 8-K/A.

     The Initial 8-K is only amended to the extent specifically provided herein and shall not otherwise be deemed amended or superseded in any other respect.

     This Form 8-K/A contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements contain words such as “will,” “expect,” “believe,” or the negative thereof or comparable terminology, and may include (without limitation) information regarding Spectrum’s expectations, goals or intentions regarding the future, including but not limited to statements regarding the Joint Venture. Forward-looking statements involve certain risks and uncertainties, and actual results may differ materially from those discussed in any such statement. In particular, Spectrum can provide no assurances that it will be able to realize the benefits anticipated from the Joint Venture transaction. Risks that could affect forward-looking statements also include those related to the parties’ ability to successfully operate the Joint Venture, changes in laws and regulations and general economic conditions. Additional factors that could cause actual results to differ are described in further detail in Spectrum’s reports filed with the U.S. Securities and Exchange Commission (the “SEC”), including without limitation its Annual Report on Form 10-K for the year ended December 31, 2007 and its subsequent Quarterly Reports on Form 10-Q. All forward looking statements in this Form 8-K/A speak only as of the date hereof. Spectrum does not plan to update any such forward-looking statements and expressly disclaims any duty to update the information contained herein except as required by law.

Item 9.01 Financial Statements and Exhibits.

     (a) Financial Statements of Businesses Acquired.

     Pursuant to paragraph (a)(4) of Item 9.01 of Form 8-K, the attached audited financial statement of the Zevalin Business was omitted from disclosure contained in the Initial 8-K. Included herein as Exhibit 99.2 to this Form 8-K/A, and incorporated herein by reference, is the

2

audited financial statement of the Zevalin Business for the nine month period ended September 30, 2008, in reliance on Rule 3.06 of Regulation S-X

     (b) Pro Forma Financial Information.

     Pursuant to paragraph (b)(2) of Item 9.01 of Form 8-K, the attached pro forma financial statements were omitted from disclosure contained in the Initial 8-K. Included herein as Exhibit 99.3 to this Form 8-K/A, and incorporated herein by reference, are the unaudited pro forma combined financial statements and related notes of Spectrum as of September 30, 2008 and for the nine months then ended.

     (c) Exhibits.

2.1+	Purchase and Formation Agreement, dated as of November 26, 2008, by and among Spectrum Pharmaceuticals, Inc., Cell Therapeutics, Inc. and RIT Oncology, LLC* (Schedules and similar attachments omitted pursuant to Item 601(b)(2) of Regulation S-K. Spectrum will furnish supplementally a copy of any omitted schedule or similar attachment to the SEC upon request.)
23.1	Consent of Stonefield Josephson, Inc.
99.1+	Press Release dated December 16, 2008.
99.2	Audited financial statement of the Zevalin Business for the nine month period ended September 30, 2008.
99.3	Unaudited Pro Forma Combined Financial Statements and Related Notes of Spectrum Pharmaceuticals, Inc.

+ Previously filed as exhibits to Spectrum’s Current Report on Form 8-K (File No. 000-28782) filed with the SEC on December 19, 2008.

* The registrant has requested confidential treatment with respect to portions of this exhibit.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

March 2, 2009	SPECTRUM PHARMACEUTICALS, INC.
	By:	/s/ Shyam Kumaria
		Name: Shyam Kumaria
		Title: V.P. Finance

4

Exhibit List

2.1+	Purchase and Formation Agreement, dated as of November 26, 2008, by and among Spectrum Pharmaceuticals, Inc., Cell Therapeutics, Inc. and RIT Oncology, LLC* (Schedules and similar attachments omitted pursuant to Item 601(b)(2) of Regulation S-K. Spectrum will furnish supplementally a copy of any omitted schedule or similar attachment to the SEC upon request.)
23.1	Consent of Stonefield Josephson, Inc.
99.1+	Press Release dated December 16, 2008.
99.2	Audited financial statement of the Zevalin Business for the nine month period ended September 30, 2008.
99.3	Unaudited Pro Forma Combined Financial Statements and Related Notes of Spectrum Pharmaceuticals, Inc.

+ Previously filed as exhibits to Spectrum’s Current Report on Form 8-K (File No. 000-28782) filed with the SEC on December 19, 2008.

* The registrant has requested confidential treatment with respect to portions of this exhibit.

EX-23.1

EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (Nos. 333-150260, 333-142628, 333-135029, 333-125208, 333-121612, 333-115759, 333-110103, 333-108658, 333-105814, 333-102587, 333-64444, 333-64432, 333-60966, 333-51388, 333-42852, 333-38710, 333-37180, 333-92855, 333-73009, 333-52331, 333-37585) and Form S-(Nos. 333-134566, 333-119833, 333-106427, 333-54246, 333-30345) of Spectrum Pharmaceuticals, Inc. of our report dated March 2, 2009, relating to the Statement of Revenues and Direct Expenses of the Zevalin product line, which appears in the Current Report on Form 8-K/A of Spectrum Pharmaceuticals, Inc. dated March 2, 2009.

/s/ Stonefield Josephson, Inc.

Los Angeles, California
March 2, 2009

EX-99.2

Exhibit 99.2

INDEX TO CELL THERAPEUTICS, INC’s

ZEVALIN® STATEMENT OF REVENUES AND DIRECT EXPENSES

	Page
Report of Stonefield Josephson Inc., Independent Registered Public Accounting Firm		2
ZEVALIN® Statement of Revenues and Direct Expenses		3
ZEVALIN® Notes to Statement of Revenues and Direct Expenses		4

1

To the Board of Directors of Spectrum Pharmaceuticals, Inc.

We have audited the accompanying historical statement of Revenues and Direct Expenses for the nine months ended September 30, 2008 of the Zevalin product line (the “Product Line”) of Cell Therapeutics, Inc. (the “Company”). This historical statement is the responsibility of the Company’s management. Our responsibility is to express an opinion on this historical statement based upon our audit.

     We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement is free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the statement, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation. We believe that our audit provides a reasonable basis for our opinion.

     The accompanying historical Statement of Revenue and Direct Expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, as described in Note 1 and is not intended to be a complete presentation of Revenues and Expenses of the Product Line.

In our opinion, the historical Statement of Revenue and Direct Expenses referred to above presents fairly, in all material respects, the revenue and direct expenses described in Note 1 for the Product Line for the nine months ended September 30, 2008, in conformity with accounting principles generally accepted in the United States of America.

/s/ Stonefield Josephson, Inc.

STONEFIELD JOSEPHSON, INC.
Los Angeles, Ca
March 2, 2009

2

CELL THERAPEUTICS, INC.
ZEVALIN® STATEMENT OF REVENUES AND DIRECT EXPENSES
(In thousands)

	For the Nine
	Months Ended
	September 30,
	2008
Product sales	$	8,824
Direct costs and operating expenses:
Cost of product sales		2,349
Research and development		5,674
Selling, general and administrative		6,519
Amortization of Intangibles		519
Total direct costs and operating expenses		15,061
Total direct costs and operating expenses in excess of product revenues	$	(6,237	)

See accompanying notes to the Zevalin statement of revenues and direct expenses.

3

CELL THERAPEUTICS, INC.

NOTES TO ZEVALIN STATEMENT OF REVENUES AND
DIRECT EXPENSES

1. Organization and Basis of Presentation

Organization

Cell Therapeutics, Inc. (CTI) develops, acquires and commercializes innovative treatments for cancer. In December 2007, CTI acquired the U.S. development, sales and marketing rights to the radiopharmaceutical product Zevalin® (ibritumomab tiuxetan) in the United States from Biogen Idec Inc., or Biogen, pursuant to an Asset Purchase Agreement. The assets acquired included the Zevalin FDA registration, FDA dossier, U.S. trademark, trade name and trade dress, customer list, certain patents and the assignment of numerous contracts. Additionally, CTI entered into a 78-month supply agreement with Biogen to manufacture Zevalin for sale in the United States as well as a security agreement providing Biogen a first priority security interest in the assets purchased in the transaction. Zevalin is a form of cancer therapy called radioimmunotherapy and is indicated for treatment of relapsed or refractory, low-grade or follicular B-cell non- Hodgkin’s lymphoma, including patients with rituximab refractory follicular NHL. Zevalin is also indicated, under accelerated approval, for the treatment of relapsed or refractory, rituximab-naïve, low-grade and follicular NHL. It was approved by the FDA in February 2002 as the first radioimmunotherapeutic agent for the treatment of NHL.

     On June 16, 2008, CTI entered into an Access Agreement with Bayer Schering Pharma AG, or Bayer, which holds the rights to Zevalin outside of the United States. Under the agreement, Bayer gave CTI access to data from Bayer’s phase III first-line indolent trial, or FIT trial, of Zevalin. Under the terms of the agreement with Bayer, CTI made an initial payment to Bayer of $2 million. Based on the FIT trial data, CTI submitted a supplemental biologics license application, or sBLA, on September 30, 2008 for use of Zevalin in consolidation therapy of first remission in advanced stage follicular NHL. The FDA granted priority review status for this sBLA.

     In December 2008, CTI contributed Zevalin to its 50/50 owned joint venture with Spectrum Pharmaceuticals, Inc., or Spectrum, as discussed further in Note 6, Subsequent Events.

     CTI operates in one business segment, which is the business of development, acquisition and commercialization of drugs for the treatment of cancer. Zevalin was CTI’s only approved drug. All other CTI product candidates, including OPAXIO, pixantrone and brostallicin, are under development.

Basis of Presentation

     The accompanying statement of revenues and direct expenses was prepared in order to present the revenues and direct expenses related to Zevalin. The accompanying statements of revenues and direct expenses exclude all assets and liabilities and include

4

CELL THERAPEUTICS, INC.

NOTES TO ZEVALIN STATEMENT OF REVENUES AND
DIRECT EXPENSES (Continued)

all product revenues and direct expenses. Separate complete historical financial information was not maintained for the Zevalin operations.

     The accompanying statement of revenues and direct expenses has been prepared from the historical accounting records of CTI and does not purport to reflect the revenues and direct expenses that would have resulted if Zevalin had been a separate, stand-alone company during the periods presented. It is not practical for CTI’s management to reasonably estimate expenses that would have resulted if Zevalin had operated as an unaffiliated independent company. Since separate complete financial statements were not maintained for the Zevalin operations, preparation of statements of operations and cash flows, including amounts charged for corporate overhead, interest and other expenses, were deemed impractical. Additionally, since Zevalin never operated as a standalone business, a balance sheet and statement of stockholders’ equity are not applicable.

     As a product of CTI, the Zevalin operations were dependent upon CTI for all of its working capital and financing requirements.

2. Accounting Policies

Use of Estimates

     The preparation of the Zevalin Statement of Revenue and Direct Expenses requires CTI’s management to make estimates and judgments that may affect the reported amounts in the statements of revenues and direct expenses and accompanying notes. On an on-going basis, CTI evaluates its estimates, including those related to revenue recognition and related allowances, inventory, impairment of long-lived assets, research and development, amortization life of intangibles and contingencies. CTI bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Revenue Recognition

     CTI recognizes revenue from sales of Zevalin when there is persuasive evidence that an arrangement exists, title has passed and delivery has occurred, the price is fixed and determinable, and collectability is reasonably assured. Product sales are generally recorded upon shipment, net of an allowance for estimated product returns and rebates. Such allowances totaled $954,000 for the nine months ended September 30, 2008. CTI analyzes historical return patterns for its products in determining an appropriate estimate for its returns allowance. CTI may need to adjust its estimates if actual results vary, which could have an impact on earnings in the period of adjustment. If customers have product acceptance rights or product return rights and CTI is unable to reasonably

5

CELL THERAPEUTICS, INC.

NOTES TO ZEVALIN STATEMENT OF REVENUES AND
DIRECT EXPENSES (Continued)

estimate returns related to that customer or market, it defers revenue recognition until such rights have expired.

Cost of Product Sold

     Cost of product sales consists of the cost of the product sold to CTI customers, including any necessary allowances for excess inventory that may expire and become unsaleable. CTI purchased Zevalin from Biogen pursuant to a supply agreement entered into in connection with the acquisition of this product. Contractual royalties of approximately $1,724,000 based on product sales are also included in cost of product sales.

Direct Costs and Operating Expenses

     The caption “direct costs and operating expenses” on the accompanying statements of revenues and direct expenses represents the total direct expenses recorded to the Zevalin operation. Not all of the research, development, selling, general and administrative expenses were recorded in accounts exclusively related to Zevalin. CTI does not allocate operating costs to individual compounds such as Zevalin as its accounting system does not provide for the tracking of costs in this way. Therefore, certain research, development, sales, and general and administrative expenses related to Zevalin were extracted from CTI’s accounts based upon specifically identifiable project codes associated with the activities of Zevalin. All other operating expenses, including portions of research and development, are allocated based primarily on headcount. Allocations also reflect stock-based compensation charges related to Statement of Financial Accounting Standard (“SFAS”) No. 123(R). Direct operating expenses exclude certain allocated operating expenses such as facility expenses, income taxes and interest since it is not practical for CTI’s management to reasonably estimate expenses such as these that would have resulted if Zevalin had operated as an unaffiliated independent company.

     The direct costs and operating expenses are not necessarily indicative of the costs and expenses that would have been incurred had Zevalin operated as a separate stand-alone company during the periods represented. It is not practical for CTI management to reasonably estimate the direct cost and operating expenses that would have been incurred had Zevalin operated as an unaffiliated independent company.

Research and Development

     Research and development expenses consist of expenses incurred in performing research and development activities including allocation of salaries and benefits, clinical trials and related clinical manufacturing expenses, contract services and other outside expenses. Research and development costs are expensed as incurred.

3. Transition Services and Supply Agreement

6

CELL THERAPEUTICS, INC.

NOTES TO ZEVALIN STATEMENT OF REVENUES AND
DIRECT EXPENSES (Continued)

     In connection with CTI’s acquisition of the U.S. development, sales and marketing rights to Zevalin from Biogen in December 2007, CTI entered into a 78-month supply agreement with Biogen to manufacture Zevalin for sale in the United States as well as a security agreement providing Biogen a first priority security interest in the assets purchased in the transaction.

4. Geographic Information

     Zevalin has historically formed a part of a single segment of CTI as described in Note 1. Within its single operating segment, Zevalin was not separated into a further reporting operating segment. Product revenues of Zevalin are solely attributable to the U.S.

     One customer individually accounted for 77% of Zevalin’s product revenues during the period presented.

5. Indemnifications

     In connection with Biogen’s consent to the joint venture transaction, RIT agreed to indemnify Biogen and its affiliates for breaches of licensing agreements transferred by CTI to RIT, agreements to which Biogen is a party, with respect to RIT’s operation of Zevalin.

6. Subsequent Events

     In December 2008, CTI formed a 50/50 owned joint venture with Spectrum to commercialize and develop Zevalin. The joint venture operated through RIT Oncology, LLC (RIT), to which CTI and Spectrum were 50/50 members. Pursuant to the Purchase and Formation Agreement of RIT dated November 26, 2008, RIT purchased the U.S. marketing, sales, and manufacturing and development rights to Zevalin. The assets acquired were deemed a business hereinafter the “Business.” Under the terms of the operating agreement for the joint venture, dated December 15, 2008 (the “LLC Agreement”), CTI and Spectrum were the sole members of the joint venture whose sole purpose was to commercialize Zevalin in the United States. A Board of Managers comprised of an equal number of members from CTI and Spectrum was established to govern the joint venture. Both CTI and Spectrum equally provided for the future capital requirements of the joint venture and shared equally in its profits and losses. CTI received an initial payment of $7.5 million at closing and an additional $7.5 million in early January 2009. In addition CTI could receive up to $15 million in product sales milestone payments upon the achievement of certain Zevalin revenue targets.

7

CELL THERAPEUTICS, INC.

NOTES TO ZEVALIN STATEMENT OF REVENUES AND
DIRECT EXPENSES (Continued)

     In connection with the joint venture transaction and the receipt of Biogen’s consent to such transaction, CTI and Biogen amended the terms of the supply agreement, the security agreement and certain milestone payments under the asset purchase agreement.

     Also in connection with the joint venture transaction, the Access Agreement with Bayer was assigned to the joint venture, and beginning January 1, 2009, the joint venture is responsible to Bayer for royalties on net sales of Zevalin and will continue to be until an aggregate of $11.5 million in royalties has been paid to Bayer under the agreement. The joint venture will make an additional payment of $3 million to Bayer if it is able to obtain FDA approval of an sBLA for Zevalin based on the FIT trial results and milestone payments to Biogen.

     On February 20, 2009, CTI exercised its option to sell its 50% ownership interest in the 50/50 owned joint venture with Spectrum for $18 million, as may be adjusted for amounts owed between CTI and the joint venture as of the closing (the “Purchase Price”), pursuant to the term of the LLC Agreement.

     On February 27, 2009, CTI notified Spectrum of its exercise of the sale option. The closing is scheduled to occur on March 2, 2009. Upon closing, Spectrum is required to pay $6 million, with the remaining balance of the purchase price of $12 million, as adjusted, to be paid in two installments 45 days and 90 days after the closing. The consummation of the sale option transaction was contingent upon the satisfaction of certain closing conditions, including the delivery of a legal opinion from counsel to CTI, as specified in the LLC Agreement. Additionally prior to or concurrent with closing, a $750,000 consent fee is required to be paid to Biogen under the terms of a certain security agreement and guarantee in favor of Biogen.

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EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

     The following unaudited pro forma condensed financial statements combine the historical financial statements of Spectrum Pharmaceuticals, Inc. and the historical statement of net revenues and direct expenses of the Zevalin Business, including certain estimates, assumptions and adjustments described in the accompanying notes to the pro forma condensed combined financial information. The Zevalin Business is being conducted by a 50/50-owned joint venture called RIT Oncology, LLC (the “Joint Venture”) of which Spectrum and Cell Therapeutics, Inc. (“CTI”) were each issued a 50% membership interest upon the closing of the Joint Venture transaction on December 15, 2008.

For pro forma purposes:

• Spectrum’s unaudited balance sheet as of September 30, 2008 has been adjusted to reflect pro forma adjustments as if the Joint Venture transaction had occurred on September 30, 2008;

• Spectrum’s unaudited statement of operations for the nine months ended September 30, 2008 has been combined with Zevalin’s audited statement of net revenues and direct expenses for the nine months ended September 30, 2008 as if the Joint Venture transaction had occurred on January 1, 2008;

• Spectrum’s unaudited statement of operations for the year ended December 31, 2007 has been combined with Zevalin’s statement of net revenues and direct expenses for the nine months ended September 30, 2008 to represent combined results of operations as if the Joint Venture transaction had occurred on January 1, 2007, and assumes that the Zevalin business performance was similar to 2008.

     The unaudited pro forma condensed combined financial information is intended for informational purposes only and does not purport to represent what Spectrum’s financial position or results of operations would actually have been if the Joint Venture transaction had in fact occurred on the dates indicated above, and should not be construed as being representative of future operating results.

     Also, these unaudited pro forma condensed combined financial statements and accompanying notes should be read in conjunction with the historical financial statements and the related notes included in Spectrum’s Annual Report on Form 10-K for the year ended December 31, 2007, its quarterly report on Form 10-Q for the nine months ended September 30, 2008 and the statements of net revenues and direct expenses and related disclosure of the Zevalin Business for the nine months ended September 30, 2008.

UNAUDITED PRO FORMA CONDENSED
COMBINED BALANCE SHEET
September 30, 2008
(In thousands)

	Spectrum			Zevalin
	Pharmaceuticals,			Business			Pro Forma						Pro Forma
	Inc.			Note 1			Adjustments			Note 2			Combined
ASSETS
Current assets:
Cash and marketable securities	$	51,636		$	—		$	(15,000	)		(A	)	$	36,636
Accounts receivable-trade, net of allowance for doubtul accounts		186			—			—						186
Inventory		1,446			—			—						1,446
Prepaid expenses and other current assets		254			—			—						254
Total current assets		53,522			—			(15,000	)					38,522
Property and equipment, net		1,633			—			—						1,633
Intangible Assets, net		—			37,200			—			(B	)		37,200
Other assets and deferred charges		143			—			—						143
Total assets	$	55,298		$	37,200		$	(15,000	)				$	77,498
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accounts payable and accrued expenses	$	7,934		$	2,200			—			(C	)	$	10,134
Deferred revenue and other credits		1,026			—			—						1,026
Total liabilities	$	8,960		$	2,200		$	—					$	11,160
Commitments and contingencies	$	—		$	9,700		$	—			(D	)	$	9,700
Minority interest in Joint Venture	$	—		$	—		$	12,650			(A	)	$	12,650
Preferred stock		419			—			—						419
Common stock		32			30,000			(30,000	)		(A	)		32
Additional paid-in capital		294,051			—			—						294,051
Accumulated other comprehensive income		390			—			—						390
Accumulated deficit		(248,554	)		(4,700	)		2,350			(B	)		(250,904	)
Total stockholders’ equity		46,338			25,300			(27,650	)					43,988
Total liabilities and stockholders’ equity	$	55,298		$	37,200		$	(15,000	)				$	77,498

UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 2008
(In thousands, except per share amounts)

	Spectrum			Zevalin
	Pharmaceuticals,			Business			Pro Forma						Pro Forma
	Inc.			Note 1			Adjustments			Note 2			Combined
Revenues:
Licensing and milestone revenues	$	20,676		$	—		$	—					$	20,676
Product sales		—			8,824			—						8,824
Total revenues		20,676			8,824			—						29,500
Operating expenses:
Cost of product sold		—			2,349			—						2,349
Research and development		19,089			5,674			—						24,763
Selling, general and administrative		8,947			6,519			—						15,466
Amortization of purchased intangibles		—			519			2,181			(E	)		2,700
Total operating expenses		28,036			15,061			2,181						45,278
Loss from operations		(7,360	)		(6,237	)		(2,181	)					(15,778	)
Other income, net		556			—			—						556
Net loss before minority interest		(6,804	)		(6,237	)		(2,181	)					(15,222	)
Minority interest					3,118			1,090			(F	)		4,208
Net loss attributable to common stockholders	$	(6,804	)	$	(3,119	)	$	(1,091	)				$	(11,014	)
Basic and diluted net loss per common share	$	(0.22	)										$	(0.35	)
Shares used in calculation of basic and diluted net loss per common share		31,424,358												31,424,358

UNAUDITED PRO FORMA CONDENSED
COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2007
(In thousands, except per share amounts)

	Spectrum			Zevalin
	Pharmaceuticals,			Business			Pro Forma						Pro Forma
	Inc.			Note 1			Adjustments			Note 2			Combined
Revenues:
Licensing and milestone revenues	$	7,672		$	—		$	—					$	7,672
Product sales		—			8,824			—						8,824
Total revenues		7,672			8,824			—						16,496
Operating expenses:
Cost of product sold		—			2,349			—						2,349
Research and development		33,285			5,674			—						38,959
Selling, general and administrative		11,582			6,519			—						18,101
Amortization of purchased intangibles		—			519			3,081			(E	)		3,600
Total operating expenses		44,867			15,061			3,081						63,009
Loss from operations		(37,195	)		(6,237	)		(3,081	)					(46,513	)
Other income, net		3,139			—			—						3,139
Liabilities and shareholders’ deficit		(34,056	)		(6,237	)		(3,081	)					(43,374	)
Minority interest		20			3,118			1,540			(F	)		4,678
Net loss before minority interest	$	(34,036	)	$	(3,119	)	$	(1,541	)				$	(38,696	)
Basic and diluted net loss per common share	$	(1.17	)										$	(1.33	)
Shares used in calculation of basic and diluted net loss per common share		29,013,850												29,013,850

Notes to Unaudited Pro Forma
Condensed Combined Statements of Operations

Note 1. The Zevalin Business

     On December 15, 2008, Spectrum Pharmaceuticals, Inc. (“Spectrum” or “the Company”) closed a transaction to enter into a 50/50-owned joint venture (the “Joint Venture”) whose purpose is to commercialize and develop Zevalin (ibritumomab tiuxetan), or Zevalin (the “Zevalin Business”) in the United States. The Joint Venture is being conducted through a newly-formed Delaware limited liability company, RIT Oncology, LLC (“RIT”), of which Spectrum and CTI were each issued a 50% membership interest upon the closing of the Joint Venture transaction.

     Pursuant to the Purchase and Formation Agreement (the “Joint Venture transaction”) dated as of November 26, 2008, Spectrum contributed $15 million as initial consideration for 50% interest in the Joint Venture. Accordingly, the initial capitalization of the Joint Venture was recorded as $30 million. Additionally, CTI has the option to sell its 50% membership interest in the Joint Venture to Spectrum. CTI exercised this Put Option on February 20, 2009, and Spectrum has 30 days to accept the Put. Therefore, the accompanying proforma financial information is presented on the basis of the Zevalin Business being consolidated into Spectrum Pharmaceuticals, Inc., with CTI’s interest in the Joint Venture presented as a Minority Interest.

     CTI contributed to the Joint Venture all of its interests in the Zevalin Business, which included the following: (i) Assets acquired in the December 2007 agreement with Biogen Idec Inc., or Biogen, which included the U.S. development, sales and marketing rights to Zevalin. The assets acquired included the Zevalin FDA registration, FDA dossier, U.S. trademark, trade name and trade dress, customer list, certain patents and the assignment of numerous contracts. There was no continuity of physical facilities or personnel from that acquisition. (ii) Assets acquired in the June 2008 Access Agreement with Bayer Schering Pharma AG, or Bayer, which holds the rights to Zevalin outside of the United States. Under the agreement, Bayer gave CTI access to data from Bayer’s phase III first-line indolent trial, or FIT trial, of Zevalin. And (iii) CTI’s September 30, 2008 submission of a supplemental biologics license application, or sBLA, for use of Zevalin in consolidation therapy of first remission in advanced stage follicular NHL. The FDA has granted priority review status for this sBLA and a decision is targeted for July 2009. The Joint Venture also assumed certain obligations as follows: $2.2 million current liabilities, and $16 million contingent obligations.

     The allocation of the initial capitalization of the Joint Venture, detailed below, was based on the relative fair values of the intangible assets acquired, as determined by an independent valuation consultant, and the obligations assumed by the Joint Venture.

Developed technology				$	23,100
Core technology					14,100
Acquired in-process research and development					4,700
Assumed Obligation to pay Biogen					(2,200	)
Assumed Contingent Obligations	$	12,500
Less: Limitation based on excess of values of Intangibles acquired over Initial capitalization		(2,800	)
Contingent Obligations, as recorded					(9,700	)
Total initial capitalization of Joint Venture				$	30,000

     The total fair value of intangible assets equals $41.9 million which includes developed technology, core technology and acquired in-process research and development. The developed technology asset relates to intellectual property and rights thereon related to Zevalin as approved by the FDA for relapsed or refractory low-

grade, follicular, or B-cell NHL. The core technology asset represents the value of the intellectual property and rights thereon expected to be leveraged in the development of label expansions for Zevalin. Developed and core technologies will be amortized over the term of the patents related to such technologies. We estimate aggregate amortization expense related to these acquired intangible assets to be $3.6 million annually. In-process research and development (IPRD) for the Joint Venture transaction was evaluated utilizing the present value of the estimated after-tax cash flows expected to be generated by purchased undeveloped technology related to the Zevalin Business or label expansions for indications that have not been approved by the FDA. Since, at the effective time of the Joint Venture transaction, the IPRD had not reached technological feasibility, such amount has been charged to retained earnings as of the formation date of the Joint Venture.

     Because the Joint Venture transaction involves contingent consideration, the Company recognized $9.7 million contingent obligation which is equal to the excess of the fair value of the intangible assets over the initial capitalization, and is less than the approximately $12.5 million fair value of the contingent consideration, as determined by the independent valuation consultant. When the contingencies are resolved and the contingent consideration becomes payable, any excess of the fair value of the contingent consideration over the amount initially recognized as a liability shall be recognized as an additional cost of the acquired entity. If the amount initially recognized as a liability exceeds the fair value of the contingent consideration, that excess will be allocated as a pro rata reduction of the amounts assigned to the assets acquired.

Note 2. Pro Forma Adjustments

     The pro forma amounts and adjustments included in the unaudited pro forma condensed combined financial statements are as follows:

(A)	Adjustment to record the initial contribution to the Joint Venture of $15 million in consideration for Spectrum’s 50% interest in the Joint Venture. In addition, given the accounting for the Joint Venture as a consolidated entity, the $30 million initial capitalization of the Zevalin Business is eliminated, and CTI’s 50% interest in the Joint Venture is classified as $15 million Minority Interest in Joint Venture less its 50% share of the IPR&D charge of $2.35 million.
(B)	To record Zevalin’s $41.9 million of Intangible Assets representing $23.1 million in developed technology and $14.1 million in core technology, and after the $4.7 million write-off of in-process research and development (IPR&D) as of the formation date.
(C)	To record $2.0 million in Zevalin milestone fees paid to Biogen by RIT (as successor to CTI) pursuant to the First Amendment to Asset Purchase Agreement, dated as of December 9, 2008. Amount also includes $200,000 reimbursement to CTI by RIT from the initial capital contributions made by Spectrum and CTI. The $200,000 amount was a payment required by Biogen for consenting to the Joint Venture.
(D)	To record contingent consideration of $9.7 million based on the excess of the fair value of the intangible assets over the initial capitalization.
(E)	Adjustment to record $2.7 million amortization for the acquired intangible assets for the nine months ended September 30, 2008, and $3.6 million for the year ended December 31, 2007.
(F)	To record CTI’s 50% Minority Interest in the Joint Venture for the periods presented.

There is no income tax adjustment related to the pro forma adjustments due to the assumption that the tax benefit generated by the Zevalin Business losses would require a full valuation allowance.