* Analysts expect approval next year
* Shares rise as much as 7 pct (Adds detail, analysts' comment; updates shares)
By Natalie Grover
April 23 (Reuters) - Spectrum Pharmaceuticals Inc said it expects to seek U.S. marketing approval for its blood cancer drug in the third quarter, after the treatment was shown to be safe and effective in a key mid-stage trial.
The company's shares rose up as much as 7 percent on Wednesday.
The injectable drug, Captisol-enabled melphalan, an improved form of common chemotherapy drug melphalan, is being tested in patients with multiple myeloma undergoing stem cell transplants.
Roth Capital Partners analyst Joseph Pantginis said he expects CE-Melphalan to receive full approval next year.
"CE-Melphalan would fit nicely with (Spectrum's) salesforce's current hematological bag," he said.
H.C Wainright & Co analyst Reni Benjamin estimated that the drug could generate about $25 million to $50 million in annual peak sales.
High-dose chemotherapy in combination with stem cell transplants is one of the last options for patients with multiple myeloma - a type of blood cancer that originates in the bone marrow.
The higher dose of chemotherapy given during the treatment destroys more myeloma cells. But it also kills normal blood-producing stem cells in the bone marrow, which must be replaced in order to restore blood cell production.
The drug is free of propylene glycol found in melphalan products, including GlaxoSmithKline Plc's Alkeran, that has been associated with renal and cardiac side-effects.
Captisol-enabled melphalan is formulated using a drug delivery technology designed to optimize the solubility and stability of the drug.
Spectrum Pharma, which acquired the development and marketing rights to the drug from Ligand Pharmaceuticals Inc in 2013, currently markets four cancer-related drugs.
About 24,050 new cases of multiple myeloma will be diagnosed in the United States in 2014, according to American Cancer Society estimates.
The Irvine, California-based company's shares gave up some of their earlier gains to be up 5.36 percent at $7.27 in late morning trade on the Nasdaq.
(Reporting by Natalie Grover and Esha Dey in Bangalore; Editing by Sriraj Kalluvila)