UPDATE 2-Spectrum says FDA extends review date of cancer drug

* FDA extends Spectrum's cancer drug review date

* Spectrum to become sole owner of RIT Oncology

* Shares fall as much as 8 pct (Recasts, adds analyst comments, updates share movement)

By Anand Basu

BANGALORE, Feb 23 (Reuters) - Spectrum Pharmaceuticals Inc (SPPI.O) said U.S. regulators have extended the review date of its experimental cancer drug, Zevalin, by three months to July 2.

The decision by the U.S. Food and Drug Administration comes after the regulator received a major amendment to an application for the additional use of Zevalin as first line consolidation therapy for patients with B-cell follicular non-Hodgkin's lymphoma (NHL), the company said.

"The expectation from this drug is very low from investors. I don't believe that this drug can substantially increase sales," Morgan Joseph & Co analyst Shiv Kapoor said.

The drug has received priority review status from the FDA and is currently approved for the treatment of patients with relapsed or refractory, low-grade or follicular B-cell NHL.

Kapoor said the company is "still a great investment" because of Fusilev, a drug approved to treat a type of bone cancer, and as it has over $50 million in cash.

The company's shares are cheap, given that Spectrum sold about $15 million to $18 million of Fusilev in the first five months of its approval, the analyst said. The company also said it would acquire the 50 percent interest it does not already own in RIT Oncology LLC, a joint venture between the company and Cell Therapeutics Inc (CTIC.O) to develop Zevalin, for $18 million.

Spectrum is paying the right amount for Zevalin, said Kapoor, who has a "buy" rating and a price target of $5 on the company's stock.

Fusilev sales will help the company fund the acquisition, Chief Executive Rajesh Shrotriya said.

Shares of Irvine, California-based Spectrum were down 4 percent at $1.58 in morning trade on Nasdaq, while Cell Therapeutic shares were trading at 5.5 cents. (Editing by Pratish Narayanan and Deepak Kannan)