Spectrum Pharmaceuticals (NASDAQ:SPPI) is hurting today after dialing back guidance for the year. Apparently the increased production by Sagent Pharmaceuticals (NASDAQ:SGNT) of generic leucovorin, a less purified version of Spectrum's Fusilev, is cutting into Fusilev sales .

Don't say I didn't warn you.

October 2011: "How do you guess when Teva Pharmaceuticals (NYSE:TEVA) and others will get their act together? And then when -- dare I say, if -- they do, how do you estimate how many doctors will head back to the generic?" 

July 2012: "If you can confidently say that Fusilev sales are here to stay for the long term, Spectrum is probably a good buy at this point. I don't have that confidence."

Spectrum claims that doctors actually want to buy the product, but that hospitals that stock the drug are cutting back on Fusilev now that the generic is more readily available.

The biotech is guiding for Fusilev sales of $10 to $15 million for the first quarter of the year, and approximately $80 to $90 million for the full year 2013. Spectrum claims sales will stabilize in the second half as inventory is drawn down and sales match demand.

That could be wishful thinking. Even if it hits that goal, assuming $30 million in the first half and $50 million in the second half, we're still a run rate of just half the over $200 million worth of Fusilev sold last year.

Fusilev is Spectrum's top-selling drug by far, so the drop in sales hurts overall sales. Last month, Spectrum guided for 2013 revenue above the $268 million it brought in last year. Now it's looking for revenue in the $160 million to $180 million range.

If Spectrum can stabilize sales and get things moving back in the right direction, it might be worth picking through this train wreck looking for some value. But that's a pretty monumentous task. Risk-adverse investors would be best off watching from the sidelines for a few quarters until things stabilize.

Fool contributor Brian Orelli has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.