Development-stage biopharmaceutical stocks have always been known as high-risk and potentially high-reward companies. Nowhere are the risks and rewards higher for biotech companies than for those developing drugs to treat cancer. Yesterday, drug developers GPC Biotech (NASDAQ:GPCB) and Pharmion (NASDAQ:PHRM) vividly proved this point, when shares of both companies rose more than 20% on the release of positive clinical trial results for the companies' lead chemotherapy drug, satraplatin.

GPC and Pharmion announced that satraplatin improved the length of time that patients with advanced prostate cancer survived without disease progression. In this large, 950-patient phase 3 trial, satraplatin showed a 13% improvement in progression-free survival for patients who took the drug versus a placebo.

Satraplatin is a platinum-based chemotherapy, an important drug class in treating cancer. If approved, it would be the only platinum-based chemotherapeutic agent on the market. In addition, satraplatin's great advantage is that it can be orally administered, whereas other platinum-based chemotherapies in development must be administered intravenously.

It should also be noted that platinum-based chemotherapeutic agents offer some advantages, like improved efficacy compared to their non-platinum brethren. But they're also associated with some disadvantages, like an increased level of side effects.

GPC owns the rights to satraplatin in the United States after licensing the drug from Spectrum Pharmaceuticals (NASDAQ:SPPI) in 2002. If approved, GPC will have to pay royalties and milestone payments on sales of satraplatin to Spectrum. In Europe, Pharmion owns the rights to the drug after licensing it from GPC.

Currently, GPC is filing a rolling New Drug Application with the FDA for satraplatin. The company expects the application to be completed by the end of 2006. Pharmion plans to file for approval in the EU sometime during the first half of 2007.

Since there are so few treatments available for late-stage prostate cancer, there's a good chance that satraplatin might get a priority review with the FDA, making it to the market six months after GPC completes the NDA, rather than the ten months associated with a standard FDA review.

The companies are testing satraplatin in a variety of cancers, and since it has proven itself effective in treating prostate cancer, I expect that it will do likewise against the other cancers targeted by platinum-based drugs.

The future of cancer treatment lies in the targeted therapies being developed by Genentech (NYSE:DNA), Exelixis (NASDAQ:EXEL), and a range of other biopharmaceutical companies. Nonetheless, there will still remain a place for using chemotherapies, and satraplatin should find a niche in this market for GPC and Pharmion.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.