NEW YORK (AP) — Spectrum Pharmaceuticals Inc. said Wednesday it will buy Talon Therapeutics Inc. for as much as $206 million, gaining Talon's leukemia drug Marqibo.

Spectrum will pay $11.3 million upfront for Talon, and agreed to issue contingent value rights worth as much as $195 million. The value of those rights will be based on sales targets for Marqibo and the approval of Talon's menadione topical lotion product. The lotion is in mid-stage testing and is intended to treat skin toxicity associated with cancer drugs that target the epidermal growth factor receptor.

The Food and Drug Administration approved Marqibo in August as a treatment for recurrences of a rare type of adult lymphoblastic leukemia. The company is conducting other studies that could broaden its approval.

Talon shareholders will get 5.6 cents per share in cash and one contingent value right for every share they own. Spectrum will also issue 3 million shares of common stock in exchange for the South San Francisco, Calif., company's debt.

Talon shares, which trade on the over-the-counter bulletin board, declined nearly 19 percent to 30 cents in midday trading. The stock has traded between 22 cents and $1.83 over the past year.

The companies expect the sale to close by Thursday. They said Spectrum will buy an 89 percent stake in Talon from its principal shareholders and will then complete a short-form merger by buying the remaining shares.

Spectrum's biggest-selling drug is Fusilev, which treats the side effects of a chemotherapy drug called methotrexate. Its other approved products are Zevalin, a treatment for non-Hodgkin lymphoma, and Folotyn, which is used to treat peripheral T-cell lymphoma.

The Henderson, Nev., company reported $255 million in product sales in 2012 and $267.7 million in total revenue. However earlier this year Spectrum said it expects Fusilev to fall significantly in 2013. The company then licensed a potential treatment for multiple myeloma from Ligand Pharmaceuticals Inc.

Shares of Spectrum fell 20 cents, or 2.3 percent, to $8.69. They have traded between $6.92 and $13.15 so far this year.