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                                                                     EXHIBIT 4.2

                                 AMENDMENT NO. 3
                                     TO THE
                                RIGHTS AGREEMENT
                          DATED AS OF DECEMBER 13, 2000
                                 BY AND BETWEEN
                         SPECTRUM PHARMACEUTICALS, INC.
                                       AND
                         U.S. STOCK TRANSFER CORPORATION

      On December 13, 2000, the Board of Directors of Spectrum Pharmaceuticals,
Inc., a Delaware corporation (the "Company") authorized and declared a dividend
distribution of one Right (as defined in the Rights Agreement) for each share of
its Common Stock, each Right initially representing the right to purchase
one-hundredth of a share of Series B Junior Participating Preferred Stock of the
Company, upon the terms set forth in a Rights Agreement dated as of December 13,
2000 by and between U.S. Stock Transfer Corporation (the "Rights Agent") and the
Company (the "Rights Agreement")

      The Company recently entered into a Preferred Stock and Warrant Purchase
Agreement dated September 26, 2003 (the "Series E Purchase Agreement"), pursuant
to which the Company issued and sold shares of its Series E Convertible Voting
Preferred Stock (the "Series E Preferred Stock") and Series E-1 Warrants to
Purchase Common Stock (the "Series E-1 Warrants"), Series E-2 Warrants to
Purchase Common Stock (the "Series E-2 Warrants") and Series E-3 Warrants to
Purchase Common Stock (the "Series E-3 Warrants") (the "Series E-1 Warrants,
Series E-2 Warrants and Series E-3 Warrants together, the "Series E Warrants").
Pursuant to the terms of the Certificate of Designation of the Series E
Preferred Stock (the "Certificate of Designations"), each holder of the Series E
Preferred Stock has the right to receive, on the Distribution Date (as defined
in the Rights Agreement), without further action by the Board, such number of
Rights (as defined in the Rights Agreement) equal to the number of Rights such
holder would have held if, immediately prior to the Distribution Date, all of
the shares of Series E Preferred Stock had been converted into shares of Common
Stock at the then current Conversion Value (as defined in the Certificate of
Designations). Pursuant to the terms of the Series E Warrants, each holder of a
Series E Warrant has the right to receive, after the Distribution Date, upon
exercise of the Series E Warrant, such number of Rights equal to the number of
Rights such holder would have held if, immediately prior to the Distribution
Date, the portion of the Series E Warrant being exercised at such time had been
exercised and the Series E Warrant Shares issuable upon such exercise were
outstanding immediately prior to the Distribution Date.

      Therefore, in order to give effect to the above terms of the Series E
Preferred Stock and the Series E Warrants, the Company and U.S. Stock Transfer
Corporation hereby agreed to amend the Rights Agreement as follows:
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      1.    Amend Section 1(a) of the Rights Agreement to add the following
            separate paragraph at the end of the section:

            "Also, notwithstanding the foregoing, each of the persons and
entities listed on Schedule 1 (the "Series E Purchasers") to the Preferred Stock
and Warrant Purchase Agreement dated September 26, 2003 (the "Series E Purchase
Agreement"), by and among the Company and the Series E Purchasers thereto, shall
not be deemed to be an "Acquiring Person," by virtue of such Series E Purchaser
acquiring Beneficial Ownership of shares of Common Stock pursuant to the terms
of the Series E Purchase Agreement, the Certificate of Designations (the "Series
E Certificate of Designations") of the Company's Series E Convertible Voting
Preferred Stock (the "Series E Preferred Stock"), the Series E-1 Warrants (as
defined in the Series E Purchase Agreement), the Series E-2 Warrants (as defined
in the Series E Purchase Agreement) or the Series E-1 Placement Agent Warrants
(as defined in the Series E Purchase Agreement) and the Series E-3 Placement
Agent Warrants (as defined in the Series E Purchase Agreement) issued or
issuable to SCO Financial Group LLC, and/or its designees, pursuant to that
certain financial advisory agreement between the Company and SCO Financial Group
LLC, dated February 1, 2003 (the Series E-1 Warrants, Series E-2 Warrants,
Series E-1 Placement Agent Warrants and Series E-3 Placement Agent Warrants
hereinafter referred to as the "Series E Warrant" if singular, or "Series E
Warrants" if plural). However, this exception to the definition of "Acquiring
Person" shall not affect the determination of whether the Series E Purchasers,
or any of them, shall be an "Acquiring Person" as the result of any other
acquisition of Beneficial Ownership of shares of Common Stock."

      2.    Add subsection (f) to Section 3 of the Rights Agreement to read in
            its entirety as follows:

            "(d) Notwithstanding any of the foregoing, each record holder of
shares of Series E Preferred Stock has the right to receive, on the Distribution
Date, such number of Rights equal to the number of Rights such holder would have
held if, immediately prior to the Distribution Date, all of the shares of Series
E Preferred Stock had been converted into shares of Common Stock at the then
current Conversion Value (as defined in the Series E Certificate of
Designations). As soon as practicable after the Distribution Date (but in any
case no later than 5 business days following the Distribution Date), the Rights
Agent will send by first-class, insured, postage prepaid mail, to each record
holder of the Series E Preferred Stock as of the Close of Business on the
Distribution Date, one or more Rights Certificates evidencing the Rights so
held. No further Rights shall attach or be issuable in respect of any shares of
Common Stock issued thereafter upon conversion of any shares of Series E
Preferred Stock. In addition, notwithstanding any of the foregoing, any holder
of a Series E Warrant who exercises any portion of such Series E Warrant after a
Distribution Date shall receive, upon exercise of such Series E Warrant, a
number of Rights equal to the number of Rights such holder would have held in
respect of the Warrant Shares (as defined in the Series E Warrant) issuable upon
such exercise if the portion of the Series E Warrant being exercised had been
exercised immediately prior to the Distribution Date. As soon as practicable
after such exercise (but in any case no later than 5 business days following
such exercise), the Rights Agent will send by first-class, insured,
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postage prepaid mail, to the record holder of such Warrant Shares, one or more
Rights Certificates evidencing the Rights so held. In an event that an
adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section 11(p) hereof, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof) so
that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights.

      Capitalized terms used and not otherwise defined herein shall have the
meanings given such terms in the Rights Agreement.

                            [SIGNATURE PAGE FOLLOWS]
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      IN WITNESS WHEREOF, the Company and the Rights Agent have caused this
amendment to be executed this 10th day of May, 2004.

Spectrum Pharmaceuticals, Inc.          U.S. Stock Transfer Corporation

By: /s/ SHYAM KUMARIA                   By: /s/ RICHARD C. BROWN
   ----------------------------------      -------------------------------------

Name: Shyam Kumaria                     Name: Richard C. Brown
     --------------------------------        -----------------------------------

Title: Vice President Finance           Title: Vice President
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