Observed shark eating elongated needlefish heads (4)
I believe the answer is:
seen
'observed' is the definition.
('seen' can be a synonym of 'observed')
'shark eating elongated needlefish heads' is the wordplay.
'heads' suggests taking the first letters.
The initial letters of 'shark eating elongated needlefish' is 'SEEN'.
(Other definitions for seen that I've seen before include "Sighted" , "Spotted" , "Noticed" , "Distinguished" , "Witnessed" .)