Spectrum Pharmaceuticals Sells Marketed Portfolio to Acrotech Biopharma L.L.C. to Focus on New and Innovative Therapies for Cancer Patients
HENDERSON, Nev.--(BUSINESS WIRE)--Jan. 17, 2019-- Spectrum Pharmaceuticals, Inc. (NASDAQ-GS: SPPI) announced today that it has entered into a definitive agreement to sell its portfolio of seven FDA-approved hematology/oncology products to Acrotech Biopharma L.L.C. Acrotech Biopharma is a New Jersey-based wholly-owned subsidiary of Aurobindo Pharma USA Inc.
“This divestiture marks a major strategic shift for Spectrum to ensure laser-focus on novel, oncology drug development and commercialization,” said Joe Turgeon, President and CEO of Spectrum Pharmaceuticals. “The proceeds generated by the sale will significantly strengthen the financial position of the company, providing the capital to develop and commercialize our two late-stage pipeline assets, and placing us in a solid position to evaluate additional growth opportunities.”
The seven products included in the sale are: FUSILEV® (levoleucovorin), FOLOTYN® (pralatrexate injection), ZEVALIN® (ibritumomab tiuxetan), MARQIBO® (vinCRIStine sulfate LIPOSOME injection), BELEODAQ® (belinostat) for injection, EVOMELA® (melphalan) for injection, and KHAPZORY™ (levoleucovorin). The products generated combined sales of $76.4 million during the first nine months of 2018.
“Along with this divestiture, the majority of impacted staff will transition to Acrotech thereby right sizing Spectrum for our development efforts. Additionally, we are retaining a core group of commercial talent to lead the launch of ROLONTIS and poziotinib,” added Joe Turgeon.
The Boards of Directors of Spectrum Pharmaceuticals and Aurobindo have both approved the transaction, which is subject to regulatory approvals and expected to close within 90 days. Jefferies LLC is acting as exclusive financial advisor to Spectrum. Paul Hastings LLP is acting as exclusive legal counsel to Spectrum.
Terms of Purchase and Sale Agreement
Under the terms of the deal, Acrotech will make a $160 million up-front cash payment and up to $140 million in milestones listed below:
Marqibo Milestones
$30 million for FDA Product Approval for MARQIBOwith label indicated for diffuse large B-cell lymphoma
$10 million for FDA Product Approval for MARQIBO for any indication other than the B-Cell Lymphoma Indication, single vial or pediatric ALL
$30 million for Net Sales of MARQIBOduring any trailing twelve (12) month period during the Milestone Period are equal to or greater than $300,000,000
$10 million for Net Sales of MARQIBO during any trailing twelve (12) month period during the Milestone Period are equal to or greater than $400,000,000
Khapzory Milestones
$5 million for Net Sales of KHAPZORY during any trailing twelve (12) month period during the Milestone Period are equal to or greater than $50,000,000
$5 million for Cumulative Net Sales of KHAPZORY are equal to or greater than $150,000,000 at any time during the Milestone Period
$10 million for Cumulative Net Sales of KHAPZORY are equal to or greater than $200,000,000 at any time during the Milestone Period
$15 million for Cumulative Net Sales of KHAPZORY are equal to or greater than $300,000,000 at any time during the Milestone Period
$25 million for Cumulative Net Sales of KHAPZORY are equal to or greater than $400,000,000 at any time during the Milestone Period
The milestone period lasts for five years post the closing of the transaction. KHAPZORY milestones only payable in the event KHAPZORY is assigned a unique J-code.
About Spectrum Pharmaceuticals, Inc.
Spectrum Pharmaceuticals is a leading biotechnology company focused on acquiring, developing, and commercializing drug products, with a primary focus in hematology and oncology. Spectrum has an advanced stage pipeline that has the potential to transform the company. Spectrum's strong track record for in-licensing and acquiring differentiated drugs, and expertise in clinical development have generated a robust, diversified, and growing pipeline of product candidates in advanced-stage Phase 2 and Phase 3 studies. More information on Spectrum is available at www.sppirx.com.
Jan 17, 2019
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