In a better position to focus on its late-stage oncology programs these days, Spectrum Pharmaceuticals Inc. is essentially out-licensing its generic business.
The deal caps a three-year turnaround at the Irvine, Calif.-based specialty pharmaceutical company. Back then, its market cap had eroded to just above $1 million, and it was facing the loss of its public listing. In part to attract new investments, Spectrum began to focus on generic drug approvals in the U.S., efforts that largely came about through collaborative efforts with Indian companies seeking FDA clearances.
But now Spectrum is ready to fully turn its attention toward its internally borne cancer drug pipeline.
"We are a proprietary drug company focused on oncology and unmet medical needs," Rajesh Shrotriya, Spectrum’s chairman, president and CEO, told BioWorld Today. "As our proprietary drugs are making progress, anything to do with generics was a distraction."
So Spectrum agreed to allow Par Pharmaceutical Cos. Inc. to market the generic line, which includes three FDA-approved products and nine under review.
The agreement also covers additional abbreviated new drug applications belonging to Spectrum, which could receive more than $10 million from Par Pharmaceutical Cos. Inc. in the form of milestone payments on achievement of specified regulatory approvals and an equity position from Par. In addition, Par, of Woodcliff Lake, N.J., will provide financial and legal support for the ongoing patent challenge for an injectable version of the migraine drug sumatriptan (Imitrex), which is in litigation with London s GlaxoSmithKline plc.
Both Spectrum and Par will share profits from the sale of Spectrum’s generic products, and Par also agreed to make an equity investment in Spectrum during the next two years. More specific financial terms were not disclosed.
"We already have upside from this deal, and we have kept further upside for our shareholders with the profit-sharing," Shrotriya said. "But more importantly, we have taken care of our so-called distraction. It’s now three-and-a-half years since we started this [generic] business, and the time has come for us to focus our energies in the company on our proprietary business."
Spectrum’s lead drug is satraplatin, an oral anticancer product for which a rolling new drug application has begun. Phase III enrollment is complete in a 900-patient study, with full data expected in the third quarter of this year. Its development is moving forward under the watch of GPC Biotech AG for its initial indication, as a second-line chemotherapy for hormone-refractory prostate cancer. (See BioWorld Today, Dec. 16, 2005.)
"This drug could be on the market next year," Shrotriya said. Industry estimates project that satraplatin could generate $500 million in prostate cancer sales.
Phase II investigations have demonstrated the platinum-based product’s activity in gastric, ovarian and lung cancers, "so we have data to show that this drug should have broad-based activity," Shrotriya added. The FDA has granted fast-track status to satraplatin.
Munich, Germany-based GPC is funding all development costs, and Spectrum stands to receive up to $58 million in additional milestone payments, plus royalties on worldwide sales.
A European filing is expected to coincide with completing the FDA submission through an arrangement between GPC and Pharmion Corp., of Boulder, Colo., a deal that could provide Spectrum $40 million in milestone payments. (See BioWorld Today, Dec. 21, 2005.)
Spectrum also has four drugs in multiple Phase II trials.
EOquin (apaziquone), a synthetic prodrug being studied for superficial bladder cancer, is on track to enter Phase III by the end of this year following a meeting with the FDA that laid the groundwork for such pivotal work. In Phase II, it produced a complete response in 67 percent of relapsed bladder cancer patients. Spectrum, which has worldwide control of the product, plans to hang onto North American rights while out-licensing EOquin in Europe and Japan.
Ozarelix, a fourth-generation LHRH antagonist, is due to produce Phase II data in prostate cancer and benign prostatic hypertrophy in the third quarter.
Other clinical products include elsamitrucin, initially targeting non-Hodgkin's lymphoma, and lucanthone, a radiation sensitizer in the treatment of brain cancer.
Spectrum’s preclinical portfolio includes compounds being developed for end-stage renal disease and chemotherapy-induced neuropathy, as well as an adjunct to chemotherapy and a radiation sensitizer for solid tumors.
Shrotriya referred to the company as "an undiscovered jewel." On Thursday, its stock (NASDAQ:SPPI) closed at $5.13, unchanged.