West Coast Editor

Having completed enrollment in its Phase II prostate cancer trial four months ahead of schedule, Spectrum Pharmaceuticals Inc. entered definitive agreements to raise about $42 million by issuing 8 million shares of stock at $5.25 per share, pursuant to a shelf registration.

The company's stock (NASDAQ:SPPI) closed Thursday at $5.23, up 3 cents.

Stock buyers also get six-year warrants to purchase up to about 4 million shares of stock at an exercise price of $6.62 per share.

In August, Spectrum finished early the 48-patient sign-up for its Phase II trial of ozarelix in Europe in hormone-dependent prostate cancer, and will test the drug's effects on testosterone, as well as objective antitumor effects. The trial is being conducted in collaboration with AEterna Zentaris Inc., of Quebec, and is one of two studies under way in Europe. A Phase I/II study with the compound began this year in the U.S.

Earlier this month, Spectrum started a new Phase II study of EOquin intravesical instillation in patients with high-risk superficial bladder cancer. The product has shown encouraging activity and safety in superficial bladder cancer in Phase I and Phase II studies performed in 68 patients with multiple, recurrent disease.

Company officials could not be reached, but said in the firm's report for the quarter ended June 30 that an FDA meeting is expected before year's end to discuss EOquin's Phase III trial, which should begin in 2006.

In May, Spectrum strengthened its oncology pipeline by in-licensing the Phase II compound lucanthone, a radiation sensitizer in clinical development to treat cancers of the central nervous system, from Robert Bases, who invented a method of treating cancer using the drug with radiation.

The company also has satraplatin, partnered with GPC Biotech AG, of Munich, Germany, which in July said a Phase I study evaluating the compound in combination with Taxotere (docetaxel) in patients with advanced solid tumors has opened for accrual. Satraplatin is in a Phase III registration trial as a second-line chemotherapy for patients with hormone-refractory prostate cancer.

Funding for satraplatin, Spectrum noted in its quarterly report, is being borne entirely by GPC, and the Phase III study is expected to finish by the end of this year. A rolling new drug application filing is expected to begin in the second half of 2005 and an interim analysis of the Phase III data is due early next year, with completion of the full NDA filing likely in the second half of 2006.

Elsewhere in the pipeline is elsamitrucin for non-Hodgkin's lymphoma, which began a Phase II trial in April 2004, with enrollment expected to finish by the end of this year.

Spectrum said this summer that it aims to file investigational new drug applications for two more drugs, RenaZorb and SPI-1620, in the next 12 months to 18 months.

RenaZorb consists of two second-generation, lanthanum-based phosphate-binding drugs that use nanoparticle technology to treat hyperphosphatemia, or high phosphate levels in the blood, in kidney disease patients. SPI-1620 is an endothelin B agonist designed to stimulate receptors on endothelial cells to selectively dilate blood vessels in the tumor to increase the delivery of cancer drugs.

As of June 30, Spectrum had about $33.5 million in cash and cash equivalents.

Rodman & Renshaw LLC, of New York, is acting as placement agent for the offering.

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