Spectrum Pharmaceuticals Inc. expects to raise $25 million by selling about 3.2 million shares of its common stock to institutional investors at a price of $7.75 per share.
Purchasers also will receive warrants to buy up to 1.1 million shares of common stock at an exercise price of $10 per share, exercisable in April 2005, the company said.
Representatives from the Irvine, Calif.-based company were not available for comment Wednesday.
The firm also said proceeds from the private placement will be used for general corporate purposes. Its stock (NASDAQ:SPPI) rose 4 cents Wednesday to close at $7.60.
Spectrum (formerly NeoTherapeutics Inc.) buys, develops and commercializes proprietary and generic drug products in cancer and related diseases.
Satraplatin, the firm's lead candidate, is an oral cancer drug being developed through a deal with GPC Biotech AG, of Martinsried, Germany. Satraplatin has received FDA fast-track designation as second-line chemotherapy in hormone-refractory prostate cancer.
While the product currently is the subject of a Phase III trial, the partners believe they will be prepared to seek FDA approval in the prostate indication sometime in 2006. (See BioWorld Today, Sept. 3, 2003.)
Spectrum licensed satraplatin, a third-generation platinum analogue, to GPC in a deal valued at $22 million in October 2002. GPC, which owns worldwide rights to satraplatin, paid a $2 million up-front fee. (See BioWorld Today, Oct. 2, 2002.)
As of Dec. 31, Spectrum had $26.4 million in cash, cash equivalents and marketable securities. Cash for 2003 includes $20 million raised in September through the sale of Series E convertible preferred stock at $5 per share. (See BioWorld Today, Sept. 30, 2003.)
The company reported a net loss for 2003 of about $10.4 million, compared to a net loss of about $17.6 million in 2002. The decrease reflects expenses associated with the restructuring initiated in August 2002, wherein all activities outside oncology were eliminated. Revenue for 2003 was $1 million, compared to $2.4 million for 2002.
Beyond satraplatin, the firm is conducting a Phase II trial for elsamitrucin - an antitumor antibiotic that acts as a dual inhibitor of two enzymes involved in DNA replication - in non-Hodgkin's lymphoma. In another Phase II trial, the company is evaluating EOquin, a synthetic prodrug, in superficial bladder cancer.
Also, Spectrum has filed abbreviated new drug applications for the generic drugs ciprofloxacin, carboplatin and fluconazole.
In other business, Spectrum's board approved a reduction in the number of directors from nine to seven and amended the firm's bylaws to eliminate classes and staggered terms in favor of the annual election of all directors. The changes will be effective immediately prior to the 2004 annual meeting of stockholders, tentatively scheduled for July 9, the company said.