Spectrum sells off 7 drugs, cutting 40% of staff in re-focus
- Spectrum Pharmaceuticals will sell seven hematology and oncology therapies to Acrotech Biopharma, a unit of the Indian drugmaker Aurobindo, for $160 million, the Henderson, Nevada-based company announced Thursday.
- Spectrum will also cut its workforce by about 40%, with most of that staff moving over to Acrotech. Spectrum is also eligible to receive as much as $140 million in milestone payments from the sale.
- The company said the incoming cash and savings from the staff reduction will help the biotech focus on its Rolontis and poziotinib cancer therapies.
Spectrum is betting on a late-stage pipeline that it says has greater potential to find success.
First to market could be Rolontis (eflapegrastim), which is designed to treat chemotherapy-induced neutropenia and may offer an alternative to Amgen's blockbuster Neulasta (pegfilgrastim) therapy. Neulasta brought in sales of more than $1 billion in the third quarter of 2018, but is facing competition from biosimilars.
Spectrum expects Food and Drug Administration approval of Rolontis as early as this year after submitting its application in December. As it reduces staff elsewhere, the company said it will keep "a core group of commercial talent" to handle the launch of Rolontis and poziotinib, a therapy in clinical trials for cancer patients with genetic mutations that defy current treatment.
At the end of 2017, the company had 215 employees, according to a filing with the Securities and Exchange Commission.
"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," Spectrum CEO Joe Turgeon said in a Jan. 17 statement.
The seven products Acrotech is buying from Spectrum posted cumulative sales of $76.4 million over the first nine months of 2018, the company stated.
Spectrum may receive further payments based on sales milestones for Khapzory (levoleucovorin) and Marqibo (vincristine sulfate liposome injection), as well as for two possible FDA approvals for expanded uses of Marqibo. The biotech will remain eligible for milestone payments from Acrotech for five years.
The companies expect the deal to close within 90 days, pending regulatory approvals.