Buzz of a potential sale at Spectrum Pharma first emerged last June. As it turns out, the rare disease and cancer specialist is indeed pulling off a transaction—but only for its FDA-approved products.
Spectrum is selling its entire portfolio of seven marketed products to Acrotech Biopharma, a wholly owned subsidiary of India’s Aurobindo, the Nevada-based company announced Thursday. In exchange, Spectrum will get $160 million upfront and up to $140 million in regulatory and sales-based milestones.
As a result, the company will cast aside about 40% of its workforce—or about 90 by its 2017 end-of-year tally of 215—with most of them slated to move to New Jersey-based Acrotech, “thereby right-sizing Spectrum for our development efforts,” Spectrum president and CEO, Joe Turgeon, said in a statement on Thursday.
To hear Turgeon tell it, the selloff is a strategic shift “to ensure laser-focus” on novel oncology drugs, and the cash is placing Spectrum “in a solid position to evaluate additional growth opportunities.”
Spectrum just recently strengthened its development force, having poached Ziopharma Oncology’s executive vice president of R&D, Francois Lebel, M.D., as its chief medical officer. But the castoff doesn’t mean Spectrum is abandoning commercial operations altogether. The company is keeping “a core group of commercial talent” in anticipation of the launch of two late-stage drugs.
Designed to reduce the duration of severe neutropenia in breast cancer patients treated with chemotherapy, Rolontis’ biologics license application is already on the FDA waiting list. In two phase 3 studies, the drug matched Amgen’s Neulasta in improving an abnormally low count of white blood cell neutrophils.
TKI poziotinib, which targets EGFR and HER2 exon 20-mutant cancer, is the other near-term focus at Spectrum. However, despite somewhat encouraging midstage data in metastatic non-small cell lung cancer, the FDA recently turned down poziotinib’s application for a “breakthrough” designation, meaning an expedited review is currently off the table. At that time, Turgeon said the firms’ plan and commitment to the program remains unchanged, and that it will continue to work with the FDA “to achieve the fastest route to approval” based on the phase 2 data.
On the castoff board are seven already-approved products in oncology and hematology, including a folate analog called Khapzory that just nabbed an FDA nod in October. Together, these products generated sales of $76.4 million in the first nine months of 2018.
With blessings from both companies’ boards, the transaction is expected to close within 90 days, pending regulatory approvals.
For Aurobindo, it marks yet another purchase in just a few months. In September, the Indian drugmaker signed a deal with Novartis, obtaining about 300 products and development projects in its Sandoz U.S. generic oral solids and dermatology business for $900 million upfront. Shortly before that, Aurobindo expanded in Europe, acquiring Apotex’s commercial operations in five European countries, in a deal that added more than 200 generics and more than 80 OTC products to its European portfolio. Then, in November, it announced a pact to acquire “an under-development product and certain related assets” from Australia’s Advent Pharma for $12.5 million.