CEO Joe Turgeon said in an interview that the company aims to focus more on developing drugs for larger, broader and more lucrative oncology markets.
A company best known for making drugs for niche cancer indications is selling off its portfolio to refocus on potentially more lucrative areas of oncology.
Henderson, Nevada-based Spectrum Pharmaceuticals, said Thursday it would sell all seven of its marketed drugs to Acrotech Biopharma, a division of Aurobindo, an Indian company primarily focused on generics. The deal is potentially worth up to $300 million, including a $160 million upfront payment and up to $140 million in regulatory and sales-based milestone payments.
Spectrum’s shares opened up 6.1 percent on the Nasdaq Thursday following the news.
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In a phone interview, CEO Joe Turgeon said the company’s new focus would be on development of novel drugs rather than the “legacy products.” “We want to compete in large markets, not the small markets we used to,” he said.
One of the two lead products is Rolontis (eflapegrastim), for which the company filed for Food and Drug Administration approval last month based on its Phase III study comparing the drug with pegfilgrastim in early-stage breast cancer patients as a prevention against neutropenia associated with chemotherapy. The other drug Turgeon pointed to is poziotinib, which he said is in a fully enrolled, registration-directed Phase II clinical trial in non-small cell lung cancer with exon 20 insertion mutations, a hard-to-treat subtype of the disease with an unfavorable prognosis. Poziotinib is a tyrosine kinase inhibitor of EGFR and HER2.
The drugs the company is selling off are Fusilev and Khapzory (both levoleucovorin), for treating side effects associated with methotrexate and treating metastatic colorectal cancer; Folotyn (pralatrexate) and Beleodaq (belinostat), for T-cell non-Hodgkin lymphomas; Zevalin (ibritumomab tiuxetan), for B-cell non-Hodgkin’s lymphoma; and the chemotherapy drugs Marqibo (vincristine sulfate liposome injection) and Evomela (melphalan).
But while Spectrum sold those legacy products because they were not of interest to large pharmaceutical companies due to the small patient populations they target, Rolontis is for a market worth $4 billion, while even the single-digit percentage of NSCLC patients for poziotinib represents a relatively large and untapped market, Turgeon said. For its part, he said, Acrotech is buying the aforementioned seven drugs in order to establish a footprint in the US.
From a strategic standpoint, Turgeon said the thinking behind selling off those products is that it will free up capital that it can focus on research and development of novel drugs. Because the legacy products’ markets are so small, the company has had to devote significant resources to marketing them, he explained. “They’re really hard to sell – you have to chase patients, and it requires a lot of time, money and effort on those drugs,” he said. “We want to devote our time, money and effort to much larger markets.”
Date: January 21, 2019