Irvine drug maker Spectrum Pharmaceuticals Inc. is raising money.
Spectrum said earlier this month that it’s getting $20 million in cash from Par Pharmaceutical Cos. of Woodcliff Lake, N.J., for a stake in a generic migraine injection drug.
The payment is giving Par 95% of the profits from the generic version of GlaxoSmithKline PLC’s Imitrex.
Par previously had a 38% profit stake.
With the payment, Spectrum won’t need to raise cash in the near future, Chief Executive Rajesh Shrotriya said in a statement.
Spectrum also plans to use the money to help launch Levoleucovorin, a cancer treatment that received Food and Drug Administration approval in March.
The company plans to launch Levoleucovorin for treating malignant bone cancer in June.
It also plans to ask regulators to approve it for other cancers.
Investors sent Spectrum’s stock up 5% on May 7, when it announced the Par deal.
Overall, however, Spectrum shares are down 70% in the past year with a recent market value of $55 million.
Besides the Par deal, Spectrum also recently sold four injectable generic drugs to Sagent Pharmaceuticals Inc. of suburban Chicago for undisclosed terms.
The drugs are ondansetron, which treats nausea and vomiting, and cancer treatments carboplatin, fludarabine and mitoxantrone.
Shrotriya called the drugs “non-core assets.” Selling them gives Spectrum money to pay for late-stage clinical trials for other drugs, he said.
Spectrum has had some costly regulatory setbacks within the past year in its effort to develop brand-name drugs.
Last summer, FDA reviewers raised issues with satraplatin, a pill to fight advanced prostate cancer.
Investors hammered Spectrum’s stock on the news.
GPC Biotech AG, a German company that is working with Spectrum on satraplatin, eventually pulled the drug application to focus on getting overall survival results and integrating data into a new submission after the FDA indicated it wouldn’t be approved.
Shrotriya has always argued that Spectrum is more than satraplatin and has pointed to other potential products, such as ozarelix, a drug for treating benign enlarged prostates that’s in clinical trials.
Congress Questions Medicare
Members of Congress now are questioning a proposed Medicare plan to use competitive bidding for things such as oxygen equipment, wheelchairs, hospital beds and power walkers.
Lawmakers expressed concern about the plan in “a sign that lobbying by medical-equipment companies is gaining traction,” The Wall Street Journal recently reported.
Apria Healthcare Group Inc., a Lake Forest provider of home healthcare services run by former Nixon administration official Larry Higby, has been one of the more avid companies when it comes to lobbying lawmakers about changes affecting its business.
The Centers for Medicare and Medicaid Services is launching a competitive bidding process for 10 cities this year. Under the system, companies such as Apria would bid on how low of a fee they would be willing to accept. Regulators would then limit distribution rights for a particular geographic area to several low bidders.
Aeolus Updates Lead Drug
Aeolus Pharmaceuticals Inc., a drug developer based in Laguna Niguel, updated progress on its lead drug candidate.
Aeolus, in a release, said data on what it calls AEOL 10150 was “promising” as a protective agent against mustard gas exposure for the skin and lungs.
The company also said it was ready to initiate mouse and primate studies on AEOL 10150 as a protective agent against radiation exposure in the lung.
The drug developer also is expecting to receive results on a second study for another candidate, AEOL 11207, in Parkinson’s disease, said John McManus, Aeolus’ chief executive.
Aeolus is looking to raise money.
In a release, Aeolus said that it had $406,000 in cash and equivalents, and nearly 32 million shares of stock outstanding as of March 31.
Aeolus said its management believes it has “adequate financial resources” to operate through the current quarter. But it also said it was “actively pursuing strategic and financial alternatives,” including selling more stock.
The company “believes that without additional investment capital it will not have sufficient cash to fund its activities in the near future, and will not be able to continue operating.”
Dentists in Anaheim
More than 30,000 dentists, industry professionals and dental products exhibitors gathered in Anaheim earlier this month for the California Dental Association’s 2008 spring scientific session at the Anaheim Convention Center.
Newport Beach-based Glidewell Laboratories Inc., BioLase Technology Inc. of Irvine, Nobel Biocare of Yorba Linda and 3M ESPE Dental Products, an Irvine-based 3M Co. unit, were among the conference’s exhibitors.
