Spectrum Pharmaceuticals Inc. (Nasdaq: SPPI), a clinical-stage biopharmaceutical company focusing on oncology drug development, announced Jan. 4 a $20 million equity investment by South Korean pharmaceutical company Hanmi Pharmaceutical.
Under the terms, the equity purchase agreement will be priced at $1.60 per share. After the announcement, the shares of the company, based in Nevada but with its research and development facility in Irvine, fell 10% to around $1.43 and a $234 million market cap.
“Following a recent meeting in Korea with Spectrum management, we wanted to make this investment as a symbol of our confidence in their strategic direction moving forward,” Hanmi Pharmaceutical Chief Executive Se-Chang Kwon said in a statement. “We view our collaboration with Spectrum as a key driver of our future growth and an integral part of bringing Hanmi’s novel molecules to the U.S. market.”
Seoul-based Hanmi sells about 200 different pharmaceuticals worldwide.
Spectrum Pharmaceuticals was originally based in Irvine, where it still operates a 56,000-square-foot administrative and research and development facility and employs about 100 locally. It ranks No. 8 among drugmakers in OC by employee count, according to Business Journal data.
It moved its headquarters designation to Henderson, Nev., a few years ago.
“This investment represents a strengthening in the relationship that we have with Hanmi,” Spectrum Chief Executive Tom Riga said in a statement. “We look forward to our continued partnership with Hanmi and to achieving the shared goal of gaining FDA approval for Rolontis and poziotinib.”
Riga on Dec. 31 took the CEO role from Joe Turgeon, who retired after nine years with the company.
Along with entering the equity purchase, the company reported amendments to Hanmi’s licensing agreements for Spectrum’s investigational drugs Rolontis and poziotinib.
Rolontis, which is designed to help the bone marrow make more white blood cells, hasn’t yet been approved by the FDA. It’s designed to treat neutropenia, a side effect of cancer treatments.
According to Spectrum, Rolontis was evaluated for neutropenia in 643 early-stage breast cancer patients during two Phase 3 clinical trials called “Advance” and “Recover.”
Last December, the company submitted its New Drug Application (NDA) for poziotinib, an orally administered tyrosine kinase inhibitor, to the FDA for use in patients with lung cancer.
The NDA submission for poziotinib marked “an important step in achieving a first treatment for patients” with lung cancer, Turgeon said in a Dec. 6 statement.
Amendments to the licensing agreements for Rolontis and poziotinib will result in the conversion of the upfront milestone payments for both products to deferred royalties, the company said.
Since Spectrum sold its portfolio of approved drugs in 2018 to focus on clinical trials, the company hasn’t reported revenue. Spectrum ended the three-month period of Sept. 30 with cash, cash equivalents, and marketable securities of $133.6 million. It had 176 employees as of Dec. 31, 2020.