Date: Jul 17, 2013 Source: Company Data (
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HENDERSON, Nev.--(BUSINESS WIRE)-- Spectrum Pharmaceuticals, Inc. (NasdaqGS: SPPI), a biotechnology company with fully-integrated commercial and drug development operations with a primary focus in hematology and oncology, today announced that, through a wholly-owned subsidiary, the company entered into an agreement to acquire Talon Therapeutics, Inc. (OTCQB: TLON), a biopharmaceutical company based in South San Francisco, California, and expects to complete the acquisition within one day.
In connection with the closing of the acquisition, Spectrum will pay Talon stockholders an aggregate upfront cash consideration of approximately $11.3 million and will issue 3 million shares of its common stock in exchange for the cancellation of all of the outstanding indebtedness under Talon's credit facility. Talon stockholders will also receive contingent value rights (CVRs) in an aggregate of up to $195 million in future cash payments from Spectrum upon the achievement of certain one-time sales-based milestones for Marqibo® and an approval-based milestone for Menadione Topical Lotion. There can be no assurance as to the actual value, if any, of a CVR. The CVRs will not be publicly traded.
Through this acquisition, Spectrum will gain worldwide rights to Marqibo, an FDA-approved hematology product for the treatment of leukemia, as well as a Phase 2 product, Menadione Topical Lotion for the treatment of the skin toxicity associated with epidermal growth factor receptor anti-cancer agents, such as ERBITUX®. Marqibo, is a novel, sphingomyelin-based liposome encapsulated formulation of vincristine indicated for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. Vincristine, a microtubule inhibitor, is widely used in combination regimens for treatment of adult and pediatric hematologic and solid tumor malignancies. Spectrum expects to launch Marqibo with the same sales force that sells its current oncology drugs, FOLOTYN® (pralatrexate injection) and ZEVALIN® (ibritumomab tiuxetan) injection for intravenous use.
"With this acquisition, we have added another drug that fits very well with our hematology and oncology franchise and addresses an unmet medical need for cancer patients," said Rajesh C. Shrotriya, MD, Chairman, Chief Executive Officer, and President of Spectrum Pharmaceuticals. "In a registration trial in Ph- ALL patients who had all previously failed multiple prior therapies and, therefore, had limited treatment options, Marqibo, as a single agent, demonstrated efficacy that led to accelerated approval by the FDA. By acquiring the rights to Marqibo, Spectrum will be able to further leverage its current infrastructure and experience in hematology and oncology to help these patients. We are very excited about this potential transaction as it delivers both an important clinical treatment to cancer patients and compelling value to our shareholders."
Pursuant to the terms of the transaction agreements, a wholly-owned subsidiary of Spectrum entered into an agreement to purchase approximately 89% of the outstanding shares of Talon directly from Talon's principal stockholders and purchased additional shares directly from Talon that, together with the shares acquired from Talon's principal stockholders, represent in excess of 90% of the outstanding shares of Talon. Spectrum, through its subsidiary, agreed to acquire the remaining outstanding shares of common stock of Talon through a "short form" merger under applicable Delaware law. Spectrum expects to complete the merger and acquire 100% of the common stock within one day and, as a result, Talon will become a subsidiary of Spectrum.
Corporate Stock Transfer, Inc., acting as the paying agent for the merger, will mail to the remaining former stockholders of Talon materials necessary to exchange their Talon shares for such payment. Additionally, the paying agent will distribute an appraisal rights notice containing additional detail regarding the transaction and the consideration received by common stockholders within 10 days following the merger.
H.C. Wainwright & Co., LLC is acting as Spectrum's exclusive advisor, Stradling Yocca Carlson & Rauth, P.C. is acting as legal counsel to Spectrum.
About Spectrum Pharmaceuticals, Inc.
Spectrum Pharmaceuticals is a leading biotechnology company focused on acquiring, developing, and commercializing drug products, with a primary focus in oncology and hematology. Spectrum and its affiliates market three oncology/hematology drugs ─ FUSILEV® (levoleucovorin) for Injection in the U.S.; FOLOTYN® (pralatrexate injection), also marketed in the U.S.; and ZEVALIN® (ibritumomab tiuxetan) Injection for intravenous use, for which the Company has worldwide marketing rights. Spectrum's strong track record in in-licensing and acquiring differentiated drugs, and expertise in clinical development have generated a robust, diversified, and growing pipeline of product candidates in advanced-stage Phase 2 and Phase 3 studies. More information on Spectrum is available at www.sppirx.com.
About Talon Therapeutics
Talon Therapeutics, Inc. is a biopharmaceutical company dedicated to seizing upon medical opportunities, efficiently and expertly leading product candidates through clinical development, and transferring value to patients, patient care providers, shareholders, corporate partners, and employees.
In addition to Marqibo® (vincCRIStine sulfate LIPOSOME injection) which received accelerated approval from the US FDA for the treatment of Philadelphia chromosome negative adult acute lymphoblastic leukemia (ALL) patients in second or greater relapse or whose disease has progressed following two or more prior lines of anti-leukemia therapy, Talon has additional pipeline opportunities some of which like Marqibo, have the potential to improve delivery and enhance the therapeutic benefits of well characterized, proven chemotherapies and enable high potency dosing without increased toxicity.
Forward-looking statements — This press release may contain forward-looking statements regarding future events and the future performance of Spectrum Pharmaceuticals and Talon Therapeutics that involve risks and uncertainties that could cause actual results to differ materially. These statements are based on management's current beliefs and expectations. These statements include, but are not limited to, statements that relate to our and Talon's business and future, including the timing and completion of the share acquisitions and the merger, the success and strategic fit of Talon within Spectrum, the potential value of the consideration to be received by Talon's stockholders in connection with the acquisition by Spectrum, including, without limitation, the achievement of certain milestones, the ability to develop and commercialize the acquired products, and any statements that relate to the intent, belief, plans or expectations of Spectrum, Talon or their respective management, or that are not a statement of historical fact. Risks that could cause actual results to differ include the possibility that existing and new drug candidates may not prove safe or effective, the possibility that existing and new applications to the FDA and other regulatory agencies may not receive approval in a timely manner or at all, the possibility that existing and new drug candidates, if approved, may not be more effective, safer or more cost efficient than competing drugs, the possibility that efforts to acquire or in-license and develop additional drug candidates may fail, the dependence on third parties for clinical trials, manufacturing, distribution and quality control and other risks that are described in reports filed with the Securities and Exchange Commission by Spectrum and Talon. Neither Spectrum nor Talon plan to update any such forward-looking statements and expressly disclaim any duty to update the information contained in this press release except as required by law.
