Aurobindo Pharma USA subsidiary Acrotech Biopharma has signed a definitive agreement to buy seven haematology and oncology drugs from Spectrum Pharmaceuticals for a consideration of up to $300m.
The terms of the agreement involve upfront payment of $160m in cash in and up to $140m in milestones.
Spectrum’s products covered under the deal are Fusilev (levoleucovorin), Zevalin (ibritumomab tiuxetan), Evomela (melphalan) for injection, Khapzory (levoleucovorin), Marqibo (vinCRIStine sulfate Liposome injection), Folotyn (pralatrexate injection) and Beleodaq (belinostat) for injection.
The products collectively generated $76.4m in sales during the first nine months of last year.
Spectrum’s decision to sell the portfolio is part of its strategy to focus on the development and commercialisation of new drugs for cancer.
The company plans to use the proceeds from the divestiture to bolster its pipeline and business.
Spectrum Pharmaceuticals president and CEO Joe Turgeon said: “This divestiture marks a major strategic shift for Spectrum to ensure laser-focus on novel, oncology drug development and commercialisation.
“The proceeds generated by the sale will significantly strengthen the financial position of the company, providing the capital to develop and commercialise our two late-stage pipeline assets, and placing us in a solid position to evaluate additional growth opportunities.”
The company is also downsizing its staff by nearly 40%. Majority of the affected employees will join Acrotech Biopharma.
Spectrum will retain a core group of commercial workforce to support the launch of its Rolontis and poziotinib products.
The acquisition has been approved by the boards of directors of both the companies. However, the deal is subject to regulatory approvals and is set to be completed by March this year.
In September last year, Aurobindo Pharma USA agreed to purchase generic and branded dermatology businesses of Novartis’ unit Sandoz for $900m and additional potential earn-outs worth $100m.
The deal also included Sandoz generic oral solids portfolio in the US.