Benzinga | Jan 4, 2022 07:05AM EST

Spectrum Pharmaceuticals Announces $20M Investment By Hanmi Pharmaceutical

Spectrum Pharmaceuticals (NASDAQ:SPPI), a biopharmaceutical company focused on novel and targeted oncology therapies, today announced a $20 million equity investment by Hanmi Pharmaceutical along with revisions to the licensing agreements for ROLONTIS(r) (eflapegrastim) and poziotinib. Under the terms of the strategic investment, Hanmi entered into a $20 million equity purchase agreement that will be priced at $1.60 per share.

"This investment represents a strengthening in the relationship that we have with Hanmi," said Tom Riga, President and CEO of Spectrum Pharmaceuticals. "We look forward to our continued partnership with Hanmi and to achieving the shared goal of gaining FDA approval for ROLONTIS and poziotinib."

"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," said Se-Chang Kwon, Ph.D., Chief Executive Officer at Hanmi Pharmaceutical. "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."

Amendments to the licensing agreements for both ROLONTIS and poziotinib will result in the conversion of the upfront milestone payments for both products to deferred royalties. In addition, the royalty obligation for ROLONTIS will be changed to mid-single digits as a percent of sales for a specified period. Previously, the contract terms stipulated tiered royalties ranging from low double digits to mid-teens on Spectrum's annual net sales of ROLONTIS. The milestone payment based on ROLONTIS approval in the U.S. will be eliminated in return for an additional royalty, that will continue until the milestone is fully paid, based on the incremental royalty. Also, the amended agreement eliminates poziotinib's approval milestone payment in return for an additional royalty that will continue until the milestone is fully paid, based on the incremental royalty. The companies also agreed to an amended supply arrangement that is expected to result in a lower cost of goods sold for Spectrum.