Back to top

Analyst Blog

Spectrum Pharmaceuticals, Inc. (SPPI - Snapshot Report) recently acquired more than 90% of the outstanding shares of Calif. based Talon Therapeutics for an upfront cash consideration of $11.3 million. Spectrum Pharma expects to acquire all shares of Talon’s common stock shortly.

Apart from the upfront cash payment, Spectrum Pharma will also issue 3 million shares of its common stock to Talon stockholders to cancel out the outstanding indebtedness under Talon's credit facility. The shareholders of Talon are also entitled to receive contingent value rights (CVRs) of up to $195 million in cash payments on achieving certain milestones related to Talon’s Marqibo and Menadione Topical Lotion, which will be added to Spectrum Pharma’s portfolio following the acquisition.

Spectrum Pharma will gain worldwide rights to Marqibo following the completion of the acquisition. Marqibo is currently approved in the US for the treatment of adults suffering from Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed after two or more anti-leukemia therapies.

Spectrum Pharma intends to launch Marqibo later this year. The same sales force which currently sells Spectrum Pharma’s Folotyn and Zevalin is expected to be utilized for Marqibo. Folotyn and Zevalin are currently approved for the treatment of patients with relapsed or refractory peripheral T-cell lymphoma (PTCL) and non-Hodgkin's lymphoma (NHL), respectively. Folotyn and Zevalin contributed around $9.9 million and $7.6 million, respectively, to Spectrum Pharma’s total revenues recorded in the first quarter of 2013.

The addition of Marqibo will boost Spectrum Pharma’s oncology portfolio. Marqibo is also being developed in a phase III study for the treatment of non-Hodgkin's lymphoma. Marqibo has shown encouraging results in its mid-stage trials in this indication.

The Talon acquisition will also add a phase II candidate, Menadione Topical Lotion, to Spectrum Pharma’s pipeline. The candidate is being developed for the treatment of skin toxicity. The completion of acquisition will also add brakiva and alocrest toSpectrum Pharma’s pipeline. These are liposomal versions of approved anti-cancer drugs.

Spectrum Pharma currently carries a Zacks Rank #1 (Strong Buy). Other companies such as Jazz Pharmaceuticals Public Limited Company (JAZZ - Analyst Report), WuXi PharmaTech (Cayman) Inc. (WX - Snapshot Report) and Cadence Pharmaceuticals Inc. also carry a comparable rank.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%