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Spectrum Pharmaceuticals’ Product Licensing Agreements

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Zevalin

In 2012, Spectrum Pharmaceuticals (SPPI) acquired the rights to market Zevalin outside the US from Bayer for 19 million euros. According to Spectrum Pharmaceuticals, Zevalin is approved in about 40 countries outside the US for treating B-cell Non-Hodgkin’s lymphoma. The royalty payment to Bayer equals 20.0% of sales from Spectrum.

In India, the company out-licensed Zevalin to Dr. Reddy’s Laboratories (RDY) in 2014 and receives a 20.0% royalty from these sales.

Folotyn agreements

Spectrum Pharmaceuticals (SPPI) entered into an in-license agreement with Sloan-Kettering Institute of Cancer Research, SRI International, and Southern Research Institute for Folotyn in 2002. Spectrum Pharmaceuticals owns the exclusive worldwide rights to the patents and applications of Folotyn and pays graduated royalties on the sales of the drug.

Spectrum Pharmaceuticals has out-licensed the worldwide commercialization rights of Folotyn outside the US and Canada to Mundipharma except for Europe and Turkey. In August 2017, Folotyn was launched in Japan.

Rolontis agreement

Spectrum Pharmaceuticals (SPPI) holds the worldwide rights for Rolontis except in Korea, China, and Japan. Rolontis is based on Hanmi Pharmaceutical’s (HANPF) proprietary Lapscovery technology and is used for treating chemotherapy-induced neutropenia. Spectrum is obligated to pay royalties to Hanmi on certain regulatory and sales milestones that range from $13.0 million to $225.0 million.

Rolontis presents a significant opportunity for the company to boost its sales. In the Chemotherapy-Induced Neutropenia (or CIN) market, Amgen’s (AMGN) Neulasta has generated revenues of $3.4 billion in fiscal 2017 so far.

Capturing 10.0% of those sales also represents an ~$400.0 million opportunity for the company. This scenario would represent a considerable upside from the $146.0 million in revenues generated from the company’s six commercialized drugs in fiscal 2016.

Treanda and Bendeka

Teva Pharmaceuticals’ (TEVA) Treanda and Bendeka are among the other competing products in this segment. Together, these two products generated revenues of $181.0 million for Teva in 3Q17.

In 2016, TEVA out-licensed Zevalin, Folotyn, Beleodaq, and Marqibo to Servier for an upfront payment of $6.0 million. Teva Pharmaceuticals would receive a royalty on the sale of these products.

Spectrum Pharmaceuticals comprises ~0.04% of the Vanguard Small-Cap ETF’s (VB) total portfolio holdings.

In the next part of this series, we’ll take a look at the current pipeline of drugs for Spectrum Pharmaceuticals.

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