Milestone payment triggered by tentative FDA approval of sumatriptan injection.
Spectrum Pharmaceuticals will receive a $5-million milestone payment under its agreement with Par Pharmaceutical. The payment comes in relation to Spectrum’s sumatriptan injection, a prescription medicine for the acute treatment of migraine attacks.
“The tentative approval of sumatriptan injection and the subsequent payment we will receive from Par Pharmaceutical is yet another milestone achieved by our team in the past couple of months and is further validation of the strength of our business model,” states Rajesh C. Shrotriya, M.D., chairman, CEO, and president of Spectrum Pharmaceuticals. “This cash infusion is consistent with our mission to bring funds into the company without unnecessarily diluting our current investors.
“Our partner for sumatriptan injection, Par Pharmaceutical, is responsible for the sale and distribution of the drug and we will receive the majority of profits from the sale of this product,” Dr. Shrotriya explains.
Earlier this year, Spectrum formed a strategic alliance with Par Pharmaceutical for the sale and distribution of some of its generic drugs. The terms of the agreement stated that Spectrum would receive certain milestone payments on achievement of specified regulatory approvals and that Spectrum and Par would share the profits from the sale of Spectrum’s generic products. In addition, Par agreed to make an equity investment in Spectrum by early 2008.
The amended agreement states that Spectrum will receive a $5-million payment from Par related to sumatriptan injection in satisfaction of any future milestone or equity commitment by Par. Therefore, Spectrum will not issue any shares of its common stock to Par Pharmaceutical in relation to this milestone payment or any other transaction. In addition, Par will focus solely on the marketing and distribution of sumatriptan injection pursuant to the amended agreement.
