Allergan/Spectrum in $345M apaziquone deal

US firms Allergan and Spectrum Pharmaceuticals have signed an exclusive collaboration for the development and commercialization of apaziquone, an anti-neoplastic agent currently being investigated for the treatment of non-muscle invasive bladder cancer by intravesical instillation. Spectrum is currently conducting two Phase III clinical trials to explore apaziquone's safety and efficacy as a potential treatment for non-muscle invasive bladder cancer following surgery. The company expects to complete enrollment by year-end 2009.

Under the terms of the agreement, Allergan will pay the drug developer $41.5 million at closing and up to an additional $304.0 million based on the achievement of certain development, regulatory and commercialization milestones. Spectrum has retained exclusive rights to apaziquone in Asia, including Japan and China. Allergan receives these for the treatment of bladder cancer in the rest of the world, including the USA, Canada and Europe. In their domestic market, the two companies will co-promote apaziquone and share in its profits and expenses. Allergan will also pay Spectrum royalties on all of its apaziquone sales outside the USA. Spectrum will continue to conduct the apaziquone clinical trials under a joint development plan, with Allergan bearing the majority of these expenses.

Reacting to the deal, Spectrum's shares surged 78% to $1.69, while Allergan saw its stock price advance 5% to $36.70, despite the same day announcing third-quarter results and cutting its full-year guidance (see page 11).