Spectrum Pharmaceuticals, Inc. has entered into a definitive agreement to acquire all of the oncology drug assets of Targent, Inc. The key product to be acquired is levofolinic acid (LFA), the pure active isomer of calcium leucovorin, a component of "standard of care" 5-fluorouracil (5-FU) containing regimens for the treatment of colorectal and other malignancies. Calcium leucovorin is also used after the administration of high-dose methotrexate in treating certain malignancies.

A New Drug Application (NDA) for LFA has been filed with by the Food and Drug Administration (FDA) for the osteosarcoma indication. In addition, LFA has been granted orphan drug status for colorectal cancer in combination with 5-FU and for osteogenic sarcoma in use with metheotrexate rescue. LFA is currently marketed by Wyeth, Sanofi-Aventis and others in certain parts of the world, including Europe and Japan, while Spectrum will obtain the rights in the US, Canada and Mexico. It is estimated that the current annual market of LFA outside North America is approximately $200 million, stated a company release.

Rajesh C. Shrotriya, Chairman, Chief Executive Officer and President said, "While LFA was recommended for approval by the Oncology Advisory Committee at a vote of 8-0, the Chemistry Manufacturing and Control portion of the submission generated additional questions from the FDA. We believe that it is possible to file a response to these questions in approximately one year and to have this important drug available to patients in late 2007."

"Scientific consensus in the US and abroad acknowledges that LFA is the only active isomer of leucovorin," Dr, Luigi Lenaz, Chief Scientific Officer for Spectrum said adding, "The currently available drug on the market (calcium leucovorin) is a racemic mixture containing only 50% of active drug LFA. Consistent with the FDA's position to develop pure isomers of drugs, LFA represents an improvement over the currently marketed product and an opportunity for Spectrum to launch its first proprietary drug."

Under the terms of the agreement, Spectrum has agreed to issue to Targent an aggregate amount of 600,000 shares of the company's common stock at closing. Only 1/3rd (200,000) of these shares will be registered for resale. The remaining 2/3rd (400,000) shares will not be registered and therefore will be subject to restrictions on resale under rule 144 of the Securities Act of 1933. In addition, on achieving certain regulatory and sales milestones, Targent is eligible to receive cash payments as well as up to an aggregate amount of 650,000 shares of the company's common stock. Only 1/3rd of these shares will be registered for resale. The remaining 2/3rd shares will not be registered and therefore will be subject to restrictions on resale under rule 144. At Spectrum's option, any amounts due in cash may be paid by issuing shares of the company's common stock 1/3rd of which will also be registered. Additional financial details have not been disclosed.