Two ailing firms have been scooped in M&A deals announced this week.

First, through a wholly owned subsidiary, hematology and oncology-focused Spectrum Pharmaceuticals is acquiring South San Francisco-based Talon Therapeutics. Spectrum said it plants to complete the acquisition by purchasing 100% of Talon’s common stock. Going forward, Talon will be a subsidiary of Spectrum.

Under the terms of the agreement, Spectrum will pay Talon stockholders an aggregate upfront cash consideration of approximately $11.3 million and will issue 3 million shares of its common stock in exchange for the cancellation of all of the outstanding indebtedness under Talon’s credit facility. Talon stockholders will also receive contingent value rights in an aggregate of up to $195 million in future cash payments from Spectrum upon the achievement of certain one-time sales-based milestones for Marqibo® (an FDA-approved hematology product for the treatment of leukemia), and an approval-based milestone for Menadione Topical Lotion (a Phase II product for the treatment of the skin toxicity associated with epidermal growth-factor receptor anticancer agents such as Erbitux®). Through this acquisition, Spectrum will gain worldwide rights to Marqibo as well as Menadione Topical Lotion.

Talon hadn’t been doing so well financially, as it reported in its first quarter results for 2013 a net loss of $17.5 million and deemed dividends attributable to preferred stock of $5.1 million for the three months ended March 31, 2013, which resulted in a net loss applicable to common stockholders of $22.6 million, or $1.03 per share, when combined. Talon’s board authorized a review of strategic alternatives, including a merger, back in January.

Meanwhile, Montreal-based Paladin Labs has become the sole shareholder of Allon Therapeutics. Immediately prior to this, pursuant to an Order for Reorganization in Allon’s proposal proceedings under the Bankruptcy and Insolvency Act (Canada) and under the Canada Business Corporations Act, all existing issued and outstanding shares and other securities of Allon were cancelled without payment or other consideration. Allon will no longer be a reporting issuer in Canada as a result of Paladin’s takeover. Key terms of the transaction, as announced May 30, included a $900,000 cash payment by Paladin to Allon.

Like Talon, Allon also hadn’t been doing so well, having terminated 40% of its staff in December 2012 after a strategic review immediately following the announcement of a clinical trial failure. Its lead product candidate davunetide, which was being assessed as a treatment for progressive supranuclear palsy (PSP), failed to demonstrate efficacy in this population, according to the firm.

Previous articleRexahn Licenses University of Maryland Cancer Drug Delivery Platform
Next articlePfizer Licenses Phase II TB Antibiotic Rights to Sequella