Spectrum Pharmaceuticals is taking over the effort to develop and commercialize Ligand Pharmaceuticals’ Captisol®-enabled, propylene glycol-free (PG-free) melphalan as part of a potentially $53 million-plus global licensing deal disclosed to regulators today.

Under the deal, Ligand and its CyDex Pharmaceuticals subsidiary granted to Spectrum an exclusive, nontransferable worldwide license to develop Captisol-enabled melphalan, a new intravenous formulation of the chemotherapy drug being investigated for multiple myeloma transplant patients. In return, Ligand will receive from Spectrum a nonrefundable $3 million license fee, and could rack up more than $50 million in payments tied to undisclosed milestones.

Ligand would also be eligible for “significant double-digit” royalties on future worldwide net sales of among “any products that are successfully commercialized,” the company stated today in an 8-K filing with the U.S. Securities and Exchange Commission.

Spectrum said it will immediately begin overseeing a pivotal Phase III trial of Ligand’s intravenous formulation of melphalan being investigated for use as a conditioning treatment prior to autologous stem cell transplant for patients with multiple myeloma.

The multi-center trial, launched in December 2012, will evaluate safety and efficacy in 60 patients. The trial is also intended to confirm results from an earlier Phase II study demonstrating that the Captisol-enabled melphalan formulation was safe and well-tolerated, and met the requirements for establishment of bioequivalence to the current commercial intravenous formulation of melphalan, sold by GlaxoSmithKline as Alkeran® for Injection.

“Spectrum has an established oncology and hematology business, and this melphalan product is an ideal complement to their two commercial hematology products, Zevalin and Folotyn, including an expected high degree of commercial call overlap,” John Higgins, Ligand’s president and CEO, said in a statement.

Publicly-traded Spectrum, headquartered in Henderson, NV, markets three cancer drugs: the folate analog Fusilev® (levoleucovorin) for injection, the CD20-directed radiotherapeutic antibody Zevalin® (ibritumomab tiuxetan) Injection, and the folate analog metabolic inhibitor Folotyn® (pralatrexate injection), for relapsed or refractory peripheral T-cell lymphoma.

Ligand says the Captisol technology should allow the chemo drug to be administered for longer durations at slower infusion rates, potentially enabling clinicians to safely achieve a higher dose intensity of pretransplant chemotherapy. By avoiding PG, a co-solvent in Alkeran, Ligand reasons it can avoid renal and cardiac side-effects that limit the ability to deliver higher quantities of melphalan.

According to Ligand, the current intravenous melphalan market is approximately $130 million annually, with predominant use in stem cell transplants. For the drug’s target population of patients with multiple myeloma, the rate of autologous stem cell transplants is growing by approximately 3.3% annually—about twice the 1.7% rate of incidence of new multiple myeloma cases nationwide.

Ligand said the licensing deal would raise its 2013 revenue guidance to investors to the range of $43 million to $46 million, versus previous guidance of $41 million to $44 million. The company also raised its guidance on earnings per share, to the range of 47 cents to 51 cents, versus previous guidance of 35 cents to 39 cents.

Headquartered in La Jolla, CA, publicly traded Ligand was founded in 1987 and markets treatments addressing the unmet medical needs of patients for a range of diseases including idiopathic thrombocytopenic purpura (ITP), multiple myeloma, diabetes, hepatitis, muscle wasting, dyslipidemia, anemia, and osteoporosis.

For multiple myeloma, Ligand markets Kyprolis® (carfilzomib) for Injection to patients with multiple myeloma who have received at least two prior therapies—including bortezomib and an immunomodulatory agent—and have demonstrated disease progression on or within 60 days of completion of the last therapy.

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