Spectrum cuts 30% of its workforce and some R&D to focus on 2 key cancer meds

Spectrum Pharmaceuticals has weathered changes and challenges in recent years, including a sale of its marketed drugs portfolio in 2019 and an FDA rejection for a key prospect last year. Now, it's cutting staff to save cash and focus on its mid- and late-stage cancer meds.

Wednesday, Spectrum said it is cutting about 30% of its workforce to prioritize work on its two late-stage assets—oral tyrosine kinase inhibitor poziotinib and neutropenia candidate Rolontis, which suffered an FDA rejection last August. With the move, the company will "deprioritize development activities of its early-stage clinical development and research programs."

As of Spectrum's most recent annual report with the Securities and Exchange Commission, the biotech employed 176 people. That means the cuts could affect about 53 employees. 

Spectrum expects the layoffs to reduce its cash burn by 20% to 25%, extending its cash runway into 2023. Meanwhile, the company will also cut its physical presence at "selected facilities."

RELATED: Spectrum's Rolontis, angling to rival Amgen's Neulasta, hit with FDA rejection over manufacturing 'deficiencies'

This week, just before Spectrum's restructuring announcement, the company revealed it had secured a $20 million equity investment from Hanmi Pharmaceutical, which developed and licensed Rolontis and poziotinib. The companies also tweaked their licensing deals for those meds.

The moves come after an FDA rejection for Rolontis last summer thanks to manufacturing shortfalls. In 2020, the agency had to delay its review of the drug because of pandemic-related inspection delays. 

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Even before the Rolontis saga, Spectrum had been gearing up for change. In 2019, the company sold its portfolio of seven marketed products to Acrotech Biopharma, a wholly owned subsidiary of India’s Aurobindo Pharma, for up to $300 million. That move was designed to allow the biotech to focus on its cancer prospects.