Hanmi Pharmaceutical is drawing attention after changing the terms of a technology transfer agreement with Spectrum, a U.S. partner developing its anticancer drugs poziotinib and Rolontis.
Industry insiders have interpreted the change in the agreement between the two companies to reduce Spectrum's initial commercialization cost burden by reducing the amount of single milestone payments and receiving them sequentially as royalties.
On Tuesday, Hanmi said it had changed the milestone and royalty terms of the license agreement signed with Spectrum Pharmaceuticals for poziotinib and Rolontis.
Accordingly, the supply cost of Rolontis, produced by Hanmi and supplied to Spectrum, will be lowered. However, the two companies did not disclose the specific price citing contractual reasons.
Hanmi has also decided to receive the milestones from the U.S. marketing approval of the two anticancer drugs through "additional royalties" and receive them annually.
The company decided to maintain the royalties at a double-digit percentage of Rolontis' annual net sales and then adjust the rate to a single-digit percentage after receiving royalties equal to the milestone amount.
In the case of poziotinib’s royalty, Hanmi plans to keep its receipt at a high double-digit rate of annual net sales and adjust it to a middle double-digit rate when the milestone payment meets the agreed amount.
Hanmi said that it had changed the contract terms to support the aggressive marketing and successful commercialization of Spectrum. While the milestones received by Hanmi will decrease in the short term, the company stressed royalties to be paid after commercialization can offset this.
"The technology transfer agreement with Spectrum has not changed in a big way, and only the details have changed," a company official said.
Spectrum submitted a new drug application (NDA) for poziotinib to the U.S. Food and Drug Administration (FDA) in December 2021 and planned to submit a biologics license application (BLA) for Rolontis within this year after receiving a complete response letter (CRL) from the FDA last year.
Aside from the change in terms of the contract, Hanmi said that it had signed a contract to acquire 24 billion won ($20 million) worth of Spectrum stocks at $1.6 per share. Hanmi's stake in Spectrum will expand to about 10 percent with this stock acquisition.
Hanmi explained that the background for this equity investment is to preempt the expanded future value of two innovative anticancer drugs currently under development by Spectrum and establish a strong cooperative relationship.
"This investment is based on trust in the strategic direction of the Spectrum," Hanmi Pharmaceutical CEO Kwon Se-chang said. "Cooperation with Spectrum is one of the key drivers of future growth of Hanmi, and is an important factor for the successful advancement of Hanmi's innovative new drugs, poziotinib and Rolontis, into the U.S. market."
Spectrum CEO Tom Riga said, "This investment means strengthening the partnership between Spectrum and Hanmi."
Riga added that the company looks forward to continuing its partnership with Hanmi to achieve the two companies' common goal of FDA approval and successful commercialization of poziotinib and Rolontis.
Riga assumed the position of president and CEO of Spectrum on Dec. 31. He had served as senior vice president and chief operating officer.
Former President Joe Turgeon resigned as president-CEO and a board member of the company.