sppi: Don't know whether this is good or bad, but I do know satraplatin is the main value driver here. Stock hasn't reacted much.
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Spectrum Pharmaceuticals Files Arbitration Claim Against GPC Biotech AG for Violations of Satraplatin License Agreement
Thursday December 14, 3:01 am ET
IRVINE, Calif., Dec. 14 /PRNewswire-FirstCall/ -- Spectrum Pharmaceuticals, Inc. (Nasdaq: SPPI - News) today announced that on December 12, it filed a Demand for Arbitration and Statement of Claims with the American Arbitration Association ("Demand"), to address violations of the letter and spirit of its co-development and license agreement with GPC Biotech AG (Frankfurt Stock Exchange: GPC; TecDAX 30; Nasdaq: GPCB) for satraplatin ("License Agreement"). Through its Demand, Spectrum seeks to enforce its rights under the License Agreement. The Demand is a response to GPC Biotech's intentional and bad faith exclusion of Spectrum from its rightful participation in sublicense fee income received by GPC Biotech, and to other non-monetary violations of the License Agreement.
As set forth in Spectrum's Demand, GPC Biotech willfully and materially breached the License Agreement and the implied covenant of good faith and fair dealing by structuring its co-development and license agreement with Pharmion GmbH ("Sublicense Agreement") to evade financial obligations owed to Spectrum under the License Agreement. Specifically, GPC Biotech owes Spectrum a percentage of fees that GPC Biotech receives from any sublicensee, including Pharmion. GPC Biotech has reported receipt of approximately $37 million in upfront payments from Pharmion, and a commitment by Pharmion to pay an additional $22 million. Of this $59 million, GPC Biotech claims that it owes Spectrum nothing. Spectrum therefore seeks damages and other relief related to GPC Biotech's material breaches of the License Agreement. In addition to GPC Biotech's monetary breaches, GPC Biotech has also breached the License Agreement through material failure to use commercially reasonable endeavors to obtain regulatory approvals and to promote the distribution of satraplatin in Japan; repeated failure to properly acknowledge Spectrum's rights to satraplatin in GPC Biotech's literature; and failure to provide Spectrum with copies of all satraplatin-related correspondence with the FDA, all of which is required by the License Agreement.
As a result of these numerous, material breaches, Spectrum's Demand also seeks a declaration that GPC Biotech's breaches provide a basis for termination of the License Agreement. If the License Agreement is terminated, GPC Biotech would be required to transfer to Spectrum all rights to satraplatin, including the Sublicense Agreement. |
