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PROSPECTUS SUPPLEMENT NO. 1 (TO PROSPECTUS DATED MAY 5, 2008) | Filed pursuant to Rule 424(b)(5) Registration Statement No. 333-150260 |
The information in this prospectus supplement is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission and has been declared effective. This prospectus supplement is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Per Share | Maximum Offering | |||||||
Public offering price | $ | $ | ||||||
Proceeds, before expenses, to us | $ | $ |
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Common stock offered by us: | ||
Common stock outstanding before the offering: | 32,166,316 | |
Common stock to be outstanding after the offering (if all shares are sold): | ||
Use of proceeds: | We currently anticipate that the net proceeds from the sale of the common stock will be used for general corporate purposes. Please see the section entitled “Use of Proceeds” | |
Nasdaq Global Market Symbol: | SPPI |
• | 136,000 shares of common stock issuable upon the conversion of our Series E Preferred Stock; | ||
• | 5,444,555 shares of common stock issuable upon the exercise of outstanding warrants to purchase our common stock; | ||
• | 7,115,772 shares of common stock issuable upon the exercise of outstanding stock options under our stock incentive plans, with a weighted average exercise price of $4.80; and | ||
• | approximately 1,000,000 shares of common stock available for future grants under our equity incentive plans. | ||
• | approximately 195,409 shares of common stock available for issuance under our 401(k) profit-sharing plan. |
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• | maintaining compliance with foreign legal requirements, including employment law; | ||
• | unexpected changes in foreign regulatory requirements, including quality standards and other certification requirements; | ||
• | tariffs, customs, duties and other trade barriers; |
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• | changing economic conditions in countries where our products are manufactured; | ||
• | exchange rate risks; | ||
• | product liability, intellectual property and other claims; | ||
• | political instability; | ||
• | new export license requirements; and | ||
• | difficulties in coordinating and managing foreign operations. |
• | unwillingness on the part of a partner to pay us milestone payments or royalties that we believe are due to us under a collaboration; | ||
• | uncertainty regarding ownership of intellectual property rights arising from our collaborative activities, which could prevent us from entering into additional collaborations; | ||
• | unwillingness by the partner to cooperate in the development or manufacture of the product, including providing us with product data or materials; | ||
• | unwillingness on the part of a partner to keep us informed regarding the progress of its development and commercialization activities or to permit public disclosure of the results of those activities; | ||
• | initiation of litigation or alternative dispute resolution options by either party to resolve the dispute; or | ||
• | attempts by either party to terminate the collaboration. |
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• | a covered benefit under its health plan; | ||
• | safe, effective and medically necessary; |
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• | appropriate for the specific patient; | ||
• | cost-effective; and | ||
• | neither experimental nor investigational. |
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• | the effectiveness of the drug product; | ||
• | the prevalence and severity of any side effects; | ||
• | potential advantages or disadvantages over alternative treatments; | ||
• | relative convenience and ease of administration; | ||
• | the strength of marketing and distribution support; | ||
• | the price of the drug product, both in absolute terms and relative to alternative treatments; and | ||
• | sufficient third-party coverage or reimbursement. |
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• | warning letters; | ||
• | fines; | ||
• | changes in advertising; | ||
• | revocation or suspension of regulatory approvals of products; | ||
• | product recalls or seizures; | ||
• | delays, interruption, or suspension of product distribution, marketing and sale; | ||
• | civil or criminal sanctions; and | ||
• | refusals to approve new products. |
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• | we or our licensors might not have been the first to make the inventions covered by each of our or our licensors’ pending patent applications and issued patents, and we may have to participate in expensive and protracted interference proceedings to determine priority of invention; | ||
• | we or our licensors might not have been the first to file patent applications for these inventions; | ||
• | others may independently develop similar or alternative product candidates or duplicate any of our or our licensors’ product candidates; | ||
• | our or our licensors’ pending patent applications may not result in issued patents; | ||
• | our or our licensors’ issued patents may not provide a basis for commercially viable products or may not provide us with any competitive advantages or may be challenged by third parties; | ||
• | others may design around our or our licensors’ patent claims to produce competitive products that fall outside the scope of our or our licensors’ patents; | ||
• | we may not develop or in-license additional patentable proprietary technologies related to our product candidates; or | ||
• | the patents of others may prevent us from marketing one or more of our product candidates for one or more indications that may be valuable to our business strategy. |
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• | adverse results or delays in our clinical trials; | ||
• | fluctuations in our results of operations, timing and announcements of our bio-technological innovations or new products or those of our competitors; | ||
• | developments concerning any strategic alliances or acquisitions we may enter into; | ||
• | announcements of FDA non-approval of our drug products, or delays in the FDA or other foreign regulatory review process or actions; |
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• | adverse actions taken by regulatory agencies with respect to our drug products, clinical trials, manufacturing processes or sales and marketing activities; | ||
• | any lawsuit involving us or our drug products; | ||
• | developments with respect to our patents and proprietary rights; | ||
• | announcements of technological innovations or new products by our competitors; | ||
• | public concern as to the safety of products developed by us or others; | ||
• | regulatory developments in the United States and in foreign countries; | ||
• | changes in stock market analyst recommendations regarding our common stock or lack of analyst coverage; | ||
• | the pharmaceutical industry generally and general market conditions; | ||
• | failure of our results of operations to meet the expectations of stock market analysts and investors; | ||
• | sales of our common stock by our executive officers, directors and five percent stockholders or sales of substantial amounts of our common stock; | ||
• | changes in accounting principles; and | ||
• | loss of any of our key scientific or management personnel. |
• | the ability of our board of directors to amend our bylaws without stockholder approval; | ||
• | the inability of stockholders to call special meetings; | ||
• | the ability of members of the board of directors to fill vacancies on the board of directors; | ||
• | the inability of stockholders to act by written consent, unless such consent is unanimous; and |
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• | the establishment of advance notice requirements for nomination for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings. |
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Public offering price per share | $ | |||||||
Net tangible book value per share as of September 30, 2008 | $ | 1.46 | ||||||
Increase in net tangible book value per share attributable to this offering | $ | |||||||
Pro forma net tangible book value per share as of September 30, 2008, after giving effect to the offering | $ | |||||||
Dilution per share to new investors in the offering | $ |
• | 136,000 shares of common stock issuable upon the conversion of our Series E Preferred Stock; | ||
• | 5,444,555 shares of common stock issuable upon the exercise of outstanding warrants to purchase our common stock; | ||
• | 7,115,772 shares of common stock issuable upon the exercise of outstanding stock options under our stock incentive plans, with a weighted average exercise price of $4.80; and | ||
• | approximately 1,000,000 shares of common stock available for future grants under our equity incentive plans. | ||
• | approximately 195,409 shares of common stock available for issuance under our 401(k) profit-sharing plan. |
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100 F Street, N.E.
Washington, D.C. 20549
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• | our Annual Report on Form 10-K for the fiscal year ended December 31, 2007, filed with the SEC on March 14, 2008; | ||
• | our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2008, filed with the SEC on May 12, 2008; June 30, 2008, filed with the SEC on August 11, 2008; and September 30, 2008, filed with the SEC on November 7, 2008; | ||
• | our Current Reports on Form 8-K (in each case, other than information and exhibits “furnished” to and not “filed” with the SEC in accordance with SEC rules and regulations, except as indicated) filed with the SEC on March 11, 2008, March 27, 2008, April 30, 2008, 2008, June 26, 2008, October 29, 2008, December 3, 2008, December 5, 2008, December 11, 2008 and December 19, 2008; and | ||
• | the description of our Common Stock contained in the Registration Statement filed with the SEC on Form 8-A, as filed on December 26, 2000, together with any amendments or reports filed for the purposes of updating such description. |
Vice President, General Counsel
Spectrum Pharmaceuticals, Inc.
157 Technology Drive
Irvine, California 92618
Telephone: (949) 788-6700
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$150,000,000
Debt Securities
Preferred Stock
Common Stock
Warrants
Units
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• | debt securities; | ||
• | preferred stock; | ||
• | common stock; | ||
• | warrants; and | ||
• | units, comprised of two or more of the following securities in any combination: debt securities, preferred stock, common stock and warrants. |
• | the type and amount of securities that we propose to sell; | ||
• | the public offering price of the securities; | ||
• | the names of any underwriters, agents or dealers through or to which the securities will be sold; | ||
• | any compensation of those underwriters, agents or dealers; | ||
• | information about any securities exchanges or automated quotation systems on which the securities will be listed or traded; | ||
• | any risk factors applicable to the securities that we propose to sell; and | ||
• | any other material information about the offering and sale of the securities. |
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• | Acquiring and developing a broad and diverse pipeline of late-stage clinical and commercial products with a focus on oncology and urology. | ||
We acquire and develop multiple novel, late-stage oncology drug products that address niche markets. A late-stage focus helps us effectively manage the high cost of drug development by focusing on compounds that have already passed the many costly hurdles in the pre-clinical and early clinical process. Our strategy allows us to leverage organizational, collaborative, commercial and scientific efficiencies from a therapeutic focus on oncology and urology. | |||
• | Establishing a commercial organization for LEVOleucovorin that will be available if and when each of the other drug products in our pipeline are approved. As we transform from a development to a commercial organization, we are building a foundation for successful product launches. | ||
• | Continuing to build a team with significant drug development and commercialization expertise in our areas of focus and creating a culture of success that allows our people to thrive. | ||
We have built the foundation of a team with significant experience in oncology and urology drug development. We endeavor to leverage the talents of our team and add people who have relevant experience. Our team members have, in the past, been responsible for the development of drugs such as adriamycin, cisplatin, carboplatin, paclitaxel, Etoposide, Buspar, Cialis, Nefazodone and Stadol, among others. We also have, and will continue to bring, commercialization experience to the Company as we build our commercial infrastructure. | |||
• | Leveraging the expertise of partners around the world in areas of manufacturing, development and commercialization to assist us in the execution of our strategy. |
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Year Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
Ratio of earnings to fixed charges (1) | N/A | N/A | N/A | N/A | N/A |
(1) | Earnings have been inadequate to cover fixed charges. The dollar amount (in thousands) of the coverage deficiency in the five year period ended December 31, 2007 was approximately $10,390, $12,286, $18,642, $23,284, and $34,036 for the years 2003, 2004, 2005, 2006 and 2007, respectively. |
Year Ended December 31, | ||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | ||||||||||||||||
Ratio of earnings to combined fixed charges and preferred share dividends (1) | N/A | N/A | N/A | N/A | N/A |
(1) | Earnings have been inadequate to cover fixed charges and preferred stock dividends. The dollar amount of the coverage deficiency in the five year period ended December 31, 2007 was approximately $10,792, $12,556, $18,854, $23,445 and $34,055 for the years 2003, 2004, 2005, 2006 and 2007, respectively. |
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• | the title of the shares of preferred stock; | ||
• | the number of shares of preferred stock offered, the liquidation preference per share and the offering price of the shares of preferred stock; | ||
• | the dividend rate(s), period(s) and/or payment date(s) or method(s) of calculation thereof applicable to the shares of preferred stock; | ||
• | whether the shares of preferred stock are cumulative or not and, if cumulative, the date from which dividends on the shares of preferred stock shall accumulate; | ||
• | the procedures for any auction and remarketing, if any, for the shares of preferred stock; | ||
• | the provision for a sinking fund, if any, for the shares of preferred stock; | ||
• | the provision for redemption, if applicable, of the shares of preferred stock; | ||
• | any listing of the shares of preferred stock on any securities exchange; | ||
• | the terms and conditions, if applicable, upon which the shares of preferred stock will be convertible into common shares, including the conversion price (or manner of calculation thereof); | ||
• | a discussion of federal income tax considerations applicable to the shares of preferred stock; | ||
• | the relative ranking and preferences of the shares of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of our affairs; | ||
• | any limitations on issuance of any series or class of shares of preferred stock ranking senior to or on a parity with such series or class of shares of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of our affairs; | ||
• | any other specific terms, preferences, rights, limitations or restrictions of the shares of preferred stock; and | ||
• | any voting rights of such preferred stock. |
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• | the title of the warrants; | ||
• | the aggregate number of warrants to be issued and currently outstanding, if any; | ||
• | the price or prices at which the warrants will be issued; | ||
• | the number or principal amount of securities purchasable upon exercise of the warrants and the exercise price of each warrant; | ||
• | the procedures and conditions relating to the exercise of the warrants including: |
• | the date on which the right to exercise the warrants will commence and the date on which the right will expire; | ||
• | the maximum or minimum number of the warrants which may be exercised at any time; and | ||
• | any limitations relating to the exchange and exercise of such warrants; |
• | any provisions for adjustment of the number or amount of shares of our preferred or common stock receivable upon exercise of the warrants or the exercise price of the warrants; | ||
• | in the case of warrants to purchase preferred stock, the designation, stated value and terms, such as liquidation, dividend, conversion and voting rights, of the series of preferred stock purchasable upon exercise of the warrants; | ||
• | if applicable, the number of warrants issued with each share of our preferred or common stock, and the date on and after which the warrants and the related securities will be separately transferable; | ||
• | if applicable, a discussion of any material federal income tax considerations; and | ||
• | any other material terms of such warrants. |
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• | all terms of the units and of the debt securities, preferred stock, common stock and warrants comprising the units, including whether and under what circumstances the securities comprising the units may or may not be traded separately; | ||
• | a description of the terms of any unit agreement governing the units; and | ||
• | a description of the provisions for the payment, settlement, transfer or exchange of the units. |
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• | through agents; | ||
• | to or through underwriters; | ||
• | to or through broker-dealers (acting as agent or principal); | ||
• | in “at the market offerings” within the meaning of Rule 415(a)(4) of the Securities Act, to or through a market maker or into an existing trading market, on an exchange, or otherwise; | ||
• | directly to purchasers, through a specific bidding or auction process or otherwise; or | ||
• | through a combination of any such methods of sale. |
• | the name of any underwriter, dealer or agent involved in the offer and sale of the securities; | ||
• | the terms of the offering; | ||
• | any discounts concessions or commissions and other items constituting compensation received by the underwriters, broker-dealers or agents; | ||
• | any over-allotment option under which any underwriters may purchase additional securities from us; | ||
• | any initial public offering price; | ||
• | any discounts or concessions allowed or reallowed or paid to dealers; | ||
• | any securities exchanges on which the securities may be listed; and | ||
• | the anticipated date of delivery of the securities. |
• | exchange offers or other transactions on the Nasdaq Global Market or any other organized market where the securities may be traded; | ||
• | in the over-the-counter market; |
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• | in negotiated transactions; | ||
• | through put or call option transactions relating to the securities; | ||
• | under delayed delivery contracts or other contractual commitments; or | ||
• | a combination of such methods of sale. |
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100 F Street, N.E.
Washington, D.C. 20549
• | Our Annual Report on Form 10-K for the year ended December 31, 2007 filed with the SEC on March 14, 2008; | ||
• | Our Current Reports on Form 8-K filed with the SEC on March 11, 2008, March 27, 2008 and April 30, 2008; | ||
• | The description of our common stock contained in the Registration of Securities of Certain Successor Issuers filed pursuant to Section 12(g) of the Exchange Act on Form 8-B on June 27, 1997, including any amendment or reports filed for the purpose of updating such description; and | ||
• | The description of our Rights to Purchase Series B Junior Participating Preferred Stock contained in the Registration of Certain Classes of Securities filed pursuant to Section 12(g) of the Exchange Act on Form 8-A on December 26, 2000, including any amendment or reports filed for the purpose of updating such description. |
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Vice President, General Counsel
Spectrum Pharmaceuticals, Inc.
157 Technology Drive
Irvine, California 92618
Telephone: (949) 788-6700
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