Spectrum Pharmaceuticals, a commercial and drug development biotech company with a primary focus in hematology and oncology, will acquire Talon Therapeutics, a biopharmaceutical company based in South San Francisco, Calif.

Spectrum will pay Talon stockholders approximately $11.3 million in cash and will issue three million shares of its common stock in exchange for the cancellation of all outstanding indebtedness under Talon's credit facility.

Spectrum will gain worldwide rights to Marqibo, an FDA-approved hematology product for the treatment of leukemia, as well as phase II product Menadione Topical Lotion for the treatment of the skin toxicity associated with epidermal growth factor receptor anti-cancer agents, such as ERBITUX. Marqibo is a novel, sphingomyelin-based liposome encapsulated formulation of vincristine indicated for the treatment of adult patients with Philadelphia chromosome-negative (Ph-) acute lymphoblastic leukemia (ALL) in second or greater relapse or whose disease has progressed following two or more anti-leukemia therapies. Vincristine, a microtubule inhibitor, is used in combination regimens for treatment of adult and pediatric hematologic and solid tumor malignancies.

Talon stockholders will also receive contingent value rights up to $195 million in future cash payments from Spectrum upon the achievement of milestones for Marqibo and an approval-based milestone for Menadione Topical Lotion.